Big Physical Gold Deliveries on First Day Notice

31 January 2017 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price rallied, under some pressure I might add, up until around 10 a.m. China Standard Time on their Monday morning.  From that point, it began to crawl lower — and its low tick of the day came suspiciously close to the 10:30 a.m. GMT London morning gold fix.  It chopped quietly higher from there until at, or shortly after, the London p.m. gold fix.  It took off higher from there, but was stopped dead its tracks as it tried to break above the $1,200 spot mark.  It chopped lower until about an hour after the COMEX close — and then rallied a few dollars before trading sideways for the last couple of hours.

The low and high tick were reported as $1,187.10 and $1,198.50 in the February contract.

Gold was closed in New York on Monday at $1,195.30 spot, up $4.00 on the day.  Gross volume was huge at 246,806 contracts — and net volume was fairly decent at around 127,500 contracts, with the lion’s share of that in the new front month for gold, which is April.  Monday/yesterday was the last day for traders to roll out of February if they weren’t standing for delivery.

The price activity in silver was pretty anemic — and traded within a dime either side of unchanged through all of Far East and London trading on Monday.  It rallied a bit at the COMEX open, but wasn’t allowed to get far.  Once its high tick was in [such as it was] the same time as gold’s, it was sold back below unchanged by the COMEX close — and didn’t do much after that.

The low and high ticks aren’t worth my effort to look up.  But since I have that link opened in my web browser already, here they are…$17.08 and $17.295 in the March contract.

Silver finished the Monday trading session at $17.075 spot, down 4.5 cents from Friday’s close.  Net volume was pretty impressive for such a quiet trading day, as it checked in at a hair under 45,000 contracts.  Roll-over volume was fairly impressive as well.

Here’s the 5-minute tick chart courtesy of Brad Robertson.  It barely made the grade today, but I though I’d include it so you could see just how much volume there was associated with the price-capping going on after the London p.m. gold fix during the COMEX trading session..  The up/down/up/down price action certainly shows that.  It was similar in gold, but not to the same degree.  And, as per usual, volume dropped off to virtually nothing after the 11:30 a.m. Denver time COMEX close.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ feature is a must.

Platinum took off right at the open of trading in New York at 6:00 p.m. EST on Sunday evening, but that price spike was hammered flat and turned lower within a few minutes.  It chopped unevenly lower from there — and the $974 spot low tick appeared to occur just before it blasted skyward shortly after the Zurich close on Monday afternoon, which was shortly after 11 a.m. in New York.  That rather impressive rally, in a very illiquid market, got capped and turned lower at 1 p.m. EST, which was thirty minutes before the COMEX close.  It was sold down five bucks or so from there, but by 2 p.m. it was back in rally mode — and finished the Monday session at $987 spot — up 3 bucks on the day.

The palladium price began to head lower the moment that the market opened at 6 p.m. in New York on Sunday evening — and its $724 spot low tick was set shortly before 11 a.m. in Zurich.  It rallied quietly, but very unsteadily from there — and its $741 spot high tick came less than an hour before the 5 p.m. close — and it was sold off a few dollars at that point, finishing the day down 2 dollars at $738 spot.

The dollar index closed very late on Friday afternoon in New York at 100.58 — and was immediately marked down to 100.34 for whatever reason the moment trading began at 3 p.m. EST on Sunday afternoon.  It was down another 5 basis points or so by 4:35 p.m. EST — and it’s 100.45 Far East morning high tick came at precisely 8:00 a.m. JST in Tokyo on their Monday morning.  The 100.18 low tick of the Monday session came around 9:45 a.m. China Standard Time — and it began to crawl higher from there.

The rally became more intense in afternoon trading in Shanghai — and made it up to the 100.61 mark by 9 a.m. in London.  It sold off a bit during the next couple of hours, before blasting to its 101.02 high tick of the day — and that came a minute or so after 8 a.m. EST — which was a minute or so after 1 p.m. GMT in London.  Then down it went, with its 100.29 New York low coming at 12:35 p.m.  It rallied a bit into the COMEX close, before drifting lower for the rest of the day.  The dollar index finished the Monday session at 100.38 — down 20 basis points from its Friday close, but only 4 basis points from its Sunday afternoon mark-down.

