Back in ‘Care and Maintenance’ Mode on Friday

16 March 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crawled a few dollars lower starting about two hours after trading began at 6:00 p.m. EDT in New York on Thursday evening.  That ended a few minutes before 11 a.m. China Standard Time on their Friday morning — and from that juncture the price began to rise very unsteadily.  That lasted until shortly before 9 a.m. in London — and the gold price really didn’t do much after that for the remainder of the Friday session, although a smallish rally that began early in the morning in New York was summarily dealt with once the afternoon gold fix in London was put to bed.

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

Gold finished the Friday session in New York at $1,302.30 spot, up $6.50 from Thursday’s close — and back above $1,300 spot…but not above its 50-day moving average.  Net gold volume was pretty light once again at just over 187,000 contracts — and there was just under 48,000 contracts worth of roll-over/switch volume out of April and into future months.

Silver was forced to follow the same general price path as gold.  Selling pressure in that precious metal appeared right at the noon silver fix in London/8 a.m. EDT in New York — and except for the tiny morning rally in this precious metal that was subsequently capped, it was sold quietly lower into the 5:00 p.m. close of trading.

The low and high closes in silver were reported by the CME Group as $15.165 and $1.39 in the May contract.

Silver was closed at $15.26 spot, up 11 cents on the day.  Net volume was just under 57,000 contracts — and there was 2,679 contracts worth of roll-over/switch volume on top of that.

The platinum price began to rise around 8 a.m. CST on their Friday morning — and that continued rather quietly until 1 p.m. in Zurich/8 a.m. in New York.  Starting at that point, the price was sold down about 9 bucks by around 9:15 a.m. EDT.  Its subsequent rally was dealt with at 10 a.m. EDT — and it chopped mostly lower until around noon — and then didn’t do much after that.  Platinum was closed at $828 spot, up 6 dollars on the day.

The palladium price was up about ten dollars by shortly after 10:30 a.m. in Zurich trading — and held in there until the COMEX open.  It was unevenly down hill from there — and palladium was closed at $1,532 spot, unchanged on the day.

The dollar index closed very late on Thursday afternoon in New York at 96.79 — and then opened down 7 basis points once trading began at 7:45 p.m. EDT on Thursday evening.  It made two attempts to break above unchanged on the day…the first time at 9:18 a.m. in Shanghai on their Friday morning — and again at precisely 9:00 a.m. EDT in New York.  Both attempts failed — and after the second attempt, it quickly fell to its 96.49 low tick, which came at 10:15 a.m. EDT.  It bounced off that low a few times before rallying by a bit — and then the index didn’t do much of anything after that.  The dollar index finished the Friday session in New York at 96.60…down 19 basis points from Thursday’s close.

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

And here’s the 6-month U.S. dollar index chart courtesy of the folks over at stockcharts.com — and the delta between its close…96.05…and the close on the DXY chart above, was 55 basis points on Friday.  Click to enlarge.

The gold stocks gapped up a hair at the open — and then climbed to their respective highs by around 10:20 a.m. EDT in New York trading on Friday.  It was all down hill from there — and back into negative territory.  Their respective lows were set around 2:40 p.m. — and they rallied a bit from there — and back into the green by a hair.  The HUI closed up a less than impressive 0.18 percent.

The silver equities rallied smartly at the open — and were up about 2.5 percent by 10:20 a.m. in New York.  They headed lower from there, but never sank into the red…with their respective lows coming at the same time as gold’s…around 2:40 p.m. EDT.  From that point they headed sharply higher — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.24 percent.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart as well, updated with Friday’s gain.  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 weekly chart — and as you can see that the gold shares were down a bit — and the silver equities up a bit, despite the fact that they’re underlying precious metals did the opposite during this past reporting week.  Click to enlarge.

Here is the month-to-date chart — and except for platinum and palladium, everything else is in the red by a bit.  That’s because of the engineered price declines in everything that began starting before February ended — and spilled over into March.  Nothing has been allowed to recover enough so far this month to put everything back in the green.  Click to enlarge.

The year-to-date chart — and with the exception of gold, still shows green across the board.  All of the big gains we had earlier have been taken back during this latest engineered price decline.  Of course palladium is in a world of its own.  Click to enlarge.

Hopefully, although there’s no guarantee, these latest engineered price declines look pretty much done — and I expect these charts to be far more rosy looking than they are now going forward. I’ll reserve complete judgement on that until we get past this coming week’s FOMC meeting.  And there’s still that DoJ thingy hanging over JPMorgan.  But four months have now passed since the announcement — and Jamie and his merry band of price riggers are still walking free — and still doing their shtick in the COMEX futures market.


The CME Daily Delivery Report showed that 20 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

The two short/issuers in gold were ADM and Advantage, with 18 and 2 contracts out of their respective client accounts.  The three long/stoppers were Advantage, JPMorgan and Morgan Stanley, with 9, 8 and 3 contracts for their respective client accounts as well.

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 March remained unchanged at 38 contracts still open, minus the 20 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 1 gold contract was posted for delivery on Monday, so that means that 1 more gold contract was added to March deliveries.  Silver o.i. in March fell by 10 contracts, leaving 65 still around.  Thursday’s Daily Delivery Report showed that 10 silver contracts were actually posted for delivery on Monday…so the change in open interest and the deliveries matched for once.

So far this month there have been 357 gold contracts issued/reissued and stopped — and in silver, that number is 5,302.


There was a withdrawal from GLD yesterday, as an authorized participant removed 45,771 troy ounces.  There were no reported changes in SLV.

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

Month-to-date the mint has sold 8,500 troy ounces of gold eagles — 4,000 one-ounce 24K gold buffaloes — 2,000 one-ounce platinum eagles — and 850,000 silver eagles.

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 received at HSBC USA.  I won’t bother linking this amount.

It was much busier in silver, as 600,104 troy ounces…one truckload…was received — and all of that ended up at CNT.  There was 831,953 troy ounces shipped out.  The largest of the ‘out’ movement was 775,844 troy ounces that departed Canada’s Scotiabank.  There was 29,836 troy ounces shipped out of Brink’s, Inc. — and 26,271 troy ounces that left the International Depository Services of Delaware.  The link to all this is here.

The only activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, was 3,215.100 troy ounces/100 kilobars that was shipped out of Brink’s, Inc.  I won’t bother linking this activity, either.


The Missorium of Theodosius I is a large ceremonial silver dish preserved in the Real Academia de la Historia, in Madrid, Spain. It was probably made in Constantinople for the tenth anniversary (decennalia) in 388 of the reign of the Emperor Theodosius I, the last Emperor to rule both the Eastern and Western Empires. It is one of the best surviving examples of Late Antique Imperial imagery and one of the finest examples of late Roman goldsmith work. It is the largest and most elaborate, and the most famous, of the 19 surviving vessels believed to represent largitio (“largesse”) or a “ceremonial gift given by the emperor to a civil or military official“.

The missorium comes from a treasure of silver objects that also included two plain silver cups, now missing, discovered by a labourer in 1847 in Almendralejo, close to Mérida in the Spanish province of Badajoz. When found it was folded flat along the line of the diagonal cut that now divides it into two pieces, which was made as part of an attempt to restore it, though an attempt at a cut along the same line may also have been made in antiquity. It is in good condition apart from the areas affected by this, but that it was folded may suggest it was being treated as bullion when deposited.

Its size is exceptional compared to other contemporary silver dishes, measuring 74 cm in diameter with a thickness which varies between 4 and 8 mm. It rests on a ring, 3 cm thick with a diameter of 26 cm, which was welded to the base. This ring has a Greek inscription specifying the official weight of the object…16.13 kg of silver, whereas the dish actually weighs only 15.35 kg…the difference could be because the dish was weighed and marked before being decorated: a piece of the dish is also missing.  Click to enlarge.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, March 12 turned out to be a pleasant surprise in both silver and gold…despite my comments on it Friday’s column.  Both showed further decreases in the commercial net short positions in both precious metals.  Ted was delighted.

In silver, the Commercial net short position declined by 5,980 contracts, or 29.9 million troy ounces of paper silver.

They arrived at that number by reducing their long position by 1,144 contracts, but the also reduced their short position by 7,124 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Ted mentioned the Big 4 traders reduced their short position by only about 800 contracts during the reporting week, which wasn’t overly large…but at least it was a move in the right direction.  He also figures that one or two of the Managed Money traders now has a large enough short position to be included in the ‘5 through 8’ large trader category.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bunch more.  They reduced their long position by 3,654 contracts, plus they added 4,715 short contracts — and it’s the sum of those two numbers…8,369 contracts…that represents their change for the reporting week.

The difference between that number — and the Commercial net short position…8,369 minus 5,980 equals 2,389 contracts.  That difference, as it always is, was made up by the traders in other two categories.  In actual fact it was the ‘Other Reportables’ that made up for all of that change, plus more, as they increased their long position by a bit over 2,900 contracts, because the ‘Nonreportable’/small traders increased their net short position by around 550 contracts.

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

The Commercial net short position is down to 46,261 COMEX contracts, or 231.3 million troy ounces of paper silver, which can hardly be described as bullish…at least using an historical perspective.

Ted pegs JPMorgan’s short position at around 10,000 contracts, which is down from the 11-12,000 contracts he figured they were short in last week’s COT Report.

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

Not only was the COT Report in silver an unexpected positive surprise, there’s most likely been further improvement since the Tuesday cut-off for next week’s COT Report.


In gold, the commercial net short position declined by 5,523 COMEX contracts, or 552,300 troy ounces of paper gold.

They arrived at that number by increasing their long position by 36,297 contracts, but they also increased their short position by 30,774 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Ted said that the Big 4 traders only reduced their collective short positions by around 500 contracts, which is mostly immaterial.

Under the hood in the Disaggregated COT Report it was all Managed Money traders once again — and by a huge amount.  They reduced their long position by 2,610 contracts — and they also added a chunky 11,230 short contracts — and it’s the sum of those two numbers…13,840 COMEX contracts…that represents their change for the reporting week.

And as always, it was the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader category that made up the difference during the reporting week, as both increased their net long positions by very decent amounts.  Here’s the snip from the Disaggregated Report for gold, so you can see these changes for yourself.  Click to enlarge.

The commercial net short position in gold is now down to 10.85 million troy ounces, which Ted would certainly describe as bullish, especially when one considers how big these numbers were almost ten years ago.

As for the big increase in the commercial open interest in gold during the reporting week…around 60,000 contracts according to Ted…that turned out to be all spread trade related — and it is obvious to see in the Disaggregated Report in the snip above.

Ted also expressed the opinion that JPMorgan might actually be long the COMEX futures market in gold by a bit now.

Here is the 3-year COT chart for gold — and this week’s change should be noted, although it’s not overly large.  But because like for silver, it turned out to be a positive surprise…we should be thankful.  Click to enlarge.

And also like for silver, I certainly suspect that there has been further, albeit small, improvement in the commercial net short position in gold since the Tuesday cut-off for next week’s report.

As per usual, there was very little volume in thinly-traded palladium market during the reporting week.  The Managed Money traders reduced their net long position by 874 contracts — and the amounts traded by the commercial traders, along with the traders in the other two categories, was even less.  Total open interest in palladium is 26,743 contracts.   in Platinum, the Managed Money traders reduced their net long position by 7,223 contracts — and are now market neutral with around 22,300 contracts held both long…and short.  Total open interest in this precious metal is 77,461 contracts.  In copper, the Managed Money traders reduced their net long position by 6,287 COMEX contracts.


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

For the current reporting week, the Big 4 traders are short 119 days of world silver production, which is down 1 day from last week’s report — and the ‘5 through 8’ large traders are short an additional 66 days of world silver production, also down 1 day from last week’s report — or a total of 185 days that the Big 8 are short, which is a hair over 6 months of world silver production, or about 431.8 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were short 187 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 231.3 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 431.8 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 431.8 minus 231.3 equals 200.5 million troy ounces.

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

As stated earlier, Ted estimates JPMorgan’s short position at around 10,000 contracts, down 1-2,000 contracts from last week’s report, or 50 million troy ounces of paper silver held short.  That translates into about 21 days of world silver production.  That number also represents 11 percent of the short position of the Big 8 traders — and about 32 percent of the short position held by the Big 4 traders.

The Big 4 traders are short 119 days of world silver production — and once you subtract out the 21 days that JPM is short, that leaves 98 days split up between the other three large traders…a bit under 32 days that each is short.  And as I pointed out in the COT Report, JPMorgan is no longer the Big short in silver — and these numbers prove that once again.

The four traders in the ‘5 through 8’ category are short 66 days of world silver production in total, which is around 16.5 days of world silver production each.  The smallest of the traders in this category holds something less than 16.5 days — and the largest, something more than that amount.

Based on these numbers, I would suspect that JPMorgan is not only the smallest of the Big 4 traders, but any further reduction in their short position will drop them into the Big ‘5 through 8’ large trader category.

The Big 8 commercial traders are short 45.4 percent of the entire open interest in silver in the COMEX futures market, down a hair from the 46.0 percent they were short in last week’s report.  And once whatever market-neutral spread trades are subtracted out, that percentage would be a bit over 50 percent.  In gold, it’s now 33.4 percent of the total COMEX open interest that the Big 8 are short, down quite a bit from the 37.4 percent they were short in last week’s report — and something under 40 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 41 days of world gold production, down 1 day from the 42 days they were short in last week’s COT Report.  The ‘5 through 8’ are short another 20 days of world production, up 1 day from the 19 days of world production they were short last week…for a total of 61 days of world gold production held short by the Big 8…unchanged from last week’s COT Report.  Based on these numbers, the Big 4 in gold hold about 67 percent of the total short position held by the Big 8.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 64, 69 and 80 percent respectively of the short positions held by the Big 8.  Silver is unchanged from a week ago, platinum is down 4 percentage points from last week — and palladium is up 1 percentage point.

Another very quiet news day — and I don’t have all that many stories for you.


CRITICAL READS

Foreigners Dumped Most U.S. Investments in a Decade in December/January

U.S. total cross-border investment outflows rose to $143.7b in January, that is the biggest net monthly outflow since Sept 2016…Click to enlarge.

…and is the largest two-month Net TIC outflows since February 2009.  Click to enlarge.

So, January’s stock market surge was all domestic flow driven.

This multi-chart Zero Hedge article appeared on their website at 6:21 p.m. EDT on Friday afternoon — and I thank Brad Robertson for this one.  Another link to it is here.


No One Knows How Monetary Policy Works — Doug Noland

At least from the perspective of my analytical framework – things continue to follow the worst-case scenario. What started with Greenspan, expanded dramatically with Bernanke, spread globally through the entire central bank community, further escalated by Draghi’s “whatever it takes” and Kuroda’s “it takes everything”, to yet further emboldened by Powell’s U-Turn and the accompanying flock of dovish central banks worldwide.

The heart of the issue is that monetary policy has come to chiefly function through a massive global infrastructure of speculative finance. Over the past three decades, things evolved from monetary policy operating subtly to encourage/discourage bank lending at the margin – to central banks expressly working to ensure that Trillions of levered holdings and perhaps tens of Trillions of speculative positions don’t face risk aversion and liquidation.

Speculative finance became the marginal source of liquidity for markets and economies generally. This all appears almost magical when the markets are rising, but in reality this is a highly unstable situation. We’re at the stage of the cycle where there is an incredible excess of finance that is speculative in character, while speculative market psychology has become deeply emboldened. The upshot is a bipolar world: too much risk-embracing finance chasing inflating markets, ensuring excessively loose financial conditions; or, when risk aversion hits, intense de-risking/deleveraging quickly leading to illiquidity, faltering markets and an abrupt tightening of financial conditions. There’s little middle-ground.

The entire notion of some so-called “neutral rate” is delusion. With markets so highly speculative and market-based finance dictating financial conditions, what policy rate would today equate with stable markets and economic conditions? Good luck with that.

It’s similar to the issue faced in 2007, although today’s global backdrop has closer parallels to 1929. Speculative finance and asset Bubbles run amok, while economic prospects dim. And nowhere are such dynamics more at play than in China.

Doug’s latest Credit Bubble Bulletin showed up on his website in the wee hours of Saturday morning — and it’s always worth reading.  Another link to it is here.


Pompeo Tells Senators They Don’t “Truly Care About Yemeni Lives” After Vote

This week the Senate voted to cease and desist U.S. military cooperation with allies Saudi Arabia and UAE in waging the war in Yemen, which according to the United Nations has created one of the worst humanitarian disasters in recent history. The Wednesday vote was was 54 to 46, including seven Republicans voting with the Democrats.

The “war powers” legislation has been widely seen as a direct rebuke of Trump’s foreign policy amid broader push-back over his defense of Saudi Arabia in the wake of last year’s Jamal Khashoggi killing at the Saudi embassy in Istanbul. The invocation of the War Powers Act of 1973 expressly prohibits U.S. military action not previously approved by Congress.

A House vote is expected soon, which would require President Trump to immediately withdraw American military support from the Saudi-led coalition. Trump said in December he would veto the Senate resolution if it ever reached his desk, which now appears likely.

Meanwhile Secretary of State Mike Pompeo on Friday heaped criticism on Congress for seeking to end Washington support for military efforts in Yemen, saying that if U.S. lawmakers “truly care about Yemeni lives“, they would back Riyadh.

Predictably, Pompeo framed U.S. involvement in Yemen in terms of preventing Iranian expansion in the broader Middle East.

If you want to put a face to a sociopathic personality type…Mike’s a card-carrying member.  This story from the Zero Hedge website was posted there at 5:30 p.m. EDT on Friday afternoon — and another link to it is here.


Change your course!“: Pompeo threatens ICC over U.S. war crimes probe

In an effort to threaten everyone into not investigating U.S. or Israeli war crimes in the International Criminal Court, Secretary of State Mike Pompeo says anyone involved in such probes will lose their visa and may be sanctioned.

The Washington war hawk said that action had to be taken because any investigation into alleged war crimes and torture committed by the United States would be a threat to U.S. rule of law. Visas will be pulled or denied for anyone who has been involved in or even requested an ICC investigation of “any U.S. personnel.”

The ICC is currently mulling over a request to investigate possible war crimes committed by the U.S. in Afghanistan in the course of the nearly 20-year conflict which has left over 100,000 Afghans dead. The international court prosecutor’s office says it has “reasonable basis” to believe that “war crimes and crimes against humanity” were, and continue to be, committed by foreign government forces in Afghanistan.

Pompeo openly stated that the action was intended to get the court to drop the potential investigation, and that Washington was ready to further increase the pressure if they don’t do as he says.

We are prepared to take additional steps, including economic sanctions, if the ICC does not change course,” he said.

The court responded later in the day saying they would continue their work “undeterred” by Pompeo’s aggressive statement, and act in accordance with international law rather than Washington’s threats.

This news story showed up on the rt.com Internet site at 4:56 p.m. Moscow time on their Friday afternoon, which was 9:56 a.m. in Washington — EDT plus 7 hours.  I thank George Whyte for pointing it out — and another link to it is here.


Crimean people would gladly vote to join Russia again, polls show

On March 16, 2014, Crimea held a referendum election on the question of rejoining the Russian Federation and seceding from Ukraine. The vote passed by an enormous margin, nearly 97% of the voters saying they wished to rejoin Russia. That number was amplified by the 83.1% voter turnout. Clearly this was a very pressing matter for the Crimean people.

But now it is just about five years later. Do the Crimean feel that their rejoining Russia has turned out well for them? TASS reported on a poll that was taken on 10 March to address this question. The agency that took the poll was the Russian Public Opinion Research Center.

Many people in the West may laugh at this title, but this is only because they are themselves steeped in the narrative that Russia is somehow still the Soviet Union, with repressive laws against freedom of speech, expression, the right to gather and so on. The results of the poll would also seem to lend further credence to this idea because the answer was overwhelmingly positive about the transition to Russian sovereignty for the province. The TASS report follows (with emphases added):

Crimea remains positive about the peninsula’s reunification with Russia and if the referendum was held today, 89% of Crimeans would support joining Russia, the Russian Public Opinion Research Center announced the results of a poll on Thursday in Simferopol.

The attitude towards Crimea’s reunification with Russia remains decisively positive. Eighty-nine percent would cast their votes to reunite with Russia if a referendum were held next Sunday, and 93% view the reunification in a positive light. The level of negative attitudes and support for an Autonomous Republic of Crimea as part of Ukraine are minimal (3% each), the data says. The survey also noted that across Russia, 85% of respondents would support the reunification.

Why am I not surprised — and you shouldn’t be, either.  This longish article put in an appearance on theduran.com Internet site on Friday morning EDT — and I thank Roy Stephens for sharing it with us.  Another link to it is here.


The last great tree: a majestic relic of Canada’s vanishing rain forest

The tree dominated the forest – a monarch of its species. Its crown of dark green, glossy needles flitted in the breeze well above the canopy of the forest. Like many of the oldest Douglas firs he had come across in his career, the tree’s trunk was limbless until a great height. The species often loses the lower branches that grow in the shadow of the forest’s canopy. Many of these large and old Douglas firs have clear marks of disease, with trunks that are twisted and gnarled. This tree’s trunk sported few knots and a grain that appeared straight: it was a wonderful specimen of timber, Cronin thought.

With his hand-held hypsometer, a device to measure a standing tree’s height using a triangulation of measurements, Cronin took readings from the base and the top of the tree and estimated its stature at approximately 70 metres – around the height of a 20-storey apartment building. Using a tape, he measured the tree’s circumference at 11.91 metres, and calculated the diameter to be 3.79 metres; if felled and loaded on to a train, the log would be wider than an oil tank car. The tree appeared just shy of the Red Creek Fir, the largest Douglas fir in the world, located a couple of valleys away.

Cronin didn’t know it then, but he had not only stumbled upon one of the largest trees he had ever seen in his career – he had found one of the largest trees in the country. It was surely ancient as well, Cronin knew. A Douglas fir of such height and girth, growing in a wet valley bottom on Vancouver Island, could easily prove half a millennium in age. But to the experienced forester, this one looked much older. A thousand years? he wondered.

This very interesting story, along with some incredible photos, was posted on theguardian.com Internet site back on March 5 — and I thank Patricia Caulfield for sending it our way last Saturday.  It’s been sitting in my in-box since then, waiting for this Saturday’s column.  It’s certainly worth reading…if you have the interest, that is…and another link to it is here.


Update on coins, precious metals sales tax exemptions [in the U.S] — Patrick Heller

As of right now, 37 states have either no state sales taxes at all (Alaska, Delaware, Montana, New Hampshire, and Oregon) or have complete or partial sales tax exemptions on the in-state retail sales of coins and precious metals bullion. That may soon change.

All ten of the most populous states and 17 of the 20 most populous have such exemptions, so that well over 80% of the nation’s residents have such an exemption where they live.

Last Friday, the West Virginia legislature overwhelmingly passed a coins and precious metals sales tax exemption (33-0 in the Senate and 90-9 in the House). It now awaits the governor’s signature to take effect on July 1.

A legislative committee in Tennessee has already passed a similar exemption bill. On March 13, the first legislative committee in Arkansas considered such legislation. There have also been coins and precious metals exemption bills introduced in the legislatures in Kansas, Maine, and Wisconsin.

Because of my past career as a certified public accountant and in leading Michigan’s effort to gain a coin and precious metals sales tax exemption in 1999, I have been heavily involved in such exemption efforts. After Michigan adopted its exemption, I later documented that the Michigan Treasury actually experienced an increase in total sales tax collections and also in other tax collections. This research, in conjunction with the Industry Council for Tangible Assets, has been used to subsequently help gain similar sales tax exemptions in the states of Alabama, Indiana, Iowa, Minnesota, Nebraska, North Carolina, Oklahoma, Ohio, Pennsylvania, South Carolina, and Virginia and to expand an existing exemption in Texas and Louisiana (and to help reinstate Louisiana’s exemption after it was suspended in 2016).

This commentary from Patrick was posted on the numismaticnews.com Internet site on Thursday sometime — and I thank Tolling Jennings for sending it along.  Another link to it is here.


Fiat Recall Leaves Palladium Buyers Bracing for ‘Supply Shock’

Fiat Chrysler Automobiles NV’s recall of almost 862,520 gasoline-fueled vehicles could spur additional demand for the palladium market that’s already reeling from shortages.

Replacing the catalytic converters in these vehicles would require an additional 77,000 ounces of palladium, said Miguel Perez-Santalla, sales and marketing manager at refiner Heraeus Metals New York LLC. Prices of the metal that’s used to curb greenhouse gas emissions from vehicles have been climbing to records this year as producers struggle to keep up with demand.

This eventually will be a bit of a supply shock,” said Maxwell Gold, director of investment strategy at Aberdeen Standard Investments, which oversees $736 billion. “Overall, this does paint a very positive picture of just growing emission standards globally, particularly in the U.S. for palladium and gasoline engines.”

Production of the precious metal will trail consumption by 545,000 ounces this year, Citigroup Inc. said in December. Newer and stricter regulations to curb emissions in gasoline vehicles have been forcing automakers to boost their purchases of palladium, fueling the surge in demand even amid a slowdown in car sales in China, Europe and the U.S.

This news item appeared on the Bloomberg website at 11:35 a.m. PDT on Wednesday — and I picked it up off the Sharps Pixley website.  Another link to it is here.


South African court blocks mine union’s plan for industry-wide strike

South Africa’s labor court has rejected a request by the Association of Mineworkers and Construction Union (AMCU) to hold an industry-wide strike covering the platinum and gold sectors, Anglogold Ashanti, Anglo American Platinum and Lonmin said on Friday.

AMCU has been on strike at Sibanye-Stillwater’s gold operations since mid-November in a pay dispute. It wanted to extend the strike to at least 11 other mining firms including Anglo American’s gold and platinum operations, Harmony Gold and Lonmin.

The union said it was shocked and would appeal the decision, adding that “secondary strikes are an integral part of the constitutional right to strike”.

In a written judgment, labor court judge Connie Prinsloo said an extended strike would put the entire economy at risk.

This factor certainly outweighs the negligible effect the secondary strike may have on Sibanye and therefore renders it unreasonable,” the judge said.

South Africa’s labor court has rejected a request by the Association of Mineworkers and Construction Union (AMCU) to hold an industry-wide strike covering the platinum and gold sectors, Anglogold Ashanti, Anglo American Platinum and Lonmin said on Friday.

This Reuters story, filed from Rustenburg in South Africa, showed up on their website at 4:21 a.m. on Friday morning EDT — and I plucked it from a GATA dispatch the Chris Powell filled from Saigon in the wee hours of Saturday morning local time.  Another link to it is here.


The PHOTOS and the FUNNIES

I mentioned the Highland Valley Copper mine in yesterday’s selection of photos, so I thought I’d present these pictures in today’s column.  The first two were taken last Sunday — and at the altitude that the mine is located, spring and snow melt are still some distance away.  The first shot shows part of the mine tailings taken from B.C. Highway 97C.  The tailings are on both sides of the highway — and this photo gives no hint of that.  The scale of the operation borders on the gargantuan.  The top level would be around 300m/1,000 feet above the valley floor.  The second shot is of one of the three open pits in operation…taken from across the highway — and on top of the observation hill.  This is a very wide-angle shot.  Click to enlarge.

This last shot shows the ongoing work on the waste water dam/tailings pond at the mine.  I took this picture back in December after their first snow of the season — and just before driving off the Thompson Plateau — and down into Ashcroft.  The photos of the descent were in Friday’s column.  I’ve also included a bird’s-eye view of the mine from 82 miles up, courtesy of Google Earth — and that puts some of the places I’ve posted photographs from, in some sort of context vis-à-vis Merritt.  Click to enlarge.


The WRAP

Today’s pop ‘blast from the past’ is one that needs no introduction whatsoever.  I’ve only posted it once before, so it’s time for a revisit.  The link is here.

With the spring equinox only four days away…Wednesday, March 20 at 5:58 p.m. EDT…it’s time to bring out that old Vivaldi warhorse…his Concerto No. 1 in E major, Op. 8, RV 269, “La primavera” (Spring).   In this iteration, Julia Fischer does the honours on violin, accompanied by the Academy of St. Martin-in-the-Fields.  The performance is first rate, but the quality of the video sucks.  The link is here.


It was yet another day where ‘da boyz’ were carefully watching over the precious metal market.  They were there in the rally attempts in Far East trading — and again as they guided their respective prices lower.  That started at noon GMT in London for gold, silver and platinum — and shortly after the COMEX open for palladium.

This just seemed like another ‘care and maintenance’ sort of trading session.  But after Thursday’s big down-day, Ted was somewhat surprised that ‘da boyz’ didn’t press their advantage yesterday, as they still have the precious metal market in their iron fists.

Gold broke above its 50-day moving average intraday on Friday, but was closed below it — and silver closed well above its 200-day moving average once again.  Platinum closed above its 200-day moving average by a dollar or so as well.

Here are the 6-month charts for all four precious metals, plus copper and WTIC.  Click to enlarge for all.

It’s amazing to watch the amount of gaming going on in the Dow and the S&P500 these days, as the powers-that-be continue their attempts to break out of this bear market in stocks that has now been ongoing since September 21, 2018.  The break in both indexes really occurred back on January 26 last year, but the PPT have been ever vigilant every time that one of these major indices rolls over hard.  Here’s the 5-year S&P — and it was obviously hauled back from the nether reaches of the earth starting back on December 21 of last year — and in January of 2018 as well.  Click to enlarge.

Here we are as of Friday’s close — and they have yet to succeed.  Even if they do, it won’t be because of any underlying fundamentals, only intervention on a massive scale.

There’s no question in my mind, nor should there be in yours…dear reader, that if the Plunge Protection Team put their hands in their proverbial pockets, the worlds’ economic, financial and monetary systems would be that proverbial “smouldering ruin” within five business days.

Pardon the hyperbole dear reader, but what your watching is Kabuki theatre in the best looking Potemkin village that money can buy.  And that would also apply to the Chinese and Japanese equity markets as well.

After the Fed’s debacle in December, all the world’s central banks know it too — and the Bank of Japan, China and the ECB are already back to money printing once again — and it’s only a matter of when, not if, the Federal Reserves joins the “Print, or die” club.

