<![CDATA[Ed Steer's Gold & Silver Daily]]> http://www.caseyresearch.com/feeds/main Stay abreast of the news that's moving the gold and silver markets in The Gold & Silver Daily. en <![CDATA[Central Bank Gold is Being Held in Investment Bank Vaults]]> http://www.caseyresearch.com/gsd/edition/central-bank-gold-is-being-held-in-investment-bank-vaults/ http://www.caseyresearch.com/gsd/edition/central-bank-gold-is-being-held-in-investment-bank-vaults/#When:09:18:00Z "There's not a lot to read into yesterday's price action"

¤ Yesterday In Gold & Silver

[Note: After three years without a break, I'll be taking some time off.  There will be no Gold and Silver Daily next week.  Ed]

The gold price action on Wednesday was a real yawner.  The only activity worthy of mention was the small rally that began at the London a.m. gold fix---and "da boyz" took care of that at exactly 1 p.m. BST---20 minutes before the Comex open.  From there it got sold down to its 10:35 a.m. EDT low---and then recovered a bit before trading sideways for the remainder of the day.

The highs and lows aren't worth looking up.

Gold finished the Wednesday trading session at $1,283.70 spot---unchanged on the day.  Volume, net of April and May, was only 113,000 contracts.

It was pretty quiet in silver yesterday as well---and there really isn't anything to talk about here.  Like gold, the highs and lows aren't worth looking up.

Silver closed yesterday afternoon in New York at $19.45 spot, up 6.5 cents on the day.  Volume, net of roll-overs was pretty quiet at 19,000 contracts.

The price action in platinum and palladium barely had a pulse, either.  Here are the charts.

The dollar index closed around 79.90 on Tuesday in New York---and didn't do much until moments before London opened yesterday.  By 9:30 a.m. BST, the 79.70 low was in---and the index rallied quietly back to almost unchanged, as it closed on Wednesday at 79.86---down a whole 4 basis points.

The gold stocks opened in the black---and then began to rally convincingly about an hour after the equity markets opened in New York.  Their highs came about 2:20 p.m. EDT---and then they gave up a bit going into the close.  The HUI finished up 2.07% on the day.

The silver equities price path looked similar, but Nick Laird's Silver Sentiment Index closed up only 1.02%

This is the second day in a row that the precious metal equities vastly outperformed the metals themselves---and I've very encouraged by that.

The CME Daily Delivery Report showed that 56 gold and a whopping 151 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  Once again the largest short/issuer in gold was Jefferies and, once again, the two biggest long stoppers were JPMorgan and Canada's Scotiabank.

But the totally out-of-the-blue surprise was the 151 silver contracts that were posted for delivery, as there was no hint of it in the current CME's Daily Information Bulletin.  I would guess that this delivery was arranged privately---and left until the last possible moment.  It was the biggest Comex silver short [JPMorgan] delivering to the second largest Comex silver short [Canada's Scotiabank].  One crook lending a helping hand to another crook, methinks.  The link to yesterday's Issuers and Stoppers Report is here---and it's worth a quick peek.

While on the subject of deliveries, according to the current CME Daily Information Bulletin, there are around 600 gold contracts still open in April---and that's netting out the deliveries due today, plus the 56 contracts posted for delivery tomorrow.  Any bets that JPMorgan and Scotiabank are long/stoppers on what's left to deliver this month?  The only other unknown would be the identity of the short/issuer.  Jefferies, perhaps---but that's a lot of contracts for a company their size.  In the end, it doesn't really matter who they are, but it's fun to speculate, now that we're down to the final days before all and sundry have to make their intentions known.

There were no reported changes in either GLD or SLV yesterday.

The U.S. Mint had a smallish sales report.  They sold 50,000 silver eagles---and that was it.

There was no in/out movement in gold at the Comex-approved depositories on Tuesday---and only smallish in/out movement in silver, as 20,717 troy ounces were received---and 88,852 troy ounces were shipped out.  The link to that activity, such as it was, is here.

Here are two more gold and silver charts courtesy of Nick Laird that he whipped up for us yesterday.  The top chart in both is the spot price in each metal going back about 8 years.  The 2-colour charts below that show the long and short positions of the Big 4 and Big 8 traders in each in the Commitment of Traders Report over the same time period.  Note the short positions of the Big 8 in gold vs. the Big 8 in silver over time---especially over the last six months or so.

I have very few stories for you today---and the final edit is yours.

¤ Critical Reads

Weapon of Last Resort: ECB Considers Possible Deflation Measures

One of European Central Bank President Mario Draghi's most important duties is watching his mouth. One ill-considered utterance is enough to sow panic on the financial markets.

But during a press conference earlier this month, Draghi allowed himself a telling slip.

Speaking to gathered journalists at the Spring Meetings of the International Monetary Fund and the World Bank, Draghi twice almost uttered a word he has been at pains to avoid. "Defla…", Draghi began, before stopping himself and continuing with the term "low inflation."

Yet despite Draghi's efforts, the specter of deflation was omnipresent in Washington during the meetings. And it is one that is making central bank heads and government officials nervous across the globe. The IMF in particular is alarmed, with Fund economists warning that there is currently up to a 20 percent risk of a euro zone-wide deflation. IMF head Christine Lagarde has called on European central bankers to "further loosen monetary policy" to address the danger.

This longish article is worth reading---and it showed up on the German website spiegel.de very early yesterday evening Europe time---and it's the first offering of the day from Roy Stephens.

Europe braces for gas showdown with Russia, helped by Japan's nuclear restart

The Western powers are scrambling to bolster defences against a halt in Russian gas supplies after the Kremlin tightened the energy noose on Ukraine, and paramilitary actions in eastern Ukraine increased the risk of a full-blown sanctions war.

The Geneva deal reached last week to defuse the crisis is close to disintegration, with the U.S. government openly accusing Russia of carrying out covert operations across the Donbass region.

Two key U.S. senators have already called for sanctions on large Russian banks, mining companies and energy groups, including the state gas monopoly Gazprom. Any such move would freeze gas deliveries to the E.U., since few European banks would risk defying U.S. regulators by handling Gazprom transactions.

Dmitry Medvedev, Russia’s premier, accused the Americans of “pure bluff”, challenging the U.S. to show its teeth. “You can, of course, continue to expand the 'black list’: it will lead absolutely nowhere,” he told the Duma.

This commentary by Ambrose Evans-Pritchard is definitely worth reading---and it was posted on the telegraph.co.uk Internet site late on Tuesday evening BST.  It's the second offering in a row from Roy Stephens.

Putin Has Taken Control of Russian Facebook

Russian president Vladimir Putin has essentially taken control of VKontakte, the home-grown Russian social network which is that country's version of Facebook.

The founder and CEO, 29-year-old Pavel Durov, posted on his VK page that he had finally given up control of the company to two investors allied with Putin, Buzzfeed reported:

Announcing his firing on his VKontakte page, Durov said: “Today, VKontakte goes under the complete control of Igor Sechin and Alisher Usmanov.” Usmanov is a metals tycoon who expanded into tech via his company Mail.ru, which has steadily upped its stake in the Russian social network. Until recently, Usmanov owned a 10% stake in Facebook. Sechin is the leader of the hardline silovik faction that backs Putin, is CEO of Rosneft, the state-owned oil company, and is believed to be one of the Russian president’s closest advisors.

Generally, Putin has maintained his control of Russia by allowing his allies to control vast chunks of the economy, like Rosneft. This appears to be an extension of that control into social media.

This very interesting news item was posted on the businessinsider.com Internet site at noon EDT on Tuesday---and I thank West Virginia reader Elliot Simon for pointing it out.

Putin's Dilemma: Fending off the United States' Imperial Hand

The United States is in the opening phase of a war on Russia. Policymakers in Washington have shifted their attention from the Middle East to Eurasia where they hope to achieve the most ambitious part of the imperial project; to establish forward-operating bases along Russia’s western flank, to stop further economic integration between Asia and Europe, and to begin the long-sought goal of dismembering the Russian Federation. These are the objectives of the current policy. The US intends to spread its military bases across Central Asia, seize vital resources and pipeline corridors, and encircle China in order to control its future growth. The dust-up in Ukraine indicates that the starting bell has already been rung and the operation is fully-underway. As we know from past experience, Washington will pursue its strategy relentlessly while shrugging off public opinion, international law or the condemnation of adversaries and allies alike. The world’s only superpower does not have to listen to anyone. It is a law unto itself.

The pattern, of course, is unmistakable. It begins with sanctimonious finger-wagging, economic sanctions and incendiary rhetoric, and quickly escalates into stealth bombings, drone attacks, massive destruction of civilian infrastructure, millions of fleeing refugees, decimated towns and cities, death squads, wholesale human carnage, vast environmental devastation, and the steady slide into failed state anarchy; all of which is accompanied by the stale repetition of state propaganda spewed from every corporate bullhorn in the western media.

Isn’t that how things played out in Afghanistan, Iraq, Libya and Syria?

This  commentary by Mike Whitney falls into the absolute must read category---and is by far the most important story in today's column.  It was posted on the counterpunch.org Internet site yesterday---and it's another contribution to today's column from Roy Stephens, for which I thank him.

Three King World News Blogs

1. Art Cashin: "Fed's Plan to Use Stocks to Boost U.S. Economy Has Failed"  2. James Turk: "Western Central Banks To Run Out Of Gold This Year"  3. Grant Williams: "West Hemorrhaging Gold But Here's Its True Achilles' Heel"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Goldman Sachs Stands Firm as Banks Exit Commodity Trading

Goldman Sachs Group Inc., whose three top executives began their careers at the firm in the commodity-trading unit, is poised to gain market share as pressure from regulators drives competitors to scale back.

Barclays Plc, the U.K.’s second-largest bank, said that it’s exiting commodities businesses other than trading precious metals and derivatives tied to oil, U.S. gas and commodity indexes. In January, the London-based bank cut jobs in the group that traded raw materials and in February shut power-trading desks in the U.S. and Europe.

JPMorgan Chase & Co. last month announced the $3.5 billion sale of its raw-materials trading unit to Mercuria Energy Group Ltd. and Morgan Stanley plans to sell its physical oil business to Russia’s OAO Rosneft. Goldman Sachs, Morgan Stanley, Barclays and JPMorgan were the biggest traders of commodity derivatives among banks, according to a Greenwich Associates survey last year.

“The more banks that exit commodities trading, the less competitive it becomes for the banks which stick with it,” Jeffery Harte, an analyst at Sandler O’Neill & Partners LP, said in a phone interview. Goldman Sachs has “the bigger franchise to be a winner. It now has a much bigger piece of a much smaller pie.”

This Bloomberg story showed up on their website late on Tuesday afternoon Denver time---and it's the second offering of the day from Elliot Simon.

So central bank gold is being held in investment bank vaults

Yesterday's Reuters report about changes at the gold and currency trading desks of investment banks is notable for more than its acknowledgment that central banks are surreptitiously trading gold every day, an acknowledgement made last September by the Banque de France.

For in reporting that "banks that serve central banking customers with large bullion reserves to manage will have a greater need to offer gold trading and storage services," Reuters also has acknowledged that much central bank gold is now held outside central bank vaults.

That's what the reference to "storage services" is about.

Presumably the central bank gold being vaulted by investment banks is gold that central banks have leased or swapped into the market for market-rigging purposes.

This commentary by Chris Powell, with two embedded must read links, was posted on the gata.org Internet site yesterday.

The Secret World of Gold

This 42:34 minute video has been around the block, as it has been viewed over 179,000 time on the youtube.com Internet site, but I don't ever remember seeing it before, or even posting it in this column, although I'm sure I did.  However, based on the viewings, you've probably already seen it.

[I just watched it from start to finish right now---and I don't remember seeing it before---however I do remember posting it.]

But just in case you were on some other planet when it was made public, like I obviously was---here it is again---and I thank Casey Research's own John Grandits for bringing it to my attention on Monday.  And if you haven't seen it yet---it's certainly a must to view.

Chorus to lower gold curbs grows louder in India

India's Commerce Ministry came out in favour of axing restrictions on gold imports.

"The present gold import policy is workable only for a short distance. When this policy was conceptualised, it was for a limited objective...the Department of Commerce has taken a very clear decision that this policy is not sustainable in the long run," Commerce Secretary Rajeev Kher told media persons.

He further said that the policy needed to be appropriately amended. In order to check India's rising current account deficit (CAD), the government had raised import duties on bullion, while the Reserve Bank of India had imposed additional curbs on the import of the metal to jewellery exporters.

Almost in tandem, as the Commerce Ministry pitched for the removal of restrictions on gold imports, came the news that India's gems and jewellery exports fell by about 9% to $39.5 billion in 2013-14.

This gold-related news item, filed from Mumbai, was posted on the mineweb.com Internet site yesterday.

¤ The Funnies




 

¤ The Wrap

Once in a while you will stumble upon the truth, but most of us manage to pick ourselves up and hurry along as if nothing had happened. - Winston Churchill

There's not a lot to read into yesterday's price action---and it was just another day off the calendar as Ted Butler is wont to say from time to time.

Here, once again, are the 6-month charts for gold and silver.  With no new lows being set---and price action subdued on top of that---I doubt very much if yesterday's trading meant much as far as the Commitment of Traders Report is concerned.

There are four trading days left for contract holders in the May delivery month in silver to either sell, roll, or stand for delivery---and there are still about 44,000 contracts left open.  Only 5,577 were rolled yesterday, at least according to the preliminary report from the CME Group.

When I checked the CME's preliminary Daily Information Bulletin that was posted on their website in the wee hours of this morning EDT---it showed the big increase in silver open interest for the April delivery month that appeared on their Daily Delivery Report late last evening.  As I said earlier, it's obvious, at least to me, that this delivery from JPM to Scotiabank was privately arranged and hidden from public view until the last possible moment.  As to what it portends for the future, I don't really know for sure, although I do have my suspicions---which I'll keep to myself, as it falls into the "wild-ass speculation" category.

Not much of anything happened in Far East trading on their Thursday---and the same can be said now that London has been open about 20 minutes.  Volumes in both gold and silver are very light---about 18,000 contracts in gold, and 4,000 contracts [net of roll-overs] in silver.  The dollar index is down a handful of basis points.

And as I send this out the door to Stowe, Vermont at 4:55 a.m. EDT, all four precious metals are now down a bit from yesterday's close in New York.  I see that JPMorgan et al are still trying to beat up the technical funds to the down side in silver---and it remains to be seen how successful they are.  But at these volume/price levels, they're picking up nickles in front of the proverbial steamroller.  Volumes in gold and silver are still on lighter side, so it's not wise to read too much into this price action, even in silver---although the volume in that has picked up quite a bit, as has the roll-over action.  The dollar index is still down the same handful of basis points it was 90 minutes ago.

Here's the Kitco silver chart as I hit the 'send' button.

That's all I have for today---and as the April delivery month winds down---and the May contract goes off the board---the price/volume activity between now and the Comex close on Tuesday, could prove interesting.

See you tomorrow.

]]>
Thu, 24 Apr 2014 09:18:00 +0000
<![CDATA[Barclays Quits Commodities—But Retains Its Precious Metal Trading Division]]> http://www.caseyresearch.com/gsd/edition/barclays-quits-commodities-but-retains-its-precious-metal-trading-division/ http://www.caseyresearch.com/gsd/edition/barclays-quits-commodities-but-retains-its-precious-metal-trading-division/#When:09:20:00Z "It was another day of salami slicing in gold and platinum"

¤ Yesterday In Gold & Silver

[Note: After three years without a break, I'll be taking some time off.  There will be no Gold and Silver Daily next week.  Ed]

The gold price got sold down a few dollars in the first three or four hours of Far East trading on their Tuesday.  The tiny rally that was born out of that around 1 p.m. Hong Kong time got met by the usual not-for-profit sellers 10 minutes after the Comex open---and by the time "da boyz" were done at 11:35 a.m. EDT in New York, they had sold gold down about 14 bucks from its 8:30 a.m. high.  The subsequent rally from that point, such as it was, met with a willing seller the moment that it really started to gather strength shortly before 4 p.m. in electronic trading---and that was that.

The CME Group recorded the high and low prices as $1,293.10 and $1,275.80 in the June contract.

Gold finished the Tuesday session in New York at $12,83.70 spot, down $6.60 from Monday's close.  Volume, net of April and May, was pretty decent at 131,000 contracts---and a lot of that came as a result of the engineered price decline that began at 8:30 a.m. EDT, as "da boyz" took another slice off the golden salami.

The silver price action was very similar to gold's price action, but quite a bit more subdued---and the major inflection points as far as price was concerned, also occurred at the same times.  Silver would have closed higher on the day, except the same seller of last resort in gold that showed up at 4 p.m. EDT, also showed up in the Comex silver market at the same time as well.  And, for the second day in a row, no new lows were set.

The high and low ticks, such as they were, were reported as $19.53 and $19.285 in the May contract.

Silver closed in New York yesterday at $19.385 spot, down 5.5 cents on the day.  Gross volume jumped up to 73,300 contracts, but once the huge amount of May roll-overs were deducted, net volume fell all the way down to about 22,500 contracts.

The general shape of the platinum chart was similar in virtually every way to the gold and silver charts posted above.  But the timing of the high and lows ticks was slightly different.  Platinum's engineered price decline also set a a new low price tick for this move down.  Palladium attempted to rally starting around 2 p.m. Hong Kong time, but the tiny gain got taken away during the London lunch hour.  After that it didn't do much.  Here are the charts.

The dollar index closed late on Monday afternoon in New York at 79.95---and then did nothing until shortly after 2 p.m. Hong Kong time on their Tuesday afternoon.  From there it chopped lower, hitting its 79.80 low tick at the 8:20 a.m. EDT Comex open.  From there it rallied back to just above unchanged on the day by around 10:35 a.m., before sliding a bit lower into the close.  The index finished the Tuesday session around 79.90, which was basically unchanged.

The rallies in all four precious metals began the moment that the dollar index headed south in Hong Kong trading, but all four got scuppered at different times than the dollar's absolute low and, of course gold, silver and palladium's engineered price declines extended long after the dollar index had rallied back to unchanged.  As a matter of fact, the index had rallied back to unchanged before prices really cratered, so the sell-offs had zero to do with what was happening in the currency markets.

And, for the second day in a row, the scale of the chart makes the index movements look far more impressive than they actually were.

Despite the shenanigans of JPMorgan et al, the gold stocks chopped around the unchanged mark until the low was set around 10:45 a.m. in New York.  Then, despite the smack-down in the metal itself, the stocks moved solidly higher---and closed on their high tick of the day, which was probably the result of that tiny rally in gold going into the 4 p.m. close of the equity markets.  The HUI finished up 1.49%.

Everything that the HUI lost on Monday and Friday, plus a bit more, was recovered in Tuesday's rally.

The silver equities also finished in the black, but Nick Laird's Intraday Silver Sentiment Index only finished up 1.36%---which was everything it lost on Monday.

The CME Daily Delivery Report showed that 51 gold and 1 lonely silver contract were posted for delivery within the Comex-approved depositories on Thursday.  Once again the biggest short/issuer was Jefferies and, once again, JPMorgan and Canada's Scotiabank [the largest silver shorts on the Comex] were the largest stoppers. The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday---and as of 9:33 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

The U.S. Mint had another sales report yesterday.  They sold 2,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---399,000 silver eagles----and 100 platinum eagles.

Over at the Comex-approved depositories on Monday, they reported receiving a decent chunk of gold, as 89,248 troy ounces were accepted.  It was divided up between Canada's Scotiabank and HSBC USA.  The link to that activity is here.

And, for the second day in a row, there wasn't a lot of silver activity.  Nothing was reported received---and 27,003 troy ounces were reported shipped out.  The link to that 'action' is here.

Here's a chart that reader Brad Robertson sent our way yesterday.  It's the 2-minute price tick chart [The time scale is Mountain Daylight Time---BST-7].  It shows the final smack-down in gold just after 11:30 a.m. EDT, when the final slice of the golden salami took place in Comex trading yesterday.

Here are two more charts courtesy of Nick Laird over at sharelynx.com that he sent my way a couple of days ago, but had to wait until today because of space issues.  They look colourful---which they are---and complicated---which they're not.

This is the data for both gold and silver---and it comes out of the weekly Disaggregated Commitment of Traders Report.  It's precisely same data as what's in the legacy COT Report that I talk about every week, but it just reported in different categories---in these cases, four.

The first chart is the price of the metal itself.   The last chart in the sequence are the spread trades in each category.  They are trades that are market neutral because they represent a pair of trades that are long one month and short another, or vice versa.  The middle chart is the all-important net figure---total open interest minus spread trades.

It's the overall shape of the 'net figure' over time, versus the price of the metal itself in the top chart that is of interest---especially when you compare what's been going on with gold and silver prices lately.  The internal dynamics of one vs. the other, especially over the last few years---and few months---is striking.

As Ted Butler said to his paying subscribers on Saturday---as the net open interest in gold is approaching historic lows---the net open interest in silver is blowing out almost to new highs, despite the fact that both gold and silver are either at, or within spitting distance of their low prices as this current rendition of the engineered price declines unfold.
Here's the chart for gold.

And here is silver's chart.

When the next rally in both metals begins, it will be interesting to see what happens to the net open interest in both metals.  This blow-out to the upside in silver's net open interest can't go on forever.  And as Ted also mentioned, the Big 8 shorts in silver are holding their biggest short position in three and a half years---and with silver at its lows for this move down, will they continue to add to their already grotesque short positions on the next rally?  Stay tuned?

I have the usual number of stories for a mid-week column---and I hope you find some in here that you like.

¤ Critical Reads

Social Security, Treasury target taxpayers for their parents’ decades-old debts

A few weeks ago, with no notice, the U.S. government intercepted Mary Grice’s tax refunds from both the IRS and the state of Maryland. Grice had no idea that Uncle Sam had seized her money until some days later, when she got a letter saying that her refund had gone to satisfy an old debt to the government — a very old debt.

When Grice was 4, back in 1960, her father died, leaving her mother with five children to raise. Until the kids turned 18, Sadie Grice got survivor benefits from Social Security to help feed and clothe them.

Now, Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.

Wow!  You couldn't make this stuff up!  This news item showed up on The Washington Post's website almost two weeks ago---and Roy Stephens dug it up for us.  It's certainly worth skimming.

 

Retail Store Closures Soar In 2014: At Highest Pace Since Lehman Collapse

What a better way to celebrate the rigged markets that are telegraphing a "durable" recovery, than with a Credit Suisse report showing, beyond a reasonable doubt, that when it comes to traditional bricks and mortar retailers, who have now closed more stores, or over 2,400 units, so far in 2014 and well double the total amount of storefront closures in 2013, this year has been the worst year for conventional discretionary spending since the start of the great financial crisis!

While distressed retailers (e.g. Radio Shack) and bankruptcies, which have reached a three-year peak year-to-date, make up 63% of the unit closures in 2014, they comprise only 34% of the total square footage closed. On a square footage basis, broadline retailers  contributed over 28% of closures, with M, DDS, JCP, TGT, and Sam's Club participating in right-sizing their store bases.

Office supply stores have been equally significant contributors to the rationalization process as they grapple with the effects of broader distribution and deeper online penetration. We expect this trend to continue as Office Depot evaluates its real estate in the wake of its merger with OfficeMax. Even dollar stores and drug stores, which combined have consistently built out hundreds of stores per year, are beginning to reel back on expansion, with Family Dollar and Walgreens both planning to shutter  underperforming stores.

This Zero Hedge piece from Monday, was something I found in yesterday's edition of the King Report.

Existing Home Sales Hit 1-1/2 Year Low in March

U.S. home resales fell to their lowest level in more than 1-1/2 years in March, but there were signs a recent downward trend that has plagued the housing market may be drawing to an end.

"The negative housing momentum, which was exacerbated by severe weather conditions during the winter months, may be starting to fade," said Gennadiy Goldberg, an economist at TD Securities in New York.

Existing home sales are counted at the closing of contracts and March's sales reflected contracts signed in January and February, when the country was in the grip of an unusually cold and snowy winter.

[But] even accounting for the terrible weather, the housing market has slowed significantly since last summer as a run-up in mortgage rates, high house prices and a dearth of properties sidelined potential buyers.

This very interesting news item appeared on the moneynews.com Internet site yesterday morning EDT---and it's the first offering of the day from West Virginia reader Elliot Simon. It's worth reading as well.

Hussman: The Fed Has Built a 2-Legged Stool

The Federal Reserve is resting the fate of the U.S. economy on a two-legged stool by focusing only on jobs and inflation, while financial excesses are left unchecked, according to Fed perma-critic and mutual fund manager John Hussman.

In his weekly market commentary, the founder of the eponymous Hussman Funds predicted the Fed has baked unavoidable consequences into the cake of massive monetary stimulus that will prevent its employment and inflation goals from being met.

"Make no mistake. The Federal Reserve's policy of quantitative easing has starved investors of all sources of safe return, provoking them to reach for yield in more speculative assets, including equities, leveraged loans, covenant-lite debt and other securities," he wrote.

"Having stomped on the pedal for years, all of these asset classes are valued at levels that are strenuously elevated from a historical perspective, and as a result, offer strikingly poor prospective returns for long-term investors."

It sounds like John has been reading Doug Noland's weekly Credit Bubble Bulletin on a regular basis, as his  weekly market commentary [which is linked in the story itself] is spot on.

This is another article from the moneynews.com Internet site---and it's also courtesy of Elliot Simon.  It falls into the must read category.

IRS workers who didn't pay taxes got bonuses

The Internal Revenue Service handed out $2.8 million in bonuses to employees with disciplinary issues — including more than $1 million to employees who didn't pay their federal taxes, a watchdog report says.

The report by the Treasury Inspector General for Tax Administration said 1,146 IRS employees received bonuses within a year of substantiated federal tax compliance problems.

Non-payment of taxes by federal employees is a government-wide problem. The IRS says 311,536 federal employees were tax delinquents in 2011, owing a total of $3.5 billion.

I came close to deleting this news item after reading the first few paragraphs, but I'm glad I read the whole thing, as it's definitely worth your while.  This short story was posted on the usatoday.com Internet site early yesterday evening EDT---and I thank Harry Grant for sliding it into my in-box in the wee hours of this morning.

Six Ukraine/Russia/Crimea-related stories

1. As Biden lands, Russia warns Kiev to back off: The Washington Post  2. U.S. responsible for Ukrainian crisis after investing $5bn in regime change – Russia’s envoy to U.N.: Russia Today  3. Firefighters vs. arsonists: U.S. confirms $5bn spent on 'Ukraine democracy'Russia Today op-ed  4. Ukraine must urgently implement Geneva agreement - Lavrov: The Voice of Russia  5. U.S. sends 600 troops to Eastern Europe, warship USS Taylor enters Black Sea: Russia Today  6. Ukraine orders military action in the east: Al Jazeera

[The above stories are courtesy of the King Report, South African reader B.V.---and Roy Stephens]

What Germany Left Behind: A Feeling of Abandonment in North Afghanistan

For 10 years, Germany was responsible for the province of Kunduz as part of its role in the International Security Assistance Force (ISAF). It was the first real war the Bundeswehr, as Germany's military is known, participated in, and Berlin's aims were lofty indeed. German development experts were to help extend rights to women, democracy was to be fostered and the economy was to grow significantly. Billions of euros were made available -- and the blood of German soldiers was spilled. Kunduz was a place of great sacrifice.

Until Oct. 6, 2013. On that day, Germany handed over the camp to Afghanistan.

"They ran away," croaks the deputy police chief for the Kunduz province in his office and gestures dismissively. "They simply ran away. It was too soon."

"It was too soon. It was like an escape." One can hear almost exactly the same thing from the mouths of German soldiers, some of whom even compare the Bundeswehr's departure with that of the Americans from Saigon at the end of the Vietnam War. "If there is one thing the Bundeswehr is really good at, it's retreating," is a sentiment that can often be heard in the government quarter in Berlin these days.

This very interesting, but not surprising, 2-page essay appeared on the German website spiegel.de late yesterday afternoon Europe time---and it's courtesy of Roy Stephens, for which I thank him.  And if you have the time, it's worth reading.

Japan warns Beijing over ship seizure

China’s seizure over the weekend of a container ship owned by shipping giant Mitsui O.S.K Lines for its failure to respond to a wartime compensation order related to a contractual dispute has raised concerns in Japan that further assets may be confiscated if more rulings favor Chinese plaintiffs.

The container vessel was seized Saturday at a port in Zhejiang province, Shanghai municipal authorities said Sunday.

The seizure appears to mark the first time that an asset belonging a Japanese company has been seized over litigation related to wartime compensation.

The Maritime Court said that if Mitsui does not honor its legal obligations, it will dispose of the ship in accordance with the law.

This article showed up on the japantimes.co.jp Internet site on Monday---and it's worth reading as well.  It has also had a headline change in the hours between the time I posted it---and finally got around to checking the link.  It now reads "China ship seizure hikes redress fears".  My thanks go out to Roy Stephens once again.

BOJ Survey: Japan Q1 Bank Loan Demand Down; 1st in 3 Qtrs

Japan's corporate demand for financing via bank loans fell in January-March for the first time in three quarters on the back of lower capital investment and improvement of other funding tools, according to a survey of senior loan officers by the Bank of Japan, released Monday.

The BOJ's index for corporate fund demand, which is calculated by subtracting the number of banks reporting a decline in lending from the number of those reporting an increase, fell to +5 in the first quarter of 2014 from +8 in the fourth quarter of 2013.

But the index is expected to rise to +6 in the April-June quarter, the survey showed.

Loan officers cited the drop in capital spending and improvement of other funding tools as the main reasons for the drop in demand in the first quarter, according to the survey conducted from March 11 to April 10.

This very short news item, filed from Tokyo, was posted on the marketnews.com Internet site on Sunday evening---and it's another article I found embedded in yesterday's edition of the King Report.

Four King World News Blogs

1. SentimenTrader: "Presenting the Massive Tech Bubble in One Astounding Chart"  2. Dr. Stephen Leeb: "Axis of Power" as Countries Move to Link Currencies to Gold"  3. Jeffrey Saut: "Massive Volcanic Eruptions Wreaking Havoc On The World"  4. Grant Williams: "Collapse of Western Ponzi Scheme to Send Gold Skyrocketing"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Barclays joins retreat from commodities as new rules bite

Barclays will quit most of its commodities trading businesses, joining a broader retreat by banks as profits tumble in the face of tougher regulation.

The British bank's exit means three of the top five banks in commodities have significantly reduced or shuttered their natural resource trading arms since last summer, with profits hit by regulatory demands for lenders to hold more capital to shield them against any problems.

Barclays said it would exit most of its base metals, energy and agricultural trading but will continue in precious metals, some oil and gas derivatives products and index products. The smaller business will be based on electronic execution, it said.

The fact that Barclays will continue to trade precious metals should come as no surprise to anyone, as all the big banks that are selling their commodities divisions are keeping their precious metal trading desks, as you can't rig prices on the Comex if don't control the trading activity---especially when their in collusion.  This Reuters story appeared on their website during the New York lunch hour yesterday---and I found it on the sharpspixley.com Internet site.

That Was Quick! Coins Commemorate Crimea-Russia 'Reunification'

A Russian factory has produced 25 palm-sized silver coins bearing President Vladimir Putin's face to commemorate Crimea's "reunification" with Russia, state media reported on Tuesday.

“Crimea's reunification with Russia was a historic event which we decided to embody in a souvenir collection of coins made of 925 grade silver,” said Vladimir Vasyukhinsaid, the director of the factory in Yekaterinburg, Russia, according to ITAR-TASS.

Each coin weighs about 2.2 lbs. [1 kilogram] and features Putin's portrait on one side and a map of Crimea on the other. The makers had not decided how much to charge for each, the news agency reported.

This news item showed up on the nbcnews.com Internet site early yesterday morning EDT---and it's the final offering of the day from Elliot Simon, for which I thank him.

Sprott Money: Ask the Expert---Koos Jansen

This 21:08 minute audio interview with Koos was posted on their Internet site yesterday.  There's also a transcript coming, but it won't be posted until today sometime.  I haven't had the time to listen to this Q&A session as of yet, but will read the transcript later today.

