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Ed Steer
Over-the-Moon Trading Volumes in Silver and Gold on Wednesday
1 month ago




18 May 2017 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price traded flat for the first forty-five minutes once it began at 6:00 p.m. EDT on Tuesday evening.  Then it rallied sharply until ‘da boyz’ capped the price [with huge volume] staring shortly before 8 a.m. CST in the Shanghai on their Wednesday morning.  From there it didn’t do much of anything until around 9:20 a.m. BST in London — and it began to wander higher in price from there.  Then, for the second day in a row, the price got capped at the 11 a.m. EDT London close, but within an hour it was crawling higher once again — and into the thinly-traded after-hours market as well, closing on its high tick of the day.

The low and higher were recorded by the CME Group as $1,236.30 and $1,261.50 in the June contract.

Gold finished the Wednesday session in New York yesterday at $1,260.90 spot, up $24.20 from Tuesday’s close — blowing through its 50-day — and closing above its 200-day moving average in the process.  Net volume was over the moon at just north of 335,000 contracts.

Here’s the 5-minute gold tick chart courtesy of Brad Robertson.  There was very little in the way of background volume anywhere, except in afternoon trading in the Far East, although it did fall off to next to nothing after 14:00 Denver time on the chart below, which was 4 p.m. in New York.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ feature is a must.

It was an identical chart pattern for silver, except the moment it broke above $17 spot minutes after the London close at 11 a.m. EDT, it was quickly sold lower — and the sluggish rally that followed met the same fate at 3:00 p.m. EDT in the thinly-traded after-hours market.

The low and high ticks in this precious metal were reported as $16.755 spot and $17.035.

Silver was closed yesterday at $16.86 spot, up 2.5 cents from Wednesday’s close, so it’s obvious that JP Morgan isn’t letting the silver price get out of hand, at least for the moment.  Net volume was eye-watering at just under 105,500 contracts.  Who were the buyers and sellers yesterday, as no moving average worthy of the name were broken to the upside yesterday?  That was the question that Ted was asking on the phone yesterday — and in his quote further down in The Wrap section.

And here’s the 5-minute tick chart for silver, courtesy of Brad as well.  The volume that mattered began at 06:00 Denver time, which was 8:00 a.m. in New York.  The standout feature is the monstrous volume spike on the engineered price decline at 3:00 p.m. EDT in the thinly-traded after-hours market.  Like gold, silver volume didn’t dry up until after 2 p.m. MDT/4 p.m. in New York.

Like the 5-minute gold chart, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ feature is a must here as well.

Platinum also rallied a bit in the first couple of hours of trading in New York on Tuesday evening — and then was sold back to barely above unchanged by 9 a.m. in Shanghai.  It traded sideways until shortly before 2 p.m. in Zurich — and began to chop quietly higher but, like silver and gold, was capped shortly after the London/Zurich close.  It was sold down a few dollars from there — and then chopped sideways for the rest of the day.  Platinum finished the Wednesday session at $944 spot, up 5 dollars from Tuesday’s close.

Palladium was the Rodney Dangerfield of the precious metal complex again yesterday.  After trading a dollar so above unchanged until shortly after the Zurich open, the selling pressure began.  Most of the price damage was done by 1 p.m. in New York — and it traded flat until shortly after 3:30 p.m. in the very thinly-traded after-hours market.  It rallied very quietly into the close from there, finishing the day at $780 spot, down another 11 bucks.

The dollar index closed very late on Tuesday afternoon in New York at 98.22 — and continued lower once trading began at 6:00 p.m. EDT about forty-five minutes later.  With only a few minor pauses, the index continued to sink, with the 97.35 low tick coming around 5:45 p.m. EDT, just minutes before the close of trading on Wednesday afternoon.  It rallied a few basis points from there — and finished the day at 97.39 — down 83 basis points from its close on Tuesday.

It was another day where very little should be made of the supposed correlation between the U.S. dollar index and the precious metals…with the goings-on in silver and palladium to be cases in point yesterday.

And here’s the 6-month U.S. dollar index chart — and you can read into it whatever you wish.  Normally it might be a semi-proxy for what the precious metals should be doing from a price perspective in a free market, but since we don’t have a free market in either the currencies or the precious metals…..

