Well, dear reader, you don't need me to explain what happened in the precious metal market yesterday, as we've seen it all before. It's just "da boyz" and their HFT buddies running the stops for fun, profit and price management purposes.
In gold, the price was under some sort of pressure starting around 9 a.m. Hong Kong time---and by 1 p.m. in London, the price was down about twelve bucks. There was a tiny rally during the next hour of trading, but at 9 a.m. in New York, the HFT spun their algorithms---and that was that, with the low coming minutes after 12 o'clock noon EST. The gold price rallied quietly higher from there into the close of electronic trading.
The high and low tick were reported by the CME Group as $1,236.70 and $1,203.30 in the April contract.
Gold closed in New York yesterday at $1,209.80 spot, down $18.10 from Friday's close---and it was down about twenty bucks from Monday's close. Net volume was only 140,000 contracts---and that doesn't include Monday's volume, which I've already subtracted from that figure.
Reader Brad Robertson sent me the 5-minute tick chart for gold yesterday. It starts around 7:25 p.m. MST/9:25 p.m. EST on Monday evening, which was early morning in Far East trading---and runs through until the COMEX close in New York yesterday. Note the huge volume spike once the HFT traders spun their algorithms---and the technical funds puked their long positions. They probably added to their short positions as well. Don't forget the 'click to enlarge' feature!
Not surprisingly, it was silver that got hit the worst---and the chart below tells you all you need to know. You don't need the play-by-play on this, as you've heard it all before---and are probably just as tired of reading about it, as I am writing about it.
The high and lows were reported as $16.26 and $17.40 in the March contract---an intraday move of 6.5 percent.
Silver finished well off its low at $16.47 spot, down 85 cents from Friday's close---and 83 cents from Monday's close. Net volume on Tuesday was 49,000 contracts---that's net of Monday's volume and Tuesday's roll-overs. And considering the severity of the engineered price decline, that's not a lot of volume. I'll have more on this volume issue in The Wrap.
Ditto for platinum, except its low tick came just before 10:30 a.m. EST. It bounced off its low by five bucks or so---and then traded ruler flat into the close, finishing the day at $1,173 spot, down 32 dollars from Monday's close.
The palladium price chart was a very mini version of the platinum chart. Palladium was closed at $781 spot, down only six bucks from Monday.
The dollar index closed late on Monday afternoon at 94.43---and after a down/up move of about 15 basis points in Far East trading on their Tuesday, the index hit its 94.45 high about 8:20 a.m. GMT in London. By noon in London, it was at its 93.85 low---and at that juncture it was 'rescued' once again---and then chopped sideways, closing at 94.13---down 30 basis points on the day.
Once again the currency moves had zero to do with what was happening in the precious metals, as their price action there was 100 percent engineered in the COMEX futures market.
The gold stocks gapped down a bit more than 2 percent at the open---and continued to slide a bit as the trading day wore on. Not even the gold rally that began at noon EST---and continued for the rest of the day---helped the equities, as the HUI close virtually on its low tick, down 3.32 percent.
The silver equities followed a similar price pattern and, once again, the silver rally off its price low that began at noon EST made no difference, as the silver shares continued to slide. Nick Laird's Intraday Silver Sentiment Index closed down a chunky 4.51 percent.
The CME Daily Delivery Report showed that 50 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. Jefferies was the short/issuer on all of them---and JPMorgan stopped 48 of them in its client account. The link to yesterday's Issuers and Stoppers Report is here.
The CME Preliminary Report for the Tuesday trading session showed that gold open interest in February increased by one lonely contract---and now stands at 602 contracts, minus the 50 mentioned in the previous paragraph. The February o.i. in silver was unchanged at 56 contracts.
There were no reported changes in GLD yesterday---and as of 9:12 p.m. EST yesterday evening, there were no reported changes in SLV.
The U.S. Mint didn't have a sales report, either.
Over at the COMEX-approved depositories on Friday, there were 32,150.000 troy ounces of gold reported received---and that works out to exactly 1,000 kilobars of the stuff---and 16,075.000 troy ounces were shipped out. That amount works out to exactly 500 kilobars. All of the in/out activity was at Canada's Scotiabank---and the link to that is here.