Goldman Sachs Upgrades Gold/Silver Stocks to Neutral; Barrick Upped to Buy

Goldman Sachs is becoming more constructive on gold and silver equities and as a results is raising their coverage view to Neutral.

Analyst Andrew Quail said, "After underperforming the SPX by 21% since September 2013, gold and silver equities now appear more fairly valued, offering an average 7% total upside. We raise our coverage view to Neutral as we believe (1) more responsible capital allocation, (2) successful cost cutting initiatives, (3) a refocus on maximizing free cash flow, and (4) sound strategic portfolio optimization should improve the positioning of our companies offsetting our below-consensus outlook for commodity prices (we forecast $1,200/oz for gold from 2015 onwards)."

The firm is upgrading Barrick Gold Corp. to Buy, while initiating coverage on five others.

Please excuse me for asking, but isn't this the same Wall Street investment firm that said that gold at $1,050 was a slam-dunk this year?  This gold-related new item showed up on the streetinsider.com Internet site early yesterday morning EDT---and I thank Casey Research's own John Grandits for bringing it to my attention---and now to yours.

Lawrence Williams: Anglo’s platinum policy – fact or fiction?

Almost 20 years ago, Anglo American sacrificed Johannesburg Consolidated Investment (JCI) on the altar of emerging black investment in South African mining and in so doing took over the then around 50% owned JCI’s best assets. Of these perhaps the most significant were the company’s platinum mines around Rustenburg and its Union and Amandelbult operations, leaving Anglo American Platinum as comfortably the world’s largest platinum miner. Now, according to reports circulating in South Africa and in London, it appears to be looking at disposing of its deep Rustenburg platinum mining operations which it sees as a problematic and vulnerable business.

As we noted in recent articles the recent takeover of union negotiating rights on the platinum mines by the fledgling, highly aggressive, AMCU, and the subsequent now 13 week-long strike which has closed the Rustenburg mining operations, appears, according to media reports, to have focused Anglo’s mind on how to rid itself of this troublesome part of its operations, which requires a significantly higher platinum price to make it decently profitable.

As Lawrie has pointed out recently in another article on platinum mining, he's more than aware of the fact that platinum and palladium prices are just as managed as the prices of gold and silver.  This news item was posted on the mineweb.com Internet site yesterday.

¤ The Funnies







¤ The Wrap

I suppose it’s possible these new [Managed Money] longs could still end up selling at even lower prices, but anything is always possible, even if it is unlikely. Taking everything into account, including a near-record raptor net long position, a near-record technical fund short position and what may be a fully liquidated technical fund long position; that is a compelling list of buy signals. I know that the concentrated and manipulative short position of the Big 8 shorts is way too high, but between the raptors---and what now looks like new value players on the long side of the managed money category---it’s just possible those concentrated shorts may have met their match. If we do rally at some point in the short term, it will be interesting to see if the big silver shorts add aggressively from current holdings and expose themselves to greater criticism.  - Silver analyst Ted Butler: 19 April 2014

It was another day of salami slicing in gold and platinum on Tuesday.  Not much happened in palladium---and likewise silver, but the bottom, as Ted Butler has pointed out on several occasions in this column, already appears to be in.

Now all we have to do is wait and see if JPMorgan et al can force more technical funds to go short in gold as the days pass.  It was 'mission accomplished' yesterday---and it wouldn't surprise me in the slightest if the same thing happened again today, although I reserve the right to be wrong about that.

Here are the 6-month charts for both gold and silver, so you can see the lay of the land in both metals after yesterday's price action.

After heavy trading volume in silver yesterday, I was somewhat surprised to see that open interest in May had only declined by 6,223 contracts when I checked out the CME's Preliminary Report at 3:32 a.m. EDT this morning.  There are still 50,000+ contracts that have to be rolled or sold by the end of trading on Monday, so there's miles left to go.

Not much happened in gold in Far East trading on their Wednesday---and the same can be said now that London has been open 35 minutes.  Silver had a price spike about 9:30 a.m. Hong Kong time on their Wednesday morning, but it didn't take long for a seller of last resort to hammer that flat---and the silver price hasn't done much since.  Gold volume is very light for this time of day---around 18,000 contracts.  Silver's volume is pretty light as well---and about 25% of it is roll-overs out of May and into July, the next front month once May goes off the board next week.

Platinum and palladium aren't doing much of anything---and prices are mostly flat.  I note that platinum had the audacity to rally a few dollars over the $1,400 the ounce price mark---and it will be interesting to see how long that state of affairs is allowed to last.

Yesterday was the cut-off for this Friday's Commitment of Traders Report---and I'm expecting some pretty decent numbers when the report is released at 3:30 p.m. EDT on that day.

And as I send today's commentary off to Stowe, Vermont at 5:10 a.m. EDT---I note that nothing much has changed in London trading since my previous paragraph about 35 minutes after the market opened over there.  Prices are still flat across the board and volumes are up---but not by a lot---and roll-overs in silver are up by a noticeable amount.  The dollar index, which hadn't been doing much of anything up until 2 p.m. Hong Kong time, has become more agitated---and the index is currently down about 16 basis points.

Like the trading pattern in all four precious metals yesterday, I'm not expecting a lot of price activity until Comex trading begins in New York at 8:20 a.m. EDT---and after that, all bets will be off.

Enjoy your day---and I'll see you here tomorrow.

]]>
Wed, 23 Apr 2014 09:20:00 +0000
<![CDATA[China Allows Gold Imports Via Beijing Amid Reserves Buying Talk]]> http://www.caseyresearch.com/gsd/edition/china-allows-gold-imports-via-beijing-amid-reserves-buying-talk/ http://www.caseyresearch.com/gsd/edition/china-allows-gold-imports-via-beijing-amid-reserves-buying-talk/#When:09:16:00Z "Well, it was pretty much the usual hatchet job by JPMorgan et al"

¤ Yesterday In Gold & Silver

[Note: After three years without a break, I'll be taking some time off.  There will be no Gold and Silver Daily next week.  Ed]

The gold price got sold off a few dollars the moment that trading began at 6 p.m. in New York on Sunday evening.  Then two hours later at exactly 8 a.m. in Hong Kong on their Monday morning, a rally began that got met by usual not-for-profit sellers the moment it broke above $1,300 spot---and two hours later, gold hit its low tick of the day.  Volume by lunchtime in Hong Kong was north of 32,000 contracts, a spectacular amount. From there the price began to recover, but at a snail's pace---and the rally that began at the 8:20 a.m. EDT Comex open, ran into the usual sellers of last resort.  The snail's pace rally then continued into the close.

The CME Group recorded the high an lows ticks as $1,302.50 and $1,281.80 in the June contract.

Gold closed in New York on Monday afternoon at $1,290.30 spot, down only $4.30 on the day.  Volume, net of April and May, was 104,000 contracts---and as I pointed out above, over 30% of that occurred before lunch in Hong Kong.

The silver price action was a virtual carbon copy of what happened to the gold price.  The low was in at 10 a.m. Hong Kong time, with a secondary low at 1 p.m. BST London time---20 minutes before the Comex open---and the subsequent rally from there got chopped off at the knees minutes after 9 a.m. EDT in New York.  From there it got sold down a bit---and then traded flat from about 10:30 a.m. until a smallish rally began at 3:45 p.m. in electronic trading.

The high and low ticks were recorded as $19.705 and $19.23 in the May contract---an intraday move over a bit more than 2%.

Silver finished the Monday trading session at $19.44 spot, down 21 cents from Thursday's close.  Net volume was pretty light at only 22,000 contracts. Gross volume was 32,000 contracts, with an incredible 11,000 of those contracts being traded by noon in Hong Kong.

Platinum's vertical price spike at the Sunday night open immediately ran into a wall of sellers of last resort---and that forced the price to chop around within a five dollar range of its Thursday close, even though it was obvious that the price want to rally strongly as well.  The Far East low came shortly after 10 a.m. Hong Kong time---and from there it chopped its way higher until shortly before 10 a.m. BST London time.  The selling pressure began once again at that point---and the price went into a slow decline until 12:30 p.m. in New York.  From there it traded sideways, with three attempts to force the price lower after that, but all of them failed.

Palladium took off to the upside at the open on Sunday night as well---but the moment it got a sniff of the $800 spot price, a not-for-profit seller was there to put a quick end to that rally attempt.  By the Comex open, palladium was down a bit more than a percent.  But the HFT boyz showed up at, or just minutes after, the London p.m. gold fix---and palladium got creamed for another 2% in very short order.  From there it rallied a bit into the close.

The dollar index closed at 79.85 late on Thursday afternoon in New York last week.  And even though the gold markets were closed, the dollar index did trade on Friday, but didn't do much.  It got as high as 79.92 in early Far East trading on their Monday morning---but began to sell off almost immediately, with the 79.80 low of the day, such as it was, coming at 10 a.m. in London.  From there the index 'rallied' as high as 79.98 shortly before noon in New York---and slid a hair into the close.  The index closed at 79.95---up ten basis points from Thursday's close, but the scale of the chart makes the 'action' appear far more impressive than it really was.  However, it is interesting to note that the rally---such as it was---failed to break back above the 80.00 mark.

As has been the case lately, the gold stocks opened in positive territory, only to get sold down into the red almost right away---and as you can tell, this was the procedure again yesterday.  The low of the day came shortly after 1 p.m. EDT in New York---and the HUI rallied for the remainder of the day, cutting its loss to only 0.23%.

And as has also been the case, the silver stocks stunk up the place once again.  Even though the HUI and Nick Laird's Intraday Silver Sentiment Index had the same chart pattern, the silver stocks closed down 1.23%.

The CME's Daily Delivery Report showed that 68 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  Jefferies was the only short/issuer of note with 66 contracts---and it was the usual two suspects as long/stoppers---JPMorgan and Canada's Scotiabank.  The link to yesterday's Issuers and Stoppers Report is here.

Since I'm talking about delivery, there are still a huge number of silver contracts in the May contract---58,529 as of this writing---that have to been sold or rolled by the end of next Monday's trading day.  Whoever isn't out by that time is obviously standing for delivery.  But with only five trading days left between now and then, the activity in the May contract month will be fast and furious up until then.

Another day---and another withdrawal from GLD. This time an authorized participant took out 96,327 contracts.  And as of 7:20 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I checked back there at 9:35 p.m.----I was astonished to discover that an authorized participant had deposited 1,729,976 troy ounces.   Based on current price activity, this deposit must have been used to cover an existing short position, as no other explanation is possible under the circumstances.

The U.S. Mint had a sales report.  They sold 691,500 silver eagles---and that was it.

Over at the Comex-approved depositories on Friday, they reported receiving 16,557 troy ounces of gold---and shipped out 32,092 troy ounces.  All the activity was at Brink's, Inc. and HSBC USA.  The link to that is here.

There wasn't much activity in silver, as nothing was reported received---and only 104,747 troy ounces were shipped out the door.  All the activity was at CNT---and the link to that activity is here.

The Commitment of Traders Report [for positions held at the close of Comex trading on Tuesday, April 15] was more or less what I was hoping to see---as it appeared most, if not all, of the volume from Tuesday's big price hit in both gold and silver showed up in the numbers.  There will most likely be some spill-over into this Friday's report, but it shouldn't be a huge amount.

Because I didn't have a column on Saturday, I'm "borrowing" a decent amount of stuff from Ted Butler's COT commentary to his paying subscribers on the weekend, which is a luxury I can't remember ever enjoying before.

In silver, the Commercial net short position declined by a chunky 5,611 contracts, or 28.1 million troy ounces.  The Commercial net short position now sits at 116.5 million troy ounces.  Ted says that JPMorgan covered 1,700 short contracts---and pegs JPMorgan's concentrated net short position around 20,000 contracts, or 100 million troy ounces.  JPMorgan's short position represents about 86% of entire short position in the Commercial category.

Ted mentioned last week that there was obviously a 9-10,000 contract "value investor" embedded on the long side of the Managed Money/Technical Fund/Non-Commercial category that has been there since October of last year---regardless of what was happening price wise---up or down.  Even after last Tuesday's big sell-off, that long position was still intact in this report.

Unless "da boyz" can force the holder[s] of this position to liquidate, Ted feels that the bottom in silver is within a handful of contracts of being in---and that should most likely be confirmed by this coming Friday's COT Report.

In gold, the Commercial net short position declined by 14,138 contracts, or 1.41 million ounces.  The Commercial net short position is now down 87,605 contracts, or 8.76 million troy ounces.  Ted said that the eight largest Commercial traders bought back 3,200 contracts---and their net short position is now the lowest in nearly a year---and that JPMorgan purchased "up to" 2,000 new long contracts---and their long-side corner in the Comex gold market is up to 38,000 contracts, or 3.8 million ounces.

About gold's current situation, silver analyst Ted Butler had this to say---"Looking under the hood in the disaggregated report at the managed money category of gold and comparing the current technical fund position with historical levels, there doesn’t appear to be much room for further technical fund long liquidation; no more than 5,000 to 10,000 contracts of gross long liquidation compared to previous record low readings."

Ted also said that "The concentrated net short position in silver is the largest of any regulated commodity by a wide margin at the equivalent of nearly 320 million troy ounces, or 40 percent of world's yearly silver production---and it remains an oddity that the concentrated short position in Comex gold is closer to its historical low, while the concentrated short position in silver is nearer the high."

Here's Nick Laird's "Days of World Production to Cover Comex Short Positions" chart updated with Friday's numbers.  In silver, JPMorgan's current Comex short position is 50 days of world silver production in both the red and green bars.  How's that for concentration?

Ted's comments about the oddity of the the short position of the Big 8 in silver and the Big 8 in gold being at such extremes is very noticeable in this chart.

Here's another chart from Nick Laird.  This is for silver only---and is the same data that appears in the "Days to Cover" chart above.  The only difference being that it shows the short positions of the Big 4 and Big 8 traders going back seven years---and not just the current week as the "Days to Cover" chart does.  And as Ted has pointed out, as silver's price has declined, the short positions of the Big 4 and 8 traders has blown out as well, which makes no sense at all.  It's exactly the opposite in gold---and I'll have those charts for you tomorrow.

Here's a chart that skipped my mind in my Friday column.  Since the 20th of the month fell on a weekend, The Central Bank of the Russian Federation updated their website with their March data---and it showed no change in their gold reserves which still sit at 33.5 million troy ounces.  Here's Nick Laird's most excellent chart.

Since it was four days since my last column, I have a large number of stories for you today.  I've already hacked and slashed more than I wanted to, so I'll happily leave the final edit up to you.

¤ Critical Reads

Gasoline Prices Rise to 13-Month High in Lundberg Survey

The average price for regular gasoline at U.S. pumps jumped 8.5 cents in the past two weeks to a 13-month high of $3.6918 a gallon, according to Lundberg Survey Inc.

The survey covers the period ended April 18 and is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company.

Prices are the highest since March 22, 2013. The average is 15.55 cents higher than a year ago, Lundberg said. Gasoline has risen 39.74 cents a gallon since bottoming out in February and is up 43 cents this year.

“The most important factor right now in this rise is crude oil, which rose by a very similar amount to the street-price move,” Trilby Lundberg, the president of Lundberg Survey, said in a telephone interview Sunday. “From here, we will probably see very little increase, if any, with the big caveat of course being crude. If crude prices climb even higher, then this may not be the peak.”

Today's first news item, which is courtesy of West Virginia reader Elliot Simon, was posted on the moneynews.com Internet site on Sunday afternoon EDT.

Brown Economists: 'Secular Stagnation' May Strangle Economy

The U.S. economy may not mend its woes soon and instead may suffer a bout of "secular stagnation," Brown University economists Gauti Eggertsson and Neil Mehrotra maintain in a recent paper.

A deleveraging shock, a drop in population growth, or an increase in income inequality could shift people from borrowing to savings, the economists say. Essentially, there simply aren't enough promising real-world investments, forcing investors to put their money into stocks, junk bonds, etc. — and not investments that create demand for a product. This weak demand results in economic stagnation.

And with a short-term interest rates already at zero, the Fed will be "unable to generate a sufficient monetary stimulus," they assert. The outcome: a "permanent slump in output," Eggertsson and Mehrotra write.

"It's not a baseline scenario, but I think people should at least be starting to consider the possibility that this could go on for a while," Eggertsson told CNBC.com

This short article also showed up on the moneynews.com Internet site, but this one is from last Friday morning EDT---and it's also courtesy of Elliot Simon.

Doug Noland: Automatic Stabilizer?

From Yellen: “If the public understands and expects policymakers to behave in this systematically stabilizing manner, it will tend to respond less to such developments. Monetary policy will thus have an ‘automatic stabilizer’ effect that operates through private-sector expectations.”

The traditional gold standard was so effective because it in fact provided an “automatic stabilizer.” If Credit was created in excess, an economy would suffer a loss of gold. The reduced gold reserve would dictate higher rates and a (stabilizing) contraction in lending. Bankers and politicians understood the mechanics of the system (and were committed to sustaining the monetary regime), so they would tighten their belts when excess first emerged. In this way, the gold standard for the most part provided a stabilizing and self-correcting system. These days, everyone knows the Fed will not respond to excess. Our central bank, however, will be predictably quick to print additional “money” at the first sign of a faltering Bubble, liquidity that will further reward financial speculation. Excess begets excess. Today’s system is the very opposite of “automatic stabilizer.”

This all could sound too theoretical. But with the Fed intending to conclude balance sheet leveraging later in the year, this theory might soon be tested.

For obvious reasons, Doug's Friday commentary had to wait until today.  It's always worth reading---and this one is no exception, as I read it over the weekend.

Lawyers Sue Stock Market for Being Rigged

On March 30, Michael Lewis went on "60 Minutes" and said that the stock market is "rigged." This past Friday, some plaintiffs' lawyers filed a lawsuit against, um, the stock market. This raises many questions, of which the most pressing is, what took so long? The lawsuit is basically just a synopsis of Lewis's book, "Flash Boys," and, I mean, how long can that take? I feel like plaintiffs' lawyers by now must have algorithms to transform news articles into lawsuits, so what was the holdup here?

The other problem with the lawsuit is that it pretty much sues the stock market for being the stock market. So the defendants include pretty much every stock and options exchange, and also literally every brokerage, and literally every high-frequency trading firm. There's a long list of brokerages and HFT firm.

Every brokerage firm that transacted for clients since April 2009 is (supposedly!) a defendant in this lawsuit, including just for instance noisy HFT critics Themis Trading. And everyone who "operated alternative trading venues which provided venues for the anonymous placing of bids and offers" is (supposedly!) a defendant, including just for instance Michael Lewis's heroes at IEX.

This Bloomberg story showed up on their website late yesterday morning EDT---and it's the first offering of the day from Roy Stephens.

Eight E.U. states in deflation as calls grow for Q.E. in Sweden

Sweden has become the first country in northern Europe to slide into serious deflation, prompting a blistering attack on the Riksbank’s monetary policies by the world’s leading deflation expert.

Swedish consumer prices fell 0.4pc in March from a year earlier, catching the authorities by surprise and leading to calls for immediate action to avert a Japanese-style trap.

Lars Svensson, the Riksbank’s former deputy governor, said the slide into deflation had been caused by a “very dramatic tightening of monetary policy” over the past four years. He called for rates to be slashed from 0.75pc to -0.25pc to drive down the krona, and advised the bank to prepare for quantitative easing on a “large scale”.

Prof Svensson said Sweden was at risk of a “liquidity trap” akin to the 1930s, with deflation causing debt burdens to ratchet up in real terms. Swedish household debt is 170pc of disposable income, among Europe’s highest.

This Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site late Friday evening BST---and it's definitely worth reading.  It's the second offering in a row from Roy Stephens.

Shell tells Putin gas project not derailed by Ukraine

Royal Dutch Shell’s new CEO Ben Van Beurden met with Russian President Vladimir Putin on Friday, signaling Ukraine tension has not affected investment in Russia, and that energy contracts won't be derailed by international politics.

Chief executive Van Beurden met with the president at his residence outside of Moscow and reaffirmed the company’s commitment to develop Russia’s only liquefied natural gas (LNG) plant with Gazprom.

"We also know that this is going to be a project that will need strong support to succeed. So one of my purposes of meeting with you, Mr. President, is to also secure support for the way forward on this project," Van Beurden said.

“Now is the time to expand this lucrative project, we will need strong support to make it a success,” the oil chief said.

This news item showed up on the Russia Today website on Friday afternoon Moscow time---and I thank South African reader B.V. for sending it our way.

Deadly shootout in eastern Ukraine threatens Geneva deal

The deadly shootout near the eastern Ukrainian city Slaviansk during the early hours of Sunday has sparked a heated international war of words in the wake of a deal signed in Geneva aimed at averting a broader conflict in the region.

At around 2am (11pm GMT), four vehicles rolled up to a separatist checkpoint near Slaviansk where they opened fire, pro-Russian militants reported. Three people were killed and three more wounded, police in Ukraine’s capital Kiev confirmed.The exact details and who was responsible for the incident are still unclear.

The deaths were the first from armed clashes in eastern Ukraine since Russia, Ukraine, the European Union and the United States signed a truce agreement in Geneva on Thursday calling for all illegal armed groups to surrender their weapons and vacate public buildings in Ukraine.

Sunday’s shootout, however, triggered a war of words between Russia and Ukraine’s government, with each questioning the others commitment to the Geneva deal, which sought in part to bring an end to the worst crisis between the West and Russia since the end of the Cold War.

This news item showed up on the france24.com Internet site early yesterday morning sometime---and it's another contribution from Roy Stephens.

Russia, U.S. Trade Blame as Ukraine Accord Nears Collapse

Russia and the U.S. traded blame for failing to rein in extremists in Ukraine, as a diplomatic accord reached last week all but collapsed.

U.S. Secretary of State John Kerry warned Russian Foreign Minister Sergei Lavrov today that “there will be consequences” if Russia fails to act “over the next pivotal days” to restrain pro-Russian militants in eastern Ukraine, spokeswoman Jen Psaki said in Washington. In Moscow, Lavrov called on the U.S. to hold Ukraine’s interim government accountable for curbing what Russia portrays as right-wing militias.

The agreement signed in Geneva by Ukraine, the European Union, the U.S. and Russia on April 17 calls for all illegal groups to give up their arms and return seized buildings. Pro-Russian forces held their ground in several eastern cities, as their leaders denied they were bound by the accord. The government in Kiev has said Russia is behind the unrest, exploiting the situation to prepare a potential invasion.

This Bloomberg story, co-filed from Moscow and Kiev, was posted on their Internet site early yesterday afternoon Denver time.

Only Ukraine Can Make Peace Happen

If the Ukrainian government in Kiev thinks that the truce signed last week in Geneva will make pro-Russian rebels go away, it had better think again.

Developments before and since the Geneva agreement, signed on April 17, demonstrate that Ukraine is a genuinely divided nation, in which Russian interference is merely a catalyst of resentment. Observers from the Organization for Security and Cooperation in Europe, led by the pedantic German diplomat Klaus Zillikens, have reported that neither side is following the agreement. As of April 19, pro-Russian rebels were still holding on to buildings in Donetsk, Lugansk and surrounding small towns, and Ukrainian "self-defense" paramilitaries in Dnepropetrovsk and Kherson were refusing to give up weapons or "regularize."

This should come as no surprise, given that no one in Geneva fully represented the sides in the actual conflict. The interim government is uneasy about the paramilitaries left over from the Maidan revolution that brought it to power. Russia has never admitted it had enough influence over the rebels in the east to make them lay down their arms. To Zillikens the stickler for precision, Russian presence in eastern Ukraine is not even an established fact. "There are signs that foreign consultants worked in Ukrainian territory," he told Echo Moskvy radio. "We do not, however, have any clear proof of that."

This very short Bloomberg op-ed piece showed up on their website yesterday sometime, I believe.  But it's hard to tell, as there's no dateline.  I thank Roy Stephens for sharing it with us---and it's worth reading.

Pepe Escobar: Ukraine and the grand chessboard

Ukraine is for all practical purposes broke. The Kremlin's consistent position for the past three months has been to encourage the European Union to find a solution to Ukraine's dire economic mess. Brussels did nothing. It was betting on regime change to the benefit of Germany's heavyweight puppet Vladimir Klitschko, aka Klitsch The Boxer.

Regime change did happen, but orchestrated by the Khaganate of Nulands - a neo-con cell of the State Department and its assistant secretary of state for European and Eurasian Affairs Victoria Nulands. And now the presidential option is between - what else - two US puppets, choco-billionaire Petro Poroshenko and "Saint Yulia" Timoshenko, Ukraine's former prime minister, ex-convict and prospective president. The EU is left to pick up the (unpayable) bill. Enter the International Monetary Fund - via a nasty, upcoming "structural adjustment" that will send Ukrainians to a hellhole even grimmer than the one they are already familiar with.

Once again, for all the hysteria propagated by the US Ministry of Truth and its franchises across the Western corporate media, the Kremlin does not need to "invade" anything. If Gazprom does not get paid all it needs to do is to shut down the Ukrainian stretch of Pipelineistan. Kiev will then have no option but to use part of the gas supply destined for some EU countries so Ukrainians won't run out of fuel to keep themselves and the country's industries alive. And the EU - whose "energy policy" overall is already a joke - will find itself with yet another self-inflicted problem.

This absolute must read commentary by Pepe was posted on the Asia Times Internet site last Thursday---and it's another contribution to today's column from reader B.V.

BRICS aim to finish development bank preparations by July summit

The BRICS bloc of emerging economies will have all preparatory work done for setting up its development bank by the group's summit in July, South African Finance Minister Pravin Gordhan said on Thursday.

The bank Brazil, Russia, India, China and South Africa plan to support infrastructure projects has been slow in coming, with prolonged disagreements over its funding, management and headquarters.

The group, which has struggled to take coordinated action on most issues in the past year after the scaling back of U.S. stimulus prompted an exodus of capital from their markets, is hoping their leaders will officially launch the bank at their July meeting in Brazil.

"We've made very good progress on the new development bank and most of the formal documentation is ready," Gordhan told journalists after a meeting of the BRICS finance ministers in Washington.

This Reuters story, filed from Washington, is 11 days old but dovetails nicely with the Escobar commentary above---and it's also courtesy of reader B.V.

Iran Gets an Unlikely Visitor, an American Plane, but No One Seems to Know Why

President Obama has warned that Iran is not open for business, even as the United States has loosened some of its punishing economic sanctions as part of an interim nuclear pact.

Yet on Tuesday morning, Iran had an unlikely visitor: a plane, owned by the Bank of Utah, a community bank in Ogden that has 13 branches throughout the state. Bearing a small American flag on its tail, the aircraft was parked in a highly visible section of Mehrabad Airport in Tehran.

But from there, the story surrounding the plane, and why it was in Iran — where all but a few United States and European business activities are prohibited — grows more mysterious.

While federal aviation records show the plane is held in a trust by the Bank of Utah, Brett King, one of its executives in Salt Lake City, said, “We have no idea why that plane was at that airport.”

This very interesting story showed up on The New York Times website last Friday---and is certainly worth your time, if you have it.  Once again my thanks go out to Roy Stephens for digging it up for us.

U.S. says forfeiture over Iran assets in New York, elsewhere will be record terror-related deal

A federal judge has approved plans to sell a 36-story Manhattan office building and other properties owned by Iran nationwide in what will be the largest terrorism-related forfeiture ever, a prosecutor said Thursday.

U.S. Attorney Preet Bharara said Judge Katherine Forrest approved the deal between the U.S. government and 19 holders of more than $5 billion in terrorism-related judgments against the government of Iran, including claims brought by the estates of victims killed in the Sept. 11, 2001, terrorist attacks.

The deal calls for the Manhattan building and other forfeited assets to be sold by the U.S. Marshals Service, with the U.S. government receiving reimbursement for litigation expenses and any costs of the sales before the rest is distributed to victims of terrorist attacks. The agreement stems from a 2008 lawsuit by the government against the building's owners.

Bharara said the settlement is an important step toward "completing what will be the largest ever terrorism-related forfeiture and providing a substantial recovery for victims of terrorism."

Excuse me for bringing up an "Inconvenient Truth"---but most of the "hijackers" involved in 9/11 were from Saudi Arabia---that's if you believe the American government's fairy tale about what happened on that day.  This AP story was picked up by Fox News---and posted on their Internet site on Thursday sometime---and I thank internationalman.com senior editor Nick Giambruno for bringing it to our attention.

China Court Impounds Japanese Ship in Unprecedented Seizure

A Shanghai court ordered the seizure of a Japanese ship owned by Mitsui OSK Lines Ltd. as compensation for the loss of two ships leased from a Chinese company before the two countries went to war in 1937.

The 226,434-ton Baosteel Emotion was impounded on April 19 at Majishan port in Zhejiang province as part of a legal dispute that began in 1964, the Shanghai Maritime Court and Mitsui OSK said in notices on their websites.

The holding of the ship reflects strained ties between China and Japan amid a territorial dispute over an island chain and visits by Japanese politicians to a Tokyo shrine honoring that country’s war dead. The move is the first time a Chinese court has ordered the seizure of Japanese assets connected to World War II, and could cast a pall over the countries’ trade, according to Shogo Suzuki, a senior lecturer at the University of Manchester in the U.K. who studies China-Japan relations.

Wow!  This is an ugly turn of events---and certainly turns up the tension level more than a notch.  This Bloomberg news item, filed from Beijing, was posted on their website in the wee hours of yesterday morning MDT---and it's definitely worth reading.  It's also courtesy of Roy Stephens.

Japan’s Trade Deficit Widens as Export Growth Weakens

Japan’s weakest export growth in a year spurred a wider-than-forecast trade deficit in March, adding to challenges for Prime Minister Shinzo Abe in steering the economy through the aftermath of an April 1 sales-tax rise.

The 1.8 percent rise in the value of shipments overseas from a year earlier, reported today by the Ministry of Finance, compared with a 6.5 percent median estimate of 27 economists in a Bloomberg News survey. An 18.1 percent jump in imports helped widen the deficit to the biggest ever for the month.

Exports by volume fell the most since June last year, suggesting external demand may fail to provide much support for an economy set to contract this quarter. A spending spree ahead of the tax increase boosted imports, already swollen by a surge in energy costs due to the yen’s slide and nuclear shutdowns.

This Bloomberg news item, filed from Tokyo, was posted on their Internet site late on Sunday evening Mountain Daylight Time---and I found it in yesterday's edition of the King Report.

Nine King World News Blogs/Audio Interviews

1. Victor Sperandeo [#1]: "Legend Who Predicted 1987 Crash Warns "This Will End Badly"  2. Egon von Greyerz: "A Bankrupt World---$26,000 Gold---and the Destruction of Wealth"  3. James Turk: "Gold Market Now Seeing Deepest Backwardation in 8 Months!"  4. Victor Sperandeo [#2]: "The Catastrophic End Game---and Skyrocketing Gold Prices"  5. Ronald-Peter Stoferle: "Two of the Most Remarkable Charts We've Seen This Year"  6. Robert Fitzwilson: "Shocking Events Rapidly Unfolding Around the World"  7. Richard Russell:  "The Dollar Will Crash in a Matter of Months"  8. The first audio interview is with Victor Sperandeo---and the second audio interview is with Dr. Philipa Malmgren

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]
 

Sprott's Thoughts: Why Rick Rule Says ‘Anti-gold Investors Will be Destroyed’

Gold has made its way down again, to around 1,300 per ounce this month. Rick Rule, Chairman of Sprott Global Resource Investments Ltd. says that a few years out, you will be happy you stuck with gold.

For context to today’s downturn, look back at the great bull market for gold in the 1970s’.

As Rick recently put it to King World News, “that is the kind of regret that no investor wants to live with for the rest of their lives.”

Rick believes the overall bull market will return and produce substantial returns to investors who own gold.

China Spot Copper Premium Surges as Supply Cut: Chart of the Day

Copper fabricators in China, the biggest consumer, are paying the highest premium in 29 months to secure delivery of the metal that’s used in everything from electric wires to water pipes.

Chinese smelters are hoarding the metal in bonded warehouses in an attempt to drive up the local price against the rate in London and sell it abroad at a profit, according to SMM Information & Technology Co. At the same time, local traders have locked up as much as 1 million metric tons as collateral to get credit for other investments, Goldman Sachs Group Inc. said on March 18.

