10 May 2016 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
NOTE: If you’re still not receiving my daily commentary by e-mail, please hit the ‘Contact Me’ button and let me know—and I will have your name put on the list. And if you are getting it—and you’re missing a day here and there—check your ‘junk’ e-mail, plus the ‘junk’ e-mail folder of your ISP, as it’s most likely in one of those two places. – Ed
The gold price was tapped lower by about three bucks or so at the 6:00 p.m. EDT open on Sunday evening in New York—and the price sat there until around 1:30 p.m. HKT on their Monday afternoon. At that point the HFT traders and their algorithms sprang into action—and they really smacked the price at 9:15 a.m. EDT in COMEX trading when the New York bullion banks got involved. Most of the price damage was done in the next thirty minutes of trading, but they continued to work the price lower from there, with the low tick coming at 4:15 p.m. EDT in after-hours trading. It rallied a couple of bucks into the close from there.
The high and low ticks were recorded by the CME Group as $1,289.50 and $1,263.60 in the June contract.
Gold was closed in New York yesterday afternoon at $1,263.40 spot, down $24.30 from Friday’s close. Net volume, as can be imagined, was very high at 178,000 contracts.
And here’s the 5-minute gold price tick chart courtesy of Brad Robertson once again. The volume picked up the moment that ‘da boyz’ showed up at 1:30 p.m. HKT in the thinly-traded Far East Market, then really got serious once COMEX trading began at 6:20 a.m. Denver time on the chart below, which was 8:20 a.m. EDT. The big volume was mostly done by the COMEX close, but picked up a hair as the not-for-profit sellers leaned on the price starting just before 4 p.m. in the after-hours session.
The vertical gray line is midnight in New York, noon the following day in Hong Kong—and don’t forget to add two hours for EDT. The ‘click to enlarge‘ feature makes all the difference in the world in how easy it is to read this chart.
It was more or less the same price pattern in silver, but JPMorgan et al set the low tick in that precious metals at precisely 10:00 a.m. EDT. After that, its several attempts to break back above the $17 spot mark, all got turned aside.
The high and low tick for silver were recorded as $17.505 and $16.96 in the July contract.
The silver price was closed in New York yesterday afternoon at $16.99 spot, down 44.5 cents from Friday. Net volume was pretty chunky as well at a hair under 51,000 contracts.
Platinum’s price path was engineered lower in a similar manner as both gold and silver—and it’s low price tick came around 11:40 a.m. in New York—and wasn’t allowed to do much after that. Platinum finished the Monday trading session at $1,042 spot, down 36 bucks from Friday’s close.
‘Da boyz’ really put the boots to palladium—as the market basically went no bid shortly after 11 a.m. EDT, so they were able to carve $17 dollars out of the price in just a few minutes. It recovered sharply from there—and finished the day at $582 spot, down 24 dollars. Intraday it was down 31 bucks.
The dollar index closed late on Friday afternoon in New York at 93.81—and when trading began at 2 p.m. EDT on Sunday afternoon in New York, it had about a 25 basis point up/down move between then and 1 a.m. HKT on their Monday afternoon. From that point it began to chop higher in fairly wide range, with the 94.20 high tick coming at the 1:30 p.m. EDT COMEX close. From there it gave back about 10 basis points—and finished the Monday session at 94.16—up 35 basis points from its close on Friday.
You’ll excuse me for thinking this, but judging from the deep saw-tooth trading pattern that started at 1 p.m. HKT, it looked like the index had a lot of support from the usual ‘gentle hands’—because the rally didn’t look anything close to being a free-market event. Here’s the 3-day intraday dollar index chart so you can see all the action on both Sunday and Monday combined—and all of Friday as well.
And here’s the 6-month U.S. dollar index showing the current status of the what looks like a manufactured counter-trend ‘rally’.
The gold stocks gapped down a bit more than 4 percent at the open—and continued to chop quietly lower from there, as the HUI closed on its absolute low tick, down 6.88 percent.
The silver equities traded in a similar fashion. Their respective lows came around 11:15 a.m. in New York trading—and they didn’t do much after that, as Nick Laird’s Intraday Silver Sentiment Index closed down a whopping 7.05 percent.
