07 March 2016 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
Gold began to head higher the moment that trading began at 6:00 p.m. on Sunday evening in New York. But three hours later the not-for-profit sellers had it back below unchanged. The price chopped sideways until about 1:30 p.m. Hong Kong time on their Monday afternoon—and that rally ran into ‘day boyz’ at the COMEX open. The New York low came at 12:45 p.m.—and it rallied a bunch until shortly after 2 p.m. EST before trading sideways into the close.
The low and high ticks were reported as $1,257.40 and $1,274.10 in the April contract.
Gold finished the Monday session at $1,267.00 spot, up $7.90 from from Friday’s close and, like is normally the case these days, would have closed materially higher if allowed to do so. Net volume was pretty heavy at just over 165,000 contracts.
Silver’s 6 p.m. Sunday evening rally met the same fate as gold’s—and had a mostly similar price path to gold for the remainder of the Monday session as well. The big spike rally that started about ten minutes before the COMEX open got hammered flat at that point—and the New York low tick was at 12:45 p.m. as well. The subsequent rally flatlined from about 2:10 p.m. onwards.
The low and high ticks in silver were reported as $15.495 and $15.83 in the May contract.
Silver closed in New York on Monday at $15.625 spot, up 12 cents the ounce from Friday’s close and, like gold, would have closed at a spectacularly higher in price if allowed to run free. Net volume was pretty chunky at a hair over 44,500 contracts.
It was the same in platinum, although once Zurich opened at 10 a.m. Europe time, the price rallied up to the $1,000 mark within an hour or so. It made it up to $1,009 spot, but JPMorgan et al were there at the COMEX open to make sure that it didn’t get any higher. They had the price back below the $1,000/ounce by the COMEX close—and it traded flat from there, closing at $999 spot, up 21 bucks from Friday.
Palladium sailed as well—and ‘da boyz’ were nowhere to be found at the COMEX open, but did step in at 10:30 a.m. EST in New York trading. The price didn’t do a lot after that. This precious metals finished the Monday session at $577 spot, up 23 dollars from Friday’s close.
The dollar index closed late on Friday afternoon in New York at 97.25—and it rallied about 10 basis points in the first 30 minutes minutes of trading when the markets opened at 6 p.m. on Sunday evening. From there it traded pretty flat until a sharp rally began shortly before 3 p.m. Hong Kong time. Most of the gains were in by 8:40 a.m. GMT in London—and it chopped sideways until the London p.m. gold fix, which was 10 a.m. in New York. By shortly before 1 p.m. EST the index had fallen all the way down to its 97.04 low tick, although the ‘gentle hands’ had shown up thirty minutes before that. The index rallied a bit, but sank into the close, finishing the Monday trading session at 97.10—down 15 basis points from Friday’s close.
Without those always-present ‘gentle hands’—it’s obvious that the index would have fallen through the 97.00 mark with ease if left to its own devices, just like it wanted to do on Friday.
“The are no markets anymore, only interventions.”
Here’s the 3-day dollar index chart so you can see the Sunday activity as well.
And here’s the 6-month U.S. dollar chart so you watch the declining fortunes of the world’s reserve currency for yourself.
The gold stocks gapped up at the open—and rallied to their 10:20 a.m. EST high tick, which was gold’s high in New York while the equity markets were open. Their lows came at 12:45 p.m. EST at gold’s N.Y. low tick. They rallied quietly into the close from there, as the HUI finished the day up 3.55 percent.
Not surprisingly, the silver equities followed a similar price path, as Nick Laird’s Intraday Silver Sentiment closed higher by 4.03 percent.
To put the 2016 gains in the Intraday Silver Sentiment Index chart in some perspective, here’s the ISSI/Silver 7 chart going back five and a half years.
The CME Daily Delivery Report for Day 6 of deliveries in the March silver contract, shows that 1 gold and 7 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. ADM was the short/issuer for all 7 silver contracts—and JPMorgan stopped 5 of them for its own account—and other 2 for its clients.