Here’s the 3-day U.S. dollar index so you can see the Friday, Sunday and Monday trading action all one chart.  Despite the big moves in the dollar index, there almost no sign of it in the precious metal prices yesterday.

And here’s the 6-month U.S. dollar index charts which, as you know, I include mostly for entertainment purposes.

The gold shares opened around unchanged — and rallied to their respective high ticks minutes after 11 a.m. EST.  They chopped lower from there — and were back in negative territory to stay shortly before the COMEX close.  This price action was a surprise considering gold’s positive close.  They drifted a bit lower from there, finishing the Monday session just off their lows, as the HUI closed down 0.64 percent.

The silver equities traded in a mostly similar fashion, so I’ll spare you the play-by-play.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 0.59 percent.  At least they had a reason to close down on the day.  Click to enlarge if necessary.

The CME Daily Delivery Report showed that the one lone silver contract that was M.I.A. on Friday, showed up yesterday as I expected.  Barclays issued it out of their in-house [proprietary] trading account — and Citigroup stopped it for their client account.  That contract will be delivered today as January deliveries are completed.

First Day Notice for delivery into the February contract showed that 3,291 gold and 88 silver contracts were posted for delivery on Wednesday.  In gold, the three short/issuers that mattered were JP Morgan with 2,167 contracts out of its client account, Macquarie Futures with 890 contracts out of its in-house [proprietary] trading account — and S.G. Americas with 170 contracts out of its client account.  Citigroup was an “also ran” with 60 contracts issued.  There were twenty long/stoppers in total.  The tallest hog was HSBC USA with 1,950 contracts for its own account — and in distant second place was ABN Amro with 392 contracts — and then Scotiabank with 313.  JPMorgan was in fourth spot with 186 contracts for its own account.  In silver, ABN Amro issued 86 of the 88 contracts.  Scotiabank picked up 57 contracts for its own account — and Citigroup 26 for its client account.  To see all this action, which is definitely worth a look if you have the interest, the link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in January fell by 47 contracts, leaving a zero balance — and silver o.i. in January dropped by 1, leaving a zero balance as well.  January deliveries are done without incident.

For January, there 1,254 gold contracts issues and stopped — and in silver that number was 746 contracts.  Both are very decent for what isn’t a normal delivery month for either precious metal — and that comment applies to silver in particular.

Gold open interest in February crashed by 21,074 contracts, leaving just 6,509 open, minus the 3,291 contracts mentioned above.  Silver o.i. in February rose for the second day in a row, adding 5 contracts, leaving 246 contracts still around…minus the 88 mentioned in the previous paragraph.

Since Ted has his mid-week column today, it’s a reasonable bet that he won’t wait until the weekend to comment on “all of the above” delivery activity — including first day notice.

There was an issue with the GLD‘s home page yesterday — and I have no idea if there were any changes in it yesterday, as the spot where the number is supposed to appear, is blank.  The rest of the pertinent data from Monday is also missing.  There were no reported changes in SLV.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of trading on Friday, January 27 — and this is what they had to report.  There was 5,369 troy ounces added to their gold ETF — plus 24,435 troy ounces added to their silver ETF.

There was a decent 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 80,000 silver eagles.

There was no ‘in’ activity in gold over at the COMEX-approved depositories on the U.S. east coast on Friday — and there was only 321.500 troy ounces/10 kilobars [U.K./U.S. kilobar weight] shipped out — and that came from the Manfra, Tordella & Brookes, Inc. depository.  I shan’t bother linking this small amount.

It was much busier in silver, of course, as 578,996 troy ounces were received at Canada’s Scotiabank — and 685,237 troy ounces were shipped out.  Of the amount shipped out the door, there was 643,015 troy ounces that left the vaults over at HSBC USA.  Smaller amounts came out of Scotiabank and Brink’s, Inc.  The link to this action is here.

It was fairly quiet in gold over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They only received 503 — and shipped out 828 of them.  All of this activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

I have an average number of stories for you today, but a Jim Grant video interview — and an longish essay by The Saker will take a chunk of your time if you devour both of them, which you should.