The CME Daily Delivery Report showed that 100 gold and 138 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. In gold, the only two short/issuers were HSBC USA and ABN Amro, both with 50 contracts apiece—HSBC USA out of its own account, and ABN Amro out of its client account. In silver, International F.C. Stone issued 100 contracts out of its client account—and ABN Amro issued 16 out of its client account as well. The two biggest long/stoppers were JPMorgan and Canada’s Scotiabank, with 89 and 42 contracts in their respective in-house [proprietary] trading accounts. The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Monday trading session showed that gold open interest in May dropped by 25 contracts, leaving 1,416 still open. Since there were no gold contracts issued for delivery today in Friday’s Daily Delivery Report, it appears that the long/stoppers allowed these 25 short/issuers off the hook in the May delivery month. Silver o.i. for May actually increased by 1 contract. But since there were 17 silver contract actually posted for delivery today in Friday’s Daily Delivery Report, that means that another [17+1=18] silver contracts were added to May o.i. for delivery sometime before the end of the month.
And here’s a paragraph I stole from Ted’s weekly review on Saturday—and I’m sliding it in here, hoping he won’t notice: “The May delivery process for both COMEX silver and gold still indicates physical tightness. In silver, JPMorgan has taken 826 (47%) of the 1,757 contracts issued so far and with around 1,050 May contracts still open and with JPM stopping contracts at a recent rate of close to 65% of new contracts issued, it looks nip and tuck as to whether the bank will get to the 1,500 contract (7.5 million oz) limit allowed or if physical material has gotten too tight to demand the full amount, lest it influence silver prices. As in its buying of Silver Eagles, JPMorgan is only interested in buying as much physical silver as it can without causing prices to rise. Remember, we’re talking about the master market criminal of the financial universe.” — Silver analyst Ted Butler: 07 May 2016
There was another deposit in GLD reported yesterday, as an authorized participant added 85,984 troy ounces—and after yesterday’s price action, it’s a safe bet that gold will soon start to head out of this ETF. And as of 6:09 p.m. EDT yesterday evening, there were no reported changes in SLV.
The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on in their gold and silver ETFs as of the close of trading on Friday—and both showed slight declines from the previous week. Their gold ETF shed 4,689 troy ounces—and their silver ETF declined by 66,391 troy ounces.
There was no sales report from the U.S. Mint.
The Royal Canadian Mint finally got around to posting their 2015 Annual Report on their website—and on Page 24 of that report I found this paragraph…”Sales of gold coins [gold Maple Leafs – Ed] increased 34.8% to 953,000 ounces in 2015 from 707,000 ounces in 2014 as the average price declined 8.4% to US$1,160.06 per ounce from US$1,266.40 per ounce in 2014. Sales of silver coins [Silver Maple Leafs – Ed] increased 17.9% to 34.3 million ounces from 29.1 million ounces in 2014, establishing a record volume of sales for the third consecutive year. The average silver price declined 17.9% to US$15.68 per ounce from US$19.1 per ounce in 2014. Although activity in the silver and gold bullion markets have historically correlated, many investors have shifted to silver as the preferred investment over gold due to its affordability and the safety net provided by industrial demand.”
And if you believe the contents of that last sentence, dear reader, I have a bridge for you at a very good price. One thing that this quarterly report didn’t mention was how well sales were going with their 10 and 100 oz. silver bars, as those are the only other bullion products they make. They mentioned them in their 2014 annual report, but not this one.
And all this demand the Royal Canadian Mint is talking about didn’t come from the general public in North America, because as Ted’s sources in the retail precious metals business, along with mine, confirm that—except for some brief flashes of big buying—the general public has, for the most part, had their wallets firmly in the their pockets for the last year or more.
There was very decent movement in gold over at the COMEX-approved depositories on Friday. There was 184,369 troy ounces reported received, but only 365 troy ounces shipped out. Two thirds of the amount received ended up at Brink’s, Inc.—and the rest at Canada’s Scotiabank. The link to this activity is here.
It was pretty quiet in silver. Nothing was reported received—and only 84,578 troy ounces were shipped out the door—and all of that came out of Canada’s Scotiabank. I shan’t both linking that activity.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, they reported receiving 1,708 kilobars—and shipped out 1,196 of them. All of the action was at Brink’s, Inc. as per usual—and the link to that, in troy ounces, is here.
