01 November 2016 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
How can it be November already???
The gold price jumped a small handful of dollars right out of the chute at 6:00 p.m. EDT on Sunday evening in New York. The price got capped within fifteen minutes or so — and that was it. There was a bit of down-side pressure starting shortly before London opened on their Monday morning, with the low of the day…if you wish to dignify it with that name…coming right at the COMEX close. From that point it ‘rallied’ back above unchanged until 4 p.m. EDT — and didn’t do a lot after that.
Once again, the low and high price ticks aren’t worth looking up.
Gold finished the Monday session in New York at $1,277.00 spot, up $2.30 from its close on Friday. Net volume was very quiet for most of the day, but picked up a bit as the COMEX trading session moved along. It checked in at just under 109,000 contracts.
Silver made several rally attempts during the Far East trading session, but as you can tell from a cursory glance of the Kitco charts below, the ‘Do Not Pass Go’ sign was put up at the $17.88 spot level starting shortly after 12 o’clock noon China Standard Time on their Monday. Around 2:20 p.m. over there, the usual sell-off began — and silver’s low tick of the day came about 12:40 p.m. BST in London, which was about forty minutes before the COMEX opened for business in New York. The price rallied a few pennies from there, before chopping quietly sideways until around 3 p.m. EDT in the thinly-traded after-hours market. Then it rallied sharply, only to run into the $17.88 spot ‘Do Not Pass Go’ sign about an hour later for the second time during the Monday trading session. The price didn’t do much after that.
The low and high ticks in this precious metal aren’t worth looking up, either.
Silver was closed in New York yesterday at $17.87 spot, up 14.5 cents on the day. Net volume, which had been ultra-quiet until the COMEX open, blew out to just over 42,500 contracts by the end of the day.
The platinum price action was a mini version of what happened in gold. The $971 spot low tick came at 1 p.m. in New York — and it rallied back into positive territory by the 5:00 p.m. EDT close, finishing the Monday session at $980 spot — up 3 dollars on the day.
Palladium traded in negative territory for virtually the entire Monday session. It’s $609 low tick came shortly before the Zurich close, which was shortly before 11 a.m. in New York. Then, with some obvious price resistance after that, it rallied back to unchanged by the end of the the day, which was $619 spot.
The dollar index closed very late on Friday afternoon in New York at 98.31 — and didn’t do much once trading began at 1:00 p.m. EDT on Sunday afternoon. Then shortly after 6:00 p.m. on Sunday evening, it began to chop quietly higher, with Monday’s 98.70 high tick coming around 11:30 a.m. in New York. At 11:50 a.m. it shed 20 basis point in less than thirty minutes — and continued to chop lower until about 4:20 p.m. EDT in after-hours trading. It rallied a handful of basis points from there, finishing the Monday session at 98.36 — and down 5 basis points from its close on Friday. Here’s the 3-day U.S. dollar index chart so you can see yesterday’s price action in some context.
And, as usual, here’s the 6-month U.S. dollar index chart and, as usual, you can read into it whatever you wish.
The gold stocks opened unchanged, but began to head higher almost right away — and they finished almost on their respective high ticks, as the HUI closed up a decent 2.53 percent.
It was mostly the same for the silver equities, but they didn’t fare quite as well as their golden brethren, closing up only 1.73 percent. Click to enlarge if necessary.
The CME Daily Delivery Report showed that 13 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. The only short/issuer was F.C. Stone — and Canada’s Scotiabank stopped all of them.
The CME Preliminary Report for the Monday trading session showed that gold open interest in November fell by 899 contracts, leaving 475 still around. Friday’s First Day Notice numbers showed that 875 gold contracts were actually posted for delivery today, so that means that 899-875=24 short/issuers in gold were let off the delivery hook by the long/stoppers that held the other side of their transactions. November o.i. in silver declined by 337 contracts, leaving just 9 left open. Friday’s First Day Notice numbers showed that 338 silver contracts are actually posted for delivery today, so that indicates that 338-337=1 lonely silver contract was added to the November delivery month.
For the second day in a row there were no reported changes in either GLD or SLV.
The good folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of trading on Friday, October 28 — and this is what they had to report. Their gold ETF added 2,636 troy ounces — and their silver ETF increased by a fairly decent 211,200 troy ounces.
