13 July 2017 — Thursday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price crawled quietly higher in morning trading in the Far East on their Wednesday — and topped out around noon China Standard Time.  It traded flat until fifteen minutes after the afternoon gold fix in Shanghai.  The price softened a bit more until Yellen opened her yap at 8:30 a.m. EDT in New York.  The price blasted higher at that point — and ‘da boyz’ had it capped…on huge volume…a minute or so before 9 a.m.  It was sold down a bit going into the afternoon gold fix in London — and didn’t do a thing after that.

The low and high ticks really aren’t worth looking up.

Gold finished the Wednesday session at $1,220.00 spot, up $2.80 from Tuesday’s close.  Net volume was enormous at just over 219,000 contracts.

And here’s the 5-minute tick chart for gold…courtesy of Brad Robertson — and the only reason I’m posting it is so you can see the monster volume both before –and on the 6:30 a.m. MDT/8:30 a.m. EDT spike higher.  It took a fair amount of COMEX paper gold for ‘da boyz’ to get that one under control — and volume remained very elevated until 09:30 Denver time, which was 11:30 a.m. EDT.

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 the same price pattern for silver, including the sharp sell-off that started shortly before the COMEX open.  And also like gold, JPMorgan et al had the price back on stick [and back below $16 spot] by 9 a.m. EDT.  It was back to the $15.90 mark by the London p.m. gold fix — and then did nothing for the remainder of the Wednesday session.

The low and high ticks are barely worth looking up, but were recorded by the CME Group as $15.71 and $15.995 in the September contract.

Silver was closed in New York yesterday at $15.895 spot, up 6.5 cents from Tuesday.  Net volume was monstrous once again at a hair under 89,000 contracts.

Here’s the 5-minute silver tick chart courtesy of Brad as well.  Like in gold, the stand-out feature was the volume required for ‘da boyz’ to put the fires out in the COMEX futures market on the words from Yellen at 8:30 a.m. in New York.

Like for gold, 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 as well.

Platinum got the same treatment as gold and silver, complete with the tiny sell-off ten minutes before the COMEX open — and after looking at the silver and gold charts above, no further words of explanation are required, or forthcoming.  Platinum finished the Wednesday session at $915 spot, up 14 bucks on the day.

Palladium was a mini version of platinum — and it closed higher by 12 dollars at $858 spot.

The dollar index closed very late on Tuesday afternoon in New York at 95.76 — and chopped quietly lower until a minute or so after 1 p.m. China Standard Time on their Wednesday afternoon.  From that juncture it rallied until exactly 9:00 a.m. BST in London — and then didn’t do much until Yellen spoke.  ‘Gentle hands’ stepped in at the 95.51 mark just before 9 a.m. EDT — and the subsequent rally flamed out about ten minutes after the equity markets opened in New York.  It headed lower from there until a few minutes after 2 p.m. — and then crawled quietly higher into the close.  The dollar index finished the day at 95.77 — up 1 whole basis point from Tuesday’s close.

Here’s the 6-month U.S. dollar index — and it was just another day where the dollar index would have crashed and burned — and the precious metals would have exploded higher, if all the power and money in the world hadn’t shown up when it did.

The gold stocks gapped up about a percent at the open — and then sagged a bit.  From there they chopped sideways for the rest of the day.  The HUI closed up a smallish 0.59 percent.

The silver equities gapped up around 2 percent at the open, but were sold lower from there — and couldn’t squeeze a positive close, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index finished down a smallish 0.24 percent.  Click to enlarge if necessary.

And here’s the 6-month Silver Sentiment/Silver 7 Index as well.  Click to enlarge.

The CME Daily Delivery Report showed that 52 gold and 50 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  In gold, JPMorgan issued all 52 contracts out of its client account.  The largest long/stopper was Canada’s Scotiabank with 28 for its in-house [proprietary] trading account.  The rest were divided up between five other stoppers.  In silver, the three short/issuers were Goldman Sachs, International F.C. Stone — and ABN Amro…with 31, 10 and 9 contracts out of their respective client accounts.  The long/stoppers were ADM, Citigroup and ABN Amro…with 28, 14 and 8 contracts for their respective client accounts.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session, which didn’t appeared on their website until after midnight EDT, showed that gold open interest in July rose by another 2 contracts, leaving 85 still open, minus the 52 contracts mentioned above.  Tuesday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today.  Silver o.i. for July declined by 96 contracts, leaving 151 still open, minus the 50 contracts mentioned in the previous paragraph.  Tuesday’s Daily Delivery Report showed that 145 silver contracts were posted for delivery today, so that means that another 145-96=49 silver contracts were added to the July delivery month.

