10 December 2015 — Thursday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price didn’t do a thing in Far East trading on their Wednesday. There was a bit of a spike around 10 a.m. in London—and another once Comex trading began—but JPMorgan et al took that all away and more once the London p.m. gold fix was put to bed for the day. The low tick came shortly after 11 a.m. in New York—and the subsequent rally was allowed to last until about twenty minutes before the COMEX close. Then it was sold down for a small loss on the day from there.
The high and low ticks were reported by the CME Group as $1,085.00 and $1,086.70 in the February contract.
Gold was closed in New York yesterday at $1,072.50 spot, down $2.10 from Tuesday’s close. Net volume was pretty decent at just over 130,000 contracts, so it took a decent amount of COMEX paper to put out the attempted gold rally on Wednesday.
Here’s the five minute tick gold chart courtesy of Brad Robertson once again. You can see the volume spike around 3 a.m. Denver time, which revolved around the price spike at 10 a.m. GMT in London trading. The COMEX open is 6:20 a.m. MST on this chart—and of course that’s when the real volume began. Once the COMEX closed at 11:30 a.m. Denver time, the volume vanished. The vertical gray line is midnight in New York yesterday, add two hours for EST—and don’t forget the ‘click to enlarge‘ feature.
Although the silver price action was more subdued than gold’s, the price pattern was mostly the same, as ‘da boyz’ were in full ‘care and maintenance’ mode again. Once the day’s gains were taken away after the London p.m. gold fix, it traded mostly flat for the remainder of the Wednesday session.
The silver price traded well within a twenty cent price range yesterday, so I shall dispense with the high and low ticks in this precious metal.
Silver finished the Wednesday session at $14.14 spot, unchanged from Tuesday’s close. Net volume was just over 31,500 contracts, which was nothing special.
In most respects, the platinum price followed the same price-controlled path that silver and gold were forced to follow on Wednesday. However, the rally in early afternoon trading in New York enabled platinum to close at $855 spot, up 9 dollars on the day.
Ditto for palladium, but this precious metal set a new intraday low for this [3 day] move lower in Far East trading, although it did finally managed to close up 3 bucks from Tuesday at $549 spot.
The dollar index closed late on Tuesday afternoon in New York at 98.40—and continued its losing trend the moment that trading began on Wednesday morning in the Far East. The decline accelerated starting around 11:45 a.m. GMT in London trading, with the 97.22 low coming around 2:40 p.m. EST in New York. It recovered a bit from there, finishing the Wednesday session at 97.39—down 101 basis points.
Of course, the precious metals made several attempts to rally during the dollar decline, but the not-for-profit sellers were ever vigilant, particularly in gold and silver. And as I [and Ted Butler] have pointed out on countless occasions—and has been more than obvious in the last week—it’s what JPMorgan et al are doing in the COMEX futures market that affects precious metal prices—and not what’s going on in the currency markets.
If ‘da boyz’ stood back and let the markets do what they really wanted to do, one can only fantasize on what values the dollar index and the precious metals would sport by the end of trading today. It would be a grand repricing—and one of these days, that’s what we’re going to get. It just didn’t happen to be yesterday.
And here’s the 6-month chart for the U.S. dollar index—and it looks ominous. One wonders what it will look like a week from now.
The gold stocks gapped up at the open—and hung in there until ‘da boyz’ took the gold price lower after the 10 a.m. EST London p.m. gold fix. The low tick of the day came at 11:00 a.m. EST—and they more or less chopped sideways until they caught a bit of a bid staring just before 2:30 p.m. in New York trading. The HUI finished the Wednesday session up 1.76 percent.
The price action in the silver equities was a virtual carbon copy of what happened in the gold shares, except at a somewhat reduced price level—and Nick Laird’s Intraday Silver Sentiment Index closed higher to the tune of 0.83 percent.