There was another sales report from the U.S. Mint on the final business day in October. They sold 7,500 troy ounces of gold eagles — 3,000 one-ounce 24K gold buffaloes — plus 150,000 silver eagles.
For the month, the mint sold 116,000 troy ounces of gold eagles — 28,500 one-ounce 24K gold buffaloes — and 3,825,000 silver eagles.
As a comparison, the mint sold 58,500 gold eagles…9,000 gold buffaloes…and 1,280,000 silver eagles in August. Those numbers in September were 94,000…17,500…and 1,675,000 respectively. So you can see that sales in October were up substantially over the prior two months.
I’ll steal two sentences from Ted Butler’s weekly review regarding his comments on silver eagles sales — and here they are: “Silver Eagle sales are such that I can’t tell if JPM has returned in force and my sense is that the bank may be laying off a bit to avoid being identified as the big buyer. After all, JPMorgan has just about completely hoodwinked everyone in its silver acquisition via the COMEX and, particularly, through the SLV, so why make it more obvious by buying all the Silver Eagles it is capable of buying as well?“
There was very little activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday. Brink’s, Inc. reported receiving 192 troy ounces — and that was it. I won’t bother linking this activity.
It was much busier in silver, as 610,140 troy ounces were received — and 624,745 troy ounces were shipped out. With the exception of 10,017 troy ounces deposited at Brink’s, Inc…the rest of the ‘in’ amount was at CNT. All of the ‘out’ activity was at Delaware. A link to all this action is here.
It was very quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday. They reported receiving 293 kilobars — and shipped 787 of them out the door for parts unknown. All of the activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.
Here’s a chart that Nick Laird passed around on Saturday night. It shows how much gold was shipped out of the Federal Reserve Bank of New York — and back to their rightful owners overseas during the month of September. During that month, they shipped out 5.894 tonnes of the stuff. Click to enlarge.
I have a decent number of stories for you today — and I’ll happily leave the final edit up to you.
CRITICAL READS
Asset Managers Bleed $50 Billion as Industry Crisis Deepens
The business of picking stocks and bonds for clients is getting smaller by the day.
Seven top asset managers this week reported a total of $50 billion in third-quarter net redemptions, most of it from active funds, company filings show. The biggest losers: Franklin Resources Inc. with $22.1 billion, AllianceBernstein with $15.3 billion and Waddell & Reed Financial Inc. at $4.9 billion.
In the second quarter, that group of seven saw $34 billion in outflows. The tally is further evidence that investors, frustrated with high fees and mediocre performance of actively managed funds, are increasingly casting them off for low-cost passive investments. In the 12 months ended Sept. 30, active funds had redemptions of $295 billion while passive took in $454 billion, according to data from Morningstar Inc.
“The shift from active to passive is an accelerating secular trend,” said Benjamin Phillips, a principal with the consulting firm Casey Quirk by Deloitte. “It is not going away.”
This Bloomberg news item showed up on their Internet site at 8:34 a.m. Denver time on Friday morning — and it comes to us courtesy of Swedish subscriber Patrik Ekdahl. Another link to this article is here.
Banks Are Hoarding $2.4 Trillion of Bonds [as BoA Leads Stampede]
If the world’s biggest economy is really on the upswing, then why are America’s banks stockpiling a record amount of ultra-safe bonds?
After all, jobs are back, the Federal Reserve is close to raising interest rates again and growth has perked up after a sluggish first half. But instead of ramping up lending to keep up with deposits, banks are plowing into U.S. government and related debt at the fastest clip since 2014.
The easy answer, of course, has to do with post-crisis financial regulations, which were designed to curb risk-taking and have compelled banks to hold more high-quality assets. Yet in many ways, the buildup reflects a more worrying sign. In the past year, more loan officers at large and midsize banks have tightened credit to businesses than at any time since 2009, when the U.S. was still reeling from the housing bust. Americans are also saving more rather than taking on extra debt, damping demand for new loans.
Though it’s hard to say whether that means the seven-year-long U.S. expansion may be closer to an end than the upbeat data suggest, the demand for bonds is welcome news for investors buffeted by the biggest monthly selloff since 2010.