CRITICAL READS

Trump signs executive order to cut regulations on businesses

President Donald Trump on Monday signed an executive order requiring that for every new federal regulation, two existing regulations must be removed.

This will be the largest ever cut by far in terms of regulation,” Trump said during a signing ceremony.

Trump signed the order, which he said was “a big one,” following a meeting with small business leaders. During the meeting, Trump said the “American dream is back,” adding that he wants to end regulatory discrepancy between small and big business. We are going to create an environment for small business like we haven’t had in many, many decades,” Trump said during the meeting. “This isn’t a knock on President Obama. This is a knock on many presidents preceding me — this is a knock on everybody — particularly bad in the last eight years but it’s not a knock on anybody, it’s a knock on many.

Trump also threatened the Dodd–Frank Wall Street Reform and Consumer Protection Act, the massive financial regulatory law established under President Barack Obama that specifically targeted financial institutions that were “too big to fail” following the financial crisis of 2007-08, which led to the global Great Recession.

Dodd-Frank is a disaster. We’re going to be doing a big number on Dodd-Frank,” Trump said.

This UPI story, filed from Washington, put in an appearance on their Internet site at 12:12 p.m. on Monday afternoon EST — and today’s first news item is courtesy of Roy Stephens.  Another link to it is here — and it’s worth reading.


Trump Fires Acting Attorney General

President Trump fired his acting attorney general on Monday after she defiantly refused to defend his immigration executive order, accusing the Democratic holdover of trying to obstruct his agenda for political reasons.

Taking action in an escalating crisis for his 10-day-old administration, Mr. Trump declared that Sally Q. Yates had “betrayed” the administration, the White House said in a statement.

The president appointed Dana J. Boente, United States attorney for the Eastern District of Virginia, to serve as acting attorney general until Senator Jeff Sessions of Alabama is confirmed.

Ms. Yates’s decision confronted the president with a stinging challenge to his authority and laid bare a deep divide at the Justice Department, within the diplomatic corps and elsewhere in the government over the wisdom of his order.

This news item, filed from Washington, appeared on The New York Times website yesterday sometime — and I thank Patricia Caulfield for pointing it out.  Another link to it is here.


Mnuchin dims banks’ hopes he will allow a proprietary-trading revival

Steven Mnuchin made clear he doesn’t want Wall Street banks getting back into the business of making risky market bets with their own capital, after Senate Democrats pushed him to clarify his responses to questions they asked during his confirmation process to be Treasury secretary.

In written remarks to lawmakers, Mnuchin said that even banking units that lack a government backstop should be restricted from making speculative trades. At issue is the Volcker Rule, a contentious provision in the 2010 Dodd-Frank Act that sought to prevent lenders from putting federally-insured deposits at risk through wagers on stocks, bonds and other assets.

A legal distinction between the insured and non-insured entity is an important factor in eliminating risky activities within the institution that has insured deposits“, Mnuchin said in an amended response to a senator’s question about Volcker. “I do not believe that the uninsured entity should be able to perform proprietary trading.”

But as Ted Butler told me on the phone yesterday — and has said several time in the public domain in the recent past — JPMorgan will do precisely what it wants regardless, as it tells the government what to do…not the other way around.  This Bloomberg item was posted on their website at 3:45 p.m. Denver time on Saturday afternoon — and I found it embedded in a GATA release.  Another link to it is here.


Only Glass-Steagall Can Save the U.S. from Another Epic Crash — Pam Martens

Allowing the largest Wall Street banks to brazenly loot the public is now the official policy of Congress. Following the worst financial crash since the Great Depression in 2008, Congress and the Obama administration engaged in the greatest legislative hoax in history in passing the Dodd-Frank financial reform legislation. Rather than reforming the corrupt and dangerous practices of the biggest Wall Street banks, the Dodd-Frank legislation actually allowed the biggest banks to expand their global loan-sharking operations, engage in ever more brazen crimes, while giving their lapdog regulator, the Federal Reserve (whose derelict oversight had led to the 2008 crash) expanded supervisory powers.

