Category Archives: Newsletter Archive

A Blockbuster COT Report on Friday

20 April 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


With most markets closed for Good Friday, there certainly wasn’t much happening.

But the currencies did trade yesterday.

The dollar index closed very late on Thursday afternoon in New York at 97.47 — and opened down 5 basis points once trading commenced at 7:44 a.m. China Standard Time on their Friday morning.  It really didn’t much during the Friday session, which is not entirely surprising — and it closed at 97.38…down 9 basis points on the day.

Here’s the DXY chart…courtesy of BloombergClick to enlarge.

Here are the usual charts from Nick that show what’s been happening for the week, month-to-date — and year-to-date.  The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York — along with the changes in the HUI and the Silver 7 Index.

Here’s the weekly chart — and there’s no way to paint this, except ugly.  The equities got crucified. This data isn’t quite accurate, as it contains the last five trading days — and in a holiday-shortened week like this week, it includes last Friday’s [April 12] data as the first day of the last five trading day sequence.  Click to enlarge.

And with the exception of platinum and palladium, everything is now down month-to-date, with most of the negative price activity coming during the last eight trading days as ‘da boyz’ engineered gold and silver prices lower.  Click to enlarge.

The year-to-date chart also shows that everything, with the exception of platinum and palladium, is now down on the year.  Chalk this unhappy looking chart to last two weeks of price activity as well.  Click to enlarge.

I would suspect that we’re very near the end of this engineered price decline in silver and gold…particularly silver.  As I mention in my COT narrative further down, the only big unknown is whether the powers-that-be are going to go gunning for gold’s 200-day moving average or not.  And as I also mention below, I doubt we’ll have long to wait to find out — and I doubt that that gold and silver prices will remain there for long if they do.

Other than that, with New York shut tight, there are no reports from anywhere to pass along.


But one thing I do have for you is that The Central Bank of the Russian Federation updated their website with their March data on Good Friday — and during that month they reported adding another 600,000 troy ounces of gold to their reserves.

Their total gold reserves now stand at a hair under 2,168 metric tonnes…69.7 million troy ounces.

Here’s Nick Laird’s most excellent chart showing this new data point.  Click to enlarge.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, April 16 were better than Ted had said they might be in silver — and massively better in gold.

In silver, the Commercial net short position declined by 14,090 contracts, or 70.0 million troy ounces of paper silver.

They arrived at that number by adding 15,451 long contracts, but they also increased their short position by 1,361 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, the Managed Money traders made up only part of the change for the reporting week, as they increased their short position by 8,823 contracts, but they also added 427 new long contracts — and it’s the difference between those two numbers…8,396 contracts…that represents their change for the reporting week.

The difference between that number — and the Commercial net short position…14,090 minus 8,396 equals 5,694 contracts, was made up [as it always is] by the traders in the other two categories.  Both the ‘Other Reportables’ and the ‘Nonreportable’/small trader categories sold long positions and increased their short positions as well.

Here’s the snip from the Disaggregated COT Report so you can see these changes for yourself.  Click to enlarge.

The fact that the Managed Money traders increased their long position during the reporting week [albeit by a tiny amount] pretty much means that the traders holding all these long positions are of the ‘non-blinking’ variety — and are value-based investors and are not slaves to moving average penetrations…like the Managed Money traders on the short side.  So this is very much a bifurcated report for the Managed Money traders…value investors on the long side — and the brain-dead/moving average-following Managed Money traders on the short side.

Ted figures that JPMorgan went from the a 2,500 contract short position in last week’s COT Report — and are now long the COMEX futures market in silver by around 2,000 contracts.

The Commercial net short position in silver is down to 24,672 contracts, or 118.4 million troy ounces.  Although not a record low, it’s certainly far more bullish than it has been for quite some time now.

Ted is also of the opinion that the eight largest traders in silver on the short side…all Commercial traders…are now contaminated by up to three Managed Money traders whose short positions are now big enough to be included in that category.  I have more about this in my ‘Days to Cover’ discussion a bit further down.

Here is the 3-year COT chart — and this week’s big improvement should be note.  Click to enlarge.

So, are we done to the downside — and is there any more blood to get wrung out of the COMEX silver market stone?  That’s a good question.  But as I have commented on this week, gold made two new intraday lows during this past week, but silver only one — and that was on Monday.  There has been no real serious attempt by ‘da boyz’ since to break the silver price to new lows.  So you can read into that whatever you wish.


In gold, the commercial net short position dropped by a knee-wobbling 54,379 contracts, or 5.44 million troy ounces of paper gold…one of the largest one week declines that I can remember.

They arrived at that number by adding 13,224 long contracts — and they also covered 41,155 short contracts — and it’s the sum of those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, it was almost all Managed Money traders that made up that change, as they sold 21,721 long contracts — and added a chunky 30,703 short contracts, for a totally weekly change of 52,424 contracts.

The difference between that number — and the commercial net short position…54,379 minus 52,424 equals only 1,955 COMEX contracts.  That difference was made up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small traders categories, but both went about it in wildly different fashion.  The former increased their net long position by 3,333 contracts — and the latter increasing their short position by a goodly amount…5,288 contracts.  The difference between those two number is 1,955 contracts on the short side, which is what it has to be.

Here’s the snip from the Disaggregated COT Report for gold — and the above changes can be noted…if you have the interest, that is.  Click to enlarge.

The commercial net short position in gold is now down to 7.84 million troy ounces of paper gold.

Ted mentioned on the phone yesterday that it appears to him that JPMorgan may be long the COMEX futures market in gold by 10-15,000 contracts.

Here is the 3-year COT chart for gold — and this week’s change is more than obvious.  Click to enlarge.

So, do ‘da boyz’ have enough already, or are they still going to be gunning for gold’s 200-day moving average?  A good question for which no one has an answer.  But I suspect that we’ll find out the answer to that in fairly short order.

In the other metals, it was business as usual in palladium this past week, as the Managed Money traders reduced their net long position by a further 701 contracts — and the other two categories did even less.  The Managed Money traders are net long the palladium market by 9,236 contracts.  Total open interest in palladium dropped to 21,712 COMEX contracts, down 1,225 contracts from the previous week.  It’s a very tiny market.  In platinum, the Managed Money traders went long a bit more during the reporting week…increasing their long position by only 695 contracts.  The Managed Money traders are now net long the platinum market by about 21,038 contracts, up about 1,500 contracts from last week’s COT Report.  In copper, the Managed Money traders increased their net long position by a further 2,589 COMEX contracts — and are now net long the COMEX futures market by 1,157 contracts, which is really nothing at all.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading this past Tuesday. It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX. Click to enlarge.

For the current reporting week, the Big 4 traders are short 104 days of world silver production, which is down 12 days from last week’s report — and the ‘5 through 8’ large traders are short an additional 55 days of world silver production, down 7 days from last week’s report — for a total of 159 days that the Big 8 are short, which is a bit over 5 months of world silver production, or about 371.1 million troy ounces of paper silver held short by the Big 8.  [In the prior week’s COT Report, the Big 8 were short 178 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 118.4 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 371.1 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 371.1 minus 118.4 equals 252.7 million troy ounces.

The reason for the difference in those numbers…as it always is…Ted’s raptors, the 35-odd small commercial traders other than the Big 8, are net long that amount.

As Ted mentioned on the phone yesterday, JPMorgan is now net long the COMEX futures market in silver by about 2,000 contracts.

The Big 4 traders now in that category are short, on average, about…104 divided by 4 equals…26 days of world silver production each.

The four traders in the ‘5 through 8’ category are short 55 days of world silver production in total, which is a bit under 14 days of world silver production each.

Ted’s of the opinion that there could be up to three Managed Money traders with short positions large enough in the COMEX futures market to inhabit the Big 8 category now.

The Big 8 commercial traders are short 33.1 percent of the entire open interest in silver in the COMEX futures market, down big from the 39.7 percent they were short in last week’s report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be a bit under the 40 percent mark.  In gold, it’s now 33.6 percent of the total COMEX open interest that the Big 8 are short, down from the 37.7 percent they were short in last week’s report — and something approaching 40 percent once the market-neutral spread trades are subtracted out.

It’s been many a moon since the Big 8 commercial traders held a larger percentage of total open interest short in gold, than in silver…albeit by a tiny amount.

In gold, the Big 4 are short 31 days of world gold production, down 7 days from what they were short in last week’s COT Report.  The ‘5 through 8’ are short another 20 days of world production, down 1 day from what they were short last week…for a total of 51 days of world gold production held short by the Big 8…down 8 days from last week’s COT Report.  Based on these numbers, the Big 4 in gold hold about 61 percent of the total short position held by the Big 8…down 3 percentage points from last week’s COT Report.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 65, 75 and 77 percent respectively of the short positions held by the Big 8.  Silver is unchanged from a week ago, platinum is up 7 percentage points from last week — and palladium is down 2 percentage points.

Because of the Easter holiday, there’s not much in the way of news stories, but I do have a couple that I’ve been saving for today for length and/or content reasons.


CRITICAL READS

Housing Starts Collapse Continues – Worst Annual Drop Since 2011

Well this should steal the jam out of the green-shoot-brigade’s doughnut. Housing Starts and Permits unexpectedly tumbled in March.

Housing Starts fell 0.3% MoM (against expectations of a 5.4% rebound) and to make matters worse, February’s 8.7% plunge was revised down to a shocking 12% collapse…Click to enlarge.

This is the weakest level of Housing Starts since May 2017…Click to enlarge.

And biggest Y/Y drop since 2011, suggesting builders remain wary even as lower mortgage rates and steady wage gains offer support to consumers.

Permits were just as ugly – dropping 1.7% MoM (against expectations of a 0.7% rise) and, like Starts, February’s data was downwardly revised (from -1.6% to -2.05% MoM)

The drop signals developers continue to struggle to build affordable properties amid rising labor and materials costs…but, but, but… lower rates and green shoots!!

This chart-filled Zero Hedge news item showed up on their Internet site at 8:45 a.m. on Friday morning EDT — and I thank Brad Robertson for pointing it out.  Another link to it is here.


The Aftermath of the 2008 Crisis is That We Never Really Escaped (Part 1) — Jim Rickards

The economy is vulnerable to economic “chaos” due to several monetary and policy mistakes made since the 2008 recession, said best-selling author Jim Rickards.

His new book “Aftermath: Seven Secrets of Wealth Preservation In The Coming Chaos” details how the last economic crisis never really ended.

Technically, the recession was over in June 2009 and the U.S. economy has been expanding ever since. We’re coming up on 10 years of expansion, it’s one of the longest expansions in U.S. history and it’s one of the longest bull markets in stocks in U.S. history, so that’s true. But, it’s also been the weakest expansion in U.S. history. For 10 years average growth has been about 2.2%,” Rickards told Kitco News.

Part 1 of this 2-part video interview is linked in the headline — and here.  And the link to Part 2 is here.  Both segments run for 18 minutes — and I thank Harold Jacobsen for bringing them to our attention.


Doug Noland: Full Capitulation

It’s stunning how dramatically the Fed’s perspective has shifted since the fourth quarter. There’s now a chorus of Fed governors and Federal Reserve Bank Presidents calling for the central bank to accommodate higher inflation. Watching the inflation data (March CPI up 1.9% y-o-y), it’s not readily apparent what has them in such a tizzy. And with crude prices surging 40% to start 2019, it takes some imagining to see deflationary pressures in the pipeline.

The Fed’s (and global central banks’) dovish U-turn was clearly in response to December’s global market instability. Quickly, the global system was lurching toward the precipice. Acute fragility revealed – and central bankers were left shaken. And witnessing the speculative fervor that has accompanied central bankers change of heart, the backdrop is increasingly reminiscent of Bubble Dynamics following the 1998 LTCM bailout.

Central bank officials today lack credibility when they direct so much attention to consumer price inflation while disregarding the overarching risks associated with unrelenting global debt growth, highly speculative and leveraged global financial markets, and deep global economic structural maladjustment. In the grand scheme of things, consumer prices running just below target seems rather trivial. What’s not trivial are central bankers that now appear to have accepted that they will accommodate financial excess and worsening structural impairment. At this point, it appears Full Capitulation.

It’s simply difficult to believe such analysis resonates – yet it sure does. These are strange and dangerous times. Kocherlakota: “If your medicine chest is nearly empty, you want to keep your patient as healthy as possible.” Noland: If you’re running short of medicine, you better not encourage your patient to live a reckless lifestyle. You certainly don’t want to convince the foolhardy that you possess an elixir that will cure whatever ails them. These central bankers have really lost their minds: What they administer is anything but medicine.

Such central bank crazy talk should have longer-term bonds beginning to sweat. But, then again, bond markets are confident that central bankers from across the globe will be buying plenty of bonds over the coming months and years. When central bankers talk about accommodating higher inflation, bonds hear “more QE”. And while safe haven bonds may not be overjoyed at the thought of CPI creeping higher, they remain more than fine with bubbling risk markets – prospective bursting Bubbles ensuring only more expansive QE programs. The so-called U-turn marked an inflection point from a meek attempt to return central banking to sounder principles – to a decisive breakdown in any semblance of responsible monetary management.

These days, I worry about what central bankers have unleashed with their ultra-dovishness in the face of historic late-stage global Bubble “terminal excess.”

Doug’s weekly commentary was posted on his Internet site in the very wee hours of Saturday morning — and another link to it is here.


Russian fuel embargo could lead to collapse of Ukraine’s economy, oil major warns

Russia’s ban on exports of oil and petroleum products to Ukraine in response to Kiev’s latest sanctions could be a catastrophic blow to Ukraine’s economy, according to one of the leading Ukrainian oil refiners.

Now that the suspension of such supplies becomes a reality, it can really lead to the collapse not only in the fuel market, but also in the Ukrainian economy and undermine the national security of the country,” Ukrtatnafta said in a statement on Thursday. To stabilize the situation and provide the country with necessary oil products, the company has offered to boost processing the oil stock of the Caspian fields.

Commenting on concerns about the consequences of the embargo, Russian Senator Aleksey Pushkov noted that Kiev has long been willing to “tear apart everything” linked to Russia and purchase goods from its Western allies. He noted that Ukrainian authorities mistakenly thought that Russia wouldn’t respond to its “provocations” and warned that its “sanctions reserve is not exhausted.”

Moscow expanded restrictions on specific Ukrainian goods on Thursday. Apart from exports of oil, Russia banned some Ukrainian imports, such as clothes, bulldozers, pipes and pipe-laying vehicles, among other goods. Russian Prime Minister Dmitry Medvedev said that the new restrictions target goods worth $250 million as of last year.

Russia’s move came around a week after Kiev expanded its own sanctions against Moscow in addition to earlier restrictions on trade.

This story was posted on the rt.com Internet site at 10:11 a.m. Moscow time on their Friday morning, which was 3:11 a.m. in Washington — EDT plus 7 hours.  I thank Larry Galearis for sharing it with us — and another link to it is here.


The Hunt for Rocket Boosters in Russia’s Far North

The boreal forest of the Mezensky district in Arkhangelsk Oblast, Russia, teems with wild reindeer, wolverines, and grouse. But in January, the hunter photographer Makar Tereshin—on his fifth trip to the region while shooting his stunning series, Fields of Fall— was after bigger, more exotic prey: a 65-foot-long Soyuz rocket booster.

It crashed among the birches and pines in 1989 after blasting off from Plesetsk Cosmodrome in Mirny some 200 miles south. Constructed in the late 1950s as the world’s first intercontinental missile base, the military facility performed more than 1,500 spacecraft launches between 1966 and 2005—more than 60 in each year of the 1970s. Much of the launch refuse—boosters, fuel tanks, and fuselage—tumbled into the uninhabited forests and swamps of the Mezensky district, where hunters eventually would find it.

They never dared scavenge the junk for scrap until the late 1980s, when the Soviet Union began to fall. At first, they told Tereshin, they hacked the metal with axes. Then someone got the bright idea to use a circular saw. Still, it could take more than a week to dismantle a single booster, sometimes sleeping inside for warmth. They sold the metal—aluminum, gold, silver, copper, and titanium—for cash in the capital Arkhangelsk and also hammered it into whatever they happened to need: flat-bottomed boats (dubbed “ракетаs” or rockets), hunting sleds, fencing, gutters, and even saunas—infusing a region otherwise known for its traditional Russian culture and folklore with a touch of space punk.

This very interesting news item put in an appearance on the wired.com Internet site on Thursday morning — and for obvious reasons I thought it best to wait for my Saturday missive.  I thank Roy Stephens for finding it for us — and another link to it is here.


Greece Escalates Demands For WWII Reparations From Germany

Six months since Der Speigel revealed a 2016 report detailing the cost of Germany’s Nazi occupation of the nation during World War II, the Greek Parliament voted Wednesday to demand Germany pay reparations for those damages.

As we noted previously the audit report, ready since August 2016, claims Greece is entitled to €269.5 billion of repairs from the Second World War. In addition, Greece demands the repayment of a €10.3 billion occupation loan.

Having emerged from a decade of Troika-imposed austerity in the past year, Tsipras, a leftist, said his government did not want to link the two issues (imposed austerity and reparations), responding to criticism over the parliament’s delayed response to the report on the matter issued in 2016.

For its part, the German government is expected to reject the request. Already in the past, it has made it clear that Greece has no legal right to claim damages for the Second World War.

As Reuters reports, Germany has in the past apologized for Nazi-era crimes but has not been willing to reopen talks on reparations. Then-West Germany paid Greece the sum of 115 million deutschmarks in 1960 as reparations for its wartime suffering.

This story appeared on the Zero Hedge website at 4:15 a.m. EDT on Friday morning — and it also comes courtesy of Brad Robertson.  Another link to it is here.


Middle East Resistance is Stiffening — Tom Luongo

Amidst all of the truly terrible things happening geopolitically around the globe I find it’s important to take that big step back and assess what’s really going on. It’s easy to get caught up (and depressed) by the deluge of bad news emanating from the Trump administration on foreign policy matters.

It seems sometimes that it’s pointless to even discuss them because any analysis of today will invariably be invalidated by the end of the week.

But that’s also why the big picture analysis is needed.

Resistance to the U.S. empire’s edicts is rising daily. We see it and we see the counter-reactions to them from the useful idiots who make up Trump’s Triumvirate of Belligerence – John Bolton and Mikes Pompeo and Pence.

It doesn’t matter if we’re talking about sovereignist movements across Europe threatening the apple cart of the wicked European Union or something as small as Syria granting Iran a port lease in Latakia.

The Trump administration has abandoned diplomacy to such an extent that only raw, naked aggression is evident. And it has finally reached the point where even the world’s most accomplished diplomats have dispensed with the niceties of their profession.

This [I thought] worthwhile commentary/opinion piece by Tom showed up on the strategic-culture.org Internet site on Friday — and it’s the second contribution of the day from Larry Galearis.  Another link to it is here.


Manipulation of Gold Price is as Evil as WWII Expropriation — Chris Powell

SBTV caught up with Chris Powell, Co-Founder of the Gold Anti-Trust Action (GATA) Committee, in Singapore at The Safe House precious metals vault and found out the latest updates on his work. We asked Chris what keeps him going in his tireless work of calling out gold rigging by central banks and their agents – find out his answer in this interview!

Discussed in this interview:

07:42 How gold manipulation/rigging works
11:52 Why manipulate gold?
14:28 Senator Alex Mooney’s letters to the Federal Reserve
18:58 Article 1 Section 10 of the Constitution
20:09 How can gold rigging ever stop?
25:14 Central bank record gold buys and Basel III changes
27:18 Price of gold without manipulation or if it was revalued
29:37 Price manipulation during the 2000 to 2011 gold bull market?
31:47 What keeps Chris going with GATA?
33:20 Gold rigging is as evil as Nazi expropriation of occupied Europe

This 41-minute video interview with Chris took place in a precious metal bullion vault in Singapore about a month ago — and was posted on the youtube.com Internet site on April 14 — and is certainly worth your while if you have the time.  I thank Elliot Simon for sharing it with us — and another link to it is here.


The PHOTOS and the FUNNIES


The WRAP

Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population. Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries such as telecommunications, health care, automobiles, and energy.

These policies are implemented and praised by these groups’ willing servants, namely the increasingly bought-and-paid-for leadership of America’s political parties, academia, and lobbying industry.

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultra-wealthy elite. Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism.”

Charles Ferguson, Predator Nation, 2012


I don’t have a ‘blast from the past today’.  Today’s ‘pop’ song is from Kazakhstan singing sensation “Dimash” Kudaibergen, who I’d never heard of until Roy Stephens slid a couple of his youtube.com videos into my in-box a few minutes before midnight on Thursday.

He is university trained in classical, as well as in contemporary music — and is known for his wide vocal range of 6 octaves and 2 semitones, from C2 to D8. This spans from the bottom of the bass range, to beyond the top of the soprano range.

It is a voice not of this earth — and that is not hyperbole!  I was totally blown away.  I’ve watched it an unhealthy number of times already.

The fact that you don’t know the language doesn’t matter — and the fact that you won’t understand a single word, or have heard the song before, doesn’t matter either.  Only ‘the voice’ matters — and the link is here.

And as an aside, here’s celebrity vocal coach Tara Simon’s first reaction — and critique of him as a singer.  Click here.  And for a purely emotional response to a first listening, you can’t beat the dude linked here.


Today’s classical ‘blast from the past’ is actually from the Renaissance — and is one I try to post around Easter every year.

Miserere (full title: Miserere mei, Deus, Latin for “Have mercy on me, O God”) is a setting of Psalm 51 (50) by Italian composer Gregorio Allegri. It was composed during the reign of Pope Urban VIII, probably during the 1630s, for use in the Sistine Chapel during matins, as part of the exclusive Tenebrae service on Holy Wednesday and Good Friday of Holy Week.

The Miserere is written for two choirs, one of five and one of four voices, and is an example of Renaissance polyphony. One of the choirs sings a simple version of the original Miserere chant; the other sings an ornamented commentary on this.

It is, without doubt, one of the most beautiful pieces of religious music ever composed — and the Mozart connection to this work is the stuff of legend.  You can read about that here.

Here’s the composition itself, as performed by the Tallis Scholars back in 1994 — and I consider this to be the definite recording of this work.  I know that others disagree — and I respect their opinions.  The link is here.


Such a precarious time in history.”…Doug Noland’s famous sentence in his commentary from last Saturday is still top of mind for me as I write today’s closing notes.

Nothing has changed since last week that alters his take on the current situation, not only in the U.S…but on a global scale for all nations…except Russia, the most financially solvent nation on Planet Earth at the moment.

As a good proxy for world equity markets, here’s a chart from Nick Laird’s website showing a triple top in the Dow Jones U.S. Total Stock Market Index — and I suspect that this is how the world looked back in 1929 before everything headed south.  It’s difficult to see how will be able to break out to new highs from here considering the current underlying economic fundamentals world wide.  Click to enlarge.

The only reason that the markets are this high is because of the massive market interventions undertaken by the Fed during and since the 2008/9 melt-down in the sub-prime mortgage.  The the market crash of ’87 is barely a blip on this chart, but it was only intervention by the soon-to-be anointed Plunge Protection Team that saved the day back then.

The sum of all U.S. equities has been inflated by a factor of fifteen times that size since that time — and has now become the biggest stock market bubble in all of U.S. history.

There might be some comfort in the fact that if it was only the U.S. equity markets at substantial risk, then a correction would be brutal, but survivable for some.  But that’s no longer the case, as the financial and monetary bubble now encompasses our entire planet.

I and others have spoken of the IMF and their SDRs…Special Drawing Rights — and that there’s this chance of a new world currency based on that.  But you have to wonder how much of that would have to manufactured out of thin air to save the markets this time around, or would they wait until the inevitable melt-down had taken its toll before they acted?

But SDRs or not, the only way that the world’s central banks and the IMF are going to be able to extricate themselves from this situation is by massive money printing on a scale far larger than it has been to date — and the inflation that they’ve craving to ignite in an ever-increasing deflationary  financial environment, will ultimately be successful beyond their wildest dreams.

Then all the pain of the last eight years for us precious metal holders will disappear in short order, as the powers-that-be will no longer be able to contain precious metal prices, nor will they want to.

It’s always darkest, just before dawn.

I’m done for the day — and the week…with Happy Easter wishes to all those who care to receive them.

See you on Tuesday.

Ed

Another New Intraday Low For Gold on Thursday

19 April 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was engineered quietly lower — and a tiny new intraday low for this move down was set a few minutes before the London open on their Thursday morning.  It rallied about seven dollars or so from there on pretty ferocious volume — and the high tick of the day, such as it was, came at…or just before…the 10:30 a.m. morning gold fix in London.  It crawled very quietly and unevenly lower until a few minutes before 12:30 p.m. in New York — and then crept a bit higher into the 5:00 p.m. EDT close from there.

The low and high ticks certainly aren’t worth looking up.

Gold finished the Friday trading session at $1,275.50 spot, up $1.90 from Wednesday’s close.  Net volume was pretty decent at 225,000 contracts — and that certainly had something to do with the fact that there was far heavier volume that normal during the first two hours of trading in London yesterday morning.  Roll-over/switch volume was around 5,300 contracts.

The price path for silver was mostly the same as it was for gold, at least up until the 10:30 a.m. BST morning gold fix in London on their Thursday morning.  It broke above $15 spot by a penny — and after that, any and all rally attempts that tried to break above that price mark, were carefully turned aside.  And after about 12:20 a.m. in New York, not much happened from a price perspective, as traders headed out early for the Easter long weekend.

The low and high ticks in this precious metal aren’t worth looking up, either.

Silver closed in New York on Thursday at $14.975 spot, up 2 cents on the day.  Net volume was exceptionally quiet at around 38,300 contracts, even though…like for gold…there was elevated trading volume during the first two hours in London.  Unlike gold, silver did not set a new low for this move down on Thursday.  Roll-over/switch volume out of May and into future months was a hefty 21,500 contracts.

Platinum was sold down to its low of the day by around 11:30 a.m. China Standard Time on their Thursday morning — and it didn’t do much over the next couple of hours.  It then rallied a few dollars into the Zurich open — and then didn’t do much until around 1:30 p.m. CEST.  It began to chop quietly higher from there — and that continued throughout the entire New York trading session — and into after-hours trading as well.  Platinum finished on its high of the day…$900 spot…up 13 dollars from Wednesday’s close.

The palladium price began to slide quietly in price starting about two hours after trading began in New York at 6:00 p.m. EDT on Wednesday evening — and its low came around 10:40 a.m. in Zurich.  It gained about half of its losses back in the next two hours — and then didn’t do anything until 9 a.m. in New York.  The price stair-stepped its way quietly higher from there — and it came close to finishing the Thursday session on its high tick as well…closing at $1,402 spot, up 23 dollars on the day.

The dollar index closed very late on Wednesday afternoon in New York at 97.01 — and opened unchanged once trading commenced at 7:44 p.m. EDT on Wednesday evening, which was 7:44 a.m. China Standard Time on their Thursday morning.  From that juncture it didn’t do much of anything — and it’s 96.96 low tick, such as it was, coming around 2:35 p.m. CST in Shanghai.  Then minutes before 8:30 a.m. BST in London, it jumped higher by 20+ basis points — and rallied unevenly higher until around 1:05 p.m. in New York.  Its high at that point was 97.49 — and it crawled generally sideways for the remainder of the Thursday session.  The dollar index closed at 97.47…up 46 basis points from Wednesday.

