Gold & Silver Daily

¤ Yesterday In Gold & Silver

The gold price managed to creep back to the $1,200 spot mark in early Far East trading on their Tuesday morning---and that lasted until noon in Hong Kong.  At that point the HFT boyz showed up---and it was all down hill into the release of the retail sales numbers shortly before 8:30 a.m. EDT.

The dollar index crashed---and gold, along with the other precious metals, moved higher.  But their respective rallies were met with whatever selling it took to cap the price---and gold didn't even make it back to $1,200 spot.  Once London closed at 11:00 a.m. EDT, JPMorgan et al had the gold price back in the box by 12:30 p.m. in New York---and it traded almost ruler flat into the close.

The high and low ticks were recorded by the CME Group as $1,201.30 and $1,183.50 in the June contract.

Gold finished the Tuesday session in New York at $1,191.90 spot, down another $6.10 from Monday's close.  Net volume was very decent at 150,000 contracts, which was about 50 percent more than Monday's volume.

Here's the 5-minute tick chart for gold courtesy of Brad Robertson.  Midnight EDT, noon Hong Kong time, is the dark gray line---and you can see the big volume spikes on the rallies after the retail sales numbers were released on Tuesday morning in New York.  It's easy to spot the New York high at the London close---and subsequent sell-off until 12:30 p.m. EDT, which is 10:30 a.m. MDT on this chart.  Add 2 hours for EDT---and the 'click to enlarge' feature is a must.

The Kitco silver price chart was a spittin' image of the gold chart---and you can just reread the first two paragraphs about gold above---and substitute the word silver every time I use the 'gold' word.  Nothing free market about that, but you should be used to that by now.

The high and low were recorded as $16.34 and $15.955 in the May contract.

Silver finished the Tuesday session at $16.125 spot, down 13 cents from Monday.  Net volume was 32,000 contracts, close to 50 percent higher than it was on Monday, but about average when one considers the daily volume from last week.

The platinum chart was basically the same as gold and silver's as well---and once JPMorgan et al capped the price after the London close, it finished the Tuesday session unchanged at $1,150 spot.

The chart for palladium was a mini version of the above three charts and, like gold and silver, it was closed down on the day, finishing the Tuesday session at $762 spot, down 6 dollars.

The dollar index closed late on Monday afternoon in New York at 99.50---and after selling off a hair in the first couple of hours of Far East trading, rallied to its 99.67 high around 2:30 p.m. Hong Kong time.  From there it slid about 15 basis points over the next six hours going into the retail sales numbers, before falling off the proverbial cliff, with the 98.40 low tick being printed around 10:35 a.m. EDT.  From there it rallied until about 2:30 p.m., before it traded more or less sideways into the close.  The dollar index finished the Tuesday session at 98.78---down 72 basis points from Monday's close.

You will carefully note the dollar index and the precious metals were not trading in sync between noon in Hong Kong---and when the retail sales numbers were released---and then it was obvious that precious metal prices were capped after that.

Despite the fact that the gold price was well managed yesterday, their shares opened up---and stayed up.  Their highs came shortly before 11 a.m. EDT---and then they quietly sold down until about 2:10 p.m.---and then they rallied equally as quietly into the close.  The HUI finished the Tuesday session up 1.29 percent.

The trading pattern for the silver equities was very similar, except they didn't do quite as well, as Nick Laird's Intraday Silver Sentiment Index closed up only 0.39 percent.

The CME Daily Delivery Report showed that 2 gold and 23 silver contracts were posted for delivery on Thursday.  In silver, Jefferies was the short/issuer out of it proprietary trading account---and Canada's Scotiabank stopped 22 of them. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that a further 250 contracts of April open interest in gold vanished yesterday---and the o.i. for the month is now down to 2,148 contracts.  Silver added another 18 contracts to its April open interest---and April o.i. now sits at 193 contracts.

