The gold price was under selling pressure from the HFT boyz almost right from the open in New York on Sunday evening. The low of the day came about 90 minutes before the London open---and by 8 a.m. GMT, gold volume was already well north of 30,000 contracts, which is enormous for that time of day for such a "thinly traded" market.
From the pre-London open low, gold rallied until the London p.m. gold fix, which now comes an hour later than normal in New York because London is not yet on British Summer Time, although it did experience a slight downdraft for a couple of hours starting at the Comex open, which is obvious from a quick glance at the Kitco chart below. Once the "fix" was in, gold got sold down until shortly after 2 p.m. EDT---and then traded flat into the 5:15 p.m. electronic close.
The low/high ticks were recorded by the CME Group at $1,327.50 and $1,344.90 in the April contract.
Gold closed in New York on Monday at $1,339.80 spot, up 30 cents on the day. Volume, net of roll-overs out of the April delivery month, were pretty light at only 99,000 contracts. But as I mentioned further up, almost a third of that occurred in the "thinly traded" Far East market, so it's obvious that the JPMorgan et al were out and about to influence prices during that time period.
The silver chart was almost a carbon copy of the gold chart, except for the fact, that the high of the day came at, or just before, the Comex open---and silver never rallied going into the 11 a.m. EDT London p.m. gold fix, before getting sold off in a similar manner to gold in electronic trading.
The low and high ticks in silver were recorded as $20.61 and $21.06 in the May contract.
Silver finished the Monday trading session at $20.835 spot, down a nickel from Friday's close. Volume, net of March and April, was very chunky at 48,000 contracts.
Both platinum and palladium got sold down before the London open as well. Platinum managed to claw back most of its losses, but palladium recovered little after that. Here are the charts.
I mentioned copper's price smash on Friday in my Saturday column---and the HFT boyz were still pounding away again on Monday---and here's what the 6-month copper chart looks like after Monday's action. I'd guess that major price bottom is in now that JPMorgan et al have the technical funds loaded up on the short side. When the next rally begins, will they let the technical funds off easy, like they're doing in gold and silver right now, or will they really stick it to them? It's all to JPMorgan.
The dollar index closed at 79.71 on Friday afternoon in New York---and weakened a handful of basis points during the Far East trading day on their Monday. But the moment that London opened, a rally developed that was pretty much all done a few hours later---and from there, the dollar chopped sideways into the close in New York. The index finished at 79.75---up 4 basis points from where it started the day. Nothing to see here.
The gold stocks gapped down a bit, hitting their low of the day around 10 a.m. EST. Then they rallied to their high of the day, which was in positive territory, by around 11:30 a.m. EDT. But they couldn't hang on once the "fix" was in, and got sold down as the trading day progressed. A smallish rally into the close cut their loses a bit---and the HUI finished down 0.57%.
The silver equities opened down---and stayed down for the rest of the day, although they did get the same bounce that gold shares got going into the close. But the equities still finished the day worse off than their golden brethren, closing down 1.67%.
The CME Daily Delivery Report wasn't much to look at yesterday, as only 5 gold contracts were posted for delivery within the Comex-approved depositories on Wednesday. However, just a matter of interest, JPMorgan Chase in its in-house [proprietary] trading account stopped 4 of the 5 contracts. The Issuers and Stoppers Report isn't worth linking.
And I note that the number of silver contracts still outstanding in the March delivery month is up to almost 700---but it still remains to be seen how many get delivered. However, from what I'm seeing at the moment, I'd guess most of the long/stoppers will be looking to take delivery. I would also guess that JPMorgan Chase will gobble up most of them.
Much to my surprise, there was another deposit in GLD yesterday. This time an authorized participant added a very respectable 240,929 troy ounces. And as of 9:52 p.m. EDT yesterday evening, there were no reported changes in SLV.
The U.S. Mint also had a sales report to start the week. They sold 4,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and a very healthy 736,000 silver eagles. And as Ted Butler has asked on numerous occasions this year---who is the buyer for all these silver eagles, as it certainly isn't the retail trade.
There was only a small amount of gold received at the Comex-approved depositories on Friday, as 4,501 troy ounces were deposited in Scotia Mocatta's warehouse---and nothing was reported received. The link to that activity, if you wish to dignify it with that name, is here.