Next Tuesday and Wednesday the Fed has their regularly scheduled FOMC meeting, with the smoke going up the chimney at the Eccles Building thirty minutes after the COMEX close in New York on Wednesday.  With the ‘Powell Put’ in full force, it will be interesting to see what crumbs he’ll be offering Wall Street this time around, as this trade deal with China is starting to look more shaky — and more distant, with each new tweet from the White House.

As far as the precious metals are concerned, the current bull run that began on or about September 7, is very much alive and well.  But as you are already more than aware, JPMorgan et al are not letting it run wild, as they still are very much in control of precious metal prices, until they’re not…either by choice, or by circumstance.

Here’s the 2-year HUI chart from stockcharts.com — and we’re not even close to being overbought — and the stock are up about 52 percent of their lows back then.  Click to enlarge.

However, the silver equities are only up about 22 percent, but the rally in them only started in very late November — and that’s because JPMorgan has been keeping the underlying precious metal on the shortest of leashes.  When the silver price is allowed to rise unfettered, the gains in the silver equities will blow the doors off the gains in the gold shares.

So not all is lost, although none of us…including this writer…is happy about the speed at which this is all unfolding.  But the current “trend is our friend” as the saying goes — and despite the engineered price declines that are throw in our path, this budding bull market is still very much intact.

That’s all I have for the day — and the week — and I’ll see you here on Tuesday.

Ed

More Quiet Engineered Price Declines on Thursday

15 March 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Quiet selling pressure in gold began about ninety minutes after trading began in New York at 6:00 p.m. EDT on Wednesday evening — and in the thinly-traded Far East market, ‘da boyz’ had an easy time of it.  The low tick in gold came a few minutes after 9 a.m. EDT in COMEX trading in New York on Thursday morning — and it crawled a few dollars higher into the close from there.

The high and low ticks were reported as $1,310.30 and $1,292.50 in the April contract.

Gold was closed on Thursday afternoon in New York at $1,295.80 spot…down $13.10 on the day — and back below both the $1,300 spot mark, plus its 50-day moving average as well.  Net gold volume was higher than it has been lately, but nothing really extraordinary at around 209,500 contracts — and there was 40,000 contracts worth of roll-over/switch volume in this precious metal.

The silver price was guided lower in a similar fashion during the Thursday trading session, except its low tick came right at the 11 a.m. EDT London close.  It rallied a few pennies from there — and then really didn’t do much for the remainder of the day.

The high and low ticks in silver were recorded by the CME Group as $15.47 and 15.135 in the May contract.

Silver was closed yesterday at $15.15 spot, down 26.5 cents from Wednesday — and back below its 200-day moving average once again.  Net volume was very decent at 66,000 contracts — and there was just about 4,400 contracts worth of roll-over/switch volume on top of that.

It was the same selling pressure price pattern in platinum — and its low of the day came at exactly 2:00 p.m EDT in the thinly-traded after-hours market in New York on Thursday afternoon.  The price didn’t do much after that.  Platinum was closed at $822 post, down 19 dollars on the day.

‘Da boyz’ had palladium down 13 bucks by around 2:45 p.m. China Standard Time on their Thursday afternoon.  From that juncture it wandered higher — and then lower — and finally came close to finishing unchanged on the day.  But that attempt was halted at 1 p.m. EDT — and the price didn’t do much after that.  Platinum finished the Thursday session in New York at $1,532 spot, down 3 dollars on the day.

The dollar index closed very late on Wednesday afternoon in New York at 96.55 — and opened down 7 basis points once trading commenced around 7:45 p.m. EDT on Wednesday evening/7:45 a.m. CST in Shanghai.  It crawled a bit higher until 2:06 p.m. CST — and then began to chop quietly lower — and was back below the unchanged mark at 8:15 a.m. in London.  A ‘rally’ began at that point — and the 96.82 high tick came at 11:30 a.m. GMT — and the index chopped quietly but evenly sideways for the remainder of the Thursday trading session.  The dollar index finished the day at 96.79…up 24 basis points from its close on Wednesday.

It was another day where the dollar index had zero influence on precious metal prices, as it was obvious that the engineered price declines on Thursday were GLOBEX/COMEX futures market related….as ‘da boyz’ did the dirty.

Here’s the DXY chart for Thursday, courtesy of Bloomberg as always.  Click to enlarge.

Here’s the 6-month U.S. dollar index chart, courtesy of the folks over at stockcharts.com — and the delta between its close…96.24…and the close on the DXY chart above, was 55 basis points on Thursday.  Click to enlarge.

The gold shares gapped down a whole bunch at the open of trading in New York yesterday — and then crawled to their respective lows shortly after 12 o’clock noon EDT.  They didn’t do a thing after that.  The HUI closed lower by 3.02 percent.

It was almost the same for the silver equities, with most of their losses coming by 11:30 a.m. in New York trading — and they didn’t do much of anything after that, either.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 3.63 percent.  Click to enlarge if necessary.

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 10 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

The lone gold contract was issued by ADM — and stopped by JPMorgan.  Both transactions involved their respective client accounts.

In silver, the two short/issuers were Advantage and ADM…with 9 and 1 contracts from their respective client accounts.  ABN Amro and Morgan Stanley stopped 4 and 2 contracts for their respective client accounts.  The remaining 4 contracts were stopped by The CME Group, which immediately reissued them as 4×5=20 one-thousand ounce COMEX silver contracts — and ADM stopped all 20.

It’s not unusual for the CME Group to perform this exercise, as they do it all the time.  However, it’s the first time that I’ve seen them do it this early in the delivery month.  Normally they leave these particular deliveries until the final days of the month.  But not this time, for whatever reason.

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 March rose by 1 contract, leaving 38 still around, minus the 1 contract mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today, so that means that 1 more gold contract was added to March deliveries.  Silver o.i. in March dropped by 122 contracts, leaving 75 still open, minus the 10 mentioned a few paragraphs ago.  Wednesday’s Daily Delivery Report showed that 128 silver contracts were actually posted for delivery today, so that means that 128-122=6 more silver contracts just got added to the March delivery month.

The Preliminary Report showed yet another big increase in total gold open interest yesterday…10,521 contracts. Silver’s total open interest fell again…by 1,097 contracts.  These numbers will certainly drop a bit when the CME Group posts the final numbers for Thursday’s trading session later in the morning in New York.


There were no reported changes in GLD on Thursday, but an authorized participant added 1,172,100 troy ounces of silver to SLV.

There was a tiny sales report from the U.S. Mint yesterday.  They sold 2,000 one-ounce 24K gold buffaloes — and that was it.

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

There was some activity in silver, as one truckload…597,920 troy ounces…was received — and all of that ended up at CNT.  There was 93,808 troy ounces shipped out — and that departed the International Depository Services of Delaware.  There was also a paper transfer of 349,154 troy ounces from the Eligible Category — and into Registered over at CNT as well.  Without doubt, that’s scheduled for delivery in March.  The link to that is here.

There was a bit of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 500 of them — and shipped out 600.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here’s a 5-year chart that Nick Laird keeps tucked away on his website that I always keep an eye on — and I thought it worth sticking in today’s column.  It shows the gold price plotted against the net long or short positions of the Managed Money traders.  This graph should leave no doubt in anyone’s mind that it’s only what they do…or what the commercial traders trick them into doing…that controls the gold price.

I’m no mathematician, but just eye-balling the correlation between the gold price — and the net positions held by the Managed Money traders, appears to be well in excess of 90 percent.  That’s why Ted says that its only what the Managed Money traders are up to, that is the controlling factor in the gold price — and he is 100 percent correct about that.  The chart for silver is very similar.

The top half of the chart shows the gold price in blue — and the thin black line [on both the upper and lower charts] shows the net long or short positions of the Managed Money traders.  Click to enlarge.

It was another extremely quiet news day — and I had to scrape the bottom of the proverbial l barrel to even find what I have for you today.


CRITICAL READS

U.S. new home sales declined 6.9 percent in January

Sales of new U.S. homes slumped 6.9 percent in January, a possible sign that buyers paused during the government shutdown.

The Commerce Department says that new homes sold at a seasonally adjusted annual rate of 607,000 in January, down from 652,000 in December.

The partial government shutdown during January as well as a battered stock market appears to have hurt sales, even as lower mortgage rates eased affordability pressures and boosted buyer interest. Purchases of homes yet to be constructed to plunged 26.8 percent in January, accounting for all of the month’s decline. Sales increased of homes that were already under construction. New-home sales in January ran slightly below the totals for 2018 and 2017.

The median sales price of a new home in January fell 3.8 percent to $317,200.

The above four paragraphs are all there is to this brief news item that showed up on the cnbc.com Internet site around 11 a.m. EDT on Thursday morning — and it’s a story I found on Doug Noland’s website.  Another link to the hard copy is here.


Socialism: The Real Trickle-Down Economics — Dennis Miller

While politicos like to call tax cuts “trickle-down economics”, the real culprit is socialism. The Robin Hood theory of “steal from the rich and give to the poor” sounds noble however, in practice it doesn’t work that way. The political class tax and spend for their benefit first, then some may trickle-down to the masses.

Margaret Thatcher sums up the problem well. Citizens gladly take government benefits as long as someone else pays for them, while politicians of all flavors are happy to oblige.

Politicos buying votes with tax dollars, offer give-away programs to the citizens and politically connected – only after protecting themselves and millions of government employees. High salaries, generous health care, family leave, and pension benefits garner votes and significant campaign contributions from government workers.

With each election, creative politicos invent new and creative ways to grow and maintain their power spending our tax dollars.

If tax revenues can’t cover the costs, the government raises taxes and/or borrows money to make up the difference. Unlike the federal government, individual states can’t print money. Is there a breaking point on how much they spend, borrow and tax?

This long commentary by Dennis put in an appearance on his Internet site on Thursday morning sometime — and another link to it is here.


Brexit: MPs vote by a majority of 211 to seek delay to E.U. departure

MPs have voted by 413 to 202 – a majority of 211 – for Prime Minister Theresa May to ask the E.U. for a delay to Brexit.

It means the U.K. may not now leave on 29 March as previously planned.

Mrs. May says Brexit could be delayed by three months, to 30 June, if MPs back her deal in a vote next week.

If they reject her deal again then she says she will seek a longer extension — but any delay has to be agreed by the 27 other E.U. member states.

Most Conservative MPs voted against delaying Brexit — including seven cabinet members – meaning Mrs. May had to rely on Labour and other opposition votes to get it through.

This story was posted on the bbc.com Internet site on their Thursday evening sometime — and I thank Swedish reader Patrik Ekdahl for sending it our way.  Another link to it is here.


2018 Swiss gold exports = 46% global gold production! — Lawrie Williams

We have often in these pages recounted the importance of gold refined or re-refined and exported via Switzerland in terms of global gold flows, and the latest figures out of the small European nation serve to emphasise that point despite 2018 being perhaps a weaker year for the nation’s overall gold trade.  In terms of gold imports the country took in some 1,500 tonnes of gold during the year and exported 1,473 tonnes – mostly to Asia where Mainland China was the dominant recipient.  Indeed if we add exports to Hong Kong to the Chinese total, given that most of this will have been fabricated and re-exported to the Chinese mainland, the flows to the Asian giant alone amounted to around 729 tonnes of gold last year.

Switzerland has a batch of major gold refineries which specialise in taking doré bullion from mines, scrap gold and large refined gold bars – the latter primarily from the U.K., probably the centre for global gold trade – and producing high purity gold in the small kilobar sizes and wafers most in demand in Asia.  The amounts flowing through Switzerland have probably fallen in recent years due to the building of new gold refineries in Asia and the Middle East (some owned by by the Swiss refiners) but nevertheless the amount of gold routed through Switzerland remains substantial.  In 2018 it amounted to around the equivalent of nearly half global new mined gold.  Indeed if one takes Chinese gold production (which all remains in China) of around 400 tonnes out of the equation, Swiss refineries handle an amount of gold equivalent to some 50% of global new mined non-Chinese output.

The other statistic which can be gleaned from the Swiss gold export figures for all of 2018 is that around 1,266 tonnes — or close to 86% — flowed to Asian and Middle Eastern nations. This serves to again emphasise the continuing flows of gold from West to East, with the Eastern holdings seen as being in stronger hands and less likely to flow back into the markets.

This 1-chart gold-related article from Lawrie was posted on the Sharps Pixley website yesterday — and another link to it is here.


The PHOTOS and the FUNNIES

These three photos were taken driving on B.C. Highway 97C from the Thompson Plateau and the Highland Valley Copper mine on December 2, 2018…a sequence I’ll have later.  The first photo was on the descent — and the first place I could pull over safely, as it has a very steep grade with no shoulders.  The town of Ashcroft, the Thompson River — and the CPR and CNR tracks, are buried in the valley that runs across the middle of the shot.  The second photo shows the Thompson River — and a 3-mile/5-kilometer long unit grain train snaking along the CPR tracks.  Neither the ‘head end’ or the rear of the train are visible because it’s so long.  Click to enlarge for both.

The third shot on the descent from the plateau shows the town of Ashcroft…at the confluence of the Bonaparte and Thompson Rivers.  All of Highland Valley Copper’s concentrate ends up here via truck — and is then loaded on a CPR train for heaven only knows where.  Having driven this stretch of Highway 97C twice, I would never want to be a truck driver hauling concentrate down from the mine to the rail head.  It was a bit of a white-knuckler even in my car.  Click to enlarge.


The WRAP

Thursday was another day of quietly engineered price declines in gold, silver and palladium and, as ‘da boyz’ always do, they started their attack in the very thinly-traded overnight market in the Far East — and once the sell stops got hit, then the price decline becomes self sustaining.  But when it stopped or reversed a bit for whatever reason, the powers-that-be were there to sell whatever contracts it took to resume the downward price path.  That was in full force yesterday.

And if there was any correlation between what was going on in the currency market and the precious metal market, it certainly wasn’t very evident in the dollar index chart.  These price declines were a completely managed affair — and as Ted Butler said on the phone yesterday, it’s amazing that more people can’t see it for what it is.

Here are the 6-month charts for the Big 6 commodities.  And as I mentioned earlier, silver and platinum were closed back below their respective 200-day moving averages — and gold was closed back below its 50-day.  Click to enlarge for all.

And as I post today’s column on the website at 4:02 a.m. EDT, the London open is less than ten minutes away — and I note that there certainly has been some interesting price activity in the precious metals starting shortly before 11 a.m. China Standard Time on their Friday morning.  All have been heading unsteadily higher since then.  Currently, gold is up $7.10 the ounce, silver is up 18 cents — and platinum and palladium are higher by 8 and 7 dollars respectively.

Gross gold volume is a bit over 75,000 contracts — and minus the current roll-over/switch volume, net HFT gold volume is getting up there at around 56,500 contracts.  Net HFT silver volume is pretty heavy as well at 18,500 contracts — and there’s only 171 contracts worth of roll-over/switch volume in that precious metal.

The dollar index opened down 7 basis points once trading began around 7:45 p.m. EDT on Thursday evening in New York, which was 7:45 a.m. CST in Shanghai.  It crept back to the unchanged mark by 9:18 a.m. CST — and then fell down to its current 96.60 low tick at exactly 11:00 a.m. CST.  It appeared to get rescued at that point — and the index ‘rallied’ a bit from there until 1:15 p.m.  — and has turned a bit lower since — and is currently down 14 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.


Today, around 3:30 p.m. EST, we get the latest and greatest Commitment of Traders Report…this one for positions held at the close of COMEX trading on Tuesday, March 12.  In some respects, particularly in silver, this report is already very much “yesterday’s news” after the engineered price declines we had on Thursday.


NOTE: Because of the switch over to Daylight Saving Time in North America this past Sunday, I’m not staying up the extra hour to record the first hour of London/Zurich trading.  Britain and Europe don’t go on British Summer Time [BST] and Central European Summer Time [CEST] for another two weeks.  Once they do the switch-over to BST and CEST, then I’ll resume the usual routine of commenting on the first hour of trading in both those markets.


With today being Friday, the last trading day of the week, I’m not sure what to expect as far as precious metal price action is concerned…especially considering Thursday’s price activity, along with the current price action in Far East trading at the moment.  But, as always, nothing will surprise me when I check the charts when I roll out of bed later this morning.

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

Ed

Another Very Quiet Volume Day in Silver and Gold

14 March 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price began to crawl unevenly higher two hours and change after trading commenced at 6:00 p.m. EDT in New York on Tuesday evening.  That lasted until around 10:30 a.m. China Standard Time on their Wednesday morning — and it then traded sideways until about fifteen minutes after the London open.  From that juncture it continued to edge unevenly higher until the high tick was set around 3:30 p.m. EDT in the thinly-traded after-hours market.  It was sold a few dollars lower into the close from there.

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

Gold finished the Wednesday session in New York at $1,308.90 spot, up $7.50 from Tuesday’s close.  Net volume was pretty quiet at something over 172,500 contracts — and there was a bit over 45,500 contracts worth of roll-over/switch volume in that precious metal.

The silver price didn’t do much of anything in Far East trading on their Wednesday, but was up a penny or so by the London open.  It crept quietly higher until around 10:30 a.m. GMT, which was the morning gold fix in London, but was sold a bit lower starting around noon GMT, which was the noon silver fix over there.  That tiny sell-off lasted until 9 a.m. in New York — and the price really didn’t do much of anything after that.

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

Silver was closed in New York yesterday at $15.415 spot, up 0.5 cents on the day.  Net volume was very quiet once again at a bit over 42,500 contracts — and there was 4,200 contracts worth of roll-over/switch volume on top of that.

The platinum price traded quietly and unevenly sideways in Far East trading yesterday — and began to tick unsteadily higher starting at the Zurich open.  That rally appeared to have been capped a few minutes before noon in New York — and it was sold unevenly lower into the 5:00 p.m. close of trading from there.  Platinum finished the Wednesday session at $841 spot, up 8 dollars on the day.

The palladium price action on Wednesday trading in the Far East was about the same as it was for platinum.  Its rally began shortly after the Zurich open — and it wandered unevenly higher until shortly after 3 p.m. in after-hours trading in New York.  Then, like the other precious metals, it was sold a bit lower into the 5:00 p.m. close.  Palladium closed yesterday at $1,535 spot, up 16 bucks from Tuesday.

The dollar index closed very late on Tuesday afternoon in New York at 96.94 — and opened up 8 basis points once trading began at 7:45 p.m. EDT on Wednesday evening.  From that point, it traded quietly sideways until exactly 8:00 a.m. GMT, which was the London open.  It began to chop quietly and unevenly lower from there — and that state of affairs lasted until around 2:38 p.m. EDT in New York.  It took a real header from there — and the 96.39 low tick was set at 4:32 p.m.  It recovered a few basis points into the close — and the dollar index finished the Wednesday session in New York at 96.55…down 39 basis points from Tuesday’s close.

Here’s the 6-month DXY chart courtesy of BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site — and the delta between its close…96.51…and the close on the DXY chart above, was 4 basis points on Wednesday.  Click to enlarge.

The gold stocks opened about unchanged…then rallied a percent and change, but were back in negative territory by a bit by 12 o’clock noon in New York trading.  They crawled quietly higher from there into the close — and the HUI finished up a piddling 0.62 percent.  I was not overly impressed.

The price path for the silver equities was very similar to that of the gold shares.  Except once they rallied off their respective 12 o’clock EDT lows, they barely made it back into positive territory — and from around 1:50 p.m. onwards, they chopped quietly sideways for the remainder of the New York trading session.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.04 percent…so call it unchanged.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that zero gold and 128 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In silver, the two short/issuers were ABN Amro and Advantage, with 70 and 58 contracts out of their respective client accounts.  The three long/stoppers were JPMorgan, The CME Group — and Advantage.  JPMorgan and Advantage picked up 83 and 13 contracts for their respective client accounts — and CME Group picked up 28 contracts for its own account.

They immediately reissued those contracts as 28×5=140 one-thousand ounce COMEX mini silver contracts — and ADM stopped 139 of them — and Advantage picked up the remaining one…all 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 March declined by 1 contract, leaving 37 still around.  Tuesday’s Daily Delivery Report showed that only 1 gold contract was posted for delivery today, so the change in open interest and deliveries match for the second day in a row.  Silver o.i. in March dropped by 220 contracts, leaving 197 contracts still open, minus the 128 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 292 silver contracts are actually posted for delivery today, so that means that 292-220=72 more silver contracts were just added to the March delivery month.

And it was yet another day where total gold open interest rose — and silver open interest declined.


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

There was a smallish sales report from the U.S. Mint yesterday.  They sold 500 one-ounce platinum eagles — and 71,000 silver eagles.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday was 160.755 troy ounces/5 kilobars [SGE kilobar weight] that were shipped out of Brink’s, Inc.  I won’t bother linking this.

There was very little activity in silver as well.  There was 307,799 troy ounces received — and nothing was shipped out.  Of the amount received, there was 299,222 troy ounces dropped off at Brink’s, Inc. — and the remaining 8,576 troy ounces was picked up by Canada’s Scotia Mocatta.  The link to this is here.

There was very decent movement over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They only received 39 of them, but shipped out 7,109.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Here are two charts that I got from Nick yesterday — and I thought worth sharing.  They show the  total gold imports and exports into and out of Switzerland for the 2018 calendar year.  The first chart shows the total tonnage of gold received by Switzerland from the Top 25 countries they import from.  The second chart is the same, except it shows the Top 25 countries that they export re-refined gold to.  They’re worth a minute of your time…if you’re interested.  Click to enlarge for both.

It was another exceptionally quiet news day — and I have only four stories in total.


CRITICAL READS

AOC’s “Solutions” Will Just Make Things Worse — Bill Bonner

First, the jobs report on Friday showed a big collapse in hiring. The official numbers showed 20,000 new jobs added in February, a far cry from the 170,000 that were expected.

Then, the Atlanta Fed said projected GDP growth for Q1 slowed to a crawl. It estimates Q1 growth will come in at just 0.2%.

And now this. The Washington Post:

Total household net worth in the fourth quarter of 2018 dropped by the largest amount since the fourth quarter of 2008 when the country was amid a steep recession, according to data released Thursday by the Federal Reserve.

Total household net worth is a measure of the assets – such as homes, stocks and bank accounts – owned by American families and nonprofits minus their debts. In the fourth quarter of 2018, it fell by about $3.7 trillion, a 3.5 percent quarterly decline. Going back to 1952, the start of the Fed’s data, only three quarters – the third and fourth quarters of 2008, and the second quarter of 1962 – posted bigger declines in household net worth, percentage-wise.

Yes, the “recovery” seems to be rolling over. But let’s wait to hear a few more notes before we “guess that tune.”

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


James Rickards on Central Banking and Investing — Interview

On today’s show, Preston and Stig talk to New York Times Best Selling Author, Dr. James Rickards.  Dr. Rickards talks about many of the decisions happening at the central banks around the world.
In this episode, you’ll learn:

  • How and why the FED is preparing for the next recession
  • How the Fed Chairman is signaling to the market what he plans to do.
  • Why having a strong dollar is currently the least bad economic policy
  • Why the world is currently dependent on the US dollar, and how a new system is built not to include it
  • What happens if the stock market is made up by passive investors and the computers make the decisions

This 41-minute audio interview with Jim showed up on theinvestorpodcast.com Internet site…but there’s no dateline, although I’m assuming that it’s current.  I thank Harold Jacobsen for pointing it out — and another link to it is here.


Germany’s Über Hypocrisy over Venezuela — Finian Cunningham

Germany has taken the lead among European Union member states to back Washington’s regime-change agenda for Venezuela. Berlin’s hypocrisy and double-think is quite astounding.

Only a few weeks ago, German politicians and media were up in arms protesting to the Trump administration for interfering in Berlin’s internal affairs. There were even outraged complaints that Washington was seeking “regime change” against Chancellor Angela Merkel’s government.

Those protests were sparked when Richard Grenell, the U.S. ambassador to Germany, warned German companies involved in the Nord Stream 2 gas pipeline with Russia that they could be hit with American economic sanctions if they go ahead with the Baltic seabed project.

Earlier, Grenell provoked fury among Berlin’s political establishment when he openly gave his backing to opposition party Alternative for Germany. That led to consternation and denunciations of Washington’s perceived backing for regime change in Berlin. They were public calls for Grenell to be expelled over his apparent breach of diplomatic protocols.

Now, however, Germany is shamelessly kowtowing to an even more outrageous American regime-change plot against Venezuela.

This longish commentary by Finian showed up on the strategic-culture.org Internet site on Tuesday — and I found it in a Zero Hedge story that Brad Robertson sent our way.  Another link to it is here.


Rhodium Trading At 11-Year High, Up 35% YTD

Rhodium continues to be the unsung hero of the precious metals market as prices have pushed above $3,000 an ounce, hitting its highest level since early-October 2008. Currently, the price is up more than 35% since the start of the year with spot prices trading at a high of $3,120 an ounce.

Although rhodium prices remain extremely volatile because of its opaque marketplace, some analysts continue to see higher prices as the market continues to be dominated by growing demand and shrinking supply.

Bernard Sin, head of metals trading at MKS Group said that the same fundamental factors pushing palladium prices to record highs above $1,500 an ounce is also driving rhodium.

As long as palladium prices continue to push to new highs, you will continue to see rhodium rally,” he said.

This 3-chart news item put in an appearance on the kitco.com Internet site on Tuesday sometime — and I plucked it off the Sharps Pixley website.  Another link to it is here.


The PHOTOS and the FUNNIES

These next two shots [25 November 2018] were taken on the old highway less than a kilometer north of Hope, B.C.…which, as I mentioned in yesterday’s column, was either bypassed or partially buried when they put in the new highway almost a century ago.  The first photo was taken in a breathtakingly beautiful spot — and no picture, including this one, can do it full justice.  Note the high-water mark on the left bank from the yearly spring run-offs.  And also note the tiny bit of old highway visible in the left-center part of the photo. The second photo was taken there — and it shows the old highway at that point, along with salmon-drying racks on the left — and the Fraser River in the background.  This particular spot is an important fishing place for the local natives when the salmon are running up river to spawn in the fall.  The tall skinny plant on the right side of the photo at the edge of the pavement is a common mulleinClick to enlarge for both.

This photo of the Fraser Canyon was taken a handful of kilometers/miles further north on the Trans-Canada Highway — and a bit above the river bed.  Note the CPR tracks in the foreground — and the CNR tracks on the other side of the river.  I waited a while for a train to appear on either track, so the shot would have a ‘point of interest’…but, alas….  Click to enlarge.


The WRAP

Humankind cannot bear very much reality.”– T.S. Eliot


I was happy to see the gold price close higher again yesterday — and in doing so, closed above its 50-day moving average by about five dollars.  However, I was more than underwhelmed by the performance of their respective equities.  Silver didn’t do much yesterday, or wasn’t allowed to do much…you choose — and the price activity in their underlying shares was about as expected…all things considered.  Platinum is now back above both its 50 and 200-day moving averages as of yesterday’s COMEX closing price.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and all four precious metals closed higher yesterday, with silver being the laggard.  Click to enlarge for all.

And as I post today’s column on the website at 4:02 a.m. EDT, the London open is less than ten minutes away — and I note that the gold price didn’t do much for the first ninety minutes after trading began at 6:00 p.m. EDT in New York on Wednesday evening. At that juncture it began to head quietly and somewhat unevenly lower — and as London opens, gold is down $7.00 the ounce. Silver has been sold unsteadily lower as well — and is down 12 cents currently. Ditto for platinum, although its off its current low tick by a bit, but still down 9 bucks. Palladium was also sold lower along with the other three precious metals and, like platinum is off its current low as well — and still down 7 dollars as Zurich opens.

Gross gold volume is sitting around 60,000 contracts — and minus the decent amount of roll-over/switch volume, net HFT gold volume is 46,500 contracts. Net HFT silver volume is pretty heavy already at about 15,200 contracts — and there’s only 436 contracts worth of roll-over/switch volume in this precious metal.

The dollar index opened down 7 basis points when trading commenced around 7:45 p.m. EDT on Wednesday evening in New York. It began to creep quietly higher right away — and its current 96.69 high tick was set at 2:06 p.m. China Standard Time on their Thursday afternoon, which was probably the time of the afternoon gold fix in Shanghai. It has been heading quietly lower since — and is up only 5 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.


NOTE: Because of the switch over to Daylight Saving Time in North America this past Sunday, I’m not staying up the extra hour to record the first hour of London/Zurich trading.  Britain and Europe don’t go on British Summer Time [BST] and Central European Summer Time [CEST] for another two weeks.  Once they do the switch-over to BST and CEST, then I’ll resume the usual routine of commenting on the first hour of trading in both those markets.


That’s it for today — and I didn’t have much — and I’ll see you here tomorrow.

Ed

Gold Was Closed Just Below Its 50-Day Moving Average

13 March 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price hit its low tick of the day, such as it was, a few minute before 8 a.m. China Standard Time on their Tuesday morning — and from there, edged higher until 2 p.m. CST.  It was sold a bit lower until 8 a.m. in London — and then began to chop quietly higher until the 1:30 p.m. COMEX close in New York.  The rally became somewhat more substantial at that point, passing through the $1,300 spot mark with no issues…but was stopped a dollar or so short of its 50-day moving average around 3 p.m. EDT in the thinly-traded after-hours market.  From that point, it chopped quietly sideways until trading ended at 5:00 p.m. EDT.

The gold price traded in a ten dollar price range on Tuesday, so the low and high ticks aren’t worth looking up.

Gold finished the day at $1,301.40 spot, up $8.50 on the day.  Net volume was very quiet once again at a bit under 158,000 contracts — and there was around 48,500 contracts worth of roll-over/switch volume in this precious metal.

The silver price traded pretty flat for the first three hours after trading began at 6:00 p.m. EST in New York on Monday evening, but began to head higher around 9 a.m. CST on their Tuesday morning.  That lasted until shortly after 11 a.m. over there — and the price crawled quietly sideways until 8:30 a.m. in New York.  Then, like for gold at that juncture, the price jumped higher, but was immediately capped the moment it stuck its nose above $15.45 spot.  About fifteen minutes after that, the price was sold lower until around 1 p.m. EDT — and from there, crawled higher until shortly after 3 p.m. in after-hours trading.  It was sold a few pennies lower into the 5:00 p.m. close from there.