“Banks continue to buy Treasuries as we move further through the economic cycle,” said Jeff Caughron, chief operating officer at Oklahoma City-based Baker Group, which advises community banks with over $45 billion in investments. And there are just “fewer good loans out there to be made.”
Well, dear reader, you should carefully note that when you click on the link, the words “as BoA Leads Stampede” have been deliberately removed from the headline, but they’re included in the link/URL to the story. I’ve added them back in, in the headline above. This Bloomberg story comes courtesy of Brad Robertson, via Zero Hedge. It was posted on their website at 5:00 p.m. Denver time on Sunday afternoon — and another link to it is here.
Jim Grant: Hey Fed, Enough Is Enough!
Well-known Wall Street pundit and Fed critic Jim Grant doesn’t want the academics running the show anymore — one of his main message at this year’s New Orleans Investment Conference. Grant said he remains a gold bug in this environment where PhD academics are running the global economy.
The video interview runs for 7:17 minutes — and it was posted on the kitco.com Internet site on Friday — and is definitely worth watching.
Doug Casey: The most important U.S. election in history
With the presidential vote less than two weeks away, famed investor Doug Casey says this election is probably a lot more important than the American people think. “This is probably the most important election in American history since the Civil War, since the one that put Lincoln in office.” Casey also said he thinks the polls are off, calling for Republican candidate Donald Trump to win the popular vote by a landslide.
This 6:01 minute video clip showed up on the kitco.com Internet site last Thursday — and it’s worth watching as well.
The Clintons are a “crime family“: ex-FBI big
A high-ranking FBI official talked of La Cosa Clinton on Sunday — as he placed the Democratic political family in the same category as the Gambinos, Colombos and Luccheses.
“The Clintons, that’s a crime family,” declared former New York FBI chief James Kallstrom in a radio interview.
“It’s like organized crime, basically. The Clinton Foundation is a cesspool.”
He echoed many of GOP presidential candidate Donald Trump’s talking points as he described the Clintons as dishonest, greedy and scheming, during the interview with supermarket billionaire John Catsimatidis on AM970.
“It’s just outrageous how Hillary Clinton sold her office for money,” said Kallstrom, who has long been a critic of the Clintons and President Obama. “And she’s a pathological liar, and she’s always been a liar. And God forbid if we put someone like that in the White House.”
This news item was posted on The New York Post website at 10:04 a.m. EDT on Sunday morning — and it’s something I found in yesterday’s edition of the King Report. Another link to this story is here.
Can The American People Defeat the Oligarchy That Rules Them? — Paul Craig Roberts
Hillary’s standing in the polls is based on the pollsters over-weighting Hillary supporters in the polls. It is easy to produce a favorite if you overweight their supporters in the poll questions. If you look at the crowds attending the two candidate’s public appearances, it is clear that the American people prefer Donald Trump, who is opposed to war with Russia and China. The election settles no greater issue.
This has the ruling American Oligarcy, for which Hillary is the total servant, concerned. What are they going to do about Trump? Will his fate be the same as John F. Kennedy, Robert Kennedy, Martin Luther King, George Wallace? Time will tell. Or will a hotel maid appear at the last minute in the way that the Oligarchy got rid of Dominic Strauss-Kahn?
All of the American and Western feminists, progressives, and left-wing remnant fell for the obvious frame-up of Strauss-Kahn. After Strauss-Kahn was blocked from the Presidency of France and resigned as Director of the IMF, the New York authorities had to drop all charges against Strauss-Kahn. But Washington had succeeded in putting its French vassal, Sarkozy, in the presidency of France.
This is how the American Oligarchy destroys those it suspects might not serve its interests. The corrupt self-serving Oligarchy makes sure that it owns the government and the media, the think tanks and increasingly all of the major universities, and, of course, through the presstitutes, Americans’ minds.
The Oligarchs are now hard-pressed to rescue Hillary as U.S. president, so let’s see if the Oligarchs can once again deceive the insouciant American people.
This commentary by Paul was posted on his website yesterday sometime — and it’s definitely worth reading. I thank Roy Stephens for sharing it with us — and another link to it is here.
