07 December 2016 — Wednesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
After doing nothing for the first hour of trading after the markets opened at 6:00 p.m. on Monday evening, gold rallied 5 bucks by 10 a.m. China Standard time on their Tuesday morning — and that was as high as it was allowed to get for the rest of the day. It was sold down a few dollars from there — and chopped sideways until shortly before 10 a.m. in New York. Then a ‘surprise’ rally began to develop in the U.S. dollar index, which reached it zenith around 12:20 p.m. The gold price went from being up a handful of dollars, to down a handful of dollars. It then chopped sideways into the 5:00 p.m. close of trading.
The high and low ticks certainly aren’t worth looking up.
Gold was closed in New York yesterday at $1,169.30 spot, down 70 cents on the day. Net volume was reasonably light at just under 129,000 contracts.
Silver followed a somewhat similar price path to gold in Far East trading, with the low over there coming an hour before the London open. It began to creep higher from there, but shortly after the COMEX open in New York, a short buyer/long seller of last resort had the price back slightly below unchanged by the 9:30 a.m. open of the equity markets at 9:30 a.m. EST in N.Y. It rallied sharply into the London p.m. gold fix — and then succumbed to the same dollar index rally that gold did. By the COMEX close it was back to a few pennies below unchanged — and it traded flat for the remainder of the Tuesday session.
The high and low ticks in this precious metal aren’t worth looking up, either.
Silver finished the Tuesday session at $16.69 spot, down 2 cents on the day. Net volume was very decent at around 42,500 contracts.
Platinum’s early morning rally in the Far East got capped shortly after 9 a.m. CST — and its low tick over there came just less than an hour before the Zurich open. It began to rally with some authority from that point — and the price appeared to go ‘no ask’ just minutes after the COMEX open. At that juncture ‘da boyz’ showed up and, like silver, had the price back to unchanged by the 9:30 a.m. open of the equity markets in New York. From there it blasted back to its $950 high tick of the day, but JPMorgan et al were having none of that — and used the same tiny rally in the dollar index to hammer the snot out of platinum. By 1:00 p.m. EST it was back below unchanged — and like silver and gold, traded flat from there. Platinum was closed on Tuesday at $932 spot, down only 3 bucks from Monday’s close, but $18 off its high tick. Heaven only knows how high it would have traded if hadn’t run into the “all the usual suspects“. Of course the same can be said of gold and silver yesterday as well.
Ditto for palladium. It’s high tick spike in early Far East trading got hammered flat — and after that it followed an identical price pattern to platinum. It was up 7 dollars at the COMEX open, but by the time the short buyers/long sellers of last resort were done with it, it was 18 bucks off its high tick — and was closed down ‘only’ 8 dollars from Monday, at $735 spot.
The dollar index closed very late on Monday afternoon in New York at 100.14 — and began to creep every-so-slowly higher starting around 1:30 p.m. China Standard Time on their Tuesday afternoon. That ended about 3:15 CST — and by shortly after the London open it was back at the 100.00 level. It bounced along that mark for about forty-five minutes — and began to chop quietly higher from there. But it really began to head north starting around 10:30 a.m. in New York — and a lot of the price damage in all four precious metals occurred between 11:30 a.m. and 12:20 p.m. EST, as the ‘rally’…if you wish to dignify it with that name…ended. From there it crept quietly lower, finishing the Monday session at 100.49 — up 35 basis points on the day.
If you knew what to look for — and where to find it — it’s obvious that ‘da boyz’ were all over the precious metals during the COMEX trading session in New York on Tuesday. Any ‘analyst’ who can’t [or won’t] see this, is one whose job depends on them not seeing it — and there are lots of them around.
And here’s the 6-month U.S. dollar index — and you can read into it whatever you wish.
The gold stocks opened unchanged — and within fifteen minutes were at their respective high ticks of the day. They chopped lower from there — and into negative territory. Their respective low ticks came around 3:25 p.m. in New York — and they rallied a hair into the close. The HUI finished the Tuesday session down 0.62 percent.
