04 December 2015 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
As you already know, the HFT traders and their algorithms set a new low for this move down in gold in mid-morning trading in the Far East on their Thursday, but by 2 p.m. local time it was more or less back to unchanged. It got sold down a bit at 9 a.m. in London—and then didn’t do much until 1:30 pm. Europe time when Draghi spoke. When that happened, the dollar cratered—and what little reaction there was in gold got capped by JPMorgan et al—and things were more or less back to normal by the London p.m. gold fix. The price chopped higher from there, but you can tell by the saw-tooth chart pattern that they were keeping in it on a very short leash as far as price was concerned. The high tick came around 3 p.m. in electronic trading—and it got sold down a bit after that.
The low and high ticks for gold yesterday were reported as $1,064.50 and $1,045.40 in the February contract.
Gold was closed in New York yesterday at $1,061.60 spot, up $8.40 from Wednesday’s close. Net gold volume was pretty chunky at just over 164,000 contracts. I wasn’t happy to see that—and I’ll have a lot more about this in The Wrap.
Here’s the 5-minute gold tick chart courtesy of Brad Robertson once again—and as you can see, there was decent, but not overwhelming volume on the new low price tick in Far East trading on their Thursday morning—and after that was done, volume dropped back to next to nothing. It began to pick up at 5:30 a.m. Denver time on this chart on the Draghi news—and was very decent after that, even into electronic trading once that COMEX closed at 11:30 a.m. MST on the chart below. Midnight in New York is the vertical gray line, add two hours for EST—and don’t forget the ‘click to enlarge‘ feature.
“Da boyz” manhandled silver in the same way that they did the gold price, so I’ll spare you the play-by-play on this precious metal.
The low and high ticks were reported by the CME Group as $13.805 and $14.145 in the March contract.
Silver finished the Thursday trading session at $14.07 spot, up 10 cents on the day. Net volume was very decent as well at just under 43,000 contracts—and I wasn’t happy about that, either.
It was more or less that same for platinum, although once it began to rally, it was allowed to climb higher on a price percentage basis than either silver or gold were. Platinum rallied until shortly before 9:30 a.m. in New York before it was capped—and even though it got sold down a bit after that, it was able to regain that loss—and closed almost at its high. Platinum ended the Thursday session at $845 spot, up 16 bucks from Wednesday’s close.
Although palladium got sold down by the powers-that-be in mid morning trading in the Far East on their Thursday morning, it was the only precious metal that did not set a new low price tick for this move down. It barely reacted to the Draghi news—and rallied ten bucks beginning shortly after the afternoon gold fix in London. It got capped shortly after 11:30 a.m. in New York—and traded ruler flat into the close from there. Palladium finished the Thursday session at $535 spot, up an even 10 dollars.
Well, the big surprise of the day was the dollar index. It closed late on Wednesday afternoon in New York at 100.04—and began to rally quietly but steadily, reaching its 100.47 high tick moments before Draghi spoke at 7:30 a.m. EST, which was 1:30 p.m. in Europe. Then the dollar index crashed—literally–as the euro blasted higher. By 8:45 a.m., the dollar index was down 200 basis points—and continued to move sharply lower from there. The 97.59 absolute low tick came at 4:00 p.m. EST right on the button, as ‘gentle hands’ obviously showed up—and it began to rally from there. The dollar index closed out the Thursday session at 97.92—down a whopping 212 basis points. From its high to low ticks, the dollar index got walloped for 288 basis points.
The dollar index changes were so big on Thursday that I had to use my calculator to figure them out. Normally I do it it my head. Not yesterday!
And if you’re wondering about the muted response of the precious metals to such a monumental decline in the U.S.. dollar index—so am I—and I’ll have more about this in The Wrap.
However, in all fairness, it should be pointed out that they wanted to blast off to the moon and the stars, but the not-for-profit sellers showed up as per usual. Here’s the 2-day U.S. dollar index, so you can put Thursday’s action into perspective compared to Wednesday.