There was another deposit in GLD yesterday.  This time an authorized participant added 57,568 troy ounces.  There have been three withdrawals and two deposits in GLD in April---and this ETF now holds about 37,000 troy ounces less than it started the month with.  And as of 9:33 p.m. EDT, there were no reported changes in SLV.

It was another down week for both gold and silver ETFs at Switzerland's Zürcher Kantonalbank for the week ending Friday, April 10---as their gold ETF had a withdrawal of 24,382 troy ounces---and their silver ETF sold off a chunky 610,872 troy ounces.

There was a very decent sales report from the U.S. Mint yesterday.  They sold 4,500 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and another 440,000 silver eagles.

And still not a peep out of the Royal Canadian Mint---and its 2014 annual report.

Over at the COMEX-approved depositories on Monday, they reported receiving 32,161 troy ounces of gold, all of which went into the vaults over at HSBC USA---and nothing was shipped out.  The link to that activity is here.

In silver, only 1,966 troy ounces were received, but a very chunky 1,226,696 troy ounces were shipped out the door for parts unknown.  The big withdrawal was from the CNT Depository---and the link to that action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong---Brink's, Inc. reported receiving 5,596 kilobars---and shipped out 3,990 kilobars.  The link to that activity in troy ounces is here.

I received an e-mail from reader John Bastion on Monday---and he informed me that two Canadian-based closed-end precious metal mutual funds are in the process of being raided by a Cayman Islands-based hedge fund called North Pole Capital Master Fund.  The two mutual funds in question are Central GoldTrust and Silver Bullion Trust---and both are manged by Stefan Spicer et al of Central Fund of Canada fame.

I spent a decent amount of time on the phone with Stephan yesterday, as I'd met both him and his father at one of the late Jim Blanchard's Investment Conferences in New Orleans about ten years ago.

What he had to say yesterday was not only interesting, but very alarming as well---and if you have a position in either of these funds, spending some time on this issue is an absolute must.  The link to the information at the Central GoldTrust website is here---and just click on the "YES" box when you hit the landing page---and you'll end up on the home page immediately.

Similar information will be posted on the website within a week or so, but you can read the recent press releases on this issue by clicking here.

I don't have all that many stories for you today---and I hope you find a few in here that you like.


¤ Critical Reads

Retail Sales Miss For 4th Month in a Row: First Time Since Lehman

After 3 months of missed expectations and the first consecutive drop in retail sales since Lehman, retail sales rose 0.9% in March (missing expectations of +1.1%), following a revised 0.5% drop in February. While the 0.9% rise is the biggest since March last year, this is now the worst streak of missed expectations in retail sales since 2008/9. Ex-Autos, retail sales also missed expectations (rising just 0.4% vs 0.7% expected).

This is the worst March YoY growth in retail sales (control group) since 2009...

This chart-filled Zero Hedge piece appeared on their Internet site at 8:35 a.m. EDT on Tuesday morning---and today's first story is courtesy of Dan Lazicki.


Small Business Optimism Plunges to 9-Month Lows as Hiring Plans Tumble

Remember back at the turn of the year when NFIB Small Business Optimism was surging and the mainstream media proclaimed that jobs were coming back thanks to small business, and Obama stated "the shadow of crisis is behind us." Well, if March's Small Business Optimism index is to be believed... it's not. At 95.2 (missing expectations for the 3rd month in a row), this is the least optimistic small businesses have been in 9 months. Worse still, all those jobs that were going to be created by this optimism.  Hiring Plans dropped to 6-month lows.

This is another article from the Zero Hedge Internet site yesterday morning---and it's very much on the tiny side, with two embedded must see charts.  It's the second offering in a row from Dan Lazicki.


U.S. Q1 GDP Expectations Are Crashing

In just six short months, expectations for U.S. economic growth in Q1 2015 has been slashed by more than half (from 'trend' 3% to a mere 1.4% growth this week). While consensus is still well above the Atlanta Fed's 0.1% forecast, the sell-side is rapidly being forced to admit it's not just the weather...

GDP growth is collapsing---and the bounces in forward earnings and U.S. macro data are stalling once again...