Nick Laird passed around a couple of charts on the weekend—and here they are. The first shows that China’s central bank ‘officially’ added 11 tonnes of gold to their reserves in April. Nobody with more than two synapses to rub together believes that, of course, but they have to report something. CLICK to ENLARGE!
And here’s the other chart from Nick—and he’s titled “Top 15 Silver Mining Countries“—and doesn’t need any embellishment from me. The ‘Click to Enlarge‘ feature works wonders here.
There wasn’t much in the way of hard news yesterday, or over the weekend, so I don’t have much for you today.
CRITICAL READS
April retail sales in U.S. confirm spring off to a slow start
Even though there’s less than a dozen companies that still report monthly retail sales, those that did report April numbers disappointed and confirmed that the spring season is off to a slow start.
L Brands, the maker of Victoria Secret, was especially disappointing—sales at the flagship Victoria Secret brand were down 1 percent, well below expectations of a gain of 4 percent.
But they weren’t the only disappointments…Costco, Zumiez, Buckle and Cato were all below expectations.
What happened? First there’s the weather, which this time really has been disappointing—and it’s been poor into May. It’s been cloudy in New York for a week and a half. I just spoke to an analyst in Atlanta: it’s supposed to be 75 degrees, it’s 51 and cloudy.
This news item was posted n the cnbc.com Internet site last Thursday—and it’s something I found in yesterday’s edition of the King Report. Another link to this story is here.
What do Janet Yellen and Cinderella have in common? — Dennis Miller
My boarding pass said seat 1-B, nice upgrade on a long flight. I did a double take as I saw who was sitting in seat 1-A. It was Jack Kemp, former NFL player, Housing Director and soon to be Republican nominee for Vice-President of the United States.
I asked, “What the hell are you doing on a commercial flight?” He laughed and said, “Going to Los Angeles.” That prompted an incredible 5-hour conversation. I got a terrific education from the greatest supply-side economics advocate in the country. He made it easy to understand.
To spark economic growth you make it easy for the consumer to spend money, particularly discretionary income. As business sales increase, they buy more from their suppliers. High demand increases prices and profit. Businesses invest in manufacturing facilities, hire more people and increase supply to meet that demand. More people are working, spending, and the economy grows.
This commentary by my good friend Dennis showed up on his website last Thursday—and had to wait until I found room for it, so here it is now. Another link to his commentary is here.
Trumped! Why It Happened and What Comes Next, Part 3 (The Jobs Deal) — David Stockman
Donald Trump’s patented phrase “we aren’t winning anymore” lies beneath the tidal wave of anti-establishment sentiment propelling his campaign and, to some considerable degree, that of Bernie Sanders, too.
As we demonstrated in Part 1, what’s winning is Washington, Wall Street and the bicoastal elites. The latter prosper from finance, the LA and SF branches of entertainment ( movies/TV and social media, respectively) and the great rackets of the Imperial City—including the military/industrial/surveillance complex, the health and education cartels, the plaintiffs and patent bar, the tax loophole farmers and the endless lesser K-Street racketeers.
But most of America’s vast flyover zone has been left behind. Thus, the bottom 90% of families have no more real net worth today than they had 30 years ago and earn lower real household incomes and wages than they did 25 years ago.
Needless to say, the lack of good jobs lies at the bottom of the wealth and income drought on main street, and this week’s April jobs report provided still another reminder.
This commentary by David put in an appearance on his Internet site on Saturday—and I thank Roy Stephens for sending it our way. Another link to this article is here.
Trump’s Right: Paying Back The National Debt With “Discounts” Is Already Public Policy — David Stockman
Donald Trump says a lot of whacko things, and his recent wild pitches about defaulting on the national debt and replacing Yellen because she is not a Republican sound as if they were coming right out of his wild man wheelhouse. Certainly these statements have gotten mainstream financial journalists and editorial writers in high dudgeon.
Said the NYT editorial page about Trump’s observation that if things got bad enough he’d seek to negotiate “discounts” on Uncle Sam’s towering debt,
“Such remarks by a major presidential candidate have no modern precedent. The United States government is able to borrow money at very low interest rates because Treasury securities are regarded as a safe investment, and any cracks in investor confidence have a long history of costing American taxpayers a lot of money.“
Well, now. These “very low rates” could not have anything to do with the fact that the Fed has vacuumed up $3.5 trillion of Treasury debt and its close substitute in GSE securities since September 2008. Apparently, the law of supply and demand has been suspended until further notice—-except for the fact that when Bernanke even hinted that the Fed might sell-down some of its grossly bloated balance sheet in April 2013; treasury yields erupted higher in the infamous taper tantrum.