The gold shares gapped up a bit over 2 percent at the open — and continued higher until the gold price was capped shortly after the 11 a.m. EDT London close.  Down they went from there, with their respective lows coming a few minutes after 3 p.m. They rallied a bit from there, but the HUI only managed to close higher by 1.45 percent.

The silver stocks aren’t exactly going gangbusters, either…but at least they had an excuse yesterday after the manhandling the silver price was subjected to.  But despite that, Nick Laird’s Silver Sentiment/Silver 7 Index still managed to close higher by 1.23 percent — and here’s the 6-month chart of that index.  Click to enlarge.

I continue to be underwhelmed by the performance of the precious metals shares, especially the gold stocks, again yesterday.

The CME Daily Delivery Report showed that 17 gold and 47 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, Morgan Stanley issued all 17 contracts out of its client account — and Scotiabank stopped 12 of them for its own account.  In silver, ABN Amro and International F.C. Stone were the two sole short/issuers with 37 and 10 contracts out of their respective client accounts.  The two largest long/stoppers were ADM with 25 — and Morgan Stanley with 11 contracts for their respective client accounts as well.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in May rose by 8 contracts, leaving 40 still around, minus the 17 mentioned just above. Tuesday’s Daily Delivery Report showed that zero gold contracts were actually posted for delivery today, so that means the obvious…that a net 8 gold contracts were added to May.  Silver o.i. in May also rose…by 10 contracts, leaving 121 still open…minus the 47 mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that 28 silver contracts were actually posted for delivery today, so that means that another 28+10=38 silver contracts were added to the May delivery month.

So far in May there have been 4,514 silver contracts issued and stopped, with more contracts being added every day without fail.  This is amazing to watch — and it’s unprecedented as well.

There were no reported changes in GLD yesterday, but after the big price run-up on Wednesday, I expect to see some activity in this ETF pretty soon.  And as of 7:39 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was no sales report from the U.S. Mint yesterday.

It was all zeros in gold over at the COMEX-approved depositories on the U.S. east coast on Tuesday, as nothing was reported received, or shipped out.

It was busier in silver, as 506,821 troy ounces were received…all of which went into Canada’s Scotiabank.  There was 75,037 troy ounces shipped out as well…35,092 from Scotiabank, plus 39,945 troy ounces out of CNT.  There were also transfers from Eligible to Registered totally 448,245 troy ounces — and the depositories involved were CNT and Brink’s, Inc.  The link to all this activity is here.

It was very busy at Brink’s, Inc. at their gold kilobar depository in Hong Kong on their Tuesday, as they reported receiving 4,018 of them, plus they shipped out another 4,069.  The link to that, in troy ounces, is here.

Here’s a Nick Laird chart that I borrowed from an article over on the bullionstar.com Internet site headlined “An update on SGE Vault Withdrawals and SGE Price Premiums“.  It shows the gold withdrawals from the Shanghai Gold Exchange for the first four month of the year, for each of the last ten years.  As you can tell…2017 is shaping up to be another great year for withdrawals from the SGE, which is seen as a proxy for Chinese retail gold demand.  Click to enlarge.

I have very few stories for you today, so you’re editing job won’t take too long.


CRITICAL READS

U.S. Household Debt Surpasses 2008 High, Hits Record $12.7 Trillion

Total debt held by U.S. household reached $12.73 trillion in the first quarter of 2017, finally surpassing its $12.68 trillion peak reached during the recession in 2008 according to the N.Y. Fed’s latest quarterly report on household debt. This marked a$479 billion increase from a year ago, and up $149 billion from Q4 2016 after 11 consecutive quarters of growth since the deleveraging period immediately following the Great Recession.

The quick and dirty breakdown:

  • Total household indebtedness stood at $12.73 trillion as of March 31, 2017. This increase put overall household debt $50 billion above its previous peak set in the third quarter of 2008 and 14.1 percent above the trough set in the second quarter of 2013.
  • Mortgage balances, the largest component of household debt, reached $8.63 trillion as of March 31, a $147 billion uptick from the fourth quarter of 2016.
  • Balances on home equity lines of credit fell slightly in the first quarter, down $17 billion to $456 billion.
  • Non-housing debt saw mixed changes—an increase of $10 billion in auto loans and $34 billion in student loan balances, and a $15 billion drop in credit card balances.

