19 February 2016 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price traded pretty flat through most of the Far East session on their Thursday, but began to develop a slight negative bias shortly before 2 p.m. Hong Kong time. The low tick of the day came minutes after 11 a.m. GMT in London at just above the $1,200 spot price mark. From there it began to crawl higher. But the rally began to develop some real legs starting at precisely 9:30 a.m. in New York—and as it continued to climb, it was obvious that someone was there to tap the price down when the rally started getting to rambunctious. The final capping came around 3:50 p.m. in after-hours trading—and the not-for-profit seller sold it down about ten bucks into the 5:00 p.m. EST close.
The low and high tick were reported as $1,201.30 and $1,240.60 in the April contract.
Gold finished the day in New York at $1,230.70 spot, up $22.30 on the day but, as is obvious from the charts, the price would have closed materially higher if ‘da boyz’ hadn’t been riding shotgun over the price during the New York trading session. This price control was obvious both during and after the COMEX close. Net volume was pretty chunky at just over 157,000 contracts.
Here’s the 5-minute gold tick chart courtesy of Brad Robertson once again. Volume began to pick up a fair amount starting at the spike low tick at 11 a.m. in London, which is 4 a.m. Denver time on this chart below. Volume became even larger once the price began to rally with some authority starting at 9:30 a.m. EST—7:30 a.m. MST. The really big volume was all done by 2 p.m., but it didn’t back off to background levels until the last hour of trading when the HFT boyz and their spoofing antics appeared. The vertical gray line is midnight in New York—add two hours for EST—and there’s still no ‘click to enlarge’ feature.
And here’s the New York Spot Gold [Bid] chart on its own, so you can the times that JPMorgan et al showed up to micromanage the price to prevent it from getting away from them. It’s very subtle, but it’s certainly there.
The silver price traded flat as well before it began to head lower around 1:15 p.m. Hong Kong time on their Thursday afternoon. Like gold, the low tick came a minute or so after 11 a.m. GMT—and the price path for silver was almost the same as gold’s for the remainder of the day, complete with the not-for-profit selling at 3:50 p.m. in after-hours trading, which took away about a percent [over half] of Thursday’s gain.
The low and high tick were reported by the CME Group as $15.225 and $15.57 in the March contract.
Silver finished the Thursday session at $15.38 spot, up only 11.5 cents—and obviously well off its high tick. Net volume was, surprisingly, pretty light at just under 28,000 contracts. But a third of gross volume, which was heavy at 85,136 contracts, was roll-overs out of the March contract.
And here’s the New York Spot Silver [Bid] chart—and you can see how the price of this metal was carefully managed as well.
The platinum price chopped around unchanged until the Zurich open at 10 a.m. Europe time—and then began to head lower, with the low tick of the day coming around 9:30 a.m. EST, the same time as gold and silver began to rally. The high of the day came about thirty minutes after the COMEX close and, along with silver and gold, got sold down a few dollars just before 4 p.m. in after-hours trading. Platinum finished the day higher by 1 whole dollar at $943 spot.
Palladium’s $515 high of the day came in mid-morning trading in the Far East—and it too came under selling pressure once Zurich opened. Then it got hammered for ten dollars right at the London p.m. gold fix. The $495 low tick came about forty-five minutes later—and the subsequent rally got capped at 2 p.m. EST. It sold off a few dollars after that, before trading sideways into the close. Palladium finished the Thursday session in New York at $501 spot, down 11 bucks from Wednesday.
The dollar index closed late on Wednesday afternoon in New York at 96.87—and then chopped lower, hitting its 96.69 low tick at 9:30 a.m. in London. The index began to head higher from that point—and on four separate attempts to rally and stay above the 97.00 level, it got sold down each time. The 97.10 high tick came at 9:30 a.m. EST in New York—the same time as the precious metals began to rally with real conviction—and it started to chop lower in a wide range for the rest of the day, finishing the Thursday session at 96.84—down 3 basis points from Wednesday’s close—and well of its high.
