After that surprising down/up dip in morning trading in the Far East on their Tuesday morning, the price didn't do much of anything until 9 a.m. in New York. At that point it rallied sharply, only to get cut off at the knees at the London p.m. gold fix. By the London close an hour later, the HFT boyz had the price back below Monday's close in New York---and it didn't do a thing after that.
The low and high ticks were reported as $1,194.60 and $1,214.40 in the April contract.
Gold finished the Tuesday session in New York at $1,203.50 spot, down $2.40 on the day. Net volume was pretty decent at 137,000 contracts.
Here's the 24-hour, 5-minute tick chart starting at 6 p.m. EST on Monday evening, so you can see the price/volume action during that big down/up move in Far East trading. Don't forget to add two hours for EST---and the 'click to enlarge' feature really helps here.
Silver had the same down/up event in morning trading in Hong Kong as well. It hit its Far East high shortly after 12 o'clock noon over there---and then quietly drifted lower into the noon London silver fix. The rally at that point got hammered flat---and then silver rallied anew along with gold at 9 a.m. EST and, like gold, the rally got sold down to well below Monday's closing price---and it didn't do a lot after that.
The low and high ticks were recorded by the CME Group as $16.07 and $16.58 in the May contract.
Silver finished the Tuesday session at $16.225 spot, down 13 cents from Monday's close. Net volume was very decent at 39,000 contracts.
The platinum chart was a mini version of the silver chart---and it was closed at $1,182 spot, down 2 bucks from Monday.
After getting sold down about eight bucks in early Far East trading on their Tuesday morning, palladium struggled back to close unchanged on the day.
The dollar index closed late on Monday afternoon at 95.49---and began to head lower right out of the gate in Far East trading on their Tuesday morning, hitting its 95.21 low tick minutes after 3 p.m. Hong Kong time---and just under an hour before the London open. From there it rallied until the noon silver fix, before rolling over with a vengeance. "Gentle hands" rescued it at the 95.10 level a precisely noon in New York five hours later. It 'rallied' until around 3 p.m. EST---and then sold off a handful of basis points into the close, finishing the Tuesday session at 95.37---down 12 basis points on the day.
You should note once again that the precious metal price action was totally independent of what the currencies were doing.
Here's the 5-day dollar index. It spent about three weeks struggling, with help, to stay above the 94.00 level. Then it got ramped above the 95.00 level last Thursday---and as you can see, it's taken even more 'gentle hands' help to keep it at that level as well.
The gold stocks opened in positive territory on the back of the 9 a.m. EST rally in the metal itself---and you can see the point where gold got hit once the London p.m. 'fix' was in. The shares followed, of course, as the HUI finished down another 2.01 percent.
It was more or less the same chart pattern for the silver equities, as Nick Laird's Intraday Silver Sentiment Index closed down 1.61 percent.
The CME Daily Delivery Report for Day 4 of deliveries into the March silver contract showed that zero gold and 39 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday. RBC Capital Markets issued 37 of those contracts and, once again, it was JPMorgan stopping 23 of them for its in-house [proprietary] trading account. As Ted Butler has been saying for years, JPMorgan is buying every ounce of silver, in whatever form available, that it can get its hands on. The link to yesterday's Issuers and Stoppers Report is here.
The CME Preliminary Report for the Tuesday trading session showed that March open interest in gold declined by 10 contracts---and now sits at 153 contracts. In silver, the March o.i. fell by 247 contracts [almost all of them deliveries] and it now stands at 1,136 contracts---minus the 39 contracts in the previous paragraph, of course.
Ted mentioned on the phone yesterday that it will be very interesting to see how much of remaining March open interest in silver ends up in JPMorgan's depository. He might have something to say about that in his mid-week commentary to his paying subscribers this afternoon. However, he may wait until his weekly report on Saturday, just to see how the rest of this week's deliveries go.
For the second day in a row there was surprise withdrawal from GLD. This time it was 86,393 troy ounces. There was a smallish withdrawal from SLV as well, as an authorized participant removed 124,894 troy ounces, which may or may not have been a fee payment of some kind.
There was another sales report from the U.S. Mint yesterday. They sold 3,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 246,000 silver eagles.