Despite the new nominal all time high, on a relative basis, household debt remained below past levels in relation to the size of the overall U.S. economy, and in Q1 total debt was 66.9% of GDP, nearly 20% lower compared to 85.4% of GDP in Q3 of 2008.

This very long graph and chart-filled commentary showed up on the Zero Hedge website at 12:32 p.m. on Wednesday afternoon EDT — and I thank Richard Saler for sharing it with us.  Another link to it is here.


Carmageddon: All 3 Major Auto Markets Contract YoY For the First Time Since January 2009

For the first time since January 2009, sales of cars declined year-over-year in all three of the world’s largest auto markets of Western Europe (-6.8%), China (-1.8%) and the United States (-3.7%).  Combined, these three markets account for roughly 70% of the world’s auto sales.

And while auto OEMs spent the first part of 2017 ignoring the growing signs of trouble facing their industry, some are finally starting to admit that all is not well in autoland.  As we noted a couple of days ago (see “How Is This Not A Recession? Ford To Slash 10% Of Global Workforce“), Ford just announced plans to cut about 10% of its global workforce.  Meanwhile Nissan Motor is forecasting a surprise drop in profit this year and Toyota Motor expects an 18% decline as well.

As we’ve been saying for months, this is likely just the beginning of what may be a very painful several quarters for the auto industry.  So what else could go wrong?  Here is a just a short summary from Morgan Stanley’s auto team, led by Adam Jonas, of the things that could cause used car prices to crash by up to 50% over the next 4-5 years…which, of course, is probably not great news for new car prices either (Executive Summary:  flood of supply, poor lending standards and desperate OEMs who need to keep new car sales elevated at all costs).

This chart-filled news item put in an appearance on the Zero Hedge website at 5:48 p.m. on Wednesday afternoon EDT — and it comes to us courtesy of Brad Robertson — and another link to it is here.


Housing Recovery? U.S. Mortgage Applications Tumble Most Since 2016

After dismal housing starts and permits data yesterday, the ‘housing recovery’ narrative took another knock this morning as mortgage applications tumbled 4.1% last week – the biggest drop since December 2016.

While mortgage rates were unchanged, both purchases and refis fell notably…

  •     Purchases down 2.7% after rising 1.7% in prior week
  •     Refis fell 5.7% after rising 3.3% in prior week

Perhaps additionally of note the government’s programs saw a dramatic drop off in the last week…

This brief news story appeared on the Zero Hedge website at 8:55 p.m. EDT yesterday evening — and another link to it is here.


Look Ma, No Hands!” — David Stockman

The Deep State is escalating its war on President Trump but the Wall Street partiers apparently couldn’t care less. When the machines tagged 2402 on the S&P 500 yesterday, it was surely a historic case of “look ma, no hands!

It’s hard to imagine what more will be needed to ignite an eruption of fear and panic in the casino amidst Wall Street’s record and wholly irrational state of somnolence.

After all, the Fed is sidelined and out of dry powder. The Red Ponzi is tottering. The U.S. retail sector is descending into an apocalypse. The giant auto bubble is fracturing. The Trump Stimulus is dead in the water, and Washington is heading for an extended stretch of complete dysfunction and acrimonious combat.

And if that isn’t that enough to upset the apple cart — there are a lot more headwinds coming down the pike.

But the point is the insane governance process in Washington, which is completely unhinged, is combined with a level of insane complacency on Wall Street. Which is literally off the charts.

This commentary by David showed up on the dailyreckoning.com Internet site on Tuesday sometime — and I thank Brad Robertson for his second offering in a row.  Another link to it is here.


Cisco Plunges After Slashing Revenue Guidance

With Cisco reporting quarterly earnings moments ago, traditionally one of the closers of earnings season, few were expecting big fireworks out of the company, and based on what the company reported for the just concluded quarter, there should not have been any: in its fiscal Q3 the company earned $0.50 in GAAP EPS, which however after some aggressive fudging was pushed up to $0.60 non-GAAP, beating expectations by 2 cents. Revenue of $11.94 billion likewise beat estimates by $50 million.