For the second day in a row there were no reported changes in GLD.  But for the fifth day in a row there was more silver deposited into SLV, as an authorized participant added another 1,985,676 troy ounces.

That makes 9.55 million troy ounces added since this time last week!  I’m not sure what’s happening, but it’s miles away from being normal.

Except for Ted Butler — and by extension, myself — none of the other so-called precious metal “analysts” are breathing a word about this.   By the way, Ted spoke on another subject in his mid-week column yesterday — and didn’t mention a word about this developing situation.  But it’s a given that he will on Saturday.

The folks over at the shortsqueeze.com Internet site finally got around to updating their website with the short positions in both GLD and SLV as of the close of business on June 30 — and this is what they had to report.  The short position in GLD declined from 1,047,250 troy ounces, down to 874,140 troy ounces, which works out to a drop of 16.5 percent.  The short position in SLV also fell.  It dropped from 11.80 million shares/troy ounces, down to 10.03 million shares/troy ounces, a decline of 15.0 percent.

And how much of the 9.55 million troy ounces of silver that have been deposited in SLV since the June 30th cut-off was used to cover the remaining short position, won’t be known for another two weeks.  The cut-off for the next report from shortsqueeze.com is at the close of trading tomorrow.

There was a smallish sales report from the U.S. Mint yesterday.  They sold 1,000 troy ounces of gold eagles — 500 one-ounce 24K gold buffaloes — and a very decent 300,000 silver eagles.

It was very quiet in gold once again over the COMEX-approved depositories on the U.S. east coast on Tuesday.  There was 5,040 troy ounces received…all at Canada’s Scotiabank — and that entire amount was shipped out of Brink’s, Inc.  There was also a paper transfer of 74,762 troy ounces out of the ‘Registered’ category — and back into ‘Eligible’.  That activity was at Scotiabank as well.  I won’t bother linking this.

It was even quieter in silver, as nothing was reported received — and one good delivery bar…1,000.850 troy ounces…was shipped out of Delaware.  I shan’t bother linking this activity, either.

It was another pretty busy day for the folks over at the Brink’s, Inc. COMEX-approved gold kilobar depositories in Hong Kong on their Tuesday.  They reported receiving 4,118 kilobars — and shipped out 5,159 of them.  There were also 3 kilobars received at Loomis International [HK] Ltd as well.  The link to that action, in troy ounces, is here.

Just when I thought I was going to have no charts from Nick, these two turned up in my in-box around 9 p.m. EDT last evening.  These are the ‘corrected’ gold and silver imports into India for the month of May.  It appears that they were overstated by a factor of two.  Even Ted Butler categorically stated on the phone yesterday morning that the first set of import figures were “bulls hit“.  Click to enlarge.

It’s another day where I don’t have many stories — and the last one is far and away the most important.


CRITICAL READS

Fed Chair Janet Yellen Warns Congress: U.S. Debt Trajectory is Unsustainable

During her testimony this morning, Fed Chair Janet Yellen urged Congress to take into account the growth trajectory of the federal debt when making decisions about spending and taxation.

She said lawmakers need to work toward achieving “sustainability of this debt path over time,” …

Let me state in the strongest possible terms that I agree” the U.S. federal debt trend is unsustainable, may hurt productivity, and living standards of Americans.

Of course she is correct, but we do not remember her being so forthright during the last few years of President Obama’s reign as he doubled the national debt?

This story is the first of several from the Zero Hedge website.  This one appeared there at 6:55 p.m. EDT yesterday evening — and another link to it is here.


JPMorgan hires new head of global government relations

JPMorgan Chase & Co has hired a former chief of staff to majority leaders of the U.S. House of Representatives as its new head of global government relations, according to an internal memo the bank provided on Wednesday.

Tim Berry will replace Nate Gatten, who left in May after nearly nine years at the bank to become head of government relations for American Airlines.

Berry, who worked on Republican legislative agendas, will also assist JPMorgan Chief Executive Jamie Dimon in his role as chairman of the Business Roundtable, according to the memo from Peter Scher, head of corporate responsibility for JPMorgan.

The above three paragraphs are all there is to this tiny Reuters story that showed up on their Internet site at 8:56 a.m. on Wednesday morning EDT — and I found it embedded in a GATA dispatch.  Chris Powell’s headline to it read “Is anyone still expecting reform from the Republicans?” — and that pretty much sums it up.