There was some decent gold moment over at the COMEX-approved depositories on Monday, as 64,300.000 troy ounces [2,000 kilobars] were reported received---and 230 troy ounces were withdrawn---4 kilobars, plus one other. The big deposit was into Canada's Scotiabank depository. The link to that activity is here.
In silver, there was 660,302 troy ounces received, but only 31,129 troy ounces shipped out. Virtually all of the action was at Brink's, Inc. The link to that activity is here.
I have somewhat fewer stories for you today---and I hope there are some here that you like.
Investors are feeling good right now. Really good. By some measures, bullishness has reached levels not seen in more than 10 years. But the positive vibes are at odds with some hard data that suggests we're on the threshold of a "come back to reality" moment.
What data? How about the fact that forward earnings are rolling over at a pace that's only been seen during recessions? Or that factory activity in the Chicago area slumped to a low not seen since July 2009? Or that overall U.S. economic data is disappointing in a way that it hasn't quite since 2012? Or the wipe out in commodity prices over the last few months, the kind typically seen during recessions? Or that consumer prices, on the headline measure, declined outright for the first time since Lehman Brothers imploded?
Moreover, the problem is global. So far this year, 20 central banks around the world have cut interest rates. And most other countries — except Singapore, Ireland and Japan — are also seeing earnings downgrades.
This article originally appeared on The Fiscal Times website, but it was picked up by the finance.yahoo.com Internet site on Monday at 6 a.m. EST---and I thank West Virginia reader Elliot Simon for today's first story.
Corporate America’s love affair with itself grows more passionate by the month.
Stock buybacks, which along with dividends eat up sums of money equal to almost all the Standard & Poor’s 500 Index’s earnings, vaulted to a record in February, with chief executive officers announcing $104.3 billion in planned repurchases. That’s the most since TrimTabs Investment Research began tracking the data in 1995 and almost twice the $55 billion bought a year earlier.
Even with 10-year Treasury yields holding below 2.1 percent, economic growth trailing forecasts and earnings estimates deteriorating, the stock market snapped back last month as companies announced an average of more than $5 billion in buybacks each day. That’s enough to cover about 2 percent of the value of shares traded on U.S. exchanges, data compiled by Bloomberg show.
This short article, filed from New York, appeared on their website at 10 p.m. Denver time on Monday evening---and it's the second contribution in a row from Elliot Simon. It's worth reading.
Janet Yellen is turning from currency traders’ best friend to their biggest foe.
The most popular trade in the $5.3 trillion-a-day foreign-exchange market has been betting on a stronger dollar, leaving investors exposed when the Federal Reserve chair damped speculation last month of an imminent increase to interest rates. As the dollar slowed its advance, an index of currency returns snapped a record winning streak, prompting traders to reassess how much higher the greenback can go.
“Currency managers had been doing well because they’ve been long dollars, and the dollar had been pretty much on a straight-line trajectory higher,” said Adam Cole, the global head of currency strategy at RBC Capital Markets in London. The dollar’s slowdown is “a major factor behind returns looking less positive,” he said.
While Bloomberg’s Dollar Spot Index climbed to a record on Tuesday, the measure is rising at the slowest pace since June and speculators including hedge funds are paring bets on how much the currency will strengthen. Yellen told Congress last week she won’t be locked into a timetable for boosting borrowing costs, just days after minutes of the Fed’s January meeting underlined the damage a stronger dollar can do to the economy.
This is the second Bloomberg article in a row from Elliot Simon---and it was filed from Edinburgh at 5:00 p.m. MST on Monday evening.
Bill Gross said a global race to devalue currencies in an “undeclared” war risks slowing growth instead of stimulating it.
Central bank policies have pushed interest rates below zero in Europe, and countries including China and Japan appear to be devaluing their currencies, he wrote in an investment outlook for Janus Capital Group Inc., where he runs the $1.5 billion Global Unconstrained Bond Fund. While such moves make debt burdens more tolerable and exports cheaper, they are bound to hurt the global economy as a whole, he wrote.
“Common sense would argue the global economy cannot devalue against itself,” Gross wrote. “Either the strong dollar weakens the world’s current growth locomotive (the U.S.) or else their near in unison devaluation effort fails to lead to the desired results.”