The low and high ticks in silver were reported by the CME Group as $15.31 and $15.49 in the May contract.

Silver was closed in New York yesterday at $15.41 spot, up 13 cents on the day.  Net volume was also pretty quiet at just under 49,000 contracts — and there was a bit under 6,000 contracts worth of roll-over/switch volume on top of that.

The platinum price headed very unevenly higher starting at 6:00 p.m. EST in New York on Monday evening — and obviously ran into ‘something’ at 9 a.m. in New York, as it wasn’t allowed above the $835 spot.  Once the afternoon gold fix was in, it was sold down a bit until a few minutes after 12 o’clock noon in New York trading.  It crept higher until a few minutes after 3 p.m. in the thinly-traded after-hours market — and then traded flat into the close from there.  Platinum finished the Tuesday session at $833 spot, up 17 dollars on the day.

The palladium price rose and fell a few dollars during most of the Far East trading session yesterday — and its low of the day, such as it was, came shortly before 2:30 p.m. China Standard Time on their Tuesday afternoon.  It then rallied 20 bucks by shortly before 11 a.m. in Zurich.  From there it faded a bit, before retesting its high of the day around 9 a.m. in New York.  It was sold back to the unchanged mark by 1 p.m. EDT — and it rallied a small handful of dollars into the close from there.  Palladium was closed at $1,519 spot, up 5 dollars on the day.

The dollar index closed very late on Monday afternoon in New York at 97.22 — and opened down 17 basis points the moment that trading began around 7:45 p.m. EDT on Monday evening in New York.  It crept a few basis points higher until 1 p.m. CST on their Tuesday afternoon — and then headed lower until a few minutes before 9 a.m. in London.  It rallied a bit from there, making it back into positive territory by a bit between 11 and 12 o’clock noon GMT — and then began to head lower once again, with the 96.86 low tick being set around 3:25 p.m. EDT in New York.  It appeared to get ‘rescued’ at that point — and made it back above the 97.00 mark by a whisker by shortly before 5 p.m…but then sank into the close, finishing the Tuesday session at 96.94…down 28 basis points on the day.

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

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site.  The delta between its close…96.90…and the close on the DXY chart above, was 4 basis points on Tuesday.  Click to enlarge.

The gold stocks opened up a bit — and then wandered aimlessly higher-to-sideways until around 2 p.m. EDT in New York trading.  Then the rally got a bit more serious — and the HUI closed higher by 2.36 percent — and almost on its high of the day.

The silver equities rallied to their respective highs by around 11:45 a.m. EDT on Tuesday morning.  They dipped a bit until 2 p.m. — and then made it back to their previous high by 3 p.m. EDT.  From that juncture they edged a bit lower into the close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 2.92 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 1 gold and 292 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.

The lone gold contract was issued by Advantage — and stopped by JPMorgan.  Both transactions involved their respective client accounts.

In silver, the four short/issuers were ADM, International F.C. Stone, ABN Amro and Advantage…with 157, 62, 58 and 15 contracts out of their respective client accounts.  The largest long/stopper by far was JPMorgan as usual, with 139 contracts in total…47 for its own account, plus 92 for its client account.  In second and third place came the CME Group and Advantage, with 71 and 56 contracts…the former for its own account — and the latter for its client account.

The 71 contracts stopped by the CME Group were immediately reissued as 71×5=355 one-thousand ounce silver mini contracts.  ADM and Advantage were the sole long/stoppers, picking up 274 and 81 contracts for their respective client accounts.

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

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in March declined by 8 contracts, leaving 38 still open, minus the 1 contract mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 8 gold contracts were actually posted for delivery today, so the deliveries and change in open interest matched for once.  Silver o.i. in March rose by 3 contracts, leaving 417 still around, minus the 292 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 14 silver contracts were posted for delivery today, so that means that 14+3=17 more silver contracts just got added to the March delivery month.

It was another day where gold open interest blew out by a bunch, this time by 14,631 contracts.  That will be whittled down somewhat when the Final Report for Tuesday is posted on the CME’s website later this morning EDT.  The reason I’m pointing it as an anomaly, is because total open interest in silver actually fell by 820 contracts yesterday.

Ted and I spent some time discussing this on the phone yesterday — and he can’t image it being anything other than spread trades based on the current price action.  Neither can I — and Friday’s COT Report will tell all…hopefully, as yesterday’s data will be in it.


There was another addition to GLD yesterday, as an authorized participant deposited 94,460 troy ounces…which is within 2 troy ounces of the deposit that was made into GLD on Monday.  There were no reported changes in SLV.

After “Showing Signs of Life” on Monday, there was no sales report from the U.S. Mint on Tuesday.

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Monday, as 147,228 troy ounces was shipped out of HSBC USA…but every troy ounce of that ended up in JPMorgan’s vault.  The link to that is here.

There was decent activity in silver, as 1,180,058 troy ounces was received — and 394,983 troy ounce was shipped out.  In the ‘in’ category, there was a smallish truckload…544,651 troy ounces…dropped off at Canada’s Scotiabank — and another truckload…600,586 troy ounces was picked up by CNT.  The remaining 34,819 troy ounces found a home over at JPMorgan.  In the ‘out’ category, there was 310,545 troy ounces withdrawn from Brink’s, Inc. — and lesser amounts were shipped out of HSBC USA and CNT…54,988 troy ounces and 29,449 troy ounces, respectively.  There was also a smallish transfer of 14,383 troy ounces from the Eligible category — and into Registered — and that occurred at CNT.  The link to this activity is here.

I haven’t made mention of JPMorgan COMEX silver stash lately.  Here’s the chart from Nick showing their current inventory level…147.8 million troy ounces…vs. everybody else.  Brink’s, Inc. is in very distant second place with 54.4 million troy ounces.  Click to enlarge.

It was also pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  They received 6,500 of them — but shipped out only 207.  All this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.


Here’s two of the usual charts that Nick passes around for free to a select group on the weekend.  They  show the total gold and silver holdings in all known [and published] Depositories, Mutual Funds and ETFs, as of the close of business on Friday, March 8.  The gold depositories continue their short-term decline, shedding 428,000 troy ounces during the reporting week — and in silver, there was 504,000 troy ounces added during the the same one-week period.  Click to enlarge for both.

It was another quiet news day — and I don’t have much for you.


CRITICAL READS

Jeff Gundlach Says “We Are In a Bear Market“, S&P Will Take Out December Lows in 2019

Today [Tuesday] at 4:15pm EDT, DoubleLine founder Jeff Gundlach is holding his latest live webcast open to investors and casual listeners, titled enticingly ‘Highway to Hell‘, and which we assume will discuss either Brexit, the U.S.-China trade deal, the long-term US debt picture or how this, latest asset bubble finally ends.

Gundlach, as usual, starts with one of his favorite charts, the one showing the global central bank balance sheet level juxtaposed to the global market, as the background for the Fed’s “180 degree turn” in the stock market’s recent rebound, which is understandable since the “S&P was and is in a bear market.”

If that wasn’t bad enough, Gundlach also said that stocks will take out the December low during the course of 2019 and markets will roll over earlier than they did last year.

Shifting from the market to the economy, Gundlach shows that global economic momentum is getting worse across the globe…

Going back to one of his favorite topics, the relentless growth of U.S. debt, Gundlach shows the following chart of debt by sector. Needless to say, it is troubling…

And tied to that, the following new warning on the U.S. interest expense: “The U.S. interest expense is projected by the CBO to explode higher starting yesterday.

And speaking of the next president, Gundlach suggests that if the economy falls into recession and Trump gets thrown out, we might get the chance to see how MMT, i.e. helicopter money, really works with the next, socialist, president.

Perhaps this is also why to Gundlach “the next big move for the dollar is lower.”

This longish chart-filled article showed up on the Zero Hedge website at 4:44 p.m. on Tuesday afternoon EDT — and I thank Brad Robertson for this one.  Another link to it is here.  There was also a 9:52 minute video interview with Gundlach on thesoundingline.com Internet site yesterday.  It’s headlined “The Biggest Fed Reversal in Memory” — and the link to that is here.  It’s from Brad as well.


An Oasis in a Desolate Wilderness… — Bill Bonner

Donald Trump produced his budget proposal yesterday. As expected, it includes a big increase for the military; more money than even the bamboozlers at the Pentagon know what to do with.

The New York Times:

President Trump sent Congress on Monday a record $4.75 trillion budget request that proposes an increase in military spending and sharp cuts to domestic programs like education and environmental protection for the 2020 fiscal year.

Mr. Trump’s budget, the largest in federal history, includes a nearly 5 percent increase in military spending – which is more than the Pentagon had asked for – and an additional $8.6 billion for construction of a border wall with Mexico.

So, what do you think, Dear Reader? What is the biggest threat that the U.S. faces? Terrorists? Russia? China? Or, its own lack of financial self-control?

This commentary from Bill put in an appearance on the bonnerandpartners.com Internet site early on Tuesday morning EDT — and another link to it is here.


Brexit: MPs reject Theresa May’s deal for a second time

Theresa May’s E.U. withdrawal deal has been rejected by MPs by an overwhelming majority for a second time, with just 17 days to go to Brexit.

MPs voted down the prime minister’s deal by 149 — a smaller margin than when they rejected it in January.

Mrs May said MPs will now get a vote on whether the U.K. should leave the E.U. without a deal and, if that fails, on whether Brexit should be delayed.

She said Tory MPs will get a free vote on a no-deal Brexit.

That means they can vote with their conscience rather than following the orders of party managers — an unusual move for a vote on a major policy, with Labour saying it showed she had “given up any pretence of leading the country“.

This news item was posted on the bbc.com Internet site yesterday sometime — and I thank Swedish reader Patrik Ekdahl for sending along.  Another link to it is here.  There was a follow-up Reuters story on this development headlined “No more talks planned with E.U. on Brexit for now – May’s spokesman” — and it’s linked here.  I found it on Doug Noland’s website.


We Reject a Merger” – Deutsche Bank Supervisory Board Opposes Commerz Deal

Deutsche Bank shares are down this morning after a critical supervisory-board member has signaled strong internal resistance to the planned rescue (sorry, merger) with Commerzbank.

Bloomberg reports that Jan Duscheck, an official with the Ver.di union and a key labor representative on Deutsche Bank’s supervisory board, opposes the merger, saying it would threaten thousands of jobs and fail to shore up Germany’s finance sector. The stance is hardening as talks behind the scenes gradually advance.

We reject a merger,” Duscheck — who has served on Deutsche Bank’s supervisory board since 2016 — said in an e-mailed statement. The deal would make the combined bank even more susceptible to a hostile takeover from abroad and “would not create a national champion,” he said, taking a rare public stand.

Employee representatives are powerful forces in German companies, generally making up half the seats on supervisory boards, which hire and fire senior executives and sign off on major strategy decisions.

At least 10,000 further jobs would be directly threatened,” Duscheck said.

That would be in addition to jobs that would probably have to go in the future because the merged bank, seen from today, would not achieve the growth expected of it.”

It is clear that the hurdles for completion of this deal are high and getting higher. So what happens next? Lehman here we come?

This Zero Hedge news item was posted on their Internet site at 11:16 a.m. EDT on Tuesday morning — and I thank Brad Robertson for this story as well.  Another link to it is here.


Iran’s Rouhani Makes First Ever Visit to Iraq to “Bypass Unjust U.S. Sanctions

What Iran is billing as President Hassan Rouhani’s first “historic” and landmark visit to Iraq, both the United States and Israel are seeing as a provocative move to solidify Iran’s influence over Baghdad.

Just prior to arriving in Iraq Monday, Rouhani said on state television that his country is determined to “strengthen its brotherly ties” with neighboring Iraq. It’s expected that the the three-day visit will result in a wide range of economic deals in fields such as energy, transport, and agriculture; however, as Israel’s Haaretz writes based on a Reuters report:

The visit is a strong message to the United States and its regional allies that Iran still dominates Baghdad, a key arena for rising tension between Washington and Tehran.

Reuters further noted that Shi’ite Iran will is using the official visit to gain all the trade and energy export deals it can as Tehran suffers amidst U.S.-led international sanctions, and as it continues to demand more concrete action from Europe in the wake of last year’s U.S. pullout of the JCPOA nuclear deal.

We are very much interested to expand our ties with Iraq, particularly our transport cooperation,” Rohani said at Tehran’s Mehrabad airport. “We have important projects that will be discussed during this visit.”

Crucially, a senior Iranian official who is accompanying Rohani on the trip told Reuters:

“Iraq is another channel for Iran to bypass America’s unjust sanctions imposed on Iran. This trip will provide opportunities for Iran’s economy.”

But this is ultimately the lasting legacy of Bush and Cheney’s 2003 regime change war and toppling of Saddam Hussein: they overthrew a Sunni Baath secular dictator in exchange for entrenching pro-Iran influence in Baghdad, to the delight of the Ayatollahs.

Washington can now behold the fruits of its neocon interventionist labor as Iran’s president is granted a hero’s welcome in the heart of Baghdad (this after Iran and Iraq were very recently bitter enemies) — all the while U.S. officials in the same city will look on helplessly from the sidelines.

This is a classic case of “reaping what you sow“.  This  news story appeared on the Zero Hedge website at 4:15 a.m. on Tuesday morning EDT — and it’s the final contribution of the day from Brad Robertson.  Another link to it is here.


Sales of Gold And Silver Should Not Be Taxed — Steve Forbes

When you exchange a $20 bill for two $10 bills, you don’t pay sales tax on the transaction, even though, theoretically, you are “buying” the tens. The notion is utterly preposterous. Yet if you purchase a gold coin that was created by the U.S. Mint and is legally usable for commercial transactions, in some states you have to pay sales tax on that coin. Uncle Sam also says people who buy and sell such coins are liable for capital gains taxes. Of course, you would never buy a silver dollar from the mint for, say, $35 and then use it to pay for a $1 candy bar, but the point is that such coins are legal tender.

That’s why the White House should follow the recommendation of the American Principles Project, an organization that, among other things, advocates sound money: “President Trump should direct the U.S. Treasury Department to issue a rule ending taxation on U.S.-minted gold coins.” While we’re at it, let’s add silver ones as well.

It’s only a matter of time before Washington undermines the value of the dollar again, and people should be able to hedge themselves against such depredation. And someday soon, Congress should allow Americans to use alternative currencies for domestic commercial transactions if they so wish.

The above three paragraphs are all there is to this very brief commentary by Steve that appeared in today’s issued of Forbes.  I found this in a GATA dispatch the Chris Powell filed from Taipei, Taiwan very early on their Wednesday morning.  Another link to the hard copy is here.


The PHOTOS and the FUNNIES

About a 30-minute drive north of Hope on the Trans-Canada Highway is the village/hamlet of Yale, B.C.  The town has a spectacular natural landscape –and generally considered to be on the dividing line between the Coast and the Interior regions of the British Columbia Mainland. Immediately north of the town, the Fraser Canyon begins and the river is generally considered unnavigable past this point — and it is.  The first photo is at the first tunnel, the Yale tunnel, just north of the town on the Trans-Canada Highway.  The second photo was taken a few hundred feet from the first one, looking down the Fraser River…Yale, such as it is, is just out of sight around the bend in the river.  The Trans-Canada Highway is on the right — and the CPR tracks on the left and below — and barely distinguishable between them and the river, is what’s left of the old ‘highway’ that was built in 1922.  The click to enlarge feature only helps with the second photo.

This next photo was taken from that old highway — and it has been mostly bypassed and/or buried under the new Trans-Canada Highway just above it.  Click to enlarge.


The WRAP

Another very quiet trading session, especially the volumes in silver and gold.  There was a bit of a tick up in both starting at 8:30 a.m. in COMEX trading in New York, but both those attempted breakouts, such as they were, were quickly capped and turned lower — and both finished higher by a bit, with gold closed a hair below its 50-day moving average.

I’m not sure what, if anything, should be read into Tuesday’s price action…as it’s impossible to make any assumptions based on one day’s trading.  However, I like the overall ‘feel’ of the market.  But, having said that, ‘da boyz’ could still do some serious price damage without exerting themselves too much.

Here are the 6-month charts for the Big 6 commodities — and it should be noted that all four precious metal high price closes came after the COMEX close, so those data points don’t appear on their respective Tuesday dojis on the charts below.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price dipped a bit once trading began at 6:00 p.m. EDT in New York on Tuesday evening — and then began to edge unevenly higher. That lasted until around 10:40 a.m. China Standard Time on their Wednesday morning. The current high tick of the day was set at that point — and the gold price was sold down a dollar at that juncture — and has been trading quietly sideways since. Gold is currently up $2.80 the ounce. The silver price has been trading quietly and unevenly sideways in Far East trading as well — and is currently up a penny. Platinum traded a dollar or so either side of unchanged in Far East trading on their Wednesday– and that’s where it sits at the moment. Palladium was sold down five bucks or so in mid-morning trading in Shanghai — and has been trading sideways since — and is down 2 dollars as Zurich opens.

Gross gold volume is a hair over 42,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is bit over 39,000 contracts. Net HFT silver volume is 8,200 contracts — and there’s only 192 contracts worth of roll-over/switch volume in that precious metal.

The dollar index opened up 7 basis points once trading began around 7:45 a.m. in New York on Sunday evening, which was 8:45 a.m. CST in Shanghai. It dropped back below the 97.00 mark within an hour or so — and has been trading quietly sideways since — and is up 3 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.


Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report.  I said yesterday that I wasn’t at all inclined to hazard a guess as to what that report might show.  But now that I have all five trading days to look at on the above 6-month charts, I’ll speculate that we might see some increases in the commercial net short positions in both.  This would be particularly true of silver, since it penetrated its 200-day moving average during the reporting week.


NOTE: Because of the switch over to Daylight Saving Time in North America this past Sunday, I’m not staying up the extra hour to record the first hour of London/Zurich trading.  Britain and Europe don’t go on British Summer Time [BST] and Central European Summer Time [CEST] for another two weeks.  Once they do the switch-over to BST and CEST, then I’ll resume the usual routine of commenting on the first hour of trading in both those markets.


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

Ed

U.S. Mint Sales Showed Signs of Life Yesterday

12 March 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


Once trading began at 6:00 p.m. EST in New York on Sunday evening, the gold price edged a few dollars lower until shortly after 10 a.m. China Standard Time on their Monday morning.  It began to crawl higher from there — and minutes after the gold price broke above unchanged, which occurred very shortly before the London open, it was sold quietly lower until the low of the day was set a very few minutes before 2 p.m. EST in after-hours trading in New York.  It crawled a few dollars higher into the 5:00 p.m. EST close from there.

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

Gold was closed on Monday in New York at $1,292.90 spot, down $4.80 from Friday.  Net volume was exceedingly quiet at just over 154,000 contracts — and there was around 46,500 contracts worth of roll-over/switch volume in this precious metal.

The price pattern in silver was similar in just about every way to gold’s price path yesterday. The only glaring exception was that silver’s low tick was set about fifteen minutes before the 11 a.m. EST London close — and it crept higher into the 5:00 p.m. close from there.

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

Silver finished the Monday session in New York at $15.28 spot, down 3 cents on the day.  Net volume, like for gold, was pretty quiet at 45,000 contracts — and there was 3,850 contracts worth of roll-over/switch volume on top of that.

Platinum had a down/up move in Far East trading similar to silver and gold’s.  It also lasted until just before the Zurich open — and the price didn’t do much from that  juncture until at, or just before, the afternoon gold fix in London.  It was hammered lower from that point until a few minutes before the Zurich close — and rallied sharply from there.  That rally petered out around 2:30 p.m. in the very thinly-traded after-hours market — and then proceeded to trade sideways into the 5:00 p.m. close from there.  Platinum finished the day at $816 spot, up a dollar from Friday.

The palladium price traded very unsteadily sideways a handful of dollar either side of unchanged until moments before the Zurich close.  Then away it went to the upside.  That lasted until 3 p.m. in after-hours trading and, like platinum, didn’t do much after that.  Palladium closed on Monday at $1,514 spot, up 21 dollars on the day.

The dollar index closed very late on Friday afternoon in New York at 97.31 — and opened up 8 basis points once trading commenced at 6:30 p.m. EST on Sunday evening in New York, which was 6:30 a.m. China Standard Time on their Monday morning.  Its 97.45 high tick of the day was set at 8:40 a.m. CST — and it was then very quietly and very unevenly down hill from there for the remainder of the Monday trading session.  The dollar index finished the day at 97.22…down 9 basis points from its close on Friday.

Despite the soft dollar index, it was not allowed to be reflected in precious metal prices.

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

And here’s the 6-month U.S. dollar index chart from the folks over at the stockcharts.com Internet site — and the delta between its close…97.17…and the close on the DXY chart above, was 5 basis points on Monday.  Click to enlarge.

The gold shares ticked up a bit at the open, but then headed quickly lower to their respective lows, which came a few minutes before the 11 a.m. EST London close.  They rallied rather unevenly higher from that point until trading ended at 4:00 pm…as the HUI closed down 0.42 percent.

The silver equities opened about unchanged — and then sank to their lows of the day, which was when the low tick in the silver price was set, a few minutes before 11 a.m. in New York trading.  They made it back to almost unchanged by around 2:45 p.m. EST — and then sagged a bit into the close from there.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.59 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 8 gold and 14 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, the largest short/issuer was Advantage, with 7 contracts out of its client account.  The two largest long/stoppers were JPMorgan and Advantage, with 4 and 3 contracts for their respective client accounts as well.

In silver, Advantage and ADM issued 11 and 3 contracts out of their respective client accounts.  JPMorgan, not surprisingly, was the biggest long/stopper, picking up 10 contracts in total…4 for its own account, plus another 6 contracts for clients.  Advantage picked up the other 4 contracts for its client account.

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

The CME Preliminary Report for the Monday trading session showed that gold open interest in March remained unchanged at 46 contracts, minus the 8 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 more gold contracts just got added to March deliveries.  Silver o.i. in March rose by 4 contracts, leaving 414 still open, minus the 14 mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 10 silver contracts were actually posted for delivery today, so that means that 10+4=14 more silver contracts were just added to the March delivery month.

I also noted that there was a fairly chunky increase in gold open interest in yesterday’s Preliminary Report…9,259 contracts…which is somewhat surprising considering the fact that the gold price closed lower yesterday.  That’s the third time in a week that there’s been an out-of-the blue jump in total open interest in gold…while o.i. in silver has dropped.  I suppose it could be spread-trade related, but we won’t know for sure until this Friday’s Commitment of Traders Report.  Ted commented on this in his weekly review on Saturday as well.


There were additions to both GLD and SLV on Monday.  An authorized participant added 94,462 troy ounces of gold to GLD — and a.p. added 515,757 troy ounces to SLV.

The folks over at the shortsqueeze.com Internet site updated their short position data for both GLD and SLV as of the close of trading on Thursday, February 28 — and this is what they had to report.  The short position in SLV rose from 9,946,200 shares/troy ounces, up to 10,467,900 shares/troy ounces…an increase of 5.2 percent.  The short position in GLD dropped from 1,731,790 troy ounces, down to 1,550,010 troy ounces, a decline of 10.5 percent.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, March 8 — and this is what they had to report.  Both ETFs reported withdrawals during the week, as 12,796 troy ounces came out of their gold ETF — and 98,863 troy ounces was withdrawn from their silver ETF.  I would suspect that JPMorgan owns all of that now, as their the custodian for those ETFs as well.

The U.S. Mint finally had a sales report worthy of the name.  They sold 7,000 troy ounces of gold eagles — 4,000 one-ounce 24K gold buffaloes — 1,000 one-ounce platinum eagles — and 779,000 silver eagles.

We’re already well into March, but so far no 4th quarter/annual report from the Royal Canadian Mint — and I’ve been checking their website daily for the last three weeks.

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

It was very quiet in silver, as nothing was reported received — and only 83,282 troy ounces was reported shipped out…43,142 troy ounces from the International Depository Services of Delaware — and the remaining 40,139 troy ounces left CNT.  I won’t bother linking this amount.

There was a fair amount of activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received 2,000 of them — and shipped out 2,084.  All this occurred at Brink’s, Inc. — and the link to that, in troy ounces, is here.


The folks over at the Shanghai Gold Exchange updated their numbers for February — and they reported that only 99.8 metric tonnes were withdrawn that month, which is not a lot.  Their total withdrawals since the beginning of 2008 adds up to 17,432 metric tonnes.  Here’s Nick Laird’s chart updated with that data.  Click to enlarge.

Lawrie Williams over at Sharps Pixley had a story about this on Friday that was headlined “China’s gold demand looks to be slowing this year so far“.  I posted that in my Saturday column, but another link to it is here…if you wish to refresh your memory.  Lawrie has another story about China’s gold reserves in today’s Critical Reads section as well.

I have an average number of stories for you today.


CRITICAL READS

GDP Crash: Atlanta Fed Sees Q1 GDP Tumbling to Just 0.2%

While the market was delighted two weeks ago to see a delayed Q4 GDP print of 2.6%, which came in well above the expected 2.2% consensus number, we warned that “while Q4 was clearly a stronger than expected print, the real question is what happens in Q1, when most banks and nowcasts expect GDP to print below 1%, in some cases concerningly so.”

Moments ago we got another confirmation of this, when following the latest retail sales report which saw a dramatic cut to December retail sales even as January surprised modestly to the upside, the Atlanta Fed slashed its Q1 GDP nowcast, and after rebounding modestly from 0.3% to 0.5% a week ago, it has once again slumped, and is now at the lowest recorded level, and just 0.2% away from economic contraction.  Click to enlarge.

This is how the Atlanta Fed justified its latest Q1 GDP cut, which as of March 11 was just 0.2 percent, down from 0.5 percent on March 8: “After this morning’s retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth declined from 1.5 percent to 1.0 percent.”

Meanwhile, while stocks continue to ignore the economic slowdown, bond yields were well ahead of the slide in the Atlanta Fed’s increasingly gloomy forecast.

It appears that the now-certain Q1 earnings recession won’t be in isolation, with the broader U.S. economy also on the verge of contracting, if only for just one quarter. The question then becomes whether China’s ongoing reflation attempts will be successful (although the February total credit injection was a major disappointment), and lead to a rebound in U.S. growth in the second quarter. If not, what was expected to become the longest U.S. expansion in history in June 2019, will be prematurely terminated by a technical recession just as Donald Trump was set to make a new economic record.

This tiny 2-chart Zero Hedge story showed up on their Internet site at 11:58 a.m. EST on Monday morning — and it comes courtesy of Brad Robertson.  Another link to it is here.


The Only Way to Drain The Swamp — Bill Bonner

A Washington Post headline caught our eye on the weekend: “Trump to slash spending

At last! Our eyes lit up. Our pulse raced. Finally, the Great Disruptor was disrupting something that really matters.

Slash spending! Cut the budget! Fire federal employees! Eliminate agencies. Kill departments. Bring home the troops. Curb the Deep State. MAGA!

It wasn’t much of a slash… just 5%. But at least the president finally had the razor in his hand.

But wait… what’s this?

This commentary from Bill appeared on the bonnerandpartners.com Internet site on Monday morning EST — and another link to it is here.  Another story about the 2020 U.S. budget comes from Zero Hedge.  It’s headlined “Trump 2020 Budget Raises Military Spending, Cuts Everything Else” — and I thank Brad Robertson for that one.


Trump Regime Electricity War in Venezuela More Serious Than First Believed

On Thursday, Venezuela’s Guri dam hydroelectric power plant was cyber-attacked at 5:00 PM during the late afternoon rush hour to cause maximum disruption.

Up to 80% of the country was affected, damage done more severe than initially thought. Weeks or months of planning likely preceded what happened – U.S. dark forces almost certainly behind it, considerable expertise needed to pull it off.

On Friday, another cyber-attack occurred, followed by a third one on Saturday, affecting parts of the country where power was restored, further complicating resolution of the problem, Maduro saying:

After power was restored to about 70% of the country, “we received another attack, of a cybernetic nature, at midday…that disturbed the reconnection process and knocked out everything that had been achieved until noon,” adding: “(O)ne of the sources of generation that was working perfectly” was sabotaged again…infiltrators…attacking the electric company from the inside.”

Power is being restored “manually,” efforts continuing to learn precisely why computerized systems failed – things further complicated after a Bolivar state substation transformer exploded and burned, suggesting more sabotage.

What’s happening in Venezuela is similar to infecting Iran’s Bushehr and Natanz nuclear power facilities with a Stuxnet malware computer virus in 2010, a likely joint U.S./Israeli intelligence operation. Edward Snowden blamed them for what happened.

Another blatant and unprecedented attack on a sovereign nation.  There is no rule of international law that the U.S. won’t break.  This is international terrorism on a national scale.  This worthwhile commentary from Stephen Lendman showed up on his website on Sunday — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Trump’s coronation of Guaido as Venezuelan president…Al Capone redux — John Wight

Scour the history books and you will struggle to find an act of imperialism more brazen than U.S. President Donald Trump’s de-recognition of Nicolas Maduro as Venezuela’s president.

In a scathing denouncement of the Mexican-American War of 1846-48, famed U.S. Civil War General (and later president) Ulysses S. Grant told a reporter, “We had no claim on Mexico. Texas had no claim beyond the Nueces River, and yet we pushed on to the Rio Grande and crossed it. I am always ashamed of my country when I think of that invasion.”

The Mexican-American War was a war of plunder and conquest on the part of a U.S. ruling class for whom every country south of the Rio Grande was then, as if by divine right, deemed subservient to Washington. From then to now the U.S. has regarded Latin America as a wholly owned subsidiary, its primary function to serve Washington’s economic interests.

Any Latin American government that dared assert its country’s right to sovereign independence of the U.S. in the years since has found itself subjected to a campaign of subversion and attack, so blatant in gangsterism it would have made Al Capone blush.

It was U.S. Marine General Smedley Butler who famously said after retiring in 1931: “I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street.”