The CME Preliminary Report for the Monday trading session showed that gold open interest in March dropped 45 contracts, showing just 82 left. Since 54 gold contracts were actually posted for delivery in Friday’s report, another 54-45=9 contracts were added to March delivery to make the numbers work. In silver, March o.i. fell by 391 contracts to 1,820 remaining. Since only 5 silver contracts were reported in Friday’s Preliminary Report, it’s obvious that JPMorgan and/or its clients let another 391-5=386 short/issuers off the hook in the March delivery month. More “Get-Out-of-Jail-Free” cards from JPM.
There were no reported changes in either GLD or SLV yesterday, although it’s a safe bet that both are owed metal.
And, much to my amazement, there was no sales report from the U.S. Mint—and I must admit that I’m wondering why.
There wasn’t a lot of activity in gold over at the COMEX-approved depositories on Friday, as only 2,501 troy ounces were received—and 2,250.500 troy ounces/70 kilobars were shipped out. The link to that is here.
Of course it was exactly the opposite in silver, as it was another monster day—as 1,988,757 troy ounces were reported received—and 809,871 troy ounces were reported shipped out. Of the amount shipped out, another 530,495 troy ounces came out of JPMorgan’s vault. The ‘in’ activity was at Canada’s Scotiabank—and at Brink’s, Inc. The link to ‘all of the above’ action is here.
And here’s a chart that Nick Laird whipped up at my request this past weekend. It shows the inventories of the six COMEX legacy silver depositories—and begins the day that JPMorgan et al smashed the silver price in that drive-by shooting back on May 1, 2011. It shows the ascendancy of JPMorgan and, with the exception of the Delaware depository, the inventory declines in the rest. Both Ted and I have spoken of this on a number of occasions, but here it is in graphic form.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, they reported receiving 3,233 kilobars—and shipped out 5,057 of them. All of the activity was at Brink’s, Inc.—and the link to that, in troy ounces, is here.
Here’s a chart that Nick Laird passed around in the wee hours of this morning. It shows the gold flows into all the world’s transparent gold depositories on a weekly basis going back a couple of years.
And here’s the same chart for silver…
And here’s a chart that goes with a story in the Critical Reads section that talks about the increase in gold holdings in February. Nick’s covering e-mail contained this comment—“China adds 11.37 tonnes of gold & drops 28.572 billion in forex reserves in February“. The ‘click to enlarge’ feature still doesn’t work—although if you have Google Chrome or Firefox as your web browser, you can right-click on your mouse and enlarge it that way. It doesn’t work for Internet Explorer.
I have the usual number of stories for a weekday column—and I hope you’ll find a couple in here that you like.
CRITICAL READS
The Price Isn’t Right: How Central Banks are Fixing to Ambush the Casino — David Stockman
The casino is incorrigible. After a monumental short squeeze that has lifted the averages right into the jaws of danger, Goldman Sachs has the temerity to print the following: “Our model suggests SPX calls are more attractive than at any time over the past 20 years.”
There must have been a mullets’ breeding frenzy awhile back because it’s hard to fathom how Goldman has any real customers left. Then again, its current preposterous call is just indicative of the horrible threat heading menacingly toward what remains of main street’s 401k investments.
To wit, the Fed and other central banks have thoroughly falsified financial market prices and destroyed all of the ordinary mechanisms of financial discipline. Foremost among these are short sellers and a meaningfully positive cost of carry trades.
Markets are therefore unhinged from any connection to fundamental economic and financial reality, meaning that they are capable of an extended period of spasmodic dead-cat bounces that will have only one end result.
This longish, but must read commentary by David appeared on his Internet site yesterday afternoon sometime—and it’s the first of many offerings from Roy Stephens. Another link to this article is here.
U.S. watchdog to probe Fed’s lax oversight of Wall Street
A U.S. watchdog agency is preparing to investigate whether the Federal Reserve and other regulators are too soft on the banks they are meant to police, after a written request from Democratic lawmakers that marks the latest sign of distrust between Congress and the central bank.
Ranking representatives Maxine Waters of the House Financial Services Committee and Al Green of the Subcommittee on Oversight and Investigations asked the Government Accountability Office on Oct. 8 to launch a probe of “regulatory capture” and to focus on the New York Fed, according to a letter obtained by Reuters.
