19 August 2015 — Wednesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price developed a choppy positive bias starting around 8 a.m. Hong Kong time, with the high tick of the day coming minutes after 11 a.m. in London. Then at the noon silver fix, the price really got leaned on—and JPMorgan et al finished the job in early COMEX trading, with the low of the day coming at the London p.m. gold fix. It rallied back to unchanged by 10:40 a.m. EDT, but got capped there—and didn’t do much after that.
The high and low ticks were recorded by the CME Group as $1,120.20 and $1,108.40 in the December contract.
Gold closed in New York yesterday at $1,117.50 spot, up a dime from Monday. Net volume wasn’t overly heavy at 114,000 contracts.
Here’s the 5-minute gold price chart courtesy of Brad Robertson—and it should come as no surprise that all the volume that mattered occurred between 9 and 11:30 a.m. EDT in New York, which is between 7 and 9:30 a.m. MDT on this chart. Midnight EDT is the vertical gray line, use the ‘click to enlarge‘ feature—and don’t forget to add two hours to the ‘x’ axis to convert to EDT.
The silver price had a negative price bias almost right from the open in Far East trading on their Tuesday morning. But the real selling pressure began at the noon London silver fix—and the coup de grâce came at precisely 9 a.m. EDT in COMEX trading. JPMorgan et al had the low tick in by 10:20 a.m.—and the subsequent rally wasn’t allowed to get far. After that the price traded virtually flat for the remainder of the day.
The high and low ticks were recorded as $15.325 and $14.68 in the September contract, an intraday move of a bit more than 4 percent.
Silver finished the Tuesday session at $14.87 spot, down 45 cents from Monday. Not surprisingly, net volume was very chunky at 50,000 contracts.
Platinum and palladium were taken out to the woodshed along with silver—and their respective low ticks came at the London p.m. gold fix as well. Platinum recovered some of its losses, but palladium wasn’t allowed that luxury. Platinum closed at $993 spot, down five bucks—and palladium finished the Tuesday session back below $600 the ounce at $597 spot, down 16 dollars on the day. Here are the charts.
The dollar index finished the Monday trading session in New York at 96.82—and didn’t do much until shortly before noon in Hong Kong trading where it zoomed up to just about the 97.00 mark, but after failing to breach it, chopped down to its 96.68 low tick at 11 a.m. BST in London. The subsequent rally finally made it above the 97.00 level, albeit barely—and after numerous attempts to shove it higher failed, it fell back a bit and closed at 97.00 right on the button, up 18 basis points on the day.
And here’s the 6-month U.S. dollar chart for comparative purposes.
The gold stocks gapped down at the open on the big engineered price decline that began earlier in the morning, but rallied strongly on the gold rally after the London p.m. gold fix was done for the day. The rally was stopped dead in its tracks at 10:40 a.m. EDT when the gold price got capped—and from there they stocks chopped lower until around 12:45 p.m. They didn’t do much after that, but did rally about a percent going into the close. The HUI finished down 1.58 percent.
The chart pattern for the silver equities was very similar to the HUI, but they were hit pretty hard—and Nick Laird’s Intraday Silver Sentiment Index got smacked for 3.94 percent. At one point they were down 5 percent, but the end-of-day rally saved them from that fate.
The CME Daily Delivery Report showed that, for the second day in a row, only one gold and zero silver contracts were reported for delivery within the COMEX-approved depositories on Thursday. In the last four business days there have been 2 gold contracts posted for delivery, along with zero silver contracts.
The CME Preliminary Report for the Tuesday trading session showed that another 115 August gold contracts disappeared, leaving 1,648 left to deliver. Once again August silver o.i. is unchanged at 16 contracts.
There were no reported changes in GLD yesterday—and as of 6:21 p.m. EDT yesterday evening, there were no reported changes in SLV, either.
The U.S Mint had another sales report yesterday. They sold 6,500 troy ounces of gold eagles—500 one-ounce 24K gold buffaloes—and 250,000 silver eagles.
There was no in/out gold movement over at the COMEX-approved depositories on Monday.
However, it was another very decent day in silver, as only 1,961 troy ounces were reported received, but 675,541 troy ounces were shipped out the door. The two biggest withdrawals were from Brink’s, Inc. and Canada’s Scotiabank. The link to that activity is here.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday, they reported receiving 4,405 kilobars—and shipped out 183 of them. Once again, all the activity was at Brink’s, Inc.—and the link to that action, in troy ounces, is here.
I have about the same number of stories in today’s column that I did in my Tuesday column—and I’ll happily leave the final edit up to you.