The CHART OF THE DAY tracks spot prices in Shanghai and the futures contract for immediate delivery on the Shanghai Futures Exchange. The lower panel shows the premium reached 585 yuan ($94) a ton on April 16, the highest level since November 2011.

“The premium has surged while stockpiles in the physical market are decreasing rapidly as Chinese smelters are selling their copper to bonded zones,” said Jiang Ning, a senior analyst with Shanghai-based SMM Information.

This Bloomberg piece, filed from Shanghai, was posted on their Internet site at noon in Denver on Sunday---and it's the final offering of the day from Elliot Simon.

The New York Sun: Piketty's Gold?

In terms of public policy, though, we favor honest money. It works out better for more people. And there is a moral dimension to the question of honest money. This was a matter that was understood — and keenly felt — by the Founders of America, who almost to a man (Benjamin Franklin, a printer of paper notes, was a holdout), cringed with humiliation at the thought of fiat paper money. They’d tried it in the revolution, and it had been the one embarrassment of the struggle. They eventually gave us a Constitution that they hoped would bar us from ever making the same mistake.

There is an irony here for Monsieur Piketty. It was France who gave us Jacques Rueff, the economist who had the clearest comprehension of the importance of sound money based on gold specie. He was, among other things, an adviser of Charles de Gaulle. It was de Gaulle who in 1965, called a thousand newspapermen together and spoke of the importance of gold as the central element of an international monetary system that would put large and small, rich and poor nations on the same plane. We ran the complete text of Professor Piketty’s book “Capital” through the Sun’s own “Electrically-operated Savvy Sifter” and were unable to find, even once, the name of Rueff.

Reflecting on French economist Thomas Piketty's new book, "Capital," The New York Sun offers a most politically incorrect explanation for the explosion in income inequality and unemployment in the United States since the 1970s: the end of the dollar's gold convertibility and the unleashing of the age of infinite fiat money.  I found this N.Y. Sun editorial embedded in a GATA release yesterday---and it's worth reading.

Barrick Proposal to Acquire Newmont Hits Roadblock, Sources Say

Talks between Barrick Gold Corp and Newmont Mining Corp about a potential merger have hit a snag, but sources close to the situation say the companies remain keen to reach a deal and discussions are likely to resume.

The talks had been on for a few weeks, and the two sides had broadly agreed to a transaction under which Toronto-based Barrick would acquire Denver-based Newmont in an all-stock deal, said one source close to the matter.

That source said the deal would offer Newmont shareholders a slight premium to its current share price. Newmont shares rose 6.4 percent to close at $25.05 on the New York Stock Exchange, while Barrick's shares edged down 78 cents Canadian to C$19.03.

The sources, who asked not to be named due to the sensitive nature of the situation, said the talks have stalled over the issue of the spin-out of some assets from the combined entity, which is among the hurdles to a deal.

This gold-related story showed up in a Reuters piece filed from Toronto very early yesterday evening---and another item I found over at the gata.org Internet site yesterday.

Press’ anti-gold scare tactics largely ineffective

The first lesson to file for future reference is that major banks with huge balance sheets and big-name consultants do not necessarily have a better crystal ball on the gold price than anyone else. The second is that, when it comes to gold reporting, one should not accept as gospel everything one sees or reads in the mainstream media. Its traditional anti-gold bias bleeds from its pages, so to speak, and should be taken with a grain of salt.

The mainstream media, for whatever reason, continues to believe that it can scare potential gold owners away with its consistently negative coverage, but as a recent Gallup Poll suggests, such tactics no longer work all that well. That poll ranks gold the second best option among long-term investments behind real estate and tied with stocks.

What makes gold’s poll performance interesting is that it reflects public opinion on gold after a more than two year decline that began in 2011 and at a time when real estate and stocks have enjoyed strong performances. In 2011, after ten straight years of annual gains, the public ranked gold the number one investment. Prior to 2011 gold was not included in the Gallup survey.

This commentary by Mike Kosares, was posted on the usagold.com Internet site on Sunday---and it's certainly worth skimming.

Sprott cites GATA consultant on Chinese demand, notes paper bombing of gold

Interviewed by Sprott Money News, Sprott Asset Management CEO Eric Sprott cites gold researcher and GATA consultant Koos Jansen and GoldMoney's Alasdair Macleod in support of his belief that the World Gold Council's estimates of China's gold demand are grossly understated. Sprott also discusses last week's manipulation of the gold market via the dumping of a huge amount of paper gold.

The interview, which was posted on the sprottmoney.com Internet site last Thursday, runs for 10:28 minutes.

CORRECTION: Platinum producers increase wage offer, negotiations resume

Editor's note: A previous version of this article titled "Platinum producers capitulate on union pay demand" updated by Mineweb's Kip Keen incorrectly stated Impala Platinum and Anglo American had met Association of Mineworkers and Construction Union (AMCU) demands. Mineweb apologises for any confusion it created.

While the platinum producers new offer is significant and guarantees more years of higher wage increases, it does not fully meet AMCU demands.

The AMCU has asked for an increase in basic pay to R12,500 over a 4-year period for entry-level workers.

Impala and Anglo American are now offering R12,150 in cash remuneration - which includes basic pay but also a living allowance and holiday pay - over a five year period for entry-level workers. The new offer would be reached by 2017 and, as previous offers, would be back dated to mid 2013.

It's obviously back to the drawing board for negotiations between the platinum producers and their workers in South Africa.  This correction to the mineweb.com's Thursday story was posted on their website shortly after the original news item showed up there.

China stands tough on rare earths trade war; appeals WTO ruling

China’s Ministry of Commerce (MOFCOM) announced Thursday that it will appeal a World Trade Organization ruling that China’s restrictions on rare earths, molybdenum and tungsten exports violate global trade rules.

In response to a reporter’s question during a press briefing Thursday, Ministry of Commerce spokesman Shen Danyang told reporters China would present its cross appeal to the WTO Thursday.

No matter what the outcome of the appeal, Shen said, China will continue to protect resources and environmental policy objectives will not change. China will continue to comply with the WTO rules on strengthening the management of resources products and maintaining fair competition, he stressed.

This news item showed up on the mineweb.com Internet site last Friday.

China allows gold imports via Beijing, sources say, amid reserves buying talk

China has begun allowing gold imports through its capital Beijing, sources familiar with the matter said, in a move that would help keep purchases by the world's top bullion buyer discreet at a time when it might be boosting official reserves.

The opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong's pole position in China's gold trade, as the mainland can get more of the metal it wants directly rather than through a route that discloses how much it is buying.

China does not release any trade data on gold. The only way bullion markets can get a sense of Chinese purchases is from the monthly release of export data by Hong Kong, which last year supplied $53 billion worth of gold to the mainland.

"We have already started shipping material in directly to Beijing," said an industry source, who did not want to be named because he was not authorised to speak to the media. The quantities brought in so far are small, as imports via Beijing have only been allowed since the first quarter of this year, sources said.

This very interesting Reuters story, filed from Singapore yesterday, is definitely a must readZero Hedge also had something to say about this story as well.  It's headlined "China Goes Dark: PBOC to Keep Goldbugs Clueless About Its Gold Buying Spree"---and is courtesy of reader Bill Crampton.

¤ The Funnies

¤ The Wrap

There is potentially more substantial capacity for new technical fund short gold contracts to be added before we hit historical extremes. Therein lies the only real threat to lower gold prices, namely, can the commercials lure the technical funds onto the short side of COMEX gold? I don’t have the answer to that question but I can assure you that if we do go lower in the gold price in the immediate future, this will be the only explanation for the decline. - Silver analyst Ted Butler: 19 April 2014

Well, it was pretty much the usual hatchet job by JPMorgan et al in the precious metal markets again yesterday.  Gold, as Ted Butler mentioned, is still 5-10,000 contracts off its low point---and it remains to be seen if they can, or will, finish the job in the days ahead.  I noted that despite the pounding that silver took in early Far East trading on their Monday morning, that it did not take out its Thursday low---and as Ted has said, that metal is pretty much done to the downside, unless "da boyz" can blow out that 9-10,000 long position in the Managed Money category.

And as I noted further up, there are still about 58,000 silver contracts still open in the May contract, so there have to be some serious roll-overs between now and the end of trading next Monday.  I'll be interested in seeing what sort of price action accompanies that activity.

Here are the 6-month charts updated with Monday's data.

With all the 'stuff' going on in the world at the moment, it's amazing to watch how easily that JPMorgan et al can still control world prices in all four precious metals.  The world's financial, economic, monetary---and now political---situations are well into the ditch.  And that doesn't include the ongoing strike in South Africa which is fast approaching its 11th week.  It's obvious that if the powers that be weren't ridding shotgun on these market 24/7---that the rush to precious metals would be on in earnest.  This is obviously a situation that they don't want to happen---and if there is a way out, it would be the simultaneous repricing of all four precious metals at a time when no one was able to react.  The Easter weekend would have been a terrific time fore that, but if it's in the cards at all, it's obvious that the event is still in the future at some point.

Not much happened in Far East trading on their Tuesday---and most of the lows of the day, at least up until now, came in early afternoon trading Hong Kong time.  I note once again that silver did not breach its Thursday low.  Once these lows were in, all the metals rallied a bit going into the London open, but are now all of their highs of the day.  Both gold and silver are down a bit from Monday's New York close---and platinum and palladium are up.  Gold and silver volumes are pretty light for this time of day---and light years away from where they were this time yesterday.

Today is the cut-off for this Friday's Commitment of Traders Report.  The previous Tuesday we had a huge engineered price decline in both gold and silver, but most of that volume/price data was in last Friday's COT Report---and whatever data didn't make it by the cut-off will be in this Friday's report.  I'm hoping that we won't see a repeat of a week ago during the New York session today, but you just never know with both options and futures expiry coming up hard in the next day or so---and still more down-side work in the gold price left unfinished.

And as I hit the send button on today's column at 5:30 a.m. EDT, I see that gold is rallying a bit---and is a dollar or so above yesterday's close in New York---and silver is back to yesterday's closing price as well.  Platinum and palladium are still up on the day. Gold volume is about 'normal'---with virtually all of it in the current front month. 

Net volume in silver is not very heavy, with decent roll-over activity already in progress.  The dollar index has rolled over a bit---and is down 6 basis points at the moment.

I haven't a clue what the rest of the trading day will be like, but I'll be watching the trading activity for the rest of the week with great interest.

That's all I have for today, which is more than enough---and I'll see you here tomorrow.

]]>
Tue, 22 Apr 2014 09:16:00 +0000
<![CDATA[Platinum Producers Capitulate on Union Pay Demand]]> http://www.caseyresearch.com/gsd/edition/platinum-producers-capitulate-on-union-pay-demand/ http://www.caseyresearch.com/gsd/edition/platinum-producers-capitulate-on-union-pay-demand/#When:09:19:00Z "Wonder why palladium and platinum didn't head south at the same time"

¤ Yesterday In Gold & Silver

[NOTE: Unless the precious metal markets are open in New York today---and there's something worth reporting if they are---I can absolutely guarantee that I won't have a column tomorrow.]

Gold chopped around the $1,300 price mark for all of the Far East and early London trading sessions yesterday.  The price rallied a bit more convincingly above the $1,300 mark once the noon silver fix in London was in---but that ended an hour later---20 minutes before the Comex open.  It was all downhill from there, with an extra kick in the pants starting at noon in New York.  By 1:10 p.m. EDT, the price was down another $7---and then traded sideways into the close.

The CME Group recorded the high and low ticks at $1,304.40 and $1,292.80 in the June contract.

Gold closed in New York at $1,294.60 spot, down $7.60 from Wednesday.  Volume, net of April and May, wasn't overly heavy at 111,000 contracts.



Not much happened in silver yesterday---and the price action really doesn't merit any comment at all---except for the fact that it was the only precious metal that didn't get kicked in the teeth during the New York lunch hour.  The low and high ticks aren't worth looking up, either.

Silver closed in New York at $19.65 spot, up two cents from Thursday.  Net volume was very light at around 19,500 contracts.



Platinum traded pretty flat up until about 12:30 p.m. in New York---and at that point, the roof caved in.  Platinum finished down $26 on the day.  And I thought for sure that palladium was finally going to close well above the $800 spot price mark, but JPMorgan et al. showed up shortly before 1 p.m. EDT and put an end to that.  Palladium closed down $5---and back below $800 per ounce.





Now there was news on the strike front that Anglo American Platinum and Impala Platinum had made a "startling" offer to AMCU, but if that was the real reason for the selloffs in both platinum and palladium, why did they occur at different times---and not simultaneously?  Just asking.

The dollar index finished the Wednesday trading session in New York at 79.83---but by 10:45 BST in London, it was down to its 79.59 low.  The subsequent rally took the index back up to 79.84 by 12:30 p.m. EDT---and the index didn't do much after that.  It finished the Thursday session almost where it started---at 79.85.



Once again the gold stocks opened in positive territory---and for the most part remained in the black until the gold price got sold down $5 starting around lunchtime in New York.  Then the shares headed south as well, and the HUI finished down another 0.92%---and on its absolute low of the day.



Despite the fact that silver outperformed gold in the New York trading session---and actually finished up on the day, that didn't affect the silver equities, as they continued to sell off as the Thursday trading session wore on.  Nick Laird's Intraday Silver Sentiment Index closed down 1.17%.



The CME's Daily Delivery Report showed that five gold and 20 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  ABN Amro was the short/issuer on the 20 silver contracts---and Canada's Scotiabank took delivery of all of them.  The link to yesterday's Issuers and Stoppers Report is here.

Another day---and another withdrawal from GLD.  This time an authorized participant took out 105,965 troy ounces.  And as of 9:10 p.m. EDT yesterday evening, there were no reported changes in SLV.

Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with the internal goings-on within SLV for the end of their reporting week on Wednesday---and this is what he had to say:  "Analysis of the 16 April 2014 bar list, and comparison to the previous week's list.  No bars were added, removed, or had serial number changes.  As of the time that the bar list was produced, it was overallocated 39.6 oz.  All daily changes are reflected on the bar list."  As you know, dear reader, despite the big decline in the silver price recently, there has been no in/out activity over at SLV worthy of the name---and I'm really starting to wonder why that is.  The link to Joshua's website is here.

There was no sales report from the US Mint.

Over at the Comex-approved depositories on Wednesday, they showed that only a tiny 353 troy ounces of gold were shipped out---and none was reported received.  I shan't bother with the link.

Of course it was a different story in silver, as it almost always is.  There was nothing reported received---and 802,042 troy ounces were reported shipped out.  It was JPMorgan and Canada's Scotiabank doing the honours---and the link to that activity is here.

Here's a FRED chart that Casey Research's BIG GOLD editor Jeff Clark sent my way yesterday---and it has finally cracked the $4 trillion mark.  Jeff mentioned that "It was $855 billion in April 2008, so that's a 368% increase in six years."



I have the usual number of stories for a weekday column---and I hope you find some you like.  Because of the Good Friday holiday,  I probably won't have a column tomorrow, because all the market are closed, so I've included all the stories that I've been saving for that---and some of them are truly incredible.

¤ Critical Reads

NYT: Rents No Longer "Affordable" for Most Americans

Demand for rental housing has soared over the past seven years, and that has pushed rents higher than many middle-class Americans can afford to pay.

A rule of thumb is that households shouldn't pay more than 30% of their income on rent and utilities.

But now half of U.S. renters devote more than 30% of their income to housing, up from 38% in 2000, revealed a report from Harvard University.

Housing Secretary Shaun Donovan has called this "the worst rental affordability crisis that this country has ever known."

The story from The New York Times showed up on the moneynews.com Internet site early Wednesday afternoon EDT---and today's first news item is courtesy of West Virginia reader Elliot Simon.

IHS Economist: "Living Standards Will Suffer" as Food Prices Surge

Food prices are registering sharp gains, climbing 0.4% in both February and March and threatening to put a damper on the economy.

What's happening is that wholesalers have raised the prices they charge grocers, and grocers in turn have passed along the increases to their customers, USA Today reports. That obviously creates a hardship for consumers, who account for about 70% of GDP.

"Living standards will suffer, as a larger percentage of household budgets are spent on grocery store bills, leaving less for discretionary spending," Chris Christopher, an economist at IHS Global Insight, told USA Today.

The bad news may not be over. California's drought will probably push prices upward this year for fruits and vegetables, including avocados, lettuce and berries, Timothy Richards, a professor at Arizona State University's business school, told the paper.

This short article from USA Today on Thursday, was also picked up by the moneynews.com Internet site---and it's also courtesy of Elliot Simon.

Hedge Funds Post Worst First-Quarter Results Since 2008

It’s time again for another installment of “Hedge Funds Are a Ripoff,” our long-running series chronicling the asset class’s habit of underperforming far less exotic investments while charging more and limiting clients’ access to their own money.

Hedge funds posted their worst first-quarter results since 2008, according to financial data service Preqin, whose “All Hedge Fund Strategies” index shows a gain of 1.2% since the start of the year. That compares with a 1.8% total return for the Standard & Poor’s 500-stock index through March 31. Hedge funds have badly trailed plain-vanilla equities over the past 12 months, gaining 8.53% vs. 19.32% for the S&P. In 2013, the gap between hedge funds and stocks was the widest since 2005.

Defenders of hedge funds often get exasperated when the asset class gets compared with stocks: The investments are not supposed to outperform equities when the market is on a tear, this argument goes—they operate complicated strategies that hedge against lots of contingencies, so that they do well in all types of weather. Well, nobody would call 2014 a bull market, and hedge funds aren’t exactly shining now, either.

This piece appeared on the businessweek.com Internet site on Wednesday---and I found it in yesterday's edition of the King Report.

Matt Taibbi: The SuperRich in America Have Become "Untouchables" Who Don't Go to Prison

Earlier this month, attorney James Kidney, who was retiring from the Securities and Exchange Commission, gave a widely reported speech at his retirement party. He said that his bosses were too "tentative and fearful" to hold Wall Street accountable for the 2008 economic meltdown. Kidney, who joined the SEC in 1986, had tried and failed to bring charges against more executives in the agency’s 2010 case against Goldman Sachs. He said the SEC has become "an agency that polices the broken windows on the street level and rarely goes to the penthouse floors. ... Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening," he said.

Well, for more, we turn to our guest Matt Taibbi, award-winning journalist formerly with Rolling Stone magazine, now with First Look Media. His new book is called The Divide: American Injustice in the Age of the Wealth Gap.

Matt, we welcome you back to Democracy Now! It’s a remarkable, important, certainly needed book in this day and age. Talk about the thesis. What is the divide?

This interview/book review was posted on the alternet.org website on Tuesday---and for content and length reasons, had to wait for today's column.  It's the first offering of the day from Roy Stephens.  This will be on my must-read pile for the weekend.

After Success on Iran, US Treasury's Sanctions Team Faces New Challenges

This is what the modern American war room looks like: the clocks on the wall show the times in Kabul, Tehran and Bogota. The faces around the conference table are mostly young. There is talk of targets, and of middle-of-the-night calls to Europe.

But the meeting one recent morning convened deep within the Treasury Department, not the Pentagon. The weapons at hand were not drones or cruise missiles, but financial sanctions, aimed with similar precision at U.S. rivals' economic interests.

Before discussing possible next steps against Russia over its annexation of Crimea, Adam Szubin, the slim, boyish-looking director of Treasury's Office of Foreign Assets Control, thanked his team for putting in a string of sleepless nights to devise sanctions against senior Russian officials and associates of President Vladimir Putin.

The measures, rolled out in three executive orders signed by President Barack Obama in March, included blocking the Russians and Bank Rossiya, Russia's 17th-largest bank, from access to the U.S. financial system and freezing their U.S. assets.

This longish Reuters story, filed from Washington, was posted on their website late Monday afternoon EDT---and it's another news item that had to wait for today's column.  It's definitely worth reading---and Ambrose Evans-Pritchard touches on it in the story from The Telegraph posted below this one.  I thank internationalman.com senior editor Nick Giambruno for bringing it to our attention.

US Financial Showdown with Russia Is More Dangerous Than It Looks, for Both Sides

The United States has constructed a financial neutron bomb. For the past 12 years an elite cell at the US Treasury has been sharpening the tools of economic warfare, designing ways to bring almost any country to its knees without firing a shot

The strategy relies on hegemonic control over the global banking system, buttressed by a network of allies and the reluctant acquiescence of neutral states. Let us call this the Manhattan Project of the early 21st century.

"It is a new kind of war, like a creeping financial insurgency, intended to constrict our enemies' financial lifeblood, unprecedented in its reach and effectiveness," says Juan Zarate, the Treasury and White House official who helped spearhead policy after 9/11.

“The new geo-economic game may be more efficient and subtle than past geopolitical competitions, but it is no less ruthless and destructive,” he writes in his book Treasury's War: the Unleashing of a New Era of Financial Warfare.

This absolute must read Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site very early Wednesday evening BST---and I found it in yesterday's edition of the King Report.

Runaway Spy Snowden Is Surprise Guest on Putin Phone-In

Edward Snowden, the fugitive former U.S. spy agency contractor who leaked details of U.S. intelligence eavesdropping, made a surprise appearance on a TV phone-in hosted by Vladimir Putin on Thursday, asking the Russian president if his country also tapped the communications of millions.

The exchange was the first known direct contact between Putin and Snowden since Russia gave the American refuge last summer after he disclosed widespread monitoring of telephone and internet data by the United States and fled the country.

Snowden was not in the studio with Putin, who angered U.S. President Barack Obama by refusing to send the American home to face espionage charges. He submitted his question in a video clip that a lawyer said had been pre-recorded.

Snowden, 30, wearing a jacket and open-collar shirt and speaking before a dark background, asked Putin: "Does Russia intercept, store or analyze, in any way, the communications of millions of individuals?"

This must-read Reuters story, filed from Moscow, was posted on their Web site late on Thursday morning EDT---and it's the second contribution to today's column from Roy Stephens.

Putin Says it's Impossible for Europe to Stop Buying Russian Gas

Russian President Vladimir Putin said on Thursday it would not be possible for Europe, which is trying to cut its reliance on Russian energy, to completely stop buying Russian gas.

Putin also said that the transit via Ukraine is the most dangerous element in Europe's gas supply system, and that he was hopeful a deal could be reached with Ukraine on gas supplies.

Russia meets around 30% of Europe's natural gas needs. Moscow's actions in Ukraine have spurred attempts by the continent to reduce its dependency on oil and gas supplies from the former Cold War foe.

"Of course, everyone is taking care about supply diversification. There, in Europe, they talk about increasing independence from the Russian supplier," said Putin.

This is another moneynews.com story that's courtesy of Elliot Simon.  It was posted on their Internet site later in the morning EDT.

Seven Ukraine/Russia-Related Stories

1. Putin: "Nonsense - no Russian troops, special services in east Ukraine": Russia Today  2. Russia has no intentions to send troops to Ukraine - Lavrov: The Voice of Russia  3. Putin on Kiev op: "Tanks, jets against own people?! Are they nuts?!": Russia Today  4.  Princeton's James: Sanctions Against Russia Could Lead to Banking Crisis, Shooting War: Moneynews  5. "Washington has miscalculated the wishes of Ukrainian people": Russia Today op-ed  6. Ukraine Push Against Rebels Grinds to Halt: The New York Times  7. U.S. and Russia Agree on Pact to Defuse Ukraine Crisis: The New York Times

[The above stories are courtesy of South African reader B.V., Elliot Simon---and Roy Stephens.]

Opinion: Putin's Q&A Session Was Brilliant, Sincere, Warm, and Compassionate

The President of the Russian Federation Vladimir Putin conducted his yearly question-and-answer session with the public and citizens of Russia, this time spending approximately three hours and fifty minutes answering a wide range of questions in an impressive manner never once faltering or at a loss and citing facts, figures and details on everything from assisting a disabled man to obtain a home to the aggressive expansion of NATO to the East. This year the Kremlin added a the possibility of sending in video for those who wanted to ask the president questions, as well as text messages, e-mails, regular post, phone calls and submissions through the Internet.

This very interesting commentary, which is worth reading, showed up on the voiceofrussia.com Internet site early on Thursday evening Moscow time---and it's the final offering of the day from Roy Stephens, for which I thank him.

Saudi Spy Chief Ousted Under US Pressure: Experts

The exit of Saudi's spy chief was the result of US pressure over his stance on Syria but does not signal a shift in Riyadh's goal of toppling the Damascus regime, experts say.

Riyadh, as is usual, did not elaborate on its statement this week that Prince Bandar bin Sultan was being replaced, saying only that the veteran diplomat had asked to step down.

But a Saudi expert said that Washington -- irritated for some time by Prince Bandar's handling of the Syria dossier -- had in December demanded his removal.

This news item showed up on the france24.com Internet site later in the afternoon Europe time---and it's certainly a must read for all students of the New Great Game.

Death from Above: How American Drone Strikes Are Devastating Yemen

The people of Yemen can hear destruction before it arrives. In cities, towns and villages across this country, which hangs off the southern end of the Arabian Peninsula, the air buzzes with the sound of American drones flying overhead. The sound is a constant and terrible reminder: a robot plane, acting on secret intelligence, may calculate that the man across from you at the coffee shop, or the acquaintance with whom you've shared a passing word on the street, is an Al Qaeda operative. This intelligence may be accurate or it may not, but it doesn't matter. If you are in the wrong place at the wrong time, the chaotic buzzing above sharpens into the death-herald of an incoming missile.

Such quite literal existential uncertainty is coming at a deep psychological cost for the Yemeni people. For Americans, this military campaign is an abstraction. The drone strikes don't require U.S. troops on the ground, and thus are easy to keep out of sight and out of mind. Over half of Yemen's 24.8 million citizens – militants and civilians alike – are impacted every day. A war is happening, and one of the unforeseen casualties is the Yemeni mind.

Symptoms of post-traumatic stress disorder, trauma and anxiety are becoming rampant in the different corners of the country where drones are active. "Drones hover over an area for hours, sometimes days and weeks," said Rooj Alwazir, a Yemeni-American anti-drone activist and co-founder of Support Yemen, a media collective raising awareness about issues afflicting the country. Yemenis widely describe suffering from constant sleeplessness, anxiety, short-tempers, an inability to concentrate and, unsurprisingly, paranoia.

Ah, yes!  America bringing "democracy" to all countries of the world.  This two-page essay showed up on the Rolling Stone Web site on Monday---and is another news item that had to wait for today's column.  It's also another offering from Roy Stephens.

America's Coup Machine: Destroying Democracy Since 1953

Soon after the 2004 U.S. coup to depose President Jean-Bertrand Aristide of Haiti, I heard Aristide's lawyer Ira Kurzban speaking in Miami.  He began his talk with a riddle: "Why has there never been a coup in Washington D.C.?"  The answer: "Because there is no U.S. Embassy in Washington D.C."  This introduction was greeted with wild applause by a mostly Haitian-American audience who understood it only too well.

Ukraine's former security chief, Aleksandr Yakimenko, has reported that the coup-plotters who overthrew the elected government in Ukraine "basically lived in the (U.S.) Embassy.  They were there every day."  We also know from a leaked Russian intercept that they were in close contact with Ambassador Pyatt and the senior U.S. official in charge of the coup, former Dick Cheney aide Victoria Nuland, officially the U.S. Assistant Secretary of State for European and Eurasian Affairs.  And we can assume that many of their days in the Embassy were spent in strategy and training sessions with their individual CIA case officers.

To place the coup in Ukraine in historical context, this is at least the 80th time the United States has organized a coup or a failed coup in a foreign country since 1953.  That was when President Eisenhower discovered in Iran that the CIA could overthrow elected governments who refused to sacrifice the future of their people to Western commercial and geopolitical interests.  Most U.S. coups have led to severe repression, disappearances, extrajudicial executions, torture, corruption, extreme poverty and inequality, and prolonged setbacks for the democratic aspirations of people in the countries affected.  The plutocratic and ultra-conservative nature of the forces the U.S. has brought to power in Ukraine make it unlikely to be an exception.

If I had to pick just one story for you to ready today---this would be it.  And if you want to hear about these sorts of things from the inside, John Perkins, author of Confessions of an Economic Hit Man, was an operative for the U.S. in some of these situations.  This longish essay showed up on the alternet.org Web site on April 8---and it's another contribution from Roy Stephens, for which I thank him.

Japan Population Drops for Third Year Straight; 25% Are Elderly

Japan’s population has shrunk for the third year running, with the elderly making up a quarter of the total for the first time, government data showed Tuesday.

The number of people in the world’s third-largest economy dropped by 0.17% or 217,000 people, to 127,298,000 as of last Oct. 1, the data said. This figure includes long-staying foreigners.

The number of people aged 65 or over rose by 1.1 million to 31.9 million, accounting for 25.1% of the population, it said.

With its low birthrate and long life expectancy, Japan is rapidly graying and already has one of the world’s highest proportions of elderly people.

This very interesting story is definitely worth reading.  It was posted on the japantimes.co.up Internet site on Tuesday sometime---and it's another story I found in yesterday's edition of the King Report.

Japan Bond Market Liquidity Dries Up as BoJ Holding Crosses ¥200 Trillion

The Bank of Japan’s massive purchases of government debt hit a milestone this week, sucking liquidity out of the market to such an extent that the benchmark 10-year bond went untraded for more than a day, the first time in 13 years.

Data from the BoJ late on Monday showed its holding of Japanese government bonds topped ¥200tn ($1.96tn), or about 20% of outstanding issuance – up by more than half from ¥125tn about a year ago.

The fall in market liquidity looks set to intensify as the BoJ has vowed to continue its aggressive buying for at least another year, with market players expecting it to expand its easing some time later this year.

“Everybody thinks the market is not going to move for the time being because of the purchase by our dear customer, the BoJ,” said a trader at a major Japanese brokerage.

This Reuters story from Tuesday found a home over at the gulf-times.com Internet site---and I thank reader 'David in California' for sending it around yesterday.

Five King World News Blogs

1. David P: "One of the Greatest Opportunities In More Than a Decade"  2. Art Cashin: "Unprecedented $5 Trillion Liquidity Monster to Be Unleashed"  3. Keith Barron: "The Elites Fear What Will Crash the Global Financial System"  4. Richard Russell: "Silver---and the Greatest Mistake My Father Made"  5. "Pippa" Malmgren: "Western Default, China---and Gold"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Paper Gold Falls in West, but Premium for Real Metal Jumps in India

Hawala Premium Crosses 4% as Akshay Tritiya Boosts Demand; Spot Delivery Premium also Doubles

The premium for getting spot delivery for gold in the Indian market jumped to $70 an ounce from $35 a couple of days earlier, with a sudden scarcity.

While the trade is facing a scarcity of gold in official channels due to lower imports by private banks, the increase in demand in the unofficial market resulted in the hawala market premium crossing four per cent from 2.75-3% a few days earlier and 2-2.25% a month before, said a source in the Kolkata market, where smuggled gold inflow is said to be higher.

Recently, gold spot premiums were on a downward trajectory due to permission to five private banks to import gold. However as the new financial year had begun, a private bank bullion desk official said quarterly and yearly targets were being fixed, which is why their import was limited.

This gold-related news item, filed from Mumbai, showed up on the Business Standard Web site late on Wednesday evening IST---and I found it embedded in a GATA release.

Asia Takes Every Ounce West Unloads, but Gold Will Fall for Two Years, GFMS Says

A lack of investment interest in gold is starting to take its toll on the price, with an average of $1,225/oz forecast for 2014 and heading lower in 2015, GFMS said Thursday in its Gold Survey 2014.

The price forecast is 13% lower than the 2013 average of $1,411.23/oz.

"The price is expected to post 2014 lows in mid-year, with a fundamentally driven rally thereafter, but this is likely to peter out in early 2015," the Thomson Reuters/GFMS survey read.

Despite the "heavy visible sales from Exchange Traded Funds, driving a 25% price fall in the second quarter [of 2013], OTC investors were net buyers in 2013, notably in East Asia and the Middle East," the report read.

This story showed up on the platts.com Internet site midmorning in London yesterday---and it's another gold-related news item I found in a GATA release.  By the way, I'd take anything that GMFS says with a big grains of salt.  But it's worth reading nonetheless.

Platinum Shortfall to Take Four Years to Fix - Morgan Stanley

A labor dispute that all but shut platinum mines in South Africa since January is extending the longest shortfall in global production since 2005, which Morgan Stanley predicts will take at least four years to fix.

