Yet Another Monstrous Withdrawal From SLV

18 January 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much of anything anywhere on Planet Earth on Thursday, trading in a six-dollar price range throughout the entire Thursday session.

Of course the lows and highs aren’t worth mentioning.

Gold finished the day in New York at $1,291.30 spot, down $1.90 from Wednesday’s close.  Net volume was very light once again at 165,000 contracts — and there was just over 26,500 contracts worth of roll-over/switch volume in this precious metal.

Silver didn’t do much either — and one was down 3 cents by 1 p.m. GMT in London/8 a.m. EST in New York.  A bit of price pressure showed up at that point — and the low tick of the day, such as it was, came minutes after 9 a.m. in New York.  It inched quietly higher until a hour or so before the 5 p.m. EST close.

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

Silver was closed at $15.505 spot, down another 6.5 cents.  Net volume was pretty light as well at just under 53,000 contracts — and there was only 1,903 contracts worth of roll-over/switch volume on top of that.

The platinum price traded a dollar or so higher when it began at 6:00 p.m. EST in New York on Wednesday evening — and the downward price pressure started shortly before 9:30 a.m. China Standard Time on their Thursday morning.  That lasted until about 1 p.m. CST — and then it chopped quietly sideways until around 9:30 a.m. CET in Zurich.  It began to edge higher from there, culminating in an up/down price spike that started around 12:30 p.m. CET — and by around 9:30 a.m. in New York it was down a few dollars on the day.  It rallied very unevenly higher from there — and finished the Thursday session at $809 spot, up 4 dollars on the day.

The palladium price didn’t do much of anything until the Zurich open — and then the rally began, culminating in a NASA-type space launch in price starting shortly after 12 o’clock noon CET…blast through $1,400 the ounce in the process.  That was capped around the $1,415 spot price mark — and then was sold lower until minutes after 9 a.m. in New York — and well over half of its prior gains disappeared in the process.  It didn’t do much from there until the COMEX close — and at that juncture, crept very quietly higher until 4 p.m. EST in the thinly-traded after-hours market.  From that point it traded flat into the close.  Palladium finished the Thursday session at $1,377 spot, up another 34 bucks on the day, but off its high tick by a very chunky 38 dollars or so.

Palladium is now about 80 dollars per ounce more expensive than gold.  The supply/demand fundamentals are really kicking into high gear now.

The dollar index closed very late on Wednesday afternoon in New York at 96.06 — and fell a small handful of basis points once trading began at 7:45 p.m. on Wednesday evening.  Then the roller coaster ride began.  The 96.26 high tick was set around 10:50 a.m. in New York — and was back at the unchanged mark by around 1:05 p.m. EST.  It chopped quietly sideways from there until trading ended.  The dollar index finished the Thursday session virtually unchanged at 96.07…up 1 basis point on the day.

Here’s the DXY chart from Bloomberg once again.  Click to enlarge.

Here’s the 6-month U.S. dollar index chart — and the delta between its close…95.71…and the close on the DXY chart above, was 36 basis points on Thursday.  Click to enlarge.

The gold stocks dropped a bit at the 9:30 a.m. open in New York yesterday morning, but then bounced back to unchanged less than thirty minutes later — and they traded quietly but unsteadily sideways for the remainder of the Thursday session.  The HUI closed higher 0.03 percent.  Call it unchanged.

The silver equities dropped a bit over 2 percent at the open, but struggled unevenly higher for the rest of the day.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.79 percent.  Click to enlarge.

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

The CME Daily Delivery Report showed that 1 gold and 23 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, Advantage issued — and JPMorgan stopped.  Both transactions involved their respective client accounts.  In silver, the largest short/issuer was Advantage with 15 contracts.  JPMorgan stopped 9 contracts…5 for clients, plus 4 for its own account.  In second and third spots were Goldman and Advantage, with 6 and 5 contracts for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in January rose by 1 contract, leaving 52 left, minus the 1 contract mentioned just above.  Wednesday’s Daily Delivery Report showed that no gold contracts were posted for delivery today.  Silver o.i. in January declined by 104 contracts, leaving 377 still around, minus the 23 contracts mentioned in the previous paragraph.  Wednesday’s Daily Delivery Report showed that 124 contracts were actually posted for delivery today, so that means that 124-104=20 more silver contracts were just added to the January delivery month.


There were no reported changes in GLD yesterday, but there was another whopping big chunk of silver taken out of SLV, as an authorized participant removed 3,894,319 troy ounces.  That’s makes 6.05 million troy ounces withdrawn in the last two business days…ten truckloads.

Since October 22, 2018…the total amount of silver taken out of SLV now totals 27.40 million troy ounces…almost 12 days of world silver production — and almost 46 truckloads.

There was another sales report from the U.S. Mint on Thursday.  They sold 4,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — 75,000 silver eagles — and 1,000 one-ounce platinum eagles.

There was very little movement in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  Nothing was reported received — and only 160.750 troy ounces/5 kilobars [U.K./U.S. kilobar weight] was shipped out — and that happened at Canada’s Scotiabank.  There was also a smallish 192 troy ounces transferred from the Eligible category — and into Registered.  I won’t bother linking this.

It was certainly a lot busier in silver, as 900,363 troy ounces was reported received — and another 1,332,764 troy ounces shipped out.  In the ‘in’ department, one smallish truckload…585,464 troy ounces…was dropped off at CNT — and the remaining 314,898 troy ounces landed at Brink’s, Inc.  In the ‘out’ category, one big truckload…640,964 troy ounces…left Scotiabank — and another truckload…600,171 troy ounces departed Brink’s, Inc.  The remaining 91,628 troy ounces was shipped out of CNT.  There were also some transfers from the Registered category — and back into Eligible…32,323 troy ounces at Scotiabank — and 19,523 troy ounces at CNT.  The link to all this action is here.

It was another fairly busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  There were 601 kilobars received — and 3,810 shipped out.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The Hoxne Hoard is the largest hoard of late Roman silver and gold discovered in Britain, and the largest collection of gold and silver coins of the fourth and fifth centuries found anywhere within the Roman Empire. It was found by Eric Lawes, a metal detectorist in the village of Hoxne in Suffolk, England on 16 November 1992. The hoard consists of 14,865 Roman gold, silver, and bronze coins and approximately 200 items of silver tableware and gold jewellery. The objects are now in the British Museum in London, where the most important pieces and a selection of the rest are on permanent display. In 1993, the Treasure Valuation Committee valued the hoard at £1.75 million (roughly equivalent to £3.27 million in 2016).

The hoard was buried in an oak box or small chest filled with items in precious metal, sorted mostly by type, with some in smaller wooden boxes and others in bags or wrapped in fabric. Remnants of the chest and fittings, such as hinges and locks, were recovered in the excavation. The coins of the hoard date it after A.D. 407, which coincides with the end of Britain as a Roman province. The owners and reasons for burial of the hoard are unknown, but it was carefully packed and the contents appear consistent with what a single very wealthy family might have owned. It is likely that the hoard represents only a part of the wealth of its owner, given the lack of large silver serving vessels and of some of the most common types of jewellery.  Click to enlarge.

I only have two stories for you today, as there’s no real ‘news’ out there.


CRITICAL READS

Trillion-Dollar Deficits From Here to Eternity — Bill Bonner

We count on the sun to rise in the morning. We trust our burgers to be edible. And we expect the markets and the feds to do predictable things. In the present context, for example, there is almost no chance that the Fed will normalize interest rates.

And there is almost no chance that Congress and the White House will reduce spending or raise taxes – even to prevent a death spiral of debt and inflation. Once underway, empires, love affairs, and financial calamities have to run all the way to the end.

In America today, it is almost impossible – politically – to cut government spending or to raise taxes. That leaves debt as the only way forward.

This year, the deficit is projected to be around $1 trillion. And now, with the economy sinking towards recession, markets ready to crash, and a Democratic majority in the House, hold your breath; it’s trillion-dollar deficits… and rising… from here to eternity.

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


Billionaire Investor Sam Zell Says He’s Buying Gold “For The First Time In My Life

Amid a cresting wave of consolidation in the gold mining space as spending on new mines has dried up since 2011, billionaire investor Sam Zell is buying the shiny metal “for the first time in his life” because he sees opportunities stemming from an expected shortage in supply.

Gold notably didn’t perform as well as many might have expected during the eruption of market volatility during Q4, but some investors see scope for the shiny metal to embark on its strongest rally since the crisis after years of lackluster returns as global economic growth slows and investors look for somewhere to hide.

That, and the impending supply crunch that Zell envisions from the drop in new mining capacity – the capacity of unmined gold still buried in existing mines shrank by 40% in 2017 – are the two reasons why Zell has been buying.

For the first time in my life, I bought gold because it is a good hedge,” Sam Zell, the founder of Equity Group Investments, said in a Bloomberg TV interview. “Supply is shrinking and that is going to have a positive impact on the price.

The amount of capital being put into new gold mines is a most nonexistent,” Zell said. “All of the money is being used to buy up rivals.”

Of course it’s a given that he knows nothing about the ‘da boyz’ and the gold market — and is probably buying paper gold in lieu of the real thing.  This Zero Hedge article appeared on their website at 3:30 p.m. EST on Thursday afternoon — and comes to us courtesy of Brad Robertson.  Another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos in the series titled “Wildlife photographer of the year people’s choice award” that appeared on The Guardian‘s website back on December 26 — and they’re courtesy of Patricia Caulfield.

The first one is entitled “Under the snow” — and is by French photographer Audren Morel.  The caption reads “Unafraid of the snowy blizzard, this squirrel came to visit Audren as he was taking photographs of birds in the small Jura village of Les Fourgs, France. Impressed by the squirrel’s endurance, he made it the subject of the shoot.”  Click to enlarge.

This second shot entitled “Ice and Water” by Norwegian photographer Audun Lie Dahl.  It’s captioned “The Bråsvellbreen glacier moves southwards from one of the ice caps covering the Svalbard archipelago, Norway. Where it meets the sea, the glacier wall is so high that only the waterfalls are visible, so Lie Dahl used a drone to capture this unique perspective.”  Click to enlarge.


The WRAP

With the obvious exception of palladium, it was pretty much a nothing day in the precious metals again on Thursday.  But it is interesting to note that platinum echoed the advance in palladium, although by far less of an amount, so there is starting to be some spill-over from one precious metal to another.

And because volumes in both silver and gold have been so light lately, I would be careful to read too much into the current price action, but it’s obvious that ‘da boyz’ are there when they have to be. It remains to be seen what they will do when a rally of some substance develops…or is allowed to develop.

Here are the 6-month charts for the Big 6 commodities — and yesterday’s big gain by palladium should be noted.  It’s now more than obvious that supply/demand fundamentals are making an appreciable different to its price.  But as I’ve already pointed out countless times, it’s current price would be much higher if it were allowed to trade freely, which it obviously isn’t — and yesterday’s price action was yet another case in point.  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 has been chopping quietly sideways with a slightly negative bias since trading began in New York on Thursday evening. At the moment it’s down $1.70 an ounce. Silver has been doing even less — and it’s down a penny currently. The platinum price has been inching unsteadily higher throughout all of Far East trading — and it’s up 3 bucks. The palladium price began to crawl higher in early evening trading in New York yesterday evening — and then jumped up a bunch between 9 and 10 a.m. China Standard Time on their Friday morning. From that juncture it traded sideways until it poked its nose above the $1,400 spot mark at 3 p.m. CST on their Friday afternoon — and there was ‘someone’ there to sell it lower, but it’s still up 15 bucks as Zurich open…but was up $25 at its current high tick.

Net HFT gold volume is extremely light at a bit under 25,500 contracts — and there’s only 1,967 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is just over 7,900 contracts — and there’s only 285 contracts worth of roll-over/switch volume in that precious metal.

The dollar index has been chopping very quietly sideways in an extremely tight range since trading began at 7:45 p.m. EST in New York on Wednesday evening — and it’s up 1 basis point as of 7:45 a.m. GMT in London.

I’m off to Vancouver for the Cambridge House Investment Conference tomorrow — and if I see/learn anything while I’m there, I’ll report on it in my Tuesday column.  They say that they have 9,000 people signed up to attend it, so if those numbers are even close to being correct, it should be pretty busy on the floor when the doors open on Sunday morning.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the gold price, which had begun to turn lower at exactly 3:00 p.m. CST on their Friday afternoon, continues to fall — and is down $3.30 an ounce as the first hour of London trading draws to a close.  Silver is now down 3 cents.  Platinum is up 2 bucks — and palladium has ticked a bit higher in the last fifteen minutes — and is now up 19 dollars…knocking on the $1,400 spot price door once again.

Gross gold volume is coming up on 45,000 contracts — and minus the current roll-over/switch volume, net HFT gold volume is around 39,300 contracts.  Net HFT silver volume is now around 9,500 contracts — and there’s only 302 contracts worth of roll-over/switch volume on top of that.

The dollar index continues to do not much of anything — and is up 6 basis points as of 8:45 a.m. BST in London/9:45 a.m. CET in Zurich.

And because there’s no Commitment of Traders Report, my Saturday column will be as brief as I can make it.

Have a good weekend — and I’ll see you here tomorrow.

Ed

Another Big Withdrawal From SLV Yesterday

17 January 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rose and fell a few dollars in the first four hours once trading began at 6:00 p.m. in New York on Tuesday evening — and the Far East low, such as it was, came around 11:15 a.m. China Standard Time on their Wednesday morning.  It began to edge higher from there — and the Far East high tick, such as it was, was set at the 2:15 p.m. CST afternoon gold fix in Shanghai.  It was sold quietly lower from there until around 12:45 p.m. in London trading — and then began to rally with some substance.  Of course it ran into ‘resistance’ — and the high tick of the day, such as it was, was set around noon in New York.  It was sold unevenly lower into the 5:00 p.m. EST close.

The low and high ticks of the day aren’t worth looking up.

Gold was closed in New York on Wednesday at $1,293.20 spot, up $4.10 on the day.  Net volume was very quiet once again at only 152,000 contracts — and there was a bit under 30,000 contracts worth of roll-over/switch volume on top of that.

The silver price didn’t do much of anything in Far East trading, but rallied a few pennies shortly after the London open, but even that tiny gain was all gone a few hours later.  But once the noon  GMT silver fix was put to bed, someone stepped on the price — and the low tick was set about fifteen minutes later.  It was bounced off that price multiple times over the next forty minutes or so — and began to head higher with a vengeance at 1 p.m. GMT/8 a.m. EST.  The price appeared to go ‘no ask’ at 9 a.m. EST — and a short-seller showed up minutes later — and the high tick was set a few minutes after the afternoon gold fix in London.  It was sold down a few pennies after that — and then chopped quietly sideways for the remainder of the Wednesday session.

The low and high ticks, despite the down/up dip after the noon silver fix in London, aren’t worth looking up, either.

Silver was closed on Wednesday at $15.57 spot, up 2 cents on the day.  Net volume was very quiet in this precious metal as well…just under 47,500 contracts — and there was 2,233 contracts worth of roll-over/switch volume in this precious metal.

The platinum price crawled quietly but unsteadily sideways during all of Far East and most of Zurich trading yesterday — and was down a dollar at the COMEX open.  From that point, it began to edge unsteadily higher — and the price was capped minutes before 12 o’clock noon in New York.  It didn’t do much after that.  Platinum finished the Wednesday session at $805 spot, up 7 bucks on the day.

The palladium price crawled quietly higher until around 1 p.m. CST on their Wednesday morning — and then traded flat until shortly after the Zurich open.  It was up 9 dollars at that point.  Then it began to edge quietly higher once again — and then went ballistic just minutes before 9 a.m. in New York.  It was obviously capped a few minutes before the afternoon gold fix in London — and then sold quietly lower until a  minute or so after 1 p.m. EST in the thinly-traded after-hours market.  It stair-stepped its way higher from that juncture going into the 5:00 p.m. close — and finished the day at $1,343 spot, up 41 bucks from Tuesday.  It should be noted that the spread between the bid and the ask on this precious metal is now up to 25 dollars.

And as impressive as palladium’s rally has been to date, it should be more than obvious that with the supply issue it currently faces, the price is not being allowed to rise to it’s intrinsic value too quickly.  The slightest pick-up investment demand would soon drive palladium’s price to the moon.


The dollar index closed very late on Tuesday afternoon in New York at 96.04 — and it opened down about 11 basis points as soon as trading began at 7:45 p.m. EST yesterday evening.  It began to ‘rally’ about fifteen minutes later — and then headed lower starting right at the 8 a.m. GMT London open.  The 95.86 low tick was set an hour later — and then it began to ‘rally’ anew.   The 96.18 high tick was set at noon in London — and it sank quietly from there until 11:50 a.m. in New York.  It then began to edge higher — and back above unchanged — and finished the Wednesday session at 96.06 — up 2 basis points on the day.

Here’s the DXY chart from Bloomberg once again.  Click to enlarge.

Here’s the 6-month U.S. dollar index chart — and the delta between its close…95.68…and the close on the DXY chart above, was 38 basis points on Wednesday.  Click to enlarge as well.

Despite what the chart looks like, the gold shares didn’t do much of anything yesterday.  They opened unchanged, dipped into negative territory for a few minutes — and then began to creep unsteadily higher.  Their respective highs came around 11:35 a.m. in New York trading, but were then quietly sold lower — and back to a hair below unchanged by around 2:40 p.m. EST.  They popped into positive territory by a bit after that — and the HUI closed up a measly 0.48 percent.

The price pattern for the silver equities followed an almost identical path to their golden brethren, so I won’t bother repeating myself.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.21 percent.  Click to enlarge.

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

The CME Daily Delivery Report showed that zero gold and 124 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In silver, the only short/issuer worth mentioning was International F.C. Stone, with 120 contracts out of its client account.  There were seven long/stoppers in total, with JPMorgan topping the list with 48 contracts…28 for clients — and 20 for its own account.  In second and thirds spots came Goldman and Advantage, with 35 and 23 contracts for 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 January declined by 3 contracts, leaving 51 left.  Tuesday’s Daily Delivery Report showed that 3 gold contracts were actually posted for delivery today, so the change in open interest and deliveries match for a change.  Silver o.i. in January dropped by 3 contracts as well, leaving 481 still open, minus the 124 contracts mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that 7 silver contracts were actually posted for delivery today, so that means that 7-3=4 more silver contracts were just added to the January delivery month.


There were no reported changes in GLD on Wednesday, but that certainly wasn’t the case in silver, as another 2,158,329 troy ounces were removed from SLV.

Since October 18, 2018…three months ago…there has been 23.03 million troy ounces of silver taken out of SLV.  Ted and I had a discussion about this on the phone yesterday — and I was wondering out loud/speculating if there was a physical shortage developing in silver — and the big industrial users were buying SLV shares and then converting them into physical metal, because it wasn’t available anywhere else.

There was another sales report from the U.S. Mint. They sold 3,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 420,000 silver eagles.

There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday.  Nothing was reported received — and only 3,624 troy ounces were shipped out.  This occurred at Canada’s Scotiabank — and I won’t bother linking this amount.

For a change, it was very quiet in silver as well.  Only 2,050 troy ounces…two good delivery bars…was reported received — and nothing was shipped out.  The ‘in’ activity was at Delaware.  There was a paper transfer from the Registered category — and back into Eligible over at Delaware as well…15,060 troy ounces worth.  The link to this ‘activity’ is here.

But it was another very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They received 4,827 of them — and shipped out 803.  This activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The Trier Gold Hoard is a hoard of 2,516 gold coins with a weight of 18.5 kilograms found in Trier, Germany in September 1993.  It is described as the largest preserved Roman gold hoard worldwide.

On 9 September 1993, an excavator unearthed and ripped apart a bronze cauldron during excavations for an underground parking garage. Part of the cauldron and some coins went to a dump site, initially unnoticed.

An amateur archaeologist, Erich Eixner went back to the excavation site at night and found the larger part of the bronze cauldron, containing 560 coins and an additional lump of 1,500 coins using his metal detector. He informed the authorities of his discovery and received about 20,000 DM, a fraction of their estimated worth.

The earliest coins in the hoard were minted 63 A.D, during the reign of Nero.  Ninety-nine percent of the coins were minted before 167 A.D. Only six coins were struck between 193 and 196 A.D. The coins weigh between 5.8 and 7.6 gram. Forty Roman emperors and their relatives are depicted on the coins.  Click to enlarge.

It’s another day where I only have a tiny handful of stories for you.


CRITICAL READS

Is This the Real Reason Why Stocks Are Surging?

Wondering why U.S. equity markets are soaring at a pace not seen since the March 2009 lows?

Confused by the massive swings higher despite weak macro data, and tumbling earnings expectations?

Well, the answer is simple once again, “it’s not the economy, it’s the central banks, stupid!Click to enlarge.

Q4 2018 saw global stock markets finally wake up to the fact that the world’s central banks were withdrawing liquidity and played catch-down to an ugly tightening reality. December’s contagion to American stocks was the final straw for the world’s elites however  and after the Mnuchin Massacre, it appears the Plunge Protection was ordered back into battle and as the chart below shows – central bank balance sheets suddenly started to grow – aggressively so… and that is what is dragging stocks higher, squeezing shorts at an unprecedented pace, and economically irrationally levitating P/Es despite a wall of uncertainty ahead.

Just like in 2018, 2017, and 2016, the start of the year has prompted a resurgence in the size of global central bank balance sheets… and just like in 2018, 2017, and 2016, global stocks (with U.S. being the most liquid attractor of that flow) are soaring…

A short squeeze it is.  This Zero Hedge article, which is certainly worth reading, was posted on their Internet site at 1:36 p.m. EST on Wednesday afternoon.  I thank Brad Robertson for that one — and another link to it is here.


It’s a Gas…Germany Outraged by U.S. Colonial Arrogance

This time the outspoken U.S. ambassador in Berlin may have gone too far to be ignored. The German government has denounced as a “provocation” letters that the American envoy sent to companies involved in the Nord Stream 2 project warning them of possible U.S. sanctions.

The German government reportedly told the project companies to “ignore” the missives dispatched by Ambassador Richard Grenell.

Nord Stream 2 is the 1,222-kilometer pipeline being laid in the Baltic seabed which will greatly increase delivery of natural gas from Russia to Germany. It will double Germany’s import of Russian gas when complete. But the Trump administration has repeatedly voiced its objection to the project, claiming that it will give Moscow undue political leverage over Europe. Trump has warned of sanctions on participating companies, which include German and Austrian firms.

The flagrant ulterior agenda is seen as the U.S. trying to undermine German-Russian energy trade, for the purpose of selling more expensive American liquefied natural gas to Europe. So much for American free-market capitalism!

This very worthwhile article by Finian Cunningham appeared on the strategic-culture.org Internet site on Tuesday — and I thank Roy Stephens for pointing it out.  Another link to it is here.


Sanctions? Russian economy to overtake Germany’s by 2020 – report

Despite years of Western sanctions, Russia will become the world’s fifth-largest economy as early as next year, surpassing Germany and the U.K., multinational bank Standard Chartered said in its long-term growth forecasts.

In a report outlining projections about the world economy up until 2030, the bank said that China is likely to unseat the U.S. to become the world’s biggest economy at some point in the next year, when measured by a combination of purchasing-power-parity (PPP) exchange rates and nominal gross domestic product. It will be joined by the U.S., India, Japan, and Russia in the top five.

This news item showed up on the rt.com Internet site at 10:12 a.m. Moscow Time on their Wednesday morning, which was 3:12 a.m. in Washington.  It’s the second offering in a row from Roy Stephens — and another link to it is here.


China Injects Gargantuan 1.14 Trillion Yuan in Liquidity This Week

Following what Bloomberg calculated was a record net reverse repo liquidity injection on Wednesday, when the PBOC injected a whopping 560 billion yuan of liquidity into the financial system via open market operations, the Chinese central bank has done it again and in Thursday’s open market operation, it sold 250BN yuan in 7 Day repos (slightly below yesterday’s record 350BN), and 150BN in 28 Day repos, which net of maturities resulted in a whopping net 380BN yuan ($56.2BN) liquidity injection.  Click to enlarge.

This brings the net liquidity injection this week to a near record 1.14 Trillion yuan (Monday 20BN, Tuesday 180BN, Wednesday 560BN and Thursday 380BN) and the week is not even over yet – should tomorrow’s reverse repo be of similar magnitude, then this week will go down in history as China’s biggest liquidity injection on record.

As yesterday, today’s massive liquidity injection was aimed at “keeping reasonable and sufficient liquidity in banking system as liquidity falls relatively fast during peak season for tax payments,” according to a statement from the PBOC, although why this year should be such a significant outlier, even when factoring in the liquidity needs ahead of the Lunar new year, to prior periods was not exactly clear.

There is, of course, a much simpler explanation: with Chinese economic and trade data turning from bad to worse with every passing day, Beijing’s response is increasingly one of a panicked “spasm“, as Nomura’s Charlie McElligott wrote today when he noted that with regard to the response of Chinese authorities in addressing their economic slowdown and credit crunch, “it had to get worse before it got better“—recently collapsing Chinese data has now clearly forced an escalation of easing-/stimulus-/liquidity- policies…

The bigger issue is that if not even China can move the needle with short-term liquidity injections, and a long-term monetary intervention is out of the question for now due to China’s record debt, while fiscal stimulus takes months if not quarters to kick in, once the sugar rush from the current bear market rally is over, the hangover will be especially brutal.

