26 January 2016 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price rallied quietly higher through most of the Far East trading session on their Monday—and this continued through the first half of London trading as well. The smallish rally at the COMEX open was capped at the $1,108 spot mark—and then it traded mostly flat with a down/up move centered around the COMEX close that brought it back the $1,108 spot mark once again in after-hours trading in New York.
The low and high ticks were reported by the CME Group as $1,094.40 and $1,109.20 in the February contract.
Gold finished the Monday session at $1,107.90 spot, up $9.90 on the day. Gross volume was heavy at 218,977 contracts because of roll-overs out of the February contract, but net volume was pretty light at just under 79,500 contracts.
Here’s the 5-minute gold chart courtesy of Brad Robertson. Volume began to pick up shortly before the London open, which is 01:00 Denver time on this chart—and was pretty decent starting an hour or so before the COMEX open at 6:20 a.m. MST on the chart below. Midnight in New York is the vertical gray line, add two hours for EST—and the ‘click to enlarge’ feature is still MIA.
Silver was up a dime by the time four hours worth of trading were done in the Far East—and then chopped sideways until 9 a.m. in London. At that point it got sold off a nickel before rallying anew until shortly after 12:30 p.m. GMT. It dipped into the COMEX open—and then, like gold, the subsequent rally got cut off a the knees ten minutes later—and then was sold down a bit before chopping more or less sideways for the remainder of the day.
The low and high tick in this precious metal were recorded as $14.02 and $14.36 in the March contract.
Silver closed in New York yesterday at $14.22 spot, up 22 cents from Friday’s close. Roll-over volume was decent in silver as well, but it all netted out to a hair over 27,000 contracts—which was pretty light.
Platinum had a slightly positive price bias up until around 12:45 p.m. Zurich time—and at that point began to rally in earnest. That lasted until shortly after 9 a.m. in New York—and at that point the price was $861 spot. From there it edged lower for the remainder of the Monday session. Platinum finished the day at $855 spot, up 28 bucks from Friday’s close.
The palladium price made a couple of attempts to climb up to the $500 spot mark in Far East trading on their Monday, but didn’t make it—and about an hour before the Zurich open, began to head lower. It rallied a bit between 10 a.m. in Zurich and 10 a.m. in New York, before getting sold down some more—and it finished the trading day at $486 spot, down 8 dollars from Friday.
The dollar index closed in New York late on Friday afternoon at 99.53—and when it opened at noon EST on Sunday, it rallied about five basis points to its high in the first couple of hours, before chopping quietly lower for the rest of Sunday—and all of Monday. It closed yesterday at 99.28—down 25 basis points on the day.
Here’s the 6-month U.S. dollar chart—and as you can see the index continues to edge higher.
The gold stocks gapped up a bit over 3 percent at the open—and managed to add a bit more to those gains by the end of a very choppy, and mostly sideways, trading session. The HUI closed up 3.91 percent—and I thank Nick Laird for the chart.
The silver equities roared higher, up 5 percent at one point, but began to head lower from there—and Nick Laird’s Intraday Silver Sentiment Index managed to hold onto a gain of only 0.46 percent. I was underwhelmed.
The CME Daily Delivery Report showed that 2 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.
The CME Preliminary Report for the Monday trading session showed that both gold and silver open interest for January were unchanged. There are still 183 gold [minus the 2 mentioned above] and 23 silver contracts left open for delivery on or before Friday. It’s another month where deliveries are going down to the wire.
There were no reported changes in GLD yesterday, but an authorized participant removed another 952,492 troy ounces of silver out of SLV.
Month/year-to-date there has been no silver added to SLV, but 7.28 million troy ounces have been withdrawn.
There was no gold added to any of the COMEX-approved depositories on Friday, but 16,075.000 troy ounces were shipped out of Canada’s Scotiabank. That works out to precisely 500 kilobars, which is the second 500 kilobar withdrawal from Scotiabank in the last week or so. The link to that activity is here.
