17 November 2016 — Thursday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLDIUM
It wasn’t much of a day for gold yesterday. The high tick [such as it was] came shortly before 10 a.m. China Standard Time on their Wednesday morning. The low tick [such as it was] came at the noon silver fix in London. It rallied from there, but got capped at the exact instant that trading began in New York at 9:30 a.m. EST. The New York low came minutes after the COMEX close — and it rallied a few bucks from there.
With an intraday day move of about 11 dollars, the high and low ticks aren’t worth looking up for the second day in a row.
Gold finished the day at $1,225.00 spot, down $3.40 from Tuesday. Net volume was far more reasonable, but still elevated at 159,000 contracts.
Silver rallied a dime and change by around 10 a.m. CST as well — and hung in there until shortly before 3 p.m. over there. Its London low came at the noon silver fix, and the subsequent rally was capped at 9:30 a.m. in New York. The low tick of the day came shortly after the London p.m. gold fix. It chopped quietly higher from there into the 5:00 p.m. close.
Silver traded within a 25 cent range all of Wednesday, so I shall dispense with the high and low tick prices in this precious metal as well.
Silver closed in New York on Wednesday at $16.96 spot, down a dime on the day — and back below $17 spot. Like gold’s volume, silver’s net volume yesterday was more ‘reasonable’ as well but still pretty high at just over 47,000 contracts.
Platinum was up five bucks or so in the early going in the Far East on their Wednesday morning, but began to chop lower starting just before 11 a.m. in Shanghai. The $924 spot low tick came at the noon London silver fix, 1 p.m. Zurich time — and away it went to the upside until it got capped shortly after 12 o’clock noon in New York. It was sold off a few dollars from there. Platinum finished the Wednesday session at $942 spot, up 5 dollars on the day.
Palladium chopped and flopped around just above the $700 spot mark until it began to sell off a few bucks starting around noon in Zurich. It’s $691 low tick came a bit over an hour later — and it began to rally with some authority once the noon London silver fix was done. That rally met with some resistance shortly after the COMEX open — and it crawled higher from there until 1 p.m. EST. From that point, like platinum, it got sold down a small handful of dollars into the close. Palladium ended the day at $717 spot, up another 13 bucks — and left the $700 spot mark in the dust, at least for time being.
The dollar index was closed very late on Tuesday afternoon in New York at 100.16 — and it began to head lower the moment that trading began at 6:00 p.m. EST in New York yesterday evening. It appeared to get rescued around the 99.92 mark about 10:45 a.m. China Standard Time on their Wednesday morning. It ‘rallied’ back above the 100.00 mark in short order, but couldn’t hold it — and it was back to the 99.95 point in short order. Then ‘gentle hands’ appeared around 3:10 p.m. CST — and by the time they were done with this ‘rally’, it had reached the 100.51 mark by shortly after 12 o’clock noon in London, which just happened to be the time of the noon silver fix. By 9:30 a.m. in New York, it was back to the 100.18 mark before launching skyward again — and the absolute 100.57 high tick came at 11:00 a.m. EST right on the button, which also happened to be the London close. By 12:20 p.m. it was back down to the 100.18 mark — and by 2:20 p.m. it had been ramped up almost to its previous high tick. From there it sold off into the close, finishing the Wednesday session at 100.30 — up another 14 basis points on the day.
It’s safe to assume that the dollar index would have closed materially lower on Wednesday if not for the constant intervention by the powers-that-be.
And here’s the 6-month U.S. dollar index chart — and this rally has been painted to perfection — but you can read into it whatever you wish.
The gold stocks opened down a bit — and headed a bit lower from there. Their respective low ticks came a few minutes after 11 a.m. EST — and they chopped sideways until they caught a bid about 2:30 p.m. — and closed well off their lows. The HUI finished down 1.56 percent.
