24 September 2015 — Thursday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold priced traded a couple of dollars either side of its Tuesday closing price in New York for the first part of Wednesday—and that lasted right up until the noon silver fix in London. At that point it rallied a bit, with its high of the day coming around the 9:30 a.m. EDT open of the equity markets in New York—and then chopped mostly lower from there into the close.
The low and high tick were recorded by the CME Group as $1,121.10 and $1,134.00 in the December contract.
Gold closed in New York yesterday at $1,130.30 spot, up $5.60 from Tuesday. Net volume was very much on the lighter side once again at just over 81,000 contracts.
Here’s the 5-minute gold tick chart courtesy of Brad Robertson once again—and the only volume that mattered came between 5:30 and 11:30 a.m. MDT time on this chart, which was the time between the noon London silver fix and the COMEX close. The vertical gray line is midnight Tuesday night in New York—add two hours for EDT—and don’t forget the ‘click to enlarge’ feature.
The silver price didn’t do much yesterday either. It’s low tick came at exactly 10 a.m. Hong Kong time on their Wednesday morning. It traded flat into the early afternoon—and then followed the gold price path almost exactly after that, including its high tick at 9:30 a.m. in New York. From there it was sold down until 12:15 p.m. EDT—and then traded pretty flat into the 5:15 p.m. close of electronic trading.
The silver price traded in a two bit price range all day on Wednesday, so I shan’t bother with the low and high ticks.
Silver finished the Wednesday session in New York at $14.79 spot, up 2.5 cents from Tuesday. Net volume was reasonably quiet at just over 24,000 contracts.
Platinum traded lower in the early Far East session, but began to recover starting just after 1 p.m. Hong Kong time on their Wednesday afternoon. The price chopped higher until just before 1 p.m. Zurich time—and then got sold down until noon in New York. Then, like silver, it didn’t do much after that. Platinum was closed at $931 spot, down 4 bucks from Tuesday’s close—and a new 6-year low.
Palladium traded very flat until Zurich opened at 10 a.m. Europe time yesterday morning. It chopped higher from there, but really started to fly once COMEX trading began. The rally ended minutes before noon in New York—and then it got sold down a bit into the COMEX close. Then, starting shortly after 3 p.m. in electronic trading, the price began to pick its way higher once again, closing almost on its high of the day at $648 spot, up a very chunky $41 dollars on the day. This had all the hallmarks over a short covering rally—and I have a palladium-related story in the Critical Reads section that deals with the news surrounding this rally. But if you want to read it right now, the link is here.
The dollar index closed late on Tuesday afternoon in New York at 96.32. It rallied as high as 96.46 in mid-morning trading in Hong Kong on their Wednesday morning—and from that high, it began to chop lower in a 30 basis point price in a rather agitated fashion, until ‘gentle hands’ showed up at the 96.02 mark at 3 p.m. EDT. Less than half an hour later it was up 20 basis points and back to just above the 96.20 mark—and that’s where it traded for the remainder of the day. The dollar index finished the Wednesday session at 96.20—down 12 basis points.
And here’s the 6-month U.S. dollar chart for reference purposes once again.
The gold stocks opened in the green, but began to chop lower immediately. The low tick in the stocks came at 3 p.m. EDT—and they traded pretty flat after that. Despite the positive close in the gold price, the HUI finished lower by 1.36 percent.
It was almost the same trading pattern for the silver equities, as Nick Laird’s Intraday Silver Sentiment Index closed down 1.88 percent.
The CME Daily Delivery Report showed that zero gold and 9 silver contracts were posted for delivery within the COMEX-approved depositories on Friday. ADM was the lone short/issuer—and Canada’s Scotiabank stopped 6 for its in-house account—and JPMorgan stopped the other 3 for its in-house account as well. The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Wednesday trading session showed that gold open interest increased by 1 contract, leaving 71 still open—and in silver, o.i. declined by 6 contracts, leaving 213 left for delivery. After Friday’s deliveries, there are only three delivery days remaining in the month.
There was another smallish addition to GLD yesterday, as an authorized participant added 19,155 troy ounces. And as of 9:13 p.m. EDT yesterday evening, there were no reported changes in SLV.
Not surprisingly, there was no sales report from the U.S. Mint yesterday.
There was no in/out activity at all in gold over at the COMEX-approved depositories on Tuesday.