This commentary by John is definitely worth reading.  It was posted on the rt.com Internet site way back on January 24 — and is even more relevant now than it was then.  I thank Roy Stephens for sending it along — and another link to it is here.


U.S. Warns Germany to Drop Huawei or Risk Losing Intelligence Sharing

Following intense pressure from the U.S. on its European allies to boycott the use of Huawei products in the rollout of next-generation 5G products and shut out the Chinese telecom giant from local markets, Germany was the first nation to rebuke Washington, with Handeslblatt reportingone months ago that the German government wanted to avoid excluding products offered by Huawei.

Then it was the U.K.’s turn, and as we reported three weeks ago, in the latest “serious blow” to U.S. efforts to persuade allies to ban the Chinese supplier from high-speed telecommunications systems, the Financial Times reported that the British government has concluded that it can “mitigate the risk from using Huawei equipment in 5G networks.” The U.K. National Cyber Security Centre had reportedly determined that “there are ways to limit the risks from using Huawei in future 5G ultra-fast networks” and in doing so it was ignoring escalating U.S. efforts to persuade countries to bar Huawei from their networks on the basis that it could help China conduct espionage or cyber sabotage.

Now, it is the U.S.’ turn to respond to these “insurgencies” by western ally nations, and as The Wall Street Journal reports, the Trump administration has told the German government it would limit the intelligence it shares with German security agencies if Berlin allows Huawei to build Germany’s next-generation mobile-internet infrastructure.

Needless to say, the warning is “likely to cause alarm among German security circles” amid persistent terror threat, largely the result of Merkel’s disastrous “Open Door” policies which allowed over 1 million middle eastern immigrants into he country.

Citing a letter dated Friday from U.S. Ambassador to Germany Richard A. Grenell and addressed to Germany’s economics minister, the U.S. diplomat said that the U.S. “wouldn’t be able to keep intelligence and other information sharing at their current level if Germany allowed Huawei or other Chinese vendors to participate in building the country’s 5G network.”

Wow!  Jeff Thomas’s commentary further up about Now Is the Time of Monstersis even spreading to the U.S.’s so-called allies.  This Zero Hedge article showed up on their website at 10:57 a.m. EST on Monday morning — and another link to it is here.


China will not devalue renminbi to spur exports: central bank chief

China has gone to great lengths to support its currency and would not devalue the renminbi to spur exports or combat trade frictions, the governor of the central bank said Sunday.

Speaking on the sidelines of China’s annual parliamentary session, Yi Gang said Washington and Beijing had discussed exchange rates in recent trade talks and reached a consensus on many “crucial” issues.

U.S. President Donald Trump has long accused Beijing of manipulating its currency to gain a trade advantage and Washington has been seeking assurances on the exchange rate in the ongoing trade talks between the two nations.

Let me stress here that we will never use the exchange rate for the purpose of competition, nor will we use the exchange rate to increase China’s exports or as a tool in handling trade frictions,” said Yi.

We have committed not to do this,” Yi told reporters.

Well, dear reader, I would suspect that they’re “committed” until push really becomes shove, because at some point they’ll be forced to do so in their best interest, especially if there’s a huge decline in the U.S. dollar index.  This AFP news story, picked up by yahoo.com, put in an appearance on their Internet site on Sunday — and I found it embedded in a GATA dispatch on Sunday night.  Another link to it is here.


Now Is the Time of Monsters” — Jeff Thomas

In ancient Rome, interregnum was the term given to the period between stable governments when anything untoward might occur, and sometimes did – civil unrest, warfare between warlords, power vacuums and, finally, succession wars.

But eventually the dust would settle and the victors, whoever they might be, would at some point restabilise the empire, often with a new map, showing the latest lines of geographic possession.

In 1929, the Italian Antonio Gramsci was in a fascist prison, writing about what he considered to be a new interregnum – a Europe that was tearing itself apart. He anticipated civil unrest, war between nations and repeated changes in the lines of geographic possession.

At that time, he was attributed as saying, “The old world is dying and the new world struggles to be born. Now is the time of monsters.”

And, of course, looking back from our vantage point in the twenty-first century, we have no difficulty in confirming that he was correct in his prognosis. The world war that followed brought forward the worst traits in mankind. The sociopaths of the world came centre stage. By the time the dust had settled, tens of millions were dead.

What we do have difficulty with is recognizing that the same pattern is again with us. National leaders and their advisors are spoiling for war, building up weaponry, creating senseless proxy wars in other nations’ backyards and playing a dangerous game of “chicken” with other major powers

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


West Virginia legislature votes to end sales taxation on gold and silver

Sound money advocates rejoiced today as the West Virginia legislature overwhelmingly passed Senate Bill 502 and sent it to Governor Jim Justice for his signature.

First passed in the West Virginia senate unanimously last month, the measure removes state sales taxation of precious metals, specifically on gold, silver, platinum, and palladium bullion and coins.

State Senator Craig Blair (R-District 15) introduced SB 502 with the goal of encouraging precious metals purchasers to keep their investment dollars in the state rather making investments elsewhere. The bill impacts purchases of platinum, gold, palladium, or silver bullion valued upon its precious metal content, whether in coin, bar, or ingot form.

The Sound Money Defense League helped make the case to West Virginia legislators, explaining why charging sales taxes on money itself is beyond the pale. In effect, those states that collect taxes on purchases of precious metals are inherently saying gold and silver are not money at all.

West Virginia’s legislature has taken a huge step forward with the passage of SB 502. Thanks to the efforts of Senator Blair and other groups, Governor Justice can sign a measure eliminating obstacles in the way of West Virginia citizens to protect themselves from the inflationary practices of the Federal Reserve,” said Jp Cortez, Policy Director of the Sound Money Defense League.

But according to very politically-savvy reader Elliot Simon, there’s no guarantee that the governor will sign it.  This precious metal-related news item was posted on the moneymetals.com Internet site last Friday — and it’s another article I found on the gata.org Internet site.  Another link to it is here.


Barrick backs down from takeover bid

Barrick Gold Corp. is withdrawing its US$17.8 billion hostile takeover bid for Newmont Mining Corp., with the companies opting instead to forge a joint venture around their Nevada projects.

The change came weeks after Barrick proposed an all-share offer that would have created the world’s largest gold producer. After Newmont’s board rejected the bid, Newmont Chief Executive Officer Gary Goldberg proposed the joint venture as an alternative both companies could gain from.

Barrick’s decision ends two weeks of animosity between the gold producers, and helps Newmont focus on securing shareholder approval for its previously announced offer to buy Goldcorp Inc. Newmont raised doubts about the Barrick bid from the start, saying its Goldcorp move offered better benefits.

We listened to our shareholders and agreed with them that this was the best way to realize the enormous potential of the Nevada goldfields’ unequaled mineral endowment, and to maximize the returns from our operations there,” Barrick CEO Mark Bristow said in a statement Monday.

This Bloomberg story from Monday was picked up by the wealthprofessionals.ca Internet site — and I thank Brad Robertson for that one.  Another link to it is here.


China adds 10 tonnes to gold reserves, but is that all? — Lawrie Williams

Latest figures from the People’s Bank of China, the country’s central bank, claim that the nation increased its gold reserves again in February by a somewhat conservative 320,000 troy ounces (9.95 tonnes).  It is only recently that the Asian Dragon has started re-reporting monthly gold reserve increases – but are these an any more accurate guide to the true size of the nation’s gold reserves than past announcements?  After all China has a pretty dismal record in reporting the size of its gold reserve leading many to believe, ourselves included, that the size of its gold reserves as reported to the IMF is more fiction than fact.

If we add the latest 9.95 tonne figure to its previously reported gold reserve this now stands at some 1,862 tonnes, the world’s sixth largest holding, but only equivalent in value to around 2.4% of the country’s total Forex holding value.  By contrast, all of the top four nations, and also the Netherlands at No.9 hold more than 60% of their Forex holdings in gold.

However the Chinese central bank is not thought to be the only official government entity which holds gold on its behalf.  These probably include the State Agency for Foreign Exchange, China Investment Corporation (the nation’s sovereign wealth fund) and the military, and we can probably add the commercial banks to this list as they are all state-owned.

Given that China has hidden its gold purchases in the past behind all kinds of screens and tended to release reports of substantial gold reserve increases only at five or six year intervals – which it explains as having moved its gold from an account it feels it does not need to report to one that it does, its real reserve figure is far from transparent.  There have been utterances from Chinese politicians and academics over the years suggesting that they assume that gold will play an increasingly important role in a global reserve currency reset at some time in the future and the country needs to increase its gold reserves.  Thus there is speculation that China may be building its gold reserve to match the USA’s 8,000 tonnes plus level.  Some even reckon that its real holding may already be in excess of Germany’s 3,369.7 tonnes, but the truth is that no-one outside of China knows and those within China who do have been hugely successful in maintaining secrecy.  Some day we will learn the true figure – but probably not yet!

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


The PHOTOS and the FUNNIES

I’ll take a break from my travels around Merritt to post a couple of photos that Nick Laird took a few days ago — and sent me on Monday.  They’re definitely worth sharing.  Introducing Mr. & Mrs. SunbirdClick to enlarge for both.

I had an e-mail exchange with Lawrie Williams of Sharps Pixley fame in the very wee hours of Saturday morning — and he sent me this photo he took from the back yard of his country home on Friday.  The daffodils are already up and blooming!

He lives only 25 miles due south of London, thus very close to the capital city .  It’s in the village of Limpsfield which has some homes dating back to the 12th Century — and is on the Greenwich Meridian. The hills in the background are the North Downs.  It is an attractive area of England, only a 35 minute commute by train to central London from Oxted station…a 7-minute walk away.  Lots of National Trust and Woodlands Trust protected areas close by.  Rated as an area of Outstanding Natural BeautyClick to enlarge.


The WRAP

With volume in both silver and gold very much on the lighter side, I wouldn’t be reading too much into yesterday’s price action in anything.  When volume is this light, it is…as I’ve said on many occasions…very easy for anyone with an agenda to move prices in whatever direction they so choose.  That was the case yesterday — and in gold and silver, that price management was overly aggressive. It was mostly of the ‘care and maintenance’ variety — and it was obvious that ‘da boyz’ weren’t going to allow silver and gold prices to reflect the slow decline in the dollar index on Monday.

Gold was held below its 50-day moving average once again — and platinum was closed below its, for the second trading day in a row.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and there really isn’t much to see.  Click to enlarge.

And as I type this paragraph, the London open is less than ten minutes away — and I note that after trading sideways for the first two hours in New York on Monday evening, the gold price began to edge a bit higher — and that lasted until shortly after 11 a.m. China Standard Time on their Tuesday morning. It then began to crawl lower starting around 2 p.m. over there — and is currently up $1.20 an ounce. It was about the same for silver, except it heading higher about an hour after gold did — and it’s up 8 cents currently. Ditto for platinum, except once it reached its 11 a.m. CST high, it has been chopping unevenly sideways since, but jumped a few more dollars going into the Zurich open — and is up 10 dollars at the moment. Palladium was up about 8 dollars at its high, which came around 12:20 p.m. in Shanghai. It was sold a bit lower at that juncture — and is up only 3 dollars as Zurich opens.

Gross gold volume is a bit over 42,000 contracts — and net of the current roll-over/switch volume, net HFT gold volume is a bit under 38,000 contracts. Net HFT silver volume is a bit over 10,800 contracts — and there’s only 371 contracts worth of roll-over/switch volume in that precious metal.

The dollar index gapped down 17 basis points the moment that trading began in New York around 7:45 p.m. on Monday evening, which was 7:45 a.m. China Standard Time on their Tuesday morning. It hasn’t done much of anything since — and is down 18 basis points as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich.


Today, at the close of COMEX trading, is the cut-off for this Friday’s COT Report — and unless there’s a huge price move one way or another during the Tuesday trading session, I have no intention of offering a prediction of what may or may not be in it.  That’s Ted’s area of expertise, as always.  And if he does have some thoughts on this in his Wednesday missive, I’ll mention them in Friday’s column.


NOTE: Because of the switch over to Daylight Saving Time in North America this past Sunday, I’m not staying up the extra hour to record the first hour of London/Zurich trading.  Britain and Europe don’t go on British Summer Time [BST] and Central European Summer Time [CEST] for another two weeks.  Once they do the switch-over to BST and CEST, then I’ll resume the usual routine of commenting on the first hour of trading in both those markets.


That’s it for yet another day.

I’m off to bed — and I’ll see you here tomorrow.

Ed

Gold Stopped Cold at $1,300 Spot on Friday

09 March 2019 — Saturday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price edged quietly sideways once trading began at 6:00 p.m. EST on Thursday evening in New York — and that lasted until around 9:20 a.m. China Standard Time on their Friday morning.  It began to head higher from there — and that lasted until shortly before 9:30 a.m. in London.  It crept quietly lower from that juncture until the job numbers came out at 8:30 a.m. in New York.  It jumped higher at that point, but was obviously brutally capped the moment the price broke above the $1,300 spot mark.  It was sold a bit lower into the afternoon gold fix from there — and rose quietly until minutes before 4 p.m. in the thinly-traded after-hours market.  At that point it poked its nose above the $1,300 spot mark once again — and was then sold quietly lower until trading ended at 5:00 p.m. EST in New York.

The low and high ticks were recorded by the CME Group as $1,285.60 and $1,301.30 in the April contract…an increase of a bit over 1 percent.

Gold was closed in New York on Friday at $1,297.70 spot, up $12.50 from Thursday.  Net volume was very decent at just under 240,500 contracts — and there was a bit over 48,000 contracts worth of roll-over/switch volume out of April and into future months.

It was exactly the same price path for silver, but once it started to rally on the job numbers, it only paused briefly at the afternoon gold fix — and continued higher from there.  However, it obviously ran into ‘something’ a few minutes before 11:30 in New York trading — and was sold lower until 1 p.m.  The silver price didn’t do much after that.

The low and high ticks in this precious metal were reported as $15.015 and $15.385 in the May contract.

Silver was closed at $15.31 spot, up 31 cents on the day and, like gold, would have probably closed materially higher, if allowed. It should also be noted that silver closed above its 200-day moving average by a decent amount.  Net HFT volume was reasonably heavy at just under 70,000 contracts, but not as heavy as one might expect considering the size of the price move.  There was around 4,300 contracts worth of roll-over switch volume in that precious metal.

Platinum traded pretty flat until shortly after 1 p.m. CST on their Friday afternoon — and then began to head higher.  But, like for silver and gold, it was sold lower at shortly after 11 a.m. CET in Zurich trading.  That lasted until the 11 a.m. EST Zurich close — and it crawled unevenly higher until shortly after 3 p.m. in the thinly-traded after-hours market — and was sold a few dollars lower into the 5:00 p.m. close of trading from there.  Platinum finished the day at $815 spot, up 3 bucks from Thursday’s close.

Palladium traded a bunch of dollars either side of the $1,500 spot mark through all of Far East and most of Zurich trading on Friday — and was back within a few dollars of unchanged by the COMEX open.  It ran into ‘something’ at that juncture — and by the time they were through, the low tick of the day was set at 1 p.m. in New York.  It rallied a bunch from there until shortly before 3 p.m. in after-hours trading — and didn’t do a lot after that.  Palladium was closed at $1,493 spot, down 13 dollars on the day.

The dollar index closed very late on Thursday afternoon in New York at 97.67 — and opened down 4 basis points the moment that trading commenced at 7:45 p.m. EST on Thursday evening, which was 8:45 a.m. China Standard Time on their Friday morning.  It was all unevenly down hill from there — and the 97.25 low tick was set at 8:45 a.m. in New York.  It recovered about 10 basis points from there in very short order — and then chopped nervously sideways for the remainder of the Friday session.  The dollar index finished the day at 97.31…down 36 basis points from Thursday’s close.

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

And here’s the 6-month U.S. dollar index chart from the folks over at the stockcharts.com Internet site — and the delta between its close…97.27…and the close on the DXY index above, was 4 basis points on Friday.  Click to enlarge.

The gold stocks gapped up a bit over three percent at the open, but willing sellers appeared right away — and they gave up over half their gains by around 10:25 p.m. in New York trading.  From that point, they crawled quietly higher for the remainder of the Friday session — and the HUI closed up a very respectable 3.52 percent.

It was the same price pattern for the silver equities, except the sell-off after the opening gap higher was much more pronounced.  The ensuing rally was hardly enthusiastic — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up only 1.81 percent.  I was more than underwhelmed.  Click to enlarge if necessary.

And here’s Nick’s 1-year Silver Sentiment/Silver 7 Index chart 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 weekly chart — and as you can see there wasn’t much happening, at least on a net basis during this past reporting week, but the intraday prices moves during the last five business days were rather interesting.  A lot of the poor price action in the equities was because of the out-of-the-blue down day on Wednesday — and the silver equities poor performance yesterday.  Click to enlarge.

Here is the month-to-date chart — and except for palladium, everything else is in the red by a bit.  That’s because of the ongoing engineered price declines in everything that began starting before February ended — and spilled over into March, which is still only six business days old.  Click to enlarge.

The year-to-date chart still shows green across the board, except for silver and, as I mentioned in my comments on the month-to-date data…all of the gains so far this year have been taken back during this latest engineered price decline.  However, their associated equities continues to hold up.  Click to enlarge.

Once this sequence of engineered price declines is done with — and that may have ended at the close of trading on Thursday, I expect these charts to be far more rosy looking than they are now.  However — and as I said last week in this space, I expect that any decision that goes against JPMorgan, to show up in the price activity long before any word comes out of the DoJ.


The CME Daily Delivery Report showed that 8 gold and 10 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.

In gold, Advantage and ADM were the short/issuers, with 5 and 3 contracts out of their respective client accounts.  And the two largest long/stoppers were JPMorgan and Advantage, with 4 and 3 contracts for their respective client accounts as well.

In silver, all 10 contracts were issued by Advantage out of its client account — and they also stopped 3 contracts for their client account as well.  The only other long/stopper was JPMorgan, picking up 3 for their own in-house trading account — and 4 for their client account.

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

Month-to-date there have been 327 gold contract issued/reissued and stopped — and that number in silver is now up to 4,858 contracts.

The CME Preliminary Report for the Friday trading session showed that gold open interest in March declined by 7 contracts, leaving 46 still open, minus the 8 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 9 gold contracts were actually posted for delivery on Monday, so this means that 9-7=2 more gold contracts were added to March.  Silver o.i. in March dropped by 125 contracts, leaving 410 still around, minus the 10 contracts mentioned a few paragraphs ago.  Thursday’s Daily Delivery Report showed that 122 gold contracts were actually posted for delivery on Monday, so that means that 125-122=3 silver contracts vanished from the March delivery month.


There were no reported changes in GLD yesterday, but an authorized participant added 1,359,740 troy ounces of silver to SLV.

Once again, there was no sales report from the U.S. Mint.

Month-to-date the mint has sold a piddling 1,500 troy ounces of gold eagles — and 500 one-ounce 24K gold buffaloes — and no silver eagles at all.

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

There was a fair amount of activity in silver, however — and all of it occurred at CNT.  They received two truckloads…1,199,653 troy ounces…and shipped out one truckload…600,911 troy ounces.  The link to this activity is here.

It was pretty busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday.  The reported receiving 500 of them — and shipped out a hefty 5,605.  All this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Treasure of El Carambolo was found in El Carambolo hill in the municipality of Camas (Province of Seville, Andalusia, Spain), 3 kilometers west of Seville, on 30 September 1958. The discovery of the treasure hoard spurred interest in the Tartessos culture, which prospered from the 9th to the 6th centuries BCE, but recent scholars have debated whether the treasure was a product of local culture or of the Phoenicians. The treasure was found by Spanish construction workers during renovations being made at a pigeon shooting society.

It consists of 21 pieces of crafted gold: a necklace with pendants, two bracelets, two ox-hide-shaped pectorals, and 16 plaques that may have made up a necklace or diadem. The jewelry had been buried inside a ceramic vessel. Alternatively, some current thinking is that the plaques were attached to textiles adorning animals led to sacrifice, while the necklace and bracelets were worn by the priest officiating. Following the discovery, archaeologist Juan de Mata Carriazo excavated the site. The treasure has been dated to the 8th century BCE, with the exception of the necklace, which is thought to be from 6th century BCE Cyprus. The hoard itself is thought to have been deliberately buried in the 6th century BCE.  Click to enlarge.


The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday, March 5, showed the expected big declines in the commercial net short positions in both silver and gold.  The silver numbers were better than Ted expected, but a bit less than he was hoping for in gold.

In silver, the Commercial net short position declined by 25,928 contracts, or 129.6 million troy ounces of paper silver.

They arrived at that number by reducing their long position by 1,878 contracts — and they covered 27,806 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Ted said that most of the change came in the Big 4 trader category, where JPMorgan and Citigroup hang out…along with what’s left of Scotiabank’s short position in silver — and suspects that it was all JPMorgan.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus much more, as they sold 17,762 long contracts, plus they added 12,144 new short contracts — and it’s the sum of those two numbers…29,906 contracts…that represents their change for the reporting week.

The difference between that number — and the Commercial net short position…29,906 minus 25,928 equals 3,978 contracts.  And as is always the case, that difference was made up by the traders in the other two categories.  It was mostly the ‘Other Reportables’, as they went net long by 4,114 contracts — and the ‘Nonreportable’/small traders didn’t do much, as they decreased their long position by a tiny 136 contracts.

The head-scratcher for Ted was the fact that the big banks in the ‘Producer/Merchant’ category only decreased their short position by a net 7,788 contracts, while the traders in the ‘Swap Dealer’ category decreased their short position by a chunky net 18,148 contracts.

But since Ted thinks that because of the new Bank Participation Report, JPMorgan decreased their short position by around 16,000 contracts or so…why is the change in ‘Producer/Merchant’ category so small…only 7,788 contracts?  He now figures that the CFTC is allowing JPM to trade in both that category — and the ‘Swap Dealer’ category as well, because that’s the only way that the numbers make any sense.  He’ll have lots to say about this in his weekly review later today.

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

The Commercial net short position in silver is now down to 52,241 COMEX contracts, or 261.2 million troy ounces of paper silver.

The Big 4 traders are short 29.6 percent of the entire open interest in silver, which is down quite a bit from the COT Report from last week — and the Big 8 traders, which obviously includes the Big 4, are short 46.0 percent of the entire open interest in silver, which is down quite a bit from the 50.4 percent the Big 8 were short in the last COT Report.  However, virtually all the decline came in the Big 4 category, as the ‘5 through 8’ large traders did very little.

Ted pegs JPMorgan’s short position around the 12,000 contract mark, down from the 28,000 contracts he felt they were short in last week’s report.  But he also admitted that it was an approximation.  JPMorgan is no longer the big short in silver — and that title is most likely held by Citigroup now.  Canada’s Scotiabank is still in the Big 4 short category somewhere.  I’ll have more on this in the Bank Participation Report further down.

Here’s the 3-year COT chart for silver — and the big improvement should be noted.  Click to enlarge.

As I mentioned in Friday’s column, despite how big an improvement there would be in the Commercial net short position in this week’s COT Report, silver would remain in a bearish configuration from a COMEX futures market perspective — and it is.  Whether that matters now, remains to be seen.


In gold, the commercial net short position declined by a hefty 45,848 COMEX contracts, or 4.58 million troy ounces of paper gold.

They arrived at that number by adding 9,690 long contracts — and they also reduced their short position by 36,158 contracts.  It’s the sum of those two numbers that represents their change for the reporting week.

The short position of the Big 4 traders in gold is down to 25.4 percent of the total open interest in gold…which is a big drop from last week — and the traders in the Big ‘5 through 8’ category actually increased their short position by a bit during the reporting week.  But despite that increase, the short position of the Big 8 traders took a tumble last week, as the are now short ‘only’ 37.4 percent of the entire open interest in the COMEX futures market in gold.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus a bit more, as they sold 28,314 long contracts — and they increased their short position by 18,998 contracts as well.  It’s the sum of those two numbers…47,312 contracts…that represents their change for the reporting week.

The difference between that number — and the commercial net short position…47,312 minus 45,848 equals 1,464 contracts was made up almost entirely by the traders in the ‘Nonreportable’/small trader category, as the ‘Other Reportables’ barely did anything on a net basis during the reporting week.

The commercial traders in the ‘Producer/Merchant’ reduced their short position by 13,568 contracts on a net basis — and the commercial traders in the ‘Swap Dealer’ category reduced their net short position by a hefty 32,280 contracts — and the sum of those two numbers equals the commercial net short position in gold, which it mathematically must do.

Here’s the snip from the Disaggregated COT, so you can see all this activity for yourself if you wish.  Click to enlarge.

The commercial net short position in gold is down to 11.40 million troy ounces of paper gold, which I’m sure Ted would classify as pretty bullish.

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

With the COMEX futures market bullish in gold, but still bearish in silver, you have to wonder where we go from here from a price perspective.  Ted always said that there would come a time when what was in the COT Reports wouldn’t matter.  This might be one of those times, but I wouldn’t bet the ranch on it at the moment.

There was very little volume in thinly-traded palladium market.  The Managed Money traders reduced their long position by a tiny 368 contracts — and the amounts traded by the commercial traders, along with the traders in the other two categories, was even less.  When I say “thinly-traded”…I mean it.  Platinum was entirely different, as the Managed Money traders got their faces ripped off by the commercials, as they covered a net 8,904 short contracts for big losses.  Now their getting hammered to the downside, losing even more money.  In copper, the Managed Money traders kept their losing streak unblemished, as they reduced their short position by 6,153 contracts, as the commercial traders rang the cash register on them in this metal as well.

Remember, as Ted keeps pointing out, it’s the commercial traders gaming the Managed Money traders that sets the world prices in most commodities…not supply demand.  The crooks at the CFTC and the CME Group knows all about this, but won’t do a thing to stop it.


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

For the current reporting week, the Big 4 traders are short 120 days of world silver production—and the ‘5 through 8’ large traders are short an additional 67 days of world silver production—for a total of 187 days, which is a hair over 6 months of world silver production, or about 436.4 million troy ounces of paper silver held short by the Big 8.  [In the COT Report last week, the Big 8 were also short 224 days of world silver production.]

In the COT Report above, the Commercial net short position in silver was reported as 261.2 million troy ounces.  As mentioned in the previous paragraph, the short position of the Big 8 traders is 436.4 million troy ounces.  The short position of the Big 8 traders is larger than the total Commercial net short position by a chunky 436.4 minus 261.2 equals 175.2 million troy ounces.  The reason for the difference in those numbers…as it always is…is that Ted’s raptors, the 32-odd small commercial traders other than the Big 8, are long that amount.

As stated earlier, Ted estimates JPMorgan’s short position at around 12,000 contracts, down 16,000 contracts from last week’s report, or 60 million troy ounces of paper silver held short.  That translates into about 26 days of world silver production.  That number also represents 22 percent of the short position of the Big 8 traders — and about 39 percent of the short position held by the Big 4 traders.

The Big 4 traders are short 120 days of world silver production — and once you subtract out the 26 days that JPM is short, that leaves 94 days split up between the other three large traders…a bit over 31 days that each is short.  And as I pointed out in the COT Report, JPMorgan is no longer the Big short in silver — and these numbers prove that.

The four traders in the ‘5 through 8’ category are short 67 days of world silver production in total, which is around 16.75 days of world silver production each.  The smallest of the traders in this category holds something less than 16.75 days — and the largest, something more than that amount.  So it appears that JPMorgan is most likely the smallest of the Big 4 traders at this point.

As I state earlier, the Big 8 commercial traders are short 46.0 percent of the entire open interest in silver in the COMEX futures market.  And once whatever market-neutral spread trades are subtracted out, that percentage would be a bit over 50 percent.  In gold, it’s now 37.4 percent of the total COMEX open interest that the Big 8 are short — and something over 40 percent once the market-neutral spread trades are subtracted out.

In gold, the Big 4 are short 42 days of world gold production — and the ‘5 through 8’ are short another 19 days of world production, for a total of 61 days of world gold production held short by the Big 8.  Based on these numbers, the Big 4 in gold hold about 69 percent of the total short position held by the Big 8.

The “concentrated short position within a concentrated short position” in silver, platinum and palladium held by the Big 4 commercial traders are about 64, 73 and 79 percent respectively of the short positions held by the Big 8.


The March Bank Participation Report [BPR] data is extracted directly from the data in yesterday’s Commitment of Traders Report.  It shows the number of futures contracts, both long and short, that are held by all the U.S. and non-U.S. banks as of Tuesday’s cut-off in all COMEX-traded products.  For this one day a month we get to see what the world’s banks are up to in the precious metals —and they’re usually up to quite a bit.  The March Bank Participation Report covers all of February.

In gold, 5 U.S. banks were net short 61,228 COMEX contracts in the March BPR.  In February’s Bank Participation Report [BPR] these same 5 U.S. banks were net short 75,739 contracts, so there was a big drop of 14,511 contracts from a month ago.  If JPMorgan was short gold up to that point, I’d suspect that they’re mostly out of that position by now.

Also in gold, 29 non-U.S. banks are net short 54,200 COMEX gold contracts, which is well under two thousand contracts per bank.  In the February’s BPR, 30 non-U.S. banks were net short 51,374 COMEX contracts…so the month-over-month increase is up a bit…2,826 contracts.  However, as I always say at this point, I suspect that there’s at least one large non-U.S. bank in this group, most likely Scotiabank, that still holds a fairly hefty short position in gold, even thought they appear to be no longer active in the precious metals futures market anymore.

As of this Bank Participation Report, 34 banks [both U.S. and foreign] are net short 24.5 percent of the entire open interest in gold in the COMEX futures market, which is down a bit from the 26.5 percent they were short in the February BPR.

Here’s Nick’s chart of the Bank Participation Report for gold going back to 2000.  Charts #4 and #5 are the key ones here.  Note the blow-out in the short positions of the non-U.S. banks [the blue bars in chart #4] when Scotiabank’s COMEX short position was outed by the CFTC in October of 2012.  Click to enlarge.