It was another absolutely monstrous day in silver over at the COMEX-approved depositories on Friday, as 2,054,807 troy ounces were reported received—and 1,229,343 troy ounces were shipped out the door. Once again there was no activity at the JPMorgan warehouse. The link to yesterday’s action is here—and it’s worth a look if you have the interest.
There was no in/out activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, which I found rather strange, considering the manic activity of the last few weeks. They had no holiday on Friday, as I checked.
Because I’m still on the road, there aren’t that many stories today.
CRITICAL READS
700 Days In No-Man’s Land: Why They Can’t Keep It Up — David Stockman
This week brought another reason to get out of the casino, and to sell it short if you can tolerate some volatility.
On Friday the Japanese stock market ripped 6% higher and the European bourses were up 5% because their respective central bankers emitted some hints of more easing just ahead. Even the US market managed to find green for the week.
Apparently, the day traders and robo-machines think BTFD still works. But they are going to be sorely disappointed——just as they have been for nearly 700 days running.
That is, since the S&P 500 crossed the 1870 mark in early March 2014, there have been 35 attempts to rally higher. All of them have failed.
This commentary appeared on David’s website on Saturday—and I thank Richard Saler for today’s first story. It’s definitely worth reading.
Why Dip Buyers Will Get Clobbered: The U.S. Economy Isn’t Doing “Just Fine” — David Stockman
As of June 2008 no Wall Street banking house was predicting a recession, yet by then the Great Recession—–the worst economic downturn since the 1930s—– was already six months old, as per the NBER’s subsequent official reckoning.
Actually, it was already several years old if you concede that the phony housing boom of 2005-2007 was generating merely transient “statistical” GDP, not permanent gains in main street wealth. Even the movie houses now showing “The Big Short” have some pretty palpable reminders on that point——not the least being the strip club dancer who owned 5 residential properties, with two adjustable rate mortgages on each.
In fact, by then main street America was crawling with strippers. That is, equity strippers who were repeatedly doing “cash out” refinancings in order to generate between $20,000 and $100,000 or more of mortgage proceeds to spend on vacations, cars, man caves, aspirational leather goods, shoes and apparel, among much else.
At the peak in 2006-2007, upwards of 10% of personal consumption expenditures were accounted for by MEW (mortgage equity withdrawal). The utter unsustainability of that kind of Potemkin prosperity goes without saying, but the point here is that it was no deep dark secret buried in the economic entrails.
This David Stockman commentary is from yesterday—and I thank Roy Stephens for sending it along.
Global oil glut sends U.S. stock markets plummeting
U.S. stock markets fell once more Monday as a renewed slump in oil prices, anxiety over global economic growth and central bank policies all but wiped out last week’s brief recovery.
The Dow Jones Industrial Average lost more than 200 points, or 1.3%, and the S&P 500 and tech-heavy Nasdaq both fell over 1.5%. European markets had already finished the day down: in London the FTSE 100 closed down 23.01 points, or 0.39%, Germany’s DAX dropped 0.29% and France’s Cac fell 0.58%.
The declines followed a two-day rally on Wall Street late last week and came as crude oil prices fell as much as 5% following an announcement from Iraq about record-high oil production that will feed into an already oversupplied market, wiping out much of the oil price gains from of the biggest-ever daily rallies on Friday.
This story appeared on theguardian.com website at 9:43 p.m. GMT yesterday evening, which was 4:43 p.m. in New York—EST plus 5 hours—and it’s the first offering of the day from Patricia Caulfield.
Wal-Mart: It Came, It Conquered, Now It’s Packing Up and Leaving
The Town’n Country grocery in Oriental, North Carolina, a local fixture for 44 years, closed its doors in October after a Wal-Mart store opened for business. Now, three months later — and less than two years after Wal-Mart arrived — the retail giant is pulling up stakes, leaving the community with no grocery store and no pharmacy.