This is another brief Zero Hedge piece from Dan Lazicki.  This one contains three charts---and they're definitely worth a look.  They appeared on their website at 2:30 p.m. EDT yesterday afternoon.


The Strong Dollar Could Turn on a Dime -- Jim Rickards

Today’s currency war started in 2010. My first book, Currency Wars came out a little bit after that. One of the points that I made in the book is that the world is not always in a currency war but when we are, they can last for a very long time. They can last for five, ten, or even fifteen years — sometimes longer.

It’s really not a surprise that here we are in 2015 talking about currency wars because it’s the same currency war. A lot of what you read or see on the TV will be some policy move by, let’s say, Japan, to weaken the yen. And reporters will say: “There’s a currency war going on”, or “There’s a new currency war.” I just roll my eyes a little bit and think to myself, “No, this is the same currency war; it’s just a new phase or new battle.”

Currency wars have a lot of explanatory power — in fact, they’re one of the most important things going on in economics today. I fully expect that a year from now, we’ll still be talking about it.

This commentary by Jim showed up on the Internet site on Monday---and I thank West Virginia reader Elliot Simon for sharing it with us.


Ackman Says Student Loans Are the Biggest Risk in the Credit Market

Bill Ackman says the biggest risk in the credit market is student loans.

“If you think about the trillion dollars of student loans we have outstanding, there’s no way students are going to pay it back,” Ackman, who runs $20 billion Pershing Square Capital Management, said today at 13D Monitor’s Active-Passive Investor Summit in New York.

The balance of student loans outstanding in the U.S. -- also including private loans without government guarantees -- swelled to $1.3 trillion as of the second quarter 2014, based on data released by the Federal Reserve in October. The rising level has prompted investors and government officials to draw parallels to the subprime mortgage market before housing collapsed starting in 2006.

About $100 billion of federal student loans are in default, 9 percent of outstanding balances, according to a Treasury Borrowing Advisory Committee update on student lending trends released in November.

This Bloomberg news item put in an appearance on their Internet site at 3:41 p.m. EDT Denver time on Monday afternoon---and it's the second offering in a row from Elliot Simon.


IMF fears 'cascade' of woes as Fed crunch nears

The United States is poised to raise rates much more sharply than markets expect, risking a potential storm for global asset prices and a dollar shock for much of the developing world, the International Monetary Fund has warned.

The IMF fears a "cascade of disruptive adjustments" as the US Federal Reserve finally pulls the trigger for the first time in eight years, ending an era of cheap and abundant dollar liquidity for the international system.

The Fed's long-feared inflexion point is doubly treacherous because investors seem ill-prepared for what lies ahead, and levels of dollar debt outside the US have reached an unprecedented extreme. The Fund said future contracts are pricing in a "much slower" pace of monetary tightening than the Fed itself is forecasting.

This Ambrose Evans-Pritchard offering appeared on The Telegraph's website at 4:19 p.m. BST yesterday afternoon---and it's the first contribution of the day from Roy Stephens.


Florida Ex-Senator Pursues Claims of Saudi Ties to 9/11 Attacks

Mr. Graham, 78, a two-term governor of Florida and three-term senator who left Capitol Hill in 2005, says he will not relent in his efforts to force the government to make public a secret section of a congressional review he helped write — one that, by many accounts, implicates Saudi citizens in helping the hijackers.

“No. 1, I think the American people deserve to know the truth of what has happened in their name,” said Mr. Graham, who was a co-chairman of the 2002 joint congressional inquiry into the terrorist attacks. “No. 2 is justice for these family members who have suffered such loss and thus far have been frustrated largely by the U.S. government in their efforts to get some compensation.”

He also says national security implications are at stake, suggesting that since Saudi officials were not held accountable for Sept. 11 they have not been restrained in backing a spread of Islamic extremism that threatens United States interests. Saudi leaders have long denied any connection to Sept. 11.