Loonie Spikes After Bank of Canada Raises Rates For the First Time Since 2010…as Expected

Heading into today’s meeting with a smorgasbord of ‘relatively’ good data recently, Governor Poloz had the perfect excuse to raise rates (for the first time since 2010) and tamp down the firey bubble in home prices. Not a total surprise, given hawkish comments from BoC officials in recent weeks, but the Loonie is surging on the hike but CAD stocks (which were rallying into the decision) are limping lower.

The Bank of Canada raised interest rates for the first time since 2010, citing a recent acceleration of growth that it predicts will eliminate fully the economy’s economic slack by the end of this year.

Odds of a hike were at 90% heading into the decision, so it is perhaps a little odd that the Loonie is so exuberant (perhaps combined with Yellen’s dovishness?)

This is the strongest for the Canadian Dollar since Aug 2016…

This 2-chart Zero Hedge news item was posted on their Internet site at 10:07 a.m. EDT on Wednesday morning — and it comes to us courtesy of Richard Saler.  Another link to it is here.


Royal Bank of Scotland Pays $5.5 Billion to Settle U.S. Mortgage-Backed Securities Probe

Another day, another British bank fined billions of dollars for its past-life transgressions.

Moments ago Royal Bank of Scotland announced it has agreed to pay $5.5 billion to the U.S. Federal Housing Finance Agency to settle a probe into its sale of toxic mortgage-backed securities ahead of the financial crisis, part of what it says was a “heavy price” paid for over-expansion before the financial crisis. The settlement targets $32 billion in debt issued by housing agencies Fannie Mae and Freddie Mac.

This settlement is a stark reminder of what happened to this bank before the financial crisis, and the heavy price paid for its pursuit of global ambitions” said RBS CEO Ross McEwan, adding that it was an “important step forward in resolving one of the most significant legacy matters facing RBS”. There was some good news: RBS is eligible for a $754 million reimbursement under indemnification agreements with third parties.

According to the WSJ, RBS said in a statement that it had already set aside funds to cover most of the cost of the settlement. The 71% U.K. government owned bank will have to take an additional charge of $196 million which will be realized in its coming results in August:

Settling these probes is a major hurdle for RBS as it continues its slow return to private hands. U.K. government officials have said they would not sell down the government’s stake until they have clarity on the size of the U.S. fines RBS may face. RBS warned Wednesday that “further substantial provisions and costs may be recognized…depending upon the final outcomes.”

    RBS had set aside $8.3 billion to cover a range of allegations linked to its role in packaging and selling on subprime mortgages in the lead up to the financial crisis. The bank still faces probes from several U.S. agencies including a criminal and civil investigation by the U.S. Department of Justice.

This brief Zero Hedge news item appeared on their website at 9:23 a.m. EDT on Wednesday morning — and I thank Brad Robertson for pointing it out.  Another link to it is here.


Why Foreign Real Estate Is a Grand Slam — Nick Giambruno

In baseball, a grand slam is the most potent move possible in a single play. It happens when a player hits a home run with the bases loaded, scoring four runs.

This is why I say owning foreign real estate is an international diversification grand slam. It accomplishes four key goals at once.

1. Move Savings and Wealth Abroad

Owning foreign real estate moves some of your savings and wealth offshore and out of your home government’s immediate reach. Unlike an intangible financial account, it is effectively impossible for your home country to seize foreign real estate at the drop of a hat. Doing so would likely take a literal act of war.

2. Create Other Internationalization Options

In most cases, owning real estate in a foreign country makes it much easier to open a financial account there. Without that entry ticket, many foreign financial institutions will show you the door, especially if you’re an American.

Buying foreign real estate usually gives you some sort of residency, sometimes a shortened path to citizenship, and in the case of one particular country, immediate citizenship and a coveted second passport with visa-free travel to over 100 countries, including the Schengen Area (26 European countries).

This very interesting article by International Man senior editor Nick Giambruno, was posted on their website on Wednesday — and another link to it is here.


German police are searching for a stolen gold coin: It’s the size of a manhole cover and worth $3.9 million

Brother, can you spare a gigantic gold coin?

Hundreds of special German police officers executed raids across several buildings across southern Berlin early Wednesday, nabbing four suspects in the hunt for a 220-pound gold coin valued at about $3.9 million. It was stolen from Berlin’s Bode Museum in March, where it had been since 2010.

The police, who conducted the raids wearing masks and strapped with heavy weapons according to the Associated Press, are questioning nine others in connection with the missing coin. The four main suspects are related and between 18 and 20 years old.