Here’s the 3-day U.S. dollar index chart so you can see that the 97.00 level has turned into a ceiling for the dollar index, at least for the moment.
And here’s the 6-month U.S. dollar index—and as I’ve been mentioning lately, it doesn’t look too healthy—and I saw nothing in Thursday’s activity that changes my mind.
Although the gold stocks opened down, they were in positive territory to stay by 11 a.m. in New York. A half an hour later, the rally slowed at bit—and from that point it climbed quietly to its high tick, which came shortly after 3 p.m. After that they traded sideways into the close. The HUI finished the day up 4.86 percent.
The silver equities followed a somewhat similar price path—and Nick Laird’s Intraday Silver Sentiment Index closed up a very decent 6.18 percent. A lot of the junior silver producers were up double digits yesterday.
The CME Daily Delivery Report showed that 3 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday. HSBC USA stopped all three contracts.
The CME Preliminary Report for the Thursday trading session showed that gold open interest in February dropped by 256 contracts, to 278 contracts still open. But since there were 327 gold contracts posted for delivery today, that means that [327-256=71] contracts were also added to gold’s open interest for February delivery. That’s the number of contracts it takes to make the numbers work out. Silver o.i. for February was unchanged at 1 lonely contract. But that number has to increase by about 24 contracts before the February deliveries are done, because there are currently 121 COMEX mini silver contracts shown outstanding. That’s 121 good delivery bars, or 24 contracts and a bit.
An authorized participant added 86,059 troy ounces of gold to GLD yesterday—and as of 8:53 p.m. EST yesterday evening, there were no reported changes in SLV.
There was another sales report from the U.S. Mint yesterday. They sold 2,500 troy ounces of gold eagles—and 4,500 one-ounce 24K gold buffaloes.
It was a quiet day for gold over at the COMEX-approved depositories on Wednesday. There was 4,000.000 troy ounces of gold [400 – 10 oz. bars] deposited at Brink’s, Inc.—and 1,639.650 troy ounces were removed—51 kilobars. Five were shipped out of the Manfra, Tordella & Brookes, Inc. depository—and the other 46 came from Canada’s Scotiabank. The link to that activity is here.
It was another barn burner of a day in silver, as 1,201,853 troy ounces were reported received—and an eye-watering 2,330,078 troy ounces were shipped out the door for parts unknown. Of the amount received, JPMorgan got 601,903 troy ounces—but they also shipped out 600,000 troy ounces. The rest of the ‘in’ activity was at HSBC USA—and most of the rest of the ‘out’ activity was at Brink’s, Inc. The link to that action is here—and it’s worth a quick peek if you have the interest.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday, they reported receiving 485 kilobars—and shipped out a very large 8,047 of them. All of the activity was at Brink’s, Inc. as per usual—and the link to that, in troy ounces, is here.
I have the usual number of stories for a week-day column—and the final edit is yours.
CRITICAL READS
Another Dead Cat Bounce: And They’ve Already Buried the Cat — David Stockman
That didn’t take long. We’ve just had another short-covering rip from the 1870 Bullard Bottom on the S&P 500 and it’s already petered out. Not even another one of the St. Louis Fed President’s bouncing billiard balls could keep the machines slamming the buy key.
And that’s why there is a monumental market storm brewing dead ahead. Yes, James Bullard is a complete joke who gives zig-zagging a whole new meaning. After yesterday’s about face from rate increase hawk to dove, I’d even be inclined to designate him as a “monetary whirling dervish”. His policy pronouncements fit the urban dictionary’s definition perfectly:
(n.) A person whose behavior resembles a rapid, spinning object. These actions are often spastic fidgeting and incessant babbling. The actions of the whirling dervish are irritating and annoying, often exhausting other people in the immediate vicinity.
You can’t disagree with that, but the issue isn’t Bullard; its the entire central bank policy regime that is now racing towards a fiery dead-end. Bullard is just idiomatic—–the least reluctant of what will soon be a desperately flailing gaggle of Fed heads trying to explain that recession has returned, but that they are out of dry powder without a clue on what to do next.