In silver, nothing was reported received, but 528,938 troy ounces were shipped out the door, with virtually all of it coming out of the CNT Depository. And, for the second day in a row, there was a transfer from the Registered to the Eligible category at CNT. This time it was 600,837 troy ounces—and the link to all that action is here.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, they reported receiving 2,780 kilobars—and shipped out 3,056 of them. The link to that activity, in troy ounces, is here.
It was a pretty slow news day once again—and I don’t have all that many stories.
CRITICAL READS
Bill Gross’ Latest: “Mainstream America is Being Slowly Cooked Alive”
While hardly as dramatic as Bill Gross’ last letter in which he urged readers to “go to cash” as a result of the “Frankenstein creation” that ZIRP has created, his latest letter “Saved by Zero” takes a calmer stance and taking a page out of Paul Marshall’s FT Op-Ed profiled yesterday, urges central banks to “get off zero” as the “developed world is beginning to run on empty because investments discounted at near zero over the intermediate future cannot provide cash flow or necessary capital gains to pay for past promises in an aging society. And don’t think that those poor insurance companies and gargantuan pension funds in the hundreds of billions are the only losers.”
His punchline:
“Mainstream America with their 401Ks are in a similar pickle. Expecting 8-10% to pay for education, healthcare, retirement or simply taking an accustomed vacation, they won’t be doing much of it as long as short term yields are at zero. They are not so much in a pickle barrel as they are on a revolving spit, being slowly cooked alive while central bankers focus on their Taylor models and fight non-existent inflation.”
This commentary by Gross was embedded in a Zero Hedge story that put in an appearance on their Internet site at 8:19 a.m. EDT on Wednesday morning—and the first person through the door with it was ‘David in California’.
“The Government Is Literally Paying Itself” – Citi Calls For Money Para-drops
The report was critical for two main reasons:
First, it admitted that the conventional Fed QE approach of using banks (and excess reserves) as intermediaries, is now widely accepted as a failure and that a more “acute” form of money printing would be required, one which nobody would mistake for what took place in Weimar Germany.
Second, and even more important to us, was that now that the seal has been broken on “very serious people” discussing monetary para-drops, it was just a matter of time before the entire sell-side brigade jumped on board this brand new bandwagon. To wit:
“will the Macquarie report become the benchmark which the other penguins will ape as suddenly calls to bypass the banks become the norm and suddenly every “authority” on the topic, which so vehemently advocated for QE, admits it never worked from day one, and instead recommends that the only option left to save the world is the “nuclear” one?”
Today, less than a week later, we got the first official penguin in the form of Citigroup, which just released a note titled “Cold Fusion”, which proposes a way to “transform ineffective monetary into effective fiscal policy.”
This longish, but very interesting news item appeared on the Zero Hedge website at 3:46 p.m. EDT yesterday afternoon—and I thank Richard Saler for his first contribution to today’s column.
Hackers Took Fingerprints of 5.6 Million U.S. Workers, Government Says
Just a day before the arrival of President Xi Jinping here for a meeting with President Obama that will be focused heavily on limiting cyberespionage, the Office of Personnel Management said Wednesday that the hackers who stole security dossiers from the agency also got the fingerprints of 5.6 million federal employees.
The attack on the agency, which is the main custodian of the government’s most important personnel records, has been attributed to China by American intelligence agencies, but it is unclear exactly what group or organization engineered it. Before Wednesday, the agency had said that it lost only 1.1 million sets of fingerprints among the records of roughly 22 million individuals that were compromised.
“Federal experts believe that, as of now, the ability to misuse fingerprint data is limited,” the agency said in a written statement. But clearly the uses are growing as biometrics are used more frequently to assure identity, in secure government facilities and even on personal iPhones.
The working assumption of investigators is that China is building a huge database of information about American officials or contractors who may end up entering China or doing business with it. Fingerprints could become a significant part of that effort: While a Social Security number or a password can be changed, fingerprints cannot.
Customs and immigration officials frequently fingerprint incoming travelers; millions of fingerprints in a Chinese database would help track the true identities of Americans entering the country.
A very convenient story to have break just days before China’s president arrives on U.S. shores, but fingerprints don’t do much good if that’s all the hackers got. This story showed up on The New York Times website yesterday—and the comments in the last paragraph probably sums it up best. I thank Patricia Caulfield for her first offering in today’s column.