This must read commentary by David was posted on his website yesterday—and that makes it two in a row from Roy. Another link to this commentary is here.
The Arrogance of the Prom King — Robert Ringer
Just when you think you’ve heard and seen it all in the Republican campaignathon, along comes prom king Paul Ryan displaying an arrogance that makes Donald Trump look like the Dalai Lama by comparison. Millions of American jaws must have dropped in unison when chameleon Ryan casually told CNN’s Jake Tapper that he’s “just not ready” to support Trump.
Really? Where do I even begin to address such a remarkable display of unflinching arrogance? How about just stating the obvious — that the litmus-test conservative crowd still doesn’t get it.
That’s right, hard as it is to believe, after ten months of watching Trump swat every political fly who’s annoyed him, the pathetic “Never Trump” crowd really and truly still does not understand what’s taking place in America.
Specifically, what they don’t get is that this is a genuine revolution. And it’s not a revolution about Trump. It’s a revolution about the corruption and arrogance of the leadership of the Republican Party — and, on a broader scale, the entire Washington political establishment.
This longish, but very worthwhile read, appeared on Robert Ringer‘s website on Saturday—and I thank Kathmandu reader Nitin Agrawal for passing it around on Sunday. Another link to this commentary is here.
A Need to Clear Up Clinton Questions — Ray McGovern
“Some people think they can lie and get away with it,” said former Defense Secretary Donald Rumsfeld with feigned outrage. And, of course, he has never been held accountable for his lies, proving his dictum true.
The question today is: Will former Secretary of State Hillary Clinton’s Teflon coat be as impermeable to deep scratches as Rumsfeld’s has proven to be?
With the “mainstream media” by and large giving Hillary Clinton a pass on her past, few Americans realize how many Pinocchio faces need to be tacked onto many of her statements. Clinton is said to be “unquestionably” the front-runner for the Democratic nomination, essentially the presumptive nominee. That is unquestionably true – but only because she has not been questioned with much rigor at all. And on those few occasions when she has been asked hard questions, she has often ducked them.
For example, at the March 9 debate in Miami, Jorge Ramos, the longtime anchor for Noticiero Univision, asked Secretary Clinton whether she would quit the presidential race if she were indicted for putting classified information on her private email server.
She replied: “Oh, for goodness sake, it’s not going to happen. I’m not even answering that question.”
When Ray McGovern writes such commentary, it’s worth reading—and this piece is very much on the shorter side. It appeared on the consortiumnews.com Internet site back on May 5—and I thank Larry Galearis for bringing it to our attention. Another link to this article is here.
“Ocean of fire“ destroys 2,400 structures but 85% of Fort McMurray still stands
Wood Buffalo Fire Chief Darby Allen said 85 per cent of Fort McMurray is still intact, despite a devastating wildfire that ravaged several neighbourhoods.
Allen said people may be under the impression that most of the city has been levelled, but that’s just not the case.
He said between 40 and 50 per cent of Fort McMurray could have been destroyed if firefighters hadn’t been able to hold back the flames at key points.
“You might be seeing images today of the area you live and indeed you might be seeing images of where your home was,” he said. “This was a horrible fire. Whatever we tried to do, it went a different way… We did our very best.”
This continually-updated story appeared on the globalnews.ca website yesterday morning—and I thank Ken Hurt for bringing it to my attention—and now to yours. Another link to this news item is here.
U.K. Stores Post Steepest Sales Decline Since Financial Crisis
U.K. stores had their steepest sales decline since 2008 last month as British consumers shunned the country’s shopping streets.
Like-for-like sales fell 6.1 percent compared with April last year, business advisory firm BDO LLP said in its monthly report. Fashion retailers were hardest hit, with sales dropping 9.2 percent as stores ended seasonal discounting toward the end of the month.
The figures confirm recent evidence of difficult trading for U.K. retailers. Clothing merchant Next Plc cut its sales forecast for a second time this week, shortly after the collapses of department-store chain BHS Group Ltd. and formal wear retailer Austin Reed. Cool spring weather, muted wage gains and uncertainty surrounding the upcoming European Union referendum have caused consumers to defer purchases.