This right-on-the-money short novel by David appeared on his website yesterday—and I thank Roy Stephens for bringing it to our attention. Another link to this commentary is here.
New York Fed warns that asset managers are vulnerable to ‘runs‘
The New York Federal Reserve has warned that asset managers are vulnerable to quasi-bank runs that can cause “significant negative spillovers” across financial markets.
The combination of deteriorating trading conditions — especially in corporate bonds — and the swelling of the U.S. mutual fund industry that promises investors the ability to redeem money at a moment’s notice has become an increasing concern for some policymakers, fund managers, and analysts.
While the New York Fed’s researchers have argued that bond market “liquidity” is not as bad as many traders and analysts maintain, they have examined the vulnerability of mutual funds to a sudden spurt of investor withdrawals, and concluded that they are indeed susceptible to “runs” despite not using leverage.
“The price dislocations that follow after large redemptions and liquidations are quite significant and have market-wide implication,” the New York Fed’s researchers said on the central bank’s Liberty Street Economics blog. “Investors seem to have become more skittish since the crisis and are quicker to redeem shares, and in larger amounts, for a given degree of underperformance.” …
Well, they certainly have that right—and the Fed’s money printing is the cause of it all as well. The above four paragraphs are all there is to this Financial Times story that appeared on their website on Thursday sometime. The rest is behind and subscription wall. I found this news item embedded in a GATA release yesterday.
“Helicopter money” on the horizon, fund manager Dalio says
Bridgewater’s Ray Dalio has argued that central banks’ ability to invigorate economic growth has atrophied, and he predicts a new era of radical monetary policy possibly involving “helicopter money.”
Central banks around the world have been attempting to revive durable economic growth and combat deflationary forces through conventional measures like interest rate cuts and unconventional policies such as quantitative easing — or bond buying — and even negative interest rates.
But Mr. Dalio, by one measure the most successful hedge fund manager of all time, argued in a note to clients that these measures have been exhausted and are increasingly ineffective.
“While QE will push asset prices somewhat higher, investors/savers will still want to save, lenders will still be cautious lenders, and cautious borrowers will remain cautious, so we will still have ‘pushing on a string,’” he wrote.
This is another story from the Financial Times of London yesterday—and there are two more paragraphs posted in the clear in this GATA release—and they’re worth reading. The rest is behind the usual subscription wall. Another link to this article is here.
Negative interest rates set stage for next crisis — Stephen Roach
In what could well be a final act of desperation, central banks are abdicating effective control of the economies they have been entrusted to manage. First came zero interest rates, then quantitative easing, and now negative interest rates — one futile attempt begetting another.
Just as the first two gambits failed to gain meaningful economic traction in chronically weak recoveries, the shift to negative rates will only compound the risks of financial instability and set the stage for the next crisis.
The adoption of negative interest rates — initially launched in Europe in 2014 and now embraced in Japan — represents a major turning point for central banking. Previously, emphasis had been placed on boosting aggregate demand — primarily by lowering the cost of borrowing, but also by spurring wealth effects from appreciating financial assets.
But now, by imposing penalties on excess reserves left on deposit with central banks, negative interest rates drive stimulus through the supply side of the credit equation — in effect, urging banks to make new loans regardless of the demand for such funds.
This commentary by Stephen Roach put in an appearance on the marketwatch.com Internet site at 11:44 a.m. on Thursday morning EST—and I thank Scott Linn for sending it along. It’s definitely worth reading. Another link to this op-ed piece is here.
When Cash is Outlawed…Only Outlaws Will Have Cash — Bill Bonner
Harvard economist Larry Summers is a reliable source of claptrap. And a frequent spokesman for the Deep State.
To bring new readers up to speed, voters don’t get a say in who runs the country. Instead, a ‘shadow government’ of elites, cronies, lobbyists, bureaucrats, politicians, and zombies — aka the Deep State — is permanently in power.
Put simply, it doesn’t matter which party is in power; the Deep State rules.