More importantly, Gross wrote, low to negative interest rates hamper the functioning of capital markets and prompt investors to take on higher risk to boost returns, making the financial system more vulnerable. That’s one reason why the U.S. Federal Reserve appears on course to start raising interest rates as early as June, he wrote.
This is another Bloomberg story. This one was filed from New York at 5:52 a.m. MST on Monday morning---and this one is courtesy of Brad Robertson.
Inflation and deflation are two sides of the same coin. Inflation is marked by generally rising prices. Deflation is marked by generally falling prices. Both are deviations from price stability, and both distort the decisions of consumers and investors. In inflation, consumers may accelerate purchases before the price goes up. In deflation, consumers may delay purchases in the expectation that prices are going down and things will be cheaper if they wait.
Both inflation and deflation are challenging to investors who have to guess future returns based on changes in price indexes in addition to navigating the normal business risks of any investment. Inflation favors the debtor because the real value of his debts goes down as money becomes worth less. Deflation favors the creditor because the real value of amounts owed to him goes up as money becomes worth more. In short, both inflation and deflation make economic decisions more difficult by adding a wild card to the deck.
To investors, inflation and deflation are bad in equal, if opposite, measure. But, from a central banker’s perspective, inflation and deflation are not equally bad. Inflation is something that central bankers consider to be a manageable problem and something that is occasionally desirable. Deflation is something central bankers consider unmanageable and potentially devastating. Understanding why central banks fear deflation more than inflation is the key to understanding future central bank monetary policy.
Jim's comments appeared on the darientimes.com Internet site yesterday---and I thank Harold Jacobsen for pointing it out.
Even with well completions being suspended, supplies continue to build. The latest EIA data shows that oil stocks in the United States climbed to 434 million barrels, the highest levels in storage in over 80 years. “My gut feeling is that the oil price could see a double bottom,” Jason Kenney, an analyst with Banco Santaander SA said in a Bloomberg interview. “We’ve got too much inventory.” Bloomberg noted that Kenney has a good track record of predicting price swings in the past. Even though rig counts have declined significantly, output has so far proved resilient.
Finally, there is some evidence that the ability to move excess oil into storage may run into trouble if production does not decline. Storage tanks are starting to fill, raising the possibility that a glut could worsen. There is a great deal of uncertainty around how quickly this might happen. The EIA sought to clarify, noting that the markets have confused some of its storage figures – some oil supplies in the EIA’s weekly inventory data is actually sitting in pipelines and at well sites, meaning there is more storage capacity available than many news outlets had originally thought. An EIA analyst recently told Bloomberg that overall storage capacity is only at about 60 percent, and “[w]e still have a way to go before we can consider ourselves to be full,” Rob Merriam, EIA’s head of petroleum statistics said. It would take a few months of strong inventory builds to fill up the remaining storage, perhaps an unlikely scenario, especially if production starts to take a hit. But if storage tanks did start to fill up, prices would dive once again and companies would have to shut in wells and cut back on production.
This short essay, courtesy of the OilPrice.com Internet site, found a home over at the Zero Hedge Internet site at 1:20 p.m. EST yesterday afternoon---and it's the first offering of the day from Dan Lazicki. If you follow the oil market closely, then this is definitely worth reading.
While the Hillary Clinton email fiasco is sure to be the talk of the town for the next few days, weeks, and months and may have seriously jeopardized the former Secretary of State's chances at becoming America's next president, an even more important story is how the revelation that Hillary exclusively used a private, unencrypted and unsupervised email for 4 years of state-level, official business communications, emerged in the first place.
The answer, shockingly, comes courtesy of a Romanian hacker who was known by the handle "Guccifer", and who is currently serving time in a Bucharest prison for his online attacks against countless public figures including the infamous leaks of George W. Bush personal paintings.
How is it possible that a Romanian convict may have helped accelerate the downfall of Warren Buffett's presidential hopeful? According to the Smoking Gun, which first reported on this topic back in March 2013, “Guccifer” illegally accessed the AOL e-mail account of Sidney Blumenthal, who then worked as a senior White House adviser to President Bill Clinton, and later became a senior adviser to Hillary Clinton’s 2008 presidential campaign.