The "official" version of 9/11---the U.S. government fairy story that just won't go away---and for very good reason, as intelligent people keep asking embarrassing questions that obviously have answers that are equally as embarrassing.  This essay appeared on The New York Times website [of all places] on Monday---and is definitely worth reading.  I found it in yesterday's edition of the King Report.


IMF: oil price collapse will cripple North Sea producers

Britain's oil industry faces a deep and long-lasting crisis, according to the International Monetary Fund, which said the collapse in oil prices would stifle investment and hit production at a much faster pace than other countries.

Analysis by the IMF and Rystad Energy showed North Sea oil producers would be among the hardest hit by the slump in prices because huge operating costs meant they could not absorb the decline as easily as countries such as Kuwait, Iraq and Saudi Arabia.

"Canada, the North Sea, and the United Kingdom are among the most expensive places to operate oil fields. As a result, the oil price slump will affect production in those locations earlier and more intensely than in other locations," the IMF said in its World Economic Outlook.

This article was posted on the Internet site at 2:14 p.m. BST yesterday afternoon, which was 9:14 a.m. in Washington.  I thank South African reader B.V. for sending it our way.


Banks Across Europe Pay Borrowers to Buy Homes

Back in January we asked the following: “who will be the first to offer a negative rate mortgage?” Soon thereafter we discovered that in fact, this NIRP-inspired aberration already existed in Denmark where Nordea Credit was offering to pay borrowers to purchase a house prompting us to make the following assessment: And just like that, first in Denmark, and soon everywhere else in Europe, a situation has now emerged where savers who pay the bank to hold their cash courtesy of negative deposit rates, are directly funding the negative interest rate paid to those who wish to take out debt. In fact, the more debt the greater the saver-subsidized windfall.

That would turn out to prove rather prescient because as The Wall Street Journal reports, this bizarre characteristic of the new paranormal is spreading throughout Europe on the back of Mario Draghi’s trillion-euro adventure in debt monetization land.

"Tumbling interest rates in Europe have put some banks in an inconceivable position: owing money on loans to borrowers."

This is insanity---and it won't last.  Reader B.V. found this story on the Zero Hedge website yesterday---and it was posted there at 10:55 a.m. EDT Tuesday morning.


Varoufakis sets up date with Obama to break Greece's debt stalemate

Greece's finance minister Yanis Varoufakis is due to meet President Barack Obama on Thursday, in a sign that Athens is appealing to the highest levels of international diplomacy to secure its future in the eurozone.

Mr Obama has previously indicated his support for the Leftist government, calling for a fast and equitable solution to the country's debt crisis.

"You cannot keep on squeezing countries that are in the midst of depression," the U.S. president said in February following Syriza's election victory.

The visit comes amidst a growing stalemate between the Greek government and eurozone creditors, with officials at the International Monetary Fund privately voicing doubts about the country's continued membership of the eurozone.

According to reports in Greek media, Poul Thomsen, the IMF's Europe director told his executive board that negotiations were "not working" and he could not envisage a successful conclusion to the country's current bail-out.

This commentary showed up on the Internet site at 4:25 p.m. BST yesterday afternoon---and it's the third contribution in a row from reader B.V.


Foreign ministers demand fighting end in east Ukraine

Foreign ministers from Germany, France, Russia and Ukraine called for an end to the renewed heavy fighting in eastern Ukraine following tough talks in Berlin on Monday.

German Foreign Minister Frank-Walter Steinmeier told reporters the talks had been “at times very controversial” but said all participants agreed there was no alternative to the ceasefire agreement signed in the Belarusian capital Minsk in February.

We need to ensure that the ceasefire is adhered to far more strongly as fully as possible,” Steinmeier said.

The talks took place amid a sharp spike in hostilities in eastern Ukraine over the weekend. On Monday one Ukrainian serviceman was killed and six were wounded in rebel-held territories.

This Reuters news item was posted on the Internet site yesterday---and I thank Roy Stephens for sending it our way.