And here’s the 6-month U.S. dollar chart for even more perspective. That’s the biggest 1-day move in the dollar index I’ve ever seen, as we watched the U.S. dollar get devalued over 2 percent in the space of a few hours.
The gold stocks rallied about two percent and a bit at the open—and then wandered around that mark for the remainder of the day. The ‘high’ came shortly after the COMEX close—and it drifted lower from there. The HUI finished the day up 2.23 percent.
The silver equities followed a very similar pattern, but dipped into negative territory for a bit at one point. The high came minutes before 1 pm. and, like the gold stocks, drifted lower as the Thursday trading session moved along. Nick Laird’s Intraday Silver Sentiment Index closed up only 1.20 percent.
The CME Daily Delivery Report for Day 5 of the December delivery month showed that 4 gold and 29 silver contracts were posted for delivery within the COMEX-approved depositories on Monday. Merrill issued the four gold contracts—and JPMorgan stopped them all for its own account. In silver, all 29 contracts were issued by ADM—and the biggest long/stopper with 12 contracts was JPMorgan for its own account. What do they know that we haven’t found out about yet? The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Thursday trading session showed that December gold open interest took another tumble. This time it was by 806 contracts, leaving 2,993 still open for delivery. That’s still a lot of of gold, but o.i. is being whittled down at a very decent rate. Silver o.i. dropped by 111 contracts, leaving 480 still around. Both these open interest numbers do not account for the Monday deliveries mentioned above—such as they are.
There was a smallish withdrawal from GLD yesterday, as an authorized participant took out 7,264 troy ounces and, like the tiny withdrawal from SLV on Wednesday, this amount would certainly represent a fee payment of some kind. And as of 7:50 p.m. EST yesterday evening, there were no reported changes in SLV.
Since yesterday was Thursday, Joshua Gibbons, the Guru of the SLV Bar List, updated his website with the goings-on over at the iShares.com Internet site as of the close of business on Wednesday—and this is what he had to report.
“Analysis of the 02 December 2015 bar list, and comparison to the previous week’s list. No bars were added, removed, or had a serial number change.”
“As of the time that the bar list was produced, it was overallocated 168.5 oz.”
“There was a deposit of 1,325,367.6 oz on Monday that is not reflected on the bar list.”
For the second day in a row, there was no sales report from the U.S. Mint.
There was decent in/out movement in gold over at the COMEX-approved depositories on Wednesday. They reported receiving 32,150.000 troy ounces, which works out to precisely 1,000 kilobars of the stuff—and that deposit was made into JPMorgan’s vault. There was 20,077 troy ounces shipped out as well, with a tiny amount of that coming out of JPMorgan’s depository. The link to that activity is here.
It was somewhat quieter in silver, as only 12,994 troy ounces were reported received—and 407,889 troy ounces were shipped out the door. There was also a lot movement from the Eligible to Registered category—and vice versa—and you can see all that action linked here.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday, they reported receiving 300 kilobars—and shipped out 5,267 of them. All of the action was at Brink’s, Inc. as per usual—and the link to that, in troy ounces, is here.
Here are three more charts from Nick Laird’s stash—and they all involve movements of Swiss gold in October. The first shows total imports and exports in tonnes. The second show what countries they received gold from—and how much. And the third chart shows what countries received gold from Switzerland and how much they got. The ‘click to enlarge’ feature helps.
While I was fabricating today’s missive, I got an e-mail from reader Stewart Naylor who currently lives in China—and he had this to say about Chinese gold demand in his area. “Dear Ed, I am in Henan province—and my girlfriend is manager of a gold retail shop. She tells me even though price is so low, there are not many sales . My guess that will be familiar story across China. So where is all the Shanghai gold going? Easy guess I think. Best regards, S.N.”
I don’t have a huge number of stories today—and I hope you’ll find a couple that you consider worth reading.
CRITICAL READS
Fed Weighs Easing Stress Tests After Plea From U.S. Banks
The Federal Reserve, which has said it may toughen capital requirements in future stress tests of U.S. banks, is open to relaxing another aspect of the annual exams at the request of some of the firms, according to people briefed on the discussions.
