30 September 2016 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
Gold’s attempted rally in morning trading in the Far East got snuffed out around 8:20 a.m. China Standard Time on their Thursday — and from there, the price was rolled over starting around 1 p.m. in Shanghai. The low tick of the day — and a new low for this move down — was printed shortly after London closed, which was shortly after 11 a.m. EDT in New York. It rallied quietly from there until 2 p.m. in the thinly-traded after-hours market — and was sold down 4 bucks from there into the 5 p.m. EDT close.
The gold price traded within a ten dollar price range on Thursday, just as did on Wednesday, so I’ll pass on looking up the high and low ticks.
Gold was closed in New York on Thursday at $1,319.90 spot, down $1.50 from Wednesday. Net volume wasn’t overly heavy at just under 135,000 contracts.
Silver’s rally in early Far East trading was far more impressive — and ‘da boyz’ and their algos had their work cut out from them hammering that flat, but it only took them an hour to get the job done. Then, like gold, the HFT boys spoofed and spun their algorithms starting at 1 p.m. CST — and the silver price was bounced off it $19.00 spot low tick at the noon silver fix in London, plus a few times after the COMEX open — and then again when gold set its low of the day shortly after 11 a.m. EDT. Silver rallied about 15 cents by 11:30 a.m. — and it wasn’t allowed to do much after that.
The high and lows ticks in this precious metal were recorded by the CME Group as $19.46 and $19.05 in the December contract.
Silver was closed on Thursday at $19.09 spot — and down 8 cents on the day. Net volume was fairly decent at just over 48,500 contracts. I’ll leave it up to your imagination as to what the silver price would have closed at if the rally that began in Far East trading on their Thursday morning had been allowed to run its course.
And here’s the 5-minute silver tick chart courtesy of Brad Robertson — and you can see that the price spike in Far East trading yesterday morning had some decent volume attached to it. Then volume picked up again starting around 4:30 a.m. Denver time on the chart below, which was the lead-up to the first take-down in the silver price going into the noon London silver fix. Volume didn’t die off to background until shortly after 2 p.m. MDT, which was 4 p.m. in New York.
The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT. The ‘click to enlarge‘ is a must here.
Platinum’s rally was capped at the same time as gold and silver in Far East trading — and it’s price was turned lower starting shortly after 12 o’clock noon Shanghai time. It’s low tick came at 9 a.m. in New York. It rallied until the p.m. gold fix — and then retested its earlier low. The subsequent rally, like the rally in silver at that point, wasn’t allowed to get far — and platinum was closed at $1,024 spot, down 3 dollars on the day. It was up 13 bucks before JPMorgan et al appeared on the scene.
Ditto for palladium, with its first low coming at the noon silver fix in London — and it ‘retested’ that low minutes after 9 a.m. in New York. It rallied until shortly after the London p.m. gold fix, before getting sold down a few dollar. The price chopped sideways from there for the rest of the Thursday session, finishing the day at $713 spot, up 3 bucks on the day.
The dollar index closed very late on Wednesday afternoon in New York at 95.43 — and dipped to its 95.34 low just before 9 a.m. China Standard Time. It chopped generally higher from there, with the 95.68 high tick coming at precisely 9:00 a.m. in New York — and by around 12:15 p.m. EDT, it was back at its 95.33 low. By 2 p.m. on the dot it was up to 95.62 — and then faded for the rest of the day, as the index closed at 95.53 — up 10 basis points from its Wednesday close.
Here’s the 6-month U.S. dollar index chart — and it doesn’t mean much anymore, because if left to their own devices, the world’s currencies would reprice themselves, just like the precious metals.
The gold stocks opened down a bit on the day — and then poked their noses into positive territory briefly at the London p.m. gold fix. Their respective low ticks came shortly after 11 a.m. in New York, when the powers-that-be set gold’s low tick of the day — and after that they chopped mostly higher. The HUI closed down only 0.49 percent.
The silver equities followed an almost identical pattern, except their rally off their 11:10 a.m. New York lows was far less impressive — and Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.48 percent. Click to enlarge if necessary.
The CME Daily Delivery Report showed that the last 30 gold contracts remaining in the September delivery month were issued by Morgan Stanley out of their client account — and Goldman Sachs picked up 29 of them and ABN Amro got 1 contract. That completes the September deliveries in gold.