The coin was not recovered in the operation.

We assume that the coin was partially or completely sold,” Carsten Pfohl of the Berlin state criminal office said at a news conference. Police are picking apart clothes and vehicles used by the suspects to find traces of gold left behind.

The saga continues.  This very interesting gold-related news story showed up on The Washington Post website at 2:47 p.m. EDT yesterday afternoon — and I found it on the gata.org Internet site.  Another link to it is here.


Implications for silver of Tahoe’s Escobal shutdown — Lawrie Williams

The world’s second largest primary silver mine has been shuttered at least temporarily.  Tahoe Resources’ somewhat controversial Escobal mine in Guatemala is to be closed for perhaps three months – possibly for longer – while court hearings are under way.  In a statement to shareholders, Tahoe says that  the Supreme Court of Guatemala has issued a provisional decision in respect of an action brought by the anti-mining organization, CALAS, against Guatemala’s Ministry of Energy and Mines (“MEM”).  The action alleges that MEM violated the Xinca Indigenous people’s right of consultation in advance of granting the Escobal mining license to Tahoe’s Guatemalan subsidiary, Minera San Rafael.  The provisional decision is in respect of a request by CALAS for an order to temporarily suspend the license to operate the Escobal mine until the action is fully heard.

Tahoe is putting a brave face on the decision, but problems may run rather deeper given a long running dispute over the mine and opposition to it.  Escobal has effectively been closed for a month already due to a blockade of the main access road by protestors.  Guatemala has not proved to be a particularly mining-friendly nation and there are accusations of irregular dealings by the company over the award of the original mining license, as well as over dealing with mine opponents in the past including a serious shooting incident involving mine security personnel.

On the other hand, Escobal is a very significant revenue producer for the country and has single handedly moved Guatemala up from an ‘also ran’ to the world’s 11th largest silver producer and Escobal to the world’s second largest individual silver producing mine, after Fresnillo’s Saucito mine in Mexico,  according to the latest figures from The Silver Institute.  There could thus be some strong financial pressures to get the mine back into operation.

This very worthwhile silver-related article by Lawrie put in an appearance on the Sharps Pixley website on Wednesday sometime — and another link to it is here.


CME CEO Terry Duffy Covers His A$$

This absolutely positively must watch video clip appeared on the foxbusiness.com Internet site yesterday afternoon EDT.  It features Neil Cavuto interviewing CME CEO Terry Duffy.  It runs for 6:19 minutes, but it’s the commentary starting around the 4:55 minute mark that should receive your full and undivided attention.

Dr. Dave Janda slid it into my in-box minutes before 2 p.m. EDT, along with the following comments…

So I just heard the bell ring that something is in the cards…positive for gold and silver.  I am sure this will be on YouTube within minutes. Cavuto of Fox Business News was interviewing Duffy, the head of the CME.

I know he is an a$$ who is part of the criminal syndicate, but when Cavuto asked him about why precious metals were not higher in price with all of the troubles in the world…I fell off the chair.  At first his response was the usual bulls hit…then he blurted out…that with all the problems in the world, people will wake up and precious metals, gold and silver, will be substantially higher — and they will wonder why, and then they will realize that an event does impact the precious metals positively.

“After it hits, he will be the first one telling everybody…. “see I gave you a head’s up”…Jerk! — Dave

My comment back to him was as follows…”One thing that I can tell you for sure, having been in lots of interview situations myself, is that the question did NOT come out of the blue, as I’m sure that Duffy asked Cavuto to ask it.  Cavuto would never have thought it up on his own.

And Dave’s reply to that was…”I agree with you 110%.  I have done dozen’s of network interviews on health care issues and nothing is asked without a previous head’s up.  Wait until you see it…I doubt it came out of the blue because as the question was asked, a long term chart of gold popped up.

Well, dear reader, Duffy might has well taken out a full-page ad in The Wall Street Journal, as that’s as close to an admission that significantly higher precious metals price are in our future, as we’re ever going to get — and most likely in the near future as well.

Don’t say you weren’t warned.

Another link to this must watch video is here.


The PHOTOS and the FUNNIES

The grizzly bear, less commonly known as the silvertip bear, is a large subspecies of brown bear inhabiting North America. Scientists generally do not use the name grizzly bear, but call it the North American brown bear.  The Kodiak bear is a recognized sub-species.   Most grizzly bear attacks result from a bear that has been surprised at very close range, especially if it has a supply of food to protect, or female grizzlies protecting their offspring.  Click to enlarge!