In silver, 5 U.S. banks are net short 31,643 COMEX silver contracts in March’s BPR.  According to Ted, JPMorgan now holds around 12,000 contracts of that amount…down quite a bit from the 28,000 contracts he estimated they held short in the February 26 COT Report.  I suspect that Citigroup holds a very large short position in COMEX silver now as well, almost certainly larger than JPMorgan’s.  In February’s BPR, the net short position of these U.S. banks was 46,281 contracts, so the short position of the U.S. banks is down a substantial 14,638 contracts from February BPR.

Also in silver, 21 non-U.S. banks are net short 29,118 COMEX contracts…which is virtually unchanged from the 29,126 contracts that these same non-U.S. banks were short in the February BPR.  That’s the biggest short position that the non-U.S. banks have held in aggregate since November 2017.  I would suspect that Canada’s Scotiabank still holds a goodly chunk of the short position of these non-U.S. banks.  I believe that a number of the remaining 21 non-U.S. banks are actually net long the COMEX futures market in silver.  But even if they aren’t, the remaining short positions divided up between these other 21 non-U.S. banks are immaterial — and have always been so.

As of March’s Bank Participation Report, 26 banks [both U.S. and foreign] are net short 31.9 percent of the entire open interest in the COMEX futures market in silver—which is down a bit from the 36.4 percent that they were net short in the February BPR — with much, much more than the lion’s share of that held by JPMorgan, Citigroup and Scotiabank.

Here’s the BPR chart for silver.  Note in Chart #4 the blow-out in the non-U.S. bank short position [blue bars] in October of 2012 when Scotiabank was brought in from the cold.  Also note August 2008 when JPMorgan took over the silver short position of Bear Stearns—the red bars.  It’s very noticeable in Chart #4—and really stands out like the proverbial sore thumb it is in chart #5.  Click to enlarge.

In platinum, 5 U.S. banks are net short 11,866 COMEX contracts in the March Bank Participation Report.  In the February BPR, these same banks were net short 9,947 COMEX contracts…so there’s been an increase of 1,919 contracts month-over-month.  [At the ‘low’ back in July of 2018, these same five U.S. banks were actually net long the platinum market by 2,573 contracts.] That’s quite a change for the worse in nine months.

Also in platinum, 17 non-U.S. banks are net short 9,392 COMEX contracts, which is up big from the 5,478 COMEX contracts they were net short in the February BPR…and in percentage terms, that’s an increase of 71 percent.  [Note: Back at the July 2018 low, these same non-U.S. banks were net short only 1,192 COMEX contracts.]

And as of March’s Bank Participation Report, 22 banks [both U.S. and foreign] are net short 27.4 percent of platinum’s total open interest in the COMEX futures market, which is up big from the 19.1 percent they were net short in February’s BPR.  That rally in platinum in February did not go unopposed by the world’s banks.

Here’s the Bank Participation Report chart for platinum.  Click to enlarge.

In palladium, ‘3 or less’ U.S. banks were net short 7,964 COMEX contracts in the March BPR, which is up from the 7,278 contracts they held net short in the February BPR.

Also in palladium, ’12 or more’ non-U.S. banks are net short 1,005 COMEX contracts—which is down from the 1,320 COMEX contracts that 14 non-U.S. banks were short in the February BPR.  That’s the lowest short position that the non-U.S. banks have held since June 2016.

When you divide up the short positions of these non-U.S. banks more or less equally, they’re completely immaterial…especially when you compare them to the positions held by the ‘3 or less’ U.S. banks.

As of this Bank Participation Report, 15 banks [U.S. and foreign] are net short 33.9 percent of the entire COMEX open interest in palladium.  In February’s BPR, the world’s banks were net short 29.8 percent of total open interest, so there’s been a small increase in the concentrated short position of the banks in this precious metal over the last month.

Here’s the palladium BPR chart.  You should note that the U.S. banks were almost nowhere to be seen in the COMEX futures market in this metal until the middle of 2007—and they became the predominant and controlling factor by the end of Q1 of 2013.  Click to enlarge.

I’m certainly happy to see the world’s banks, but mostly the U.S. banks — and mostly JPMorgan and Citigroup, reduce their net short positions over the last month.  But it’s still grotesque that they continue to control the prices of the precious metals, as they neither produce these metals, nor consume them.  Their only purpose is price management.  That’s all there is, there ain’t no more.

I have no idea where prices will head from here.  Friday was a very positive day — and whether it continues or not, remains to be seen.

I have an average number of stories for you today.  Doug Noland is back this week — and I have a Cohen/Batchelor interview as well.


CRITICAL READS

February Payrolls Shocker: Hiring Plunges to 20K as Wage Growth Soars

Just as we warned moments ago when we cautioned that the whisper number is for a sharply lower print than the expected 180K print, moments ago the BLS confirmed that in February the U.S. labor market hit a brick wall, or perhaps a blizzard, when it added just 20K jobs in February…

… the lowest monthly gain in more than a year and far below all estimates, although revisions to the prior two month actually added another 12K jobs, with the January 304K print revised higher to 311K and Dec also revised higher from 222K to 227K.

What is surprising is that while the Establishment Survey was a big miss, the Household Survey actually saw a big drop in the number of unemployed workers, which tumbled by 300K to 6.235MM.

Additionally, non-employment among the key worker demographic, those Americans aged 35 to 44, plunged in February to the lowest level in 12 years.

Another major surprise: while the jobless rate fell modestly to 3.8% from 4.0, the broader U-6 measure of unemployment plunged to 7.3% from 8.1%, the biggest monthly drop on record, after jumping last month.

This chart-filled Zero Hedge commentary showed up on their website at 9:40 a.m. EST on Friday morning — and I thank Brad Robertson for sending it our way.  Another link to it is here.


Fed’s QE Unwind Reaches $501 Billion, Balance Sheet Falls Below $4 Trillion. “Autopilot” Engaged — Wolf Richter

Over the next few months, the Fed is expected to announce its new plan for its balance sheet. Meanwhile, as we’re riveted to the edge of our seat, the old plan continues on autopilot, and February was one of the few months when the Treasury “roll-off,” as Chairman Jerome Powell likes to call it, hit the “caps.”

In February, the Fed shed $57 billion in assets, according to the Fed’s balance sheet for the week ended March 6, released this afternoon. This slashed the assets on its balance sheet to $3,969 billion, the lowest since December 2013. Via its “balance sheet normalization,” the Fed has now shed $501 billion. And since peak-balance-sheet at the end of 2014, the Fed has shed $547 billion:

During peak-balance-sheet at the end of 2014, total assets ($4.52 trillion) amounted to 26% of GDP. Today’s assets amount to 19.4% of GDP. In the years before QE started, the balance sheet ran around 6% of GDP.

By comparison, the ECB’s balance sheet assets now exceed 40% of GDP, and the Bank of Japan’s assets amount to 101% of GDP.

This interesting commentary from Wolf appeared on the wolfstreet.com Internet site on Thursday sometime — and I thank Richard Saler for passing it along.  Another link to it is here.


David Stockman: The Undrainable Swamp & the Inevitable Recession

Love it or hate it, the potency of the Trump Administration is on the wane, soon to be stuck in the mire of the Swamp it has deepened instead of drained, while the economy falls into one hell of a recession — so claims former Regan-era Cabinet member and Congressman David Stockman.
In his new book Peak Trump, Stockman notes how the wide divergence between Trump the campaigner and Trump the president appears to be proving to be his undoing.

Rather than fight to dismantle the institutions he railed against as a candidate — most notably the Deep State and the Federal Reserve — Trump has embraced them.

Now, when this latest asset bubble bursts (and Stockman believes the markets saw their peak back in Fall 2018), Trump will ‘own’ that. Having chosen to tie his administration’s success to the rising price of the S&P 500 since taking office, he won’t be able to foist the blame of a market crash on his predecessors.

Similarly, the Deep State — especially the military industrial complex — is experiencing a bonanza under the Trump administration. As a result, the Swamp is deeper than it has ever been.

This 56-minute audio interview was posted on the peakprosperity.com Internet site on Tuesday — and I found it on the Zero Hedge website on Wednesday.  But because of its length, I thought it best to wait for my Saturday missive.  Another link to it is here.


Doug Noland: Q4 2018 Z.1 “Flow of Funds”

The wide – and widening – divergence between booming risk markets and more than resilient safe haven sovereign bond prices narrowed just a bit this week. The Shanghai Composite was slammed 4.4% Friday (reducing y-t-d gains to 19.1%) on fears Beijing is increasingly alarmed by speculative securities markets. They should be. More dismal data (i.e. February exports down 16.6%) – along with indications that the U.S./China trade deal is not the done deal many have been presuming – pressured markets from China to the U.S. Mixed signals – i.e. paltry February job gains (20k) in the face of a stronger-than-expected ISM Non-Manufacturing index – provide little clarity regarding underlying U.S. economic momentum.

For the most part, markets have been mesmerized by a flock of dovish global central bankers – while ignoring gathering storm clouds. Yet Z.1 data are a reminder of how quickly the markets buckled back in the fourth quarter. By now, I’ll assume the vigorous short squeeze and unwind of hedges have pretty much run their course. It has me pondering the next leg down in the unfolding bear market.

At some point, it’s not going to be as easy for central bankers and Beijing to reverse faltering markets. A big surge in Broker/Dealer assets, “repo” and bank lending would prove problematic if, instead of recovering, markets continue sinking into illiquidity. Financial conditions would tighten dramatically. No junk – or investment-grade issuance. Q4 ETF outflows and derivative issues offered a hint of what’s to come. Foreign buyers have been losing interest in U.S. securities. And definitely don’t rule out a quick $10 TN drop in Household Net Worth – and attendant major economic ramifications. Silly me. Annual $2.0 Trillion federal deficits effortlessly monetized by our accommodating central bank will cure all ills – financial, economic, social, geopolitical and otherwise. Global policymakers will regret becoming so adept at stoking speculative excess.

Doug’s Credit Bubble Bulletin is always a must read for me.  His latest commentary put in an appearance on his website in the very wee hours of Saturday morning EST — and another link to it is here.


U.S. treats Luxembourg like a vassal state…or how U.S. imperial hubris has gone bonkers — The Saker

The U.S. Embassy in Luxembourg, responding to news of the Russian Prime Minister’s planned visit issued the following statement:

Luxembourg and its government find themselves at a unique time and in a unique place for advancing the right of all countries and peoples to “stay what [they] are”. It is a unique time as Russian Prime Minister Medvedev comes to Luxembourg just after the fifth anniversary of the illegal annexation of Crimea by Russia. Luxembourg is a unique place because Luxembourg was twice in the position of Crimea – occupied by a larger foreign power insisting it give up its identity to become part of a larger empire. Now, the world will watch to see if Luxembourg officials accept a different future for the people of Crimea than it insisted for itself, or will instead look the other way. To challenge illegal aggression, Luxembourg is at the perfect moment, in the perfect place, to forcefully call on Russia to reverse course and leave Crimea. After all, who in Europe or even around the world has greater standing to raise this issue?

Comment: clearly there is no such thing as “U.S. diplomacy” out there.  All that’s left are a sad gang of illiterate ignoramuses who don’t even realize how utterly offensive and yet also comical they look in the eyes of civilized people.  The local reaction was predictable:

The Luxembourgish government does not need tutoring from another state or embassy about how foreign policy should be defined. This is unacceptable!

Wow…hubris is being kind.  This tiny but worthwhile commentary from The Saker put in an appearance on his website on Thursday sometime — and I thank Larry Galearis for pointing it out.  Another link to it is here.


U.S. may demand ‘allies’ pay 150% for privilege of hosting [its] troops

Frustrated by its allies’ lagging military spending, the Trump administration is reportedly drawing up demands that countries where U.S. troops are stationed pay the full cost – and then some – for the ‘privilege’.

The White House is drawing up demands that Germany, Japan, South Korea and eventually every other country ‘hosting’ U.S. troops on its soil pay “cost plus 50” – 150 percent – for their upkeep, including the soldiers’ salaries, Bloomberg reports, citing “a dozen” sources in the Trump administration.

The Pentagon was asked to gather data on the cost of keeping U.S. troops abroad and countries’ contributions toward these expenses, several officials – again, anonymously – told AP on Friday. Countries whose policies “align closely” with the U.S. would get an unspecified discount, according to these sources.

President Donald Trump is pushing the proposal personally, according to Bloomberg, going so far as to demand “cost plus 50” in a note to National Security Advisor John Bolton, when the U.S. was negotiating the status of 28,500 or so troops in South Korea. The two countries eventually agreed on Seoul paying $924 million in 2019, up from $830 million the year before.

By way of comparison, Germany currently pays 28 percent of the cost of U.S. troops being based on its soil – about $1 billion-a-year – according to Rand Corporation researcher David Ochmanek. At a recent congressional hearing, the top U.S. general in Europe asked for even more troops, citing a “threat” from Russia. This was in addition to U.S. demands for European NATO members to buy more U.S.-made weaponry.

This news story was posted on the rt.com Internet site at 12:24 a.m. Moscow time on their Saturday morning, which was 4:24 p.m. in Washington — EDT plus 8 hours — and this comes courtesy of George Whyte.  Another link to it is here.  The Bloomberg story on this is headlined “Trump Seeks Huge Premium From Allies Hosting U.S. Troops” — and I thank Larry Galearis for that one.


Tales of the New Cold War: 100 years of the U.S. meddling in Russian affairs — John Batchelor interviews Stephen F. Cohen

Part 1:  Although not specifically about the Russiagate story, the two pundits discuss the other side of the accusations of “Russian meddling in U.S. elections” as balanced by a look at U.S. meddling in Russian affairs. Batchelor comments that the United States has been meddling with Russia for as long as three centuries. The professor, as an historian, agrees with this and adds that the social media effort used in the U.S. is what is new. Historically, however, this meddling in Russian affairs has been going on for a century – and visa versa. For example, he continues, the Russians were involved on the union side during the civil war (as other foreign states were somewhat participants or observers on both sides of this war. L.) The British favoured the Confederacy and the Czar sent naval units to ward off British ships in American waters. Then there were the three cold wars since the Russian Revolution – and he adds that these “wars” lasted a total of 85 years in duration. And in addition to espionage, these cold wars also involved meddling in the internal affairs of all the players.

Batchelor then describes how the West interfered in the Bolshevik Revolution on the side of the “Whites” against the “Reds” by actually sending troops into Russia. Cohen adds that the U.S. contingent of troops numbered 8,000 — and the U.S. position was clearly about fighting the Bolsheviks (Reds) considered a menace to all governments. Although the U.S. casualties were very modest, it was the only time that America was actually at war with Russia. This history led to the Communist International as an institution in Russia and beyond. The result was the spread of  Communist political parties in foreign states. By the time Stalin became leader of the Soviet Union, these parties were more or less controlled by Moscow – and that included the American Communist Party – and that meant Russia was probably meddling in U.S. politics. And Batchelor adds that the very act of the Western powers militarily supporting the Czarist regime was seen as significant hostility from then on by Communist governments.

Part 2:  In this segment Batchelor begins with describing how the anti-Bolshevik stance in the West became orthodoxy until Roosevelt recognized the Soviet Union in 1934, and how this alienation was very damaging to that country. He postulated that this contributed to the brutality of the Stalin regime. Cohen agrees and cites his own written biography about Nikolai Bukharin, who was General Secretary of the Executive Committee of the Communist International, and advocate of both moderation in the treatment of Russian peasants and better relations with the West. Stalin eventually executed him. Cohen then speculated that the first detente with the Soviets was initiated by the German aggression under Hitler. The relationship with Europe and the US then moderated and the American Communist Party relatively prospered. Batchelor then points out that the American invention of “the bomb” created “polar opposites” in the relations of the two countries, and the second cold war came into being. This affected the “information” flows that were censored in a variety of ways in each country, but surprisingly cultural forms, like music were more freely accepted although this too was a form of meddling. More serious meddling came from “Radio Free Europe” and the Russian equivalent going the other way. The Western radio propaganda worked because of the popular music quotient embedded in the programming. The modern version of this technology, the two pundits agree, has become Facebook.

Cohen then describes himself as a victim of being accused of meddling by the Soviets in 1982. His “crime” was talking to dissidents and he was denied a visa entry by the regime. This exists today, of course, as even the U.S. president can be accused of meddling for the Russians, an abuse as extreme as it is dishonest. And the most appalling modern example of Western meddling is of course the U.S. support of the Yeltsin leadership of the 1990s that resulted in more grief for Russia.

**********************************************************

The discussion leaves this listener with the impression that “meddling” has a more extreme meaning coming from Washington activities than from Russian ones. As such there is not a balance in grievances, and this also applies to Washington’s relationships with virtually every country on the planet where there has been meddling, or meddling is threatened as a matter of policy relations with unaligned nations. Russians died of starvation due to Washington interference in the Yeltsin years, and yet there was not nearly the degree of animosity as this deserved towards the West by Russians. The hypocrisy is obvious in the Russiagate event. Nor is this discussion comprehensive, as sanctions involving commodities, especially energy and FOREX interventions against Russia, should also be mentioned. There is also the broad interference of Washington against military sales by Russia to unaligned countries and even a NATO member. The U.S. is complicit in attempting to direct what can or cannot be sold to foreign states by Russia. One can often use the word meddling or interference and draconian in the same sentence with this topic. And it is getting worse by the day. [And a perfect example of that is the that brief article by The Saker posted about Luxembourg two stories back. – Ed]

This 2-part audio interview, with both sections being twenty minutes in length, was posted on the audioboom.com Internet site on Tuesday — and I thought it best to wait for today’s column, when you might have more time to listen to it.  I thank Larry Galearis for his excellent executive summary — and personal comments as well.  The link to Part 1 is in the headline — and here.  The link to Part 2 is here.


Global Warming a “Hoax and Scam” Pushed By Greedy Government Scientists: Greenpeace Co-Founder

The co-founder and former president of Greenpeace, Patrick Moore, says that climate change is a “complete hoax and scam,” which has been “taking over science with superstition and a kind of toxic combination of religion and political ideology.”

Moore, who recently made headlines for calling Rep. Alexandria Ocasio-Cortez a “pompous little twit” and “garden-variety hypocrite” on climate change, sat down with SiriusXM’s Breitbart News Tonight with hosts Rebecca Mansour and Joel Pollak…

The Greenpeace co-founder’s message echoes that of John Coleman, the late Weather Channel founder who called global warming “the greatest scam in history.”

Moore told Breitbart how fear and guilt are driving the climate change argument, reports Breitbart News.

Fear has been used all through history to gain control of people’s minds and wallets and all else, and the climate catastrophe is strictly a fear campaign — well, fear and guilt — you’re afraid you’re killing your children because you’re driving them in your SUV and emitting carbon dioxide into the atmosphere and you feel guilty for doing that. There’s no stronger motivation than those two.”

Precisely, dear reader!!! No surprises here — and it’s even more so coming from a source like him.  But I’ve known this for what it was when it first became ‘news’ way back when. This Zero Hedge story, complete with a 26-minute audio interview with Patrick Moore, appeared on their Internet site  at 3:05 p.m. on Friday afternoon EST — and is certainly worth your while if you have the interest.  Another link to it is here.


China’s gold demand looks to be slowing this year so far — Lawrie Williams

Shanghai Gold Exchange (SGE) figures for February’s gold withdrawals are now in and using our assumption (contentious in some analyses) that SGE gold withdrawals equate closely to overall Chinese gold demand it looks as though the nation’s voracious appetite for gold may be slowing.  The total of withdrawals for the first two months of the year comes to 318.31 tonnes as against 342.0 tonnes in 2018 and 332.65 tonnes in 2017.  Indeed the February 2019 gold withdrawal figure is the first monthly sub 100-tonne total for over 3 years.

Although the fall in the withdrawal figure as total Chinese gold demand would seem to be confirmed by other available data – notably a fall in deliveries of re-refined gold from Switzerland both to Mainland China and to Hong Kong so far this year, perhaps not too much should be read into the decline at this stage of the year.  The Chinese (Lunar) New Year, which encompasses a week-long Golden Week holiday commenced on February 5th this year so the whole holiday period – over which time government bodies like the SGE were closed – occurred in February thus reducing total gold withdrawal figures that month.  In 2018 the New Year holiday commenced later in the month, but still meant the SGE would have been closed for a full week during February, while in 2017 the New Year holiday commenced on January 28th meaning there will have been a couple of more trading days in February then.

So although we say that perhaps not too much sway on overall Chinese demand should be placed on cumulative figures for the first two months of the year because of the week-long February holiday period, the data taken in conjunction with that from other sources does, at this stage, suggest that Chinese demand is indeed turning down along with the slippage in the nation’s GDP growth.  Even so China remains the principal driver of global demand for gold bullion, although the gap that has built up between it and India may be slipping.

This commentary from Lawrie appeared on the Sharps Pixley website on Thursday GMT sometime — and another link to it is here.


PHOTOS and the FUNNIES

After leaving the Othello Tunnels, we took the back road into Hope, B.C. — and ran into the lovely jewel of Kawkawa Lake, a 5-minute drive from the town itself.  Just driving the main highways in the area, you’d never know this place existed.  I didn’t until then.  I took these two shots looking across the lake.  The first winter snow had just dusted Ogilvie Peak in the background of the second shot.  This is an area that we’ll explore in far more detail once spring arrives. The Trans-Canada Highway, B.C. Highways 3&7, plus the Highway 5/Coquihalla Highway — and main-line CNR and CPR all pass through, or around this town.  The Coquihalla River empties into the Fraser River in the town as well. Click to enlarge.

For fun…here’s a snip from the Google Earth website from four miles/7 kilometres up.  All the places mentioned above are contained in this image.  If you’re an arm-chair adventurer, you can go to their website and ‘drive’ the streets and highways of the entire area for yourself…plus more.  Click to enlarge.


The WRAP

I have two pop ‘blasts from the past’ for you today.  The first one, from 1979, is rather on the sedate side, but it was huge hit back in its day here in Canada — and the bordering states in the U.S. that could pick up Canadian radio stations.  The band was called ‘Deliverance‘ — and they were 1-hit wonders, but what a hit is was…at least in these parts — and it even charted on the Billboard Hot 100 in the U.S.  The link to that is here.

But if you’re looking for something that really rocks — and is more kick-ass/upbeat, here’s another Canadian rock classic.  I’ve posted this before several times, but I’m in the mood for it right now, so you’re getting it again today — and the link to that is here.  And if you’re into bass covers, here’s all-Canadian Constantine Isslamow doing the honours in the longer/full version of this tune — and the link is here.

Beethoven’s Symphony #5 is a work that I’ve only posted once before as a classical ‘blast from the past’ — and the reason for that is personal, as I’m just tired of it.  But it dawned on me this evening that others may not be, so I shouldn’t let my personal opinion get in the way of one of the most popular classical compositions of all time.

Here’s the West-Eastern Divan Orchestra under the baton of the world renown Daniel Barenboim.  This iteration was performed at the Royal Albert Hall on 23 July 2012 as part of The Proms that year.  The link is here.


The big rally in gold on the job numbers looked like it ran into ‘da boyz’ almost right away in New York yesterday morning, even before it attempted to blast above $1,300 spot — and the price was successfully capped minutes after 9 a.m. EST.  Silver fared better, but even it wasn’t allowed to run away to the upside.

I’m still wondering who was selling the precious metal equities so aggressively, not only yesterday, but on several other occasions this week.  The gold stocks did OK on Friday, despite that initial sell-off, but the silver shares weren’t as fortunate.

And as for where we go from here price-wise…I’m just not sure, as the commercial traders still have precious metal prices in their iron grip…with or without the help of JPMorgan.

Here are the 6-month charts for all four precious metals, plus copper and WTIC — and it should be noted that silver closed well above its 200-day moving average.  Whether that means anything in these managed markets, remains to be seen.  Click to enlarge.

With the ECB back in official Q.E. mode once again — and Japan’s central bank chomping at the bit to announce their next stock-buyback extravaganza, it’s only fitting to know that Fed chairman Jerome Powell will be appear on the CBS show ‘60 Minutes‘ on Sunday.

From quiet and secretive fifty years ago, they’ve now gone full 3-ring circus on us…complete with their versions of clowns and carnival barkers.  And with the world financial and economic system teetering on the brink…let the show begin!

That would be funny, if it wasn’t so tragic.  Most us are old enough to remember the gold standard — and when politics, banking and economic affairs were run by more serious minds.  It’s more than alarming to see how all this…and much more…has degenerated to farce within our lifetimes.

And as Doug Noland pointed out in his Credit Bubble Bulletin in the Critical Reads section…

For the most part, markets have been mesmerized by a flock of dovish global central bankers – while ignoring gathering storm clouds. Yet Z.1 data are a reminder of how quickly the markets buckled back in the fourth quarter. By now, I’ll assume the vigorous short squeeze and unwind of hedges have pretty much run their course. It has me pondering the next leg down in the unfolding bear market.

At some point, it’s not going to be as easy for central bankers and Beijing to reverse faltering markets. A big surge in Broker/Dealer assets, “repo” and bank lending would prove problematic if, instead of recovering, markets continue sinking into illiquidity. Financial conditions would tighten dramatically. No junk – or investment-grade issuance. Q4 ETF outflows and derivative issues offered a hint of what’s to come. Foreign buyers have been losing interest in U.S. securities. And definitely don’t rule out a quick $10 TN drop in Household Net Worth – and attendant major economic ramifications.”

As I said when this bear market began last spring…the implosion of the biggest financial and economic bubble in world history will take decades to unwind — and most of us, including this writer, will not be around to see the moment that biggest bear market the world will ever know, breaths its last.

Hard assets, especially the precious metals, will be the only safe harbour at some point — and both Ted and I have pointed out over the last few months, this rally from last year’s low feels different for some reason.  Some of which has to do with the dos à dos between JPMorgan and the DoJ that’s been going on since last October…or longer.  I also have one eye on Basel III…because as of the end of this month, gold suddenly becomes a Tier 1 capital asset…like cash or Treasury Bills.  Before that, it was relegated to a speculative holding category.  That will soon be no more.

But what happens from that point going forward remains to be seen.

And because of “all of the above”…I’m still ‘all in’.

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

Ed

A Strange Thursday Trading Session

08 March 2019 — Friday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


It was another day where the gold price didn’t do much…or wasn’t allowed to do much…you choose.  The attempt to smack it lower at the London open on Thursday morning, got bought immediately…but any of the tiny rallied that occurred after that, weren’t allowed to get far.  Except for the down/up spike at the London open, gold traded in a four dollar price range yesterday.  Nothing to see here…please move along.

Of course there were no high or low ticks worthy of the name.

Gold finished the Thursday session in New York at $1,285.20 spot, down 80 cents on the day.  Net volume was fairly quiet at a hair under 191,000 contracts — and there was a very chunky 73,000 contracts worth of roll-over/switch volume out of April and into future months.

The silver price chopped and flopped around until around 1 p.m. in London/8 a.m. in New York.  Then it was sold down to its low tick of the day, which came just before, or at, the afternoon gold fix in London — and it continued to chop and flop sideways from there until trading ended at 5:00 p.m. EST.

The high and low ticks aren’t really worth looking up for silver either, but here they are anyway…$15.13 and $14.985 in the May contract.

Silver was closed yesterday at $15.00 spot, down 4 cents from Wednesday.  Net volume was somewhat elevated at just under 55,000 contracts — and there was 6,900 contracts worth or roll-over/switch volume in that precious metal.

Platinum was sold a few dollars lower in Far East and early Zurich trading on their respective Thursdays, but was back at unchanged by 2 p.m. CET/8 a.m. EDT.  The engineered price decline commenced at that point — and that sell-off lasted until a few minutes after 12 o’clock noon in New York — and the price didn’t do much of anything after that.  Platinum was closed at  $812 spot, down another 13 bucks on the day…and right on its 50-day moving average, which it penetrated briefly intraday.

The palladium price crawled quietly sideways during Far East trading yesterday — and that lasted until a few minutes before the Zurich open.  It took flight at that point but, like the other three precious metals, it ran into ‘something’ about forty-five minutes later — and that was its high tick of the day — and at that juncture it was up 15 dollars.  It was sold a bit lower over the next hour — and then, like platinum, the price was engineered lower staring at 2 p.m. CET/8 a.m. EST.  That lasted until just before 10:30 a.m. in COMEX trading in New York — and then it edged unevenly higher for the rest of the Thursday session.  Palladium finished the day back above $1,500 spot, at $1,506…down 9 dollars from Wednesdays close.

The dollar index closed very late on Wednesday afternoon in New York at 96.87 — and really didn’t do much of anything once trading commenced at 7:45 a.m. EST on Wednesday evening.  It was basically comatose until it began to turn higher at precisely 11 a.m. GMT in London.  The rally became far more serious ninety minutes later — and it headed unevenly higher until 2:50 p.m. EST — and an hour or so later, crept a few basis points lower into the close.  The dollar index finished the Thursday session at 97.67…up 80 basis points from Wednesday.

This move in the U.S. dollar index yesterday had all the hallmarks of a short-covering rally that came on the news from the ECB yesterday.  And the fact that the gold and silver prices didn’t get pounded into the ground on that dollar index rally, should be carefully noted.

Here’s the DXY chart from BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart courtesy of stockcharts.com — and the delta between its close…97.63…and the close on the DXY chart above, was 4 basis points on Thursday.  Click to enlarge.

The gold stocks opened unchanged, dipped into negative territory ever so briefly — and then began to chop quietly higher.  Their respective highs came around 12:45 p.m. in New York trading — and then slid a bit over the next fifteen minutes, before chopping quietly sideways for the rest of the day.  The HUI closed higher by 1.01 percent.

The silver equities opened down a bit, hit their respective lows just before 9:30 a.m. in New York trading.  They began to chop quietly higher from there — and their respective highs came around 2:25 p.m. EST.  They softened a a hair going into the 4:00 p.m. close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 0.93 percent.  Click to enlarge if necessary.

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

The CME Daily Delivery Report showed that 9 gold and 122 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

In gold, the sole short/issuer was Advantage.  JPMorgan picked up 4 of those contracts — and Advantage 4 as well.

In silver, the only short/issuer that mattered was International F.C. Stone, with 120 contracts out of their client account.  Of course the biggest long/stopper was JPMorgan with 81 contracts…31 for its own account, plus 50 for its client account.  Advantage was in distance second place with 33 contracts for its client account.