Of course the silver action in these same depositories on Friday was far more substantial, as 867,884 troy ounces were shipped in---and only 29,027 troy ounces were shipped out. The link to that action is here.
The stories started off at a reasonable number early yesterday, but it didn't last. Now I have lots---and I turn the final editing job over to you once again.
Moments ago McDonalds reported its latest monthly comp store sales numbers. Printing at -1.4% for the US, this was a nearly double miss to expectations of a 0.6% decline, and was the 4th consecutive monthly drop in annual sales - the longest such stretch in the past decade and likely longer. Looking at this data, there are two observations: i) Americans, courtesy of record obesity rates, are finally getting serious about their health, and have shunned the infamous 99 cent deep fried meals or ii) courtesy of the Fed's "Fed's recovery", the average American can no longer even afford sub-$1 deep fast food.
There is a third option: that it snowed... In fact it snowed so much, everywhere, and the weather was so harsh around the world, that global store sales declined by 0.3%, far below the modest 0.1% drop expected. Yup. Must have been the snow.
This tiny Zero Hedge story is worth the the trip just for a peek at the embedded charts. I thank reader M.A. for today's first news item.
The U.S. Securities and Exchange Commission is investigating whether currency traders at the world's biggest banks distorted prices for options and exchange-traded funds by rigging benchmark foreign-exchange rates, according to two people with knowledge of the matter.
The SEC's inquiry adds to European and U.S. regulatory probes of possible manipulation in currency markets. The SEC's investigation is in the early stages, said the people, who asked not to be named because the matter isn't public. The Commodity Futures Trading Commission, which regulates foreign-exchange derivatives, is also investigating possible manipulation, another person said.
This Bloomberg story, filed from New York, was posted on their Internet site very early yesterday morning MDT---and I found it embedded in a GATA release.
In July 2006, during lunch at an upmarket restaurant overlooking the sprawling Smithfield meat market in the City of London, Bank of England officials and senior bank dealers discussed evidence of potential manipulation of the foreign exchange market. People at the lunch said the attempts to move the market meant the process of establishing official prices - known as "fixing" - was becoming "increasingly fraught".
It was two years before the issue was discussed again, according to minutes from the meetings, released after a Reuters freedom of information request, and seven years before the Financial Conduct Authority (FCA), Britain's financial regulator, kicked off a global investigation and banks started to suspend or layoff traders.
The FCA probe focuses on whether traders used advance knowledge of customer orders to try and manipulate benchmark foreign exchange rates for their own gain, and is a blow to the "hands off" approach to regulating the world's largest financial market.
This Reuters piece, filed from London, was posted on their website late Friday morning EST---and it's another story that I found tucked away in a GATA release.
The Telegraph can reveal that the Bank’s oversight committee is set to appoint an external heavyweight to run an independent assessment of the Bank’s actions both in relation to the allegations made and how it has handled those allegations.
The heavyweight figure could be a judge, an academic or a City executive. He or she would need to be far enough removed from the Bank to ensure the inquiry is seen as independent.
The Bank’s committee appointed the law firm, Travers Smith, last week to prepare a formal report which will be made public.
This news item appeared in The Telegraph late on Saturday evening GMT---and is another article I found on the gata.org Internet site.
George Soros, the billionaire investor, believes the banking sector is a “parasite” holding back the economic recovery and an “incestuous” relationship with regulators means little has been done to resolve the issues behind the 2008 crisis.
“The banking sector is acting as a parasite on the real economy,” Mr Soros said in his new book “The Tragedy of the European Union”.
“The profitability of the finance industry has been excessive. For a while 35pc of all corporate profits in the United Kingdom and the United States came from the financial sector. That’s absurd.”
“Very little has been done to correct the excess leverage in the European banking system. The equity in the banks relative to their balance sheets is wafer thin, and that makes them very vulnerable.
This article/book review was posted on the telegraph.co.uk Internet site---an it showed up at noon GMT on Saturday---and it's the first offering of the day from Roy Stephens.