The CME Daily Delivery Report showed that zero gold and 1 lonely silver contract was posted for delivery within the COMEX-approved depositories on Friday. The long/stopper for that one lonely silver contract was none other than JPMorgan for its own account.
The CME Preliminary Report for the Wednesday trading session showed that December gold open interest declined by another 268 contracts, leaving only 2,008 left open. At this rate, there’ll be nothing left by the end of the month. Silver o.i. actually increased by 3 contracts, leaving 383 still open for delivery by the end of December.
There were no reported changes in GLD yesterday—and as of 6:25 p.m. EST yesterday evening, there were no reported changes in SLV, either.
The folks over at the shortsqueeze.com Internet site updated the short position numbers for both GLD and SLV as of the last trading day in November—and this is what they had to report. The short position in SLV declined from 11.79 million share/troy ounces, down to 10.28 million shares/troy ounces. That’s a drop of 12.85 percent. I would guess that least two of the deposits made into SLV in the first couple of days of December may have been used to reduce the short position even further—and the short report that comes out at the end of the month may or may not confirm that.
The short position in GLD rose by 23.43 percent during the same period—from 1.06 million troy ounces, up to 1.31 million troy ounces.
Finally we got a sales report from the U.S. Mint. They sold 500 troy ounces of gold eagles—500 one-ounce 24K gold buffaloes—and 936,000 silver eagles.
I’m somewhat surprised at the low levels of gold sales, but I’ll reserve judgement on that for a bit—although the erratic sales reporting by the mint was part of the discussion that Ted and I had on the phone yesterday.
There was very little gold moment at the COMEX-approved depositories on Tuesday. Nothing was reported received—and only 1,221 troy ounces were shipped out. And not that it matters, there was also a small 2,915 troy ounce transfer from the Eligible to the Registered category. I won’t bother providing the link to this smallish amount of activity.
It was a lot different in silver, as 599,862 troy ounces were reported received—and all of that went into JPMorgan’s vault. There was also 658,402 troy ounces shipped out. Of that amount 594,850 troy ounces were shipped out of JPMorgan. The link to that action is here.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, they reported receiving 2,420 of them—and shipped out a very chunk 8,367. All of the activity was at Brink’s, Inc. as per usual—and the link to that activity, in troy ounces, is here.
I have very few stories again today, so I hope you’ll find some in the list below that you’ll find of interest.
CRITICAL READS
The Fed’s Painted Itself Into the Most Dangerous Corner in History—–Why There Will Soon Be a Riot in the Casino — David Stockman
The chart below crystalizes why the Fed is stranded in a monetary no man’s land. By the time of next week’s meeting the federal funds rate will have been pinned at about 10 bps, or effectively zero, for 84 straight months.
Yet during that same period, the consumer price level has risen by 1.75% per year. And that’s if you give credit to all of the BLS gimmicks, such as hedonic adjustments for quality change, homeowners “imputed” rents and product basket substitution, which cause inflation to be systematically understated.
On a basis that is close enough for government work, therefore, the real money market interest rate has been negative 2% for seven years. But that’s so crazy, unjustified, and unprecedented that even the Keynesian money printers who run the Fed have run out of excuses.
Presumably, Yellen and her posse know that we did not have seven years running of negative real money market rates even during the Great Depression of the 1930s.
So after one pretension, delusion, head fake and forecasting error after another, the denizens of the Eccles Building have painted themselves into the most dangerous monetary corner in history. They have left themselves no alternative except to provoke a riot in the casino—the very outcome that has filled them with fear and dread all these years.
This long chart-filled commentary by David put in an appearance on this website yesterday sometime—and I thank Roy Stephens for today’s first story.
Who’s the Bear Driving Up the Price of U.S. Stock Options? Banks
For more than a year, dealers in the U.S. equity derivatives market have noted a widening gap in the price of certain options. If you want to buy a put to protect against losses in the Standard & Poor’s 500 Index, often you’ll pay twice as much as you would for a bullish call betting on gains.