Here’s the DXY chart, courtesy of Bloomberg as usual.  Click to enlarge.

And here’s the 5-year U.S. dollar index chart, to put the current 6-month dollar index activity in some context.  The delta between its close…96.61…and the close on the DXY chart above, was 86 basis points on Wednesday.  Click to enlarge as well.

The gold stocks opened unchanged, rallied a bit into the afternoon gold fix in London — and then some kind souls, most likely mutual or hedge funds, sold them lower until around 12:45 p.m. EDT in New York trading.  They crept a bit higher from there — and the HUI closed down 1.91 percent.

The price activity in silver equities was almost the same as it was for the gold shares, with all the same price inflection points, so I’ll spare you the play-by-play on that.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 1.56 percent.  Click to enlarge if necessary.

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

It certainly wasn’t John Q. Public selling the precious metal shares lower yesterday, but whoever the buyers happened to be, those stocks now reside in the strongest of hands.


The CME Daily Delivery Report showed that 19 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, the only short/issuer was Advantage — and they also stopped 3 contracts.  JPMorgan picked up the other 16.  All contracts, both issued and stopped, involved 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 April declined by 837 contracts, leaving only 164 left, minus the 19 contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 839 gold contracts were actually posted for delivery on Tuesday.  That means that 839-837=2 more gold contracts were added to the April delivery month.  Silver deliveries are done for the month, unless something pops up between now and First Day Notice on April 29.


After a small deposit into GLD on Wednesday, there was a withdrawal from GLD on Thursday, as an authorized participant took out 37,769 troy ounces.  There were no reported changes in SLV.

There was no sales report from the U.S. Mint on Thursday.

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.   There was 1,999.990 troy ounces/62 kilobars [U.K./U.S. kilobar weight] deposited at Delaware.  Nothing was shipped out.  There was also a paper transfer in gold, as 88,023.030 troy ounces/2,737 kilobars [U.K./U.S. kilobar weight] was transferred from the Registered category — and back into Eligible. That occurred at HSBC USA.  The link to this is here.

As usual, there was much more activity in silver, as 1,198,984 troy ounces was reported received — and 648,092 troy ounces were shipped out.  In the ‘in’ category, there was one truckload…600,598 troy ounces…dropped off at HSBC USA — and the other truckload…598,386 troy ounces…found a home over at CNT.  In the ‘out’ category, there was one truckload…631,631 troy ounces shipped out of CNT.  Lesser amounts…14,480 and 1,980 troy ounces…departed Loomis International and Delaware respectively.  The link to all this is here.

It was another busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 5,585 of them — and shipped out 5,862.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Bitterley Hoard is the largest post medieval / English Civil War Coin Hoard found to date from Shropshire, England. It was discovered on 17 February 2011 by a metal detector user near the village of Bitterley, South Shropshire. The find consists of one gold coin and 137 high denomination silver coins. These were placed within a high quality leather purse which was contained within a pottery vessel called a tyg. The earliest coin was from the reign of Edward VI, the latest from the Bristol Provincial Mint of Charles I, indicating it was buried after early 1644.

On 28 June 2012 the coin hoard was declared as Treasure under the 1996 Treasure Act by the Coroner for Shropshire — and has been valued by the independent treasure valuation committee of the Department for Culture, Media and Sport. Shropshire Museum Service has expressed an interest in acquiring the hoard for display at Ludlow Museum. Funds are being raised via public subscription by the Friends of Ludlow Museum.   There’s only this one photo.  Click to enlarge.

With the Easter long weekend upon us, there wasn’t much in the way of relevant news yesterday.


CRITICAL READS

U-Turn In Trucking: Cass Freight Shipment Index Contracts For 4th Consecutive Month

The Cass Freight Index, a measure of truck shipments is down for the fourth consecutive month year-over-year.  The ‘click to enlarge‘ feature only helps a bit.

Please consider the Cass Freight Index Report for March 2019.

The Cass Freight Index was one of the first freight flow indicators to turn positive (in October 2016) and confirm our prediction of a recovery in the U.S. economy. Beyond our concern that the Cass Freight Shipments Index has been negative on a YoY basis for the fourth month in a row. Bottom line, the data in coming weeks will indicate whether this is merely a pause in the rate of economic expansion or the beginning of an economic contraction.”

  • We are concerned about the severe declines in international airfreight volumes (especially in Asia) and the recent swoon in railroad volumes in auto and building materials
  • We are reassured by the sequential increase in the Cass Freight Shipments Index (up 2.0%) and the volumes in U.S. domestic trucking (especially in truckload dry van)
  • We are closely watching the volumes of chemicals and other shipments via railroad, as they have lost momentum in recent weeks and may give us the first evidence of the global slowdown spreading to the U.S.

J.B. Hunt, the largest U.S. trucking company had this to say: “Volume, or lack thereof, is obviously the main story. The inventory pile-up hurts. And the driver shortage is ending.”

The global economy is on life support. We have simultaneous slowdowns in the U.S., China, and the E.U.

This Zero Hedge article was posted on their Internet site at 11:30 a.m. EDT on Thursday morning — and another link to it is here.


U.S. Services PMI Crashes to 2-Year Lows, Signals GDP Slump

While all eyes focused on retail sales rebound in March, the flash US composite PMI plunged to 31-month lows in April, led by a collapse in the Services economy, catching down to the Manufacturing side.  Click to enlarge.

  • Flash U.S. Composite Output Index at 52.8 (54.6 in March). 31-month low.
  • Flash U.S. Services Business Activity Index at 52.9 (55.3 in March). 25-month low.
  • Flash U.S. Manufacturing PMI at 52.4 (52.4 in March). Unchanged.

So it seems ‘hard data’ was right after all and ‘soft’ surveys wrong…Click to enlarge.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

The U.S. economy started the second quarter with its weakest expansion since mid-2016 as businesses reported a marked slowing in output, new orders and hiring.”

The survey indicates that the manufacturing downturn seen in the first quarter has persisted into April, but growth in the service sector has now also slumped to a two-year low as the malaise showed further signs of spreading beyond the factory sector.

The April surveys are consistent with GDP rising at an annualised rate of just under 2%, with the official measure of manufacturing production remaining in decline.

This news item put in an appearance on the Zero Hedge website at 9:54 a.m. on Thursday morning EDT — and it comes courtesy of Brad Robertson.  Another link to it is here.


When is Capital Preservation Not Enough? — Dennis Miller

Pundit Bill Bonner’s article about our growing government debt grabbed my attention.

…. When it comes to government debt, the borrower never pays; the feds have no money. The lenders – big banks, investment funds, well-heeled insiders – don’t want to pay.

Generally, they collude with the feds to make sure the real cost is put on innocent third parties – taxpayers and consumers.”

Governments pass the real cost to taxpayers and consumers by creating high inflation. Mr. Bonner lives in Argentina. At the end of February, the official annual inflation rate jumped to 51.3% per year. He estimates it is over 100%.

The next article I picked up quoted Fed Chairman Powell:

Powell called out the need for the Fed and other central banks to find better ways to deal with pervasive low inflation, and said…it ought to pay serious attention to strategies that would drive inflation higher….” (my emphasis)

That is government lingo, meaning pass the cost of government debt to taxpayers and consumers by devaluing the dollar.

This interesting commentary from Dennis put in an appearance on his Internet site early on Tuesday morning — and another link to it is here.


Deutsche Bank is Scrambling For a ‘Plan B’ to Justify Abandoning Commerzbank Merger Talks

The fraught, government-assisted courtship of troubled German banking giants Deutsche Bank and Commerzbank has hit yet another snag. According to a series of reports published Thursday morning, concerns about a mass defection of mutual clients moving some, or all, of their business is giving Deutsche Bank – long reputed to be the more reluctant partner – cold feet.

Deutsche CEO Christian Sewing is reportedly trying to devise a ‘Plan B’ to pitch to investors who support the tie-up. These investors are reportedly demanding that if Deutsche doesn’t go ahead with the merger, it must come up with a plan to turnaround its struggling business as its streak of declining revenue is widely expected to continue.

However, while investors are demanding that the bank try ‘something different’, the options reportedly under consideration (as described by Bloomberg) sound like more of the same: They include a) more cost cuts, focusing on DB’s investment bank and b) a nebulous ‘strategy shift’ that would involve more upfront costs. However, Sewing must at least find a way to paint the turd gold, so to speak, since a return to his original strategy simply ‘wouldn’t be credible’.

In another sign that the deal could be headed for the rocks, BBG noted that after five weeks of talks, the two banks are apparently no closer to a deal. Meanwhile, more Social Democrats, the party of finance minister Olaf Scholz – who is perhaps the biggest proponent of a merger, which he hopes will create a new German ‘national champion’ to support its industrial sector – are siding with the labor unions from the two banks, which have warned that a merger could lead to the loss of 40,000 jobs.

But in a sign that critics of the deal (of which there are many, including the Qatari wealth funds that are among the biggest shareholders in the two banks) are making headway in trying to stop it, the Financial Times reported that the prospects for  ‘revenue attrition’ are why DB is suddenly getting nervous. BBG added that doubts about cost savings and the battle to raise capital to finance the deal are also among the bank’s concerns.

But in a ironic twist, it’s looking increasingly plausible that Deutsche Bank’s track record of being “the biggest money laundering bank in the world” – as Maxine Waters so eloquently put it – might end up sinking the deal that its CEO so clearly doesn’t want. According to a separate report in the FT citing internal Deutsche Bank sources, the bank has reportedly estimated that it processed at least €175 million ($197 million) of dirty money for Russian criminals between 2011 and 2014. The bank is bracing itself for fines and litigation. And this doesn’t include the €160 billion ($180 billion) in ‘suspicious’ money that it processed on behalf of Danske Bank’s Estonian branch.

Regulatory concerns about AML [anti-money laundering]  might be one potential out for DB. But if the bank really must come up with a ‘Plan B’ if it wants to justify abandoning the talks without risking shareholder backlash, well, we can only think of one realistic alternative: Let Deutsche Bank fail.

This longish story showed up on the Zero Hedge website at 9:04 a.m. EDT on Thursday morning — and it’s another contribution from Brad Robertson.  Another link to it is here.


Rumors of War: Washington Is Looking for a Fight

It is depressing to observe how the United States of America has become the evil empire. Having served in the United States Army during the Vietnam War and in the Central Intelligence Agency for the second half of the Cold War, I had an insider’s viewpoint of how an essentially pragmatic national security policy was being transformed bit by bit into a bipartisan doctrine that featured as a sine qua non global dominance for Washington. Unfortunately, when the Soviet Union collapsed the opportunity to end once and for all the bipolar nuclear confrontation that threatened global annihilation was squandered as President Bill Clinton chose instead to humiliate and use NATO to contain an already demoralized and effectively leaderless Russia.

American Exceptionalism became the battle cry for an increasingly clueless federal government as well as for a media-deluded public. When 9/11 arrived, the country was ready to lash out at the rest of the world. President George W. Bush growled that “There’s a new sheriff in town and you are either with us or against us.” Afghanistan followed, then Iraq, and, in a spirit of bipartisanship, the Democrats came up with Libya and the first serious engagement in Syria. In its current manifestation, one finds a United States that threatens Iran on a nearly weekly basis and tears up arms control agreements with Russia while also maintaining deployments of U.S. forces in Syria, Iraq, Afghanistan, Somalia and places like Mali. Scattered across the globe are 800 American military bases while Washington’s principal enemies du jour Russia and China have, respectively, only one and none.

Never before in my lifetime has the United States been so belligerent, and that in spite of the fact that there is no single enemy or combination of enemies that actually threaten either the geographical United States or a vital interest. Venezuela is being threatened with invasion primarily because it is in the western hemisphere and therefore subject to Washington’s claimed proconsular authority. Last Wednesday Vice President Mike Pence told the United Nations Security Council that the White House will remove Venezuelan President Nicolás Maduro from power, preferably using diplomacy and sanctions, but “all options are on the table.” Pence warned that Russia and other friends of Maduro need to leave now or face the consequences.

The development of the United States as a hostile and somewhat unpredictable force has not gone unnoticed. Russia has accepted that war is coming no matter what it does in dealing with Trump and is upgrading its forces. By some estimates, its army is better equipped and more combat ready than is that of the United States, which spends nearly ten times as much on “defense.”

This commentary/opinion piece showed up on the strategic-culture.org Internet site on Thursday sometime — and I thank Roy Stephens for pointing it out.  Another link to it is here.


Asia Gold: China premiums bounce to two-year highs as prices dip, yuan gains

Gold premiums in top consumer China jumped to their highest in more than two years, as a drop in global prices and strengthening yuan encouraged purchases amid optimism about the state of the economy. Click to enlarge.

Chinese premiums climbed to about $20 an ounce over global benchmark prices this week, a level last seen in March 2017. Premiums of about $13-$15 were charged last week.

Lower prices are giving way to a rise in buying,” said Alfonso Esparza, senior market analyst at OANDA.

Physical demand has been climbing as central banks have stepped up their efforts, leaving investors to follow their lead.”

Data earlier this month showed China raised its gold reserves for a fourth straight month during end-March. Some central banks often use bullion to diversify their reserves away from the U.S. dollar.

This Reuters story, co-filed from Bengaluru and Mumbai, appeared on their website at 6:20 a.m. EDT on Thursday morning — and I picked it up off the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

These next two photos were taken within a hundred meters or so of where I took the photos of the bighorn sheep that I posted in yesterday’s column, but looking towards Kamloops Lake and the CN tracks at the Savona siding, instead of the hills on the left.  In the first shot, you can see that the lake level is way down — and the cut in the hill on the left is the CN rail right-of-way.  I waited for about thirty minutes before a train showed up — and the wait resulted in photo number two.  Click to enlarge.


The WRAP

‘Da Boyz’ took another tiny salami slice out of gold on Thursday — and that occurred about twenty minutes or so before the London open.  To tell you the truth, I’m somewhat surprised that they weren’t far more aggressive than the were.  I’m not sure how to interpret that — and I’ll be interested in what happens when trading begins at the New York open at 6:00 p.m. EDT on Sunday evening.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  Gold’s new intraday low for this move down should be noted…as should the fact that silver’s price is being carefully kept in line on a closing price basis.  Once again it was platinum and palladium that were the stars of the day.  Click to enlarge.

The precious metal market is closed for Good Friday, so there’s nothing else to report except the fact that there is supposed to be a Commitment of Traders Report today, despite the holiday.

And because today is a holiday just about everywhere in the Western world, my Saturday missive won’t have a lot in it because the U.S. will be shut tight.

Enjoy your holiday weekend if you’re lucky enough to get one — and I’ll see you here tomorrow.

Ed

Except For Palladium…All Was Quiet Yesterday

18 April 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much of anything in morning trading in the Far East on their Wednesday, but from noon until the afternoon gold fix in Shanghai, it crawled a few dollars back above unchanged, but was quietly turned lower around 9 a.m. in London — and it crept quietly lower for the remainder of the Wednesday trading session.

The high and low ticks certainly aren’t worth looking up.

Gold finished the day at $1,273.70 spot, down $2.90 from Tuesday’s close, but was not closed at a new low for this move down.   Net volume was slightly elevated at just under 216,000 contracts — and there was a bit under 8,000 contracts worth of roll-over/switch volume in this precious metal.  I suspect that this increase in volume was a result of the activity in Far East trading on their Wednesday, as it was quite high.

The price activity in silver, was a bit more ‘volatile’.  Its tiny rally that began at noon China Standard Time was capped and turned lower shortly before 10 a.m. in London — and that tiny sell-off lasted until 1 p.m. BST…twenty minutes before the COMEX open in New York — and then it began to head higher with some authority.  However ‘da boyz’ showed up a minute or so after 9 a.m. EDT — and had it down about 7 cents on the day by shortly after 12:15 p.m.  It rallied a bit going into the COMEX close — and then traded ruler flat until the market closed at 5:00 p.m. EDT.

The high and low ticks in this precious metal were reported by the CME Group as $15.055 and $14.88 in the May contract.

Silver was closed in New York on Wednesday at $14.955 spot, down 2 cents from Tuesday.  Net volume was nothing out of the ordinary at 52,500 contracts, as no new low for this move down was set in silver, either.  But roll-over/switch volume out of May and into future months was pretty beefy at a bit over 26,000 contracts.

Like gold and silver, platinum traded sideways in morning trading in the Far East — and then began to head higher shortly after 12 o’clock noon CST.  That rally was capped and turned lower a few minutes after 10 a.m. CEST in Zurich.  Every rally attempt after that was not allowed to broach the $867 spot price mark after that — and shortly after the COMEX close it traded quietly sideways for the remainder of the Wednesday session in New York.  Platinum was closed at $887 spot, up 8 dollars on the day.

The palladium price wandered around a few dollars either side of unchanged until the 9 a.m. open in Zurich.  It added a few dollars at that point — and then really didn’t do much of anything until the COMEX open.  Then a rally of some magnitude got underway at that juncture — and that was allowed to last until a few minutes before noon in New York.  From that point it was forced to trade sideways until the market closed at 5:00 p.m. EDT.  Palladium finished the Wednesday session at $1,379 spot, up a hefty 41 bucks from Tuesday’s close.

The dollar index closed very late on Tuesday afternoon in New York at 97.04 — and opened up 4 basis points once trading commenced at 7:44 p.m. EDT on Tuesday evening, which was 7:44 a.m. in Shanghai.  The 97.12 high tick was set around 8:35 a.m. CST — and it was sold quietly and unevenly lower until the 96.82 low tick was set around 8:40 a.m. in London.  It crept unevenly higher until around 12:15 p.m. in New York — and didn’t do a whole heck of a lot after that.  The dollar index finished the Wednesday session back above the 97.00 mark by a hair, at 97.01…down 3 basis points from Tuesday’s close.

Here’s the DXY chart courtesy of 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 — and the delta between its close…96.13…and the close on the DXY above, was 88 basis points on Wednesday.  Click to enlarge as well.

The gold shares notched a bit higher once trading began at 9:30 a.m. in New York on Wednesday moving — and their respective highs were printed at, or shortly after, the afternoon gold fix in London.  They were sold quietly lower until about 3:35 p.m. EDT — and then jumped up a decent amount going into the 4:00 p.m. close.  The HUI closed down only 0.76 percent.

The silver equities started off the Wednesday trading session the same as the gold stocks, but their respective low ticks came around 12:20 p.m. in New York trading.  Then they rose and fell a bit until 3:35 p.m. EDT — and they also rallied into the close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 1.03 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 839 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, of the three short/issuers, Citigroup was only one that mattered once again, issuing 798 contracts out of its own account — and of the four long/stoppers, the biggest…as always…was JPMorgan picking up 743 contracts for its client account.  In very distant second place was Advantage, stopping 81 for its client account as well.

The link to yesterday’s Issuers and Stoppers Report is here.

So far in April, Citigroup has stopped 2,340 gold contracts, but has already reissued 1,940 of them — and it remains to be seen if it will reissue the rest.  So far in April, JPMorgan has issued 2,552 gold contracts, plus they’ve stopped 2,195 of them.  They haven’t done a thing for their own account up to this point in the April delivery month.

So far this month, there have been 6,294 gold contracts issued/reissued and stopped — and Citigroup and JPMorgan combined have accounted for more than the lion’s share [about 4,500 contracts] of that activity.  I don’t know what it means…I’m just reporting the data as presented on the CME’s website.  Ted may or may not have something to say about this in his weekly review on Saturday.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in April rose once again, this time by 203 contracts, leaving 1,001 still around, minus the 839 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 91 gold contracts were actually posted for delivery today, so that means that 203+91=294 more gold contracts were added to the April delivery month.  Silver o.i. in April is zero.  There was no changes in April open interest — and no deliveries are slated for today.


There were surprises in both GLD and SLV, as both had additions to their total holdings…particularly in SLV.  There was a rather smallish 18,885 troy ounce of gold added to GLD…but a very chunky 2,811,696 troy ounces was added to SLV.  I’m suspecting that these deposits may have been made to cover existing short positions, as I doubt it would be investor buying that’s responsible.

There was no sales report from the U.S. Mint on Wednesday.

For the the third day in a row, there was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.

There was some activity in silver, as one smallish truckload…557,757 troy ounces…was reported received at JPMorgan — and the ‘out’ activity consisted of one small truckload…535,414 troy ounces…that was shipped out of CNT.  There was also 595,418 troy ounces transferred from the Eligible category — and into Registered over at CNT as well.  The link to all this is here.

It was a pretty big day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  The reported receiving 6,000 of them — and shipped out another 4,252.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Bedale Hoard is a hoard of forty-eight silver and gold items dating from the late 9th to early 10th century A.D. and includes necklaces, arm-bands, a sword pommel, hacksilver and ingots. It was discovered on 22 May 2012 in a field near Bedale, North Yorkshire by metal detectorists, and reported via the Portable Antiquities Scheme. Following a successful public funding campaign, the hoard was acquired by the Yorkshire Museum for £50,000.

The hoard contains forty-eight items of silver and gold and was declared as ‘treasure’ under the Treasure Act 1996. In addition to 29 silver ingots, the hoard contained an iron sword pommel inlaid with foil plaques, four gold hoops or bands from the hilt of the sword, six small gold rivets, four silver collars and neck-rings (one cut into two pieces), one silver arm, one fragment of a ‘Permian’ ring, and one silver penannular brooch.

Twenty-nine ingots of silver (with a variety of minor alloys) were found with the hoard, many of which have testing-nicks. Three have crosses incised upon them. They range from 40 to 146 grams (1.4 to 5.1 oz) in weight.  Click to enlarge.

I have an average number of stories for you today, including a very interesting video interview involving Kyle Bass.


CRITICAL READS

Manufacturing Weakness Continues: U.S. Economic Data Nears Two-Year Lows

Despite all the talk of a great U.S. economy ready for rebirth now that The Fed has taken its foot off the neck of expansion, U.S. macro-economic data has collapsed (absolutely and relative to expectations) in recent weeks to its lowest since July 2017 – taking on the ugly title of ‘worst economic data in the world’…Click to enlarge.

And things are getting worse. As Knowledge Leaders Capital blog’s Steven Vanelli notes, so far this week, we’ve received a few data points that reinforce the manufacturing slowdown taking place in the U.S.

Industrial production undershot monthly estimates, falling 0.10% when it was expected to rise 0.2%. This brought the 1-year percent change down to 2.8% from a rate about twice that of last September.

Lastly, capacity utilization was reported at 78.8%, coming in 0.3% lower than the 79.1% estimate.

All of this explains why the Bloomberg Industrial Surprise Index – a sub-index of the Bloomberg Economic Surprise Index – has notched down recently — even as stocks near record highs.

This chart-filled story showed up on the Zero Hedge website at 2:53 p.m. on Wednesday afternoon EDT — and another link to it is here.


American retailers already announced 6,000 store closures this year. That’s more than all of last year

This year, U.S. retailers have announced that 5,994 stores will close. That number already exceeds last year’s total of 5,864 closure announcements, according to a recent report from Coresight Research.

Bankruptcies in the retail sector are piling up and chains have aggressively closed under-performing stores. That has led to an uptick in store closures this year.

Payless, Gymboree, Charlotte Russe and Shopko have all filed for bankruptcy this year and will close a combined 3,720 stores, according to the report. The majority of those are because of Payless, which filed for its second bankruptcy in February and said at the time it would shutter 2,100 stores in the United States.

Other retailers, such as Family Dollar, GNC (GNC), Walgreens (WBA), Signet Jewelers (SIG), Victoria’s Secret and JCPenney (JCP), are struggling and are shrinking their store footprints to save money.

Family Dollar will close 359 stores this year, while Signet Jewelers, the parent company of mall stalwarts Kay, Jared and Zales, will close 159.

This news story was posted on the cnn.com Internet site at 1:27 p.m. EDT on Tuesday afternoon — and another link to it is here.


Why Kyle Bass Sees Recession Risk Rising — Keith McCullough/Hedgeye TV

This 1 hour and 4 minute video/audio interview was conducted back on April 8, 2019.  They discuss China, global recession — and why interest rates may head to near zero by 2020.

This is a wonderful interview — and definitely worth your time if you have it.  The thing I found surprising in it was that Bass [along with a lot of other big money managers] did not see the big October to December 24 swoon in the U.S. stock market coming.  It was no surprise to me…or to a lot of others.  And after hearing him say that, I’m wondering what else he [and others] might be missing.

This interview is posted on the hedgeye.com Internet site — and I thank Richard Saler for pointing it out.  Normally I’d save this for my Saturday missive, but I thought it important enough to toss it in to today’s column.


What History Teaches Us About Socialism — Bill Bonner

Our subject: Who’s dumber, more dangerous…

…those who want to reform capitalism and control it?

…Or those who want to do away with it altogether?

The question springs from several recent news items. First, Alexandria Ocasio-Cortez was elected… and New York Magazine came out with “When Did Everyone Become a Socialist?

Then, America’s most successful hedge fund manager, Ray Dalio, claimed that capitalism needed to be fixed…

And then, Financial Times correspondent, Edward Luce, piled on…

Both outright socialists and capitalist reformers have more or less the same goal – to bang, bend, and bamboozle the world into a shape that is more pleasing to them.

This commentary from Bill, filed from Paris, was posted on the bonnerandpartners.com Internet site early on Wednesday morning EDT — and another link to it is here.


Argentine Policymakers “Start to Panic” as Inflation Soars

The Argentine Peso has rallied the last few days – after crashing to a new record low – in what some consider a vote of confidence in central bank and government promises to crackdown on inflation.

However, don’t believe the hype – as Argentine credit markets (far less easy to manipulate than FX) are screaming new lows ahead for the peso…

Prices climbed 4.7 percent in March from the month before, the fastest pace since October and exceeding all eight forecasts in a Bloomberg survey. Annual inflation accelerated to 54.7 percent from 51.3 percent, putting President Mauricio Macri’s re-election bid further at risk.

In response to this surge in inflation, Argentina today said it will freeze prices on 60 food products until October. This follows yesterday’s central bank announcement that it would fix the exchange-rate band for the rest of the year instead of allowing it to depreciate. To prop up the peso, the government’s already selling $60 million a day of the cash it got from the IMF.

In fact, Capital Economics’ Edward Glossop warns that Argentine policymakers are ‘starting to panic’ and ‘resorting to old habits to tame inflation’ ahead of October’s presidential election:

Central bank’s decision to keep the currency band unchanged coupled with an expected announcement of some price controls today “suggest that policymakers are panicking.”

But Bloomberg‘s Sebastian Boyd sums up the farce best: the measures the government and bank are taking are short-sighted and damaging. Price controls and FX manipulation are part of what got Argentina into this mess and are aimed at boosting president Mauricio Macri’s re-election chances — at the expense of economic orthodoxy. It’s a sign of weakness and fear.

This news item put in an appearance on the Zero Hedge website at 2:10 p.m. on Wednesday afternoon EDT — and another link to it is here.


Britain Tries to Confront Russia but Germany Is Being Sensible

As Britain staggers from crisis to crisis, with the Brexit debacle rending the country apart, with its prisons in a “disgraceful” state, a knife crime epidemic, and the doctors of its Health Service at “breaking point” it might be imagined that the government would avoid playing futile military games and concentrate on trying to run the country. But national crises don’t matter to the would-be big-spenders of the UK’s Ministry of Defence whose titular head Gavin Williamson, the paintball strategist, announced on April 3 that Britain would “spearhead” a ‘Joint Expeditionary Force’ in a military mission called ‘Baltic Protector’. The anti-Russia manoeuvres are to involve 2,000 military personnel from the UK and a further thousand from Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Norway and Sweden. (It is notable that Sweden and Finland are supposed to be neutral nations.)