CRITICAL READS
The S&P’s 13th Trip Thru 2,100 Since February 13th: Call It Monetary Rigor Mortis—–The Bull is Dead
http://davidstockmanscontracorner.com/the-sps-13th-trip-thru-2100-since-february-13th-call-it-monetary-rigor-mortis-the-bull-is-dead/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+AM+Tuesday
The robo machines pushed their snouts through 2100 on the S&P index again yesterday. This was the 13th time since, well, February 13th that this line has been re-penetrated from below.
But don’t call it an omen of bad luck; its more like monetary rigor mortis. The bull market is dead, but the robo-machines and talking heads of bubble vision just don’t know it yet.
And most certainly, the full-time stock traders who occupy the C-suites of corporate America don’t know it, either. They are still spasmodically buying their own drastically over-priced shares hand-over-fist. During last Monday’s knee-jerk stock market rip even Goldman Sachs confessed that their corporate buyback desk had a record day.
That should not be surprising, however. America’s stock option addicted executives are getting desperate. With nearly all of the S&P 500 companies having now reported Q2 results, LTM reported earnings have come in at about $97.35 per share. That’s down 5.6% from prior year and 8.2% since the cycle peak in Q3 2014.
This commentary by David Stockman appeared on his website early yesterday morning sometime—and I thank Roy Stephens for today’s first item.
U.S. Lacks Ammo for Next Economic Crisis — Jon Hilsenrath
As the U.S. economic expansion ages and clouds gather overseas, policy makers worry about recession. Their concern isn’t that a downturn is imminent but whether they will have firepower to fight back when one does arrive.
Money has been Washington’s primary weapon in the decades since British economist John Maynard Keynes proposed aggressive government spending to battle the Great Depression. The U.S. generally injects cash into the economy through interest-rate cuts, tax cuts or ramped-up federal spending.
Those tools could be hard to employ when the next dip comes: Interest rates are near zero, and fiscal stimulus plans could be hampered by high levels of government debt and the prospect of growing budget deficits to cover entitlement spending on retired baby boomers.
More milquetoast from the Fed via Jon Hilsenrath at The Wall Street Journal yesterday. Since that version is behind a subscription wall, I found this one on the ibloomberg.net Internet site—and I thank Brad Robertson for sending it our way.
Housing Starts in U.S. Climb to an Almost Eight-Year High
New-home construction in the U.S. climbed in July to the highest level in almost eight years, indicating the industry will pick up in the second half of the year.
Residential starts rose 0.2 percent to a 1.21 million annualized rate, the most since October 2007, from a 1.2 million pace in the prior month that was higher than previously estimated, a Commerce Department report showed Tuesday in Washington. The median forecast of 77 economists surveyed by Bloomberg was 1.18 million. A drop in permits, a proxy for future construction, signals additional gains will take time to develop.
Rising employment and historically low mortgage rates are enticing buyers, while increasing prices induced by a lack of homes on the market is an incentive to start new developments. Data showing builder sentiment at a decade high in August underscores the view that the housing rebound will stay on track even as the Federal Reserve is poised to boost borrowing costs.
Bloomberg‘s Joe Weisenthal spins a sow’s ear into a silk purse in this story, plus the embedded 1:03 minute video clip. All of this put in an appearance on the Bloomberg Internet site at 6:30 a.m. EDT on Tuesday morning—and I thank Patricia Caulfield for her first offering of the day.
Chart Of The Day: Single Family Housing Starts Back To 1991 Level!
Despite the rose-coloured glasses that Pollyanna was wearing as she whistled past the graveyard writing the previous story on new housing starts, the in-your-face reality of the U.S. real estate market is in this one-chart posting on David Stockman’s website yesterday—and it’s definitely worth a look. It’s the same chart that Bloomberg’s Joe Weisenthal tried to spin into a silk purse in the previous Bloomberg story.
No Jon Hilsenrath, It is Not “Anti-Semitic” to Criticize Goldman Sachs
Yesterday, in the aftermath of the Dallas Fed’s grotesque hire of a former Goldman banker, Robert Kaplan (while former Dallas Fed president Dick Fisher is now collecting a salary from Barclays, where he is now a “Senior Advisor”) even some “very serious people” employed by the WSJ were shocked by this blatant flaunting of central bank capture by Goldman Sachs: consider that in addition to all the other global power posts currently held by Goldman alumni, three of the Fed’s 12 presidents are now Goldman Sachs alumni.