Although gold kilobars of four nines fineness are not classified as "good delivery" by the LBMA or the COMEX just yet, the day will come when they will be---and that will probably occur the day that gold gets repriced.
In silver, nothing was reported received, but a very chunky 1,222,866 troy ounces were reported shipped out. Three different depositories were involved---and the link to that action is here.
I'm happy to say that I don't have all that many stories for you today, so that should give you more time to read the ones you didn't get around to in the Critical Reads section of yesterday's column.
Yes, indeed. They bought the dip again, nudging the S&P 500 to another “record close”. This time the magic number was 2097 and its represented a tiny gain of 0.3% from the last record close, which was 2090 on December 29th.
Needless to say, there were a lot of thrills and spills in between. As shown below, the broad market index has been staggering upward like a drunken sailor for the last three months. Just about 90 days ago on November 17, in fact, the S&P 500 hit a then record high of 2073 before plunging on five separate occasions by 3-4% toward the 2000 marker during the interim.
So it all adds up to a 1.2% net gain since mid-November. Call it a 4% annualized rate. The question at hand, therefore, is who in their right mind would want to play on the jagged curves shown below for 4% a year?
Indeed, the sharp dips here pictured are not even half the story. The real risk/reward equation is the prospect of gaining perhaps 4% when buying the dips versus a 30-50% bloodbath when comes the next slaughter.
This very interesting commentary by David, with lots of good charts, appeared on his website yesterday afternoon EST---and I thank Roy Stephens for today's first story.
Younger Americans are struggling to keep up with steadily-rising student debt loads, a burden that is limiting their ability to buy homes.
The Federal Reserve Bank of New York said Tuesday that the percentage of student loans 90 days or more overdue rose to 11.3 percent in the final three months of last year, up from 11.1 percent in the previous quarter. That's the highest in a year. Total student borrowing now stands at $1.16 trillion, the most on record and 7.1 percent higher than 12 months earlier.
Previous research by the New York Fed has found that younger Americans with student loans are less likely to take out mortgages than those without student debt. That's a reversal from the pre-recession pattern.
Before the 2008-09 downturn, 30-year-olds with student debt were more likely to have mortgages because of their higher levels of education and higher potential incomes, the New York Fed says. Now they are slightly less likely to have mortgages than 30-year-olds without student debt.
This story appeared on the moneynews.com Internet site at 1:33 p.m. EST on Tuesday afternoon---and I thank West Virginia reader Elliot Simon for sharing it with us.
From: Staff Report, 113th Congress, December 8, 2014
"At a minimum, Operation Choke Point is little more than government-mandated de-risking. FDIC, in cooperation with the Justice Department, made sure banks understood – or in their own language, “got the message” – that maintaining relationships with certain disfavored business lines would incur enormous regulatory risk.
The effect of this policy has been to deny countless legal and legitimate merchants access to the financial system and deprive them of their very ability to exist. Accordingly, Operation Choke Point violates the most fundamental principles of the rule of law and accountable, transparent government."
This 8:19 minute video update from Mike appeared on the youtube.com Internet site yesterday morning---and if you run your business through an American bank, it's a must watch. Bill Busser was the first reader through the door with it.
The United States has found a way to permanently embed surveillance and sabotage tools in computers and networks it has targeted in Iran, Russia, Pakistan, China, Afghanistan and other countries closely watched by American intelligence agencies, according to a Russian cybersecurity firm.
In a presentation of its findings at a conference in Mexico on Monday, Kaspersky Lab, the Russian firm, said that the implants had been placed by what it called the “Equation Group,” which appears to be a veiled reference to the National Security Agency and its military counterpart, United States Cyber Command.
It linked the techniques to those used in Stuxnet, the computer worm that disabled about 1,000 centrifuges in Iran’s nuclear enrichment program. It was later revealed that Stuxnet was part of a program code-named Olympic Games and run jointly by Israel and the United States.
Kaspersky’s report said that Olympic Games had similarities to a much broader effort to infect computers well beyond those in Iran. It detected particularly high infection rates in computers in Iran, Pakistan and Russia, three countries whose nuclear programs the United States routinely monitors.
I posted two stories about this in my column yesterday. Here's The New York Times' commentary on this issue---and I thank Roy Stephens for his second contribution to today's column.