Banks have asked the Fed to remove an assumption that they would continue dividends and stock buybacks even during a severe economic downturn, said the people, who asked not to be identified because no decision has been made. The banks have argued that such an assumption is unrealistic because they would pause payouts in a crisis to preserve capital, the people said.
The Fed’s Comprehensive Capital Analysis & Review, or CCAR, has become one of the most important annual events for the largest banks, determining whether they can pay out capital to shareholders. In the test, banks must demonstrate that they can weather a crisis and stay above minimum capital ratios even as their amount of equity is reduced by losses and the planned dividends and buybacks.
Allowing the banks to pause their planned payouts in the test may offset or even outweigh the increase in difficulty that would come from raising the minimum ratios lenders must stay above. Federal Reserve Governor Daniel Tarullo said in a Bloomberg Television interview on Nov. 23 that there’s “more than a pretty good chance” that those minimums will increase in future tests, perhaps by incorporating surcharges based on size and complexity that the Fed has proposed for required ratios in normal times.
One doesn’t have to drill too far down into any of the major U.S. banks to discover that they’re completely insolvent—and hold tens of trillions in derivatives as well. Another debacle like the crash of 2007/08 will be the end of them—and as Jim Rickards has said on many occasions, that day [and worse] is coming. This Bloomberg story was posted on their website at 12:45 p.m. Denver time on Thursday afternoon—and today’s first story is courtesy of Patricia Caulfield.
Goldman Sachs has plan for investment banks to issue their own currency
Goldman Sachs has made a patent application for a cryptocurrency settlement system in a move that underlines bank hopes that the architecture behind bitcoin can revolutionise global payments.
The application for a new virtual currency, dubbed “SETLcoin” by the bank, said it would offer “nearly instantaneous execution and settlement” of trades involving assets including stocks and bonds.
Banks have been racing to tap the power of blockchain — the ledger system that backs digital currencies such as bitcoin. Harnessing the technology has been likened to the changes wrought by file transfer systems on the music industry, or to the effect that email had on communication.
Although electronic dealing platforms have increasingly made front-office trades virtually instantaneous, the actual swapping of payments often still takes days, creating risk in the banking system.
The above four paragraphs are all that are posted in the clear from this story that appeared in the Financial Times of London yesterday—and the rest is behind their subscription wall. I found this news item in a GATA release yesterday.
No one knows what the Federal Reserve will do
If anyone says they know what the Federal Reserve will do at its next meeting, just look them straight in the eye, crack a little smile and say, “You’re an idiot.”
The Fed’s policy-making committee is set to meet on Dec. 15 and 16, and Wall Street is betting there’s a 75 percent chance that interest rates will be raised — not by a lot, but by enough to send a message.
Why are only idiots making predictions right now?
Because even the Fed doesn’t know what it is going to do. Indeed, Fed Chair Janet Yellen and her band of confused academics probably won’t be able to come to a decision until the very last moment.
This commentary by John Crudele showed up on The New York Post‘s website just after midnight EST on Thursday morning—and I thank “Joe T” for sending it along late last night.
Investors got ECB odds wrong, but Draghi could pay hefty price
It’s hard to know who is most to blame: Mario Draghi, for leading investors up the garden path; or investors, for believing that the European Central Bank president’s talk of doing “what we must” equated to a firm promise of a bigger dose of quantitative easing.
Either way, the marriage of a teasing central banker and a gullible set of investors produced an ugly stock market on Thursday. The French and German markets fell 3.6% and even the FTSE 100 shed 146 points, or 2.3%.
On balance, you’d mostly blame the investors. The eurozone economy has been chugging along at a quarterly growth rate of roughly 0.3% for the past 18 months. That’s not a good performance, but neither is it so awful that the ECB had to reach for the emergency button.