Brazil’s Currency Plunges Again, as Decision to Uphold Spending Vetoes Fails to Shore Up Confidence
The beleaguered BRL – which one might have expected to get some respite from the fact that Brazilian lawmakers upheld 26 of President Dilma Rousseff’s 32 vetoes on some $32 billion in expenditures – is plunging anew, punctuating the largest five day drop in four years and hitting fresh record lows against the dollar…while CDS blows out (again) and is now at near record wides.
Congress, which looked set to delay a vote on the vetoes, decided to go ahead (presumably in light of the FX turmoil that has the central bank operating in “crisis mode”) and after a marathon session, Rousseff came away largely victorious.
But renewed pressure on the BRL suggests the country is far from out of the woods.
This is another Zero Hedge story courtesy of Richard Saler. This one has three excellent charts, which are certainly worth the trip—and it appeared on their Internet site at 10:41 a.m. EDT on Wednesday morning.
Germany’s Five-Year Yields Drop Below Zero as Equities Tumble
European government bonds surged, pushing German five-year yields below zero for the first time in almost a month, as a slide in equity markets boosted demand for fixed-income assets.
Benchmark German 10-year bunds led gains as European stocks fell the most in almost a month, underpinning the region’s benchmark sovereign securities. Speculation of extended stimulus from the European Central Bank increased after Executive Board member Peter Praet said on Monday that policy makers would “forcefully react” to defend their inflation objective.
Since the ECB started its 1.1 trillion-euro ($1.2 trillion) bond-buying program in March, inflation in the currency bloc has slowed to a near standstill, compared with the ECB’s goal of just below 2 percent. The U.S. Federal Reserve’s decision to refrain from increasing interest rates last week has bolstered the prospect of the ECB extending its “easy-monetary policy stance,” according to Rabobank International.
“We are seeing softness in European equities and that provides a conducive backdrop for fixed income,” said Richard McGuire, head of European rates strategy at Rabobank in London. He added that “ongoing speculation of additional central-bank support in Europe and beyond, in the wake of the Fed’s steady rate decision, may be also playing a part here.”
This Bloomberg story showed up on their website at 1:46 a.m. Denver time on Tuesday morning—and was updated about nine hours later. It’s something I found in yesterday’s edition of the King Report.
Volkswagen chief quits over emissions scandal as car industry faces crisis
The chief executive of Volkswagen has quit the car firm, insisting he was not involved in the emissions tests scandal that has rocked the automotive industry and could lead to one of the biggest ever legal claims.
Martin Winterkorn said the German company needed a fresh start but stressed he was “not aware of any wrongdoing on my part” as he stepped down as boss.
The resignation of Winterkorn follows five days of growing pressure on VW after the U.S. Environmental Protection Agency (EPA) accused the carmaker of using a defeat device to cheat emissions tests on diesel cars.
The crisis could lead to millions of VW and Audi vehicles being recalled around the world and legal claims from motorists. Leigh Day, a UK law firm, said that if VW also manipulated tests in Europe then UK consumers could claim compensation.
This news item appeared on theguardian.com Internet site at 9:19 p.m. BST, which was 4:19 p.m. in New York—EDT plus 5 hours. I thank Patricia Caulfield for this story.
What Was Volkswagen Thinking? — Editorial Board, The New York Times
It is incredible that anyone at Volkswagen thought the company could get away with it. Did the engineers and executives who came up with that bit of cheating software ever consider the enormous risk they were taking? Did they really think it was worth the inestimable damage to their customers, to the environment, to their shareholders and to their venerable brand to squeeze a bit of illicit power out of their engines?
Yet that’s exactly what they did, according to an announcement by the Environmental Protection Agency on Friday. VW’s share prices promptly plummeted 19 percent; the company now faces billions in fines, costly recalls, possible class-action lawsuits and criminal charges, investigations into its global practices and tremendous blows to sales, to the VW brand and to Germany’s vaunted auto industry.
Senior executives are rushing to express remorse for installing “defeat devices” in Volkswagens and Audis with 2-liter diesel engines not only in the United States but in an astonishing 11 million cars worldwide. The devices consisted basically of software that lowered emissions to legal standards during emissions testing but let the pollutants spew the rest of the time, increasing performance. The bad stuff includes nitrogen oxides, a primary constituent of health-threatening smog, and micro-fine particulate matter, which causes respiratory disease. Both are strictly regulated under the Clean Air Act. For something this deceitful and stupid, a corporate mea culpa is not enough. Volkswagen must explain how something like this could happen, and identify those who came up with the idea and authorized it.