For a third straight year, makers of auto parts and jewelry will use more of the metal than is mined. Credit Suisse Group AG on March 31 raised its deficit forecast for this year by 25% to 836,000 ounces, after concluding the strike in South Africa, the world’s top producer, will prevent more than 1 million ounces from being retrieved in 2014.

Workers who normally earn 5,000 rand ($474) a month have gotten nothing since the walkout began, forcing some to sell belongings as union leaders renew demands for higher pay. Mine owners including Lonmin Plc say they are losing $15 million a day and may buy metal to meet supply commitments. Hedge funds more than doubled their bets on higher prices this year, and holdings in exchange-traded funds backed by platinum are up 68% from a year ago.

This longish Bloomberg story, co-filed from Johannesburg and New York, was picked up by the mineweb.com Internet site yesterday---and represents the final offering of the day from Elliot Simon.  It's certainly worth reading.

Platinum Producers Capitulate on Union Pay Demand

Saying they could "ill afford" it, Anglo American Platinum and Impala Platinum made a startling offer to the Association of Mineworkers and Construction Union (AMCU) on Thursday in a bid to end a 13-week long strike that has shut down much of South Africa's platinum sector.

Both Anglo American and Impala issued press releases stating they would agree to pay entry-level underground workers a minimum of R12,500 a month in pay by July 2017.

The offer appears to substantially meet the AMCU's strike demand on pay that Anglo American, Impala and Lonmin had long maintained was impossible.

I linked this story further up when I was discussing the strange timing of the selloffs in both platinum and palladium in New York trading yesterday, but here it is again if you missed it.  It was filed from Johannesburg---and posted on the mineweb.com Internet site yesterday sometime---and it's worth reading as well.

¤ The Funnies

¤ The Wrap

The additional commonality is that the silver, platinum and palladium concentrated short position is dominated by a U.S. bank or banks, according to the latest Bank Participation Report of April 4. I know Ed Steer has raised this issue before, but as I said, I wasn’t interested in delving into palladium and platinum. Now, it’s hard not to. The Bank Participation Report leads me to conclude that JPMorgan, in addition to being the big short in Comex silver, is also the big short in Nymex platinum and palladium. (There is no big U.S. bank short position in cocoa).

What I believe this means is that JPMorgan is the prime manipulator of all five major Comex/Nymex metals; silver, platinum and palladium on the short side, gold and copper on the long side. The one sure thing you can say about a concentrated position is that if it did not exist, the price of the commodity in question would be markedly different because it would need to be replaced by many other traders responding to current prices. - Silver analyst Ted Butler: 16 April 2014

Since I won't have a column tomorrow---here's your pop "blast from the past."  It's by a Canadian pop group from back in the mid to late 1970s---and this was one of their biggest hits.  I heard it on the radio earlier this week---and couldn't get it out of my head, so now you have to put up with it. The link is here---and if you wish to listen to others by this group, they're in the right sidebar.

Recuerdos de la Alhambra [Memories of the Alhambra] is a classical guitar piece composed in 1896 in Granada by Spanish composer and guitarist Francisco Tárrega. It uses the classical guitar tremolo technique often performed by advanced players.

The piece showcases the challenging guitar technique known as tremolo, wherein a single melody note is plucked consecutively by the ring, middle and index fingers in such rapid succession that the result is an illusion of one long sustained tone. The thumb plays a counter-melody on the bass between melodic attacks. Many who hear this piece initially in a non-live setting can mistake it for a duet, rather than the challenging solo effort it actually is.

South Korean classical guitarist Kyuhee Park does the honours---and she's fantastic.  I thank reader U.D. for bringing this recording to my attention earlier this week---and the link is here.  Enjoy!

It was a pretty quiet trading day in the precious metals up until noon in New York.  Then the gold price got docked $5---and at 12:30 EDT the platinum price got hit hard---and at 1 p.m. it was palladium's turn.  You have to wonder why palladium and platinum didn't head south at the same time on the news out of South Africa---and it's for that reason alone that the declines in these two precious metals look "engineered" to me.

Here are the updated six-month gold and silver charts.

Gold closed below its 200-day moving average once again---and it will be interesting to see how it "performs" at the open in New York on Sunday evening.  Silver is well below any of its moving averages---and has been for many weeks, so the technical funds will be in no rush to cover short positions, or go long in a big way until one or both are broken to the upside.  At that point it will be interesting to see if JPMorgan increases its already grotesque short position in that metal as a seller of last resort.

Ted mentioned the April 4, 2014 Bank Participation Report in his quote above---and I thought I should post Nick Laird's famous charts from that report once more.  They're for all four precious metals---and show the Comex short and long contracts held by the the US banks---and also the non-US banks.  JPMorgan's long position in gold stands out, as do its short positions in the other three precious metals as well.  The "click to enlarge" feature is useful here---and all eyes should be on Charts 4 and 5 in each one, along with a quick glance at Chart #3.

As I say every month when this report comes out, the precious metals price management scheme is 100% "Made in the U.S.A." with JPMorgan Chase as the capo di tutti capi---with Canada's Scotiabank thrown in for a little international "spice" in silver and gold.

I don't know how much more obvious the price management scheme in the precious metals can get.

And here is Nick Laird's "Days of World Production to Cover Comex Short Positions" chart.  It's a week old, because this week's COT Report doesn't come out until later today---and with the exception of gold---it's looked like this for years.

That's all I have for today.  I understand that the new Commitment of Trader Report will be posted on the CFTC's website, but the play-by-play on that will have to wait until my Tuesday column.  And, as I said at the top of today's column, unless the precious metal markets are open in New York today---and there's something significant to report---I can absolutely guarantee that I won't have a column on Saturday.

Enjoy your long weekend, if you get one---and I'll see you on Tuesday.

 

 

 

]]>
Fri, 18 Apr 2014 09:19:00 +0000
<![CDATA[Gold Import Curbs Seen Continuing in India to Help Currency]]> http://www.caseyresearch.com/gsd/edition/gold-import-curbs-seen-continuing-in-india-to-help-currency/ http://www.caseyresearch.com/gsd/edition/gold-import-curbs-seen-continuing-in-india-to-help-currency/#When:09:21:00Z "What they do, are instructed to, will determine prices going forward"

¤ Yesterday In Gold & Silver

The gold price sold off $5 or so during early Far East trading, but had gained it all back by shortly after 9 a.m. in London---and after that the price didn't do a thing until the Comex open.  The rally that began at that point got dealt with in the usual manner less than 15 minutes later---and that was it for the remainder of the Wednesday trading session.  The lows and highs aren't worth the effort of looking up.

Gold closed in New York at $1,302.20 spot, down 20 cents from Tuesday's close.  Volume, net of May, was around 127,000 contracts.

Naturally enough, the silver price got manhandled the most of all four precious metals.  The silver price hit its low of the day about 30 minutes before the London open---and the rally that began shortly before the Comex open got dealt with in the usual manner as well---and at the exact same time as the tiny rally in gold got put in its place.  After that, the silver price traded pretty flat.

The CME Group reported the low and high ticks as $19.325 and $19.805 in the May contract, an intraday move of well over 2%.

Silver closed yesterday at $19.63 spot, up 7 cents from Tuesday.  Volume, net of roll-overs, was 30,500 contracts.

Platinum didn't do much yesterday---and palladium closed up a bit over a percent.  Here are the charts.

The dollar index closed late on Tuesday afternoon in New York at 79.79---and after flopping around a bit on either side of unchanged on Wednesday, finished the day at 79.83.  Nothing to see here.

The gold stocks opened up a bit, but there was someone there to happily sell them down---and they never saw positive territory again, although they finished off their lows, as the HUI closed down "only" 1.00%.  I spoke with John Embry yesterday---and we're both of the opinion [and have always been] that the precious metal equities are almost as managed as the metal prices themselves.

And despite the fact that the silver price did much better, that didn't help the silver equities one bit, as Nick Laird's Intraday Silver Sentiment index closed down another 1.47%.

Over at the Comex-approved depositories they reported that 76 gold and one silver contracts were posted for delivery on Friday within the Comex-approved depositories.  The largest of the short/issuers was Jefferies once again---and the two biggest long/stoppers were the two usual suspects, JPMorgan and Canada's Scotiabank.  Between them, they stood for delivery on 65 contracts. The link to yesterday's Issuers and Stoppers Report is here.

The GLD ETF had a monster withdrawal yesterday, as 269,731 troy ounces were removed.  What the bullion banks giveth, they can also taketh away---and they did.  GLD is now back at the same level it was at the beginning of 2014.  And as of 9:27 a.m. EDT, there were no reported changes in SLV.

Over at Switzerland's Zürcher Kantonalbank for the period ending 14 April, they reported a smallish increase in their gold ETF of 6,211 troy ounces.  That's the first increase since February 7.  Their silver ETF went in the other direction, as 64,752 were removed.

The U.S. Mint had another sales report yesterday.  They sold 2,500 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---200 platinum eagles---and 50,000 silver eagles.

There wasn't a lot of activity at the Comex-approved depositories on Tuesday.  Once again, there were no reported in/out movements in gold---and in silver, a smallish 170,873 troy ounces were removed.  The link to the silver activity is here.

I don't have a large number of stories for you today, but some of them are definitely worth reading.

¤ Critical Reads

Path to Extinction: Only Three US Companies Still Have AAA Credit Ratings

Their numbers have been dwindling for years, and now only three U.S. companies have the coveted AAA credit rating from Standard & Poor's.

Automatic Data Processing was the latest U.S. blue chip to lose its pristine AAA rating from S&P, downgraded this week after it spun off its auto-dealers services unit, USAToday noted.

That leaves only Johnson & Johnson, Exxon-Mobil, and Microsoft as companies rated AAA, which is reserved for companies with the unassailable financial strength and discipline.

In 1980, there were more than 60 U.S. companies with AAA ratings. That number declined to six in 2008. Since then, General Electric, Pfizer, and now ADP have fallen out of that esteemed ranking.

Today's first news item was posted on the moneynews.com Internet site early yesterday morning EDT---and it's courtesy of West Virginia reader Elliot Simon.

Yellen: Fed Stimulus Still Needed for Job Market

Federal Reserve Chair Janet Yellen said Wednesday that the U.S. job market still needs help from the Fed and that the central bank must remain intent on adjusting its policy to respond to unforeseen challenges.

In her first major speech on Fed policy, Yellen sought to explain the Fed's shifting guidance on its interest-rate policy, which at times has confused or jarred investors. She said the Fed's policies "must respond to significant unexpected twist and turns the economy may make."

"Thus far in the recovery and to this day, there is little question that the economy has remained far from maximum employment," Yellen told an audience at the Economic Club of New York.

She said the Fed's forecast for moderate growth has changed little since last fall despite the severe winter. Fed officials still see only a gradual return to full employment over the next two to three years, Yellen said.

This AP news item was picked up ABC News yesterday---and it's the second offering in a row from Elliot Simon.

Spain ETF Grows as Rajoy Attracts Record US Investments

The iShares MSCI Spain Capped ETF attracted almost $238 million in the period ended April 11, the most for any country, according to data compiled by Bloomberg going back to 2002. Traders have poured money into the exchange-traded fund every week in 2014. The $1.9-billion ETF tracking companies from Banco Santander (SAN) SA to Telefonica SA has gained 5.3% this year, compared with declines in the Standard & Poor’s 500 Index and the Stoxx Europe 600 Index.

Confidence is growing that Prime Minister Mariano Rajoy will make good on his pledge to complete an overhaul of Spain’s economy as the nation that sought a bank bailout in 2012 returns to growth. A manufacturing report this month pointed to the fastest expansion since at least April 2011, and lenders from Santander to Banco Popular Espanol SA (POP) are benefiting from European Central Bank President Mario Draghi’s policy to keep interest rates at a record low.

This longish Bloomberg article, filed from London, was posted on their Internet site late yesterday morning MDT---and that makes it three in a row from Elliot Simon.

Regional Unemployment Highest in Spain

Over two dozen regions throughout the Union have an unemployment rate twice the EU average.

The data, published on Wednesday (16 April), by the EU’s statistical office Eurostat, says the jobless rate in 27 regions in 2013 was higher than 21.6%.

Thirteen are found in Spain, 10 in Greece, three in the French Overseas Departments, and one in Italy.

Five of the worst affected are found in Spain alone.

This story, filed from Brussels, showed up on the euobserver.com Internet site yesterday morning---and it's the first offering of the day from Roy Stephens.

Eurozone Inflation Stuck in "Danger Zone," Keeps Pressure on the ECB

A shock drop in March eurozone inflation to its lowest level since November 2009 was confirmed on Wednesday, keeping pressure on the European Central Bank to intervene should prices not rebound.

The year-on-year inflation rate in the 18 countries sharing the euro was 0.5% in March against 0.7% in February, the European Union's statistics office Eurostat said.

Inflation has now been in the ECB's "danger zone" of below 1% for six consecutive months, fuelling speculation that the ECB will need to take further action.

ECB policy makers said the bank stood ready to deploy unconventional measures to ensure that inflation did not stay low for too long.

This short, but must-read commentary, was posted on the moneynews.com Internet site early yesterday morning EDT---and it's the fourth and final offering of the day from Elliot Simon.

Out of Ammo? The Eroding Power of Central Banks

Since the financial crisis, central banks have slashed interest rates, purchased vast quantities of sovereign bonds, and bailed out banks. Now, though, their influence appears to be on the wane with measures producing paltry results. Do they still have control?

Once every six weeks, the most powerful players in the global economy meet on the 18th floor of an ugly office building near the train station in the Swiss city of Basel. The group includes United States Federal Reserve Chair Janet Yellen and her counterpart at the European Central Bank (ECB), Mario Draghi, along with 16 other top monetary policy officials from Beijing, Frankfurt, Paris, and elsewhere.

The attendees spend almost two hours exchanging views in a debate chaired by Bank of Mexico Governor Agustín Carstens---and the central bankers talk about the economy, growth and market prices.

But ever since many central banks lowered their interest rates to almost zero, bought up sovereign debt and rescued banks, a new, critical undertone has crept into the dinner conversations. Monetary experts from emerging economies complain that the measures taken by Europeans and Americans are pushing unwanted speculative money their way. Western central bankers say they have come under growing political pressure. And recently, when the host of the meetings -- head of the Basel-based Bank for International Settlements Jaime Caruana -- speaks in one of his rare public appearances, he talks about "chronic post-crisis weakness" and "risk." Monetary institutions, says Caruana, are at "serious risk of exhausting the policy room for manoeuver over time."

This longish five-page essay showed up on the spiegel.de Internet site early yesterday afternoon Europe time---and it's the second offering of the day from Roy Stephens. It's definitely worth reading.

EU Countries to Boost Defence Budgets in Light of Ukraine

Military chiefs have said the Ukraine crisis is a “wake-up call” for E.U. countries’ defence spending, as the US backed Ukraine’s use of force in eastern regions.

Speaking to press after a regular meeting of E.U. defence ministers in Luxembourg on Tuesday (15 April), the deputy chief of the EU’s external action service, Maciej Popowski, said: “We’ve had 70 years of peace now [in Europe], but we see that power politics is back with a vengeance, so it’s a wake-up call and now we need to get serious about defence.”

He noted that “this was the feeling around the table” at the Luxembourg event.

He added that E.U. foreign relations chief Catherine Ashton told the ministers: “If Ukraine is not a trigger to get serious about spending, about pooling and sharing, about smart defence, then what more do we need to get real?”

Blah, blah, blah.  I'll be amazed if this amounts to anything more than talk.  This "news" item was posted on the euobserver.com Internet site yesterday morning Europe time---and I thank Roy Stephens once again for sending it our way.

Three King World News Blogs

1. Grant Williams: "Remarkable Road Map From $5,000 to $20,000 Gold"  2. Eric Sprott: "Crisis, Gold---and an Incredible Opportunity No One is Looking At"  3. David P: "One of the Greatest Opportunities in More Than a Decade"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Scientists Verify World's Largest Single Crystal Piece of Gold

Scientists at Los Alamos National Laboratory in the U.S. have confirmed a 7.68 oz (217.78 g) piece of gold is in fact a single crystal, increasing its value from around US$10,000 to an estimated $1.5 million. The specimen, the largest single crystal piece of gold in the world, was discovered in Venezuela decades ago, but it is only by using advanced probing instruments that experts can now verify its authenticity.

Gold found in the ground will generally have a polycrystalline structure, meaning it is made up of many crystallites, varying in shape and size. Gold of a mono-crystalline structure, where the material is unbroken, are rarer and of significantly higher value. The US-based owner provided geologist John Rakovon with four gold specimens, hoping to determine whether they were of a polycrystalline or mono-crystalline structure.

This very interesting news item, complete with an embedded video, showed up on the gizmag.com Internet yesterday---and my thanks go out to Saskatoon, Saskatchewan reader Marvin Weiler for bringing it to my attention---and now to yours.  If you don't read the article, you should at least look at the picture.

How Marriage Is Keeping Gold’s Prospects Bright in China

Last year was a big one for gold in China. As Chinese middle-class families, particularly aunties, bought up gold bars and jewelry for their use as accessories as well as investments, China became both the number-one producer and consumer of the precious metal—surpassing even India where yearly bullion demand had long been the world’s highest.

This year, with prices up of gold up, a government campaign against conspicuous spending by officials, and financial reforms designed to increase the availability of other investment opportunities, a new report from the World Gold Council predicts that demand for the metal won’t be as strong as last year.

But there’s one segment of the market that has and should continue to underpin China’s appetite for gold—newlyweds and the people who want to wish them well.

This short, but rather interesting gold-related article showed up on the qz.com Internet site on Tuesday---I found it posted over at the Sharps Pixley website---and here's another article on the same subject from the mining.com Internet site.

Gold Import Curbs Seen Continuing in India to Help Currency

India, the world’s second-largest gold consumer, will probably keep restrictions on imports to control the current account deficit and defend the rupee, said the managing director of the country’s biggest refiner.

The limits would result in shipments of 650 metric tons to 700 tons in the 12 months started April 1 from 650 tons a year earlier, according to Rajesh Khosla at MMTC-PAMP India Pvt. Purchases were 845 tons in 2012-2013, the finance ministry says. While the form of restrictions may change, the government will continue to restrain buying, he said in an interview.

India represented about 25% of global demand in 2013, the World Gold Council says. Prime Minister Manmohan Singh requires importers to supply 20% of purchases to jewelers for export and sell 80% on the local market. Singh also raised import taxes and only allows banks and government-nominated entities to ship in gold. The new finance minister may review the rules after elections in progress now.

This news item, filed from New Delhi, was posted on the Bloomberg website just before midnight last night Denver time---and it's another story that I "borrowed" from the Sharps Pixley Web site.

India’s Gold Demand Surges as Supply Declines

Amidst high import duties, the gold demand in India likely to stay high in this year. Last year, India consumed 975 tons and it expects to be between 900 and 1,000 metric tons in 2014.

According to the World Council, last year China overtook India as the biggest consumer of gold in the world and both countries seem to want more gold for further days.

As per the report, India’s current account deficit was narrowed by the stringent import restrictions over the last year whereas the gold smuggling increased, approximately 200 tons of gold. The customs department seized less than 1% of smuggled gold in the last year.

This very short gold-related news item, filed from Mumbai, showed up on the metal.com Internet site in the wee hours of the morning British Summer Time [BST].  It's another story I found over at the sharpspixley.com Internet site just after midnight Denver time [BST-7].

India's Pain Is UAE's Gain - Indian Expats Buy Up Gold Jewellery

If any nation is happy about India's gold import curbs it is the UAE, where bullion traders are registering brisk sales given the restrictions on the import of the precious metal in India.

The curbs on gold in India have raised demand for gold and diamond-studded gold jewellery among expatriate Indians and visitors from India to the UAE.

"The UAE’s gold trade has become the de facto beneficiary of the Indian government’s tough stance on domestic consumption. There is almost a 16% difference on a per gram basis, in buying gold ornaments in the UAE as compared to buying gold in India," said an official at a store in Dubai's gold souk.

This interesting, but not surprising story, was posted on the mineweb.com Internet site yesterday---and it's worth reading.

Lawrence Williams: Jansen Sticks By China Gold Demand Figures

There has been a considerable amount of disagreement over China’s real gold demand figures – with some of the differences being accounted for by what is actually being included in the varying estimates, with different analysts coming up with figures between around 1,100 tonnes from organisations like GFMS to over 4,000 tonnes from Alasdair Macleod of Gold Money. While the 1,100 tonne estimates seem on the face of things to be unaccountably low given some of the published statistics on known Chinese imports, the Macleod figures seem unaccountably high.

Somewhere in the middle comes the detailed analyses from China gold watcher Koos Jansen as published on his In Gold we Trust website, and he has now put out a detailed response confirming his own figures and commenting that Macleod’s high figures include unintentional double counting – and given that Chinese sources for this information can be confusing and contradictory, this is not too surprising!

This commentary by Lawrie is definitely worth reading---and it was posted on the mineweb.com Internet site sometime yesterday.

¤ The Funnies

¤ The Wrap

As regular readers know, it is not just the fact that gold, silver, copper, platinum, and palladium are traded on the Comex/Nymex; it is in how each are traded that most reasonably explains why all five declined sharply on Tuesday. The pricing in each is determined by the same technical fund/commercial paper trading tango that I harp on continuously in Comex silver and gold. The price of all five metals went sharply lower yesterday as a direct result of the commercials (led by JPMorgan) rigging prices lower in order to induce technical fund selling (so that the commercials could buy). This is the essence of the price control that the commercials possess. I know it seems counterintuitive and difficult for many to grasp, but on the big down days like yesterday, the commercials were not the big sellers, but were the big buyers. In fact, the sole reason for the big price decline was for the purpose of allowing the commercials the opportunity to buy. - Silver analyst Ted Butler: 16 April 2014

After Tuesday's engineered price decline, "da boyz" decided to take a breather on Wednesday.  I wouldn't read much of anything into yesterday's price action, except to point out that the tiny rallies in all four precious metals that began at the Comex open in New York, all ran into a not-for-profit seller at 8:37 a.m. EDT, which was less than 15 minutes after the open.  This was particularly noticeable in silver.

Here are the six-month gold and silver charts once again.

As I mentioned yesterday, silver is pretty much washed out to the downside---and it's impossible to know what's in store for the other three precious metals going forward.  JPMorgan has short-side corners in silver, platinum, and palladium---and long-side corners in gold and copper.  What they do, are instructed to do, will determine prices going forward.

I would suspect that not much will happen, or be allowed to happen, at least until we get past first notice day for the May delivery month.  Of course things could go bump in the night sooner than that, but as we know, the real world supply and demand pricing mechanism is no longer functioning in these five metals---and if there is market-moving news to the upside, "da boyz" are there to kill any rallies before they get even close to getting out of hand.

And as I type this paragraph at 3:20 a.m. EDT, I note that both gold and silver got sold down a bit in Far East trading---and are still down now that London has been open for 20 minutes.  Gold is lower by about four bucks---and silver is down another 15 cent.  Platinum and palladium are within a dollar of unchanged.  Volumes are very light in both gold and silver---15,000 contracts in one and 5,000 contracts in the other, so I wouldn't read a thing into the current price action.  The dollar index took a bit of a header about 9 a.m. Hong Kong time---and is down 15 basis points as of this writing.

I've been looking at the CME's Daily Bulletin closely starting on Wednesday to see if there's a clue in the volume/open interest numbers to indicate if the figures from Tuesday's big sell-off were reported in a timely manner or not---and it's not possible to tell.  And as Ted Butler has mentioned on numerous occasions over that last ten years, the bullion banks [besides withholding data] can hide their tracks very well using spread trades.  This could be one of those times---and any speculation in advance is fraught with danger, as I've had egg on my face a number of times over the years from attempting to divine what the Commitment of Traders numbers will show.  Whatever they are, I'll have them for you on Saturday.

And as I hit the send button on today's column at 4:55 a.m. EDT, there hasn't been much change in either gold or silver prices, but platinum and palladium are now both down a few dollars from Wednesday's close in New York.  Volumes in both silver and gold are heavier now, of course, but nothing really out of the ordinary for this time of day---and the dollar index is still down the same amount as it was a bit over 90 minutes ago.

That's everything for today---and I'll see you here tomorrow.
 

 

 

 

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Thu, 17 Apr 2014 09:21:00 +0000
<![CDATA[Zero Hedge: Gold Futures Halted Again on Latest Furious Slam Down]]> http://www.caseyresearch.com/gsd/edition/zero-hedge-gold-futures-halted-again-on-latest-furious-slam-down/ http://www.caseyresearch.com/gsd/edition/zero-hedge-gold-futures-halted-again-on-latest-furious-slam-down/#When:09:22:00Z ""Da boyz" could hit gold for another $50 easily if they choose to do so"

¤ Yesterday In Gold & Silver

The gold price drifted quietly lower in Far East trading on their Tuesday until around 2 p.m. Hong Kong time---and it was about then that the HFT boyz showed up, with the final kick in the pants coming at 8:27 a.m. EDT---seven minutes after the New York trading session began.  Gold futures traded was halted, as gold gapped down $12 in an instant, as 4,000 contracts were dumped in seconds.  In less that three minutes it was all over, with the low tick coming a precisely 8:30 a.m.

From there, the price recovered a bit until noon---and then traded pretty flat for the remainder of the day.

The CME Group recorded the high and low price ticks as $1,328.40 and $1,284.40 in the June contract.

Gold finished on Tuesday at $1,302.40 spot, down $24.20 from Monday's close.  Volume, net of April and May, was very heavy at 198,000 contracts.



The silver price traded flat until about 9 a.m. Hong Kong time---and then it, too, came under selling pressure.  There was a tiny rally beginning at the London a.m. gold fix, but that was dealt with in short order---and that's when JPMorgan et al. really went to work.  Like gold, the big selloff began at, or minutes before, the Comex open---and silver was down 40 cents in less than fifteen minutes as the their HFT traders worked their magic.  The low was also at precisely 8:30 a.m. EDT as well.

The subsequent rally worked its way higher in fits and starts until shortly after 4 p.m. in electronic trading---and from there it sold off a bit into the 5:15 p.m. close.

The high and low ticks were recorded at $19.995 and $19.22 in the May contract---and intraday move of almost 4%.

Silver finished the Tuesday session at $19.56 spot, down 40.5 cents from Monday's close.  Net volume was very high at 54,500 contracts.



Platinum and palladium weren't spared by "da boyz" either, although the timing of the engineered price declines varied with each metal, as most of their attention was taken up in silver and gold.  Here are the charts.





The dollar index finished late on Monday afternoon in New York at 79.76---and then chopped and flopped around a bit during the Tuesday session. It got as high as 79.87---but sold off a bit into the close finishing the day almost unchanged at 79.79.



Not surprisingly, the gold stocks gapped down a hair over 3% at the open, rallied a bit---and then headed to their low of the day which came shortly before 11:30 a.m. EDT in New York.  From there, the stock rallied a respectable amount [all things considered] and the HUI closed down only 2.11%.



The silver equities followed a very similar chart pattern---and Nick Laird's Intraday Silver Sentiment Index only closed down 1.79% when all was said and done.



The CME's Daily Delivery Report showed that 97 gold and five silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  Jefferies was the big short/issuer with 86 contracts---and JPMorgan and Canada's Scotiabank stopped 77 contracts combined.  Scotiabank accepted delivery on all five silver contracts as well. The link to yesterday's Issuers and Stoppers Report is here.

Just as a matter of interest, there are still about 700 gold contracts open [net of the above 97 gold contracts just issued for delivery] in the April delivery month at the moment---and it will be interesting to see who the short/issuer is when they finally decide to crawl out from under their rock.

There was a smallish deposit in GLD again yesterday.  This time an authorized participant deposited 19,267 troy ounces.  And as of 9:41 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was another sales report from the U.S. Mint again yesterday.  The 2,500 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---100 platinum eagles---and 282,500 silver eagles.

There were no reported in/out movements in gold over at the Comex-approved depositories on Monday---but it was another busy day in silver, as 743,338 troy ounces were reported received---and 140,350 troy ounces were shipped out.  The link to that action is here.

In this space yesterday I posted the six-month chart for the Ukrainian Hryvnia---their not-quite-eight-year-old national currency.  Nick decided to up the ante and whipped up this chart that shows the entirety of this currency's young life, whose longevity is being threatened at the moment.  It sure makes gold look good.



Here's a two-minute tick chart of the gold price action on the Comex yesterday---a price pattern that JPMorgan et al. have presented to us before on numerous occasions.  The times on the chart are Mountain Daylight Time [BST-7].  I thank reader Brad Robertson for sending it our way.



I have a decent number of stories today---and I hope that there are few in the list below that interest you.

¤ Critical Reads

Debt Burdens Soar for Major US Companies

Large U.S. companies have more than tripled their debt loads in the past three years, enabling them to spend money without dipping into their record-high cash reserves.

The spending has included share buybacks, dividends and capital investments. Stock buybacks and dividends registered $214.4 billion in the fourth quarter, according to The Wall Street Journal.

The companies are reluctant to spend cash partly because much of it is held offshore and would be subject to taxes if repatriated, the Financial Times reports.

From 2010 to 2013, the 1,100 companies rated by Standard & Poor's for five years or longer saw their combined cash reserves climb $204 billion to $1.23 trillion, according to the FT. That pales in comparison to the $748 billion jump in gross debt to $4 trillion during that period.

This short, but must read news item, was posted on the moneynews.com Internet site early yesterday morning EDT---and today's first story is courtesy of West Virginia reader Elliot Simon.

France Is the New Cauldron of Eurosceptic Revolution

Britain is marginal to the great debate on Europe. France is the linchpin, fast becoming a cauldron of Eurosceptic/Poujadist views on the Right, anti-EMU reflationary Keynesian views on the Left, mixed with soul-searching over the wisdom of monetary union across the French establishment.

Marine Le Pen’s Front National leads the latest IFOP poll for the European elections next month at 24%. Her platform calls for immediate steps to ditch the euro and restore the franc (“franc des Anglais” in origin, rid of the English oppressors), and to hold a referendum on withdrawal from the EU.

The Gaullistes are at 22.5%. The great centre-Right party of post-War French politics is failing dismally to capitalise on the collapse in support for President François Hollande.

The Parti Socialiste is trailing at 20.5%. The Leftist Front de Gauche is at 8.5% and they are not exactly friends of Brussels.

This Ambrose Evans-Pritchard blog was posted on the telegraph.co.uk Internet site yesterday sometime---and it's the first story of the day from Roy Stephens.

Russian Holdings of Treasuries Fall to Lowest Since 2011

Russian holdings declined for a fourth straight month, to $126.2 billion, from $131.8 billion in January, according to figures released today in Washington as a part of a monthly report on foreign holders of Treasuries as well as international portfolio flows.

Russia might have been selling Treasuries, world’s most liquid assets, as part of an effort to limit a decline in the ruble, which lost 2% versus the dollar in February, the biggest drop that month among 24 emerging-market peers tracked by Bloomberg. The currency weakened amid rising tensions in Ukraine’s Crimean peninsula.

“Russia’s been slowly shedding holdings,” said Gennadiy Goldberg, a U.S. strategist at TD Securities USA LLC in New York. “When you try to defend your currency, this is when you really use those Treasury reserves.”

Russia might have also switched custodian from the Federal Reserve to an offshore center, based perhaps in the U.K., said Sebastien Galy, a senior currency strategist at Société Générale SA in New York. If that were the case, the securities would show up in the Treasury’s survey as British holdings.

This Bloomberg news item, filed from Washington, appeared on their Internet site late yesterday morning Denver time---and my thanks go out to Washington state reader S.A. for sending it along.

Russia's Bond Market Is Achilles Heel as Showdown with West Escalates

Russia is at increasing risk of a full-blown financial crisis as the West tightens sanctions and Russian meddling in Ukraine pushes the region towards conflagration.

The country’s private companies have been shut out of global capital markets almost entirely since the crisis erupted, causing a serious credit crunch and raising concerns that firms may not be able to refinace debt without Russian state support.

“No Eurobonds have been rolled over for six weeks. This cannot continue for long and is becoming a massive issue,” said an official from a major Russian bank. “Companies have to roll over $10bn a month and nothing is moving. The markets have been remarkably relaxed about this, given how dangerous it is. Russia’s greatest vulnerability is the bond market,” he said.