A leading German institute has called for full-blown quantitative easing by the European Central Bank (ECB) to head off a deflation spiral, marking a radical shift in thinking among the German policy elites.
Marcel Fratzscher, head of the German Institute for Economic Research (DIW) in Berlin, demanded €60bn (£50bn) of bond purchases each month to halt the contraction of credit and avert a Japanese-style trap.
"It is high time for the ECB to act. Otherwise Europe risks falling into a dangerous downward spiral of sliding prices and declining demand", he wrote in Die Welt.
"The ECB must counter the deflation threat quickly and decisively, and launch a broad-based programme of bond purchase along the lines of the Federal Reserve," he said. The scale should be 0.7pc of eurozone state debt each month, comparable to 'QE3' in the U.S.
It's "Print, or die" for Europe as well. This Ambrose Evans-Pritchard commentary showed up on The Telegraph's website early yesterday afternoon GMT---and it's the second contribution in a row from Roy Stephens. It's worth reading.
While the U.S. may be rejoicing its daily stock market all time highs day after day, it may come as a surprise to many that global equity capitalization has hardly performed as impressively compared to its previous records set in mid-2007. In fact, between the last bubble peak, and mid-2013, there has been a $3.86 trillion decline in the value of equities to $53.8 trillion over this six year time period, according to data compiled by Bloomberg. Alas, in a world in which there is no longer even hope for growth without massive debt expansion, there is a cost to keeping global equities stable (and US stocks at record highs): that cost is $30 trillion, or nearly double the GDP of the United States, which is by how much global debt has risen over the same period. Specifically, total global debt has exploded by 40% in just 6 short years from 2007 to 2013, from "only" $70 trillion to over $100 trillion as of mid-2013, according to the BIS' just-released quarterly review.
It should come as no surprise to anyone by now, but the only reason why global stocks haven't plummeted since the Lehman collapse is simple: governments have become the final backstop for onboarding risk, with a Central Bank stamp of approval - in other words, the very framework of the fiat system is at stake should global equity levels collapse. The BIS admits as much: “Given the significant expansion in government spending in recent years, governments (including central, state and local governments) have been the largest debt issuers,” according to Branimir Gruic, an analyst, and Andreas Schrimpf, an economist at the BIS.
It should also come as no surprise that courtesy of ZIRP and monetization of debt by every central bank, debt has itself become money regardless of duration or maturity (although recent taper tantrums have shown what will happen once rates start rising across the curve again), explaining the mind-blowing tsunami of new debt issuance, which will certainly never be repaid, and whose rolling will become impossible once interest rates rise. But of course, under central planning that is not allowed. As Bloomberg reminds us, marketable U.S. government debt outstanding has surged to a record $12 trillion, up from $4.5 trillion at the end of 2007, according to U.S. Treasury data compiled by Bloomberg. Corporate bond sales globally jumped during the period, with issuance totaling more than $21 trillion, Bloomberg data show.
This longish but very worthwhile Zero Hedge piece was posted on their website late on Sunday morning EST---and I thank Manitoba reader Ulrike Marx for her first story of the day.
In his first live public appearance since fleeing the U.S. after leaking thousands of secret intelligence documents, Edward Snowden warned that the National Security Agency (NSA) is ruining the Internet.
Snowden, who obtained asylum in Russia after helping to expose the NSA’s dragnet surveillance of millions of Americans, was speaking at the South by Southwest (SXSW) festival in Texas on a panel about how NSA spying impacts the tech community. He spoke via livestream, with an image of the Constitution as his background.
U.S. government surveillance is “setting fire to the future of the internet,” he told the crowd, adding that “you guys in the room are the global firefighters.” He was referring to ways to combat mass surveillance, like using encryption and TOR, a way to browse the Internet anonymously. Also speaking on his panel was the American Civil Liberties Union’s Ben Wizner and Christopher Soghoian.
This news item appeared on the alternet.org Internet site yesterday---and my thanks go out to Roy Stephens once again.