The silver equities gapped down a bit at the open — and then followed the same trading pattern as gold for the rest of the Wednesday session. Nick Laird’s Intraday Silver Sentiment Index/Silver 7 Index closed lower by 1.11 percent. Click to enlarge if necessary.
The CME Daily Delivery Report showed that 1 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Friday.
The CME Preliminary Report for the Wednesday trading session showed that gold open interest in November increased by 30 contracts, leaving 59 still open, minus the 1 contract mentioned in the paragraph above. Tuesday’s Daily Delivery Report showed that only 5 contracts were posted for delivery today, so that means that 5+30=35 gold contracts were added to the November delivery month. Silver o.i. in November was unchanged at only 1 contract still remaining to be delivered this month. But since 1 silver contract was actually posted for delivery today, that means that 1+0=1 silver contract was added to November.
There was another withdrawal from GLD yesterday. This time an authorized participant took out 38,136 troy ounces. And as of 7:15 p.m. EDT yesterday evening, there were no reported changes in SLV.
After a huge sales report from the U.S. Mint on Tuesday, there was another decent sales report yesterday. They sold another 12,500 troy ounces of gold eagles — 2,000 one-ounce 24-karat gold buffaloes — but no silver eagles.
It was huge ‘out’ day for gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday. There was only 1,059 troy ounces received — and all of that went into Brink’s, Inc. But 320,434 troy ounces were shipped out the door — and almost all of that was in kilobar form for the second day in a row. Of that amount, there was 96,482.150 troy ounces/3,001 kilobars [U.K./U.S. kilobar weight] withdrawn from Brink’s, Inc. A chunky 160,750.000 troy ounces/5,000 kilobars [U.K./U.S. kilobar weight] were shipped out of JPMorgan’s vault…the second big ‘out’ movement from their gold vault in as many days. And 63,202 troy ounces were shipped out of Canada’s Scotiabank. The link to that action is here.
Over 12,000 kilobars of gold have been shipped out of JPMorgan in the last two days. That, plus all the gold kilobars being shipped out of other depositories during the same time period, is a real mystery — and if you’re looking for a reason or an answer, I don’t have one. But it’s certainly worth noting.
Not much happened in silver, as only 233,930 troy ounces were received — and 75,078 troy ounces were shipped out the door for parts unknown. With the exception of 34,724 troy ounces departing CNT’s vault, all of the rest of the in/out activity was at Canada’s Scotiabank — and the link to that is here.
It was another busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday, as 2,000 kilobars were reported received — and a very decent 7,457 kilobars were shipped out. All of this action was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.
Is it just me, or is there a lot more gold on the move this month than normal? And it’s not even a delivery month, or even the month after a delivery month.
I have an average number of stories for you today — and here’s hoping that there are a few in here you think worth reading.
CRITICAL READS
Jim Rickards Interviewed About Interest Rates on RT.com
Jim Rickards, author of the new book “The Road to Ruin,” tells Ameera what he thinks could happen under a president Trump, and where interest rate are heading.
This rt.com video interview runs for a bit over 8 minutes — and it was posted on the youtube.com Internet site on Tuesday — and I thank Ken Hurt for bringing it to our attention.
Obama on Trump’s election: We “have to guard against a rise in a crude sort of nationalism“
President Barack Obama on Tuesday warned of a need to “guard” against a rise in nationalism both at home and abroad during a press conference in Greece one week after the election of Donald Trump.
Alongside Greek Prime Minister Alexis Tsipras, Obama said that “separate and apart from any particular election or movement,” that guard is a necessity.
“We are going to have to guard against a rise in a crude sort of nationalism or ethnic identity or tribalism that is built around an ‘us’ and a ‘them,’” he said. “And I will never apologize for saying that the future of humanity, the future of the world is going to be defined by what we have in common, [not] those things that separate us and ultimately lead us into conflict.”
The self-described alt-right, a movement that believes strongly in ethnocentricity and nationalism, helped usher Trump into the presidency. Trump in turn elevated Steve Bannon, a top executive of the alt-right media outlet Breitbart, to his campaign CEO and, more recently, to his chief strategist in the White House.