Thus the ECB’s compromise decision – no increase in the €60bn-a-month size of the asset-purchase programme, just an extension by six months – was always a reasonable possibility. The market just got its odds wrong: it had €75bn-a-month, or more, as a nailed-on heavy favourite.
This commentary on the Draghi moment in Europe yesterday put in an appearance on theguardian.com Internet site at 8:02 p.m. GMT Thursday evening, which was 3:02 p.m. in New York—EDT plus 5 hours. It’s the second offering of the day from Patricia Caulfield.
Mario Draghi riles Germany with QE overkill
The European Central Bank has cut the deposit rate to a record low of -0.3 percent and vowed to print money for as long as it takes to defeat deflation, pushing its radical stimulus measures to extremes never seen before in any major region in modern history.
The far-reaching moves come despite signs that economic growth in the eurozone is picking up, and ignores vehement protests from German-led hawks that quantitative easing at this late stage is doing more harm than good.
Mario Draghi, the ECB’s president, said the bank will keep buying €60bn of bonds each month as far out as March 2017 or “beyond if necessary”. It is effectively an open-ended pledge. “Abundant liquidity will continue for a long, long time,” he said.
Markets were betting on even more largesse, and reacted badly to the package of measures.
This commentary by Ambrose Evans-Pritchard appeared on the telegraph.co.uk Internet site at 8:04 p.m. GMT yesterday evening—and I thank Patricia C. for this story as well. It’s certainly worth reading, as is the previous piece from The Guardian.
Catalonia to pursue split from Spain despite court block, Mas says
Catalonia’s government will continue its drive for independence, its acting head said on Thursday, a day after Spain’s Constitutional Court annulled a Catalan assembly resolution calling for a republic to be established within 18 months.
The court was ruling on an appeal by the Spanish government of Prime Minister Mariano Rajoy, who has said Catalonian independence is “nonsense” and will never happen.
But Acting Catalan President Artur Mas, who ran the Catalan government during years of national economic crisis that saw the independence movement swell, said the government of the wealthy northeastern region would stick to its plan.
“Legally, it is clear that the Catalan parliament’s resolution is now annulled,” he said in an interview with Cadena Ser radio.
“But politically, it is not, because the will of the parliament cannot be annulled and the will of the parliament reflects the will and the ideas of a significant part of the Catalonian population.”
This Reuters article, filed from Madrid yesterday, showed up on their website at 6:35 a.m. EST—and I thank Richard Saler for finding it for us.
The Tax Europe Can’t Afford Not to Pay
In the capitals of Europe, they are calling in the spies and the generals. I would call in someone far more frightening: an accountant. Europe’s states cannot afford the crises they have on their hands.
After the Paris attacks, the European Union needs to achieve three things: to restore control of its borders, screen and resettle its refugees, and retool its security forces to break the urban jihadist underground. Yet from London to Athens, governments are discovering that Europe’s financial quagmire has eaten away the very resources this security crisis demands.
Across the Continent, austerity budgets have cut the British Army to its smallest size since the Napoleonic Wars, slashed the Greek Navy, handicapped the Italian Coast Guard and seen Bulgarian border police officers protesting on the streets. Europe is not ready for urban warfare against the Islamic State, or even to patrol Greek island shores, let alone to conduct screening of the refugees shipwrecked on Italian beaches. Only a huge injection of cash can change this.
This very interesting opinion piece, filed from London, was posted on The New York Times website yesterday sometime—and it’s worth reading. I thank Patricia C. for this story as well.
Holy smoke Batman! Erdogan has to go
Turkish President Recep Tayyip Erdogan has been shooting from the lip over the past week since the fatal shooting down of a Russian fighter jet. He truculently denied accusations of supporting terrorism, challenging Russia to prove it. Well, holy smoke Batman!
Yes, Batman. Not the caped screen hero. Instead, we’re talking about the city of the same name, located in Turkey’s southeastern region. It is where Turkey’s state-owned oil industry is centered.
Batman is also where the oil smuggling routes run by the Islamic State terror network are centered, according to surveillance images released this week by the Russian Defense Ministry.