This short Bloomberg article appeared on their Internet site at 2:03 a.m. Denver time last Friday morning—and it’s courtesy of Aaron Krowne. This brief news item is certainly worth reading—and another link to it is here.
U.S. Ambassador to Hungary: Overthrow Assad, Let in Refugees, and Fight Russia…or Else!
If anyone wants a short course on what’s wrong with U.S. diplomacy look no further than U.S. Ambassador to Hungary Coleen Bell’s speech Friday to the Foreign Affairs Committee of the Hungarian Parliament. In typical diplo-speak there was plenty of flowery language about shared values, fish swimming together in the same water (?), sappy poetics like “together, out of that winter, we would force the spring,” and talk of together being “part of the world’s greatest military and political alliance.”
But make no mistake: Inside Ambassador Bell’s velvet glove is an iron fist, poised to strike should Washington’s annoyingly independent-minded Fidesz-led government step out of line on the big issues. And by “big” issues it should be understood that the US means the issues it considers in the interests of its own foreign policy, not those in Hungary’s interest.
Message to Hungary: do as we say or you will be sorry.
Ambassador Bell’s previous job was as a television soap opera producer, but raising more than two million dollars for the election of Barack Obama “earned” her the position of top U.S. diplomat in Hungary.
The American Empire just never quits. This news item showed up on the informationclearinghouse.com Internet site on Sunday—and I thank Doug Clark for sending it our way. It’s a must read, even if you’re not a serious student of the New Great Game. Another link to this story is here.
Greece passes painful fiscal reforms, heeding E.U.
Greek lawmakers passed unpopular pension and tax reforms on Monday that a European official said marked a major advance in negotiations towards unlocking more rescue funds from the country’s creditors.
Euro zone finance ministers will hold talks on Greece’s progress on economic and fiscal reforms later in the day, and assess if it has met terms of its multi-billion euro bailout.
A positive sign-off on the review will unlock more than €5 billion (US$5.7 billion) to ease Greece’s squeezed finances and cover debt repayments maturing in June and July.
This Reuters story, filed from Athens, was posted on their Internet site at 10:45 a.m. on Monday morning EDT—and it’s courtesy of Brad Robertson via Zero Hedge. Another link to this news item is here.
Don’t forget how the Soviet Union saved the world from Hitler — The Washington Post
In the Western popular imagination — particularly the American one — World War II is a conflict we won. It was fought on the beaches of Normandy and Iwo Jima, through the rubble of recaptured French towns and capped by sepia-toned scenes of joy and young love in New York. It was a victory shaped by the steeliness of Gen. Dwight D. Eisenhower, the moral fiber of British Prime Minister Winston Churchill, and the awesome power of an atomic bomb.
But that narrative shifts dramatically when you go to Russia, where World War II is called the Great Patriotic War and is remembered in a vastly different light.
It’s a grand moment, but few of the world’s major leaders will be in attendance. The heads of state of India and China will look on, but not many among their Western counterparts. That is a reflection of the tense geopolitical present, with Putin’s relations with the West having turned frosty after a year of Russian meddling in Ukraine.
Unfairly or not, the current tensions obscure the scale of what’s being commemorated: Starting in 1941, the Soviet Union bore the brunt of the Nazi war machine and played perhaps the most important role in the Allies’ defeat of Hitler. By one calculation, for every single American soldier killed fighting the Germans, 80 Soviet soldiers died doing the same.
I was amazed to see this story appear on The Washington Post‘s website yesterday. It’s part propaganda to be sure, but in the end the article bows deeply to the untold truths behind the war that the West has never allowed to see the light of day. For that reason alone, this article is a must read. I thank Bill Moomau for sharing it with us—and another link to this must read article is here. The folks at The Washington Post had a second article on this subject headlined “One of Russia’s biggest holidays is a WWII anniversary Americans don’t think about“—and it appeared on their Internet site on Saturday—and it’s worth reading as well—and the link to that is here. Bill Moomau sent us that one as well.