First Day Notice for delivery into the October gold contract showed that 2,470 gold and 301 silver contracts were issued for delivery on Monday, October 3. In gold, the only short/issuer was Canada’s Scotiabank with all 2,470 contracts. There were 16 long/stoppers. The tallest hog at the trough as long/stopper was Goldman Sachs with 655 for its client account, plus another 497 for their own in-house account! Macquarie Futures was a close second with 976 contracts for its own account — and JPMorgan was an ‘also ran’ with 168 contracts for its own account as well. In silver, the only two short/issuers were ABN Amro and Canada’s Scotiabank with 153 and 148 contracts respectively. Macquarie Futures was the largest long/stopper with 250 contracts for its own account. The two ‘also rans’ were ADM and Merrill with 34 and 16 contracts respectively.
While I’m at it, the platinum deliveries were huge as well. Of the 1,209 platinum contracts issued, there were 1,200 that came out of JPMorgan’s client account. There were sixteen long/stoppers in this precious metal as well. ADM stopped 308 contracts for its client account, JPMorgan stopped 287 for its own account — and SG Americas was in third spot with 281 contracts for its client account as well. The link to yesterday’s Issuers and Stoppers Report is certainly worth a look if you have the interest — and the link to that is here.
The CME Preliminary Report for the Thursday trading session showed that as of the close of trading today, all September deliveries are done, so October is now in the crosshairs. Gold open interest in October fell another 2,311 contract, leaving just 7,393 contracts left, minus the 2,470 mentioned in the previous paragraphs. October silver o.i. dropped 37 contracts, leaving just 437 left, minus the 301 that were mentioned above.
There were no reported changes in GLD yesterday — and as of 7:33 p.m. EDT yesterday evening, there were no reported changes in SLV, either.
There was a smallish sales report from the U.S. Mint yesterday. They sold 9,000 troy ounces of gold eagles, plus 75,000 silver eagles.
There was some gold activity over at the COMEX-approved depositories on Wednesday. They reported receiving 2,999 troy ounces — and shipped out 40,293 troy ounces. All of the ‘in’ activity was at Brink’s, Inc. — and virtually all of the ‘out’ activity was at HSBC USA. A link to that is here.
After many days of frantic in/out activity in silver, it was much quieter on Wednesday. They didn’t receive any — and only 249,832 troy ounces were shipped out the door — and all of that came from Brink’s, Inc. The link to that activity is here.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday, they reported receiving 323 of them — and shipped out 1,818. All of the activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.
After a week of slim pickings, I have quite a number of stories for you today, so I hope you can find the time to read the ones that interest you.
CRITICAL READS
The Fed’s Monetary Politburo Is Finally Catching Some Flack — David Stockman
Now that’s more like it. Echoing Donald Trump’s Monday night bull’s-eye regarding the Fed’s thoroughly political essence, Rep. Scott Garrett put more wood to Janet Yellen during yesterday’s hearing:
Rep. Scott Garrett, R-N.J., seized Trump’s mantle during Wednesday’s hearing, saying “the Fed has an unacceptable cozy relationship” with the Obama administration and Democrats.
“As the saying goes, perception is reality,” Garrett told Yellen. “Whether you like it or not, the public increasingly believes that the Fed’s independence is nothing more than a myth.”
Of course it’s a myth, and a dangerous one at that. The truth is, Keynesian monetary central planning is inherently, massively and irremediably “political”.
That’s because it interjects the state deeply into the money and capital markets—-the very heart of capitalism—-and thereby in plenary fashion manipulates, rigs and falsifies the prices of all financial assets.
This commentary by David showed up on his Internet site yesterday sometime — and it’s worth reading. It comes courtesy of Roy Stephens — and another link to this article is here. There was a New York Times article from Wednesday that covers this as well. It’s headlined “House Panel Questions Fed Chief on Wells Fargo Scandal” — and I thank Jerome Cherry for passing it along late last night Denver time.
Pain Spreads To Germany’s Second Biggest Bank: Commerzbank Scraps Dividend, Fires 20% Of Workforce
With Deutsche Bank mercifully missing from overnight headlines for the first day in almost two weeks, it is time to bring attention to Germany’s second largest bank which, as we first reported earlier in the week citing a Handelsblatt leak, confirmed it is also going through a historic rough patch. This morning, Commerzbank said it plans a wide-ranging business restructuring that includes scrapping the bank’s dividend for the rest of the year, terminating nearly 10,000 jobs – roughly 20% of its workforce – and merging two large units.