The probe, which had not been previously reported or made public, is the first by an outside agency into the perception that government regulators are “captured” by and too deferential toward the bankers they supervise, so that Wall Street benefits at the public’s expense.
Yes, of course the regulators are captured. All one has to do is look at the SEC and CFTC to see that. This Reuters story, filed from New York, put in an appearance on their Internet site on Friday afternoon EST—and I found it on the gata.org Internet site. Another link to this news item is here.
Faith in central banks’ healing powers is faltering, BIS says
Financial markets’ shaky start to the year shows they are losing faith in the “healing powers” of central banks, the Bank for International Settlements (BIS) said today while voicing concerns over sub-zero interest rates and emerging economies.
The Swiss-based organization, which fosters cooperation between central banks in the pursuit of monetary and financial stability, said that recent worries over China’s economy, oil and commodity prices, and some European banks had come as fundamental shifts take place in the global economy.
“The latest turbulence has hammered home the message that central banks have been overburdened for far too long post-crisis,” the head of the BIS monetary and economics department, Claudio Borio, said in its first quarterly report of the year.
This is another Reuters article. It was posted on their website at 8:01 a.m. EST on Sunday morning—and it’s the second story in a row that I found in a GATA release. Another link to this commentary is here.
The Danger of Media Blackout: Jeff Thomas
Recently, Russian Foreign Minister Sergey Lavrov held a press conference with about 150 journalists from around the world, including representatives of the western media.
Mister Lavrov was brief and concise; however, the question period lasted for some two hours. A breadth of topics was discussed, including the re-convening of the Syrian peace talks in Geneva, diplomatic relations in Georgia and, tellingly, the increasingly fragile relations with the U.S. This has not been reported on in Western media.
This followed close on the heels of reports (again, not to be found in Western media) that the U.S. has quadrupled its budget for the re-armament of NATO in Europe (from $750 million to $3 billion), most of which is to be applied along the Russian border. The decision was explained as being necessary “to combat and prevent Russian aggression.”
It should be mentioned that this decision, no matter how rash it may be, is not a random incident. It’s a component of the U.S.’ decidedly imperialist Wolfowitz Doctrine of 1992. This doctrine, never intended for public release, outlined a policy of military aggression to assure that the U.S. would reign as the world’s sole superpower and, in so-doing, establish the U.S. as the leader within a new world order.
This absolute must read commentary by Jeff appeared on the internationalman.com Internet site yesterday. Another link to this short essay is here—and it’s definitely worth the trip.
Downfall of Brazil’s Lula marks end of BRICS fantasy
The dream of a Brics ascendancy has ended in sadness and squalor after the iconic figure of the era was seized by police at his home here, to the rapturous applause of Brazil’s stock exchange.
Luiz Inacio Lula da Silva, or “Lula” to the world, is sacrosanct no more. The once beloved president – and former Fiat car worker – who came to personify Brazil’s seeming rise to prosperity and global stature is under criminal investigation for his role in the ever-spreading Lava Jato (car wash) scandal.
So are his three sons, and his wife. “Nobody is above the law in this country,” said the lead prosecutor, Carlos Fernando dos Santos Lima.
The shock comes as Lula’s economic legacy turns to ruin. Output has been falling for most of the past nine quarters. It contracted 3.8pc last year. The OECD expects another 4pc fall this year, the deepest slump since national records began in 1901.
Ambrose Evans-Pritchard wrote this long piece that appeared on the telegraph.co.uk Internet site at 12:23 p.m. GMT on their Monday afternoon, which was 7:23 a.m. in New York—EDT plus 5 hours. It’s courtesy of Roy Stephens as well—and another link to this story is here.
“Freedom Always Dies Bit by Bit”: Bundesbank Takes Sides in War on Cash
There are two sides in the global war against cash. On one side are many of the world’s governments, central banks, fintech firms, banks, credit card companies, telecommunication behemoths, financial institutions, large retailers, etc. According to them, the days of physical currency are numbered, so why not pull the plug already, beginning with the largest denomination bills such as the $100-note and particularly the €500-note?
