26 November 2016 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
Gold’s tiny rally in the first hour of trading once New York opened on Thursday evening, ended about an hour later — and at 9 a.m. China Standard Time, the algorithms and spoofing took gold to a new look tick for this move down once again. It crawled higher from there, but that rally developed more legs an hour before the London open — and the high tick of the day was set shortly before 9 a.m. in London. The price didn’t do much from there until the equity markets opened in New York on their Friday morning — and it was sold down to its New York low at exactly 12:30 p.m. EST. It rallied quietly from there until the COMEX close — and traded flat until the GLOBEX closed fifteen minutes later.
The low and high ticks were reported by the CME Group as $1,170.30 and $1,192.70 in the December contract.
Gold finished the Friday trading session in New York at $1,183.60 spot, down 30 cents on the day — and would have obviously closed well up on the day if it was allowed to trade freely, which it just as obviously wasn’t. Gross volume was over the moon at 405,569 contracts, but once Thursday’s net volume, plus all of yesterday’s roll-over and switches were subtracted out, net volume was around 123,000 contracts, which I thought pretty high, all things considered.
And here’s the 5-minute gold price tick chart courtesy of Brad Robertson as per usual. I’m only posting it because it includes the engineered price take-down in morning trading in the Far East, plus the price capping shortly after London opened. Volume picked up again once ‘da boyz’ applied price pressure starting at 7:30 a.m. Denver time on the chart below, which was the open for the equity markets in New York.
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.
Silver’s low tick of the day came at the same time as gold’s. Its rally after that was decent, but did run into JPMorgan et al about 45 minutes before London opened. The price obviously wanted to rally in the worst way, but it was equally obvious that it wasn’t being allowed to. Its high tick came at the 9:30 a.m. EST open of the equity markets in New York — and at that point, ‘da boyz’ gave it the same price treatment as gold. After the sell-off, it rallied right through the COMEX close — and into the close of GLOBEX trading at 1:45 p.m. EST.
The low and high ticks in this precious metal were reported as $16.15 and $16.575 in the December contract.
Silver finished the Friday session at $16.51 spot, up 20.5 cents on the day. Net volume, once Thursday’s data and Friday’s roll-overs and switches were removed, was about 26,500 contracts.
And here’s Brad’s 5-minute silver tick chart. The low tick in Friday morning trading in the Far East did not set a new low price for this move down, so there was no pressure for the Managed Money traders to do anything — and that’s why the volume wasn’t overly heavy at that point. ‘Da boyz’ set a new low tick for this move down in gold — and that’s why the volume was as heavy as it was, as it forced more Managed Money long selling/shorting, which was the object of the exercise…so JPM et al could cover their short positions and go long themselves. Why ‘da boyz’ haven’t pushed their advantage in silver is beyond me.
The platinum price followed a similar path to gold and silver in Far East trading, but once the price was capped shortly before 10 a.m. Zurich time on Friday morning, it was mostly down hill into the COMEX close. Platinum finished the day at $905 spot, down 6 dollars from Thursday. Like gold, if left to its own devices, would certainly have closed well into the plus column.
Palladium was up a few bucks in the first two hours of trading in New York on Thursday evening, but like the other precious metals, ‘da boyz’ showed up at 9 a.m. China Standard Time — and the low tick was set about an hour later. It chopped unsteadily higher from there, with every rally attempt getting capped — and it was down five bucks by the COMEX open. Then away it went to the upside, with the high tick of the day coming right at the COMEX close. Palladium finished the Friday session at $744 spot, up 13 dollars — and at a new high for this move up.
Why palladium is being allowed to rally, while the other three precious metals are getting hammered into the dirt, is something that I don’t really understand.
The dollar index closed very late on Thursday afternoon at 101.70 — and surged higher the moment that trading began at 6:00 p.m. EST on Thursday evening in New York. By 9 a.m. in Shanghai it was up 20 basis points, but rolled over pretty hard from there — and chopped unsteadily lower until the 101.21 low tick was set about 9:15 a.m. in New York. It rallied from there until noon EST — and then traded unevenly sideways for the rest of the day. The dollar index closed yesterday at 101.47 — down 23 basis points on the day.