Air reconnaissance photos show thousands of trucks running stolen oil from Syrian state-owned fields in the east of the country converging on the Turkish city of Batman, near the Syrian border.
The oil smuggling operation has been going for at least two years since the so-called Islamic State (IS) terror group took over the oilfields in eastern Syria near the city of Deir Ezzor. The illicit trade is reckoned to have been earning the jihadists up to $3 million a day to help fund their war against the Syrian government of President Assad.
This opinion piece appeared on the Russia Today website yesterday afternoon at 3:02 p.m. Moscow time, which was 7:02 a.m. in Washington—EDT plus 8 hours. It’s worth reading if you’re a serious student of the New Great Game.
Extended interview with Jim Rickards: China, the yuan, the SDR—and GOLD
China’s quest for international endorsement as a responsible and liberalised economic superpower took a step up this week with the IMF deciding to include the Yuan as a reserve currency in its Special Drawing Rights basket or SDR basket, joining the U.S. dollar, Euro, Sterling and Yen. Jim Rickards, author of Currency Wars and the Death of Money, speaks to Ticky.
This 12:14 minute video interview with Jim is hosted by Ticky Fullerton down under at the Australia Broadcasting Corporation. It was posted on the abc.net.au Internet site on their Wednesday sometime—and I thank Harold Jacobsen for bringing it to our attention. The comments on gold begin at the 7:30 minute mark.
India’s November Gold Imports Said to Double on Slump in Prices
Gold imports by India, the world’s second-biggest consumer, more than doubled in November as a slump in global prices to a five-year low stoked demand amid the peak festival and wedding seasons.
Overseas purchases last month climbed to 101 tonnes from 45 tonnes in October, two finance ministry officials said, asking not to be identified citing government rules. Imports dropped 22 percent to 655 tonnes in the eight months through November from 841 tonnes a year earlier, they said.
Finance ministry spokesman D.S. Malik declined to comment on imports. The Commerce Ministry separately compiles and publishes gold data that differs from the finance ministry data.
This gold-related Bloomberg story put in an appearance on their website at 5:42 a.m. MST on Wednesday morning—and I found it on the Sharps Pixley website last night.
After Monsoon Failure, Deluge Mars India Gold Demand Outlook
The first back-to-back shortfall in India’s monsoon rain in three decades is hurting gold demand with sales of pendants to bracelets and necklaces dwindling during the busiest quarter of the year. A deluge that’s marooned Chennai, a key market, is only adding to the woes.
Bullion consumption is seen as low as 200 metric tons in the fourth quarter, P.R. Somasundaram, managing director for the World Gold Council in India, said in an interview in Mumbai on Wednesday. That compares with demand of 268.1 tons in the third quarter and 202 tons during the fourth quarter of 2014, council data showed.
Large parts of India, which vies with China as the biggest gold consumer in the world, received below-average rain this year as an El Nino, ranked among the strongest since 1950, intensified. That hurt crops from rice to cotton and sugar cane, leaving less money in the hands of farmers in rural areas, which account for about 60 percent of annual demand. The worst deluge in a century in India’s southern state of Tamil Nadu is now threatening to further hurt demand, Somasundaram said.
Who to believe? This is another gold-related Bloomberg news item from India. It appeared on their Internet site at 4:06 p.m. Denver time on Wednesday afternoon—and I found this article on the Sharps Pixley website as well.
Indian gold monetisation scheme a ‘scam for gullible people’ – Bhandari
Speaking at an excellent day of talks at this year’s Mines & Money conference in London yesterday, well-respected Indian national and analyst Jayant Bhandari, had little positive to say about his native country, where he still spends about six months of the year. He describes the nation and its political system as inherently extremely corrupt, and this coupled with its sometimes unnavigable bureacracy, as a huge limiter on potential Indian growth prospects.