1. Ukraine crisis: Russian troops take Ukrainian border guards hostage: The Telegraph 2. Details of sanctions against Russia to be finalised in London: The Guardian 3. Confrontation in Ukraine as diplomacy stalls: Reuters 4. NATO to deploy jets to monitor Ukraine crisis: France 24
[All the above stories courtesy of Roy Stephens]
Abolghassem Mesbahi, a defector to Germany, said Pan Am flight 103 was downed in 1988 in retaliation for a U.S. Navy strike on an Iranian commercial jet six months earlier, in which 290 people died.
He claims the Ayatollah Khomeini, who was Iran’s Supreme Leader, ordered the bombing “to copy exactly what happened to the Iranian Airbus”.
Previously unseen evidence gathered for the aborted appeal hearing of Abdelbaset al-Megrahi, the former Libyan intelligence officer convicted of the bombing, supports Mr Mesbahi’s claim and suggests that the bombers belonged to the extremist group the Popular Front for the Liberation of Palestine – General Command (PFLP-GC).
Documents obtained by Al Jazeera television for a documentary called Lockerbie: What Really Happened? name key individuals said to be involved in the bombing, including the alleged bomb-maker, the alleged mastermind and the man who may have put the bomb on the doomed Boeing 747.
This very surprising story showed up on the telegraph.co.uk Internet site late last night GMT---and it's another item I found in a GATA release.
China’s CSI 300 Index (SHSZ300) plunged to the lowest level in five years and the yuan weakened as an unexpected drop in exports spurred concern that the world’s second-largest economy is slowing.
The index of the largest Chinese stocks slid 3.3 percent to 2,097.79 at the close, the lowest since February 2009, while the Shanghai Composite Index tumbled 2.9 percent, the most since June. The yuan fell 0.2 percent to 6.1385 per dollar. Money-market rates slumped to a 21-month low amid speculation demand for cash is diminishing as economic growth weakens.
Overseas shipments plunged 18.1 percent in February, compared with analysts’ median estimate for a 7.5 percent increase, as distortions from the Lunar New Year holiday made forecasting more difficult. Investors are looking for policy guidance from this month’s National People’s Congress in Beijing amid concerns over slowing growth, a flood of new share sales and geopolitical tension between Russia and Ukraine.
This Bloomberg article from yesterday, co-filed from Singapore and Hong Kong, is worth reading. It was posted on their website in the wee hours of yesterday morning Denver time---and it's courtesy of West Virginia reader Elliot Simon.
China’s onshore bond market experienced its first default as a solar-cell maker failed to pay full interest on its bonds, signaling the government will back off its practice of bailing out companies with bad debt.
Shanghai Chaori Solar Energy Science & Technology Co. is trying to sell some of its overseas plants to raise money to repay the debt, Vice President Liu Tielong said in an interview yesterday at the company’s Shanghai headquarters. The company said March 4 it would only be able to pay 4 million yuan ($653,000) of an 89.8 million yuan coupon due yesterday.
The number of Chinese companies whose debt is double their equity has surged since the global financial crisis, suggesting this first onshore bond default won’t be the nation’s last. Publicly traded non-financial companies with debt-to-equity ratios exceeding 200 percent have jumped 57 percent since 2007. Chaori Solar may become China’s own “Bear Stearns moment,” prompting investors to reassess credit risks as they did after the U.S. securities firm was rescued in 2008, according to Bank of America Corp.
This Bloomberg story, co-filed from Singapore and Shanghai, is definitely worth reading. It showed up on their Internet site Friday morning MST---and I thank Casey Research's own Marin Katusa for bringing it to our attention.
China is likely to ease controls on interest rates paid on bank savings within two years and will allow wider use of its tightly controlled currency for trade and investment, the central bank governor said Tuesday.
Zhou Xiaochuan's comments follow pledges by Chinese leaders to make the country's slowing economy more productive by giving market forces a "decisive role" in allocating credit and other resources.
Allowing banks to compete for deposits by paying higher rates on savings would put more money in the pockets of Chinese families, helping to achieve official goals of boosting consumer spending and reducing reliance on trade and investment.
"Liberalization of deposit rates, this should be the last step in interest rate marketization," said Zhou at a news conference. "I personally believe it is very possible to realize this within one to two years."
This AP story, filed from Beijing earlier this morning, found a home over at the usnews.com Internet site---and I thank Elliot Simon for sliding it into my in-box just after 2 a.m. EDT this morning.