This short, and to-the-point editorial was posted on The New York Times website on Wednesday sometime—and I thank Patricia Caulfield for this article as well. It’s definitely worth reading.
Volkswagen woes drag peers into the fray
Volkswagen’s admission that its diesel engines sidestepped US emissions regulations has severely dented both its and its German peers’ credit risk.
* Volkswagen CDS spread has more than doubled in the last two days to a six year high
* Volkswagen’s bond yields have widened across the maturity curve
* Daimler and BMW have seen their spread jump by over 50% on these developments
Yesterday’s shock admission that German carmaker Volkswagen’s diesel engines were designed to circumvent US environmental regulation sent its shares into free fall. The second day of the crisis brought little relief for the company’s shares, which tumbled by as much as 20% as the market digested the news that it was facing investigations on both sides of the Atlantic after the number of cars affected by the scandal grew to 11 million worldwide, over 20 times the number affected in the US. Volkswagen has set aside $7.3bn to deal with the initial costs of the scandal
This worthwhile story appeared on the markit.com Internet site on Tuesday sometime—and it’s another offering from Richard Saler.
Divided European leaders meet to devise plan to tackle refugee crisis
European heads of government are meeting in Brussels to try to hatch a common plan on refugees following months of recriminations and amid a sense of spiralling momentum of which the leaders have lost control.
The emergency E.U. summit on Wednesday pitted the governments of central Europe against Germany and France after Berlin and Paris forced a new system of imposed refugee quotas on a recalcitrant east on Tuesday. There was talk of boycotts and threats to take the issue to court from the Czechs and Slovaks who were outvoted on Tuesday, while the E.U.’s most robust anti-immigration hardliner, Viktor Orban of Hungary, warned Chancellor Angela Merkel against any “moral imperialism” at the summit.
“We have reached a critical point where we need to end the cycle of mutual recriminations and misunderstandings,” said Donald Tusk, the president of the European council who chaired the summit. “Our debate must be based on facts, not illusions and emotions.”
The Czechs, Slovaks, Hungarians and Romanians are deeply indignant at being outvoted on one of the biggest and most toxic issues in national politics anywhere in Europe.
This story was posted on The Guardian‘s website at 5:39 p.m. BST on Wednesday afternoon in London, which was 12:39 p.m. in Washington. It’d definitely worth reading—and my thanks go out to Patricia Caulfield for her final offering in today’s column.
Putin works to counter impact of low oil prices
Russian economy struggling under the dual pressures from sanctions and low crude oil prices needs to work to overcome recession, the Russian president said.
“In the present environment, it is particularly important to provide a set of measures to overcome the economic recession and maintain the role of the federal budget as one of the leading development tools,” President Vladimir Putin said in a statement.
The Russian economy teetered on the brink of recession when entering fiscal year 2015. In early September, the Bank of Russia said it was keeping the key rate at 11 percent annually because of higher inflationary risks and “persistent risks of considerable economy cooling.”
The International Monetary Fund in January warned the low price of oil is “clearly bad news” for economies like Russia’s that depend heavily on export revenue. The adverse effect for Russia, the fund warned, would likely be “very large.”
This UPI story, filed from Moscow, put in an appearance on their Internet site at 6:51 a.m. EDT yesterday morning—and my thanks go out to Roy Stephens for this one.
Putin Proves It in Syria: The U.S. No Longer Runs the World
Only a few weeks ago, the al-Assad regime seemed in danger of losing the swath of land from Latakia to Damascus to the assaults of the Islamic State of Iraq and the Levant (ISIL), Jabat al-Nusra and others. Today, Russia has taken over and brought in heavy weapons. Not only can Bashar al-Assad breathe a sigh of relief, but the entire Syrian scene should now be revisited from three different angles.
First, this is about rescuing al-Assad from the edge of a cliff. The hypothesis of the entire country falling to ISIL and the al-Assads fleeing to Sochi is now implausible. Al-Assad is in safe hands. If ever rebel groups still want to conquer Syria’s west, their unlimited violence will be met by the Russian army, not the teetering regime forces.
But this is not just about rescuing one man. By establishing a strategic presence in Syria, President Vladimir Putin is securing the future of a vital ally in the Middle East, one that has long had its military trained and equipped by Russia, and making western Syria into Russia’s strategic base in the Middle East.