As a further reminder, it is not just the Fed – the Goldman alumni network has quietly, and not so quietly, over the past few years taken over Europe as well.
Today, perhaps to diffuse the situation with one of the WSJ‘s best Street relationships, none other than Fed mouthpiece and author of the infamous “why are you so stingy, U.S. consumer?” letter, Jon Hilsenrath, decided to “go there” in a piece titled “Dallas Fed Gets a Non-Economist with a Controversial Resume.”
Has journalism sunk this low? Are there no adults left in supervisory positions? This article appeared on the Zero Hedge website at 1:15 p.m. yesterday afternoon EDT—and it’s certainly worth reading. I thank reader M.A. for bringing it to our attention.
Illinois is in ‘technical default’
In what has been a not-so-stunning turn of events over the last week, the State of Illinois has failed to appropriate funds on a certain class of its outstanding appropriation-backed sales tax debt issued by the Metropolitan Pier & Exposition Authority (Met Pier). The mechanics of this missed payment mirror Puerto Rico’s default on its appropriation-backed Public Finance Corp. (PFC) bonds earlier this month.
To be sure, Illinois has not missed a payment on its outstanding debt. It has, however, failed to make a monthly payment to the trustee for a December 15th payment, a covenant breach that constitutes a “technical default”— not a payment default, but typically the first step that fallen angels take on the way to a payment default. In mid-July Puerto Rico failed to appropriate funds to a trustee, which later resulted in a payment default on a class of its outstanding debt.
This news story was posted on the businessinsider.com website at 4:32 p.m. EDT on Monday—and it’s something I found in yesterday’s edition of the King Report.
How Wall Street’s Bankers Stayed Out of Jail
On May 27, in her first major prosecutorial act as the new U.S. attorney general, Loretta Lynch unsealed a 47-count indictment against nine FIFA officials and another five corporate executives. She was passionate about their wrongdoing. “The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States,” she said. “Today’s action makes clear that this Department of Justice intends to end any such corrupt practices, to root out misconduct, and to bring wrongdoers to justice.”
Lost in the hoopla surrounding the event was a depressing fact. Lynch and her predecessor, Eric Holder, appear to have turned the page on a more relevant vein of wrongdoing: the profligate and dishonest behavior of Wall Street bankers, traders, and executives in the years leading up to the 2008 financial crisis. How we arrived at a place where Wall Street misdeeds go virtually unpunished while soccer executives in Switzerland get arrested is murky at best. But the legal window for punishing Wall Street bankers for fraudulent actions that contributed to the 2008 crash has just about closed. It seems an apt time to ask: In the biggest picture, what justice has been achieved?
Since 2009, 49 financial institutions have paid various government entities and private plaintiffs nearly $190 billion in fines and settlements, according to an analysis by the investment bank Keefe, Bruyette & Woods. That may seem like a big number, but the money has come from shareholders, not individual bankers. (Settlements were levied on corporations, not specific employees, and paid out as corporate expenses—in some cases, tax-deductible ones.) In early 2014, just weeks after Jamie Dimon, the CEO of JPMorgan Chase, settled out of court with the Justice Department, the bank’s board of directors gave him a 74 percent raise, bringing his salary to $20 million.
This short essay was posted on theatlantic.com Internet site late last week I believe. Roy Stephens sent it to me on Saturday—and it had to wait for today’s column.
Banks brace for billions in civil claims over forex rate rigging
Global banks are facing billions of pounds-worth of civil claims in London and Asia over the rigging of currency markets, following a landmark legal settlement in New York.
Barclays, Goldman Sachs, HSBC, and Royal Bank of Scotland were among nine banks revealed last Friday to have agreed to a $2 billion settlement with thousands of investors affected by rate-rigging in a New York court case.
Lawyers warned the victory opens the floodgates for an even greater number of claims in London, the largest foreign-exchange trading hub in the world, in a sign that the currency manipulation scandal is far from over.
More of this Financial Times story from Monday is available on the gata.org Internet site where I found this news item, but a decent chunk of it is only available by subscription.
Brazil’s Political Crisis Puts the Entire Economy on Hold
In Brazil, General Motors Co. has been halting factories and laying off thousands. Latam Airlines, the region’s biggest, is cutting flights. And the world’s third-largest planemaker, Embraer SA, is delaying its biggest new aircraft.
In the midst of its deepest economic and political crisis in a generation, Brazil is contending with a business climate so punishing that major projects across numerous sectors are being frozen or shrunk, while small businesses slash prices and shift focus.