“The focus on the core business, with some business activities being discontinued, and the digitalization and automation of workflows will lead to staff reductions amounting to around 9,600 full-time positions,” Germany’s second-largest lender said.
The plan, according to the WSJ, is a strong sign new Chief Executive Martin Zielke is determined to shrink the partially state-owned bank amid a protracted period of ultra-low or negative interest rates and weak client demand.
While the overhaul and liquidity “shoring” was previously reported in recent weeks, it came as a surprise because the bank portrayed the picture of an institute that is done emerging from an extensive overhaul when former Chief Executive Martin Blessing in November last year said he would leave the bank. However, now the bank is merging its investment bank with the unit that caters to small and midsize enterprises. The renewed efforts to streamline Germany’s second-largest bank mark the first moves Mr. Zielke, who took the helm at Commerzbank in May.
This story was posted on the Zero Hedge website at 8:06 a.m. on Thursday morning EDT — and I thank Richard Saler for finding it for us. Another link to this article is here.
Is Deutsche Bank the next Lehman Brothers? The denials certainly don’t help suggest it’s not
Anshu Jain said nothing. Honouring a long-standing commitment to appear on a panel at a Bloomberg conference in London, the man who co-led Deutsche Bank for three years until July last year, was careful not to mention the gigantic elephant in the room.
He was happy to talk about asset valuations, and the impact on deposit taking institutions. And he was only too pleased to wax lyrical on low interest rates causing serious issues for pensions. But discuss the ails of his former employer he did not.
Whether by remiss or by Jain’s request, his questioner chose to steer clear of a subject the man who spent 20 years of his career rising up the corporate ladder of Germany’s largest bank would surely have had lots to say on.
For the question of whether or not Deutsche Bank can survive without a bail-out by the German government is the only topic most other European bankers want to converse upon.
This news item showed up on the telegraph.co.uk Internet site at 8:00 p.m. BST on their Wednesday evening, which was 3:00 p.m. in New York — EDT plus 5 hours. It’s the first offering of the day from Swedish subscriber Patrik Ekdahl — and another link to this story is here.
Major Dollar Shortage Exposed In Europe As Deutsche Bank Contagion Spreads
“Storm in a teacup“ this is not.
While global markets remain calm(ish), distracted by OPEC headlines, U.S. election ‘entertainment’, and Middle East proxy wars, the reality is, something very ugly is accelerating in Europe. With the collapse of the “most systemically dangerous bank in the world” we should hardly be surprised, but Deutsche Bank’s crash is being shrugged off by average joes on mainstream media… and besides, the central banks will save us, right?
Well, Deutsche contagion is spreading… rapidly.
Since Deutsche’s recent highs, the short-end of the EUR-USD basis swap curve has collapsed…
This 4-chart Zero Hedge article put in an appearance on their Internet site at 12:42 p.m. EDT yesterday afternoon — and it’s courtesy of Richard Saler as well. It’s worth a minute or so of your time — and another link to it is here.
The Run Begins: Deutsche Bank Hedge Fund Clients Withdraw Excess Cash
Deutsche Bank concerns just went to ’11’ as Bloomberg reports a number of funds that clear derivatives trades with Deutsche Bank AG have withdrawn some excess cash and positions held at the lender, a sign of counterparties’ mounting concerns about doing business with Europe’s largest investment bank.
While the vast majority of Deutsche Bank’s more than 200 derivatives-clearing clients have made no changes, some funds that use the bank’s prime brokerage service have moved part of their listed derivatives holdings to other firms this week, according to an internal bank document seen by Bloomberg News.
Millennium Partners, Capula Investment Management and Rokos Capital Management are among about 10 hedge funds that have cut their exposure, said a person familiar with the situation who declined to be identified talking about confidential client matters.
The hedge funds use Deutsche Bank to clear their listed derivatives transactions because they are not members of clearinghouses. Millennium, Capula and Rokos declined to comment when contacted by phone or e-mail.
Which explains why short-dated CDS is soaring. As a reminder, if the liquidity run forces DB to start unwinding or being forced to novate derivatives, it could get ugly.
This very interesting news item showed up on the Zero Hedge website on Thursday around lunchtime in New York, because I received it from Richard Saler at 12:50 p.m. EDT. It’s now datelined 4:34 p.m. EDT, so it was obviously been modified/updated in some way. Another link to this story is here.