This is another offering from Ambrose Evans-Pritchard.  This one was posted on The Telegraph's Web site late on Monday evening BST---and it's the second contribution of the day from Roy Stephens.  It's worth skimming.

Seven Ukraine/Russia-Related Stories

1. West pressures Russia as separatists tighten grip on east Ukraine: France24  2. Ukraine Falters in Drive to Curb Unrest in East: The New York Times  3. 'We Will Shoot Back': All Eyes on Russia as Ukraine Begins Offensive in East: Spiegel Online  4. Putin: Ukraine’s radical escalation puts it on edge of civil war: Russia Today  5. Those who don’t lay down arms, will be destroyed - Ukrainian military op commander: Russia Today  6. Villagers stop armored column of Ukrainian troops near Lugansk: Voice of Russia  7. Ukraine on brink of civil war as Kiev sends in troops: The Telegraph

The Spiegel Online story was originally headlined "Tensions in eastern Ukraine rise as Kiev offensive begins."

[All of the above stories are courtesy of Roy Stephens, for which I thank him.]

BRICS Countries to Set Up Their Own IMF

Very soon, the IMF will cease to be the world's only organization capable of rendering international financial assistance. The BRICS countries are setting up alternative institutions, including a currency reserve pool and a development bank.

The BRICS countries (Brazil, Russia, India, China and South Africa) have made significant progress in setting up structures that would serve as an alternative to the International Monetary Fund and the World Bank, which are dominated by the U.S. and the EU. A currency reserve pool, as a replacement for the IMF, and a BRICS development bank, as a replacement for the World Bank, will begin operating as soon as in 2015, Russian Ambassador at Large Vadim Lukov has said.

Brazil has already drafted a charter for the BRICS Development Bank, while Russia is drawing up intergovernmental agreements on setting the bank up, he added.

In addition, the BRICS countries have already agreed on the amount of authorized capital for the new institutions: $100 billion each. "Talks are under way on the distribution of the initial capital of $50 billion between the partners and on the location for the headquarters of the bank.

This story was posted on the Russia Beyond the Headlines Web site on Monday---and it's courtesy of Elliot Simon.

Chinese Economic Growth Continues to Slow

China's Q1 GDP beat expectations rising 7.4% year-over-year.

Economists polled by Bloomberg were looking for Q1 GDP to rise 7.3%. But this was down from 7.7% the previous quarter, showing that China's economy continues to slow. 

Quarter-over-quarter however GDP was up 1.4% or 5.7% annualized. This was also slower than revised 1.7% growth in Q4 2013 and 7% annualized.

Meanwhile, year-to-date Chinese retail sales were up 12%, beating expectations for an 11.9% rise. For March, retail sales were up 12.2%.

I would expect that China's GDP numbers are massaged to perfection, just as much as the numbers coming out of the United States these days.  This business news item was posted on the Bloomberg Web site late yesterday evening MDT---and it's another contribution from Roy Stephens.

Japan Risks Public Souring on Abenomics as Prices Surge

Prime Minister Shinzo Abe’s bid to vault Japan out of 15 years of deflation risks losing public support by spurring too much inflation too quickly as companies add extra price increases to this month’s sales-tax bump.

Businesses from Suntory Beverage and Food Ltd. to beef bowl chain Yoshinoya Holdings Co. have raised costs more than the 3 percentage point levy increase. This month’s inflation rate could be 3.5%, the fastest since 1982, according to Yoshiki Shinke, the most accurate forecaster of Japan’s economy for two years running in data compiled by Bloomberg.

The challenge for Abe and the Bank of Japan is to keep the public focused on the long-term benefits of exiting deflation when wages are yet to pick up and, according to BOJ board member Sayuri Shirai, most people still see price gains as “unfavorable.” Any jump in inflation that’s perceived as excessive by a population more used to prices falling could worsen consumer confidence and make it harder to boost growth.

A policy of "Inflate or die" is fraught with danger, as the Japanese government is discovering to its dismay.  This Bloomberg piece, filed from Tokyo, was posted on their Internet site in the wee hours of Monday morning Denver time.  I "borrowed" this story from yesterday's edition of the King Report---and it's worth reading.

Kyle Bass: Why Japanese Bonds Look "Terrible"

Hayman Capital's Kyle Bass believes Wall Street's recent declines in the biotech and social media sector, which spread to global stock markets last week, shows cracks in the Japanese economy.

The Japanese Nikkei saw a huge drop last Friday, but the country's benchmark 10-year government bonds did not see yields change as investors fled stocks. Bass, one of the biggest critics of the Japanese economy, has made a big bet on Japan's economy devolving into a debt crisis.

During an interview on CNBC's "Squawk on the Street" on Tuesday, the hedge fund manager said questions remain whether Japan will lose control of interest rates or whether the yen can serve as an "escape valve." Bass sees inflation quickly surpassing Japaneses bond yields, he said.

Kyle only gets 1:03 minutes in this very brief appearance on CNBC yesterday---but it's a must watch.  I borrowed this from Tres Knippa's daily newsletter yesterday.

Four King World News Blogs

1. Art Cashin: "The Reason Gold, Silver and Commodities Are Getting Smashed"  2. Dr. Stephen Leeb: "Gold and Silver Smashed as incredible Events Unfold in Europe"  3. Dr. Paul Craig Roberts: "U.S. Now Close to Total Collapse"  4. Gerald Celente: "The Vampire Squid, Gold and the Global Ponzi Scheme"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Zero Hedge: Gold Futures Halted Again on Latest Furious Slam Down

It seems the two words "fiduciary duty" are strangely missing from the dictionary of the new normal's asset management community. This morning, shortly before 8:27 a.m. ET, someone decided that it was the perfect time to dump thousands of gold futures contracts worth over half a billion dollars notional. This smashed gold futures down over $12 instantaneously, breaking below the 200-day moving averaged and triggering the futures exchange to halt trading in the precious metal for 10 seconds.

Ah, yes---there are those words "fiduciary duty" once again---the other thing, along with their testicles, that precious metal mining executives leave hanging on a nail in the hall closet before they head to the office.  This tiny Zero Hedge piece was posted on their Web site an hour after the Comex event itself---and the charts are worth a look.  I found this worthwhile news item in a GATA release yesterday.

Dave Kranzler Reports on the Latest Manipulation of the Gold Price

Shortly after the Shanghai gold market closed last night, the market manipulators went to work on the gold price.  Gold was taken down another $20 during the morning trading in London, primarily in three HFT trading induced “mini flash crashes.” There were not any related news reports or events that would have triggered the relentless selling of paper gold (Comex futures via the Globex system and LBMA forward
contracts).

As soon as the Comex floor trading opened at 8:20 a.m. EST, nearly 4,000 contracts were dropped instantaneously onto the floor and into the Globex system.  This is over a half a billion dollars worth of gold – over 10 tonnes of paper gold – in a nanosecond.    This amount represents 47% of the amount of actual physical gold that was reported to be available for delivery by the Comex yesterday.  The sudden burst in volume halted the Comex computer system for 10 seconds.  The contract bomb caused an immediate $16 plunge in the price of gold.   Over a period of seven minutes from the time the Comex opened, over 14,000 contracts traded.  This represented over 18% of the total volume in Comex contracts that had traded in the previous 14 hours of trading starting at 6 p.m. EST the night before.

Obviously this is was intentional and determined selling  of paper gold for the purposes of driving the price a lot lower.  The news reported over the last 24 hours, if anything, should have caused the price of gold to move higher. This includes the re-escalation of the events in Ukraine, an inflation report released this morning which showed that the rate of inflation in March was double the rate that was expected by Wall Street forecasters and a report of manufacturing activity in the northeast which was significantly  lower than expected.

This short must read commentary showed up on the paulcraigroberts.org Internet site yesterday---and I thank Brad Robertson for sending our way.

China Gold Demand Rising 25% by 2017 as Buyers Get Wealthier

Gold demand in China, which overtook India as the largest user last year, will rise about 25% in the next four years as an increasing population gets wealthier, according to the World Gold Council.

Consumer demand will expand to at least 1,350 metric tonnes by 2017, the London-based council said in a report today. Growth may be limited this year after 2013’s price decline spurred consumers to do more buying last year, it said. China accounted for about 28% of global usage last year, the council estimated in February.

Buying accelerated last year as prices slumped 28%, the most since 1981, and the nation became the top buyer in place of India, where import restrictions curbed demand. China’s economy will expand 7.4% this year, economists surveyed by Bloomberg estimate. While that’s set to be the least since 1990, it’s still more than double expected growth in the U.S.

This Bloomberg story showed up on their Web site during the Denver lunch hour yesterday MDT---and it's another gold-related story that I found over at the gata.org Internet site yesterday.  The World Gold Council's report on which this story is based is linked here.

Much More to Come in China’s Already "Breathtaking" Gold Story

The scale, scope and speed of the development of the gold market in China to date has been “quite breathtaking” – and there is still a lot more to come, World Gold Council (WGC) investor relations manager John Mulligan indicated on Tuesday.

Speaking to Mining Weekly Online from London, Mulligan revealed that the WGC was engaged in ongoing discussions to support initiatives to make gold even more accessible in China and that various Chinese gold organisations were simultaneously setting out to modernise the entire gold supply chain from mining through to fabrication and appropriate technologies.

In its latest report, titled "China's gold market: progress and prospects," the WGC explains why the Chinese gold market will continue to expand, irrespective of short-term blips in the economy, and calculates that China’s middle class will grow by another 200 million people in the next six years, taking the total in the middle-income bracket to 500 million.

This is the same story as the prior Bloomberg piece, but with a slightly different spin.  This version, filed from Johannesburg, was posted on the miningweekly.com Internet site yesterday.  I thank reader Richard Murphy for finding it for us.

Wall Street Journal Spins a Gold-Bullish Report to Bearish

China's appetite for gold is waning after a decade-long buying spree, suppressed by the country's economic slowdown and constrained credit markets.

Demand in the world's biggest gold consumer is likely to stay flat in 2014, according to estimates from the World Gold Council. Gold demand in China has expanded every year since 2002, when it declined, according to the industry group, whose forecasts are closely watched in the gold market.

Decelerating Chinese gold demand could threaten the recent recovery in gold prices, some investors and analysts say.

It's hard to believe that the WSJ could spin a sow's ear out of a silk purse, but when something has to be spun with a negative slants, there's always someone up to the task---especially when their jobs may be on the line if they don't.  A lot of gold and silver columnists and so-called experts fall neatly into this category as well.

The above three paragraphs are all there is to this WSJ story---at least that's all there is posted in the clear; and you need a subscription to read the rest.  This is another news item I found on the gata.org Internet site yesterday.

Lawrence Williams: Chinese Take-Away – WGC Study Leaves Many Questions Unanswered

Further, although this report deals specifically with Chinese demand, the general urbanisation and earnings growth prevalent among the whole Asian gold-oriented populace – which hugely exceeds that of China alone – will also have a similar impact. Gold demand will be increasing hugely so where is the supply going to come from? And supply shortfalls will ultimately result in price increases – perhaps very substantial ones, but maybe not quite yet.

As gold bulls will be only too aware, such factors may take a long time to come to fruition and gold investment has to be seen as for the long term. It cannot be relied upon for short-term gains. That is very much the way the Asian market views it and ultimately – unless there is a total sea change in the way this sector views it – gold will undoubtedly prove perhaps the best asset class of all, particularly as the East begins to dominate global trade and finance as it surely will. Other assets will wax and wane but gold, which has stood the test of time through all kinds of political and financial upheavals over hundreds of years, will likely continue to do so in the years ahead.

Yes, one of these days the gold price will be allowed to rise to something resembling a fair market supply vs. demand price, but as Lawrie is more than aware, it will only happen with the blessing of JPMorgan et al.---and the rest of short sellers of last resort in the paper precious metal market.  This commentary was posted on the mineweb.com Internet site yesterday.

Koos Jansen: Shanghai Gold Exchange Withdrawals Equal Chinese Gold Demand, Part 3

Gold researcher and GATA consultant Koos Jansen tonight provides his most detailed review yet of China's gold demand and explains why he thinks it is not as much as recently estimated by GoldMoney research director Alasdair Macleod.

Jansen's commentary is headlined Shanghai Gold Exchange Withdrawals Equal Chinese Gold Demand, Part 3, and it's posted at his Internet site, ingoldwetrust.ch.  And the GATA releases just keep on coming---and I thank Chris Powell for wordsmithing the paragraph of introduction.

Hardly a Mention of Central Banks in Financial Times Report on London Gold Fix

The fix remains the global gold benchmark, used by miners, central banks, jewellers and the financial industry to trade gold bars, value stocks and price derivative contracts. The original five bullion dealers have been replaced by five banks: HSBC, Deutsche Bank, Scotiabank, Barclays, and Société Générale. But the process and traditions are little changed; had Rothschild not sold its fixing seat in 2004, the members might still be meeting in its oak-panelled boardroom with small Union Jack flags on their desks, rather than via conference call.

To supporters of the gold fixing, its longevity is a mark of its efficiency and utility. To a growing group of critics, however, the benchmark is opaque, old fashioned and vulnerable to market abuse.

Pressure to reform is coming from several directions.

Since uncovering evidence of alleged abuse by bankers of the Libor and forex benchmarks, regulators have been scrutinising other big financial benchmarks for signs of weakness. The German watchdog BaFin has requested documents from Deutsche Bank, which has put its seat up for sale, as part of a precious metals market review. Academics have questioned the fix's fairness and suggested possible collusion. Smelling blood, US lawyers launched at least three class action suits in March alleging rigging. From being an asset of considerable prestige, a fixing seat may be turning into a liability.

This longish Financial Times story from Monday---which is long on drivel and short on substance---was posted in the clear on the gata.org Internet site yesterday---and it's not worth reading, at least in my opinion.

¤ The Funnies









¤ The Wrap

If silver prices rally enough from here in the short run (always a 50-50 proposition), the technical funds can be expected to buy and the raptors can be expected to sell and take profits. Usually the raptors need a rally of a dollar or more to begin to sell. Where does that leave JPMorgan and the other big shorts? Normally, the big commercial shorts sell on rallies, but since they just, effectively, sold on the way down, will they just keep adding silver shorts regardless of price direction? - Silver analyst Ted Butler: 12 April 2014

As the Zero Hedge commentary in the Critical Reads section so succinctly put it, these HFT price smashes were for one purpose only---and that was to get all four precious metal prices as low as possible, and as quickly as possible.  It was not-for-profit selling, pure and simple.  Supply and demand, the world's financial and monetary system, along with the Ukraine/Russia situation mean nothing.  Prices are set by JPMorgan et al. in the Comex futures market irrespective of anything else.  Why a large portion of the gold and silver commentators won't go there is impossible to fathom, but any other explanation they may come up with is pure bulls hit.

We have options and futures expiry coming up next week---and I'm sure that JPMorgan et al. wanted as many of these contracts to finish out of the money as they could.  And as both Ted Butler and I have warned, the Commitment of Traders Report has been configured for a down-side engineered price decline for quite some time---and "da boyz" did not disappoint yesterday.

Here are the six-month charts for both gold and silver showing yesterday's price declines in all their ugliness.





Ted feels that we are pretty much done to the downside in silver.  There may be more price pain to go, but it now becomes a question of how many more long contracts JPMorgan et al. can get the technical funds to puke up---and how many possible short positions they can get these same funds to put on.  And as Ted also said, the raptors [the Commercial traders other than the Big 8] were buying every long contract that came their way yesterday.  One would like to assume that the Big 8 short holders were doing likewise---and covering part of their grotesque short positions---but as Ted pointed out in the quote just above, that hasn't been the case lately.

As for gold, there's still a lot of room to go.  Ted mentioned that the Commercial net short position in gold improved by as much as 20,000 contracts yesterday---and looking at the gold chart, I'd guess that "da boyz" could hit gold for another $50 easily if they choose to do so, as the technical funds still have a very large net long position, despite the pounding they took yesterday.  But can they, or will they, is always the question---and we got part of that answer yesterday.

Yesterday at the close of Comex trading was also the cutoff for this Friday's Commitment of Trader Report---and the question that always arises on big price moves the day of the cutoff is whether or not all of yesterday's price/volume action will be reported in a timely manner.  They weren't two weeks ago when this same set of circumstances occurred---and we won't know for sure until the report comes out at 3:30 p.m. EDT on Friday.

And as I mentioned in The Wrap yesterday, the "Managed Money" category in the Disaggregated COT Report, which is usually net short at this point of any engineered price decline, is currently net long 8,400 contracts---and it will be interesting to see how much has changed in this category when the new COT Report comes out on Friday.

So we wait.

As I type this paragraph, the London open is about 15 minutes away.  All four precious metal got sold down a bit more in Far East trading, but now are rallying a bit as the London open approaches.  Gold volume is already north of 28,000 contracts---and silver, net of rollovers, is around 7,000 contracts.  Not exactly light volume, but most of it is of the HFT variety anyway.  And not that it matters, but the dollar index is down a small handful of basis points.

And as I send this down to Stowe, Vermont at 5:05 a.m. EDT, all four precious metals are back at, or just above their Tuesday closing prices in New York.  Gold volume is at 43,000 contracts---and silver's net volume is at 10,000 contracts---and almost all of it, especially in gold, is still of the HFT variety.  The dollar index has rolled over a bit and is now down 14 basis points.

I have no idea what to expect when I check in later this morning---but nothing will surprise me, nor should it you.

See you tomorrow.

]]>
Wed, 16 Apr 2014 09:22:00 +0000
<![CDATA[Grant Williams: All Markets Are Rigged, Maybe Gold Most of All]]> http://www.caseyresearch.com/gsd/edition/grant-williams-all-markets-are-rigged-maybe-gold-most-of-all/ http://www.caseyresearch.com/gsd/edition/grant-williams-all-markets-are-rigged-maybe-gold-most-of-all/#When:09:21:00Z "Prima facie evidence of the Anglo/American price management scheme"

¤ Yesterday In Gold & Silver

The gold price rallied sharply at the 6 p.m. Sunday evening open in New York---and ran into short sellers of last resort almost immediately.  Volume wasn't overly heavy, but it was enough to do the job.  From there the price didn't do much until the 8 a.m. BST London open---and then got sold down to its low of the day, which came at 8:30 a.m. in New York, 10 minutes after the Comex open.  The subsequent rally got capped shortly before the London close---11 a.m. EDT---and from there got sold down $5 before trading sideways starting at noon in New York.

The CME recorded the low and high ticks as $1,318.70 and $1,331.40 in the June contract.

Gold finished the Monday session in New York at $1,326.60 spot. up $8.20 on the day.  Net volume was around 106,000 contracts, which was about 5,000 more than Friday's volume---and pretty light.



It was more or less the same chart pattern in silver, except for the fact that it got sold down once London began to trade---and looking at the chart pattern on the decline, it appears that the technical funds were doing some shorting, which added to the size of the price decline.  The low was in at the noon silver fix---and from there the price was allowed to rally back to the $20 spot price mark---and that as it for the day, as every rally back over that price got firmly put in its place.

The low and high ticks were $19.735 and $20.11 in the June Contract.

Silver closed in New York at $19.965 spot, up half a cent.  Net volume was 25,500 contracts, which is on the lighter side.



Here's the New York Spot Silver [Bid] chart on its own, so you can see how carefully the silver price was managed around the $20 price mark in the Comex session.



After their initial rallies at the New York open on Sunday evening, neither platinum and palladium were allowed to get far after that.  Here are the charts.





The dollar index closed late Friday afternoon at 79.49---and spiked down to 79.42 immediately, before heading north seconds later, settling out at 79.62.  From there it didn't do much until about 20 minutes after London opened.  The subsequent rally took the index up to 79.82 before it fell back a bit into the close.  The dollar index finished at 79.76---up 27 basis points on the day.



The gold stocks gapped up about 2% at the open---and hit their high tick the same time as the gold price did, shortly before the London close.  They hung on to most of these gains until shortly before 3 p.m. EDT---but then got sold down about 1% going into the New York close.  The HUI finished up 1.49%---the exact same amount it lost on Friday.



The silver equities put in a similar performance, but Nick Laird's Intraday Silver Sentiment Index only closed up 1.20---which isn't bad considering that the metal itself closed flat on the day.



I forgot to "fill in the blanks" for Friday's CME Daily Delivery Report.  I have the paragraph typed before the CME posts the numbers on their website around 10 p.m. EDT---but then put "x"s where the actual numbers are supposed to go---and then fill them in when I edit the column, or sooner if I remember.  The editor missed that---and he ensures that he'll be more careful next time.

Anyway, the Friday numbers were nothing to write home about, as only three gold and two silver contracts were posted for delivery within the Comex-approved depositories on Tuesday, so you didn't miss much.

The CME's Daily Delivery Report for yesterday showed that 45 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  Jefferies was the short/issuer on all 45 contracts---and JPM and Canada's Scotiabank stopped 38 of them.  The link to yesterday's Issuers and Stoppers Report is here.

An authorized participant added gold to GLD yesterday---57,801 troy ounces to be exact.  And as of 6:47 p.m. EDT yesterday evening, there were no reported changes in SLV.

Since yesterday was a Monday, there was a decent sales report from the U.S. Mint.  They sold 5,500 troy ounces of gold eagles---and 752,500 silver eagles.

There was a pretty decent deposit in gold over at the Comex-approved depositories on Friday, as 158,397 troy ounces were reported received.  About a tonne went into HSBC USA---and the balance was taken by Canada's Scotiabank.  Nothing was shipped out.  The link to Friday's activity is here.

It was another decent in/out day in silver as well.  597,216 troy ounces were reported received---and 607,136 troy ounces were shipped out.  The link to that action is here.

Yesterday, reader "T.B." sent me the information below about 1-ounce gold coin holdings at the Permanent Fund---and I thought it worth sharing.

Ed,

Just thought I'd give you an update on the 1-ounce gold coin holdings of the Permanent Fund.  As normal it's delayed info, but should give you some insight to the supply/(decreasing) demand for the newly minted eagles/maples.
 
Holdings on July 31, 2013: 1,200,000 coins
Holdings on Oct 31, 2013: 1,080,000 coins
Holdings on Jan 31, 2014: 930,000 coins
 
Without the selling of some 270,000 coins over a six-month period, the mint stats would obviously have been that much stronger.  I guess one has to assume that these coins made their way back into individual investor aftermarket sales. 
 
When you start to see big 25-50,000-ounce sales weeks in gold eagles again you can probably assume that the $9 Billion Permanent Fund is once again growing and increasing its mandated allocation to gold.
 
Cheers,  T.B.

Here's a chart of the almost-18-year-old Ukrainian hryvnia [the national currency] vs. the U.S. dollar over the last six months---a graph that I shamelessly stole from an email that Casey Research's Bud Conrad sent around yesterday.  One would suspect that it's only a matter of time before the U.S. dollar chart is similarly configured.



I have a lot of stories today---and the final edit is yours.

¤ Critical Reads

Mortgage Lending Drops to 17-Year Low as Rates Curb Borrowing

U.S. mortgage lending is contracting to levels not seen since 1997 — the year Tiger Woods won his first of four Masters championships — as rising interest rates and home prices drive away borrowers.

Wells Fargo & Co. and JPMorgan Chase & Co., the two largest U.S. mortgage lenders, reported a first-quarter plunge in loan volumes that’s part of an industry-wide dropoff. Lenders made $226 billion of mortgages in the period, the smallest quarterly amount since 1997 and less than one-third of the 2006 average, according to the Mortgage Bankers Association in Washington.

Lending has been tumbling since mid-2013 when mortgage rates jumped about a percentage point after the Federal Reserve said it might taper stimulus spending. A surge in all-cash purchases to more than 40% has kept housing prices rising, squeezing more Americans out of the market. That will help push lending down further this year, according to the association.

This article showed up on the moneynews.com Internet site yesterday---and I thank West Virginia reader Elliot Simon for sending it along very late last night.

Tensions over Money Flows Bode Poorly for Global Economy

For a bunch of people who just agreed the global economy is doing better, top officials from the world's rich and poor nations sound rather worried.

For poor nations, the easy monetary policies in advanced economies are leading to big swings in capital flows that could destabilize emerging markets. For rich countries, the hoarding of currency by developing nations is blocking progress toward a more stable global economy.

Those tensions, which have been brewing for years, seemed to be rising as finance ministers and central bank chiefs from the Group of 20 economies gathered last week in Washington, as evidenced by harsh words from Washington and Delhi.

Both rich and poor say they are acting in their own self interest, and what makes the conflict so intractable is that both have very rational arguments.

This Reuters piece, filed from Washington, was posted on their Internet site in the wee hours of Sunday morning EDT---and I thank reader "h c" for sharing it with us.

Martin Hutchinson: The Ultimate in Foolish Leverage

The Financial Times revealed this week that trades in index credit default swap (CDS) options had managed to avoid being listed on exchanges, with all the transparency requirements that brings, instead being allowed to continue trading on an over-the-counter basis. The amount outstanding is relatively small in relation to the $25 trillion of CDS outstanding, but lack of transparency is likely to hide a deep underlying problem. I had thought that CDS themselves represented the ultimate in unmanageability by conventional risk management. But index CDS swaptions are worse, being even more leveraged and hence even more liable to excessively large tail risks that can crater the world's banking system.

Let's start with a little background, for those who never read our 2010 book, "Alchemists of Loss," or who have forgotten it. CDS were invented in the 1990s as a way to hedge/bet on credit risk. As an instrument, they have a number of problems, one of which (significant for these new gambling chips) being that there's really no good way to determine how much the thing will pay off in a bankruptcy. The CDS bankruptcy "auction" in which a few million dollars' worth of defaulted debt is put up for auction, to determine the price of instruments worth billions, is far too easily gameable. That's why, when swap market practitioners like myself had looked at the possibility of CDS in the 1980s, we had decided there was no practical way to create a sound product.

Well, dear reader, this short essay is a must read, but don't feel bad if you get a little lost as you progress through it.  If you don't completely understand why you should be terrified of credit default swaps and swaptions, just know that you should be. [That, and collateralized debt obligations [CDO], which he doesn't mention]  You'll be scared enough by the parts you do understand.  This commentary by Martin was posted on the Bear's Lair over at the prudentbear.com Internet site a week ago yesterday---and I thank reader U.D. for bringing it to our attention.

Guardian and Washington Post Win Pulitzer Prize for NSA Revelations

The Guardian and The Washington Post have been awarded the highest accolade in US journalism, winning the Pulitzer prize for public service for their groundbreaking articles on the National Security Agency’s surveillance activities based on the leaks of Edward Snowden.

The award, announced in New York on Monday, comes 10 months after the Guardian published the first report based on the leaks from Snowden, revealing the agency’s bulk collection of U.S. citizens’ phone records.

In the series of articles that ensued, teams of journalists at The Guardian and The Washington Post published the most substantial disclosures of U.S. government secrets since the Pentagon Papers on the Vietnam war in 1971.

The Pulitzer committee praised The Guardian for its "revelation of widespread secret surveillance by the National Security Agency, helping through aggressive reporting to spark a debate about the relationship between the government and the public over issues of security and privacy".

This article showed up on The Guardian Web site early yesterday evening BST---and it's the first offering of the day from Roy Stephens.

Europe's Top Banks Cut 80,000 More Staff in Post-Crisis Overhaul

Europe's largest banks cut their staff by another 3.5 percent last year and the prospect of a return to pre-crisis employment levels seems far off, despite the region's fledgling economic recovery.

Spurred into action by falling revenue, mounting losses and the need to convince regulators they are no longer "too big to fail", banks across the globe have shrunk radically since the 2008 collapse of U.S. bank Lehman Brothers sparked the financial crisis.

Last year, the tide of bad news began to turn for European banks, which are among the region's largest employers.

But despite the improved outlook, Europe's 30 largest banks by market value cut staff by 80,000 in 2013, calculations by Reuters based on their year-end statements showed.

This short Reuters essay, filed from London, was posted on their Web site on Sunday morning EDT---and it's the second offering of the day from reader "h c".

Banking Union Dominates Final European Parliament Session This Week

Crucial laws for the EU's banking union will headline proceedings in Strasbourg this week as MEPs gather there for the parliament's final session before May's European elections.

On Tuesday (15 April) deputies will debate and then sign off on the three final pieces of banking legislation: pan-EU rules protecting the first €100,000 of individuals' savings; a directive on bank recovery which sets out the hierarchy of shareholders and bondholders who will suffer losses if private banks get into difficulties; and a law establishing a single resolution mechanism for banks.

The agreement establishes a single regime to wind-down banks alongside a common fund worth €55 billion paid by the banks themselves to cover the costs of resolution. The rules will apply to all banks in the eurozone, as well as to those in countries which sign up to them.

This story, filed from Brussels, was posted on the euobserver.com Internet site yesterday morning Europe time---and it's the second contribution of the day from Roy Stephens.  It's worth reading.

Washington Drives the World to War — Paul Craig Roberts

The CIA director was sent to Kiev to launch a military suppression of the Russian separatists in the eastern and southern portions of Ukraine, former Russian territories for the most part that were foolishly attached to the Ukraine in the early years of Soviet rule. 

Washington’s plan to grab Ukraine overlooked that the Russian and Russian-speaking parts of Ukraine were not likely to go along with their insertion into the EU and NATO while submitting to the persecution of Russian speaking peoples.  Washington has lost Crimea, from which Washington intended to eject Russia from its Black Sea naval base. Instead of admitting that its plan for grabbing Ukraine has gone amiss, Washington is unable to admit a mistake and, therefore, is pushing the crisis to more dangerous levels.

If Ukraine dissolves into secession with the former Russian territories reverting to Russia, Washington will be embarrassed that the result of its coup in Kiev was to restore the Russian provinces of Ukraine to Russia.  To avoid this embarrassment, Washington is pushing the crisis toward war.

This essay by Paul was posted on his Web site yesterday---and is definitely worth reading, especially for all serious students of the New Great Game.  My thanks go out to Roy Stephens once again.

Europe Has Subjected the Greek People to a Cruel Experiment

Greece’s triumphant sale of five-year bonds to hedge funds (1/3) and global in investors – half based in London – tells us a great deal about the mental and emotional state of investors.

It tells us very little about the state of the Greek economy or Greek society. It is certainly not evidence that Greece is safely out of the woods. It is even less a vindication of EU/IMF Troika policies, an epic failure that will be studied years hence by scholars.

Normally when a country emerges from the trauma of an IMF austerity regime it has at least a tolerable level of debt, and if need be a devalued currency to restore competitiveness. Tough reforms matched by condign relief. The country is put on a viable path towards recovery.

This has not happened in Greece. Public debt is still 178pc of GDP, despite a haircut of private creditors near 70pc in effective terms, and despite (or because of) serial EU-IMF loan packages – the “occupation loans” as they are known in Greece. This level remains untenable for a country without a sovereign central bank and currency.

This Ambrose Evans-Pritchard blog, which is worth reading as well, was posted on the telegraph.co.uk Internet site on Saturday---and once again I thank Roy Stephens for sending it our way.

US Corn Exports to China Drop 85% After Ban on GMO Strains – Industry Report

China’s rejection of shipments of US corn containing traces of unapproved genetically modified maize has caused a significant drop in exports. According to a new report, US traders have lost $427 million in sales.

Overall, China has barred nearly 1.45 million tons of corn shipments since last year, the National Grain and Feed Association, an American industry association, said Friday.

The tally is based on data from export companies and is significantly higher than the previous numbers reported by the media, which said roughly 900,000 tons were affected. US corn exports to China since January are down 85 percent from the same period last year, the report says.

China has been blocking shipments of American corn from its market since November. This was caused by the presence of the MIR162 genetically modified corn strain in the shipments. It was developed by the company Syngenta and has not been approved by the Chinese government since an application was submitted in March 2010.

This article appeared on the Russia Today Web site during the Moscow lunch hour on Saturday---and I thank South African reader B.V. for finding it for us.