That’s exactly what the people in the U.K. and U.S. voted for, their own countries and identities — and good on ’em! This article was posted on the businessinsider.com Internet site at 11:08 a.m. EST on Tuesday morning. I passed on it for yesterday’s column, but when it showed up in Wednesday’s edition of the King Report, I changed my mind. Another link to it is here.
Calgary sees blistering pace of business closures alongside boom in new startups
Calgary businesses are shutting down or moving at a record pace as a stagnant economy begins to exact a heavy toll, says the chamber of commerce.
According to third quarter numbers obtained by Postmedia, nearly 2,000 Calgary businesses closed their doors over the summer, with another 1,785 changing addresses over the same three-month period.
In the first nine months of 2016, more than 11,000 businesses have either shut down or moved.
With more than 5,500 shutting down so far this year, closures are nearing what the Calgary Chamber of Commerce would see in a full year, said spokesman Scott Crockatt. The high water mark for closures in Calgary tends to be around 6,000, he said, meaning that with three months of data still to be tabulated, the city will almost certainly eclipse that number.
“I see no signs, nothing to indicate this trend is changing,” Crockatt said. “These are absolutely the most challenging economic times we’ve seen in a generation.”
No surprises here at all…and I’ll bet serious coin right now that the number of retail businesses closing their doors here in Alberta after this year’s Christmas shopping season, will be breathtaking to watch. This news item showed up on the calgaryherald.com Internet site on Monday — and was subsequently updated at 12:47 p.m. MDT on Wednesday afternoon. I thank Brad Robertson for sharing it with us — and another link to it is here.
Sweden’s Recycling is so Revolutionary, the Country is Running Out of Trash
When it comes to recycling, Sweden sets an example for the rest of the world. Thanks to a government prioritization on sustainability, the Nordic country recycles 1.5 billion bottles and cans annually, a staggering amount for a population of about 9.6 million (in 2013). In terms of rubbish, Swedes only produce a measly 461 kilograms (1,106 pounds) of waste average per year—less than 1% of discard ends up in landfills. This is slightly below the half-ton average in the rest of Europe.
This impressive commitment to an eco-friendly world has a bizarre effect on electricity production. Sweden participates in a waste-to-energy (WTE) program, and they have 32 of these special plants. If you’re unfamiliar with this unique form of energy production, here’s how it works: furnaces are loaded with garbage and burned to generate steam. This newly-produced gas is then used to spin generator turbines and produce electricity, transferred to transmission lines and the power grid. By using this approach, the country is able to reduce toxins that seep into the ground. “When waste sits in landfills, leaking methane gas and other greenhouse gasses, it is obviously not good for the environment” Swedish Waste Management communications director Anna-Carin Gripwell explained in a statement.
Before incinerating garbage, it’s first filtered by home and business owners. Things that can be recycled are separated (such as food scraps and paper products), and anything that can be salvaged is set aside. Because would-be waste is carefully examined, it leaves relatively little for the WTE program. As a result, Sweden imports garbage from the UK, Italy, Norway, and Ireland to ensure they stay up and running.
This interesting article appeared on the buzzworthy.com Internet site on Wednesday, I believe, even though it’s not dated. I figured that out by the fact that all the comments posted under the article are less than 24 hours old. I thank Swedish reader Patrik Ekdahl for sending it our way — and another link to it is here.
Sweden could become the first major country to issue a national digital currency
Sweden aims to decide on whether to issue a digital currency called “ekrona” within two years, according to a Financial Times report.
Cecilia Skingsley, deputy governor of Sweden’s central bank Riksbank, told the Financial Times in an interview that the bank is considering the move after a dramatic drop in the usage of cash. The amount of notes and coins in circulation has fallen by 40% since 2009, with a rise in online shopping and card payments.