Williamson demonstrates his ineptitude all too frequently, and recently confirmed his confused mental state by stating that “As Britain prepares to leave the E.U., our unwavering commitment to European security and stability is more important than ever. Deploying our world class sailors and marines to the Baltic Sea, alongside our international allies, firmly underlines Britain’s leading role in Europe.” (It is intriguing that he considers Sweden and Finland to be allies of the UK.)

Consider the military budgets of NATO countries. As stated by the International Institute for Strategic Studies, the surge in US spending “was the largest increase in the world in 2018… [and] European nations also contributed to the global trend… Their total spending would – if the aggregate figure of $264 billion were considered on its own – amount to the second largest defence budget in the world. It would be equivalent to 1.5 times China’s official budget ($168 billion), and almost four times Russia’s estimated total military expenditure ($63 billion).”

It is difficult to see how anyone could conclude that Russia, with such modest defence expenditure, could even contemplate waging a war in Europe. There appears to be nothing —neither common sense, pragmatic examination nor consideration of inevitable consequences — that will alter the conviction that instead of strongly desiring trade, mutual prosperity and social improvement, the Kremlin wants its forces to roll across Europe in a latter day Operation Barbarossa.

This very interesting and [I think] worthwhile commentary was posted on the strategic-culture.org Internet site on Tuesday — and I thank Roy Stephens for sending it along.  Another link to it is here.


The Bank of Japan is Now a Top-10 Shareholder in 50% of All Japanese Companies

While traders continue to obsess over daily “China trade deal optimism” headlines, Japan’s central bank is quietly nationalizing its entire market.

The last time we looked at how much of the stock market the Bank of Japan controls, we found that Kuroda’s central bank owned a stunning 75% of all Japanese ETFs as the central bank keeps buying stocks under its ultra-loose monetary policy. Perhaps more importantly, as of March 2018, the Japanese central bank has also become a major shareholder in nearly 40% of listed companies. According to Nikkei calculations at the time, the bank was one of the top 10 shareholders in 1,446 listed companies out of 3,735.

Fast forward to today, when according to the latest BOJ holdings update following even more ETF purchases, the BOJ held over ¥28 trillion ($250 billion) in ETFs as at the end of March, or 4.7% of the total market capitalization of the first section of the Tokyo Stock Exchange. This, of course, in addition to the BOJ’s trillions in Japanese JGB holdings, which at last check were over 100% of GDP and 43% of all outstanding.

It gets better. According to  the latestNikkei calculations, not only has the BOJ also become the top shareholder in 23 companies, including Nidec, Fanuc and Omron, through its ETF holdings, but as of Q1, it was among the top 10 holders for 49.7% of all Tokyo-listed enterprises.

In other words, the BOJ has gone from being a Top 10 holder in 40% Japanese stocks last March, to 50% just one year later.

This amazing, but not entirely surprising, Zero Hedge article appeared on their Internet site at 3:31 p.m. EDT on Wednesday afternoon — and another link to it is here.


A rare look inside the West Point Mint’s massive gold vaults and coin operations

About an hour and a half’s drive north from New York City lies a treasure — the gold kind. But it’s not one that you can go and find.

In fact, you can’t get anywhere near it. Because this treasure belongs to the United States Treasury.

Nearly a quarter of the U.S. government’s gold sits beneath a windowless building on the campus at West Point.

We’ve got approximately 54 million ounces here that we store, which is about 22% of the nation’s gold,” Ellen McCollum says from her office.

McCollum is the Superintendent of the West Point Mint; a facility built the same year as Fort Knox and originally housed the nation’s silver.

Most of that silver was sold off and now, the latest treasury department numbers show West Point is second only to Fort Knox in the amount of government gold in its vaults.

This interesting story from the fox5ny.com Internet site…complete with a very worthwhile 5:49 minute embedded video clip, was posted on their website on Tuesday — and updated yesterday.  It’s the first of two precious metal-related items that I found on the Sharps Pixley website — and another link to it is here.


Germans Hoard More Gold than the Bundesbank

The Germans own about 6.5 percent of the world’s gold holdings. In the past two years alone 250 tons have been added. And the interest continues to grow. But experts doubt that gold is the most lucrative savings option.

The love of Germans for gold is well known. It reaches up to the highest floors: The Bundesbank hoards as much gold as almost any other central bank in the world. Some 3,370 tons are in the Bundesbak’s possession. Only the United States guards an even bigger treasure in the cellars of Fort Knox, namely around 8,130 tons.

But Germany’s citizens own even more gold — more than the Bundesbank and even more than the U.S. The appetite for the precious metal, however, seems unbroken: over the past three years, holdings in coffers and safes in Germany have even risen significantly, and German citizens also want to buy more gold in the coming years.

In total, private individuals in Germany own around 8,918 tonnes of gold. These figures were calculated by researchers from Steinbeis University for travel agencies on the basis of a representative survey of 2,000 adults. About half of it consists of bars and coins and corresponding securities, and just under 4,000 tons are jewelry. A troy ounce of gold (32.1 grams) currently costs about $1,287 dollars or €1,137, resulting in a fortune of about €326 billion, which is bound in Germany in the precious metal.

Compared to the last such survey three years ago, private gold ownership in Germany has increased by about 246 tonnes. Around a quarter of respondents said they had bought gold in the past two years. “The demand driver is the prevailing uncertainty, for example, due to the trade dispute,” says Christof Wilms, head dealer of ReiseBank. Above all, there is a continuing strong demand for physical gold. “Especially wanted are gold bars from 100 grams and bullion coins.”

This interesting gold-related article, which is a translation from German — and filed from Berlin, appeared on the welt.de Internet site on Tuesday sometime.  I found it in a GATA dispatch yesterday — and another link to it is here.  The original German version of the article is linked here.


Romania’s central bank objects to lawmakers’ attempt to repatriate gold reserve

The Budget and Finance Committee of the Chamber of Deputies on April 16 issued a favorable report on the bill drafted by social democrats Liviu Dragnea and Şerban Nicolae that amends law 312/2004 on the functioning of the National Bank of Romania (BNR). The primary goal of this bill is to limit the gold reserves Romania holds abroad.

The draft bill will be voted in the Chamber of Deputies and, if approved, BNR will have to repatriate the gold it keeps at the Bank of England (65% of country’s 103.7-tonne reserves).

Under a last-minute amendment, the share of gold that can be deposited abroad was cut to 0% (from 5%). But the bill has a broader scope: under some of its provisions, BNR has to inform “no later than 20 days” about the occurrence of crisis situations “where the monetary stability, inflation target or macroeconomic policies are at risk”.

BNR can’t fully accept the amendments to its Statute, Adrian Dumitrescu, a senior BNR expert, said during debates at the Chamber of Deputies, according to local Economica.net. Firstly, he argued that any change to its Statute requires “mandatory” consultation of the European Central Bank (ECB) and proper consideration of the opinion issued by the ECB. Secondly, Dumitrescu argues that the amendments are hindering BNR in its duty of managing the country’s gold reserves, which is a responsibility of the central banks according to the European Union Treaty.

Let’s see if this turns out to be a roadblock or not.  The above four paragraphs are all there is to this brief gold-related news item that showed up on the romania-insider.com Internet site on Wednesday sometime — and I found it on the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

Continuing on with the road trip along the Trans-Canada Highway between Cache Creek and Kamloops, B.C., we took a side-road the led to the CN railway junction at Savona alongside Kamloops Lake.  We happened upon a small herd of female and juvenile bighorn sheep — and here are three shots of the group.  The first two are with the 400mm telephoto — and the last one with the walk-around lens to put the herd in some sort of perspective with their surroundings.  They’re almost as common as mule deer in these parts.  Click to enlarge.


The WRAP

It was a ‘nothing’ sort of day yesterday — and no moving averages were broken — and no new intraday lows were set in either gold or silver.  Silver volumes were nothing out of the ordinary, but slightly elevated in gold.  Platinum was up a bit, but palladium was the star performer yesterday.

It’s already 1:47 a.m. EDT on Thursday morning as I type this paragraph — and I note that Ted’s “Midnight Moves” are underway in gold, as ‘da boyz’ have set a new intraday low for this move down in early morning trading in Shanghai.

Here are the 6-month charts for the Big 6 commodities — and except for palladium, there’s not a lot to see.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I see that gold opened unchanged once trading began at 6:00 p.m. EDT in New York on Wednesday evening. That lasted until 9 a.m. China Standard Time on their Thursday morning — and it was tapped a few dollars lower at that point — and as I mentioned above, to a new intraday low for this move down…but not by much. It has been trading quietly sideways since, but was hit for a few dimes more about twenty minutes before the London open — and is down $2.30 the ounce at the moment. Silver followed almost the exact same price path as gold — and it’s down 2 cents currently. Palladium’s downward descent began shortly before 8 a.m. in Shanghai — and that lasted until around 1:30 p.m. CST — and it has ticked a few dollars higher since — and is down 4 bucks. Platinum was sold a bit lower between 8 and 9 a.m. CST — and has traded flat since, but slid a bit in the the last thirty minutes — and is now down 9 dollars as Zurich opens.

Net HFT gold volume is a bit under 41,500 contracts — and there’s only 815 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is pretty quiet at about 6,500 contracts — and there’s 1,059 contracts worth of roll-over/switch volume on top of that.

The dollar index opened unchanged once trading began at 7:44 p.m. EDT in New York on Wednesday evening, which was 7:44 a.m. in Shanghai on their Thursday morning — and began to creep very unsteadily higher from there. The current 97.05 high tick was set at 10:48 a.m. CST — and it has been chopping very unevenly lower since — and is down 4 basis points as of 7:45 a.m. BST in London…8:45 a.m. CEST in Zurich. It’s not doing much at the moment.


It still remains to be seen whether or not the powers-that-be have gold’s 200-day moving average in their sights or not.  I was kind of hoping that they would be satisfied with closing gold below its 100-day m.a. on Tuesday, but that may have been wishful thinking.  We’ll just have to watch the situation and see what develops.

And as I post today’s column on the website at 4:02 a.m. EDT, I note that gold has rallied off its pre-London open low tick — and is now up 70 cents an ounce — and silver is now up 3 cents. Platinum is still down 4 dollars, but palladium has rallied a bit on jumpy price action since the Zurich open — and it’s down only 4 bucks as well.

Gross gold volume has soared to a bit over 62,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is just under 60,000 contracts. Net HFT silver volume has also jumped up…to a bit over 10,000 contracts — and there’s 1,583 contracts worth of roll-over/switch volume on top of that. Those tiny rallies in silver and gold at the London open were met by ‘da boyz’ with all guns blazing.

The dollar index hit its current low tick, such as it was, about twenty-five minutes before the London open — and has rallied a bit since then, but then blasted higher starting minutes before 8:30 a.m. BST — and is now up 16 basis points as of 8:45 a.m. in London/9:45 a.m. in Zurich.

That’s all for today — and I’ll see you here on Friday.

Ed

Gold Was Closed Below Its 100-Day Moving Average

17 April 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price “midnight move” began at 8:00 a.m. China Standard Time on their Tuesday morning — and it was quietly sold lower until a few minutes before 8:30 a.m. in New York.  Then the real engineered price decline got underway.  That lasted like it did on Monday, until five minutes after the equity markets opened in New York — and it crawled a bit higher from there until the 11 a.m. EDT London close.  It was sold back to its low tick of the day around 12:50 p.m. — and then crept a bit higher from that point until trading ended at 5:00 p.m. EDT.

The high and low ticks were recorded by the CME Group as $1,291.70 and $1,275.50 in the June contract.

Gold was closed on Monday at $1,276.50 spot, down $10.90 on the day — and at a new low for this engineered price decline.  Net volume was extremely heavy at just under 313,500 contracts — and there was a bit under 14,000 contracts worth of roll-over/switch volume in this precious metal.

The silver price activity on Tuesday was more ‘volatile’…but the end result was the same, as ‘da boyz’ set the low of the day at the same time as gold…five minutes after the equity markets opened in New York, but it was not a new low for this move down.  From there it chopped quietly higher until 3 p.m. EDT in the thinly-traded after-hours market — and didn’t do a lot after that.

The high and lows in this precious metal certainly aren’t worth looking up.

Silver was closed at $14.975 spot, up a penny on the day.  Net volume was a bit higher than it was on Monday, but only just, at a bit under 58,000 contracts — and there was a bit over 13,500 contracts worth of roll-over/switch volume on top of that.

Platinum was sold a few dollars lower in Far East trading on their Tuesday.  That lasted until around 2 p.m. CST — and it jumped up 6 bucks or so by minutes after 10 a.m. in Zurich.  It was all downhill from there until the low tick of the day was set around 10:25 a.m. in New York…a price point which it revisited about two hours and change later.  Platinum was closed at $879 spot, down 8 dollars from Monday.

Palladium’s high came at the same time as platinum’s…a few minutes after 10 a.m. in Zurich trading.  It had a bit of a wild ride to the downside from there — and the $1,334 spot low tick of the day was set multiple times during the remainder of the day.  It closed off that low by a few dollars at $1,338 spot, down 4 bucks.

The dollar index closed very late on Monday afternoon in New York at 96.94 — and then proceeded to chop very unevenly sideways once trading began at 7:44 p.m. EDT on Monday evening.  It made numerous attempts to break above the 97.00 mark during the Tuesday session — and finally made it stick starting around 10:40 a.m. in New York…but it was a feeble effort.  It crawled very quietly and very unevenly higher from there — and finished the day at 97.04…up 10 basis points from Monday’s close.

It almost goes without saying that, once again, there was no correlation between the currencies — and the engineered price declines in the precious metals yesterday.

Here’s the DXY chart, courtesy of BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.12…and the close on the DXY chart above, was 92 basis points on Tuesday.  Click to enlarge as well.

The gold stocks gapped down at the open — and crawled unevenly lower until 1 p.m. EDT — and then crawled equally quietly higher until around 3:25 p.m.  Then it appeared that the day traders unloaded their positions into the close.  The HUI closed down 2.24 percent.

The silver equities turned in a similar performance, so I shan’t bother repeating myself, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 2.17 percent.  Click to enlarge if necessary.

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

I’m surprised that the silver equities didn’t do better yesterday, considering the fact that the metal itself finished in the green on Tuesday.  I would suspect that some fund unloaded a position in both precious metals yesterday — and it resulted in a similar down day for all.


The CME Daily Delivery Report showed that 91 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.

In gold, of the five short/issuers in total, the only one that mattered was Advantage, with 82 contracts out of its client account.  There were three long/stoppers in total — and the two largest were JPMorgan and Advantage, picking up 78 and 12 contracts for their respective client accounts.

The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in April fell by 560 contracts, leaving 798 still around, minus the 91 mentioned three paragraphs ago.  Monday’s Daily Delivery Report showed that 1,143 gold contracts were actually posted for delivery today, so that means that another 1,143-560=583 gold contracts were added to the April delivery month.  Silver o.i. in April fell by 1 contact, leaving zero left — and Monday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today.

The jury is still out on whether there will be more silver deliveries in April or not.


There was another withdrawal from GLD yesterday, as an authorized participant took out 56,654 troy ounces.  There were no reported changes in SLV.

Since the beginning of the month, there has been 1,028,487 troy ounces of gold taken out of GLD.  Over the same time period, there has only been 133,817 troy ounces of silver withdrawn from SLV — and you have to ask yourself why that is so.

There was a tiny sales report from the U.S. Mint on Tuesday.  They sold 500 one-ounce 24K gold buffaloes — and 500 one-ounce platinum eagles.

There was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.

It was far busier in silver of course, as 1,638,751 troy ounces were received — and 616,243 troy ounces were shipped out.  In the ‘in’ category, there was one truckload…599,763 troy ounces…received at CNT — and another truckload…559,531 troy ounces…was dropped off at JPMorgan.  The remaining 479,456 troy ounces was left outside the vault door at Canada’s Scotiabank.  All the ‘out’ activity was one truckload…613,272 troy ounces…that departed CNT.  The link to all this activity is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They reported receiving 1,000 of them — and shipped out 1,180.  All this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Beau Street Hoard, found in Bath, Somerset, is the fifth-largest hoard ever found in Britain and the largest ever discovered in a British Roman town. It consists of an estimated 17,500 silver Roman coins dating from between 32 B.C. and 274 A.D. The hoard was found on Beau Street about 150 metres (490 ft) from the town’s Roman Baths, built when Bath was a Roman colony known as Aquae Sulis.

The Beau Street Hoard is the largest hoard ever found in the U.K. by a professional archaeologist. The coins were found fused together into a large block.  It was secreted under the floor of a Roman building near the face of a masonry wall, within a small oval pit measuring about 40 cm × 30 cm (16 in × 12 in). The find’s location makes it highly unusual, as hoards more typically come from rural locations. It was thought initially that the hoard comprised up to 30,000 coins but the estimated number was subsequently reduced to around 17,400. The hoard appears to have been deposited towards the end of the 3rd century A.D…coins spanning a period from 32 B.C. to 274 A.D. have been identified by British Museum conservators.

When the hoard was discovered it was believed that it had been deposited in a wooden box which had since rotted away. The position of the hoard was recorded and then placed into a wooden crate as a single block so that it could be lifted out intact by a crane for later examination at the British Museum. X-ray analysis of the block of coins by Southampton University found that the coins had been stored in a number of leather bags. Six bags were visible on the X-rays, and two more were discovered as the hoard underwent conservation. Traces of the leather are still visible, having been partially protected from decay by contact with the copper coins, which repelled the bacteria that would otherwise have destroyed it. Each of the coins was then cleaned by manual and chemical processes to enable identification.  There’s only this one picture — and the ‘click to enlarge‘ feature doesn’t help with it.

Another very quiet news day — and I have very little for you.


CRITICAL READS

U.S. Industrial Output Contracts in March as Auto Production Slumps

Having slipped for two consecutive months, US Manufacturing production was expected to modestly rebound in March (by 0.1% MoM) but it failed, ending unchanged.  Click to enlarge.

However, headline industrial production data was not just worse than expected but contracted by 0.1% MoM in March…Click to enlarge.

The biggest drivers were Mining which fell 0.8% in March after no change in February, and Motor vehicles and parts production, which tumbled 2.5% in March to the lowest level since July. Q1 saw auto production slide 6.9% – the biggest drop since Oct 2014.

Capacity utilization fell to 78.8% from 79% in February (revised down from 79.1%).

Manufacturing output fell at a 1.1 percent annual rate in the first quarter, the worst performance since late 2017.

As Bloomberg notes, the data signal further manufacturing softness as producers cope with an inventory buildup, continuing uncertainty around trade and a dimming global growth outlook.

This 3-chart Zero Hedge article was posted on their website at 9:28 a.m. EDT on Tuesday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.


What is Bank of America Seeing: Credit Loss Provision Spikes to 6 Year High

There was some good and some not so good news in Bank of America’s just reported Q1 earnings report. On one hand, the bank unveiled that its quarterly profit rose 6% to $7.3 billion, a new all time high, even as revenues dipped with the company trimming some more fat (and/or muscle) as operating expenses dropped by 4% to offset the continued shrinkage in the bank’s trading revenues (all of which was discussed previously).

And while the rest of BofA’s results were generally in line if on the soft side, there was one aspect of the quarterly report that was especially notable, and it had to do with the bank’s asset quality.

Here, what was remarkable is that even as the economy is reportedly getting stronger with better consumer trends, Bank of America bumped up its provision for credit losses to just above $1 billion, or $1.013BN to be specific, up over $100MM from both a year earlier and Q4. This was the highest credit loss provision number since in 6 years, or Q2 2013.

What was also notable, is that this increase took place even as net charge-offs remained relatively stable and as the bank’s total nonperforming loans declines by $0.1BN to $4.9BN, “driven by improvements in consumer.”

Which begs the question: if the economy is so strong and the bank’s NPLs are declining, just what is BofA seeing to be raising its loss provision to a 6 year high?

This brief 1-chart Zero Hedge article put in an appearance on their Internet site at 9:15 a.m. on Tuesday morning EDT — and it’s the second contribution in a row from Brad Robertson.  Another link to it is here.


Dollar Dominance Under Multiple, Converging Threats — Jim Rickards

For years, currency analysts have looked for signs of an international monetary “reset” that would diminish the dollar’s role as the leading reserve currency and replace it with a substitute agreed upon at some Bretton Woods-style monetary conference.

That push has been accelerated by Washington’s use of the dollar as a weapon of financial warfare, including the application of sanctions. The U.S. uses the dollar strategically to reward friends and punish enemies.

The use of the dollar as a weapon is not limited to trade wars and currency wars, although the dollar is used tactically in those disputes. The dollar is much more powerful than that.

The dollar can be used for regime change by creating hyperinflation, bank runs and domestic dissent in countries targeted by the U.S. The U.S. can depose the governments of its adversaries, or at least blunt their policies without firing a shot.

But for every action, there is an equal and opposite reaction.

As the U.S. wields the dollar weapon more frequently, the rest of the world works harder to shun the dollar completely.

This worthwhile commentary from Jim showed up on the dailyreckoning.com Internet site on Tuesday sometime — and another link to it is here.


The U.S…Japan on a Larger Scale — Jim Rickards

In my 2014 book, The Death of Money, I wrote, “The United States is Japan on a larger scale.” That was five years ago.

Last week, prominent economist Mohamed A. El-Erian, formerly CEO of PIMCO and now with Allianz, wrote, “With the return of Europe’s economic doldrums and signs of a coming growth slowdown in the United States, advanced economies could be at risk of falling into the same kind of long-term rut that has captured Japan.”

Better late than never! Welcome to the club, Mohamed.

Japan started its “lost decade” in the 1990s. Now their lost decade has dragged into three lost decades. The U.S. began its first lost decade in 2009 and is now entering its second lost decade with no end in sight.

What I referred to in 2014 and what El-Erian refers to today is that central bank policy in both countries has been completely ineffective at restoring long-term trend growth or solving the steady accumulation of unsustainable debt.

In Japan this problem began in the 1990s, and in the U.S. the problem began in 2009, but it’s the same problem with no clear solution.

Another interesting commentary from Jim that put in an appearance on the dailyreckoning.com Internet site on Tuesday as well — and another link to it is here.


It’s Disfigured, But Still Standing”… — Bill Bonner

A sad day in Paris. In this, the holy week of Christendom… one of its most sacred and beautiful monuments caught fire. The conflagration was reportedly brought under control around 3 a.m.

And when dawn came, Parisians found Notre Dame “disfigured, but still standing.” Its oak beams – dating from the 12th century – were charred and still smoking… its roof had caved in.

It’s “catastrophic,” says a friend who lives nearby.

Adolf Hitler tried to destroy Notre Dame. He sent the order to his man on the scene, General Dietrich von Choltitz, to blow up all the city’s monuments, its bridges, its railroad stations – everything.

He wanted the city leveled. He knew the allies would take Paris soon (they were advancing toward it from Normandy), but Hitler insisted that Paris be “complete rubble” when they arrived.

On the 24th of August, 1944, Hitler telephoned von Choltitz. “Brennt Paris?” (is Paris burning) he asked.

But by then, two things had changed. First, von Choltitz saw which team the gods of war were on… and he had no trouble imagining himself in front of an allied military tribunal or a firing squad after it was over.

He preferred to face the music as the “savior of Paris” rather than its destroyer.

This very interesting commentary from Bill was posted on the bonnerandpartners.com Internet site on Tuesday morning EDT — and another link to it is here.


Italian banking major to pay hefty U.S. fine for Iran sanctions-busting

European subsidiaries of Italy’s biggest bank UniCredit have pleaded guilty to U.S. charges of violating sanctions against Iran and other countries. The lender has agreed to pay $1.3 billion to settle the six-year probe.

UniCredit’s units in Germany, Austria and Italy admitted to illegally moving of hundreds millions of dollars via the US financial system on behalf of sanctioned entities, according to the U.S. Treasury Department. The violations reportedly included sanctions programs against weapons of mass destruction proliferation.

The resolution, which is among the largest ever related to U.S. sanctions laws, followed last week’s $1.1 billion settlement reached by London-based banking multinational Standard Chartered with American and British authorities over similar misconduct.

The latest case revealed that UniCredit’s subsidiary in Germany processed more than 2,000 payments totaling over $500 million through U.S. financial institutions. In addition, over two years through 2012 all the three of the bank’s units reportedly carried out transactions, withholding information on sanctioned persons or countries from the U.S. authorities.

The U.S. Treasury Department noted that the illegal cash proceedings were carried out to several states subject to U.S. penalties, including Burma, Cuba, Libya, Sudan, and Syria.

It will be interesting to see if the Italian government has anything to say about it.  This news item appeared on the rt.com Internet site at 10:17 a.m. Moscow time on their Tuesday morning, which was 3:17 a.m. in Washington — EDT plus 7 hours.  I thank Larry Galearis for pointing it out — and another link to it is here.


I didn’t find any precious metal stories that I thought worth posting.


The PHOTOS and the FUNNIES

These two photos were taken overlooking the Thompson River just off the Trans-Canada Highway between Cache Creek and Kamloops, B.C. — and like any river that flows over fairly flat terrain, regardless of its size, it meanders.  Both photos were taken looking generally east.  In the first shot, you can see what remains of the old road between these two population centers before the Trans-Canada Highway came into being after WW2.  Click to enlarge for both.


The WRAP

Although both silver and gold were quietly sold lower in Far East and morning trading in London on their respective Tuesdays, ‘da boyz’ saved their real bag of tricks until a minute or so before 8:30 a.m. in New York trading…with gold plunging below its 100-day moving average in the process.

The fact that they didn’t set a new intraday low in silver was somewhat of a surprise, although there’s only so much silver blood that they can get out even the dumbest of the Managed Money traders.  We may [or may not] have seen that limit yesterday.  Time will tell.

With gold now below its 100-day moving average, it remains to be seen if the powers-that-be will go after its 200-day moving average.  Can they do it, you ask?  Well, as I think Ted Butler would say at this point…”it’s their game — and they can do anything they want.”  He would be right about that.

Not surprisingly, gold volume was enormous yesterday — and not so much in silver obviously, as no new low was made in that precious metal.  But — and you can take this to the bank — the commercial traders were the ones that started the engineered price decline yesterday morning, and it was the Managed Money traders that were selling longs and going short — and it was the commercial traders [‘da boyz’] that were gobbling up the other side of every one of these trades that they could get their hands on.  This is Ted’s position on this — and he’s 100 percent correct.

The Zero Hedge story on this yesterday was very misleading, but people lap this stuff up like it was The Gospel.  Just because a hyperbole-laced story appears on their website, doesn’t mean that it’s correct.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  The new intraday low and close for gold should be noted.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price traded quietly sideways in Wednesday morning trading in the Far East. But starting around noon China Standard Time, the gold price began to edge higher, but got turned a bit lower a few minutes after the 2:15 p.m. afternoon gold fix in Shanghai — and is currently up $1.30 the ounce. It was about the same for silver — and it’s up 4 cents. Ditto for platinum — and it’s up 3 bucks. Palladium has been edging very unevenly higher in Far East trading — and it’s down a dollar as Zurich opens.