Q: Would you tell us about your ideas in regards to the “financialization of the global order"?
For some time, the international order was structured around the United Nations and the corpus of international law, but more and more the West has tended to bypass the U.N. as an institution designed to maintain the international order, and instead relies on economic sanctions to pressure some countries.
We have a dollar-based financial system, and through instrumentalizing America's position as controller of all dollar transactions, the U.S. has been able to bypass the old tools of diplomacy and the U.N. -- in order to further its aims.
But increasingly, this monopoly over the reserve currency has become the unilateral tool of the United States -- displacing multilateral action at the U.N.
This must read interview appeared on the russia-insider.com Internet site on Sunday---and it's courtesy of Roy Stephens once again.
"There is a great game of poker taking place for the future of this currency," Nigel Farage exclaims as he deservedly takes a small victory lap over his warnings of the anti-democratic nature of the dis-union that has been created.
As his warnings that "the E.U. will crush, and kill, and destroy nation state democracy," have gone unheeded, this last week has seen The Eurogroup's behavior justify everything Farage has feared... Juncker: "there can be no democratic choice against the Euro."
This 4:28 minute video clip shows Nigel off at his best---and even his European Parliamentary colleagues applaud him louder now than they ever used to. It was posted on the zerohedge.com Internet site at 9:50 p.m. EST on Tuesday evening---and it's courtesy of reader M.A.
Greece is on a collision course with the eurozone’s creditor powers after emergency talks ended in acrimony on Monday night, triggering the most serious political crisis since the launch of the euro.
The Leftist Syriza government reacted with fury to eurozone demands that it must stick to the country’s discredited austerity plan, describing the draft text as “absurd and unacceptable”.
Yanis Varoufakis, the Greek finance minister, said Eurogroup finance ministers had ignored a deal already agreed with the European Commission for a four-month delay and a “new contract for growth”, returning instead to old demands. "The only way to solve Greece is to treat us like equals; not a debt colony,” he said, predicting that E.U. authorities would soon have to withdraw their latest “ultimatum”.
The talks were halted after four hours of stormy exchanges, risking a traumatic showdown that could precipitate the biggest default in world history and force Greece out of the euro by the end of the month.
This commentary by Ambrose Evans-Pritchard put in an appearance on the telegraph.co.uk Internet site at 9:24 p.m. GMT on Monday evening---and I received it from Roy Stephens too late to make yesterday's column. It's worth reading.
At the moment, Europe is struggling to pass an inflamed financial gallstone. The sooner that Greece is permitted to escape the debt clogged financial ducts fashioned by its Brussels paymasters, the sooner the entirety of Europe can begin the cure of debt liquidation and return to honest finance.
In their wooden-headed insistence that Greece remains obligated to 100% of its crushing $350 billion debt load, the Germans are, ironically, doing the work of the financial gods. By making it literally impossible for the new Greek government to abide by its voter mandate, Berlin is paving the way for “Grexit” and is thereby setting-up the catalyst for the Euro’s demise. And with it, of course, the obliteration of the E.U.’s rotten regime of bank bailouts, central bank money printing and fiscal policy anesthesia.
Hallelujah! Europe and the world desperately need a big, bloody sovereign default, and there is no more worthy case than Greece. As Finance Minister Varoufakis so inconveniently stated last week, Greece is a “bankrupt state” and has been since the crisis first erupted back in 2010.
Accordingly, the Brussels bailout transfer of that impaired debt from the banks and investors, which had so richly earned the right to experience deep losses owing to their lack of prudence, to E.U. taxpayers was a stupendous act of economic and political folly. It paved the way for the very evil that the fiscally resolute Germans profess to fear the most. Namely, central bank financing of state deficits and the unleashing of politicians to thereby ultimately bankrupt it.
Wow! No shades of grey here! This worthwhile commentary by Mr. Stockman showed up on the zerohedge.com Internet site at 3:15 p.m. EST on Tuesday afternoon---and I thank reader U.D. for sending it our way.
Russian President Vladimir Putin arrived in Budapest, Hungary, on Tuesday for his first official visit to a Western country in more than eight months, stirring protest against the Hungarian government's warming ties with the Kremlin and fears that they will inflict division in the European Union.
