http://www.caseyresearch.com/gsd/edition/gold-traders-most-bullish-in-three-weeks-after-fed-surprise
¤ YESTERDAY IN GOLD & SILVER
The gold price did very little on Thursday just about everywhere on Planet Earth. However, you can tell by the saw-tooth pattern that every rally attempt, no matter how tiny, got sold down before it could get very far, especially in New York. The low tick of the day came at the London p.m. gold fix.
Gold closed at $1,365.10 spot yesterday, down 20 cents from Wednesday's close. Volume was huge, around 184,000 contracts. Virtually all of it was of the HFT variety to keep the price in check.
Silver traded very close to the the $23 spot mark right up until 1 p.m. in London, which was 8 a.m. in New York, twenty minutes before the Comex open. The rally that began at that point got capped at the open, as did every subsequent rally attempt, no matter how tiny.
Silver closed on Thursday at $23.085 spot, up 12.5 cents from Wednesday. Net volume was a very chunky 57,500 contracts and, like gold, it was virtually all of the HFT variety.
Platinum appeared to have the same price capping in place that gold and silver did, except the capping there was even more obvious. Palladium had a smallish rally, but it also looked like it wanted to move higher than it actually did. Here are the charts, and you can make up your own mind.
The dollar index closed late on Wednesday at 80.27, andand traded in a pretty tight 30 basis point range for the entire day on Thursday. The index closed at 80.34 which was up a whole 7 basis points from the prior day. Nothing to see here.
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I would guess that some day-type traders, nervous about the fact that gold and silver didn't show any follow-through price action up to that point on Thursday, decided to sell their shares. I had a couple of e-mails from worried readers about this share price action, and I told them that they shouldn't read much into just one day's worth of trading. I forget to mention to them that they should take a blue pill, so I'll mention it now.
The CME's Daily Delivery Report showed that 68 gold and 43 silver contracts were posted for delivery on Monday within the Comex-approved depositories. In gold, Jefferies was the short/issuer on all 68 contracts, and HSBC USA and Canada's Bank of Nova Scotia were the long/stoppers on 51 and 16 contracts respectively.
In silver, Newedge was the short/issuer of note with 25 contracts, and Canada's Bank of Nova Scotia stopped 22 contracts. Yesterday's Issuers and Stoppers Report is worth a quick peek, and the link is here.
There were deposits made in both GLD and SLV yesterday. In GLD an authorized participant added 28,206 troy ounces. But over at SLV, they reported receiving a very chunky 3,373,727 troy ounces of the stuff. I'm not sure if that deposit intoSLV was to cover an existing short position, or if it was in response to Wednesday's price action. Because it was so quick, I suspect the former, but must admit that I really don't know for sure. As I said in yesterday's column, the deposits going into both ETFs after Wednesday's big price run-ups, bear watching closely during the next three or four business days.
Joshua Gibbons, the "Guru of the SLV Bar List", updated his website with internal goings-on within SLV for the week just ended. Here, in part, is what he had to say: "Analysis of the 18 September 2013 bar list, and comparison to the previous week's list: 2,120,572.4 troy ounces were removed (all from Brinks London), and 963,679.6 troy ounces were added (all to Brinks London), no bars had a serial number change."
"The bars removed were from: Degussa (0.9M oz), Noranda (0.2M oz), Comptoir Lyon-Alemand (0.2M oz), J.M. UK (0.2M oz), and 17 others. The bars added were from: Kazakhmys (0.5M oz), Krasnoyarsk (0.2M oz), Russian State Refineries (0.2M oz), and 4 others." The link to Joshua's website, and the rest of his short commentary, is here.
There was no sales report from the U.S. Mint.
Once again there was no gold activity worthy of the name within the Comex-approved depositories on Wednesday, as just 1 kilo bar was shipped out of Brink's, Inc., and nothing was reported received.
It was also quiet in silver as well. Nothing was received, and only 46,865 troy ounces were shipped out.
Here's a FRED chart that Casey Research's own Jeff Clark sent our way early yesterday evening Denver time. Jeff commented that "They’re gonna need to make more room at the top of their graph again…" That they are!
It was a very quiet news day as well, so today's missive should be a quick read if you're the type that reads a lot of stories that I post.
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Selected non redundant news and views....
JPMorgan Chase to Pay $920 Million in fines Over Trading Loss
High above Park Avenue, in a 50th-floor conference room overlooking Central Park, JPMorgan’s board members had a pressing question about regulatory problems that have dogged the bank for more than a year: are we done yet?
In short, according to people briefed on the meeting held on Monday, the answer was no.