Net HFT gold volume is a bit over 48,000 contracts already — and there’s 1,896 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is just about 11,200 contracts — and there’s 1,592 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened up 3 basis points once trading began at 7:44 p.m. EDT in New York on Tuesday evening. It hit its current 97.12 high tick around 8:35 a.m. CST on their Wednesday morning — and it has been a downhill ride since going into the 2:15 afternoon gold fix in Shanghai. It has rallied a bit since then — and is currently down 10 basis points as of 7:45 a.m. BST in London…8:45 a.m. CEST in Zurich.


Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and it should be a dandy.  I’m not even going to hazard a guess at any numbers, as Ted is the real authority on this — and I’ll wait to see what he has to say in his mid-week column to his paying subscribers this afternoon.

And as I post today’s missive on the website, I note that all four precious metals are higher as the first hour of London and Zurich trading draws to a close — and the dollar index heads lower. Gold is up $1.80 — and silver is now up 7 cents. Platinum and palladium are up 7 and 10 dollars respectively.

Gross gold volume is coming up on 62,500 contracts — and minus what little roll-over/switch volume there is, net HFT silver volume is just under 58,500 contracts. Net HFT silver volume is coming up on 14,300 contracts — and there’s 1,883 contracts worth of roll-over/switch volume in this precious metal. Based on these volume numbers, these ‘rallies in both silver and gold are not going unopposed.

The dollar index tick higher after the afternoon gold fix in Shanghai lasted about thirty minutes — and has rolled over since. And as of 8:45 a.m. in London…9:45 a.m. in Zurich, the dollar index is down 21 basis points.

That’s it for yet another day — and I’ll see you here tomorrow.

Ed

“Midnight Moves” & Salami Slicing Once Again

16 April 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Gold’s tiny rally attempt at the 6:00 p.m. EDT open in New York on Sunday evening ran into ‘something’ right away — and it was sold generally lower until 1 p.m. BST in London/8 a.m. EDT in New York.  It rallied about three dollars from that juncture going into the 8:20 a.m. COMEX open, but ran into ‘da boyz’ at that point.  Its low tick — and new intraday low for this move down, came about five minutes after the equity markets opened in New York on Monday morning.  From there it rallied until 12:50 p.m. EDT — and was then sold lower into the 1:30 p.m. COMEX close.  The price traded virtually ruler flat into the 5:00 p.m. close from there.

Despite all the movement, gold traded in a ten dollar price range on Monday — and the high and low ticks aren’t worth looking up.

Gold was closed in New York yesterday at $1,287.40 spot, down $2.40 on the day.  Net volume was a bit heavier than normal, but nothing earthshaking, at a bit under 222,500 contracts — and there was a bit over 11,000 contracts worth of roll-over/switch volume in this precious metal.

The price path for silver was somewhat similar, at least up until the 8:00 a.m. BST London open — and from that juncture it chopped quietly sideways until the COMEX open in New York yesterday morning.  From that point it traded exactly the same as gold — and its low tick…and a new low for this move down…came at 9:35 a.m. EDT as well.  It should be carefully noted that silver was capped at the same time as gold, just as it was about to break above $15 spot.  It was sold a bit lower until around 2 p.m. in after-hours trading and, like gold, traded flat from there until trading ended at 5:00 p.m. EDT.

The low and high ticks in silver really aren’t worth looking up, either…but here they are anyway…$14.99 and $14.795 in the May contract.

Silver was closed on Monday afternoon EDT at $14.965 spot, up 1.5 cents from Friday.  Net volume was reasonably heavy, but nothing earthshaking either, at a bit over 60,500 contracts — and there was just under 16,000 contracts worth of roll-over/switch volume on top of that.

In most respect that mattered, platinum was forced to trade in a similar fashion as gold and silver on Monday, so I don’t need to repeat myself for a third time.  Platinum was closed at $887 spot, down 3 dollars on the day.

Palladium came under quiet price pressure about two hours after trading began at 6:00 p.m. EDT in New York on Sunday evening — and it chopped quietly lower for the rest of the Monday session.  It also got sold lower around 1 p.m. EDT in COMEX trading, but that tiny decline was mostly lost in the general price action.  Once the COMEX session ended at 1:30 p.m…it didn’t do a lot after that.  Palladium finished the Monday session in New York at $1,342 spot, down 10 bucks from its close on Friday.

The dollar index closed very late on Friday afternoon in New York at 96.96 — and opened down 3 basis points once trading began at 6:34 p.m. EDT in New York on Sunday evening.  It headed quietly and unevenly lower from that point until about 8:35 a.m. BST in London — and then chopped sideways until around 9:05 a.m. in New York.  It then proceeded to chop quietly and unevenly higher until around 2:35 p.m. EDT — and it edged a few basis points lower until trading ended at 5:15 p.m.  The dollar index finished the day at 96.94…down 2 basis points from its Friday close.

Needless to say, it was yet another day where the currencies had nothing to do with the precious metal price action, as that was all paper trading in the GLOBEX/COMEX futures market.

Here is the DXY chart from BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…96.03…and the close on the DXY chart above, was 91 basis points on Monday.  Click to enlarge as well.

The gold shares gapped down a bit at the open — and then proceeded to chop quietly higher and back into positive territory.  Their respective highs came when the gold price was capped in very late COMEX trading on Monday — and they edged a bit lower into the close from there.  The HUI closed up 0.19 percent.

It was the same general price action in the silver equities, except their respective highs came a few minutes before noon in New York — and from that juncture they were sold quietly and unevenly lower until trading ended at 4:00 p.m. EDT.  Nick Lairds’ Intraday Silver Sentiment/Silver 7 Index closed higher by 0.54 percent.  Click to enlarge.

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

I was very happy to see the positive price action in the precious metal equities yesterday, as it was obvious that strong hands were the buyers yesterday — and they equally obviously overwhelmed whatever selling pressure was around.


The CME Daily Delivery Report showed that 1,143 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, the only short/issuer that mattered was Citigroup, with 1,142 contracts out of its in-house/proprietary trading account.  The only long/stopper that mattered was JPMorgan, with 1,005 for its client account — and in non-consequential second place was Advantage, with 91 contracts for its client account as well.

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 April rose yet again, as it had to, for the third day in a row…this time by 492 contracts, leaving 1,358 still around, minus the 1,143 contracts mentioned three short paragraphs ago.  Friday’s Daily Delivery Report showed that 10 gold contracts were actually posted for delivery today, so that means that 492+10=592 more gold contracts were added to the April delivery month.  Silver o.i. in April fell by 1 contract, leaving zero left.  Friday’s Daily Delivery Report showed that 1 silver contract was posted for delivery today, so there are zero silver contracts left to deliver in the April delivery month.

And as I mentioned in my Saturday column, I’ll be very surprised if that proves to be the last silver contract delivered in April.  But if that does turn out to the case, it will be the earliest in the month that deliveries have concluded in silver or gold…ever — and not by a small amount.  Normally, deliveries are concluded on the last, or second last delivery day of the month.  Why does it appear to be turning out so different this month?


There were withdrawals from both GLD and SLV on Monday.  In GLD, an authorized participant took out 122,753 troy ounces — and in SLV, and a.p. removed 749,827 troy ounces, which was within 22 troy ounces of the amount that was deposited last Friday.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, April 12 — and this is what they had to report.  There were small amounts withdrawn from both.  In gold, it was 1,125 troy ounces — and their silver ETF shed 36,974 troy ounces.

There was no sales report from the U.S. Mint on Monday.

There was no in/out movement in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.

The only activity in silver last Friday, was one truckload…609,395 troy ounces, that was shipped out of CNT.  The link to that is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  There was 4,115 kilobars received — and none were shipped out.  This all happened at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.

Here are the usual two charts that Nick Laird passes around on the weekend.  They show the totals of all known gold and silver depositories, ETFs and mutual funds at the close of business on Friday, April 12.  For the week just ended, there was a net 154,000 troy ounces of gold taken out — and in silver, that number was 763,000 troy ounces.  Click to enlarge for both.

I don’t have all that many stories/articles for you today.


CRITICAL READS

Uncle Sam Takes More Than Taxes From the Middle Class — Bill Bonner

The latest budget proposal calls for a 20% increase over Obama-era spending, with $2 trillion more in debt added in the last 24 months.

As David Ricardo demonstrated 200 years ago, the cost is the same, whether it is taken from people directly in taxes, or embezzled from them in the form of debt.

But as the number of PhD economists has gone up, the public’s awareness of basic economics has gone down.

Now, people are ready to believe six impossible things before breakfast. They think that, somehow, the Fed will take care of it… or that the rich will pay it… or that we will grow our way out of it.

None of those things will happen. Instead, the tax cut was a typical win-lose deal from the feds, taking money from the many to pay off the few. The winners were people who owned businesses, such as your editor. We benefited from substantial tax reductions.

The losers were middle-income consumers and taxpayers… who will eventually pay higher taxes, higher prices, with lower incomes.

And the bill is coming due remarkably fast.

This commentary from Bill showed up on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.


Time to Become a Hindu — Jeff Thomas

For centuries, East Indians have regarded gold as the primary source of wealth. All Indians own gold if they can afford to. They keep it as close as possible, sometimes in coin form, but often as jewellery, since “wearing wealth” means that it can be kept very close. They’re often especially reluctant to trust banks to hold their gold.

Hindus make up 80% of India’s population and, to Hindus, gold is sacred. Lakshmi is the Hindu goddess of purity, prosperity and good fortune. Her symbol is gold, so gold plays an important part in Hindu ceremonial occasions and Hindus donate large amounts of gold to the temples in Lakshmi’s name.

In recent years, the Indian government has tried one ploy after another to gain control of the temples’ gold. The most recent ploy was a programme whereby the temples could deposit the parishioners’ gifts to Lakshmi in banks. The gold would then be melted down and the temples would be given cash in an amount that would exceed the value of the gold.

Sounds pretty good. In many countries, the average individual would be shortsighted enough to go for it, thinking that he would have a few extra rupees. Internationally, even some Prime Ministers have thought it a good idea. UK PM Gordon Brown sold England’s gold at the bottom of the market between 1999 and 2002. More recently, Canadian PM Justin Trudeau sold off all of Canada’s gold during a major downward correction as soon as he took office. (Two excellent examples of proof that it’s possible to be elected the leader of a major country and still be an imbecile.)

But, returning to India, those running the temples tend to be distrustful of governments. Most are also distrustful of bank storage, although some do store gold in banks. The majority of the gold that they hold, however, remains in the temples.

This interesting commentary from Jeff put in an appearance on the internationalman.com Internet site on Monday morning sometime — and another link to it is here.


Foreigners Dump a Record $205BN in U.S. Stocks in the Past Year

Led by selling from Belgium (whose Euroclear is often seen as a proxy for China), down $10.1 BN…Click to enlarge.

…foreign central banks dumped Treasuries for the 5th consecutive month (-$157bn), and 10th of last 11 months (-$252bn)…although much of this was offset by buying from private accounts.  Click to enlarge.

But the real action was away from the bond market, where TIC data showed that foreigners sold U.S. stocks for a record 10th consecutive month…and 12 of the past 13:

The aggregate $205 billion sale in the past 12 months, is the largest liquidation of U.S. equities by foreigners on record.

This chart-filled Zero Hedge article was posted on their Internet site at 4:19 p.m. on Monday afternoon EDT.  I thank Brad Robertson for sending it our way — and another link to it is here.


Salvini is Positioning Italy for Confrontation — Tom Luongo

Italy’s Matteo Salvini is riding high right now. Having weathered a couple of cheap legal moves to derail his assault on the European Parliament this May, Salvini is working to galvanize Euroskepticism across the continent into a viable political force.

He’s got his work cut out for himself.

But, he has at least two major allies. Marine Le Pen of the National Rally in France and Viktor Orban, the leader of Hungary. Salvini and Le Pen met last week to announce they would be campaigning together for the European elections as well as a major summit in Milan soon.

This is only the beginning, however.

I’ve been saying for over a year now that Salvini needs to be the person who lays the foundation for a wholesale revolt against the European Union and Italy’s participation in the Euro.

His Lega party have skyrocketed in the polls, reversing the dynamic between it and coalition partner Five Star Movement. It’s a coalition that is of the kind which frightens the political establishment in Europe because it isn’t formed on the traditional left-right false divide.

It is a populist one united on the common cause of overthrowing the corrupt, corporatist system which most western governments are fronts for.

This very interesting commentary from Tom showed up on the strategic-culture.org Internet site last Wednesday — and I thank Roy Stephens for pointing it out over the weekend.  Another link to it is here.


Why won’t Jim Grant ever say gold is rigged like stocks and interest rates?

Thanks to Zero Hedge for calling attention tonight to the interview of the Zurich-based financial letter The Market with James Grant, editor of Grant’s Interest Rate Observer, wherein Grant remarks that the Federal Reserve is manipulating the stock market up and interest rates down. Grant calls the latter rigging “very near to a crime.”

But, as always, Grant has nothing to say about the rigging of the gold market by government, which seems especially strange since gold traditionally has maintained an inverse relationship with real interest rates. That is, in the old days low real rates meant high gold prices, and vice versa.

The closest Grant gets in the interview to the paradox of the gold price is to call it “a little bit of a disappointment.” He adds: “It seems as if gold were not reading the newspapers. But seriously, I really wish gold had done better, and I wish it were doing better. Yet I’m as convinced as ever that gold is an attractive and rational alternative to these monetary shenanigans and to the consequences of 10 years of artificially imposed ultra-low interest rates. Unfortunately, when this great bet pays off is hard to say.”

A few years ago Grant and your secretary/treasurer were invited to speak at a meeting of the Committee for Monetary Research and Education, held as always in New York. Following Grant’s remarks and regretting that he had not addressed manipulation of the gold market, your secretary/treasurer said that since there were no longer any interest rates for his financial letter to observe, Grant might do the world a service to examine the documentation of gold market manipulation, which your secretary/treasurer has sent to him from time to time.

Despite his longstanding criticism of central banking and his inclination to gold, Grant is frequently quoted by mainstream financial news organizations and often appears on financial television news networks. So does he really believe that governments are diddling with stock prices and interest rates but not gold? Or does he fear or has he been told that his respectability with mainstream news organizations will disappear if he carries his complaint about market manipulation one critical step further?

I would suspect that to be the case, dear reader.  This worthwhile commentary from Chris Powell appeared on the gata.org Internet site on Sunday evening — and another link to it is here.  Reader Jim Gullo sent me the original Zero Hedge article on Sunday afternoon — and it’s headlined “Jim Grant: “The World-Wide Suppression of Interest Rates Has Been a Crime


Venezuela Sells $400 Million in Gold Amid Sanctions, Sources Say

Venezuela sold about $400 million in gold despite a growing international push to freeze the country’s assets, according to two people with knowledge of the matter.

The amount, which would equal almost 9 tonnes, was reflected by a drop in the bank’s total reserves, which fell to $8.6 billion on April 12, according to data provided by the central bank. About $5.1 billion of that is gold.

A central bank press official didn’t immediately respond to requests for comment on the sale Monday.

The sale could mean President Nicolas Maduro has found a way to skirt the economic blockade. Maduro has blown through reserves, selling gold to firms in the United Arab Emirates and Turkey, as sanctions increasingly cut off his authoritarian regime from the global financial system. While he maintains a stranglehold on power on the ground — including the military and government bureaucracy — opposition leader Juan Guaido is using support from dozens of countries to slowly seize Venezuela’s financial assets abroad.

This gold-related news item was posted on the Bloomberg website at 12:43 p.m. Pacific Daylight Time on Monday afternoon — and I plucked it from a GATA dispatch.  Another link to it is here.


World’s Largest Primary Silver Miner Production Plunges

Silver production at the world’s largest producer fell significantly in the first quarter of the year.  Fresnillo PLC reported a decrease in silver production in Q1 2019 versus the same period last year, due to lower ore grades and reduced volumes of processed ore at its Fresnillo Mine.

Furthermore, while silver production fell the most at its Fresnillo Mine, the company also experienced declines at its Saucito and San Julian Mines. Total silver production at Fresnillo PLC dropped by 15% in the first quarter compared to the same quarter in 2018.

Total silver mine supply at the company fell to 13.1 million oz (M oz) in Q1 2019 versus 15.4 M oz in Q1 2018.  According to the press release, the majority of the decline was due to expected lower ore grades and throughput at its main flagship mine, Fresnillo Mine.  The Fresnillo Mine’s silver production fell 1.4 M oz (-31%), while the San Julian dropped 615,000 oz (-17%), followed by loss of 500,000 oz (-10%) at the Saucito Mine.

So, as we can see, silver production fell across the board at all of the company’s mines.

Surprisingly, another primary silver producer also reported a substantial decline in production. Endeavour Silver saw its production fall a stunning 21% in the first quarter.

Silver production and Endeavour plunged to 1.07 M oz in Q1 2019 versus 1.35 M oz during the same period last year.

Well, dear reader, drops in production they are to be sure, but the total of both companies production declines total well under one day’s worth of world silver production, so it’s important to put this news item in some perspective.  This rather breathless 2-chart silver-related news story put in an appearance on the srsroccoreport.com Internet site on Sunday sometime — and I thank Brad Robertson for sending it along.  Another link to it is here.


Tocqueville Gold Strategy First Quarter 2019 Investor Letter: What If “Whatever It Takes” Isn’t Enough? — John Hathaway

Reasons to buy gold and precious metals mining stocks have been numerous for many years.  Rarely, however, have so many of these considerations been as timely as now.  To summarize, and connect as many dots as possible in a brief note, here are ten that come to mind (all in our opinion):

  1. U.S. fiscal situation is dreadful and promises to worsen
  2. Rising populism
  3. Positive supply and demand fundamentals
  4. Global economy weakening
  5. Monetary policy turning dovish globally
  6. Inflation is rising
  7. Gold is undervalued and unloved
  8. Gold has gone through a multi-year correction/base-building process
  9. Gold is a proven diversifier, risk mitigator, and capital protector
  10. Outlier/Systemic Risks

It is quite possible, in our view, that ground zero for the next systemic crisis will be sovereign credit itself.  The promise to do “whatever it takes” in the application of monetary and fiscal policies, no matter how drastic or innovative, could appear impotent.  Since Mario Draghi’s famous pronouncement of 7/26/12, financial markets have been buoyed, in our opinion, by the expectation that public policy would always backstop downside exposure to a possible repeat of the 2008 global financial crisis.  We are not so sure that investor faith in Draghi’s promise is well founded.  More debt issuance, more deeply negative interest rates, wider budget deficits, and overt money-printing (Modern Monetary Theory) have, in our opinion, already run into the brick wall of diminishing returns.  If so, exposure to gold, even in small proportions – the only systemically bulletproof asset that is both liquid and readily deployable – will, in our opinion, prove highly satisfactory.

This quarterly commentary from John, which never breaths a word about the real reason why precious metal prices remain stagnant, appeared on the tocqueville.com Internet site on Monday, even though it’s dated last Friday.  Another link to it is here.


The PHOTOS and the FUNNIES

I finally got the photos of a bald eagle that I’d been waiting for months to get.  The first shot is with my 24-70mm walk-around lens at its full 70mm ‘telephoto’ setting, as I just wanted to get the shot in case it flew away before I had the 400mm strapped on.  The second shot is with the aforesaid mentioned lens attached.  This is the best of the four photos I kept.  And in case you’re thinking I was out in the middle of nowhere when I took these…I shot them from the comfort of the driver’s seat of my car in the parking lot of a rather run-down motel in Cache Creek on March 10. But judicious cropping makes them seem otherwise.  Click to enlarge for both.


The WRAP

It was another day of Ted’s “Midnight Moves” and salami slicing again on Monday.  Gold set a new intraday low for this move down — and to a new low going back to the end of the first week in March.  In silver, the new intraday low that ‘da boyz’ set, was at a price going back to December 24 of last year.  And in platinum, they set a new intraday low for this move down as well.

But despite the rather non-impressive volumes in both silver and gold, it was…as Ted said on the phone yesterday…another day where the commercial traders were going long and covering short positions — and the brain-dead Managed Money traders were doing the opposite.

But it was comforting to see that the precious metal equities managed to close in positive territory yesterday.

Here are the 6-month charts for the Big 6 commodities — and the above mentioned changes in all three precious metals should be noted.  Click to enlarge.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price, after crawling a few dimes higher in the first two hours of trading in New York on Monday evening, began the ‘midnight move’ at 8 a.m. China Standard Time on their Tuesday morning — and the current low tick was set at 2 p.m. CST. It has edged a bit higher since — and is currently down $1.50 an ounce. The price path for silver was identical, but silver is now back at unchanged currently. In most respects the price action in platinum was the same — and it’s now up a dollar at the moment. Palladium didn’t do much until shortly after 10 a.m. CST — and then it began to edge unevenly higher from there — and is up 4 dollars as Zurich opens.

Net HFT gold volume is about 38,000 contracts — and there’s only 578 contracts worth of roll-over/switch volume in that precious metal. Net HFT silver volume is around 9,300 contracts — and there’s 951 contracts worth of roll-over/switch volume on top of that.

The dollar index has been basically chopping sideways even since trading began at 7:44 p.m. EDT in New York/7:44 a.m. CST in Shanghai. It did make it above the 97.00 mark very briefly just minutes before 10 a.m. CST…but has fallen back — and is sitting at down 2 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and despite the fact that it is Good Friday as well, the report will be issued at its usual time on that date.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that all four precious metals haven’t done much in the first hour of London trading, although gold and silver are a bit lower. Gold is now down $2.80 an ounce — and silver is down 4 cents. Platinum is up 3 dollars — and palladium by 5.

Gross gold volume is coming up on 51,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is around 49,500 contracts. Net HFT silver volume is just under 12,000 contracts — and there’s 1,229 contracts worth of roll-over/switch volume in that precious metal.

The dollar index continues to chop quietly sideways — and is down 3 basis points as of 8:45 a.m. GMT in London…9:45 a.m. CEST in Zurich.

That’s all I have for today — and I’ll see you here tomorrow.

Ed

Doug Noland: “Such a Precarious Time in History”

13 April 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much of anything on Friday — and its high tick of the day, if you wish to dignify it with that name, came a few minutes before 11 a.m. in London.  From there it was mostly quietly and unevenly down hill until trading ended at 5:00 p.m. EDT in New York.

The low and high ticks certainly aren’t worth looking up.

Gold finished the Friday session at $1,289.80 spot, down $2.10 on the day.  Net volume was pretty quiet at just under 185,500 contracts — and there was a hair under 8,000 contracts worth of roll-over/switch volume on top of that.

The silver price didn’t do much of anything until around 12:30 p.m. China Standard Time on their Friday afternoon.  From that juncture it crawled rather unevenly higher [and back above $15 spot briefly] until shortly after the afternoon gold fix in London and, like gold, was sold quietly lower for the remainder of the New York session.

The low and high ticks aren’t worth looking up in this precious metal, either.

Silver was closed at $14.95 spot, up a penny on the day.  Net volume was fairly impressive at just under 60,500 contracts — and there was a bit over 11,000 contracts worth of roll-over/switch volume in this precious metal.

Platinum trade very unevenly sideways in Far East trading — and that state of affairs lasted until the 2:15 p.m. CST afternoon gold fix in Shanghai.  It rallied unsteadily from that point until the 8:20 a.m. COMEX open in New York — and at that juncture, suffered the same fate as both silver and gold.  Platinum was closed at $890 spot, down 2 bucks on the day.

Palladium chopped quietly sideways until the COMEX open in New York on Friday morning — and then had a bit of a down/up/down move for the rest of the Friday session.  It was closed at $1,352 spot, up 4 dollars.

The dollar index closed very late on Thursday afternoon in New York at 97.18 — and opened down 4 basis points points once trading began at 7:44 p.m. EDT on Thursday evening, which was 7:44 a.m. China Standard Time on their Friday morning.  Within thirty minutes it was back at unchanged — and began to decline quietly and unevenly lower until the 96.75 low tick was set around 9:05 a.m. in New York.  It began to chop quietly higher from there, with all that gains that mattered in by around 12:45 p.m. EDT — and the index didn’t do much after that.  The dollar index finished the Friday session at  96.97…down 21 basis points from Thursday’s close.

That decline in the dollar index certainly wasn’t allowed to manifest itself in the prices of the precious metals.

Here’s the DXY chart courtesy of Bloomberg as per usual.  Click to enlarge.

And here’s the 5-year U.S. dollar index chart courtesy of the folks over at stockcharts.com — and the delta between its close…96.07…and the close on the DXY chart above, was 90 basis points on Friday.  Click to enlarge as well.

The gold stock chopped sideways once trading began at 9:30 a.m. in New York — and that lasted until around 11:30 a.m. — and then they slid into the red to stay.  That quiet sell-off lasted until shortly before 1 p.m. EDT — and they edged unevenly sideways, with a slight positive bias, until the markets closed at 4:00 p.m.  The HUI closed down 0.42 percent.

The silver equities opened unchanged to down a bit — and that lasted until shortly after 10 a.m. EDT.  And as the silver price began to get sold lower starting at that juncture, the shares followed.  That quiet sell-off lasted until a few minutes after 3 p.m. EDT — and then notched a bit higher into the close of trading from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 2.18 percent.  Click to enlarge if necessary.

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

Here are the usual charts from Nick that show what’s been happening for the week, month-to-date — and year-to-date.  The first one shows the changes in gold, silver, platinum and palladium for the past trading week, in both percent and dollar and cents terms, as of their Friday closes in New York — along with the changes in the HUI and the Silver 7 Index.

Here’s the weekly chart — and except for palladium, everything else was down on the week.  A lot of this ugly activity was a direct result of the engineered price decline by ‘da boyz’ last Thursday.  Click to enlarge.

And with the exception of platinum and palladium, everything is now down month-to-date, but not by amounts that I consider worrying, as it was mostly a result of last Thursday’s price activity.  Click to enlarge.

The year-to-date chart shows that everything, with the exception of silver and their associated equities, is in positive territory…although gold, not by much.  Chalk this unhappy looking chart to last week’s price activity as well.  Click to enlarge.

Looking at the 6-month charts in The Wrap section, it certainly appears that the precious metals have been on ‘care and maintenance’ since the beginning of March — and I have no idea as to what will happen going forward.  All we can is wait some more.


The CME Daily Delivery Report showed that 10 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, the lone short/issuer was Advantage — and JPMorgan picked up 9 contracts as the largest long/stopper.  Advantage picked up the remaining contract.  All transactions involved their respective client accounts.

In silver, the lone contract was issued by ADM — and was stopped by the CME Group, which immediately reissued it as 1×5=5 one-thousand ounce COMEX mini silver contracts.  Advantage stopped 3 of those — and ADM picked up the other two.

The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in April rose yet again…for the second day in a row…this time by 300 contracts, leaving 866 still around, minus the 10 contracts mentioned a few short paragraphs ago.  Thursday’s Daily Delivery Report showed that 49 gold contracts were actually posted for delivery on Monday, so that means that another 49+300=349 gold contracts were added to the April delivery month.  Silver o.i. in April remained unchanged at 1 contract still open, minus the 1 contract mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that zero silver contracts were reported for delivery on Monday.

This indicates the silver deliveries will be done for April as of Tuesday, but I’ll really be surprised if we don’t see more deliveries added in this precious metal before the month is over.

So far this month, there have been 4,221 gold contracts issued/reissued and stopped — and that number in silver is 774.