Though mom-and-pop stores have steadily disappeared across the American landscape over the past three decades as the mega chain methodically expanded, there was at least always a Wal-Mart left behind to replace them. Now the Wal-Marts are disappearing, too.
“I was devastated when I found out. We had a pharmacy and a perfectly satisfactory grocery store. Maybe Wal-Mart sold apples for a nickel less,” said Barb Venturi, mayor pro tem for Oriental, with a population of about 900. “If you take into account what no longer having a grocery store does to property values here, it is a significant impact for us.”
This rather tragic story showed up on the Bloomberg Internet site at 3:00 a.m. Denver time on Monday morning—and it was posted on the Zero Hedge website—and I thank Brad Robertson for sending it.
Failed Talks Raise Specter of Biggest Default in Puerto Rico Crisis
Negotiations to restructure roughly $9 billion of the debt of Puerto Rico’s power company collapsed late Friday, raising the prospect of the biggest default yet in Puerto Rico’s deepening debt crisis.
The creditors blamed the utility, the Puerto Rico Electric Power Authority, or Prepa, for scuttling the talks, saying Prepa officials had decided to let a critical expiration date pass without taking action. But Prepa said it was the creditors’ fault for trying to impose a requirement that Prepa had already rejected.
Prepa is one of the largest single issuers of Puerto Rico’s $72 billion in debt, most of it in the form of municipal bonds, which are widely held through mutual funds and other investment firms. It is a monopoly, owned by the residents of the island, and until 2014, it was self-regulated.
“They had no incentives whatsoever to be efficient,” the president of Puerto Rico’s Senate, Eduardo Bhatia, said of Prepa in a recent interview. “This is incredible. Our power plants look like the cars in Cuba.”
This news item put in an appearance on The New York Times website on Saturday—and I thank Patricia Caulfield for her second story in today’s column. The Zero Hedge spin on this is headlined “Here Come the Blackouts: Largest Ever Muni Restructuring Falls Apart as Puerto Rico’s Power Authority Balks at $9 Billion Deal“—and I thank Brad Robertson for that one.
Having helped cripple Suriname, IMF swoops down to mortgage the country
Having helped to cripple the economy of the gold- and commodity-producing South American country of Suriname, the International Monetary Fund is on the way there to put a mortgage on the little multi-racial democracy’s vastly undervalued natural resources.
The IMF and Suriname’s government announced the mission this week. Appended are the IMF’s press release and a ham-handed English translation of a news report in De Ware Tijd (The True Times), the country’s largest newspaper, based in the capital city, Paramaribo. (As Suriname is the former Dutch Guyana, Dutch remains the official language.)
Suriname’s economy is built on gold and bauxite mining and oil extraction and exploration — Iamgold, Newmont, and Alcoa have operations there — and the recent collapse of commodity prices has almost wiped out the country’s foreign exchange reserves.
But the spectacular hypocrisy here is that the IMF itself is a primary perpetrator of Suriname’s problem, as the IMF long has been a crucial part of the gold price suppression scheme of Western central banks. The IMF’s participation in the scheme was disclosed three years ago by GATA’s publication of the agency’s secret March 1999 staff report, which described how the agency was allowing its member central banks to conceal their gold swaps and leases to facilitate their secret interventions in the gold and currency markets
This must read commentary appeared on the gata.org Internet site on Saturday.
This is What the Death of a Nation Looks Like: Venezuela Prepares For 720% Hyperinflation
For citizens of Nicolas Maduro’s socialist paradise the news is terrible, and getting worse with every passing day.
Yesterday, we reported that one year after our November 2014 forecast, Barclays has decided that Venezuela is now past the “point of no return”, and a bankruptcy in 2016 will be “difficult to avoid.” But while some may have thought that this dramatic impact, while welcome by the rest of OPEC and oil bulls around the globe, would only impact the government, the reality is that this latest hit means a total disintegration of the economy and will take the country’s already staggering hyperinflation to previously unprecedented levels.