On the other side are people who like to use cash – most of whom, according to the dominant official narrative, are either criminals or terrorists. After all, they must have something to hide; otherwise, why would they use a private, untraceable (not to mention archaic, dirty, dangerous and unhygienic) form of payment like cash?
The powers that want to kill off cash already have vital technological and generational trends firmly on their side, along with widespread public ignorance, apathy, and disinterest. But in recent weeks the unlikeliest of defenders of physical money has emerged: the national central bank of Europe’s biggest economy, the German Bundesbank.
“I have my doubts that introducing a cash limit or getting rid of bigger denominations can really prevent terrorists or criminals from engaging in illegal activities,” Carl-Ludwig Thiele, Bundesbank board member in charge of cash issues, said in a speech last week. “We also should ask ourselves: what sort of an understanding of government forms the basis of these proposals? Citizens should not be put under general suspicion.”
This worthwhile commentary showed up on the wolfstreet.com Internet site on Sunday sometime—and it’s the second contribution in a row from Roy Stephens. Another link to this article is here.
Week twenty-one of the Russian military intervention in Syria: the calm before the storm?
The Saker is not confident that the Saudis and Turks (and their allies) are not going to involve themselves militarily in Syria. Although logistics are awkward for the Saudis (they would have to invade Iraq as well), the over 300,000 strong Turkish army would be force enough to carry a war to Syria. And inevitably the Russian forces there would be attacked as the Syrian Arab Army would almost certainly respond. (And would to guard the eastern flanks of Syria against interference by Iran – the Saudi troops are reportedly there.)
We shouldn’t forget that Erdogan is in a painted corner politically and getting desperate. The army will either support him or depose him, and so far the mini civil war with his domestic Kurds is keeping his place in power secure. The Turkish military would likely not want to destabilize their country further with a coup to depose their president while dealing with an internal crisis. And perhaps would not wish to take on Syria while its own domestic situation is fraught. But like the neocon thinking behind policy in Washington the ideologically driven usually leads to tunnel vision in policy decisions and Erdogan is definitely an ideologue.
This commentary was posted on thesaker.is Internet site on Sunday sometime—and it’s a must read for any serious student of the New Great Game. I thank ‘aurora’ for sending me the link, but the big THANK YOU goes to Larry Galearis for the above two paragraph executive summary. But regardless of the contents of the ‘executive summary’—the article is a must read anyway. Another link to this article is here.
Turkish police seize anti-Erdogan newspaper
Turkish riot police on Saturday fired plastic bullets and tear gas to disperse hundreds of protesters who gathered outside an opposition newspaper after it was seized yesterday by authorities in a violent raid.
“Free press cannot be silenced”, the protesters shouted as they stood outside the offices of Zaman newspaper.
Many were holding the latest edition of the newspaper in a show of solidarity, while the newspaper’s employees entered the building under police scrutiny.
Police also fired tear gas and water cannon late Friday to move away a hundreds-strong crowd that had formed outside the newspaper offices, following a court order issued by Istanbul prosecutors that placed the media business under administration.
This news item appeared on the france24.com Internet site on Saturday—and it now sports a news and ‘improved’ headline. It reads “Turkish police clash with anti-Erdogan newspaper supporters“—and it’s another offering from Roy Stephens. Another link to this story is here.
Iran Makes Trade, Not War, with Eurasia — F. William Engdahl
If the intent of the Obama Iran strategy was to woo the great Persian nation to the West in a complex geopolitical game, and turn her against Russia, China and the emerging Eurasian Century being constructed around China’s One Belt, One Road project, it is emerging as another colossal failure. The newly-sanction-free Iran, far from becoming a pawn of NATO intrigues, is making rapid and brilliant moves to connect with her Eurasian neighbors. What a contrast to the Saudi-Turkish moves to connect with murder, rape and destruction in Syria, Iraq, Yemen and beyond in the name of Allah and oil.
One week after Chinese President Xi Jinping’s historic visit to post-sanctions Iran, where the two countries signed major trade agreements including bringing Iran fully into the emerging strategic New Economic Silk Road and Maritime Road blueprint, China launched a new maritime shipping route to Iran. Two days before that, the first freight train departed China for the Islamic Republic.