Nine King World News Blogs/Audio Interviews

1. John Embry: "The End Game Will Be Disastrous For the U.S. and the West"  2. James Turk: "Comex Casino Lies---and Skyrocketing to New All-Time High"  3. Dr. Paul Craig Roberts: "Why This Collapse Will Be So Horrific"  4. Michael Pento: "The End Game For the United States Will Be Catastrophic"  5. John Ing: "China's Massive Gold Hoard---and Global Flight From the Dollar"  6. Robert Fitzwilson: "Alarming Secrets U.S. and Saudi Arabia Are Hiding From the World"  7. Richard Russell: "The Cheapest Thing on the Planet is Silver"  8.  The first audio interview is with Dr. Paul Craig Roberts---and the second audio interview is with Bill Fleckenstein

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

Goldman Stands by $1,050 Gold Target on Outlook for Recovery

Gold will resume a decline as U.S. economic growth accelerates, according to Goldman Sachs Group Inc., which reiterated a forecast for the metal to end the year at $1,050 an ounce.

Bullion’s rally this year was spurred by poor U.S. data probably linked to the weather and rising tension in Ukraine, analysts led by Jeffrey Currie wrote in a report, describing the reasons as transient. With the tapering of the Federal Reserve’s bond-buying program, U.S. economic releases will return as the driving force behind lower prices, he wrote.

Gold’s 12-year bull run ended in 2013 as the Fed prepared to reduce monthly bond-buying that fueled gains in asset prices while failing to stoke inflation. Prices rose 10 percent this year even as the Fed cut purchases, with Russia’s annexation of Crimea and mixed U.S. economic data boosting haven demand. Last year, Currie described gold as a “slam-dunk sell” for 2014.

Of course there's no way that gold will even get a sniff of that price, but the mainstream media will print any drivel without question that Wall Street hands them.  I found this Bloomberg story, which was filed from Singapore, posted on their Web site very early yesterday morning Denver time.  I borrowed it from the sharpspixley.com Internet site.

Question Greenspan About Gold at the New Orleans Conference in October

The greatest failure of financial journalism and investment fund management long has been the failure to put specific questions to central banks about their surreptitious interventions in the markets, their market rigging. But participants at this October's New Orleans Investment Conference may have an opportunity to start correcting that failure.

Astounding as it seems, former Federal Reserve Chairman Alan Greenspan has agreed to speak at the conference and to take questions from the audience, including questions about gold.

Of course there is no guarantee that Greenspan will answer the questions, or answer them honestly, rather than claim some obligation to protect the secrecy of Federal Reserve operations or deflect questions to the U.S. Treasury Department, whose Exchange Stabilization Fund is explicitly authorized by federal law to trade secretly not only in gold but also in any foreign currencies and "other instruments of credit and securities"...

This commentary by GATA secretary/treasurer Chris Powell was posted on the the gata.org Internet site yesterday.

Bart Chilton Joins America's Largest Law Firm as Policy Advisor

It seems like it was only yesterday (actually it was early November) when infamous CFTC commissioner, legendary threat to gold manipulators nowhere, and Alexander Godunov impersonator Bart Chilton made a very dramatic exit stage left.

Here is what we said at the time:  Having "left traders in their own" during the shutdown, Chilton expressed "excitement" at his new endeavours after sending his resignation letter to President Obama this morning (more poetry? - or body doubles?) "I'm reminded of the old Etta James song, 'At Last,'" said Mr. Chilton, one of the agency's three Democratic members. "At last, we've got this rule here," and at last, he would be leaving the CFTC. This leaves us wondering whether Chilton, no longer burdened by the shackles of his meagre compensation, perhaps can finally do what he has been promising to do for years - become a whistleblower - after all he has insinuated so many times he knows where all the "dirt" is; unless, of course, it was all for show.

The rhetorical answer to the rhetorical question: of course it was all for show, confirmed moments ago when Chilton became just the latest "regulator" to take the great revolving door out of a worthless public service Washington office into a just as worthless, but much better paying private-sector Washington office. Presenting the latest employee of DLA Piper, the largest law firm in the US, and possibly the world, by number of partners - Bart Chilton, poet.

This should come as no surprise to anyone, as it certainly didn't for me.  This news item showed up on the Zero Hedge Web site late yesterday evening EDT---and I thank Elliot Simon for sending it to me just after midnight.

New York Fed Contradicts Its Former Vice President About Gold Accounts

The Federal Reserve Bank of New York has contradicted the assertion of its former vice president that it has provided gold accounts to bullion banks.

The assertion of such accounts was made by H. David Willey, the former New York Fed vice president in charge of foreign central bank accounts and the gold vault at the New York Fed, in a speech given in May 2004 to the American Institute for Economic Reserve in Great Barrington, Massachusetts.

Willey said: "The Federal Reserve Bank of New York provides limited facilities for gold transactions. The bank will allow gold accounts only for foreign monetary authorities and for banks that are members of the Federal Reserve System, not for other gold dealers in the U.S. markets."

I found this commentary by Chris Powell posted on the gata.org Web site yesterday.

Anglo American "Mulls Sale of South African Platinum Mines"

Anglo American's chief executive has hinted that the mining titan is looking to offload its strike-hit South African platinum mines to concentrate on open-cast extraction.

The London-listed firm's operations in South Africa's platinum belt north of Johannesburg have been idle for close to three months, forcing the firm to dig into reserves and hitting its bottom line.

About 80,000 miners are on strike and have vowed not to return to the shafts until their minimum monthly wage is doubled to 12,500 rand, around $1,200.

Anglo American says that demand, if met, would wreck its platinum subsidiary.

This AFP story, was posted on the france24.com Internet site yesterday morning---and I thank reader B.V. for his final contribution to today's column.

Gold scarce, India's Silver Jewellery Exports Double

A shortage of gold as a raw material and the consequent decline in gold jewellery exports appears to have opened up new avenues of growth for silver jewellery in India.

India's silver jewellery exports rose 45.33% to $84.1 million in February 2014, and jumped 89% in the 11-month period to $1.35 billion, according to data from the Gems and Jewellery Export Promotion Council.

Council data also showed that silver jewellery exports rose 109% between April 2013 and February 2014, to $1.3 billion (Rs 81.4 billion) from $642 million (Rs 38.85 billion) in the same period of the previous financial year.

Pankaj Parekh, vice chairman of the Council said it was not just silver jewellery that shone in the overseas market, but rather exports of silver utensils, artifacts and other silver articles too continued with their upward trend to the US, parts of Europe and Japan.

This silver-related news item, filed from Mumbai, showed up on the mineweb.com Internet site yesterday---and it's a must read of course.

Economists Notwithstanding, Indians Know How to Put Their Gold to Work

It's indestructible. It's fungible. It's beautiful. And for Indians, gold -- whether it's 18, 22, or 24-carat -- is semi-sacred.

The late distinguished Indian economist I.G. Patel observed, "In prosperity as in the hour of need, the thoughts of most Indians turn to gold."

No marriage takes place without gold ornaments presented to the bride. Even the poorest Indian outfits girls in the family with a simple nose ring of gold.

The India of old was known as "sone ki chidiya" or "golden sparrow," so opulent were the jewels of its rulers from the Moghul dynasty to the princely states.

For Indian women who were not formally educated, gifting them gold was their social security. Today, whether Hindu, Christian, Buddhist, or Muslim, bedecking the bride in gold invests her with good fortune, according to anthropologist Nilika Mehrotra.

This story, posted on the npr.org Internet site in the wee hours of yesterday morning, was something I found posted on the gata.org Internet site yesterday as well.  Its real headline reads "A Gold Obsession Pays Dividends For Indian Women".  Needless to say, it's worth reading.

Koos Jansen: Shanghai Withdrawals Falling but Still Above Last Year's

Weekly withdrawals from the Shanghai Gold Exchange have been declining for five weeks but remain above withdrawals for the same period last year, gold researcher and GATA consultant Koos Jansen reports at the Swiss Internet site ingoldwetrust.ch.

This is another gold-related news item I found on the gata.org Internet site yesterday.

Grant Williams: All Markets Are Rigged, Maybe Gold Most of All

All markets are rigged these days, perhaps the gold market most of all, fund manager Grant Williams writes in the new edition of his Things That Make You Go Hmmm... newsletter.

Williams writes: "In order for market rigging to be stopped, the changes have to come from those entrusted with regulation, in the form of stern punishments for those caught rigging them, and there must be changes to the rules to close the loopholes that allowed this kind of activity to occur in the first place.

"Instead, the bodies which supposedly oversee the markets are involved in the most serious rigging of all.

Grant's gold commentary isn't very long---and there isn't anything in it that you haven't see already in this column---but it, along with the rest of the column [which is a big read], is definitely worth your time.  I thank Chris Powell for wordsmithing the above two paragraphs of introduction.

¤ The Funnies

¤ The Wrap

But under the hood, things got a lot stranger in silver.  For starters, the concentrated short position of the four largest shorts increased by nearly 1,900 contracts. Accordingly, I would peg JPMorgan’s short corner in Comex silver to now be 22,000 contracts, up from the 20,000 contracts the bank held last week. After removing spreads (as must be done), JPMorgan holds 16.6% of the short side of the entire Comex short position in silver futures. If the 4 and 8 largest shorts in Comex silver added shorts (which they did to the tune of 2.200 contracts combined) and the commercial short position increased by less than 500 contracts that means the raptors (the smaller commercials apart from the big 8) had to buy 1,700 new longs, which was the case.
 
Here’s what is so strange – even as the raptors have built up their net long position by almost 18,000 contracts to 37,500 contracts since March 4, JPMorgan and the other 7 big silver shorts have added 7,000 new shorts in that same time (with JPM accounting for 4,000 new short contracts). In fact, the concentrated net short position of the 8 largest Comex silver shorts is now at the highest level in three and a half years; 66,435 contracts, or the equivalent of 332 million oz. Huh? Silver prices are stinking up the joint and near the lowest levels in 3.5 years and the concentrated short position is the largest it has been in that time. What other evidence is required to prove that silver has been manipulated lower by JPMorgan and the other concentrated Comex shorts?

Up until very recently, the raptors and JPMorgan and the other big concentrated silver shorts generally worked the same side of the street, but with different agendas. Usually it was the raptors and the big shorts aligned against and milking the technical funds; the raptors for pure profit, the big shorts in order to contain the price first, with profits a secondary objective. That meant that the raptors and JPM and the other big silver shorts all bought and sold in harmony. These past four or five weeks have featured a very different pattern with the raptors buying big and JPM and the other big shorts actually selling pretty heavy. I don’t think I’ve ever seen the raptors adding long contracts while JPM and the others added shorts. - Silver analyst Ted Butler: 12 April 2014

It was another day that, even though there were relatively low volumes in both silver and gold, it was obvious that prices were being actively managed---and that the prices of all four precious metals [silver and gold in particular] were capped during the New York trading session.  Fortunately, all this data should be in Friday's Commitment of Traders Report.

Here are the silver and gold charts with yesterday's price data included.

With the exception of one day, silver has been closed at or just below the $20 spot price for three straight weeks.  A chart pattern like the one above cannot occur in a free market---which it isn't.

The gold price has now closed about its 50-day moving average for 3 consecutive days---and it will be interesting to see if this rally is allowed to continue.  Even if it does continue, it's obvious from the chart patterns of the last week or so, that the daily price rises are being heavily controlled---and it's equally as obvious that all four precious metals would be doing much better than they are if allowed to trade freely.  It's still entirely possible that we could get a "failure" at this level, but we'll have to wait it out.

In the Grant Williams' commentary that's posted in the Critical Reads section, he had a couple of gold charts embedded in it that you can't make out at all, so I asked Nick to send them along---and here they are below.  I've posted them on many occasions---and the "click to enlarge" feature works wonders here.  The contents in the dialogue boxes tells all.  If you started with $100 on January 1, 1970---and invested as indicated on these two charts, the amounts show on the far right is what that $100 investment would have returned after 40+ years.

As Grant pointed out---and as I've said on many occasions as well---these 40+ year charts are prima facie evidence of the Anglo/American price management scheme that has been in place since gold hit $850/oz. 30+ years ago.  Only the willfully blind can't/won't see it, but I know you can, dear reader---or you wouldn't be reading this.

Today is the cutoff for this Friday's COT Report and as always, I'm hoping that everything that happens today in gold and silver gets reported in a timely manner.  The data from two week ago, wasn't---and we had big spillover into last Friday's report, which really skewed the numbers in the last two reports.

And as I write this paragraph at 3:05 a.m. EDT, the London market has been open about five minutes.  I also note that the HFT boyz have been up to their usual tricks during Far East trading, as all four precious metals got "the treatment."  Gold volume is already a hair over 30,000 contracts---and silver's volume is around 9,000 contracts---with little, if any of the volume, rollovers or switches.  And not that it matters, but the dollar index is up a handful of basis points.

When I was talking to Ted yesterday, I mentioned the fact that I was concerned about the large net long position that still existed in the Non-Commercial category of the COT Report.  In reply, Ted pointed out that there was the big long position in the "Managed Money" category in the Disaggregated Commitment of Traders Report.  The "Managed Money" position is included in the "Non-Commercial" category of the legacy COT Report, the one I follow every week.  But, as Ted mentioned, normally this category would be net short---especially considering the current silver price action as of late---but that's not the case this time.  At the moment, the category is net long about 8,400 contracts---and Ted is wondering who might be sitting in the bushes on the long side at this juncture---and in that category in particular.  That's a good question---and I know that Ted will have much more to say about it in his mid-week commentary to paying subscribers tomorrow.

And as I send today's column off to Stowe, Vermont, I note that all four precious metals are still under selling pressure from the high-frequency traders.  Gold volume is over 45,000 contracts---and silver's net volume is just above 10,000 contracts.  The dollar index is still up about the same number of basis points as it was a couple of hours ago.

I'm must admit that I'm not exactly looking forward to what might await me from a price perspective when I check in later this morning.  As you are more than keenly aware, the price action at the moment has nothing to do with supply and demand, as it's all paper trading on the Comex.  You wonder what has to happen to goad the mining companies into action.  If not these engineered prices---and not the multitude of class-action lawsuits against the LBMA---then what, you might ask?  A good question for which there is no answer, as it doesn't appear the executives running these companies have a gonad to share amongst each other---let alone two of them.

See you tomorrow.

]]>
Tue, 15 Apr 2014 09:21:00 +0000
<![CDATA[Pressure on India to Cut Gold Duty Mounts]]> http://www.caseyresearch.com/gsd/edition/pressure-on-india-to-cut-gold-duty-mounts/ http://www.caseyresearch.com/gsd/edition/pressure-on-india-to-cut-gold-duty-mounts/#When:11:56:00Z "If they really set their HFT foxes amongst the golden pigeons"

¤ Yesterday In Gold & Silver

Looking at the Friday trading session in gold as a whole, not much happened.  There was a bit of a selloff starting an hour before London opened---and the subsequent rally that began around 10 a.m. BST lasted less than two hours---and after that the price drifted lower for the rest of the day.  Not much to see here.

Of course, the low and high weren't much to write home about---$1,314.00 and $1,24.20 in the June contract.

Gold finished the Friday session at $1,318.40 spot, up a whole 30 cents on the day.  Volume, net of May, was only 101,000 contracts.

The price chart for silver was virtually the same as gold.  The early morning rally in London took silver back above the $20 spot price mark---and has been the case for nearly every day for the last 14 consecutive days, it was closed back below that price by the end of trading in New York.

The difference between the low and high price ticks looked to be about two bits---and I'm not even going to bother looking them up on the CME's website.

Silver closed in New York yesterday at $19.96 spot, down 7 cents on the day.  Net volume was only 22,500 contracts---and down substantially from Thursday when "da boyz" threw everything they had at the silver price.

Platinum was similar, although it did a bit more flopping and chopping in a ten-dollar price range during the New York trading session---and it closed unchanged.

Palladium was following the same price pattern as the other three precious metals up until shortly before 10 a.m. EDT---and then it blasted off to the upside, only to run into a seller of last resort shortly after it broke above the $800 price mark.  It got sold down hard from there, but managed to finish above $800 spot.  Just as a matter of interest, the low and high ticks in palladium were recorded as $785.15 and $812.50 in the June contract---and heaven only knows how high the price would have gone if that not-for-profit seller hadn't put in an appearance.

The dollar index closed in New York late Thursday afternoon at 79.41---and just sat there until until an hour before the London open.  It chopped around a bit before hitting its 79.54 'high' about 8:30 a.m. EDT---and then gave a bit of that back going into the close.  The index finished the Friday session at 79.49---up 8 whole basis points.  Nothing to see here, either, folks---please move along.

Once again the gold stocks opened in positive territory, but couldn't hold on---and drifted quietly lower as the New York trading session advanced.  The HUI finished just off its low of the day---and down another 1.49%.

Despite the fact that silver was down only 7 cents on the day, the silver equities declined some more, as Nick Laird's Intraday Silver Sentiment Index closed down 2.34%.

The CME's Daily Delivery Report showed that xx gold and xx silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.

Another day---and another withdrawal for GLD.  This time it was 57,803 troy ounces.  And as of 7:47 p.m. yesterday evening, there were no reported changes in SLV.  I attempted to check the SLV data while I was editing today's column in the wee hours of this morning, but they've changed their website around---and the link I've always used is now inactive.  I hope to have that fixed before Tuesday's column.

There was a tiny sales report from the US Mint for the second day in a row.  They sold 57,500 silver eagles---and that was it.  Month-to-date the mint has sold 17,000 troy ounces of gold eagles---10,000 one-ounce 24K gold buffaloes---1,345,500 silver eagles---and 600 platinum eagles.  Based on these figures, the current silver/gold ratio works out to a hair under 50 to 1.

There was no reported in/out activity in gold over at the Comex-approved depositories on Thursday.  In silver, there was a smallish deposit of 4,958 troy ounces---but a very large 1,179,247 troy ounces were shipped out.  The link to the activity in silver is here.

The Commitment of Traders report was a bit of a strange animal.  I'll just hit the highlights and leave the rest to Ted Butler.  Since I didn't know what to expect, I figured that I wouldn't be surprised by what was in it.  But I was, anyway.

In a week where the silver price didn't do much---and the $20 price was miles below any relevant moving average, the Commercial net short position increased by a rather small 463 contracts.  The Commercial net short position now stands at 144.5 million ounces.  The surprise under the hood here, according to Ted, was that JPMorgan increased their net short position by another 2,000 contracts.  They now hold 22,000 Comex short positions [net] in silver, or 110 million  troy ounces.  That represents 76% of the total Commercial net short position I just computed---and a bit over 16.5% of the entire Comex silver market on a net basis.

It's a complete mystery to Ted---and to me, now that I know about it---as to why JPMorgan would be aggressively going shorter at the same time as the raptors [the Commercial traders other than the Big 8] were aggressively adding to their long positions during the same reporting week.  It's a situation Ted doesn't remember ever seeing before, as normally JPM and the raptors are in sync with each other.

It's entirely possible that all the data from the prior reporting week wasn't  reported in a timely manner---and what didn't make it, ended up in this report, which skewed the numbers.  I mentioned that as a possibility earlier this week.

I know that Ted has noticed something else in the COT numbers that came as a surprise to him---and I'll be interested in what he has to say about this in his report to paying subscribers later today.

As different as silver was, the COT for gold was way out there as well.

Just eye-balling the gold chart, it looks like gold was up between 15 and 20 bucks during the reporting week, which isn't a lot.  However, the COT Report in gold showed that the Commercial net short position improved by a massive 12,286 contracts, or 1.23 million ounces of gold.  The Commercial net short position is now down to 10.17 million  troy ounces.  The technical funds pitched about 8,500 long contracts and went short about 3,100 contracts on top of that amount.

But the real under-the-hood surprise according to Ted, was that despite this massive improvement in the headline number, JPMorgan actually sold another 7,000 contracts of their long-side corner during the reporting week.  Their long-side Comex corner in gold is now down to about 36,000 contracts, or 3.6 million ounces.

I suppose that, like silver, there was a lot of carry-over from the previous reporting week, as that's the only explanation that I can come up with.  I also suppose there could have been reporting errors from the CFTC, but not in both metals at once.  As I said in silver, I'll wait for Ted's take on all this, as he's the real authority on this report.

Here's Nick Laird's most excellent "Days of World Production to Cover Comex Short Positions" chart in each physical commodity traded on the Comex.  It shows the short positions of the four and eight largest traders in each one.  Silver is still nailed to the right hand side of this chart---and only the grotesque short position in palladium knocked it out for a few months a year or so ago---but now the grotesque short position in silver is back in top spot once again.

All this chart does is reconfirm what's in the Bank Participation Report every month as well, as "four or less" U.S. bullion banks have massive Comex short positions in all four precious metals.  Gold's two bars in the above chart would look entirely different if JPMorgan was on the short side in gold instead of the long side.  The revised gold position would muscle out cocoa---and the four precious metals would be in the top four positions on this chart.  JPMorgan's 22,000 contract short-side corner in Comex silver represents about 55 days of world silver production.

And while I'm looking at this chart, I now know one of things that Ted is going to talk about in his weekly review later today---and why.  I'll steal his comments about it for Tuesday's column.

I don't have all that many stories for a Saturday---and only a couple that I've been saving for today---so I hope you have enough time in what's left of your weekend to read the ones you like.

¤ Critical Reads

SEC Eyes Test That May Lead to Shift Away from "Dark Pools"

U.S. securities regulators are considering testing a proposed reform that could drive business to major stock exchanges and away from alternative trading venues such as "dark pools" that critics say may be hurting investors by reducing the quality of pricing.

The proposal, which has so far only been discussed among staff involved in policy making at the U.S. Securities and Exchange Commission, could limit how much trading occurs inside brokerages and in dark pools, according to people familiar with the matter.

The measure aims to address a concern among some regulators and academics about the increasing level of trading that happens outside of exchanges.

They say that the amount of trading being done in the "dark" means that publicly quoted prices for stocks on exchanges may no longer properly reflect where the market is, meaning that investors may not be getting the best prices for their trades.

This Reuters story, co-filed from Washington and New York, was posted on their website very early yesterday morning EDT---and I thank West Virginia reader Elliot Simon for today's first news item.  It's definitely worth reading.

Doug Noland: Financial Stability

So I’m seeing significant confirmation of the bearish thesis – fundamentally and more recently in the marketplace. The global liquidity backdrop has become less bullish. Central bank liquidity has peaked. A strong yen restrains “carry trade” speculative leveraging, while changes in China’s currency management regime reduce the incentive for yuan “carry trades.” Especially with the prospect of Fed balance sheet growth ending later this year, the notion of the Fed as the markets’ liquidity backstop is now in question. From my perspective, the leveraged speculating community will need to adjust to a much less favorable backdrop for risk-taking and leveraging. The marginal operator in the marketplace is evolving from buyer to seller; from risk-taker to risk reducer and hedger; from liquidity provider to liquidity taker.

While I don’t expect market volatility is going away anytime soon, I do see an unfolding backdrop conducive to one tough bear market. Everyone got silly bullish in the face of very serious domestic and global issues. Global securities markets are a problematic “crowded trade.” Marc Faber commented that a 2014 crash could be even worse than 1987. To be sure, today’s incredible backdrop with Trillions upon Trillions of hedge funds, ETFs, derivatives and the like make 1987 portfolio insurance look like itsy bitsy little peanuts. So there are at this point rather conspicuous reasons why Financial Stability has always been and must remain a central bank’s number one priority (whether Dr. Evans appreciates this or not). Just how in the devil was this ever lost on contemporary central bankers?

Doug's most excellent commentary was posted on the prudentbear.com Internet site early yesterday evening---and I thank reader U.D. for sending it our way.

Debt-Laden France Sells Off Lavish Foreign Properties

The official Manhattan residence of France’s ambassador to the United Nations went on sale this week, with French authorities hoping to collect 34.5 million euros ($48 million) for the luxury property.

The sale of the 18-room duplex overlooking Park Avenue – located in the same building that Jackie Kennedy and John D. Rockefeller at one time called home – has been planned for over one year, and it is part of a wider effort by the Foreign Ministry, known in France as the Quai d'Orsay, to slash costs across the globe.

The sale of the Park Avenue apartment was in line with a new “streamlined management of the ministry’s real estate stock,” Dana Purcarescu, spokeswoman for France’s embassy in Washington, told Reuters on Thursday.

While France is still a key player on the global stage, as military interventions in Africa have recently highlighted, it is no secret the former imperial giant has ceded influence to other Western and emerging powers over the years.

This interesting news item appeared on the france24.com Internet site yesterday---and I thank South African reader B.V. for sliding it into my in-box just before I hit the send button on today's column.

Germany Risks EU Fines with Record Current Account Surplus

Germany's current account surplus will smash all records this year, risking a serious political showdown with Brussels and the ultimate sanction of EU fines.

A joint report by the leading German institutes, or "Wise Men", said the country's external surplus would keep rising to a modern-era high of 7.9% of GDP this year, far above the 6% limit set by Brussels under the new Macroeconomic Imbalance Procedure.

The Commission warned Germany late last year that it faced possible sanctions if failed to do its "homework", either by boosting consumption at home or by weaning its economy off excess reliance on foreign markets. The threat caused consternation in Germany's press and a vitriolic exchange with Brussels.

Well, dear reader, you have to ask yourself just one question---and that is "How did it come to this?"---penalizing a country for being too successful.  This Ambrose Evans-Pritchard commentary was posted on the telegraph.co.uk Internet site very early Thursday evening BST---and it's the first contribution of the day from Roy Stephens.  It's certainly worth skimming.

EU Taking Putin's Letter on Gas Transit "Seriously" – Merkel

The EU is taking seriously President Vladimir Putin’s letter to 18 European countries, in which he warned that Ukraine’s debt crisis could affect gas transit from Russia, German Chancellor Angela Merkel said.

"There are many reasons to seriously take into account this message […] and for Europe to deliver a joint European response,” Itar-Tass reported Merkel as saying.

She said the issue would be discussed in a meeting between European Union foreign ministers Monday.

This news item showed up on the Russia Today website early yesterday evening Moscow time---and it's another contribution from Roy Stephens.

Europe Folds as Putin Tells It to Pay Ukraine's Gazprom Bill, or Else

Another day ending in "y" means another day in which Putin plays the G(roup of most insolvent countries)-7 like a fiddle.

The latest: Europe should provide aid to Ukraine to ensure uninterrupted natural-gas deliveries to the region, President Vladimir Putin’s spokesman said as reported by Bloomberg.

"Russia is the only country helping Ukraine’s economy with energy supplies that are not paid for,"  Dmitry Peskov told reporters today in Moscow,  commenting on President Vladimir Putin’s letter yesterday to 18 European heads of state. “The letter is a call to immediately review this situation, which is absurd on the one hand and critical on the other.

Here's the Zero Hedge take on all this.  This commentary was posted on their website yesterday morning---and I thank reader B.V. for his second contribution to today's column.

Six More Ukraine/Crimea/Russia-Related Stories

1. Ukrainian prime minister offers more power to local regions: UPI  2. Putin to US: It’s bad to read other people’s letters: Russia Today  3. Europe is hard on secessions: Russia Today op-ed  4. Kiev backpedals on referendums after deadline to stop protest expires: Russia Today  5. Voices of Ukraine: "Kiev, people are not cattle!": Russia Today op-ed  6. "Ukraine can't have it both ways"Russia Today op-ed

[The above stories are courtesy of reader B.V.---and Roy Stephens]

All Hail the Draghi Put: The Global Bond Market Is Now Well and Truly Broken

The evil of modern central banking can nowhere better be seen than in this week’s mad stampede into $4 billion of Greek bonds. The fact is, Greece is not creditworthy at nearly any coupon yield, but most certainly not at the 4.75% sticker that was attached to the offering.

After a 20% contraction the Greek economy has been literally eviscerated—with not much left except tourism, yogurt plants and a 27% unemployment rate. It has an impossible debt-to-GDP ratio of 170% and, worse still, almost all of that debt is owned by EC institutions and the IMF. That is, this week’s “winners” stand in line behind the “bail-you-in-first-brigade” that will find some way to crush private investors—-English law indentures or not—when repayment of their own tower of loans comes into question.

And the claim that Greece’s fiscal affairs have turned for the better is really preposterous.  Like Italy and some of the other PIIGS, the Greek government has discovered the trick of off-balance sheet financing by stiffing its vendors. The backlog of “payables” to pharmacies, hospitals, doctors, garbage haulers, road maintenance vendors and countless more, along with deep arrearages in payments to pensioners and other transfer payment beneficiaries, has been manipulated by the finance ministry and their Brussels overseers to a far-thee-well, and now totals in the tens of billions.

This commentary by David Stockman showed up on the Zero Hedge website late yesterday evening---and my thanks go out to reader Harry Grant for sending me this, as he just made it under the wire at 5:18 a.m. EDT.

Seymour M. Hersh: Turkey – The Red Line and the Rat Line

In 2011 Barack Obama led an allied military intervention in Libya without consulting the U.S. Congress. Last August, after the sarin attack on the Damascus suburb of Ghouta, he was ready to launch an allied air strike, this time to punish the Syrian government for allegedly crossing the "red line" he had set in 2012 on the use of chemical weapons. Then with less than two days to go before the planned strike, he announced that he would seek congressional approval for the intervention. The strike was postponed as Congress prepared for hearings, and subsequently cancelled when Obama accepted Assad’s offer to relinquish his chemical arsenal in a deal brokered by Russia. Why did Obama delay and then relent on Syria when he was not shy about rushing into Libya? The answer lies in a clash between those in the administration who were committed to enforcing the red line, and military leaders who thought that going to war was both unjustified and potentially disastrous.

Obama’s change of mind had its origins at Porton Down, the defence laboratory in Wiltshire. British intelligence had obtained a sample of the sarin used in the 21 August attack and analysis demonstrated that the gas used didn’t match the batches known to exist in the Syrian army’s chemical weapons arsenal. The message that the case against Syria wouldn’t hold up was quickly relayed to the US joint chiefs of staff. The British report heightened doubts inside the Pentagon; the joint chiefs were already preparing to warn Obama that his plans for a far-reaching bomb and missile attack on Syria’s infrastructure could lead to a wider war in the Middle East. As a consequence the American officers delivered a last-minute caution to the president, which, in their view, eventually led to his cancelling the attack.

For months there had been acute concern among senior military leaders and the intelligence community about the role in the war of Syria’s neighbours, especially Turkey. Prime Minister Recep Erdoğan was known to be supporting the al-Nusra Front, a jihadist faction among the rebel opposition, as well as other Islamist rebel groups. ‘We knew there were some in the Turkish government,’ a former senior US intelligence official, who has access to current intelligence, told me, ‘who believed they could get Assad’s nuts in a vice by dabbling with a sarin attack inside Syria – and forcing Obama to make good on his red line threat.’

This essay, a must read for all serious students of the New Great Game, is one of the most serious pieces of investigative journalism that you're likely to see anywhere.  This is what the main stream press used to be like.  The story also falls into two different categories.  The first is, "you can't make this stuff up"---and the second is "the truth is stranger than fiction."  I hope you have time to read it, as it's sure to be a movie script some day.  I thank Casey Research's own Nick Giambruno for sending this my way on Monday, but for obvious reasons, it had to wait for my Saturday column.

Dust Storms Cloud Iran’s Future

Iran is, literally, being blown away. Stifling dust storms frequently now envelop both big cities and rural towns across much of Iran, the world’s 17th-largest country. They threaten to disrupt crucial parts of public and economic life, education, commerce, public health, agriculture, trade and transportation. Swirling clouds of windblown silt, soil, and sediment already affected 23 of Iran’s 31 provinces in 2013, according to Vice President Masoumeh Ebtekar, head of the country’s Environmental Protection Organization.

Iran’s massive dust storms could also spill well across Iran’s borders, generating serious regional consequences and tensions. Dust clouds veiled Tehran for 117 days of the Iranian year, which ran from March 2012 to March 2013. And blinding sand storms blocked roads across the eastern province of Sistan and Baluchistan last summer, isolating nearly 60 towns and villages.

Dust storms regularly arise in arid and semi-arid regions around the world. Indeed, the Islamic Republic sits in the center of a Northern Hemisphere “dust belt” stretching from the west coast of North Africa, through the Middle East, and across South and Central Asia to China. Winds gusting over the open, level landscape of Iran’s dry plateaus, deserts, and salt flats readily pick up loose soil and sand, lifting bits of dirt and grit into the atmosphere and carrying it tens, hundreds, or even thousands of miles away.