And here’s the 3-year U.S. dollar index so you can see the bigger picture. How much longer the powers-that-be will continue to goose the dollar index, is unknown. But, like the precious metals, if allowed to trade freely, its Friday close would certainly have been far different than what it was.
The gold stocks didn’t do much yesterday. They were up a bit over 2 percent by the London p.m. gold fix, but once ‘da boyz’ started leaning on the price, the shares soon followed. Not surprisingly, the markets closed at 1:00 p.m. in New York — and the HUI finished up 0.63 percent.
I was somewhat surprised how poorly the silver equities did. Although they opened in positive territory by a bit, they dipped into the red on a few occasions before beginning a sold rally at 10:30 p.m. EST, which ran out of gas an hour later. They dipped back to unchanged by around 12:25 p.m., but managed to haul themselves off the mat to finish in positive territory. I don’t know about you, but I was expecting better. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 0.51 percent. Click to enlarge if necessary.
And here are the usual three charts from Nick that tell all. The first one shows the changes in gold, silver, platinum and palladium for the past week, in both percent and dollar and cents terms, as of Friday’s closes in New York — along with the changes in the HUI and Silver Sentiment/Silver 7 Index — and the Click to Enlarge feature really helps on all three.
And the chart below shows the month-to-date changes as of Friday’s close.
And below are the year-to-date changes as of the close of trading yesterday.
The CME Daily Delivery Report showed that 2 gold and 1 silver contract were posted for delivery on Tuesday within the COMEX-approved depositories.
The CME Preliminary Report for the Friday trading session showed that gold open interest fell by 192 contracts, negating the increase of approximately the same amount on Wednesday.
Gold open interest in November is now down to 29 contracts, minus the 2 contracts mentioned in the previous paragraph. Wednesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery on Monday, so that means that 192 contract holders on the short side were let off the delivery hook by the long/stoppers holding the other side of that trade. Silver o.i. in November remained unchanged at 1 contract — and none were posted for delivery on Monday according to Wednesday’s Daily Delivery Report. But as per the preceding paragraph, that 1 remaining contract is now posted for delivery on Tuesday.
What I found strange about yesterday’s Preliminary Report was the fact that total open interest in gold only fell by 1,925 contracts — and silver’s total open interest actually rose by 63 contracts. I must admit, that for this time of month and the price action involved, I was expecting some reasonable declines in both. But maybe I’m looking for black bears in dark rooms that aren’t there…again. If there’s anything to this, I’m sure Ted will have something to say about it in his weekly review later today.
Open interest in gold for December fell by another 23,541 contracts, leaving 82,528 still around. Silver o.i. for December dropped by a chunky 12,111 contracts, leaving 28,284 still open. By the end of the Tuesday trading session, these numbers will be substantially lower, as all traders that aren’t standing for delivery have to sell or roll these positions before the close of COMEX trading on Tuesday. I’ll have more on this in The Wrap.
There were more withdrawals from both GLD and SLV yesterday. An authorized participant took 209,726 troy ounces of gold out of GLD — and an a.p. removed 948,550 troy ounces of silver from SLV.
This certainly appears to be “plain vanilla” liquidation as Ted would say. But the possibility exists that Ted’s “big buyers” are purchasing all the GLD and SLV shares being sold in a panic by the public on this engineered price decline — and then redeeming those same shares for the physical metal, which they intend to keep for themselves, or their selected ‘customers’.
There was another sales report from the U.S. Mint yesterday. They sold 10,000 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and zero silver eagles.
Month-to-date the mint has sold 115,500 troy ounces of gold eagles — 23,000 one-ounce 24K gold buffaloes — and 2,886,000 silver eagles.