This rather interesting story appeared on the Zero Hedge website at 10:29 p.m. on Wednesday evening EST — and another link to it is here.


Wary investors drawn to gold’s allure

If gold is anything to go by, investors are increasingly anxious about the state of the world.
Volatile equity markets and fears of a global economic slowdown have helped gold rally 10 per cent from its August lows, putting it among the best performing metals over that period.

It is a sharp contrast to much of the past two years, when rising U.S. interest rates, a strong dollar, and buoyant equity markets hurt gold bugs and the shares of miners such as Barrick Gold, Newmont Mining and Goldcorp. And when there was a correction in U.S. stocks in early 2018, the gold price failed to benefit.

Almost a year on, the big question is whether 2019 could prove a profitable year to own gold, which is typically bought as hedge or haven by investors.

The amount of physical gold in exchange traded funds has risen to 71.9 million ounces, close to the record high of 72 million touched in May 2018.

We haven’t seen flows like this since the first half of 2016, when the gold market really took off,” says Joe Foster, a portfolio manager at VanEck in New York.

This Financial Times story from Tuesday is posted in the clear in its entirety in this GATA dispatch on Wednesday — and another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos in the series titled “Wildlife photographer of the year people’s choice award” that appeared on The Guardian‘s website back on December 26 — and they’re courtesy of Patricia Caulfield.

The first one is entitled: “Shy” by Spanish photographer Pedro Carrillo.  It’s captioned “The mesmerising pattern of a beaded sand anemone beautifully frames a juvenile Clark’s clownfish in Lembeh strait, Sulawesi, Indonesia. Known as a ‘nursery’ anemone, it is often a temporary home for young clownfish until they find a more suitable host anemone for adulthood.”  Click to enlarge.

The second photo is entitled “The Orphaned Beaver” by U.S. photographer Suzi Eszterhas.  It’s captioned “A one-month-old orphaned North American beaver kit is held by a caretaker at the Sarvey wildlife care centre in Arlington, Washington. Luckily it was paired with a female beaver who took on the role of mother and they were later released into the wild.”  Click to enlarge.


The WRAP

It was yet another very quiet trading session, both from a volume and price perspective in both silver and gold yesterday.  But their respective rallies that began thirty minutes or so before the London open were dealt with in the usual manner…silver even before the afternoon London gold fix — and gold was turned lower at noon.

However, the volumes in both were even lighter than they were on Tuesday, so not much should be read into Wednesday’s price action in either precious metal…but it’s obvious that their respective prices weren’t going to be allowed to get too frisky.

Palladium is now in a world of its own — and only the obvious interference by the powers-that-be are keeping it from blowing sky high in what would turn out to be the short squeeze of the century…as the commercial traders get overrun.  That may still happen.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  The big jump in palladium to a new high closing price going back more than a decade, is worth noting.  Click to enlarge.

And as I type this paragraph, the London open is less than ten minutes away — and I note that except for a small bump up in price during the first few hours of trading in New York on Wednesday evening, the gold price has been below the unchanged market throughout the entire Far East trading session — and is currently down $1.00 an ounce. It was the same for silver — and it’s down 5 cents now. Ditto for platinum and palladium, with the former down 4 bucks, but the latter has managed to work its way back to almost unchanged during the last hour or so — and is down a dollar as Zurich opens.

Net HFT gold volume is very light once again…coming up on 33,000 contracts — and there’s 2,007 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is very light as well at a hair over 6,900 contracts — and there’s only 190 contracts worth of roll-over/switch volume on top of that.

The dollar index opened about unchanged in New York at 7:45 p.m. EST on Wednesday evening. It dipped into negative territory by a small handful of basis points in the first fifteen minutes of trading — and began to edge quietly higher from there. It made it up to the 96.20 mark by around 1:10 p.m. China Standard Time — and began to head lower immediately — and then began to take flight about an hour later. It’s currently up 13 basis points as 7:45 a.m. GMT in London.

And as silver analyst Ted Butler said in his mid-week commentary to his paying subscribers yesterday…”Has it or has it not added significantly to short positions in gold and silver and if it has added, does it intend to rig prices lower to ring the cash register machine it created over the past 11 years? I wish I knew. In this particular regard we are all in the dark, thanks to the suspension of COT data. However, that doesn’t change the fact that what JPMorgan does or doesn’t do, under the influence of the Justice Department, is the critical element for future silver and gold prices. But it is precisely the involvement of the Justice Department that makes silver more bullish than it has ever been, regardless of what may transpire in the short term.

He would be exactly right about that.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the gold price has crept a bit higher during the first hour of London trading — and is back at unchanged at the moment.  Silver is off its low tick of the day by a few pennies now — and is down 2 cents.  Platinum hasn’t done much — and is down 3 dollars currently.  But shortly after the Zurich open, palladium jumped up a bunch of dollars — and is currently higher by 16 bucks.

Gross gold volume is coming up on 46,000 contracts — a net of roll-over/switch volume, net HFT gold volume is something over 41,000 contracts.  Net HFT silver volume is now up to 9,800 contracts — and there’s still only 204 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has dipped a few basis points during the first hour of London/Zurich trading — and is up only 6 basis points as of 8:45 a.m. GMT/9:45 a.m. CET.

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

Ed

Another Day of Quiet Price Management

16 January 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Gold traded in a seven dollar price range on Tuesday — and after being sold lower at the London open, it ticked higher until the afternoon gold fix in London, which was its high of the day.  Once that event was done, it was sold down to its low of the day…around 1 p.m. EST in New York.  It rallied a few dollars after that until trading ended at 5:00 p.m.

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

Gold was closed in New York on Tuesday at $1,289.10 spot, down $2.10 from Monday.  Net volume was nothing special at just under 193,500 contracts — and there was a bit over 36,500 contracts worth of roll-over/switch volume in this precious metal.

The silver price edged unevenly sideways in Far East trading on their Tuesday — and the high of the day came at 2 p.m. China Standard Time on their Tuesday afternoon.  It was all down hill from there until the spike low tick, which came shortly before 11 a.m. GMT in London.  It began to crawl quietly higher until shortly after the COMEX open — and then a rally of some substance developed at that point.  It ran into price ‘resistance’ at the time the equity markets opened in New York — and then was driven lower once the afternoon gold fix in London was put to bed.  It began to edge higher once again starting shortly after 1 p.m. EST, but that attempt wasn’t allowed to get far — and it was sold down once again in the thinly-traded after-hours market.

The low and high ticks in this precious metal were recorded by the CME Group as $15.575 and $15.735 in the March contract.

Silver was closed at $15.55 spot, down 6.5 cents on the day.  Net volume was nothing out of the ordinary at a bit under 55,500 contracts — and there was just under 4,900 contracts worth of roll-over/switch volume in this precious metal.

The platinum price stair-stepped its way higher in price until shortly before the Zurich open — and at that juncture it suffered the same fate as gold and silver.  The down/up low tick price spike came very shortly after the COMEX open — and it rallied until the afternoon gold fix in London.  It was sold back to its earlier low of the day by shortly before 1 p.m. EST — and crawled a few dollars higher into the 5:00 p.m. close from there.  Platinum was closed at $798 spot, down a dollar on the day.  [Note: If that up/down price spike around 12:15 p.m. EST is real, it only occurred in the spot month. – Ed]

The palladium price edge quietly higher until around 11:30 a.m. CET in Zurich — and then was sold lower into the COMEX open.  Like for platinum, if that big down/up price spike is actually for real, it only occurred in the spot month.  It ticked higher into the afternoon gold fix in London — and then didn’t do much of anything until shortly before 1 p.m. EST.  Then the price got smacked back below $1,300 spot in very short order.  It managed to recover a bit from there, but was sold lower in the last hour of after-hours trading.  Palladium was closed at $1,302 spot, down 6 bucks on the day.

The dollar index closed very late on Monday afternoon in New York at 95.61 — and opened down a handful of basis points once trading began at 7:45 p.m. EST in New York on Monday evening, which was 8:45 a.m. China Standard Time on their Tuesday morning.  It was sold quietly lower from there — and the 97.47 low tick was set around 9:40 a.m. CST.  It began to crawl very quietly higher from there, before jumping up a bit starting around 9:10 a.m. in London. It took another leap higher starting a couple of minutes before 11 a.m. in New York — and the 96.26 high tick was set shortly after 1 p.m. EST.  It gave a bunch of that back by 3:18 p.m. — and then flat-lined into the close from there. The dollar index closed at 96.04…up 43 basis points on the day.

With the Brexit vote going on in the U.K….I would suspect that the usual ‘gentle hands’ were present in the currency market yesterday.

Here’s the DXY chart chart, courtesy of Bloomberg once again.  Click to enlarge.

And here’s the 6-month U.S. dollar index — and the delta between its close…95.68…and the close on the DXY chart above, was 36 basis points yesterday.

The gold stocks opened flat — and traded that way until precisely 10:00 a.m. EST, which certainly coincided with the afternoon gold fix in London.  They were sold lower from there until minutes before 1 p.m. in New York trading.  From that juncture they crept higher until around 2:30 p.m. — and crept  equally quietly lower into the 4:00 p.m. EST close from there.  The HUI finished down 2.82 percent on the day.

The silver equities gapped down about 1.5 percent at the open — and then kept on going until a few minutes before 1 p.m. EST…just like the gold equities.  They traded sideways from there — and closed virtually on their low ticks of the day, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index got slammed by 5.04 percent.  All of January’s nice gains have disappeared in the process.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 IndexClick to enlarge as well.

Both First Majestic Silver and Coeur got hit pretty hard yesterday — and I would suspect that there was some serious institutional selling for whatever reason.  I sent an e-mail off to Todd Anthony at First Majestic asking about the ten percent drop in their stock price, but haven’t heard back as of yet.


The CME Daily Delivery Report showed that only 3 gold and 7 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In gold, Advantage issued all 3 — and JPMorgan stopped 2 of them for its client account.  In silver, Advantage issued all 7.  Goldman picked up 3 for its client account — and JPMorgan picked up 3 contracts as well…2 for clients and one for itself.  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 January fell by 2 contracts, leaving 54 left, minus the 3 contracts mentioned above.  Monday’s Daily Delivery Report showed that 5 gold contracts were actually posted for delivery today, so that means that 5-3=2 more gold contracts were added to January.  Silver o.i. in January dropped by 14 contracts, leaving 484 still open, minus the 7 contracts mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 22 silver contracts were actually posted for delivery today, so that means that 22-14=8 more silver contracts were added to the January delivery month.


There were no reported changes in GLD yesterday, but another 469,209 troy ounces of silver was withdrawn from SLV.  Regardless of the reason for the withdrawal, it’s a reasonable assumption that JPMorgan owns it now.

There was a sales report from the U.S. Mint yesterday.  They sold 1,500 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — and 100,000 silver eagles.

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday.  There was no ‘in’ activity, but 9,804 troy ounces were shipped out.  There was 1,217 troy ounces shipped out of Delaware — and 8,587 troy ounces departed HSBC USA.  The link to this is here.

It was busier in silver, as one large truckload…636,063 troy ounces…was received at Brink’s, Inc.  In the ‘out’ category, there was 33,707 troy ounces that departed CNT — and the remaining 978 troy ounces was shipped out of Delaware.  There was also some paper transfers as well.  There was 725,459 troy ounces transferred from the Registered category — and back into Eligible over at CNT, plus 112,564 troy ounces transferred in similar fashion at Brink’s, Inc.  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 Monday.  They reported receiving 3,138 of them — and shipped out 5,162.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


Here are the two usual charts that Nick Laird passes around on the weekend.  They show the total amount of gold and silver inventories in all the known depositories, ETFs and mutual funds as of the close of business on Friday, January 11.  For gold, there was only 22,000 troy ounces added on a net basis during the reporting week.  For silver, there was another 3,794,000 troy ounces withdrawn during the reporting week.  This decline…which began before October 1, 2018…is mostly as a result of the 20 million troy ounces that has been taken out of the SLV ETF during that time period. Click to enlarge for both charts.

I have only a tiny handful of stories for you once again.


CRITICAL READS

Mr. Market Will Have the Last Laugh — Bill Bonner

The mega-myth of the Bubble Epoch is that we can go anywhere we want – thanks to the genius of quasi-federal employees.

It must be true, people say, because it is so implausible. You can’t make stuff like that up.

The idea is that Congress and the White House skillfully adjust fiscal policy (deficits or surpluses) to offset the bipolar tendencies of capitalism. Free markets always go up and down. The feds want to make them go in one direction only – up.

So as soon as a shadow falls on the financial world, the feds rush in with mood-stabilizers… in the familiar form of more money and credit.

The Fed, meanwhile, has a more ancient approach. Its Federal Open Market Committee (FOMC) members put on their black, hooded vestments and gather in the temple on the corner of 20th and Constitution Avenue. There, they turn to Jupiter: “Just give me some kind of sign.”

In Rome, the augurs were priests tasked with interpreting the will of the gods based on birds, dogs, thunder, or “ominous events.” Today, prophecies are based on fake “data” – compiled by the feds themselves.

This commentary from Bill appeared on the bonnerandpartners.com Internet site on Tuesday morning EST — and another link to it is here.


JPM Reports Huge Trading Miss As FICC Revenue Plunges To Lowest Since Financial Crisis

To anyone who carefully read yesterday’s dismal Citi earnings report, which was a major disappointment in virtually every way and especially in the bank’s FICC group, with the exception of Citi’s core lending business which traders decided to focus on and push Citi’s stock price 4% higher, today’s disappointing JPMorgan results should not come as a surprise.

Actually, JPMorgan Q4 results were even worse than Citi’s as they were a disappointment across the board, with both reported revenue of $26.1BN and “managed” revenue of $26.8BN missing consensus expectations of $26.9BN, while EPS of $1.98 was not only well below the $2.20 consensus, but was also the first JPM earnings miss in 15 quarters.

JPM’s FICC was so bad it was even worst than Citi’s (for the 2nd straight quarter)…

The bank blamed “challenging market conditions“for the revenue decline in FICC, while highlighting emerging markets as the one bright spot in Q4.

Of course, dear reader, JPMorgan’s stock closed higher on the day.  This longish chart-filled Zero Hedge article was posted on their Internet site at 7:27 a.m. on Tuesday morning EST — and I thank Brad Robertson for sending it along.  Another link to it is here.


In Humiliating Defeat For May, Brexit Deal Rejected By Overwhelming 230-Vote Margin

Update 10: After trending steadily lower ahead of the vote, the pound roared into the green as the Commons adjourned for the day, as traders realized that analysts who had warned about a spectacular defeat of May’s deal being good for the pound may have been on to something.

With hundreds of Labour MPs preparing to pivot toward a second referendum this week, it appears more of Jeremy Corbyn’s positions are being foisted upon May as she scrambles to figure out what’s next for her deal.

And in a potential threat to the pound and May’s government, Labour has indicated that it will try again if it loses the no confidence vote against May tomorrow.

If May loses the vote, Labour has made clear that all options – including a second referendum – are on the table.

And even if she wins, May and the E.U. have now gotten the message loud and clear: May’s deal is unworkable. If the E.U. refuses to compromise, a no deal Brexit is also clearly not going to work, since Parliament last week adopted an amendment to make sure such an outcome would require its explicit authorization.

At this point, a delay of Article 50 is looking extremely likely, unless May can win some serious concessions from the E.U. But all the bloc needs to do now is dig in its heels and refuse to budge on the deal, and there will suddenly be a strong possibility that Brexit will be killed.

This news item showed up on the Zero Hedge website at 1:56 p.m. EST on Tuesday afternoon — and it’s another contribution from Brad Robertson.  Another link to it is here.  Swedish reader Patrik Ekdahl sent along the BBC story on this issue headlined “Brexit: Theresa May’s deal is voted down in historic Commons defeat


German economy posts weakest growth in five years

Germany’s economy witnessed lackluster growth in 2018, according to flash data released Tuesday, in line with expectations.

German gross domestic product (GDP) grew 1.5 percent in 2018, compared with 2.2 percent in 2017, the latest data from the Federal Statistics Office (Destatis) showed. The figures point to the weakest rate of growth in five years.

Destatis noted that the German economy had grown for the ninth year in a row, “although growth has lost momentum.”

In the previous two years, the price adjusted GDP had increased by 2.2 percent each. A longer-term view shows that German economic growth in 2018 exceeded the average growth rate of the last ten years (+1.2 percent).”

An official estimate of fourth-quarter growth will only be available in February but the statistics office said it was likely that the economy had grown slightly in the period, meaning that a technical recession could have been avoided.

This new story showed up on the cnbc.com Internet site early on Tuesday morning EST — and I found it in this morning’s edition of the King Report.  Another link to it is here.


Why China and Russia are struggling to abandon the U.S. dollar and forge a yuan-rouble deal

Russia and China plan to ditch the U.S. dollar and switch to local currencies in international trade but yet another delay to a new system for yuan-rouble settlements shows just how complex it is to develop an alternative to the greenback.

Russia, China and a number of other countries are aiming to cut their dependence on the US dollar, as Washington uses access to the dollar payment system as a weapon to punish nations and individuals for breaking U.S. laws, even outside the United States.

In November, Russian Finance Minister Anton Siluanov said that Moscow and Beijing were finalising a memorandum to settle more bilateral trade in the rouble and yuan.

The two countries were also reportedly in talks to launch a new cross-border system to improve direct payments of trade invoices, and for the use of China’s UnionPay credit card in Russia and Russia’s Mir card in China.

But late last month, Russian media quoted Siluanov as saying that Moscow had decided to step away from Beijing’s proposed plan.

This article put in an appearance on the South China Morning Post website at 7:33 p.m. CST on their Tuesday evening, which was 6:33 a.m. EST in Washington on Tuesday morning.  It was updated about ten hours later.  I thank Bill Moomau for sharing it with us — and another link to it is here.


Amcu gears up for secondary strike at Sibanye’s platinum operations in South Africa

The Association of Mineworkers and Construction Union (Amcu) on Monday, gave notice of its intention to embark on secondary strike action at Sibanye-Stillwater’s platinum operations around Rustenburg in support of the current strike at the mine’s gold operations on the West Rand and in the Free State.

About 15,000 Amcu members have been on strike at Sibanye’s gold operations Kloof, Beatrix and Driefontein mines since November 22, 2018, refusing a three-year wage agreement signed by the mine and three other unions and demanding a R1 000 annual wage increase for the next three years.

On Monday, Amcu sent an official notice to Sibanye-Stillwater indicating that it will be embarking on secondary strike action from next week Tuesday, 22 January 2019.

This secondary strike will mean that about 12,500 Amcu members employed at Sibanye’s platinum operations will join their estimated 15,000 comrades from the same company’s gold operations.

This news item, filed from Johannesburg on Monday, put in an appearance on the iol.co.za Internet site on that date.  I plucked it from a silverdoctors.com item that Brad Robertson sent my way yesterday evening PST — and another link to it is here.


Gold hits an all time high in 72 currencies — Ross Norman

Take gold. Popular belief has it that gold prices have not performed especially well despite some egregious geopolitical and economic factors. Well measured in 72 currencies, gold is at … or within a few percentage points … of being at an all time high for people in those countries. Not on the list are the British Pound, the Swiss Franc, the Euro and Chinese Yuan – but we are not far off in all of those currencies too. Only in USD does gold lag – and not all of us live in the U.S.

Using the dollar gold price, as most of us do, has disguised what is actually quite a powerful bull market. If my memory serves me right, we saw the same phenomenon – a stealth rally in minor currencies – ahead of the last major gold bull run (in dollars) in the late 1990’s. Arguably this may be a very good leading indicator.

Faulty yardsticks also takes us onto wealth management. Measuring our net worth in local currencies, we might be rather pleased with ourselves – smug even. However we chose to ignore the fact that the yardstick is not a constant … it is shrinking and sometimes really quite fast. It’s the natural corrosive effect of inflation. Knowing this, governments give us a gauge for yardstick shrinkage to use such as RPI or CPI, to reassure you that the shrinkage is minimal… and then lie about it.

There are alternatives.

This commentary by Ross was posted on the Sharps Pixley website on Tuesday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos in the series titled “Wildlife photographer of the year people’s choice award” that appeared on The Guardian‘s website back on December 26 — and they’re courtesy of Patricia Caulfield.

The first one is entitled “Family Portrait” by Canadian photographer Connor Stefanison.  The caption reads “A great grey owl and her chicks sit in their nest in the broken top of a Douglas fir tree in Kamloops, B.C.…Canada. They looked towards Connor only twice as he watched them during the nesting season from a tree hide 50 feet (15 metres) up.”  Click to enlarge.

The second photo, by Matthew Maran, is entitled “Fox Meets Fox” — and the caption for this one reads: “Matthew has been photographing foxes close to his home in north London for over a year and ever since spotting this street art had dreamed of capturing this image. After countless hours and many failed attempts his persistence paid off.”  Click to enlarge.


The WRAP

Despite the low volumes in both gold and silver on Tuesday, it was more than obvious that the powers-that-be had their fingers in the price performance in all four precious metals.  I would also suspect that they were busy closing Citigroup and JPMorgan up on the day, despite their incredible bad earnings reports.  That went for Wells Fargo as well.  They finished down on the day, but well off its low.  Then there was the Brexit vote on top of that.  It certainly appears that nothing was left to chance…or the free markets.

And as Bill King said in his column this morning “Neither disappointing big-bank earnings nor the latest batch of weak economic data nor Brexit concern could deter the usual suspects from ‘shooting’ for 2,600 on the S&P 500 Index — and engineering the standard expiry week upward manipulation and squeeze.

Here are the 6-month charts for the Big 6 commodities once again — and it should again be noted how carefully the gold price is being managed.  It is now more than obvious, even to a casual observer.  Click to enlarge for all six.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price chopped quietly sideways until around 1 p.m. China Standard Time on their Wednesday afternoon — and then rose three bucks into the 2:15 p.m. CST afternoon gold fix in Shanghai. It has been sold lower since then — and is currently up only 20 cents the ounce. It was the same general price pattern for silver, except much more subdued — and it’s down a penny at the moment. The platinum price edged quietly sideways until around 1:30 p.m. CST — and has ticked higher by a bit — and is up a dollar currently. Palladium has been crawling unevenly higher every since trading began in New York at 6:00 p.m. EST on Tuesday evening — and it’s up 6 dollars as Zurich opens.

Net HFT gold volume is just under 38,000 contracts — and there’s 1,751 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is a bit under 8,000 contracts — and there’s only 211 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened down 11 basis points once trading began at 7:45 p.m. EST in New York yesterday evening — and has been chopping quietly sideways since — and is down 2 basis points as 7:45 a.m. GMT in London.

The Chris Powell comment back in 2008 that “there are no markets anymore…only interventions” needs to be cast in stone and on display in front of all the New York Stock Exchanges, JPMorgan — and the CME Group in Chicago.  I, amongst others, have called this a “Frankenstein market“…but it’s now way beyond that, as a free market no longer exists in anything.

But with no COT/Bank Participation Reports in the last month, there’s no way of telling just how involved JPMorgan is in selling these precious metal rallies short.  I certainly suspect it, but really won’t know for sure until Ted reports on it when the next COT Report comes out…whenever that is.

But whatever those numbers show, it’s a certainty that the commercial traders, whoever they may be, are short up the ying-yang against the Managed Money traders, who are now net long the four precious metals in a big way.  And as Ted and I have also mentioned, a cash register-ringing engineered price decline by the commercials, certainly cannot be ruled out.  It hasn’t happened yet — and may not, but don’t be surprised if it does.

And as I post today’s effort on the website at 4:02 a.m. EST, I note that the gold price continues to trade unevenly sideways in a very tight range — and it’s up $1.00 as the first hour of trading in London draws to a close. It’s been mostly the same for silver, but it has now jumped up a bit in the last thirty minutes — and is up 3 cents currently. Platinum still isn’t doing much, but it is up 3 bucks at the moment. Palladium continues to crawl unevenly higher — and it’s up 10 dollars.

Gross gold volume is around 50,500 contracts — and net of current roll-over/switch volume, net HFT gold volume is just under 46,000 contracts. Net HFT silver volume is coming up on 9,400 contracts — and there’s still only 219 contracts worth of roll-over/switch volume on top of that.

The dollar index continues to chop very quietly sideways — and it’s down 11 basis points as of 8:45 a.m. GMT/9:45 a.m. CET.

That’s all I have for this time. Let’s see what ‘da boyz’ have in store for us for the remainder of the Wednesday trading session.

Ed

A Very Quiet Day…But ‘Da Boyz’ Were Lurking About

15 January 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price began to head higher as soon as trading began at 6:00 p.m. EST in New York on Sunday evening — and was up five bucks by around 10 a.m. China Standard Time on their Monday morning.  It was sold down a few dollars from there, but began to rally a bit more staring around 3:25 p.m. CST on their Monday afternoon.  It chopped quietly higher until at, or just before, the noon silver fix in London — and that was its high of the day.  The price got stepped on shortly before trading began on the COMEX in New York on their Monday morning, but once that was done, the price crawled higher until shortly before the COMEX close — and it didn’t do a lot after that.