I posted a story on this issue last year, but this two-page essay by David Michael really fleshes it out.  It showed up on the Asia Times website yesterday sometime---and if you don't read it, then you should at least look at the pictures.  I thank Roy Stephens for bringing it to our attention.

Global Warming Scare Tactics

If you were looking for ways to increase public skepticism about global warming, you could hardly do better than the forthcoming nine-part series on climate change and natural disasters, starting this Sunday on Showtime. A trailer for Years of Living Dangerously is terrifying, replete with images of melting glaciers, raging wildfires and rampaging floods. “I don’t think scary is the right word,” intones one voice. “Dangerous, definitely.”

Showtime’s producers undoubtedly have the best of intentions. There are serious long-term risks associated with rising greenhouse gas emissions, ranging from ocean acidification to sea-level rise to decreasing agricultural output.

But there is every reason to believe that efforts to raise public concern about climate change by linking it to natural disasters will backfire. More than a decade’s worth of research suggests that fear-based appeals about climate change inspire denial, fatalism and polarization.

This short op-ed piece showed up on the New York Times website on Tuesday---and because of the content, had to wait for today's column.  It's also courtesy of Roy Stephens.

China Fake Data to Skew More Export Numbers

China's data distortions will muddy analysis of the nation’s trade until at least June, making it harder to assess the strength of the world’s biggest exporter and second-largest economy.

That’s when China will provide figures that compare with what Royal Bank of Scotland Group Plc economist Louis Kuijs says are “pretty clean” numbers from May 2013 that followed a crackdown on inflated invoices used to disguise capital inflows. Government data yesterday that showed March exports unexpectedly fell 6.6% from a year earlier marked the peak of distortions, RBS said.

China’s reluctance to revise figures it’s acknowledged were inflated has left the job of explaining why the trade numbers are better than they appear to analysts like Kuijs, as the nation endures its worst economic slowdown since the global financial crisis. The distortions add to investor and analyst concerns that the quality of data from jobs to gross domestic product isn’t good enough for a country that’s driving commodity prices and Asian growth.

This Bloomberg news item, filed from Beijing, was posted on their Internet site Thursday evening Denver time---and I thank Elliot Simon for sharing it with us.

Forex Scandal Hits Singapore Central Bank

A suspended Deutsche Bank trader may have had inappropriate links to the Monetary Authority of Singapore (MAS), it emerged yesterday.

London-based sales director Kai Lew was put on leave last month as part of the bank's internal probe into alleged foreign exchange benchmark manipulation.

The action was taken because she had communicated improperly with MAS, the Wall Street Journal reported yesterday.

The revelation means Singapore's central bank joins the Bank of England in having links with the emerging scandal.

This short news item was posted on the kitco.com Internet site yesterday---and it's courtesy of reader B.V.

Three King World News Blogs

1. Egon von Greyerz: "Global Implosion---and Why the IMF Just Lied to the Entire World"  2. Dr. Paul Craig Roberts: "2014 Will Be a Year of Reckoning For the U.S."  3. John Hathaway: "Remarkable Events Taking Place As the War in Gold Heats Up".

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

John Hathaway: Tocqueville Gold Strategy Investor Letter, First Quarter 2014

We observe that many investors who understand, and may well have been deeply committed to the investment rationale for gaining exposure to potential currency debasement, have been scarred by two extremely difficult years of negative performance and are therefore on the sidelines looking for a comfortable point to reenter the sector. In the meantime, we have witnessed the entry of contrarian value investors whose rationale can be summed up as viewing gold mining shares as an inexpensive way to protect capital in the event of a broad correction in equity and capital markets. It seems highly certain to us that the positive returns generated by equity markets over the past two years have represented a substantial barrier for capital to reenter precious metals. We therefore believe that a bear market in equities would constitute a catalyst to drive gold and precious metals equities sharply higher.

In terms of supply and demand flows, the stage is set in our opinion for higher gold prices. No mining company management in its right mind would commit to a program of mine construction at current prices. Therefore, we believe that mine supply will shrink in the years ahead, especially after 2015. Given the lead times involved in new mine construction and even with a moderately rising trend in gold prices, supply could be constrained through the end of the current decade. The demand picture, especially from Asian consumers and possible central banks, looks robust. The flow of gold into China continues to set records and the all-important consumption by the Indian subcontinent remains solid. The Chinese government, acutely aware to the downside risks of its $4 trillion exposure to the US currency, has almost certainly been surreptitiously accumulating physical gold as a hedge. There has been no update from official sources on central bank holdings since 2009, and if China is still in an accumulation mode, one can be certain that they have taken full advantage of the two year price decline and that their future intentions remain a well-guarded secret.

This commentary by John was posted on the tocqueville.com Internet site early yesterday evening---and it's a must read for sure.  It's the same commentary that was posted in the King World News section just above this story, but without the perpetual hyperbole---and with the correct headline.

Sprott Money Weekly Wrap-Up with Rick Rule

This week, Rick Rule discusses the debate between emerging markets and central banks, impact of South African strikes to platinum supply and prices, and differences between Japan and US economies.

This 8:47-minute audio interview was posted on the sprottmoney.com Internet site yesterday---and I'm not in a position to comment on it, as I haven't had the time to listen to it as of yet.

Koos Jansen: New Physical Gold Exchange in Singapore

I was tipped of by one of my readers on a new gold exchange operating in Singapore; Allocated Bullion Solutions Singapore. After taking a look on their website I asked their public relations desk for the details of their business. Websites can be incomplete and I wanted to be sure on what kind of exchange it was. They kindly responded whereupon a comprehensive Q&A followed.

This item was posted on the ingoldwetrust.com Internet site yesterday---and I found it embedded in a GATA release.

Alasdair Macleod: Gold and Bail-Ins

Even allocated gold probably isn't safe in an insolvent bank being restructured under government supervision, GoldMoney research director Alasdair Macleod writes today, especially since Western central banks may no longer have the gold they long have used to rescue bullion banks in trouble.

Alasdair's commentary is headlined Gold and Bail-Ins and it's posted at GoldMoney's Internet site.  This is another item I found on the gata.org Internet site yesterday.

Gold Rush Threatens West Africa's Cocoa Future

A month ago, Bouafu Kouassi dug a neat circular hole in the middle of his one-hectare cocoa plantation in western Ivory Coast, and, sifting through the gravel on his shovel, found the unmistakeable traces of gold dust.

With luck, it could transform his life, but it could just destroy his farm. And as the story repeats across the cocoa heartland of the world's top producer and neighbouring Ghana, the second-largest, it could do lasting damage to the industry.

Today, nearly three dozen vertical shafts plunge down into the soil beneath Kouassi's cocoa trees, branching out into a web of underground tunnels 10 metres below the surface.

This longish, but very interesting Reuters essay---filed from Yoho, Ivory Coast---was posted on their website early yesterday morning BST---and I thank reader B.V. for his final contribution to today's column.  It's worth reading if you have the time---and/or the interest.

Gold Smuggling Arrests Jump 750% YoY in India

While cases of gold smuggling in India have jumped 265% from 40 in 2012-13 to 146 in 2013-14, the number of people arrested has shot up by 750%, from 30 in 2012-13 to 255 in 2013-14, data from the Directorate of Revenue Intelligence shows.

"Gold imports through the legal channel have come down considerably. The chorus to decrease import duty is gaining everyday, and the recent trade figures are indicative that things have slumped to a new low," said Manish Kedia, bullion trader.

Data shows that gold smuggling cases at the Sardar Vallabhbhai Patel International Airport in Ahmedabad, have jumped 15 times in the last one year. Around 75% of the gold seized by customs officials at the airport in 2013-14 has been after August 2013, when the Indian government slapped 10% duty on gold imports.

This gold-related news story, filed from Mumbai, was posted on the mineweb.com Internet site yesterday sometime.

Pressure on India to Cut Gold Duty Mounts

The stage appears to be set for India to reduce import duty on gold.

Government data released on Friday showed that gold and silver imports have declined 40% to $33.46 billion in 2013-14, as compared to the $55.79 billion in 2012-13. India's exports have jumped a bit, while imports dipped by over 8% narrowing the trade deficit.

A sharp decrease in gold and silver imports has also helped narrow the trade gap to $138.59 billion from $190.33 billion, though crude oil imports continued to surge ahead.

Bimal Jalan, former governor with India's central bank, the Reserve Bank of India (RBI), told newspersons that if India's current account deficit (CAD) "is okay, and it is comfortable just now, there is no reason to control gold imports, particularly if (gold) prices are reasonable."

Here's another story from the mineweb.com Internet site yesterday.  This one was also filed from Mumbai.

Hugely Outnumbered – Western Gold Bears by Asian Gold Enthusiasts

Within an interesting almost hour-long discussion published on Chris Martenson’s Peak Prosperity website, Alasdair Macleod of Gold Money made the interesting – but in retrospect, patently obvious – comment that gold buyers and sellers in the West are hugely outnumbered by a traditionally gold hoarding community in Asia. And as Asian economies develop, this gold-oriented (carefully chosen word!) community is expanding rapidly as is its purchasing power. Macleod commented thus: “The point is there are 4 billion people in Asia who have got a very old-fashioned view of gold, and they have become wealthy over the last 20 years. And their view is likely to prevail against the ~1 billion of us in North America and Western Europe. I mean it really is as simple as that. It's not a question of Austrian economics, or Keynesian, or whatever. We're outnumbered.” 

This Asian appetite for gold has been expanding. It certainly hit a record last year as seen by the enormous volumes of recorded Chinese imports and gold movements out of the Shanghai Gold Exchange, the anecdotal evidence of a huge amount of gold being smuggled into India to try and circumvent the country’s gold import restrictions, and the massive level of gold trade seen through Dubai – most of which will have been destined for points East. Now even if this gold demand stutters this year given a growth downturn in the Chinese economy, it will still remain at an extremely high level – indeed Hong Kong has already reported record gold export figures to mainland China for the first two months of the year, with these figures supported by data showing big withdrawals of gold through the Shanghai Gold Exchange. With the prospect, perhaps likelihood, of India’s gold import restrictions being reduced, or lifted altogether one suspects that overall Eastern demand will continue to remain strong through the year, easily soaking up new mine supply and any forced sales out of the gold ETFs.

This commentary by Lawrie was posted on the mineweb.com Internet site yesterday as well.

¤ The Funnies

¤ The Wrap

Because silver’s unique dual demand profile makes it fundamentally different from most other metals and commodities, its real production and consumption must be analyzed differently. Whereas one might devote the most attention in evaluating prospective changes in world mine production and industrial consumption in commodities like copper, lead or zinc, such an approach has proven unproductive in silver. None of the price moves over the past 20 years or longer in silver have had much, if anything, to do with real production or industrial consumption. The clearest proof is that silver ran to almost $50 at a time of record high world production and had also lost its leading industrial demand component in the ten years leading up to that high (photography).

Even though industrial demand, combined with all other fabrication demand, makes up close to 90% of the total silver annual production of one billion oz (mine, plus recycling), this demand does not exert a proportionate influence on price. It is the other 10% of silver demand, in the form of investment in 1,000 oz bars that typically moves the price. I think the key to understanding real silver supply and demand is to focus on the 10% investment demand component. After deducting the 900 million oz total silver fabrication demand (industrial, jewelry, the minting of coins, etc.) from the billion ounces of current total production, the remainder of 100 million oz available for investment in the form of 1,000 oz bars will determine the price of silver. - Silver analyst Ted Butler: 09 April 2014

Today's pop "blast from the past" features Nat King Cole with his daughter Natalie Cole singing Nat's most famous number.  You'll know it in an instant---and the link is here.

Today's classical "blast from the past" dates from the early 18th century.  It's the second Brandenburg Concerto, BWV 1047, but only the first two movements, as I couldn't find the third movement [Allegro assai] anywhere in the right sidebar over at YouTube.  Too bad, as it's the most famous of the movements.  I don't see his name in the credits anywhere, but it looks like the late Karl Richter is conducting from the harpsichord.  It's a wonderful performance, what there is of it---and the link is here.  Note: I had to dig for it while I was editing this column, but I found the third movement.  However I have no time to rewrite this paragraph, so here it is.

With low volume and little interest in the precious metals [excluding palladium's price action, of course] yesterday, you can consider Friday just another day off the calendar.  But I wasn't happy to watch the precious metal stock prices get it in the neck for the second day in a row.  It's obvious that the decline in stocks on the U.S. exchanges are having a spill-over effect.  The precious metal equities have given up over half their gains of 2014 so far---and the premiums [such as they were] on some of the precious metal mutual funds that I follow on a daily basis, are starting to unwind.

Here are the charts for both gold and silver once again---and updated with yesterday's price performance.

Although we closed above the 50-day moving average in gold for the second day in a row, this loss of momentum---entirely caused by JPMorgan Chase et al---will/could set up the chart pattern for a 'failure' at this moving average.  I stated the same thing in this space yesterday, but with one more data point added, my conviction remains unchanged.  And as Ted said on the phone yesterday, the COT set up is such that "da boyz" could peel $100 off the gold price if they really set their HFT foxes amongst the golden pigeons.

The situation in silver is similar, except for the fact the metal is well below any significant moving average but, like gold, the technical funds are still massively long---and JPMorgan and the raptors could harvest these longs and ring the cash register if they so wished.

But the question concerning "all of the above" is---can they, or will they?  The short answer is the same as the long answer---I don't know, and only time will tell.

Before heading off to bed, I'd like to mention [for the second and final time] the Casey Research production titled Meltdown America.  It runs almost 29 minutes and features the harrowing tales of three people who survived economic and political collapse in Zimbabwe, Yugoslavia, and Argentina… with guest commentators Doug Casey; Jeff Opdyke from Sovereign Society; David Walker, former US Comptroller General; Jane Kokan, former BBC/CNN journalist; Dr. André Gerolymatos, former member of the Canadian Advisory Council on National Security; and Scott Taylor, war correspondent and publisher of Esprit de Corps magazine discussing how these powerful stories of hardship foreshadow what soon could be happening in the US.

This absolute must-watch documentary was posted on the Casey Research website on Tuesday---and the link is here.

That's it for the day---and the week---and I'll see you here on Tuesday.

]]>
Sat, 12 Apr 2014 11:56:00 +0000
<![CDATA[U.S. Mined Silver Output Continues to Fall—USGS]]> http://www.caseyresearch.com/gsd/edition/u.s.-mined-silver-output-continues-to-fall-usgs/ http://www.caseyresearch.com/gsd/edition/u.s.-mined-silver-output-continues-to-fall-usgs/#When:09:26:00Z "The sellers of last resort were at battle stations once again"

¤ Yesterday In Gold & Silver

The price action in gold on Thursday was very similar in most respects to the price action on Tuesday---and you can see that in the Kitco chart below.  There were a couple of short, sharp rallies in Far East trading between the New York open on Wednesday evening, right up until 9 a.m. Hong Kong time on their Thursday morning.  Then the price traded flat until the 8 a.m. BST London open.  The rally continued at that point, as did the efforts of the sellers of last resort.  However it all ended minutes after Comex trading began in New York yesterday morning---and it was all downhill into the close from there.

The low and high ticks were recorded by the CME Group as $1,311.0 and $1,324.90 in the June contract.

Gold finished the Thursday session at $1,318.10 spot, up $5.80 on the day.  Volume, net of May, was 134,000 contracts, with well over a third of that amount occurring before the London a.m. gold fix, as the HFT boyz did what was necessary to prevent the gold price from blowing out to the upside and taking out the 50-day moving average with any kind of authority---which it would have done handily if the not-for-profit sellers hadn't intervened.

It was virtually the same story in silver---and one can only imagine the rather large handle the silver price would have closed at if JPMorgan et al hadn't interfered.

The low and high ticks were recorded as $19.86 and $20.40 in the May contract, an intraday move of almost 3%.

Silver closed the trading day barely above the $20 spot mark at $20.03---up 18.5 cents on the day---but "da boyz" took it back below twenty bucks 45 minutes later, the moment that trading began in the Far East on their Friday.  Gross volume was over 80,000 contracts once again, but it all netted out to around 38,000 contracts, about the same volume as Tuesday.

Platinum and palladium had similar chart patterns, but their prices weren't capped for the final time until noon in New York.  Both closed with very decent gains on the day.  Here are the charts.

The dollar index closed in New York late on Wednesday afternoon at 79.53---and then didn't do much of anything until the equities markets opened in New York yesterday morning.  Then the index dropped down to its 79.35 low around 11:20 a.m. EDT---and from there it rallied a handful of basis points into the close.  The index finished the Thursday session at 79.41---down 12 basis points on the day.

Here's the 6-month dollar index chart---and you can see the damage that has been done during the last five trading sessions.

Although the gold stocks gapped up a bit at the open on the positive gold price action, they probably got caught up in the general sell-off in the U.S. equity markets---and down they went as well.  The HUI finished the day down 1.77%.

It was the same for the silver stocks, as Nick Laird's Intraday Silver Sentiment Index got clocked to the tune of 2.29%.

The CME's Daily Delivery Report showed that 46 gold and 20 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  Credit Suisse was the short/issuer on 45 of the gold contracts---and JPMorgan and Canada's Scotiabank stopped 38 of them.  In silver, Morgan Stanley and JPM were the two issuers---and Canada's Scotiabank stood for delivery on all 20 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There was a tiny withdrawal from GLD yesterday, as an authorized participant took out 8,429 troy ounces.  I would guess that this would represent a fee payment of some kind.  And as of 10:05 p.m. EDT yesterday evening, there were no reported changes in SLV.

Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with the goings-on over at SLV for the reporting week that ended on Wednesday---and here's his report:  "Analysis of the 09 April 2014 bar list, and comparison to the previous week's list---672,916.9 oz were added (all to Brinks London), 145,919.6 oz were removed, no bars had a serial number change."

"The bars added were from: KGHM Poland (0.4M oz), Solar Applied Materials (0.2M oz and 2 others.  The bars removed from were: KCM SA (0.1M oz), and 2 others. As of the time that the bar list was produced, it was overallocated 39.6 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

The U.S. Mint had sales report yesterday, but it was on the skinny side.  They sold 3,000 troy ounces of gold eagles---25,000 silver eagles---and 300 platinum eagles.

Over at the Comex-approved depositories on Wednesday, they reported receiving 14,202 troy ounces---and shipped out zip.  All of the gold went into Brink's, Inc.  The link to that 'activity' is here.

Of course it was a lot busier in silver, as a chunky 1,123,832 troy ounces were reported received---and nothing was shipped out.  The link to that action is here.

If you haven't noticed from the CME warehouse report yet---and just as a point of interest---JPMorgan Chase is the top dog in physical silver as well, as their depository now hold 45.49 million troy ounces of the stuff---a couple of million more than does HSBC USA.  One has to wonder how much more silver they may have stashed away, either in other Comex depositories [or elsewhere] in good delivery form that we just don't know about.  Then there's the question of who the mystery buyer is of all those silver eagles that have been sold for the last year or so.  Ted Butler suspects JPMorgan---and I'm not about to argue the point.

I have the usual number of stories for a week-day column---and I hope you find some in here that interest you.

¤ Critical Reads

Marc Faber's dire warning for the market

Marc says that the 2014 crash will be worse than 1987.  This 11:52 minute video clip was posted over at the CNBC website very early yesterday afternoon EDT---and today's first news item is courtesy of reader Ken Hurt.

US Budget Deficit Falls In March To $37 Billion

The U.S. government's budget deficit shrank to just $37 billion in March from $107 billion in the same month last year, the latest sign of improvement in the nation's finances. The deficit was the lowest for the month of March in 14 years.

The deficit fell partly because revenue jumped 16 percent to $216 billion, the Treasury Department said in its monthly budget report Thursday. Individual income and Social Security tax receipts have increased as employers have steadily hired more workers in the past year.

And if you believe that's actually true, then I really do have this bridge I'd like to unload---and you look like the perfect buyer.  This AP story showed up on the kitco.com Internet site at 2 p.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for bringing it to our attention.

Internet giants to government: We can spy on customers’ data, you shouldn’t

Silicon Valley has been largely speaking out as of late against the United States government’s controversial surveillance programs, but some say the nation’s top cyber firms are scared that their own abilities to collect info could soon be eroded.

Months into the ongoing and always heated debate about the U.S. National Security Agency’s spy operations, President Barack Obama said last December that he had appointed a small panel of experts to assess the NSA programs in question that had been exposed after former contractor Edward Snowden started to disclose classified documents earlier that year. That review group has since presented a few dozen recommendations to the White House, and last month President Obama asked Congress to codify into law changes concerning the way that the US government gets access to certain sensitive records — namely the telephony metadata created by telecommunication companies and currently gathered in bulk by the NSA, as exposed by Mr. Snowden.

In January, however, the president also said a separate group would reach out to privacy experts, technologists and business leaders to inspect the way that “big data” is created, collected and used by both the public and private sector, and “whether we can forge international norms on how to manage this data and how we can continue to promote the free flow of information in ways that are consistent with both privacy and security.”

This article showed up on the Russia Today website late yesterday afternoon Moscow time---and it's the first offering of the day from Roy Stephens.

More than 40,000 signed for 'Alaska Back to Russia' petition

The petition on Alaska going back to Russia, posted on the White House website on March 21st 2014, has since been signed by over 40,000 people. It should be signed by at least 100,000 by April 20th so the US authorities come up with an official response.

The petition points out that those residing in Siberia crossed into Alaska via Bering Strait ages ago.

Russians became the first Europeans to appear in Alaska on August 21st 1732. The actual discoverers are the St. Gabriel ship crew under land surveyor Gvozdev and junior sailing master Fyodorov, who were part of the 1729-1735 Shestakov and Pavlutsky-led expedition.

This rather amusing news item appeared on the Voice of Russia website early yesterday evening Moscow time---and if you're looking for a short history of Alaska before the U.S bought it from the Russians for a song in 1867---this is a must read.  It's the second offering in a row from Roy Stephens, for which I thank him.

Draghi Seen Easing Policy by June as ECB Readies Rate Cut

Mario Draghi will probably take action within two months against the threat of deflation, economists said.

Almost two-thirds of respondents in the Bloomberg Monthly Survey predicted the European Central Bank president will ease policy by June. Of those economists, just under half said he may implement multiple measures ranging from interest-rate cuts to asset purchases and long-term loans.

With euro-area inflation at the weakest in more than four years, Draghi says he has “unanimous” backing from policy makers for unconventional measures if needed. Even so, recent comments show officials haven’t yet agreed on which tools to use, setting them up for discussions on whether to take an unprecedented leap into quantitative easing or rely on smaller and more-targeted initiatives.

This Bloomberg article, filed from Frankfurt, was posted on their website in the wee hours of Thursday morning Denver time---and I thank reader Ward Pace for sending it our way.

Christine Lagarde: Huge Government and banks debts risk new financial crash

George Osborne is to tell an audience of free-market campaigners in Washington that the UK's economic turnaround will defy those who say austerity and low wage growth will lead to long-term stagnation. In his first major speech in the US, the chancellor will attempt to demolish claims that a further five years of austerity will restrict growth and hurt workers' living standards.

Osborne will argue at the American Enterprise Institute that low interest rates, the Bank of England's creation of new money through massive bond purchases under its quantitative easing programme and a strengthened banking sector can secure a bright future for the UK.

Osborne's speech comes after head of the International Monetary Fund, Christine Lagarde, issued a warning to world leaders that they need to do more to deal with huge government and bank debts that she said continue to drag down growth and undermine the stability of the financial system. Speaking at the IMF's spring conference, Lagarde said leaders needed to co-operate in their efforts to repair public sector and bank finances to protect against a repeat of the 2008 crash.

This article from The Guardian has had a major headline change, as you'll find out if you click on the link. It now reads a much softer sounding "George Osborne to use first major U.S. speech to rebuke critics of austerity."  It was posted on their website early yesterday afternoon BST---and I thank South African reader B.V. for digging it up on our behalf.

Top economists warn Germany that EMU crisis as dangerous as ever

The eurozone debt crisis is deepening and threatens to re-erupt on a larger scale when the liquidity cycle turns, a leading panel of economists warned in a clash of views with German officials in Berlin.

"Debts above 130pc of GDP for Italy and 170pc for Greece are a recipe for disaster once we go into the next downturn," said Professor Charles Wyplosz, from Geneva University.

"Today's politicians believe the crisis is over and don't want to hear any more about it, but they have not tackled the core issues of fiscal union and public debt," he said, speaking at Euromoney's annual Germany conference.

This Ambrose Evans-Pritchard offering showed up on the telegraph.co.uk Internet site very early on Wednesday evening BST---and I thank Roy Stephens for another contribution to today's column.

Angela Merkel denied access to her NSA file

The U.S. government is refusing to grant Angela Merkel access to her NSA file or answer formal questions from Germany about its surveillance activities, raising the stakes before a crucial visit by the German chancellor to Washington.

Merkel will meet Barack Obama in three weeks, on her first visit to the US capital since documents leaked by whistleblower Edward Snowden revealed that the NSA had been monitoring her phone.

The face-to-face meeting between the two world leaders had been intended as an effort to publicly heal wounds after the controversy, but Germany remains frustrated by the White House's refusal to come clean about its surveillance activities in the country.

This story is from theguardian.com Internet site---and it was posted there very early yesterday evening British Summer Time.  It's certainly worth reading.

Is the U.S. or the World Coming to an End? — Paul Craig Roberts

2014 is shaping up as a year of reckoning for the United States.

Two pressures are building on the US dollar. One pressure comes from the Federal Reserve’s declining ability to rig the price of gold as Western gold supplies shrivel and market knowledge of the Fed’s illegal price rigging spreads. The evidence of massive amounts of naked shorts being dumped into the paper gold futures market at times of day when trading is thin is unequivocal. It has become obvious that the price of gold is being rigged in the futures market in order to protect the dollar’s value from QE.

The other pressure arises from the Obama regime’s foolish threats of sanctions on Russia. Other countries are no longer willing to tolerate Washington’s abuse of the world dollar standard. Washington uses the dollar-based international payments system to inflict damage on the economies of countries that resist Washington’s political hegemony.

Russia and China have had enough. As I have reported---and as Peter Koenig reports, Russia and China are disconnecting their international trade from the dollar. Henceforth, Russia will conduct its trade, including the sale of oil and natural gas to Europe, in rubles and in the currencies of its BRICS partners.

This commentary by Paul falls into the must read category as far as I'm concerned, especially for any serious student of the New Great Game.  I thank Luxembourg reader Rudi Staudinger for bringing it to our attention.

Chinese exports and imports fall sharply in March

The country's exports fell by 6.6% in March when compared with the previous year.

Imports dropped by 11.3% in the same month, when compared with the same time last year.

This is the second straight month of falling exports for China. In February, exports dropped by 18.1%.

It is the first time since 2009 that exports have fallen for two months in a row.

This news item showed up on the bbc.com Internet site a few minutes after midnight EDT on Thursday morning---and it's worth reading.  I thank reader B.V. for sending it our way.

Bank of China Sydney branch issues 2 billion yuan bonds

Bank of China's Sydney branch issued 2 billion yuan (325 million U.S. dollars) of yuan bonds on Wednesday, the first yuan bond in Australia, the bank announced on Thursday.

The two-year bonds, with a coupon rate of 3.25 percent, were well-received in the market, oversubscribed 1.45 times.

Some 27.5 percent of the bonds were subscribed by local investors, said the bank.

This short article appeared on the xinhuanet.com Internet site early yesterday evening Beijing time---and I thank reader 'David in California' for sharing it with us.

Five King World News Blogs/Audio Interviews

1. William Kaye [#1]: "Gold Delivery Strains Reappear---and What Might Destroy COMEX"  2. Art Cashin: "Critical Metric is Now Over 1,000 Times Higher Than Normal!"  3. Jean-Marie Eveillard: "U.S. Gold Gone---and What 52 Years in This Business Taught Me"  4. William Kaye [#2]: "The Secret That Has U.S. and Western Leaders Truly Terrified"  5. The audio interview is with Gerald Celente

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]

Blythe Masters Under Investigation By Federal Prosecutors

There is much new info in the just released Bloomberg profile on the infamous ex-JPMorganite Blythe Masters, among which the disclosure that she had made it clear that she had wanted to go along with the disposable JPM physical commodities unit (which as was reported recently, was sold to Swiss commodities giant Mercuria) and "and continue as the group's chief", a plan which did not work out as she had planned since she has no plans to "join the unit’s purchaser" (although joining Glencore is another matter entirely, and one which looks increasingly plausible) but what we find most striking is the following revelation: "Masters is under investigation by federal prosecutors in Manhattan, according to two people with knowledge of the matter. That probe was opened following a settlement with regulators that alleged JPMorgan manipulated power markets in the Midwest and California."

This is somewhat ironic because it was none other than Zero Hedge which asked nearly a year ago if "JPMorgan's "Enron" Will Be The End Of Blythe Masters?" Suddenly, the answer appears to be yes.

This very interesting commentary over at Zero Hedge was posted on their website very late yesterday evening EDT---and it's definitely worth reading.  My thanks go out to Elliot Simon for bringing it to my attention---and now to yours.

Pat Heller: U.S. has rigged precious metals markets for 80 years

Writing for Coin Week, Patrick Heller of Liberty Coin Service in Lansing, Michigan, provides a brief history of the U.S. government's mechanisms of surreptitious market intervention and headlines his commentary, "The U.S. Government Has Rigged Precious Metals Markets For 80 Years".

I found this article in a GATA release last evening.

Chris Martenson and Alasdair Macleod discuss China's corner on gold

Market analyst Chris Martenson and GoldMoney's Alasdair Macleod discuss China's increasing control of the gold market, anti-gold propaganda in the Western financial news media, the likelihood that Western governments will commandeer the gold of private investors, and other provocative topics in an interview posted this week in audio and text versions at Martenson's Internet site, peakprosperity.com

The audio interview runs for 54:32 minutes, so top up your coffee or blow the froth off a cold one.

U.S. mined silver output continues to fall--USGS

U.S. mines produced 80,900 kilograms (2,600,995 troy ounces) of silver in November 2013, a 14% decrease from the 94,300 kg (3,031,815 oz) produced in November 2012, the U.S. Geological Survey reported.

Monthly silver production continued on a downward trend that began in June 2013, the USGS observed.

Average daily U.S. silver production in November 2013 was 2,700 kg (86,807 oz), compared with 3,140 kg (100,953 oz) in November 2012.

The Silver State of Nevada led silver production in November 2013 with 19,700 kg (633,369 oz) of output, while the combined total production of Alaska, Arizona, California, Colorado, Idaho, Missouri, Montana, New Mexico, South Dakota and Utah was 60,900 kg (1,957,980 oz).

Total U.S. silver output from January to November 2013 totaled 956,000 kg (30,736,114 oz), said the Geological Survey.

Wow!  U.S. silver production is even worse than I imagined it to be---only a bit over 33 million ounces per year based on current production rates.  That means that the U.S. Mint has to import about 10 million ounces of silver per year just to meet demand.  One has to wonder how much more has to be imported on a yearly basis to meet the rest of U.S. silver demand.  I would bet that it's a lot.  The above five paragraphs are all there is to this news item that was posted on the mineweb.com Internet site just after midnight Reno time this morning, but it's worth reading a second time if you've already read it.

By the way, here's a link to the Top 10 silver producers in 2013.

Lawrence Williams: Silver being left behind in latest gold price surge – but don’t despair!

Silver investors will have been a little disappointed by the metal’s performance vis-à-vis the gold price following the latter’s gains after the release of the latest U.S. FOMC meeting minutes. The minutes suggested that the low interest rate regime may well continue longer than expected and resulted in a major boost to the stock market and a significant uptick in the gold price. But it had rather less impact on silver which initially remained stuck below the $20 mark, although this morning’s trade has at last see it move up above this mark. Perhaps European investors are less pessimistic about silver’s investment credentials.

Now silver usually moves with gold, but in a more exaggerated manner so the silver investors could have been forgiven for expecting that the near 2% rise in the gold price since Tuesday would be accompanied by an even greater rise in silver in percentage terms. This may yet happen should the gold price continue its latest mini-surge, but silver has been more volatile and indeed the price actually fell back sharply on some adverse comment in the U.S. before recovering quite well in this morning’s trade… But over the same 3 day period that gold rose the 2% mentioned above the silver price was, in effect, following a very sharp temporary dip yesterday.