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 March declined by 3 contracts, leaving 53 still around, minus the 9 contracts mentioned a few paragraphs ago.  Wednesday’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 were added to March deliveries.  Silver o.i. in March fell by 19 contracts, leaving 535 still open, minus the 122 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 22 silver contracts were actually posted for delivery today, so that means that 22-19=3 more silver contracts were added to March.

I noted that total gold open interest blew out by 23,329 contracts in the above Preliminary Report — and I’m kind of wondering what that’s all about.  Maybe it was spread trade related.


There were no reported changes in GLD on Thursday, but an authorized participant, most likely JPMorgan, removed 703,325 troy ounces of silver from SLV.

And, for the third day in a row, there was no sales report from the U.S. Mint.

There was some activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday.  JPMorgan reported receiving 55,955 troy ounces of the stuff — and that was a transfer from Brink’s, Inc.  There was no other ‘in’ activity.  Besides the transfer out of Brink’s, Inc., there was 63,202 troy ounces shipped out of HSBC USA.  The link to that is here.

There was very little activity in silver.  All the ‘in’ activity was 45,839 troy ounces that JPMorgan [again] picked up in a transfer out of the Brink’s, Inc. depository.  The only other ‘out’ activity was one good delivery bar…1,000 troy ounces…that departed Delaware.  There was also a small paper transfer…19,743 troy ounces…from the Eligible category — and into Registered over at CNT.  That, I suspect, will be used for March deliveries.  The link to this is here.

It was fairly busy over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday.  They reported receiving 3,860 of them — and shipped out 1,097.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.


I see that the People’s Bank of China added to their gold reserves in February for the third month in a row.  This time it was a smallish 380,000 troy ounces/11.82 tonnes…according to Nick Laird’s chart below.

I don’t get overly exited about such pronouncements from the PBOC, as it’s pretty common knowledge that they aren’t reporting all the gold reserves they actually have…releasing that information in dribs and drabs when it suits them.  That’s more than apparent in the chart below, which contains twenty years worth of data.  Click to enlarge.

I have an average number of stories for you today.


CRITICAL READS

Federal Reserve scraps ‘qualitative’ test for U.S. banks in 2019 stress tests

The U.S. Federal Reserve said on Wednesday it would no longer flunk banks based on operational or risk management lapses during its annual health check of the country’s domestic banks.

The “qualitative” portion of the 2019 test, however, will still apply to the U.S. subsidiaries of five foreign banks subject to the annual exam.

The move, which is a big win for major banks, such as Goldman Sachs Group Inc, Morgan Stanley and JP Morgan, Bank of America and Citigroup, forms part of a broader effort by the Fed to overhaul its annual “stress-testing” process, which the industry has long criticized as too onerous and opaque.

Since the 2007-09 global financial crisis, the Fed has put the country’s lenders through strict annual tests to see whether they would have enough capital to withstand a major economic downturn.

For the largest lenders, that test also included a so-called “qualitative objection,” that gives the Fed the discretion to fail banks due to risk management or operational failures, even if they have sufficient capital.

Lower the bar so all the banks can jump over easily.  Not exactly a big vote of confidence in the U.S. banking system.  This Reuters story, filed from Washington, was posted on their website at 1:24 p.m. EST on Wednesday — and it comes to us courtesy of Mike Easton.  Another link to it is here.


BlackRock CEO Larry Fink Says Modern Monetary Theory Is ‘Garbage

BlackRock Chief Executive Officer Larry Fink said he’s not a proponent of modern monetary theory.

That’s garbage,” Fink said in an interview with Erik Schatzker on Bloomberg Television Thursday. “I’m a big believer that deficits do matter. I’m a big believer that deficits are going to be driving interest rates much higher and it could drive them to an unsustainable level. ”

MMT economists argue that because the U.S. borrows in its own currency, it can print dollars to cover its obligations, and can’t go broke. The theory has won converts among freshman Democrats like Alexandria Ocasio-Cortez as a way to finance such social policies as the Green New Deal and Medicare For All.

The U.S. deficit is on course to top $1 trillion in the coming years, according to the Congressional Budget Office. Last week, Federal Reserve Chair Jerome Powell described that school of thought as “wrong,” while economists like Larry Summers and Paul Krugman have also denounced it.

But not everyone is so dismissive: Paul McCulley, former chief economist at Pacific Investment Management Co., says that he has a lot of sympathy for the doctrine although he’s “not a card-carrying MMTer.

This Bloomberg news item, with a 5:09 minute video clip embedded, put in an appearance on their Internet site at 4:01 a.m. PST [Pacific Standard Time] on Thursday morning — and was updated about ninety minutes later.  I thank Swedish reader Patrik Ekdahl for sending this along — and another link to it is here.


Surprise! Surprise! American Car Payment Delinquencies Set Record — Dennis Miller

Former Fed Chairs, Janet Yellen and Ben Bernanke took great credit for steering the world recovery from the great recession. When something good happens, it’s a result of their masterful strategic planning. Why are they totally surprised when negative news gets reported?

The Business Insider headline blared, “A record 7 million Americans have stopped paying their car loans, and even economists are surprised.”

Wolf Street headline, “Subprime Arrives: Auto-Loan Delinquencies Spike to Great Recession Levels”:

A development that is surprising during a strong economy and labor market”: New York Fed.

The Fed drives interest rates to historic lows, borrowing hits all-time highs and they’re surprised when auto loan delinquencies set new records?

Do their economists really wear those beanie hats with the propellers? At what point do these PhD’s lose their common sense? I’m serious! It doesn’t take a genius to understand cause and effect. Don’t they look at their own published data?

This long commentary from Dennis showed up on his website on Thursday morning sometime — and another link to it is here.


Consumer Credit Storms Above $4 Trillion, as Credit Card Debt Hits Record High

After a few months of wild swings, in January U.S. consumer credit normalized rising by $17 billion, in line with expectations, following December’s $15.4 billion increase. The continued increase in borrowings saw total credit storm above $4 trillion, and hitting a new all time high of $4.034 trillion on the back of a America’s ongoing love affair with auto and student loans, and of course credit cards.

Revolving credit increased by $2.6 billion, a rebound from December’s downward revised $939 million, and rising to $1.058 trillion, a new all time high in total credit card debt outstanding.

There was barely a change in the monthly increase in non-revolving credit, i.e. student and auto loans, which jumped by $14.5 billion, up from the $14.4 increase in December, and bringing the non-revolving total also to a new all time high of $2.977 trillion.

And while January’s rebound in credit card use may assuage some concerns about the sharp slowdown in spending in the end of 2018 and start of 2019, and the subsequent plunge in retail sales, as the household savings rate surged by the most in years, one place where there were no surprises, was in the total amount of student and auto loans: here as expected, both numbers hit fresh all time highs, with a record $1.569 trillion in student loans outstanding, an impressive increase of $10.3 billion in the quarter, while auto debt also hit a new all time high of $1.155 trillion, an increase of $9.5 billion in the quarter.

In short, whether they want to or not, Americans continue to drown even deeper in debt, and enjoying every minute of it.

This 4-chart Zero Hedge article was posted on their Internet site at 3:15 p.m. on Thursday afternoon EST — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Which Sector Is the Pin That Pricks the Everything Bubble? — Mike Maloney

With seemingly everything except precious metals in a bubble, it can be quite hard to keep your eye on the ball. Join Mike as he uncovers what could potentially be a huge factor in the next crash – insane levels of corporate debt.

This 7:11 minute video presentation from Mike appeared on the goldsilver.com Internet site on Thursday morning sometime — and I thank Jim Gullo for pointing it out.


Argentine Peso Plummets To Record Low As Inflation Soars

With inflation soaring (and forecast to accelerate further), the Argentine Peso has plummeted the last few days even as the central bank raised 7-day Leliq rate to 51.862%, according to two people with direct knowledge.

Peso has dropped 11% this year, making it the worst performer against USD.

Argentina, at the close of this article, maintains a high country risk. In fact, the second highest in Latin America and the third of the emerging countries if we include Turkey.

What is the country risk? It is the spread between the yield of the sovereign bond of a nation compared with the United States Treasury bonds, the lowest risk asset. Investors demand higher-yielding bonds due to the risk of the issuer’s economy, to compensate for the currency and solvency risk.

Argentina’s country risk increased by 130% in 2018 due to delayed reforms, constant devaluation and loss of foreign exchange reserves. The country risk has fallen significantly from its high of 817 basis points to the current 706. However, it remains the second highest in the region after Venezuela.

The only way that Argentina will erase its unnecessarily high country risk is by cutting bloated public spending, lowering taxes, attracting investment and improving ease of doing business. But more importantly, it needs to stop financing public spending by printing pesos for once and for all.

As if that’s going to happen, dear reader.  This Zero Hedge article appeared on their website at 1:28 p.m. on Thursday afternoon EST — and it’s from Brad Robertson.  Another link to it is here.


ECB Injects More Stimulus as Draghi Reveals Slashed Forecasts

The European Central Bank delivered a fresh round of monetary stimulus in a bid to shore up the weakening economy as it cut its growth forecast by the most since the advent of its quantitative-easing program four years ago.

ECB President Mario Draghi said the euro-zone economy will now expand only 1.1 percent this year, a drop of 0.6 percentage point from forecasts just three months ago. A package of assistance from new loans for banks to a longer pledge on record-low rates is intended to expand existing stimulus, he said.

The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment,” Draghi told journalists in Frankfurt on Thursday. “The risks surrounding the euro area growth outlook are still tilted to the downside.”

The ECB is reverting to more monetary support just three months after policy makers decided to end their bond-buying program and hoped to start weaning the euro-area economy off its crisis-era stimulus.

This Bloomberg story was posted on their website at 5:56 a.m. PST on Thursday morning — and was updated a bit over ninety minutes later.  It’s the second offering of the day from Patrik Ekdahl — and another link to it is here.  There was a follow-on story to this from Reuters headlined “With friends like Draghi, banks don’t need enemies” — and that comes courtesy of Richard Saler.


China Has Printed More Money than Any Country in History — Kyle Bass

The Chinese print more money than any other country has printed, in gross terms, in world history… Since 2001, they’ve printed roughly $30 trillion worth of RMB (Chinese Yuan). Think about that for a second. The debate here in the U.S., about the Fed, is: ‘Is the Fed balance sheet too big? Is it too large? It got to $4.5 trillion. Should it be $3.5 trillion?’ China has printed $30 trillion worth of RMB in a decade (18 years). The scale to which they have printed is… unprecedented. Can the Chinese run their stock market up? Absolutely. They control the price. They control the printing press. They control the police and they control the narrative.  They can control that for a long time. They way they interact with the rest of the world is they actually have to spend Dollars, Euros, Yen, or Pounds for anything that they are trying to import… At some point in time economic gravity is going to catch them on the FX reserves side… By the way, they run a 10% of GDP fiscal deficit… We are up in arms about running a trillion here, which is roughly 4%…

This 11-minute CNBC video interview with Kyle was embedded in a story over at thesoundingline.com Internet site yesterday — and I thank Roy Stephens for sharing it with us.  Another link to it is here.


CME Group renews discounts for secret trading by governments and central banks

Market manipulation by governments and central banks is right out in the open again, hiding in plain sight in the confidence that mainstream financial news organizations, financial letter writers, and gurus who purport to bring “technical analysis” to bear on markets will avert their gaze.

The CME Group, operator of the major U.S. futures exchanges, has just renewed its “Central Bank Incentive Program,” in which governments and central banks receive discounts for surreptitiously trading all major futures contracts on CME Group exchanges — not just financial futures but also monetary metals futures and even agricultural futures.

CME Group’s previous discount schedule, called to your attention by GATA a year ago January was dated December 2017.

Now a new one has been posted, dated last month — and has added bitcoin futures.

Some of the discounts have changed but governments and central banks continue to receive 15 percent discounts on fees for trading gold and silver futures.

Of course CME Group’s trading discount schedule doesn’t prove that any particular government or central bank has been trading any particular contract lately. But on Page 6 of its 2019 10-K form filed with the U.S. Securities and Exchange Commission, CME Group continues to acknowledge that “the customer base of our derivatives exchanges includes professional traders, financial institutions, institutional and individual investors, major corporations, manufacturers, producers, governments, and central banks.”

This link-filled commentary from GATA secretary/treasurer Chris Powell was posted on the gata.org Internet site late on Thursday morning EST — and another link to it is here.


Wedding Demand Props Up Indian Gold Imports for a Second Month

Gold imports by India climbed in February for a second straight month as retailers increased buying due to jewelry purchases for weddings in the world’s biggest consuming nation after China.

Overseas purchases advanced 5.5 percent to 70.7 tons last month from a year earlier, according to a person familiar with the data, who asked not to be named as the figures aren’t public. Imports during the April-February period declined 6.4 percent to 720 tons, the person said. Finance Ministry spokesman D.S. Malik wasn’t immediately available for comment.

Buying and wearing of gold during weddings and festivals is seen as auspicious in the majority Hindu country. Demand is set to recover this year as cash handouts and higher spending in an election year boost disposable incomes, according to the World Gold Council.

Rural demand is on the rise thanks to higher crop support prices and more rural-friendly schemes by the government,” Gnanasekar Thiagarajan, director at Commtrendz Risk Management Services, said by phone from Coimbatore in southern India.

This Bloomberg article put in an appearance on their Internet site at 9:13 p.m. PST on Wednesday evening — and it’s something I found on the Sharps Pixley website.  Another link to it is here.


China Gold Reserves Rise to 60.26 Million Ounces Worth Just $79.5 Billion

China increased its gold reserves for a third straight month in February, data from the People’s Bank of China (PBOC) showed this morning.

The value of China’s gold reserves rose slightly to $79.498 billion in February from $79.319 billion at the end of January, as the central bank increased the total amount of gold reserves to 60.260 million fine troy ounces from 59.940 million troy ounces.

Chinese foreign exchange reserves, the world’s largest, rose by $2.26 billion in February to $3.090 trillion, central bank data showed on Thursday, marking the highest level since August 2018. The U.S. trade deficit hit its highest in a decade in 2018, in a resounding failure for President Donald Trump’s global trade offensive, U.S. government data showed yesterday.

We have long pointed out two other entities, besides the PBOC, have also been buying gold – the State Administration of Foreign Exchange (SAFE) and the China Investment Corporation (CIC).

These potentially sizeable sources of demand are not included in the PBOC figures.

It is important to note this lack of transparency regarding total aggregate Chinese central bank and sovereign fund demand. Therefore, it is likely that we are underestimating Chinese and thus global gold demand.

That’s exactly right, dear reader.  This gold-related news story showed up on the goldcore.com Internet site yesterday sometime — and it’s another contribution from Richard Saler — and another link to it is here.


The PHOTOS and the FUNNIES

I only have two photos for you today and, like yesterday, both taken along the Kettle Valley Railway track bed on the way to the Othello Tunnels, which were closed for the winter, as these shots were taken on November 25.  The first is another shot along the KVR right-of-way — and the second is of the Coquihalla River which runs alongside the tracks.  It empties into the Fraser River at Hope, B.C., which is about a ten minute freeway drive from where I was standing — and thirty minutes or so by the back roads, which are far more scenic, as you’ll find out tomorrow.  Click to enlarge.


The WRAP

It was a very different trading session on Thursday.  The sell-off at the London open in gold — and a bit in silver, ran into pretty ferocious buying, but the ensuing rallies in both [and the other two precious metals] ran into ‘something’ just before 9 a.m. GMT/10 a.m. CET.  From there they both chopped nervously sideways, with ‘da boyz’ setting a new low close in silver for this move down

All this happened on trading volume that was pedestrian at best.

But with the dollar index soaring, it was a table set for a price smash to the downside in all four.  But there was nary a hint of that — and you have to wonder why that was.  I know I certainly am.

Then, despite the fact that the general equity markets were down all day long in New York on Thursday, the precious metal equities put in a very respectable performance….all things considered.

Here are the 6-month month charts for the four precious metals, plus copper and WTIC.  Gold was the only precious metal that didn’t have a new low close for this engineered move down.  And as I pointed out earlier, platinum was closed right on its 50-day moving average, after being closed below its 200-day moving average on Wednesday.  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 chopped quietly sideways once trading began at 6:00 p.m. EST in New York on Thursday evening.  That ended shortly after 9 a.m. China Standard Time on their Friday morning — and it began to head quietly higher from there.  The price was capped a bit after 3:30 p.m. CST, but has rallied a tiny bit since.  At the moment, gold is up $7.90 an ounce.  It was the same price path for silver — and it’s up 9 cents.  Platinum was down a dollar or so until shortly after 1 p.m. CST — and at that point it crept higher until exactly 3 p.m. CST — and hasn’t done much since — and is up 3 bucks.  Palladium inched unsteadily lower until shortly after 3 p.m. CST — and then it got kicked downstairs — and back below $1,500 spot.  It was down 14 bucks at its current low tick, but has jumped a higher since — and is down only 6 dollars as Zurich opens.

Net HFT gold volume is around 44,000 contracts — and there’s 2,965 contracts worth of roll-over/switch volume in this precious metal.  Net HFT silver volume is a bit over 12,500 contracts — and there’s only 158 contracts worth of roll-over/switch volume on top of that.

The dollar index opened down 4 basis points once trading began around 7:45 p.m. EST on Wednesday evening in New York, which was 8:45 a.m. China Standard Time on their Friday morning.  It chopped quietly lower until precisely 3:00 p.m. CST — and from there it jumped up a bit, but has turned lower once again — and as of 7:45 a.m. GMT in London/8:45 a.m. CET in Zurich, the dollar index is down 20 basis points.

Today, around 3:30 p.m. EST, we get the new and completely up-to-date COT Report and Bank Participation Report for positions held at the close of COMEX trading on Tuesday — and I know that Ted will be delighted to be working with current data.  So will I.

And as I’ve mentioned several times this week already, Ted is expecting huge improvements in the commercial net short positions in both silver and gold…hoping for at least 20,000 COMEX contracts in silver — and 50,000 in gold.  Of course, more is better!

And as I post today’s column on the website at 4:02 a.m. EST, I note that the gold price has continued to crawl quietly and unevenly higher during the first hour of London trading — and is currently up $8.50 an ounce. Silver is now up 13 cents. Platinum is now up 5 dollars — and palladium is now down 4 as the first hour of Zurich trading draws to a close.

Gross gold volume is coming up on 61,000 contracts — and minus roll-over/switch volume, net HFT gold volume is now up to 53,500 contracts. Net HFT silver volume is around 14,400 contracts — and there’s only 188 contracts worth of roll-over/switch volume in this precious metal.

The dollar index has been chopping quietly sideways during the first hour of London trading — and is still down 20 basis points as of 8:45 a.m. in London/9:45 a.m. in Zurich.

Today is not only Friday, but we also get the jobs report from the folks living in Never-Never Land over at the BLS.  That appears at 8:30 a.m. EST.  And after the rather weird trading action in the precious metals, not only yesterday, but all week long…nothing will surprise me when I check the charts after I roll out of bed later this morning.

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

Ed

A Snoozefest in Silver and Gold on Wednesday

07 March 2019 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price certainly didn’t do much yesterday.  The tiny ‘rally’ that began shortly after 1 p.m. China Standard Time on their Wednesday afternoon was capped and sold quietly lower until around 11 a.m. in London.  It crawled a few dollars higher into the COMEX open from there — and ran into “all the usual suspects” at that point — and the price didn’t do much of anything after that.

There are no real high or low ticks worth looking up.

Gold finished the Wednesday session in New York at $1,286.00 spot, down $1.30 from Tuesday’s close…and a new low close for this move down.  Net volume was pretty quiet at just under 175,500 contracts — and there was 19,000 contracts worth of roll-over/switch volume on top of that.

It was quiet in silver as well…generally following the same price path as gold. But after the tiny price spike going into the COMEX open, it was subsequently sold lower — and the silver price retested its Tuesday low price tick.  It managed to edge off that mark by a few pennies going into the 5:00 p.m. close of trading.

Like for gold, the high and low ticks aren’t worth looking up.

Silver was closed at $15.04 spot, down 6 cents on the day.  Net volume was nothing special at just under 53,500 contracts — and roll-over/switch volume was around 3,750 contracts in this precious metal.

Platinum was sold quietly and unevenly lower until the low was set in COMEX trading in New York and, like silver and gold, edged off that low as trading ended at 5:00 p.m. EST.  Platinum was closed at $825 spot, down 10 bucks on the day — and back below its 200-day moving average after its big short-covering rally in mid February.

The palladium price edged quietly lower throughout all of Far East and most of Zurich trading on their respective Wednesdays as well — and its low was set at the COMEX open.  At that juncture, it was down 9 dollars on the day.  It began to head higher from there — and that rally lasted until around 2:20 p.m. in the very thinly-traded after-hours market — and it didn’t do much of anything after that.  Palladium finished the Wednesday trading session in New York at $1,515 spot, up 19 dollars from Tuesday’s close.

The dollar index closed very late on Tuesday afternoon in New York at 96.87 — and opened up 3 whole basis points once trading began around 7:45 p.m. EST on Tuesday evening, which was 8:45 a.m. in Shanghai.  It edged a few basis points lower until precisely 10:00 a.m. China Standard Time on their Wednesday morning — and it chopped quietly higher until the high tick of the day…96.99…was set at 11:50 a.m. CST.  From that point it began to chop quietly and unsteadily lower in a fairly wide range — and the 96.78 low tick was set at 10:45 a.m. in New York.  It edged quietly higher and back into positive territory by a few basis points by 12:45 p.m. EST — and sank back to the unchanged mark by the close of trading at 5:28 p.m.  The dollar index finished the day exactly at unchanged…96.87…from Tuesday’s close.

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

Here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.80…and the close on the DXY chart above, was 7 basis points on Wednesday.  Click to enlarge.

The gold shares began to sell off the moment that trading began in New York at 9:30 a.m. EST on Wednesday morning.  That trend continued until shortly after 3 p.m. EST — and they didn’t do much of anything after that.  The HUI closed down 2.72 percent.

The silver equities opened unchanged — and hit their highs of the day, such as they were, at precisely 10:00 a.m. EST in New York trading.  From that point, they followed the gold equities like a shadow until minutes after 3 p.m. — and then managed to tick a bit higher into the close.  But that was cold comfort indeed, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed lower by 3.09 percent.  Click to enlarge if necessary.

Although the U.S. equity markets closed down on the day, there was no rhyme nor reason as to why the precious metal equities got sold off so hard, as their underlying metals barely moved all day long during the COMEX trading session.

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

The CME Daily Delivery Report showed that 8 gold and 22 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

In gold, ADM and International F.C. Stone issued 4 and 3 contracts out of their respective client accounts.  And the two biggest long/stoppers were JPMorgan and Advantage, with 4 and 3 contracts for their respective client accounts as well.

In silver, the two short/issuers were Advantage and ADM, with 18 and 4 contracts out of their respective client accounts.  JPMorgan was the largest long/stopper, picking up 6 contracts for its own account, plus 9 contracts for its client account.  Advantage came in second place with 6 contracts for its client account.

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 March fell by 31 contracts, leaving 56 still open, minus the 8 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 39 gold contracts were actually posted for delivery today, so that means that 39-31=8 more gold contracts were added to the March delivery month.  I suspect that those 8 contracts are the ones posted for delivery on Friday in the above Daily Delivery Report.  Silver o.i. in March dropped by 352 contracts, leaving 554 still around, minus the 22 contracts mentioned a few paragraphs ago.  Tuesday’s Daily Delivery Report showed that 372 silver contracts were actually posted for delivery today, so that means that 372-352=20 more silver contacts were just added to March.

And I also note that there are 989 contracts of open interest in the March 1,000 ounce mini silver contract, about 200 contracts worth — and that ain’t exactly chopped liver.


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

And there was no sales report from the U.S. Mint, either.

The only activity in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday was 7,720 troy ounces that was shipped out of Canada’s Scotiabank — and the link to that is here.

It was a bit busier in silver, as 753,425 troy ounces was received — and only 177,885 troy ounces were shipped out.  In the ‘in’ category, there was one truckload…600,820 troy ounces…received at Brink’s, Inc. — and the remaining 152,605 troy ounces found a home over at Scotiabank.  In the ‘out’ category, there was 152,605 troy ounces shipped out of Brink’s, Inc. — and remaining 25,280 troy ounces departed CNT.  The link to that activity is here.

Over at the COMEX-approved gold kilobar depository in Hong Kong on their Tuesday, they reported receiving 1,000 of them — and shipped out 115.  This activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


The Dacian bracelets are bracelets associated with the ancient people known as the Dacians, a distinct branch of the Thracians. These bracelets were used as ornaments, currency, high rank insignia and votive offerings Their ornamentations consist of many elaborate regionally distinct styles. Bracelets of various types were worn by Dacians, but the most characteristic piece of their jewelry was the large multi-spiral bracelets; engraved with palmettes towards the ends and terminating in the shape of an animal head, usually that of a snake.

They were discovered c.2000 in Romania — and were crafted sometime between the 1st century B.C. and the 1st century A.D. ….but other than that, there’s no other information available about the discovery itself.   Click to enlarge.

It was a pretty quiet news day yesterday — and I don’t have much for you.


CRITICAL READS

Fed’s Kaplan says U.S. corporate debt a reason for rate hike pause

A $5.7 trillion borrowing binge by U.S. companies could make a slowdown in the world’s biggest economy even more painful and is one more reason the Federal Reserve was wise to put interest rate hikes on hold, Robert Kaplan, president of the Dallas Fed, said.

It’s something that I’m aware of, which sort of reinforces for me why I feel we should be taking no action for some period of time,” Kaplan said in an interview with Reuters ahead of the publication on Tuesday of an analysis of U.S. corporate debt.

Companies with big debt loads may be more likely to cut spending and hiring in a downturn, “and the danger is that with a sufficient enough slowing, you’ll have a greater deterioration in credit quality than you would otherwise, which could in turn amplify the slowdown,” Kaplan said.

I borrowed this Reuters story from yesterday’s edition of the King Report.  Bill King also posted a tweet by Fred Hickey on his reaction to this statement — and it reads as follows: Fred Hickey @htsfhickey: Are these Fed people brain dead?  Can’t raise rates because of too much corp. debt? Reason there’s too much corp. debt is because Fed has suppressed rates to such low levels it encouraged taking on of debt (all kinds).  Want to reduce debt problem: RAISE RATES.  Amen to that.  Another link to this Reuters article, filed from San Francisco, is here.


Watching the Global Flows Explains Why the Dollar Won’t Be Kept Down

The dollar’s resilience after what some have categorized as the most dovish Federal Reserve turnaround in history comes as little surprise to Exante Data’s Jens Nordvig.

U.S. President Donald Trump may be looking to jawbone the greenback. But for Exante, it’s still all about the grab for yield, with rates on dollar-denominated assets remaining more attractive relative to the painfully low or negative ones found in Europe and Asia. The firm’s analysis of the holdings of global asset managers suggests that isn’t going to change anytime soon.

Exante’s flagship global flow analytics product aggregates fund managers positioning in fixed income and currencies to pinpoint extremes. It’s readings — which have helped snag Exante clients willing to pay $60,000 a year for its insights — include gauges of activity tied to carry trades.

Inflows into this strategy, a bet in which an investor borrows in a lower-yielding currency and invests in one with higher rates, using purchases of dollar-denominated assets surged this quarter to multiyear highs. That’s come even as Fed Chairman Jerome Powell and his colleagues have indicated a resolve to stand pat on policy normalization for now.

People are using the dollar as the long in the carry trade, with European investors still having very little to buy at home that they can accumulate yield in,” said Nordvig, who launched Exante in 2016. “You can absolutely see this in the global fund flows we track. It really explains the dollar holding up in the face off this U-turn by the Fed.”

This is mostly bulls hit, as the only reason that the dollar index hasn’t crashed and burned already is because of the always-present ‘gentle hands’ when it begins heading for the nether reaches of the earth.  This Bloomberg story put in an appearance on their Internet site at 9:00 p.m. PST on Tuesday evening — and was updated about twelve hours later.  I found it embedded in a GATA dispatch — and another link to it is here.


U.S. Credit Card Debt Closed 2018 at a Record $870 Billion

U.S. credit card debt hit $870 billion — the largest amount ever — as of December 2018, according to the data from the Federal Reserve. Credit card balances rose by $26 billion from the prior quarter.

The increase in credit card balances is consistent with seasonal patterns but marks the first time credit card balances re-touched the 2008 nominal peak,” according to the report.

Nearly 480 million credit cards are now in circulation — up by more than 100 million since hitting bottom after the recession a decade ago.

At the end of last year, credit cards were the fourth-largest portion of consumer debt in the U.S. after mortgage, student loan and auto debt. But the quarterly increase in credit card debt was faster than the other categories. Overall debt reached a record $13.5 trillion.

About 37 million credit card accounts had a 90+ days delinquent mark added to their credit report last quarter, an increase of about two million from the fourth quarter of 2017. These 37 million accounts hold roughly $68 billion in debt that is 90-plus days delinquent.

In aggregate, credit card limits rose for the 24th consecutive quarter, with a 1.5% increase in the fourth quarter of 2018.

This Bloomberg story showed up on their website at 4:00 a.m. EST on Tuesday morning — and was updated about four hours later.  It’s the second news item that I ‘borrowed’ from yesterday’s edition of the King Report — and another link to it is here.


U.S. Trade Deficit Soars to $621BN, Highest Since 2008 as Goods deficit Hits Record

Confirming last week’s advance goods data which saw the biggest trade deficit on record in December, moments ago the BEA reported that the U.S. trade deficit soared to a 10-year high of $621 billion in 2018, jumping by $68.8 billion, or 12.5 percent in the year, and crushing Trump’s pledges to reduce it, as tax cuts boosted domestic demand for imports while the strong dollar and retaliatory tariffs weighed on exports.

The data release was originally delayed a month by the partial government shutdown. January figures are due March 27.