On the country’s gold monetisation scheme, he described this as a ‘scam for gullible people’ and does not see it as having an impact on the pattern of Indian gold consumption. He pointed to the tiny take-up of the scheme in its early days, suggesting that even the Modi Cabinet – whose members’ families are probably almost all substantial gold holders – has not felt it worthy of taking up. Indians will continue to accumulate gold he reckons as the other investment options open to people there are mostly effectively negative yielding, whereas gold has proved itself over hundreds of years as providing financial stability for the Indian populace.
This commentary by Lawrie Williams appeared on his own website, lawrieongold.com, yesterday. There’s more to it than this, but the rest of it has nothing to do with gold. You’ll have to skim it yourself and see if the rest of the article, with its link to the Sharps Pixley website, is of interest. I thank Patricia Caulfield for her final offering in today’s column.
India targets temple gold hoard to rescue monetization plan
India is trying to persuade rich temples to deposit some of their gold hoards with banks to revive a plan to recycle tonnes of the precious metal and cut gold imports, sources said.
The scheme has only attracted about one kilogram in a month, prompting the government to nudge temples through banks to hand over their treasures, the sources said, but at least one temple said it was still unconvinced by the plan.
“Convincing retail consumers is not an easy task, it takes time,” said a senior official with a state bank, who declined to be named. “We’re planning now to focus on institutions like temples.”
But Mumbai’s two-century-old Shree Siddhivinayak temple, which is devoted to the Hindu elephant-headed god Ganesha, said it remained unconvinced about the benefits.
And so he should be, dear reader! This Reuters news item, co-filed from Mumbai and New Delhi, showed up on their Internet site at 9:55 a.m. EST on Thursday morning—and it’s another article I found on the gata.org Internet site.
The PHOTOS and the FUNNIES
I came across this male starling in full breeding plumage at the top of just about the only tree on Pier 39 on San Francisco’s Fisherman’s Wharf when I was at last week’s Silver Summit. I could hear it overhead, but couldn’t see it, so I climbed the stairs to the second level—and there it was. I took these photos from just under three meters away. The birds around there are more than used to humans. Starlings are everywhere on Planet Earth, but the California variety is a lot different that the variety we have here in Edmonton. Don’t forget the ‘double-click to enlarge‘ feature, as it certainly makes a difference with these photos.
The WRAP
As always, when the managed money technical funds put on what turns out to be a record long position, prices have been driven higher and are in position for a sell off. Conversely, and as is the case currently, when the managed money technical funds sell and put on an extreme net short or create a low net long position, that means prices have come down and the market structure is set for a rally. Only a fool or a dyed-in-the-wool manipulation denier would doubt the connection between managed money buying and selling and price movement.
The fact that we’ve witnessed record extremes recently in COT readings for managed money positions, both long and short, means one thing for sure – these traders’ collective positions are more massive than ever before. Thus, there can’t be any real debate whether the managed money positions are massive and it can’t be a coincidence that gold and silver and copper prices have hit multi-year lows amid managed money short positions being, effectively, at multi-year highs. And does anyone seriously believe we would be at multi-year price lows without technical fund short positions being equally extremely short?
Therefore, the markets’ price discovery process has been captured by excessive and massive managed money positioning, as I’ve long contended and as Kemp’s article indicates. What to do about it? While I think it’s too far gone in silver—and its price is destined to explode, the answer to massive managed money positioning is so simple and obvious that it’s almost funny that it hasn’t been proposed and enacted by the CFTC and CME. The answer to massive and price-setting speculative positions is one thing and one thing only – legitimate speculative position limits. The only difference here is that because the managed money position is massive mostly on a collective basis and not on an individual trader basis, there must be a collective position limit on managed money traders. — Silver analyst Ted Butler: 02 December 2015
Draghi spoke, precious metals rallied smartly, but only to get capped before they barely got out of the gate—and the U.S. dollar index crashed. So, what happened?
Well, Ted and I had a very long chat about that yesterday—and at the end of it, we both agreed that neither one of us had enough data to support our respective positions, which weren’t very far apart.