This commentary showed up on the russia-insider.com Internet site yesterday sometime—and I thank reader “aurora” for sharing it with us.
Jim Chanos Compares China’s Stock Market to Pig on LSD, Fears “Lost Chinese Decade”
Over the past three months, there’s been no shortage of attempts to explain the wild gyrations in China’s equity markets by way of analogy and/or colorful metaphors and the same goes for efforts to analyze the country’s decelerating economy.
Take Horseman Global for instance, who, in a moment of nostalgia for classic 80s cinema, said the following earlier this month:
For bears, much like the alien in Predator, the Chinese government has continually used special abilities that were previously unknown. In my experience, in the mind of the international investment community, small devaluations tend to encourage even more capital outflow, which in turn leads to even larger devaluations. Or to borrow a line from Predator, “If it bleeds, we can kill it”.
Now obviously, topping that is no small feat, but Jim Chanos took a stab at it during a panel discussion on China in New York on Tuesday.
“It’s like a pig on LSD. You don’t know which way it’s going to run,” Chanos said of China’s stock market, which of course is susceptible to huge intraday swings depending on what mood the PBoC’s plunge protection team happens to be in.
This is another Zero Hedge piece that’s courtesy of Richard Saler. This one was posted there at 7:54 a.m. EDT on Wednesday morning—and I thank him for his final contribution to today’s column.
‘The Wrong People Got the Capital’………Astute Investor Warns of Crisis in E.M. and Junk Debt
The world economy is locked on a course towards an emerging markets crisis and a renewed slowdown in the US, despite the Federal Reserve’s decision last week to hold off on a rise in rates, according to one of 2015’s most successful hedge fund managers.
John Burbank, whose Passport Capital has placed lucrative bets against commodities and emerging markets this year, forecast that the Fed would eventually be forced into a fourth round of quantitative easing to shore up the economy.
In an interview with the Financial Times, Mr Burbank said years of QE had caused a misallocation of capital across the world, while the end of QE last year triggered a dollar rally with consequences that were only now beginning to be realised.
“The wrong people got the capital — emerging markets countries and corporates and a lot of cyclical companies like mining and energy, particularly shale companies — and this is now a major problem for the credit markets,” he said.
This Financial Times story from Tuesday was posted in the clear over at the David Stockman website—and my thanks go out to Roy Stephens for sharing it with us.
Palladium Rises to Two-Month High on China Auto-Emissions Push
China’s clean-air drive is giving palladium a boost.
The metal, used in pollution-control devices for cars, climbed to the highest in more than two months after China said it will accelerate construction of electric-car charging facilities. Premier Li Keqiang announced the plan after almost a dozen Chinese cities made emissions pledges at a two-day climate change summit in Los Angels last week. The auto industry accounts for about three-quarters of demand for palladium, according to Morgan Stanley.
“They want to start doing more electric cars,” Peter Thomas, a senior vice president for metals at Zaner Group LLC in Chicago, said in a telephone interview. “If they’re speeding it up, it would make sense for palladium to go up.”
Palladium futures for December delivery jumped as much as 6.6 percent to $651 an ounce on the New York Mercantile Exchange, the highest since July 15. Prices settled at at $645.70 at 1:36 p.m. local time. Platinum futures for October delivery fell 0.5 percent to $932.40, after touching $925.80, the lowest since January 2009.
This Bloomberg article showed up on their Internet site at 8:31 p.m. Denver time on Tuesday evening—and was updated about 16 hours after that.
Central bank gold at the Bank of England — Ronan Manly
This very long commentary by Ronan was posted on the Singapore-based bullionstar.com Internet site late yesterday—and I must admit that I haven’t had the time to read it—and so I offer it with no comment or opinion. Like Ronan’s other long essay from yesterday, you’re on your own with this one as well. The essay contains a boat load of charts courtesy of Nick Laird over at the sharelynx.com Internet site. I found all of this on the Sharps Pixley website in the wee hours of this morning.
Price suppression ends if buyers take delivery, Swiss refiner tells Physical Gold Fund
Physical Gold Fund’s John Ward today interviews an unidentified director of a large Swiss gold refinery who asserts, among other things, that gold is heading from West to East in huge volumes; that the gold price at the moment has no correlation to the physical market, which is tight; that if gold buyers ever start taking delivery of metal instead of leaving their metal on deposit with bullion banks, the situation could become dangerous; but that as long as buyers don’t take delivery, the current price mechanism — that is, price suppression by central banks and their bullion bank agents — can continue forever.