Putin and Hungarian Prime Minister Viktor Orban appeared to be expecting mutual validation from the summit -- the Kremlin leader demonstrating that he still has friends in the West in spite of the Ukraine crisis and Orban ensuring his country's energy security with new deals on gas imports and a major upgrade of its nuclear facility.
At least 2,000 Hungarians took to the streets on the eve of the Kremlin leader's visit to protest what they see as an unwelcome return to dependence on Moscow for reliable power supplies, as well as Orban's apparent disregard for the violence inflicted on neighboring Ukraine by Russia-backed separatists.
This news item appeared on the latimes.com Internet site yesterday at 3 p.m. Pacific Standard Time---and I thank International Man senior editor Nick Giambruno for bringing it to our attention.
All my sources confirm that Debaltsevo is mostly in Novorussian hands and that the junta forces are in full retreat to the south of the pocket. All the top Novorussian brass was on hand today, including Kononov, Motorola, Givi, Mozgovoi and Zakharchenko as were many tens of Ukrainian prisoners. It appears that the junta forces were unable to provide the kind of resistance they showed in Peski, and that make sense because in Peski they were not surrounded and they had the fire support of Ukrainian forces just north and west of them. This time the cauldron is too deep and the "lid" too strong.
You can see that the cauldron "lid" has now closed on Debaltsevo from the north and that the junta forces are either surrendering of fleeing south where there is quite literally nothing for them to do then to wait until they run out of food and ammo. Bottom line: it's over for the Ukie forces in the Debaltsevo cauldron.
Amazingly, the freaks in Kiev as still insisting that there is no cauldron but only a "bridgehead". The good news is that apparently nobody buys that nonsense any more and the mothers and wives of the men caught in the cauldron are trying everything they can to force the Ukie high command to accept the Novorussian offer of an evacuation corridor. The try to protest in front of the General Staff building in Kiev, then the blocked traffic. In a particularly poignant moment one of these women put a megaphone next to a cellphone to amplify the voice of her son/husband calling from the cauldron and announcing that they had for about 3 hours of supplies left.
This short commentary appeared on the vineyardsaker.blogspot.ca website yesterday---and it's definitely a must read. However, like all 'war stories' this one should be read with your eyes wide open. But, having said that, if I had to believe this, or a main stream media source, it would be no contest. You can decide for yourself. I thank reader M.A. for finding it for us.
The President discussed the new Ukrainian effort to relieve its grouping in the Debaltsevo cauldron.
The Russian leader appearing at a press conference to discuss the outcome of the meeting with Hungary’s Prime Minister Viktor Orban, said that the continuing clashes between the Ukrainian forces and the militia are not a surprise to him.
“It was predictable. I talked about it in Minsk. It was clear that whoever is in the cauldron will attempt to break out, escape, while the militias who are holding their positions will resist.”
“I hope the responsible [sic] parties in Kiev will not prevent its surrounded troops from laying down their arms and returning to their families.”
This news item showed up on the fortruss.blogspot.ca website yesterday---and it's also courtesy of Roy Stephens. There was another story on the same website headlined "Ukrainian troops surrender by the hundreds"---and it's worth a quick look as well. We'll find out soon enough how much truth there is to all this.
The Prime Minister of Canada, Stephen Harper, has issued a statement announcing fresh economic sanctions and travel bans against 37 Russian and Ukrainian individuals, and economic sanctions against 17 Russian and Ukrainian entities over their alleged role in the escalation of the situation in Ukraine.
"In coordination with our EU and U.S. partners, Canada is once again intensifying its response to the situation [in southeastern Ukraine] by announcing further sanctions against Russian and Ukrainian individuals and entities," Harper said Tuesday as quoted in a statement released on his official website.
According to the statement, the new restrictive measures target, among others, Director General of the Rossiya Segodnya International Information Agency Dmitry Kiselev, Russian Deputy Defense Minister Anatoly Antonov and deputy head of the Russian Armed Forced general staff Andrei Kartapolov.
It's embarrassing to have to post stories like this, as Harper is a totally paid for American whore. Too bad, as there was time when he was a real decent guy. Roy Stephens, who sent me this sputniknews.com story from 4:01 a.m. Moscow time on their Wednesday morning, feels exactly the same way.
