16 November 2016 — Wednesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price rallied ten dollars by 9:20 a.m. China Standard Time on their Tuesday morning — and by 11 a.m. over there, half of those gains had vanished. From that point, the gold price chopped around five bucks either side of unchanged for the rest of the Tuesday session in both London and New York.
For a change, the high and low ticks aren’t worth looking up.
Gold was closed in New York yesterday at $1,228.40 spot, up $7.40 from Monday. Net volume was very heavy once again at just over 201,000 contracts.
It was more or less the same price pattern in silver — and once it settled down around the $17 spot mark, it traded about a dime either side of that price for the rest of the day.
The high and low ticks aren’t worth looking up here, either.
Silver finished the Tuesday session in New York at $17.06 spot, up 14 cents. Net volume was pretty heavy at just under 60,500 contracts.
Platinum was up 15 bucks by 9:20 a.m. CST — and it was sold off unsteadily until the London/Zurich open. It revisited its earlier high shortly before 10 a.m. Zurich time — and then sold off five bucks going into the COMEX open. At that juncture ‘da boyz’ spun their algos — and the low tick of the day was set shortly after 9:30 a.m. in New York. It blasted higher from there, but got capped the moment that Zurich closed –and was sold back to unchanged by around 12:30 p.m. EST. It crawled higher from there into the 5 p.m. close. Platinum finished the day at $937 spot, up 7 dollars from Monday.
Palladium didn’t do a lot in morning trading in the Far East, but by shortly before the Zurich open, it was down to its $689 spot low tick. From there it rallied steadily, finally breaking above $700 spot around 10:30 a.m. Zurich time. Once it hit $703 spot, that was it — and it chopped quietly sideways in a very tight range [but always above $700 spot] for the rest of the day. It sure didn’t look like the free markets at work in palladium again yesterday. It finished the day at $704 spot, up 9 bucks on the day.
The dollar index closed very late on Monday afternoon in New York at 99.97 — and after trading flat for a bit after the 6:00 p.m. open, it fell off a 30-basis point cliff shortly after 9 a.m. CST. From there it rallied back to almost unchanged…but at precisely 2:00 p.m. China Standard Time, the bottom fell out again, with the 99.45 low tick coming about 9:35 a.m. in London. It was obvious that ‘gentle hands’ put in an appearance at that point — and lifted it up to the 100.23 mark by shortly after 9 a.m. in New York. It managed to stay above the 100.00 mark for the rest of the day, closing at 100.16 — and up 19 basis points from Monday.
And here’s the 6-month U.S. dollar index chart for entertainment purposes only.
The gold stocks were up about 3 percent by 10:15 a.m. EST — and then chopped quietly higher from there right into the close. The HUI finished just off its high tick, as the day traders took profits right at the close, finishing the day up 4.50 percent.
The silver equities followed an almost identical price pattern, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished the Tuesday session up a chunky 6.79 percent.
The Daily Delivery Report showed that 5 gold and 1 silver contract were posted for delivery within the COMEX approved depositories on Thursday. Canada’s Scotiabank was the stopper on all these contracts.
The Preliminary Report for the Tuesday trading session showed that gold open interest in November dropped by 49 contracts, leaving 29 left…minus the 5 mentioned in the above paragraph. Monday’s Daily Delivery Report showed that 51 gold contracts were actually posted for delivery today, so that means that 51-49=2 gold contracts were added to the November delivery month. Silver o.i. in November fell by 111 contracts, leaving just 1 left — and according to the above paragraph, that will be delivered tomorrow. Monday’s Daily Delivery Report showed that 112 silver contracts were posted for delivery today, so that means that 112-111=1 lonely silver contract was added to the November delivery month.
There was another withdrawal from GLD yesterday, as an authorized participant took out 47,671 troy ounces. And as of 6:49 p.m. EST yesterday evening, there were no reported changes in SLV.
There was a huge sales report from the U.S. Mint, but in actual fact they updated their website twice yesterday, so I’d guess that these numbers represent two days worth of sales. Not that it matters, I suppose, but I though I’d point it out anyway.
They sold 22,500 troy ounces of gold eagles — 7,000 one-ounce 24K gold buffaloes — and 1,250,000 silver eagles. It’s a given that virtually all of these sales ended up in the lap of Ted’s “big buyer”, as these amounts certainly don’t represent what’s happening at the general retail level on either side of the Canada/U.S. border.