“Political instability is enormous, and it’s paralyzing Brazil,” said Eduardo Fischer, co-chief executive officer at homebuilder MRV Engenharia & Participacoes SA, in an Aug. 5 interview. In Brasilia, the nation’s capital, “decisions and actions that need to be taken are being delayed, questioned or defeated, and nothing happens.”
Even luncheonettes are hurting.
Carambola’s, a juice and sandwich shop in Sao Paulo’s financial district, saw a 30 percent drop during lunch starting a couple of months ago. The corner store fired two employees, and closes earlier as customers stop coming in after-hours.
This Bloomberg offering was posted on their website at 6 p.m. Denver time on their Monday evening—and I thank Roy Stephens for sharing it with us.
U.K. Inflation Quickens as Core Rate Rises to 5-Month High
Britain’s inflation rate unexpectedly rose in July and a core measure of price growth increased to the highest in five months. The pound jumped.
The change in the headline reading to 0.1 percent from zero was mainly driven by smaller clothing discounts in the summer sales this year compared with a year earlier. Economists in a Bloomberg survey had forecast the rate would stay at zero. The core measure — which excludes volatile food and energy costs — increased to 1.2 percent from 0.8 percent, higher than the 0.9 percent reading predicted by economists.
While the figures published Tuesday were stronger than anticipated, inflation is still well below the Bank of England’s 2 percent target. Policy makers have said it will remain low in the short term because of the strength of the pound and a renewed decline in oil prices. Over the longer term, Governor Mark Carney says price growth will accelerate and the time to begin raising the interest rates is approaching.
This news item appeared on the Bloomberg website at 2:30 a.m. MDT yesterday morning—and was updated several hours later. It’s the second offering of the day from Patricia Caulfield.
E.U. migrant arrivals pass record 100,000 in July: border agency
Nearly 110,000 migrants were tracked entering the E.U. in July by irregular means, official data showed on Tuesday, setting a record as the influx continues, notably of Syrians reaching Greek islands from Turkey.
The European Union’s border control agency Frontex said that it had detected some 107,500 people arriving outside regular channels in July, a sharp increase on the previous record set in June of over 70,000, and more than three times as many as it registered in the same month last year.
The most active frontiers were those of the Greek islands in the Aegean off Turkey, where nearly 50,000 people were recorded arriving by sea, mainly on Lesbos, Chios, Samos and Kos.
Nearly 340,000 such migrants were seen so far this year arriving in the E.U., mainly in Italy, Greece and Hungary. That was a 175 percent rise on the same period last year and much more than the 280,000 registered arrivals in all of 2014.
This Reuters article, filed from Brussels, showed up on their Internet site at 12:42 p.m. yesterday afternoon EDT—and I thank Patricia Caulfield for sending it along.
Crimea’s Future Was Decided by Local Residents, the Issue is Closed – Putin
Vladimir Putin declined to comment on Ukrainian President Petro Poroshenko’s remarks that the Russian president should have coordinated with Kiev his current trip to Crimea.
“I am not going to make any comments on this issue, because the future of Crimea has been decided by people who live on this territory,” Putin told reporters. “They have voted for the reunification with Russia. Period.” Putin stressed.
Crimea seceded from Ukraine to reunify with Russia in March 2014, following a referendum in which 96 percent of the voters supported rejoining Russia.
This news story, filed from Sevastopol, put in an appearance on their Internet site at 4:51 p.m. Moscow time on their Tuesday afternoon, which was 9:51 a.m. in Washington—EDT plus 7 hours. This article is certainly worth reading—and I thank Roy Stephens for finding it for us.
Market Unconvinced as Turkey Central Bank Pitches Its ‘Road Map’
Investors sold Turkish assets, sending the lira to a record low, after the nation’s central bank published a “road map” of measures it said would prepare the country for the normalization of global monetary policy.
The list of nine technical adjustments fell short of investor expectations that Turkey’s central bank would be moving toward simplifying its monetary policy framework, one of the world’s most complex. The lira fell as much as 1.3 percent to a record 2.9066 per dollar, while yields on two-year government debt surged to the highest in more than a year at 10.68 percent.
“The strategic plan is disappointing,” Guillaume Tresca, a senior emerging market strategist at Credit Agricole in Paris, said by e-mail on Tuesday. “The market was expecting more, and I have the impression that the central bank is just trying to justify saying to the markets that it’s ready to face a Fed rate hike, without really announcing anything new.”
The decision today was the Turkish central bank’s last chance to move before the Federal Reserve’s policy meeting on Sept. 17, when many economists expect it may announce its first rate increase in nine years. Turkish policy makers will next convene five days later, on Sept. 22.