According to the latest IMF estimate, Venezuela’s consumer inflation, already the world’s highest, will triple this year to a level above all estimates from economists surveyed by Bloomberg.
This is because the IMF, which until recently had predicted “only” 204% inflation for Venezuela, already higher than the 140% consensus, revised its numbers and now sees a mind blowing 750% hyperinflation in 2016: this means that the average price of products and services will increase over eight times over the span of the next 12 months.
This article appeared on the Zero Hedge website last Friday—and it’s another contribution from Brad Robertson.
Fruit, Vegetable Prices Soar in Canada: “If You Insist on Eating Tomatoes, You’re Going to Pay For It”
Earlier this month, we documented the surging price of fresh produce in Canada, where the plunging loonie is creating a nightmare for shoppers in grocery aisles across the country.
Because Canada imports more than three quarters of its fresh fruits and vegetables, the inexorable decline of the Canadian dollar has driven up prices on everything from cucumbers to cauliflower to tomatoes, and as we showed via a series of tweets from incredulous supermarket shoppers, Canadians are not pleased.
“Three bucks. For a cucumber,” one shopper wrote.
“Had a similar reaction when I saw the price of cauliflower,” another said. “Welcome to the future..”
This Zero Hedge article appeared on their website at noon EST on Saturday—and I thank ‘aurora’ for finding it for us.
German Business Sentiment Falls as Market Woes Cloud Outlook
German business confidence fell for a second month in January in a sign that companies in Europe’s largest economy are increasingly worried about slowing global growth.
The Ifo institute’s business climate index dropped to 107.3 from a revised 108.6 in December. The median estimate in a Bloomberg survey of economists was for a decline to 108.4.
German manufacturing is increasingly at risk from a slowdown in global trade, with the weakest Chinese economic growth in more than two decades throwing markets into turmoil and the International Monetary Fund downgrading its outlook for 2016. Even so, the Bundesbank remains confident that exports will rise and predicts that low interest rates and falling unemployment continue to support domestic demand.
“Greater international economic risks, especially the uncertainty about the Chinese economy, are impairing business expectations, especially in export-dependent manufacturing,” economists at DZ Bank AG in Frankfurt led by Michael Holstein wrote in a client note ahead of the release.
This Bloomberg article was posted on their website at 2:03 a.m. MST on Monday morning—and was updated about twenty minutes later. It’s another article from Brad Robertson via Zero Hedge.
Saudis ‘will not destroy the U.S. shale industry’
Hedge funds and private equity groups armed with $60bn of ready cash are ready to snap up the assets of bankrupt US shale drillers, almost guaranteeing that America’s tight oil production will rebound once prices start to recover.
Daniel Yergin, founder of IHS Cambridge Energy Research Associates, said it is impossible for OPEC to knock out the US shale industry though a war of attrition even if it wants to, and even if large numbers of frackers fall by the wayside over coming months.
Mr Yergin said groups with deep pockets such as Blackstone and Carlyle will take over the infrastructure when the distressed assets are cheap enough, and bide their time until the oil cycle turns.
“The management may change and the companies may change but the resources will still be there,” he told the Daily Telegraph. The great unknown is how quickly the industry can revive once the global glut starts to clear – perhaps in the second half of the year – but it will clearly be much faster than for the conventional oil.
This Ambrose Evans-Pritchard offering appeared on the telegraph.co.uk Internet site on Sunday afternoon GMT—and it’s courtesy of Roy Stephens.
OPEC pleads for Russian alliance to smash oil speculators
The OPEC oil cartel has issued its strongest plea to date for a pact with Russia and rival producers to cut crude output and halt the collapse in prices, warning that the deepening investment slump is storing up serious trouble for the future.
Abdullah al-Badri, OPEC’s secretary-general, said the cartel is ready to embrace rivals and thrash out a compromise following the 72pc crash in prices since mid-2014.