It was mostly the same for the silver equities, except their respective lows occurred around 12:25 p.m. EST. They rallied a bit off those lows at that juncture — and really didn’t do much for the rest of the day after that. Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 1.66 percent. Click to enlarge if necessary.
The CME Daily Delivery Report showed that 16 gold and 3 silver contracts were posted for delivery on Thursday. In gold, it was ADM with 14 contracts issued — and the usual ‘3 Musketeers’…HSBC USA, Scotiabank and JPMorgan [8 for clients, 1 contract for itself] stopping/receiving 15 of the 16 contracts issued. In silver, ABN Amro issued the 3 contracts…and JPMorgan and Macquarie Futures picked them up for their own accounts…two for the former — and one for the latter. I shan’t bother linking this activity.
The CME Preliminary Report for the Tuesday trading session showed that gold open interest in December fell by 128 contracts, leaving 1,462 left, minus the 16 mentioned above. Monday’s Daily Delivery Report showed that only 37 gold contracts were actually posted for delivery today, so that means that 128 – 37 = 91 short/issuers were let off the delivery hook by those holding the long sides of those particular contracts. Silver o.i. in December dropped by 143 contracts, leaving 1,845 left, minus the 3 contracts mentioned in the previous paragraph. Monday’s Daily Delivery Report showed that only 52 silver contracts were actually posted for delivery today, so that means that 143 – 52 = 91 short/issuers were let off the December delivery hook by the long/stoppers on the other side of the trades.
There were no reported changes in GLD yesterday — and as of 7:26 p.m. EST yesterday evening, there were no reported changes in SLV, either.
There was no sales report from the U.S. Mint.
There wasn’t a lot of gold movement over at the COMEX-approved gold depositories on the U.S. east coast on Monday. Nothing was reported received — and only 29,417.250 troy ounces/915 kilobars [U.K./U.S. kilobar weight] were reported shipped out the door. That activity, such as it was, occurred over at Canada’s Scotiabank — and the link to that is here.
It was much busier in silver, as 1,118,382 troy ounces were received, but only 90,169 troy ounces were shipped out. There was a container load into both HSBC USA and CNT — and smallish amount shipped out came from Scotiabank. A link to that action is here.
It was a very busy day over at the COMEX-approved gold kilobar depositories in Hong Kong on their Monday. They reported receiving 11,024 of them — and shipped out 9,206. That a lot of gold — and I’d love to know where it came from — and where it’s going. All this action was at Brink’s, Inc. as per usual — and a link to that, in troy ounces, is here.
Here are some charts that Nick sent our way on Monday, but I was already full up with charts in my Tuesday column, so these had to wait for today.
The first one shows gold imports into Turkey, updated with November’s data. The imported 7.6 tonnes that month, which isn’t a lot. Click to enlarge.
This next chart shows how much gold that China imported through Hong Kong in October. The magic number, according to Nick, was 61 tonnes. Click to enlarge.
Now that Nick has India’s gold imports for October — and that chart was in my Tuesday column — he was able to update his “Silk Road Gold Demand” chart with all the applicable data — and for the that month, the combined demand from India, Turkey, Russia and China totalled 308.500 tonnes. Nick also pointed out that this amount was well in excess of the 266 tonnes of gold that was mined on a global basis during that period. Where is the rest of the world getting its gold from, I wonder? Click to enlarge.
After having too many stories in my Tuesday column, I’m back scraping the bottom of the barrel today, as I don’t have much.
CRITICAL READS
U.S Trade Deficit Grows More Than Expected As Stronger Dollar Pressures Exports
The U.S. monthly international trade deficit increased in October 2016 according to the U.S. Census Bureau, rising from $36.2 billion in September (revised lower from $36.4 billion) to $42.6 billion in October, higher than the $41.8BN consensus estimate, as exports decreased and imports increased which was to be expected following the recent surge in the US Dollar. The goods deficit increased $6.3 billion in October to $63.4 billion. The services surplus decreased $0.1 billion in October to $20.8 billion.
Breaking down the main trade categories, exports of goods and services decreased $3.4 billion, or 1.8 percent, in October to $186.4 billion. Exports of goods decreased $3.5 billion and exports of services increased $0.1 billion.