Worse, for goods only, the deficit with the world surged to a record $891.3 billion in 2018 from $807.5 billion the prior year, as merchandise deficits with Mexico and the European Union also hit records. Offsetting the record good deficit was the surplus in services which kept rising, and also hit a record – in the other direction – rising to a $270.2 billion surplus in 2018.

The reason for the massive jump in the deficit is that while exports increased $148.9 billion or 6.3% as shipments of goods including crude oil, petroleum products and aircraft engines increased. However, imports increased even more, some 7.5%, or $217.7 billion, on purchases of items from pharmaceuticals to computers, along with services such as travel.

On a monthly basis, the December deficit soared from $50.3 billion to $59.8 billion, also a 10-year high and far worse than the consensus estimate of $57.9 billion.

This news item was posted on the Zero Hedge website at 8:56 a.m. EST on Wednesday morning — and I thank Brad Robertson for sending it along.  Another link to it is here.


OECD Slashes Global GDP Forecast, Warns “Outcome Could Be Weaker Still

The world is rapidly headed for a recession unless something changes, according to the latest gloomy warning from the OECD overnight, which has joined the IMF in warning that the global economy is suffering more than expected from trade tensions and political uncertainty which are clouding prospects particularly in Europe, where the OECD slashed its 2019 growth outlook to just 1%, almost half its prior 1.8% forecast.

The global expansion continues to lose momentum,” the Paris-based Organization for Economic Cooperation and Development said as it downgraded the 2019 GDP forecast of almost every Group of 20 nation including the U.S., China, U.K. and euro area, while it now expects Italy to be headed to worst year since 2013. “Growth outcomes could be weaker still if downside risks materialize or interact.”

The OECD’s growth guillotine was not exactly a surprise as these are the organization’s first forecasts in almost four months, and it is forced to play catch-up with developments in a world in which central banks U-turned from hawkish to dovish to reflect a sharp slowdown from Japan to the U.S. Indeed, as Bloomberg notes, in that period little has gone right for the world’s biggest economies: Weakness in the euro area and China are proving more persistent, trade growth has slowed sharply and uncertainty over Brexit has continued.

Perhaps because it came about a month after the IMF’s own latest forecast cut, the OECD’s numbers were even more downbeat than the monetary fund’s, particularly the euro region and the U.K., where the organization warns that things could get even worse.

This article appeared on the Zero Hedge Internet site at 9:25 a.m. on Wednesday morning EST — and it comes to us courtesy of Brad Robertson as well.  Another link to it is here.


Platinum American Eagle bullion coin sales inching toward sell-out

During the month of February, the U.S. Mint’s authorized purchasers bought another 2,400 of the 2019 American Eagle 1-ounce .9995 fine platinum coins, bringing cumulative totals for 2019 to 29,500 coins.

The Mint has limited itself to a 40,000-coin maximum mintage for the 2019 coins. Mint officials indicated that an initial 30,000 coins were produced in advance of the Jan. 7 sales launch date, with another 10,000 pieces to be minted when the first 30,000 coins are sold.

Of course the U.S. Mint won’t be producing any 1-ounce palladium coins this year, as that would just exacerbate the physical shortage in that precious metal.  This article was posted on the coinworld.com Internet site on Wednesday sometime — and another link to it is here.


Venezuelan opposition asks Citibank to delay gold repurchase

Opposition leader Juan Guaido has asked Citibank to delay by 120 days Venezuela’s scheduled repurchase of gold that President Nicolas Maduro’s government put up as collateral for a loan in 2015, three members of the team advising Guaido said.

Maduro’s government began to use gold swap deals some four years ago in order to obtain financing as oil income plummeted in the face of sanctions. Under such agreements, if the borrower does not pay back the loan on time, the financial institution keeps the gold.

One of the sources told Reuters that Citibank has not yet informed them whether or not it will agree to the request. A Citibank spokesperson declined to comment. Venezuela’s Information Ministry and the central bank did not respond to requests for comment on the status of the loan and its own discussions with Citibank, if any.

The request is part of the opposition’s strategy to safeguard Venezuela’s foreign assets and prevent the socialist Maduro government from selling off gold reserves to raise hard currency amid tightening sanctions.

This Reuters story, filed from Caracas, showed up on their website at 4:06 p.m. on Tuesday afternoon EST — and it’s a news item I found on the gata.org Internet site yesterday.  Another link to it is here.


South Africa’s mines minister calls on police to quell violence at Sibanye mine

Growing unrest at Sibanye-Stillwater’s South African gold operations has left nine people dead since workers downed tools in November, prompting the country’s mines minister to call on the police to step in and protect the local community.

Mineral Resources Minister Gwede Mantashe has requested the assistance of the Minister of Police to “restore and safeguard the safety and security of the community” in Carletonville in the west of Johannesburg, the mines ministry said.

“[The strike] has become violent, impacting negatively on communities in the area, with nine deaths reported thus far and an estimated 62 houses burnt down,” the mineral resources department said.

The Association of Mineworkers and Construction Union (AMCU) has been on strike at Sibanye’s bullion operations since mid-November and plans to extend the strike to its platinum mines as well as all other mines where the AMCU has members.

Sibanye-Stillwater said last month it could cut nearly 6,000 jobs at its gold mining operations, where AMCU has been on strike since mid-November over a wage dispute.

Firms including AngloGold Ashanti, Harmony Gold , Anglo American Platinum who received a strike notice are awaiting a labour court ruling which will decide if mine workers’ can embark on an industry-wide strike.

This Reuters story, filed from Johannesburg on Tuesday, was picked by the news.trust.org Internet site — and I found it on the Sharps Pixley website yesterday.  Another link to it is here.


India’s jewellers restock gold after prices drop 4%

After a lull of almost a fortnight, there was some buzz as demand showed an uptick in the gold market. Price of gold has dropped by 4.17 per cent since February 20, prompting jewellers to restock the metal. The discount of $2-3 per troy ounce at the B2B level last week has disappeared, indicating demand is picking up.

The market expects gold prices could slip to Rs 31,700 per 10 gm by this weekend. On Tuesday, gold price was hovering around Rs 32,445 per 10 gm (without GST).

We are seeing some movement in the market after almost a fortnight. Rupee has appreciated, too, which is supporting gold prices. Indians have started buying jewellery after a long gap,” said Mukesh Kothari, director of RiddiSiddhi Bullion.

This gold-related news item, filed from Kolkata, put in an appearance on the Economic Times of India website at 8:40 a.m. IST on their Wednesday morning, which was 10:30 p.m. in New York on Tuesday night — EST plus 10 hours.  I found it on the Sharps Pixley website — and another link to it is here.


The PHOTOS and the FUNNIES

This first photo was taken about a fifteen minute drive south of Merritt, B.C. on the lightly-travelled Coldwater Road.  It was late in the afternoon on a fall day — and with the sun low in the sky, this photo op showed up.  So I stopped the car in the middle of the road, as there are no shoulders to speak of — and took this shot.  Click to enlarge.

One thing I discovered within weeks of my move to Merritt, B.C. was that the now defunct Kettle Valley Railway extended just about everywhere in lower British Columbia.  These two photos were taken on the KVR rail bed just outside of Hope, B.C. at a place called the Othello Tunnels…which is now a fairly major tourist attraction, but was closed for the ‘winter’ season when we were there.  Because of the huge amount of rain they get, moss grows everywhere on the trees.  Click to enlarge.


The WRAP

It was a ‘nothing’ sort of day in both gold and silver yesterday, although both were closed at new lows for this move down…but not by much.  And because both these low closes occurred after the 1:30 p.m. COMEX close, neither number will appear on their respective dojis on the 6-month charts below.  The same can be said for palladium, as it’s high close of the day came after the COMEX close as well.

Here are the 6-month charts for the Big 6 commodities — and there’s certainly no much to see…except for the fact that ‘da boyz’ have platinum back below its 200-day moving average after its big short-covering rally that began in mid February.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away, I see that the tiny ‘rally’ that began as soon as trading started at 6:00 p.m. EST on Wednesday evening, got capped and turned lower shortly before 10 a.m. China Standard Time on their Thursday morning. It has been edging lower in price ever since. At the moment, gold is down $2.10 the ounce. It was the same price path for silver — and it’s now bouncing along its Tuesday and Wednesday low ticks…down 3 cents currently. Platinum is a bit lower as well — and down 2 bucks. And after being down a few dollars in Far East trading, palladium is back at unchanged as Zurich opens.

Net HFT gold volume is pretty light at 30,500 contracts — and there’s about 3,900 contract worth of roll-over/switch volume in this precious metal. Net HFT silver volume is around 9,200 contracts — and there’s only 282 contracts worth of roll-over/switch volume on top of that.

The dollar index has been doing virtually nothing — and is up 1 whole basis point from its 7:45 p.m. EST open in New York on Wednesday evening.


It’s still impossible to tell whether or not we’ve seen the lows for these engineered price declines or not.  Ted is expecting huge decreases in the commercial net short positions in both silver and gold in tomorrow’s Commitment of Traders Report.  But even if his estimates turn out to be on the conservative side in silver, it’s still very much in bearish territory from a COMEX futures market perspective.

And as I post today’s missive on the website at 4:02 a.m. EST, I note that the gold price had a small, but vicious price spike lower — and recovered all of that, plus a lot more within the next thirty or so minutes — and is currently down only 10 cents an ounce. Ditto for silver, as it was blasted below $15.00 the ounce…but it came roaring back in short order — and is now up 2 cents on the day. Platinum ticked a bit lower at the Zurich open as well, but it recovered as well — and is now back at unchanged. Palladium didn’t get the same treatment as the other three precious metals, but it has roared higher — and is now up 12 bucks as the first hour of Zurich trading comes to a close.

Gross gold volume is now up to a bit over 65,000 contracts — and minus roll-over/switch volume, net HFT gold volume is a bit under 52,000 contracts. Net HFT silver volume is coming up on 13,400 contracts — and there’s only 384 contracts worth of roll-over/switch volume in this precious metal.

The dollar index remains comatose — and is still up one basis point as of 8:45 a.m. GMT in London/9:45 a.m. CET in Zurich.

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

Ed

So, Is ‘The Bottom’ In Yet?

06 March 2019 — Wednesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rallied a few dollars once trading began at 6:00 p.m. EST on Monday evening in New York — and the high of the day came at 1 p.m. China Standard Time on their Tuesday afternoon.  Ted’s “midnight move” commenced at that point — and the price was sold quietly lower until the 10:30 a.m. morning gold fix in London.  It crept back to a bit above unchanged by the COMEX open, but was then sold lower until around 1 p.m. EST…however, the low tick of the day came on a very sharp spike down at the 10 a.m. EST afternoon gold fix.  From 1 p.m. onwards it crawled a bit higher — and finished in positive territory by a bit.

The high and lows certainly aren’t worth looking up.

Gold finished the Tuesday session in New York at $1,287.30 spot, up 90 cents on the day.  Net volume was nothing special at a hair under 196,000 contracts — and roll-over/switch volume was a bit over 22,500 contracts.

Silver was up about 7 cents by around 11:30 a.m. in Shanghai on their Tuesday morning — and that was its high of the day.  It was sold unevenly lower from there until a few minutes after London opened — and it crawled quietly higher into the COMEX open from there.  After that, it was more or less the same price path that gold was forced to follow — and silver closed up a bit on the day as well.

The high and low ticks really aren’t worth looking up in this precious metal, but here they are anyway…$15.175 and $15.06 in the May contract.

Silver finished the day at $15.10 spot, up 4 cents from Monday’s close.  Net volume was very decent at a bit over 65,500 contracts — and there was around 3,250 contracts worth of roll-over/switch volume in that precious metal.

Platinum’s price path was very similar to both silver and gold, so I’m not going to spend any time on the play-by-play.  Although I will point out that the low price tick in platinum came around 10:35 a.m. in New York, which was well after the afternoon gold fix in London.  Platinum was closed at $835 spot, up a dollar on the day.

Palladium traded almost ruler flat in price right up until a few minutes after 1 p.m. CST on their Tuesday afternoon.  Ted’s “midnight move” commenced at that juncture — and then palladium really had its lights punched out at the Zurich open.  From that point it crawled higher until shortly before 9 a.m. in New York, but was then sold quietly lower until a few minutes before 1 p.m. EST.  It crept higher from there until shortly before 3 p.m. in the thinly-traded after-hours market — and didn’t do much of anything after that.  Palladium was closed at $1,496 spot, down 16 bucks on the day.

The dollar index opened unchanged at 96.68 once trading commenced at 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.  It traded almost ruler flat until about 11:30 a.m. CST — and then jumped higher by 8 basis points.  From there it chopped quietly sideways until a ‘rally’ began minutes before 10 a.m. in New York…very close to the time of the afternoon gold fix in London.  The 97.01 high tick was set very close to 10:30 a.m. EST — and had given back a very decent chunk of its previous ‘rally’ by shortly before 2 p.m.  It didn’t do a thing after that.  The dollar index finished the Tuesday session at 96.87…up 19 basis points from Monday’s close.

Here’s the DXY chart from BloombergClick to enlarge.

And here’s the 6-month U.S. dollar index chart, courtesy of the folks over at the stockcharts.com Internet site — and the delta between its close…96.79…and the close on the DXY chart above, was 8 basis points on Tuesday.  Click to enlarge.

The gold shares opened a bit on the weaker side once trading began in New York at 9:30 a.m. on Tuesday morning — and their respective lows came a few minutes after 10 a.m. EST.  They chopped very unevenly sideways, with a slightly positive bias, for the rest of the day — and managed to finish just above the unchanged mark, as the HUI closed higher by 0.43 percent.

The silver equities traded in a very similar fashion on Tuesday, except the rally off of their lows was somewhat more robust — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed up 1.11 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 for Day 5 of March deliveries showed that 39 gold and 372 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, the largest short/issuer was ADM with 30 contracts out of its client account.  JPMorgan stopped 25 contracts…3 for its own account, plus 22 for its client account.  The only other long/stopper that mattered was Advantage, picking up 12 contracts for its client account.

In silver, the two biggest short/issuers were ADM and Morgan Stanley.  ADM issued 148 contracts from its client account — and M.S. issued 147 contracts from its in-house/proprietary trading account.  In distant third spot was ABN Amro with 41 contacts from its client account.  Of course the tallest hog at the long/stopper trough was JPMorgan, as they stopped 237 contracts in total…81 for their own account, plus another 156 for its client account.  In distant second spot was Advantage, with 98 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 March dropped by 54 contracts, leaving 87 left, minus the 39 mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 19 gold contracts were actually posted for delivery today, so that means that 54-19=35 gold contracts disappeared from the March delivery month.  Silver o.i. in March rose by 61 contracts, leaving 906 still open, minus the 372 contacts mentioned a few paragraphs ago.  Monday’s Daily Delivery Report showed that 108 silver contracts were actually posted for delivery today, so that means that 108+61=169 more silver contracts just got added to March.


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

And there was no sales report from the U.S. Mint, either.

There was a bit of movement in gold over at the COMEX-approved gold depositories on the U.S. east coast on Monday.  Nothing was reported received — and only 10,375 troy ounces were taken out — and that occurred at Delaware.  The link to that activity is here.

Surprisingly enough, there was even less activity in silver.  There was 2,069 troy ounces received…two good delivery bars…that arrived at CNT.  Nothing was shipped out — and I won’t bother linking this amount.

It was much busier over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday.  There were 6,155 kilobars received — and only 266 were shipped out.  All of this activity was at Brink’s, Inc. of course — and the link to that, in troy ounces, is here.


Nick passed around these two charts late on Tuesday afternoon.  They show sales from The Perth Mint, updated with February’s sales data.  For that month, they sold 19,524 troy ounces of gold coins — and 584,310 troy ounces of silver coins.  Like the U.S. Mint, their bullion coin sales of late aren’t exactly setting the world on fire — and have been on an overall declining trend for the last six month.  Click to enlarge for both.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, February 26, showed a further increase in the Commercial net short position in silver — and rather smallish decline in the commercial net short position in gold.

In silver, despite what the 6-month silver chart showed in yesterday’s column, the Commercial net short position increased by 4,295 contracts, or 21.5 million troy ounces of paper silver.

Ted says this deterioration came about because silver rallied to its recent high on the first day of the reporting week — and the ensuing price decline during the next four reporting days wasn’t enough to negate all the shorting that the Commercial traders did on that one day.

They arrived at that number by decreasing their long position by 8,721 contracts — and they also reduced their short position by 4,426 contracts.  It’s the difference between those two numbers that represent their change for the reporting week.

Under the hood in the Disaggregated COT Report, it was all Managed Money traders, plus much more, as they added 2,610 long contracts — and they reduced their short position by 6,352 contracts.  It’s the sum of those two numbers…8,962 contracts…that represents their change for the reporting week.

And, as is always the case, the difference between what the Managed Money traders did — and the change in the Commercial net short position…8,962 minus 4,295 equals 4,667 contracts…was made up by the traders in the other two categories.  Both decreased their net long long positions during the reporting week…the ‘Other Reportables’ by 918 contracts — and the ‘Nonreportable’/small traders by 3,749 contracts.  Here’s the snip from the Disaggregated COT Report so you can see these changes for yourself.  Click to enlarge.

In the Commercial category, the banks in the Producer/Merchant category decreased their long position by 2,373 contracts — and the traders in the ‘Swap Dealer’ category increased their net short position by 1,922 contracts — and the sum of those two numbers equals the change in the Commercial net short position.

Ted said that JPMorgan was pretty much responsible for all the new shorting by the Commercial traders during the reporting week — and he estimates JPMorgan’s short position at around 28,000 contracts, up 3,000 contracts from his estimate on Saturday, from last Friday’s COT Report.  This Friday’s Bank Participation Report will enable Ted to recalibrate that number.

The Commercial net short position is now up to 78,169 contracts, or 390.8 million troy ounces of paper silver held short.

The Big 4 commercial traders are short 35.4 percent of the entire open interest in the COMEX futures market in silver — and the Big 8 traders [which includes the Big 4, of course] are short 50.4 percent of the entire open interest in COMEX silver…104,049 contracts…which is another new record high in contract terms.

104,049 COMEX silver contracts equals to 520.2 million troy ounces of paper silver — and that’s equal to about 223 days of world silver production…about seven and a half months.   That’s even more perverted and grotesque than the numbers that Ted pointed out in his Saturday missive.

Here’s the 3-year COT chart for silver, courtesy of Nick Laird — and the change should be noted.  Click to enlarge.

Of course, this report is already very much yesterday’s news, as the engineered price decline in silver didn’t get started until the day after the cut-off for this report, which was certainly deliberate.  This Friday’s COT Report will show a remarkable improvement, as both the 50 and 200-day moving averages were broken to the downside during the reporting week.


In gold, the commercial net short position declined by 6,632 COMEX contracts, or 663,200 troy ounces of paper gold.

They arrived at that number by reducing their long position by 119 contracts, but they also reduced their short position by 6,751 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.

Under the hood in the Disaggregated COT Report, the Managed Money traders made up only part of the change during the reporting week, as they reduced their long position by 12,194 contracts — and they also reduced their short position by 8,376 contracts — and it’s the difference between those two numbers…3,818 contracts…that represented their change for the reporting week.

The difference between that number — and the commercial net short position…6,632 minus 3,818 equals 2,814 contracts…was made up by the traders in the ‘Other Reportables’ and ‘Nonreportable’/small trader category.  But each group went about it in entirely separate fashions, as the first group decreased their net long position by 6,133 contracts — and the ‘Nonreportable’/small traders increased their long position by a net 3,419 contracts.  Here’s the snip from that report so you can see these changes for yourself.  Click to enlarge.

The big banks in the ‘Producer/Merchant’ category reduced their short position by 2,688  contracts — and the traders in the ‘Swap Dealer ‘ category reduced their short position as well, by a net 3,944 contracts.  The sum of those two numbers is, as it mathematically has to be, the change in the commercial net short position in gold.

The commercial net short position in gold is down to 15.98 million troy ounces of paper gold — and is not a material change from last Friday’s COT Report.

Here’s the 3-year COT chart for gold.  Click to enlarge.

Like for silver, these gold numbers are ancient history because of the engineered price decline that commenced the day after the cut-off for the above COT Report.  And with gold back below its 50-day moving average, the new and completely up-to-date COT Report we get on Friday, will be a totally different animal.

Just as point of interest, the commercial traders in copper [the U.S. banks are barely involved in copper] increased their short position in that metal by a very hefty 24,184 COMEX contracts during the reporting week just past.  And in platinum, the Managed Money traders reduced their short position by a whopping 16,779 contracts…just under twenty percent of the total open interest.  Ted pointed out a week or so ago that the reason platinum was rising was because of that — and had nothing to do with supply/demand issues.  The above short covering by these Managed Money traders is certainly all the proof necessary.


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

I’m not going to bother with any further commentary on this chart, as it’s already ancient history, but I just thought I’d stick it in here so I can record this high water mark of the record high COMEX contract short position held by the Big 8 traders in silver.

When the new and current COT Report comes out on Friday, then I’ll resume my commentary on this data.

I have an average number of stories for you today.


CRITICAL READS

U.S. Budget Deficit Soars 77% as Federal Interest Expense Hits Record High

Another month, another frightening jump in the U.S. budget deficit.

According to the latest Treasury data, the U.S. budget surplus in January – traditionally one of the few surplus months of the year due to tax receipts vs refunds timing – was only $9 billion, badly missing the $25 billion surplus expected, and far below the $49 billion surplus recorded last January; it was the smallest January gain since 2015.

As a result, the budget deficit for the first four months of the fiscal year, widened to $310 billion, a whopping 77% higher than the $175.7 billion reported for the same period last year, largely the result of the revenue hit from Trump’s tax cuts and the increase in government spending. The deficit was the result of a 2% drop in fiscal YTD receipts to $1.1 trillion, while spending jumped 9% to $1.4 trillion.

The jump in the deficit was despite the bump in customs duties, which almost doubled to about $24.5 billion this fiscal year from $12.6 billion a year ago, reflecting the Trump administration’s tariffs on Chinese imports.

What was more concerning perhaps is that rolling 12 month receipts declined 1.5% Y/Y, after posting a 0.4% drop last month which marked the first decline since March 2017. Worse, the absolute drop in tax receipts, which declined for both corporations and individuals, was the biggest since the financial crisis; and, as shown in the chart below, every time that receipts have posted an annual decline, a recession either followed shortly or had already arrived.

Why am I not surprised.  This very interesting 4-chart Zero Hedge article was posted on their website at 4:08 p.m. EST on Tuesday afternoon — and I thank Brad Robertson for pointing it out.  Another link to it is here.


How the Feds Socialized American Capitalism — Bill Bonner

Mike Pence told the crowd at CPAC (Conservative Political Action Conference) that “we will never be a socialist country.”

What was that? A prediction? Or just political B.S.?

Already, America’s medical system – 17% of the economy – is largely socialized. So is the education system – another 7.3%. And its national pension system… Social Security… is run by the feds and takes up about 5% of GDP.

If you add in all the industries and activities that are required by the feds, or heavily controlled by them… the total comes to about half the GDP. How much of an economy do you have to socialize before you have a socialist country?

We don’t know. And we don’t want to find out. But we suspect the answer has something to do with another bit of political puffery at the “conservative” confab.

This longish, but interesting commentary from Bill was posted on the bonnerandpartner.com Internet site on Monday morning EST — and another link to it is here.


BIS Warns of Market Crash Risk, Looming Fire Sales Once BBB Downgrade Avalanche Begins

Over the past year, one of the key concerns to emerge in the $6.4 trillion investment grade corporate bond market is when and how will BBB-rated bonds, which now comprise 60% of all outstanding investment grade names in the U.S., be downgraded and whether a new financial crisis will follow.

We addressed this issue most recently in “The $6.4 Trillion Question: How Many BBB Bonds Are About To Be Downgraded” while the broader question of the “next bond crisis” was address in “Over $1 Trillion In Bonds Risk Cut To Junk Once Cycle Turns.” It wasn’t just us, however, with financial luminaries, regulators and investors such as the Fed, the BOE, the IMF, Oaktree’s Howard Marks, Doubleline’s Jeff Gundlach, JPMorgan, and Guggenheim all warning that the “fallen angel” threat is arguably the most serious challenge facing the U.S. corporate bond market during the next recession.

And now, it’s the turn of the central banks’ central bank, the Bank of International Settlements, to join the bandwagon, warning that the surging supply of corporate debt in the riskiest, BBB investment-grade category has left markets vulnerable to a crash once economic weakness triggers a bout of rating downgrades, and sends over $1 trillion in IG bonds, or fallen angels, right into junk bond purgatory.

This 4-chart Zero Hedge article appeared on their website at 3:51 p.m. on Tuesday afternoon EST — and is another contribution from Brad Robertson.  Another link to it is here.


Trump to strip India, Turkey of preferential trade status

Washington “intends to terminate India’s and Turkey’s designations as beneficiary developing countries under the Generalized System of Preferences (GSP) program because they no longer comply with the statutory eligibility criteria,” the Office of the U.S. Trade Representative said in a statement.

India has failed to provide assurances that it would allow required market access, while Turkey is “sufficiently economically developed” that it no longer qualifies, it added.

Under the GSP program, “certain products” can enter the U.S. duty-free if countries meet eligibility criteria including “providing the United States with equitable and reasonable market access.”
India, however, “has implemented a wide array of trade barriers that create serious negative effects on United States commerce,” the statement said.

It said Turkey, after being designated a GSP beneficiary in 1975, has meanwhile demonstrated a “higher level of economic development,” meaning that it can be “graduated” from the program.

This news item showed up on the france24.com Internet site at 8:37 a.m. Central European Time on Tuesday morning, which was 2:37 a.m. in Washington — EST plus 6 hours.  I thank Roy Stephens for pointing it out — and another link to it is here.  There was another story about this on the businessinsider.com Internet site yesterday.  That one is headlined “Trump moves his trade war to a new frontier as he kicks India and Turkey out of a $19 billion agreement” — and it comes to us courtesy of Swedish reader Patrik Ekdahl.


The Slippage Continues: India Resists Trump On Everything — Tom Luongo

With the U.S.’s attempt at regime change in Venezuela going nowhere fast it’s becoming increasingly obvious that major vassals allies aren’t scared of the consequences of defying us.

India, in particular, has been quite clear in its opposition to Trump’s edicts on who they can and cannot trade with. And with Prime Minister Narendra Modi reeling from a corruption scandal it’s clear he isn’t going to give Trump an inch on important trade issues, especially with Modi in full re-election mode.

Not only has India defied the U.S. over buying Iranian oil and Russian S-400 missile defense systems but now they continue to flaunt U.S. sanctions on Venezuela upping its purchases from 400,000 barrels per day to more than 600,000.

The quantity of exports to India has jumped 66 per cent to 620,000 barrels a day and the boost is being driven by refiners like Reliance Industries Ltd and Nayara Energy Ltd, backed by Rosneft, Russia.

Overall though, Venezuela’s crude exports have taken a dip as the U.S. has intensified the sanctions against the Latin American nation’s oil company.

The response from the U.S. was the nearly inconsequential removing India from the Generalized System of Preferences which created tariff-free trade on a number of products between the U.S. and India.

This longish, but interesting background story put in an appearance on the Zero Hedge website at 8:45 p.m. on Tuesday evening EST — and another link to it is here.


Pompeo’s War Warning to China — Patrick Buchanan

As President Trump flew home from his Hanoi summit with Kim Jong Un, Mike Pompeo peeled off and flew to Manila. And there the Secretary of State made a startling declaration.

Any armed attack by China on a Philippine ship or plane in the South China Sea, he told the Philippine government, will be treated as an attack on an American ship or plane, bringing a U.S. military response.

China’s island building and military activities in the South China Sea threaten your sovereignty, security and, therefore, economic livelihood, as well as that of the United States,” said Pompeo.

As the South China Sea is part of the Pacific, any armed attack on Philippine forces, aircraft or public vessels in the South China Sea will trigger mutual defense obligations under article 4 of our mutual defense treaty.”

Article 4 requires the U.S. and the Philippines to come to the defense of the other if one is attacked. The treaty dates back to August 1951. There are Americans on Social Security who were not born when this Cold War treaty was signed.

Pompeo’s declaration amounts to a U.S. war guarantee.

Why would we make such a commitment? Why take such a risk?

This commentary by Patrick put in an appearance on his Internet site on Monday sometime — and I thank Brad Robertson for sending it our way.  Another link to it is here.


Goldman Sachs hiking its gold price forecast (silver too)

GS expect the bullish gold trend to continue. New forecasts, each up by 25 USD

  • three months $1,350
  • six month $1,400
  • 12 month $1,450

Also, silver forecasts:

  • three month $16.50
  • six month $17.00
  • 12 month $17.50

each up 25 cents from previous

That’s mighty big of them.  But if ‘da boyz’ take their feet of their respective prices, they’ll rise far higher than that — and a lot sooner.  This precious metal-related news story showed up on the forexlive.com Internet site at 12:48 a.m. GMT in London on their Tuesday morning, which was 7:48 p.m. in New York — EST plus 5 hours.  I found this on the Sharps Pixley website — and another link to it is here.


Global Gold output to fall through 2020 — BMO

The concept of peak gold is something that investors should get used to as one Canadian bank sees gold production falling through 2020 at least.

Looking at the global gold supply, Colin Hamilton and Andrew Kaip, analysts at BMO Capital Markets, said that with most of the 2018 numbers out, it looks like gold production has dropped for the second consecutive year. The analysts added that this trend is not expected to shift for at least the next two years.

We anticipate that, with existing operations continuing to be a drag on supply volumes, and Chinese output in trend decline, a renewed focus on exploring for and developing large, longer-dated gold projects will be required,” the analysts said in their report.

Although mining companies are increasing their exploration budget, the analyst said that the problem remains the dearth of significant deposits.

When we look out over the next five years, there are very few large scale new gold projects earmarked to come on-stream,” the analysts said. “The only large-scale gold projects that we see as probable to enter the top 10 producing gold mining operations by 2025 are Donlin Creek project, owned by Barrick and Novagold, and Sukoi Log owned by Polyus Gold.”

The bank noted that even if major deposits are discovered, they still face development hurdles.

