11 November 2016 — Friday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price wandered generally higher in Far East trading on their Thursday — and by the time that London opened, it was up around 4 bucks or so. It was up 11 dollars an hour later, but shortly after that, ‘da boyz’ began to pick away at the price — and it was downhill for most of the remainder of the Thursday session, with the low tick of the day set around 3:35 p.m. EST in the not-so-thinly-traded after-hours market. It rallied a bit from there into the 5:00 p.m. close.
The high and low tick were reported as $1,292.50 and $1,251.90 in the December contract, which was an intraday move of a bit over 41 dollars.
Gold was closed yesterday at $1,258.60 spot, down $19.60 from Wednesday. Net volume was sky-high once again at around 345,000 contracts.
And here’s the 5-minute gold tick chart courtesy of Brad Robertson once again. The stand-out features are the two big 10,000+ contract volume spikes associated with the quick sell-off between 9:25 and 9:45 a.m. EST yesterday morning in New York, which is 07:25 and 07:45 Denver time on the chart below. For the second day in a row, there really wasn’t much in the way of ‘background’ volume, as it was elevated throughout the entire Thursday session.
The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST. The ‘click to enlarge‘ is a must for this chart.
The rally in the silver price in Far East trading yesterday was far more spirited — and the powers-that-be waiting until shortly before 9 a.m. in London before they put the kibosh on the price. At it high tick, it was up almost 45 cents the ounce. The engineered price decline from that juncture ended on the low tick of the day — and that occurred right at 10 a.m. EST in New York which, of course, was the London p.m. gold fix. From there it chopped generally higher before being capped at exactly 1 p.m. in New York. The price hung in there until around 2:20 p.m. in the after-hours market, with the final sell-off lasting until 4 p.m. EST — and then, like gold, rallied a bit into the close.
The high and low tick in this precious metal was reported as $18.99 and $18.38 in the December contract.
Silver finished the Thursday session in New York at $18.585 spot, up 13 cents on the day. Net volume was monstrous once again at a bit under 94,500 contracts. Roll-over volume out of December was pretty decent…as it was in gold.
Here’s the 5-minute tick chart for silver courtesy of Brad as well — and what it shows is that the high tick of the day actually occurred just before 10 a.m. in London — and because it was over so quickly, there’s hardly a trace of it on the Kitco chart just above. But the 5-minute chart locks it in place — and you can see the $18.99 high tick plain as day. Volume was heavy on the rally in Far East and early London trading — and then picked up on the engineered price decline as well, with the real heavy trading volume in New York coming to an very abrupt end at the COMEX close, which is 11:30 a.m. MST on the chart below.
Like the 5-minute gold tick chart, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST. The ‘click to enlarge‘ is a must here as well.
The platinum price chopped sideways a few bucks either side of unchanged — and its last rally about the $1,000 spot mark got met by JPMorgan et al at the same time as gold, shortly after 10 a.m. Zurich time/9 a.m. GMT in London. ‘Da boyz’ set the low tick at the London p.m. gold fix — and its 2-hour rally after that got sold down almost to its low of the day. Platinum was closed at $972 spot, down 17 bucks from Wednesday.
Palladium traded mostly sideways until 1 p.m. China Standard Time on their Thursday — and then it began chop quietly higher until it ran into a ceiling at the $695 spot mark. It bounced off that price a fair number of times during the New York lunch hour, before getting sold down about 9 bucks into the close. Palladium finished the Thursday session up another 10 dollars at $686 spot. It’s obvious from the Kitco chart below that its price rallies are being actively managed during the COMEX trading session over the last three days.
The dollar index closed very late on Wednesday afternoon in New York at 98.62 — and then sold off a bit until sometime after 9 a.m. China Standard Time on their Thursday morning. From that point, it didn’t do a lot until a smallish rally developed starting just a few minutes after 8:30 a.m. GMT in London. The index poked its nose above the 99.00 mark on two occasions…once just before 12:30 p.m. GMT — and there at the 10 a.m. EST London p.m. gold fix. By 2 p.m. in New York, it had shed about 30 basis points of its Thursday gains — and didn’t do a lot after that. The index finished the day at 98.82 — up 20 basis points from Wednesday’s close.