1. John Embry: "Propaganda, Lies---and a World Headed For Disaster" 2. William Kaye: "Did Ukraine Just Airlift Its Entire Gold Hoard to the U.S. Fed? 3. Egon von Greyerz: "The Ukraine Crisis and a Terrifying Global Economic Meltdown" 4. Michael Pento: "The Rate of This Worldwide Depression Will Only Get Worse" 5. Dr. Paul Craig Roberts: "The World is Now on the Edge of Nuclear War" 6. Robert Fitzwilson: "Investors Need to Stay Focused With Ukraine Crisis Unfolding" 7. The first audio interview is with Michael Pento---and the second 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]
numerous gold- and silver-coin shipments has closed shop, according to a posting on the company's Costa Mesa office window.
"The Tulving Company has closed. More information the week of March 10th," reads the sign, which was seen Thursday at the firm's headquarters.
It appears a flood of complaints against The Tulving Company and owner Hannes Tulving Jr. led to a state investigation.
No surprises here, as Joshua Gibbons over at the about.ag Internet site has been on top of this situation for months. This news item showed up on the Orange County Register's website last Thursday---and it's another article I found on the gata.org Internet site on Saturday.
Gold researcher and GATA consultant Koos Jansen explains today that while a Citi Research report has done a little better in calculating China's gold demand than other Western sources, the report still grossly underestimates it.
Jansen's commentary is headlined "Chinese Gold Demand 418 Tonnes Year to Date, West Confused" and it was posted at the Swiss Internet site ingoldwetrust.ch on Sunday afternoon Europe time. It's another story I found in a GATA release.
Norman speaks in half-truths in this 6:13 minute video interview on BNN on Friday. His comments about the London fixes may be true in the context he's talking about---but it's just one element in the overall price management scheme in gold that's been going on for about 15 years. Maybe he'd like to be re-interviewed and discuss the contents of The Wrap section in my Friday column, as the two charts shows clearly that he lied by omission. The four charts from the Bank Participation Report in the first section of Saturday's column put icing on the cake.
I found this interview on the sharpspixley.com Internet site in the wee hours of yesterday morning.
Coutts & Co. is adding gold for investors as rising wealth in China and increasing political risks including in Ukraine spur demand, helping prices rally from the biggest annual decline in more than three decades.
The private-banking division of Royal Bank of Scotland Group Plc holds 3 percent to 4 percent in its portfolios, from 1 percent to 2 percent last year, said Gary Dugan, chief investment officer for Asia and the Middle East. Coutts had 29.7 billion pounds ($49.4 billion) under management as of Dec. 31.
Gold rebounded this year as rising consumption in Asia and emerging-market turmoil boosted demand. The value of bullion held in exchange-traded products climbed 10 percent to $75.5 billion this year as prices advanced and holdings increased in February for the first time in 14 months. China surpassed India as the world’s largest user last year as demand expanded 32 percent, according to the World Gold Council.
This very interesting Bloomberg story appeared on the mineweb.com Internet site yesterday---and I thank Ulrike Marx for her second contribution to today's column.
Sprott CEO Eric Sprott, interviewed by Sprott Money News, comments on the lawsuits that are starting to be filed against the investment houses participating in the daily London gold fix.
This audio interview was conducted last Friday---and is definitely worth your time.
GATA Chairman Bill Murphy and GoldMoney research director Alasdair Macleod, interviewed by FinanceAndLiberty.com's Elijah Johnson, discuss the growing suspicions about the daily London gold fix, the slow pace of the repatriation of the German Bundesbank's gold reserves, and other matters of gold price suppression.
The interview is 25:42 minutes long and was posted on the youtube.com Internet site yesterday
The Russian-language and pro-Russian Internet news organization, Iskra ("Spark") News in Zaporozhye, eastern Ukraine, which perhaps has taken its name from the early socialist newspaper founded by Lenin reported Friday that Ukraine's gold reserves had been hastily airlifted to the United States from Borispol Airport just east of Kiev.
A Google-assisted translation is appended.