The decrease in exports of goods reflected decreases in foods, feeds, and beverages ($1.4 billion), in industrial supplies and materials ($1.0 billion), and in consumer goods ($0.9 billion).
The increase in exports of services mostly reflected an increase in transport ($0.1 billion), which includes freight and port services and passenger fares.
At the same time, imports of goods and services increased $3.0 billion, or 1.3 percent, in October to $229.0 billion. Imports of goods increased $2.8 billion and imports of services increased $0.2 billion.
This news item put in an appearance on the Zero Hedge website at 8:40 a.m. EST on Tuesday morning — and another link to it is here.
Nobel secretary regrets Obama peace prize
Geir Lundestad told the AP news agency that the committee hoped the award would strengthen Mr Obama.
Instead, the decision was met with criticism in the U.S. Many argued he had not had any impact worthy of the award.
Mr Lundestad, writing in his memoir, Secretary of Peace, said even Mr Obama himself had been surprised.
“No Nobel Peace Prize ever elicited more attention than the 2009 prize to Barack Obama,” Mr Lundestad writes.
“Even many of Obama’s supporters believed that the prize was a mistake,” he says. “In that sense the committee didn’t achieve what it had hoped for“.
Well, I’d dearly love to know the politics behind this award, but Mr. Lundestad’s mea culpa fall well short of that. Most of us think that the prize is awarded for meritorious work performed over a lifetime, not what is ‘hoped’ for in the future. If that’s really the case, then I expect my medal to be in the mail by Christmas. This very interesting AP story, which was picked up by the bbc.com Internet site, is very old. It’s datelined 17 September 2015 — but I don’t recall every seeing it, or even hearing about it. I thank Dennis Miller for finding it for us — and another link to it is here.
Auditor Deloitte Fined a Record $8 Million For Massive Fraud
Remember when auditors were, by their very definition, supposed to be the embodiment of credibility, trustworthiness and moral fiber? The Brazilian arm of Big Four auditing giant, Deloitte, forgot these simple prerequisites and as a result the US auditing watchdog fined the firm a record $8 million for what amounts to massive fraud: falsifying audit reports, altering documents and providing false testimony during an investigation that unearthed what it described as its “most serious” finding of misconduct.
The US Public Company Accounting Oversight Board, or PCAOB, also penalized or barred 12 former partners, including a national practice director, and auditors of the Brazil-based Deloitte Touche Tohmatsu Auditores Independentes.
The Deloitte Brazil case is the first time the PCAOB has “charged a member of the Big Four auditing firms with fraud and for failing to co-operate with an investigation” according to the FT. Worse, unlike banks which resolve similar cases without admitting or denying guilt, in settling, Deloitte Brazil admitted it had violated quality control standards and failed to co-operate with the auditing board’s inspection and subsequent investigation.
“This is the most serious misconduct we’ve uncovered. It’s cover-up after cover-up after cover-up,” Claudius Modesti, director of enforcement at the PCAOB, said. “As an investor you’re expecting that the audit was done properly and sufficiently and that wasn’t the case here.”
Not only was that not the case, but the details read like straight out of a fictional account of third-world crime.
This is the Zero Hedge spin on a Financial Times story from Monday. It was posted on their website at 9:43 p.m. on Monday evening, which was one of the reasons I missed it — and another link to it is here.
Brussels to fine three banks over Euribor rate rigging
Brussels on Wednesday will hit HSBC, JPMorgan, and Credit Agricole with multimillion-euro fines for rigging the Euribor interest rate benchmark, closing a five-year cartel probe into a scandal that shook the financial world.
The three banks held out against a 2013 settlement with the European Commission that imposed almost E1 billion of fines on Deutsche Bank, Societe Generale, and Royal Bank of Scotland.
Margrethe Vestager, the EU’s competition commissioner, is expected to unveil fines on the trio of banks ranging from tens of millions of euros to the low hundreds, according to people familiar with the case.