International MH17 crash investigation “politically deficient, defective by process“
The Dutch-led investigation into the MH17 crash was politically motivated; its goal was to determine why Russia was responsible instead of finding out who actually downed the plane, says Joaquin Flores, an Editor-in-Chief at Fort Russ news.
The Dutch-led criminal investigation into the ill-fated flight MH17 has concluded the missile which downed the passenger jet came from a rebel-held area in eastern Ukraine. According to the Joint Investigation Team (JIT) a Buk missile system was brought from Russia.
The JIT consists of investigators and experts from the Netherlands, Belgium, Australia, Malaysia and Ukraine.
RT: What do you make of the investigation results? Are you surprised?
We are not at all surprised by the results. The very problem with the JIT from its genesis was that it was put together by NATO as a result of a failure to actually create a truly independent inquiry team which was rejected at the level of the UN Security Council, once it became clear the point of any investigation was going to be to determine how it was that the Russian Federation was responsible instead of looking at the first question, ‘who did it?’ So, that was the problem from the very start. It was a geopolitically motivated investigation and it was flawed. Of course, you have a conflict of interest here, right at the start because the Netherlands is a NATO country. And NATO has been actively involved in this conflict on the side of the Ukrainian government. So, we are not at all surprised by the results and it is politically deficient, and by process it is also defective.
This story, was posted on the Russia Today website at 1:53 p.m. Moscow time on their Wednesday afternoon, which was 5:53 a.m. in Washington — EDT plus 8 hours. Another link to it is here — and I thank Roy Stephens for sharing it with us. Roy had another Russia Today article on this subject. It’s headlined “‘Ukraine fully responsible for security of its own airspace’ – MH17 victims’ lawyer to Russia Today“. That story is linked here.
U.S. to Suspend Syria Diplomacy With Russia, Prepares “Military Options”
In the most dramatic diplomatic escalation involving the Syrian conflict in the past years, yesterday John Kerry issued an ultimatum to Russia, in which he warned his colleague Lavrov to stop bombing Aleppo or else the U.S. would suspend all cooperation and diplomacy with Russia.
24 hours later, this appears to be precisely what is about to take place, leading to an even greater geopolitical shock in Syria. According to Reuters, the United States is expected to tell Russia on Thursday it is suspending their diplomatic engagement on Syria following the Russian-backed Syrian government’s intense attacks on Aleppo, U.S. officials said on condition of anonymity.
“We are on the verge of suspending the discussion because it is irrational in the context of the kind of bombing taking place to be sitting there trying to take things seriously,” Kerry told an audience in Washington.
“It is one of those moments where we are going to have to pursue other alternatives,” he added.
Why now and what happens next? According to U.S. officials, the Obama administration is now considering tougher responses to the Russian-backed Syrian government assault on Aleppo, including military options. According to Reuters, the new discussions were being held at “staff level,” and have yet to produce any recommendations to President Barack Obama, who has resisted ordering military action against Syrian President Bashar al-Assad in the country’s multi-sided civil war.
One more step closer to a war of some kind — and is a must read for any serious student of the New Great Game. This is another Zero Hedge news item courtesy of Richard Saler once again. This one put in an appearance on their website at 3:36 p.m. yesterday afternoon EDT — and another link to it is here.
Middle East “Peace” Report: Turkey Risks Kurdish War on Two Fronts as Army Advances in Syria
Mustafa Denktas had twin sons. One of them, a Kurdish militant, was killed fighting the Turkish army in 2012. Denktas was still in mourning when news arrived three weeks later that the other son had met the same fate.
Back then Turkey’s war with separatist Kurds, however bloody and protracted, was essentially a domestic issue. Now it’s an international conflict. When President Recep Tayyip Erdogan sent his army into Syria last month, he wasn’t just striking a blow against Islamic State: a second goal was to stop Kurds from creating a de facto state.
That’s the element of Erdogan’s Syrian gambit that poses the biggest political risks. It threatens to ensnare his soldiers in a civil war that’s already lasted 5 1/2 years, and drive a wedge between Turkey and its NATO allies — especially the U.S., which considers the Syrian Kurds an ally against Islamic extremists. When Moody’s Investors Service cut Turkey’s rating to junk last week, it cited “the persistence of geopolitical threats” among other reasons.
