31 May 2016 – Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
‘Da boyz’ went to work on the gold price the moment that trading began in New York at 6:00 p.m. on Sunday evening. They set the low tick around 9:30 a.m. HKT—and within half an hour, the price had bounced a few dollars—and then it chopped quietly sideways until 9 a.m. in London on their Monday morning. The rally that began at that juncture peaked/got capped around 11:30 a.m. BST—and it quietly sold off until the Globex trading system closed at 1:00 p.m. EDT.
The high and low tick were recorded by the CME Group as $1,213.80 and $1,199.00 in the June contract.
Gold finished the Monday session at $1,204.90 spot, down another $7.90 from Friday’s close. Net volume, most of which is now in the new front month, which is August…was a bit over 78,700 contracts. That’s quite decent volume considering the fact that New York was closed yesterday, as was London.
JPMorgan et al leaned on the silver price in exactly the same manner as they did with gold, except the sell-off was much sharper, as silver was down 30 cents at its 9:30 a.m. HKT low tick. From there it traded sideways in a tight range, with the down/up spike low tick of the day coming shortly before 10 a.m. in London. Silver rallied a dime, but once it poked its nose above the $16 per ounce price mark at 11:30 a.m. BST, the not-for-profit sellers were there to nudge it back below that mark, which was a feat they had to perform once more before the markets closed at 1 p.m. EDT.
The high and low ticks in this precious metal were recorded as $16.245 and $15.915 in the July contract.
Silver finished the Globex trading session yesterday at $15.965 spot, down another 23.5 cents from Friday’s close. Net volume was just under 22,000 contracts, which was an amazingly large amount considering the fact that both London and New York were supposedly closed. 
The platinum price was forced to follow a path similar to both gold and silver on Monday—and it was closed at $966 spot yesterday, down an even 10 bucks from Friday.
Palladium was the outlier once again, as once its low tick was set, it chopped quietly higher until about an hour or so before the Globex close. It finished the day at $540 spot, up 4 dollars from Friday.
The dollar index closed late on Friday afternoon in New York at 95.75…and when it opened at 5 p.m. EDT on Sunday afternoon, it rallied up to its 95.97 high tick a minute or so before 2 p.m. HKT on their Monday afternoon. It began to head south with some authority from there, with its 95.67 low tick coming shortly before 12:30 p.m. BST in London. It crawled quietly higher for the next five hours, before crawling a bit lower, as it finished the Monday session at 95.70…down 5 basis points from its Friday close. The folks over at ino.com indicated that dollar finished lower by 17 basis points, but that’s not what the 3-day dollar index chart below, or the numbers, show.
And since New York was closed yesterday, as was London, there was no data from the CME, GLD or SLV…and the U.S. Mint. The only reason I’m having a column is to report on the above, plus post the stories I’ve accumulated over the weekend.
CRITICAL READS
Ultimate Market Timer Sam Zell: “Know What the Problem Is?”
“No one has ever accused me of not being a realist,” Sam Zell told CNBC. The chairman of Equity Group Investments and of apartment mega-landlord Equity Residential was talking about the markets for office and apartment buildings in some major cities that have already peaked.
“Overall we’ve come off this extraordinary period of liquidity and this extraordinary period of low interest rates,” he said. “I think we’re unlikely to see a repeat of that going forward, and I think we’re going to see more supply in what had been pretty tight markets.”
And he has been selling. Back in 2007, he once again proved his sense of market timing. As the commercial property bubble was already teetering, he sold Equity Office Properties Trust to Blackstone for $23 billion, not including $16 billion in debt. Then prices crashed, and commercial property defaults hit the banks. As the dust was settling at the end of the Great Recession, he went on a shopping spree.
Now he’s selling again, unloading multifamily properties at peak prices on a massive scale just when a multi-year construction boom is flooding the market with new supply.
This CNBC news item put in an appearance on the wolfstreet.com Internet site last Friday. I found it on the Zero Hedge website last night…and another link to this story is here.
A Worrisome Pileup of $100 Million Homes
One of the latest symbols of the over-inflated luxury housing market is a pink mansion perched above the Mediterranean on the French Riviera.
The 13,000-square-foot property, built and owned by the fashion magnate Pierre Cardin, is composed of giant terra cotta orbs arranged in a sprawling hive. The home’s name befits its price. “Le Palais Bulles,” or “the Bubble Palace,” is being offered for sale at approximately $450 million.