We Risk Being Collateral Damage in the Neocon Lust For War — Chris Martenson
The winds of change are now swirling so rapidly that it’s hard to make sense of what’s happening. And adding to the confusion is an all-out effort by the establishment to convince the masses that, despite the multiplying signs of instability, “everything is fine”.
The deceptions surrounding us are now constant and impossible to avoid. How much longer will it take until a critical mass of the populace starts to see through the delusion?
The stock and bond markets are rigged by central banks and their allies to go ever higher, enriching an elite few at the expense of everyone else. The mainstream media over-reports the inconsequential, and under-reports the most important things. It’s truly astonishing what is not being reported on, presumably in an effort to minimize attention on some really important matters (Yemen, Russia’s increasing concerns over western actions, Wikileaks on HRC, etc).
If it all weren’t so serious, it would be humorous because the chicanery is now so over-the-top obvious.
This looongish commentary, which will also be in my Saturday missive, is certainly worth reading — and that’s why I’m not waiting until then to post it. But this article is only Part 1 of the whole essay — and if you want to read the rest, you have to “enroll” for Part 2 — although there is a free executive summary. This was posted on the burningplatform.com Internet site on Sunday sometime — and another link to it is here. I thank reader U.D. for passing it around on Sunday night.
Viva la Revolución? — Jeff Thomas
So let’s take a thumbnail view of revolutions. The premise behind the desire for revolution is always the same – a segment of the population feels that the government (and very possibly their cohorts) have become oppressive and should be overthrown. When the history is written by the victors, they will endeavour to create the impression that the entire population rose up; however, this is never the case. A dissatisfied minority succeeded in taking over.
In Russia in 1917, a relatively small number of people overthrew the aristocracy and were then faced with the problem of taking over. They had no experience in this and didn’t know where to begin. Enter Leon Trotsky and Vladimir Lenin, who had little to do with the revolution itself but, through funding from London and New York banks, were able to pay the Russian military and police to establish order, to a cursory degree. Once this was achieved, they used the military and police to establish order to a ruthless degree. (Not exactly saving the little man from the oppression of the aristocracy.) As Mister Lenin himself said,
“One man with a gun can control one hundred without one.”
In the aforementioned France in 1789, the aristocracy was overthrown by a relatively small number of revolutionaries, and, again, the victors had no real experience in running a country. Enter Maximilien Robespierre, a lawyer with a flair for control and a contempt for the hoi polloi. However, he was good at rhetoric, and the people cheered as he lopped off heads. This in spite of the fact that he most certainly did not deliver “freedom” to the French people, only the illusion of it. As he himself stated,
“The secret of freedom lies in educating people, whereas the secret of tyranny is in keeping them ignorant.”
This very interesting commentary by Jeff put in an appearance on the internationalman.com Internet site yesterday — and it’s worth reading. Another link to it is here.
Huge Inflation Coming With Coming Economic Meltdown — Jim Rickards
This 31:06 minute video interview with Greg Hunter was posted on the youtube.com Internet site sometime yesterday — and I thank Roy Stephens for pointing it out.
It’s on the longish side for a weekday column — and if you don’t have time for it now, I’ll be posting it in my Saturday column as well.
Venezuelans Give Up on Counting Piles of Cash and Start Weighing Them
At a delicatessen counter in eastern Caracas, Humberto Gonzalez removes slices of salty white cheese from his scale and replaces them with a stack of bolivar notes handed over by his customer. The currency is so devalued and each purchase requires so many bills that instead of counting, he weighs them.
“It’s sad,” Gonzalez says. “At this point, I think the cheese is worth more.”
It’s also one of the clearest signs yet that hyperinflation could be taking hold in a country that refuses to publish consumer-price data on a regular basis. Cash-weighing isn’t seen everywhere but is increasing, echoing scenes from some of the past century’s most-chaotic hyperinflation episodes: Post-World War I Germany, Yugoslavia in the 1990s and Zimbabwe a decade ago.
“When they start weighing cash, it’s a sign of runaway inflation,” said Jesus Casique, financial director of Capital Market Finance, a consulting firm. “But Venezuelans don’t know just how bad it is because the government refuses to publish figures.”