There wasn’t a lot of activity in gold over at the COMEX-approved depositories on the U.S. east coast on Wednesday. There was 32,582 troy ounces reported received — and nothing shipped out. Almost all of the ‘in’ movement was 32,150.000 troy ounces/1,000 kilobars [U.K./U.S. kilobar weight] at Canada’s Scotiabank. The remainder went into Brink’s, Inc. The link to this activity is here.
There was 507,525 troy ounces of silver reported received — and all of that went into Brink’s, Inc. as well. The link to that is here.
There was the usual big in/out activity over at the COMEX-approved gold kilobar depositories in Hong Kong on their Wednesday, as 8,019 were reported received — and another 4,942 were shipped out. As usual, all that action was at Brink’s, Inc. — and the link to that is here.
With the U.S. closed for Thanksgiving on Thursday, there was no Commitment of Traders Report yesterday. That will posted on the CFTC’s website on Monday afternoon — and I’ll have all the details in my Tuesday column.
Here’s a chart that Nick Laird passed around last night. It shows that 48.847 metric tonnes of gold were withdrawn from the Shanghai Gold Exchange for the week just past. Click to enlarge.
I don’t have a lot of news items again today, but I do have a couple that I’d been saving for Saturday’s column, plus the usual John Batchelor/Stephen F. Cohen interview.
CRITICAL READS
Surging ‘Trump dollar’ risks earthquake for emerging markets — Ambrose Evans-Pritchard
The resurgent ‘Trump’ dollar is setting off an incipient credit crunch across large parts of the world economy, forcing countries to tighten monetary policy or intervene in the exchange markets to defend their currencies.
The dollar index (DXY) reached a fresh 14-year high of 102 overnight as global markets rotate violently into the U.S. “reflation trade”, betting that Donald Trump’s eye-watering fiscal expansion will prove a replay of Reaganomics in the early 1980s.
Rocketing U.S. bond yields have triggered a global stampede into U.S. assets, draining the international system of dollar liquidity. It is the exact opposite of what happened in the glory days of the emerging market boom when quantitative easing by the U.S. Federal Reserve flooded the world with cheap dollar credit.
The above four paragraphs are all there is to this Ambrose Evans-Pritchard commentary that’s posted in the clear. Most commentary worth reading these days is starting to disappear behind subscription walls — and AE-P’s articles certainly fall into that category. That’s what happened to all of David Stockman’s stuff at the beginning of October as well. If you want credible commentary, you have to pay for it. This article by Ambrose was posted on the telegraph.co.uk Internet site at 8:19 p.m. GMT on Friday evening, which was 3:19 p.m. in New York — EDT plus 5 hours — and I thank reader ‘h c’ for sending it our way.
Retail sales numbers are fake, but the harm is real
There’s an old saying that no one should ever see how laws or sausages are made. I’ll add to that: Nobody should know how the government comes up with its retail sales figures.
But I’m going to tell you anyway because the sales figures that were put out last week were so arbitrary, so random, so ridiculous — yet so important.
Last week, the Census Bureau announced that retail sales for October increased a very healthy 0.8 percent from the previous month and were up 4.3 percent compared with those of October 2015.
Wall Street was expecting a 0.6 percent increase for October.
But there was a lot less meat in that 0.8 percent than you might think.
This commentary by John Crudele was posted on The New York Post‘s website on Monday — and it’s certainly worth reading. I extracted it from yesterday’s edition of the King Report — and another link to it is here.
Inside a Moneymaking Machine Like No Other
The Medallion Fund, an employees-only offering for the quants at Renaissance Technologies, is the blackest box in all of finance.
Sixty miles east of Wall Street, a spit of land shaped like a whale’s tail separates Long Island Sound and Conscience Bay. The mansions here, with their long, gated driveways and million-dollar views, are part of a hamlet called Old Field. Locals have another name for these moneyed lanes: the Renaissance Riviera.