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

Gold finished the Monday session at $1,291.20 spot, up $4.40 on the day.  Net volume was pretty light at 167,500 contracts — and there was heavy roll-over/switch volume once again…just over 57,500 contracts.

The silver price opened flat in New York on Sunday evening — and its rally in early morning trading in the Far East was dealt with in short order — and then it didn’t do much of anything until shortly before 3:30 p.m. CST on their Tuesday afternoon.  At that juncture it began to chop quietly and very unevenly higher until around 2 p.m. EST in after-hours trading in New York — and didn’t do much after that.

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

Silver finished the day at $15.615 spot, up 4.5 cents.  Like for gold, net silver volume was exceedingly quiet at 43,700 contracts — and there was a hair over 4,900 contracts worth of roll-over/switch volume in this precious metal.

The platinum price was up a couple of bucks by around 9 a.m. China Standard Time on their Monday morning — and then was stair-stepped lower in price until about fifteen minutes before the COMEX open.  It rallied a bit from there until shortly before 10 a.m. CET in Zurich — and then chopped quietly sideways, with the New York high tick…such as it was…coming at the afternoon gold fix in London.   It was sold lower until minutes after 1 p.m. EST — and rallied back to the $800 spot mark a hour later, but wasn’t allowed to close there.  Platinum was close in New York on Monday at $799 spot, down down 9 dollars on the day.

The palladium price was sold quietly and unsteadily lower until shortly before the Zurich open as well.  At its low, it was at the $1,295 spot mark.  It rallied a few dollars minutes before the Zurich open — and then traded quietly sideways until shortly before noon over there.  Then away it went to the upside.  Palladium’s high tick was set right at the 9:30 a.m. EST open of the equity markets in New York on Monday morning — and it was sold lower from there until shortly after the Zurich close.  It rallied a few dollars from that point, before chopping unevenly sideways until trading ended at 5:00 p.m. EST.  Palladium was closed at $1,308 spot, up 5 bucks on the day, but 16 dollars off its high tick.  It was another one of those days that palladium would have closed higher by an appreciable amount, if it had been allowed to trade freely.

The dollar index closed very late on Friday afternoon in New York at 95.67 — and opened down 2 basis points once trading began at 6:30 p.m. EST on Sunday evening.  And after popping into the green for a bit, began to head lower — and was down 12 basis points by a few minutes before 10 a.m. China Standard Time on their Monday morning.  It chopped quietly sideways in a fairly narrow range for the remainder of the Monday session — and the index finished at 95.59…down 8 basis points on the day.  Nothing to see here.

Here’s the DXY chart courtesy of Bloomberg once again.  Click to enlarge.

And here’s the 6-month U.S. dollar index courtesy of stockcharts.com — and there isn’t a lot to see here, either.  The delta between its close…95.21…and the close on the intraday chart above was 38 basis points on Monday.  Click to enlarge.

The gold shares opened unchanged at 9:30 a.m. EST on Monday morning in New York — and began to head lower about fifteen minutes later.  That lasted until a minute or so before noon EST — and then began to head quietly and unevenly higher from there.  That ‘rally’…such as it was…came to an end at exactly 3:00 p.m EST — and they sold off very quietly into the close from there.  The HUI finished down 1.34 percent.

The silver shares were up a bit at the open but, like their golden brethren, began to head lower a few minutes later — and their respective low ticks came a few minutes after 11 a.m. EST in New York.  They rallied very unevenly higher from that juncture — and were back in the green by a bit at 3:00 p.m. EST — and then also ticked lower into the 4:00 p.m. close from there.  Nick Laird’s Silver Sentiment/Silver 7 Index closed down 0.50 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 5 gold and 22 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, the sole short/issuer was Advantage — and JPMorgan stopped 4 contracts for its client account.  In silver, the two short/issuers were ADM and Advantage, with 16 and 6 contracts out of their respective client accounts.  Goldman picked up 8 for its client account — and JPMorgan picked up 8 in total…four four its own account, plus 4 for its client account.  Advantage picked up 4 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 January declined by 3 contracts, leaving 56 still open, minus the 5 gold contracts mentioned just above.  Friday’s Daily Delivery Report showed that 8 gold contracts were actually posted for delivery today, so that means that 8-3=5 more gold contracts just got added to the January delivery month.  Silver o.i. in January fell by 7 contracts, leaving 498 still around, minus the 22 contracts mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 29 silver contracts were actually posted for delivery today, so that means that 29-22=7 more silver contracts were just added to January.


For the second day in a row, there were no reported changes in either GLD or 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 trading on Friday, November 11 — and this is what they had to report.  Their gold ETF showed an increase of 7,767 troy ounces, but their silver ETF showed that a whopping 859,293 troy ounces of silver was withdrawn.  That withdrawal is so far out of the ordinary, that I suspect it’s a reporting error.  If it is, I probably won’t find out until next week, as I doubt they’ll post a correction.

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

There was a bit of movement in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  They didn’t receive anything, but 4,500 troy ounces departed Canada’s Scotiabank.  I won’t bother linking this amount.

It was a lot busier in silver, of course, as 598,412 troy ounces was received — and all of that, one truckload, found its way into JPMorgan’s vault.  There was 1,153,978 troy ounces shipped out — and virtually all of that…two truckloads totalling 1,096,250 troy ounces…was shipped out of Brink’s, Inc.  There were smaller amounts…55,730 and 1,997 troy ounces…shipped out of CNT and Delaware respectively.  The link to all this activity is here.

There was some fairly decent activity in over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received 4,594 of them — and shipped out 444.  All of this occurred at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Here are a couple of charts that Nick Laird passed around on the weekend.  The first one shows the withdrawals from the Shanghai Gold Exchange, updated with December’s data.  During that month, there was 178.04 tonnes withdrawn.  Total withdrawals from the SGE since the start of 2008…eleven years in total…shows that 17,113 tonnes have been withdrawn during that time period.  Click to enlarge.

This second chart from Nick shows totally yearly withdrawals for the same 11 year period, now updated with all the data from 2018.  During the calendar year just past, they took out 2,054.6 tonnes.  Click to enlarge.

Lawrie Williams has a story about Chinese gold demand in 2018 based on the above charts.  It’s in the Critical Reads section below, headlined “Chinese gold demand falters but still up y-o-y…just“.  If you want to read it now, the link is here.

It was another very slow news day — and I don’t have all that many articles for you.


CRITICAL READS

Collapse In Global M1 Signals A Worldwide Recession Has Arrived

By now everyone has seen some iteration of this chart showing that the annual change in central bank liquidity is now negative.

When it comes to markets – where the events of December were a vivid reminder that just as QE blew the world’s biggest asset bubble, so QT will deflate it.

But while the immediate effect of the expansion and shrinkage of the Fed’s balance sheet on various asset classes is rather intuitive – if not to Fed presidents of, course – a more pressing question is how will the upcoming liquidity shrinkage affect the global economy.

Unfortunately, the answer appears to be ominous.

And just to confirm that the collapse in Global M1 growth is a major problem – perhaps the biggest for the global economy – Morgan Stanley shows the following chart which confirms that every time M1 has dipped negative – as central bank liquidity injection either slowed or went into reverse – there has been a financial crisis: whether the 2015 EM and Manufacturing Commodity Recession, the Sovereign Debt Crisis of 2011, the Global Financial Crisis and U.S. Housing bubble burst of 2007/2008, the Tech Bubble burst of 2000 and so on.

Needless to say, the above charts confirm that the key variable for the global economy is not whether the Fed stops hiking or starting cutting rates (although any further rate hikes will surely have an adverse impact on global liquidity), but whether the Fed – and other central banks – pause their balance sheet shrinkage, and once again start actively injecting liquidity into the global system, or soon enough we will be looking for the best description of “[insert here] crisis of 2019.”

This chart-filled article put in an appearance on the Zero Hedge website at 7:25 p.m. on Monday evening EST — and another link to it is here.


The Most Absurd Myth of the 21st Century — Bill Bonner

Every era has its busted myths and failed dreams. Wall Street and Washington wallow in them.

The practical challenge for us is not to be smarter than other investors or wiser than other voters… but merely to step outside the myth long enough to get a good look at it.

In the 1960s, the idea was that you could just buy the leading stocks – the Nifty Fifty; it seemed a foregone conclusion that you’d get rich as America’s commercial genius conquered the world.

In the 1980s, it was Japan, Inc. that captured imaginations. Everyone wanted to learn the latest Japanese business jargon and imitate Japan’s extraordinary success.

Then, in the late 1990s came the dot.com boom. Everybody knew that the new internet technology would set the world on fire – with faster growth, higher wages, and no need for debt financing (information would replace the need for capital!).

Then came the myth that “house prices never go down” … which blew up in 2007.

This commentary from Bill appeared on the bonnerandpartners.com Internet sit on Monday morning sometime — and another link to it is here.


Quantitative Brainwashing — Jeff Thomas

We’re all familiar with the term, “quantitative easing.” It’s described as meaning, “A monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply.”

Well, that sounds reasonable… even beneficial. But, unfortunately, that’s not really the whole story.

When QE was implemented, the purchasing power was weak and both government and personal debt had become so great that further borrowing would not solve the problem; it would only postpone it and, in the end, exacerbate it. Effectively, QE is not a solution to an economic problem, it’s a bonus of epic proportions, given to banks by governments, at the expense of the taxpayer.

But, of course, we shouldn’t be surprised that governments have passed off a massive redistribution of wealth from the taxpayer to their pals in the banking sector with such clever terms. Governments of today have become extremely adept at creating euphemisms for their misdeeds in order to pull the wool over the eyes of the populace.

At this point, we cannot turn on the daily news without being fed a full meal of carefully- worded mumbo jumbo, designed to further overwhelm whatever small voices of truth may be out there.

This commentary by Jeff was posted on the internationalman.com Internet site on Monday sometime — and another link to it is here.


Newmont takes top gold producer spot with $10 billion Goldcorp buy

Newmont Mining Corp said on Monday it would buy smaller rival Goldcorp Inc for $10 billion, creating the world’s biggest gold producer in the face of dwindling easy-to-find reserves of the precious metal.

The transaction, the biggest ever takeover in the gold sector according to Refinitiv, follows Barrick Gold Corp’s agreement in September to buy Randgold Resources Ltd in a deal valued at $6.1 billion.

Combining forces will give us the sector’s best project pipeline and exploration portfolio,” Newmont Chief Executive Gary Goldberg said on a conference call with analysts. “These prospects translate to the gold sector’s largest reserve and resource base.”

Vancouver-based Goldcorp’s Toronto-listed shares rose 7 percent to C$13.75 at 12:03 p.m. EST (1703 GMT). Newmont Mining’s shares were down about 8.8 percent at $31.83 in New York.

In recent years, investor criticism over inadequate management of capital had largely kept gold companies focused on costs while dampening enthusiasm for acquisitions. But the need to bolster shrinking reserves and production and a rising gold price are now serving as catalysts for increased deal-making.

This Reuters story, was posted on their Internet site at 2:10 a.m. EST on Monday morning — and was updated around 4 p.m. EST on Monday afternoon.  The first person through the door with it yesterday morning was Swedish reader Patrik Ekdahl.  Another link to it is here.


Turkey set to refine more Venezuelan gold as Maduro sends committee

A committee from Venezuela is set to arrive in Turkey to discuss a gold refining deal between Ankara and Caracas, pro-government Yeni Şafak daily reported.

The group sent by Venezuelan President Nicolas Maduro will visit Turkey’s central province of Çorum, where it’s looking to conduct bilateral trade talks and refine thousands of tons of Venezuelan gold as part of an inspection of Turkey’s gold refining facilities, the newspaper said.

The delegation arrives as  Turkey continues to set up joint ventures with the Venezuelan government for gold and coal exploration and has started investing in the country’s oil industry.
Venezuela’s central bank began refining gold in Turkey in 2018 . Gold, worth $834 million in the first 7 months of 2018 alone, is being shipped to Turkey for refinement and procession, with U.S. officials alleging that some may be making its way onto Iran in a violation of sanctions.

In November, the United States announced sanctions against U.S. citizens from dealing with entities or individuals involved with “corrupt and deceptive” gold deals from the country, in a move to curb the inflation-ravaged country’s exports.

This gold-related news item was posted on the ahvalnews.com Internet site yesterday sometime — and I found it embedded in a GATA dispatch yesterday evening.  Another link to it is here.


Chinese gold demand falters but still up y-o-y…just — Lawrie Williams

We still consider Shanghai Gold Exchange (SGE) gold withdrawal data the best comparable measure of the nation’s gold demand year on year and for 2018 the annual total was a little higher than in 2017 or 2016, but still well short of the record figure reported in 2015.  However as can be seen from the table below, this demand slipped quite significantly in the final four months of 2018 compared with a year earlier and in the last three months of the year  compared with 2017, although ended the year marginally higher than in both prior years. (See bar chart of full year figures).  The annual total though still ended up below the figures for 2013 and 2014 as well as comfortably below the 2015 figure.

The faltering in the total gold demand level though ties in with a slowing down of the Chinese economy – particularly over the past three or four months since the onset of the President Trump initiated ‘trade war’ with the U.S.  – so the downturn shouldn’t be a surprise.  Indeed the nation’s gold demand is holding up quite well under the circumstances, but one might suspect a further slowing of gold demand in the current year.  It will thus be particularly interesting to see 2019 monthly data as it is announced.  To an extent the ramifications of the slowing of economic growth will be being offset by the ever-continuing rise in that proportion of the Chinese population achieving middle class status.  The Chinese middle class has a propensity for saving, perhaps not quite so apparent in the current equivalent Western segment, and precious metals play an important role in ongoing wealth protection in Chinese culture.

Chinese demand remains vitally important in the gold supply and demand equation so any slowing down could be significant, but the growth in the country’s middle classes has to be an important factor in keeping the balance reasonably strong.

This commentary from Lawrie showed up on the Sharps Pixley website on Sunday sometime — and another link to it is here.


The PHOTOS and the FUNNIES

Here are the next two photos in a series titled “Wildlife photographer of the year people’s choice award” that appeared on The Guardian‘s website back on December 26 — and it’s courtesy of Patricia Caulfield.

This first shot is by award-winning photographer Federico Verones and entitled “Ambush”.  The caption reads “On a hot morning at the Chitake Springs, in Mana Pools National Park, Zimbabwe, Federico watched as an old lioness descended from the top of the riverbank. She’d been lying in wait to ambush any passing animals visiting a nearby waterhole further along the riverbed.”  Click to enlarge.

The second photo is by David Lloyd — and is entitled “Resting Mountain Gorilla”.  It’s captioned “The baby gorilla clung to its mother while keeping a curious eye on David. He had been trekking in South Bwindi, Uganda, when he came across the whole family. Following them, they then stopped in a small clearing to relax and groom each other.”  Click to enlarge.


The WRAP

Although precious metal prices were obviously managed on Monday, volumes in both gold and silver were almost of the ‘fumes and vapours’ variety — and for that reason, I wouldn’t read too much into them because, as I keep saying, it’s extremely easy for anyone to control prices when there’s not much going on.  Prices are rising on equally quiet volume, but it’s certainly true that prices would keep on rising if the powers-that-be weren’t there to ride shotgun over them.

Here are the 6-month charts for all four precious metals, along with copper and WTIC.  There’s not much to see, but I’ll point out that the gold price has been held in a very tight trading range for the last eight consecutive trading sessions.

WTIC was turned down the moment it broke above its 50-day moving average — and it remains to be seen if this is the start of a new price trend lower.  Click to enlarge for all six.

And a I type this paragraph, the London open is less than ten minutes away — and I note that the gold price has been chopping mostly quietly sideways ever since trading began at 6:00 p.m. EST in New York on Monday evening. That lasted until 10 a.m. CET in Shanghai. It’s been sold unsteadily lower since — and at the moment it’s down $1.70 an ounce. Silver spent almost all of Far East trading in positive territory, but has been sold lower in the last hour or so — and is now down 3 cents. The platinum price has been chopping quietly and unsteadily higher in Far East trading — and it’s up 5 bucks at the moment. Palladium hasn’t been doing much — and is up a dollar currently.

Net HFT gold volume is pretty quiet…coming up on 36,000 contracts — and there’s 3,654 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is quiet as well…6,900 contracts — and there’s 556 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down a small handful of basis points once trading began around 7:45 p.m. EST in New York on Monday evening, which was 8:45 a.m. China Standard Time on their Tuesday morning. Its current 95.47 long tick came at 9:40 a.m. CET — and it’s been edging quietly and unsteadily higher since — and is down 3 basis points as of 7:45 a.m. in London/8:45 a.m. in Zurich.

Today, at the close of COMEX trading, would be the normal cut-off for this Friday’s Commitment of Traders Report but, alas, there obviously won’t be one this Friday, either. This makes it four consecutive weeks without any COT or Bank Participation Report data. How long this semi-shutdown of the U.S. government will continue, is anyone’s guess now…as nothing seems to be going on at the moment as far as negotiations are concerned.

And as I post today’s column on the website at 4:03 a.m. EST, I see that the precious metal price sell-off in gold and silver that began before the London open, has continued. Gold is now down $2.80 an ounce — and silver is now down 5 cents. Platinum is up only 3 dollars now, but palladium is now up 2 bucks.

Gross gold volume is coming up on 61,500 contracts — and minus the current roll-over/switch volume, net HFT gold volume is about 52,700 contracts, a big jump from an hour ago. Net HFT silver volume has also jumped up…about 9,800 contracts — and there’s only 575 contracts worth of roll-over/switch volume in that precious metal.

The tiny dollar index rally that began shortly before 7:30 a.m. GMT, has now taken it back into positive territory by a bit — and is now up 6 basis points.

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

Ed

Waiting for Godot

12 January 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price began to rally quietly as soon as trading began in New York at 6:00 p.m. EST on Thursday evening.  That lasted until about fifteen minutes after the London open — and from that point it was sold equally quietly lower until trading ended at 5:00 p.m. EST in New York.

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

Gold finished the Friday session at $1,286.80 spot, up 80 cents from Thursday’s close.  Net volume was very quiet at a bit under 160,000 contracts — and there was heavy roll-over/switch volume once again…around 44,500 contracts.

Silver also rallied in Far East trading on Friday, but was halted in its tracks at the $15.70 spot mark at the 2:15 p.m. China Standard Time afternoon gold fix in Shanghai.  From there it chopped quietly sideways for about four hours, but with that $15.70 spot ceiling always in place.  It began to head quietly lower starting shortly before 10 a.m. GMT in London.  There was a big down/up dip between 9 a.m. in New York — and the 11 a.m. EST London close — and from there it traded pretty flat until a few minutes before 1 p.m. EST.  Quiet selling pressure resumed at that point — and that lasted for a few hours before it began to chop quietly sideways into the 5:00 p.m. EST close.

The high and low ticks in silver were reported by the CME Group as $15.78 and $15.59 in the March contract.

Silver was closed in New York yesterday afternoon at $15.57 spot, up 3.5 cents on the day.  Net volume was nothing out of the ordinary at 57,500 contracts — and there was a bit over 5,500 contracts worth of roll-over/switch volume in that precious metal.

The platinum price crawled unevenly higher in Far East and Zurich trading until minutes before 2 p.m. Central European Time [CET] — and up 5 dollars at that juncture.  But then the selling pressure appeared — and it was sold lower until shortly before 1 p.m. in COMEX trading in New York.  It didn’t do a thing after that.  Platinum was closed yesterday at $808 spot, down 10 dollars on the day.

The palladium price stair-stepped its way higher until minutes before 1 p.m. CST on their Friday afternoon — and at that point, it was up 11 dollars.  It edged very quietly lower from there until around 11:45 a.m. CET in Zurich — and then it took off to the upside.  That rally ran into ‘something’ about forty-five minutes later — and it was sold down hard from there into the 11:00 a.m. EST Zurich close.  It bounced a bit higher from that point, but that tiny gain was all taken back by 1 p.m. EST — and it traded flat into the 5:00 p.m. EST close from there.  Palladium was closed at $1,303 spot, down 8 dollars on the day.  At its high tick, it was up 18 bucks…so it was another day where it would have closed at heaven only knows what price if allowed to trade freely.

The dollar index closed very late on Thursday afternoon in New York at 95.54 — and it opened ten basis points lower once trading began at 7:44 p.m. EST on Thursday evening.  It began to head unevenly lower from there until around 12:45 p.m. CST in Far East trading — and then chopped unsteadily sideways until 9:00 a.m. in New York.  It blasted higher from there until around 9:45 a.m. EST — and the 95.75 high tick was set at 9:46 a.m.  It began to head lower from that point — and actually dipped below unchanged by a bit, but those ‘gentle hands’ appeared at 12:26 p.m. — and lifted it up until 3:18 p.m. — and it edged a few basis points lower into the close from there.  The dollar index finished the Friday session at 95.67…up 13 basis points.

Gold and silver prices obviously reacted to that dollar index price spike at 9 a.m. in New York…but the effect was short lived.

Here is the DXY chart courtesy of Bloomberg once again.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart — and the delta between its close…95.27…and the close on the intraday chart above, was 40 basis points on Friday.  Click to enlarge.

The gold shares opened up a bit — and then proceed to chop quietly sideways until a few minutes before the 1:30 p.m. COMEX close.  At that juncture, they began to head lower — and dipped into the red by a bit.  That lasted until minutes before 3:15 p.m. EST — and they rallied back to finish in the green by the smallest amount possible.  The HUI closed up 0.01 percent, so call it unchanged once again.  That’s been happening a lot recently.

The silver equities had a bit of a wilder ride than their golden brethren, but spent most of the Friday trading session in negative territory by a bit.  They also rallied a small amount during the last forty-five minutes of the Friday session — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.34 percent.  Click to enlarge.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chartClick 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 both gold and silver weren’t allowed to do much during the reporting week, with both finishing very close to the unchanged mark — and palladium is still on a tear.  But even though gold finished up a hair on the week — and silver did the same, except lower for the week…their respective equities went in the opposite direction.  Click to enlarge.

Here is the month-to-date/year-to-date chart — and even though gold and silver prices are up tiny amounts month/year-to-date, the silver equities are outperforming their golden cousins by a country mile so far.  Click to enlarge.

And because it’s January, the month-to-date/year-to-date numbers are the same, so I shan’t bother with the Y.T.D. chart.

With no COT or Bank Participation Reports, it’s hard to tell what’s going on under the hood — and what JPMorgan may or may not be doing on the short side.  Ted feels that both metals are ‘market neutral’ from a COMEX futures point of view — and this DoJ investigation into JPMorgan’s price management schemes in the precious metals is still ongoing.  So we’ll just have to wait and see how things turn out.


The CME Daily Delivery Report showed that 8 gold and 29 silver contract were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, the sole short/issuer was Advantage — and they also picked up 2 contracts as a long/stopper as well.  JPMorgan picked up the other 6.  All contracts, both issued and stopped, involved their respective client accounts.

In silver…Advantage, ADM and International F.C. Stone issued 19,7 and 3 contracts from their respective client accounts.  JPMorgan stopped 12 contracts…6 for its clients — and 6 for its own account.  Goldman stopped 11 contracts for its client account.

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

So far in this non-traditional delivery month for either precious metal, there have been 533 gold contracts issued and stopped — and that number in silver is 615.

The CME Preliminary Report for the Friday trading session showed that gold open interest in January dropped by 37 contracts, leaving 59 left, minus the 8 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 45 gold contracts were actually posted for delivery on Monday, so that means that 45-37=8 more gold contracts were just added to the January delivery month.  Silver o.i. in January fell by 111 contracts, leaving 505 left, minus the 29 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 142 silver contracts were actually posted for delivery on Monday, so that means that 142-111=31 more silver contracts were added to January.


And, for a change, there were no reported changes in either GLD or SLV on Friday.

There was another sales report from the U.S. Mint yesterday.  They sold 2,000 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — 50,000 silver eagles — and 500 one-ounce platinum bullion coins.

Month/year-to-date, the mint has sold 48,500 troy ounces of gold eagles — 18,500 one-ounce 24K gold buffaloes — 2,846,000 silver eagles — and 22,800 one-ounce platinum bullion coins.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday was 128.600 troy ounces/4 kilobars [U.K./U.S. kilobar weight] that were shipped out of Canada’s Scotiabank — and I won’t bother linking this.

There was far more activity is silver, of course, as 1,581,348 troy ounces was reported received — and 996,831 troy ounces were shipped out.  But of that amount, there was an intra-bank transfer of 396,380 troy ounces from HSBC USA — and into JPMorgan.  So the both the in/out numbers are reduced by that amount.  The remaining ‘in’ activity was two truckloads…1,184,968 troy ounces that arrived at CNT.  The remaining ‘out’ activity was one truckload…600,450 troy ounces…and that departed CNT as well.  The link to all this is here.

There was very little going on over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  Nothing was reported received — and only 13 kilobars were shipped out.  That occurred at Brink’s, Inc. — and I won’t bother linking this activity, either.