Once one of the world’s strongest currencies, the bolivar has been reduced to a nuisance. Basic purchases require hundreds of bills. Shoppers shove piles of them into gym bags before venturing into crime-plagued streets and shopkeepers stash thousands in boxes and overflowing drawers. In the absence of official data, economists are left to guess what the inflation rate is. Estimates for this year range from 200 percent to 1,500 percent.
This Bloomberg news item appeared on their Internet site at 3:00 a.m. MDT on Monday morning — and I thank Roy Stephens for sending it our way — and it came from a Zero Hedge piece he sent. Another link to this Bloomberg story is here.
Apple hikes U.K. computer prices by around 20%
In the latest blow to U.K. shoppers since the decision to leave the European Union saw the pound start to slide, the computer-maker began charging £2,999 for its Mac Pro desktop.
This is an increase of 20% from £2,499 earlier in the week.
The prices were changed as Apple revealed a revamped MacBook Pro on Thursday, adding a fingerprint reader, and replacing function keys with a small touch screen.
The 12in MacBook Air went up by 19% from £1,049 to £1,249, the 13in from £999 to £1,249 and the 15in from £1,599 to £1,899.
On its desktop line, the Mac mini had been £399 before the launch but £479 afterwards – a difference of 20% – while the cheapest iMac 4k went from £1,199 to £1,449 – an increase of 21%.
The above five paragraphs are all there is to this brief news item that appeared on the sky.com Internet site on Friday afternoon BST — and it’s another contribution from Patrik Ekdahl.
Europe’s Bond Rout Unlocks $635 Billion of Debt for ECB Buying
The sell off in euro region bonds this month has delivered a boost of more than €580 billion ($635 billion) to the European Central Bank’s asset-purchase program.
That’s the amount of quantitative-easing eligible bonds that have seen their yield cross above the central bank’s minus 0.4 percent deposit rate in October through Thursday, passing through the threshold for purchases. At the start of the month, almost a third of the securities that comprise the Bloomberg Eurozone Sovereign Bond Index were off limits under this criteria.
This exacerbated investor concern that President Mario Draghi’s quantitative-easing plan was running out of wiggle room, especially in core-European bonds such as Germany, where the scarcity levels were most pronounced.
“The rise in yields means the supply constraints are being alleviated,” said Richard McGuire, head of rates strategy at Rabobank International in London. This is mostly true in “terms of the ECB being able to access core bonds, which is where supply issues are most acute.”
This Bloomberg article put in an appearance on their website at 12:00 a.m. MDT on Saturday — and it’s the third offering of the day from Patrik Ekdahl. Another link to this news item is here.
World to face stress test as dollar LIBOR spikes and bond rout deepens — Ambrose Evans-Pritchard
Surging rates on dollar LIBOR contracts are rapidly tightening conditions across large parts of the global economy, incubating stress in the credit markets and ultimately threatening overvalued bourses.
Three-month LIBOR rates — the benchmark cost of short-term borrowing for the international system — have tripled this year to 0.88 percent as inflation worries mount.
Fear that the U.S. Federal Reserve may have to raise rates uncomfortably fast is leading to an increasingly acute dollar shortage, draining global liquidity.
“The LIBOR rate is one of the few instruments left that still moves freely and is priced by market forces. It is effectively telling us that that the Fed is already two hikes behind the curve,” said Steen Jakobsen from Saxo Bank.
This commentary by Ambrose appeared on the telegraph.co.uk Internet site at 9:39 p.m. BST on Sunday evening, which was 4:39 p.m. EDT — and it’s certainly worth reading. I found it embedded in a GATA release — and another link to it is here.
Gold is Going to Play a Role in a New Monetary System — Koos Jansen
The Netherlands financial newspaper Het Financieel Dagblad, which translates to “The Financial Times” but isn’t the London-based paper that spews so much disinformation about gold, has interviewed gold researcher Koos Jansen.
He predicts that gold will be a part of a new world financial system and notes that he is pressing the Netherlands central bank to be transparent about its gold reserves.
This very brief interview can be read in English at the bullionstar.com Internet site. It was posted there on Saturday — and it’s another gold-related story that I found on the gata.org Internet site. Another link to it is here.