Erdogan is trying to stem a tide that turned more than two decades ago, when war in Iraq left Kurds in charge of that country’s oil-rich north. Since 2011, civil war has given a similar opportunity to Syrian Kurds, who now control of much of the territory along the 900-kilometer border with Turkey. Among the world’s largest ethnic groups without a state of their own, the Kurds can now glimpse a viable one.
This Bloomberg article from Thursday ended up on David Stockman’s website — and is certainly worth reading if you have any interest in what’s currently happening in the Middle East right now, which you should. I thank Roy Stephens for bringing it to our attention — and another link to it is here.
Panic In The Kingdom: Saudi Currency, Bonds, Banks Extend Collapse Despite OPEC ‘Deal’
Following Obama’s 9/11 bill veto defeat yesterday, and despite a surge in oil prices after a ‘deal’ was struck by OPEC, Saudi Arabia’s markets are signaling panic in The Kingdom. Currency forwards are collapsing, default risk is jumping, and bank stocks are hitting record lows…
Mint’s Bill Blain, in his Morning Porridge noted that last nights “surprise” OPEC agreement to agree to agree about talks on cutting oil production is fascinating. Not from the likelihood it may not ever happen, (the earliest we will know is the Vienna meeting in November), but what it tells us about how the sands are shifting around Saudi Arabia. Deliberate Saudi over-production caused the oil glut and was a policy designed to take out expensive US producers. Voodoo economics didn’t work – US producers cut and adapted, and the rest of the world hasn’t played along.
Last night’s agreement represents a fundamental shift in Saudi – a wake up and smell the camel-waste moment. The result is the kingdom is suffering rising twin deficits amounting to over 20% of GDP. As global oil revenues have tumbled on the back of crashing prices, Saudi faces a cash and spending crisis for which it’s largely unprepared. Social issues are mounting. The elites “salaries” have been slashed. It’s being forced towards the international debt markets – a massive deal is on the new issue stocks. My colleague Martin Malone expects to see Debt/GDP rise from 15% to 50%.
This is a picture we’ve seen before.
This Zero Hedge article from Richard Saler is his last contribution to today’s column — and I thank him on your behalf. It showed up on their Internet site at 11:48 a.m. on Thursday morning EDT — and another link to it is here.
India says hits Pakistan-based militants, escalating tensions
Indian officials said elite troops crossed into Pakistan-ruled Kashmir on Thursday and killed suspected militants preparing to infiltrate and carry out attacks on major cities, in a surprise raid that raised tensions between the nuclear-armed rivals.
Pakistan said two of its soldiers were killed in exchanges of fire, but denied India had made any targeted strikes across the de facto frontier that runs through the disputed Himalayan territory.
An Indian military source and a government official said Indian special forces crossed the heavily militarized border by foot just after midnight and hit about half a dozen “launching pads”, where suspected militants were preparing to sneak across.
The official said troops killed militants numbering in the double digits, and that no Indian soldier was killed.
This Reuters news item, co-filed from New Delhi and Islamabad, appeared on their website at 6:53 p.m. EDT yesterday evening — and has obviously been updated at least once since it was originally posted on their Internet site, because I got it from Brad Robertson [via Zero Hedge] at 8:54 a.m. on Thursday morning. Another link to it is here.
China factories limp along, Japan inflation goes backwards
China’s factory sector struggled to gain speed in September while Japanese inflation went backwards in August despite the best efforts of policymakers, underscoring the limits of stimulus in reviving world growth.
Friday’s unflattering figures bookmarked a week in which the IMF warned it would likely downgrade forecasts for the U.S. economy, and the World Trade Organization slashed its outlook for global trade flows.
The limits of policy stimulus were all to evident in Japan where core consumer prices fell 0.5 percent in August from a year earlier, the largest drop since March 2013. The data seemed to mock the Bank of Japan’s recent pledge not only to boost inflation to 2 percent but to lift it above that, so far unreachable, target for a sustained period.
Nor were Japanese consumers cooperating. Household spending sank 4.6 percent in the year to August, almost twice the fall expected by analysts.
Indeed, Friday’s data across Asia were littered with unwanted milestones.
This Reuters article, filed from Sydney, appeared on their Internet site at 5:01 a.m. BST in London this morning — and I thank Patrik Ekdahl for sending it to me at midnight last night Denver time. Another link to this story is here.