Want to know what the Deep State is up to now? Read Larry Summers:
‘It’s time to kill the $100 bill,’ he wrote in the Washington Post (another reliable source of claptrap).
Ain’t this the truth!!! This absolute must read commentary by Bill appeared on the dailyreckoning.com.au website on Thursday in Australia—and I thank Kathmandu reader Nitin Agrawal for passing it around yesterday. Another link to this Bill Bonner essay is here.
Apple’s Stance Highlights a More Confrontational Tech Industry
The battle between Apple and law enforcement officials over unlocking a terrorist’s smartphone is the culmination of a slow turning of the tables between the technology industry and the United States government.
After revelations by the former National Security Agency contractor Edward J. Snowden in 2013 that the government both cozied up to certain tech companies and hacked into others to gain access to private data on an enormous scale, tech giants began to recognize the United States government as a hostile actor.
But if the confrontation has crystallized in this latest battle, it may already be heading toward a predictable conclusion: In the long run, the tech companies are destined to emerge victorious.
This very interesting and worthwhile news item was posted on The New York Times website on Wednesday—and my thanks go out to Patricia Caulfield for sending it our way. Another link to this story is here.
Congress is Wary of Chinese Deal for Chicago Stock Exchange
Dozens of members of Congress plan to ask the Obama administration to review the planned acquisition of the Chicago Stock Exchange by a Chinese firm, to assess whether it poses a national security risk or a risk to the companies traded on the exchange.
The Chicago Stock Exchange announced this month that it would be sold to a consortium led by the Chongqing Casin Investment Group of China, a move that would inject needed resources into the exchange and give the Chinese firm a foothold in the $22 trillion U.S. equities marketplace. Chinese state media reported that the deal was meant to eventually bring more Chinese firms into the U.S. market and that U.S. technology could be used to open new exchanges in China, a potential win-win for both sides.
But the exchange’s CEO, John Kerin, has said that he cannot publicly identify who owns Chongqing Casin and that the Chinese government may be a minority stakeholder, as it is in most large Chinese businesses.
This story showed up on the bloombergview.com Internet site at 6 a.m. EST on Wednesday morning—and I thank Brad Robertson for this one. Another link to this article is here.
European Union Struggling With How to Keep Britain in the Fold
The leaders of the 28 European Union nations assembled again in an atmosphere of crisis on Thursday, confronting the details of a deal to keep Britain from bolting from the bloc as well as the complexities of stemming the flow of migrants to the Continent.
But perhaps more so than at any time over the last very challenging decade, the leaders were facing a more straightforward question: how much to compromise on some of the most cherished principles of European integration.
On the agenda as the leaders sat down to dinner and then a long night of negotiation were proposals that would acknowledge that not all their members are committed to the goal of “ever closer union,” long the bloc’s driving philosophy, and that could weaken the ideals of a level playing field for businesses, open borders and the right of European citizens to live and work anywhere among the member states.
This news item, filed from Brussels, was posted on The New York Times website yesterday—and I thank Patricia Caulfield for her second contribution to today’s column. Another link to this article is here.
British PM begging for E.U. concessions “humbling and humiliating” – UKIP’s Farage to Russia Today
The move by the British P.M. to get a “credible deal” with Brussels to persuade Brits to stay in the E.U. has been called “humiliating” by the head of the U.K. Independence Party, who told Russia Today that David Cameron will not be able to guarantee anything to the U.K. public.
Cameron is currently in Brussels for a two-day summit negotiating with E.U. leaders on ways to settle the question of Britain’s European Union membership. He is seeking a “credible” deal that he can use to convince the British public to stay in the bloc ahead of the referendum, with June 23 being the most likely polling date.
“I will be battling for Britain, if we can get a good deal, I will take that deal, but I will not take a deal that doesn’t meet what we need,” Cameron said on his arrival, as London demands EU reforms.
But Nigel Farage, the head of the U.K. Independence Party (UKIP), has called Cameron’s move to seek a better deal for the U.K. within the E.U. a “humiliating” one, and compared the British P.M. to an orphan from Charles Dickens’ novel.
