The Rate Makers Vs. Silver and Gold's Resolutes
Great and Wonderful Tuesday Morning Folks,
December Gold continues to gain with the trade at $1,441.60, up $8.30 and right close to the high at $1,442.50 with the low at $1,434.80. The Tag A Long Kid (Silver) is “bringing up the rear” with the September trade at $16.49, inside a tight range between $16.53 and $16.425. The US Dollar continues to gain as well as it seems European traders are starting to get more and more nervous about everything these days with the Dollar trade at 97.815, up 1.9 points with the high at 97.96 and the low close by at 97.800. All of this was done way before 5 am pst, the Comex open, the London close, and before the start of the FOMC meetings.
Our Emerging Markets currency watch is mixed with the Venezuelan Bolivar now showing the Nobel metal valued at 14,397.98, giving the first money of all mankind an 88.89 Bolivar jump in value with Silver gaining .699 Bolivar at 164.694. In Argentina, the Peso has Gold valued at 63,093.32 giving us a 1,093.07 A-Peso jump making this a WOW gain. Silver under the same currency received only a whoopee gain totaling 1.1103 in A-Peso value with the price at 721.663. Over in Turkey, the Lira has Gold priced at 8,013.68 going in the opposite direction and losing by 54.08 T-Lira with Silver losing .7788 in value with its trade at 91.6890 T-Lira.
July Silver Deliveries are over, with the closing numbers gaining 34 more buy orders but without a price set with the closing count at 56 physical demands for Silver that had to get their receipts by the end of yesterday’s trade and with no trading range given during the day. Also of note the Volume from yesterday’s trade went up to 64 and yet we still have no prices given. The numbers are intentionally incomplete. If this was a spread liquidation, there should be prices given for both sides of the calendar spread. I consider this totally unacceptable because it hides the activities that are generated inside what is supposed to be real price discovery. August Silver Deliveries are now the focus with tomorrow being the First Notice Day with the Open Interest count now at 1,005 and with a Volume of 53 up on the board with a trading range between $16.44 and $16.37. Thursday will be the starting point for the next month’s delivery system.
Silver’s Overall Open Interest continues to gain with the total count now at 237,158 Obligations adding on 1,976 more Overnighters that are still proving 2 points. 1 point being how the shorts need to “stay the price” no matter what, the other proving how Resolute things have remained for both sides of the equations and for years now. The finale will be when they lose control of their physicals required to support their papered positions.
Today we start the FOMC meetings with our President being too busy to attend but that doesn’t stop his Tweeties from kicking in and reminding Team Powell that they can be fired if they don’t do the job the president wants as he reminded the players of rates “…the central bank "raised way too early and way too much" and that their "quantitative tightening" was "another big mistake." The markets are already showing a ½ basis point cut in the Eurodollar (considered the Fed Window rate by some). The spot month charge shows a 2.195% rate, December 2020 is now at 1.68% giving the spread a .515% reduction out in time. The numbers may not be much to look at here but add a house or auto purchase and see how much a buyer saves by simply “staying in place” and waiting for the cheaper rate. Of course it would do the credit card companies better if they reduced now, but that cuts into their immediate profit margins, so it’s ignored.
So here we sit in the dilemma created by rate makers whose primary concern was to spread their control out far and wide. But now, their wings are being clipped, and the rates are being caged, just like the rest of the G7 rates. The precious metals have been doing well the whole time our currency has traveled higher in value. One can only imagine what will happen when our currency finally gets devalued. Who knows? Maybe we’ll see a real precious metals price jump like those under the South America currencies we’ve been watching. Waiting ain’t so hard when you already have your precious metals in hand. The rate makers have the stage and the direction is already spelled out in the markets. So enjoy the show, keep your precious metals close and as always ….
Stay Strong!
J. Johnson