That’s because the area’s wealthiest residents, scientists all, work for the quantitative hedge fund Renaissance Technologies, based in nearby East Setauket. They are the creators and overseers of the Medallion Fund—perhaps the world’s greatest moneymaking machine. Medallion is open only to Renaissance’s roughly 300 employees, about 90 of whom are Ph.D.s, as well as a select few individuals with deep-rooted connections to the firm.
The fabled fund, known for its intense secrecy, has produced about $55 billion in profit over the last 28 years, according to data compiled by Bloomberg, making it about $10 billion more profitable than funds run by billionaires Ray Dalio and George Soros. What’s more, it did so in a shorter time and with fewer assets under management. The fund almost never loses money. Its biggest draw-down in one five-year period was half a percent.
This feature article appeared on the bloomberg.com Internet site on Monday — and was updated late yesterday morning — and for obvious reasons had to wait for my Saturday missive. It comes to us courtesy of Doug Clark — and another link to it is here.
Decoding the Future for Stocks, Real Estate, Gold and Silver — Mike Maloney
“What if you knew what the markets were going to do before they did it? What if you knew the ultimate destiny of stocks, real estate, and gold and silver?” That’s how Mike Maloney began his presentation at the Gold & Silver Summit in San Francisco last week. Mike tells the audience upfront that not only do we know what’s coming, but we can profit from it. “We were left with a road map that we can turn into a treasure map.” It’s an exciting proclamation, though not everything coming will be pleasant.
So what is this road map? And how do we turn it into a treasure map?
This 56:47 minute video presentation by Mike, which he presented at the San Francisco Gold & Silver Summit last week, showed up on the youtube.com Internet site on Monday sometime — and his right-hand guy and video photographer extraordinaire, Dan ‘the man’ Rubock, sent it to me in the wee hours of Tuesday morning. It was in my Tuesday column, but I said at the time that I would also post it in my Saturday column if you didn’t have time for it in the middle of the week. So here it is again — and another link to it is here.
Talks on Final Brexit Deal Will Have to Wait, U.K. Is Warned
Prime Minister Theresa May will not be able to begin talks on a final Brexit deal until the U.K. has agreed how much money it will pay to leave the European Union and resolved border issues, Maltese Premier Joseph Muscat said.
The 27 remaining members of the E.U. are taking a three-tier approach to exit talks with Britain, Muscat said on Friday in a BBC Radio interview. The U.K. will firstly have to agree to a departure payment to the bloc, before settling its E.U. border arrangements, especially those surrounding the boundary between the U.K. and the Republic of Ireland, he said.
“Only after those two areas have been resolved, that third negotiation will start –which is what type of new relationship will there be between the U.K. and the European Union,” Muscat said. “There will not be a situation where the U.K. will have a better deal than it does now — it simply cannot be.”
Malta will assume the rotating presidency of the Council of the EU in 2017, when Brexit talks are due to begin. Muscat’s comments shed new light on the hard-line approach being taken in European capitals ahead of formal Brexit talks, which May says she wants to begin by the end of March.
Meanwhile, Irish Prime Minister Enda Kenny told Sky News that it will prove “impossible” to agree a full Brexit deal within the two-year time frame for negotiations and so a transitional arrangement is “inevitable.”
This news item showed up on the Bloomberg website at 3:07 a.m. Denver time on Friday morning — and was updated about 6 hours later. It comes to us courtesy of West Virginia reader Elliot Simon — and another link to it is here.
Germany needs post-Brexit E.U. trade deal with Britain to minimise own economy fallout, minister warns
Germany needs a “comprehensive” new trade E.U. deal with the U.K. after Brexit to minimise the potential fallout for its own economy, a leading politician has warned.
Ilse Aigner, the Bavarian economy minister, said that Brexit poses a “high risk” to the economy and argued that the U.K. is one of the “most important trading partners for Bavaria“, one of Germany’s most prosperous states.
Britain is hoping that Germany will help to temper demands from France that Britain must “pay a price” for its decision to leave the E.U.
Ministers were encouraged last week after Angela Merkel suggested that she was willing to compromise on free movement in the wake of Brexit.