It has spurred the Riksbank to think about new ways of issuing money across Sweden. Skingsley told the FT: “This is as revolutionary as the paper note 300 years ago. What does it mean for monetary policy and financial stability? How do we design this: a rechargeable card, an app or another way?”
While Sweden may be the first to issue digital currency, it is not the only country considering such a move. The U.K. Home Office told the Treasury earlier this year that there “might be a number of advantages of any digital currency for the U.K. being created and owned by central government.” Citi also told the government during the same consultation: “The greatest benefits of digital currencies can be realised through the government issuing a digital form of legal tender.”
Of course this story doesn’t even hint at the Dark Side of digital currencies — and there are a number of very important ones. This article put in an appearance on the nordic.businessinsider.com Internet site in the wee hours of Wednesday morning EST — and it’s the second contribution in a row from Patrik Ekdahl. Another link to it is here.
Russia withdraws from International Criminal Court
Russian President Vladimir Putin has signed a decree withdrawing Russia from the International Criminal Court, following the recent withdrawals of Gambia, Burundi and South Africa.
Russia signed the international treaty in 2000 but had not ratified it. On Wednesday, Putin ordered for Russia to withdraw from the tribunal — a day after the ICC released a decision in which it recognized the existence of an international armed conflict between Russia and Ukraine, while also classifying Russia’s presence in the Crimean peninsula as a military occupation.
“The International Criminal Court has not justified hopes placed upon it and did not become a truly independent and authoritative judicial body,” Russia’s Ministry of Foreign Affairs said in a statement. “Russia consistently advocates that people guilty of grave offenses must be held accountable … Russia was at the origins of creation of Nuremberg and Tokyo tribunals, took part in developing of the basic laws against such grave international crimes as genocide, crimes against humanity and war crimes.”
Putin’s decree said Russia’s institutions were all in agreement “about sending the Secretary General of the United Nations notice of the intention of the Russian Federation to no longer be a party to the Rome Statute of the International Criminal Court.”
Russia and long-time ally Syrian President Bashar al-Assad are accused of carrying out war crimes of “historic proportions” in Aleppo. United Nations High Commissioner for Human Rights Zeid Ra’ad al-Hussein in October said Aleppo is a “slaughterhouse” due to Russian and Syrian indiscriminate airstrikes.
Neither Russia or Syria could hope for a fair trial under that tribunal The U.N. is now a political arm of U.S. and NATO foreign policy — and is rapidly heading toward uselessness, as it predecessor, the League of Nations did before the outbreak of World War II. This UPI story was posted on their Internet site at 7:41 a.m. on Wednesday morning EDT — and it comes to us courtesy of Roy Stephens. Another link to it is here — and it’s definitely worth reading if you have the interest.
Saudi Arabia warns Trump against banning oil imports
Trump made the threat earlier this year, saying that if elected he might halt imports of oil from Saudi Arabia and other Arab countries if they don’t commit ground troops to fight ISIS, or at least reimburse the U.S. for efforts to battle the terror group.
“Without us, Saudi Arabia wouldn’t exist for very long,” Trump told The New York Times in March.
Trump later said in a major energy speech that he would bring about “complete American energy independence” from “our foes and the oil cartels.”
Now that Trump has won the White House, that threat carries more weight.
Saudi energy minister Khalid al-Falih warned this week that banning oil from his kingdom could backfire.
This story showed up on the money.cnn.com Internet site at 3:09 EST yesterday afternoon — and it’s the final offering of the day from Patrik Ekdahl. I thank him on your behalf — and another link to this news item is here.
Saudis, China Dump Treasuries; Foreign Central Banks Liquidate a Record $375 Billion In U.S. Paper
Today, to corroborate the disturbing weekly slide in the Fed’s custody data, we also got the latest monthly Treasury International Capital data for the month of September, which showed that the troubling trend presented one month ago, has accelerated to an unprecedented degree.