This very interesting and rather in-depth article, filed from London, appeared on the scrapregister.com Internet site yesterday sometime, although there’s no dateline.  It’s another gold-related article I found on the Sharps Pixley website.  Another link to it is here.


Italy’s gold reserves belong to central bank – Bank of Italy’s Visco

Bank of Italy’s Governor Ignazio Visco said on Monday the country’s reserves of gold belonged to the central bank and could not be used to fund government spending.

Bank of Italy’s golden reserves amount to between €80 and €90 billion … less than 10 percent of its total assets,” he said during a panel discussion.

Like the rest of its assets, it cannot be used for monetary financing by the Treasury. These things are not hard to understand,” he added.

The above three paragraphs are all there is to this brief Reuters news item, filed from Milan, that was posted on their Internet site at 5:28 a.m. EST on Monday morning — and it’s the third and final story that I ‘borrowed’ from the Sharps Pixley website.


The PHOTOS and the FUNNIES

These next three photos were taken just south of Merritt along the now-abandoned Kettle Valley Railway line.  The first two show the tiny ghost town of Kingsvale, along with a portion of the track bed just across the road.  The rail line was opened in 1915 — and the last vestiges of it were closed in 1989.  The last shot is of the next stop down the KVR line…Brookmere…which is a tiny village of under 100 people.  The water tower for the steam locomotives still stands, with the rail bed running along in front of it.  Click to enlarge.


The WRAP

There were new intraday or closing lows in all four precious metals on Tuesday…but except for palladium, none were of significance.

So, is this the bottom or not?  Frankly, I don’t know…but I must admit that I’m more than impressed with how the precious metal equities have been holding up/performing this week.

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.  I will also point out that copper has been sold lower in price since last Tuesday’s COT Report — and it remains to be seen as to how much more Managed Money selling there’s going to be in that metal.  Click to enlarge for all.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price chopped quietly sideways in Far East trading up until shortly after 1 p.m. China Standard Time on their Wednesday morning. It edged a bit higher from there — and is currently up $1.70 the ounce. Silver didn’t do much until shortly before 10 a.m. CST– and then was sold down a bit — and then didn’t do much until shortly after 1 p.m. CST as well. It has rallied a bit since — and is now up a penny on the day. Palladium was sold 7 dollars lower by around 11:45 a.m. CST on their Wednesday morning — and it didn’t do much of anything until shortly after 2 p.m. — and then crawled a few dollars higher, but is still down 4 bucks currently. The palladium price has been edging unevenly lower throughout all of Far East trading — and is down 9 dollars as Zurich opens.

Net HFT gold volume is coming up on 42,500 contracts — and there’s only 1,572 contracts worth of roll-over/switch volume in this precious metal. Net HFT silver volume is already up to around 13,700 contracts — and there’s a tiny 122 contracts worth of roll-over/switch volume on top of that.

The dollar index opened up a small handful of basis points once trading began around 7:45 p.m. EST in New York on Tuesday evening, which was 8:45 a.m. in Shanghai. It has chopped quietly and unevenly higher since then, not quite making it to the 97.00 mark, but has turned lower since — and as of 7:45 a.m. GMT in London, is up only 3 basis points.


Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s COT Report — and as I said further up in this column…this COT Report, plus the companion Bank Participation Report, will finally be current after an almost 3-month wait since the U.S. government shut-down began in December.

And as I post today’s column on the website at 4:02 a.m. EST, I note that the gold price, which was up $2.40 at it high, is now down 40 cents as the first hour of London trading draws to a close — and ‘da boyz’ have silver down 3 cents currently. Platinum is now down 7 bucks — and palladium by 8.

Gross gold volume is 55,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is a bit under 51,500 contracts. Net HFT silver volume is 15,500 contracts — and there’s still only 137 contracts worth of roll-over/switch volume in that precious metal.

The dollar continued to crawl quietly lower during the first hour of London trading — and it’s now back at unchanged as of 8:45 a.m. GMT/9:45 a.m. CET.

That’s all I have for today, which is more than enough — and I’ll see you here tomorrow.

Ed

The Precious Metals Engineered Lower in Price Again

05 March 2019 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price was up a couple of dollars a few minutes after the market opened at 6:00 p.m. EST in New York on Sunday evening — and then it chopped quietly sideways until around 1 p.m. China Standard Time on their Monday morning.  One of Ted’s “midnight moves” began at that point — and the price was sold quietly lower until 9 a.m. in London.  From there the price chopped quietly sideways until a few minutes before 9 a.m. in New York — and was then sold down to its low tick of the day at the afternoon gold fix.  It crawled higher until exactly 12:00 o’clock noon EST — and then it crawled quietly lower until trading ended at 5:00 p.m. in New York.

The high and low ticks were recorded as $1,298.10 and $1,283.80 in the April contract.

Gold was closed in New York yesterday at $1,286.40 spot, down $6.50 on the day — and a new low for this move down.  Net volume was pretty decent at a bit under 250,500 contracts — and there was a bit over 21,000 contracts worth of roll-over/switch volume on top of that.

Silver was up about 6 cents by noon in Shanghai on their Monday — and after that, ‘da boyz’ guided silver’s price in a very similar manner as they did for gold from that point onwards.

The high and low ticks in this precious metal were reported by the CME Group as $15.295 and $15.075 in the May contract.

Silver was closed on Monday at $15.06 spot…down 12.5 cents from Friday.  Net HFT volume was very heavy at a bit over 87,000 contracts — and there was around 4,650 contract worth of roll-over/switch volume in this precious metal.

Platinum’s descent to its low tick at the afternoon gold fix in London was virtually the same as it was for silver and gold — and after the ‘fix was in’, the price didn’t do much after that.  Platinum was closed at $834 spot, down a chunky 23 dollars from Friday.

Palladium was up 13 bucks by 1 p.m. in Shanghai on their Monday afternoon — and it was sold quietly but unevenly lower from there, culminating in another one of those patented down/up price spikes that came minutes before 12 o’clock noon in New York.  It gained all of that price spike back within the next three hours, but then had another brief down/up price spike going into the 5:00 p.m. EST close of trading.  Palladium was closed at $1,512 spot, down 13 dollars on the day.

The dollar index closed very late on Friday afternoon in New York at 96.53 — and opened down 19 basis points once trading began at 6:30 p.m. EST on Sunday evening.  It edged quietly higher until around 3:15 p.m. China Standard Time on their Monday afternoon.  At that point the rally became a little more serious — and it chopped unsteadily higher until the 96.81 high tick was set around 10:35 a.m. in New York.  From that juncture it edged unevenly lower until trading ended around 5:30 p.m. EST — and finished the Monday session at  96.68…up 15 basis points from Friday’s close.

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

And here’s the 6-month U.S. dollar index chart, courtesy of stockcharts.com — and the delta between its close…96.61…and the close on the DXY chart above, was 7 basis points on Monday.  Click to enlarge.

The gold shares gapped down a bit at the 9:30 open of the equity markets in New York on Monday  morning — and hit their respective lows a few minutes after 10 a.m. EST.  A very few minutes after that they began to head higher — and that positive price path continued right into the 4:00 p.m. EST close of trading.  The HUI finished up 1.08 percent — and on its high tick of the day.

It was mostly the same for the silver equities, although their post-10 a.m. EST rally ran out of gas an hour later — and they were sold lower until shortly before 1 p.m. in New York trading.  They began to power higher from that juncture — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down only 0.10 percent.  Call it unchanged on the day.  Click to enlarge.

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

Needless to say, I was very pleased that the precious metal stocks did well yesterday, as there was obviously some serious bottom fishing going on — and these newly-purchased shares now reside in the strongest of hands.


The CME Daily Delivery Report for Day 4 of March deliveries showed that 19 gold and 108 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

In gold, there were three short/issuers in total.  The two largest were Advantage and JPMorgan, with 9 and 6 contracts out of their respective client accounts.  They were also the two largest long/stoppers, picking up 12 and 4 contracts for their respective client accounts as well.

In silver, the only two short/issuers that mattered were ABN Amro and Advantage, with 50 and 48 contracts out of their respective client accounts.  Of the five long/stoppers in total, the two biggest were JPMorgan, with 60 in total…23 for its own account, plus 37 for clients — and Advantage, with 34 contracts for its client account.

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

The CME Preliminary Report for the Monday trading session showed that gold open interest in March fell by 40 contracts, leaving 143 still around, minus the 19 contracts mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 52 gold contracts were actually posted for delivery today, so that means that 52-44=8 more gold contracts were just added to the March delivery month.  Silver o.i. in March declined by 279 contracts, leaving 845 still open, minus the 108 contracts mentioned a few paragraphs ago.  Friday’s Daily Delivery Report showed that 351 gold contracts were actually posted for delivery today, so that means that 351-279=72 more silver contracts were just added to March.


There was another pretty decent withdrawal from GLD yesterday, as an authorized participant took out 188,937 troy ounces.  And an authorized participant…most likely JPMorgan…removed 870,796 troy ounces of silver from SLV as well.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, March 1 — and this is what they had to report.  Both ETFs added small amounts of metal…their gold ETF by 1,075 troy ounces — and their silver ETF by 7,877 troy ounces.

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

There was a bit of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  They didn’t receive any, but 44,944 troy ounces was shipped out of HSBC USA.  The link to that is here.

It was certainly busier in silver, as 1,201,354 troy ounces…two truck loads…were received — and all of that ended up at CNT.  There was 306,581 troy ounces shipped out…of which 299,629 troy ounces departed Brink’s, Inc. — and the remaining 6,952 troy ounces left Delaware.  There was also 589,082 troy ounces that was transferred from the Eligible category — and into Registered.  That occurred at CNT as well — and is certainly destined for delivery in March.  A link to this activity is here.

The only activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday was 1 kilobar…32.151 troy ounces…that departed Brink’s, Inc. — and I won’t bother linking that amount.


Here are the usual two charts that I get from Nick every weekend — and because I had so many charts from him last week, these didn’t make the cut…so there’s two weeks worth of new data on them.

They show the total gold and silver holdings in all known depositories, mutual funds and ETFs as of the close of business on Friday March 1.  For the week just past, there was 130,580 troy ounces of gold taken out — and in silver, there was a tiny 15,260 troy ounces added.  Click to enlarge for both.

I have an average number of stories for you today.


CRITICAL READS

Trump Says Dollar Too Strong in Renewed Criticism of Powell

President Donald Trump said Saturday that the U.S. dollar is too strong and took a swipe at Federal Reserve Chairman Jerome Powell as someone who “likes raising interest rates.”

The dollar was quoted lower against the euro and the yen in early Asia-Pacific trading hours on Monday after Trump’s comments.

The U.S. economy is doing well despite the actions of the central bank, Trump said during a wide-ranging speech at the Conservative Political Action Conference in National Harbor, Maryland.

I want a strong dollar but I want a dollar that does great for our country, not a dollar that’s so strong that it makes it prohibitive for us to do business with other nations and take their business,” Trump said Saturday.

He didn’t mention Powell by name, but referenced “a gentleman that likes raising interest rates in the Fed, we have a gentleman that loves quantitative tightening in the Fed, we have a gentleman that likes a very strong dollar in the Fed.”

This Bloomberg story was posted on their Internet site on Saturday morning Pacific Standard Time — and updated about twenty-six hours later.  I found it embedded in a GATA dispatch — and another link to it is here.


The Return of the Deodand — Jeff Thomas

In 1066, my family were centred in Somerset, England, where, if a horse ran over and killed someone, or a boat capsized, and caused a drowning, that horse or boat was given over to the victim’s family, under “noxal surrender.”

Alternatively, if an animal or object were responsible for the death of a person other than its owner, it could be taken and sold, and the proceeds passed to the family of the deceased.

One can see the purpose here – to provide some sort of compensation for those aggrieved.
However, as readers will know, the Normans came over to the British Isles in 1066 and conquered much of England.

Subsequently, the practice of noxal surrender was formalized into English common law and enforced by the state.

And, of course, as we know, when the state takes charge of anything, no matter how insignificant, it eventually finds a way to turn that power into a means of state profit.

This longish, but very interesting commentary from Jeff appeared on the internationalman.com Internet site on Monday morning — and another link to it is here.


Switzerland’s Controversial 1,000-Franc Note Is Getting a New Look

At jeweller Les Millionnaires, tucked away in the historic old town of Zurich, being handed a 1,000-franc bill ($1,002) to settle a purchase is no unusual event.

It’s quite frequent that we’ve got someone who comes in looking for a present and who pays in cash because they don’t want their partner to find out, “ said one of the proprietors of the shop, which sells earrings, necklaces and bracelets made of gold with precious stones. “It’s the surprise effect.”

True to Switzerland’s penchant for discretion — one reason cash has remained popular in the generally tech-savvy country even as its use is dwindling elsewhere — she declines to give her name. “Here in our shop, we do get 1,000 franc notes when it’s a very big purchase.”

Along with 10,000-dollar notes in Singapore and Brunei — current exchange rate for both is about $7,400 — the top Swiss denomination is one of the world’s most valuable. A revamped design is due to be unveiled on March 5, in defiance of international calls that the bills aid crime and tax evasion.

This rather interesting news item showed up on the Bloomberg website very late on Saturday night PST — and it’s another article I found on the gata.org Internet site.  Another link to it is here.


Kyle Bass: Chinese Economy Is a “Mirage

Kyle Bass, founder of Hayman Capital Management, recently spoke with Real Vision to reiterate his concerns about the Chinese economy.

Kyle Bass on China’s dwindling FX reserves:

We think the number is closer to $2 trillion, instead of $3.2 trillion, which is dangerously below adequate levels. The broad measure of credit in China’s financial system is $48 trillion worth of RMB (Chinese Yuan). They only have $2 trillion of reserves… In their last banking crisis, which was between 1998 and 2002, the loss given defaults were 80% of loans that defaulted and at one point in time… 35% of their entire system was non-paying.”

What brings this to a head is the current account. When the current account goes negative and the reserve balance is going the other way (going negative), the rubber meets the road there. As long as that balance is increasing annual along with GDP in RMB terms, they can keep going… Now their fiscal balance is… -9.5%. Their current account balance goes negative, and its a secular negativity, then they have more money leaving then coming in and they have to desperately borrow and now they’re changing their laws. They’re saying ‘You know what? Now Westerners can own more than half of our banks. Not a problem…’ Without Western capital flowing into China, China can’t hold this all together… (Chinese President Xi) has made the West think somehow his economic model is superior to that of Western capitalism and it’s all a facade. The whole thing is a mirage. The whole thing is made up with a printing press, keeping a closed capital account, and hoping the world doesn’t notice it…

This 10:11 minute video clip is a short excerpt from a Real Vision interview.  I found it interesting — and although Kyle is 100 percent correct in what he says, he is talking his book, as he’s massively short their equity market, the yuan, or both.  It was posted on the soundingline.com Internet site on Monday — and I thank Brad Robertson for sending it along.  Another link to it is here.


It Begins: China’s Largest Property Developer Will Sell All Homes at a 10% Discount

Back in 2017, we explained why the “fate of the world economy is in the hands of China’s housing bubble.” The answer was simple: for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth would keep rising. However, unlike the U.S. where the stock market is the ultimate barometer of the confidence boosting “wealth effect”, in China it has always been about housing as three quarters of Chinese household assets are parked in real estate, compared to only 28% in the U.S., with the remainder invested in financial assets.

Property accounts for roughly 70 per cent of urban Chinese families’ total assets – a home is both wealth and status. People don’t want prices to increase too fast, but they don’t want them to fall too quickly either,” said Shao Yu, chief economist at Oriental Securities. “People are so used to rising prices that it never occurred to them that they can fall too. We shouldn’t add to this illusion,” Shao added, echoing Ben Bernanke circa 2005.

The bottom line is that just like true price discovery for U.S. capital markets is prohibited (and sees Fed intervention any time there is an even modest, 10-20% drop in asset prices) or else the risk of an all out panic is all too real, in China true price discovery is also not permitted, however when it comes to the country’s all important, and wealth effect boosting, real estate.

Which is a problem, because whereas China suddenly appears to be suffering from all the conventional signs of deflation in the auto retail sector, where as we noted previously, neither lower prices nor easier loans have managed to put a dent the ongoing demand plunge…

… the same ominous price cuts – which are clearly meant to boost flagging demand — are starting to emerge in China’s housing sector.

Case in point, according to China’s Paper, Hui Ka Yan, the Chairman of Evergrande, China’s biggest property developer, and China’s second richest person announced it must ramp up home sales and to do that it would sell all its properties at a 10% discount after its home sales tumbled in January amid a cooling market.

Now that Evergrande is rushing to slash prices, it appears that runaway home prices are no longer a concern for Beijing, and in fact, a far greater concern is how Beijing may intervene to prevent what could soon be a price plunge spiral; many have already speculated that Beijing will have no choice but to bar Evergrande’s sales. If it doesn’t, or if homeowners have already figured out that their home prices are floating in the sky on a bubbly foundation that has now burst, the knock on effect could be devastating as instead of an asset, China’s most popular and aspirational “wealth effect” product could turn into a liability overnight.

If that happens, no amount of intervention by Beijing could stop the avalanche of selling that would ensue, not to mention the deflationary shock wave that a hard landing – i.e. crash – in China’s housing market would launch across the entire world…

No surprises here.  This long but worthwhile chart-filled news story was posted on the Zero Hedge website at 6:56 p.m. EST yesterday evening — and another link to it is here.  Another ZH article about China showed up on their website at  10:35 p.m. last night — and it’s headlined “Deflationary Red Alert: Chinese Car Dealers Are Slashing Prices, and It’s Not Helping“.


Trump Sabotages North Korea Summit to Appease the Hawks — Mike Whitney

The U.S.-North Korea Summit in Hanoi has ended in failure just as all previous attempts at peace have ended in failure. This is by design. Washington has refused to incrementally lift the sanctions on the DPRK because sanctions are Washington’s way of prosecuting an economic war against an enemy who, for the last six and a half decades, has been the target of U.S. hostility.

In case you hadn’t noticed, U.S. policy towards North Korea is regime change, the same as it is towards Iran, Cuba, Russia, Venezuela and any other country that doesn’t accept Washington’s moral superiority and divine right to rule the world. Economic strangulation (sanctions) is just one way that Washington cracks down on the dissidents and imposes its will with an iron fist. But don’t kid yourself, this isn’t about nuclear weapons, in fact, the Trump administration hasn’t even bothered to assemble a team of weapons inspectors to investigate probable nuclear sites. Why? Because it isn’t about nuclear weapons, it’s about regime change, it’s about inflicting maximum pain and suffering on the Korean people so they take up arms against the government and violently depose Kim and his cabinet. That’s the goal. That’s always been the goal. The blocking of heating oil, essential medicines and vital food supplies are all being used to promote social unrest, fratricidal warfare, and political anarchy. Sound familiar? It should, Washington has it down to an art.

Kim Jong Un attended the summit in Hanoi hoping that Trump could be persuaded to keep up his end of the bargain. He hoped that Trump would overrule the warmongering political class and honor the agreement he made in Singapore in June, 2018.

This longish, but very interesting [if you have the interest, that is] commentary appeared on the unz.com Internet site last Friday — and I thank Brad Robertson for sharing it with us.  Another link to it is here.  In a parallel story of equal interest…at least in my humble opinion…is this article that appeared on theamericanconservative.com Internet site on Sunday headlined “For Bolton, Diplomatic Success Is Failure — and Failure Is Success” — and I thank Roy Stephens for that one.


Newmont’s board rejects Barrick’s hostile offer

Barrick Gold Corp. plans to proceed with a formal takeover offer for Newmont Mining Corp., undeterred by a rebuff from the target company.

Newmont’s board unanimously rejected Barrick’s $17.8 billion unsolicited proposal, saying it would not be better than Newmont’s previously announced takeover of Goldcorp Inc. Instead, Newmont submitted a joint venture proposal to Barrick that would encompass the two companies’ Nevada operations, saying it would pursue that as well as its Goldcorp takeover.

Barrick is “definitely not” going to withdraw its hostile bid, Chief Executive Officer Mark Bristow said Monday in response to the statement and letter Newmont released earlier in the day. Barrick will take its offer to Newmont shareholders, and at the same time will try to advance talks about the possibility of a Nevada joint venture, Bristow said.

Time is of the essence,” he said in a telephone interview, adding that Barrick plans to speak to Newmont “ASAP.”

In response, Newmont spokesman Omar Jabara said by e-mail that “we look forward to hearing back from Barrick on our letter and joint venture proposal.”

Newmont had raised serious doubts about Toronto-based Barrick’s full merger proposal — a hostile all-share no-premium bid — from the day it was made public Feb. 25. The Barrick bid also led to a round of acrimony from both sides. Goldberg characterized Barrick’s bid as “desperate” and “bizarre.” On the same day, Bristow said his team could run Newmont better than Goldberg’s managers: “I have spent a lot of time in Nevada, and I have no doubt that I can do a better job than Newmont.”

This story has had ‘page 1 rewrite’ since it first appeared on the Bloomberg website at 4:43 a.m. PST [Pacific Standard Time] on Monday morning.  It’s had two headline changes…the  first being “Newmont is said to reject Barrick hostile bid as soon as Monday — and the current being “Barrick CEO Vows to Press On With Bid for Newmont After Rebuff“.  The first four paragraphs of the original story can be found in the GATA dispatch linked here — and the current rewrite is linked here.


317 tonnes? That’s just gold for Australian miners

Australia’s gold miners are on fire, producing a record 317 tonnes of the precious metal as jittery investors around the world scramble for the ultimate safe-haven investment.

Last year’s production eclipsed the 314.5 tonnes mined in 1997 and shows the industry has shaken off the malaise of 10 years ago when just 220 tonnes was pulled out of the ground.

Yesterday’s figures from respected gold mining consultants Surbiton Associates are sure to further bolster confidence in a sector which has been at the heart of the WA economy since gold was discovered in Halls Creek in 1885.

The record output last year was worth $17.3 billion at the average spot price,” Surbiton Associates director Sandra Close said.

Production would have been higher had it not been for a slower-than-expected start to the year because of wet weather and a pit wall collapse at Kalgoorlie’s Super Pit.

It took 21 years to break the old calendar year record and the outlook for the near term looks positive,” Dr. Close said.

This gold-related news item put in an appearance on thewest.com.au Internet site on Sunday morning ‘down under’ — and it comes to us courtesy of Australian reader Garry Robinson.  Another link to it is here.


Whither peak gold? Australian 2018 output at new record — Lawrie Williams

Predictions of the timing of peak gold (when global annual gold output starts to come down) keep on falling by the wayside and the latest nail in its coffin may well prove to be the apparent rise in last year’s gold output from Australia – currently the world’s No. 2 producer of new mined gold.  There seems to be an ongoing battle for the No. 2 spot between Australia and Russia and figures emanating from both countries suggest that their outputs of gold last year are both still on the upwards path.

We reported here that the Russian Finance Ministry put that nation’s 2018 output at around 314 tonnes and now Australian consultancy, Surbiton Associates, has come up with a report estimating the down-under 2018 figure for gold output was a new annual record of 317 tonnes, keeping it in the No. 2 spot (still just ahead of Russia).  Now the Russian Finance Ministry and Surbiton Associates figures will probably both be a little above the year-end estimates from the two big U.K.-based precious metals consultancies, Metals Focus and GFMS when they publish their assessments in around a month’s time, as we believe they both include categories of gold output not taken into account by the big U.K. consultancies, but regardless new mined output in both nations continues to rise and may carry on doing so for the next couple of years at least.

In Russia both the the country’s largest gold miners (Polyus Gold and Polymetal) are on the expansion trail while Australia’s future output growth also looks to be positive. Indeed Dr Sandra Close, a director of Surbiton Assoiciates, comments  “It took 21 years to break the old calendar year record and the outlook for the near term looks positive but of course there can always be surprises,” she said. “Following a fall to just 220 tonnes in calendar 2008, the industry has bounced back, helped in part by the weakening of the Australian dollar against the U.S. dollar, as it has fallen from around parity to near U.S. 70 cents in the last decade.”

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


Unique 98.8 carat diamond unearthed in Russia’s Far North

Russian-based world leader in diamond mining, Alrosa, has mined a gem-quality diamond weighing almost 100 carats at its deposit in the northeastern region of Yakutia. It is the second-largest gem ever found at the facility.

The diamond, which has an octahedral shape, was found at the Zapolyarnaya kimberlite pipe, which is the part of the Verkhne-Munskoye diamond deposit, on February 17. Despite having some inclusions, the rough diamond is transparent with a visible yellow shade.

The recently mined trove proves that the diamond mine in Yakutia, which is Alrosa’s largest investment project, has great potential, according to the company.

This brief, but interesting 2-photo story showed up on the rt.com Internet site at 9:59 a.m. on Sunday morning Moscow time, which was 1:59 a.m. in New York — EST plus 8 hours.  I thank Larry Galearis for finding it for us — and another link to it is here.


The PHOTOS and the FUNNIES

It may seem hard to believe that these next three shots were taken less than three miles/5 kilometers from downtown Lillooet…the photos that were featured in Saturday’s missive.  Seton Lake is tucked out of sight between and behind the two big mountains just west of the town.  It’s a freshwater fjord draining east via the Seton River into the Fraser River at the town.  It’s about 22 km long and 243 meters in elevation — and 26.2 square kilometres in area. Its depth is 460 meters/1,500 feet. The lake is natural in origin but was raised slightly as part of the Bridge River Power Project.  It’s a jewel set in a stunning vista — and the first two photos hardly do it justice.  The third photo was taken on the highway around the lake just outside of town — and is the northern access to Vancouver via Whistler.  That road trip is on my bucket list of things to do when spring/summer arrives.  Click to enlarge.


The WRAP

It was the second day in a row where the powers-that-be were very active in the Dow — and the precious metals.  The Dow was turned higher around 1:10 p.m. EST — and the precious metals ran into more of Ted’s “night moves” in the thinly-traded afternoon trading session in the Far East.  It was all down hill for them from there going into the afternoon gold fix in London…with the exception being palladium, where it ran into ‘something’ a few minutes before noon in New York.

Quoting Bill King from his King Report for today…”stocks tanked on Monday despite the WSJ story that many operators believe was another leak from Team Mnuchin.  Perhaps, enough is enough with the U.S.-China trade deal hope and hype stories.  They not only appear regularly, but seem to be released quite often on Sunday night near the time when the equity futures begin trading.  Please note that over the past few weeks, when stocks are down sharply in the morning, someone appeared at midday or the early afternoon and forced ESHs higher.”

And as reader Mark Barooshian said in an e-mail to me yesterday…”Is this orchestrated sell-off over in the metals?… Why is it always baby steps up — and freight train on the way down?”  The answer to the first question is…I don’t know,  nor does anyone else.  The answer to the second is that it’s what ‘da boyz’ do to maximize their profits…trapping as many Managed Money longs on the losing side as possible.

There are no markets anymore…only interventions.”

Here are the 6-month charts for the Big 6 commodities — and with the exception of WTIC, all were down on the day.  And it should be pointed out that gold was closed below its 50-day moving average for the second day in a row — and silver was closed below both its 50 and 200-day moving averages for the second day in a row as well.  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 crawled a few dollars unsteadily higher until around 11:30 a.m. CST on their Tuesday morning — and the usual “night move” appeared shortly before 3 p.m. on their Tuesday afternoon.  At the moment gold is down $2.10 the ounce.  Silver was up 8 cents at one point, but ‘da boyz’ have it down 1 cent currently.  Platinum was up 4 bucks, but has been engineered back to unchanged.  Palladium was trading flat until shortly after 1 p.m. China Standard Time on their Tuesday morning — and Ted’s “night move” began at that point — and they now have the price down 8 bucks as Zurich opens.

Net HFT gold volume is coming up on 39,000 contracts — and there’s only 819 contracts worth of roll-over/switch volume in that precious metal.  Net HFT silver volume is sitting at 17,000 contracts already — and there’s only 572 contracts worth of roll-over/switch volume on top of that.

The dollar index traded sideways until around 11:22 a.m. China Standard Time on their Tuesday morning — and at that juncture began to rally very unsteadily higher.  It’s current high tick, such as it is, came at 3:30 p.m. CST — and it’s off that by a bit — and up 9 basis points as of 7:45 a.m. GMT in London.


Today we get another Commitment of Traders Report, this one for positions held at the close of COMEX trading on Tuesday, February 26.  The dojis on the 6-month gold and silver charts posted above would seem to indicate that there will be a decrease in the commercial net short positions in both metals — and that’s as far as my guesstimate goes.

But none of the engineered price declines that began last Wednesday, the day after the February 26 cut-off date, will be in this report — and it’s a given that it wasn’t accidental.  It’s a move that ‘da boyz’ have pulled countless times over the last fifteen years or so, when they wish to hide their tracks from public view for as long as possible.

But whatever the numbers are, I’ll have them for you in Wednesday’s missive.

And as I post today’s column on the website at 4:02 a.m. EST, I see that the gold price continued a bit lower until a few minutes after the London open — and had a tiny up/down move during the first hour of trading — and is currently down $2.00. Ditto for silver — and it’s down a penny. And after a tiny down/up move at the Zurich open, platinum is now up 2 dollars. But palladium really got roasted at the Zurich open — and is barely off its low. It’s down 22 dollars as the first hour of trading coming to an end.

Gross gold volume is a bit over 51,000 contracts — and minus what little roll-over/switch volume there is, net HFT gold volume is just over 48,500 contracts. Net HFT silver volume is now up to a hair over 19,500 contracts — and there’s 912 contracts worth of roll-over/switch volume on top of that.

The dollar index has chopped quietly sideways during the first hour of London/Zurich trading — and as of 8:45 a.m. GMT/9:45 a.m. CET, it’s up 6 basis points.

Today, at the close of COMEX trading, is the cut-off for this Friday’s COT Report — and with that report, we’ll be all caught up from the government shut-down in December of 2018.  Also on Friday, we get the March Bank Participation Report for positions held by the world’s banks during February — and they’re always up to something…especially the U.S ones.

That’s all I have for today, which is more than enough — and I’ll see you here tomorrow.

Ed