There were no reported changes in GLD on Friday.  But there was a change in SLV, as an authorized participant added a rather counterintuitive 749,849 troy ounces.

There was a small sales report from the U.S. Mint yesterday.  They sold 500 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — 500 one ounce platinum eagles — and zero silver eagles.

Month-to-date the mint has sold 5,000 troy ounces of gold eagles — 4,000 one-ounce 24K gold buffaloes — 1,600 one-ounce platinum eagles — and 550,000 silver eagles.

And still no Q4 or 2018 financial statements from the Royal Canadian Mint.

There was no in/out activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday.

It was far different in silver, as 1,195,415 troy ounces was reported received — and 1,736,161 troy ounces were shipped out.  All of the ‘in’ activity…two truckloads…occurred at CNT.  In the ‘out’ category, there was 1,079,846 troy ounces shipped out of Canada’s Scotiabank, plus one truckload…632,122 troy ounces…left Brink’s, Inc.  The remaining 24,192 troy ounces departed Delaware.  There was also a paper transfer of 151,331 troy ounces from the Registered category — and back in Eligible — and that occurred at Brink’s, Inc. as well.  The link to all this activity is here.

There was a decent amount of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  They only reported receiving 200 of them, but shipped out a rather hefty 4,150.  All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The Ringlemere Gold Cup is a Bronze Age vessel found in the Ringlemere barrow near Sandwich in the English county of Kent in 2001.

The body of the cup was created by hammering a single piece of gold, with the handle cut from a flat strip of gold and attached by rivets. Although badly crushed by recent plough damage, it can be seen to have been 14 cm high with corrugated sides. The cup resembles a late Neolithic (approximately 2300 B.C.) ceramic beaker with Corded Ware decoration, but dates to a much later period.

The cup was discovered by metal detectorist Cliff Bradshaw on 4 November 2001. He reported the find to the local coroner’s office, and through the Portable Antiquities Scheme and the Treasure Act 1996 the cup was recorded and declared to be treasure in 2002. It was bought by the British Museum for £270,000 (then roughly US$520,000), with the money paid split between Bradshaw and the Smith family who own Ringlemere Farm. The money to secure the cup for the nation was raised through donations by the Heritage Lottery Fund, the National Art Collections Fund and The British Museum Friends.  Click to enlarge.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, April 9, showed increases in the short positions in both silver and gold, with the biggest increase coming in gold.

I suppose the increase in silver should come as no surprise, as it spent a goodly portion of the week above its 200-day moving average…but gold only broke above its 50-day moving average on a intraday basis on the the final day of the reporting week.  So its rally even rising to to its 50-day moving average obviously ran into considerable resistance.

In silver, the Commercial net short position increased by 3,404 COMEX contracts, or 17.0 million troy ounces.

They arrived at that number by increasing their long position by 6,409 contracts, but they also increased their short position even more, by 9,813 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, the Managed Money traders actually decreased their long position by a net 808 contracts, which Ted thought rather strange…as did I.  All of the change for the reporting week, plus a bit more, came from the ‘Nonreportable’/small trader category, as they increased their net long position by 3,769 contracts.  Ted speculated that it could have been a reporting error of some kind.

The Commercial net short position in silver is now up to 188.8 million troy ounces — and Ted also figured that JPMorgan added 2,500 short contracts during the reporting week to keep that silver rally above its 200-day moving average from going further than it did.

Here is the 3-year COT chart for silver — and the change should be noted.  Click to enlarge.

Of course — and as I said in Friday’s column…”all of the above” is now irrelevant after the engineered price decline that ‘da boyz’ laid on us on Thursday.


In gold, the commercial net short position blew out by another 14,579 contracts, or 1.46 million troy ounces of paper gold.

They arrived at that number by reducing their long position by 7,036 contracts — and they also added 7,543 short contracts — and it’s the sum of those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, it was almost all Managed Money traders that accounted for the weekly change, as they added 7,101 long contracts — and reduced their short position by 5,318 contracts.  It’s the sum of those two numbers…12,419 contracts…that represents their change for the reporting week.

The difference between that number — and the commercial net short position…14,579 minus 12,419 equals 2,160 contracts was made up by the traders in the other two categories.  However both went about it in entirely differently — and here’s the snip from the Disaggregated COT Report so you can see that for yourself.  Click to enlarge.

The big banks in the Producer/Merchant category didn’t do much in gold during the reporting week, as all the commercial activity that really mattered occurred in the Swap Dealer category…which you can see in the above chart as well.

The commercial net short position in gold is back up to 13.29 million troy ounces.

Here’s the 3-year COT chart for gold — and that changes in it should be noted as well.  Click to enlarge.

Of course — and like for silver, all of the above numbers are “yesterday’s news” in every sense of the word.  Whatever improvements there are won’t be known until this time next week.

In the other metals, it was back to business as usual in palladium this past week, as the Managed Money traders reduced their net long position by a paltry 502 contracts — and the other two categories did even less.  The Managed Money traders are net long the palladium market by 10,000 contracts.  Total open interest in palladium dropped to 22,937 COMEX contracts, down 904 contracts from the previous week.  It’s a very tiny market.  In platinum, the Managed Money traders went long big time…increasing their long position by 10,225 contracts.  The Managed Money traders are now net long the platinum market by about 20,300 contracts.  Total open interest in this precious metal is 74,605 contracts, up 6,541 contracts from last week’s report.  In copper, the Managed Money traders increased their net long position by a further 2,012 COMEX contracts — and are only net short the COMEX futures market in copper by around 2,400 contracts.


Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading this past Tuesday. It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX. Click to enlarge.

For the current reporting week, the Big 4 traders are short 116 days of world silver production, which is up 6 days from last week’s report — and the ‘5 through 8’ large traders are short an additional 62 days of world silver production, up 2 days from last week’s report — for a total of 178 days that the Big 8 are short, which is a hair under 6 months of world silver production, or about 415.4 million troy ounces of paper silver held short by the Big 8.  [In the prior week’s COT Report, the Big 8 were short 170 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 188.8 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 415.4 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 415.4 minus 188.8 equals 222.7 million troy ounces.

The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 34-odd small commercial traders other than the Big 8, are net long that amount.

JPMorgan has only about a 2,500 contract short position in the COMEX futures market in silver…what they added this past reporting week — and with such a tiny short position, are not even close to being part of the Big 8 traders in silver.

The Big 4 traders now in that category are short, on average, about…116 divided by 4 equals…29 days of world silver production each.

The four traders in the ‘5 through 8’ category are short 62 days of world silver production in total, which is 15.5 days of world silver production each.  JPMorgan’s current 2,500 contract short position only amounts to 5.4 days of world silver production.

The Big 8 commercial traders are short 39.7 percent of the entire open interest in silver in the COMEX futures market, precisely unchanged from the 39.7 percent they were short in last week’s report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be very close to the 45 percent mark.  In gold, it’s now 37.7 percent of the total COMEX open interest that the Big 8 are short, also unchanged from what they were short in last week’s report — and something over 40 percent once the market-neutral spread trades are subtracted out.

The fact that both these percentages are unchanged from last week make me wonder about their accuracy, as it’s never happened before…ever.  I’ve never even had even one of these percentages show unchanged week-over-week.

In gold, the Big 4 are short 38 days of world gold production, unchanged from what they were short in last week’s COT Report.  The ‘5 through 8’ are short another 21 days of world production, up 1 day from what they were short last week…for a total of 59 days of world gold production held short by the Big 8…up 1 day from last week’s COT Report.  Based on these numbers, the Big 4 in gold hold about 64 percent of the total short position held by the Big 8…down 2 percentage points from last week’s COT Report.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 65, 75 and 77 percent respectively of the short positions held by the Big 8.  Silver is unchanged from a week ago, platinum is up 7 percentage points from last week — and palladium is down 2 percentage points.

It’s another day where I have very few stories for you.


CRITICAL READS

What America’s Elite Have Planned for Your Money — Bill Bonner

Yes, it is heartwarming, isn’t it? Almost inspiring.

We mean… seeing our leaders finally get together… embracing warmly… and agreeing on something.

No more trouble. No more strife. Oh, Lord, they’ve seen the light!

They are all on board now – Trump, AOC, Bernie Sanders, Powell, The New York Times… and hundreds, thousands of others, the great, the good, and the grandiose numbskulls.

Swaying together… singing… hugging… drinking cocktails… and giving each other high fives…

…as they ride along on the DebtBall Express.

This commentary from Bill, filed from Paris, was posted on the bonnerandpartners.com Internet site early on Friday morning EDT — and another link to it is here.


The U.K. Has Gone Mad” – Brits’ Disenchantment With Politics is Soaring

The rest of the world is watching in disbelief…

In The New York Times Thomas L. Friedman wrote “If you can’t take a joke you shouldn’t come to London right now because there is political farce everywhere. In truth though it’s not very funny, it’s actually tragic… What we’re seeing is a country that’s determined to commit economic suicide but can’t even agree on how to kill itself.”

He went on to say we were led by “a ship of fools” unwilling to “compromise with one another and with reality… an epic failure of political leadership,” scary stuff “but you can’t fix stupid.”

In The Washington Post Fareed Zakaria wrote  “Brexit will mark the end of Britain’s role as a great power. Britain famous for its prudence, propriety and punctuality is suddenly looking like a banana republic.”

He goes on to warn that the consequences of a no-deal Brexit could mean the beginning of the end of “the West as a political and strategic entity.”

Yep, that pretty much sums it up, dear reader.  This Zero Hedge story put in an appearance on their Internet site at 2:45 a.m. on Friday morning EDT — and I thank Brad Robertson for pointing it out.  Another link to it is here.


E.U. Readies List of $12BN in Retaliatory Tariffs on U.S. Ketchup, Orange Juice, Tobacco

Europe is reportedly preparing a list of U.S. imports worth some €20 billion ($22.6 billion) that will be subject to retaliatory tariffs in what appears to be the latest development in an incipient trade spat that helped crash the S&P 500’s eight-day winning streak earlier this week.

As the two sides inch closer to an all-out trade war, here’s more from Reuters:

The European Commission has drawn up a list of U.S. imports worth around 20 billion euros ($22.6 billion) that it could hit with tariffs over a transatlantic aircraft subsidy dispute, EU diplomats said.

U.S. President Donald Trump on Tuesday threatened to impose U.S. tariffs on $11 billion worth of European Union products over what Washington sees as unfair subsidies given to European planemaker Airbus.

The E.U. measures would relate to the European Union’s World Trade Organization complaint over subsidies to Boeing.

A WTO adjudicator still has to set a final amount of potential countermeasures.

Offering a slightly different version of the facts, Bloomberg reported that the E.U. is considering retaliatory tariffs on €10.2 billion euros ($11.5 billion) of goods ranging from foods to helicopters. The list reportedly includes frozen seafood, vegetable oil, chocolate, rum, ketchup, orange juice, vodka, tobacco, trunks and many other items.

The WTO ruled last week that the European Union had unfairly subsidized French aerospace company and Boeing arch rival Airbus, prompting President Trump to chime in and threaten tariffs on $11 billion of goods, though the WTO has not yet ruled on the proper retaliatory measures to which the U.S. would be entitled.

This Zero Hedge new item appeared on their website at 11:52 a.m. on Friday morning EDT — and another link to it is here.


China’s Debt Bomb is Back: Beijing Injects Most Ever Credit For Month of March

One month ago, we asked if that was it for China’s “Shanghai Accord 2.0“? Turns out the answer was a resounding “no.”

As we noted at the time, one month after the PBOC injected a gargantuan 4.64 trillion yuan ($685 billion) into the economy – more than the GDP of Saudi Arabia – in the month of January in the country’s broadest credit measure, the All-System Financing Aggregate a credit injection that was so massive it even prompted the fury of China’s prime minister Li Keqiang who lashed out at the central bank for its unprecedented debt generosity in a time when China was still pretending to be on a deleveraging path, in February the PBOC again surprised China-watchers, this time to the downside, when the Chinese central bank reported that aggregate financing increased by a paltry 703 billion yuan, roughly half the expected 1.3 trillion, the lowest print in the revised series history.  Click to enlarge.

However, to assuage fears that China was turning off the credit taps just one month after the release of weak February TSF, PBOC governor Yi commented in his press conference during the NPC that (although February TSF data was weak) the data should be viewed in light of strong January data. He also noted that even combined Jan-Feb data could be distorted by the Chinese New Year, and one needed to wait for March data.

Well, we got just that overnight (as reported previously) and it was a monster: just after 4 a.m. ET, the S&P futures surged above 2,900 when the PBOC reported that in March, new yuan loans jumped by 1.69 trillion, far above 1.25 trillion estimate, while total social financing in March soared higher 2.86t yuan, the highest March increase on record; smashing the 1.85 trillion yuan estimate, and more than four times the February 703BN yuan increase.

Putting the staggering jump in China’s All-System Financial Aggregate in context, the March number was 80% higher than the year ago March print, and the YTD TSF cumulative total is 40% higher than a year ago! Run-rated, and assuming no further growth at any month in the rest of 2019, China’s TSF is set to close 2019 some 12% higher than a year ago, and nearly twice as high as China’s official GDP growth rate.

Wow!  This amazing news item showed up on the Zero Hedge website at 10:20 a.m. EDT on Friday morning — and another link to it is here.


Doug Noland: The Perils of Stop and Go

Such a precarious time in history. So much crazy talk has drowned out the reasonable. Deficits don’t matter, so why not a trillion or two for infrastructure? Our federal government posted a $691 billion deficit through the first six months of the fiscal year – running 15% above the year ago level. Yet no amount of supply will ever impact Treasury prices – period. A Federal Reserve governor nominee taking a shot at “growth phobiacs” within the Fed’s ‘temple of secrecy’, while saying growth can easily reach 3 to 4% (5% might be a “stretch”). Larry Kudlow saying the Fed might not raise rates again during his lifetime.

Little wonder highly speculative global markets have become obsessed with the plausible. Why can’t China’s boom continue for years – even decades – to come? Beijing has everything under control. Europe has structural issues, but that only ensures policy rates will remain negative indefinitely. Bund and JGB yields will be stuck near zero forever. The ECB and BOJ have everything under control. Bank of Japan assets can expand endlessly. Countries that can print their own currencies can’t go broke. And it’s only a matter of time until all central banks are purchasing stocks and corporate Credit.

Lurking fragility is not that difficult to discern, at least not in the eyes of safe haven debt markets. And sinking sovereign yields – as they did in 2007 – sure work to distract risk markets from troubling fundamental developments. Stop and Go turns rather perilous late in the cycle. Speculative Dynamics intensify – “risk on” and “risk off.” Beijing and the Fed (and global central banks) were compelled to avert downturns before they gathered momentum. But that only ensured highly energized “blow off” speculative dynamics and more problematic Bubbles.

The next serious bout of “risk off” will be problematic. Another dovish U-turn will not suffice. A significant de-risking/deleveraging event in highly synchronized global markets will only be (temporarily) countered with QE. And with the markets’ current ebullient mood, there’s no room for worry: of course central bankers will oblige with more liquidity injections. They basically signaled as much.

Timing is a major issue. Especially as speculative Bubbles turn acutely unstable, any delay with central bank liquidity injections will boost the odds things get out of hand. Central bankers, surely in awe of how briskly intense speculative excess has returned, may be hesitant to immediately accommodate.

The way things are setting up – intense political pressure, the election cycle and such – they will likely be reluctant to return to rate normalization. Yet the crazier things get in the markets the more cautious they will be next time in coming to a quick rescue. The Perils of Stop and Go.

This absolute must read by Doug was posted on his Internet site in the very wee hours of Saturday morning — and another link to it is here.


Global silver demand up 4% in 2018

The Silver Institute has released a report saying global silver demand rose 4% – to 1.03 billion oz. – in 2018. This is the first time since 2015 that demand has risen year-over-year.

Three factors were at play: demand growth, robust retail investment, and falling supply.

On the demand side, sales of silver bars and coins rose by 20%, the largest driver was silver bar demand, which jumped 53%. Silver jewelry demand moved up 4%, to 212.5 million oz. Demand for industrial silver fell 1% to 578.6 million oz., due to a 9% drop in silver used in photo-voltaic.

Silver supply fell by 2% last year, the third consecutive annual decline to 855.7 million oz. The largest downturn was experienced by primary silver mines, which decreased by 7% to contribute 26% of total mine supply. The zinc-lead sector contributed 38% of by-product silver, followed by copper at 23% and gold at 12%.

The price of silver also declined by 7.8% to average $15.71 in 2018. Negative factors affecting the price last year included a rising U.S. dollar, interest rate hikes, the trade dispute between the United States and China, and lower global economic growth projections.

Well, dear reader, the “negative factors” pointed out in this Canadian Mining Journal‘s story are all bulls hit.  The only reason that the silver price hasn’t blasted higher is because JPMorgan is sitting on the price.  This 5-paragraph article was posted on the mining.com Internet site yesterday — and I plucked it from another article that Brad Robertson had sent my way.  Another link to the hard copy is here.  And if you wish to read the 104-page Silver Institute’s World Silver Survey…it’s linked here.  I found that on the Sharps Pixley website.


The PHOTOS and the FUNNIES

On the road to Cache Creek via Ashcroft.  I took the first photo from Highway 97C looking over the Thompson River and Ashcroft.  No snow anywhere at this elevation and location, which is classified as semi-arid, which is certainly not what the climate is on the Thompson PlateauClick to enlarge.

These second two photos were taken in and around the rather tiny community of Cache Creek, which is a 10-minute or so drive from Ashcroft — and it’s at the junction of B.C. Highway 97 — and the Trans-Canada Highway.  The highway in the second shot is B.C. Highway 97…which starts at Watson Lake, Yukon — and ends up in Las Vegas.  Click to enlarge for both.


The  WRAP

Today’s pop ‘blast from the past’ hails from ‘down under’ in Australia — and the year was 1980.  It’s from the soundtrack of the movie ‘Xanadu’.  You should know it…plus the classy and sexy 4-time Grammy award-winning performer that sings it…right away, as it’s a classic.  The link is here.  And if you have the interest, the bass cover of this tune is here.

Today’s classical ‘blast from the past’ is a very short work for cello and piano extracted from Camille Saint-Saëns “The Carnival of the Animals” (Le carnaval des animaux) that he composed in February of 1886.  It’s a humorous musical suite of fourteen movements — and was written for private performance by an ad hoc ensemble of two pianos and other instruments, and lasts around 25 minutes.

Number XIII “Le cygne” (The Swan) is a staple of the cello repertoire — and is the most well-known movement of the suite, usually in the version for cello with solo piano, which was the only publication of this work in Saint-Saëns’s lifetime.

Here are Yo-Yo Ma and Kathryn Stott doing the honours — and the link to this very moving and touching performance, is here.


Well, there was absolutely no follow-through to the downside after the engineered price declines in the precious metals on Thursday.  If there was ever a time that ‘da boyz’ could have pushed their advantage and really laid the lumber to the Managed Money traders, it was yesterday.  But they passed on it — and don’t ask me why.

Looking at the 6-month charts for both gold and silver below, it certainly does appear that ‘da boyz’ have both precious metals on ‘care and maintenance’…gold below its 50-day — and silver below its 200-day for the last couple of months.

Here are the 6-month charts for the Big 6 commodities — and there’s not a lot to see.  Click to enlarge for all.

With the Dow and S&P500 painting triple tops at the moment, one has to wonder how long these indices can keep flying high, when the underlying U.S. economy is slowly sinking into the abyss.

None of us alive today would be old enough to remember the crash of ’29…but if we had been, I get the feeling that the euphoria then, would have matched the euphoria that exists in the U.S. equity markets at the moment.  It is sheer madness.  First there are the FANG stocks.  Then all the zombie companies that are only alive because they can continue to borrow on the cheap — and don’t even get me started on Tesla.

I can do no better than to quote Doug Noland from his commentary this week headlined “The Perils of Stop and Go“…”If Dr. Richebacher were alive today, he would draw a direct link between rising populism and central bank inflationism. Born in 1918, he lived through the horror of hyperinflation and its consequences. While he was appalled by the direction of economic analysis and policymaking, we would tell me that he didn’t expect the world to experience another Great Depression. He had believed that global leaders learned from the Weimar hyperinflation, the Great Depression — and WWII. His view changed after he saw the extent that policymakers were willing to go to reflate the system after the “tech” Bubble collapse.”

It was fundamental to Dr. Richebacher’s analysis that Bubbles destroy wealth. He spared no wrath when it came to central bankers believing wealth would be created through the aggressive expansion of “money” and Credit. ”

Such a precarious time in history. So much crazy talk has drowned out the reasonable. Deficits don’t matter, so why not a trillion or two for infrastructure? Our federal government posted a $691 billion deficit through the first six months of the fiscal year – running 15% above the year ago level. Yet no amount of supply will ever impact Treasury prices – period. A Federal Reserve governor nominee taking a shot at “growth phobiacs” within the Fed’s ‘temple of secrecy’, while saying growth can easily reach 3 to 4% (5% might be a “stretch”). Larry Kudlow saying the Fed might not raise rates again during his lifetime.”

It’s all so utterly unbelievable and preposterous.  I — and probably you as well dear reader, never thought we’d live to see such times.  I wake up every morning wondering if this is the day that the end will begin.  We had a glimpse of that in the December melt-down — and the Fed et al rushed to save the markets before they imploded, which they most certainly would have if they hadn’t intervened.  Then there was Draghi’s “Whatever it Takes 2.0” earlier this week.  And if you read the piece in today’s Critical Reads section about China and its liquidity infusions so far this year, only those massive liquidity injections at all levels of the banking system are preventing the melt-down of China Inc.

It is, as Doug said just above — and in today’s headline…”Such a precarious time in history.”

I’m done for the day — and the week — and I’ll see you here on Tuesday.

Ed

‘Da Boyz’ Ring the Cash Register on the Managed Money Traders

12 April 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price fell and rose a couple of dollars in Far East trading on their Thursday — and that lasted until the 2:15 p.m. CST afternoon gold fix in Shanghai.  At that juncture, the engineered price declines in all of the Big 6 commodities that I track on a daily basis.  The gold price was sold unevenly lower until a few minutes before the 1:30 p.m. COMEX close in New York on Thursday afternoon — and from that point, it crept quietly higher until trading ended at 5:00 p.m. EDT.

The high and low ticks in gold were reported by the CME Group as $1,313.10 and $1,292.90 in the June contract.

Gold was closed by ‘da boyz’ in New York on Thursday at $1,291.90 spot, down $15.60 from Thursday…back below $1,300 spot — and its 50-day moving average.  Of course net volume was sky high at 317,000 contracts — and roll-over/switch volume was a hair over 9,000 contracts on top of that.

‘Da boyz’ manhandled the silver price in almost the same matter, including the time of the start of the engineered price decline — and its end…the afternoon gold fix in Shanghai and a few minutes before the COMEX close in New York.

The high and low ticks in silver were recorded as $15.215 and $14.845 in the May contract.

Silver was closed at $14.94 spot, down 25.5 cents from Wednesday’s close…back below $15 spot — and its 200-day moving average.  Not surprisingly, net volume was pretty heavy as well, at a bit over 78,000 contracts — and there was a pretty chunky 30,600 contracts worth of roll-over/switch volume in this precious metal.

Platinum’s quiet rally in Far East trading on their Thursday was capped at 2 p.m. CST at $909 spot — and wasn’t allowed to trade above that mark after that.  Then shortly after the Zurich open, it was sold lower like everything else — and that state of affairs lasted until a few minutes after 9 a.m. in New York.  It jumped higher at that point — and ran into the $909 spot brick wall a few minutes before the afternoon gold fix in London.  It was sold sharply lower from there until shortly after 12 o’clock noon EDT — and didn’t do much after that until late in the thinly-traded after-hours market, when it edged a few dollars higher going into the 5:00 p.m. EDT close.  Platinum finished the Thursday session in New York at $892 spot, down ten dollars on the day.  At its high tick, platinum was up 7 bucks.

Palladium traded flat until 2 p.m. CST on their Thursday afternoon — and at that juncture, it jumped higher by about 12 dollars.  But the engineered price decline began at that point — and in fits and starts it was sold down to its low, which was shortly after 12 o’clock noon in New York. [I’m ignoring that price spike lower at 8:30 a.m. EDT, because it only occurred in the spot month.]  Anyway, from that low, it crawled higher into the 5:00 p.m. close from there.  Platinum  was closed at $1,348 spot, down 21 dollars on the day.

The dollar index closed very late on Wednesday afternoon in New York at 96.95 — and opened down 6 basis points once trading began at 7:44 a.m. EDT on Wednesday evening, which was 7:44 a.m. CST in Far East trading on their Thursday morning.  It chopped very quietly sideways from there until a couple of minutes after 12 o’clock noon BST in London/7 a.m. EDT in New York.  A ‘rally’ began at that juncture — and all the gains that mattered were in by a few minutes before the 1:30 p.m. EDT COMEX close…which more or less coincided with the low ticks in both gold and silver.  From that juncture the index didn’t do much for the remainder of the Thursday session.  The dollar index closed at 97.18…up 23 whole basis points from Wednesday.

Although the engineered price declines in the precious metals began at the afternoon gold fix in Shanghai on their Thursday, most of the real price damage came during the dollar index ‘rally’ between noon BST and 1:30 p.m. EDT.  I suspect that the ‘rally’ in the dollar index was just as engineered as the ‘declines’ in the precious metal prices.

Here’s the DXY chart, courtesy of BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart courtesy of stockcharts.com — and the delta between its close…96.28…and the close on the DXY above, was 90 basis points on Thursday.  Click to enlarge as well.

Of course the gold shares gapped down at the open, but then quickly rallied back to about the unchanged mark a few minutes after 10 a.m. in New York trading.  But a quiet sell-off began at that juncture — and the low tick of the day appeared to come around 2:45 p.m. EDT.  Then, about thirty minutes later, they rallied rather smartly into the close — and the HUI finished down only 1.46 percent.

The price path for the silver equities was virtually identical, but Nick Laird’s Intraday Silver Sentiment Index closed down only 1.28 percent.  Click to enlarge if necessary.

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

Considering how badly the underlying precious metals got hammered yesterday, the losses in their associated equities were rather subdued, as it was obvious that strong hands were there to buy up just about everything that the weak hands were selling.


The CME Daily Delivery Report showed that 49 gold and zero silver contracts were posted for delivery  within the COMEX-approved depositories on Monday.

In gold, the two short/issuers were Morgan Stanley with 42 contracts out of it own account — and Advantage, with 7 contracts out of its client account.  The three largest long/stoppers were HSBC USA with 32 contracts for its in-house/proprietary trading account — and Advantage and JPMorgan, with 10 and 6 contracts for their respective client accounts.

The link to yesterday’s Issuers and Stoppers Report is here.

The CME Daily Delivery Report showed that gold open interest in April jumped up by 275 contracts, leaving 566 still around, minus the 49 mentioned just above.  Wednesday’s Daily Delivery Report showed that 15 gold contracts were actually posted for delivery today, so that means that 275+15=290 gold contracts were added to the April Delivery month.  Silver o.i. in April declined by 15 contracts, leaving just one left.  Wednesday’s Daily Delivery Report showed that 15 silver contracts were actually posted for delivery today, so the change in open interest — and the deliveries match.


There were no reported changes in either GLD or SLV on Thursday.