The WRAP

But there are other factors that may play into the only question that matters, namely, will JPM add to shorts or not. Among those factors are the widespread and growing attention to the extreme COMEX positioning changes and otherwise unexplainable and weird price action in silver, which can only be explained by COMEX positioning. Throw in the wildcard of the new Enforcement Director at the CFTC, James McDonald, and the game’s outcome goes beyond interesting.

As far as I’m concerned, we’re on the verge of discovering if McDonald will go down as perhaps the regulatory hero of all time or if we’ll be calling for his head on a spike. Again, it all comes down to whether JPMorgan adds or doesn’t add to its silver short positions whenever the next price rally commences. I can’t get more specific than that.

As far as what Friday’s COT report will indicate, the dramatic downside price action and extremely high trading volume point to yet another week of significant improvement – big commercial buying and managed money selling. This is also supported by an increase in total open interest in the reporting week (4,000 contracts in silver and 18,000 in gold). We may even see improvements on the scale of last week’s report, but regardless of whatever the actual reported numbers may be, it sure feels to me that we’re at or passed the point of a downside climax, particularly in terms of extreme contract positioning. Full and maximum exposure is warranted, particularly in silver.Silver analyst Ted Butler: 12 July 2017


After the dovish surprise from Yellen on Wednesday morning, the volume needed to cap the subsequent rallies in gold and silver was quite amazing — and ‘da boyz’ used up a reasonable amount of COMEX contracts to put out those fires.  It appears obvious that with the lows for these engineered price declines now mostly in, JPMorgan et al have to be ever vigilant in order to keep a lid on prices until they’re ready to set them free.

Here are the 6-month charts for all four precious metals, plus copper, once again — and like the same charts in yesterday’s missive, there isn’t a lot to see.  The ‘click to enlarge’ feature helps a bit 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 of anything until shortly before 9 a.m. China Standard Time on their Thursday morning. It rallied back above unchanged at that juncture — and then traded flat from shortly after 11 a.m. CST — and at the moment it’s up $2.80 the ounce. Silver rallied weakly as well — and is up 3 cents currently. Platinum is up 3 dollars — and palladium was up about the same amount earlier in Far East trading, but is now only up a buck as the Zurich open approaches.

Net HFT gold volume is just over 34,000 contracts, which is pretty quiet compared to what it has been at this time of day. Net HFT silver volume is pretty chunky — and approaching 14,500 contracts.

The dollar index has been heading lower ever since trading began in New York at 6:00 p.m. EDT yesterday evening — and as London opens, it’s down 26 basis points.

Well, the Duffy/Cavuto interview certainly looked a bit stage-managed to me.  The leading questions were too pat — and the answers came too smoothly.  The gold chart, as Dave Janda pointed out in the story above, appeared right on cue.  Nothing was left to chance.  The other thing that I found intriguing was the fact that he said “people will wake up some morning and find precious metal prices substantially higher“…or words to that effect.  What that translates into from where I sit, is that the blast off will begin while North America is asleep.  All we await is the whatever “event” he spoke of, to occur.  As I’ve told Ted for years now, the precious metals price explosion will not take place in a news vacuum.

But when this “event” does finally occur, it will bring an end to the precious metal price management scheme in general — and silver in particular.  The only side-show left will be to place your bets on high silver prices go, or are allowed to go.  I’m not sure if this will be a partially controlled event or not…but if left to free-market forces alone, the 3-digit silver price we end up with will be jaw-dropping — and silver will really become the “new gold“.

So we wait some more.

And as I post today’s missive on the website at 4:02 a.m. EDT, I see that the gold price has been edging lower since around 2:30 p.m. CST on their Thursday afternoon — and is up only $1.60 at the moment. The same can be said of silver — and it’s down 3 cents an ounce. Platinum is back to unchanged — and palladium is now up 2 dollars.

Gross gold volume is just over 44,000 contracts, but once the roll-over and switch volume is subtracted out, the net number works out to 41,000 contracts. Net HFT volume in silver is sitting right at the 18,000 contract mark, which is very heavy for this time of day.

The dollar index bottomed out at 2:30 p.m. CST, which was fifteen minutes after the afternoon gold fix in Shanghai — and has been chopping quietly higher since. And as I post today column, it’s down 17 basis points.

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

Ed

 

The post CME CEO Terry Duffy Gives Fair Warning! appeared first on Ed Steer's Gold and Silver Digest.