Anyone who has experienced the industriousness of the Chinese, once they define a major goal, will not be surprised. Still, it shows the strategic priority Beijing is giving to integrate Iran, a centuries-long ally of China going back to the ancient Silk Road, into its unfolding Eurasian economic space. Events to flesh out Iran’s integration into the Eurasian One Belt, One Road are moving on both sides very rapidly. Clearly, at the next annual Shanghai Cooperation Organization annual meeting later this year, Teheran will also be invited to full membership status in that organization now that sanctions are lifted as well, firming a growing political and economic bond with the nations of Eurasia following years of sanctions and isolation.
This commentary by Engdahl showed up on the journal-neo.org Internet site a week ago—and it’s definitely worth reading, especially if you’re a student of the New Great Game. It’s another contribution from Roy Stephens, for which I thank him. Another link to this article is here.
BlackRock gold fund expects to resume issuing shares by Wednesday
BlackRock Inc said on Friday it had suspended the issuing of shares in its physically backed gold exchange traded product due to a historic surge in buying as global economic uncertainty rekindled bullion’s safe-haven appeal among investors.
BlackRock anticipates it will be able to resume issuing more shares by Tuesday or Wednesday, according to a person familiar with the matter.
While the BlackRock move appears to be an isolated case, it illustrates the voracious demand for bullion as economic uncertainty, a weak dollar and falling expectations for U.S. interest rate hikes have spurred the biggest buying spree of gold ETFs in five years and helped prices rally to their highest in 13 months.
This Reuters article, filed from New York, was posted on their website at 3:07 p.m. on Friday afternoon EST—and I found it embedded in a GATA release. Another link to this story is here.
BlackRock gold fund resumed issuing shares too soon, faces penalties
BlackRock issued 25 million shares of the iShares Gold Trust (IAU) before they were officially registered with securities regulators, and the fund “may become subject to penalties” by securities regulators, the fund manager said in a regulatory filing today.
The fund company resumed issuing new shares of the physically backed gold exchange-traded product after suspending new issuance on Friday, citing heavy demand for the product.
But, in its filing, BlackRock said it may have to sell gold in the fund to buy back the shares that were inadvertently not registered and pay interest to investors who purchased the shares. Those investors “may have the right to collect damages” from the fund, the filing said.
The above three paragraphs are all there is to this Reuters article, filed from New York. It put in an appearance on their Internet site at 9:40 a.m. EST yesterday morning—and I found this gold-related news item in another GATA release.
U.S. Mint Stays Course, Another Million Silver Eagles Allocated March 7
Nine weeks into the production of the 2016 30th Anniversary issue of the American Silver Eagle, the United States Mint is staying the course and allocating another million ounces of the one-ounce silver bullion coins for sale this week to authorized dealers. This according to an email from Adam Stump, deputy director of the office of corporate communications.
So far this month, 263,500 Silver Eagles have been sold out of last week’s allotment of one million ounces (coins), and year-to-date sales total 11 million.
Allocated ounces for the month of January totaled six million. The 2016 Silver Eagle bullion coins was released on January 11, with an initial allotment of four million ounces. One million ounces were allotted for the week of January 19, and another one million were allocated the following week, on January 25.
February 1 saw the allocation of 1,045,500 ounces of the silver coin, but the rest of the month saw a drop back down to one million ounces per week.
This interesting news item showed up on the coinweek.com Internet site yesterday—and I found it on the Sharps Pixley website. Another link to the story is here.
Fake 2015-W proof silver Eagles reported
Fake proof 2015-W silver American Eagles have been reported by Numismatic News columnist F. Michael Fazzari, who works for ICG grading service.
He said he purchased a counterfeit 2015-W silver Eagle at the Sarasota, Fla., show that was held Feb. 26-28. He learned of the existence of others.
They apparently showed up two weeks earlier at the show in Lakeland, Fla., he said.Fazzari warned that the fakes might be on the Internet too.
At least one dealer reportedly bought a bunch and tried to sell them to Heritage where they were rejected.