Since April 1, there has been 849,080 troy ounces of gold removed from GLD.  But there has only been 133,839 troy ounces of silver removed from SLV during that same time period.  I would suspect that all the SLV shares that have been sold since April 1 now reside in the strongest of hands…most likely JPMorgan’s.  So it wouldn’t surprise me in the slightest to see a monster withdrawal from that ETF at some point.  I’m sure that Ted is expecting that as well.

There was no sales report from the U.S. Mint yesterday.

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  The only ‘in’ activity was 64.300 troy ounces/2 kilobars [U.K./U.S. kilobar weight] — and that was received at Canada’s Scotiabank.  The only ‘out’ activity was 16,991 troy ounces that was shipped out of JPMorgan.  The link to this is here.

It was very quiet in silver as well.  There was only 2,045 troy ounces received — and that amount ended up at Delaware.  There was only 74,201 troy ounces shipped out — and that movement involved three different depositories.  I shan’t do the break-down on that, but if you wish to check that out, the link to this ‘activity’ is here.

And there wasn’t much activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They received 587 of them — and shipped out only 109.  All this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here’s a chart from Nick that I asked him to update for me — and it would have been in Thursday’s column if I’d got it back from him in time, but I didn’t.  This one shows the amount of gold withdrawn from the Shanghai Gold Exchange every year going back to and including 2008, compared to total world gold mining production for each year.

As you can see, for the year just passed, the SGE withdrew 2,055 tonnes, compared to total world mine output of 3,260 tonnes.  The SGE withdrawals represent 63 percent of world mine production in 2018.  Click to enlarge.

Back in 2008, the SGE withdrew just under 24 percent of world mine production — and in 2015, the peak year, they withdrew just under 84 percent of world mine production.

And once you add in India, Russia and Turkey, it’s over 100 percent of total mine production…a state of affairs that’s been going on for over six years now.  Where is the physical gold coming from to supply the rest of the world’s yearly gold demand…which is not an inconsequential amount by the way.

I only have a handful of stories for you again today.


CRITICAL READS

Trump and AOC Actually Agree on Something… — Bill Bonner

Yes, Stimulus Theory – the idea that cheap credit and EZ money will make us richer – is a fraud.
But that doesn’t make it unpopular. Au contraire… it is a classic federal program: like the war on drugs, or the war on terror… the more it fails, the more it succeeds.

That is, the more stimulus drags the economy down… the more people want the feds to “do something” to fix it. And what can they do? Stimulate!

And now, The New York Times and the Trump Team are on the same page. Both want more stimulus. The NYT:

…the Fed should have kept interest rates lower for longer after the 2008 recession, to deliver a significantly stronger dose of economic stimulus… it should show a little less fear of inflation the next time the economy needs its help.”

How many bad ideas can you pack into a single sentence? We don’t know… The NYT deserves credit for trying.

This commentary from Bill, filed from Paris, appeared on the bonnerandpartners.com Internet site early on Thursday morning EDT — and another link to it is here.


Kudlow “I Don’t See Rates Rising Again in My Lifetime

Almost five years ago, in May 2014, when he was setting the scene for the biggest asset bubble trap in history – trap because his own policies made it impossible to undo the Fed’s monetary policies without bringing the entire financial system crashing down – Bernanke uttered what was very unwitting gallows humor, when he said that he does not expect the Fed’s interest rate to rise back to its 4% average during his lifetime.

In retrospect, he was right because just a few years later, with the Fed Funds rate at 2.50%, the Fed realized that any further hikes would crash the market, which was already on the verge of a bear market, and as a result Fed Chair Powell put the Fed’s rate hike strategy on hold.

Now, five years after Bernanke’s infamous statement, Trump’s top economic advisor Larry Kudlow has done Bernanke one better, and during an event in Washington, said that he does not think that rates will go up ever again, “maybe never again in my lifetime“, effectively admitting that the U.S. economy is on the verge, if not in, a recession (either that, or giving a pretty dire prognosis of his own health).

Kudlow also said that Powell is doing a good job, despite disagreements. “I do. I know we’ve had some discussions about that in recent weeks.”  Ah yes, it got to the point where Trump even had to call Powell, and while the full conversation shall remain a mystery, Trump told the Fed chair that he is “stuck” with him (for now).

This Zero Hedge news item was posted on their Internet site at 10:52 a.m. EDT on Thursday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.


Why Buy Bonds? — Dennis Miller

Realizing you are wrong about a basic belief is tough. The last two weeks we discussed “The Bond Fund Risks Your Broker Won’t Tell You” and “Closed-End Bond Funds, Friend or Foe?

We concluded holding top-rated bonds is O.K. – individually, not in a publicly traded fund. Fund managers, chasing high returns, take risks I’m not comfortable with. If bonds are downgraded, or default, the Net Asset Value (NAV) of the fund would drop and could take years to recover.

I planned for this bond article to be positive, showing readers how easy it is to build a do-it-yourself bond portfolio. Unlike a brokerage sponsored bond fund, you would buy, hold, collect interest and when they mature – repeat the process – with minimum fees and risk. We are investors, not interest rate speculators.

My parents relied on FDIC insured Certificates of Deposit (CDs). They used to beat inflation, providing around 6% interest. Corporate bonds paid more interest to compensate for the higher risk.

Start with safety first.

Bloomberg’s warns, “A $1 Trillion Powder Keg Threatens the Corporate Bond Market“…

This longish commentary from Dennis put in an appearance on his website on Thursday morning — and another link to it is here.


WikiLeaks co-founder Julian Assange arrested in London; faces possible extradition to the U.S.

WikiLeaks co-founder Julian Assange was arrested in London on Thursday morning, nearly seven years after he sought refuge at the Ecuadorian Embassy, and faces a possible extradition to the United States.

The U.K. Metropolitan Police confirmed that Assange was arrested by officers at the embassy after the Ecuadorian government withdrew asylum for the Australian national.

Assange was taken to a central London police station and will be presented before Westminster Magistrates’ Court “as soon as is possible,” police said.

The police said he was arrested for failing to surrender to a court on a warrant issued by the Westminster Magistrates’ Court in June 2012. The police later further updated that the arrest is in relation to an extradition warrant on behalf of the United States authorities.

This event was inevitable at some point — and that time has arrived.  There’s no chance in hell that he’ll get a fair trial anywhere.  This story showed up on the CNBC website early on Thursday morning EDT — and the first reader through the door with this news item was Swedish reader Patrik Ekdahl.  Another link to it is here.  There are two Zero Hedge stories about this.  The first is headlined “Democratic Senator: Assange Is “Our Property” Now” — and the second “The DoJ’s Entire Case Against Assange Hinges on This One Critical Piece of Evidence“.


South Africa’s gold output has longest losing streak since 2009

South African gold production shrank for a 17th straight month in February, the longest string of contractions since the financial crisis.

Gold output fell 21% from a year earlier compared with a revised 23% drop in January, Pretoria-based Statistics South Africa said in a statement on its website Thursday. Production contracted for 29 months through January 2009.

South Africa used to be the world’s top producer of the metal but deeper ore bodies, labour strife, high costs and policy uncertainty have crimped output. A strike by members of the Association of Mineworkers and Construction Union that started in November has slashed output at the South African operations of Sibanye Gold, the biggest producer of the metal from local mines.

While Sibanye is challenging the legality of that strike, it’s also preparing for pay negotiations with Amcu at its platinum business.

Total mining output declined 7.5% from a year earlier, the most since March 2016. The country is the world’s biggest platinum producer. Output of platinum-group metals, which include palladium, rose for a sixth straight month, expanding 18%.

The above five paragraphs are all there is to this Bloomberg story that was picked up by the moneyweb.co.za Internet site yesterday. I found it on the Sharps Pixley website — and another link to the hard copy is here.


China gold demand up marginally so far this year — Lawrie Williams

China’s gold demand as represented by Shanghai Gold Exchange (SGE) monthly gold withdrawals had seemed to be slipping back this year. But this now looks to have been the timing of the Chinese New Year holiday when the SGE was closed for a week.  A boost in withdrawals in March has seen the Q1 figures this year climb above those for the same quarter for the past two years (see table below), albeit only marginally so.  Although it is early days yet, on current figures China could well be heading for another year of +2,000 tonne gold demand.

The Chinese demand news will come as some relief to gold investors.  The February figure had been low compared with the two years previous, but with central bank demand seemingly holding up well so far and some other demand figures looking a little stronger according to Metals Focus’ Gold Focus report, this may be enough to counteract a continuing series of withdrawals from the big GLD gold ETF.  It seems that no sooner does the World Gold Council publish a statement that global ETFs are increasing their gold hogold Trustldings that GLD appears to start moving in the other direction.

To this observer the withdrawals from GLD, in the face of what appears to be a strengthening gold price, is illogical given that the withdrawal figures are not being matched in the other big U.S. gold ETF, the iShares Gold Trust (IAU).  It is possible that closer scrutiny of the COMEX gold futures machinations by the U.S. Justice Department is leading those who would seek to control the gold price to utilise other high profile gold investment channels to perpetrate their agenda, and GLD holdings would fit this purpose well!

We reiterate here our belief that SGE gold withdrawals are an excellent indicator of China’s ongoing gold demand despite arguments against this from some of the premier precious metals consultancies which tend to estimate Chinese demand at a level well below China’s known gold imports plus its own domestic gold production, let alone scrap supplies and gold imports from countries which do not detail their country-by-country gold export breakdowns.  SGE withdrawal totals on an annual basis are far closer to these annual figures than those from other sources – and in the past the official China Gold Yearbook itself has equated SGE gold withdrawal figures to total Chinese demand.  Whatever the truth of this may be, the SGE figures do give a monthly year on year comparison which has to be a great indicator of the overall demand flows for Chinese gold.

This commentary by Lawrie was posted on the Sharps Pixley website on Thursday morning BST sometime — and another link to it is here.


Golden straws in the wind — Alasdair Macleod

Life in the world of gold bullion is full of mysteries. Each mystery is like a straw in the wind, which individually means little, but tempting us to speculate there’s a greater meaning behind it all. Yes, there is a far greater game in play, taking Kipling’s aphorism to a higher level.

One of those straws is Russia’s continuing accumulation of gold reserves. Financial pundits tell us that this is to avoid being beholden to the U.S. dollar, and undoubtedly there is truth in it. But why gold? Here, the pundits are silent. There is an answer, and that is Russia understands in principal the virtues of sound money relative to possession of another country’s paper promises. Hence, they sell dollars and buy gold.

But Russia is now going a step further. Izvestia reported the Russian Finance Ministry is considering abolition of VAT on private purchases of gold bullion. We read that this could generate private Russian annual demand of between fifty and a hundred tonnes. More importantly, it paves the way for gold to circulate in Russia as money.

We should put ourselves in Russia’s shoes to find out why this may be important. Russia is the largest exporter of energy, including gas, pushing Saudi Arabia into second place. This means she is also the largest acquirer of fiat currency for energy. That’s fine if you like fiat currencies, but if you suspect them, then you either turn them into physical assets, such as infrastructure and military hardware, or gold. Russia does both.

Then there is China. China has started announcing monthly additions to her gold reserves. China is up to her neck in dollars, and the relatively minor monthly additions to her reserves really make little difference. However, the link between the gold exchanges in Moscow and Shanghai strongly suggest Russia and China are coordinating gold dealing activities.

In any event, China now dominates physical bullion markets. Deliveries (withdrawals) from the Shanghai Gold Exchange’s vaults into public hands are running at roughly two-thirds of the world’s annual mine supply. At 426 tonnes in 2017, China is the largest gold mining nation by far, and the state owns all China’s refining capacity, even taking in doré from abroad. No gold leaves this version of Hotel California.

This long, but worthwhile commentary from Alasdair appeared on the goldmoney.com Internet site on Thursday morning BST sometime — and I found it embedded in a GATA dispatch.  Another link to it is here.


The PHOTOS and the FUNNIES

A week after our trip to Peachland, B.C.…we were off to Cache Creek via Ashcroft — and on the way there, I took these photos of a bald eagle sitting in a dead ponderosa pine.  A magnificent creature — and they’re a very common sight in these parts.  Click to enlarge for both.


The WRAP

The powers-that-be got the ball rolling down the hill in the Big 6 commodities starting at the afternoon gold fix in Shanghai on their Thursday afternoon — and once the sell stops got hit — and the critical moving averages broken to the downside, the sell-off became self reinforcing.

As Ted always points out at times like this, except for the small amount of selling that the commercial traders do to get things started, plus maintain the downside price momentum, the are always, always, always the big buyers on engineered price declines like this…and never big sellers.

Gold was closed not only below $1,300 spot, but also back below its 50-day moving average — and silver was sold back below its 200-day moving average.  It was all done for profit and price management purposes — and the Managed Money traders were the patsies once again.  You’d think they’d learn after all these years, but they’re slaves to moving averages — and nothing else matters to them.

Here are the 6-month charts for the Big 6 commodities — and you can see the inflicted damage for yourself.  Click to enlarge.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price didn’t do much in morning trading in the Far East — and was down about a dollar at that point. It has been crawling quietly higher since — and is currently up 90 cents the ounce. The price path for silver has been guided in a similar manner — and it’s up a penny at the moment. The platinum price has been chopping very unevenly and quietly higher in Far East trading — and is currently up 2 bucks. Palladium has been inching quietly higher as well — and it’s up 4 dollars as Zurich opens.

Net HFT gold volume is pretty light at a bit over 32,000 contracts — and there’s only 897 contracts worth of roll-over/switch volume in that precious metal. Net HFT silver volume is around 10,600 contracts — and there’s 833 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down 4 basis points once trading began at 7:44 a.m. EDT on Thursday evening in New York, which was 7:44 a.m. in Shanghai on their Friday morning. It made it back to the unchanged mark about thirty minutes after that, but began to head lower from there. That decline lasted until a few minutes before 1 p.m. China Standard Time — and it has been edging quietly and unevenly higher since — and is down 16 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


I just finished reading a book that rare coin dealer Richard Nachbar gave me at the Vancouver Investment Conference in late January.  It’s titled “CONFISCATION: Gold as Contraband…1933 to 1975” by Kenneth R. Ferguson.  It’s only 143 pages long — and I can honestly say that it was worth the read.  I thought I already knew all there was to know on this subject from what I’ve read on the Internet over the last 20-odd years, but I was wrong.  If you’ve got a small handful of dollars laying around, buying this book would be money well spent.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that the gold price was turned quietly lower shortly after the afternoon gold fix in Shanghai on their Friday afternoon — and it’s now down 60 cents an ounce as the first hour of London trading comes to an end. Silver was guided on a similar price path, but its back to up a penny on the day. Platinum and palladium were sold a bit lower during the first hour of Zurich trading — and both are up only a dollar.

Gross gold volume is coming up on 43,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is around 41,500 contracts. Net HFT silver volume is about 13,000 contracts — and there’s 989 contracts worth of roll-over/switch volume in that precious metal.

The dollar index hasn’t done much during the last hour — and as of 8:45 a.m. BST in London — and 9:45 a.m. CEST in Zurich, it’s down 16 basis points.

Today, at 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.  This is what silver analyst Ted Butler had to say about it in his mid-week commentary to his paying subscribers on Wednesday…”As far as what Friday’s Commitments of Traders (COT) report may indicate, the reporting week ended yesterday [Tuesday] was definitely mixed, featuring flat-to-weaker prices for the first three trading days in both gold and silver (including [last] Thursday’s new salami slice price low), followed by price strength Monday and yesterday. This makes predictions iffy, but I don’t foresee dramatic revisions in overall market structure.”

That may all be true of course, but is very much “yesterday’s news” in light of Thursday’s price action in all four precious metals.  Therefore my commentary on it will be very brief, as the data in it is pretty meaningless.

That’s all I have for today.  Have a good weekend — and I’ll see you here tomorrow.

Ed

Gold Closes Above Its 50-Day Moving Average

11 April 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was sold down a few dollars by shortly before 11 a.m. China Standard Time on their Wednesday morning — and then wandered sideways until around 9:15 a.m. in New York.  At that point a bit of a rally began — and it ran into ‘something’ about ten minutes before the COMEX close.  It was sold a few dollars lower until shortly after 2 p.m. EDT in the thinly-traded after-hours market — and didn’t do much after that.

Once again, the low and high ticks aren’t worth looking up.

Gold finished the Wednesday session in New York at $1,307.50 spot, up $3.80 from Tuesday’s close — and back above its 50-day moving average by about four dollars or so.  Net volume was nothing out of the ordinary at a hair under 204,000 contracts — and there was a bit over 8,500 contracts worth of roll-over/switch volume on top of that.

The price ‘action’ in silver was a bit more ‘volatile’.  Like for gold, its low tick was set shortly before 11 a.m. in Shanghai, but then it rallied unevenly higher from there until shortly before 1 p.m. in London, which was shortly before 8 a.m. in New York.  It was sold lower from there until about 9:10 a.m. EDT — and then, just like the gold price, it rallied until shortly after 1 p.m. — and was sold lower until shortly after 2 p.m. in after-hours trading.

Silver traded within a one percent price range on Wednesday as well, so I won’t bother with the low and high in this precious metal, either.

Silver was closed at $15.195 spot, up only 0.5 cents on the day.  Net volume was pretty light once again at a bit over 43,000 contracts, but roll-over/switch volume was quite heavy again at a bit under 19,000 contracts.

Platinum was down about six dollars by 8 a.m. China Standard Time on their Wednesday morning, but managed to recover almost all of that loss by shortly after 9 a.m. in New York.  Its subsequent rally was capped and turned lower starting around 12:30 p.m. EDT — and after about 2:30 p.m. in after-hours trading, it didn’t do much going into the 5:00 p.m. close.  Platinum was closed at $901 spot, up 11 bucks on the day.

Palladium didn’t do a whole lot of anything anywhere on Planet Earth on Wednesday — and it finished the Wednesday session in New York at $1,369 spot, down a dollar from Tuesday’s close.

The dollar index closed very late on Tuesday afternoon in New York at 97.01 — and opened down 2 basis points once trading began at 7:44 p.m. EDT on Wednesday evening, which was 7:44 a.m. China Standard Time on their Wednesday morning.  It crawled a bit higher until 9 a.m. CST — and then proceeded to edge unevenly lower until the CPI numbers were released at 8:30 a.m. in New York.  It then shot up to its 97.22 high tick, which came at 9:14 a.m. EDT — and from that point it was all down hill to its 96.85 low tick, which happened fifteen minutes before the COMEX close.  It edged erratically higher from there until trading ended at 5:15 p.m. EDT.  The dollar index finished the day at 96.95…down 6 basis points from Tuesday’s close.

The CPI numbers at 8:30 a.m. had no discernible impact on precious metal prices, but the dollar index decline [but not the preceding rally] that followed about forty-five minutes later, certainly did — and the rallies in three of the four precious metal matched that dollar index decline perfectly.

As to why the precious metals [with the exception of maybe silver] didn’t ‘react’ to the sudden dollar index price spike at 8:30 a.m…is a mystery.

Here is the DXY chart from BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart courtesy of stockcharts.com — and the delta between its close…96.04…and the close on the DXY chart above, was 91 basis points on Wednesday.

The gold stocks opened unchanged — and then chopped quietly and mostly sideways, despite the rally in the gold price, until precisely 2 p.m. EDT in New York trading — and were sold lower for exactly one hour — and then traded flat from there into the 4:00 p.m. close.  But the interesting thing about this is the fact that the gold price was capped and turned lower about forty minutes before the decline in their underlying equities began.  Very mysterious.  The HUI closed down 1.50 percent.

The price activity in the silver equities was almost exactly the same.  They opened unchanged — and then sagged a bit until around 12:10 a.m. EDT, but rallied back into positive territory until precisely 2:00 p.m. — and were sold lower until exactly 3:00 p.m. — and didn’t do much after that.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 1.11 percent.  Click to enlarge if necessary.

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

I’m not sure what should be read into the mysterious one hour long ‘flash crash’ in the precious metal shares between exactly 2 and 3 p.m. EDT in New York yesterday, but it certainly looked deliberate/non free-market to me.


The CME Daily Delivery Report showed that 15 gold and 15 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, the two short/issuers were Advantage and Mizuho, a name I don’t see often.  They issued 10 and 5 contracts out of their respective client accounts.  Advantage also stopped 7 contracts for its client account — and the other two long/stoppers were Citigroup and HSBC USA, picking up 4 contracts each for their respective in-house/proprietary trading accounts.

In silver, ADM was the sole short/issuer.  There were four long/stoppers in total.  JPMorgan was the largest with 8 contracts for its client account — and The CME Group picked up 2 contracts for its own account, which it immediately reissued as 10 one-thousand ounce COMEX mini silver contracts.  Advantage stopped 7 of those — and ADM picked up the other 3.  Both transactions involved their respective client accounts.

The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in April declined by 33 contracts, leaving 292 still open, minus the 15 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that only 12 gold contracts were actually posted for delivery today, so that means that 33-12=21 gold contracts vanished from the April delivery month.  Silver o.i. in April remained unchanged at 16 contracts, minus the 15 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 1 silver contract was actually posted for delivery today, so that means that 1 more silver contract had to have been added to April deliveries, because there was no change in April open interest.


There were no reported changes in either GLD or SLV yesterday.

There was the tiniest of sales reports from the U.S. Mint on Wednesday.  They sold 500 troy ounces of gold eagles — and that was all.

The only activity in gold over at the COMEX-approved depositories on Tuesday was 4,492.847 troy ounces/139 kilobars [SGE kilobar weight] that was shipped out of Canada’s Scotiabank.  The link to that is here.

This is the first time that I can remember seeing Scotiabank receive or send out gold kilobars using the SGE kilobar weight.  Normally, when they ship or received kilobars, they use the U.K./U.S. kilobar weight.  I don’t know if it means anything, I’m just pointing it out.

And this is also the third day in a row that all gold received, shipped out, or transferred in paper form from all these gold depositories have been of the kilobar variety.

There was more activity in silver — and all of it was at CNT, as one truckload…596,847 troy ounces…was received — and one very large truckload…663,741 troy ounces…was shipped out.  The link to all this is here.

It was fairly busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 4,216 of them — and shipped out 151.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Nick Laird sent around a couple of charts yesterday afternoon that I’m always happy to post.  The first one shows the gold withdrawals from the Shanghai Gold Exchange, updated with March’s data.  During that month, they withdrew a tad over 218 tonnes, which is quite a bit.  Click to enlarge.

Since the beginning of 2008, there has been a total of 17,650 metric tonnes of gold withdrawn from the Shanghai Gold Exchange.  That’s a lot.

And here’s Nick’s second chart showing Month 3/March withdrawals from the SGE going back to 2008 as well — and it’s about the same amount of withdrawals for Month 3 as it has been for the last four years running.  Click to enlarge.

I don’t have all that many stories for you today.


CRITICAL READS

So Much for the “Trump Boom” — Bill Bonner

The more time we spend studying it, the more we become convinced that the whole thing is one gigantic swindle. While this insight might be applied to practically anything in public life, we’re talking, specifically, about federal finances and Stimulus Theory.

Many readers think Mr. Trump’s tax cut stimulus has created a real boom.

This boom, they believe, will increase GDP, raise tax receipts, and ease the debt problem. (Mr. Trump even claimed he would pay off the national debt in eight years!)

If true, it will mean that all our theories are defective… that we greatly underestimated the man in the White House… and, in short, that we don’t know shinola about economics!

This commentary from Bill was posted on the bonnerandpartners.com Internet site early on Wednesday morning EDT — and another link to it is here.


Capitalism Gone Wild — John Mauldin

Recession is coming. We can debate the timing, but the economy will turn decisively downward at some point. My own analysis, looking at the data available on April 4, says recession isn’t likely this year but unfortunately looks very probable in 2020.

In addition to when it will happen, there’s also the question of how deep the next recession will be. A shallow downturn wouldn’t be fun, but compared to the last one might feel relatively refreshing.

Alas, I don’t think we will be that lucky. I think the opposite: The next recession will be deeper, longer and far more painful to many more people than your average recession, and could persist as long as the last one. That is because the next recession in all likelihood will be truly global. If you sailed through 2007–2009 without your lifestyle changing, I wouldn’t assume it will happen that way again.

Ironically, but not surprisingly, it will be the response to the last recession that makes the next one so much worse. Part of the reason is that investors once again “learned” that if you simply stay the course, the market will get you back to where you were and more. The massive move into low-fee index investing instead of active management will make the next recession more painful.

This long commentary from John was posted on the mauldineconomics.com Internet site back on April 5 — and I plucked it from a Zero Hedge commentary yesterday afternoon.  Another link to it is here.


Prepare Now for the Aftermath — Jim Rickards

This 23:10 minute video interview with Jim Rickards appeared on the youtube.com Internet site on April 7 — and I thank Brad Robertson for sending it our way.


Brexit: U.K. and E.U. agree delay to 31 October

Speaking after five hours of talks at an E.U. summit in Brussels, European Council president Donald Tusk said his “message to British friends” was “please do not waste this time“.

Theresa May said the U.K. would still aim to leave the E.U. as soon as possible.

Irish Taoiseach Leo Varadkar said the U.K. must now hold European elections in May, or leave on 1 June without a deal.

Prime Minister Mrs May had earlier told leaders she wanted to move the U.K.’s exit date from this Friday to 30 June, with the option of leaving earlier if her withdrawal agreement was ratified by Parliament.

Mr Tusk emerged from the talks – and a subsequent meeting with Mrs May – to address reporters at a news conference at 02:15 local time (01:15 BST).

He said: “The course of action will be entirely in the U.K.’s hands: they can still ratify the withdrawal agreement, in which case the extension can be terminated.”

This story from the bbc.com Internet site was something that Swedish reader Patrik Ekdahl sent along at 7 a.m. Central European Summer Time on their Thursday morning — and another link to it is here.


Euro Tumbles After Draghi Issues “Whatever It Takes” 2.0 Statement

While admitted there’s “a picture of weakening growth” in the euro zone, ECB chief Mario Draghi confidently intoned that the probability of an E.U. recession is low.

However, Draghi dropped the hammer on any doubters that the only thing that matters is him…

We’re ready to use all instruments. ALL instruments.”

A ‘whatever it takes‘ moment if ever there was one.

EUR/USD tumbled on the headline…Click to enlarge.

But we do note that this is a relatively modest move compared to previous “we’re all in” comments — are central banks losing their mojo?

This brief story showed up on the Zero Hedge website at 9:14 a.m. on Wednesday morning EDT — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Chinese Car Sales Thrashed in March as Unprecedented Collapse Slump Continues

Car sales in China, the world’s largest vehicle market, continue to tumble, exposing an increasingly ugly picture for the global automotive market. The data marks a dismal and protracted reversal in a market that had done nothing but grow for decades, according to Bloomberg. In March, retail sales of sedans, SUVs, minivans and multipurpose vehicles dropped 12% to 1.78 million units, according to the China Passenger Car Association. This is after an 18.5% drop in February and a 4% drop in January.  Click to enlarge a bit.

The country’s slowing economy and continued trade tensions with the United States are weighing on consumer sentiment among its 1.4 billion people. Additionally, changes in tax policies and import tariffs have also acted as a headwind for car demand. Cars were the only consumer product category in China that shrank the first two months of 2019.

Cui Dongshu, secretary general of the CPCA, is among those calling for more government intervention to spur buying: “There are only 200 million private vehicles in China, leaving huge room for growth. Policies should be put in place to spur vehicle consumption in 2019.”