There was big in/out gold movement at the COMEX-approved depositories on Monday. All the ‘in’ activity, which was 92,180 troy ounces, was at Canada’s Scotiabank. There was 255,560.350 troy ounces/7,949 kilobars [all U.K./U.S. kilobar weights] shipped out — and the lion’s share of that was 239,935.450 troy ounces/7,463 kilobars out of JPMorgan. There was also 13,695.900 troy ounces/426 kilobars shipped out of Manfra, Tordella & Brookes, Inc…plus another 60 kilobars out of Scotiabank. The link to that action is here.
All of the in/out activity in silver on Monday was at Brink’s, Inc. They received 271,370 troy ounces — and shipped out 358,238 troy ounces. The link to that activity is here.
It was another very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday. They received 5,771 — and shipped out another 5,891 of them. All of the action was at Brink’s, Inc. as well — and the link to that, in troy ounces, is here.
I have very few stories for you today — and I’m rather happy about that after the big list in my Tuesday missive. I hope you’ll find one or two worth reading in the short list below.
CRITICAL READS
Trump transitioners recommend ex-Goldman partner, Soros associate for Treasury
Former Goldman Sachs Group Inc. partner Steven Mnuchin has been recommended by Donald Trump’s transition team to serve as Treasury secretary, according to two people familiar with the process, and the choice is awaiting the president-elect’s final decision.
Mnuchin, the campaign’s national finance chairman, has been considered the leading candidate for the job. Trump has displayed a pattern of loyalty to his closest campaign allies in early administration selections, and Mnuchin, 53, had signed on at a time when many from Wall Street stayed away.
Before joining Trump, Mnuchin rose through the kind of elite institutions the president-elect spent his campaign vilifying. Mnuchin was tapped into Yale’s Skull and Bones secret society, became a Goldman Sachs partner like his father before him, ran a hedge fund, worked with George Soros, funded Hollywood blockbusters, and bought a failed bank, IndyMac, with billionaires including John Paulson. They renamed it OneWest, drew protests for foreclosing on U.S. borrowers, and ultimately generated considerable profits, selling the business last year to CIT Group Inc. for $3.4 billion.
Well, with these kind of credentials, the boys and girls in the Deep State will be happy if it does happen, unless he’s turned away from the Dark Side. This Bloomberg story showed up on their Internet site at 11:09 a.m. Denver time on Monday morning — and was subsequently updated about five hours later. I found it in a GATA release late on Monday evening, but just couldn’t squeeze it into yesterday’s column, so here it is now. Another link to it is here.
Spike in Mortgage Rates Throws a Wrench Into U.S. Housing Market
The spike in borrowing costs in response to President-elect Donald Trump’s pro-growth agenda is causing some heartburn in America’s housing industry.
San Diego mortgage broker Shanne Sleder said a third of his clients, many of whom were already stretching budgets to buy homes in pricey southern California, are having to reconsider what they can afford as rates soar.
“With a number of the people we were in the middle of pre-approving, as rates are going up, it’s getting tighter and tighter qualifying them,” Sleder said. He’s urging them to lock in rates. “In some cases, the higher rates are making it so they are not as comfortable with the payment.”
With investors anticipating faster expansion and inflation from Trump’s policies, the yield on the U.S. 10-year note — a bellwether of changes in mortgage rates — has jumped more than 35 basis points since the Nov. 8 presidential election, the biggest three-day increase since 2009. Home loans may be beginning to follow suit: The average 30-year mortgage rate rose to 3.73 percent last Wednesday from 3.69 percent the prior week, according to Bankrate.com, whose chief financial analyst Greg McBride sees the rate climbing to near 4 percent this week.
This is another Bloomberg news item, this one appeared on their website at 4:00 a.m. MST on Tuesday morning — and I thank Swedish reader Patrik Ekdahl for sharing it with us. Another link to it is here.
World’s Biggest Real Estate Frenzy Is Coming to a City Near You?
If they were anywhere else in Beijing, the five young women in cowboy hats and matching red, white, and blue costumes would look wildly out of place.
But here at the city’s biggest international property fair — a frenetic gathering of brokers, developers and other real estate professionals all jockeying for the attention of Chinese buyers — the quintet of wannabe Texans fits right in. As they promote Houston townhouses (“Yours for as little as $350,000!”), a Portugal contingent touts its Golden Visa program and the Australian delegation lures passersby with stuffed kangaroos.
Welcome to ground zero for the world’s largest cross-border residential property boom. Motivated by a weakening yuan, surging domestic housing costs and the desire to secure offshore footholds, Chinese citizens are snapping up overseas homes at an accelerating pace. They’re also venturing further afield than ever before, spreading beyond the likes of Sydney and Vancouver to lower-priced markets including Houston, Thailand’s Pattaya Beach and Malaysia’s Johor Bahru.
