I’m more than nervous about the price set-up at the moment
It was another day where gold rallied in Far East trading until 1 p.m. Hong Kong time—and then then the not-for-profit sellers showed up, with an interim low coming at the 10:30 a.m. GMT morning gold fix in London. It rallied a bit from there—and really took off to the upside the moment the London p.m. gold fix was done for the day. That rally got hammered flat—and “da boyz” set the low price tick at the 1:30 p.m. COMEX close. The gold price rallied a bit into the close of electronic trading.
The high and low on Thursday were reported as $1,208.90 and $1,195.80 in the April contract.
Gold finished the Thursday session at $1,198.00 spot, down another $2.30 from Wednesday’s close. Volume, net of roll-over out of the April contract, was pretty light at only 104,000 contracts.
The silver price pattern was virtually the same as gold’s, so I’ll spare you the play-by-play on that precious metal.
The high and low ticks, which are barely worth the effort of looking up, were recorded by the CME Group as $16.355 and $16.14 in the May contract.
Silver was closed in New York yesterday at $16.20 spot, down another 1.5 cents. Net volume was very quiet once again at only 20,500 contracts.
The platinum price followed an almost identical path to gold and silver as well—and it finished the Thursday trading session at $1,176 spot, down 4 bucks from Wednesday.
Ditto for palladium, expect the price got hit for a full percent at 10:40 a.m. EST, the precise same time as the other three precious metals got it in the ear from the HFT traders and their algorithms. Palladium recovered most of its loses—and only closed down a buck at $823 spot.
The dollar index finished the Wednesday trading session at 95.91—and began to head higher as soon as trading began in the Far East on their Thursday morning. There was an interim top at 96.25 around 2:30 p.m. Hong Kong time—and it traded flat until shortly after 12 o’clock noon in London. It then it rolled over hard, cutting through the 96.00 price mark like the proverbial hot knife through soft butter. But, once again, ‘gentle hands’ were at the ready. The subsequent rally topped out at around the 96.55 mark at precisely 12:00 o’clock noon in New York. From there it faded into the close. The dollar index finished the Thursday session at 96.35—up another 44 basis points.
The gold stocks opened around unchanged, but with a positive bias—and really took off in the rally that began at the London p.m gold fix. The high tick for the shares came at the same time as the high tick in the gold price—and from there they sank back to unchanged—and chopped sideways into the close. The HUI finished down 0.09 percent.
The silver equities followed a similar pattern to the gold shares, but the price action was much weaker, as Nick Laird’s Intraday Silver Sentiment Index closed down another 1.26 percent.
The CME Daily Delivery Report showed that 4 gold and 8 silver contracts were posted for delivery within the COMEX-approved depositories on Monday. In silver, Jefferies issued 7 contracts—and once again JPMorgan was the big long/stopper with 6 contracts in its in-house [proprietary] trading account. The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Thursday trading session showed that for the second day in a row that March open interest in gold remained unchanged at 153 contracts. March o.i. in silver declined 41 contracts to 956 contracts.
There were no reported changes in GLD yesterday, but an authorized participant added 1,339,489 troy ounces to SLV. I would guess that this deposit was used to cover an existing short position—and if that was the case, it can be assumed that it would be JPMorgan doing the honours.
Joshua Gibbons, the “Guru of the SLV Bar List,” updated his website with the weekly data from the iShares.com Internet site—and this is what he had to say: “Analysis of the 04 March 2015 bar list, and comparison to the previous week’s list — 258,026.4 troy ounces were added (all to Brinks London), no bars were removed or had serial number changes.”
“The bars added were from: Kazinc (0.1M oz), Solar Applied Materials (0.1M oz), and 6 others.
As of the time that the bar list was produced, it was overallocated 186.3oz.”
“All daily changes are reflected on the bar list.”
There was a tiny sales report from the U.S. Mint. They sold 1,500 troy ounces of gold eagles—and that was it.
There was no gold reported received at the COMEX-approved depositories on Wednesday, but a chunky 121,143 troy ounces were shipped out, with most of it coming out of Scotiabank’s vault. The link to that activity is here.
It was another very decent day in silver, as 605,830 troy ounces were received—and 562,707 troy ounces were shipped out the door. The ‘in’ volume was at Scotiabank—and the ‘out’ volume was at HSBC USA. The link to that action is here.
Here’s a chart that Nick sent my way last night—and I thought it worth sharing. It shows the amount of gold held in foreign and international accounts by the U.S. Fed since 2000.