“Tough times requires tough choices. It is crucial that all major producers sit down and come up with a solution,” he told a Chatham House conference in London.
Mr al-Badri said the world needs an investment blitz of $10 trillion to replace depleting oil fields and to meet extra demand of 17m barrels per day (b/d) by 2040, yet projects are being shelved at an alarming rate. A study by IHS found that investment for the years from 2015 to 2020 has been slashed by $1.8 trillion, compared to what was planned in 2014.
This is another Ambrose Evans-Pritchard story. This one put in an appearance on The Telegraph‘s website at 7:45 p.m. GMT last evening, which was 3:45 p.m. EST. I thank Patricia Caulfield for this one as well. It’s worth reading.
U.S. Relies Heavily on Saudi Money to Support Syrian Rebels
When President Obama secretly authorized the Central Intelligence Agency to begin arming Syria’s embattled rebels in 2013, the spy agency knew it would have a willing partner to help pay for the covert operation. It was the same partner the C.I.A. has relied on for decades for money and discretion in far-off conflicts: the Kingdom of Saudi Arabia.
Since then, the C.I.A. and its Saudi counterpart have maintained an unusual arrangement for the rebel-training mission, which the Americans have code-named Timber Sycamore. Under the deal, current and former administration officials said, the Saudis contribute both weapons and large sums of money, and the C.I.A takes the lead in training the rebels on AK-47 assault rifles and tank-destroying missiles.
The support for the Syrian rebels is only the latest chapter in the decadeslong relationship between the spy services of Saudi Arabia and the United States, an alliance that has endured through the Iran-contra scandal, support for the mujahedeen against the Soviets in Afghanistan and proxy fights in Africa. Sometimes, as in Syria, the two countries have worked in concert. In others, Saudi Arabia has simply written checks underwriting American covert activities.
And they helped pull off that 9/11 false flag operation as well. This article showed up on The New York Times website on Saturday—and I thank Tolling Jennings for sending it along.
Ford Shutting Japan, Indonesia Operations on Lack of Profit
Ford Motor Co. will close down all operations by the end of this year in Japan and Indonesia, where the U.S. automaker says it has no path to boost sales or earn profits.
The step is being taken “after pursuing every possible option,” Karen Hampton, Ford’s Asia Pacific spokeswoman, said in an e-mailed statement. The company will provide ongoing support to customers for service, spare parts and warranties, she said.
“It has become clear that there is no path to sustained profitability, nor will there be an acceptable return over time from our investments in Japan or Indonesia,” Hampton said. Ford is committed to restructuring parts of its business that “have no reasonable path to achieve sales growth,” she said.
The exits by Ford are the latest examples of an automaker losing patience in struggling auto markets in parts of Asia that are dominated by Japanese manufacturers. General Motors Co. last year closed down its factory in Indonesia, the largest car market in Southeast Asia. Industry-wide sales in both Indonesia and Japan slumped in each of the last two years.
This Bloomberg story was posted on their Internet site at 4:28 Denver time yesterday morning—and was updated about an hour later. It’s another offering from Brad Robertson via Zero Hedge.
Kyle Bass Warns of “A Lot More Pain to Come” Before This is Over
Having recently explained his “greatest investment opportunity for the next 3 to 5 years,” Kyle Bass expands on his China discussions…
“Given our views on credit contraction in Asia, and in China in particular, let’s say they are going to go through a banking loss cycle like we went through during the Great Financial Crisis, there’s one thing that is going to happen: China is going to have to dramatically devalue its currency.”
…to focus on Emerging Markets more broadly and specifically The BRICs.”
As Benzinga summed up, Bass Warns—-“we still have three tough innings to go, maybe four,” he warning that emerging markets will “see a lot more pain before things are okay.”
This article showed up on the Zero Hedge website on Sunday evening EST—and I thank Richard Saler for sending it our way.
Indian government’s gold scheme paperizes 9/10ths of a tonne of gold
The central government has mobilised more than 900 kilograms of gold [nine-tenths of a metric tonne] under its gold monetisation scheme, a senior official said on Saturday.