The listing is part of a global pileup of homes listed for $100 million or more. A record 27 properties with nine-figure prices are officially for sale, according to Christie’s International Real Estate. That is up from 19 last year and about a dozen in 2014.
If you add in high-priced “whisper listings” that are offered privately, brokers say the actual number of nine-figure listings worldwide could easily top 40 or 50.
The filthy rich and their real estate problems! This fascinating news item was posted on The New York Times website on Saturday – and it’s worth reading. I thank Roy Stephens for sliding it into my in-box just before midnight Denver time last night. Another link to this story is here.
Losing Ground In Flyover America, Part 3 – David Stockman
As we indicated in Part 2, the Fed’s crusade to pump-up inflation toward its 2.00% target by hammering-down interest rates to the so-called zero bound is economically lethal. The former destroys the purchasing power of main street wages while the latter strip mines capital from business and channels it into Wall Street financial engineering and the inflation of stock prices.
In the case of America’s 80 million working age adults (25 or over) with a high school education or less, the Fed’s double whammy has been catastrophic. As we demonstrated yesterday, the employment-to-population ratio for this group has plummeted from 60% prior to the great recession to about 54% today.
In round terms this means that the number of job holders in that pool of the less educated has shrunk from 49.4 million to 43.5 million since early 2007. That’s nearly 6 million workers gone missing or 12% of the total from just nine years ago.
And as we documented yesterday this plunge is not due to aging demographics. The MSM meme that it’s all about the baby boomers hanging up their spikes doesn’t wash; the labor force participation rate of persons over 65 has actually increased sharply in recent years.
This long commentary by David appeared on his website on Saturday – and I found it too long and too convoluted. I read part of it – and then lost interest. I thank Roy Stephens for pointing it out – and another link to this article is here.
Former Morgan Stanley Chief Asia Economist: “Don’t Listen to the Ruling Elite, the World Economy is in Real Trouble“
Andy Xie says the world’s elite that are attending the G7, G20, Davos and other wasteful meetings are wrong to try to pin the blame for the turmoil on people’s psychology; all signs point to a prolonged period of global stagnation and instability.
Before the current G7 meetings waste of time, The G20 working group meeting in Shanghai didn’t come up with any constructive proposals for reviving the global economy and, instead, complained that the recent market turmoil didn’t reflect the “underlying fundamentals of the global economy”. The oil price has declined by 70 per cent since June 2014, while the Brazilian real has halved, and the Russian rouble is down by 60 per cent. The global economy is on the cusp of another recession, and these important people blamed it all on some sort of psychological problem of the people.
Over the past two decades, the global economy has been blessed with the entry and participation of 800 million hard-working Chinese, plus the information revolution. The pie should have increased enough in size to make most people happier. Yet, the opposite has happened. The world has gone from one crisis to another. People are complaining everywhere. This is due to mismanagement by the very people who attend the G20 meetings, the Davos boondoggle, and so many other global meetings that waste taxpayers’ money and put inept leaders in the limelight.
One major complaint that people have is that the system is rigged – that is, the rising income concentration is not due to free market competition, but a rigged system that favours the politically powerful. This is largely true. The new billionaires over the past two decades have come mostly from finance and property. Few made it the way Steve Jobs or Bill Gates did, creating something that makes people more productive.
This very worthwhile commentary by Andy Xie was ‘borrowed’ from The South China Morning Post…and showed up on the Zero Hedge website at 8:20 a.m. EDT on Monday morning…and I thank Brad Robertson for pointing it out. Another link to this must read story is here.
Donald Trump’s wild idea about dealing with debt may be here sooner than you’d think
One of the wildest ideas to hit the U.S. Presidential campaign trail might become a reality sooner than you would think.
Donald Trump, the Republican party’s nominee, has claimed that the U.S. national debt, standing at more than $19 trillion (£13 trillion), does not need to be repaid.
“This is the United States government, you never have to default, because you print the money,” he declared live on air.
His comments signal his belief that America’s authorities, could, if they wanted, print enough money to pay back their creditors without raising an extra cent in taxes.
You couldn’t make this stuff up! This news item was posted on the telegraph.co.uk Internet site at 4:25 p.m. BST on Saturday…and I thank Richard Saler for bringing it to our attention. Another link to this news item is here.