The buying spree has defied Chinese government efforts to restrict capital outflows and shows little sign of slowing after an estimated $15 billion of overseas real estate purchases in the first half. For cities in the cross-hairs, the challenge is to balance the economic benefits of Chinese demand against the risk that rising home prices spur a public backlash.
“The Chinese have managed to accumulate very large amounts of wealth, and the opportunities to deploy that capital in their own market are somewhat restricted,” said Richard Barkham, the London-based chief global economist at CBRE Group Inc., the world’s largest commercial property brokerage. “China has more than a billion people. Personally, I think we have just seen a trickle.”
This is another Bloomberg story. It’s from Monday at 9:00 a.m. Denver time — and it was updated at 1 a.m. MST on Tuesday morning. I thank West Virginia reader Elliot Simon for bringing it to our attention — and another link to it is here.
German Cooling, Italy Rebound Keep Euro-Area Growth at 0.3%
German economic growth slowed to the weakest pace in a year last quarter, a reminder of the fragility of the euro area’s recovery in a time of rising uncertainty.
The slowdown in Germany to 0.2 percent, along with a resumption of growth in Italy and France, left expansion in the 19-nation currency region at 0.3 percent, in line with an initial estimate and matching the pace of the three months through June.
As Europe’s biggest economy, Germany’s fortunes are key to the recovery of the euro region, where the economy’s expansion is stuck at mediocre levels. That backdrop will color the European Central Bank’s review of its stimulus program in less than four weeks, when it will also have to factor in a global outlook characterized by the rise of populists critical of international trade deals.
“The economy is growing in the euro area but still not quite helping the ECB meet its price-growth target of 2 percent,” said Ralph Solveen, head of economic research at Commerzbank AG in Frankfurt. “It’s probably not enough to satisfy them, and we think they will have to extend stimulus in December.”
Here’s another Bloomberg story from Patrik Ekdahl. It put in an appearance on their Internet site at 12:00 a.m. MST yesterday — and was updated about 4 hours later. Another link to it is here.
Italy polls get worse for Renzi as referendum nears
Opinion polls are making increasingly grim reading for Italian Prime Minister Matteo Renzi less than three weeks ahead of a referendum on constitutional reform on which he has staked his political future.
Of 32 polls published by 11 different pollsters since Oct. 21, every one has the ‘No’ camp ahead, and generally by a widening margin.
In three polls published on Monday the lead for ‘No’ ranged from five points, according to IPR Marketing, to seven points, according to Tecne, with EMG Acqua in the middle at 6 points.
Bookmakers also hold out little hope for the 41-year-old premier, with Ladbrokes estimating a roughly 75 percent probability of a win for ‘No.’
The surveys are so one-way that attention is turning to what Renzi will do if he loses the vote on his plan to drastically reduce the role of the upper house Senate and take powers back from regional governments. At the start of the campaign he repeatedly said he would resign in the case of defeat.
This Reuters article, filed from Rome, was posted on their Internet site at 7:01 a.m. EST on Tuesday afternoon — and it’s something I found on Doug Noland’s website yesterday evening. Another link to it is here.
Giant radiation shield built to cap Chernobyl’s damaged nuclear reactor
A giant radiation shield is being manoevered over the site of the world’s worst nuclear accident in Chernobyl, Ukraine, in the final phase of a €1.5 billion (US$1.6bn) project to prevent the leaking of further radioactive material from the damaged reactor.
Construction work on the ‘New Safe Confinement’ shield began in 2012 in response to fears that the current concrete sarcophagus would eventually deteriorate and collapse, possibly leading to the release of further toxic materials.
The damaged reactor building was enclosed in an emergency radiation shield made of concrete and steel soon after the accident.
The new replacement steel shield, built by French consortium Novarka, has a lifespan of at least 100 years and is designed to withstand a tornado. The enormous arch-shaped structure was built in two halves and allows for the partial demolition of the old structure in the future.
This very interesting news item appeared on the rt.com Internet site at 3:33 p.m. Moscow time on their Tuesday afternoon, which was 7:33 a.m. in New York — EDT plus 8 hours. Another link to it is here — and I thank ‘aurora’ for passing it around yesterday.
We paid for a copy of the Fort Knox audit report, so where is it? — Koos Jansen
Gold researcher Koos Jansen reports how the U.S. Mint has failed to produce a copy of a gold audit report for which he paid more than $3,100 back in September. Why, in the digital age, anyone should have to pay that kind of money for a government report is hard to understand — unless, of course, the report contains information whose disclosure might be inconvenient to the U.S. government’s longstanding policy of gold price suppression.