However, it was the company’s projections that stunned the market, because while the company predicted Q4 EPS of $0.60 to $0.62 (or $0.46-$0.51 GAAP), on the low end of consensus estimates of $0.62 (in a range of $0.58 to $0.66), despite a sub par gross margin forecast of 63-64%, below the 64.2% estimate,  the company now expects revenue to plunge between 4 and 6% in its last fiscal quarter. Wall Street’s estimate: a modest 1% drop.

Putting the projected revenue drop in context, this would be the worst top-line drop in years.

Needless to say, nobody could have possibly seen this coming: here is how the sell-side came into today’s earnings: 21 buys, 15 holds, 0 sells.

This short Zero Hedge article, also courtesy of Brad Robertson, was posted on the their website at 4:30 p.m. on Wednesday afternoon just after the markets closed.  Another link to it is here.


Professor Cohen Says Assault on Trump Presidency is Our Greatest National Security Threat: Is There a 4th Branch of Government?

Steven Cohen, Professor of Russian studies at Princeton and NYU (an obvious Russian spy) was besides himself tonight, in sheer disbelief over the with hunt of gigantic nothing-burgers that are being used to assault the Presidency of Donald Trump.

He declared, “today, I would say (the greatest threat to national security) is this assault on President Trump. Let’s be clear what he’s being accused of is treason. This has never happened in America, that we had a Russian agent in the White House. Cohen believes Flynn did nothing wrong by talking to the Russian ambassador, describing it as ‘his job’ to do so.”

He then illuminated the indelible fact that there is a 4th branch of government, the intelligence community, who have been meddling in American foreign affairs, obstructing the other 3 branches of government.

In 2016, President Obama worked out a deal with Russian President Putin for military cooperation in Syria. He said he was gonna share intelligence with Russia, just like Trump and the Russians were supposed to do the other day. Our department of defense said it wouldn’t share intelligence. And a few days later, they killed Syrian soldiers, violating the agreement, and that was the end of that. So, we can ask, who is making our foreign policy in Washington today?

Professor Cohen added, “you and I have to ask a subversive question, are there really three branches of government, or is there a 4th branch of government? These intel services. What we know, as a fact, is that Obama tried, not very hard but he tried for a military alliance with Putin, in Syria, against terrorism and it was sabotaged by the department of defense and its allies in the intelligence services.”

The Deep State in action.  The above five paragraphs are all there is to this brief Zero Hedge item that was posted on their Internet site at 10:32 p.m. EDT on Tuesday evening.  But there’s an embedded 4:43 minute Q&A with professor Cohen hosted by Tucker Carlson that’s worth watching if you have the interest.  My thanks to ‘aurora’ for pointing this out — and another link to it is here.


Update on Brexit — Alasdair Macleod

This article looks at the background to Brexit negotiations and concludes that Britain is negotiating from a position of strength, while the E.U. is increasingly in a position of financial difficulty. Not only will the European Commission be forced to scale back its spending and redistribution of resources, but the euro project is threatened by capital flight between member states, despite the early signs of economic recovery which should be restoring market confidence. Politicking aside, pressure is mounting on the E.U. to defuse the disruption of Brexit by agreeing to a mutually beneficial deal as soon as possible.

E.U. finances are getting desperate

The E.U. cannot afford to prevaricate over Brexit because a bad Brexit risks causing it immeasurable harm. Not only does big business in Europe want a Britain with which it can freely trade, but confidence in the European Project is rapidly diminishing. The E.U. is a mega-state that is fading, and no one knows how to ensure its survival. Inevitably, the failings of the E.U. are catching up with it, and Britain’s leaving exposes the financial consequences of decades of bad management, capital destruction through wasteful redistribution and the lack of any contingency planning.

Britain’s €8bn annual contribution to the E.U. budget is almost the same as the cost of administering the whole Brussels establishment, so Brexit will create a budget shortfall that is almost total, which Brussels will have to make up from the remaining members. Inevitably, some of the redistribution to Brussel’s pet projects will end up being cut as well. It is for this reason that the Brussels politicians hope for a capital payment from Britain.