The Hildesheim Treasure, unearthed on October 17, 1868 in Hildesheim, Germany, is the largest collection of Roman silver found outside imperial frontiers. Most of it can be dated to the 1st century A.D. The trove consists of about seventy exquisitely crafted solid silver vessels for eating and drinking — and is now kept in the Antikensammlung Berlin (Altes Museum). It is generally believed that the treasure was the table service of a Roman commander, perhaps Publius Quinctilius Varus, who was militarily active in Germania. However, others also suggest that the treasure may have been war spoils rather than a table service.

The hoard was buried about 2 meters below the ground on Galgenberg Hill, and was found by Prussian soldiers. Most scholars now accept that the entire Hildesheim Treasure was produced in frontier workshops of the northwestern Roman provinces.

The trove contains plates, tureens, cups, goblets, trays, scoops, egg-holders, saltcellars, a small folding three-legged table, a candelabrum and a three-legged pedestal. One of the finest items is the so-called Minerva Bowl (or Athena Bowl). It features a detailed image of Minerva, who sits on a rock throne and holds a cane in her right hand and a shield in the left hand. The goddess is wearing her battle headgear and flowing robe, further from Minerva’s right hand is her symbol, the owl. The bowl has two handles, each measuring 3.4 cm in length. The bowl itself weighs 2.388 kg, having 25 cm in diameter and 7.1 cm in depth.  Click to enlarge.

I have very little in the way of stories for you today, but I do have a couple that I’ve been saving for the weekend because of length and/or content reasons.


CRITICAL READS

The Trouble With “The Wall…” — Bill Bonner

The Donald goes to “The Wall” and the debate goes on. POTUS visited America’s southern border towns, trying to drum up support for his long-promised border wall.

Meanwhile, as we saw yesterday, so far, we’re losing ground financially. The country is at least $1.2 trillion poorer today than it was in 2016.

Our job here is to connect the dots. To many readers, that means separating Heaven from Hell… good from evil… “us” from “them.”

But that is far beyond our ken. We only try to laugh from time to time… and at the right thing. And since money is the source of so much of our mirth, we won’t give it up here.

Lately, we’ve been pointing to a deep hole – a $21 trillion hole of debt.

When you’ve dug yourself into a hole, the first thing to do is to stop digging. No American president in 50 years has been able to do that.

This commentary by Bill appeared on the bonnerandpartners.com Internet site on Friday morning EST — and another link to it is here.


A Majority of Americans Do Not Believe the Official 9/11 Story — Paul Craig Roberts

TruePublica, a British website that has avoided the 9/11 issue, has had its fill of ignorant journalists at the BBC, Huffington Post and other propagandists for the military/security complex. The constant, shrill demeaning of experts and distinguished people who have raised questions about the official story has convinced TruePublica that skeptics who need so much shouting down must have a point.

The media has never examined the evidence or explained the analysis provided by scientists, architects, engineers, pilots, and the first responders who experienced the explosions of the World Trade Center twin towers. The media has never asked for the release of the multiple videos that recorded whatever struck the Pentagon. The media has never investigated whether cell phones worked in 2001 from the altitudes at which the official story claims calls were made.

Instead two-bit punk presstitutes, such as the BBC’s Chris Bell and the Huffington Post’s Jess Brammer and Chris York, label experts with knowledge and integrity “conspiracy theorists.” These presstitutes knowingly use a cover-up term that the CIA put into use via its media assets to discredit the expert skeptics of the Warren Commission Report on the assassination of President Kennedy.

The fact that the carefully presented evidence is never engaged except with name-calling is a strong indication that the evidence is true and cannot be refuted.

The success of the 9/11 Lawyers’ Committee in obtaining the consent of the US Attorney for the Southern District of New York to “comply with the provisions of 18 U.S.C. 3332,” which requires the convening of a federal grand jury to examine the unexamined 9/11 evidence, has impressed TruePublica as no U.S. attorney would convene a grand jury on the basis of a conspiracy theory. Clearly compelling evidence has been presented to the U.S. Attorney.

Obviously, Washington expects the Justice (sic) Department to escape from the bind into which it has been put by the Lawyer’s Committee, an escape that the presstitute media will aid and abet. Nevertheless, the escape will likely reinforce the public’s view that the government is afraid of the evidence and is no more likely to follow it than in the case of President Kennedy’s assassination, Robert Kennedy’s assassination, the Israeli attack on the U.S.S. Liberty — and a large number of other officially covered up crimes.

More and more people will come to realize that ad hominem name-calling is not an acceptable response to evidence.

This longish, but very worthwhile commentary from Paul, was posted on his website on Tuesday — and I thought it best to wait to post it in Saturday’s column.  I found it on the Zero Hedge Internet site on Wednesday — and another link to it is here.


Placing the USA on a collapse continuum with Dmitry Orlov — The Saker

I have mentioned the very visible decline of the USA and its associated Empire in many of my articles already, so I won’t repeat it here other than to say that the “ability to exert influence and impose its will” is probably the best criteria to measure the magnitude of the fall of the USA since Trump came to power (the process was already started by Dubya and Obama, but it sure accelerated with The Donald).  But I do want to use a metaphor to revisit the concept of ‘catastrophe’.

If you place an object in the middle of a table and then push it right to the edge, you will exert some amount of energy we can call “E1”.  Then, if the edge of the table is smooth and you just push the object over the edge, you exercise a much smaller amount of energy we can call “E2”.  And, in most cases (if the table is big enough), you will also find that E1 is much bigger than E2 yet E2, coming after E1 took place, triggered a much more dramatic event: instead of smoothly gliding over the table top, the object suddenly falls down and shatters.  That sudden fall can also be called a “catastrophe”.  This is also something which happens in history, take the example of the Soviet Union.

Some readers might recall how Alexander Solzhenitsyn repeatedly declared in the 1980s that he was sure that the Soviet regime would collapse and that he would return to Russia.  He was, of course, vitriolically ridiculed by all the “specialists” and “experts”.  After all, why would anybody want to listen to some weird Russian exile with politically suspicious ideas (there were rumors of “monarchism” and “anti-Semitism”) when the Soviet Union was an immense superpower, armed to the teeth with weapons, with an immense security service, with political allies and supporters worldwide?  Not only that, but all the “respectable” specialists and experts were unanimous that, while the Soviet regime had various problems, it was very far from collapse.  The notion that NATO would soon replace the Soviet military not only in eastern Europe, but even in part of the Soviet Union was absolutely unthinkable.  And yet it all happened, very, very fast.  I would argue that the Soviet union completely collapsed in the span of less than 4 short years: 1990-1993.  How and why this happened is beyond the scope of this article, but what is undeniable is that in 1989 the Soviet Union was still an apparently powerful entity, while by the end of 1993, it was gone (smashed into pieces by the very nomenklatura which used to rule over it).  How did almost everybody miss that?

This very long, but very thoughtful commentary showed up on thesaker.is Internet site yesterday — and I thank Larry Galearis for pointing it out.  It’s certainly worth reading if you have the interest.  Another link to it is here.


Next eurozone crisis has begun and will lead to more money creation

Industrial output is in crashing. Retail sales have stagnated. Business confidence has dropped, and investment is heading south. A sharp slowdown might have been expected for Britain heading out of the European Union, America where the president is busily ripping up half a century worth of carefully constructed trade agreements, or China, which has been on a decade of wild, credit-fuelled growth.  But the real slowdown is happening in the one place where few economists expected it. It is now painfully obvious that the eurozone is heading into a sharp recession.

The numbers coming out of all its main economies, from Germany to France, Italy and Spain, are relentlessly bad. What does that mean? Far from winding up quantitative easing, the European Central Bank will be forced to step in with emergency measures to rescue a failing economy — but it may well prove too little, too late.

2018 was meant to be the year when the eurozone consolidated its steady recovery, agreed on reforms to fix the flaws in the single currency, pressed forward with reforms to boost its competitiveness, and gave the rest of the world a lesson in balanced, sustainable growth. Over the past year, a ton of investors’ money has bought into the Euro-boom story. Steady recovery would drive voters away from populist parties, encourage reform, and create a virtuous circle of expansion and renewal.

The script has not quite worked out as planned, however. Today brought yet another wave of disappointing numbers. Italian industrial production was down 2.6 percent year on year. In Spain, industrial output was also down 2.6 percent, the fastest rate of contraction since May 2013. The day before, we learned that French industrial output was down by 1.3 percent in November, and Germany, which is meant to be the main engine of the continent, recorded a decline 1.9 percent for the month, as well as re-calculating October’s data to show a steeper drop than reported earlier.

The eurozone is now seeing a synchronised slowdown right across all its major economies. Germany looks certain to be in technical recession, defined as two consecutive quarters of shrinking output, and France and Italy will not be far behind. Spain, which had been growing faster than most of the continent, is slowing and so will the smaller economies. Add all that up, and it clear the whole continent is heading into a fresh downturn, even though employment and output have yet to recover their 2008 levels.

This worthwhile news item was posted on the telegraph.co.uk Internet site on Friday.  It’s behind their subscription wall, but is posted in the clear in its entirety in this GATA dispatch — and another link to it is here.


Most eurozone nations are dropping the €500 bank note

Seventeen of the 19 countries using the euro stopped issuing the €500 denomination as of Jan. 27, according to a statement on the website of the European Central Bank and reported by Agence France Press.

The statement added, “Austria and Germany will both continue printing the banknotes until April 26 in order to ensure a smooth transition and for logistical reasons.”

The highest-denomination note is being discontinued because the European Central Bank suspects that its high value makes it a payment method of choice for money laundering by criminals and for financing terrorist activities.

The ECB’s statistics show that €500 bills comprise only 2.4 percent of the total number of bank notes in circulation, and a little over 20 percent of the total value. At the end of November 521 million of them were in circulation.

At current exchange rates, €500 is about US$570. Switzerland continues to issue its 1,000-franc note, which is worth about US$1,014.

This article is one I found on the coinworld.com Internet site on Friday afternoon — and another link to it is here.


Doug Noland: Issues 2019

The U.S. dollar has serious fundamental issues: Trillion-dollar fiscal deficits; large structural Current Account Deficits; huge government, corporate and household debt loads; fragile securities markets; a maladjusted Bubble Economy; political dysfunction and, potentially, Washington chaos; and festering geopolitical risks.

The world’s reserve currency is fundamentally unsound. The dollar is also the nucleus for a financial apparatus financing much of the world’s levered speculative holdings. De-risking/Deleveraging Dynamics in 2018 saw waning liquidity and widening funding and hedging costs in the entangled world of dollar funding markets. With the likes of Goldman Sachs and Deutsche Bank seeing CDS prices rise significantly late in 2018, mounting systemic fragility would appear a serious Issue 2019.

China’s currency has serious fundamental issues: A vulnerable banking system approaching $40 TN of assets (more than quadrupling since the crisis), with Trillions of potentially suspect loans; a troubled “shadow” banking apparatus; an historic housing Bubble with an estimated 65 million vacant units; a deeply maladjusted economic structure; Bubble economic and financial structures dependent upon ongoing loose financial conditions and rapid Credit expansion; huge financial and economic exposures to the emerging markets and the global economy more generally; a population with significantly elevated expectations prone to disappointment and dissatisfaction; and mounting geopolitical risks. In short, China’s historic Bubble is increasingly susceptible to a disorderly collapse.

Bubbles are mechanism of wealth redistribution and destruction. This reality has been at the foundation of my ongoing deep worries for the consequences of history’s greatest global Bubble. We’ve witnessed the social angst, a deeply divided country and waning confidence in U.S. institutions following the collapse of the mortgage finance Bubble. I fear that the Bubble over the past decade has greatly increased the likelihood of geopolitical tensions and conflict. Aspects of this risk began to manifest in 2018, as fissures developed in the global Bubble. Geopolitical conflict is a critical Issue 2019. Trade relations are clearly front and center. Going forward, I don’t believe we can disregard escalating risks of military confrontation.

It is my long-held view that the Fed (and the other major central banks) will see no alternative than to resort to QE when global markets “seize up.” Ten-year Treasury yields at 2.70%, German bund yields at 22 bps and JGBs at zero don’t seem inconsistent with this view. It’s been a decade (or three) of Monetary Disorder. Now come the consequences, commencing with acute market and price instability. I believe this instability will end in a serious and prolonged crisis. There will be policy interventions, of course. But it will become increasingly clear that flawed monetary doctrine and policies are more the problem than the solution. In an increasingly acrimonious world, how closely will policymakers coordinate crisis responses? Will central bankers stick with “whatever it takes”? How quickly will they react to the markets – and with how much firepower? Uncertainty associated with monetary policymaking in a global crisis environment is an Issue 2019.

Doug’s weekly commentary always falls into the must read category for me — and it will be the first thing I do after I’ve posted today’s column on the website.  It appeared on his in the very wee hours of Saturday morning EST — and another link to it is here.


Tales of the New Cold War: Condemning Trump for Putin’s Syria

Part 1: The show this week concerns the consternation of Washington with Trump’s withdrawal statements for U.S. forces in Syria. Most of this outrage is summed up by the Economist Magazine where the stated worries are that Russia is supplanting the U.S. as the regional power in the M.E. and that old standby allies like Saudi Arabia are leaning more and more towards cooperation with Russia. Cohen’s response is interesting as he states that in better times troop withdrawals would be met with approval, not scorn, and he also raises for discussion the question of what role these troops really played in Syria? He continues stating that there are still 30,000 terrorists still there and therefore what use are the 2,000 U.S. troops stationed there? He mentions three: a potential diplomatic bargaining chip, a thwart to Iran, and what he calls a symbolic position. But essentially they play no role except as another tripwire for a hot war with Russia, and thus concludes that withdrawing troops is a good thing.

But what does Trump’s opposition say about this, and Batchelor wants to know why they say it? Batchelor’s view is Trump wants to reduce the war risks, but wants to understand how the opposition movement is motivated.  Cohen states clearly that there is no national interest for U.S. troops to be there, nor its Euro allies, but Russia is fighting a terrorist threat it sees as spreading eventually to Russia. For Trump and his opponents, except, notably, Rand Paul (and very few others), the opposition is against all of Trump’s foreign policies – and clearly this is not about isolationism. Cohen then notes that rationality of the opposition has nothing to do with logic. A secondary motive theme is that this opposition (MSM) is hegemonic – the “global footprint” so honoured by the media. He also noted that the Soviet Union had a similar opposition group to Gorbachev as he “shrank” the Warsaw Bloc.

Part 2:  Batchelor begins this podcast with the mention of the additional complication of a withdrawal from Afghanistan – with the usual opposition. They see Russia filling the power void in Eurasia and even Eastern Europe with the loss to American hegemony. Trumps somewhat wayward comments about the Soviet Union’s involvement in Afghanistan does not differ significantly from the U.S. arguments for fighting there now. Cohen notes the difference, however, that ISIS evolved into a terrorist movement with sovereignty ambitions, and there was an obvious need for the U.S. to cooperate against them with Russia. But Washington, under two administrations considered Russia more the enemy than ISIS. So, Cohen continues, Trump’s admission that the U.S. beat ISIS is completely wrong, but his generals support this view, including a hostile position against Russia.  Cohen then muses about whether those generals are making foreign policy? And what does that say about American democracy? The two pundits also discuss where Russiagate is leading? Will it be the election issue, or an impeachment issue beforehand?

Batchelor next brings up the topic of an “escalation cycle” where events unfold and cannot be stopped – and he is talking about a war scenario. Cohen’s answer: “Yes and No”. He agrees with being in an escalation cycle, but says it is not too late to stop it. Putin sees his legacy as about leadership and rebuilding a destroyed country, not going to war, and he wants this new cold war over. Cohen then ends with a surprising statement that (at least) in Afghanistan Putin wants the U.S. troops to stay as they stopgap ISIS from moving north from that country as a threat to Russia. He is still hopeful for cooperation against the global terrorist threat.

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Once more there is an omission in the discussion about why the United States is at all involved in Syria – against Syria. Cohen states correctly that fighting ISIS was not the main issue, but he does not state that it is in Israeli interests that the U.S. destabilizes that country that was already under attack by ISIS and Israel. This only helps Israeli ambitions, and so far American national interests are suffering, for example, by the falling out with Turkey and Washington. Russia was asked to intervene in Syria, and we know that Israel lobbied/ requested similar action from Washington even though the American presence was illegal. This is also a blunder, as Israeli and Russian relations are also injured and potentially could worsen if Israeli bombing and missile attacks on Syria continue. The trip wire presence of U.S. forces in Syria is therefore a double danger, and both Israel and Washington are facing national security setbacks for this relationship. We can add to this list with the mounting failures for U.S. involvement in the Yemen War, rifts between allies Saudi Arabia and Qatar, the failing Sunni movement against Iran in general, and the increasingly hostile Iraqi government. The recent statements by John Bolton to delay U.S. troop withdrawals again reinforces this support relationship with Israel and its foreign policy goals in Syria, and this writer wonders if John Bolton is president or Trump?

This 2-part audio interview appeared on the audioboom.com Internet site on Tuesday sometime — and it’s another item that I though should be saved for the weekend.  As always, I thank Larry Galearis for his excellent executive summary — and personal comments.  Each part is about 20 minutes long.  The link to Part 1 is in the headline — and here.  And the link to Part 2 is here.


Tocqueville Gold Strategy Fourth Quarter 2018 Investor Letter — John Hathaway

Going Bananas

U.S. debt to GDP exceeds 100%, in the danger zone that has historically led most countries into a banana-republic-style sovereign-credit crisis, loss of currency value, and credit collapse.  The ratio has hovered near the 100% level since 2013 without adverse consequences.  Over the past year, the dollar has been generally strong relative to other currencies.  However, we think that the risks are high that significant change is afoot; and if so, exposure to gold will prove timely.

For the record, gold outperformed equities in 2018, declining 1.6% vs. a loss of 4.4% for the Standard and Poor’s 500.  As almost all investors can attest, the S&P index masked the full extent of the decline in equity markets due to high concentration of the index in a handful of stocks that outperformed run-of-the-mill stocks.  Gold outperformed all currencies last year except for the Swiss franc and the Japanese yen.  It also held its own against bonds, roughly matching the 0.9% increase in the U.S. 10-year bond.  Some points to consider:

1)  Gold has historically outperformed equities during periods of market stress.  Counting 11 episodes beginning from the 1987 market crash, gold has increased an average of 6.8% while the S&P has declined 19.4%.

2)  During six recessions since the 1970s, gold increased on average 20.8%.

3)  Since 2000, gold has outperformed bonds and equities despite a substantial draw-down from 2011

Why 2000?  Because, in our view, 2000 marked the dawn of radical monetary practice by world central banks.  Under adverse scenarios for financial assets of short- and medium-term duration, gold exposure has been a winning strategy.  And as we see it, gold has also been a winning strategy since monetary policy became unhinged nearly two decades ago.

John sent this commentary my way on Friday morning — and it was posted on the tocqueville.com Internet site on Thursday sometime.  Another link to it is here.


Why Dubai has a market dedicated only to gold – with a US$3 million ring weighing 141 pounds

If you were to listen to most travel guides on Dubai, you would think the desert city materialised out of the air a decade ago.

The city exploded in prosperity after the United Arab Emirates discovered oil in 1966, leading to a development boom that has resulted in the world’s tallest building, second biggest mall, most luxurious hotel, and more skyscrapers than any city besides New York and Hong Kong.

Dubai was settled as a port city in the early 1800s, when it became a centre for fishing and pearling, and a crossroads of sea and land trade routes through Asia and the Middle East. That trading history can be seen in the souks, or markets native to the Middle East and North Africa. These are colourful places where traders of various nationalities hawk their wares, as your senses are attacked from every direction.

Dubai has many souks, although some of the modern-day versions consist of rows of air-conditioned shops, all housed under a common roof. These souks are generally dedicated to certain items: spices, perfume, clothing. But the most extravagant is the Gold Souk, where people come from all over the world to get a deal.

This long, but very interesting photo-filled essay put in an appearance on the South China Morning Post website last Sunday — and I’ve been saving it for today.  I thank Jim Gullo for sending it along — and another link to it is here.


The PHOTOS and the FUNNIES

This new photo series titled “Wildlife photographer of the year people’s choice award” appeared on The Guardian‘s website back on December 26 — and it’s yet another offering from Patricia Caulfield.

This first photo is entitled “Three Kings” — and was snapped by award-winning South African photographer Wim Van Den Heever.  It’s captioned “Wim came across these king penguins on a beach in the Falkland Islands just as the sun was rising. They were caught up in a fascinating mating behaviour – the two males were constantly moving around the female using their flippers to fend the other off.”  He obviously used a fill-flash for this photo.  Click to enlarge.

This second photo is entitled “Bond of Brothers” by award-winning New Zealand photographer David Lloyd.  The caption reads “These two adult males, probably brothers, greeted and rubbed faces for 30 seconds before settling down. Most people never have the opportunity to witness such animal sentience, and David was honoured to have experienced and captured such a moment.Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ is 41 years young…and this American rock band’s first single.  The tune was a huge success in the U.S. — and reached number 5 on the BillBoard Hot 100 chart that year.  The group went on to further fame and glory after that.  The link is here.

Today’s classical ‘blast from the past’ is one I’ve featured before, but only once — and it was a long time ago.  When I did feature it, it was only the second movement.

Joaquín Rodrigo Vidre, 1st Marquis of the Gardens of Aranjuez, commonly known as Joaquín Rodrigo, was a Spanish composer and a virtuoso pianist.  Rodrigo was born in Sagunto, Valencia, and completely lost his sight at the age of three after contracting diphtheria.  He wrote his compositions in Braille, which was transcribed for publication.

Rodrigo’s music is among the most popular music of the 20th century. In particular, his Concierto de Aranjuez…composed in Paris in 1939…is considered one of the pinnacles of Spanish music — and of the guitar concerto repertoire. The central adagio movement is one of the most recognizable in 20th-century classical music, featuring the interplay of guitar with cor anglais.

Here’s Pepe Romero with the Danish Radio Symphony Orchestra — and it is wonderful.  And as with any guitar solo with orchestral accompaniment, they have to ‘mic it’…or the orchestra will bury the guitarist, no matter how loudly he tries to play.  The link is here.


Although there was obvious interference in all of the precious metals on Friday, like there has been most of this week, I’m not going to read too much into it, because volumes have been very light…especially yesterday — and Thursday.

If you check the Kitco gold and silver charts above one more time, you’ll note that those two precious metals had almost identically managed price paths on both those day.  And as I’ve pointed out a couple of times already this week, when volumes are this low, it’s very easy for anyone with an agenda to manage prices in whatever direction they choose.

But make no mistake about it, ‘da boyz’ are still there.  However, the more important question is whether or not JPMorgan is active as short seller at the moment.  And with no Commitment of Traders Report for three weeks now — and no monthly Bank Participation Report showing December’s activity, it’s impossible for Ted tell what they’ve been up to.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  And for the second day in a row it should be noted that gold, silver, platinum’s low closes for the day occurred after COMEX trading was done at 1:30 p.m. EST, those low closing price ticks don’t appear on the Friday dojis on the chart below.  Click to enlarge for all.

Despite the fact that the Fed has thrown in the towel for the benefit of the equity and bond markets at home — and world-wide, the die had already been cast…and the Rubicon crossed, some time ago.  The “animal spirits” that kept driving the equity markets ever higher, are no longer functioning as they have in the past. The obvious global economic decline is now visible to all — and no amount of jaw-boning or money printing will save it now.

The artificial markets that have existed ever since the powers-that-be intervened during the market crash of 1987 are now so monstrous, grotesque and distorted that nothing can save them going forward.  Although the markets are now ‘too big to fail’…they have also become ‘too big to bail’.  The Federal Reserve and the various and sundry other central banks are pretty much powerless against the inevitable collapse.

As the Saker said in his lengthy commentary in the Critical Reads section above…”Eventually the USA will rebound; I have no doubts about that at all.  This is a big country with millions of immensely talented people, immense natural resources and no credible threat to its territory.  But that can only happen after a real *regime* change (as opposed to a change in Presidential Administration) which, itself, is only going to happen after an “E2 catastrophe” collapse Until then, we will all be waiting for Godot.

That’s basically what we’re all doing right now…waiting — and for a long time, especially in the precious metals.  Now that wait has commenced in the general equities markets and financial system world-wide.  The collapse of the latter two will finally bring redemption to the former — and it already appears to have started.

And as I’ve said before on too many occasions to count, the inevitable will not occur without a fight from the powers-that-be.  But at some point, not only will their efforts prove ineffective, they will actually become counterproductive, as it’s now plain to everyone everywhere that the current state of financial and economic affairs only exists on Planet Earth today because ultra-low interest rates — and endless money printing has made it so.

And as George Galloway stated in his commentary in Friday’s column…”The old order is dying; the new one cannot be born. If we are not careful, we will soon be alive in the time of monsters.”

All we can hope for is that monsters that we get in the future, are are better than the monsters ruling Planet Earth today. But that remains to be seen.