In comments seen as a significant shift, the German Chancellor suggested that the European Union needs to “discuss further” the rules around freedom of movement.
This very worthwhile read put in an appearance on the telegraph.co.uk Internet site at 1:01 p.m. GMT on their Friday afternoon, which was 8:01 a.m. EST in New York. I thank Roy Stephens for pointing it out — and another link to this story is here.
Doug Noland: Revisiting the Global Savings Glut Thesis
There was no doubt in my mind that unfettered finance would foment market and economic instability. Indeed, evidence of global financial dysfunction has been on full display now for well over two decades. As custodian of the world’s reserve currency and champion of financial innovation, the U.S. has all along been the global leader with respect to Credit excess, speculation and monetary management. The financialization of the global economy has been integral to the U.S.’s unique capacity to run persistently large trade and Current Account Deficits.
Why not de-industrialize and instead use new financial claims in exchange for imported manufactured goods? The experiment in a services and consumption economic structure then took on a life of its own, fueled first by Wall Street finance and then by government debt and central bank Credit.
Unfettered global “money” and Credit coupled with a world flooded with U.S. financial claims (largely IOUs) was a recipe for extreme financial instability. Never did I imagine such an experiment could be sustained for so long. I simply did not contemplate the extent to which central bankers would be willing to underpin unsound global finance.
In the near-term, central banking is about to turn a lot more difficult. All this QE in the face of rising bond yields and general uncertainty will stoke inflation fears. Already, the surge of liquidity into equities is drawing funds from fixed income, while exacerbating general flow instability. Liquidity flooding into king dollar exacerbates EM fragilities. Increasingly apparent EM trouble then spurs more flows into hot “Core” securities. “Melt-up” stuff. Do central banks come to view QE as destabilizing to inflation expectations and overall market speculation and flows? Or do they view the backdrop as too risky to begin reining in global monetary stimulus, again turning their backs on increasingly dangerous speculative excess? Might views begin to diverge, a likely scenario that would usher in a less straightforward – and less market-comforting — policy-making paradigm.
Doug’s weekly Credit Bubble Bulletin was posted on his website in the wee hours of Saturday morning EST — and another link to it is here.
The National Security Adviser Who Dined with Putin: John Batchelor Interviews Stephen F. Cohen
At least in the geo-strategic area we are beginning to see a Trump presidency that may be conforming to an election platform for a détente president. This is undoubtedly hugely beneficial for us all, but for Trump means virtually a political war against him from all sides of the political establishment from the E.U. and Washington itself. Cohen discusses Trumps choices for his cabinet and his advisors and its likely affect on the New Cold War. We see the usual propaganda histrionics against Trump at home led by the usual hotheads and captured “journalism”. Elsewhere NATO war games are continuing on the Russian border, there is much increased shelling by Kiev in the Donbass, and all manner of criticisms are coming at Russia over Syria. In Washington he is faced with an opposition that carries across party lines with an ingrained belief that Trump is going to pursue détente (Cohen uses their label as “reset”) with Russia as the existential enemy, and they are determined to “firewall” that resistance against the new president. The resistance will be massive. But as Cohen points out, a president has great freedom to pursue a foreign policy of détente alone without having to go through Congress.
The central figure for this cold war president, so far, is Michael Flynn, Trump’s choice for National Security Advisor. In some circles he is considered too political (he supported the Iraq wars), but where the final appeal may be found is his view that ISIS is the real threat to the United States, and he appears to be open to working with Russia in the M.E. Cohen also notes Trump’s flexibility with his meeting with Tulsi Gabbard (Democrat rep., Hawai’i) who stated that she supported Trump’s anti-war position.
But there are changes in attitudes for governments in Europe also, and Cohen lists countries that are softening their anti-Russian views – or redefining their relationship with Washington to favour Trump’s détente. One very important observation he picks up on came from President Obama at the recent APEC meeting in Peru that indicates a fundamental change in how Obama, at least, views what Trump is doing. The changes in Europe show that economic interests and common sense “are initiating policies of moving away from blindly supporting Washington to those of “greater independence”.