Saudi reshuffle points to era of oil volatility — Andy Critchlow
The removal of Ali al-Naimi as Saudi Arabia’s oil minister ushers in a new age of uncertainty, and more erratic prices. Naimi was a major architect of Saudi’s current policy of forcing oil prices lower through higher supply of crude, but he was also a trusted voice within government and a respected figure at the Organization of the Petroleum Exporting Countries. His successor Khalid al-Falih is unlikely to command the same influence over output decisions that his 80-year-old predecessor had once enjoyed.
The son of a Bedouin who climbed through the ranks of Saudi oil industry technocrats, Naimi commanded the respect of successive rulers in the oil-rich kingdom. Through boom and bust cycles he repeatedly emphasised that Riyadh’s oil policy was driven by market forces and not politics. Over almost 21 years as oil minister he was given a large degree of autonomy to devise the best strategy for the kingdom.
That arrangement has now changed. Falih represents more centralisation of power by his royal masters. With Naimi gone there is little in the way of the kingdom’s powerful Deputy Crown Prince Mohammed bin Salman dictating oil strategy as part of his plan to reform Saudi’s economy – which is helpful – and put pressure on Iran, its main political rival in the Middle East – which may not be.
This opinion piece by Reuters columnist Andy Critchlow showed up on their Internet site yesterday sometime—and I thank Richard Saler for sending it along. Another link to this article is here.
The World’s Most Extreme Speculative Mania Unravels in China
From the Dutch tulip craze of 1637 to America’s dot-com bubble at the turn of the century, history is littered with speculative frenzies that ended badly for investors.
But rarely has a mania escalated so rapidly, and spurred such fevered trading, as the great China commodities boom of 2016. Over the span of just two wild months, daily turnover on the nation’s futures markets has jumped by the equivalent of $183 billion, outpacing the headiest days of last year’s Chinese stock bubble and making volumes on the Nasdaq exchange in 2000 look tame.
What started as a logical bet — that China’s economic stimulus and industrial reforms would lead to shortages of construction materials — quickly morphed into a full-blown commodities frenzy with little bearing on reality. As the nation’s army of individual investors piled in, they traded enough cotton in a single day last month to make one pair of jeans for everyone on Earth and shuffled around enough soybeans for 56 billion servings of tofu.
Now, as Chinese authorities introduce trading curbs to prevent surging commodities from fueling inflation and undermining plans to shut down inefficient producers, speculators are retreating as fast as they poured in. It’s the latest in a series of boom-bust market cycles that critics say are becoming more extreme as China’s policy makers flood the financial system with cash to stave off an economic hard landing.
This Bloomberg article, which is definitely worth reading, put in an appearance on their Internet site at 3:00 p.m. MDT yesterday afternoon—and was subsequently updated just before 11 p.m. last night. I thank Kathmandu reader Nitin Agrawal for his second contribution to today’s column—and another link to this story is here.
Hyundai Heavy Industries to sell $1 billion in assets, cut jobs as orders slump
Hyundai Heavy Industries Co. said Monday it plans to conduct another round of restructuring, including significant job cuts and $1 billion worth of asset sales, as the Korean shipyard struggles with slumping orders.
Hyundai, the world’s largest shipbuilder by revenue, will initially seek the voluntary retirement of mid-level and senior managers, and then fire workers if needed. Hyundai didn’t specify the number of jobs to be cut, but people familiar with the matter said it would likely trim its workforce of 27,000 by about 10%.
“This is unavoidable as orders are falling significantly, threatening the fate of the company,” Hyundai said in a statement Monday.
The company also said it would streamline business divisions and sell non-core assets, including property and company resort facilities valued at 1.17 trillion South Korean won ($1 billion) in total.
This brief, but must read story, put in an appearance on the marketwatch.com Internet site at 7:26 a.m. EDT yesterday morning—and my thanks go out to Scott Linn for sending it our way. Another link to this short news item is here.
China’s gold demand off by 19% y-o-y but gold ETF holdings up sharply — Lawrie Williams
The latest figure from China’s Shanghai Gold Exchange (SGE) shows that April gold withdrawals at 171.4 tonnes remain subdued. The total therefore for the first four months of the year is 687.3 tonnes, very sharply below the 820.6 tonnes at this stage a year earlier (admittedly a record year) – representing a fall of over 19% year on year. However, even at the current lower monthly rate taken out over the full year this would suggest SGE withdrawals remaining at over 2,000 tonnes for the full year.