That the legislation was a hoax on the public is no longer debatable. Here’s how we know:

The Vice Chairman for Supervision of the banks that President Obama was mandated to put in place at the Federal Reserve as part of Dodd-Frank legislation never got appointed. From Dodd-Frank’s passage in 2010 until he left the Oval Office in 2017, President Obama simply thumbed his nose at this mandate.

In February 2015, five years after the passage of Dodd-Frank, the U.S. Treasury’s Office of Financial Research released a report showing that two of Wall Street’s biggest banks, JPMorgan Chase and Citigroup, pose the greatest interconnected risk to the U.S. financial system. In May of the same year, both banks admitted to criminal felony charges, for the first time in their century old existence, for rigging foreign currency markets.

The so-called Volcker Rule section of Dodd-Frank, which was to stop the banks from trading for their own accounts and force them to exit hedge funds and private equity funds, still has not been fully implemented. The biggest Wall Street banks are still allowed to operate Dark Pools. These are unregulated, quasi stock exchanges where the banks trade stocks, including their own and competitors’ bank stocks, in the dark.

This commentary by Pam was nowhere to be found on the wallstreetonparade.com Internet site, so I had to use the copy that showed up on the paulcraigroberts.org Internet site.  It was posted there yesterday — and I thank Roy Stephens for his second contribution to today’s column.  Another link to it is here.


Jim Grant: It’s A Different Investment World

Jim Grant declares the 35 year bull market over and sees few opportunities to replace it.

He weights in on all the monetary madness in our financial world — and says that the Fed is overshadowing the market right now.

He has lots to say about gold as well — and that starts at the 18:50 mark if you want to skip to that….BUT having said that, the whole 26:48 minute video interview with host Consuelo Mack is an absolute must watch in my opinion.  It was posted on the marketsanity.com Internet site on January 27 — and my thanks go out to Judy Sturgis for finding it for us.  Another link to it is here.


A “Color Revolution” Is Under Way in the United States — The Saker

A Russian joke goes like this: “Question: Why can there be no color revolution in the United States? Answer: Because there are no U.S. Embassies in the United States.

Funny, maybe, but factually wrong: I believe that a color revolution is being attempted in the USA right now.

While I did predict that “The USA is about to face the worst crisis of its history” as far back as October of last year, a month before the elections, I have to admit that I am surprised and amazed at the magnitude of the struggle which we see taking place before our eyes. It is now clear that the Neocons did declare war on Trump and some, like Paul Craig Roberts, believe that Trump has now returned them the favor. I sure hope that he is right.

Let’s look at one telling example:  U.S. intelligence agencies are now investigating their own boss! Yes, according to recent reports, the FBI, CIA, National Security Agency and Treasury Department are now investigating the telephone conversations between General Flynn and the Russian ambassador Sergey Kislyk.

He is also Trump’s National Security Advisor. In other words, his security clearance is stratospherically high and he will soon become the boss of all the U.S. intelligence services. And yet, these very same intelligence services are investigating him for his contacts with the Russian Ambassador. That is absolutely amazing. Even in the bad old Soviet Union, the almighty KGB did not have the right to investigate a member of the Communist Party Central Committee without a special authorization of the Politburo (a big mistake, in my opinion, but never mind that). That roughly means that the top 500 members of the Soviet state could not be investigated by the KGB at all. Furthermore, such was the subordination of the KGB to the Party that for common criminal matters the KGB was barred from investigating any member of the entire Soviet Nomenklatura, roughly 3 million people (and even bigger mistake!).

But in the case of Flynn, several U.S. security agencies can decide to investigate a man who by all standards ought to be considered at least in the top 5 U.S. officials and who clearly has the trust of the new President. And that does not elicit any outrage, apparently.

This long commentary by The Saker, which was posted on the unz.com Internet site on Sunday, was important enough that I though it necessary to post in a weekday column.  If you don’t have the time or the inclination right now, it will be in my Saturday column as well.  But whether today, or Saturday, it falls into the absolute must read category.  I had several subscribers send it to me, but the first one through the door with it was Larry Galearis late on Sunday morning Denver time.  Another link to it is here.