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

Ed

Ted Butler — Questions Only the DoJ Can Get Answered

11 January 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price opened flat in New York on Wednesday evening — and then rallied a few dollars by shortly before noon China Standard Time on their Thursday morning.  It then traded sideways until a minute or two before 9 a.m. in London — and then the selling pressure began.  There was a bit of a respite between 9:20 a.m. and 1:10 p.m. GMT, about ten minutes before the COMEX open.  But then the pressure began anew — and the powers-that-be continued to sell the gold price quietly lower until the market closed at 5:00 p.m. EST in New York.

The high and low ticks aren’t worth looking up, but the one percent that gold gained on Wednesday, had pretty much disappeared by the end of trading yesterday.

Gold was closed on Thursday at $1,286.00 spot, down $7.20 on the day.  Net volume was pretty light at a bit over 180,000 contracts — and roll-over/switch volume was very heavy once again at just under 52,500 contracts.

The silver price really didn’t do much of anything in Far East and morning trading in London, as even the smallest tick higher in price was capped and sold lower.  Like in gold, this state of affairs lasted until around 1:10 p.m. GMT/7:10 EST — and ‘da boyz’ dealt with the silver price just a they did in gold for the remainder of the Thursday trading session.

The high and low ticks in this precious metal were reported by the CME Group as $15.83 and $15.625 in the March contract.

Silver was closed in New York yesterday at $15.54 spot, down 19 cents from Wednesday.  Net volume was really nothing special at a hair over 59,000 contracts — and roll-over/switch volume out of this precious metal was nothing special, either at a bit under 5,300 contracts.

The platinum price dipped a few dollars in morning trading in the Far East, but was back in the green by noon in Shanghai — and stayed in the plus column until the COMEX open.  It was sold lower until the 1:30 p.m. COMEX close — and didn’t do anything after that.  Platinum was closed at $818 spot, down 5 dollars on the day.

Palladium traded flat until 9 a.m. CST on their Thursday morning — and then was sold down 11 dollars to the $1,300 spot price mark in very short order — and was still down 5 bucks or so by the Zurich open.  The price began to sail from there, but that wasn’t allowed to last — and it then chopped quietly higher until the COMEX open.  It was sold quietly lower into the COMEX close — and then rallied back to unchanged — and that’s where it finished the day, at $1,311 spot.

The dollar index closed very late on Wednesday afternoon in New York at 95.22 — and when trading resumed at 7:44 p.m. EST on Wednesday evening, it opened down 7 basis points.  It moved unsteadily lower from there — and most likely got rescued by the usual ‘gentle hands’ at it 95.03 low tick, which came at 11:58 a.m. China Standard Time on their Thursday morning.  It began to head unevenly higher from that juncture — and the 95.59 high tick came exactly at the 1:30 p.m. COMEX close.  It gave back a small handful of basis points very shortly after that — and then didn’t do much for the remainder of the Thursday session.  The dollar index finished the day at 95.54…up 32 basis points from its close on Wednesday.

Here’s the DXY chart from Bloomberg once again.  Click to enlarge if necessary.

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at stockcharts.com — and the delta between its close…95.12…and the close in the DXY, was 42 basis points on Thursday.  Click to enlarge.

The gold stocks opened down when trading began at 9:30 a.m. EST in New York on Thursday morning — and continued unevenly lower from there.  Their respective lows came exactly at the 1:30 p.m. COMEX close — and they chopped quietly higher from there until trading ended at 4:00 p.m. EST.  The HUI finished down 1.74 percent, double the amount of the gains that they had on Wednesday.

The silver equities followed almost an identical price path, including the 1:30 p.m. COMEX close low ticks of the day — and they gained back a bit going into the close of trading.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 2.57 percent, taking back almost everything it gained on Wednesday.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index. Click to enlarge as well.

The CME Daily Delivery Report showed that 45 gold and 142 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, the sole short/issuer was HSBC USA with 45 contracts out of its client account.  There were four long/stoppers in total — and by far the largest was JPMorgan with 32 for its client account.  In very distant second place was Advantage with 7 contracts for its client account as well.

In silver, the only short/issuers were International F.C. Stone and JPMorgan, with 122 and 20 contracts out of their respective client accounts.  There were eight long/stoppers in total — and the biggest was JPMorgan with 58 contracts…30 for its clients — and 28 for its own account.  In second spot was Goldman Sachs with 48 contracts for its client account.  In distant third place was Advantage with 13 contracts for its client account as well.

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 January declined by 36 contracts, leaving 96 still open, minus the 45 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 36 gold contracts were actually posted for delivery today, so that means that the change in open interest and the deliveries matched for a change.  Silver o.i. in January fell by 102 contracts, leaving 616 still around, minus the 142 contracts mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 124 silver contracts were actually posted for delivery today, so that means that 124-102=22 more silver contracts just got added to the January delivery month.


There was a withdrawal from GLD yesterday, as an authorized participant took out 47,261 troy ounces — and there were no reported changes in SLV.

The folks over at the shortsqueeze.com Internet site updated their short position data for both GLD and SLV yesterday, as of the close of trading on Monday, December 31 — and this is what they had to report.  The short position in SLV declined from 9,540,700 shares/troy ounces, down to 9,397,600 shares/troy ounces…which is a drop of only 1.5 percent.  The short position in GLD fell from 1,342,160 troy ounces, down to 1,319,140 troy ounces…which is a decline of only 1.7 percent.  Both amounts, if they are to believed…as Ted doesn’t really ever trust them…are insignificant changes.

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

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday was 5,477 troy ounces that was shipped out of Canada’s Scotiabank.  There was also a paper transfer of 8,587 troy ounces out of the Registered category — and back into Eligible over at HSBC USA.  The link to this is here.

There was a lot of activity in silver, but most of it involved transfers from one bank vault to another.  There was 1,203,740 troy ounces received — and 1,856,441 troy ounces shipped out.  Every ounce of the ‘in’ activity involved the ‘out’ activity — and once that is subtracted out, the net activity on Wednesday was 652,701 troy ounces that was shipped out.  One truckload…595,076 troy ounces…left CNT — and the remaining 57,625 troy ounces departed the International Depository Services of Delaware.  You can check all of this action out for yourself — and it’s linked here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 500 of them — and shipped out 507.  All this occurred at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


Here are two charts that Nick Laird passed around last weekend, that I’ve only had the space for now.  They are the usual ones that show the total gold and silver holdings of all known depositories, ETFs and mutual funds, as of the close of business on Friday, January 4.  During that week, a net 830,000 troy ounces of gold was deposited.  Here’s the chart for that precious metal.  Click to enlarge.

In silver, there was a net 2,260,000 troy ounce withdrawn during the last reporting week.

Looking at the chart below, over the last seventeen weeks, fourteen of those have shown net withdrawals — and just eye-balling the chart, I’d guesstimate that around 24 million troy ounce of silver have been removed from various ETFs, depositories and mutual funds during that time period.

If you remember what I said in yesterday’s column — and if you don’t…here it is again…

I went back a little further in my GLD and SLV numbers — and since October 19, 2018…there has been 1,715,559 troy ounces of gold added to GLD on a net basis as of the end of trading yesterday. In silver since that date, there has been 19,279,416 troy ounces withdrawn from SLV on a net basis. And that’s despite the fact that silver has rallied materially since that date.”

So, of that 24 million troy ounce “guesstimate”…19.3 million has come out of SLV — and Ted would be the first one to jump up and say that this was mostly, if not all, conversion of SLV shares into physical metal by JPMorgan.  So virtually all of this 4-month-long down-trend in the chart below is attributable to them.

Keep that in mind as you examine it.  Click to enlarge.

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


CRITICAL READS

Donald Trump: Swamp Man — Bill Bonner

In the theories of democratic government are some of the wildest, most extravagant, and least accurate claims in modern mythology.

The general idea is that the best and brightest – or at least not the dullest and most venal – are elected by the masses to represent them in the nation’s capital.

There, with their thinking caps on and their hearts attuned to the needs of “The People,” they do such things as will improve the commonweal.

More specifically, these people – including Ms. Ocasio-Cortez, Chuck Schumer, Mitch McConnell… and Donald J. Trump himself – are charged with tending the nation’s money, remembering that every penny they spend must be squeezed from some poor taxpayer’s time and the sweat of his brow.

No Money shall be drawn from the Treasury but in Consequence of Appropriations made by Law,” sayeth the Constitution. Thus, in solemn deceit, do the people’s representatives bend to their duties.

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


Earnings Season Off to a Dismal Start: Warnings, Guidance Cuts, Mass Layoffs

Earnings season has yet to officially begin when the big banks report next week and it already looks like Wall Street is in for a rude awakening when it comes to corporate profits in both the last quarter of 2018 and the rest of 2019 just one quarter after the best earnings season in history.

The recent warnings, guidance cuts and layoff announcements to date have been nothing short of dismal. Here is a quick summary of what we have observed in just the last week:

  • Apple cut revenue guidance (for the first time in 16 years)
  • Macy’s cut profit guidance, sending its shares plunging the most on record
  • Barnes and Noble cut profit guidance
  • FedEx cut profit guidance
  • American Airlines cut guidance
  • Delta cut profit guidance
  • Kohl’s reported a plunge in comp store sales
  • Ford announced it will cut thousands of jobs in Europe

Virtually every single sector is telegraphing weakness, from transports to techs to autos to retail and finance.

While the rising gloom has already had an impact on analyst expectations, with consensus estimates showing an expectation that S&P profits will rise 7.7%, down from a forecast for a 20% plus increase for all of 2018, the real number may end up being much lower.

This Zero Hedge story put in an appearance on their website at 5:46 p.m. EST on Thursday afternoon — and another link to it is here.  A parallel ZH story from an hour earlier is headlined “Global Earnings Downgrades at Highest Level in 10 Years“.  Then there’s this ZH story from Brad Robertson…”China Car Sales Collapse: First Annual Drop in Over 20 Years


Russia shifts $100bn of its reserves into yuan, yen and euro in a great dollar dump

The Central Bank of Russia has moved further away from reliance on the U.S. dollar and has axed its share in the country’s foreign reserves to a historic low, transferring about $100 billion into euro, Japanese yen and Chinese yuan.

The share of the U.S. currency in Russia’s international reserves portfolio has dramatically decreased in just three months between March and June 2018, from 43.7 percent to a new low of 21.9 percent, according to the Central Bank’s latest quarterly report, which is issued with a six-month lag.

The money pulled from the dollar reserves was redistributed to increase the share of the euro to 32 percent and the share of Chinese yuan to 14.7 percent. Another 14.7 percent of the portfolio was invested in other currencies, including the British pound (6.3 percent), Japanese yen (4.5 percent), as well as Canadian (2.3 percent) and Australian (1 percent) dollars.

The Central Bank’s total assets in foreign currencies and gold increased by $40.4 billion from July 2017 to June 2018, reaching $458.1 billion.

This interesting, but not entirely surprising news item was posted on the rt.com Internet site at 8:46 a.m. Moscow time on their Thursday morning, which was 12:46 a.m. in Washington — EST plus 8 hours.  I thank Larry Galearis for pointing it out — and another link to it is here.  The Bloomberg story on this is headlined “Russia Buys Quarter of World Yuan Reserves in Shift From Dollar” — and I found that in a GATA dispatch yesterday morning.


Fall of Empires: London, Washington and Paris on brink of collapse — George Galloway

Despite the thrashing around of the NATO disinformation apparat, the imperial heartland has entered 2019 in a state of complete chaos.

Washington, London, and Paris – the three capitals of the Empire – are today effectively ungoverned, shutdown, tottering on the brink of collapse or under siege by their own people.
Their self-chosen Nemeses – Moscow and Beijing – meanwhile toast the New Year in a state of considerable optimism and self-confidence. These are the facts, this is the news.

We should start at the top of the Empire. The United States government has closed down amid stasis and a barrage of inter-governmental howitzers.

The defense secretary, ‘Mad Dog‘ Mattis, has resigned as have other uniformed subalterns angry at the president’s re-found determination to withdraw from costly and losing foreign wars. The actual “mad dog” – John Bolton – openly defies President Trump over Syria, Mueller closes in, and the new Democratic majority in the House gears up to “impeach the mother***er.

The old order is dying; the new one cannot be born. If we are not careful, we will soon be alive in the time of monsters.

George Galloway is never lost for words — and is never off the mark by much.  His command of the English language — and his ability to put his thoughts into words of power, is only dimly matched by Nigel Farage.  This ‘op-ed’ piece, which is certainly worth reading if you have the interest, appeared on the rt.com Internet site at 2:07 p.m. Moscow time on their Wednesday afternoon, which was 6:07 a.m. in Washington — EST plus 8 hours.  I thank George Whyte for sending it our way — and another link to it is here.


4 on trial in theft of huge gold coin from Berlin museum

Four young men went on trial in Germany Thursday over the brazen theft of a 100-kilogram (221-pound) Canadian gold coin that disappeared from a Berlin museum two years ago.

Two brothers and their cousin, identified in German media as 24-year-old Wayci Remmo, 20-year-old Ahmed Remmo and 22-year-old Wissam Remmo, are accused of stealing the “Big Maple Leaf” coin from the Bode Museum in March 2017.

The fourth suspect, identified only as 20-year-old Dennis W., worked as a security guard at the museum, which is located in the heart of the German capital. He is accused of scouting out the scene of the crime.

The opening of the trial at Berlin’s district court drew intense media interest in Germany because of the Hollywood-style nature of the heist and their families’ alleged ties to organized crime.

This rather short, but very interesting news story, filed from Berlin, showed up on the apnews.com Internet site on Thursday sometime — and it’s an article I found on the gata.org Internet site.  Another link to it is here.


China’s Cynical Gold Reserve Increase? — Lawrie Williams

At long last, after over two years of reporting zero monthly increases in its gold reserves, the Chinese central bank has announced a reserve rise in December of 9.95 tonnes.  While the amount of the increase may be reasonably realistic we do not think that the announced rise is in any way confirmation of the zero increases over the preceding 26 months, but a perhaps cynical ploy to try and convince doubters that the zero increase announcements were, in fact, genuine.  We still doubt that they were given the bank’s long track record of reporting no rises in its gold reserves and then reporting huge increases at five or six year intervals.  These massive gold reserve rises have very obviously been built up over the periods  when the country has been adamant that its reserves are not being increased.  From China’s viewpoint the additional amounts have been held in accounts which it feels do not need to be reported to the IMF until they are transferred into the country’s official Forex holding accounts.

As the world’s largest producer of gold, and a non-exporter of the precious metal, China certainly has the opportunity to build up its gold reserves surreptitiously.  This may account, in part at least, for the large discrepancy in estimates by the major consultancies, who provide global gold statistics, between China’s gold consumption and the known total of gold imports plus the country’s own gold output.

There have been numerous instances of Chinese officials and academics suggesting that China should control a gold reserve on a par with that of the USA’s reported 8,133.5 tonnes, but even with the latest announced addition the amount of gold officially reported as being held by China in its Forex reserves totals only some 1,852 tonnes – a total not only exceeded by the USA, but also by Germany. Italy, France and Russia – the latter having been raising its own gold reserve figure at a rate of over 200 tonnes a year to its current 2,066.2 tonnes putting it in 5th place among national gold holders – and with France (No. 4 with 2,436 tonnes) firmly in its sights.  China’s ‘official’ holding puts it in sixth place, but many observers, including ourselves, are on record as suggesting the nation’s true gold reserve is substantially higher than the amount it reports to the IMF.

This commentary by Lawrie put in an appearance on the Sharps Pixley website on Thursday sometime — and another link to it is here.


Tanzania’s president wants central bank to buy country’s gold production

Tanzanian President John Magufuli said on Wednesday the central bank should start buying the country’s gold to curb smuggling and build reserves to stabilise the currency.

On Tuesday, Tanzania named its third mining minister since Magufuli was elected in 2015. The mining sector contributes around 4.8%  of GDP, the government said in 2018, but the value of many mining projects in Tanzania have plummeted amid repeated government interventions.

It is impossible to see gold is stolen everywhere… governor, you should work on this,” Magufuli said, referring to the central bank governor during the swearing in of the newly appointed mining minister and other officials.

Bank of Tanzania should put the money there [in gold] instead of reserving the dollars alone. We should reserve dollars and gold together.”

It wasn’t clear whether Magufuli intended to buy all the country’s gold production, thereby bringing the artisanal gold market under government control. He asked the mining and finance ministries and the central bank to come up with a plan.

I posted a story about this in Thursday’s column, but this one has a slightly different take on it, so It thought I’d include it.  It was filed from Dar es Salaam, Tanzania — and posted on the businesslive.co.za Internet site at 7:17 p.m. SAST [South African Standard Time] on their Wednesday evening, which was 12:07 p.m. in New York — EST plus 7 hours.  I found this in a GATA dispatch yesterday — and another link to it is here.


Ted Butler — Questions Only the DoJ Can Get Answered

Reasonable questions should be answered reasonably. When such questions cannot be answered reasonably or at all, particularly by those with a responsibility for answering, something is wrong. A good number of such questions remain unanswered in silver and those not providing answers include the federal commodities regulator (the CFTC), the designated self-regulator (the CME Group), as well as the most important bank in the U.S., JPMorgan.

What constitutes a reasonable question in silver? I would define questions to be reasonable if they encompass occurrences known to be unprecedented either in silver or in any other market and in which the questions have been repeatedly asked, yet remain unanswered.  To be sure, there are several such unanswered questions in silver that date back as long as a decade; each one of which stands out in terms of potential significance, but taken together point to something being seriously out of kilter in the silver market.

Standing in the way of the questions being answered is that those who know, or should know the answers, just won’t provide the answers. But now the Department of Justice has burst upon the silver scene by virtue of its Nov 6 announcement of a criminal guilty plea for manipulation on the COMEX by a long time former trader for JPMorgan, as well as its clear statement that it is immersed in an ongoing investigation. Overnight, the prospects for the previously unanswered questions finally being addressed have greatly improved. Make no mistake, if the Justice Department asks the right questions, the ongoing silver manipulation will come to a screeching halt.

This must read commentary by Ted was posted on the silverseek.com Internet site at 8:30 a.m. Denver time on Thursday morning — and another link to it is here.


The PHOTOS and the FUNNIES

Here are the last two photos from The Guardian article that Patricia Caulfield shared with us.  The first one comes with this comment: “A flock of whistling ducks in Pobitora wildlife sanctuary in Assam, India”  Click to enlarge.

This second photo bears the inscription…”A sika deer in Nara park, Japan” — Photo credit: Behrouz Mehri  Click to enlarge.


The WRAP

It was yet another day where precious metal prices would have certainly closed higher if the powers-that-be hadn’t show up at, or just before the COMEX open in New York yesterday…as all four suffered the same fate during that time period.

But it should be pointed out that net volumes, particularly in gold, were pretty quiet on Thursday — and it made the job of controlling prices that much easier for those with an agenda.

Of course the dollar ‘rally’ that began at noon in Shanghai on their Thursday morning was useful as well.  And if you look back at the DXY chart, you’ll also note that the New York low tick in the dollar index came right at the COMEX open — and its high tick of the day was set precisely at the 1:30 p.m. EST COMEX close.  The chances that this was accidental is somewhere between slim and none — and Slim is out of town.

Here are the 6-month charts for all four precious metals — and the low ticks in both gold and silver occurred after the COMEX close, so that fact is not apparent in their Thursday dojis.  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 began to head quietly higher once trading began at 6:00 p.m. EST in New York on Thursday evening. At the moment it’s up $7.20 an ounce. Silver has been chopping quietly higher as well in Far East trading, but ran into ‘something’ around the afternoon gold fix in Shanghai. It hasn’t done much since then — and it’s up 14 cents currently. Ditto for platinum — and it’s up 4 bucks. The palladium price stair-stepped its way higher until shortly before 1 p.m. China Standard Time on their Friday afternoon — and has been chopping unevenly sideways since. It’s up 8 dollars.

Net HFT gold volume is around 50,000 contracts — and there’s only 757 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is about 13,300 contracts — and there’s 929 contracts worth or roll-over/switch volume on top of that.

The dollar index opened down 10 basis points as soon as trading began at 7:44 p.m. on Thursday evening EST — and its current low tick was set around 1:18 p.m. CST on their Friday afternoon. It had a smallish up/down move since then — and is almost back at its low of the day — and down 16 basis points as of 7:45 a.m. GMT in London.


Here’s a chart that Todd Anthony of First Majestic Silver fame passed around yesterday — and I thought you might find it interesting.  I own stock in seven of the ten companies shown.  Click to enlarge.

And as I post today’s missive on the website at 4:02 a.m. EST…I note that the gold price has been sold a bit lower during the first hour of London trading — and it’s only up $6.30 an ounce. Silver appears to have been capped at the $15.70 spot mark at the moment — and it’s up 16 cents. Platinum and palladium haven’t done much during the first hour of Zurich trading, with the former up 4 dollars — and the latter by 7.

Gross gold volume is now up to around 63,500 contracts — and once you subtract out the roll-over/switch volume, net HFT gold volume is just under 61,000 contracts. Net HFT silver volume is getting up there was well at about 16,700 contracts — and there’s 942 contracts worth of roll-over/switch volume in this precious metal.

These rallies, such as they are, are not going unopposed.

The dollar index has been chopping quietly sideways in a pretty narrow price band during the first hour of London/Zurich trading — and it’s currently down 19 basis points as of 8:48 a.m. GMT/9:48 a.m. CET.

I suspect, but don’t know for sure, that any price action that really matters during the remainder of the Friday session will occur when New York begins to trade at 8:20 a.m. EST — and one should be prepared for any eventuality.

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

Ed

Another COMEX Price-Management Affair on Wednesday

10 January 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Once trading began at 6:00 p.m. EST in New York on Tuesday evening, the gold price rallied a few dollars until shortly before 10 a.m. China Standard Time on their Wednesday morning.  From that juncture it was sold quietly lower until shortly after 12 o’clock noon over there — and then proceeded to chop mainly sideways until shortly after the noon silver fix in London.  It began to head higher from that point, before running into ‘something’ around 10:30 a.m. in COMEX trading in New York.  That smallish ‘correction’ lasted for a couple of hours — and from there.  Then the gold price crawled quietly higher until a few minutes before 4 p.m. in after-hours trading.  It traded flat into the 5:00 p.m. close.

The low and high ticks were reported by the CME Group as $1,280.90 and $1,294.50 in the February contract…a bit over one percent.

Gold finished the Wednesday session in New York at $1,293.20 spot, up $8.50 from Tuesday’s close.  Net volume was nothing special at a bit over 196,000 contracts — and for the second day in a row, roll-over/switch volume out of February and into future months was pretty chunky at at bit under 40,500 contracts.

Silver’s price path on Wednesday was very similar to gold’s, except its rally after the afternoon gold fix in London ran into some serious resistance, because it really wanted to fly.  But at 10:30 a.m. in New York, it was sold down hard — and back to unchanged by precisely 12 o’clock noon EST.  After that — and like gold, it crept quietly higher until around 4 p.m. in the thinly-traded after-hours market.

The low and high ticks were recorded as $15.63 and $15.825 in the March contract.

Silver was closed yesterday at $15.725 spot, up 11.5 cents on the day.  Net volume was fairly hefty at a bit over 65,500 contracts — and there was a hair under 8,500 contracts worth of roll-over/switch volume on top of that.

The platinum price was up 5 dollars or so by shortly before noon in Shanghai on their Wednesday morning — and then chopped unevenly sideways for the remainder of the Wednesday session.  It closed in New York yesterday at $823 spot, up 6 bucks on the day.

The palladium price was higher by 11 dollars by shortly before noon CST on their Wednesday morning — and didn’t do much of anything until about thirty minutes before the COMEX open.  It began to edge higher from there, but was sold unevenly lower as soon as COMEX trading began at 8:20 a.m. EST in New York.  That sell-off lasted until the 1:30 p.m. COMEX close — and it crawled a few dollars higher after that.  Palladium was closed on Wednesday at $1,311 spot, unchanged on the day.  It was yet another day where palladium was not allowed to seek its free-market price.

The dollar index closed very late on Tuesday afternoon in New York at 95.90 — and opened down 9 basis points as soon as trading began at 7:45 p.m. EST on Tuesday evening — and was down another 10 basis points or so by 8:50 a.m. in London.  It edged higher until the 95.91 high tick was set at exactly 11:30 a.m. GMT.  It drifted lower from there until the bottom fell out a couple of minutes before the equity markets opened in New York yesterday morning.  That drop lasted until 10:15 a.m. EST — and it rallied a bit into the 11:00 a.m. EST London close.  From there it chopped quietly lower — and the 95.12 low tick of the day was set at precisely 4:00 p.m. — and it crawled a few basis points higher into the close from there.  The dollar index finished the Wednesday trading session at 95.22…down 68 basis points from Tuesday’s close.

Here’s the DXY chart from Bloomberg once again.  Click to enlarge.

And here’s the 6-month U.S. dollar index — and the difference between its close…94.79…and the close on the DXY chart above was 43 basis points yesterday.  Click to enlarge.

The gold stocks jumped up a bit at the New York open in New York at 9:30 a.m. EST on Wednesday — and their respective high ticks came at, or shortly after, the afternoon gold fix in London.  They were sold lower — and back to almost unchanged by around 12:25 p.m. EST.  From that juncture they chopped quietly and very unevenly higher until trading ended at 4:00 p.m.  The HUI closed up 1.32 percent.  I was underwhelmed.