But Cohen acknowledges that resistance to Russia in institutions like the World Court may be present there for the long term. These institutions have shown to be politically influenced for Washington –especially in the Ukrainian Civil War where realities have been misrepresented from the beginning. But this writer is still reassured that Trump’s presidency is a détente presidency, and being such a wilful personality (his public disdain for the press in the US was a good example) suggests that he will not wilt at the challenges in front of him. We should all hope so…
This 40-minute audio interview [complete with a bit of a transcript] was posted on the audioboom.com Internet site on Tuesday, but for all the usual reasons, had to wait for today’s column. I thank Ken Hurt for providing the link but, as always, the biggest THANK YOU is reserved for Larry Galearis for providing the above executive summary. This certainly is a must listen for an serious student of the New Great Game — and another link to it is here.
General Michael Flynn Says U.S. and Russia Must Adopt Strategic Cooperation (Video)
Lt. Gen. Michael Flynn, who President-elect Donald Trump recently designated his national security advisor, has come in for severe criticism by the mainstream media due to his attendance at an RT 10th anniversary reception in Moscow in December last year – where he sat next to Vladimir Putin – and other perceived “weakness” toward Russia (perceived by unhinged neocons and their shills).
However, there has also been worry concerning Flynn coming from Trump’s supporters, about whether the retired general and former head of the Defense Intelligence Agency truly sympathizes with Trump’s expressed foreign policy goal of rapprochement with Russia and co-operation in the Middle East.
During his visit to RT, Flynn sat down for a 45-minute discussion which sheds some light on his foreign policy views. Now that he has been appointed to a key position in the new administration, it’s worth revisiting.
This 44:51 minute video interview with Flynn, was hosted by the very smart — and very yummy — Sophie Shevardnadze. It was recorded a year ago, but it is, as the RT story suggests, “worth revisiting“. It’s a must watch for sure — and I thank Larry Galearis for finding this for us. It was posted on the russia-insider.com Internet site on Thursday sometime — and another link to it is here.
“Don’t go any further”: Erdogan accuses E.U. of betrayal, threatens to open borders for migrants
Turkish President Recep Tayyip Erdogan has warned that his government will open its border gates to allow migrants to flow into Europe if it is pushed any further by the EU. It comes after lawmakers in the bloc voted to halt membership talks with Ankara.
“We are the ones who feed 3-3.5 million refugees in this country. You have betrayed your promises,” Erdogan told the E.U., as quoted by AP. “If you go any further those border gates will be opened.”
He also accused the E.U. of not treating people fairly, claiming it “never treated humanity honestly” and “did not pick up babies when they washed ashore on the Mediterranean…,” Hurriyet reported.
Conversely, Germany believes that the E.U. has not broken any of its promises given to Turkey and “threats on either side” are “not helping” when handling the current situation, said Ulrike Demmer, Chancellor Angela Merkel’s spokeswoman, according to Bild newspaper.
“We see the E.U.-Turkey agreement as a success for both sides,” Demmer said, adding that it is in the interests of both parties for the agreement to hold.
This very interesting, but not surprising news story was posted on the rt.com Internet site at 10:19 a.m. Moscow time on their Friday morning, which was 1:19 a.m. in Washington — EST plus 9 hours. I thank reader ‘h c’ for his second contribution to today’s column — and another link to it is here.
Cash Crackdown Escalates: India May Impose 60% Tax on “Unaccounted” Deposits, Curbs on Gold Holdings
As reported yesterday, India’s unexpected crackdown on “black money” which saw the elimination of the old high denomination bills, is not going well, not only because former PM Manmohan Singh slammed the idea warning it would cut as much as 2% from the GDP of the world’s fastest growing economy, but because so far the voluntary participation in the “exchange” of old for new notes ahead of today’s exchange suspension (deposits of old cash may still take place until December 31) has been far below expectations.