Of course this is pretty much the account that GATA and others, like JSMineset‘s Jim Sinclair, have been providing for a long time.
Ted says that taking delivery in silver would break that market wide open as well. The interview is 23 minutes long and was posted on the physicalgoldfund.com Internet site on Wednesday sometime—and it’s definitely worth your while. I found this story on the gata.org Internet site last night.
Christian bullish on gold but we may need to wait 2 years — Lawrie Williams
A very well-presented luncheon keynote at the Denver Gold Forum from CPM Group’s founder, Jeff Christian – perhaps almost public enemy No.1 for some of the out and out gold bulls. This is primarily because he is adamant that gold price suppression by the powers that be is a figment of the gold bulls’ and GATA’s imagination, despite some compelling evidence from the latter that at least in some times past gold has been seen as a dangerous element in the system by those whose job description might be seen as protecting the almighty dollar. The bulls might thus be surprised to hear that Christian is also actually bullish on gold – albeit not seeing any kind of significant rise until perhaps 2018. At this time he feels that new mined gold production will be turning down sharply in response to the recent lower gold price levels and that this reduction will by then start to be giving the gold price a good boost with the supply/demand situation tightening in response to lower mine and refinery output..
He opened his presentation with a somewhat scornful attack on those who see a dystopian vision of the future. However he also commented that these ‘dystopian fantasies’ will indeed keep those worried about them buying gold and be price supportive, but for the wrong reasons. He averred that there was a huge disconnect between these visions of what the future might hold for us and reality. He believes we are in a ‘muddle through’ economy and that there may be difficult times ahead and is 100% sure there will be another major recession in the USA, but perhaps not until the end of the decade, nor how deep or prolonged this might be.
Contrary to SNL’s research – the subject of a presentation on the previous day – which suggested global new mined gold production may already have peaked, CPM Group analysis sees global new mined gold output continuing to rise, albeit by small amounts, until 2017. While Christian doesn’t really see any significant falls in the gold price immediately ahead he feels that it will drift on at around current levels, or a little above, until new mined production starts to dip sharply and then fundamentals will truly come into play. With Central Banks continuing to buy gold they will find themselves competing with investors to obtain diminishing amounts of physical metal and that will then stimulate the price to move to higher levels, albeit not to the kind of heights that some of the gold bulls are suggesting.
To say that Jeff Christian is “public enemy No. 1” to any level-headed in-the-know precious metal investor is pretty much right on the money. I have never met him myself, but everyone who has, to a man, has had nothing nice to say about him. Not one. It’s always best to reserve judgement on someone until you have met them yourself, but the quality and integrity of some of the people have said rather unpleasant things about Mr. Christian, are beyond dispute. Lawrie doesn’t exactly give him a free pass, either—and this commentary, which was filed on the Sharps Pixley website yesterday, is definitely worth reading. Also worth reading is the Kitco coverage of this same Jeff Christian speech in Denver yesterday—and you can be forgiven if you think that the writers are talking about two different speakers at times. The Kitco commentary is headlined “CPM Group’s Christian Looks For Gold Prices To Accelerate Upward In Two Years“—and I thank Ottawa reader Lawrence Clooney for pointing it out.
[NOTE: His disparagement of some of the pet ideas of the lunatic fringe is right on the money—and he’s on safe ground there—and knows it. But not once here, or in any past speech, does Mr. Christian even hint that the COMEX paper market is controlling the price of any of the precious metals. He never broaches the subject for the simple reason that it would be his undoing—and since he’s an emissary from the dark side of The Force, he never treads there.]
The PHOTOS and the FUNNIES
The first picture is photo of Pluto that the New Horizons spacecraft took on July 14th—but was only downloaded from that spacecraft on September 13th–and I was so enthralled with it, I though it worth posting. The ‘click to enlarge‘ feature brings this up to full-screen size—and it’s worth it. Look at the complex atmosphere this ‘planet’ has—and the topography is mind-boggling. I found the photo on the spaceweather.com Internet site—and the link to the corresponding story is here.