This interesting article was posted on the numismaticnews.net Internet site last Thursday—and I thank Tolling Jennings for bringing it to my attention—and now to yours. Another link to this story is here. [By the way, the ‘W’ stands for the West Point mint – Ed]
Remember ‘The Greening of America’? — Hugo Salinas Price
Unlimited imports, the destructive consequence of America’s proud creation of the new monetary order at Bretton Woods in 1944, have finally brought America to its knees as an industrial nation.
The creation of jobs in the U.S. now takes place at the level of service as waiters and waitresses in bars and restaurants.
The U.S. will remain on its knees until Bretton Woods is totally forgotten and the role of the dollar as world reserve currency is terminated.
There is no reason why the U.S. should not be a wealthy, prosperous and contented nation. All it would take is to declare that gold is the only money accepted by the whole world. All it would take is to step down from that high pillar, standing upon which the U.S. continues to insist that the world’s money has to be the dollar – an undefined currency which represents nothing at all.
This excellent must read commentary by Hugo was another story that I found on the gata.org Internet site site last night. Another link to this article is here.
ECB starts reporting unallocated gold, but is it the whole story?
Our friend the Dutch economist Jaco Schipper reports an increase in transparency about gold in the monthly reserve asset reports of the European Central Bank.
Since last August, Schipper notes, the ECB’s monthly report has been distinguishing the allocated from the unallocated gold in the holdings of its member central banks, with less than 2 percent of the gold now being reported unallocated. That is, almost all the gold of the members of the European Central Bank is reported as being specifically identified as owned by those banks in whatever vaults are storing it, and little of their gold has consisted of mere credits with other institutions.
But the ECB continues to combine gold deposits and gold swaps in a single line in its reserve report and does not identify the counterparties of the swaps and the locations of the swapped gold, putting in question both the central bank’s overall gold position and the degree of its secret intervention in the gold market, direct and indirect.
Indeed, the implication of its monthly report that the ECB is nearly out of the gold market contradicts recent statements by Alexandre Gautier, the director of market operations for the Banque de France, an ECB member, who told meetings of the London Bullion Market Association in 2013 and 2014 that the Banque de France is trading gold for its own account and the accounts of other central banks “nearly on a daily basis” and that central banks lately have been managing their gold reserves “more actively“.
This commentary by Chris Powell was posted on the gata.org Internet site yesterday evening—and it’s certainly worth reading. Another link to this story is here.
South African gold miners awarded $32.5 million in compensation
South African gold miners infected with lung diseases brought on by repeated exposure to dust have won a multimillion-dollar out-of-court settlement, their lawyers have said.
Anglo American South Africa and AngloGold Ashanti have agreed to pay the equivalent of $32.5 million (£22 million) to claimants affected by silicosis, settling the case before it went to court, said lawyer Zanele Mbuyisa, who represents 4,365 claimants.
Silicosis, caused by the inhalation of dust particles, makes victims vulnerable to diseases such as tuberculosis. Most of the claimants worked in South Africa’s gold mines during apartheid, when miners rarely had the proper protective gear, according to the miners’ lawyers.
“Thousands of silicosis victims must have died uncompensated during a period when the industry should have been well aware of their predicament,” said Mbusiya.
This AP/The Guardian story, along with another one on this issue that’s worth reading as well, is embedded in this GATA release from Saturday—and both are worth your while. Another link to this GATA release is here.
Mumbai: Jewellers Extend Strike for Indefinite Period
Jewellers today decided to continue their pan-India strike for an indefinite period against the Budget proposal to impose 1 per cent excise duty, despite the Centre’s assurance that it would look into the issue.
“We have met more than 358 associations affiliated with GJF, consisting of over 3 lakh manufacturers, retainers, artisans, among others, who have collectively decided to extend the strike indefinitely, till we get some positive announcement from the government,” All India Gems and Jewellery Federation (GJF) Chairman Sreedhar G V told reporters here.
He said the excise tax guidelines, which have been drafted for the gems and jewellery industry are not practically implementable and will be detrimental to the survival of the industry. “We urge the government to withdraw the proposal. Our protest continues till the government takes cognisance of our views and acts favourably,” he added.