I’m using the 3-day chart from the folks at ino.com for the second day in a row, because the 24-hour chart doesn’t show Thursday’s dollar index move in any sort of context.
And here’s the 6-month U.S. dollar index chart — and the Almighty dollar/best looking horse in the glue factory continues its relentless ascent.
Some not-for-profit seller sold a boat load of gold shares right at the open on Thursday morning — and within fifteen minutes, the stocks were down over 5 percent. They traded pretty flat from there until 2:00 p.m. EDT — and at that point they began to head lower as the ‘da boyz’ leaned on the gold price for the final time, but finished just off their respective low ticks. The HUI was clobbered for 7.80 percent.
The same thoughtless seller showed up in the silver equities — and within the same 15 minute time period they were down over 7 percent — and from there they traded exactly the same as the gold equities. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index got hammered by 9.71 percent — and that’s despite the fact that the silver price was up more than a decent amount all day long in New York. Click to enlarge if necessary.
The CME Daily Delivery Report showed that 19 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday. Goldman issued 18 out of its client account — and the two largest long/stoppers were Scotiabank and ADM with 10 and 8 contracts respectively.
The CME Preliminary Report for the Thursday trading session showed that gold open interest in the November delivery month rose by 11 contracts, leaving 36 still open, minus the 19 mentioned above. Wednesday’s Daily Delivery Report showed that 6 gold contracts were posted for delivery today, so that means that 6+11=17 gold contracts were added to the November delivery month. Silver o.i. for November was unchanged at 94 contracts — and since no silver contracts were posted for delivery today according to Wednesday’s Daily Delivery Report, that works out just as it should.
I should mention the fact that Wednesday’s Preliminary Report, which I said was posted garbled on their website in the wee hours of yesterday morning, was fixed by the time everyone got to work in New York later. When the final report was posted on the CME’s website late yesterday morning it showed that open interest in gold had actually declined by 4,042 contracts — and silver’s o.i. was down 217 contracts as well. After gold and silver’s astronomical volumes on Tuesday night and Wednesday, to see open interest actually down on the day in both precious metals, was an amazing sight for both Ted and myself.
In yesterday’s Wrap section, I said I was prepared to bet $10 that there would be massive deterioration in the short positions of both gold and silver based on the volume and price action, because the Wednesday’s Preliminary Report data wasn’t available. This report proved me wrong, at least on the face of it.
Of course these Preliminary Report numbers can be deceiving at times, as Ted has pointed out on numerous occasions, but it does give some sort of hint. However, we’ll have to wait for next Friday’s Commitment of Traders Report before we really know for sure.
After a very decent sized deposit into GLD on Wednesday, there was a huge withdrawal yesterday, as an authorized participant took out 429,060 troy ounces. I suspect that this was a conversion of shares for physical metal to prevent some entity [with the initials JPMorgan perhaps?] from exceeding SEC reporting requirements. I’ll run this thought by Ted later today — and see if he concurs. And after a deposit of almost a million ounces into SLV on Wednesday, an a.p. took out 1,328,258 troy ounces on Thursday.
There was a tiny sales report from the U.S. Mint. They sold 2,000 one-ounce 24K gold buffaloes — and that was all.
After no in/out gold activity on Tuesday, there was only 324 troy ounces received at the COMEX-approved U.S. east coast depositories on Wednesday — and nothing was shipped out.
It was another big day in silver, as 3,429,931 troy ounces were reported received — and nothing was shipped out the door. Of the amount received, there was 2,732,259 troy ounces deposited at Brink’s, Inc. — and except for one good delivery bar into Delaware, the balance…696,683 troy ounces…ended up at Canada’s Scotiabank. The link to that action is here.
Once again there was very decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday, as 5,017 troy ounces were reported received — and another 642 were shipped out the door. All of this activity was at Brink’s, Inc. — and the link to that is here.
It was a very quiet news day once again — and I really had to look hard to find anything I thought worth posting.