Because as we all know, the government manipulating the market to create demand where there isn’t any could never backfire, right?

This news item put in an appearance on the Zero Hedge website at 12:32 p.m. EDT on Wednesday afternoon — and another link to it is here.


Where did all the silver coins go?

In times past, small denomination coins were made of silver. The U.S. quarter dollar, for instance, once contained 90% silver, which meant that each quarter had 5.6 grams of precious metals. But in 1965 the U.S. Mint stopped issuing coins with silver in them. These days, a quarter is mostly copper with some nickel.

In the U.K., coins contained 92.5% silver up until 1920, and after that were 50% silver. But nowadays, there isn’t a trace of precious metals to be found in any of the circulation coins minted by the Royal Mint.

Why did coins go from being composed mostly of silver to having no silver at all? The answer is simple: technological progress. People discovered that the monetary system worked more efficiently once the denominations formerly represented by silver coins were replaced by coins that contained base metals like nickel and copper. In this post I’ll walk through how “silverless” coins improved the monetary system. But first we have to head back 200 years to the early 1800s.

Bullion Star’s J.P. Koning explains the decline of silver coins around the world as the gradually rising price of the monetary metal overtook imprinted valuations and invited melting coins back into bullion.  I borrowed this story from a GATA dispatch that was posted late on Tuesday evening.  This commentary showed up on the bullionstar.com Internet site on their Tuesday sometime — and another link to it is here.


Valcambi loses deal to refine Newmont’s gold

Swiss gold refiner Valcambi has lost a contract to refine around 4 million ounces of gold a year from Newmont Mining Corp, one of the world’s biggest producers, five sources familiar with the matter told Reuters.

U.S.-based Newmont put the contract up for tender last year and has split the business between three of Valcambi’s rivals – Asahi in the United States and Argor-Heraeus and PAMP in Switzerland, the sources said.

It all went up for tender and different refineries won different pieces (of the contract),” said one source.

Valcambi is the world’s largest gold refinery and had processed almost all of Newmont’s gold output for around 15 years, the sources said. Newmont owned a majority stake in Valcambi until 2015 when it sold the shares to India’s Rajesh Exports.

One wonders what happened between Valcambi and Newmont while Newmont was still a stakeholder, as there’s certainly a good reason why they wouldn’t give some of the business to Valcambi.  This Reuters story, filed from London, put in an appearance on their Internet site at 1:52 a.m. EDT on Wednesday morning.  I found it on the Sharps Pixley website — and another link to it is here.


The PHOTOS and the FUNNIES

Here are the last three photos from the “Let’s drive to Peachland, B.C. for lunch” series.  The first is along the waterfront of Okanagan Lake, the second from the summit of “The Connector”…B.C. Highway 97C looking west-to-northwest across the Thompson Plateau on the drive back. The distant snow-capped coastal mountain range in the center of this shot is about 100 miles/160 kilometers away.  The third shot shows the ‘descent’ into the Nicola Valley, with the town of Merritt in the center-left of the photo.  The water vapour plume comes from one of the four sawmills in town.  These pictures were taken on March 3.  Click to enlarge for all.


The WRAP

It was mostly a ‘nothing’ sort of a day in the precious metals.  Of course there were rallies in three of the four precious metals, but none were very large — and all met the same fate during the COMEX trading session.  The volumes in gold were nothing special once again — and very quiet in silver for the third day in a row.

The only event worth noting, which I’d already pointed out at the top of today’s column, was the fact that gold closed above its 50-day moving average by a few dollars on Wednesday.

Here are the 6-month charts for all four precious metals — and except for the doji in gold, there’s not a lot to see once again.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price had another down/up dip in morning and early afternoon trading in the Far East on their Thursday. It was back at almost unchanged by the 2:15 p.m. CST afternoon gold fix in Shanghai, but was tapped lower at that juncture — and is currently down $1.30 the ounce. It was the same price path for silver, but it was up a penny or two by the afternoon gold fix in Shanghai, but it’s down 2 cents now. Platinum continues to stair-step its way quietly higher — and is up 7 bucks at the moment. Palladium didn’t do anything until 2 p.m. China Standard Time — and then jumped up a whole bunch of dollars, but got smacked lower immediately — and it’s only up a dollar as Zurich opens.

Net HFT gold volume is coming up on 39,500 contracts — and there’s only 556 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is pretty light at around 7,700 contracts — and there’s only 222 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down 6 basis points once trading began at 7:44 p.m. EDT in New York on Wednesday evening. It has tried to break above the unchanged mark on three separate occasions in Far East trading since then, but without much success — and as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich, it’s down 1 basis point.


Tomorrow we get the latest and greatest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday and, of course, yesterday’s price activity won’t be in it. Ted isn’t expecting much in the way of changes — and I’ll have all his thoughts on this in my Friday missive.

And as I post today’s column on the website at 4:02 a.m. EDT, I see that all four precious metals have continued to be sold lower during the first hour of London and Zurich trading. Gold is now down $2.70 an ounce — and silver is down 6 cents. Platinum is only up 4 dollars now — and palladium is now down 9 bucks…from up 12 dollars less than two hours ago.

Gross gold volume is a bit over 52,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is around 50,800 contracts. Net HFT silver volume is now up to around 10,700 contracts — and there’s still only 340 contracts worth of roll over/switch volume in that precious metal.

The dollar index continue to attempt a break above unchanged, but still no cigar — and is down 3 basis points as of 8:45 a.m. in London — and 9:45 a.m. in Zurich.

That’s it for today — and I’ll see you here tomorrow.

Ed

Gold Spiked Above Its 50-Day Moving Average Very Briefly

10 April 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rose and fell a couple of dollars in Far East trading on their Tuesday — and was back at about unchanged by the London open.  It began to wander higher from there — and back above the $1,300 spot mark, but ran into ‘something’ very shortly after the COMEX open in New York.  From that juncture it was sold quietly and unevenly lower for the remainder of the Tuesday session.

It was yet another day where the low and high ticks in gold aren’t worth looking up.

Gold finished the day at $1,303.70 spot, up $6.60 from Monday’s close.  Net volume was nothing special at around 191,700 contracts — and there was a tiny bit over 9,000 contracts worth of roll-over/switch volume on top of that.

It was virtually the same price path for silver as it was for gold, except once the price was capped minutes after the COMEX open, the price was sold lower a bit more aggressively — and silver finished the Tuesday session in the red by a few pennies.

The low and high ticks aren’t worth looking up in this precious metal, either.

Silver was closed at $15.19 spot, down 3 cents on the day.  Net volume was very quiet for the second day in a row at a hair under 42,000 contracts — and roll-over/switch volume was pretty heavy at around 21,300 contracts.

Platinum was sold down a bit over ten dollars shortly after trading began at 6:00 p.m. EDT in New York on Monday evening.  It gained a bunch of that back in very short order — and proceeded to chop very unevenly sideways until shortly after the COMEX open in New York.  The price got leaned on at that point — and its low tick of the day was set right at the COMEX close.  The price didn’t do much after that.  Platinum was closed at $890 spot, down $17 on the day.

Palladium was sold generally lower, with the low coming shortly before the Zurich open.  It rallied very unevenly from there, with the high of the day coming at the afternoon gold fix in London, or noon in New York…you choose.  Like palladium, it was sold lower into the COMEX close from that point — and didn’t do a lot after that.  Palladium was closed at $1,371 spot, up 9 dollars on the day.

The dollar index closed very late on Monday afternoon in New York at 97.05 — and opened up 3 basis points once trading began at 7:44 p.m. EDT in New York on Monday evening, which was 7:44 a.m. China Standard Time on their Tuesday morning.  It proceeded to chop quietly lower from there — and the 96.86 low tick was set a minute or so after 9 a.m. in New York.  The index began to chop quietly higher from there — and all the gains that mattered were in by a few minutes before the 1:30 p.m. EDT COMEX close.  From that point, it chopped quietly sideways into the close.  The dollar index finished the day 97.01…down 4 basis points from Monday’s close.

Here’s the DXY chart, courtesy of BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.09…and the close on the DXY chart above, was 92 basis points on Tuesday.  Click to enlarge.

The gold shares opened up a bit — and then proceeded to chop very quietly sideways until around noon in New York trading.  They faded a bit from there, hitting their respective lows…such as they were…around the 1:30 p.m. COMEX close.  They managed to rally from that point — and made it back into positive territory by a bit, as the HUI closed higher by 0.54 percent.

In most respects, the price action in the silver equities was similar to the gold stocks, except a tad weaker.  Their lows came a few minutes after the COMEX close — and although they managed to make it back into the green by a bit after that, they struggled to stay in positive territory.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.17 percent…not what the chart says. When Nick updated the date very late on Tuesday night, the Silver 7 showed down 0.43 percent, which I don’t believe.  Nick said this would sort itself tomorrow.  Click to enlarge if necessary.

And here’s the 1-year Silver Sentiment/Silver 7 Index chart, updated with Tuesday’s doji — and it should show up 0.17 percent, not down 0.43 percent.  Click to enlarge as well.

The CME Daily Delivery Report showed that 12 gold and 1 silver contract were posted for delivery within the COMEX-approved depositories on Thursday.

In gold, the largest short/issuer was Advantage, with 11 contracts out of their client account.  They also picked up 4 contracts as long/stopper.  The other two long/stoppers of note were Citigroup and HSBC USA, with 4 and 3 contracts for their respective in-house/proprietary trading account.

The lone silver contract was issued by R.J. O’Brien — and stopped by JPMorgan.  Both transactions involved their respective client accounts.

The link to yesterday’s Issuers and Stoppers Report is here.

The Preliminary Report for the Tuesday trading session showed that gold open interest in April fell  by 20 contracts, leaving 325 still open, minus the 12 contracts mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 20 gold contracts were actually posted for delivery today, so the change in open interest and deliveries match.  Silver o.i. in April rose by 1 contract, leaving 16 still around, minus the 1 contract mentioned just above.  Monday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today, so that means that 1 more silver contract was just added to the April delivery month.


For the seventh day in a row there was a withdrawal from GLD, as an authorized participant took out 84,988 troy ounces.  Once again, there were no reported changes in SLV.

The folks over at the shortsqueeze.com Internet site updated their short position data for both SLV and GLD yesterday evening for positions held at the close of trading on Friday, March 29 — and it showed that the short position in SLV rose from 9,864,700 shares/troy ounces, up to 10,453,300 shares/troy ounces, which is an increase of 6.0 percent.  The short position in GLD declined from 1,657,950 to 1,457,400 troy ounces, a decline of 12.1 percent.

There was no sales report from the U.S. Mint.

There was a bit of activity in gold over at the COMEX-approved gold depositories on the U.S. east coast on Monday.  Nothing was reported received — and only 14,708.436 troy ounces/457 kilobars [SGE kilobar weight] was shipped out of HSBC USA.  There was also a small paper transfer of 1,580.355 troy ounces/49 kilobars [SGE kilobar weight] from the Registered category — and back into Eligible over at Delaware.  The link to all this is here.

And just as a note of interest, all the COMEX deliveries in gold this week have been of the kilobar variety, with no exceptions.  I’ve never seen that before — and what it most likely means is that, slowly but surely, the 400 ounce good delivery bar is going the way of the Dodo bird.

It was busier in silver, as 1,084,129 troy ounces were received — and only 208,186 troy ounces were shipped out.  Of the ‘in’ activity, there was one truckload…600,327 troy ounces…that departed CNT — and the remaining 483,802 troy ounces left Scotiabank’s depository.  All the ‘out’ activity was at Scotiabank as well.  The link to this is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They reported receiving 180 of them — and shipped out 184.  All this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Pereshchepina Treasure is a major deposit of Bulgar, Sassanian, Sogdian, Turkic and Avarian objects from the Migration Period.

The deposit was discovered in 1912 in the village of Mala Pereshchepina (20 km from Poltava, Ukraine) by a boy shepherd who stumbled over a golden vessel and fell into what is sometimes believed to be the grave of Kubrat, the founder of Great Bulgaria and father of Asparuh, the founder of the First Bulgarian Empire. The hoard, first described by Makarenko, was extracted under the supervision of Count Aleksey Bobrinsky, a renowned archaeologist, who published its description in 1914. Although Kubrat’s link to the hoard seems certain, the exact nature of the site, grave or treasure, is disputed, since neither human remains nor indisputable evidence of a funeral device are reported to have been found.

The hoard contains more than 800 pieces, now preserved in the Hermitage Museum, Saint Petersburg. There are 19 silver vessels and 16 gold vessels, including a striking rhyton and remains of another. The official website of the museum speaks about…

…a staff with gold facing, a well-preserved iron sword with an end in the form of a ring and gold facing on the hilt and scabbard… gold jewellery — a torque, an earring, seven bracelets and seven rings with inlays of precious stones (amethysts, sapphires, tiger-eyes, garnets, rock crystal, and emeralds)… and square gold plaques for the facing of a wooden funeral construction.”

The total weight of gold from the deposit exceeds 21 kilograms, that of silver objects 50 kilograms.   Click to enlarge.

I have an average number of stores for you again today.


CRITICAL READS

America’s Real National Emergency — Bill Bonner

We left off yesterday by noting that the masses didn’t feel they should have to worry about deficits and debt.

They’ve been told that deficits don’t matter. And government finances are always a mystery, like the Virgin Birth and who shot JFK; it’s best not to ask too many questions.

Besides, why should they worry about it? They have elites to take care of things like that.

But like the masses themselves, the elite – the feds, their cronies, Wall Street, special interests, lobbyists, the Pentagon, the social welfare complex, the Deep State, and (generally) the rich – have been corrupted by fake money. They’ve grown accustomed to spending money neither they nor anyone else ever earned. And it’s a hard habit to break.

Fake money came from the Fed – $3.6 trillion of it between 2009 and 2019. Under the guise of “quantitative easing,” the Fed bought financial assets, mostly Treasuries. Yields sank. Stocks climbed. The ultra-rich got richer.

The Fed also kept interest rates below the rate of inflation – a giveaway, in other words – financing stock buybacks, mergers, acquisitions, bonuses, and other financial razzmatazz.

Altogether, the feds shifted about $30 trillion their way (a very rough estimate) and they weren’t about to give it up.

This interesting commentary from Bill appeared on the bonnerandpartners.com Internet site early on Tuesday morning EDT — and another link to it is here.


Hey, Ray Dalio, It’s The Fed, Stupid! — David Stockman

If you want to know had badly Keynesian central banking has corrupted the financial discourse, just check into the current PC sensation of the week.

We are referring to Ray Dalio’s punking of the very capitalism under which his $160 billion hedge funds has become the largest in the world and his net worth has soared to a tidy $18 billion. Yet Sunday night he told millions of “60 Minutes” viewers that the American Dream is dead, capitalism is in desperate need of reform and that wealth, income and opportunity mal-distribution in the U.S. is so severe that the President should call an national emergency.

(We hear you, Ray, but please don’t encourage the Donald to declare any more national emergencies—the Mexican border one is stupid enough).

In any event, Dalio was just getting started, reprising on bubble-vision itself yesterday morning with further heaping loads of admonishment about why the system isn’t working anymore, and that among other things he and people like him need to be taxed good and hard. O.K. Ray, the Dems will send you a pretty hefty due bill in the spring of 2021 after they sweep the tables in the next election. But for crying out loud, can’t you explain why America has gone into reverse Robin Hood without resorting to the utterly incoherent babble you dispensed on CNBC this a.m.? After all, if the Billionaires Club is to be visited upon by a condign punishment of its own urging, the indictment ought to at least make sense, which Dalio’s 25 minutes of bloviation absolutely did not.

We might ordinarily be inclined to spare Dalio the embarrassment of this amazingly stupid clip, but the thing that needs be established is that not once did he mention the front, center and overwhelming cause of the baleful condition he rightly identifies.

To wit, wealth distribution in modern America started to go to hell in a hand basket about 1987, which is to say, the exact time in which Bubbles Alan Greenspan took over the Fed and discovered the printing press in the basement of the Eccles Building during the 22% market meltdown of October 19, 1987.

He would be right about that, dear reader.  This long chart-filled rant by David was posted on the Zero Hedge website at 3:30 p.m on Tuesday afternoon EDT — and another link to it is here.


Diocletian in Venezuela — Jeff Thomas

History has an extraordinary tendency to repeat itself time and again.

The same mistakes that rulers make in one era are repeated in subsequent eras. Political leaders have a nagging habit to want to grow governments to unmanageable proportions, invading other sovereign nations, whilst increasingly dominating the electorate at home.

Invariably, this proves extremely costly and the bill is always passed to the people, first in the form of taxation and, ultimately, in the form of confiscation. Eventually nations and empires collapse under the great weight of their own governments.

And, time after time, the same patterns are followed, particularly during the declining stages. Declining nations follow similar patterns with uncanny regularity.

Let’s have a look at just three – first, Rome – an ancient empire that collapsed, then Venezuela – a country that’s currently collapsing, then the U.S. — a country that’s well along in the process, but is just now entering the final stages prior to collapse.

This very worthwhile commentary from Jeff showed up on the internationalman.com Internet site on Tuesday morning sometime EDT — and another link to it is here.


France’s SocGen Slashes 1,600 Trading Jobs After Stunning 20% Loss

Q4 was a notoriously difficult quarter for investment bank trading revenues, as the explosion of volatility caught banks flat-footed, despite an old truism on Wall Street that the sell-side typically benefits from the frenzied trading that typically comes with it. Yet, as global equities embarked on a torrid rally last quarter, it appears trading revenues haven’t improved in Q1, as both volatility and trading volume have fallen sharply.

Hence, after reports about impending cuts to its commodities business and its prop-trading arm surfaced earlier this year, it appears SocGen has finally made it official: The French bank said Tuesday that it’s planning to cut 1,600 investment-banking jobs. Most of the cuts – close to 1,200 positions – will be positions at its global banking and investor solutions division, according to Bloomberg.

While 750 of the cuts will focus on France, the rest will be spread across the bank’s international hubs in London and New York. All told, they represent about 8% of the bank’s GBIS unit, which houses its trading divisions and has a total headcount of about 20,000.

The cuts follow CEO Frederic Oudea’s decision to abandon his growth goals for the bank. The CEO’s failure to reverse a 40% drop in the bank’s share price over the past month have led to scorching criticism of his tenure, most notably by “bond king” Jeffrey Gundlach. Oudea, who has led the bank for 11 years, is facing a shareholder vote on his renewal at the bank’s May meeting.

This story put in an appearance on the Zero Hedge website at 6:04 a.m. on Tuesday morning EDT — and I thank Brad Robertson for sending it along.  Another link to it is here.


IMF Slashes World Growth Outlook to Weakest in a Decade

Following Christine Lagarde’s warnings last week, The IMF has officially cut its outlook for global growth to the lowest since the financial crisis amid a worsening outlook in most major advanced economies and signs that higher tariffs are weighing on trade.

Following a broad-based upswing in cyclical growth that lasted nearly two years, the global economic expansion decelerated in the second half of 2018,” the International Monetary Fund says in its latest World Economic Outlook.

Activity softened amid an increase in trade tensions and tariff hikes between the United States and China, a decline in business confidence, a tightening of financial conditions, and higher policy uncertainty across many economies.”

In its latest World Economic Outlook, the IMF forecasts that the world economy will grow 3.3% this year, down from the 3.5% the IMF had forecast for 2019 in January:  Click to enlarge.

IMF says risks skewed to downside, citing trade tensions, softness in Europe, no-deal Brexit

  • IMF lowers 2019 U.S. growth estimate to 2.3% vs 2.5% estimate in January
  • IMF cuts euro-area growth forecast to 1.3% this year from 1.6%
  • IMF lowers 2019 trade volume growth est. to 3.4% vs 4% in January

Every single country’s growth outlook was cut… except Nigeria!

This 2019 outlook will get cut again…and more than once most likely before the year is out.  Their 2020 forecast is totally unattainable already. Try half that amount…or less.  This Zero Hedge news item appeared on their Internet site at 9:12 a.m. EDT on Tuesday morning — and I thank Brad Robertson for this one as well.  Another link to it is here.


Saudis Threaten to End Petrodollar — Jim Rickards

Investors have been speculating for years about the demise of the “petrodollar” deal struck by Henry Kissinger and Treasury Secretary William Simon in 1974.

It was first set up between the U.S. and Saudi princes to prop up the U.S. dollar. At the time, confidence in the dollar was on shaky ground because President Nixon had ended gold convertibility of dollars in 1971.

In 1974, the price of oil was skyrocketing, partly due to inflationary policies pursued by the Federal Reserve, and partly due to an Arab oil embargo in response to U.S. aid to Israel in the Arab-Israeli Yom Kippur War of 1973.

The world economy was under threat unless a way could be found to “recycle” the dollars the Arabs were receiving back into U.S. banks. President Nixon and Henry Kissinger asked Simon to negotiate with Saudi Arabia on this issue.

Kissinger and Simon worked out a plan. If the Saudis would price oil in dollars, U.S. banks would hold the dollar deposits for the Saudis.

Behind this “deal” was a not so subtle threat to invade Saudi Arabia and take the oil by force. I personally discussed these invasion plans in the White House with Kissinger’s deputy, Helmut Sonnenfeldt, at the time. But the petrodollar plan worked brilliantly and the invasion never happened.

Another very worthwhile commentary, this one from Jim.  It showed up on the dailyreckoning.com Internet site on Tuesday sometime…even though it’s datelined Monday.  Another link to it is here.


Venezuela removes eight tonnes of gold from central bank — sources

Venezuela removed eight tonnes of gold from the central bank’s vaults last week, and the cash-strapped socialist state is expected to sell the bullion abroad as it seeks to raise hard currency in the face of U.S. sanctions, a lawmaker and one government source said.

With sanctions imposed by Washington choking off revenues from exports by state oil company PDVSA, President Nicolas Maduro’s increasingly isolated administration has turned to sales of Venezuela’s substantial gold reserves as one of the only sources of foreign currency.

The government source said the central bank’s reserves had fallen by 30 tonnes since the start of the year before U.S. President Donald Trump tightened sanctions, leaving the bank with around 100 tonnes in its vaults, worth more than $4 billion.

At that rate of decline, the central bank’s reserves would nearly disappear by the end of the year, leaving Maduro’s government struggling to pay for imports of basic goods.

Asked to comment on the new removal of gold, a U.S. State Department spokesman said, “The United States condemns all attempts by Maduro and his supporters to steal resources from the Venezuelan people.”

We encourage companies, banks, and other entities, whether in the United States or in other countries, not to participate in the former Maduro regime’s fire sale of Venezuelan resources,” the spokesman said.

This Reuters story, filed from Caracas, was posted on their website at 9:00 a.m. EDT on Tuesday morning — and was updated about six hours later.  I found it on the gata.org Internet site — and another link to it is here.


Chinese central bank adds 11.2 tonnes of gold in March — Lawrie Williams

One of the big questions for gold this year is whether official purchase will be maintained at anywhere near last year’s level of 651.5 tonnes – the highest level since 1971 when President Nixon ended the U.S. dollar’s gold convertibility and launched the fiat currency era.  Despite Russia and Kazakhstan seen as likely continuing monthly purchases at similar levels to 2018, when the former bought just over 274 tonnes and the latter 50.6 tonnes, accounting for almost 50% of official purchases, the general consensus has been that the totals reported to the IMF might slip a little this year.  But the likelihood of official purchases matching, or even exceeding, last year’s total have been enhanced by China returning to announce monthly purchases as from December last year.

Thus, this year China has announced purchases each month to date with the latest 11.2 tonne increasing March, making a total of almost 33 tonnes in the first quarter of the year.  At this rate China would add over 130 tonnes in the full year.  What we don’t know of course is whether the country also added to its gold reserves over the previous 24 months of reporting zero increases in its reserves to the IMF.  It has a track record of building its gold reserves under the radar for several years in a row and then announcing big rises.  Has that been the case also for the past couple of years.

Overall one suspects China is, like Russia and probably some other nations too, in diversifying its reserves away from dependence on the U.S. dollar as a reserve currency.  The U.S. has been demonstrating its readiness to use the dollar, and its links to global trade, as a weapon to try and bring enemies and allies into line with its global foreign policy, and is running into problems where U.S. policies are not necessarily allied to those of friend and enemy alike.  As pointed out in an article in Grant Williams’ excellent ‘Things that make you go hmm…’ newsletter (www.ttmygh.com) the usage of other currencies – notably the Euro and the yuan – as reserve currency elements are growing at the U.S. dollar’s expense.  Quoting the U.K.’s Daily Telegraph, it was pointed out that the U.S. dollar’s share of global central bank monetary reserves fell  to a still dominant 61.94% in Q$ 2018 – the third successive month of falls.  Meanwhile the Euro’s share rose to 20.69 percent – the highest level for four years despite Brexit uncertainties, and the yuan to a still very small 1.89%, the highest level since the IMF started reporting these levels in Q4 2016.  The movement is slow at the moment but the more the U.S. weaponises the dollar, the more this trend will likely continue.

This worthwhile commentary by Lawrie showed up on the Sharps Pixley website on Monday, but I couldn’t post it yesterday, as there was an error in it, which Lawrie has fixed…so here it is now.  Another link to it is here.


Money Is Gold, and Nothing Else” — Jim Rickards

Morgan’s observation that “Money is gold, and nothing else,” was right in two respects. The first and most obvious is that gold is a form of money. The second and more subtle point, revealed in the phrase, “and nothing else,” was that other instruments purporting to be money were really forms of credit unless they were redeemable into physical gold.

So much of the gold market is “paper gold.” This paper gold market is so manipulated, we no longer have to speculate about it. It’s very well documented. A central bank, for example, can lease gold to one of the London Bullion Market Association banks, which include large players like Goldman Sachs, Citibank, JPMorgan Chase, and HSBC.

Gold leasing is often conducted through an unaccountable intermediary called the Bank for International Settlements (BIS). Historically, the BIS has been used as a major channel for manipulating the gold market and for conducting sales of gold between central banks and commercial banks. The BIS is the ideal venue for central banks to manipulate the global financial markets, including gold, with complete non-transparency.

But it all rests on a tiny base of physical gold. I describe the market as an inverted period with a little bit of gold at the bottom and a big inverted pyramid of paper gold resting on top.  There’s just not that much gold available. But in the paper gold market, there’s no limit on size, so anything goes.

This commentary from Jim, which is definitely worth your time, appeared on the dailyreckoning.com Internet site back on April 1, 2019 — and I don’t know how I missed it, as I’m on that website every day.  I found it embedded in a GATA dispatch yesterday — and another link to it is here.


The PHOTOS and the FUNNIES

These three shots are from a brief lunch trip to Peachland, B.C. along Highway 97C…know locally as “The Connector”.  It takes you across the highest part of the Thompson Plateau — and I’ll have a photo of that tomorrow.  The first and second shots were taken on the ‘final descent’ into Peachland — and the last photo was taken in a small park along Okanagan Lake, which is also clearly visible in the first shot as well.  Click to enlarge.


 

The WRAP

Tuesday was another day, like on Monday, where both silver and gold would have broken out to the upside in price if the “all the usual suspects” hadn’t been laying in wait at the COMEX open.

And also like on Monday, volumes in both these precious metals was very light once again, so it was pretty easy for ‘da boyz’ to keep their respective prices in line.

The gold price did break above its 50-day moving average on the post-COMEX open price spike, but as you already know, it was hammered back below that mark in very short order — and most likely before the Managed Money traders could make a move.