Recall that a month ago, we reported that in the latest 12 months we have observed a not so stealthy, actually make that a massive $343 billion in Treasury selling by foreign central banks in the period July 2015- August 2016, something unprecedented in size.
Fast forward to today when in the latest monthly update for the month of September, we find that what until a month ago was “merely” a record $346.4 billion in offshore central bank sales in the LTM period ending August 31 has – one month later – risen to a new all time high $374.7 billion, or well over a third of a trillion in Treasuries sold in the past 12 months.
It wasn’t just China: Saudi Arabia also continued to sell its TSY holdings, and in August its stated holdings (which again have to be adjusted for MTM), dropped from $93Bn to $89Bn, the lowest since the summer of 2014. This was the 8th consecutive month of Treasury sales by the Kingdom, which held $124 billion in TSYs in January, and has since sold nearly 30% of its U.S. paper holdings.
While it is unclear under what conditions foreign buyers may come back, one thing is very clear: as of this moments the selling strike not only continues but is accelerating, and should the foreign liquidation of Treasuries fail to slow, Yellen will have no choice but to forget about hiking rates and focus on QE4 instead.
This longish, but worthwhile 4-chart Zero Hedge article appeared on their Internet site at 4:55 p.m. EDT yesterday afternoon — and another link to it is here.
Australia Snubs Obama, Dumps TPP, Opts for China-Sponsored Trade Deal
President Obama made a foolish decision to not welcome China in the formation of the Trans-Pacific Partnership (TPP).
It was ludicrous for Obama to leave China out of things. China is the second biggest economy in the world, third if you treat the E.U. as a block.
Death of TPP is at hand. And in a Financial Times story, Australia leads the way: Australia Snubs U.S. by Backing China Push for Asian Trade Deal.
Australia is throwing its weight behind China’s efforts to pursue new trade deals in the Asia-Pacific region amid a growing acknowledgement the U.S.-led Trans-Pacific Partnership agreement is dead in the wake of Donald Trump’s election victory.
Steven Ciobo, Australia’s trade minister, told the Financial Times that Canberra [Australia’s Capital] would work to conclude new agreement among 16 Asian and Pacific countries that excludes the U.S.
He said Australia would also support a separate proposal, the Free Trade Area of the Asia-Pacific, which Beijing hopes to advance at this week’s Asia Pacific Economic Co-operation summit in Peru.
This news item, with Mish Shedlock’s spin on it, was posted on his website yesterday — but it’s definitely worth reading, regardless. I thank Roy Stephens for his second offering in today’s column — and another link to it is here.
Franco-Nevada chair remains a bull on gold post-Trump win
BNN speaks with Pierre Lassonde, chairman at Franco-Nevada, following Donald Trump’s historic presidential win. He remains bullish, but sees more volatile price moves for gold. “You will see gold move up and down $100 literally in a matter of days,” he says.
This 8:00 minute video interview with Pierre showed up on the bnn.ca Internet site at 2:30 p.m. EST on Tuesday afternoon. The interviewer, who is a real bozo, prattles on until the 1:00 minute mark — and you can fast forward to that point if you want to watch the interview. I’m not a fan of Lassonde — and I consider this interview a total waste of your time. Lassonde knows that the gold market is rigged seven ways to heaven, but will never say a word about it in public. However, Franco-Nevada, the company that he heads, is fantastic. I thank Ken Hurt for his second contribution of the day. Another link to it is here.
Decade of Gold Mine Declines Poised to Spur Deals, Prices
Gold’s dwindling pipeline of new mines is poised to usher in a decade-long output slump, spurring prices and delivering a new impetus for deal making and industry consolidation, according to Goldcorp Inc., the third-largest gold producer.
Mine supply may fall about a third in the 10 years to 2025, according to Bloomberg calculations based on forecasts from BMO Capital Markets and Randgold Resources Ltd. The number of newly discovered primary gold deposits fell to three in 2014, from a peak of 37 in 1987, according to Melbourne-based industry adviser MinEx Consulting Pty.