CRITICAL READS
Trump promised to repeal Obamacare. Now what?
Republican President-elect Donald Trump vowed on the campaign trail to repeal Obamacare, but making good on that promise may be easier said than done.
President Barack Obama’s 2010 national healthcare reform law extended medical insurance to 25 million more people by expanding the Medicaid plan for the poor and creating subsidized coverage for individuals.
Republican lawmakers, who have voted more than 50 times to repeal all or part of the law, have begun pressing Trump to deliver. Senate Majority Leader Mitch McConnell said on Wednesday repealing Obamacare is a “pretty high item on our agenda” for the new Congress.
But a complete repeal of Obama’s Affordable Care Act may not be immediately in the cards, as Republican lawmakers now hold 51 seats in the Senate at latest count, well short of the 60 seats required to overturn it.
This Reuters article, filed from New York, appeared on their Internet site at 1:36 p.m. on Thursday afternoon EDT — and I thank Doug Clark for finding it for us. Another link to it is here.
Trump Said To Consider Jamie Dimon For Treasury Secretary; Dimon Not Interested
One week ago, when the prospect of a Trump presidency was “calculated” as being anywhere between 0% and 20% by so-called experts, we reported that Trump’s campaign finance chair, Goldman Sachs partner and Soros Fund management alum, Steven Mnuchin, was being positioned for something much larger as Donald Trump reportedly told his aides today that he wants Mnuchin to serve as his Treasury Secretary.
Now, according to CNBC, Trump has decided to expand beyond just Goldman alumni, and is allegedly considering JPMorgan CEO Jamie Dimon as the next U.S. Treasury Secretary.
Needless to say, we can only hope that this is an attempt to scare clicks by CNBC instead of the actual truth, because if Trump hopes that he can “drain a swamp” by hiring the swamp puppet master, he – and millions of his supporters – will be very disappointed.
As for Dimon, or Mnuchin, they will be delighted: as a reminder, as Hank Paulson demonstrated so well, the only reason why bankers become Treasury Secretaries, is to be allowed to sell all their corporate stock upon moving to public office, tax free.
That said, as CNBC also adds, Dimon passed on the opportunity: “In the wake of Donald Trump’s upset victory, advisors have floated the idea of naming Jamie Dimon as treasury secretary, according to two people familiar with the matter, but one of them added that the JPMorgan chief has said he would not be interested in the role.”
Wow! Please say it ain’t so! This Zero Hedge piece is based on a CNBC story. It was posted on their Internet site at 11:54 a.m. EST on Thursday — and I thank Brad Robertson for sending it along. Another link to it is here. A Reuters story on the same issue, headlined “Trump outreach to Dimon for Treasury job may fall on deaf ears” was embedded in a GATA released yesterday — and the link to that is here.
Trump’s Transition Team Pledges to Dismantle Dodd-Frank Act
President-elect Donald Trump is translating some of his populist campaign rhetoric into policy statements, including the contention that the Dodd-Frank Act should be scrapped because it has made Wall Street banks an even bigger threat to the nation’s economy and working families.
After the government’s answer to the 2008 financial crisis, the “big banks got bigger while community financial institutions have disappeared at a rate of one per day, and taxpayers remain on the hook for bailing out financial firms deemed ‘too big to fail,’” says a statement posted on Trump’s official transition website. “The Financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act and replace it with new policies to encourage economic growth and job creation.”
U.S. bank stocks climbed for a second straight day on Thursday as investors bet a Trump presidency will lead to less regulation and sideline industry critics in Congress led by Senator Elizabeth Warren.
This Bloomberg news item was posted on their Internet site at 12:07 p.m. Denver time on Thursday afternoon —and was updated about ninety minutes later. I found it on Doug Noland’s website — and another link to it is here.
Is your financial advisor using obsolete tools? — Dennis Miller
Historically, as you got older, a larger portion of your nest egg would be invested in quality bonds or Certificates of Deposit (CDs). These assets were considered bulletproof and provided income certainly.