New research suggests the divergence is a consequence of financial institutions hoarding insurance against declines in stocks.
The pricing anomaly is visible in a value known as skew that measures how much it costs to buy bearish options relative to those that appreciate when shares rise. In 2015, contracts betting on a 10 percent S&P 500 decline by February have traded at prices averaging 110 percent more than their bullish counterparts. That compares with a mean premium of 68 percent since the start of 2005, according to data compiled by Bloomberg.
While various explanations exist including simply nervousness following a six-year bull market, Deutsche Bank AG says in a Dec. 6 research report that the likeliest explanation may be that demand is being created for downside protection among banks that are subject to stress test evaluations by federal regulators. In short, financial institutions are either hoarding puts or leaving places for them in their models should markets turn turbulent.
This very interesting Bloomberg article showed up on their Internet site at 10:00 p.m. Denver time on their Tuesday evening—and was updated about ten hours later. It’s certainly worth reading, at least in my opinion—and I thank West Virginia reader Elliot Simon for sending it our way.
Guess What Happened The Last Time Junk Bonds Started Crashing Like This? Hint: Think 2008
The extreme carnage that we are witnessing in the junk bond market right now is one of the clearest signals yet that a major U.S. stock market crash is imminent. For those that are not familiar with “junk bonds”, please don’t get put off by the name. They aren’t really “junk”. They simply have a higher risk and thus a higher return than other bonds of the same type. And yesterday, I explained why I watch them so closely. If stocks are going to crash, you would expect to see a junk bond crash first. This happened in 2008, and it is happening again right now. On Monday, a high yield bond ETF known as JNK crashed through the psychologically important 35.00 barrier for the very first time since the last financial crisis. On Tuesday, high yield bonds had their worst day in three months, and JNK plummeted all the way down to 34.44. When I saw this I was absolutely stunned. This is precisely the kind of junk bond crash that I have been anticipating that we would soon witness.
Normally, stocks and junk bonds track one another very closely, but just like before the 2008 crash, they have become decoupled in recent months. Anyone that even has an elementary understanding of the financial world knows that this cannot continue indefinitely. And when they start converging once again, the movement could be quite violent.
When I chose to use the word “carnage” to open this article, I was not exaggerating what is going on in the junk bond market one bit. On Tuesday evening, Jeffrey Gundlach used the exact same word to describe what is happening…
Yet another story on the disaster that is the ‘junk’ bond market. This rather short commentary by Michael Snyder appeared on theeconomiccollapseblog.com Internet site on Tuesday—and it too is worth reading. I thank Brad Robertson for this news item.
Puerto Rico Pleads for U.S. Aid as Senate Dashes Bankruptcy Push
Puerto Rico Governor Alejandro Garcia Padilla pleaded with Congress to help his government emerge from a deepening fiscal crisis, saying the federal spending bill may be the best chance for the island to secure aid before bond payments come due next month.
Just moments after the governor began speaking with reporters in Washington Wednesday, Democrats in the Senate failed in an effort to unanimously push through a bill that would allow some of Puerto Rico’s agencies to file for municipal bankruptcy, one of the island’s top priorities. The bill has stalled for lack of support among Republicans who control Congress.
Garcia Padilla said the most likely way for the island to secure aid this month would be by attaching provisions to the spending bill that Congress must pass to keep the government running.
“It looks like the most likely way for Congress to act prior to January,” Garcia Padilla told reporters. “For American taxpayers, if Congress does not act now, this will not be expensive — it will be very expensive because this will turn into a humanitarian crisis.”
This Bloomberg news item appeared on their website at 10:20 a.m. MST on Wednesday morning—and I thank Patricia Caulfield for sending it along late last night.
The IMF forgives Ukraine’s debt to Russia
On December 8, the IMF’s Chief Spokesman Gerry Rice sent a note saying:
“The IMF’s Executive Board met today and agreed to change the current policy on non-toleration of arrears to official creditors. We will provide details on the scope and rationale for this policy change in the next day or so.”