Russia’s seat in G8 ‘hinges’ on resolution of Ukraine conflict – German FM

Despite intense diplomatic efforts on the part of Moscow to find a political solution to the Ukraine crisis, G7 leaders are not yet ready to welcome Russia back at the discussion table, German FM said, insisting on further steps to deescalate the crisis.

“I wish for Russia to return to the G8 nations but the way to get there hinges on its assistance and effort to put an end to the conflict in eastern Ukraine,” German Foreign Minister Frank-Walter Steinmeier said as the G7 (former G8) foreign ministers began to arrive in Lubeck.

Speaking at an event with German students, Steinmeier said Russia’s participation is vital for solving a variety of international problems. Making it clear that Germany does not wish Russia to be excluded indefinitely, the minister also warned against further isolating Russia.

“I have no interest in Russia being permanently isolated – we know from history that someone who is isolated can develop more dangerously than someone who is not,” he said.

This story put in an appearance on the Russia Today Internet site at 20 minutes after midnight Wednesday morning Moscow time, which was 5:20 p.m. EDT yesterday afternoon.


‘Useless and expensive’ - Russian MP presses for PACE exit

A senior lawmaker has suggested Russia quits the Parliamentary Assembly of the Council of Europe (PACE), and instead donate the multi-million annual fee paid to this organization to international groups that don’t show anti-Russian bias.

Today PACE is one of the most useless organizations and even people in Strasbourg where it is located are oblivious of its existence. I am sure that 98 percent of Europeans have never heard about it,” the head of the State Duma committee for education, Vyacheslav Nikonov, told popular Russian daily Izvestia.

It is just an assembly of lawmakers with inclinations towards rights protection who decide absolutely nothing, but who always start up their anti-Russian wailing. I cannot understand what we are still doing there,” the MP added.

This interesting article showed up on the Russia Today website at 10:37 a.m. Moscow time on their Tuesday morning---and I thank Roy Stephens once again for sending it our way.


China’s Crude Imports Slow to 4-Month Low as Storage Tanks Fill

China’s record pace of crude imports is easing as its refiners fill commercial stockpiles and new tanks for holding emergency supplies remain under construction.

Overseas crude purchases totaled 26.81 million metric tons in March, data released on the website of the General Administration of Customs in Beijing showed on Monday. That’s equivalent to 6.34 million barrels a day, down 5.2 percent from February and the slowest pace since November.

China accelerated its crude imports last year amid an almost 50 percent collapse in benchmark prices and its buying is now slowing just as the global market struggles to sustain a recovery. Refiners including PetroChina Co. have filled more than half of their commercial storage capacity, according to ICIS China, a Shanghai-based commodities researcher.

“China’s crude stockpiling needs have waned with record buying in December,” Jean Zou, an analyst at ICIS, said by phone from Guangzhou. “From April onwards, refinery maintenance will also curb the nation’s imports.”

This interesting Bloomberg article appeared on their website at just after midnight Monday morning Denver time---and it's another news item I found embedded in yesterday's edition of the King Report.


JPY Jumps After Abe Special Adviser Shows He Has No Shame Whatsoever

It appears being Special Adviser to Japanese Prime Minister Shinzo Abe comes with great pressure to toe the line - as opposed to advise. Koichi Hamada yesterday said USDJPY 105 was "appropriate" and USDJPY 120 was "too weak"... that sent USD/JPY tumbling.

These comments were reiterated in the early Asia session and adding that he "doesn't think JPY will weaken much further."

We wake up this morning and Reuters reports that he has entirely flip-flopped his views saying now that "120 is appropriate," and that he " would not oppose further easing." It's clear someone got a tap on the shoulder...

You couldn't make this stuff up.  This Zero Hedge news story was posted on their Internet site at 8:15 a.m. EDT on Tuesday morning---and I thank Dan Lazicki for finding it for us.


"The Business" does the Australian Housing Bubble

Australia Broadcasting Corporation's  "The Business" aired an interesting segment last night – the first of a 3-part series – looking at the Australian housing bubble, with a particular emphasis on Sydney.