The decision is an example of the long shadow that still hangs over the industry from alleged misconduct during the years of the financial boom. …
Ms. Vestager is still developing a cartel case against multiple banks for allegedly manipulating the $5.3 trillion forex market. Given the extent of evidence in the hands of investigators, officials expect any forex fines to exceed those imposed during the rate-rigging probes.
The above five paragraphs are all of this Financial Times story from Tuesday that’s posted in the clear. The rest is behind their subscription wall. I found it on the gata.org Internet site — and another link to it is here.
ECB Buys Record Amount of Debt as QE Front Loaded Before Holidays
The European Central Bank bought a record monthly amount of assets under its quantitative-easing program in November in an attempt to front load purchases before market liquidity may dry up during the holiday season.
The ECB bought a total of €85.4 billion ($91.6 billion) of debt last month even as the pace of purchases of government bonds, which represent the bulk of the program, dropped to €70.1 billion from €73 billion in October, ECB data published on Monday showed. An increase in monthly buying of covered bonds, asset-backed securities and corporate debt helped to make up for the difference.
Policy makers will decide on Thursday whether to extend QE past the provisional end-date of March as they strive to reach their inflation goal. Economists in a Bloomberg survey foresee purchases continuing for around a further six months, most likely at €80 billion a month, an extension that may require easing some of the ECB’s self-imposed rules.
This Bloomberg news item showed up on their Internet site at 10:58 a.m. EST on Monday morning — and it’s something I ‘borrowed’ from yesterday’s edition of the King Report. Another link to it is here.
Italy preparing to take controlling stake in Monte dei Paschi – sources
Italy is preparing to take a €2 billion controlling stake in Monte dei Paschi di Siena as the bank’s hopes of a private funding rescue fade following Prime Minister Matteo Renzi’s decision to quit, two sources close to the matter said on Tuesday.
The government is already the ailing bank’s single largest shareholder with a four percent share, but is planning to buy junior bonds held by ordinary Italians to take the stake up to 40 percent, the sources said.
This would make it by far the biggest shareholder, meaning the Treasury would be able to control Italy’s third biggest bank and its shareholder meetings.
The sources said a government decree authorizing the deal, which would see the state buy the subordinated bonds from retail investors and convert them into shares, could be rushed through as early as this weekend.
Monte dei Paschi must raise €5 billion ($5.4 billion) by the end of this month to avoid being wound down, but private investors are reluctant to provide cash after Renzi lost a referendum on Sunday and announced plans to resign.
This Reuters news item, which I plucked from a Zero Hedge article, appeared on their Internet site at 7:15 p.m. GMT on Tuesday evening in London, which was 2:15 p.m. in New York — EDT plus 5 hours. Another link to it is here.
WikiLeaks dump casts rare light on Erdogan inner circle
Turkish President Recep Tayyip Erdogan seems omnipotent, but few doubt that he is grooming Berat Albayrak as his successor. Foreign officials have described Albayrak to Al-Monitor as “Turkey’s most powerful man after Erdogan.” Some go as far as to suggest that he is already de facto running the country. Those who want to glean more about Albayrak, Turkey’s energy minister and Erdogan’s son-in-law, can now sift through more than 57,000 emails supposedly associated with his personal email account that WikiLeaks released Dec. 6.
The missives, spanning the years 2000 to 2016, cast a rare light on Erdogan and his inner circle and their interactions with business, the government and the media. Some of the juiciest tidbits in “Berat’s box” are found in exchanges between Albayrak and his brother Serhat, who runs the pro-government Turkvuaz Medya conglomerate and is a board member of Calik Holding, a giant Turkish company with interests in energy, construction and telecoms, among other things.
In the e-mails, Serhat forwards his conversations with Mehmet Ali Yalcindag, U.S. President-elect Donald Trump’s business partner in Turkey. Yalcindag is the son-in-law of the Turkish media mogul Aydin Dogan and has close relations with Albayrak. He arranged the Nov. 9 telephone conversation between Trump and Erdogan after Trump’s election victory.