This Bloomberg story showed up in their business section at 5:07 a.m. MDT Wednesday morning—and was subsequently updated four hours later. I thank Patricia Caulfield for sending it along.
Saudi Stocks Sink Into Death Cross as IMF Sees Growth Slowing
Investors sold Saudi Arabian stocks after an International Monetary Fund warning of slowing growth in the Middle East’s biggest economy tipped the equity index into a so-called death cross. Dubai’s shares also slumped.
The Tadawul All Share Index slid for a sixth day, closing 2.9 percent lower at 8,197.02, the weakest level in more than seven months. That dragged its 50-day moving average below the 200-day moving average, a signal to some investors that further declines are in store. Al Rajhi Bank’s 2.9 percent decrease was the biggest contributor to the loss. Dubai’s DFM General Index slipped 2.5 percent to the lowest close since April 13.
The Tadawul’s drop comes two months after Saudi Arabia opened its stock market to direct foreign investment for the first time to help diversify its economy away from oil. It puts into focus the deepening concern that King Salman is pushing ahead with a multi-billion dollar spending program at a time when crude, which accounts for 90 percent of government revenue, is trading near the lowest in six years.
“The push was the IMF, but what dragged it down further was fear that if the market closes below the 8,000 level, no one knows when it’ll bottom out,” Muhammad Shabbir, the Dubai-based head of equities at Rasmala Investment Bank Ltd., who oversees more than $500 million in assets, said from Dubai. The measure’s death cross triggered “panic and margin calls across the board,” he said.
This is another story from the business section of the Bloomberg website in the wee hours of Tuesday morning. It appeared there at 2:15 a.m. Denver time—and was updated four and a half hours later. It’s another contribution from Patricia C.
Saudi-led warplanes hit Yemeni port, aid group sounds alarm
Warplanes from a Saudi-led coalition hit Yemen’s Red Sea port of Hodeida on Tuesday, and officials there said the raids destroyed cranes and warehouses in the main entry point for aid supplies to the north of the country.
Hodeida, controlled by Iranian-allied Houthi forces, has become a focal point of efforts to resupply the impoverished Arab state, battered by five months of war that has killed over 4,300 people.
“Fighting, critical fuel shortages and restrictions on importing relief supplies have already helped to create one of the world’s worst humanitarian crises,” said Edward Santiago of aid group Save the Children.
“The bombing of Hodeida port is the final straw … The impact of these latest air strikes will be felt most strongly by innocent children and families,” he added.
This Reuters article, filed from Sanaa, appeared on their website at 3:27 p.m. EDT yesterday afternoon—and I thank Patricia Caulfield for sending it our way.
Tianjin, China Explosions Like ‘Nuclear Bomb': Californian Witness
A Californian who captured spectacular footage of the massive explosions that devastated the Chinese city of Tianjin described the blast as akin to “a small nuclear bomb.”
Daniel van Duren, 40, told NBC News he was trying to catch a glimpse of the Perseid meteor shower from his 34-story apartment building when the disaster unfolded, lighting up the night sky.
“It was incredible, we didn’t know what was happening … then the power went out to our building,” he recalled.
His cellphone video captured an initial explosion followed by at least one gigantic blast that sent debris flying through the air like fireworks.
Well, dear reader, if it had been a nuclear bomb, the person who took this picture would not be alive to talk about it—and there wouldn’t be much left of the highrise he photographed it from. This 1:14 minute video clip of the Tianjin explosion was posted on the nbcnews.com Internet site last Friday—and it’s very impressive if you haven’t seen it. I thank Patrick Leavens for sending it along.
Edward Chancellor: The cost of China’s devaluation
Financial markets, like religions, are faith-based networks. The complex structures of assets and liabilities that comprise markets are held together by a set of underlying beliefs. Unlike religions, however, financial dogmas are occasionally shown to be false. We experienced such a moment last week, when the Chinese authorities chose to devalue their currency.
For years, the consensus view has been that as China’s economy outgrew the developed world, its currency would inevitably appreciate. True, the yuan’s value was pegged to the dollar, but Beijing in the past had allowed it to gradually rise. The decision by the People’s Bank of China to relax the peg and depreciate the currency thus took the market by surprise. The significance of this move is not that it will set off another round of currency wars or that it will exacerbate global deflation – although both these outcomes are possible. Rather, the true danger comes from the adverse impact this unexpected devaluation may have on China’s dysfunctional financial system.