The silver equities jumped up a bunch at the open — and that rally ended at 10:30 a.m. EST in New York trading.  From that point they chopped very unsteadily sideways for the remainder of the Wednesday session.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up a respectable 2.85 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 36 gold and 124 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, the three short/issuers were Advantage, RCG and Morgan Stanley, with 19, 12 and 5 contracts.  Except for Morgan Stanley, all were from their respective client accounts.  There were five long/stoppers in total, with the largest being JPMorgan, with 26 contracts — and in very distant second place was Advantage with 6…both amounts were for their respective client accounts.

In silver, the only short/issuer that mattered was International F.C. Stone with 119 contracts from its client account.  There were eight long/stoppers in total, with the largest being JPMorgan, as they picked up 48 contracts…25 for their own account, plus 23 for clients.  Close behind in second place was Goldman Sachs with 43 contracts for their client account.  In distant third spot was Advantage with 12 for its client account as well.

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

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in January rose by 33 contracts, leaving 132 still open, minus the 36 mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 46 gold contracts were actually posted for delivery today, so that means that 46+33=79 more gold contracts just got added to the January delivery month.  Silver o.i. in January fell by 18 contracts, leaving 718 still around, minus the 124 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 22 silver contracts were posted for delivery today, so that means that 22-18=4 more silver contracts were added to January.


There was a deposit in GLD yesterday, as an authorized participant added 85,072 troy ounces.  And, once again, there was another withdrawal from SLV, as an authorized participant…most likely JPMorgan converting SLV shares into physical metal…removed 1,126,195 troy ounces.

In Tuesday’s column I stated that…”Rather than silver pouring into SLV on this price rally that began back on November 14…there has been 9.70 million troy ounces of silver withdrawn on a net basis since that date.  Gold began its current rally within a day or so of the above date — and up to and including yesterday, there had been 1,192,790 troy ounces of gold added to GLD.”

I went back a little further in my GLD and SLV numbers — and since October 19, 2018…there has been 1,715,559 troy ounces of gold added to GLD on a net basis as of the end of trading yesterday. In silver since that date, there has been 19,279,416 troy ounces withdrawn from SLV on a net basis. And that’s despite the fact that silver has rallied materially since that date.

Except for Ted…and by extension, myself…none of the other so-called precious metal ‘analysts’ out there are breathing a word about this monstrous and perverted dichotomy.


There was another sales report from the U.S. Mint on Wednesday.  They sold 2,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — 125,000 silver eagles — and another 4,000 platinum eagles.

There was only a tiny bit of activity in gold over at the COMEX-approved depositories on the U.S. east cost on Tuesday.  Nothing was reported received — and only 500 troy ounces were shipped out of Canada’s Scotiabank.  I won’t bother linking this.

It was certainly busier in silver, as 429,349 troy ounces were received — and all of that was picked up by JPMorgan.  The ‘out’ activity consisted of one truckload…619,904 troy ounces — and that amount departed CNT.  A link to this activity is here.

There wasn’t much happening over at the COMEX-approved gold kilobar depository in Hong Kong on their Tuesday.  Nothing was reported received — and only 3 kilobars…96.453 troy ounces…was shipped out of Brink’s, Inc.  I won’t bother linking this, either.

Here are two more charts that Nick sent my way the other day — and that I didn’t have space for in yesterday’s column.  They show gold and silver bullion coin sales for The Perth Mint, updated with December’s data…and they certainly blew the doors off December sales for the U.S. Mint.  They sold 29,186 troy ounces of gold coins — and 692,971 troy ounces of silver bullion coins.  Click to enlarge for both.

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


CRITICAL READS

Fitch Threatens to Cut U.S. Credit Rating as Debt-Ceiling Battle Looms

In what has become a perennial exercise before every debt-ceiling showdown since at least Obama’s first term (when S&P did the unthinkable and cut the U.S.’s coveted AAA credit rating, exposing itself to extensive abuse by Tim Geithner), ratings agencies are starting to beat the credit-rating downgrade drum, with Fitch getting a jump on the competition Wednesday when its head of sovereign ratings warned that an enduring shutdown battle could negatively impact the negotiations over the debt ceiling, which could prompt Fitch to join S&P in eliminating its AAA rating for the U.S.

During an interview with CNBC and a separate appearance in London (where his comments were recorded by Reuters), Fitch’s global head of sovereign ratings James McCormack warned of a possible cut to its AAA rating for the U.S. sovereign should the shutdown continue to March, noting that the shutdown and debt ceiling battle are adding to anxieties triggered by President Trump’s tax cuts and spending hikes, which have blown out the budget deficit and led to a “meaningful fiscal deterioration.”

I think people are looking at the CBO (Congressional Budget Office) numbers. If people take the time to look at that you can see debt levels moving higher, you can see the interest burden in the U.S. government moving decidedly higher over the next decade,” James McCormack, Fitch’s global head of sovereign ratings told CNBC‘s “Squawk Box Europe” on Wednesday.

There needs to be some kind of fiscal adjustment to offset that or the deficit itself moves higher and you’re essentially borrowing money to pay interest on the debt. So there is a meaningful fiscal deterioration there, going on the United States.”

Well, dear reader, cutting U.S. bonds and treasuries directly to ‘junk’ status where they — and most every other country on Planet Earth’s debt belongs — would be about right.  But, alas.  This Zero Hedge news item put in an appearance on their website at 7:47 a.m. EST on Wednesday morning — and I thank Brad Robertson for sending it along.  Another link to it is here.


Here’s Where the Next Crisis Starts — Jim Rickards

The case for a pending financial collapse is well grounded. Financial crises occur on a regular basis including 1987, 1994, 1998, 2000, 2007-08. That averages out to about once every five years for the past thirty years. There has not been a financial crisis for ten years so the world is overdue. It’s also the case that each crisis is bigger than the one before and requires more intervention by the central banks.

The reason has to do with the system scale. In complex dynamic systems such as capital markets, risk is an exponential function of system scale. Increasing market scale correlates with exponentially larger market collapses.

This means a market panic far larger than the Panic of 2008.

Today, systemic risk is more dangerous than ever because the entire system is larger than before. Due to central bank intervention, total global debt has increased by about $150 trillion over the past 15 years. Too-big-to-fail banks are bigger than ever, have a larger percentage of the total assets of the banking system and have much larger derivatives books.

Each credit and liquidity crisis starts out differently and ends up the same. Each crisis begins with distress in a particular over-borrowed sector and then spreads from sector to sector until the whole world is screaming, “I want my money back!

This must read commentary from Jim showed up on the dailyreckoning.com Internet site on Wednesday sometime.  I got a copy from Brad Robertson on Tuesday, but because it wasn’t posted in the public domain at that time, I couldn’t use it…but here it is now.  Another link to it is here.


Alexandria Ocasio-Cortez: A Danger to The Nation — Bill Bonner

A big, new danger appeared in Congress this month: Alexandria Ocasio-Cortez, the newest representative of New York’s 14th district.

At 29, she is the youngest woman ever elected to Congress; she will doubtless be there for decades to come.

Eighteen months ago, she was working as a waitress. Then, even though her opponent outspent her 15-to-1, she won the race to sit in the House of Representatives.

Ms. Ocasio-Cortez has a pleasant look about her. We’d probably like her if we met her. But she is clearly a danger to herself, her constituents, and to the nation.

This very interesting and worthwhile commentary from Bill appeared on the bonnerandpartners.com Internet site early on Wednesday morning EST — and another link to it is here.


Swiss gold refiner Valcambi offers $16 million for Republic Metals Corp: source

Swiss precious metals refiner Valcambi has made a $16 million offer to buy the assets of Miami-based rival Republic Metals Corporation (RMC), which filed for bankruptcy last year, a source familiar with the matter said on Wednesday.

The source said the New York bankruptcy court hearing the case had accepted the offer as a stalking horse bid, implying that any other bids that come in must be higher than Valcambi’s.

A judge’s clerk confirmed there had been a hearing on Wednesday but could not give any further information. RMC referred a request for comment to its lawyers, who did not immediately respond. A Valcambi spokesman did not immediately respond to a request for comment.

This brief Reuters story is something that I pulled from a silverdoctors.com article that Brad Robertson sent my way yesterday afternoon.  It was filed from London at 11:50 a.m. EST on Wednesday morning — and updated a few hours later.  Another link to it is here.


Tanzania’s Magufuli orders central bank to create gold reserve

Tanzanian President John Magufuli on Wednesday ordered the central bank to create a gold reserve, as he urged the government to better control mineral exports from the country, Africa’s fourth largest gold producer.

We should start buying gold, the central bank must invest in this. We must have our reserves in dollars but also our reserves in gold, because gold is money,” Magufuli said at a ceremony in Dar es Salaam.

Magufuli is intent on regulating his country’s mining sector, which has faced allegations of fraud and underreporting of production and profits, and has locked horns with foreign mining companies.

There are still many problems in the mining sector,” he said.

This interesting AFP story was picked up by theeastafrican.co.ke Internet site on Wednesday sometime — and I plucked it from a GATA dispatch.  Another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos from The Guardian article that Patricia Caulfield shared with us.  The first one comes with this comment: “A ruddy shelduck and a flock of bar-headed geese fly over a wetland in Nyima county, Tibet Autonomous Region, China.”  Photograph by: Zhang Rufeng  Click to enlarge.

The second photo is captioned: “A slipper orchid, Paphiopedilum papilio-laoticus, discovered on a black market in Vientiane, Laos. Species hunters scouring the globe on behalf of the Royal Botanic Gardens, Kew — and its partners discovered more than 100 kinds of plants this year.” Photograph: Adunyadeth Luang  Click to enlarge.


The WRAP

Despite the rather precipitous decline in the U.S. dollar index during the New York on Wednesday, it wasn’t allowed to be reflected in the price of the precious metals, because ‘da boyz’ were active during the COMEX trading session yesterday.  It was obvious that they weren’t allowing them to rise too far, or too fast.  That was particularly true in silver — but also in gold and palladium as well.

And because there was a decent amount of price action after the 1:30 p.m. COMEX close in New York yesterday, the closing high prices of the day aren’t reflected in the dojis in any of the four precious metal charts below.  I’ve included natural gas once again, so that you can note that the price is now back to ‘normal’.  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 rose a couple of dollars in Far East trading on their Thursday morning — and hasn’t done much since. It’s up $1.70 an ounce at the moment. Silver has been trading unevenly sideways throughout all of the Far East trading session — and is down 2 cents currently. Platinum’s trading pattern was very similar to silver’s, except it’s back at unchanged. Palladium traded flat until 9 a.m. in Shanghai — and was sold down to the $1,300 spot mark shortly before 10 a.m. China Standard Time. It has recovered a few dollars since — and is down 4 bucks as Zurich opens.

Net HFT gold volume is already pretty healthy…coming up on 48,000 contracts — and there’s 2,368 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is a bit over 9,100 contracts — and there’s only a dinky 52 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened down 7 basis points once trading began at 7:45 p.m. EST on Wednesday evening in New York — and its current 95.03 low tick was set at 11:58 a.m. CET on their Thursday morning. It appeared that the usual ‘gentle hands’ appeared at that point — and the index has been chopping quietly higher since — and is now back at unchanged as of 7:45 a.m. GMT in London.

It will be another week where this no Commitment of Traders Report and, just as important, no Bank Participation Report, either.  Ted mentioned in his mid-week commentary to his paying subscribers on Wednesday, that because of the rallies in the both gold and silver since the last reports, the COMEX futures market in both is neutral at best.  And there’s still no sign that the end to the U.S. government shut-down is anywhere close to a resolution.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the gold price hasn’t done much of anything during the first hour of London trading — and is up $1.70 the ounce.  The silver price jumped a bit higher shortly after the London open, but that wasn’t allowed to get far, before it was tapped lower — and it’s up 1 cent now.  Both platinum and palladium are up during the first hour of Zurich trading…the former by 3 dollars — and the latter is back at unchanged.

Gross gold volume is a bit over 61,500 contracts — and net of roll-over/switch volume, net HFT gold volume is around 56,000 contracts, which is pretty decent considering the price action, or lack thereof.  Net HFT silver volume is around 11,100 contracts — and there’s still only 64 contracts worth of roll-over/switch volume on top of that.

The dollar index jumped up to its current 95.27 high tick around 7:52 a.m. in London, but has fallen back below unchanged — and is down 2 basis points as of 8:50 a.m. GMT.

And if you need a good laugh to start off your day…click here.

That’s all I have this time — and I’ll see you here tomorrow.

Ed

Palladium Pulls Away From the Gold Price

09 January 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price didn’t do much until shortly before 9:30 a.m. China Standard Time on their Tuesday morning — and at that point it was sold lower until noon over there.  From that juncture, it traded sideways until shortly before the COMEX opened — and was tapped down to its low tick of the day, such as it was, at the COMEX open.  It struggled weakly higher from there — and the high tick of the day, such as it was, came around 1 p.m. in New York trading.  It was sold a few dollars lower into the COMEX close — and didn’t do much after that.

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

Gold finished the Tuesday session in New York at $1,284.70 spot, down $3.60 from Monday’s close.  Net volume was pretty quiet at a bit over 170,000 contracts — but roll-over/switch volume out of February and into future months was very heavy at a bit over 58,000 contracts.

It was the same general price pattern in silver in morning trading in the Far East, except its low tick was set shortly before 2 p.m. CST on their Tuesday afternoon.  It began to chop unsteadily higher from there — and the New York high tick was set at the afternoon gold fix in London.  It then had a 3-hour long five cent down/up dip that ended shortly before 1 p.m. EST — and didn’t do much of anything from there until the market closed at 5:00 p.m.

The high and low ticks were reported by the CME Group as $15.745 and $15.56 in the March contract.

Silver was closed in New York yesterday at $15.61 spot, down half a cent on the day.  Net volume was nothing special at a bit over 55,000 contracts — and there was fairly heavy roll-over/switch volume in this precious metal as well, at a bit under 10,000 contracts.

Platinum traded a few dollars either side of unchanged through all of Far East and most of Zurich trading on Tuesday.  It was sold down a bit in early morning COMEX trading in New York — and the low tick in this precious metal was set about thirty minutes before the afternoon gold fix in London.  It rallied about five dollars or so from there, but still finished down on the day by 3 dollars at $817 spot.

Palladium chopped sideways until the Zurich open — and it rallied about eight bucks or so during the next hour…but gave all that away, plus a bit more by 9 a.m. in New York.  Then away it went to the upside — and was finally capped around 10:40 a.m. EST.  It was forced lower until shortly after 12 o’clock noon in New York — and then it chopped quietly higher until a few minutes after 4 p.m. in the thinly-traded after-hours market — and didn’t do a lot from there.  Palladium finished the day at $1,311 spot, up 24 bucks on the day.  It was yet another trading session for palladium where the price would have closed at heaven only know what, if it had been allowed to trade freely.  Palladium is now 40 dollars the ounce more expensive than gold.

The dollar index closed very late on Monday afternoon in New York at 95.67 — and began to head higher as soon as trading began at 7:44 p.m. EST on Monday evening.  The 95.96 Far East high came at 12:04 a.m. CST on their Tuesday afternoon — and then chopped very unsteadily sideways [with a negative bias] until 12:02 p.m. GMT in London.  It rallied sharply from there to its 96.02 high tick, which came at 8:50 a.m. in New York — and then proceeded to dip a bit, before revisiting its high tick of the day at 10:12 a.m. EST.  It was down hill from there until exactly 1:00 p.m. EST — and it edged very quietly and unsteadily higher into the close from there.  The dollar index finished the day at 95.90…up 23 basis points from Monday’s close.

Here’s the DXY chart from Bloomberg once again.  Click to enlarge.

And here’s the 6-month U.S. dollar index — and the delta between its close…95.48…and the close on the DXY chart above, was 42 basis points.  Click to enlarge.

The gold shares were sold lower as soon as trading began in New York at 9:30 a.m. on Tuesday morning.  Their respective low ticks were set minutes after 9:45 a.m. EST — and they chopped higher from there in a fairly wide range until around 12:20 p.m.  They were in positive territory by a bit at that juncture, but slid a bit from there — and then chopped quietly sideways from that point until trading ended at 4:00 p.m. EST.  The HUI closed higher up 0.03 percent…so call it unchanged once again.

The silver equities were sold down to their respective lows just minutes after trading began in New York on Tuesday morning — and their respective highs were set two hours later.  At that point, they were up a bit over two percent on the day.  But forty-five minutes later they were almost back at unchanged, but rallied quietly from there until around 12:35 p.m. EST — and from that juncture, they chopped quietly sideways for the remainder of the Tuesday trading session.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 1.35 percent.  Click to enlarge.

And here’s the 1-year Silver Sentiment/Silver 7 Index from Nick as well.  Click to enlarge.

The CME Daily Delivery Report showed that 46 gold and 22 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.

In gold, of the three short/issuers in total, the two largest were Advantage and RCG, with 22 and 21 contracts out of their respective client accounts.  There were five long/stoppers in total.  The biggest was RCG, stopping 12 — and tied for second were Advantage and JPMorgan…both stopping 11 contracts each for their respective client accounts.

In silver, ADM issued 20 contracts out of its client account.  JPMorgan was the biggest, picking up 9 contracts in total…5 for itself — and 4 for its clients.  The second largest was Goldman, stopping 8 contracts for its client account.

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 January fell by a chunky 251 contracts, leaving just 99 left open, minus the 46 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 300 gold contracts were actually posted for delivery today, so that means that 300-251=49 more gold contracts just got added to the January delivery month.  Silver o.i. in January actually rose by 11 contracts, leaving 736 contracts will around, minus the 22 contracts mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 12 silver contracts were actually posted for delivery today, so that means that 12+11=23 more silver contracts were added to the January delivery month.

I’m somewhat surprised that there are still this many silver contracts [736-22=714] left at this point of the January delivery month — and I’m wondering not only who the short/issuers are, but why they’re being so reluctant to deliver because, as Ted Butler says, there’s no benefit whatsoever for them to delay delivery.


There was a smallish withdrawal from GLD yesterday, as 8,155 troy ounces was removed — and that certainly looks like it might be a fee payment of some kind.  There were no reported changed in SLV.

There was a small sales report from the U.S. Mint on Tuesday.  They sold 2,000 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — 150,000 silver eagles — plus another 1,000 one-ounce platinum eagles.

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

That certainly wasn’t the case in silver, as 1,539,617 troy ounces were received — and another 1,410,292 troy ounces were shipped out.  In the ‘in’ category, there was on big truckload…638,847 troy ounces…dropped off at Brink’s, Inc. — and another truckload…600,448 troy ounces…left at CNT.  There was also 298,324 troy ounces deposited at JPMorgan — and the remaining two good delivery bars…1,997 troy ounces…was picked up by Delaware.  In the ‘out’ category, two truckloads…1,162,439 troy ounces…departed CNT — and 144,598 troy ounces left Brink’s, Inc.  The remaining 103,255 troy ounces was shipped out of HSBC USA.  The link to all this action is here.

There was a bit of activity over at the COMEX-approved gold kilobar depositories in  Hong Kong on their Monday.  They received 500 of them — and shipped out 550.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Here are four charts that Nick passed around the other day.  The first two 5-year charts show gold and silver bullion coin sales from the U.S. Mint, updated with December’s data.  The gold coin sales include both gold eagles and gold buffaloes — and the silver eagle sales also include sales of the 5-ounce ‘America the Beautiful’ series.  Click to enlarge for both.

The next two charts also show U.S. Mint sales, but on an historical basis.  The top half of the first chart shows annual gold sales of eagles and buffaloes going all the the way back to 1986 — and JPMorgan’s footprint of buying is clearly visible between 2008 and 2016.  The bottom half shows the break-down of the size of gold eagle coins sold over the same period of time.  Click to enlarge.

The second charts shows silver eagle/5-ounce American the Beautiful coin sales for the same period of time.  Once again, JPMorgan’s footprint of buying stands out like the proverbial sore thumb it was.  Click to enlarge as well.

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


CRITICAL READS

2019 Headwinds Are Getting Stronger — Jim Rickards

Much of the global slowdown has to do with the high degree of interconnectedness of the global economy and the extent of global supply chains. The flip side of synchronized growth is a synchronized slowdown. Just as growth in one economy can lead to increased exports for trading partners, a slowdown leads to reduced exports.

Still, why has growth slowed down at all?

The answer has to do with debt, Fed policy, political developments, as well as trade wars.

Specifically, the U.S. and China, the world’s two largest economies, are discovering the limits of debt-fueled growth.

The U.S. debt-to-GDP ratio is now 106%, the highest since the end of the Second World War. The Chinese debt-to-GDP ratio is a more reasonable 48%, but that figure is misleading because it does not include the debts and guarantees of provinces, state-owned enterprises, banks, wealth management products and numerous other entities that the government in Beijing is directly or indirectly obligated to support.

When that additional debt is taken into account, the real debt-to-GDP ratio is over 250%, about the same as Japan’s.

Debt-to-GDP ratios below 60% are considered sustainable; ratios between 60% and 90% are considered unsustainable and need to be reversed; and ratios in excess of 90% are in the red zone and will produce negative growth along with default through nonpayment, inflation or other forms of debt repudiation. The world’s three largest economies — the U.S., China and Japan — are all now deep in the red zone.

This very worthwhile commentary from Jim put in an appearance on the dailyreckoning.com Internet site on Tuesday — and another link to it is here.


Jerome Powell Caves to the Market — Jim Rickards

Fed Chair Jay Powell just sent the most powerful signal from the Fed since March 2015.

He has pretty much taken a March 2019 rate hike off the table until further notice. At a forum hosted by the American Economic Association in Atlanta last Friday, Powell used the word “patient” to describe the Fed’s approach to the next interest rate hike.

When Powell did this, he was reading from a script of prepared remarks in what was otherwise billed as a “round-table discussion.”

This is a sign that Powell was being extremely careful to get his words exactly right. When Powell said the Fed would be “patient” in reference to the next rate hike, this was not just happy talk. The word “patient” is Fed code for “no rate hikes until we give you a clear signal.

This was a signal that there would not be a rate hike at the next FOMC meeting. Investors could do carry trades safely. Only when the word “patient” was removed was the Fed signaling that rate hikes were back on the table.

In that event, investors were being given fair warning to move to risk-off positions.

This is another article from Jim that showed up in the public domain on the dailyreckoning.com Internet site yesterday — and it’s worth reading as well.  Another link to it is here.


Trump Is Trapped — Bill Bonner

Stocks advanced a little yesterday…Monday. Investors were said to be hopeful about the upcoming trade talks with the Chinese.

With a little luck, President Trump will talk to Chinese President Xi Jinping about the ongoing trade war. He’ll announce a big victory – just as he did following talks with North Korea last year.

Then, he’ll let things go back to where they were before.

His modus operandi is now well known. He stirs up a fight. Then, he moves on to another fight… while the dust settles quietly over the last combat.

Most important, a president who only fights fake battles does little harm. If presidents were rated properly, the one who did the least would be the one who got a big monument on the Potomac.

Doing nothing is generally underrated. And, in today’s case, neither the president nor the Fed can do much anyway.

The problem with the Fed is that it is trapped by its own fraud. That is, it has created a fake economy, one that depends on phony interest rates.

This worthwhile commentary by Bill was posted on the bonnerandpartners.com Internet site early on Tuesday morning — and another link to it is here.


U.S. Consumer Credit Hits All Time High Amid Surge in Student and Auto Loans

After a surprising slump in the use of revolving debt in September, when US consumers unexpectedly paid down a total of $23 million (revised)on their credit cards, followed by a sharp rebound in credit card usage in October, moments ago the Fed reported that in November, the surge consumer credit continued, rising by $22.1 billion, above the $17.5 billion expected, after October’s whopping $25 billion increase as non-revolving credit surged by the most since December 2017. The surge in borrowing in November brought the total to $3.979 trillion, new all time high, largely on the back of a newfound love with auto and student loans.

After a brief, one-month dormancy in credit cards usage in September, American consumers have clearly returned to doing what they do best – spending money they don’t have – with revolving credit jumping by $4.8 billion, one month after it surged by $9.3 billion. The latest monthly increase brought the total credit card debt to a new all time high of $1.042 trillion.

But the big reason behind the November surge in consumer credit was nonrevolving credit, i.e. student and auto loans, which soared by $17.4 billion, the highest monthly total since 2017, and bringing the non-revolving total to a new all time high of $2.937 trillion.

This Zero Hedge news item appeared on their website at 3:25 p.m. on Tuesday afternoon EST — and I thank Brad Robertson for sharing it with us.  Another link to it is here.


All hands on deck: the Caspian sails towards Eurasia integration — Pepe Escobar

The long-awaited deal on the legal status of the Caspian Sea signed on Sunday in the Kazakh port of Aktau is a defining moment in the ongoing, massive drive towards Eurasia integration.

Up to the early 19th century, the quintessentially Eurasian body of water – a connectivity corridor between Asia and Europe over a wealth of oil and gas – was exclusive Persian property. Imperial Russia then took over the northern margin. After the break up of the USSR, the Caspian ended up being shared by five states; Russia, Iran, Azerbaijan, Turkmenistan and Kazakhstan.