His position, as I understood it, was centered around the fact that none of the major moving averages was broken to the upside—and in this case it would be the 20-day moving averages. Therefore there would be no reason for the Managed Money traders, who only follow moving averages to the exclusion of all else, to begin covering their short positions. If that turns out to be the case, it’s hard to argue with it.
However, there was a time back in 2014 when some of the Managed Money traders covered in a panic—and some of the smaller traders in the Commercial category [Ted’s raptors] got their heads handed to them. Did that happen this time? It’s impossible to tell.
But the precious metal price action starting at 7:30 a.m. EST showed that somebody was either going long, or covering short positions, because it’s the very act of doing that, that caused prices to rally. But on the other side of those transactions are traders that have to be prepared to take the opposite side of the trade by going short, or selling a long position—whatever the case may be.
Who were the buyers and the sellers yesterday? Were they Managed Money, or maybe smaller traders in the Nonreportable category who saw the crashing dollar index and decided to get the hell out of Dodge while the getting was good—or a new trader who thought it a good time to go long the precious metal market. Who took the opposite side of these trades to ensure that the rallies got killed? My guess is that somebody, or more than one somebody, in the Commercial category had to fall on their respective swords to make sure that prices didn’t get out of hand. Was it someone in the Big 4 category, the ‘5 through 8’ traders—or the raptors?
I don’t know—and as Ted said, it’s too bad that we can’t have a 1-day COT Report for yesterday, as that would tell all. We still have three more business days left for next week’s COT Report—and it’s a decent bet that whatever happened on Thursday will be buried by the data between now and next Tuesday’s cut-off.
But having said all that, it should not be forgotten that three of the four precious metals had new intraday price lows set by “da boyz” in Far East trading on their Thursday.
Here are the 6-month charts for the Big 6 commodities once again. I’ve replaced the 200-day moving averages with their respective 20-day moving averages, so you can see Ted’s point of view regarding the Managed Money traders.
Today we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday—and I’m not exactly sure what to expect, so I’ll just wait to see what the numbers say. But whether good or bad, I don’t expect big changes. If I’m not mistaken we also get the monthly companion Bank Participation Report as well, so my Saturday column will include all of this—and it will be a long one. This is my least favourite column of the month, as it’s a ten or eleven hour ordeal.
And as I write this paragraph, the London open is less than ten minutes away—and I note that gold and silver are down a hair from Thursday’s close in New York. Platinum spiked higher in mid-morning trading in the Far East on their Friday morning, but “da boyz” took care of that in short order—and its price is now down on the day as well. Palladium is up a whole dollar!
Net HFT gold volume is a hair over 20,000 contracts—and the number in silver is 3,000 contracts, give or take a handful. The dollar index made it up to about the 98.10 level very early in the morning Hong Kong time on their Friday, but sank back to around 97.85 in the early afternoon. Then around 2 p.m. Hong Kong time, it began to head higher—and is currently up 37 basis points as London opens.
Today we also get the job numbers at 8:30 a.m. EST—and it wouldn’t surprise me in the slightest if JPMorgan et al were standing by to smash the prices regardless of what the news is. After yesterday’s price action, it should be obvious that the powers-that-be aren’t going to let the precious metal prices out of the box until they’re ready. And despite yesterday’s “deterioration” in the Commercial net short positions of three of the four precious metals [and the jury is still out on that] we’re still very much locked and loaded for a moon shot to the upside if JPMorgan et al wish it, or are instructed to stand aside.
And as I post today’s efforts on the website at 3:55 a.m. EST, I see that there hasn’t been much change from an hour ago—and all hovering around slightly below unchanged—except for silver, which is up a few pennies. HFT gold volume is a bit north of 24,000 contracts at the moment—and silver’s volume is up to 4,100 contracts. The dollar index is also unchanged, still up 37 basis points from when I last reported on it.
I’ll take another blue pill before I head off to bed, but it won’t do much good, because whatever happens at 8:30 a.m. will already be ancient history by the time I check the charts later this morning.
Enjoy your weekend—and I’ll see you here on Saturday sometime.
Ed
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