Since 1947 when it really started operations, the World Bank has acted as a branch of the U.S. Defense Department, from its first major chairman John J. McCloy through Robert McNamara to Robert Zoellick and neocon Paul Wolfowitz. From the outset, it has promoted U.S. exports – especially farm exports – by steering Third World countries to produce plantation crops rather than feeding their own populations. (They are to import U.S. grain.) But it has felt obliged to wrap its U.S. export promotion and support for the dollar area in an ostensibly internationalist rhetoric, as if what’s good for the United States is good for the world.
The IMF has now been drawn into the U.S. Cold War orbit. On Tuesday it made a radical decision to dismantle the condition that had integrated the global financial system for the past half century. In the past, it has been able to take the lead in organizing bailout packages for governments by getting other creditor nations – headed by the United States, Germany and Japan – to participate. The creditor leverage that the IMF has used is that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments.
This has been the system by which the dollarized global financial system has worked for half a century. The beneficiaries have been creditors in US dollars.
If you remember, my Tuesday column contained the must read story “Washington Has Scheduled IMF’s Suicide for December 8“—and as I said at the time, I would be waiting for the IMF’s response with great interest. Well, we didn’t have to wait long. This absolutely positively must read story showed up on thesaker.is Internet site yesterday—and I thank Larry Galearis for finding it for us.
Playing Chess with Putin — Nick Giambruno
“What’s it like playing chess with Obama?” asks a top aid of Russian president Vladimir Putin.
Putin replies, “It’s like playing chess with a pigeon. First it knocks over all the pieces, then it shits on the board, and finally it struts around like it won.”
Now, Putin hasn’t actually said this on record. It’s just a popular joke circulating in Russia.
But I wouldn’t be surprised if he really did say it. It’s not far off base.
This commentary/infomercial by Nick showed up on the internationalman.com Internet site yesterday—and it’s worth your while as well.
Chinese devaluation is a bigger danger than Fed rate rises
The world has had a year to brace for monetary lift-off by the US Federal Reserve. A near certain rate rise next week will come almost as a relief.
Emerging markets have already endured a dollar shock. The currency has risen 20pc since July 2014 in expectation of this moment, based on the Fed’s trade-weighted “broad” dollar index.
The tightening of dollar liquidity is what caused a global manufacturing recession and an emerging market crash earlier this year, made worse by China’s fiscal cliff in January and its erratic, stop-start, efforts to wind down a $26 trillion credit boom. The shake-out has been painful: hopefully the dollar effect is largely behind us.
Fear that China may join the world’s currency wars is what haunts the elite banks and funds in London. It is why there has been such a neuralgic response to the move this week to let the yuan slip to a five-year low of 6.4260 against the dollar.
This commentary by Ambrose Evans-Pritchard put in an appearance on the telegraph.co.uk Internet site at 9:34 p.m. GMT on their Wednesday evening, which was 4:34 p.m. in New York—EDT plus 5 hours. It’s the second offering of the day from Patricia Caulfield.
Australian police raid Sydney home of reported bitcoin creator
Australian police raided Wednesday the Sydney home and office of a man named by Wired magazine as the probable creator of bitcoin and holder of hundreds of millions of dollars worth of the crypto-currency, Reuters witnesses said.
More than a dozen federal police officers entered a house registered on the electoral roll to Craig Steven Wright, whom Wired outed as the likely real identity of Satoshi Nakamoto, the pseudonymous figure that first released bitcoin’s code in 2009.
Locksmiths broke open the door of the property, in a suburb on Sydney’s north shore. When asked what they were doing, one officer told a Reuters reporter they were “clearing the house.”
This Reuters article, filed from Sydney, appeared on their Internet site at 10:56 a.m. on Wednesday morning EST—and I found this news item on the gata.org Internet site.