“Gold Monetisation Scheme: More than 900 kgs gold mobilised so far. Scheme making steady progress. Expected to pick up in coming months,” tweeted Shaktikanta Das, secretary economic affairs in the Finance Ministry.
The central government had launched the gold monetisation scheme on November 5, 2015, to convert jewellery and other yellow metal assets into interest-bearing deposits.
According to the World Gold Council, an estimated 22,000-23,000 tonnes of gold is lying idle with households and institutions in India. The annual imports amount to around 850-1,000 tonnes valued at $35-$45 billion.
This gold-related news item, filed from Mumbai, was posted on The Times of India on Saturday—and I found it in a GATA release.
Currency reset is more likely than China to goose the gold price
As other countries recognize their exploitation by the currency market rigging done by the imperial powers, they will add to their gold holdings and thus increase the pressure on the world’s gold supply even as the world faces the catastrophic debt deflation that is inherent in a debt-based monetary system, as the burden of compound interest outpaces economic productivity. This catastrophic debt deflation is already well underway, with central banks — particularly the U.S. Federal Reserve and the European Central Bank — frantically monetizing debt all over the place and using futures market derivatives to prevent the escape of money from financial assets into commodities, resulting in hyperinflation.
These circumstances are likely to result eventually in an official, overnight upward revaluation of gold, a resetting of the international currency system, as the Scottish economist Peter Millar wrote a decade ago.
Such resets have happened before going back to ancient times. The Bible calls it a jubilee. The modern objective is to devalue debt and enable a new round of debt-based money creation as well as another round of monetary metals price suppression at a more sustainable level.
Your secretary/treasurer thinks there is a reasonably good chance that at least the younger ones among us will live to see such a day.
This commentary by GATA secretary/treasurer Chris Powell appeared on the gata.org Internet site on Sunday—and is worth reading. I had some problems linking this commentary directly, so you’ll have to scroll down a bit to find it on GATA’s website.
Hugo Salinas Price: The coming revaluation of gold
In what is likely his most profound analysis yet, Hugo Salinas Price, president of the Mexican Civic Association for Silver, foresees that the ongoing liquidation of the international reserves of central banks will require an enormous upward valuation of gold and the transformation of the monetary metal back into the primary world reserve currency, replacing the U.S. dollar.
Gold’s return to its traditional role, Salinas Price writes, will quickly balance international trade, discipline government budgets, and reliquefy debt that is becoming unpayable, though salvaging all debt and derivatives might require a gold price as high as $50,000 per ounce.
Salinas Price’s commentary is headlined “The Coming Revaluation of Gold” and it’s posted at the civic association’s Internet site, Plata.com.mx. I found this Salinas Price commentary embedded in this GATA release. It, along with the other links, are definitely worth your time. And, like the previous GATA story, you’ll have to scroll down a bit to find it.
The PHOTOS and the FUNNIES
The WRAP
At the heart of the physical commodity world, there is supply and demand. The metal coming into the COMEX silver warehouses represents supply; the metal departing represents demand. The turnover represents the intensity of each. If there was a genuine oversupply of silver, more metal would be coming in than leaving and total inventories would be growing. In addition, were there a true oversupply of metal, turnover would be subdued because who would go the expense of securing and moving metal in storage when new material is available daily? In that situation, one would expect prices to be low.
Instead, we have the opposite in silver. Because there has been documented and unprecedented frantic turnover and because total inventories have not grown for years, we can rule out the supply side of the equation as being behind this circumstance. And if it isn’t supply, then it must be demand, because there isn’t any other choice. It is physical demand that is responsible for the COMEX silver inventory turnover and for the lack of build in total inventories.