The board — which at that meeting approved $1 billion in fines to resolve investigations into an embarrassing trading loss in London as well as an inquiry into its credit card products — discussed a series of looming problems, one more vexing than the next.
That same day, the nation’s commodities trading regulator, which is investigating whether the London losses manipulated the market, warned that it intended to file an enforcement action against the bank after settlement talks broke down. The agency wanted a $100 million fine, people briefed on the matter said, and an acknowledgment of wrongdoing, a demand that the bank balked at.
This story appeared on The New York Times website early yesterday morning...and was revised yesterday evening. It's also gone through a headline change, and now reads "As Inquiries Persist, JPMorgan Loses Favor". I thank Roy Stephens for today's first story.
This story appeared on The New York Times website early yesterday morning...and was revised yesterday evening. It's also gone through a headline change, and now reads "As Inquiries Persist, JPMorgan Loses Favor". I thank Roy Stephens for today's first story.
Alasdair Macleod: No Tapering!
It was not too surprising that there is going to be no tapering for some very good reasons. The commencement of tapering would have led deliberately to bond yields rising, triggered by an increase in sales of government bonds to the public and at the same time escalating sales by foreign governments as they attempt to retain control over their own currencies and interest rates. This was the important lesson from floating the rumour of tapering in recent months.
The Fed has reaffirmed that zero interest rates will be with us for some time to come. It simply has no choice: it has to play down the risk of inflation. The result will be more price inflation, which is bad for the dollar and good for gold. This was reflected in the US Treasury yield curve, where prices of long maturities fell yesterday relative to the short end.
This short commentary by Alasdair is well worth reading...and was posted on the goldmoney.com Internet site yesterday. I found it hiding in a GATA release.
The Fed has reaffirmed that zero interest rates will be with us for some time to come. It simply has no choice: it has to play down the risk of inflation. The result will be more price inflation, which is bad for the dollar and good for gold. This was reflected in the US Treasury yield curve, where prices of long maturities fell yesterday relative to the short end.
This short commentary by Alasdair is well worth reading...and was posted on the goldmoney.com Internet site yesterday. I found it hiding in a GATA release.
E.U. to Change Budget Calculation to Ease Austerity
European Union finance experts have reached a preliminary agreement on changing the way the bloc determines some deficit figures, which will lessen the pressure for austerity measures in some crisis-hit economies, an EU official said Thursday.
The nature of the change is very technical — changing the methodology of measuring the output gap between potential and structural growth — but it could have significant repercussions. The result is used to calculate the structural deficit figure — that is the deficit adjusted for the cyclical strength or weakness of the economy — upon which the European Commission bases its policy recommendations.
"Easing austerity through change to E.U. budget policy is a very significant move," said Europe specialist Vivien Schmidt of Boston University. If agreed, this "could go a long way to easing the economic problems — and thereby also the political ones — of the southern European countries as well as Ireland," she added.
"It is also a silent acknowledgement of the fact that the radical deficit-cutting programs of the past three years have failed to address growth," Schmidt said.
Wow! Talk about cooking the books! You couldn't make this stuff up if you tried. This must read AP news item, filed from Brussels, was posted on the abcnews.go.com Internet site yesterday...and I thank U.A.E. reader Laurent-Patrick Gally for finding it for us. I extracted it from a Zero Hedge piece...and if you wish to read what they have to say about this story, the link is here.
Wow! Talk about cooking the books! You couldn't make this stuff up if you tried. This must read AP news item, filed from Brussels, was posted on the abcnews.go.com Internet site yesterday...and I thank U.A.E. reader Laurent-Patrick Gally for finding it for us. I extracted it from a Zero Hedge piece...and if you wish to read what they have to say about this story, the link is here.
Little Left to Cut: Lower Interest Rates Won't Help Greece
In August, Merkel's government admitted that Greece needs billions of euros in additional aid. Some have called for a cut to interest rates on emergency loans made to Greece. But with the rates already so low, it would be but a drop in the bucket.
At first glance, reducing interest rates appears to be a reasonable idea. The Greeks would be given more time and room to maneuver and donor countries like Germany wouldn't lose any of the money they lent to Athens. But if you take a closer look, it's not such a great deal. A lowering of interest rates wouldn't have a major influence on Greece and it could also prove costly for creditors, just as a haircut would be. The problem is that interest rates are already so low that only certain elements could be reduced at all.
At best, a reduction of interest rates could save Greece a few hundred million euros a year -- far too little to cover the country's anticipated budget shortfalls. The International Monetary Fund (IMF) is estimating a total of €11 billion in financing shortfalls during the next two years.