As Our Past Wars Are Glorified This Memorial Day Weekend, Give Some Thought to Our Prospects Against the Russians And Chinese in World War III — Paul Craig Roberts
The Saker reports that Russia is preparing for World War III, not because Russia intends to initiate aggression but because Russia is alarmed by the hubris and arrogance of the West, by the demonization of Russia, by provocative military actions by the West, by American interference in the Russian province of Chechnya and in former Russian provinces of Ukraine and Georgia, and by the absence of any restraint from Western Europe on Washington’s ability to foment war.
Like Steven Starr, Stephen Cohen, myself, and a small number of others, the Saker understands the reckless irresponsibility of convincing Russia that the United States intends to attack her.
It is extraordinary to see the confidence that many Americans place in their military’s ability. After 15 years the U.S. has been unable to defeat a few lightly armed Taliban, and after 13 years the situation in Iraq remains out of control. This is not very reassuring for the prospect of taking on Russia, much less the strategic alliance between Russia and China. The U.S. could not even defeat China, a Third World country at the time, in Korea 60 years ago.
Americans need to pay attention to the fact that “their” government is a collection of crazed stupid fools likely to bring vaporization to the United States and all of Europe.
This commentary by Paul certainly falls into the must read category, even if you’re not a student of the New Great Game. It appeared on his Internet site on Saturday…and I thank ‘aurora’ for passing it around. Another link to this must read article is here.
The only continent with weaker economic growth than Europe is Antarctica – Boris Johnson
Yes indeed, let us talk about economics. Let’s look at the real economic impact of the European Union on Britain and Europe.
We can dismiss most of the claims for the “single market” – too often an excuse for a morass of politically driven legislation that costs U.K. business about £600 million a week. In the 20 years since the dawn of the 1992 Single Market programme, there were many countries that did far better than the U.K. at exporting to the EU; 27 non-E.U. countries did better at increasing their exports of goods, and 21 did better at ramping up their exports of services. Of course they did: American and other non-E.U. businesses have excellent “access” to the E.U., but aren’t wrapped in E.U. red tape, whereas we have only 6 per cent of companies trading with the rest of the E.U. – yet 100 per cent of them have to comply with E.U. law.
And is the E.U. booming, thanks to the “single market”? Of course not. Since 2008 the U.S. has seen gross domestic product go up by about 13 per cent; the E.U.’s has gone up by 3 per cent. The E.U. is a graveyard of low growth; the only continent with lower growth is currently Antarctica. That is partly because of the sclerotic one-size-fits-all Brussels approach to regulation; but, worse, in the last decade the E.U. has been suffering from a self-inflicted economic disaster – the euro.
Boris is the former Mayor of London…and this very worthwhile commentary by him showed up on The Telegraph‘s website at 9:00 p.m. BST on Sunday. It’s the third contribution of the day from Roy Stephens…and another link to this commentary is here.
Turkey’s Erdogan: No Muslim family should engage in birth control
No Muslim family should engage in birth control or family planning, Turkish President Tayyip Erdogan said on Monday, calling again on pious Muslims to have more children.
“We will multiply our descendants. They talk about population planning, birth control. No Muslim family can have such an approach,” he said in a speech in Istanbul broadcast live on television.
“Nobody can interfere in God’s work. The first duty here belongs to mothers,” he said. Women’s groups and opposition politicians have criticized Erdogan, a devout Muslim for telling women how many children to have and dismissing the Western idea of gender equality.
He has previously equated birth control with treason.
Another man telling women what they can and cannot do with their bodies! This Reuters article, filed from Ankara, put in an appearance on the Pakistani Internet site tribune.com.pk yesterday—and it’s the fourth and final offering of the day from Roy Stephens. Another link to this news story is here.
CEO of Asia’s Largest Commodity Trader Unexpectedly Resigns
We have tracked the problems of recently junked Noble Group – Asia’s largest commodity trader – extensively over the past year (see “Noble Group’s Kurtosis Awakening Moment For the Commodity Markets“, “Junk Isn’t Very Noble: Asia’s Largest Commodity Trader Responds to Moody’s Downgrade“, “Noble Group’s Cliff-hanger“, “Noble Group’s “Collateral Margin Call“, “Noble Group’s “Margin Call” Part II: The Enron Moment“).
And then moments ago things finally turned serious for the company, which just a few weeks ago finalized a $3 billion credit facility in what according to some was an “all clear” moment. Apparently the only clarity was for long-time company CEO, and former Goldmanite Yusuf Alireza, that the time has come to exit stage left.