Gold deal making heating up as Canada’s Kirkland Lake Gold swallows Australia’s Newmarket
A proposed merger between two Canada-based gold miners is the latest example of consolidation in an industry that remains under pressure to cut costs, even as stronger gold prices smooth the way for deal-making.
Today Kirkland Lake Gold Inc. agreed to buy Newmarket Gold Inc. in an all-stock deal valued at C$1.01 billion (US$770 million), creating what the companies said will be a low-cost producer focused on Canada and Australia.
“It certainly fits with the theme of looking at junior and intermediate producers trying to move up the food chain, creating a new tier of intermediate producers nipping at the heels of the senior producers,” Michael Siperco, an analyst with Macquarie Capital Markets in Toronto, said by telephone.
Deal making in the gold industry this quarter is the busiest in a year by volume of transactions, according to data compiled by Bloomberg, as surging metal and stock prices give companies more scope to grow through acquisitions.
This news item was posted on the Bloomberg website at 7:14 a.m. MDT yesterday morning — and was updated about eight hours later. I found it embedded in a GATA release — and another link to it is here.
Metals mogul says son-in-law stole $150K in gold
The owner of a Canadian precious-metals company says his Big Apple-based son-in-law stole 10 Swiss gold ingots, worth $150,000, from a company safe deposit box.
Sprott Money founder Eric Sprott is suing Neal Cabot Ohm, a Midtown commercial real-estate broker, for “willful misconduct” by allegedly sneaking into his daughter’s HSBC bank box after she filed for divorce.
According to the Manhattan federal suit filed Wednesday, Sprott’s daughter, Larissa, the company president, set up the box in April 2011, after buying the ingots for the company.
Eric Sprott alleges Ohm accessed the box in August 2015, two months after the couple split, and moved the gold to an undisclosed location, claiming the ingots are a gift to him. In addition to the return of the gold, Sprott is suing for unspecified damages.
The above four paragraphs are all there is to this brief news item that appeared on The New York Post‘s website at 12:59 a.m. EDT on Thursday morning. I thank subscriber Colin Porter for passing it around yesterday.
Russia’s Adding Another 200 Tonnes of Gold to Its Treasury and Here’s Why
Russia plans to stock up on about 200 tonnes of gold this year, nearly matching the 208 tonnes it purchased in 2015. That’s according to Anton Navoi, the deputy head of the statistics department at the Russian Central Bank. Navoi explained that it’s profitable for the state to buy the precious metal, since Russia is a world leader in its production.Speaking at a conference on Wednesday, the official said that “last year, the Central Bank purchased 208 tonnes of gold. This year, it will purchase around 200 tonnes.”
Gold currently accounts for around 16 percent of the country’s foreign exchange reserves, Navoi noted. And while there is no directed effort to increase the precious metal’s share in Russia’s reserves, it seems likely to happen, as the purchase of gold is profitable for the country. “The Central Bank is buying gold because it is profitable. We are a country that is third in the world in terms of gold production, and we have the ability to buy it using our national currency, in contrast to other countries, which do not have such an opportunity,” the banker concluded.
This gold-related story showed up on the sputniknews.com Internet site at 1:31 p.m. Moscow time on their Thursday afternoon, which was 5:31 a.m. in New York — EDT plus 8 hours. I thank ‘aurora’ for sending it — and another link to it is here.
Alasdair Macleod: America is on a slippery slope
In early September, when President Obama landed at Hangzhoi for the G-20 summit in early September, the CIA security men were told in no uncertain terms by the Chinese that they were not in charge of landing arrangements, and that the President would disembark by the rear exit. It had the hallmarks of a calculated snub, as did the obligatory photograph of the world’s leaders, where the President was placed firmly on the far left, and not near the centre, which is customary.
Barak Obama suffered a further indignity, when ahead of his visit to Laos the following week, the new Philippine President, Rodrigo Duterte, referred to him as “a son of a whore”. The official meeting between the two was cancelled, though they did meet privately. So not only are ordinary Americans showing signs of rebelling against the status quo at home, but foreigners, some of them very important, are as well.
What follows is an assessment of today’s geopolitical situation, based on a mixture of obtainable facts, background information, informed opinions, and reasoned deduction. Guesswork, eliminated as much as possible, is inevitably involved, particularly in assessing outcomes. The conclusions are not something anyone in the deep states of America and elsewhere will admit to or endorse, which paradoxically gives this article its importance.