Here are the 6-month charts for the Big 6 commodities — and other than the above remark about gold, there’s not really a lot to see.  Click to enlarge.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price was sold quietly lower starting about two hours after trading began at 6:00 p.m. EDT in New York on Sunday evening. That lasted until shortly before 11 a.m. CST on their Wednesday morning — and it has struggled higher since — and is actually in positive territory by 90 cents now. It was exactly the same for silver — and it’s up a penny. Ditto for platinum — and it’s now up 2 bucks. The palladium price also began to rally shortly before 2 p.m. China Standard Time — and it’s up 6 dollars as Zurich opens.

Net HFT gold volume is a bit over 32,500 contracts — and there’s 2,204 contracts worth or roll-over/switch volume in this precious metal. Net HFT silver volume is a bit over 9,300 contracts — and there’s only 431 contracts worth of roll-over/switch volume on top of that.

The dollar index opened about unchanged — and then rallied a very small handful of basis points — and the current high tick, such as it is, came a few minutes after 9 a.m. in Shanghai. It has been edging very quietly lower since — and is down 4 basis points as of 7:45 a.m. BST in London/8:45 a.m. CEST in Zurich.


Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report — and although I said I wouldn’t stick my neck out, I will anyway.  Looking at the last five dojis in both silver and gold, I’d expect that we’ll see some minor increases in the commercial net short positions in both metals…but reserve the right to be wrong!  How’s that for a definitive prediction?  But as I also pointed out yesterday, I’ll wait to see what Ted has to say in his mid-week commentary this afternoon — and will offer a few sentences of his thoughts in my Friday missive.

And as I post today’s efforts on the website at 4:02 a.m. EST, I note that all four precious metals were tapped lower once London and Zurich trading began. Gold is now down $1.00 — and silver is down a penny. Platinum and palladium are now down a dollar each.

Gross gold volume is just under 46,000 contracts — and minus roll-over/switch volume, net HFT gold volume is around 41,300 contracts. Net HFT silver volume is coming up on 11,700 contracts — and there’s still only 498 contracts worth of roll-over/switch volume in this precious metal.

The dollar index hit its current ‘low’…at the 96.94 mark…four minutes before the London open — and has ‘rallied’ a bit since — and is now up 2 basis points as of 8:45 a.m. in London…9:45 a.m. in Zurich.

That’s it for yet another day — and I’ll see you here tomorrow.

Ed

“Day Boyz” Did “Whatever It Took” on Monday

09 April 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much for the first two hours once trading began at 6:00 p.m. EDT in New York on Sunday evening.  Then, over the next two hours it rallied by five bucks or so before trading flat until shortly before the London open.  It jumped a dollar and change at that point — and then traded flat once again until a few minutes before 1 p.m. BST in London/8 a.m. EDT in New York.  It began to head rather sharply higher from there — and back above $1,300 spot.  But a minute or so before 9 a.m. it ran into ‘something’ — and was sold lower until about 11:15 a.m. EDT.  From there it traded almost ruler flat for the remainder of the Monday session.

Despite the nice looking price spike, the low and high ticks aren’t worth looking up.

Gold was closed in New York yesterday at  $1,297.10 spot, up $5.70 on the day.  Net volume was nothing special at 201,000  contracts — and there was only a hair over 7,000 contracts worth of roll-over/switch volume on top of that.

The price path for silver was very similar in Far East and morning trading in London…except its price path was a bit more ragged looking.  Its sharply rally also began around 1 p.m. BST/8 a.m. EDT — and the not-for-profit sellers had to step in at 8:45 a.m…or it the price would have really sailed.  It was sold lower until around 9:35 a.m. in New York trading — and didn’t do a thing after that.

The low and high ticks in this precious metal were reported by the CME Group as $15.075 and $15.275 in the May contract.

Silver was closed at $15.22 spot, up 14 cents from Friday — and well above its 200-day moving average.  Net volume was very light at a bit over 40,000 contracts — and roll-over/switch volume was pretty decent at a bit over 17,000 contracts.

Platinum’s quiet rally in early Far East trading got stopped in its tracks a minute or so after 10 a.m. China Standard Time on their Monday morning — and it was sold down until about noon over there.  From that juncture it began to head unevenly higher and, like gold, ran into ‘something at 9 a.m. in New York.  It was sold down into the afternoon gold fix — and then chopped and flopped around by a few dollars until the 1:30 p.m. EDT COMEX close.  It didn’t do a thing after that.  Platinum finished the day at $907 spot, up at even 10 dollars from Friday.

Palladium rallied very unevenly higher — and was up ten dollars by a few minutes before 1 p.m. CST on their Monday afternoon, but by the Zurich open, was down around 7 bucks on the day.  Then, like platinum, it had a sharp rally around 10 a.m. CEST in Zurich, but was…like gold and platinum, sold lower until 9 a.m. in New York.  It rallied a bit after the afternoon gold fix in London — and then was sold down a bit until 1 p.m. EDT.  Like the other three precious metals, it didn’t do much of anything from a price perspective after that.  Palladium was close on Monday at $1,361 spot, up 11 dollars from Friday.

The dollar index closed very late on Friday afternoon in New York at 97.40 — and opened basically unchanged once trading began at 6:30 p.m. EDT on Sunday evening in New York.  It was all quietly down hill from there until 8:30 a.m. in New York — and then the decline became somewhat more serious.  The 96.98 low tick was set a minute or so before 9 a.m. EDT — and it rallied back above the 97.00 mark an hour and change later — and then didn’t do much for the remainder of the Monday trading session.  The dollar index finished the day at 97.05…down 35 basis points from Friday’s close.

Although there was a bit of correlation between the dollar index and precious metal prices in New York early on Monday morning for about an hour, it was obvious that prices were being kept well contained during the rest of the day…both before and after.

Here’s the DXY chart, courtesy of Bloomberg once again.  Click to enlarge.

Here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site — and the delta between its close…96.13…and the DXY chart above, was 92 basis points on Monday.   Click to enlarge.

The gold shares gapped up just under two percent at the open — and after a late morning down/up dip, crept very quietly lower until trading ended at 4:00 p.m. EDT in New York.  The HUI closed up 1.19 percent.

The silver equities gapped up a percent and change once trading commenced at 9:30 a.m. in New York on Monday morning. — and rallied very unevenly higher from there until a minute before 2 p.m. EDT — and then sold off a decent amount going into the close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 1.73 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 20 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on the U.S. east coast on Wednesday.

In gold, the three short/issuers were Advantage, ADM and Marex Spectron with 11, 7 and 2 contracts out of their respective client accounts.  The four long/stoppers were Advantage and JPMorgan, with 6 and 3 contracts for their respective client accounts — and Citigroup and HSBC USA with 6 and 5 contracts for their own in-house/proprietary trading accounts.

There were also 73 copper — and 2 platinum contracts stopped as well.

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 April fell by 98 contracts, leaving 345 still around, minus the 20 gold contracts mentioned a few short paragraphs ago.  Friday’s Daily Delivery Report showed that 87 gold contracts were actually posted for delivery today, so that means that 98-87=11 gold contracts vanished from the April delivery month.  Silver o.i. in April dropped by 60 contracts, leaving just 15 left.  Friday’s Daily Delivery Report showed that 60 silver contracts were actually posted for delivery today, so the change in open interest and deliveries match.


For the sixth day in a row there was a withdrawal from GLD, as an authorized participant took out 37,773 troy ounces.  Once again, there was no withdrawal from SLV.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, April 5 — and this is what they had to report.  Their gold ETF dropped by 14,207 troy ounces, but their silver ETF added 123,106 troy ounces.

There was a tiny sales report from the U.S. Mint.  They sold 500 troy ounces of gold eagles — and 500 one-ounce 24K gold buffaloes — and that was all.

There was some movement in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  Nothing was reported received, but 64,973.289 troy ounces was shipped out.  Of that amount, there was 37,137.682 troy ounces/1,155 kilobars [SGE kilobar weight] shipped out of JPMorgan — and the remaining 27,575.040 troy ounces/857 kilobars [U.K./U.S. kilobar weight] was shipped out of Canada’s Scotiabank.  There were a couple of tiny amounts shipped out of Brink’s, Inc. and Delaware as well.  There was also a paper transfer of 16,991.050 troy ounces/528 kilobars [U.K./U.S. kilobar weight] transferred from the Eligible category — and back into registered.  That occurred at JPMorgan.  The link to ‘all of the above’ is here.

It was fairly busy in silver.  There was 786,293 troy ounces reported received — and 1,735,613 troy ounces shipped out.  Of the ‘in’ amount, there was 486,787 troy ounces received at JPMorgan — and the remaining 299,505 troy ounces was dropped off at Brink’s, Inc.  In the ‘out’ category, there was 1,090,421 troy ounces taken out of Brink’s, Inc…plus one truckload…629,300 troy ounces, departed CNT.  The remaining 15,892 troy ounces left Delaware.  There was also a paper transfer of 298,872 troy ounces from the Eligible category — and into Registered over at CNT.  The link to all this activity is here.

There was no activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, as it was closed for the Ching-Ming/Tomb Sweeping Day holiday.


Here are two charts that Nick passes around every week.  I didn’t have space for them last week, as I had other charts to post that I felt were more important, so here they are now.  They show the gold and silver stored in all know depositories, mutual funds and ETFs as of the close of business on Friday, April 5.

The first chart is for gold — and it shows that total gold inventories fell by a net 352,000 troy ounces during the reporting week.  That’s a rather interesting number considering the fact that GLD, the largest of the gold depositories, shed 726,300 troy ounces of gold during the reporting week.  So that means that other depositories picked up around 374,000 troy ounces of gold that same week.  Click to enlarge.

And here’s the chart for silver — and it shows that, on a net basis, there was 343,000 troy ounces of silver withdrawn last week.  There was 433,800 troy ounces removed from SLV during the reporting week, so more must have been added elsewhere during the reporting week.  Click to enlarge.

I have an average number of stories for you today.


CRITICAL READS

U.S. Factory Orders Slumped in February as Stocks Soared

U.S. factory orders have been flat to weak for six straight months now…Click to enlarge.

Factory orders fell 0.5% MoM in February and were revised lower to unchanged in January.

Decoupling from the U.S. equity market’s push for new record highs…Click to enlarge.

But then again, when did fun-durr-mentals matter?

This very brief 2-chart Zero Hedge article put in an appearance on their website at 10:10 a.m. on Monday morning EDT — and I thank Brad Robertson for sending it along.  Another link to it is here.


The Real Threat is in Washington — Bill Bonner

We opined at the time of the 2016 election that neither foreign terrorists, nor illegal immigrants, nor cottoning up to Russia, nor Iran constituted a real threat to the U.S.

The real threat was homegrown… in the swamp of Washington, D.C., not overseas.

Unless the White House and/or Congress figured out how to walk on two legs – with some foresight and backbone – the country would go broke…

And that – as we’ve seen in Weimar, Germany, Venezuela, Zimbabwe, Brazil, and Argentina – is not just a matter of money.

When the money breaks down, other things tend to break down, too – politics, order, justice, civil society… almost everything.

This commentary, which Bill takes his time in getting around to, showed up on the bonnerandpartners.com Internet site early on Monday morning EDT — and another link to it is here.


U.S. Proposes Tariffs on Europe in Response to E.U. Airbus Subsidies

Step aside (fading) trade war with China: there is a new aggressor – at least according to the U.S. Trade Rep Robert Lighthizer – in town.

In a statement on the USTR’s website published late on Monday, the U.S. fair trade agency announced that under Section 301 of the Trade Act, it was proposing a list of E.U. products to be covered by additional duties. And as justification for the incremental import taxes, the USTR said that it was in response to E.U. aircraft subsidies, specifically to Europea’s aerospace giant, Airbus, which “have caused adverse effects to the United States” and which the USTR estimates cause $11 billion in harm to the U.S. each year.

One can’t help but notice that the latest shot across the bow in the simmering trade war with Europe comes as:  i) Trump is reportedly preparing to fold in his trade war with China, punting enforcement to whoever is president in 2025, and ii) comes just as Boeing has found itself scrambling to preserve orders as the world has put its order book for Boeing 737 MAX airplanes on hold, which prompted Boeing to cut 737 production by 20% on Friday.

While the first may be purely a coincidence, the second – which is expected to not only slam Boeing’s financials for Q1 and Q2, but may also adversely impact U.S. GDP – had at least some impact on the decision to proceed with these tariffs at this moment.

We now await Europe’s angry response to what is Trump’s latest salvo in what is once again a global trade war. And, paradoxically, we also expect this news to send stocks blasting higher as, taking a page from the U.S.-China trade book, every day algos will price in imminent “U.S.-European trade deal optimism.”

This news item appeared on the Zero Hedge website at 7:04 p.m. on Monday evening EDT — and another link to it is here.


NATO at 70 Years Old… Time For the Zombie to Die

If NATO were a person, it would be five years past retirement age. In fact, as Ron Paul notes, NATO should have retired back in the early 1990s when its reason for existence – the Warsaw Pact – ceased to exist. Instead, new missions had to be created and new enemies had to be made to justify the massive behemoth that provides lush jobs for the well-connected and vast fortunes for the weapons makers. NATO must die and the sooner the better.

When the North Atlantic Treaty Organization was created 70 years ago in 1949 it was formed as a blatant military instrument for waging the Cold War, a war that the U.S., Britain and other European allies had newly embarked on. NATO’s public relations cant about “peace and security” is but Orwellian rhetoric.

But, as The Strategic Culture Foundation notes, the supposed allies of the Soviet Union hastily went from an ostensible joint purpose of defeating Nazi Germany during the Second World War to initiating hostility towards Moscow. Already in 1946, British war-time leader Winston Churchill was fulminating about “an Iron Curtain” descending across Europe, in language adapted from Third Reich propaganda maestro Joseph Goebbels. The ensuing Cold War would last for nearly half a century until the Soviet Union collapsed from its internal political and economic stresses.

NATO’s first secretary general, Britain’s Lord Ismay, was candid in the mission of the military alliance. Its objective, he said, was to, “Keep Russia out, the Americans in, and Germany down”.

This very interesting and worthwhile commentary from Tyler Durden over at Zero Hedge appeared on their Internet site on Saturday morning EDT — and another link to it is here.


Iran Designates U.S. Military as Terrorist Organization

Just hours after President Trump formally designated Iran’s Islamic Revolutionary Guards Corps as a terrorist organization, Iran’s foreign ministry has put forward a bill placing U.S. Central Command on a list of organizations designated as terrorists, akin to Daesh.

But, as Sputnik News reports, the Iranian Foreign Ministry responded to the designation on Monday, recommending that President Hassan Rouhani designate U.S. Central Command (U.S. CENTCOM), a U.S. military theatre-level command whose area of responsibility includes the Middle East, on the list of organisations designated as terrorists by Iran.

Previously, the Iranian Foreign Minister noted that those U.S. officials who advocated IRGC blacklisting, “seek to drag the U.S. into a quagmire“.

Iranian officials previously warned that the IRGC’s inclusion on the U.S. terror list would be a “mistake” which would prompt Tehran to equate the U.S. military with Daesh (ISIS). Heshmatollah Falahatpisheh, chairman of the Iranian parliament’s National Security and Foreign Policy Commission, said a bill to this effect had already been prepared.

This story, also from the Zero Hedge website, was posted there at 11:15 a.m. EDT on Monday morning — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


Nevertheless, He Persisted“: Midnight in the Land of the Rising Sun — Jim Grant

On Friday, the Nikkei Asian Review reports that Nomura Holdings, Inc. expects to close over 30 of its 156 domestic retail branches, “previously considered a sacred cow by the group.” In addition, Nomura will eliminate roughly half of its 11 administrative departments and “revisit its policy of maintaining hubs in Japan, the U.S. and Europe.” That comes after the investment bank reported a ¥101.2 billion ($911 million) loss for the nine months ended Dec. 31, its worst such showing since 2008.

Nomura’s misadventures are no outlier. In early March, Mizuho Financial Group, Inc. was forced to take a ¥680 billion write down that included ¥150 billion worth of losses related to its portfolio of overseas bonds. More broadly, the Tokyo Stock Exchange Bank Index has seen its return on equity decline in each of the last five years, to 5.33% in 2018 from 9.77% in 2013. The index trades at a paltry 0.47 times book value, worse than even the EURO Stoxx Bank Index’s similarly-depressed 0.62 price-to-book ratio and far below the 1.18 times book valuation commanded by the U.S. KBW Bank Index.

Of course, much like Europe, Japan’s macro-economic backdrop features negative interest rates and aggressive central bank asset purchases. The BoJ has accumulated ¥557 trillion in assets, equivalent to 101% of 2018 nominal GDP (that compares to about 39% in Europe and 19% in the U.S.), as policymakers continue to up the ante in their quest to achieve a 2% measured rate of inflation.

With its gargantuan portfolio, the BoJ wields substantial control of the country’s capital markets. As noted by the Financial Times on Sunday, the central bank now holds close to 80% of outstanding ETF assets, equating to approximately 5% of Japan’s total market capitalization, while data from Bloomberg pegs the BoJ ownership of the Japanese Government Bond Market at 43%.

This very interesting article from Jim showed up on the Zero Hedge website at 7:00 p.m. EDT on Sunday evening.  I thank Richard Saler for pointing it out — and another link to it is here.


EDITORIAL: The Panic Over the Federal Reserve — The New York Sun

It’s hard to recall from the journalistic pack such a panic as has erupted over news that President Trump intends to name Stephen Moore and Herman Cain to the board of the Federal Reserve. The New York Times warns the Fed could end up under the presidential “thumb.” A “hideous specter,” says the Washington Post. “Sabotage” cries the Financial Times. They all bewail the Fed’s independence.

We’re tempted to say that all this solicitude over monetary policy warms the cockles of what’s left of our heart. Yet the fact of the matter is that none of them — neither of the two Timeses nor the Post — are worried about an independent monetary policy. If they were, they’d have been in the fight for the gold standard long ago. It’s the classical, constitutional way to keep monetary policy sound and honest.

Neither are they worried about the qualifications of either Messrs. Moore or Cain, though the Democratic press has been withering. Mr. Moore has been in the debate over economic policy his whole adult life, and Mr. Cain spent years on the board of — and chaired — the Kansas City Fed. (There’s a school of thought that reckons we need more representation of regional Feds on the board of governors.)

What the uproar over these prospective nominations reflects is the sudden realization that the President could well include monetary policy on the list of campaign promises he intends to keep. Remember? The Paris climate accord, Iran deal, Jerusalem embassy, tax cuts, full employment, rebuild the military, build the wall, conservative judges — can the Federal Reserve be far behind?

This short, but very interesting editorial was posted on The New York Sun‘s website on Sunday — and the first person through the door with it was Fred Ehrman.  Another link to it is here.


Goldcorp’s Ian Telfer rode the gold highs but exits on a low note

After helping to build what was once the most valuable gold mining company in the world, Goldcorp Inc. chairman Ian Telfer is planning to exit on a low-note — albeit $12 million richer.

Earlier this year, Telfer cut a deal to sell Goldcorp for US$10 billion — a 78 per cent hair cut from its peak valuation of US$45 billion back in 2011 when gold prices were soaring.

On Thursday, in a sign of how far the company has fallen, Goldcorp shareholders voted nearly unanimously to approve the deal. Proxy advisors have recommended Newmont shareholders do the same when they vote April 11.

That means Telfer, 73, who does not hold a position at any other gold company, could officially be jobless next week, having opted to take a $12 million severance pay out despite shareholder objections, and to give up the chance to serve as Newmont’s deputy chairman.

If he does leave the gold industry — although some friends and acquaintances doubt he will sit still in retirement — the departure comes at a time when Telfer believes the gold mining industry is headed for a period of decline, as he made clear in interviews with the Financial Post conducted during the past year including an extended conversation last May before his induction into the Canadian Business Hall of Fame.

Convinced that the major gold reserves in the world all have been discovered and the industry must shrink, Telfer has been bracing for a wave of consolidation. Unfortunately, it arrived last year as his company was trading at its lowest point in decades.

Ian is more than aware that the precious metal markets are being managed, but won’t say a word about it in the public domain.  This longish news story put in an appearance on the National Post’s website on Monday sometime — and it’s posted in the clear in its entirety on the gata.org Internet site.  Another link to it is here.


Gold belongs to the people, not bankers’: Italian govt moves to seize reserves from central bank

Italy’s government is pushing ahead with new laws challenging the central bank’s control of the country’s reserves. Rome is calling for public ownership of the nation’s gold.

The ruling coalition of the anti-establishment 5-Star Movement and the League parties proposed two bills that have evoked nationwide controversy over the country’s long-standing financial and monetary system. One draft law may, reportedly, oblige the central bank’s owners to sell their shares to the Italian Treasury at prices from the 1930s, while the second law is set to declare Italian nationals to be the owners of the Bank of Italy’s reserves.

The gold belongs to the Italians, not to the bankers. We are ready to battle everywhere in Italy and to bring Italians to the streets if necessary,” said Giorgia Meloni, leader of the Brothers of Italy opposition party, as quoted by The Wall Street Journal.

The 5-Star Movement and the League previously blamed the current system of governing the country’s monetary system for losses of small individual investors caused by the recent downfall of several Italian financial institutions.

According to government officials, the central bank failed to maintain proper supervision of the country’s banking system during the latest crisis that put the entire monetary system of the Eurozone at risk.

This news item was posted on the rt.com Internet site at 11:26 a.m. Moscow time on their Monday morning, which was 4:26 a.m. in Washington…EDT plus 7 hours  — and I thank Larry Galearis for sending it our way.  Another link to it is here.  The Zero Hedge spin on this, courtesy of Roy Stephens, is headlined ““It Belongs To The People, Not The Bankers” – Italy Moves To Seize Gold From Central Bank“.


Indian government keeps trying to paperize its people’s gold

India will hold a top ministerial meeting early this week on giving gold the status of an asset class, a move that seeks to reduce the dependence on imports by boosting the circulation of an estimated 25,000 tonnes of the metal lying locally in jewellery or coin forms.

The status of an asset class would give Indians the opportunity to capitalise their gold and make it as liquid as the stock of a listed company. The government is working on having an India gold delivery standard, similar to gold that’s certified by the London Bullion Market Association (LBMA), the world’s standard setter for the metal.

The meeting is scheduled to be held in New Delhi, two persons aware of the development said. The Bureau of Indian Standards, or BIS, would play a key role in making gold an asset class, said one to the persons.

Residents holding gold jewellery or coins would be able to get these melted into 995 or 999 purity bars by accredited refiners, who would issue a certificate to them bearing the title of goods, purity and serial number embossed on the bars, which can be traced to their owner.

This paper gold-related news story, filed from Mumbai, showed up on the Economic Times of India website — and is actually headlined “Inter-ministerial group to meet on making gold an asset class” — and I found this story on the gata.org Internet site.  Another link to it is here.


China increases pace of announced additions to gold reserve

China’s on a bullion-buying spree as Asia’s top economy expanded its gold reserves for a fourth straight month, adding to investors’ optimism that central banks from around the world will press on with a drive to build up holdings. Prices advanced back toward $1,300 an ounce.

The People’s Bank of China raised reserves to 60.62 million ounces in March from 60.26 million a month earlier, according to data on its website on Sunday. In tonnage terms, last month’s inflow was 11.2 tons, following the addition of 9.95 tons in February, 11.8 tons in January and 9.95 tons in December.

China, the world’s top gold producer and consumer, is facing signs of a slowing economy, even as progress is being made in trade negotiations with the U.S. The latest data from the PBOC indicate that the country has resumed adding gold to its reserves at a steady pace, much like the period from mid-2015 to October 2016, when the country boosted holdings almost every month. Should China continue to accumulate bullion at the current rate over 2019, it may end the year as the top buyer after Russia, which added 274 tons in 2018.

Last year’s bullion buying by emerging-market central banks was the most robust in a long time as countries diversified reserves, Ed Morse, Citigroup Inc.’s global head of commodities research, said in a Bloomberg TV interview on Monday. The bank’s positive on gold, targeting $1,400 by year-end.

Of course China didn’t ‘buy’ this gold very recently at all.  They just moved it from an off-book ledger entry — and into the light of day.  Expect more of this as time goes along.  This Bloomberg story appeared on their Internet site at 3:10 a.m. Pacific Daylight Time on Sunday morning — and was updated about 23 hours later.  I found it in a GATA dispatch — and another link to it is here.  The rt.com spin on this is headlined “China Boosts Its Gold Reserves for Fourth Month in a Row – Central Bank” — and I thank Stewart Naylor for finding it for us.


The PHOTOS and the FUNNIES

Here are the last three photos from our brief trip up to the Sun Peaks ski resort just outside Kamloops.  It’s world class in every way.  Click to enlarge.


The WRAP

The powers-that-be haven’t gone away — and were then when needed a minute or so before 9 a.m. EDT for gold — and fifteen minutes before that in silver.  And if you noted the charts for both platinum and palladium, their rally attempts at various time during the Monday trading session, both in New York and Zurich, weren’t left untouched, either.

As stated previously, volume in gold was nothing special — and in silver it was pretty light — but light volume or not, it should be more than obvious that all four precious metals would have closed at some unimaginable prices if ‘day boys’ had appeared when required to do so.

Here are the charts for all four precious metal, plus copper and WTIC — and it should also be noted that WTIC closed firmly above its 200-day moving average for the second day in a row on Monday.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price was up a dollar or so by 9 a.m. China Standard Time on their Tuesday morning — and then didn’t do much until shortly before 2 p.m. CST. It was then sold lower — and is currently up 30 cents the ounce. Silver traded unevenly sideways through all of Far East trading — and is down a 2 cents at the moment. Platinum has been sold unevenly lower in Far East trading — and is down 7 bucks. Ditto for palladium — and it’s down 2 dollars as Zurich opens. It was down 11 dollars about twenty minutes before that.

Net HFT gold volume is coming up on 35,000 contracts — and there’s only 229 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is pretty quiet at a hair over 6,000 contracts — and there’s 1,379 contracts worth of roll-over/switch volume on top of that.

The dollar index hasn’t been doing a lot. It opened up 3 basis points once trading began at 7:44 a.m. EDT in New York on Monday evening — and dipped a few basis points below the 97.00 mark by shortly before noon in Shanghai — and it edged a few bases points higher from there, but then rolled over about twenty-five minutes before the London open — and is down 8 basis points — and back below the 97.00 mark as of 7:45 a.m. in London/8:45 a.m. in Zurich.


Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and I’ll leave the guessing up to Ted as to what it may or may not say when he posts his mid-week commentary for his paying subscribers on Wednesday.

And as I post today’s column on the website at 4:03 a.m. EDT, I see that gold is off its London open low — and is back above $1,300 spot by a whisker…up $3.00 the ounce. Silver is off its low as well — and now up 1 cent. Both platinum and palladium are off their pre-Zurich open lows, with the former down 6 dollars — and palladium is now up 3 bucks.

Gross gold volume is around 44,500 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is 42,900 contracts. Net HFT silver volume is coming up on 8,100 contracts — and there’s a hair over 4,000 contracts worth of roll-over/switch volume in that precious metal already.

The dollar index rallied a bit until the London open — and then chopping lower from there — and is down 8 basis points as of 8:45 a.m. BST in London/9:45 a.m. CEST in Zurich.

That’s it for another day — and I’ll see you here tomorrow.

Ed