The Commission also has a commitment to redistribute member funds estimated at €238bn. It must have assumed prior to last year’s referendum that Britain would vote to remain and pay its share. Instead, it voted for Brexit, and the Commission will have to find the money from a capital contribution either from Britain, somewhere else, or cancel some of the projects. With these problems, the Commission is in a difficult position, wrong-footed by Brexit. And when Theresa May says no deal is better than a bad deal and means it, it really could mean an end to Brussels as we know it.

This rather intriguing but somewhat involved [at times] commentary from Alasdair is certainly worth reading if you have the interest — and it was posted on the goldmoney.com Internet site back on May 11 — and I thank U.K. reader Jonathan Lewis for bringing it to our attention.  Another link to it is here.  Nigel Farage has a thing or two to say about Brexit and the E.U. in this youtube.com video clip headlined “Nigel Farage savages John Claude Juncker” — and the link to that is here.  It’s also courtesy of Jonathan Lewis.


Vladimir Putin calls allegations Trump passed secrets to Russian FM Lavrov “political schizophrenia

Russian President Vladimir Putin was speaking with the Italian Prime Minister in the Russian resort city of Sochi when he was asked about the latest events in the United States.

The Russian President said of the outlandish claims,

We are seeing in the U.S. a developing political schizophrenia.

There is no other way I can explain the accusations against the acting U.S. president that he gave away some secrets to Lavrov”.

He further said, “those who spread them (rumours) are either stupid or dangerous”.

Dangerous” is much closer to the truth, dear reader.  This news story was posted on theduran.com Internet site early on Wednesday morning EDT — and it comes courtesy of Roy Stephens.  Another link to it is here.


Israeli Government Minister calls for assassination of President Assad and war on Iran

Israeli housing Minister Yoav Galant has openly called for the assassination of Syrian President Bashar al-Assad. This is the first time an Israeli Minister has called for the killing of the Syrian President.

Responding to unsubstantiated claims that Syria cremates prisoners, Galant stated,

We are crossing a red line, and in my view the time has come to assassinate Assad. And when we finish with the tail of the serpent, we will reach the head of the serpent which can be found in Tehran, and we will deal with it, too”.

The last part of the quote appears to be a call for war against Iran.

Such a crass and barbaric call to assassinate world leaders has no place in the 21st century.

This is another news item from theduran.com Internet site.  This one appeared there on Tuesday sometime — and I thank Roy Stephens for his second contribution in a row to today’s column.  Another link to it is here.


Saudi legal expert accuses U.S. Government of 9/11 attack as pretext to perpetual war — Paul Craig Roberts

Did you know about this? It happened one year ago. Did the presstitutes report it?

On April 28, 2016, the London-based Saudi daily Al-Hayat published an exceptionally harsh article on this topic by Saudi legal expert Katib Al-Shammari, who argued that the U.S. itself had planned and carried out 9/11, while placing the blame on a shifting series of others – first Al-Qaeda and the Taliban, then Saddam Hussein’s regime in Iraq, and now Saudi Arabia. He wrote that American threats to reveal documents that supposedly point to Saudi involvement in 9/11 are part of standard U.S. policy of exposing archival documents to use as leverage against various countries – which he calls “victory by means of archives.”

September 11 is one of winning cards in the American archives, because all the wise people in the world who are experts on American policy and who analyze the images and the videos [of 9/11] agree unanimously that what happened in the [Twin] Towers was a purely American action, planned and carried out within the U.S. Proof of this is the sequence of continuous explosions that dramatically ripped through both buildings… Expert structural engineers demolished them with explosives, while the planes crashing [into them] only gave the green light for the detonation – they were not the reason for the collapse. But the U.S. still spreads blame in all directions. [This policy] can be dubbed ‘victory by means of archives.’

No surprises here, dear reader.  I’ve been adamant since Day 1 that 9/11 was an inside job — and I’m even more strongly convinced of it now than ever before.  This article was posted on Paul’s website on Tuesday — and it’s certainly worth reading if you have the interest.  I thank Brad Robertson for sharing it with us — and another link to it is here.


World Money: Five Hidden Signals from the IMF

Less than a month ago a handful of the world’s policy makers gathered in Washington at the International Monetary Fund (IMF), no surprising headlines were run — but an obscure meeting and a discreet report launched exclusive signals for the next global economic crisis.