The e-mails reveal that Yalcindag used his position to censor Dogan-affiliated journalists critical of the president. Yalcindag was forced to step down as CEO of Dogan Publishing after Albayrak’s e-mails were first leaked in September by RedHack, a Turkish hacktivist group. RedHack made good on its threat to make them public after the government spurned its demands to release several left-wing activists from detention.
This story put in an appearance on the al-monitor.com Internet site on Tuesday sometime — and I thank Roy Stephens for pointing it out. Another link to it is here.
Trump to U.S. businesses in China: drop dead
U.S. President-elect Donald Trump’s precedent-breaking call with Taiwan’s president on Dec. 2, followed by ominous tweets about Chinese policy and American firms’ overseas production, has policy wonks scratching their heads. But one message is clear. Trump is indifferent to any potential backlash against U.S. investments in China, and may even welcome it.
It is unclear what led Trump to ditch nearly 40 years of diplomatic protocol and take a congratulatory telephone call from Taiwan’s Tsai Ing-wen. Beijing, which sees political reunification with the island as a historical necessity, lodged a diplomatic protest but otherwise seems keen to let the issue blow over. State media wrote off the call as a gaffe resulting from the transition team’s lack of foreign policy experience.
“American business operating in Asia needs certainty and stability,” the American Chamber of Commerce in China noted, with some understatement. Good luck with that while loose cannon Trump keeps firing. After defending his Taiwan call he went on to lay into China’s business policy and territorial claims in the South China Sea, making it much harder for Beijing to brush the incident off.
As worrisome for U.S. firms, Trump also tweeted a plan to apply a 35 percent tax to products imported by U.S. firms from factories they have moved overseas. That would hammer companies who have spent decades building supply chains and facilities in China, like Apple, for example. A recent Rhodium Group study shows the stock of U.S. direct investment in China reached $228 billion from 1990 through 2015.
The nightmare for any foreign firm in China is an angry mob besieging its factory or flagship store. Pressing the Taiwan button is the best way to rally such a mob, who will call on Beijing for backup.
This short Reuters news item, filed from Hong Kong, showed up on their Internet site at 3:48 a.m. EST on Monday morning — and I thank Richard Saler for sending it our way. Another link to this story is here.
Trump, Taiwan and an Uproar: Putting China on the defensive — George Friedman
U.S. President-elect Donald Trump spoke on the telephone with the president of Taiwan. This caused deep upset because it was counter to an understanding in place since President Richard Nixon opened the door with China in 1972. This understanding included an American endorsement of the one-China policy, which held that Taiwan is part of China but would continue to behave as if it weren’t. The United States agreed not to have diplomatic relations with Taiwan and pretend it isn’t a close ally. The agreement was a fairly meaningless concession that allowed the Chinese to domestically claim they had forced the U.S. to capitulate on an important issue. This was important for China. By speaking with the Taiwanese president, Trump undermined that agreement. The Chinese responded by saying that President Trump will be judged differently than President-elect Trump, and they remained calm.
The context of this agreement should be recalled. When Nixon went to China, the Vietnam War was still being fought, and it had weakened U.S. military capabilities sufficiently that it was unclear if the U.S. could resist Soviet military action in Europe. The Chinese fought a major battle in 1969 with the Russians on the Ussuri River, along the Siberian-Chinese border. Sino-Soviet relations had plummeted in the 1960s, and China was worried about a Soviet attack, including a nuclear strike.
The Soviets seemed to be in a position to confront either China or the U.S. in Europe, but not both simultaneously. The U.S. needed to tie the Soviets down by posing a counter-threat of a notional strike against the Soviets in Europe and Asia, simultaneously. Soviet transportation did not allow for rapid force movement, and coercing the Soviets to divide those forces between two fronts dramatically reduced their ability to mass strategically overwhelming power. Coordination between the U.S. and China in the 1970s led to the Chinese permitting American intelligence listening posts in China to intercept Soviet trafficking.