The era of ultra-low U.S. dollar interest rates has lured global carry traders to China. It’s easy to see why. Chinese banks paid better deposit rates than their U.S. counterparts and yields were even higher in the country’s shadow banking system. In addition, carry traders could expect to earn a few percentage points from currency appreciation each year. To many foreigners, lending in China with an expected annual return of around 10 percent must have seemed a one-way bet.
The inclination of Chinese borrowers to avail themselves of foreign loans has been driven by need as much as greed. Of course, it has been cheaper to borrow abroad and the rising yuan shrunk the size of outstanding liabilities. More to the point, as the country’s credit boom continued, China’s financial system has strained to keep up with demand. Foreign lenders have filled the gap.
This worthwhile commentary by Reuters columnist Edward Chancellor showed up on their website on Monday sometime—and once again I thank Patricia Caulfield for sending it our way.
China lashes out at U.S. after claims Beijing is deploying ‘covert agents’
China has lashed out at the United States for its “uncooperative” attitude and suggested it is becoming a haven for Chinese criminals, after Washington accused Beijing of deploying “covert agents” on American soil in a bid to snare fugitives wanted as part of president Xi Jinping’s war on corruption.
With just weeks to go until Xi makes his first state visit to the US, American officials have reportedly demanded Beijing stop sending undercover Chinese law enforcement agents there to take part in what Beijing calls “Operation Fox Hunt”.
The campaign to bring fugitives back to China is a key element of Xi’s high-profile offensive against corruption in the ruling Communist party.
China is understood to have handed lists of targets to countries including the U.S., Australia, France, Canada and the U.K.
This news item was posted on theguardian.com Internet site at 5:13 p.m. BST yesterday afternoon, which was 12:13 p.m. in New York—EDT plus 5 hours. I thank Patricia C. for bringing it to our attention.
Abe Aide Says Japan Needs ¥3.5-Trillion Economic Package
Japan needs an economic injection of as much as ¥3.5 trillion ($28 billion) to shore up consumption and stave off a further economic contraction, said Etsuro Honda, an economic adviser to Prime Minister Shinzo Abe.
“Households feel their income has been reduced,” Honda, 60, said in an interview Tuesday at the Prime Minister’s Office in Tokyo. “The negative legacy of the previous tax hike is waning, but increases in wages are lower than expected and prices of food and daily commodities are rising.”
The world’s third-biggest economy shrank an annualized 1.6 percent in the three months through June as households and businesses cut spending and exports tumbled. While the tailwind from the weaker yen and the Bank of Japan’s unprecedented monetary stimulus have helped propel stocks to an eight-year high, consumer confidence has slumped.
Honda said a package of ¥3-3.5 trillion is needed to help lower-income households and pensioners. He suggested it should be delivered as subsidies such as child-care support or coupons, rather than spending on public works.
This is another Bloomberg news item that’s also courtesy of Patricia Caulfield. This one was posted on their website on Tuesday morning at 2:38 a.m. MDT.
Japan’s Actions Louder Than Sorry Words
Japan’s embrace of American militarism in Asia-Pacific directed at China is perhaps the ultimate litmus test of Japanese sincerity about its past violations.
The differing response from the United States and China to Japanese premier Shinzo Abe’s wartime “apology” speech is revealing.
The American White House “welcomed” Abe’s statement of remorse for Japan’s war record, while China was far from placated. Chinese media rebuffed Abe’s “smart words” and “linguistic trickery” as not going far enough to make amends for Japanese crimes committed during the Sino-Japanese War and its overlapping Pacific War.
Given that China’s death toll – estimated at over 20 million – from Japan’s aggression and colonial tyranny is many times more than that suffered by the US and its Western allies during the Pacific War, it is understandable why China remains much more sensitive on the issue of wartime apologies.
This news item was posted on the sputniknews.com Internet site at 4:29 p.m. Moscow time on their Monday afternoon—and it’s the final offering of the day from Patricia Caulfield—and I thank her on your behalf. It’s worth reading.
GoldMoney Inc. Subsidiary BitGold Announces Aurum Gold-Settlement Technology Now Linked to Nine Major U.S. Financial Institutions
GoldMoney Inc., a full-reserve and gold-based financial services and technology group, announces that the BitGold “Aurum” gold-settlement technology is now integrated via the Automated Clearing House (ACH) network with nine of the top US financial institutions including: JP Morgan Chase, Bank of America, Wells Fargo, Citi, US Bank, USAA, Fidelity, Charles Schwab and Capital One. Aurum is the patent-pending ledger, exchange and settlement technology underlying the BitGold platform and soon to be re-launched GoldMoney platform.