Hillary for president? That's a very scary thought. This very interesting Zero Hedge piece put in an appearance on their website at 6:08 p.m. EST on Tuesday evening---and I thank Dan Lazicki for sending it along.
More than a third of French voters believe the country’s far-right leader Marine Le Pen “embodies French republican values”, according to a shock poll for left-leaning newspaper Libération published just weeks before key regional elections.
The survey published on Monday nevertheless showed that a significant majority (57 percent) believe Le Pen would make a “bad” or “very bad” president.
But the high level of approval – being recognised for having “Republican values” is a prized political asset – suggests that the National Front’s (FN) strategy of rehabilitating the party’s negative image through relentless domination of the media appears to be enjoying some success.
The FN is riding high. Polls give the far-right anti-immigration and anti-Europe party up to 33 percent national support as France gears up for this month’s regional vote – well ahead of the ruling Socialists, the conservative opposition UMP and other parties which have been consistently trailing behind.
This france24.com story was posted on their website on Monday sometime---and it's courtesy of Roy Stephens.
Germany’s efforts to investigate National Security Agency (NSA) spying are being hampered by Britain’s refusal to co-operate amid threats to break off intelligence-sharing agreements, a German newspaper has reported.
The claims note a heightening of tensions between Downing Street and the German Chancellery over intelligence-sharing.
According to German newspaper reports, the Bundestag’s investigation into the NSA could be halted if any UK secrets are revealed.
This Russia Today article showed up on their Internet site at 4:47 p.m. Moscow time on their Tuesday afternoon, which was 8:47 a.m. in Washington.
Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday.
Shut out of debt markets and with aid from lenders frozen, Athens is in danger of running out of cash in the coming weeks as it faces a 1.5 billion euro loan repayment to the International Monetary Fund this month.
The government has sought to calm fears and says it will be able to make the IMF payment and others, but not said how.
At least part of the state's cash needs for the month will be met by repo transactions in which pension funds and other state entities sitting on cash lend the money to the country's debt agency through a short-term repurchase agreement for up to 15 days, debt agency officials told Reuters.
This Reuters article, filed from Athens, put in an appearance on their website at 11:25 a.m. EST yesterday morning---and my thanks go out to Roy Stephens for sending it our way.
The Ukrainian parliament has approved amendments the 2015 budget that sees drastic pension cuts and energy bills tripling. The changes are needed to comply with the terms of the agreed $17.5 billion IMF bailout package.
The budget amendments were passed at an extraordinary meeting on Monday with a majority of 273 votes, well above the minimum 226 votes necessary to pass legislation.
According to the changes, Ukraine’s budget deficit increases from 3.7 percent to 4.1 percent of GDP. Amendments envisage the expenses increasing by about $1.3 billion (35 billion hryvnia), with a 21.7 hryvnia per dollar exchange rate. At the same the cabinet plans to cut government funding of Naftogaz in 2015 by 5.8 percent to 29.7 billion hryvnia.
The changes also see a cut in pensions for retired people by 15 percent. Moreover, pension payments for people working in the tax, customs and regulatory bodies, will be suspended. The job tenure for people working in hazardous and heavy industries will be gradually increased from 20 years to 25 years for men and from 15 years to 20 years for women.
This Russia Today news item appeared on their website at 2:37 p.m. EST Moscow time on their Tuesday afternoon---and once again it's courtesy of Roy Stephens.
The Ukrainian government's economic reforms, including the six-fold hike of natural gas prices for consumers, looks like the right thing to do, but amounts to a humiliation of Ukraine's citizens, Russian President Vladimir Putin announced on Tuesday.
"We talked about it, formally everything is correct, but in essence, it's humiliation," Putin said following a meeting of the Supreme State Council of the Union State of Russia and Belarus.
On Tuesday, Ukraine's energy regulator announced a six-fold increase in natural gas prices for the country's population starting on April 1, as part of a deal with the International Monetary Fund (IMF) to reduce energy subsidies. Between October 1 and April the price of natural gas used for heating homes will only be increased three-fold.