This was the context in which the agreement on Taiwan was made. Two powers faced serious strategic problems. Geopolitics trumped ideology, as it often does, and the two powers reached an understanding that achieved vital strategic goals for both. The Chinese asked for something incredibly trivial in this context. They asked the U.S. to acknowledge that there is only one China, while China agreed not to invade Taiwan. Given the stakes, the U.S. readily agreed to such a fantasy. Taiwan was very much independent of China and a close ally of the U.S. China was too weak to invade Taiwan. But China needed domestic political cover, and its ability to claim an American capitulation on the Taiwan issue was important. The U.S. didn’t want to expose the Chinese politically, so if this was what they needed, Nixon would capitulate. He knew there would be posturing in the U.S. Congress, but he could weather it. The U.S. closed its embassy in Taiwan and reopened it as the American Institute in Taiwan, a nongovernmental organization that happened to be manned by U.S. diplomats. Travel, trade, investment and arms sales continued as if nothing had happened, since in fact, nothing had.
This very interesting essay was posted on the geopoliticalfutures.com Internet site on Monday — and I thank Scott Otey for sharing it with us — and another link to it is here.
Is Trump Calling Out Xi Jinping? — Patrick Buchanan
Like a bolt of lightning, that call of congratulations from Taiwan President Tsai Ing-wen to President-elect Donald Trump illuminated the Asian landscape.
We can see clearly now the profit and loss statement from more than three decades of accommodating and appeasing China, since Richard Nixon and Henry Kissinger made their historic journey in 1972.
What are the gains and losses?
Soon after Nixon announced the trip in July 1971, our World War II ally, the Republic of China on Taiwan, was expelled from the U.N., its permanent seat on the Security Council given to the People’s Republic of China’s Chairman Mao, a rival of Stalin’s in mass murder.
In 1979, Jimmy Carter recognized the regime in Beijing, cut ties to Taipei and terminated the Sino-American Mutual Defense Treaty of 1954. All over the world countries followed our lead, shut down Taiwan’s embassies, and expelled her diplomats. Our former allies have since been treated as global pariahs.
Another very interesting view on this issue. It was posted on Pat’s website at 12:15 a.m. EST on Tuesday morning — and I thank Roy Stephens for this one. Another link to it is here.
Australia’s GDP dive of 0.5 per cent is more than a “wake-up call“, says Treasurer Scott Morrison
Treasurer Scott Morrison has branded the dramatic end to five continuous years of economic growth “not just a reminder, not just a wake-up call, but a demand to support economic policies that drive investment and jobs“.
Five months after an election won on the promise of jobs and growth, the national accounts for the three months following the election show the economy went backwards 0.5 per cent, far more than even the bleakest of the professional forecasts.
Economic growth over the year to September was just 1.8 per cent, a big comedown from 3.1 per cent over the year to June, which was itself revised down from 3.3 per cent.
“This is the second-worst economic growth result in 25 years,” Labor treasury spokesman Chris Bowen said. “It’s only the fourth negative quarter since 1991, and on the only other occasions there were good reasons. In 2011 it was dealing with Cyclone Yasi in Queensland, in 2009 it was the greatest international downturn since the Great Depression, and in 2000 it was the aftermath of the Sydney Olympics. It is also the case that this figure is worse than 2011, worse than 2000, and comparable with 2009, in the middle of the global financial crisis.”
This news item appeared on The Sydney Morning Herald website at 3:33 p.m. AEDT [Australian Eastern Daylight Time] on their Wednesday afternoon — and I thank Australian reader ‘J.W.’ for bringing it to our attention. Another link to it is here.
Italian referendum: Gold confounds…again — Lawrie Williams
I suppose we should have expected it after the Brexit vote and the Donald Trump U.S. Presidential vote result, but yet again a plebiscite, whose result would normally have been expected to give a significant boost to the gold price appears to have had the opposite effect. This time it was the Italian referendum which saw a significant defeat for would-be reformist Prime Minister, Matteo Renzi, and his as-promised subsequent resignation. True, as with the Trump and Brexit votes, once it became apparent which way the results would go, the gold price spiked upwards, but then it was brought down sharply as global markets opened giving further fuel to the conspiracy theorists claims that the financial and governmental elite is working in concert to suppress the global gold price.