Number of people going bust in the U.K. up for first time in six years

The number of people being tipped into insolvency rose for the first time since 2010 last year prompting fears the “tide has turned” for household finances.

It is likely to add to fears about the fragility of the strong consumer spending that is driving the economy, a day after official figures showed better than expected GDP growth.

Insolvency Service data showed personal insolvencies – which include bankruptcies as well as cases of entering into voluntary arrangements with creditors – climbed by 13% to 90,930 in 2016.

The number of companies entering insolvency also rose last year, for the first time since 2011.

Recent Bank of England figures showed consumer borrowing rising at the fastest pace in 11 years, prompting charities to warn family budgets could become overstretched.

This news item showed up on the sky.com Internet site at 3:24 p.m. GMT last Friday afternoon — and it comes courtesy of Swedish reader Patrik Ekdahl.  Another link to it is here.


HFT trading radio towers defeated by local council in U.K.

Flash traders have had their bid to build a giant telecoms mast on the Kent coast turned down by councillors.

Dover District Council rejected the bid by two secretive American high-frequency trading firms to build two masts taller than the Eiffel Tower, which is 1,063 feet high to its tip.

Vigilant Global — which is owned by Chicago trading firm DRW — and New Line Networks — which is part owned by New York firm Jump Trading — wanted to each build a radio mast in Richborough, north of Sandwich, to increase trading speeds between London and Frankfurt.

But on Thursday night their plans were voted down by Dover council’s planning committee after huge local opposition.  The council’s planning department warned the structures – as tall as the Eiffel Tower – would damage local views and harm the character of the area.

Bernard Butcher, vice-chairman of the planning committee, said: “In 26 years as a councillor, this is the worst application I have ever seen. This particular proposal is just unsightly, it’s too incredibly stupid for us to even contemplate.

This story appeared on the dailymail.co.uk Internet site on Friday night GMT — and was subsequently updated at 3:54 p.m. GMT on their Monday afternoon.  I found this article on the gata.org Internet site over the weekend — and another link to it is here.


Britain’s Royal Mint casts coins to mark Queen’s Sapphire Jubilee

A range of specially designed Sapphire Jubilee commemorative coins have gone into production at the Royal Mint to mark the 65th anniversary of the Queen’s accession to the throne.

The coins have been struck in a range of metals and denominations from £5, £10 and £500 to £1,000 to celebrate the milestone, which falls on 6 February and is a first for a reigning monarch.

The recommended retail prices for the coins range from £13 for the £5 piece to £49,995 for the £1,000 UK gold proof kilo coin.

All the coins feature the Queen’s image in profile on the main side but the £5 range has the imperial state crown on the reverse, and an excerpt from Princess Elizabeth’s famous speech where she dedicates herself to her future role as Queen.

It reads: “My whole life, whether it be long or short, shall be devoted to your service.

This article appeared on the sky.com Internet site at 6:12 a.m. GMT on their Monday morning, which was 1:12 a.m. EST.  It’s the second offering of the day from Patrik Ekdahl — and another link to it is here.


Eurozone ‘destruction‘ necessary if countries are to thrive again, warns former ECB hawk

The eurozone must break up if its members are to thrive again, according to a former European Central Bank official.

Jürgen Stark, who served on the ECB’s executive board during the financial crisis, said it was time to “think the unthinkable” and work towards a “reset” of Europe that pulled power away from Brussels.

The former vice-president of Germany’s Bundesbank said the creation of a two-speed eurozone, with France and Germany at its core, would help to ensure the smaller bloc’s survival.

We have to think the unthinkable. And it is already unthinkable to think about the restart of Europe, which means we have to be creative.  But in order to be creative, you have to destruct [sic] something.

Mr. Stark said countries such as Italy, which has seen its economy stagnate since the crisis, would be better off outside the single currency area.  “Italy was accustomed to this ongoing devaluation of the lira from the mid-Seventies until the late Nineties. Maybe they need devaluation and their own currency in order to become more competitive again,” he said.