This news item was posted on the sputniknews.com Internet site at 9:59 p.m. Moscow time on their Tuesday evening, which was 1:59 p.m. in Washington.
The fourth biggest bank in Ukraine, Delta Bank, has gone bankrupt after months of non-compliance, according to the National Bank of Ukraine. Two smaller banks in the Delta Banking group have also gone belly-up.
“The National Bank of Ukraine (NBU) adopted a resolution on the assignment of JSC Delta Bank to the category insolvent on March 2,” says the NBU website on Tuesday. The failure of Delta Bank owner's to take timely, efficient and sufficient measures to restore the bank's financial health and viability and bring its operations into compliance with Ukrainian laws was given as the main reason for the NBU’s decision.
“The principal shareholder and the management team of Delta Bank JSC have opted for a high-risk strategy of rapid growth through the acquisition of poor-quality assets,” the statement said.
Ukraine's monetary authorities have appeared desperate and nervous in their attempts to try to save the country's ailing economy.
This news item is another Russia Today offering. It appeared on their website at 6:20 p.m. Moscow time last night---and I thank reader 'h c' for finding it for us.
Exxon Mobil Corp. shook off the chill of sanctions and continued to snap up drilling rights in Russia last year, giving it more exploration holdings in Vladimir Putin’s backyard than in the U.S.
Taking the long view, Exxon boosted its Russian holdings to 63.7 million acres in 2014 from 11.4 million at the end of 2013, according to data from U.S. regulatory filings. That dwarfs the 14.6 million acres of rights Exxon holds in the U.S., which until last year was its largest exploration prospect.
While U.S. and European Union sanctions against Russia forced Exxon to shut down an Arctic drilling project in October, there were no legal obstacles barring the company from staking claims to areas that could yield tens of billions of barrels in coming decades. The bet on Russia follows a string of drilling failures elsewhere and spending cuts that will likely be addressed in Chief Executive Officer Rex Tillerson’s investor meeting Wednesday.
This Bloomberg article, filed from Chicago, was posted on their Internet site at 5:00 p.m. Denver time on Monday afternoon---and it's the last offering of the day from Elliot Simon, for which I thank him.
President Obama has harsh words for China’s proposed counter-terrorism law. This despite the fact that the new rules are modeled largely on the U.S. regulations, and more directly, on the precedent set by the NSA’s spying apparatus.
China released a few demands last week. If U.S. tech companies want to do business in China – and given the market size, yes, tech companies want to do business in China – then they’ll have to place servers in China. They’ll also have to provide encryption keys, and allow the Chinese government special surveillance access into their systems.
President Obama is, understandably, a little wary. Tech companies are weary. Giving a global superpower “backdoor” access to servers used by millions of people feels a bit like Big Brother. It’s uncomfortably dystopian.
But as the Snowden documents revealed, this is exactly the kind of unfettered access enjoyed by the United States.
Can you spell hypocrisy, boys and girls? This article appeared on the sputniknews.com website at 11:46 p.m. last night Moscow time---and once again I thank Roy Stephens for sending it our way.
Winston Churchill once said, "I feel lonely without a war." He also badly missed the loss of empire. Churchill’s successor - the "Empire of Chaos’ - now faces the same quandary. Some wars - as in Ukraine, by proxy - are not going so well.
And the loss of empire increasingly manifests itself in myriad moves by selected players aiming towards a multi-polar world.
So no wonder U.S. "Think Tank land" is going bonkers, releasing wacky CIA-tinted "forecasts" where Russia is bound to disintegrate, and China is turning into a communist dictatorship. So much (imperial) wishful thinking, so little time to prolong hegemony.
This must read commentary by Pepe showed up on the Russia Today website last Friday---and it's the final offering of the day from Roy Stephens.
A spectacular Mordor-style eruption has hit the Villarrica volcano in southern Chile, spewing ash and lava up to 3 kilometers into the night sky and forcing the evacuation of nearby towns and villages.
Some 3,385 people have been moved from communities surrounding the volcano, according to the mayor of Pucon, a nearby town. Interior Minister Rodrigo Penailillo said there were no reports of any injuries.
But although the fireworks display from the volcano was breathtaking, a major lava flow isn’t expected. Intermittent gas and steam continue to be erupted, although the situation remains volatile.