This item showed up on the Russia Today website at 2:44 a.m. Moscow time on their Friday morning, which was 6:44 p.m. Thursday evening in Washington—EDT plus 8 hours. It’s courtesy of Roy Stephens. Another link to this article is here.
“Most Obvious Coup in History“: Ukraine in Chaos
Nearly two years since the ousting of former Ukrainian president Viktor Yanukovych, Daniel McAdams of the Ron Paul Institute speaks with Radio Sputnik’s Brian Becker about the current state of the country.
“It’s very easy to knock over Humpty Dumpty and break him apart, but it’s not easy to put it together again,” Daniel McAdams, executive director of the Ron Paul Institute for Peace & Prosperity, tells Radio Sputnik’s Loud & Clear.
The Ukrainian parliament has been dysfunctional ever since the U.S.-assisted overthrow of the legitimately elected government.”
The current Ukrainian government has failed to enact promised reforms, the International Monetary Fund has provided billions of dollars to prop up the regime, and Prime Minister Arseniy Yatsenyuk narrowly survived a vote of no-confidence on Tuesday.
“It’s an extraordinarily unpopular government that is incapable of governing. So what is happening now, I think, is that some of the rats are deserting ship, turning on each other…How could anyone look at Ukraine now..and say, ‘Oh wow, things are so much better?’”
This interview, in both audio and transcript form, appeared on the sputniknews.com Internet site at 10:27 p.m. Moscow time on their Thursday evening—and it was updated about four hours later. I thank ‘aurora’ for sharing it with us. Another link to this interview is here.
Russia Sues Ukraine in London Court Over $3 Billion Default
Russia said it filed a lawsuit against Ukraine in the High Court in London after the government in Kiev defaulted on $3 billion in bonds.
Cleary Gottlieb Steen & Hamilton LLP was hired to represent the government in Moscow in a case that will seek to recover the principal in full, $75 million of unpaid interest and legal fees, Russian Finance Minister Anton Siluanov said on Wednesday. The filing comes after Germany tried to mediate talks between the two former-Soviet neighbors to try to reach an out-of-court settlement.
“I expect that the process in the English court will be open and transparent,” Siluanov said. “This lawsuit was filed after numerous futile attempts to encourage Ukraine to enter into good faith negotiations to restructure the debt.”
The case brings to a head a standoff between the two countries after Russia declined to take part in a $15 billion restructuring that Ukraine negotiated with its other Eurobond holders last year. Siluanov reiterated that Russia was demanding better treatment than private creditors, which include Franklin Templeton, and wants to be treated as a sovereign debtor.
I’ll be more than interested in how this turns out—and you should be too, dear reader. This very worthwhile read put in an appearance on the Bloomberg website at 10:44 a.m. Denver time on Wednesday morning—and it’s courtesy of Brad Robertson via Zero Hedge. Another link to this news item is here.
Marc Faber on a Cashless Society, Insanity—and Why Wall Street Hates Gold
Mike Gleason: Well, I want to start out by asking you about the current state of the financial world here in the early part of 2016. We’ve got the global equities markets continuing to roll over. Meanwhile, the metals are doing quite well and acting as a bit of a safe haven. What do you make of the market action here, so far this year?
Marc Faber: Well, basically, the financial markets have been sick for quite some time. Emerging markets either never made a new high above the 2006, 2007 highs, or they peaked out in 2011, or some even later in 2014. Basically after about February/March 2015, they started to drift. And in the U.S., the indices were strong, but the average stock was down substantially in 2015. This is called weakness beneath the surface of the indices because an index, theoretically, could have 500 stocks and 499 decline, but one stock goes up a lot and drives up the index. So this happened last year, to some extent, in the U.S… you have the strong stocks, Facebook, Amazon, Netflix, Google, and maybe another 20 stocks that were going up. And at the same time, you have thousands of stocks that were acting badly and going down, which accounts for actually a horrible performance for most investors. Now in January, reality set in with the strong stocks, they’re all down 20, 30, and sometimes even more percentages.