The panel, which included five of the most elite global bankers, was held during the IMF’s spring meetings to discuss the special drawing rights (SDR) 50th anniversary.  On the surface the panel was a snoozefest, but reading beyond the jargon offers critical takeaways.

The discussion revealed what global central banks are planning for a future crisis and how the IMF is orchestrating policy for financial bubbles, currency shocks and institutional failures.

Why the urgency from the financial elites?

This loooong commentary showed up on the dailyreckoning.com Internet site on Wednesday — and I extracted it from a posting on the Zero Hedge website at 2:00 a.m. EDT on Thursday morning.  It’s certainly worth reading if you have the interest — and another link to it is here.


Why Indian government’s schemes to kill gold have failed

One area where this government doesn’t seem to want to learn from its mistakes is gold schemes. Its fixation with launching these schemes despite repeated failures makes one wonder if it is pride that stands in the way of accepting that these have been duds.

To be fair there is nothing wrong with the idea of seeking gold hoarded at homes or in bank lockers to be brought into the economy. It was an innovative idea that the government dared to test. Being the second largest buyers of gold, which accounts for more than 25 percent of India’s trade deficit, Indians have persisted in investing in an unproductive asset. …

The fact is that the product itself is faulty. Gold bond buyers do not enjoy the liquidity that a physical gold buyer does. There is a lock-in period for gold bonds of eight years. On the other hand, someone buying physical gold does not have to follow any such restrictions.

Though selling in exchanges is allowed, there is no secondary market for gold bonds. Finally a gold bond buyer exposes himself to scrutiny, while there is still room for anonymity for physical gold buyers.

Unless these issues are addressed, the gold bonds are unlikely to pick up.

This gold-related news item put in an appearance on the moneycontrol.com Internet site at 8:03 p.m. IST on their Wednesday afternoon — and I found it embedded in a GATA dispatch yesterday evening.  Another link to it is here.


The PHOTOS and the FUNNIES

Yesterday’s ‘critter’ was the pine martin — and today it’s a close cousin…the even rarer fisher.  It’s a small carnivorous mammal native to North America — and a member of the mustelid family (commonly referred to as the weasel family). The fisher is closely related to, but larger than the American pine marten. The fisher is a forest-dwelling creature whose range covers much of the boreal forest in Canada to the northern United States.  I’ve never seen one, or know anyone who has.  Click to enlarge.


The WRAP

It won’t show up in [this] Friday’s COT report, but based upon [Wednesday’s] trading, I would imagine that nearly all the 60,000+ contracts sold by managed money traders in COMEX gold over the past two reporting weeks have been bought back in yesterday’s trading (with the commercials pocketing $150 million or so). Were it possible to calculate the COT report as of Wednesday’s close, the market structure in gold would be back to levels that existed prior to the last two COT reports, or decidedly neutral. That’s not to say that gold prices can’t power higher should the technical funds continue to plow onto the long side, just that this will be what’s required to drive prices higher.

Once again, it’s different in silver. I can’t rule out managed money technical fund buying and commercial selling in silver today, but with prices still far below the important moving averages, it’s harder to come up with a compelling technical fund motivation to have bought.  I will say this; if silver prices had penetrated its key moving averages as decisively as gold had penetrated its moving averages today — and silver prices had been as contained as gold prices remained over the balance of the day, I would have been mightily disappointed.

That’s because high volume but subdued price action after an upward penetration of silver’s moving averages would have very likely indicated significant commercial selling, particularly by the super COMEX silver crook and manipulator, JP Morgan. That would suggest the big move up in silver was less, not more likely to occur. Perhaps we will see signs that JP Morgan added to its silver short positions in this Friday’s or future COT reports, but until we do, there is little reason for me to abandon my big silver move premise.Silver analyst Ted Butler: 17 May 2017


The volumes in both gold and silver yesterday were simply breathtaking.  I thought they were bad when I filed yesterday’s column in the wee hours of Wednesday morning…but what went on in early Far East trading was just a dress rehearsal for what happened during the COMEX trading session.