This news item was posted on the telegraph.co.uk Internet site at 6:40 p.m. GMT on Sunday evening, which was 1:40 p.m. in Washington — EST plus 5 hours — and it’s another offering from Patrick Ekdahl.  Another link to it is here.


Greece has three weeks to deal with ‘potentially disastrous’ debt

Greece’s embattled government has three weeks to break the deadlock in increasingly difficult talks with creditors or risk the country’s debt crisis resurfacing with renewed vigour.

Faced with the dilemma of agreeing to additional austerity or calling fresh elections, prime minister Alexis Tsipras was weighing his options at the weekend. Fears of further uncertainty in Europe’s weakest member state mounted as the International Monetary Fund (IMF) predicted that Greece’s debt load could become “explosive” by 2030.

It is critical that a compromise is found,” said Aristides Hatzis, professor of law and economics at the university of Athens, noting that a slew of elections across Europe would only make Greece’s predicament worse.

If these negotiations are not wrapped up by 20 February [when eurozone finance ministers next meet] we could be looking at potentially disastrous political turmoil, which would bring back the scenario of Grexit with a vengeance.”

This news item, filed from Athens, showed up on theguardian.com Internet site at 7:07 p.m. GMT on Sunday evening — 2:07 p.m. in Washington — and it’s courtesy of Richard Saler.  Another link to it is here.  Richard also sent a Reuters article on this subject headlined “New euro zone loans to Greece hinge on IMF participation in bailout: ESM”  — and a link to that is here.


Greek 10-year bond yields leap 212 bps

Greek 10-year bond yields shot up on Friday, a day after eurozone finance ministers acknowledged the country’s fiscal progress but failed to break an impasse with the International Monetary Fund over its future bailout targets.

Athens and its European Union and IMF creditors are still at odds over the fiscal goals Greece can achieve after 2018, when its third rescue program ends.

The disagreements have also rekindled fears of a new crisis in Greece, which was forced to sign up to another bailout in July 2015 in order to stay in the eurozone.

Greek 10-year bond yields rose by 212 basis points on Friday.

The outcome was tougher than what the market had hoped for,” Beta Securities analysts Takis Zamanis told Reuters.

This Reuters article appeared on the ekathimerini.com Internet site at 6:56 p.m. Europe time on Friday evening, which was 12:56 p.m. EST in Washington.  I ‘borrowed‘ this news item from yesterday’s edition of the King Report.  The above five paragraphs are all there is to this story, but if you wish to view the hard copy, the link is here.


This gold fund looks to hedge against a strong dollar

The gold trade has historically been a good hedge against a weak dollar, but not usually a great investment when the greenback is going up. Today State Street Global Advisors and the World Gold Council launched an exchange-traded fund to figure out a way around that market friction point.

The SPDR Long Dollar Gold Trust ETF gains when gold priced in U.S. dollars rises or when the value of the U.S. dollar increases. It takes a long position on physical gold in U.S. dollars and shorts a group of major global currencies that include the euro, Japanese yen, British pound sterling, Canadian dollar, Swedish krona, and Swiss franc.

There’s nothing other than gold bars backing the product, and you’re going to get the benefits of owning gold and owning gold in a strong-dollar environment,” Joe Cavatoni, the World Gold Council’s managing director of ETFs, told CNBC‘s “Squawk Box.”

However, the new ETF will lose money when gold prices fall more than the value of the dollar rises.

This rest of this gold-related news item, along with an embedded 3:48 minute video clip, showed up on the cnbc.com Internet site around noon EST on Monday — and it’s something that I found in a GATA release late last night EST.  Another link to it is here.


Ireland’s Monetary Gold Reserves: High Level Secrecy vs. Freedom of Information – Part 2

Gold researcher Ronan Manly concludes the tale of his struggle with Ireland’s central bank to get any useful information about the nation’s gold reserves. While, predictably enough, the bank shuts him out, Manly obtains documentation indicating that Ireland’s gold has been leased out through the Bank of England and that the Bank of England presumed to instruct Ireland not to disclose any information about it because gold is far too sensitive a subject to entrust the mere public with.