This news item was posted on the outlookindia.com Internet site yesterday sometime—and it’s another article I found posted on the Sharps Pixley website. Another link to this story is here.
The Indian government’s futile war against its own people over gold — Koos Jansen
Gold researcher and GATA consultant Koos Jansen reflects on the seeming futility of the Indian government’s constant attempts to obstruct its people’s desire for and acquisition of the monetary metals. He perceives that increasingly the primary objective of modern central banking is to prevent free markets from happening at all.
Jansen’s commentary is headlined “Precious Metals Imports to India in 2015 Strong, Government Hopelessly Continues to Obstruct Demand” and it’s posted on the bullionstar.com Internet site on their Monday sometime. Another link to this article is here. I thank Chris Powell for ‘all of the above’.
China boosts gold hoard by smallest amount since at least July
China raised its central bank gold reserves by the smallest amount since the nation started disclosing monthly increases last year.
The People’s Bank of China expanded holdings by 0.6 percent to 57.50 million ounces in February from 57.18 million ounces a month earlier, according to its website. Global bullion prices jumped 11 percent in February, the biggest monthly increase in four years, as investors sought a haven from financial turmoil. Chinese markets were shut Feb. 8-12 for the Lunar New Year holiday.
The central bank has revealed its gold reserves for each month since July in a bid to enhance transparency. The assets have grown 7.8 percent since the PBOC announced it raised holdings by 57 percent through the end of June from 2009.
It’s a good bet that China imported a lot more gold than that in February, but it wasn’t reported as reserves. This Bloomberg news item put in an appearance on their Internet site at 2:40 a.m. Denver time on Monday morning—and it’s another gold-related news item I found on the gata.org Internet site. Another link to this story is here.
All change in gold sentiment, but can it persist — Lawrie Williams
Back in December gold had few, if any, friends among the mainstream analysts. The US Federal Reserve was going to start raising rates and all the experts knew that so doing would lead to a rise in the value of the US dollar and a consequent fall in the gold price. Apart from the usual suspects, gold had virtually no supporters. But three weeks after the Fed did indeed start to raise interest rates, the whole sector began to turn completely around. General equities fell and gold started to rise, while the dollar rose, then stuttered backwards. So much for expert opinions.
Gold’s performance has been little short of spectacular so far this year, with an increase to date of around 18% in just over 2 months. Equities have made something of a recovery in the past few days, but as a guide the S&P 500 is down a couple of percent year to date. In Europe the UK’s FTSE 100 is flat, Germany’s DAX is down 4% and in Asia Japan’s Nikkei 225 has fallen nearly 8% while China’s SSE Composite is down almost 13%.
But with gold, so much depends on sentiment and momentum, and while these remain positive, as at the moment, any change could see it coming back down again. There are almost certainly some waiting in the wings prepared to jump in and strike on any perceived downwards move. This could thus be a dangerous time for the gold investor. But so saying, for many of the reasons noted above, there are an awful lot of economic and geopolitical uncertainties present or building up which could well remain positive for precious metals, but any continuing upwards rise may well not prove to be a smooth one.
This commentary by Lawrie was posted on the Sharps Pixley website yesterday—and another link to this article is here. It’s worth reading.
The PHOTOS and the FUNNIES
The first photo is of a Kookaburra.
The WRAP
[Last] Wednesday, the evidence of a tight physical situation also appears indisputable. After six delivery days, only 325 silver deliveries have been issued and around 2,200 March contracts (11 million oz) remain open for delivery or futures liquidation. JPMorgan and its customer(s) have stopped or taken 273 of the 325 contacts issued so far, or 84% of the total issued. It would not be unreasonable, under COMEX delivery procedures, to assume that JPMorgan and its customer(s) hold a similar percentage of the remaining open contracts in March.
COMEX data also indicated that close to 1,000 March silver futures contracts were closed out this week, either by outright sale, rollover to another futures month or possibly by some type of off-exchange delivery (an EFP, or exchange for physical transaction). Based upon the continuing data, it is obvious that JPMorgan or its customer(s) was largely responsible for the 1,000 March contracts closed out this week. Let me speculate a bit here.