As the company announced moments ago on the Singapore stock exchange, not only is CEO Alireza resigning, to be replaced by William Randall and Jeff Frase as co-CEOs, but the company will also begin the sale process of its Noble Americas Energy Solutions, a deal that will generate “significant cash proceeds”, which is great since Nobel is desperately in need of cash; it also means that the company is losing one more of its star performing assets as it continues to asset strip itself of any potential future growth, and is merely scrambling to preserve solvency and liquidity.
Randall, based in Hong Kong, is currently President of Noble Group and an Executive Director and will retain his Board Seat. Frase, based in Stamford, Connecticut is currently President, Noble Americas and Head of Oil Liquids and will be invited to join the Board.
This longish story appeared on the Zero Hedge website at 8:35 p.m. on Sunday evening EDT…and another link to this article is here.
China fixes yuan at more than five-year low against dollar
China’s central bank set the daily yuan fixing at its weakest level against the dollar in more than five years on Monday, after hawkish comments from Federal Reserve Chairwoman Janet Yellen boosted the strength of the U.S. currency.
The People’s Bank of China set its daily reference rate for the yuan at 6.5784, the weakest level since February 2011 and 0.45 percent lower than Friday’s fixing point. Onshore, the yuan is allowed to trade 2 percent above and below the so-called fix.
The U.S. dollar index, which tracks the dollar’s strength against a basket of six currencies, rose 0.4 percent to 95.888 in early Asian trading. The move follows Yellen’s comments late Friday that it would be “appropriate” for the Fed to “gradually and cautiously” increase interest rates in the coming months.
This news item showed up on The Wall Street Journal website on Monday sometime…and the above three paragraphs are all that are posted in the clear. I found this news item on the gata.org website.
Is Scarborough Shoal Worth a War? – Patrick Buchanan
If China begins to reclaim and militarize Scarborough Shoal, says Philippines President Benigno S. Aquino III, America must fight.
Should we back down, says Aquino, the United States will lose “its moral ascendancy, and also the confidence of one of its allies.”
And what is Scarborough Shoal?
A cluster of rocks and reefs, 123 miles west of Subic Bay, that sits astride the passageway out of the South China Sea into the Pacific, and is well within Manila’s 200-mile exclusive economic zone.
This commentary by Patrick was posted on the antiwar.com Internet site last week…and it’s worth reading. I thank Brad Robertson for bringing it to our attention. Another link to this article is here.
For how many millennia do John Plender and the Financial Times plan to disparage gold?
Annoyed at former International Monetary Fund economist Kenneth Rogoff for having lent some respectability to gold this month, for having recommended that developing countries hold less of their foreign exchange reserves in zero-interest developed-nation bonds and more in gold — Financial Times columnist John Plender today can’t concede Rogoff’s point without disparaging the monetary metal.
“Gold,” Plender writes, “has been a bubble for millennia.”
Some bubble! Don’t millennia compare pretty well with the individual human lifespan? For how many millennia are Plender and the Financial Times planning to keep disparaging the monetary metal?
Repeating the appalling rookie mistake Rogoff himself made, Plender writes that gold “yields no dividends or interest,” though central banks and others lend gold at interest every day just as government currencies are lent at interest.
This commentary by GATA’s secretary/treasurer Chris Powell showed up on the gata.org Internet site on Sunday morning…and another link to this article is here.
Grant Williams Warns of Looming ‘Wealth Tax’, Says “Own Physical Gold, Not ETFs“
Grant Williams, strategy advisor to Vulpes Investment Management and co-founder of Real Vision Television is always worth the read or listen, and he sat down for an interview during his time at this year’s Mauldin Strategic Investment Conference to discuss his views on gold, and why physical cash is being eliminated.
On the subject of gold, Williams is very quick to point out that he doesn’t buy gold for the price, he owns it for what it does. He goes on to say that once people realize the value of owning physical gold, ETF’s will no longer be what investors want to own.
“I don’t buy gold, I own it. I don’t buy gold at $1,100 because I think it’s going to go to $1,200. I buy it for what it does, not what the price is, the price is the last consideration for me. I think the way the picture has been developing over the last eight years, it’s like when you take a polaroid, you take a picture and you sit there and you watch this thing and it slowly comes into focus, and that’s what it’s been like for me watching gold, we’re watching this picture slowly develop.”