If you had $100,000, you would buy five $20,000 bonds maturing a year apart; a process called laddering. When one matured, you would buy another five-year bond. You earned better interest and had good liquidity.
Today bonds are fraught with interest rate risk and/or reduction of value in the resale market. Should inflation occur, and interest rates rise accordingly, the investor must accept lower than market interest rates until maturity; or the value of the bond would drop if they try to resell it. Expect the share prices in a bond fund to drop also.
If a financial advisor tells you high rated bonds are not risky ask these questions. “Can you guarantee in the next 20-30 years we will not have Carter type inflation?” Can you guarantee interest rates will remain low?
The pre-2008 bond ladders were short term; you could hold them to maturity and then reinvest at higher interest rates. Today, yield-seeking investors are going to much longer maturities. You cannot reverse your position quickly or inexpensively.
This commentary by Dennis appeared on his website milleronthemoney.com yesterday — and another link to it is here.
Nigel Farage to be Donald Trump’s go-between amid claims Special Relationship with U.S. is faltering
Ministers will use Nigel Farage as an unofficial intermediary to build bridges with Donald Trump to ensure the “special relationship” does not falter in the wake of his election.
The Telegraph understands that ministers will be forced to seek Mr. Farage’s advice because they have no links to the President-elect’s inner circle.
Mrs. May spoke to Mr. Trump for the first time since his victory – but not until after he had spoken to the leaders of at least nine other nations.
Mr. Farage — who joined Mr. Trump on the campaign trail — told The Telegraph the relationship between Mr. Trump’s Republican Party and the Conservatives has “completely broken down“.
It is understood that Liam Fox, the International Trade Secretary who has links to the Republican Party, now intends to speak to Mr. Farage before attempting to hold talks with senior Trump advisers.
This article appeared on the telegraph.co.uk Internet site at 10:00 p.m. GMT on Wednesday evening, which was 5:00 p.m. in Washington — EST plus 5 hours. I thank Roy Stephens for finding it for us — and another link to it is here.
London’s Property Market Is ‘Tanking,’ Green’s Vernon Says
London’s real estate market, hurt by the Brexit vote, is “tanking by the day,” Green Property Chairman Stephen Vernon said.
The firm, which has closed its London office, is waiting for an opportunity to buy into the market at lower values, the 66-year-old said at a conference in Dublin. Vernon would consider buying a real estate company, raising a fund or buying a portfolio of assets in London, he said.
“It’s absolutely fantastic what’s going on,” said Vernon, who sold most of the firm’s properties in Ireland before values there crashed in 2008. A decision to re-enter the London market would be through a venture separate from Green Property and focus on commercial real estate, a spokesman for the investor said.
Office values in the City of London financial district fell the most in at least seven years in July after Britain voted to leave the European Union. Home prices in the U.K. capital fell for a fifth month in August, the worst streak since 2009, as higher taxes and the referendum result damped demand.
Well, dear reader, the story goes on to say that not only is the commercial real estate market in London in the dumpster, but so is residential. This Bloomberg item appeared on their Internet site at 7:12 a.m. MST on Thursday morning — and another link to it is here. I thank Swedish reader Patrik Ekdahl for sending it our way early Friday morning Europe time.
U.S. opposition to AIIB ‘strategic mistake’, says senior Trump adviser
A top adviser to U.S. president-elect Donald Trump has lashed out at the Obama administration’s opposition to China’s economic diplomacy, especially the decision to stay away from the Beijing-based Asian Infrastructure Investment Bank.
In an opinion piece in the South China Morning Post on Friday, James Woolsey, a senior adviser to Trump on national security and intelligence, called Washington’s spurning of the China-led multilateral lender “a strategic mistake” and expected a “much warmer” response from Trump to President Xi Jinping’s “One Belt, One Road” initiative.
The United States and Japan are the only two G7 countries that have not signed up to be AIIB members, a move viewed by Beijing as a sign of Washington’s mistrust of the Chinese government and its ambition to exert bigger regional influence.
Analysts said that if Trump backed U.S. membership of the AIIB and endorsed China’s efforts to revive trade routes along the ancient Silk Road, it would be a big sign of goodwill from Washington to Beijing to pave the way for future agreements.