Indian gold imports have also been low in the first four months – initially due to demand being held back ahead of the late February budget in the hope of a reduction in import duties – and subsequently due to strike action by the jewellery sector disappointed that the duty cuts were not forthcoming. Thus the recent performance of gold, given what has been a strong downturn in Asian demand, has been all the more remarkable.
To a significant extent growth in Western demand, represented by purchases into the major gold ETFs and strong buying of gold coins and investment bars has been making up a lot of the shortfall from Asia. The biggest of the gold ETFs, SPDR Gold Shares (GLD) for example, has added around 192 tonnes of gold so far this year alone. It is still hugely below its peak, but is currently back at a level last seen in December 2013 with holdings at the end of last week at 834.19 tonnes. It has put on 30 tonnes since the end of April.
This worthwhile commentary by Lawrie was posted on the Sharp Pixley website on Sunday sometime—and another link to this article is here.
The PHOTOS and the FUNNIES
Here are two more American white pelican shots—and that will do it for his creature. The drake mallard ducks in the foreground in the second photo give some sense of scale to these birds, as they are enormous. Only the California Condor has a larger wingspan. The other photo is of an adult Richardson’s ground squirrel munching on a dandelion. This year’s crop of young’uns won’t appear above ground for about a month. The ‘click/double-click to enlarge’ feature works well with these photos.
The WRAP
Yesterday’s price action shouldn’t have left doubt in anyone’s mind that ‘da boyz’ are still around. With Monday’s engineered price declines, they took back all of Friday’s gains on the job numbers, plus a bunch more. Only palladium came close to its critical 50 and 200 day moving averages yesterday. Gold is about $17 away from its 50-day moving average—but in silver and platinum—there is still miles to go, if that’s the intent of JPMorgan et al—and it always has been in the past.
Here are the 6-month charts for all four precious metals—and you can survey yesterday’s price declines in light of how far they may/will have to go to break through their respective and critical 50-day moving averages.
I can’t see into the future like some analysts, but I’m not prepared to stick my neck out on just one day’s price performance. But, having said that, if this is the start of the engineered price decline that Ted and I have been going on about, then yesterday’s price action was the first decent slices out of their respective salamis.
And as I type this paragraph, the London open is less than ten minutes away—and I see that gold got sold down about five bucks to a new low for this move down, but has since recovered—and is up about 2 dollars the ounce. Ditto for silver—and it’s sitting on $17 the ounce at the moment. Platinum touched a new low as well—and is currently up 3 dollars. Palladium was sold lower as well, but not to a new low—and has rallied back to a few bucks above unchanged.
Net HFT gold volume is a bit over 26,000 contracts—and in silver that number is just about 6,800 contracts. The dollar index peaked out around the 94.27 mark about 1:25 p.m. HKT on their Tuesday afternoon—and is currently down 3 basis points as London opens.
I’m guessing that if JPMorgan are going to get serious about going after the precious metals, there will have to be an equally large engineered rally in the dollar index, as that’s the fig leaf that they like to hide behind. But whether it’s going to turn out that way this time around remains to be seen, although I suspect, but don’t for sure, that there’s probably a large short position in the U.S. dollar index at the moment—and ‘da boyz’ are experts at running stops to create short-covering rallies that will your breath away.
Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report—and I might hazard a guess as to what Friday’s report will show once trading is done for the day.
And as I post today’s column on the website at 4:05 a.m. EDT, I see that the gold price continues to crawl higher—and is up around 4 bucks the ounce at the moment. Silver is up 6 cents an ounce, but off its high of about half an hour prior. Both platinum and palladium are up 4 dollars each, but their tiny rallies ended the same time as they did for silver.
Net HFT volume in gold is up to just about 32,000 contracts—and that number in silver is a hair under 9,000 contracts. The dollar index dropped to the 94.05 mark—and at that juncture it certainly appeared that ‘gentle hands’ were at the ready.
As for what might happen during the rest of the Tuesday session, I haven’t a clue. However it does appear that the powers-that-be and their algos haven’t put in an appearance as of yet, but the day is still young—and the COMEX open will be the acid test.
That’s all I have for today—and I’ll see you here tomorrow.
Ed
The post ‘Da Boyz’ Are Back in Town Again appeared first on Ed Steer.