Very complex negotiations went on for almost two decades. Was the Caspian a sea or a lake? Should it be divided between the five states into separate, sovereign tracts or developed as a sort of condominium?

Slowly but surely, the five states reached difficult compromises on sovereign and exclusive rights; freedom of navigation; “freedom of access of all the vessels from the Caspian Sea to the world’s oceans and back” – in the words of a Kazakh diplomat; pipeline installation; and crucially, on a military level, the certitude that only armed forces from the five littoral states should be allowed in Caspian waters.

No wonder then that President Putin, in Aktau, described the deal in no uncertain terms as having “epoch-making significance.”

This commentary by Pepe was posted on the Asia Times website way back on August 14 of last year — and I don’t know how I missed it.  It’s an interesting read, if you have the interest that is — and I thank Sonia Marlowe-Marais for pointing it out.  Another link to it is here.


The dystopian view: Is this the year the world falls apart? — Ambrose Evans-Pritchard

This is the year that mounting hammer blows to the Western alliance system and the edifice of global governance threaten to bring the old order tumbling down.

The geopolitical environment is the most dangerous it’s been in decades,” warns Eurasia Group, political risk-adviser to the world’s elites, and a voice of globalist ideology.

Pax Americana is unravelling. The transatlantic concord underpinning the West since the Fifties is dying. NATO, the G7, the G20, the WTO and the E.U. are all in varying degrees of crisis. Vladimir Putin’s Russia has an open goal. “Every single one of these is trending negatively. And most in a way that hasn’t been in evidence since the Second World War,” it said.

Anti-liberal strongmen are tugging away at the edges in Turkey, Brazil and Hungary. Some in the twilight zones of the democratic world are drifting – towards the Putin-Xi camp.

U.S. alliances everywhere are weakening. The limited trust that underpins the U.S.-China relationship appears to be gone,” said Eurasia in its annual outlook.

The dystopian picture is grim enough even at this late stage of global economic expansion, which begs the question: what would happen in a deep recession with mass unemployment?

This interesting commentary from Ambrose appeared on The Sydney Morning Herald website at 10:55 a.m. local time ‘down under’ on their Tuesday morning — and I plucked it from a Zero Hedge article that Brad Robertson sent our way.  Another link to it is here.


India’s gold imports dip 14.5% to 759 tonnes in 2018 on tepid demand, rule changes

India’s gold imports have declined by 14.5 per cent in 2018 to 759 tonnes from 876 tonnes the previous year. The reason are, sluggish demand, changes in regulations such as alteration of criteria for nominated agencies to import gold and the ban on export of 24 carat jewellery to stop misuse.

According to data compiled by the GFMS Thomson Reuters, the drop in import volumes is matched by a decline in the value of inward shipments, which were estimated to be lower by 13.4 per cent to $31.37 billion in 2018.

The fall in imports is attributed to weak rural demand and to higher gold prices brought about by a weak rupee which reduced the metal’s appeal to price-sensitive investors.

Debajit Saha, Senior Analyst, GFMS Thomson Reuters, says, “Sluggish demand for gold jewellery on account of price, and a not so good monsoon resulted in lower disposable liquidity in the hands of the farming community. Consumers’ reluctance to buy jewellery in cash beyond a small limit fuelled the drop in demand in the market. After demonetisation and introduction of GST, consumers have been very careful in buying gold in cash.”

It’s worth noting that India hasn’t reported gold imports for either November or December as of yet, so I get the impression that the number being used here is an educated guess, because it can’t be based on actual data.  This gold-related news story, filed from Mumbai, showed up on the business-standard.com Internet site at 11:15 p.m. IST on their Tuesday evening, which was 12:15 p.m. in New York — EST plus 11 hours.  Another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos from The Guardian article that Patricia Caulfield shared with us.  The first one comes with this comment: “A Euroasian beaver eating willow on the River Ericht near Blairgowrie, Scotland. Scottish ministers were urged this week to honour a pledge to protect beavers.” — Photograph by: Ian Sherratt  Click to enlarge.

Photo number two comes with the caption “A humpback whale off the coast of San Francisco, California. It was reported this week that Japan is to withdraw from the International Whaling Commission (IWC) and resume commercial whaling next year.” — Photograph by: Anton Sorokin  Click to enlarge.


The WRAP

With the obvious exception of palladium, it was yet another day where precious metal prices were kept well contained.  There wasn’t much in the way of volume in either gold or silver, so the powers-that-be had a pretty easy time of it — and it was also helped by the ‘rally’ in the dollar index as well.

Here are the 6-month charts for the Big 6 commodities — and with the exception of palladium, there’s not a lot to see, although the price of WTIC continues to sneak higher.  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 crawled a few dollars higher once trading began in New York at 6:00 p.m. EST on Tuesday evening. But shortly before 10 a.m. China Standard Time on their Wednesday morning, it was sold quietly lower until around 1 p.m. over there — and it has been chopping equally quietly sideways since. At the moment, gold is down $2.80 an ounce. The silver price chopped sideways until a very few minutes before 12 o’clock noon CST — and it was sold unsteadily lower from there — and is currently down 5 cents the ounce. The platinum price edged unevenly higher until shortly before noon CST as well — and it hasn’t done much since. It’s up 4 dollars at the moment. The palladium price traded sideways for the first two hours once trading began in New York yesterday evening. At that point, it jumped up about twelve bucks or so — and that spike higher was promptly capped, as was the rally that began minutes before noon CST. It has been trading mostly quietly sideways since — and is up 9 dollars as Zurich opens.

Net HFT gold volume is about 38,000 contracts — and there’s 2,085 contracts worth of roll-over/switch volume on top of that. Net HFT silver volume is 8,800 contracts — and there’s an insignificant 66 contracts worth of roll-over/switch volume in that precious metal.

The dollar index opened down about 10 basis points as soon as trading began at 7:44 p.m. EST on Tuesday evening in New York — and has been chopping very quietly sideways in a ten basis points range ever since, but has dipped a bit lower over the last hour. And as of 7:45 a.m. GMT in London, the index is down 17 basis points.

As the headline to today’s column stated, the palladium price is now a very reasonable amount higher than the gold price. And as interesting as that headline is, it still doesn’t reflect any kind of reality, as all four precious metals would be an order of magnitude higher that they are now if they were all allowed to trade freely — and that includes palladium. Based on that, one should read too much into the price difference…although there are supply/demand issues at the moment.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the gold price is a few dimes higher as the first hour of London trading draws to a close — and it’s currently down $2.30 an ounce. Silver is back at unchanged now. Platinum is up 5 dollars now — and palladium is up 10 bucks.

Gross gold volume is just under 49,000 contracts — and net of roll-over/switch volume, net gold volume is around 42,500 contracts. Net HFT silver volume is about 10,500 contracts — and there’s still only 77 contracts worth of roll-over/switch volume on top of that.

The current 95.69 low tick of the day was set around 8:42 a.m. GMT — and it’s off that mark by a hair now — and down 21 basis points as 8:45 a.m. GMT/9:45 a.m. CET.

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

Ed

“Da Boyz” Show Up At the COMEX Open on Monday

08 January 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


After a brief dip shortly after the 6:00 p.m EST open in New York on Sunday evening, the gold price rallied five dollars or so by shortly before 10 a.m. China Standard Time on their Monday morning.  From there it traded pretty much ruler flat until 1 p.m. CST — and began to inch quietly higher from there.  A stronger rally began shortly after the noon silver fix in London — and that was summarily capped and turned lower the moment that ‘da boyz’ in New York showed up at the COMEX open.  It was sold lower until about 11:35 a.m. EST — and didn’t do a thing worth mentioning after that.

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

Gold was closed in New York on Monday at $1,288.30 spot, up $4.10 on the day.  Net volume was pretty heavy in Far East trading on their Monday morning, but really petered out after that, as net volume was only about 188,500 contracts — and there was around 17,800 contracts worth of roll-over/switch volume on top of that.

It was the same general price path for silver.  It also ran into ‘resistance’ shortly before 10 a.m. CST — and from that juncture, it chopped erratically sideways until the COMEX open — and you know the rest.  The low tick of the day came around 3:30 p.m. EST in after-hours trading — and it didn’t do much after that.

The high and low ticks in this precious metal were recorded by the CME Group as $15.88 and $15.68 in the March contract.

Silver was closed on Monday at $15.615 spot, down 5 cents on the day.  Net volume in Far East trading was very chunky as well, but quieted down as the Monday session moved along in both London and New York.  Net volume was reported as a bit under 53,000 contracts — and there was 1,984 contracts worth of roll-over/switch volume in that precious metal.

Platinum followed silver’s price path very closely on Monday, except that ‘da boyz’ didn’t step into its price until about twenty minutes after the COMEX open — and the low tick of the day was set shortly after 12 o’clock noon in New York.  It edged a few dollars higher into the COMEX close from there — and didn’t do a lot after that.  Platinum was closed at $820 spot, unchanged from Friday, but 9 bucks off its high tick of the day.

The palladium price didn’t do much of anything in Far East trading on their Monday — and it made it up to the $1,296 spot mark shortly after 11 a.m. in Zurich.  It faded a hair until shortly after 9 a.m. in New York — and at that point was sold lower until about 11:30 a.m. EST.  It rallied ten dollars from that point until 1 p.m. — and then traded sideways until the market closed at 5:00 p.m. EST.  Palladium was also closed unchanged on the day at $1,287 spot.

The dollar index closed very late on Friday afternoon in New York at 96.18 — and began to chop lower the moment that trading began at 6:00 p.m. EST in New York on Sunday evening.  The 95.65 low tick was set at 1:15 p.m. in New York on Monday afternoon — and it didn’t do much of anything after that.  The index finished the Monday session at 95.67 — down 51 basis points from Friday’s close.

Except for those whose jobs depend on them not seeing it, it was obvious that all four precious metals would have closed materially higher on Monday if ‘da boyz’ hadn’t show up during the early going in the COMEX futures market in New York yesterday.

Here’s the DXY chart from Bloomberg once again.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart — and the delta between its close…95.23…and the close on the DXY chart above, was 42 basis points on Monday.

The gold stocks opened up about a percent, but it was all quietly but unsteadily down hill from there until around 2:15 p.m. EST in New York trading.  From that juncture they chopped sideways into the close.  The HUI finished down 1.36 percent.

The price pattern in the silver equities was the same, but only up until shortly before 11 a.m. EST.  They jumped up a bit from there — and then shot into positive territory around 1:15 p.m.  That was probably caused by some positive news story on one of the Silver 7 stocks.  That boost didn’t last long — and they were back in the red to stay by shortly after 2 p.m.  They chopped quietly sideways below the unchanged mark for the remainder of the Monday session — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down only 0.18 percent, so call it unchanged once again.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 300 gold and 12 silver contracts were posted for delivery within the COMEX-approved depositories on the U.S. east coast on Wednesday.

In gold, the only short/issuer was HSBC USA — and all from its client account.  There were seven long/stoppers in total — and the largest was Morgan Stanley, with 97 contracts…68 for its own account, plus 29 for its clients.  In second spot was JPMorgan with 76 for its client account — and in third place was Merrill, with 61 contracts for its client account as well.

In silver, Advantage was the largest short/issuer with 10 — and International F.C. Stone issued the other 2.  Goldman stopped 5 for its client account — and JPMorgan stopped 5 contracts as well…3 for its own account, plus 2 for its client account.

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

The CME Preliminary Report showed that gold open interest in January fell by 3 contracts, leaving 350 still around, minus the 300 mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 4 gold contracts were actually posted for delivery today, so that means that 4-3=1 more gold contract was added to the January delivery month.  Silver o.i. in January dropped by 95 contracts, leaving 725 left, minus the 12 contracts mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 106 silver contracts were actually posted for delivery today, so that means that 106-95=11 more silver contracts just got added to January.


There were rather counterintuitive withdrawals from both GLD and SLV on Monday.  An authorized participant took 47,263 troy ounces of gold from GLD, but in SLV an a.p…most likely JPMorgan…removed a very hefty 2,426,370 troy ounces.

Rather than silver pouring into SLV on this price rally that began back on November 14…there has been 9.70 million troy ounces of silver withdrawn on a net basis since that date.

Gold began its current rally within a day or so of the above date — and up to and including yesterday, there had been 1,192,790 troy ounces of gold added to GLD.

Ted had a lot to say about all this in his weekly review on Saturday — and he figures that JPMorgan has most likely been shorting SLV shares in lieu of depositing physical metal as the SLV prospectus requires.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on in their gold and silver ETFs as of the close of business on Friday, January 4 — and this is what they had to report.  Both ETFs declined by a bit…gold by 2,219 troy ounces — and silver by 12,861 troy ounces.

Much to my surprise, the U.S. Mint had a sales report on Monday.  They sold 42,500 troy ounces of gold eagles — 16,500 one-ounce 24K gold buffaloes  — 2,521,000 silver eagles — plus 18,200 one-ounce platinum eagles.

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

It was much different in silver, as 600,823 troy ounces…one truckload…was received — and that ended up at HSBC USA.  There was 1,063,684 troy ounces shipped out.  In the ‘out’ category, there was 705,363 troy ounces shipped out of CNT…298,324 troy ounces departed Canada’s Scotiabank — and 57,974 troy ounces left the International Depository Services of Delaware.  The remaining 2,022 troy ounces was shipped out of Delaware.  There was also a paper transfer of 504,285 troy ounces from the Eligible category and into Registered over at CNT as well.  The link to all that activity is here.

There was some activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received 3,000 of them — and shipped out 104.  All of this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here are three charts that Nick Laird passed around on the weekend.  They show gold imports and exports out of Switzerland for the month of December.  This first chart shows the net import and export figures, updated with the current months data.  For December they imported 81.4 tonnes — and shipped out 127.1 tonnesClick to enlarge.

The first chart below show the countries and amounts that shipped gold to Switzerland in December — and the second shows the countries that received gold from Switzerland that month — and the amounts.  Click to enlarge for both.

I have an average number of stories for you today.


CRITICAL READS

One Mistake Dooms Investors — Bill Bonner

Both the Fed and the president still have investors’ backs. Or so the punters think.

And we believe, too, that both Trump and Powell will do all they can to save this market. Both have their reputations, power, status… and in the case of the president, a personal fortune… on the line.

Both are committed to avoiding a bloodbath in the capital markets because the blood will inevitably splatter onto their own white shirts.

But what can they do? If officials really could prevent bear markets and debt crises, why do we ever have them? Specifically, what’s wrong with the Japanese?

Long-term Diary sufferers know that we keep an eye on the Japanese. We might not like the direction the Japanese have gone, but we suspect we might be going there too.

This commentary from Bill appeared on the internationalman.com Internet site early on Monday morning EST — and another link to it is here.


Fed’s Balance Sheet Reduction Reaches $402 Billion — Wolf Richter

For the past two months, the sound of wailing and gnashing of teeth about the Fed’s QE unwind has been deafening. The Fed started the QE unwind in October 2017. As I covered it on a monthly basis, my ruminations on how it would unwind part of the asset-price inflation and Bernanke’s “wealth effect” that had resulted from QE were frequently pooh-poohed. They said that the truly glacial pace of the QE unwind was too slow to make any difference; that QE had just been a “book-keeping entry,” and that therefore the QE unwind would also be just a book-keeping entry; that QE had never caused any kind of asset price inflation in the first place, and that therefore the QE unwind would not reverse that asset-price inflation, or whatever.

But in October last year, when all kinds of markets started reversing this asset price inflation, suddenly, the QE unwind got blamed, and the Fed – particularly Fed Chairman Jerome Powell – has been put under intense pressure to cut it out. Yet it continues:

The Fed shed $28 billion in assets over the four weekly balance-sheet periods of December. This reduced the assets on its balance sheet to $4,058 billion, the lowest since January 08, 2014, according to the Fed’s balance sheet for the week ended January 3. Since the beginning of this “balance sheet normalization,” the Fed has now shed $402 billion.

This article was posted on the wolfstreet.com Internet site on Friday — and comes to us courtesy of Richard Saler.  Another link to it is here.


Bears beware: the Fed has listened to the primordial scream of world markets — Ambrose Evans-Pritchard

The U.S. Federal Reserve has called off the hounds. China has abandoned efforts to purge financial excess, reverting to stimulus on multiple fronts.

Policy pirouettes by the world’s twin superpowers mark a critical moment in the tightening cycle, with sweeping implications for global asset markets and for the health of the international economy over the next year.

The shift in Washington — assuming it is more than a rhetorical feint — is the more potent of the two.

It has echoes of the Fed retreat in early 2016 when China’s currency scare threatened to spin out of control. On that occasion the Yellen Fed came to the rescue and shelved plans for higher interest rates, launching a 25 percent surge in the MSCI index of world equities over the following twelve months.

A turbo-charged variant of this happened in late 1998 following the East Asia crisis and Russia’s default. The Greenspan Fed rushed through emergency rate cuts, igniting the final leg of the explosive dotcom boom.

It is too early to judge whether this is a comparable turning point but there is no doubt that current Fed chairman Jay Powell went out of his way to soothe markets on Friday, pointedly invoking the 2016 episode. The message could hardly have been clearer.

I mentioned this in The Wrap in my Saturday missive — and Ambrose really tees that up and drive it down the fairway in this must read article that showed up on the telegraph.co.uk Internet site on Sunday.  It’s posted in the clear in its entirety on the gata.org Interne site — and another link to it is here.


IMF Warns World “Dangerously Unprepared” For Upcoming Global Recession

In the starkest warning yet about the upcoming global recession, which some believe will hit in late 2019 or 2020 at the latest, the IMF warned that the leaders of the world’s largest countries are “dangerously unprepared” for the consequences of a serious global slowdown. The IMF’s chief concern: much of the ammunition to fight a slowdown has been exhausted and governments will find it hard to use fiscal or monetary measures to offset the next recession, while the system of cross-border support mechanisms — such as central bank swap lines — has been undermined, warned David Lipton, first deputy managing director of the IMF.

The next recession is somewhere over the horizon, and we are less prepared to deal with that than we should be . . . [and] less prepared than in the last [crisis in 2008],” Lipton told the Financial Times during the annual meeting of the American Economic Association. “Given this, countries should be paying attention to keeping their economy on a level trajectory, building buffers and not fighting with each other.

While the IMF projected solid, 3.7% growth in the global economy in 2019 in its most recent, October, forecasts, with the IMF set to release updated forecasts later this month, Lipton admitted that the growth outlook is being undermined by trade tensions, policy flaws and weakness in Asia.

This news item put in an appearance on the Zero Hedge website at 7:49 a.m. EST on Monday morning — and I thank Brad Robertson for sending it along.  Another link to it is here.


Milgram Morality in the 21st Century — Jeff Thomas

[E] though we presently live in less than ideal times, these are the good old days. The era that we’re about to herald in will be far more challenging that the present one.

To wit: Markets are presently in their biggest bubble in history. We’re also in the longest bull market in history. This bubble is therefore overdue to pop. In the aftermath, we can expect to see treasuries dumped back into the U.S. market. The U.S. dollar will end as the petrodollar and the world’s reserve currency. The overblown real estate market will collapse. Debt default (consumer, bank and national debt) will be defaulted upon. Commodity prices will rise dramatically, whilst asset prices will fall. A currency collapse will occur.

Unfortunately, as scary as all that may seem, it’s a mere thumbnail sketch of events. The reality will be far more complex.

We can expect that, along with these events, will come dramatically increased unrest and civil disobedience, countered by an equal level of retaliation by authorities. Those who now complain about the existing police state can expect a dramatic increase in controlling behaviour from all of the many authorities – DHS, TSA, CIA, FBI, USMS, DEA, ATF, BOP, DOJ, the military, local and state police and a host of other authorities.

The Nazis, by comparison, had a far less extensive web of authorities through which to dominate the German people.

This very disturbing commentary from Jeff, which I have no trouble believing, put in an appearance on the internationalman.com Internet site on Monday — and another link to it is here.


Bolton Threatens Syria: U.S. Troop Withdrawal “On Hold”. Permanent U.S. Military Base on Syria-Iraqi border

On Friday, a State Department official said “(w)e have no timeline for our military forces to withdraw from” the country. Delay may turn out to be not at all.

On Sunday, a senior Iraqi parliamentarian said

“(t)he  Americans have built a military base in Erbil (in) the Iraqi Kurdistan region to use…against Iraq’s neighboring countries, in particular Iran and Syria.”

Iraqi media said the Pentagon has 14 military bases in the country – along with a reported 18 in Syria. The U.S. is highly unlikely to abandon them, especially ones considered most strategically important.

An earlier report indicated the Pentagon intends establishing a permanent base along the Iraqi border with Syria. Turkey reportedly established one or more military bases in northwestern Aleppo.

On Saturday, a senior Trump regime official said U.S. forces may remain indefinitely at the (illegally established) al-Tanf base in southeastern Syria near the Iraqi and Jordanian borders.

This worthwhile story was posted on the globalresearch.com Internet site on Monday sometime — and my thanks go out to Tolling Jennings for sending it along.  Another link to it is here.


Iran’s central bank proposes slashing four zeros from falling currency

Iran’s central bank has proposed slashing four zeros from the rial, state news agency IRNA reported on Sunday, after the currency plunged in a year marked by an economic crisis fuelled by U.S. sanctions.

A bill to remove four zeros from the national currency was presented to the government by the central bank yesterday and I hope this matter can be concluded as soon as possible,” IRNA quoted central bank governor Abdolnaser Hemmati as saying.

Proposals to remove four zeros from the currency have been floated since 2008, but the idea has gained strength as the rial lost more than 60 percent of its value in 2018 despite a recent recovery engineered by the central bank in defiance of U.S. sanctions.

The currency was trading at about 110,000 rials per U.S. dollar on the unofficial market on Sunday, according to foreign exchange websites.

This Reuters story, filed from Dubai, appeared on their website on Sunday sometime — and it’s another article that I found on the gata.org Internet site.  Another link to it is here.


China Has a Dangerous Dollar Debt Addiction

China’s foreign debt has been rising rapidly, and that’s becoming an increasingly big problem — for the country and, potentially, the world.

Officially, China lists its outstanding external debt at $1.9 trillion. For a $13 trillion economy, that’s not a major amount. But focusing on the headline number significantly understates the underlying risks.

Short-term debt accounted for 62 percent of the total as of September, according to official data, meaning that $1.2 trillion will have to be rolled over this year. Just as worrying is the speed of increase: Total external debt has increased 14 percent in the past year and 35 percent since the beginning of 2017.

This news item from Bloomberg was posted on their website on Saturday afternoon PST — and it’s the second article in a row that I plucked from a GATA dispatch.  Another link to it is here.


Some Confucian Calm, Please! — Eric Margolis

The United States and China look like two punch-drunk prizefighters squaring off for a major championship fight. They have no good reason to fight and every reason to cooperate now that both their stock markets have been in turmoil.

Six hundred point market swings down and then up look like symptoms of economic nervous breakdown.

Factions in both nations are beating the war drums, putting presidents Donald Trump and Xi Jinping under growing pressure to be more aggressive.

Trump shoulders much of the blame for having started this unnecessary confrontation by imposing heavy duties on Chinese goods. The U.S. president has turned the old maxim on its head that nations that trade heavily don’t go to war. The U.S. and China, both huge trading partners, appear headed to military clashes, or even full scale war, if their governments don’t come to their senses soon.

Trump was clearly trying to bully China into major trade concessions and better commercial behavior. He is right about this. I’ve done business in China for over 15 years and seen every kind of chicanery, fakery and double-dealing imaginable. China learned from the French that the First Commandment is ‘Thou Shalt Not Import.’

This brief, but very interesting essay from Eric showed up on the unz.com Internet site on Saturday — and it comes to us courtesy of Larry Galearis — and another link to it is here.


November Swiss Gold Exports 56% Greater Than Imports…Hong Kong Leads — Lawrie Williams

We’ve been seeing some anomalous figures in Swiss gold imports and exports of late and the recently released November figures are no exception.  After several months of gold imports exceeding exports quite substantially, in the latest month’s figures the revers is true with gold exports exceeding imports by almost 46 tonnes.  While this serves to partially redress the annual balance it appears to have been a revival in exports to Hong Kong and India – the two leading recipients of Swiss gold that month – which has been key to a rise in exports from the previous couple of months’ figures to the third highest monthly total this year.

For the first time for a number of months Hong Kong took pride of place as the leading importer of Swiss gold with India a close second.  Both eclipsed direct exports to mainland China which has been the leading importer of Swiss gold for most of the past two years.  However combined exports to Asia and the Middle East still accounted for 82% of all Swiss gold exports in November continuing to emphasise the continuing flow from the West and the world’s major gold producers to what are seem to be firmer hands in the East.  Interestingly Europe accounted for much of the balance of Swiss gold exports that month absorbing 15%.

One suspects, perhaps, that there’s something of a timing anomaly between the Hong Kong and mainland China figures with the former’s fabricators and traders building up stocks of gold slightly earlier ahead of the Chinese New Year than their mainland counterparts.  In any case the bulk of the Hong Kong imports will find their way to the mainland anyway. (This year the Chinese New Year falls on February 5th).  But the figures could also suggest a falling off of Chinese demand in line with what is being generally seen as a declining economy, perhaps being hit by the U.S. imposed trade tariff increases, although there’s little sign of this in the balance of trade between the two global economic superpowers as yet which remains heavily in China’s favour.