Gold, Jewellery Sales Spurt Up to 30% on Dhanteras
Gold and jewellery sales were up 30 per cent this Dhanteras, with jewellers across the country recording brisk business on the auspicious day on the back of favorable price and a good monsoon.
Dhanteras is considered to be an auspicious day for buying gold, silver and other valuables and is largely celebrated in North and West India.
P N Gadgil Jewellers Managing Director Saurabh Gadgil told PTI that good monsoon, pent up demand of the first half of this year which was affected by jewellers’ strike, stable gold prices and long weekend were mainly responsible for the positive consumer demand.
World Gold Council (WGC) MD Somasundaram PR said, “The physical demand is good with good footfalls, which is 30-50 per cent more than last year during this Dhanteras.
“Consumers are back in the market and retailers are all geared up to meet this demand. The level of activity only shows that things have come back to normal in trade as well as at the consumer level,” he said.
This Press Trust of India news item showed up on the ndtv.com Internet site on Saturday — and it’s an item that I found on the Sharps Pixley website very late last night Denver time. Another link to it is here.
China links gold market with Dubai
SGE, world largest physical bullion exchange, says in other talks about similar cooperation
Shanghai Gold Exchange and Dubai Gold and Commodities Exchange signed an agreement on Friday in Shanghai which makes the DGCX the first foreign exchange to use the SGE’s renminbi-denominated gold benchmark.
The SGE is in talks with other exchanges about similar cooperation, according to an SGE circular.
SGE is the world’s largest physical bullion exchange. The renminbi-denominated gold benchmark, also known as Shanghai Gold was launched in April this year. It is one of China’s efforts to earn more say over pricing of the precious metal and increase its influence in the global gold market.
China is among the world’s largest producers, consumers and importers of gold, and it deserves pricing power that matches its position. It should have more say in an industry long dominated by London, which sets global spot prices, said analysts.
This news item was posted on the chinadaily.com.cn Internet site on Saturday morning China Standard Time — and it’s another story I found embedded in a GATA release yesterday. Another link to it is here.
The PHOTOS and the FUNNIES
The WRAP
There’s certainly not much to be said about yesterday’s price action in either gold or silver, as they both continue to crawl along at, in the case of gold…or just above, in the case of silver, their respective 200-day moving averages. It seems like both precious metals have been more or less in lock-down mode for the last three weeks — and I’m assuming, unless a black swan appears, that it will remain this way until after the U.S. presidential election next week. But I wouldn’t bet the ranch on that.
Here are the 6-month charts for all four precious metals — and the above facts are more than obvious — and I’ve pointed them out before.
And as I type this paragraph, the London open is less than ten minutes away — and I see that all four precious metals didn’t do much in Far East trading on their Tuesday. But that ended shortly before 2 p.m. China Standard Time when all four jumped up by a bit. But, of course, they all got capped before the rallies could develop into anything. Gold is currently up $2.20 an ounce, silver is up 6 cents at the moment — and platinum and palladium are up 2 dollars and 5 dollars respectively.
Net HFT volume in gold is just under 19,000 contracts, which is pretty light — and in silver, that number is just under 7,900 contracts. These aren’t big volumes at all, so nothing much should be read into the last hour’s price action, at least for the moment. The dollar index rallied about 10 basis points by noon CST — and has been edging lower since — and is up 8 basis points as London opens.
Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and Friday is also the day we get the new Bank Participation Report, which is data extracted directly from the COT Report itself. For this one day a month we get to see what the banks, both U.S. and foreign, are up to in the precious metal markets. I’ll have all of that in my Saturday column, which is always my biggest missive of the month.
Other than that, I have nothing much to add to what happened on Monday as we just sit here and await developments.
And as I post today’s column on the website at 4:00 a.m. EDT — I note that all four precious metal haven’t done much during the first hour of London/Zurich trading — and are all basically unchanged from when I reported on them an hour ago.
Net HFT gold volume is now up 22,000 contracts — and that number in silver is 8,600 contracts. Still nothing to see at the moment. The dollar index continues to chop quietly and unsteadily lower, but is now down 3 basis points, from up 10 basis points earlier.
That’s all I have for today — and I’ll see you here tomorrow.
Ed
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