With the Aurum update and integration now live, the BitGold platform is directly integrated with ACH in a NACHA compliant manner for secure authentication and instant online transactions. Unlike traditional ACH confirmations which can require several days for users to verify a credit into their account, the Aurum integration allows BitGold platform users to verify and link their accounts in an innovative real-time authorization process. BitGold users with an account at one of these institutions can authorize deposits or redemptions instantly, making transactions more automated, secure, and avoiding possible bank wire fees.
Well, my two e-mails to Josh Crumb, their Chief Strategy Officer & Director last week, questioning the contents of this news item regarding their firm, are still waiting a reply. That question was “What’s the average account size (in CAD terms) of the 168,000 sign ups?” So far, nothing but silence. The story quoted above put in an appearance on the finance.yahoo.com website very early Wednesday morning EDT.
A Flyspeck of Gold — Hugo Salinas Price
Hugo Salinas Price, president of the Mexican Civic Association for Silver, writes that gold should not be measured in U.S. dollars, but the latter by their price in grams of gold. Judged that way over the long term, Salinas Price writes, the dollar has depreciated to nearly nothing.
His commentary is headlined “A Flyspeck of Gold” and it’s posted at the association’s Internet site, plata.com.mx.
I found this gold-related story posted on the GATA website yesterday—and it’s worth reading.
Major South African gold producers fly into the danger zone
So overall, baring a significant gold price increase, South Africa’s once globally-dominant gold mining industry has to be seen as in its twilight years, as the major miners cannot go on sustaining loss-making operations indefinitely.
While there are still some profitable South African gold mines at the current gold price, we will undoubtedly see some more closures moving forwards while the operating companies continue to battle to further reduce, or at least contain, operating costs.
While the industry may not die completely by 2020, it certainly looks likely to continue to contract.
This longish commentary by Lawrie gives you some idea of the plight of the South African gold miners based on the current gold price as set by JPMorgan et al. And it’s depressingly obvious that they’d rather go under than address the root cause of the problem—and that’s the price rigging scandal on the COMEX. This article was posted on the mineweb.com Internet site at 12:54 p.m. BST yesterday.
Glencore to shut Eland platinum mine in South Africa – Solidarity
Glencore Plc will shut its Eland platinum mine in South Africa, risking about 1,000 jobs, the Solidarity trade union said.
“We treat every mine closure as a permanent closure and the jobs are lost forever,” Gideon du Plessis, general secretary of the labor organization, said in a text message.
The company is in the process of reviewing the operation because of “ongoing poor market conditions in the platinum sector and difficult operational conditions at the mine,” Gugulethu Maqetuka, a spokesman for the company, said in an e- mailed statement. It has issued notices about possible job cuts to unions, he said.
Lonmin, the third-biggest miner of the precious metal, said in July that it will reduce annual output by 100,000 ounces over the next two years and eliminate as many as 6,000 jobs. Platinum has been in a bear market for two years, and South African producers are losing money on three out of every four ounces they mine. Prices have plunged 17 percent this year on a glut of metal from stockpiles and recycled material.
As you are already more than aware, dear reader, the same price management scheme exists in platinum and palladium as it does in the gold and silver—and until the miners are prepared to address this issue head on, which it’s obvious at this time that they’re not—nothing will change. This Bloomberg article found a home on the mineweb.com Internet site early yesterday afternoon.
India gold demand in 2015 to go up by 11% to 936 tonnes
With the rupee price of gold likely to be approximately 15 per cent lower in 2015 than in 2014, demand is forecast to increase by 11 per cent.
The prediction was made by Thomson Reuters in its latest report on the monsoon and its impact on gold demand in India.The report uses the combined expertise of Lanworth and GFMS analysts, Thomson Reuters group companies for research in farm produce and precious metals, respectively.
Analysts studied monsoon activity, crop production and yields, and local expenditure on gold, and examined the relationship among each of these variables to come to conclusion that demand would rise by 11 per cent in 2015.
This very interesting gold-related news item appeared on the business-standard.com website at 10:34 p.m. IST on their Tuesday evening—and I found this item on the Sharps Pixley website.
The PHOTOS and the FUNNIES
Here’s the red-necked grebe that was in the last shot I posted in yesterday’s column. I’m not sure if it was having a bath, or was just playing around, but I’d never seen such behavior in these birds—and I’ve been watching them for three years now. Photo four has a juvenile grebe close enough where I could get it in the frame as well. I was shooting at 1/2,500 of a second, so it stopped all the action, including the water droplets. The red colour of the water is the reflection from a building. The ‘click to enlarge‘ feature brings the photos up to full-screen size.