The segment features Lindsay David, author of Australia Boom to Bust, along with SQM Research’s Louis Christopher and RMIT Emeritus Professor, Mike Berry.

Well, dear reader, from our own experiences here in North America, I'm sure we can let the good folks "down under" know how this housing bubble of theirs will eventually end, as we've seen it all before---and more than once.  The embedded 5:08 minute video clip appeared on the Internet site yesterday local time---and it's definitely worth watching if you have the interest.  I thank Australian reader Grahame Goodman for sending it our way.


Gold or Fiat? That is the question -- Torgny Persson

What happens when you deposit money at the bank?

Most people don’t think much about it. The bank probably safekeeps the money in their vault. Then I can come to the bank to withdraw my money any time. Right?


When you deposit money at the bank, you immediately relinquish your ownership to that money.

The bank will not only loan out “your” money, they will use it as as reserves to loan out even more than what you deposited in the first place. The justification for this is simply that you probably won’t claim “your” money back any time soon anyways. If you were to claim it back together with only a few percent of the other depositors, the bank would go bankrupt.

This commentary appeared on the Singapore Internet site yesterday---and I thank Dan Lazicki for his final offering in today's column.


Hedge funds double bullish gold price bets

Large scale speculators in gold futures continue to add to bets on a rising price even as the metal struggles to hold onto the $1,200 an ounce level.

On Monday gold for delivery in June – the most active futures contract – drifted lower from Friday's closing price hitting a low of $1,196.35 during late morning trade in New York.

Gold has recovered 4% from its 2015 low of $1,148.20 an ounce hit mid-March but has not been able to break through $1,220 an ounce resistance, stymied by a strong dollar.

After eight straight weeks of increasingly bearish positioning on the gold market to levels last seen December 2013, large investors like hedge funds or so-called "managed money" have now doubled their bullish positions within the space of two weeks.

This sort of commentary, although well meaning, is typical of the drivel that passes for serious analysis on the major precious metal websites these days.  As the Managed Money covers short positions---and goes long, it's JPMorgan et al on the other side of the trade---and capping the price that's the real news here, but these so-called "analysts" just won't go there.  This "story" appeared on the website on Monday---and should be read for entertainment purposes only.  I found it on the Sharps Pixley website very late last night Denver time.



¤ The Funnies

Avrupa and Antofagasta intersect copper-rich VMS in Pyrite Belt, Portugal

•             First Greenfields discovery of massive sulfide mineralization in 20 years in the Iberian Pyrite Belt

•             10.85 meters of massive and semi-massive/stockwork sulfide mineralization grading 1.81% Cu, 2.57% Pb, 4.38% Zn, 0.13% Sn, and 75.27 ppm Ag

•             Including 7.95 meters @ 2.21% Cu, 3.05% Pb, 4.82% Zn, 0.15% Sn, 89.8 ppm Ag

•             Followed by 2.90 meters @ 0.71% Cu, 1.27% Pb, 3.17% Zn, 0.092% Sn, 35.4 ppm Ag

•             Avrupa and Antofagasta sign an amended Joint Venture Agreement

Please visit our website to learn more about the company and current exploration program.


¤ The Wrap

It’s usually hard to impossible to decipher and connect COMEX futures deliveries with resultant changes in COMEX warehouse inventories because there are too many unknowns. Because too much relevant information is unavailable, I’ve always refrained from such analysis. But this is a rare case where futures deliveries and warehouse movements do line up perfectly. In this case, important clues were revealed as a result of JPMorgan taking delivery in its own account (not for clients) and it owning its own warehouse, as well as the prompt timeline. Aside from being in conformity with my broader speculation that JPMorgan has acquired a massive quantity of physical silver, there are other reasonable conclusions to be made of JPMorgan shipping recently acquired silver to its own COMEX warehouse.

For one thing, it suggests JPMorgan is in position to hold its accumulated silver according to its own timetable. If it were looking to dump the metal quickly, why incur the one-time expense of moving it, as well as the loss of anonymity of ownership? It also tells us that JPMorgan, if anything, is increasing the tempo of its physical silver accumulation. And why not as the super depressed prices allow it to lower its average cost of ownership. Aside from that, there are other considerations.