"After an eruptive pulse, which was pretty intense but very short at 3 am (0600 GMT), the volcanic system remains unstable and it is possible that something similar could occur again in the next few hours," the head of national geological service Sernageomin said on Tuesday morning.
This very interesting Russia Today article was posted on their Internet site at 7:28 p.m. Moscow time on their Tuesday evening---and it's courtesy of reader M.A.
While there is still hope within the junior resource sector, John Kaiser, founder of Kaiser Research, isn’t painting a pretty picture for some companies.
Speaking at a keynote program at the Prospectors & Developers Association of Canada’s 83rd convention in Toronto, Canada, Kaiser outlined how badly the junior resource sector is hurting.
He said, “717 companies have negative working capital, 291 have between $0 and $500,000, 554 still have between $500,000 and $20 million – those are the ones that are most likely to survive.”
“How bad is this situation? The companies that have negative working capital are trading below 30 cents, totaling almost $3 billion to service providers, to the executives’ salaries – this money will never be paid back in cash,” he said. “It will be settled for paper, which will then be rolled back and then it is just going to vanish. This is a huge hit to the system right now,” he added.
One wonders what commodity prices would be if JPMorgan et al weren't sitting on all four precious metals? But Kaiser, the sensitive and caring man that I know him to be, will never go there. This news item appeared on the kitco.com Internet site at 11:22 a.m. EST on Monday---and it's courtesy of Richard O'Mara. There was another spin on this Kaiser commentary. It was posted on thestar.com Internet site on Monday as well---and it's headlined "Mining sector “in worst bear market in decades”"---and I thank Brad Robertson for sending it our way.
The impression that most of the gold in the U.S. gold reserve stored at Fort Knox originated with coin melt following the U.S. government's confiscating of privately held monetary gold in 1933 is wrong, gold researcher and GATA consultant Koos Jansen writes.
His commentary is headlined "Where Did the Gold In Fort Knox Come From? Part I" and it was posted on the bullionstar.com Internet site yesterday. I found this in a GATA dispatch yesterday.
Recent assertions by fund manager and geopolitical analyst James G. Rickards that the United States and China are cooperating in suppressing the gold price so that China more easily may obtain enough metal to hedge its grotesque foreign exchange surplus in dollars are not necessarily the first ones along those lines.
As Rickards has held U.S. Defense Department security clearance and was the lawyer for Long-Term Capital Management during the rescue arranged by the Federal Reserve in 1998, he is always worth the closest attention and surely knows more than he can tell without breaching some confidence or even risking assassination.
But the first suggestion that central banks were working surreptitiously to redistribute the world's gold among governments as the transition to some sort of worldwide currency revaluation may have been made by our friends the economists and fund managers Paul Brodsky and Lee Quaintance, then of QB Asset Management, now of Kopernik Global Investors, whose dissertation on the issue was published in May 2012 and publicized by GATA.
Brodsky and Quaintance speculated that central banks actually want the gold price up -- way up -- at least in the long term.
This 8-page commentary from three years ago, along with the balance of Chris Powell's preamble, is definitely worth reading if you have the time, especially in the light of the ever-increased gold imports into China, along with Jim Rickards' assertions. It was posted on the gata.org Internet site yesterday.
The Perth Mint's sales of silver coins slumped to a 10-month low in February, while gold product sales rose from a near-three-year low.
The Perth Mint runs the only gold refinery in Australia, the world's second-biggest gold producer after China.
The mint's gold sales rose to 31,981 ounces in February from 23,174 ounces in January, which was the lowest monthly sales figures since April 2012, data on the mint's website showed.
Sales of silver coins fell to 392,114 ounces in February, from 585,953 ounces in the previous month. Gold and silver prices declined in February after posting sharp jumps in the previous month.
This short Reuters piece, filed from Singapore at 11:44 p.m. EST yesterday evening, was something I found over on the Sharps Pixley website in the wee hours of this morning.