Manly’s report, which is the length of a short novel, is headlined “Ireland’s Monetary Gold Reserves: High Level Secrecy vs. Freedom of Information — Part 2” and it was posted on the Singapore-based bullionstar.com Internet site yesterday.  Another link to it is here.


Gold is world’s ultimate currency, former Indian central banker says

Former Reserve Bank Governor Venugopal Reddy said today the government needs to come out with a comprehensive gold policy owing to the metal’s role in the economy and to start handling the precious metal in a better way.

Speaking at ongoing Hyderabad Literary Festival here, Reddy also said it was the confiscated gold from smugglers that was pledged in the international market to tide over the country’s balance of payments crisis in 1990.

It is time we have a positive approach to policy for gold. There must be positive comprehensive gold policy and I believe it is so important for the economy because so many people are dependent on it,” he said.

Crores of rupees are traded in the market — so many are consumers, so many are producers — and the linkage it to financial sector is increasing. Therefore, it is time for the government to think of issuing a white paper on a positive, comprehensive policy for gold,” Reddy said in his speech, which was titled “Gold — Black, White, and Yellow.

He maintained that gold is the ultimate currency in the world, though domestically possessing it is part of Indian culture and for women it acts like insurance.

This gold-related news item is actually headlined “Time to come out with a comprehensive gold policy: Y. V. Reddy“.  The headline above is courtesy of Chris Powell — and I dug it out of a GATA release.  It was posted on the Economic Times of India website at 2:15 p.m. IST on their Sunday afternoon — and another link to it is here.


Guyana gold miners threaten to protest, reduce declarations amid new tax measures

Miners under the umbrella of the Guyana Gold and Diamond Miners Association on Friday warned that they would halt gold mining, reduce declarations, and stage a countrywide protest if President David Granger fails to meet with them within two weeks and address their concerns about heavy taxation.

The main problem we have to accept is that the government does not respect this industry at the present time,” said association consultant Tony Shields, reflecting that miners’ representatives met Granger only once, in December 2015. Shields charged that meeting with government ministers has turned out to be a waste of time, just photo opportunities, and the time has come for the Guyanese leader to have a big meeting with the miners rather than just the executive.

Nearly all the more than 100 attendees raised their hands in support of a protest.

The warning comes at a time when gold continues to be Guyana’s major foreign exchange earner and there has been a shortage of United States dollars, resulting in a depreciation of the Guyana dollar against major international currencies. “Mr. President, mining is in a crisis. You will need to address this industry, the number one economic thing,” he said, expressing concern that the President said he would only meet as his busy schedule allows.

This news story was posted on the demerarawaves.com Internet site on Saturday — and it’s another gold-related story that I picked up off the gata.org Internet site.  Another link to it is here.


Sunken British warship laden with gold to be raised 250 years after battle

A sunken British warship wrecked off the coast of South America is due to see the light of day once again — along with £1 billion in gold coins.

The Lord Clive was blasted by cannon fire in 1763 after an attempt to reclaim Uruguay’s Colonia del Sacramento, a former British colony that had been seized by the Spanish.

While Captain Robert McNamara planned to launch his attack and take over the city at the end of the Seven Years’ War, Spanish forces were secretly planning a counterattack.

A battle saw the Lord Clive blasted to pieces and 272 of its crew killed.

This very interesting article put in an appearance on the mirror.co.uk Internet site at 4:34 p.m. GMT on their Sunday afternoon, which was 11:34 a.m. in New York — EST plus 5 hours.  It’s another gold-related news item that I found in a GATA release yesterday.  Another link to it is here.


The PHOTOS and the FUNNIES

I looked up Guyana on Wikileaks after reading the above story, just to find out a bit more about the country itself — and discovered that their national bird was a hoatzin — which is critter from the dinosaur era if there ever was one.  Here are two shot for you…and don’t forget to click to enlarge feature.


The WRAP

Yes, the crooks at JP Morgan may have added 2,200 new shorts into last Tuesday’s cut-off in silver — and a different amount in gold.  But, in retrospect, that’s why prices fell after the cutoff – so that JPM could buy those contracts back at a profit (which I think has been accomplished). Isn’t that what their long term record of no losses suggests?  Furthermore, I think the crooks at JPM were the big buyers on the price spike in silver that suddenly occurred late Friday morning. I say this because the silver price spike was unusual in that it shot up suddenly — and then the rally was over. The gains were mostly held — and that’s good — but I’m thinking of something else.