Freeport McMoRan, World’s Second Largest Copper Miner, Suspends Dividend
They are dropping like flies. A day after Kinder Morgan announced it would slash its dividend by a more than expected 74% overnight to reflect collapsing commodity prices and a debt-heavy balance sheet, moments ago Freeport McMoRan, the world’s second largest copper miner behind Codelco and one of the world’s biggest producers of gold, just announced it too would suspend its dividend of $0.20, an action expected to save some $240 million per year.
This follows a comparable dividend cut announced in March of 2015 when the company slashed the bulk of its dividend by 84%, from $0.3125 to $0.05 quarterly.
This however may not be sufficient to stem the bleeding and prevent further turmoil for the company which has seen its stock price drop to the lowest level in over a decade, and as a result the company is also slashing its CapEx guidance from $2 billion for 2016 and 2017 to just $1.2 and $1.8 billion respectively.
Another gold mining company that won’t lift a finger to save itself, or its stockholders. This longish Zero Hedge piece was posted on their website at 8:13 a.m. on Wednesday morning EST—and I thank Richard Saler for sharing it with us.
Steve Forbes: The New York Times’ leaden analysis of gold
The New York Times recently ran an article trashing the idea of a return to a gold standard.
A growing number of Republicans, including presidential hopeful Senator Ted Cruz, advocate fixing the value of the dollar to gold.
If the purpose of the Times story was to discredit such a possibility before it gained any more momentum, it failed. The piece is actually useful in that it encapsulates some of the egregious myths, misunderstandings and just plain ignorance of what a gold standard is all about.
The purpose of a gold standard is to ensure that a currency has a fixed value, just as measures of time, weight, and distance are fixed. We don’t “float” the number of minutes in an hour or inches in a foot. Yet, strangely, economists believe that constantly changing the value of a currency is good for growth.
The link to this article by Steve Forbes was posted on the forbes.com Internet site at 6:10 a.m. EST yesterday morning—and it’s worth reading as well. I found this gold-related news item on the gata.org website.
UPDATED: Latest Gold Reserve figures from the World Gold Council
The World Gold Council (WGC) has announced its regular statistical update on gold reserves in the official sector. This monthly release includes (1) World Official Gold Holdings ranking gold holdings by country, (2) a spreadsheet with the latest changes in official sector gold holdings. As noted these are not completely up to date – except for the Chinese reserve figure where we have added in the 19.8 tonne change in our table. We are also only showing the Top 20 national plus IMF holdings in our table below.
What analysts primarily look out for are for any month by month changes in the official holdings figures. As can be seen below, the only significant regular additions to gold reserves in the second half of the year are by Russia (95.6 tonnes in the four months to end October), China (83.9 tonnes in the five months to end November) and Kazakhstan (11.7 tonnes in the 4 months to end-October). Our assumption is that going forward we would expect these countries, which seem intent on building their gold reserves, will continue to buy at a similar pace. For the record. According to the IMF figures Kazakhstan is 23rd on the list of national gold holders with 216.3 tonnes which accounts for 27.8% of its total official reserves.
The IMF figures should be taken as a guide as they relate to holdings as reported by the various countries and do not take account of gold holdings which may be temporarily reduced due to gold swaps and leasing (as the countries do not need to report these figures under the IMF guidance), or countries which may be under-reporting their gold holdings as many believe China to be.
This commentary by Lawrie Williams was posted on the lawrieongold.com Internet site yesterday—and is worth looking over. But, as I keep saying, and Lawrie mentions, most of these numbers should be read for entertainment purposes only, as even the WGC has admitted publicly that a lot of these numbers are bulls hit—as they only record what these country’s central banks report to them. I thank Patricia Caulfield for her third and final offering in today’s column.
Chris Martenson: The screaming fundamentals for owning gold
Market analyst Chris Martenson has updated his annual report detailing the reasons for owning gold, including risks to the financial system and what seems like a shrinking supply.