This article assesses the failing American empire and the current state of the global power-play between China and Russia on one side, and America on the other. It summarises the importance of gold which is central to China’s financial strategy, and concludes that America is likely to be an accumulator of bullion, for strategic if not monetary reasons. It also looks at the challenges the top three major currencies will face next year, in the context of geopolitical developments to date.
This longish commentary by Alasdair is definitely worth reading — and it was posted on the goldmoney.com Internet site yesterday. I thank Peter Holland for bringing it to our attention — and another link to it is here.
The PHOTOS and the FUNNIES
I was out at the pond briefly yesterday. Saw one of the common mergansers, plus the white-fronted/speckled goose, both of which you’ve already seen more than enough photos of. I normally don’t waste my time with Canada geese any more, but a small flock flew up directly in front of me — and even though my camera wasn’t set up in the ‘birds-in-flight’ mode, I managed to lock focus and squeeze off this shot — and though it worth sharing. I didn’t have to crop it by much — and the Click/Double Click to Enlarge feature really helps here — and shows what incredible flying machines these birds are.
The WRAP
The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. — Ernest Hemingway
‘Da boyz’ set a new intraday low in gold by just a bit yesterday — and that was all. Looking at the 6-month gold and silver charts below, I get the feeling that we’re in some sort of holding pattern. But for what reason I don’t know.
Every day I get up and see that gold isn’t down $50 or so — and silver down a buck and change — I wonder what they’re waiting for. Like Ted Butler, I’m not sure if JPMorgan et al are in control, or just hanging on by their proverbial fingernails. I doubt that the big banks in the Big 8 commercial traders are sweating much, but it’s the other players in that group, plus some of the raptors [the commercial traders other than the Big 8] that would be financially overstretched at the moment.
All we can do is sit and wait and see what happens.
Here are the 6-month charts for all four precious metals — and there’s not much to see.
And as I type this paragraph, the London open is less than ten minutes away — and I note that gold rallied a bit until exactly 10:00 a.m. China Standard Time — and by noon over there, half those tiny gains had disappeared. Then it began to rally anew — and is up $3.20 an ounce. Silver hasn’t been doing much in Far East trading on their Friday — and is sitting right at unchanged. Platinum and palladium are up 4 and 3 dollars an ounce respectively at the moment, but off their current highs by a few bucks.
Net HFT gold volume is just over 27,500 contracts — and that number in silver is around 6,600 contracts. The dollar index has been chopping around unchanged throughout the Far East trading session — and that’s where it sits as London opens…unchanged.
Today we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday. Silver analyst Ted Butler mentioned in his Wednesday column that “I would now estimate that Friday’s COT report will indicate a reduction in the total commercial short position of around 25,000 contracts in gold and around 7000 contracts in silver. Complicating any COT predictions this week is the possibility of actual reporting or compilation delays since [Tuesday’s] active trading ended the reporting week.“
As for myself, I’m not prepared to hazard a guess. As Ted said in the last sentence, there were “complications” with this prediction. So I shall, as Abraham Lincoln once said…”remain silent and be thought a fool, than to speak and remove all doubt.“
And not to forgotten is the fact that today is the day that the Chines yuan is added to the currencies that determines the value of the IMF’s Special Drawing Rights — the new world currency. Then there’s the IMF meeting next week — and it will be ‘game on’ for it after that. It will be interesting to see how quickly they start running the SDR printing press.
And as I post today’s column on the website at 4:00 a.m. EDT, I see that gold is up $5.10 the ounce now that London and Zurich have been trading for an hour — and silver is still sitting at unchanged. Platinum and palladium are still off their pre-Zurich-open highs — and are up 2 dollars and 1 dollars respectively, which is about the same amount they were up an hour ago.
Net HFT gold volume has risen to just over 33,000 contracts — and that number in silver is now up to 7,500 contracts, with a decent chunk of roll-overs into the March 2017 contract already. The dollar index hit its current 95.47 low tick around 2:25 p.m. in Shanghai, which was thirty-five minutes before the London open — and has rallied sharply since then — and is currently up 22 basis points from Thursday’s close.
Today is Friday, the last day of the month — and the third quarter. As I said in my Thursday column, nothing will surprise me in the precious metal market when I check the charts later this morning.
Enjoy your weekend — and I’ll see you here tomorrow.
Ed
The post Thursday: Another Day Where Nothing Was Resolved appeared first on Ed Steer's Gold and Silver Digest.