Last night GATA asked the Federal Reserve Bank of New York and the U.S. State Department to disclose whether the United States has taken custody of Ukraine's gold reserves. A publicist for the New York Fed immediately acknowledged the inquiry and said he would look into the issue right away. We'll keep you posted.
This GATA release was posted on their Internet site yesterday evening EDT---and is worth reading. The good folks over at Zero Hedge also had a story about this as well---and it's linked here.
Many investors, especially those new to precious metals, don't know that gold is seasonal. For a variety of reasons, notably including the wedding season in India, the price of gold fluctuates in fairly consistent ways over the course of the year.
This pattern is borne out by decades of data, and hence has obvious implications for gold investors.
Can you guess which is the best month for buying gold?
When I first entertained this question, I guessed June, thinking it would be a summer month when the price would be at its weakest. Finding I was wrong, I immediately guessed July. Wrong again, I was sure it would be August. Nope.
Cutting to the chase, here are gold’s average monthly gain and loss figures, based on almost 40 years of data.
This very worthwhile read was embedded in yesterday's edition of the Casey Daily Dispatch.
Following a record year for gold imports, Turkey's appetite for the yellow metal is suddenly waning.
According to the country's Hurriyet Daily, Turkey's gold imports dropped 93% in February, compared with the same month in 2013.
The fall comes amid a rise in the gold price – going from an average of $1,214 in December to $1,264 in January – but it's also due to the end of Turkey's gold-for-gas deal with Iran.
Under the controversial scheme, Turkey circumvented Western sanctions by paying for Iranian oil and natural gas in gold. Turkey's Halkbank claims these transactions ended last summer.
This very short story showed up on the mining.com Internet site on Sunday---and I thank reader M.A. for sending it our way.
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I don’t know who is buying all these Silver Eagles, as reports from the retail front do not suggest broad demand. As such, if it is one big buyer, perhaps that buying could end. On the other hand, it could continue, particularly if the buyer is well-informed. What I do know is that Silver Eagles are outselling Gold Eagles by an amount never witnessed in the 27 years of the Mint’s bullion coin program. One would think that this demonstrable and heavy relative demand for silver over gold would be reflected somewhat in price, instead of the pronounced relative weakness seen in silver. But one would think that only if he was unaware of the COMEX and JPMorgan. Yes, I know – this is only one slice of the supply/demand equation; but then again more silver is, effectively, consumed in Silver Eagles than in any other single demand component. - Silver analyst Ted Butler: 08 March 2014
You'd never know by just looking at the gold and silver charts from yesterday that there was big activity---but there was. The volume in Far East trading was about as big as I've seen it---and it was obvious, at least to me, that the HFT boyz were out and about big time. Even before London opened, all four precious metals had another hole to dig themselves out of by the end of Monday's trading---and some of them didn't make it. And as far as I'm concerned, that's just another form of price management. It should be obvious that JPMorgan et al are active in all four precious metal markets 24/7.
Here's a chart I ripped from a Zero Hedge posting further up in today's column. I'm posting it on its own here, because I know perfectly well that not everyone reads all the stories that I post each day---and I wanted to make sure that you saw this. It's the "official" gold holdings of all counties in the world as of the end of February 2014.
Like the U.S. jobs numbers and employment figures, you can bet that a lot of these figures are pure bulls hit---starting with China's gold reserves. The World Gold Council admitted several years ago that their data was only as good as the reporting countries were providing---and for that reason you should take it with a pound of salt as well.
After getting sold down a bit in early Far East trading, all four precious metals are attempting to rally. Both gold and silver are up a titch---and platinum and palladium are unchanged. Volumes are very light in both silver and gold---and the dollar index is up a handful of basis points.
Because London hasn't switched over to British Summer Time as of yet, their open is still about an hour away as I write this paragraph.
And as I hit the send button on today's column, I see that both gold and silver popped a bit at the London open, which was just over an hour ago and, not surprisingly, volumes---especially in gold---have picked up substantially. The dollar index is still up only a handful of basis points.
I haven't a clue how precious metal prices will perform today, or any other day this week. I know what they should be doing---and what they want to do---but whether they're allowed to or not is entirely up to JPMorgan.
That's all that I have for today, which is more than enough---and I'll see you here tomorrow.