The problem for gold is that strength in the yellow metal’s price is generally seen as recognition that the global economy is indeed in a parlous state — and neither the big money, nor the politicians, want to see this interpretation gain credence. For the former it would mean a market collapse, perhaps of epic proportions, destroying wealth, and for the latter it would damage the carefully orchestrated perceptions that all is well with the global economy, despite plenty of indicators that this is not the case.
Modern day politics is all about perception. If people can be led to believe that all is well they will continue spending at levels that will indeed help the economy. In the U.S. for example there is plenty of evidence from non-massaged statistics, that the average person is worse off than they were a few years ago – in some cases substantially so. Yet we have just seen a consumer spending splurge on Cyber Monday which has broken all records. This is obviously unsustainable, but how long will it be when this perception that all is well with the world is just a myth, is understood by the majority of the general public?
Hi Lawrie. It’s not “conspiracy theory” anymore…it’s now conspiracy fact — and has been for years. Your second paragraph above sums up the reality of that quite nicely. This short, but must read commentary appeared on the Sharps Pixley website on Monday sometime — and another link to it is here.
The PHOTOS and the FUNNIES
Here are two more of the finalists in this ongoing saga for the 2016 Comedy Wildlife Photography Awards. Click to enlarge.
The WRAP
The problem for gold is that strength in the yellow metal’s price is generally seen as recognition that the global economy is indeed in a parlous state — and neither the big money, nor the politicians, want to see this interpretation gain credence. For the former it would mean a market collapse, perhaps of epic proportions, destroying wealth — and for the latter it would damage the carefully orchestrated perceptions that all is well with the global economy, despite plenty of indicators that this is not the case. — Lawrie Williams…Sharps Pixley: 05 December 2016
Another day — and another ‘laying on of hands’ by the powers-that-be in the COMEX futures market in New York yesterday. It’s obvious that all four precious metals would have closed in positive territory, particularly platinum and palladium. But a quick rally in the dollar index at a propitious moment — and some spun algorithms from the short buyers and long sellers of last resort — and negative closes for all four were a foregone conclusion.
Here are the 6-month charts for all four precious metal, plus copper once again. Only palladium was closed at a new low tick for this move down — and as you already know, it was not free market forces that caused that.
And as I type this paragraph, the London open is less than ten minutes away — and I see that gold was sold down a few dollars in the first couple of hours of trading after New York opened at 6 p.m. on Tuesday evening — and is still down $1.70 as I write this. It was a similar story in silver — and it’s down 5 cents currently. The same can be said of platinum and palladium — with the former down 6 bucks — and the latter by 5 dollars.
Net HFT gold volume is around 23,500 contracts — and that number in silver is around 5,800 contracts. These volume amounts are very light — and combine that with the price action, there certainly isn’t much happening at the moment. That goes for the dollar index as well, as it’s been trading sideways all through Far East trading on their Wednesday, but did tick up a bit in the last hour — and is up 5 whole basis points as London opens.
Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report. Just eyeballing the 6-month charts for both gold and silver above, I’d guess that we’ll see more improvement in the Commercial net short position in gold, but most likely a smallish deterioration in silver.
Ted has his mid-week commentary this afternoon — and since he follows these things far more closely than the rest of us, he may have some estimates to go with his comments.
And as I post today’s column on the website at 4:02 a.m. EST, I note that gold rallied a bit starting shortly after London opened — and is now up $1.80 the ounce. Silver has gone from down a nickel to up 4 cents. Platinum is only down 2 dollars now, but palladium is down 7 bucks.
Net HFT gold volume is just under 28,500 contracts — and that number in silver is 7,000 contracts on the button. There’s no roll-over/switch volume worthy of the name in either precious metal. I can tell from this increase in volume that these rallies, as tiny as they are, are already up against “all the usual suspects”. The dollar index, which began to head lower just minutes before the London/Zurich open, is back to unchanged.
I have no idea what the rest of the Wednesday trading session will bring. But if Tuesday’s COMEX price action was any indication, it will certainly prove interesting.
That’s all I have for today — and I’ll see you here tomorrow.
Ed
The post Positive Price Action Turned Into Negative Closes on the COMEX appeared first on Ed Steer's Gold and Silver Digest.