The first four photos were taken outside of the town of Sedona, Arizona on State Highway 89A about an hour south of Flagstaff. The drive involves a circuitous and precipitous drop from the escarpment that Flagstaff is on, a feature called the Mogollon Rim, to a much lower elevation where Sedona is located. Sedona's main attraction is its array of red sandstone formations. The first two photos feature the Midgley Bridge which spans Oak Creek just north of the town. Once again, the 'click to enlarge' feature really helps.
This fellow is a red-crested cardinal. The photo was taken last week on Maui in the Hawai'ian Islands. Although it certainly looks like a cardinal, it's actually a member of the tanager family---and is not even closely related. It's an introduced species from South America.
No one has a crystal ball, says legendary resource speculator Doug Casey. But one thing is clear: once the gold sector gets back on its feet, a few select stocks—the survivors with quality management and proven assets—will take a moonshot. Find out how to prepare your portfolio to cash in on the jackpot. Free online event GOING VERTICAL. Click here to learn more and register.
On Wednesday of last week, the new short interest report revealed a stunning decline in the short positions of both SLV, the big silver ETF, and in GLD, the big gold ETF. In SLV, the short position dropped by more than 7 million shares, or almost 35%, to just under 13.7 million shares (oz). The short position in GLD dropped by more than 5.5 million shares (37%) to just over 9.3 million shares (0.9 million oz). These were the largest joint or single declines in memory. There had been some large deposits of metal into the GLD which appear to have accounted for the large drop in the short position, but the decline in SLV was a surprise to me.
There is one conclusion that I can draw from this unusual decline in the short position of SLV. Because it occurred when it did, namely, out of synch with what one might have reasonably expected, it seems very unlikely to be the work of many independent traders involved in various trading strategies. Instead, the large decline in the SLV short position (as well as in GLD) appears to be the work of one entity and who better than JPMorgan, the king fish of the silver price manipulation. JPMorgan is the big COMEX silver short and now the biggest stopper of silver deliveries this month and a very unusual decline just occurred in the short position of SLV (of which JPM is the custodian). I wonder what the odds would be that it wasn’t JPM behind the drop in the SLV short position. Is there any aspect to silver not dominated by JPM? This unexpected decline should be taken as good news. - Silver analyst Ted Butler: 28 February 2015
If you're looking for an explanation for the big down/up move in Far East trading on their Tuesday morning, I don't have one. Although the declines in gold and silver were certainly of the HFT variety---engineered by JPMorgan et al---the subsequent rallies were something else entirely---and whoever was responsible had some pretty deep pockets. The action later in the Tuesday session was the just the same old stuff where every rally got hammered flat. What else is new?
Here are the 6-month charts for all four precious metals after yesterday's shenanigans.
The only good thing about yesterday's price action, is that all the associated price/volume activity should be in Friday's Commitment of Traders Report, as the cut-off for that report was at the COMEX close yesterday.
And as I type this paragraph, the London open is a bit under 15 minutes away. Gold and silver had rallied a bit in Wednesday morning trading in the Far East, but both metals are back to unchanged. Platinum and palladium are both down a few bucks. Net gold volume is a bit over 14,500 contracts---and silver's net volume is pretty decent at 3,900 contracts. The dollar index is up 12 basis points. Not much to see here.
I haven't a clue as to what the powers-that-be have in store for precious metal prices going forward now that we're past the cut-off, although it certainly appears that a big rally to the upside is not going to be tolerated at this time. I'm still concerned about a down-side engineered price decline---such as the one that was thwarted in Far East trading on Tuesday morning. But as to how big and how bad it could get will almost solely be determined by how many short positions the technical funds in the Managed Money category are prepared to put on. That's the limiting factor---and it remains to be seen whether "da boyz" are going to put them to the test.
So we wait some more.
And as I hit the 'send' button on today's missive at 5:15 a.m. EST, I note that the gold price continues quietly lower, as does silver---and both are now down tiny amounts from Tuesday's close in New York.
Platinum is now down six bucks---and palladium is down eight dollars.
Net gold volume is just over 22,500 contracts---and silver's net volume is 5,400 contracts. There's not much going on, but the price biases are obviously negative at the moment. The dollar index bottomed out at the 95.40 mark just minutes before the London open---and is currently up 30 basis points from Tuesday's close.
That's it for another day. I hope your Wednesday/Thursday goes well---and I'll see you here tomorrow.