Wang Huiyao, a director at the Centre for China and Globalisation, a think tank in Beijing, said: “China can invite the United States to join the AIIB after Trump’s inauguration.”
This news item put in an appearance on the South China Morning Post at 5:29 p.m. CST on their Thursday afternoon, which was 4:29 a.m. in Washington — EDT plus 13 hours — and was updated about six hours later. I thank Ellen Hoyt for sharing it with us — and another link to it is here.
Bond Bloodbath Continues: Soaring Inflation Expectations Spark Curve Carnage as Yuan Plunges
“I’ve never seen anything like it,” exclaimed one veteran bond trader shocked at the ongoing carnage across the global bond market. 10-year Treasury yields just topped 2.10% for the first time since January as inflation expectations explode higher post-Trump. Italian bonds are getting crushed, Bunds, Gilts, and JGBs all seeing yields spike as developed market bond yields hit 6-month highs and the US yield is at its steepest since 2015.
As Reuters notes, a key market measure of long-term U.S. inflation – the five-year, five-year forward – rose to 2.38 percent, its highest since July 2015. The European equivalent rose to a level last seen in late May at 1.4890 percent. “When we think through the possible implications of some of Trump’s proposals which have to do with increasing tariffs, the most immediate implication is increasing prices – which is inflation,” Michael Hasenstab, CIO of Templeton Global Macro, said in an emailed statement. The rise in yields also came after a poorly received U.S. 10-year auction on Wednesday, which has the lowest bid-to-cover since March 2009. Analysts said bond markets were also showing nerves over how an auction of 30-year U.S. bonds on Thursday would fare.
This Zero Hedge story is their spin on a Reuters piece — and it appeared on their website at 9:01 a.m. EST yesterday morning. I thank Richard Saler for finding it for us — and another link to it is here.
Druckenmiller: “I Sold All My Gold on the Night of the Election“
Just six months ago, Stanley Druckenmiller saw nothing but pain for the economy: in a presentation to the Sohn Conference in early May, the legendary Duquesne manager delivered what may have been his most bearish fire and brimstone sermon yet, and in fact according to some buysiders who were present, its somber mood and lack of faux optimism was downright apocalyptic. Druckenmiller said that while the Fed and policymakers have no endgame, markets do – hinting that one is rapidly approaching – and suggested that everyone should liquidate their equity holdings and buy a certain 5000 year old shiny asset, which as we reported previously, is Druckenmiller’s “largest currency allocation.”
Speaking to CNBC this morning on the topic of the post-Trump election economy, Stanley Druckenmiller appears to have flipped his entire worldview, and said that he is now “quite, quite optimistic” on the U.S. economy, following the election of President-elect Donald Trump. “It’s as hopeful as I’ve been in a long time.”
But even more notable was his statement that he is no longer a gold bug: “I sold all my gold on the night of the election.” Why? Because as he added “all the reasons I owned it for the last couple of years seem to be ending“, first and foremost his expectations that inflation is now set to spike, forcing money out of safe assets – like gold and Treasuries – and into the U.S. Dollar.
As a result of the Trump presidency, Druckenmiller said he now has a “large bet on economic growth. I’m short bonds, Bunds, Italian bonds, U.S. bonds.” The trade reflect his expectation of higher deficits, stronger growth. In other words, another surge in debt.
Well, this makes no sense to me, but if you want to hear what he said exactly, the link to the CNBC interview is embedded in this Zero Hedge story that was posted on their website at 9:51 a.m. on Thursday morning EDT — and it comes to us courtesy of Richard Saler. Another link to it it here.
Late-night buying in India parked huge amounts of rupees in gold
The first refuge of all those who wish to put their ill-gotten gains to good use remains gold, and this was proved once more on Tuesday. Jewellery stores in certain localities remained open beyond midnight, allowing large cash transactions.