This commentary by Lawrie appeared on the Sharps Pixley website on Sunday sometime — and another link to it is here.


China Adds to Gold Reserves for First Time Since October 2016

After a hiatus of more than two years, China is adding to its gold reserves again.

The People’s Bank of China increased holdings to 59.56 million ounces by the end of December, or about 1,853 metric tons, from 59.24 million ounces previously, according to data on the central bank’s website. They had been unchanged since about 130,000 ounces were added in October 2016.

The world’s biggest producer and consumer boosted holdings of bullion in a month marked by mounting concerns that China’s trade dispute with the U.S. is threatening economic growth. Spot gold had its strongest month in almost two years as those fears spurred gyrations in equities and the dollar and boosted demand for the precious metal as a haven.

Speculation that the Federal Reserve may pause its interest rate hikes has given further strength to gold’s rally into the new year and assets in bullion-backed exchange-traded funds are at a seven-month high. Spot gold was trading 0.5 percent higher at $1,291.83 an ounce.

It’s a bullish sign for gold,” Matthew Turner, a commodities strategist at Macquarie Group Ltd. in London, said by phone. “The reasons could be diversification, a wish to get away from the dollar, but it’s hard to be certain because we just don’t know enough about what their motivations are.”

Of course they have far more gold than this in reserves than they’re actually reporting.  This Bloomberg story put in an appearance on their Internet site at 2:38 a.m. Pacific Standard Time [PST] on their Monday morning — and it’s yet another article from the that gata.org Internet site.  Another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos from The Guardian article that Patricia Caulfield shared with us.  The first one comes with this comment: “An adult Tibetan antelope in Qiangtang national nature reserve, in China’s Tibet Autonomous Region.” — Photograph: Xinhua  Click to enlarge.

The second is captioned: “Oryx walk in the Rub al-Khali desert in Saudi Arabia.”  Photograph: Valdrin Xhemaj   Click to enlarge.


The WRAP

It was another day where everything was going mostly ‘according to Hoyle‘ as far as precious metal price activity in Far East and London trading was concerned.  That all went out the window as soon as the COMEX opened in New York yesterday morning.  The powers-that-be obviously did not want their respective prices to reflect the continuing decline in the U.S. dollar index…which began on December 11 — and which has turned a bit nastier during the last three trading sessions.

But this state of affairs can’t continue forever.  I’m certainly expecting these rallies in the precious metals — and their respective equities, to continue for a good while long…with or without some sort of engineered temporary set-back along the way.

However, there’s no question in my mind that these rallies are being met with “whatever it takes” to ensure that they don’t run away to the upside…at least not for the moment.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and there’s not much to see, except to note the fact that all six weren’t allowed to do much on Monday.  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 didn’t do much of anything until shortly after 9 a.m. China Standard Time on their Tuesday morning — and it was sold lower from the point until the current low tick was set around 1:45 p.m. CST. It rallied a few dollars from there over the next forty-five minutes or so, but was sold lower once again — and was bounced off its earlier low. At the moment, gold is down $6.60 an ounce. The price path for silver has been precisely the same in Far East trading, except once the low tick was set around 1:45 p.m. CST, it has rallied a bit — and stayed there, but is still down 10 cents. Platinum was up 3 bucks in early morning trading in the Far East — and then down 3 bucks by noon over there — and is down 2 bucks currently. The price path for palladium was very similar, but more muted than platinum — and it’s down a dollar as Zurich opens.

Net HFT gold volume is fairly hefty already at around 51,000 contracts — and there’s about 3,500 contracts worth or roll-over/switch volume in this precious metal. Net HFT silver volume is about 13,800 contracts — and there’s 473 contracts worth of roll-over/switch volume on top of that.

The dollar index began to head higher the moment that trading began at 7:45 p.m. EST in New York on Monday evening — and its current 95.96 high tick came at 12:05 p.m. China Standard Time on their Tuesday afternoon. It dropped a bunch from there until minutes after the 2:15 p.m. CST afternoon gold fix in Shanghai — and has been bouncing unsteadily higher since. As of 7:45 a.m. GMT in London, the index is higher by 24 basis points.

Normally, the cut-off for this Friday’s Commitment of Traders Report, plus the monthly Bank Participation Report, would be at the close of the COMEX trading session today.  But with the U.S. government still shut down, there won’t be any reports again this Friday — and no resolution to this current stand-off appears to be in sight.

And as I post today’s column on the website at 4:02 a.m. EST, I note that the gold price hasn’t done much during the first hour of trading on their Tuesday morning — and is down $6.10 an ounce. Silver is up a bit — and down only 6 cents. Platinum is back at unchanged — and palladium is now up 7 bucks.

Gross gold volume is getting up there at just under 70,000 contracts — and net of roll-over/switch volume, net HFT gold volume is around 59,500 contracts. Net HFT silver volume is pretty hefty already at about 17,300 contracts — and there’s only 501 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has been chopping sideways in a fairly narrow range during the first hour of London/Zurich trading — and as of 8:45 a.m. GMT/9:45 a.m. CET…it’s up 18 basis points.

As the headline to my Friday column pointed out…”Both Gold and Silver Now in ‘Overbought’ Territory” — and I’m beginning to wonder if this price activity we’ve seen over the last two or three business day is the beginning of that engineered price decline.  If it is, then it’s a certainty that free-market forces are totally absent from this process.  It’s too soon to tell for sure, but I thought I’d mention it in closing.

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

Ed

Friday’s Precious Metal Price Action: Dichotomies Everywhere

05 January 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price edged a few dollars higher once trading began in New York at 6:00 p.m. EST on Thursday evening.  The high of the day was set shortly before 9:30 a.m. China Standard Time on their Friday morning — and from there it was sold quietly but unsteadily lower until shortly before 10 a.m. in London.  From that point it traded sideways with a slight positive bias until about fifteen minutes before the COMEX open…then down it went.  Judging by the New York Spot Gold [Bid] chart, the jobs report had almost no effect on the gold price, but it continued lower on its own, with the low tick of the day coming at, or just a few minutes before, the afternoon gold fix in London.  It crawled higher from there until around noon EST — and didn’t do much of anything after that.

The high and low ticks were recorded by the CME Group as $1,300.40 and $1,278.10 in the February contract.

Gold finished the Friday session in New York at $1,284.20 spot, down $9.70 on the day.  Net volume was pretty heavy at 284,000 contracts — and roll-over/switch volume amounted to just under 17,000 contracts.

And here’s the New York Spot Gold [Bid] chart from Kitco — and you can see in detail the lack of serious price activity at the 8:30 a.m. EST release of the jobs report.  There wasn’t any worth speaking about.

The silver price opened flat — and then didn’t do much of anything until 9 a.m. CST on their Friday morning.  It jumped up a bit over a dime at that juncture, but ran into ‘something’ almost immediately.  This proved to the high of the day.  From there it was sold quietly lower and, like gold, took a breather starting shortly before 10 a.m. GMT in London.  Then, it began to edge very quietly higher until precisely 9:00 a.m. in New York — and at that point, it was sold down 16 cents to its low tick of the day, which came a few minutes after 9:45 a.m. EST.  At 10 a.m…the afternoon gold fix in London…it began to head higher, but wasn’t allowed to get far and, like gold, was sold lower starting around noon EST.  That tiny decline ended about an hour after the COMEX close — and it ticked higher into the 5:00 p.m. close of trading from there.

The high and low ticks in this precious metal were reported by the CME Group as $15.955 and $15.645 in the March contract.

Silver was closed in New York on Friday at $15.665 spot, down 4 cents on the day — and certainly would have closed up on the day, if allowed.  Net volume was pretty heavy at just under 88,000 contracts — and there was a hair over 7,000 contracts worth of roll-over/switch volume on top of that.

The platinum price was up 6 bucks or so by around 9:30 CST on their Friday morning — and it traded pretty flat from there until shortly after the Zurich open.  It began to edge lower from there — and was back to the unchanged mark by around 11:45 a.m. CET in Zurich.  From that point it traded unevenly sideways until the afternoon gold fix in London — and then it blasted higher from there.  Most of the gains that mattered were in by noon EST — and it traded quietly sideways for the rest of the Friday session.  Platinum finished the day at $820 spot, up 24 dollars!

The palladium price traded very quietly sideways through all of Far East and most of Zurich trading yesterday, but began to head a bit lower starting at 2 p.m. CET/8 a.m. EST.  It was down about four dollars by the afternoon gold fix in London — and it then blasted higher as well.  It was obviously capped before it could break the $1,300 spot price mark — and was sold lower until around 1 p.m. in New York.  It traded quietly sideways from there until about 3:30 p.m. in the thinly-traded after-hours market — and ticked a handful of dollars higher into the 5:00 p.m. close.  Palladium finished the Friday session at $1,287 spot, up 33 bucks on the day — and was up a bit over 40 dollars at its high tick.  It also closed higher than the gold price once again.

I’ll have lots more to say about Friday’s price action in the precious metals in The Wrap.


The dollar index closed very late on Thursday afternoon in New York at 96.31 — and when trading resumed early on Thursday evening EST, it opened down 3 basis points.  Then the roller coaster ride began — and I’m only going to touch on the New York price action.  It ‘rallied’ a bit on the jobs report, but it looked rather unconvincing.  The 96.61 high tick was set at 9:50 a.m. EST — and the 96.06 low tick was set at exactly 11:00 a.m. EST, which happened to coincide with the London close.  From that point it chopped quietly higher — and finished the Friday session at 96.18…down 13 basis points on the day.  What a ride.

Of course what was happening in the currency market had no affect whatsoever on what was happening in the precious metals.

Here’s the DXY chart, courtesy of Bloomberg — and you can read into it whatever you wish.  Click to enlarge.

And here’s the 6-month U.S. dollar index chart from the folks at stockcharts.com — and the delta between its close…95.75…and the close on the intraday chart above, was 43 basis points on Friday.  Click to enlarge.

The gold stocks gapped down about three percent at the open — and then wandered higher until about 12:45 p.m. in New York trading — and then didn’t do much of anything after that.  The HUI closed down only 0.94 percent.  It could/should have been far worse.

The silver equities gapped down about 3 percent as well, but came roaring back — and were up one percent by minutes before 11 a.m. in New York.  They held in there until about 12:30 p.m. — and began to chop very quietly lower from there.  They bounced up a bit during the last thirty minutes of the New York trading session — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down only 0.08 percent.  Call it unchanged.  Click to enlarge if necessary.

And here’s the usual 1-year Silver Sentiment/Silver 7 Index courtesy of Nick as well.  Click 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 month-to-date/year-to-date chart, as I wouldn’t place too much stock in what happened during Monday’s session…the last trading day of the year.

Relative to its underlying metal, the HUI ‘outperformed’ the Silver 7…but that’s not the way an average investor would look at it…including me.  It’s just more proof that silver and its equities will be the place to be when precious metal prices are allowed to rise unencumbered.  Click to enlarge.

After Friday’s price action, I’m not sure what should be made of the precious metal market going forward, so I will wait and see how things shake out over the next week or so.  However, this ongoing DoJ criminal investigation into JPMorgan’s trading activities in the precious metals certainly has the potential to change things in a hurry at any time.


The CME Daily Delivery Report showed that 4 gold and 106 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In gold, the only thing worth noting was the fact that JPMorgan stopped 2 of those contracts for its client account.  In silver, the only short/issuer worthy of the name was International F.C. Stone, with 100 contracts out of its client account.  There were eight long/stoppers in total.  The largest was Goldman, with 41 contracts for its client account.  In second spot was JPMorgan with 37 contracts…23 for its own account, plus another 14 for its client account.  In distant third place was Advantage with 10 contracts for its client account.  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 January declined by 12 contracts, leaving 353 still open, minus the 4 mentioned just above.  Thursday’s Daily Delivery Report showed that 29 gold contracts were actually posted for delivery on Monday, so that means that 29-12=17 more gold contracts were added to the January delivery month.  Silver o.i. in January declined by 17 contracts, leaving 820 still around, minus the 106 contracts mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 24 silver contracts were actually posted for delivery on Monday, so that means that 24-17=7 more silver contracts just got added to January.


There was more gold added to GLD yesterday, as an authorized participant deposited 94,530 troy ounces.  There were no reported changes in SLV.

There was no sales report from the U.S. Mint of course.

I forgot to report U.S. Mint sales for all of 2018.  They sold 245,500 troy ounces of gold eagles — 121,500 one-ounce 24K gold buffaloes — and 15,700,000 silver eagles.  The totals for all of 2017 came to 302,500 troy ounces of gold eagles — 99,500 one-ounce 24K gold buffaloes — and 18,065,500 silver eagles.  Only the gold buffaloes showed an increase year-over-year.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Thursday was 2,000 troy ounces that was shipped out of Canada’s Scotiabank — and I won’t bother linking this amount.

It was a hugely busy day in silver, as 1,234,436 troy ounces was received — and 1,278,904 troy ounces was shipped out.  In the ‘in’ category, there was one large truckload…635,176 troy ounces received at Brink’s, Inc. — and the other truckload…599,260 troy ounces…was dropped off at Scotiabank.  All of the ‘out’ action…two big truckloads…was at CNT.  The link to that is here.

There wasn’t much happening over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  Nothing was reported received — and only 250 were shipped out.  This ‘out’ activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


The Hiddensee treasure was found in 1873 on the German island of Hiddensee in the Baltic Sea by chance, during rebuilding after significant flooding in 1872 and 1873.

The treasure consists of 16 pendants, a brooch, and a neck ring, all of gold weighing a total of 600 grams. It is the largest discovery of Viking gold artifacts in Germany.

The jewelry dates from the late Viking Age, c. 10th century. The pendants include both Norse pagan and Christian symbols – Thor’s hammer of Mjölnir and the cross. It is possible that the jewelry originally belonged to the family of the Danish King Harald BluetoothClick to enlarge.

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


CRITICAL READS

This Could Be Worse Than 1929 — Bill Bonner

What were the odds that Apple would continue to come up with knock-your-socks-off new products?

What were the odds that this geriatric bull market would race around the track again and set new records?

Of course, you never know. But stocks ultimately depend on the economy. After all, investors are buying streams of income that must come from consumers. And since the “beautiful economy” story was always counterfeit, there had to come a time when the jig would be up.

This worthwhile story from Bill, written and posted before the PPT ramp jobs on Friday, showed up on the bonnerandpartners.com Internet site early on Friday morning EST — and another link to it is here.


Powell “Listening Carefully To Markets“, Sends Stocks Soaring

After briefly spooking markets briefly with an optimistic readout of how awesome the economy is, Fed Chair Jay Powell gave stocks just what they wanted, when in a stark departure from his December FOMC speech, the Fed chair said that Fed policy can change and is “prepared to adjust policy quickly and flexibly” while adding that “there is no preset path for policy“, confirmed that the Fed is “listening carefully to markets.”

More importantly, Powell also said that the Fed would adjust the balance-sheet normalization policy “if needed” and if it becomes an issue for the market and economy: “We said that we would be prepared to adjust our normalization plans” and this would include the balance sheet.

That said, Powell also noted that “markets are pricing in downside risks” even as he sees no major risks in the economy.

There are no markets anymore…only interventions” — and that fact was on full display for all to see on Friday.  This Zero Hedge news item was posted on their Internet site at 10:31 a.m. EST on Friday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.


Doug Noland: Global Markets’ Plumbing Problem

December non-farm payrolls surged 312,000. The strongest job gains since February blew away both estimates (184k) and November’s job creation (revised up 21k to 176k). Manufacturing jobs jumped 32,000 (3-month gain 88k), the biggest increase since December 2017’s 39,000. Average Hourly Earnings rose a stronger-than-expected 0.4% for the month (high since August), pushing y-o-y gains to 3.2%, near the high going back to April 2009.

Just 90 minutes following the jobs data, Chairman Powell joined Janet Yellen and Ben Bernanke for a panel discussion at an American Economic Association meeting in Atlanta. Powell’s comments were not expected to be policy focused (his post-FOMC press conference only two weeks ago). But the Fed Chairman immediately pulled out some prepared comments, perhaps crafted over the previous 24 hours (of rapidly deteriorating global market conditions).

Powell heedfully hit the key market hot buttons: “…Policy is very much about risk management.” “We will be patient as we watch to see how the economy evolves…” “…Always prepared to shift the stance of policy and to shift it significantly if necessary…” “We will be prepared to adjust policy quickly and flexibly and to use all of our tools to support the economy…” A Bloomberg headline: “Powell Shows He Cares About Markets.” Markets heard assurances of an operative “Fed put” – with rate cuts and QE (“all of our tools”) available when demanded – and it was off to the races.

Thursday’s market gyrations hinted at a quite disconcerting scenario: illiquidity, dislocation and a “seizing up” of global markets. Thursday saw an 8% move in the yen vs. Australian dollar – two major – and supposedly highly liquid – global currencies. Trading in the yen dislocated across the currencies market, a so-called “flash crash.” We’ve seen the occasional “flash crash” in equities over the past decade. These abrupt bouts of selling reversed in relatively short order, with recovery only emboldening animal spirits. These recoveries, in contrast the current backdrop, were supported by expanding global central bank balance sheets (QE/liquidity).

I’m concerned that Thursday’s currency “flash crash” has potentially dire implications. Together with other key market indicators, evidence of systemic illiquidity risk is mounting. De-risking/deleveraging dynamics continue to gain momentum globally. Moreover, there are literally hundreds of Trillions of currency-related derivatives transactions – a byzantine edifice fabricated on a flimsy assumption of “liquid and continuous markets.”

This must read commentary by Doug appeared on his website in the wee hours of Saturday morning — and another link to it is here.


Gold imports into Ahmedabad in India fell by 34% in 2018

Gold jewellery sales in the state remained muted in 2018. Data provided by Ahmedabad Air Cargo Complex, indicate that imports of the yellow metal stood at 56.3 metric tonnes (MT) in 2018. This was a decline of 34% from the 85.5 MT of gold imports in 2017. With prices of gold remaining on the higher side throughout the year, the demand for gold dipped significantly, said experts.

Analysts have also blamed the drop in demand on customers increasingly preferring exchange of old gold instead of making fresh purchases.

Gold prices went up primarily because of the devaluation of the Indian rupee, which swung between 63 and 73 against the U.S. dollar and settled at 70.11 on Thursday.

Jewellers also blamed the poor monsoon for the dip in gold purchased by rural customers.  “The impact of shrinking revenues of rural customers is visible on gold sales as the demand is extremely poor,” said Jigar Soni, vice president of the Jewellers’ Association of Ahmedabad.

This gold-related news item showed up on The Times of India website at 2:48 a.m. IST on their Friday morning — and it’s something I plucked off the Sharps Pixley website yesterday evening.  Another link to it is here.  Another parallel story to this from the Sharps Pixley website is headlined “India discounts widen to two-month high on price surge, weak demand


Golden treasure from Thirty Years’ War discovered in Czech Republic

Officials of the Pardubice region recently announced a surprise discovery. Dozens of gold coins were found near the town of Králíky in the north east of Bohemia. Experts, who have analysed the coins, say they date to the period of the Thirty Years’ War and may have been buried while an army was on the march.

An unnamed individual found 60 coins partly buried on a pasture. The discovery was immediately reported and, before publicising the information earlier this week, local experts were asked to look at the objects.

One of them is archaeologist David Vích from the Vysoké Mýto Regional Museum. He says the youngest coin dates back to 1631, which suggests the items were likely buried sometime between the mid- to late-period in the war. The region of Pardubice was threatened multiple times during these phases of the conflict, especially by Swedish forces.

The coins, one of which weighs more than three grams, were likely to have been placed in a leather or textile pouch which rotted away over time.

Aside from Hungarian coins, there are also pieces from Poland, the Netherlands and Turkey. Most are made out of gold with a high purity.

This interesting news item appeared on the the Czech Internet site radio.cz back on December 20, 2018 — and I thank Jim Gullo for pointing it out.  The ‘click to enlarge‘ feature works well for both of the embedded photos in this story.   Another link to it is here.


The PHOTOS and the FUNNIES

Here are two more photos from The Guardian article that Patricia Caulfield shared with us.  The first one comes with this comment: “A Eurasian blue tit on a birch tree branch in Moscow.”  Photograph: Yuri Kadobnov.  Click to enlarge.

The second photo is introduced as follows: “A European badger feeding at the National Trust’s Dinefwr Park in Llandeilo, Wales, in July. Figures published this week showed 32,601 badgers were shot this autumn during the annual cull, the highest number on record.”  Photograph: Graham Harries.  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ is one I’ve posted before, but it’s been a couple of years.  This Chicago tune from back in 1970…which is 48 years ago now, was their first really big hit.  The twist with this version is that it’s a cover/faithful reproduction by a Russian rock band called ‘Leonid and Friends’.  The recording was done in Moscow, with the lead singer [Serge Tiagniryadno] adding his vocal track from Kiev in the Ukraine.  The lead guitar solos by Sergey Kashirin in this number are literally breathtaking — and the link is here.

Today’s classical ‘blast from the past’…courtesy of Antonio Vivaldi…dates from the early 18th century — and its formal name is “Concerto No. 4 in F minor, Op. 8, RV 297“.  We know it better as “Winter” from ‘The Four Seasons’.

Unusual for the period, Vivaldi published these four concerti with accompanying sonnets (possibly written by the composer himself) that elucidated what it was in the spirit of each season that his music was intended to evoke. The concerti therefore stand as one of the earliest and most detailed examples of what would come to be called program music—i.e., music with a narrative element — and you’ll see lines of that narrative pop up on the youtube.com video linked here.  Without doubt, this is the finest video recording I’ve seen of anything on that website, ever.  It’s like you’re right there in the room…courtesy of 4K photo technology.  Of course the audio track and playing is world class — and full-screen viewing is a must.


If you’re wondering what happened in the precious metal market yesterday…so am I.

The price decline in gold began in New York even before the COMEX open at 8:20 a.m. — and the job numbers at 8:30 a.m. EST.  For a change, the job numbers had no effect on the gold price…not that it should, anyway.  And I got the distinct impressive from looking at the Kitco gold chart, that the gold price would have rallied more after the afternoon gold fix in London, if allowed…but it obviously wasn’t.  But I sensed that there was really no ‘heavy hand’ in gold on Friday.

Then there was silver.  Its price path in Far East and London trading was almost identical to gold’s.  But in New York, it did nothing until 9 a.m. — and at that point it was sold down about 16 cents.  It would have certainly closed in positive territory, if allowed.  I can’t remember a day where there was such a divergence between the price path between it — and gold’s.  It certainly appeared as if JPMorgan et al were nowhere to be found.

Then there’s platinum and palladium.  Both markets appeared to go ‘no ask’ right after the afternoon gold fix in London — and both ran away to the upside in NASA-style space launch style.  I’m not sure if the short-covering rally in platinum ran out of gas on its own, or was capped.  But it certainly appeared that palladium was capped and turned lower before it could break above $1,300 spot…which also appears to be the current line in the sand for the gold price.

These were dichotomies in the precious metals yesterday — and nothing like I’d seen before in the last fifteen years.  If ‘da boyz’ were in the precious metals market yesterday, they appeared to be treading very lightly.

Ted made himself scarce yesterday — and I wasn’t able to speak to him.  I’ll be more than interested in his thoughts on Friday’s price action [if any] when his weekly commentary for his paying subscribers shows up on his website this afternoon.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and the changes in the four precious metals should be noted.  You should also note that copper was up big yesterday — and WTIC closed higher as well.  Only gold and silver weren’t allowed to close up on the day.  Click to enlarge.

But the most amazing part of yesterday was Fed Chairman Jerome Powell’s apparent — and very public total surrender to the will of the stock and bond markets.  Here’s a paragraph from a Zero Hedge article in the Critical Reads section above…

“After briefly spooking markets briefly with an optimistic readout of how awesome the economy is, Fed Chair Jay Powell gave stocks just what they wanted, when in a stark departure from his December FOMC speech, the Fed chair said that Fed policy can change and is “prepared to adjust policy quickly and flexibly” while adding that “there is no preset path for policy“, confirmed that the Fed is “listening carefully to markets.””

I’m sure he didn’t offer these comments without some “encouragement” from people even more powerful than him.

These statements elevated the Chris Powell quote…”There are no markets anymore, only interventions” to iconic status — and ongoing Fed policy.  It shows that they, amongst others, know perfectly well that the entire paper foundation that the world’s financial, economic and monetary system is built on, would collapse in a heap if the various publicly-traded markets were allowed free rein.  They have now committed themselves to holding off the inevitable…which is an impossibility.

This policy may prolong the status quo for a bit, but sooner or later, economic and financial reality will bury them.   And as I [and others] have stated on many occasions…the longer they hold off the inevitable, the worse the ultimate denouement will be when it does arrive.

And as King Théoden whispered in despair as he was armoured-up for the Battle of the Hornburg at Helm’s Deep…”How did it come to this?

I await the Sunday open in New York at 6:00 p.m. EST, not knowing what to expect.

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

Ed