The report touches briefly on the interest of central banks in controlling gold’s price. Martenson’s analysis is headlined “The Screaming Fundamentals for Owning Gold” and was posted on his peakprosperity.com Internet site yesterday.
But, as usual, there’s a ‘Part 2’ to this commentary—and you have to sign up for that, ending up on his mailing list. The other thing that should be pointed out is that this a monster article, so be prepared. I found this in a GATA release yesterday.
Why Has Gold Price Been So Depressed. Nobody Cares. — Grant Williams
The ‘Nobody Cares’ quote was the theme of Grant Williams’ polished performance at Mines & Money London last week. Grant (no relation) is a Senior adviser to Vulpes Investment Management in Singapore – but is perhaps better known as the author of the always entertaining and enlightening Things that make you go hmm… newsletter. This has been published since 2009 and has become one of the world’s most widely read financial publications. TTMYGH primarily covers the impacts of economic policies and geopolitics on all types of investment and occasionally puts a particular emphasis on gold, which Grant sees as having some very strong years ahead once it gets through the current malaise in perception – indeed indifference to gold as an asset class – throughout much of the financial world. As he says Nobody Cares!
Grant is in great demand as a conference speaker and thus travels the world to put his always highly entertaining, but extremely pertinent, slant on the subjects he covers. How he has time to still write his newsletter, while keeping up with what is going on in global finance and politics and preparing his conference presentations, is a mystery. His conference presentations are indeed performances, including sound, videos and interactive illustration and that at Mines & Money, although shortened to fit the time available, was one which few audience members will forget.
‘Nobody Cares’ is perhaps a slight exaggeration as there are nations which do care, and those nations do have a big impact on global gold demand – notably China, India and Russia. Major gold producing nations also care, but primarily in the context of the gold exports financial impact on their economies, not necessarily in terms of gold investment. But Grant’s talk largely revolved around the perception, or rather lack of it, on gold as an asset class among most of the Western World’s institutions and investors.
I met Grant at the Casey Conference in San Antonio a year ago this September—and he’s quite a guy. His presentation, particularly the one at the Silver Summit two weeks ago, was Awesome—and Lawrie Williams [no relation to Grant] description of his audio/visual spectacular only hints at it, as they’re impossible to describe. They can only be experienced. I found this commentary on the Sharps Pixley website yesterday afternoon.
Jeweler’s World-Beating 381% Indian Rally Drubs Tiffany in Slump
While a strengthening dollar and an economic slump in China are battering stocks of jewelers from Tiffany & Co. to Chow Tai Fook Jewellery Group Ltd., one company in India is predicting a demand pick-up after gold slid to a five-year low last week.
Rajesh Exports Ltd., India’s biggest exporter of gold jewelry, is betting the decline in prices of the yellow metal will lure buyers both in its overseas markets and in the South Asian country, the world’s second-biggest, helping boost revenue to a record, Chairman Rajesh Mehta said in an interview. Shares have surged almost fivefold this year, fueled by its July purchase of Swiss refiner Valcambi SA that boosted its capacity sixfold.
“We are looking at a good order book,” Mehta said. “This demand will continue for another three to four months. Prices have been on the downward side this whole year and because of that, the volumes will be good.”
Expectations of an imminent increase in interest rates in the U.S. have boosted the dollar and reduced the appeal of gold as an investment, delivering the third annual drop in prices. In signs consumers are buying more, data from the World Gold Council showed physical purchases globally jumped 8 percent to 1,121 metric tons in the third quarter, the highest in two years.
This Bloomberg story appeared on their website just before midnight Denver time last night—and I found it on the Sharps Pixley website just before I posted today’s column on the website.
The PHOTOS and the FUNNIES
Although I left San Francisco to fly back home to Edmonton—and the snow—it didn’t mean that I stopped taking photos. The one below is the view from the aircraft as it climbed out of LAX over the Pacific Ocean—and as you can tell, it was a beautiful sunny and warm day—and nothing like what was to greet me when I stepped out of the terminal in Edmonton later that evening. This—and the photo that follows—really benefit from the ‘double-click to enlarge‘ feature.