Going into last week’s first notice day for delivery, it looked to me that JPMorgan and its customer(s) were each looking to stop or take 1,500 contracts (7.5 million oz), which is the maximum amount of silver contracts any one trader can demand in a single month. Certainly, JPMorgan has taken this amount (or slightly less) on a number of occasions over the last year. I believe the only reason why JPMorgan and/or its customer(s) liquidated 1,000 March contracts this week was to relieve a very tight silver delivery situation.
In other words, JPMorgan, which I allege owns more silver than any entity in the world, stood down from demanding all the silver it and its customer(s) had legally contracted to take because if it took all the silver it was entitled to, the sellers wouldn’t have been able to deliver. That’s how tight I believe physical silver supply lines have become. The funny thing is that this has happened before in silver, including last year every time JPMorgan took less than 1,500 contracts in any deliver month. — Silver analyst Ted Butler: 05 March 2016
It was another day when JPMorgan et al, along with their HFT buddies were at work in the precious metal market. The first time was three hours after trading began in the Far East on their Monday morning—and then again at the COMEX open in gold, silver and platinum. The price capping for palladium came at 10:30 a.m. EST.
Although I’d love to see ‘da boyz’ get over run, they certainly weren’t showing any signs of it in yesterday’s price action. There’s always the chance that they will, but if/when it does happen, I would guess that it will happen without notice, as they won’t be advertising it in the paper. And I don’t expect the event to happen in a news vacuum, either.
But every ‘up’ day that goes by, makes it more and more difficult for them to smash prices lower. But that’s the only other option left to the Commercial traders if they don’t want to get over run.
So the battle continues.
Here are the 6-month charts for the Big 6+1 commodities, complete with their respective 50 and 200-day moving averages. They’re worth looking over.
And as I type this paragraph, the London open is less than ten minutes away—and I see that gold’s attempt to rally in early Far East trading on their Tuesday morning ran into the same not-for-profit sellers that it did on Monday morning in the Far East. This sell-off extended into silver, platinum and palladium at the same time, so it certainly wasn’t free-market forces at work. Gold’s current low came at 1 p.m. Hong Kong time—and has rallied smartly ever since, especially in the last few minutes before the London open. It’s currently up 6 bucks the ounce. ‘Da boyz’ really hammered silver—and although it has rallied smartly since 1 p.m. over there, it’s barely back to unchanged. Platinum and palladium are attempting to rally off their lows, as platinum is only down a dollar at the moment, but palladium is down 7 bucks an ounce.
Net HFT gold volume is very heavy at just over 39,000 contracts, so it’s more than obvious that this rally is not going unopposed. That number in silver is an eye-watering 8,900 contracts already, so JPMorgan and their ilk are at battle stations. The dollar index, which kissed the 97.00 mark in mid-morning trading in Hong Kong, rallied up to 97.13 by 1:00 p.m. HKT—and is now below the 97.00 mark by a hair—down 12 basis points as London opens.
Today, at the close of COMEX trading, is the cut-off from this Friday’s Commitment of Traders Report—and unless precious metal prices get driven into the dirt today, it will certainly be one for the record books, especially in silver.
And as I post today’s column on the website at 4:10 a.m. EST, I see that gold, silver and platinum continue to rally, albeit with some obvious opposition. Palladium is still down 8 bucks, as its rally attempt got squashed shortly after Zurich opened, but platinum is currently back above the $1,000 per ounce mark.
Net HFT gold volume is now up to just above 47,000 contracts—and that number in silver is just under 10,500—so there really hasn’t been a lot of volume since I reported on things an hour ago—and I’m encouraged by that. The dollar index dropped down to its current 96.93 low right at the London open, but was obviously rescued by the usual ‘gentle hands’—and is down 11 basis points—and a hair below the 97.00 mark.
I have no clue as to how the price action will unfold for the remainder of the Tuesday trading session, but it should not be forgotten that the powers-that-be are still ever present—and only a supply/demand situation will blow them out of the water for good. But when—and how soon—nobody knows. However, something has got to give at some point—and that time can’t come too soon for me.
Or you either, I’m sure.
I’m done for the day—and I’ll see you here tomorrow.
Ed
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