Since it appears most, if not all of the metal shipped into the JPMorgan COMEX silver warehouse came from other COMEX silver warehouses, as opposed to being metal from outside the COMEX warehouse system, it doesn’t point to silver being in vast general oversupply. You may remember that it took until the last delivery day in the COMEX March delivery period for JPMorgan to get all of the 1500 contracts allowed. Since those delivering against open futures contracts are better off delivering quickly, rather than later, the time JPMorgan had to wait to get its maximum number of physical deliveries suggests an unwanted and perhaps forced delivery circumstance on the part of the issuers. - Silver analyst Ted Butler: 11 April 2015

I  get the distinct impression that all four precious metals got sold down in late Far East and early London trading on Tuesday precisely because the powers-that-be knew the retail sales numbers in advance---and wanted to make sure that gold et al had a very deep hole to dig themselves out of when the numbers did hit the tape.  Well, if that was the plan, it worked beautifully.

The reason that I suspected it once the entire trading day was laid out for all to see, is that I've seen "da boyz" do that before when ugly news was due the next day.  So along with the a dollar index in the toilet---and ugly retail sales numbers, JPMorgan et al were at the ready as sellers of last resort as the Managed Money covered short positions and went long on the news.

In the face of all that, they even managed to close three of the four precious metals down on the day---and took more slices off the salamis once again.  These guys are good.

Here are the 6-month charts for all four precious metals as of the close of trading yesterday---and there's not a thing on these charts that would indicate a bad retail number or a face plant in the U.S. dollar index.

Mission accomplished!

And as I type this paragraph, the London open is about fifteen minutes away.  The precious metals didn't do much during Far East trading on their Wednesday, but all of them are up a hair from Tuesday's close in New York.  Gold volume is just over 14,000 contracts, with 99.5 percent of it in the current front month, so you know it's all of the HFT variety.   Silver's net volume is just over 2,700 contracts---and about 40 percent of the gross volume is roll-overs out of the May contracts.  It's unusual to see this level of roll-over activity at this time of day---and month.

The dollar index hit its current 99.056 high at precisely noon in Hong Kong trading on their Tuesday---and is now down to 98.84---but still up 7 basis points from Monday's close in New York.

Since yesterday at the 1:30 p.m. close of COMEX trading was the cut-off for Friday's Commitment of Traders Report, just eye-balling the gold and silver charts above, I'd guess that we'll see some sort of improvement in the Commercial net short position in both gold and silver, but it won't be overly large---and it certainly won't be anywhere near the mega-bullish configuration of three weeks ago.  We'll need much lower prices for that---and we'll probably get them as well.  Only the timing is unknown.

And as I hit the 'send' button on today's column at 5:20 a.m. EDT, I note that promptly at the London open, all four precious metals began to head lower---and all of the tiny gains I spoke of earlier have now vanished---and have been replaced by equally tiny loses.  Virtually all of the net 27,100 contract gold volume is of the HFT variety---and in the current front month.  Silver's net volume is now up to 5,200 contracts, with very decent roll-over volume.

The dollar index hit its 99.73 low tick about twenty minutes before the London open---and began to blast higher from there.  It's currently up 50 basis points, after being down 10 basis points at its low tick.  But as you can tell from the current precious metal charts that the sell-offs in all four began at the London open at 8:00 a.m. BST on the button, so the sell-offs were related to futures market trading on the Globex at the open---and not on what the dollar index was doing; a pattern that was similar to yesterday's action at this time of day.

But, having said all that, the precious metals are hanging in their pretty good at the moment considering the rally in the dollar index.

However, the Wednesday trading session is still young---and the die looks cast for another down day, as JPMorgan et al slice away.  I'd love to be proven spectacularly wrong of course, but if I was, it would be for the very first time.

So we wait some more.

See you tomorrow.

Ed Steer