“We’re getting to the point where people are going to be able to see the picture, and at that point gold is the answer. It’s not just an asset anymore it’s the answer to a lot of people’s questions. When that happens, I think the most important stage of this completes itself and that is the resolution between the paper price and the physical asset. I think when we get to that point where people want to own gold, ETF’s won’t suffice anymore. A promise to deliver three months hence is not going to be sufficient anymore, people are going to want to own the asset. At that point you realize that there are multiple hundreds of claims per ounce, and those claims won’t be worth anything anymore it’s going to be the asset, and that’s the end game.”
“The picture is becoming clearer, and everything the central banks are doing is bringing that day forward a little bit.”
This 6:37 minute video interview with Grant was conducted by Jonathan Roth…and it’s certainly worth watching. It was posted on the Zero Hedge website at 5:00 p.m. EDT yesterday afternoon. Another link to this interview is here.
Spotlight on LPMCL: London Precious Metals Clearing Limited – Ronan Manly
Within the last 2 months, there have been a series of developments in the London Gold Market, each of which has involved Chinese-controlled banking group ICBC Standard Bank Plc.
On 4 April, the London Bullion Market Association (LBMA) announced that ICBC Standard Bank had been reclassified as a LBMA Market Making member for the OTC spot trading markets in gold and silver.
On 11 April, ICE Benchmark Administration announced that ICBC Standard Bank had been approved for direct participation in the daily benchmark LBMA Gold Price auctions beginning on 16 May.
On 3 May, the LBMA announced in its Alchemist magazine that ICBC Standard Bank had joined the LBMA’s Physical Committee. This committee is responsible for aspects of the physical bullion market such as the LBMA’s Good Delivery List and it also liaises with the LBMA’s Vault Managers Working Party.
On 11 May, the relatively obscure but powerful London Precious Metals Clearing Limited (LPMCL) announced that ICBC Standard Bank had joined LPMCL, the first membership addition to London’s monopoly bullion clearing group since 2005.
On 16 May, ICBC Standard Bank announced that it had agreed to acquire a London-based precious metals vault currently owned by Barclays. This precious metals vault was built by, and is operated by Brinks, on behalf of Barclays. ICBC Standard says that the vault acquisition will be completed by July 2016.
Therefore, within a period of approximately 6 weeks, ICBC Standard has positioned itself front and centre of the closely protected London bullion trading, clearing and vaulting infrastructure.
This long, interesting…and somewhat convoluted commentary by Ronan Manly appeared on the bullionstar.com Internet site yesterday. I found it embedded in a GATA release…and another link to this article is here.
Gold Price Forecasts Revised Higher To $1,400/oz – Citi Says “Buy the Dip”
Gold price forecasts have been revised higher in recent weeks and Citi became the latest bank to revise higher their projections for gold, despite the recent weakness in the price.
Citi said that despite the recent gold pullback, now is an “opportune moment” for buyers and now is the time to invest in gold:
“While prices have fallen 3% (month to date) in May, we believe this may in fact prove to be an opportune moment to ‘buy the dip,’” strategists wrote in a note issued Tuesday, titled “Let the Sunshine in as Commodities Enter New Age of Aquarius.”
This gold-related news item showed up on Mark O’Byrne’s website goldcore.com yesterday…and another link to this story is here.
Higher gold prices can mean lower gold production – Lawrie Williams
To the general observer of markets – one who may be interested in resource commodities and stocks – it would seem logical that higher gold prices would stimulate, and thereby increase, production. But in fact the reverse is often the case. There’s some interesting research out from Melbourne-based independent consultants, Surbiton Associates, into the Australian gold mining sector – Australia is the World’s second largest producer after China – which makes this very point in an analysis of Q1 2016 Australian gold mining output.
What many observers don’t understand is that when metals prices rise, many miners don’t see this as a route to maximising short term profits, but rather to mine more efficiently and effectively prolong mine life through mining lower grade material within the overall mining plan. The converse is true when metals prices drop. Mine production does not necessarily fall with many miners seeking to maintain profitability levels by mining higher grades if they are able to do so. Pushing higher grade ore through the process plant at an unchanged throughput means higher production. Closing a mine because of unprofitability tends to be a last resort. It is not only psychologically unwelcome to the mining company’s executives having to deal with redundancies etc., but may also be an expensive exercise in meeting environmental clean-up and closure costs.
While the research by Surbiton Associates relates only to Australian miners, we can expect to see the same effects elsewhere in the world, and while higher gold prices may re-stimulate gold exploration and eventually lead to new mines being built, the enormous lead time to permit and build a new mine from discovery is now probably 10 years or more, other than in exceptional cases, so the knock-on effect of higher prices stimulating new production will be a slow process and meanwhile higher prices could indeed result in lower gold production.