The WRAP
How long before silver prices reflect what’s going on in the real world of actual metal supply and demand? It’s not just that we happen to be in the most severe shortage in retail forms of silver any of us has ever witnessed, because some will say the premiums fully reflect the shortage. But while the premiums do confirm the shortage, they don’t explain it. And one would think the most severe retail silver shortage in history would demand a detailed explanation.
It’s not just the retail shortage in silver demanding an explanation, all the obvious signs of wholesale tightness amid desultory price action also demand explanations. The unprecedented and frantic physical turnover in COMEX silver inventories and the growth of silver inventories in the JPMorgan COMEX warehouse and the shrinkage in other warehouses also demand explanations; but few are forthcoming.
More than anything, how long will everyone tolerate the daily pricing of commodities that is mostly divorced from the realities of actual supply and demand? Increasingly, there is no other plausible explanation for large daily price swings in silver, gold, copper and other metals and commodities than manipulative trading on the COMEX and NYMEX. For instance, I’d sure like to hear a plausible supply/demand explanation for why silver and copper fell sharply on Tuesday other than the obvious – the commercials (led by JPMorgan) rigged prices below key moving averages on the COMEX to induce selling by the managed money traders. I won’t be holding my breath for an alternative explanation.
While I don’t have a definitive answer for how much longer before silver (and other commodities) reflect actual supply and demand—and not crooked COMEX pricing; based upon the growing awareness of the price discovery process and the growing tightness in physical silver I sense not much longer. I say that for two reasons – one, a genuine wholesale physical silver shortage cannot be contained by derivatives at some point—and all the signs that I monitor show continued tightness. Two, there are indications that the most important players, like JPMorgan, may be putting the finishing touches on COMEX positioning best suited for a large up move in price. — Silver analyst Ted Butler: 23 September 2015
I was happy to see that JPMorgan et al didn’t make it three big down days in a row yesterday. But even with gold and silver finishing in positive territory, their respective equities still closed for a loss. Maybe it would have been better off if they had just blown the metals out to the downside and got it over with. However, it might have proved awkward considering the short covering tear that palladium was on.
But with low volume again, it was basically just another day off the calendar where nothing has been resolved either up or down.
Here are the 6-month charts for the Big 6 commodities once again. You’ll note that platinum set at new 6-year low price tick—and copper hit a new low for this move down. WTIC is back below its 50-day moving average as well.
And as I type this paragraph, London has been open less than five minutes—and I see that gold popped a bit at the open and is currently up about 7 dollars. Silver is up 6 cents. Platinum, which had been up about 20 bucks at one point in early Hong Kong trading is now up only 14 dollars. Palladium, which had been up 12 dollars, got capped at 10 a.m. Hong Kong time—and is now down a buck on the day.
Net gold volume is around 14,500 contracts—and silver’s volume is 2,186 contracts, with no roll-overs at all. The dollar index, which has been chopping lower all through Far East trading is currently down 18 basis points and is hanging on to the 96.00 level by its proverbial fingernails. Will ‘gentle hands’ show up again?
Ted’s mid-week commentary to his paying subscribers yesterday was headlined “How Much Longer?“—and that pretty much sums up the situation as we await developments. But until JPMorgan et al stand back and relinquish their positions of sellers of last resort, the pricing structure we’ve seen over the last four years or so, will remain in place.
I’m off to bed early for a change—and as I post today’s column on the website at 4:35 a.m. EDT, I see that for the moment, the tiny spike in gold at the London open is the high of the day—and this precious metal is now up only 5 dollars, silver is up a nickel, platinum is up 13 bucks—and the palladium price continues to sell off—and is down 4 dollars from yesterday’s close in New York.
Net gold volume is right at the 20,000 contract mark—and silver’s net volume is 3,421 contracts with only 1 contract showing rolled over. This is not heavy volume for this time of day—and it appears that “da boyz” are having no trouble keeping the precious metal prices under control, as all are off their highs from earlier.
The dollar index did dip below the 96.00 mark briefly, but is back above it at the moment, but still down 12 basis points.
As for what might happen during the remainder of the Thursday trading session, I haven’t a clue. Unless JPMorgan et al step in with their algorithms at some point, it could end up being another quiet trading session. We’ll find out soon enough.
That’s all I have for today—and I’ll see you here tomorrow.
Ed
The post Gold Price Suppression Ends if Buyers Take Delivery: Swiss Refiner appeared first on Ed Steer.