I’m certainly not doubting Ted’s take about what went on in gold in the COMEX futures market yesterday, as ‘da boyz’ rang the cash register to the tune of $150 million while they were acting as short buyers and long sellers of last resort, until all the buyers were sated.  But it was the price/volume activity in silver that, as Ted correctly points out, simply doesn’t compute and, unfortunately, none of Wednesday’s activity will be in tomorrow’s COT Report.

Just glancing at the preliminary open interest numbers that came out at 10 p.m. EDT last night, which will certainly be revised a bit lower when the final figures out later this morning in New York…I see that open interest in gold only increased by 15,000 contracts or so.  In silver, total o.i. actually dropped by about 1,000 contracts — and it will be nine long days before we get a sniff of what actually occurred yesterday.  Lots can happen between now and next Friday’s COT Report to make Wednesday’s trading data less relevant, so it’s wise not to get to hung up on just one day’s trading activity, even though it was wall-to-wall amazing.

Here are the 6-month charts for all four precious metals, plus copper once again and, once again, there was a lot of price/volume activity that occurred after the 1:30 p.m. EDT COMEX close that just doesn’t show up in Wednesday’s dojis on these graphs.  The not-so-thinly-traded after-hours market has been a hot-bed of activity lately.  The ‘click to enlarge‘ feature helps with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I note that the gold price didn’t do much in early Far East trading on their Thursday, but starting at noon in Shanghai, began to head lower — and is down $5.00 an ounce at the moment.  It was mostly the same for silver for a while, but JP Morgan really smacked it.  The first time was just minutes after 12 o’clock noon in Shanghai — and the second time was about fifteen minutes before the afternoon gold fix in Shanghai.  ‘Da boyz’ have silver down 14 cents currently.  Like gold and silver before it, platinum hit its high of the day [so far] within forty-five minutes of the markets opening in New York on Wednesday evening — and it has been mostly down hill since.  Platinum is down 6 dollars.  Palladium hit a new low for this move down at the morning gold fix in Shanghai, but is back to down only a buck at the moment.

Net HFT gold volume is already way up there at something over 58,000 contracts — and that number in silver is just over 15,000 contracts.  It’s obvious that the powers-that-be are already active in attempting to take back everything that was given away yesterday, plus more…if they can get away with it.

The dollar index 99.35 low tick that came minutes before the close on Wednesday afternoon in New York, was obviously the low for this move down, at least for the moment — and it has ‘rallied’ almost continuously since — and is up 30 basis points as London opens.

Not to be forgotten in all this is the continuing price pressure on palladium.  Regardless of what the dollar index [and gold and silver] have been doing for the last four or five trading days, the powers-that-be have been pounding the snot out of this precious metal.  It’s down about $150 the ounce since its high tick back on April 30 — and well below its 50-day moving average.  It’s the last of what I call the Big 6 commodities that ‘da boyz’ hadn’t cleaned out to the downside — and I guess it was its turn.  What it means in the grand scheme of things going forward, remains to be seen.

And as I post today’s effort on the website at 4:02 a.m. EDT this morning, I see that gold price continued lower until shortly after London opened — and it’s been moving quietly higher since — and is only down $2.80 the ounce at the moment.  In silver, they pounded it down one more time just minutes before the London open — and it was down 21 cents at one point, but is now down ‘only’ 10 cents.  Platinum was sold a dollar or so lower into the Zurich open as well, but has recovered a bit — and is still down the same 6 bucks it was an hour ago.  Palladium has been hit for another few dollars — and is down 5 bucks.

Net HFT gold volume is very heavy at just over 74,000 contracts — and that number in silver is up a to a whopping 22,500 contracts, almost double the volume it was about ten minutes before the London open.

The dollar index hit its current 97.73 high about thirty minutes before London opened — and has been heading lower since — and is up 23 basis points at the moment.

And here’s what the Kitco silver chart looked like just before I hit the ‘publish’ button on today’s column, an hour after the London open.  JP Morgan et al are obviously getting as much blood out of the silver stone as they can before the let prices rip higher.

Heaven only knows what precious metal price action will greet me when I power up my computer later this morning, but it’s obvious that the powers-that-be are all over this market at the moment.

That’s it for today — and I’ll see you here tomorrow.

Ed

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