“Could?”…how about “will”. There’s no question in my mind that gold production from existing mines will plummet the moment we get significantly higher gold prices, as mining companies will look to extend mine life at the first opportunity. I’ve stated this fact from time to time over the years, but Lawrie’s commentary here is right on the money…and a must read in my opinion. It was posted on the Sharps Pixley website yesterday…and another link to this story is here.
China’s net gold imports from Hong Kong drop 4.2% in April
Top consumer China’s net gold imports from Hong Kong fell 4.2 per cent in April from a three-month high in the previous month, data showed on Friday.
Net gold imports fell to 68.8 tonnes in April from 71.8 tonnes in March, according to data emailed to Reuters by the Hong Kong Census and Statistics Department. Total imports dipped 3.3 per cent to 73.7 tonnes from 76.2 tonnes in March.
Summer is usually a weak season for gold demand in China, so April’s demand is in line with expectations, analysts said.
This news item, filed from Beijing, put in an appearance on the gulftoday.ae Internet site on Saturday…and it’s the second story in a row that I found on the Sharps Pixley website. Another link to this story is here.
The PHOTOS and the FUNNIES
On Saturday I posted the photos of the male California Quail. Here’s the female…and she’s almost as attractive. I wasn’t aware that the female had a head plume until I downloaded the photos onto my computer the other day, as I didn’t notice it when I was taking the pictures. The third photo is of more vineyards and orchards in Penticton, B.C. from my trip to the Okanagan recently. The ‘click to enlarge’ feature works wonders with these photos, especially the third one.
The WRAP
Well, JPMorgan et al obviously showed up in the thinly-traded Far East market on their Monday morning—and set new low price ticks in gold, silver and platinum. As I said in my comments at the top of today’s column, volume was very decent even though the U.S. was closed yesterday—and it was also the Spring Bank Holiday in the U.K. as well.
I have no 6-month charts for the precious metals because the folks at stockcharts.com took the day off yesterday. But I know what they would show if they had been…and that’s Relative Strength Indicators in gold, silver and platinum rapidly approaching oversold.
As Ted said on the phone yesterday, we are obviously well along in the liquidation process, or “The Count“, but we won’t know how far until we see the Commitment of Traders Report on Friday. The cut-off for it is at the close of COMEX trading this afternoon. Monday’s trading data will certainly be in it…and hopefully the same can be said for all of today’s price/volume action as well.
And as I type this paragraph, the London open is less than ten minutes away…and I see that gold rallied until 10 a.m. HKT on their Tuesday morning, but has been trading flat since. The same can be said of silver and platinum, rallying until 10 a.m….and then chopping more or less sideways. Gold, silver and platinum are up 7 bucks, 11 cents…and 12 bucks respectively. Palladium has been chopping quietly higher ever since trading began at 6:00 p.m. EDT yesterday evening…and is up by 6 dollars the ounce.
Net HFT volume in gold is a bit over 29,000 contracts…and that’s net of Monday’s volume. In silver, net HFT volume currently sits at about 7,700 contracts…and that’s net of Monday’s volume as well. The dollar index traded lower by about 15 basis points or so in morning trading in the Far East. But shortly before noon HKT, it appeared that ‘gentle hands’ showed up—and it’s currently trading unchanged as London opens.
Ted mentioned in his weekly commentary that “there has been a recent correlation between a rising dollar index and falling metals prices…and strictly in terms of the COT structure, the dollar index seems to suggest further dollar strength.” So until that situation is rectified, it’s most likely that JPMorgan et al will use that rising dollar to continue pressuring precious metal prices to the downside. But that relationship isn’t cast in stone if you look at the long-term dollar/gold price chart. That goes for the other precious metals as well.
And as I post today’s column on the website at 4:03 a.m. EDT, I note that all four precious metals got sold down a hair when London and Zurich opened, but all are still up from their respective Monday closes.
Net HFT volume in gold is now up to a bit over 34,500 contracts net of Monday’s volume—and that number in silver is just under 11,000 contracts, also net of Monday’s volume. The dollar index is up 3 basis points at the moment—and up 16 basis points off its low at noon Hong Kong time.
Today is the last trading day of the month…and I have no idea what to expect during the remainder of the Tuesday session. But whatever happens, it’s a certainty the bullion banks in New York will have the final say in the matter during COMEX trading.
That’s all I have for today—and I’ll see you here tomorrow.
Ed
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