Shortly after the prime minister’s announcement on demonetization, clients approached goldsmiths across South Mumbai, Malad, Kandivli, Borivli, Ghatkopar, and Mulund, as well as Kharghar and Panvel in Navi Mumbai, to buy large quantities of gold, albeit at a premium. The going rate was Rs 37,000-38,000 per 10 grams, although the official price was Rs 30,000-odd. Reportedly business in Malad’s Natraj Market lasted well into the night with gold rates shooting up to Rs 48,000 per 10 grams for a brief period.
This gold-related news item, filed from Mumbai, showed up on The Economic Times of India website at 7:29 a.m. IST on their Thursday morning — and I found this story on the gata.org Internet site. Another link to it is here.
India’s bank note ban to disrupt gold-smuggling business
India’s surprise move to abolish high-value bank notes has started to disrupt cash-based gold smuggling and should benefit official importers of the metal in the world’s second biggest consumer, industry officials said.
A drop in smuggling will allow banks and refiners to charge a premium over official local prices, which include a 10 percent import tax. For most of 2016 gold traded at a discount in India as smugglers undercut official importers.
Official importers welcomed Prime Minister Narendra Modi move this week to declare 500 and 1,000 rupee bills illegal and make them worthless for holders of unaccounted wealth.
Dealers charged a premium of up to $6 an ounce over official domestic prices on Thursday, compared to a discount of $3 an ounce last week.
“Smugglers grabbed market share by offering discounts,” said Surendra Mehta, the secretary of the India Bullion and Jewellers Association. “Now banks and refiners can claim back the business.”
This Reuters article, also filed from Mumbai, was posted on their Internet site at 11:57 p.m. IST on their Thursday afternoon — and it’s another gold-related news item that I found in a GATA release yesterday. Another link to it is here.
Bullion Star’s Torgny Persson explains fraud of bullion banking and its defense of fiat money system
In his address last month [October 19] to Bullion Star’s precious metals seminar in Singapore, the firm’s proprietor, Torgny Persson, gave a masterful description of the fraud of bullion banking — its manufacture of imaginary gold — and explained how this fraud is crucial to the defense of the fiat money system.
If only Persson could be invited to give the speech at mainstream financial conferences. It’s titled “Bullion Banking 101” and it was posted at Bullion Star’s internet site on Thursday sometime.
It’s longish, but certainly worth reading — and I thank Chris Powell for the above paragraphs of introduction. Another link to it is here — and if you don’t have time for it today, it will appear in my Saturday column as well.
Central Bank Gold Demand continues in Q3
Central banks added 81.7 tonnes to their gold reserves in the third quarter, bringing total purchases in the year-to-date to 271.1 tonnes. This was a fall from 168t purchased in the previous quarter. Much of this has gone unnoticed by the mainstream media, something which seems shortsighted given the monetary and geopolitical implications both this and recent elections results may lead to.
The World Gold Council described recent buying as a ‘more measured’ approach to previous years. Between Q3 2014 and Q3 2015 407.7t were purchased by central banks. The data was slightly skewed last year as China contributed their gold reserve data for the first time since 2009.
The World Gold Council and other mainstream analysts do not appear unduly worried about the fall in gold demand from central banks. The current geopolitical and economic environment provides an irrefutable argument for central banks, as well as investors, to hold gold.
“The case for gold remains compelling for reserve managers amid the prevalence of negative interest rate policies and diversification away from the US dollar” WGC, Q3 report.
This commentary by Jan Skoyles was posted on the goldcore.com Internet site yesterday — and another link to it is here.
The PHOTOS and the FUNNIES
The WRAP
For the third day in a row, gold has been closed below its 200-day moving average — and the interim day low tick on Thursday was about twenty bucks below it as well.
Without doubt, there was more Managed Money long selling and short buying during Thursday’s engineered price decline, but there’s no way of telling just how much there was — and there are still three reporting days left, including today, in the reporting week for next Friday’s Commitment of Traders Report. As I said in yesterday column, anything can happen between now and then — and it remains to be seen if JPMorgan et al will continue to press their advantage, as they’ve been able engineer four down days in a row, including election day.