Jansen’s report is headlined “Dear U.S. Mint, We Gave You the FOIA Funds, Now Give Us the Fort Knox Audit Documents” and it was posted at the Singapore-based Internet site bullionstar.com on Tuesday sometime. I found it embedded in a GATA release — and another link to it is here. I thank Chris Powell for the above paragraph of introduction.
European Central Bank won’t account for its gold reserves — Ronan Manly
Gold researcher Ronan Manly reports that the European Central Bank does not audit its gold reserves, which are vaulted with other central banks, and will not disclose a list of the gold bars in its reserves. Such disclosure probably would impair their use in the swaps and leases undertaken by central banks for gold market rigging.
Manly’s report is headlined “European Central Bank Gold Reserves Held Across 5 Locations; ECB Will Not Disclose Gold Bar List“. This commentary was also posted on the bullionstar.com Internet site yesterday as well — and another link to it is here.
The PHOTOS and the FUNNIES
Here are three more shots from Bob Anthony’s trip to South Africa — and these are truly amazing. When I was on safari in Rhodesia, now Zimbabwe, back in the early 1970s, getting this close to an African bull elephant would get you trampled or torn to pieces. My how things have changed, at least where this photo was taken.
When you have a humans beside them, you can see them for the monstrous beasts they really are — and they dwarf their Indian cousins.
Note the warthogs in the background of a couple of these shots, so these ones have become accustomed to humans as well. The other thing that should be noted is the state of the landscape, which is barren and denuded by drought. The giraffe and elephants have stripped the trees down to next to nothing. Click to enlarge.
The WRAP
I’m not sure if the bottom is in, or if JPMorgan et al just took a break from their labours. Although silver and gold prices didn’t do a lot from a price perspective on Tuesday, they both finished in the black by a bit — and the bargain hunters were back buying precious metal stocks with a vengeance again.
Here are the 6-month charts for all four, plus copper — and you can read into them whatever you wish. And why palladium continues to be the outlier as far as price is concerned is a mystery, because I doubt its rally is supply/demand related. But rest assured that ‘da boyz’ are maximum short — and the Managed Money traders maximum long in this precious metal as well. And unless “things are different this time“, it’s only a matter of when JPMorgan et al rip the Managed Money traders a new one in this precious metal.
And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price was up about 5 bucks by shortly before 10 a.m. China Standard Time on their Wednesday morning — and has been chopping lower in fits and starts since — and is down $1.80 the ounce at the moment. Silver’s rally ended at the same time as well — and it’s down 4 cents an ounce. And with some minor variations, the trading pattern in both platinum and palladium are similar, with the former down 4 dollars and the latter down by 6.
Net HFT gold volume is pretty hefty already at just over 42,000 contracts — and that number in silver is sitting right at the 10,000 contract mark, which is very heavy as well. The dollar index was down a bit over 25 basis points by shortly before 11 a.m. in Shanghai — and made it back above the 100.00 mark an hour or so later, but couldn’t hold it. Then a few minutes after 3 p.m. over there, it was blasted over 20 basis points higher in just a few minutes — and is up 5 whole basis points as London opens.
When I was talking to Ted yesterday, he was of the opinion that yesterday’s price action in both gold and silver didn’t result in much/if any deterioration in the Commercial net short position in either metal — and that’s because their respective prices are far below any moving average that would cause the Managed Money traders to put on new long positions, or cover short contracts.
Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report and, without doubt, all of the current reporting week’s price action will be included in it.
Ted mentioned that he was going to come up with some idea of how much improvement there might be in this week’s report when he posts his mid-week column to his paying subscribers later this afternoon — and I’ll be more than interested in what his prognostications are.
And as I post today’s column on the website at 4:00 a.m. EST, I see that gold and silver have been creeping a bit higher now that London has been open an hour. Gold is down only 80 cents — and silver is down 2 cents. Much the same can be said for platinum and palladium now that Zurich has been open for an hour as well. The former is down 3 dollars — and the latter by 5.
Net HFT gold volume is now up to just under 48,000 contracts — and that number in silver is just under 11,600 contracts. Compared to the volume numbers ten minutes before the London open, they’ve dropped off to fumes and vapours.
The dollar index jumped up another 10 basis points minutes before the London open — and is now up 13 basis points. Not much to see here, but somehow I doubt that this situation will remain that way for long.
I’m done for the day — and I’ll see you here tomorrow.
Ed
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