Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

It was a fairly quiet trading day from a price perspective in the Far East on their Friday.  The price developed a negative bias right out of the gate, with the low coming at 1 p.m. in Hong Kong trading.  The tiny rally after that made it back above the Thursday close in New York by a few dollars around 8:30 a.m. in London---and then it was down hill until 12:30 BST.  The price chopped sideways into the London p.m. "fix"---and once that was out of the way, the HFT boyz spun their algorithms.  The absolute low tick came minutes before 1 p.m. EDT---and the gold price crawled higher from there into the 5:15 p.m. close of electronic trading.

The high and low ticks were recorded by the CME Group as $1,195.40 and $1,174.10 in the June contract.

Gold finished the Friday session at $1,180.40 spot, down $13.10 from Thursday's close.  Net volume was very decent at 143,000 contracts.

Here's the 5-minute tick gold chart courtesy of Brad Robertson.  As you can see, the only volume that mattered occurred during the COMEX trading session in New York, with the biggest volume coming between 8 a.m. and 9 a.m. Mountain Standard Time on this chart.  That was when JPMorgan et al appeared once the p.m. gold fix was in.  The dark gray vertical line is midnight in New York/noon in Hong Kong.  Add two hours for EDT---and don't forget the 'click to enlarge' feature.  The chart is worth a quick look.

Silver followed the same price path as gold, but the low tick in that metal came shortly after the London p.m. gold fix---and then it rallied a decent amount off its low by 11 a.m. EDT.  After the it didn't do much, although it popped a few pennies at the close.

The high and low ticks in silver were recorded as $15.885 and $15.55 in the May contract.

Silver closed yesterday in New York at $15.755 spot, down only 9.5 cents---and well off its low.  Gross volume was just under 99,000 contracts, but when everything was netted out, the volume fell down to only 26,000 contracts.

It was more or less the same chart pattern for platinum, except the sell-off at the gold fix wasn't anywhere near as severe---and the low tick came minutes before the COMEX close.  It recovered five dollars or so off its low by the close.  Platinum finished the day at $1,123 spot, down 11 dollars from Thursday's close.

Palladium followed a different path---and both its attempted rallies, particularly the one that began at the COMEX open, got dealt with in the same old way.  Palladium finished the Friday session at $768 spot, down a buck.

The dollar index closed late on Thursday afternoon in New York at 97.31---and made it to its 97.57 high tick shortly before noon in Hong Kong.  It fell down to 96.80 by 8:20 a.m. in London---and manged to struggle back to the 97.30 mark by noon BST, but headed lower once the London p.m. gold fix was in at 10 a.m. EDT---and after 11 a.m. the index chopped sideways for the remainder of the New York trading session.  The dollar index closed at 96.90---down 41 basis points from Thursday's close.

And as you should carefully note once again, what happened in the precious metal market from a price perspective had diddly to do with what was going on in the currencies yesterday.

The gold stocks flirted with positive territory at the open, but rolled over pretty quick once the gold price began to turn lower---and the low came at  gold's low tick minutes after the London fix was in.  They recovered a bit from there, but that didn't last---and the gold stocks closed just off their lows, as the HUI finished down 1.64 percent.

The silver equities followed an identical path to their golden brethren, except Nick Laird's Intraday Silver Sentiment Index closed down 2.12 percent.

Nick informed me that the HUI was down 1.65 percent on the week---and the Intraday Silver Sentiment index closed lower by 3.77 percent.

The CME Daily Delivery Report showed that 25 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.   HSBC USA was the short/issuer on 24 contracts---and Scotiabank stopped 12 of them---and JPMorgan stopped 13 contracts, all for its in-house [proprietary] trading account. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest remaining in April rose by one contract to 441 contracts---and silver's remaining April o.i. was unchanged at 22 contracts.  Twenty-five of those gold contracts are being delivered on Tuesday as per the previous paragraph, so that means that the rest [along with the 22 silver contracts] should be posted for delivery on Wednesday---and that will be in Monday's Preliminary Report.  It's going right down to the wire again this month.

There were no reported changes in GLD yesterday---and as of 7:57 p.m. EDT yesterday evening, there were no reported changes in SLV, either.  When I checked back at 2:25 a.m. this morning, I noted that, much to my surprise, an authorized participant had added another 956,120 troy ounces.  Based on the price activity over the last couple of weeks, the 7.4 million troy ounces added over that time period were done to cover an existing short position in SLV.

While on the subject of the short position in SLV and GLD, the good folks over at shortsqueeze.com update their website with the short position in both these ETFs as of the close of trading on April 15.

The short position in SLV declined from 19.55 million shares/troy ounces, down to 18.53 million shares/troy ounces---5.23 percent.  I was expecting/hoping for more, but the numbers are what they are.  The short position in GLD rose 5.16 percent, from 1.46 million troy ounces, up to 1.53 million troy ounces.

The 4.3 million ounces of silver added to SLV since the 15th won't show up until their next report, which will be on May 8 or 11.