Peter Hambro, descended from a wealthy line of Anglo-Danish bankers, recalls receiving a bottle of whisky as a gift from his mother’s gardener.
It was a token of thanks after seeing a good return on his investment in Hambro’s Russian gold mining business. “I’ve made so much money, the least I can do is give you a drink,” Hambro, 70, remembers the gardener saying at the time.
Those days are long gone.
Petropavlovsk Plc, once worth more than $3 billion as the price of gold it dug in the Russian Far East soared, has lost 99 percent of its value in the past five years. For anyone who has hung on from the start, it has been an astonishing ride as the stock rocketed more than 10-fold from its listing price in 2002, before losing all of those gains and more. The company is forecast to report a third straight annual net loss for 2014.
This interesting article, filed from London, showed up on the bloomberg.com Internet site at 5:01 p.m. Denver time on Monday afternoon---and it's courtesy of Chris Powell.
Gold researcher, Bullion Star market analyst, and GATA consultant Koos Jansen explains in painstaking detail why he has concluded that China's effective gold demand is much higher than what the World Gold Council estimates it to be.
There's way too much information here, but as I've said on many occasions over the years, you can't believe anything that comes out of the WGC, GFMS or CPM Group. I wish you luck wading through it all, but you should attempt it. It's headlined "Koos Jansen vs. WGC/GFMS/CPM Update"---and was posted on the bullionstar.com Internet site yesterday sometime---and I found it embedded in a GATA release.
Two months ago we showed, and explained in great detail, how in the new normal the role of gold is nothing more than a funding "currency" to allow the BOJ to sell Yen against it (on a borrowed basis, which is also why the LBMA halted reporting its GOFO data as of the end of February, as it would not be pleasant for the central bank cartel to demonstrate just how much institutional gold shortfall there developed following major BOJ interventions).
Well, dear reader, this is way above my pay grade---and I have no idea whether it's true or not. For the second time in today's column, you can be the judge.
I found this Zero Hedge piece embedded in an article on the gata.org Internet site yesterday.
Scuba divers have discovered the largest trove of gold coins ever found off Israel's Mediterranean coast -- about 2,000 pieces dating back more than 1,000 years, the country's antiquities authority said Tuesday.
"The largest treasure of gold coins discovered in Israel was found in recent weeks on the seabed in the ancient harbour in Caesarea," the authority said in a statement.
It was by pure chance that members of a diving club in the Roman-era port had come across the coins, which the authority said weighed nine kilograms (almost 20 pounds) but described as "priceless".
"At first they thought they had spotted a toy coin from a game and it was only after they understood the coin was the real thing that they collected several coins and quickly returned to the shore in order to inform the director of the dive club about their find," it said.
This extremely interesting AFP story, filed from Jerusalem, was picked up by the news.yahoo.com Internet site yesterday---and I thank Washington reader S.A. for finding it for us. The photo of the gold coins is worth the trip all by itself---and use the 'click to enlarge' feature for a really good look.
The first photo is of the visitor's centre at the exit from Petrified Forest National Park. As you can tell, the shadows were getting pretty long---and colours of the desert were at their peak. As a matter of fact, they were almost too intense.
The photo below was taken less than an hour after the one above---and I was blasting down Interstate 40 towards Winslow, Arizona---which you can just make out over the headlights of the oncoming truck traffic in the center of this picture. Taking photos at night while driving at 100 kilometers/hour on cruise control on a semi-busy highway---camera in one hand and steering wheel in the other---is not something that I would do again anytime soon.
"Well, I'm a standing on a corner in Winslow, Arizona---and such a fine sight to see.
It's a girl, my Lord, in a flatbed Ford slowin' down to take a look at me." - The Eagles: "Take It Easy"
Even up here in Canada, I was always aware of the association between the above song and the town itself---but had no idea that the town had capitalized on it to such an extent. So when I saw the setup the next morning as I was driving around town----how could I resist?
"A handout picture released by Israel's Antiquities Authority shows some of the gold coins recently found on the seabed in the ancient harbour in Caesarea" -- From the last story in today's column.
A Pink fairy armadillo! I'd never heard of such a creature until a reader sent me this photo on the weekend.