This commentary was posted on the German website spiegel.delate Thursday afternoon Europe time...and it's another Roy Stephens offering.
Four King World News Blogs/Audio Interviews
1. Grant Williams: "The Most Frightening Takeaway From the Historic Fed Decision". 2. Keith Barron: "This Chaos is All Part of the Move to a New Financial System". 3. Art Cashin: "Wednesday's Chaos and Where We Are Now". 4. The audio interview is with Michael Pento.
Gold Traders Most Bullish in Three Weeks After Fed Surprise
Gold analysts are the most bullish in three weeks after the Federal Reserve's surprise decision not to taper stimulus increased demand for bullion as a hedge against accelerating inflation and currency debasement.
Sixteen analysts surveyed by Bloomberg expect prices to rise next week, five were bearish and five neutral. Gold jumped 4.1 percent on Sept. 18, the most in 15 months, after the U.S. central bank said it wants more evidence of an economic recovery before slowing its $85 billion-a-month of bond buying.
“The Fed has realized that any attempt to reduce or eliminate quantitative easing will lead to a surge in interest rates,” said Jeff Sica, who helps oversee more than $1 billion as the president of Sica Wealth Management in Morristown, New Jersey. “There will be ongoing currency devaluation both in the U.S. and around the world. I anticipate significant fundamental strength in the price of gold in the near term.”
This Bloomberg story was filed on their website late last night MDT...and my thank go out to reader Ken Hurt for bringing it to our attention.
India's Government calls high-level meeting to break gold import impasse
The government has called a meeting of top officials from the finance and trade ministries in New Delhi on Friday to break a two-month impasse on gold imports that has crimped supply and pushed up prices in the world's biggest gold consumer.
Gold imports into India have virtually come to a halt since July 22 when the Reserve Bank of India introduced the so-called 80/20 rule that says 20 per cent of all imports had to be re-exported.
A lack of operational guidance on how the rules work continues to deter importing agencies from bringing in supplies because they fear their shipments could get stuck at airports.
Gold imports into India have virtually come to a halt since July 22 when the Reserve Bank of India introduced the so-called 80/20 rule that says 20 per cent of all imports had to be re-exported.
A lack of operational guidance on how the rules work continues to deter importing agencies from bringing in supplies because they fear their shipments could get stuck at airports.
This short news item, co-filed from Mumbai and New Delhi, was posted on the Economic Times of India website early Thursday evening India Standard Time...and it's definitely worth reading. I thank reader U.D for bringing it to my attention...and now to yours.
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¤ THE WRAP
There are no markets anymore, only interventions. - Chris Powell, GATA
I don't have much to add to what I've already said about yesterday's price action further up in this column.
But I was surprised by the lack of follow-through in all the precious metals during the Thursday trading session, and it's my opinion that their respective prices were kept firmly under control because of the huge volumes yesterday, most of which were of the HFT variety. Volume was heavy in both Far East and London trading, but really blew out as the Comex session wore on in New York yesterday.
In overnight trading it was obvious that the even the church mouse had died, as price action was very quiet with a negative bias, along with volumes as low as I can remember them ever being. The same can be said for the dollar index, as it is ruler-flat. I don't thing I've seen such quiet price action in Far East trading as I'm looking at right now going into the 3 a.m. EDT London open. It seems unnatural, and I'm not sure what to make of it.
Today we get the new Commitment of Traders Report for positions held at the close of Comex trading on Tuesday. All of the price/volume activity from last Thursday's big down day will be included, and I expect the Commercial net short positions in both gold and silver to reflect that. I'm sure there will be some improvement in platinum and palladium as well, which are two other markets that JPMorgan has short-side corners in. Whatever the numbers show, I'll have them for you in my Saturday column. My only regret is that Wednesday's numbers won't be included
Here's Nick Laird's now-famous "Total PMs Pool" chart updated as of the close of trading yesterday, and it certainly appears that the chart pattern is resuming its path from lower left to upper right.
And as I hit the send button on today's column at 5:15 a.m. EDT, London has been open for a bit more than two hours. All four precious metals were sold down a bit more, but are now off their lows a hair, and volumes which had been ultra-light prior to the open, have really blow out. Gold and silver volumes are well over double what they were prior to the London open. The dollar index is still doing nothing. At this particular moment, gold is down an even ten bucks and silver is down 40 cents.
With today being Friday, I have no idea what price activity lies in store for us in New York this morning, but using the price "action" of the last two days as a guide, it will be far removed from what a free market would dictate, so be ready for anything.
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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