So why is silver behaving in this manner. Perhaps the short answer is China.

That's not the short answer---and Lawrie knows it.  But why he won't say it in the public domain is beyond me.  Silver analyst Ted Butler says that JPMorgan Chase has a 20,000 contract short-side corner in the Comex futures market in silver---which represents 16% of the total net open interest as of last Friday's Commitment of Traders Report.  They, along with the smaller Commercial traders, run the show in silver---and the other three precious metals as well.  End of story.  If you read this commentary, I would do it for entertainment purposes only.

¤ The Funnies







¤ The Wrap

My advice, as it has been, is to move to the sidelines while holding large positions in physical silver and gold. Regardless of what the markets do, silver and gold represent eternal wealth, and the bid to sleep undisturbed at night. No amount of money is worth the loss of peace of mind. The power of gold opened the American West and populated Alaska. Men have spent their lives searching for gold. You can own gold by the simple action of swapping Federal Reserve notes for the yellow metal. I advise you to do it. - Richard Russell

It's getting repetitive, so I'm not going to dwell too much on what happened in Far East and early London trading on Thursday except to say that the sellers of last resort were at battle stations once again preventing all four precious metals from doing what they wanted to---and that's move sharply higher.  This was particularly true in gold, as "da boyz" wanted to prevent a major break-out above its 50-day moving average---and they succeeded.

Here, once again, are the 6-month gold and silver charts with yesterday's price action included.

Note that gold closed above its 50-day moving average, but would have closed considerably higher than that if the HFT traders hadn't been involved.

And no matter how well silver performs intraday, it's always sold back down to, or just below, the $20 spot price mark.  Yesterday they had to peel about 40 cents off the price to do it---and looking at the chart, it's a pattern that's obvious over the last 13 consecutive trading days.

In Far East trading on their Friday, the gold price didn't do much, but got sold back down below unchanged an hour before London opened.  And as I mentioned earlier, silver got sold back below the $20 mark the moment that trading began in New York yesterday evening---and every tiny rally attempt above that price mark has been sold off.  Platinum and palladium aren't doing much.  And as I write this paragraph, London has been open 75 minutes---and volumes aren't overly heavy, less than half of what they were yesterday at this time.  Roll-overs out of the May silver contract continue unabated.  The dollar index is comatose.

Today, at 3:30 p.m. EDT, we get the latest Commitment of Traders Report, I'll guess that we might see further deterioration in the Commercial net short position in gold, but that's just a guess based on a quick glance at the gold price action during the reporting week.  I'm neutral on silver, but nothing will surprise me.  The thing that makes me uncertain as to direction is that fact that all the volume from the prior week's COT Report may not have been reported in a 'timely manner'---so we could see some spill-over into today's report.  But whatever the numbers, I'll have them for you tomorrow.

And as I hit the 'send' button on today's column, I note that all four precious metals are below their closing prices in New York yesterday afternoon. Volumes are still nothing special---and the dollar index is now up a small handful of basis points.

Since today is Friday, nothing would surprise me regarding precious metal price action, especially during the New York session.  Gold is now a few dollars above its 50-day moving average---and I'll be interested in seeing if the rally [such as it is] will be allowed to continue, or whether it 'fails' at this point.

That's all I have for today.  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.

]]>
Fri, 11 Apr 2014 09:26:00 +0000
<![CDATA[Jay Taylor: Prepare For a Bull Market to Shock Even the Most Ardent Goldbugs]]> http://www.caseyresearch.com/gsd/edition/jay-taylor-prepare-for-a-bull-market-to-shock-even-the-most-ardent-goldbugs/ http://www.caseyresearch.com/gsd/edition/jay-taylor-prepare-for-a-bull-market-to-shock-even-the-most-ardent-goldbugs/#When:09:23:00Z "Silver price came within a few pennies of taking out its March 27 low"

¤ Yesterday In Gold & Silver

The gold price rallied about five bucks or so during early trading in the Far East on their Wednesday, but then began to sell off a bit starting around 2 p.m. Hong Kong time---an hour before the London open.  Then, at the noon London silver fix, the gold price got sold down another five bucks or so---and then didn't do much until the Fed minutes were released at 2 p.m. EDT.  The subsequent price spike ran into a not-for-profit seller within 30 minutes---and that was pretty much it for the remainder of the day.

The CME recorded the high and low ticks at $1,301.10 and $1,315.50 in the June contract.

The gold price closed in New York on Wednesday at $1,312.30 spot, up $4.30 on the day.  Volume, net of April and May, was fairly decent at 137,000 contracts.

The silver price got sold down back down below the $20 level the moment trading began at 6 p.m. EDT in New York on Tuesday evening---and traded within a dime of that price until noon Hong Kong time.  Then, like gold, the HFT boyz went to work, with the absolute low of the day coming minutes before 9 a.m. in New York.  The subsequent rally didn't get far---and the price spike at 2 p.m. ran into the usual sellers of last resort shortly after that.  From there, the price traded sideways into the close.

The high and low price ticks were reported as $20.095 and $19.60 in the May contract.

Silver closed yesterday in New York at $19.845 spot, down 21.5 cents from Tuesday's close.  Not surprisingly, gross volume was through the roof at almost 90,000 contracts, but netted out to 36,000 contracts---which was more than double the net volumes of both Monday and Tuesday.

The platinum price also rallied a bit in Far East trading yesterday---and also began to sell off about an hour before the London open.  The low tick, like silver, came at 9 a.m. in New York.  The metal rallied a bit after that---and manged to close up a couple of bucks on the day.

Palladium traded ruler flat once again, but popped five bucks or so on the Fed news---and finished up on the day as well.

The dollar index closed at 79.78 on Tuesday afternoon in New York---and then didn't do much until an hour before London opened.  At 10 a.m. BST, the index hit its 79.86 'high' of the day---and then began to fade until about 11:20 a.m. in New York. From there it rallied into the release of the Fed minutes, before getting hit for around 25 basis points when the news actually hit the tape.  After that, the index barely twitched.  The index closed at 79.53 down 25 basis points.

The gold stocks only opened down a percent---and then chopped sideways until 2 p.m.---before blasting skywards on the 'news'.   The rally ended when the seller of last resort showed up in the Comex futures market shortly after 2:30 p.m. EDT, but the stocks finished the day in the plus column, with the HUI up 0.65%.

The silver equities opened down a bit over a percent, but climbed back to unchanged within a couple of hours.  They, too, took off to the upside at 2 p.m.---but gave up a percent of those gains when JPMorgan et al put in an appearance in the Comex futures market around 2:30 p.m.  Considering the fact that silver closed down more than a percent yesterday, Nick Laird's Intraday Silver Sentiment Index closed up a remarkable 1.63%---and well off its high tick to boot!

The CME Daily Delivery Report showed that 16 gold and 14 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  Once again, the Issuers and Stoppers Report isn't worth the effort of hyperlinking.

There were no reported changes in GLD yesterday---and as of 10:07 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

Yesterday evening, the good folks over at the shortsqueeze.com Internet site updated the short positions of both GLD and SLV as of the end of March.  The short position in SLV declined by 4.77%---and is now down to 12,657,900 ounces/shares, or just under 394 tonnes.  The decline in the short position in GLD was far more substantial, as it dropped by 21.11%.  The short position in that ETF is now down to 1.09 million troy ounces of gold, or just under 34 tonnes.

Over at Switzerland's Zürcher Kantonalbank they reported that both their gold and silver ETFs had withdrawals for the week ending April 4.  Their gold ETF declined by 15,997 troy ounces---and their silver ETF dropped by 100,030 troy ounces.

There was a tiny sales report from the U.S. Mint yesterday, as they only sold 1,500 troy ounces of gold eagles.

Over at the Comex-approved depositories on Tuesday, there was pretty big activity in gold.  Precisely 1 metric tonne [32,150.000 troy ounces] was reported received over at Brink's, Inc.---and 148,344 troy ounces were shipped out for parts unknown.  The biggest chunk of it came out of JPMorgan's warehouse.  The link to that activity is here.

In silver, only one good delivery bar was reported received, but a very chunky 1,062,229 troy ounces were reported shipped out.  With the exception of one bar, all of it came out of HSBC USA and Canada's Scotiabank.  The link to that action is here.

I have the usual number of stories for a mid-week column but, once again, I'm a little short of precious metal related news items.

¤ Critical Reads

If this happens, the S&P 500 is in real trouble: Yamada

After two tough sessions for the market, the S&P 500 hit a one-month low on Tuesday morning before turning positive for the day. But technical analyst Louise Yamada says the stock slide isn't over just yet.

"I don't think the pullback is already over," Yamada, of Louise Yamada Technical Research Advisors, said on Tuesday's episode of "Futures Now."  I think that it's an interim pullback, and we've certainly seen what we've expected, in the Internet and biotechs coming off. And I think that although they may bounce, there's probably still a little bit more to go on the downside."

Worse yet, the selling could spread to other sectors, such as aerospace and consumer discretionary stocks.

This CNBC news item was picked up by the finance.yahoo.com Internet site on Tuesday afternoon just before the markets closed in New York.  I thank reader David Ball for today's first story.

Wall Street soars after Fed minutes signal support

U.S. stocks rallied on Wednesday after minutes from the Federal Reserve's latest policy meeting showed a more supportive central bank than investors had previously expected.

All three major U.S. stock indexes ended up more than 1 percent, with eight of the 10 S&P 500 sector indexes closing higher. Internet and biotech stocks were among the day's biggest gainers.

Fed policymakers were unanimous in wanting to ditch the thresholds they had been using to telegraph a policy tightening, according to minutes of a meeting last month that shed little new light on what might prompt an eventual interest-rate rise.

"People are taking solace in the idea that the Fed may be more accommodative than previously thought, for longer than previously thought," said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut.

This Reuters story, was also picked up by the yahoo.com Internet site, but this one showed up on their Internet site shortly after the markets closed yesterday.  I found this article on their website when I was checking out today's first story.

BofA to pay $727 million to consumers over credit card practices

Bank of America agreed to pay nearly $800 million in fines and restitution to settle allegations of deceptive marketing and unfair billing involving credit card products, U.S. regulators said on Wednesday.

The Consumer Financial Protection Bureau and Office of the Comptroller of the Currency said they had ordered the bank to pay $727 million in relief to consumers to resolve problems with add-on products providing identity theft and payment protection products.

The bank must also pay fines of $20 million to the bureau $25 million to the OCC.

"We have consistently warned companies about illegal practices related to credit card add-on products," bureau Director Richard Cordray said in a statement. "We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market."

This Reuters story showed up on their Internet site late yesterday afternoon EDT---and I thank Harry Grant for sending it to me just after midnight MDT.

98% of All Consumer Credit in Past Year Was Student and Car Loans

Same sh*t, different month. If last month total consumer credit increased by $13.8 billion, of which $14.0 billion went into student and car loans meaning consumers continued de-leveraging on their credit card statements (some expectation for a recovery there), then February was even worse. The headline number was great: $16.5 billion, well above the $14.0 billion expected. The problem is that of this number well more than 100%, or $18.9 billion was once again slated for car purchases and paying down "student bills" (not really - as has been reported numerous times before Americans increasingly use student loans as a means to pay for everything else but tuition).

In other words, anyone suggesting that the "surge" in household lending is in any way remotely indicative of consumer hope in a recovery is i) an idiot or ii) clueless and won't even be bothered to read the fine print which once again suggests that the only credit Americans will take on is whatever comes implicitly free, and is certainly not meant to be repaid, courtesy of Uncle Sam. Unlike credit cards.

This short commentary, with two excellent charts embedded, was posted on the Zero Hedge website on Monday afternoon EDT---and it's definitely worth reading.  I thank Casey Research's own Dennis Miller for sending it our way.

Triple Whammy Shocker: Goldman Shutting Down Sigma X?

Back on March 21, before the release of Michael Lewis' Flash Boys and before the infamous 60 Minutes interview, when Goldman COO Gary Cohn wrote his infamous WSJ Op-ed bashing HFT, it was clear that something was afoot. That something became promptly clear when it was revealed that Goldman is among the core backers of the pseudo dark-pool IEX exchange popularized as the protagonist in Flash Boys, and juxtaposed to the front-running, and faceless, HFT antagonist that Lewis managed to demonize so well in the span of a few hundred pages, he promptly provoked a renewed investigation by the FBI, the SEC and DOJ into HFT.

A few days later, the shocker became a double whammy when Goldman announced that in addition to turning its back on HFT which had served it so well for years, the firm would also say goodbye to the NYSE and its designated market maker post, the last remaining legacy of its $6.5 billion Spear Ledds & Kellogg acquisition from 2000. That Goldman was asking mere pennies on the dollar for the residual assets also showed just how "highly" Goldman valued said legacy operation.

Moments ago we got the third and final "shocker" in this series of stunning disclosures by Goldman, this time involving Goldman's own "unlit" venue - one involving its own Dark Pool - the infamous, and market dominant Sigma X, which according to the WSJ, is about to be shut down!

This very interesting Zero Hedge article was posted on their website late on Tuesday evening EDT---and it's definitely worth reading.  I thank reader Bryan Cooke for digging it up for us.

Florida’s orange production is declining

This year’s Florida orange crop is approaching the fruit’s lowest harvest in decades, and experts say a deadly bacteria that’s infecting the trees is to blame.

The U.S. Department of Agriculture on Wednesday released its citrus production forecast and the news isn’t good. The 2013-2014 orange forecast is 110 million boxes, down 4 percent from last month, and 18 percent less than last season’s final production figure.

Orange harvesting ends in June, and if the crop doesn’t decline further, it will barely exceed the 110.2 million orange boxes harvested in 1989-90 following the worst freeze in Florida citrus history.

Andrew Meadows, a spokesman for the Lakeland-based Florida Citrus Mutual, said that citrus greening disease is the reason for the crop decline.

This very interesting news item, filed from St. Petersburg in Florida, was posted on The Washington Post's website yesterday afternoon---and I thank West Virginia reader Elliot Simon for sharing it with us.

Snowden: NSA lies about me not trying to spur internal investigation

The United States National Security Agency was well aware that Edward Snowden was troubled by the spy office’s activities, the intelligence contractor-turned-leaker tells Vanity Fair, and that evidence exists to confirm that claim.

Ahead of a 20,000-word article on the former NSA analyst expected to be published later this week, the US-based magazine has released excerpts from an interview with Snowden in which he specifically calls for the intelligence agency to come clean about allegations concerning any complaints he may have made before he began to leak classified documents to the press.

Snowden, 30, said last month in testimony delivered to the European Parliament that he spoke up to "more than 10 distinct officials” about his concerns regarding the NSA’s activities, but was eventually driven to leak documents about those programs due to the lack of response he received. He is currently in Russia after being granted asylum there, and is wanted in the US for disclosing classified documents.

This is the first of many stories from the Russia Today website---and the first of many stories that are courtesy of Roy Stephens.  This one was posted on their Internet site yesterday afternoon Moscow time.

NSA monitors WiFi on US planes ‘in violation’ of privacy laws

Companies that provide WiFi on US domestic flights are handing over their data to the NSA, adapting their technology to allow security services new powers to spy on passengers. In doing so, they may be in violation of privacy laws.

In a letter leaked to Wired, Gogo, the leading provider of inflight WiFi in the US, admitted to violating the requirements of the Communications Assistance for Law Enforcement Act (CALEA). The act is part of a wiretapping law passed in 1994 that requires telecoms carriers to provide law enforcement with a backdoor in their systems to monitor telephone and broadband communications.

Gogo states in the letter to the Federal Communications Commission that it added new capabilities to its service that go beyond CALEA, at the behest of law enforcement agencies.

This incredible story showed up in my in-box long after I'd filed today's column, but Julie over at Casey Research was kind enough to add it to today's column---and I thank South African reader B.V. for finding it for us.  It's a must read.

German Minister: 'U.S. Operating Without any Kind of Boundaries'

SPIEGEL: Minister de Maizière, nine weeks ago at the Munich Security Conference you demanded that the United States provide detailed information about its spying activities in Germany. Have you received anything from them yet?

De Maizière: The information we have received thus far is insufficient. That remains my opinion. The US' surveillance measures are largely a result of its security needs, but they are being implemented in an excessive, boundless fashion.

SPIEGEL: How did you come to this conclusion?

De Maizière: If even two-thirds of what Edward Snowden has presented or what has been presented with his name cited as the source is true, then I would conclude that the USA is operating without any kind of boundaries.

SPIEGEL: Are you hopeful that anything will change in the near future -- perhaps when Chancellor Angela Merkel visits President Barack Obama in May?

De Maizière: I have low expectations that further talks will prove to be successful. But of course these talks are continuing.

SPIEGEL: So you don't expect a no-spy agreement to result from these discussions?

De Maizière: Going by everything that I've heard, that's the case.

As I've been saying for years, dear reader---the U.S.A. has gone rogue.  This interview showed up on the German website spiegel.de at noon Europe time yesterday---and it's the second offering in a row from Roy Stephens.

How Western Is Germany? Russia Crisis Spurs Identity Conflict

Many Germans feel a special bond to Russia. This makes the Ukraine crisis particularly dangerous for Berlin because it raises important questions about the very nature of German identity. Are we as deeply rooted in the West as most believe?

Right up to this day, Germans and Russians maintain a special relationship. There is no other country and no other people with which Germans' relations are as emotional and as contradictory. The connection reaches deep into German family history, shaped by two world wars and the 40-year existence of East Germany. German families still share stories of cruel, but also kindhearted and soulful Russians. We disdain the Russians' primitiveness, while treasuring their culture and the Russian soul.

Our relationship to the Russians is as ambivalent as our perception of their character. "When it comes to the relations between the Germans and Russians, there is a tug-of-war between profound affection and total aversion," says German novelist Ingo Schulze, author of the critically acclaimed "Simple Stories," a novel that deals with East German identity and German reunification. Russians are sometimes perceived as Ivan the Terrible, as foreign entities, as Asians. Russians scare us, but we also see them as hospitable people. They have an enormous territory, a deep soul and culture -- their country is the country of Tchaikovsky and Tolstoy.

This very interesting, but longish op-ed/essay is another contribution from Roy Stephens---and it's another posting from the spiegel.de Internet site---this one from early yesterday evening

U.S. and E.U. prepare to strike Russian banks, energy firms

The U.S. and E.U. are preparing to strike at Russian banks, energy and minerals firms if Russia invades mainland Ukraine.

Speaking to U.S. senators in Washington on Tuesday (8 April) secretary of state John Kerry used blunt terms to describe events in Ukraine's Donetsk, Kharkiv and Luhansk regions in recent days.

“Everything that we’ve seen in the last 48 hours from Russian provocateurs and agents operating in eastern Ukraine tells us that they’ve been sent there determined to create chaos … These efforts are as ham-handed as they are transparent,” he said.

“No one should be fooled, and believe me, no one is fooled by what could potentially be a contrived pretext for military intervention just as we saw in Crimea.”

Trying to make mountains out of molehills.  There's no way on God's green earth that Russia will every move militarily against the Ukraine.  This news item, filed from Brussels, was posted on the euobserver.com Internet site yesterday morning Europe time---and I thank Roy Stephens for sending it.

NATO commander says U.S. troops may be deployed to Europe over Ukrainian crisis

The United States Air Force commander in charge of the NATO alliance’s military presence in Europe said on Wednesday this week that U.S. troops may soon be deployed to the region as tensions continue to worsen near the border between Ukraine and Russia.

In an interview with the Associated Press, U.S. Air Force Gen. Philip Breedlove said that forthcoming plans intended to ensure stability in Europe for the NATO partners in the area could involve the mobilizing of American troops.

Representatives from the 28 countries involved in the multinational organization have asked Breedlove — a four-star general who has since last year served as the supreme allied commander of NATO’s European operations — to have a plan ready by early next week, according to the AP’s John-Thor Dahlburg, to reassure partners in the region “that other alliance countries have their back.”

This is insanity---and you can read all about it in this Russia Today news item that was posted on their website late Wednesday evening Moscow time.  It's also another offering from Roy Stephens.

Kiev threatens force against eastern Ukraine protesters

Ukraine’s acting Interior Minister is threatening to resolve “in 48 hours” the situation in eastern regions where administrations of at least two cities are controlled by protesters demanding a nationwide referendum on the state structure.

Arsen Avakov told journalists on Wednesday that the coup-imposed government is ready to use force in the mutinous eastern regions.

"There are two solutions: a political one through negotiations or through force,” the minister said on the margins of a government meeting.

“For those who want dialogue, we propose talks and a political solution. For the minority who want conflict they will get a forceful answer from the Ukrainian authorities,” he said as quoted by Reuters, adding that in his opinion a “solution to the crisis could be found within 48 hours.”

A wonderful way to start a civil war, don't you think?  This news item showed up on the Russia Today website early yesterday afternoon Moscow time---and once again my thanks go out to Roy Stephens for sending it our way.

Russia can’t support Ukrainian economy forever- Putin

Russia can’t continue to prop up Ukraine’s faltering economy, and this responsibility should fall on the US and EU, which have recognized the authorities in Kiev but not yet given one dollar to support the economy, President Putin has said.

“The situation is - to put it kindly, strange. It’s known our partners in Europe have recognized the legitimacy of the government in Kiev, yet have done nothing to support Ukraine – not even one dollar or one euro,” Putin said at a meeting with government officials at his residence outside of Moscow.

“The Russian Federation doesn’t recognize the legitimacy of the authorities in Kiev, but it keeps providing economic support and subsidizing the economy of Ukraine with hundreds of millions and billions of dollars. This situation can’t last indefinitely,” Putin said.

You couldn't make this stuff up, dear reader.  This must read story was posted on the Russia Today website early yesterday afternoon Moscow time---and once again I thank Roy S. for sharing it with us.

Putin turns up economic heat before Ukraine talks

Russian President Vladimir Putin turned up the heat on Ukraine on Wednesday by threatening to demand advance payment for gas supplies, a move designed to exert economic pressure as Ukraine confronts possible bankruptcy, a mutiny by pro-Russian separatists in the east and a Russian military buildup across the border.

NATO's top commander in Europe warned that the alliance could respond to the Russian military threat against Ukraine by deploying U.S. troops to Eastern Europe, but Putin's latest tactics suggest he may be aiming to secure Russia's clout with its neighbor without invading.

Speaking at a Cabinet session, the Russian leader voiced hope that diplomatic efforts to ease the Ukrainian crisis would yield "positive results," an apparent reference to talks set for next week that will bring together the U.S., the European Union, Russia and Ukraine for the first time.

This AP story, filed from Moscow, was posted on the news.yahoo.com Internet site yesterday---and I thank Elliot Simon for his second offering in today's column.

Ukraine’s Rust Belt Fears Ruin as Putin Threatens Imports

For Pavel Cesnek, the future of his sprawling locomotive maker in eastern Ukraine lies in the balance and its fate will be sealed across the Russian border.

The head of Luganskteplovoz in the city of Luhansk rules over a communist-era factory and workforce of 6,500 that builds trains primarily for state-run OAO Russian Railways. Like many local businessmen, he fears the pro-European government in Kiev will antagonize the Kremlin into unleashing trade restrictions that could wipe out industry across Ukraine’s rust belt.

“Trade ties with Russia are an existential question -- to be or not to be,” said the 40-year-old Czech. “Without Russia, there’d be a total collapse for me, my workers and my owner.”

This very interesting news item was posted on the Bloomberg website yesterday afternoon Denver time---and once again my thanks go out to Roy Stephens.

De-invest from the West: Russia urges companies to return assets to the motherland

As the US and Europe escalate talks of sanctions, Russia is recommending companies unregister abroad and bring their shares to the Moscow Exchange to protect from possible future sanctions and provide economic security.

“Companies that have listed shares on the New York Stock Exchange, London need to seriously reconsider,” Russia’s Deputy Prime Minister Igor Shuvalov told reporters in Moscow on Tuesday.

Sanctions by the West have ramped up over the geopolitical action in Ukraine, and Russian business and politicians have been the target of asset freezes and visa bans.

The government will not force companies to delist and return to Russia, but Shuvalov said the Russian state and the Moscow Exchange will work together to create “attractive conditions” for companies to make the switch.

This is another Russia Today news item.  This one showed up on their Internet site during the Moscow lunch hour yesterday---and its the second last offering of the day from Roy.

Spanish parliament rejects Catalan independence bid

Spain’s parliament on Tuesday (8 April) overwhelmingly rejected Catalonia’s bid to call for a referendum on independence.

There were 299 votes against a proposal by Catalan leader Artur Mas to have an independence poll. Only 47 MPs from the Catalan and Basque nationalist parties voted in favour of the petition. One MP abstained.

Centre-right Prime Minister Mariano Rajoy told the deputies before the vote that he could not “conceive of Spain without Catalonia nor of Catalonia outside of Spain and Europe.”

This story, filed from Brussels, was posted on the euobserver.com Internet site yesterday morning Europe time---and it's the final offering of the day from Roy Stephens.

Three King World News Blogs

1. Gerald Celente: "This Disastrous Event is Going to Shock the World"  2. Rick Rule: "Silver---and a Golden Opportunity For Investors"  3. David P.: "Shocking Charts Show Silver Set For a Staggering $70 Surge"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]

Perth Mint: Monthly Sales for March 2014

According to Bron Suchecki over at The Perth Mint: "The chart below shows our sales of minted bars and coins, with gold down and silver up on last month. However, minted products are only about 10% by volume, with our cast bar sales usually over 600,000 oz/ a month, mostly in the form kilobars into China – premiums have come off and back to normal. Perth Mint Depository is stable with a lot of buying and selling by clients."

This tiny blog, with an excellent chart, is worth a few seconds of your time---and I thank Bron for sending it our way.

Platinum prices stagnant given supply - for now

Michael Kavanagh, Noah Capital Markets metals and mining analyst, told Mineweb that if the platinum price hasn't moved, then it means there is no shortage in supply. “It looks like the buyers of the product in the open market have all the platinum they need," Kavanagh said. "And at the end of the day, the price goes up if there is a need of metals. So clearly there is no fear that they (markets) will not get it in the near future."

Ryan Seaborne, an equity analyst at 36one Asset Management, said out of the three major producers of platinum, Anglo American Platinum had the most on ground stock, while Lonmin stock was nearly depleted and Impala Platinum's was nearing its end. Amplats stock can last towards the middle of the year, Seaborne estimated. On price, he said it was stagnant - so far- because there had been no supply response. But if the unions held out the platinum price could go higher. He also claimed all three companies made a gentleman’s agreement to help each other in meeting contractual obligations. “Amplats will most likely assist with helping the others reach their (contractual) obligations and if the strike ends soon there is no risk to supply,” he said.

What no serious precious metal analysts knows, or will admit to if they do, is that 3 or 4 U.S. bullion banks, probably led by JPMorgan, hold a 19% short-side corner in the Comex platinum market, along with a 23% short-side corner in the palladium market---according to last week's Bank Participation Report.  In such tiny and illiquid markets, the price will go nowhere if the dominant players won't allow them to.  This tiny article, filed from Johannesburg, was posted on the mineweb.com Internet site yesterday.

Jay Taylor: Prepare for bull market to shock even most ardent goldbugs

This interview with Jay by The Gold Report showed up on the mineweb.com Internet site earlier this morning British Summer Time---and it's a must read.  I've known Jay for about ten years---and with the possible exception of Leonard Melman---a nicer man you could never hope to meet.

¤ The Funnies

¤ The Wrap

Every man’s heart one day beats its final beat. His lungs breathe their final breath. And if what that man did in his life makes the blood pulse through the body of others and makes them believe deeper in something that’s larger than life, then his essence, his spirit, will be immortalized by the storytellers — by the loyalty, by the memory of those who honor him, and make the running the man did, live forever. - James Brian Hellwig: The Ultimate Warrior

The attempt to sell gold back below the $1,300 spot price mark didn't pan out---and I was happy to see gold jump back into positive territory on the Fed minutes news.  Silver, of course, was another matter entirely, as JPMorgan et al kept pounding away at the price---causing more technical fund selling of long positions, along with new short positions being added.  JPMorgan et al happily took the other side of all these technical fund trades---ringing the cash register in the process.  This was the reason that silver's volume was through the roof yesterday---and none of this price/volume activity will show up in tomorrow's Commitment of Traders Report, as it happened the day after the cut-off.

Here are the 6-month gold and silver charts once again.

The gold price closed right at its 50-day moving average again---and would have handily closed above it after the Fed news at 2 p.m. EDT yesterday, but a seller of last resort was on hand to ensure that didn't happen.

The silver price came within a few pennies of taking out its March 27 low yesterday---and is about a buck away from taking out its late-December 2013 low as well.  Could JPMorgan et al pull that off?  You betcha---and in a New York minute if desired.  All they have to do is turn their HFT boyz loose like they did yesterday---and the combination of long contract selling and new shorting by the technical funds would take care of that.  "Da boyz" have painted the silver chart to perfection for just such an event.  The only question remaining is---will they, or not?

I was happy to see the gold stocks do as well as they did yesterday, even before the Fed news, as they were already hanging on to tiny gains before the announcement.  But the real surprise was in the silver equities.  Despite the fact that the metal itself got pounded, there were buyers in the market picking up every silver stock that was being sold in a panic, plus a lot more.  Silver closed down more than a percent, but Nick's chart was up nicely on the day.

As I write this paragraph at 3:47 a.m. EDT, the market in London has been open about 45 minutes---and since the open last night in New York, gold has spent almost the entire Thursday trading session in the black---and rallied a bit more during the early going in London as well.

The silver price did nothing until around 8 a.m. Hong Kong time---and it's attempt to rally above the $20 spot price mark met with the usual selling pressure.  However, it really took off at the London open, but ran into very heavy selling pressure once again as it broke above $20.20 spot---and is now back at $20.12 as I type this sentence.

Platinum also spent most of the Far East trading session in positive territory as well---and it, along with palladium are back in rally mode as of the London open.

Gold and silver volumes, which had been more or less 'normal' going into the London open, have both blown out considerably, so it's obvious that JPMorgan et al are at battle stations in all four precious metals once again.  If/when they put these rally fires out, it will be of interest to see how much Comex paper they had to throw at them to get them to behave.  Right now, gold volume is north of 33,000 contracts---and 99.9% of that is in the current front month.  In silver, the gross volume is already north of 13,000 contracts---and a bit over 10 percent of that is roll-overs---and all of the remaining volume is the current front month as well.  Based on that, it's easy to see that the lion's share [and then some] of the current volume is all HFT price management.

And to give you some idea of how tiny the platinum market is, as of this writing at 4 a.m. EDT, there have been 1,701 platinum contracts traded on the Comex so far today---and all but one of those contracts is in the current front month, which is July.  It's even more ridiculous in palladium.  Only 525 contracts have been traded so far on Thursday---and all except one is the current front month, which is June.

As of last Friday's Bank Participation Report---'4 or less' U.S. bullion banks in platinum---and '3 or less' bullion banks in palladium, were net short 19.2% and 23.5% of the platinum and palladium markets respectively.  And to put it in real perspective, the '4 or less' U.S. bullion banks were net short a stunning 12,828 Comex platinum contracts---and '3 or less' U.S. bullion banks were net short 9,653 Comex contracts in palladium.

It should be obvious to all except the willfully blind, that there's a very good reason why platinum and palladium prices are going nowhere.

If you want to review the Bank Participation Report data in my Saturday column, the link is here---and you have to scroll down a bit to find it.

And as I fire this off to Stowe, Vermont at 5:25 a.m. EDT, I note that all four precious metals continue to struggle higher---and are obviously still being met with heavy selling pressure, as the not-for-profit sellers pull out all the stops. Gold volume is approaching 45,000 contracts---and silver's gross volume is a hair under 20,000 contracts.  I forgot to mention what the dollar index was doing---and it has remained almost unchanged from it's open in early Far East trading on their Thursday.

Using the past as prologue, I'll stick my neck out here and surmise that we may have already seen the highs for both silver and gold today.  However, I'd be delighted to be proven wrong, as I'd dearly love to see JPMorgan et al get over run at this point.  And they just might if Russia and maybe China decide to move the battlefield onto the Comex futures market.

That's more than enough for one day.  I hope your Thursday goes well---and if you live west of the International Date Line, I hope you have a good weekend.

See you here tomorrow.

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Thu, 10 Apr 2014 09:23:00 +0000