As a result, the government is taking even more aggressive steps to part savers with their allegedly “laundered” cash, and as the Indian Express reports, Mody’s cabinet discussed amending laws to levy close to 60% income tax on unaccounted deposits in banks above a threshold post demonetisation of high-denomination currency notes. “The move comes amid banks reporting over Rs 21,000 crore being deposited in zero-balance Jan Dhan accounts in two weeks after the 500 and 1,000 rupee notes were banned, which authorities apprehend may be the laundered black money.”
But wait, there’s more.
Recall, that as per our report last night, one of the reasons proposed for the recent tumble in gold has been speculation that India may ban gold imports. As a reminder, gold has traditionally been a widely-accepted cash alternative in an economy where gold has long held a supremacy over cash equivalents, to the point where recently the government started paying a dividend to those who deposit their gold to local banks for “safe keeping.”
Well, it now appears that the government is taking its crusade against gold one step further, and according to a report by NewsRise, the Indian government may soon impose curbs on domestic holdings of gold as Modi intensifies his war against “black money”, news agency NewsRise reported.
As we reported previously, gold prices have soared in India ever since the November 8 demonetization announcement, and premiums jumped to two-year highs last week as jewellers ramped up purchases on fears the government might restrict imports after withdrawing higher-denomination notes from circulation in its fight against black money.
This breathless ‘news’ item, which should be read with some skepticism, showed up on the Zero Hedge website at 8:42 a.m. EST yesterday morning — and I thank Richard Saler for his second offering of the day. Another link to it is here.
Indian cash crunch hits gold demand during peak wedding season
Mumbai resident Shashikant Zhalte’s wedding this weekend will be less sparkling than his family had hoped, thanks to a cash shortage following Indian Prime Minister Narendra Modi’s shock withdrawal of high-value notes to fight “black money”.
Zhalte bought gold jewelry for his wife-to-be months ago, but had delayed purchases for his mother and sisters.
Then came the Modi bombshell on Nov. 8, in the middle of the wedding season when gold demand spikes, forcing Zhalte to drop his plans to buy an additional 50 gms, worth around $2,200.
The scenario is being played out across India, the world’s second biggest consumer of gold, where it is customary to gift jewelry in marriages.
The wedding season stretches from September to April, and Thomson Reuters-owned metals consultancy GFMS says it accounts for more than half of the country’s annual demand for gold.
This Reuters story, co-filed from Mumbai and Bengaluru, was picked up by thefiscaltimes.com Internet site on Friday sometime — and it’s a gold-related story that I found on the Sharps Pixley website last night. Another link to it is here.
The PHOTOS and the FUNNIES
Here are two more entries in the 2016 Comedy Wildlife Photo Contest. As I said before, I’ve got a bunch of these — and I’m going to post every last one of them, because they’re all first rate. ‘Click to Enlarge‘.
The WRAP
Today’s pop ‘blast from the past’ is instantly recognizable — and British singer/songwriter Roger Hodgson sounds the same now as he did when the group hit the charts with this single from their 1979 album “Breakfast in America“. He composed the song in his teens from an autobiographical point of view, from his experience of being sent away to an English boarding school for ten years. Enjoy the memories — and the link is here. You can also feast on his other hits in the right side-bar.
Today’s classical ‘blast from the past’ is somewhat more ancient of course. It is perhaps, one of the most famous works by Bach — and considered among the best examples of the work of the late Baroque period. Bach may have written it between 1717 and 1723 when he was the Kapellmeister at the court of Anhalt-Köthen, Germany.
Here’s Janine Jansen and Leonidas Kavakos performing his concerto for two violins, strings, and continuo in D minor, BWV 1043 way back on July 30, 2013. The video quality is a bit disappointing, but the audio is OK and, as you can probably imagine, the musicianship is world class. The link is here.