Silver is a different story altogether as it’s still sitting at its 200-day moving average, with that moving average well over a dollar below yesterday’s New York close. But despite that fact, the Big 8 traders in silver were able to reduce their short positions in silver in last Friday’s COT Report — and Ted is hoping that they have been able to repeat that feat in today’s report…for positions held at the close of trading this past Tuesday.
Of course it’s what happened since Tuesday’s cut-off that’s all important, as many things can be hidden in the huge silver volumes [gold too] in the COMEX futures market over the last couple of days, including a further reduction in the short positions of the Big 8, but principally the ‘Big 1’ — JPMorgan. Whether or not that’s happened, is hidden from us — and that’s one of the reasons that next Friday’s COT Report looms large.
Here are the 6-month charts for all four precious metals, plus copper, once again — and you can read into the first four, whatever you wish. But the Managed Money traders in copper continue to go hog wild on the long side for the 14th trading day in a row — and JPMorgan et al continue to pick up the short side of those trades. And if you can use the past as prologue in copper like you can in the four precious metals, this will end very badly for the Managed Money traders at some point.
And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price was taken to a new low for this move down shortly after 10 a.m. China Standard Time on their Friday morning. It was up about 3 bucks by 3 p.m. in Shanghai, but has sold off and is down $1.50 the ounce at the moment. It was the same price pattern in silver — and up until about thirty minutes before the London open, it was up about 20 cents the ounce, but is only up 4 cents now. Platinum followed the same general price path as gold, complete with 10:15 a.m. CST low tick — and it’s tiny gain vanished at the same time as silver was sold lower — and is back at unchanged. Palladium was up 5 dollars until a few minutes ago as well — and it’s now back at unchanged, too.
Net HFT gold volume is sky high once again at a hair under 70,000 contracts — and that number in silver is just over 17,000 contracts. These are amazingly high volumes considering the current price action — and very little of it is roll-overs out of the December contract. The dollar index has been chopping quietly lower ever since trading began at 6:00 p.m. EST in New York yesterday evening — and as London opens, it’s down 22 basis points.
Today, as I mentioned in passing further up in The Wrap, we get the latest and greatest COT Report — and I know that the first thing Ted will be looking for is what the Big 4 and Big 8 did in silver during the reporting week that ended at 1:30 p.m. EST on election day. And as I said on Wednesday, I hope that all of Tuesday’s volume will have been reported in a timely manner. We’ll find out soon enough.
I consider yesterday’s fifteen minute bloodbath in the precious metal equities to be a one-off event, as the severity of the sell-off had nothing whatsoever to do with what was going on in gold and silver at the time, especially considering how well silver did yesterday. Whoever did it certainly wasn’t interested in getting the best possible price, but the event had all the appearances of a forced sale. A hedge fund with a huge position perhaps.
And as I post today’s column on the website at 4:05 a.m. EST this morning, I note that all four precious metals are heading lower with some authority now that London and Zurich have been open for an hour. Gold is now down $4.10 an ounce — and silver has been whacked and is down 18 cents the ounce. And from unchanged an hour ago, platinum is now down 7 bucks — and palladium by 8.
Net HFT volume in gold is now up to just over 80,000 contracts — and that number in silver is just over 21,000 contracts. It’s obvious that the Managed Money traders are puking up longs contracts and going short en masse, with JPMorgan et al standing there happily taking the other side of these trades.
With an hour of trading gone by in London and Zurich, it’s now obvious that the dollar index began to head higher the same time as all four precious metals were capped — and that was shortly after 3 p.m. CST on their Friday afternoon. At the moment it’s only down 7 basis points, but that’s all the excuse that ‘da boyz’ needed to spin their algos and put the Managed Money traders on the run.
With today being Friday — and with the powers-that-be firmly in control of this current engineered price decline, nothing will surprise me when I power up my computer later this morning.
Enjoy your weekend, but take 1 minute of your life to remember those that paid the ultimate sacrifice so we could live to see this day dawn.
Ed
The post Another Monster Volume Day as ‘Da Boyz’ Run the Sell Stops appeared first on Ed Steer's Gold and Silver Digest.