The number of deals in the gold sector this year is the highest since 2011, as the metal’s price surge has spurred producers to trade assets to add production or to improve the quality of their mine portfolios. Goldcorp is reviewing opportunities for acquisitions or partnerships including in new discoveries and existing assets, both in the Americas and further afield, Telfer said.
“What we’ll possibly see is consolidation in the industry as a result, whether that’s a large company taking over smaller ones, a number of smaller ones getting together, or even two or three large companies being merged,” Ian Telfer, chairman of Vancouver-based Goldcorp, said in an interview. “No CEO wants to run a shrinking company.”
This gold-related news item put in an appearance on the bloomberg.com Internet site at 12:00 p.m. Denver time on Tuesday and was updated about 20 hours later. I found it on the goldcore.com Internet site last night — and it’s certainly worth reading. Another link to it is here.
The PHOTOS and the FUNNIES
Here are the last three shots from Bob Anthony’s trip to Africa. When I was on safari there back in the early 1970s, these were the only group of animals I never got to photograph — and that was the big cats. The Click to Enlarge feature really helps here.
The WRAP
“One simple rule to follow: Determine what is best for the government and know that is what the powers are working to make happen. Inflation is what is best for a government with enormous debt.” ~ Ayn Rand
It was another ‘nothing’ sort of day yesterday. Like Tuesday in some ways, except both metals closed lower yesterday, as did their respective equities. No moving averages were broken in either gold or silver — and it was just “another day off the calendar” as would Ted Butler says from time to time.
Here are the 6-month charts for all four precious metals, plus copper once again — and there’s not much to see, although palladium continues to astound. The Managed Money traders in copper look like they’re about to get their collective heads handed to them on the proverbial platter.
And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price hasn’t been doing much during Far East trading on their Thursday, but has been trading a few dollars above unchanged all day over there — and is up $2.70 at the moment. Silver has been trading flat to a bit lower — and is still down a penny as I write this. Platinum and palladium haven’t been doing much, either — with the former unchanged, and the latter up a buck.
Net HFT gold volume is a bit over 29,000 contracts, which is slightly elevated from ‘normal’….whatever ‘normal’ is these days — and that number in silver is 5,500 contracts, which is pretty light. There’s no roll-over volume out of the December contract worth mentioning — and with only nine trading days left in the month [including today] before First Notice Day, we’re going to see some pretty heavy switch volume between now and then.
The dollar index hasn’t been doing much — and is up 2 basis points as London opens.
I must admit that I don’t know what happens from here. Prices could go either way — and I could certainly make a credible case for either scenario. It’s still up to JPMorgan et al as to where prices go, as they’re still totally in charge — and I’m not prepared to speculate further until I see tomorrow’s Commitment of Traders Report. Even then it still may be hard to tell.
Ted mentioned in his mid-week column yesterday that…”For numbers, I’d guess a reduction in the total commercial net short position of around 75,000 contracts in COMEX gold futures — and 25,000 contracts in silver. As always, bigger reductions would be preferable to smaller reductions and I’ll be sensitive to the reductions in the concentrated short positions of the four largest traders in silver and gold.”
I’m cheering for much bigger reductions as well — and I’m sure you are too.
And as I post today’s column on the website at 4:00 a.m. EST, I see that gold is up $3.50 an ounce now that London and Zurich have been open an hour — and silver is now up 9 cents. Platinum and palladium are both up 2 dollars at the moment.
Net HFT gold volume is up to a bit over 36,000 contracts — and that number in silver is a hair over 7,700 contracts. I get the impression from the jump in volume in both metals in the last hour, that even these tiny rallies are not going unopposed by the short buyers and long sellers of last resort.
The dollar index is off its 100.43 high tick in early afternoon trading in the Far East — and fell down to the 100.10 mark shortly after the London open, but got rescued at that point — and is down 10 basis points currently.
That’s my column for today — and I’ll see you here on Friday at some point.
Ed
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