The documented data prove that it is physical demand that is responsible for both the COMEX silver turnover and inventory shrinkage and the only thing wrong with that is the absurd incompatibility of the data to the price. Rapidly churning inventory turnover and decreasing total inventories require higher prices according to the law of supply and demand. And since no one can deny that COMEX silver inventories have not been churning more than ever seen in any commodity or that total inventories have not been shrinking; what could possibly explain the depressed prices other than the COMEX manipulation? Believe me when I tell you that no regulator or exchange official could possibly explain these circumstances in non-manipulative terms. — Silver analyst Ted Butler: 23 January 2016
I was happy to see the rallies in both gold and silver occur on very light net volume—and if there was deterioration in the Commercial net short position in both metals, it certainly wasn’t by a material amount.
Roll-over volume was high in both metals, particularly gold, as all traders that aren’t standing for delivery in February have to roll their positions over, or sell by the close of COMEX trading on Thursday. The large traders have to be out by the COMEX close tomorrow, so you can expect extremely heavy volume in gold between now and then, despite what the price may be doing.
Here are the 6-month charts for the Big 6+1 commodities—and they show their respective 50 and 200-day moving averages.
And as I type this paragraph, the London open is less than ten minutes away—and I note that gold had been rallying quietly in Far East trading on their Tuesday morning, but thirty minutes before the London open, a not-for-profit seller tapped the price down a bit—and it’s currently up 8 dollars the ounce. It was the same thing in silver, except the 3:30 p.m. Hong Kong price spike in an illiquid ‘no ask’ market got hammered immediately—and that precious metal is only up 12 cents an ounce at the moment, but it could just as easily been up $12 an ounce if ‘da boyz’ hadn’t been standing there. Platinum and palladium had mini versions of the same price spike—and they were dealt with in a similar manner. Platinum is currently up 3 dollars—and palladium is up 6 bucks.
Net gold volume is just under 20,500 contracts—and it should come as no surprise that roll-over volume is already very heavy. That number in silver is already up to 6,600 contracts, but with much lighter roll-over activity, so it’s a good bet that the Managed Money traders were covering short positions—and that’s why JPMorgan had to step in when they did. The dollar index chopped sideways for most of Far East trading, but shortly after 3 p.m. Hong Kong time, it dropped about 12 basis points in just a few minutes—and is currently down 10 basis points. The sharp jump in the prices of all four precious metals probably had something to do with the drop in the dollar index, but those rallies were pretty impressive for the tiny size of the dollar index move—and they came a considerable time afterwards as well.
As Brad Robertson pointed out in an e-mail to me last Friday, the FOMC meeting is today and tomorrow—and the Bank of Japan meeting is on Thursday and Friday. I expect that neither of them will have anything important to say because, as Doug Noland so correctly pointed out in his Friday evening Credit Bubble Bulletin—“The issue today goes much beyond a stock market correction, a bear market or even global financial crisis. Contemporary central banking has failed. Theories have failed. Doctrine has failed.”
Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report—and I’ll reserve judgement on what it may or may not show once today’s trading action is over. I’ll post my thoughts on this in tomorrow’s missive.
And as I post today’s column on the website at 4:25 a.m. EST, I see that all four precious metal have had all their gains taken back from their brief spikes before the London open. Gold is now up 7 bucks, silver is up 7 cents—and platinum and palladium are up 1 and 3 dollars respectively. Net gold volume is up to a hair under 24,000 contracts, which isn’t a big change from over an hour ago—and roll-over continue to increase. In silver, the net volume number is already a very chunky 9,300 contracts, with decent roll-over activity as well. The dollar index got saved by ‘gentle hands’ at the 99.15 mark about thirty minutes before the London open—and is now up 5 basis points.
The equity markets in the Far East got hammered on their Tuesday—and the European markets are heavily into the red as well. At the moment, oil is down 80 cents a barrel on top of its losses yesterday. I’d love to be a fly on the wall at the Fed for the next couple of days.
It could get interesting in New York when trading begins later this morning.
I’m off to bed, as I have a plane to catch—and I’ll see you here tomorrow.
Ed
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