I was somewhat surprised that the new low tick that was set in gold in Far East trading on their Friday morning, wasn’t followed up with more of the same in London and New York on Friday. JPMorgan et al appeared content to just cap the prices in both those markets. As I pointed out before, gold and platinum would have certainly closed well into positive territory if allowed to — and silver would have closed up multiples of what it did.
Here are the 6-month charts for all four precious metals, plus copper. Note how oversold gold is vs. the other two precious metals — and I shan’t discuss palladium in this paragraph.
The ongoing [and never-ending] problem that the powers-that-be have in the precious metals now, is that they have to ride shotgun on them 24/7 — because the moment they put their collective hands in their pockets and do nothing, there are automatically not enough legitimate short buyers/long sellers of last resort at these prices to stand in the way of any rally which develops. It would automatically be the very next one that came along, within minutes most likely — and hours most certainly.
Some day they will do that very thing, but it obviously wasn’t yesterday. However, it would have been, if ‘da boyz’ and their algos hadn’t shown up for work. But the day they don’t, we’ll see a short covering rally for the ages — and it can’t come too soon for us.
And all that stands in the way of that event are the Big 8 traders…all banks and investment houses. And it wouldn’t take all of them to stand back and do nothing, just a couple of the Big 4. I’m sure Ted would think that it would be just The Big One — and that’s J.P. Morgan. I’m not arguing, as a double-cross of the other commercial traders is something that Ted has spoken of for years.
Right now ‘da boyz’ appear concentrated on covering as many short positions, particularly in gold, that they can — and as I said earlier, I’m somewhat surprised that they haven’t pressed their advantage more in silver. The other surprise is palladium. Normally all four precious metals are getting it in the neck at the same time…but not this time. I’m asking why…and can’t come with any credible answer. One thing is for sure, is that supply and demand fundamentals have nothing to do with the current palladium rally.
Then there’s the rather strange price machinations in copper. I’m no expert in this metal, but in the last 5-year period, this is the most incredible rally I’ve ever witnessed. However, it’s a certainty that neither supply or demand has anything to do with it, as it’s all paper trading on the COMEX…with the Managed Money traders up to their necks on the long side I would imagine. It’s possible Ted will have something to say about it in his commentary this afternoon.
Monday is a big day for two reasons. Firstly we get the U.S. holiday-delayed Commitment of Traders Report for the positions held at the close of trading this past Tuesday. It should certainly show improvements in the commercial net short positions in both gold and silver. But, unfortunately, the data from the big engineered price decline that began on Wednesday, the day after the cut-off, won’t be in it. I know that one of the first things that Ted will be checking for is if the Managed Money traders went short during the reporting week — and so will I. The second event is that by the close of COMEX trading on Monday, all the large traders have to exit their December contracts, unless their standing for delivery — and the rest of the traders have to be out by the same time on Tuesday.
In some ways, Monday’s COT Report has already been totally eclipsed by what has happened in gold, silver and platinum since the cut-off, so we really won’t know the true lay of the land until next Friday’s report. Of course there are still two more days trading days left in the reporting week — and I’ll be very surprised if the commercial traders aren’t active over that 2-day time period.
First Notice Day for delivery in December, which is one of the biggest delivery months of the year, follows right after that — and I’ll be more than interested in who the short/issuers and long/stoppers are when the numbers are posted on the CME’s website late Tuesday evening.
So, will this ever end you ask? That’s a good question, but they can’t keep it up forever.
One thing is certain. When JPMorgan et al have covered every short position they possibly can, or gone long during this engineered price decline — and the next rally of substance begins, we’ll know almost right away.
We were in this position a year ago — and it turned out not to be the ‘big one’ — but one day it will. And with JPMorgan holding as much physical silver as they are — and probably gold as well — they are certainly in a position to let prices soar if it’s in their best interests. At the point, Ted’s ‘double-cross’ will be on in earnest.
But until that day arrives, whenever it may be in the not-too-distant future, all we can do is hunker down and wait it out.
I’m still “all in” — and I’ll see you here on Tuesday.
Ed
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