Cypress Development Corp. is a Canadian gold, silver and base metals exploration company developing projects in Red Lake, Ontario, Canada, and in Nevada, U.S.A.
Cypress holds a 100% interest in the approximately 1140 acre Gunman Zinc-Silver Project located in White Pine County, northeast of Eureka, Nevada. Three RC drill programs totaling approx. 38,000 feet have been completed by Cypress on the Gunman project with significant grades between 5% to 33% per ton zinc and 0.5 to 15.0 oz per ton silver over considerable widths encountered. Zinc could represent the next big base metal play due to ongoing demand growth and the closures of 3 major mines in Canada, Australia and Ireland and not enough supply coming on stream from new projects. Sentiment could shift towards zinc, with prices potentially rallying in anticipation of tightening supplies.
That the unusually frantic pace of physical inventory movement has been unique to COMEX silver of all commodities, it warrants attention and analysis (speculation). Or at least, that’s what I contend. But another thought occurred to me as a result of the subscriber’s question that strikes a familiar theme of mine. As you know, I contend (as do many others) that paper (futures) COMEX silver trading artificially and illegally dictates prices to the world of physical silver, particularly the concentrated short position by the eight largest COMEX traders.
The weekly movement of physical silver into and out from the COMEX has had no discernible effect on price---and is quantified at an average weekly turnover of 5 million oz (less recently). While this level of physical movement is very large when compared to other commodities and past silver movement, it is miniscule when compared to COMEX weekly futures trading volume (around 750 million oz equivalent) or typical changes in the weekly COT report on open positions (25 million oz equivalent). I realize that futures trading volume exceeds physical movement in all commodities, but not to the extent seen in silver. Certainly, in terms of relative world production, no commodity has a larger concentrated short position. My point is simple – because COMEX futures trading volume and concentrated positioning is so much larger than the quantities of silver in the physical world, it shouldn’t be hard to see which is setting the price. - Silver analyst Ted Butler: 14 February 2015
I'm not going to dwell on what happened in the precious metal market on Tuesday. It's at time like this I like to point out that even Stevie Wonder could see what happened yesterday, as it was that obvious.
Here are the 6-month charts for all four precious metals, so you can see the "lay of the land" as of the close of trading yesterday.
In my daily conversation with Ted, we both expressed the same concern---and that was that despite the huge engineered price declines in both gold and silver [also platinum] yesterday, the volumes weren't anywhere near what they would have to be to indicate that a final low is in, in either gold or silver. Not even close.
I figure the JPMorgan et al could hit gold for another $50 or $60 without breaking into a sweat---and silver close to a buck, if not a bit more. But can they or will they? Beats the hell out of me. But if I had to bet $10---I'd say they're going to do precisely that.
The only thing that Ted and I were trying to divine was how they were going to "slice the salami" to the downside this time around---in one single thrust, or will it be death by a thousand cuts once again? I suppose that all depends on how big a hurry they're in.
Hopefully all of yesterday's price/volume action will be included in this Friday's Commitment of Traders Report, because yesterday at the close of COMEX trading was the cut-off for it.
And as I write this paragraph, the London open is forty minutes away. All four precious metals are back to unchanged after being down a hair in early Far East trading on their Wednesday. I think the church mouse died, as net volumes are literally microscopic; with gold at 8,100 contracts---and silver at 2,400 contracts. The dollar index hasn't been doing much of anything all night long, but happens to be up 7 basis points at the moment.
And as I put the finishing touches on today's effort at 4:45 a.m. EST, I see that there's still nothing going on in any of the four precious metals, as all are still virtually unchanged from Tuesday's close in New York. Gold's net volume is just now approaching 12,000 contracts---and silver's net volume is barely 3,500 contracts, with few roll-overs. The dollar index is back to unchanged as well.
Hello---is anyone out there???
I doubt very much that that this current slumberfest will last the remainder of the Wednesday trading session. There's an old saying that one should "never short a quiet market". I suppose there was a lot of truth to that statement when the markets were free and fair. But with the precious metal prices rigged seven ways to heaven, going long this market under the current circumstances is not the safest bet in town either.
And nothing will surprise me when I check the charts later this morning.
Enjoy your day---and I'll see you here tomorrow.