This photo was taken just before the aircraft’s first turn point, which was Las Vegas. What you’re looking at here is the Ivanpah Solar Electric Generating System in California’s Mojave Desert—and it’s located 40 miles/64 kilometers southwest of “Sin City” in Nevada. I knew what I was looking at even at this altitude and distance, as I’d seen photos of it from the ground years ago. It took me less than five minutes to track it down on the Internet.
The WRAP
While silver and gold prices have had nothing to do with real world supply and demand and everything to do with COMEX positioning, that just creates a different set of consequences. One potential consequence is the possibility of a melt up in prices, particularly in silver. I know that sounds crazy considering recent price action, but I just established the perverse nature of rotten price action on the market structure. The fact is, collectively, the metals are configured in the most bullish of market structures in modern history, according to COT data.
Doesn’t it follow that the best chance for a price melt up would seem to be highest when those that control the market are best positioned for a melt up? Since the commercials are positioned better than they’ve been in years, the only real question is the extent of the coming rally. That’s not to say the commercials can’t delay the coming certain rally for a time longer, possibly including slight new price lows, but the main focus should be on the inevitable price rally to come. The extent of rally depends on whether JPMorgan and the other big commercial crooks add to short positions, particularly in silver.
Given the lockstep nature of price movements in the COMEX/NYMEX metals, it wouldn’t be surprising to me to see all the metals surge upward in the very near term. After all, they all certainly fell in unison. But looking a bit ahead and assuming that JPMorgan doesn’t add to short positions aggressively, at some point we must see a genuine divorce in the price of gold and silver from the price ratio prevailing over the past year and longer. — Silver analyst Ted Butler: 09 December 2015
From the somewhat elevated volumes, especially in gold yesterday, it’s obvious that the powers-that-be were at battle stations to prevent the Big 6 commodities from reacting to another big sell off in the U.S. dollar index.
They even had the audacity to close gold for a small loss on the day—and silver unchanged. Other than that, I have nothing to add to what happened in the precious metal market yesterday.
It was almost identical to what they did in mid August when the dollar had its last near-death experience—and only intervention from central banks the world over at that point prevented a U.S. dollar meltdown—and a precious metal melt up. You can check out that fact in the 6-month U.S. dollar chart posted below, along with the 6-month charts for the Big 6 commodities.
And as I type this paragraph, the London open is less than ten minutes away—and I see that all four precious metals are up a hair from yesterday’s close in New York, but off their respective ‘highs’ from earlier in the Far East trading session on their Thursday.
Net HFT gold volume is a bit over 22,000 contracts—and that number in silver is just under 3,050 contracts. The dollar index continues its smallish rally off its 2:40 p.m. EST low yesterday afternoon in New York—and is currently up 17 basis points as London opens.
As I said yesterday, I get the impression that precious metals are being held in a ‘care and maintenance’ mode until after the Fed news next week—and unless a black swan appears between now and then, I expect that JPMorgan et al will continue to hold prices where they are, unless an opportunity presents itself to engineer another price decline between now and then. Of course, as I always say when I make a statement like that, I’d love to be proven spectacularly wrong.
And as I posted today’s column on the website at 4:00 a.m. EST this morning, I see that there’s nothing happening in gold, silver is up a nickel, platinum is up 4 dollars—and palladium is up 3 bucks.
Net HFT volume in gold is now a bit north of 26,000 contracts—and in silver, that number is 3,775 contracts, with only one contract rolled over so far. I don’t think I’ve ever seen that before. The dollar index continues to move higher—and is currently up 30 basis points.
That’s all I have for today—and I hope your Thursday goes well, or went well, depending on which side of the International Date Line you live.
See you on Friday.
Ed
The post The Screaming Fundamentals For Owning Gold — Chris Martenson appeared first on Ed Steer.