Mike Gleason: Gold has been rallying in dollar terms lately but it has done much better in terms of many other major fiat currencies. The U.S. dollar has been remarkably strong in the past year, although it’s finally showing some signs of weakness. What are you expecting over the coming year in the currency markets? Is the dollar going to head higher still or do you see it rolling over?
Marc Faber: The question should be, “Which central bank is the most insane?” Because you understand, the central banks have been manipulating just about everything. They manipulate the currencies, they manipulate interest rates, they manipulate stocks. It’s interesting sometimes if you observe in the U.S., when the market is very weak overnight, in other words the S&P futures go down 20, 30 points, suddenly, a buyer emerges and pushes up the market. I believe that the Fed has not just intervened in bonds through Operation Twist, in interest rates through QE programs but occasionally they step into the stock market to stabilize the market and try to push it up. I think other central banks around the world … in Japan, they announce it, the central bank, the Bank of Japan, is buying shares through ETFs.
Marc lets it all hang out in this absolute must read interview which was posted on the fxstreet.com Internet site at 6:23 a.m. GMT in London yesterday morning—and my thanks go out to Ken Hurt for finding it for us. Another link to this interview is here.
Anglo American Plc Cut to Junk for Third Time This Week as S&P Downgrades
Anglo American Plc’s credit rating was cut to junk by Standard & Poor’s, following similar downgrades by Moody’s Investors Service and Fitch Ratings this week, amid questions about the miner’s ability to sell assets.
The company’s rating was reduced to BB from BBB- with a stable outlook, S&P said in a statement Thursday. Moody’s cut Anglo to Ba3, and Fitch lowered the rating to BB+ earlier in the week. The shares slid 4.6 percent to 446.35 pence as of 2:25 p.m. in London.
Anglo, which became the first major London-based miner to be rated junk, has said it’s looking to speed up sales of coal and iron ore assets after losses bled into a fourth year. It’s trying to engineer a turnaround by focusing on its best mines that produce diamonds, platinum and copper. The company wants to raise $4 billion from mine sales and cut net debt to less than $10 billion this year.
This Bloomberg article was posted on their Internet site at 7:41 a.m. Thursday morning MST—and it’s another offering from Brad Robertson via Zero Hedge. Another link to this story is here.
Gold miners go for improved margins at expense of debt write-offs and production cuts
We speculated nine months ago that gold mining companies’ successes in cutting costs might be coming to an end as most of the easy cuts had been made and anything beyond that would largely be window dressing. However we were wrong, although some of the key reasons that most gold miners have continued to be able to show both lower operating costs and better margins than the up-to-now falling gold price would suggest have been from factors completely outside the companies’ controls, with the oil price suffering a huge decline, which may only now be bottoming, and from the strength of the US dollar against producer nations’ own domestic currencies.
An interesting analysis from precious metals consultancy Metals Focus in a recent client newsletter, goes a little further. It opens by pointing out that a few years ago when gold had started its decline from its 2011 high point of around $1,900 an ounce, a speaker from a prominent resource fund at one of the numerous gold conferences, expressed a wish to see the price fall further (it was around $1600 at the time), on the grounds that this would force the mining companies to tackle the then ever-rising operating cost scenario and ultimately make the companies financially stronger in the longer term.
A complex industry like mining can weather many storms. It tends to get lax in its controls in good times, carried away by euphoria and pressures from greedy institutional shareholders who always want more, but who will then knife the miners in the back if things turn around adversely and their ever-growing profits start to fade. But, as the resource fund speaker noted above suggested, such occasional severe setbacks do force the companies to at least start to put their houses in order and ultimately make their companies stronger. That is until the cycle reverts and these things are long forgotten by a new generation of directors and managers and a degree of profligacy returns along with higher metal prices.
This longish commentary by Lawrie put in an appearance on the Sharps Pixley website yesterday—and it’s worth reading. Another link to this gold-related story is here.