In keeping with my premise that nothing is accidental on the COMEX — and everything is orchestrated and arranged, the glaring meaning (to me) that silver suddenly spiked up…and then made no further highs the rest of the day…was that the ringmaster, JPM, didn’t want to slice the salami to the upside and invite technical fund buying.  Instead, JPMorgan bought as much as it could on the down move from the close on Tuesday through Friday morning…and then bought on the upside for a short while. Then it capped prices so as to blunt any technical fund buying. Gold, on the other hand, didn’t rocket higher when silver did on Friday, but was permitted to make nothing but new daily price highs the rest of the day.Silver analyst Ted Butler: 28 January 2017


Except for the elevated volume levels in COMEX trading to keep gold and silver prices in check after the London p.m. gold fix was in on Monday, there really isn’t much to see in yesterday’s price action.

The small traders that weren’t standing for delivery, had to be out of the February contract by the close of trading yesterday — and that they did in droves — and that’s why February open interest in gold crashed to the levels that it did in Monday’s Preliminary Report posted in the first section of this column.

The other thing to be noted is that even though there was huge movement in the dollar index yesterday, it never manifested itself in the precious metal prices to any great extent that I could tell.

Here are the 6-month charts for all four precious metals, plus copper, once again — and you can read into them whatever you wish.

But it should be noted that gold has moved further above its 50-day moving average — and even though ‘da boyz’ had every opportunity to hammer silver into the dirt on the dollar index rally, they declined, as JPMorgan knew that after its shenanigans in the futures market on Friday, the 50-day moving average in that precious metal was a bridge too far even for it.

And as I type this paragraph, the London open is less than ten minutes away, I note that the gold price rallied until shortly after 12 o’clock noon China Standard Time — and hasn’t done much since.  At the moment it’s up $6.00 an ounce.  Silver rallied until the same time — and it’s been chopping sideways since — and is up 12 cents an ounce.  But as London opens, they both appear to be rallying a bit.  Platinum hasn’t done much in the last six hours, but is up 3 bucks as Zurich opens.  Palladium really blasted off in Far East trading on their Tuesday morning, but about half of those gains were taken back — and it’s up 7 dollars an ounce.

Net HFT gold volume is just over 35,500 contracts, mostly in the new front month, which is April — and net HFT silver volume is very light at 4,700 contracts.

The dollar index sold down about 10 basis points by minutes after 2 p.m. CST on their Tuesday afternoon — and it has rallied a bit since then — and is sitting at 100.46…up 9 basis points as London opens.

Today, at the close of COMEX trading. is not only the last day of trading in January, but it’s also the cut-off for this Friday’s Commitment of Traders Report…plus the companion Bank Participation Report.

And as I post today’s column on the website at 4:05 a.m. EST this morning, I see that gold’s tiny rally going into the London open got hammered flat and then turned lower.  At the moment, the gold price is up only $1.00 the ounce.  It was the same for silver — and it’s only up 4 cents.  Ditto for platinum — and it’s now down two dollars.  Palladium is holding in there, at least for the moment, as it’s still up 6 bucks the ounce.

Net HFT gold volume is approaching 44,000 contracts, which is pretty high — and that number in silver is almost 6,100 contracts, which is very light.

The dollar index has been all over the place since it began trading at 6 p.m. EST yesterday evening — and is currently down 3 basis points on the day.  For the second day in a row, what the currencies have been doing have played no part in what’s going on in the precious metals.  All the price action is obviously a COMEX affair, as it normally is.

With January off the board, it’s impossible to tell how February will turn out, but with all of the Far East’s gains on their Tuesday mostly gone already, it appears…at least at the moment…that JPMorgan et al are going to end January on a sour note.

It could be an interesting trading session in New York today.

That’s all I have this time, which is more than enough — and I’ll see you here tomorrow.

Ed