Then just after midnight EST Nick slid the chart posted below into my in-box. It shows the withdrawals from the Shanghai Gold Exchange for the week ending February 27. Nick said that the 37.917 tonne withdrawal that was reported was “comprised of two days before the Golden Week—and three days after.”
I have a lot of stories for you today—and because of that, I’ll happily leave the final edit up to you.
And while I usually only comment on Silver Eagle sales in the weekly review, yesterday’s report from the U.S. Mint indicated a sharp jump in the daily sales rate this month above not only very recent daily selling rates, but even above estimated full daily production capacity. Whereas sales for February came to a bit less than 108,000 coins per day (7 day week), yesterday’s sales for the first few days of March come to 141,000 coins per day, above previous full capacity of 130,000 coins per day. My sense is that the big buyer held back a bit recently in order to give the Mint some breathing room production-wise and away from having to fully ration Silver Eagles, as has been the case many times over the past four years.
I can’t help but conclude that JPMorgan accounts for a large part of recent sales of Silver Eagles. I don’t hear of strong retail demand from my usual sources and sales of gold coins are so weak as to support the feedback of overall weak retail coin demand. Someone is a big buyer of Silver Eagles and if it’s not the public it has to be someone big. I say it’s the same big buyer of other forms of physical silver, including the delivery of COMEX March contracts. – Silver analyst Ted Butler: 04 March 2015
It was just another day off the calendar where prices rose a bit in early trading in the Far East—and then got sold down after that. Any upward price movements are hammered flat before they get too far. It’s almost like price are being kept in some sort of holding pattern—but for what reason, and how long?
Today we get the job numbers at 8:30 a.m. EST—and I’ll be interested to see what price ‘action’ we have at that point. Last month there was very little.
Once again I have the 6-month charts for all four precious metals.
You’ll note that JPMorgan et al have been taking tiny slices out of gold, silver and platinum every day this week. These “salami slices” normally culminate in a huge engineered price decline.
And as I write this paragraph, the London open is twenty minutes away. Gold and silver didn’t do much of anything in morning trading in the Far East on their Friday, but both began to head lower around lunch time in Hong Kong, just as it has been happening all week—and both are down from yesterday’s close in New York. Platinum and palladium have been chopping sideways. Net gold volume is a hair under 14,000 contracts—and silver’s net volume is very quiet as well at 2,900 contracts. The dollar index hasn’t been doing much, but is currently up about 8 basis points. Nothing to see here once again.
Today we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday—and I, like Ted, am hoping for a slight improvement in the Commercial net short positions in both gold and silver. But based on the reporting week, it’s too close to call at the moment.
We also get the latest Bank Participation Report. This is data extracted directly from the COT Report, which shows the COMEX futures contracts, both long and short, that are held by the U.S. and non-U.S. banks as of Tuesday’s cut-off. I’m expecting them [and the COT numbers] to be ugly once again—and it’s for that reason I’m more than nervous about the price set-up at the moment. I may have a better feel for it after the job numbers are released this morning. If “da boyz” are going to do anything, that would be a perfect time. However, both Ted and I have been waiting for the hammer to fall for a while now—but so far, nothing. So we wait.
And as I send today’s effort off into cyberspace at 5:15 p.m. EST, I see that the gold price is continuing to head south—and is down about five bucks at the moment. I also note that the HFT boyz put the boots to silver at exactly 9 a.m. in London trading—and it’s currently down two bits from Thursday’s close. Platinum and palladium are down four dollars each. Gold volume is just under 26,000 contracts, which isn’t overly heavy considering the price action. Silver’s net volume is a bit under 7,000 contracts—and that’s a surprisingly low number as well.
The almighty dollar index is now up 34 basis points.
Based on what I see in front of me at the moment, I look forward to the precious metal price “action” at 8:30 a.m. EST with some fear and trepidation although, as I say at times like this, I’d love to be spectacularly wrong.
That’s all I have for today. Don’t forget to sign up for Casey Research‘s free webinar that’s mentioned in the last Critical Read of the day—and to save you from scrolling up, the story is linked here.
Enjoy your weekend, or what’s left of it if you live west of the International Date Line—and I’ll see you here tomorrow.
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Here are four more photos from Sedona and area. The first is the interior of the Chapel of the Holy Cross—the photos of which adorned yesterday’s column. The second and third photos are two more view shots taken from either side of the church. When I [finally] make my millions in the precious metal market, I’m going to buy the house in the right foreground in photo #2 and use it as rental property. The third photo was taken on the walkway up to the chapel. Don’t forget the ‘click to enlarge‘ feature.