India discounts on gold hit record high
Asian physical gold demand slowed this week as consumers opted to wait out the metal’s biggest rally in years, with discounts in key consumer India hitting a record high as some investors’ cashed-out holdings.
Gold has rallied 13.7 percent this year amid a tumble in global stocks that stoked demand for the safe-haven metal. But physical buyers have so far shied away from making big purchases as they wait to see if the rally will last.
“Buyers are closely watching the wild movement in gold prices in the last one month. They are making enquiries but conversion ratio is low,” said Tanya Rastogi, a director at Lala Jugal Kishore Jewellers in Lucknow, India.
Indian consumers were also waiting to see if the government will cut the gold import duty from a record 10 per cent in the annual budget to be presented on Feb. 29.
This gold-related news item, co-filed from Singapore and Mumbai, was posted on thehindu.com Internet site yesterday sometime—and like the previous story, I found it on the Sharps Pixley website. Another link to this story is here.
The PHOTOS and the FUNNIES
The WRAP
As for what [today’s] COT report is likely to reveal, the big up day last Thursday undoubtedly featured continued heavy technical fund buying and commercial selling, but Monday’s and Tuesday’s holiday trade featured very heavy volume on the sell-off that has me scratching my head about who may have been buying and selling. I’m prepared for further deterioration (commercial selling) in Friday’s report, but not enough to reliably estimate. Expect the unexpected. — Silver analyst Ted Butler: 17 February 2016
Well, was that the ‘correction’ we were waiting for? Hardly, but even I was surprised with the Thursday rallies in both gold and silver. However, I certainly wasn’t surprised that “da boyz” and their algorithms/spoofing were evident throughout the day—and especially the take-downs in after-market hours. How blatant can you get, I wonder?
Of course neither the CFTC, the CME Group, or any of the mining companies will say or do anything, so why do JPMorgan et al really care.
As I said yesterday, I’ll await today’s Commitment of Traders Report before passing judgement on where we might go from here from a price perspective, but there’s no question that the market has a different ‘feel’ to it at the moment. However, as you already know, I’m not one to break out the party favours too soon.
Here are the charts for the Big 6+1 commodities as of the COMEX close yesterday.
And as I type this paragraph, the London open is about five minutes away—and I see that the gold price moved sideways for the first two hours of trading in the Far East on their Friday morning—and then got sold down about five bucks or so before developing a negative bias about 1 p.m. Hong Kong time. Then about fifteen minutes before London opened, it got tapped lower once again—and is currently down 7 bucks from its New York close yesterday. It was more or less the same price action in silver—and it’s currently down a nickel. Platinum is 3 dollars lower, but palladium is unchanged at the moment.
Net HFT gold volume sits at just under 31,000 contracts, which is a very chunky number for this time of day. In silver that number is just over 5,000 contracts, with decent roll-over activity already. The dollar index dropped to the 96.70 mark during the Hong Kong lunch hour—and is currently down only 2 basis points as London opens.
There’s not much to see here, except it’s already obvious that the not-for-profit sellers are already active.
As for what might happen today, I haven’t a clue—nor does anyone else. I’m just a spectator at the moment, as are you. I just report events—plus what’s going on under the hood that you don’t find anywhere else on the Internet.
And as I post today’s column on the website at 4:03 a.m. EST, I note that the gold price isn’t doing much—and is still down about 7 bucks. The silver price has popped a bit—and is currently up a penny on the day. Platinum is still down a few bucks—and palladium has slid back below the $500 spot mark by a dollar.
Net HFT gold volume is now up to just under 38,000 contracts, so there hasn’t been much volume during the last hour—and in silver that number is now up to 7,100 contracts, which is a lot—and a bit over 10 percent of gross volume is roll-overs out of the March contract and into the new front month, which is May. The dollar index fell down to the 96.65 mark about 8:15 a.m. in London, but ‘gentle hands’ were there—and it’s only down 8 basis points at the moment.
That’s all I have for today—and I await this afternoon’s COT Report with considerable interest.
Enjoy your weekend—and I’ll see you here tomorrow.
Ed
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