THE WRAP
I’d like to believe that the hallmark of my analysis is to rely on easily documented public statistics and apply the most reasonable and plausible interpretation of those facts in reaching a conclusion about future price: at least, that’s my intent. Certainly, the COMEX warehouse data is readily available and widely followed (and charted) for various purposes, although there has been little reporting on the unusual silver movement. This puzzles me. I know there are cranks and crackpots that distrust anything from the CME Group (and I understand that distrust and believe I have contributed towards it), but why would the exchange or the warehouses lie about the unusual silver movements? What could they possibly gain?
So here we have statistics published daily (for free) and to which no known underhanded purpose could be assigned and, therefore, no known reason exists for anyone to lie about the physical silver movements. Yet, despite a pattern that has persisted for four and a half years of unprecedented frantic turnover unique to silver among all commodities, the movement is ignored, even by those who follow and write about silver.
In trying to apply the most reasonable and plausible explanation for the easily documented COMEX physical silver inventory movement, I have fallen back to asking myself what would be the most reasonable explanation if this movement were occurring in any other commodity. My answer is simple – such a frantic physical turnover of any commodity to the point where 30% of world’s total mine production was moving into and out of a very narrowly-defined warehouse terminal for years on end would indicate a wholesale tightness of unprecedented proportions. I can’t help but feel that this is being overlooked in silver precisely because no other plausible explanation exists. As always, I solicit any other plausible explanations. — Silver analyst Ted Butler: 15 August 2015
As I said in The Wrap section of yesterday’s column—“I’ll be the most surprised person in the world if the precious metals are allowed to go anywhere [except down] from a price perspective for the remainder of the Tuesday trading session.”
This turned out to be a prophetic statement, but even I must admit that I wasn’t expecting the price beating that JPMorgan et al laid on the precious metals to be quite that bad. Gold managed to recover all of its loses—and platinum all except five bucks—but silver and palladium really got it in the neck.
It would be my guess that “da boyz” were flushing out all the newly placed longs that were added during the yuan devaluation last week, plus getting the technical funds in the Managed Money category back on the short side as much as possible as well. Did they succeed? Well, we may or may not find out on Friday.
Here are the 6-month charts for the ‘Big 6′ commodities once again. Silver had its ‘failure’ at the 50-day moving average—and palladium came close to setting a new low for this move down after the beating it took yesterday. Copper also hit a new low for this move down—and also closed at a new low as well.
Yesterday, at the close of COMEX trading was the cut-off for Friday’s Commitment of Traders Report and hopefully, with fingers crossed and touching wood, all of yesterday’s volume data will be in it.
And as I type this paragraph, the London open is less than ten minutes away. All four precious metals got sold down a bit more in Far East trading on their Wednesday, but are rallying smartly into the open—and it’s a sure bet that the powers-that-be will be there with the hammer in short order. Net gold volume is just over 14,000 contracts—and silver’s net volume is 4,200 contracts. I’m sure both numbers are higher than that, as the CME volume data is delayed for at least fifteen minutes, so the volume associated with the current spikes are not included in either of them.
The dollar index didn’t do much until about 8:30 a.m. JST in Tokyo—and at that point began to head south with some authority. At the moment it’s down 28 basis points, after failing numerous times in Tuesday trading in New York to stay above the 97.00 level.
As U.K. reader James O’Kelly mentioned in an e-mail yesterday, we get the release of the minutes of the Fed’s July FOMC meeting sometime today—and as he also pointed out, probably correctly, we’ll get some negative price action on that news.
And as I post today’s efforts on the website at 5:10 a.m. EDT, I note that “da boyz” showed up as per usual—and all four precious metals are now struggling. Gold and silver are both up a bit, but both platinum and palladium have been rolled over—with platinum still up a buck, but palladium is now down 4 dollars. The fall in the dollar index was also reversed—and is currently down only 18 basis points.
Net HFT gold volume is now double what it was earlier—and approaching 28,000 contracts. Silver’s net volume is up to 6,800 contracts with a decent amount of roll-over volume as well.
I have no idea what to expect for the remainder of the Wednesday session, but since it’s the day after the cut-off for Friday’s COT Report, plus we get the release of the July FOMC minutes as well, nothing will surprise me as the trading day unfolds.
That’s it for today. I’m off to bed—and I’ll see you here tomorrow.
Ed
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