There was a sales report from the U.S. Mint yesterday.  They sold 243,000 silver eagles---and that was all.

Month-to-date the mint has sold 17,000 troy ounces of gold eagles---8,000 one-ounce 24K gold buffaloes---and 2,173,500 silver eagles.  Based on these sales, the silver/gold ratio for the month works out to 87 to 1.

And I'm still waiting for the 2014 annual report from the Royal Canadian Mint---and I'm wondering what the hold-up might be.  Hopefully it won't be too much longer.

There was no gold reported received at the COMEX-approved depositories on Thursday, but a chunky 160,384 troy ounces were withdrawn.  And except for two kilobars, all of it came out of Scotiabank's vault.  The link to that action is here.

There was no in/out activity in silver at all.

It was another huge day over at the COMEX-approved gold kilobar depositories in Hong Kong.  Brink's, Inc. reported receiving 5,802 kilobars---and shipped out a whopping 11,190 of them.  These are big, big movements, dear reader!  The link to this activity in troy ounces is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday was pretty much as I was expecting/hoping for in gold, but silver was a monstrous surprise.

In silver, the Commercial net short position declined by a stunning 10,029 contracts, which was more than double what I was expecting/hoping for.  The new Commercial net short position is now down to 169,000 million troy ounces---a 50 million ounce improvement in one week.

The Big 4 short holders covered around 2,300 short contracts.  The '5 through 8' big short holders actually added about 2,000 contracts to their short position during the reporting week---and Ted's raptors, the small Commercial traders other than the Big 8, added about 9,800 contracts to their long positions.  Ted estimates JPMorgan's short-side corner in the COMEX futures market in silver is now down to around 15,000 contracts.  Not to be forgotten in all of this is the short position in silver held by Canada's Scotiabank.  I would estimate their short-side corner in the COMEX silver market to be something north of 20,000 contracts.

Under the hood in the Disaggregated COT Report in silver, the improvement in the Managed Money category was even bigger, as they sold 2,871 long contracts and added 8,925 short contracts, which is a swing of 11,796 contracts in just one reporting week!  That has to be one of the biggest 1-week changes on record.

And all of the above occurred on a price decline of about 50 cents!  That was the shocker for me.  There was absolutely nothing in silver's 6-month chart that indicated this level of change in the internal structure of the COT Report in silver---and I'll have more on this later.

In gold, the Commercial net short position increased by a smallish 1,413 contracts, or 141,300 troy ounces, which was more or less right in line with what I was expecting to see.  The Commercial net short position now sits at 15.43 million troy ounces.

The Big 4 covered 3,000 short contracts, the '5 through 8' traders added about 1,900 contracts to their short position---and the small Commercial traders sold 2,500 long contracts.

Under the hood in the Disaggregated COT Report, there was little net change by the technical funds in the Managed Money category, as they sold 2,180 long contracts, but also reduced their short position by 2,256 contracts---so it was within 76 contracts of being a wash.  Nothing to see here.

Of course, since the Tuesday cut-off there has been further improvement in the Commercial net short positions in both gold and silver---but particularly in gold, now that the 50-day moving average was pierced to the down-side on Wednesday.  Ted figures that even with the improvements we've seen over the last three trading days, we're still around 30,000 contracts off our lows from about five weeks ago.  And just eyeballing the 6-month gold chart, a price move of $30 to $35 lower from Friday's low tick should just about do it.

Ted figures we're at the lows in silver already.

Here's Nick's "Days of World Production to Cover COMEX Short Positions" chart showing the short positions of the Big 4 and Big 8 traders, which are the current short positions held by these traders that I just discussed in the previous paragraphs.   The chart hasn't changed much in the 15 years that I've been following it, as the four precious metals are still pinned to the far-right hand side of this graph.

Here's another chart courtesy of Nick Laird.  This one shows the gold withdrawals from the Shanghai gold exchange as of Friday, April 17---and during that week there was 49.954 tonnes withdrawn.  Here's Nick's most excellent chart.

I must admit that I've got a fair number of stories today, including a decent number that I've been saving for the weekend, so I hope you have enough time to read the ones that interest you.

 

¤ Critical Reads

Worst Drop in Core Durable Goods Since December 2012

Having missed expectations for 5 of the last 7 months, Durable Goods New Orders jumped 4% MoM in March - the biggest jump since the July Boeing aberration all driven by a 112% surge in defense Aircraft new orders. Not surprisingly the Department of Commerce tried to pull this trick off in late 2007 in a last gasp desperate attempt to mask the arrival of the US recession then.

Durable Goods New Orders (ex-Transports) fell 0.2% MoM (missing expectations of a 0.3% rise) for the biggest YoY drop since 2012, some -1/9%, and under the covers it is ugly - Capital Goods New Orders non-defense, ex-aircraft have now fallen for 7 straight months, missing expectations dramatically (-0.5% vs +0.3% exp.). These numbers have never fallen for this long a period without a recession.

Durable Goods New Orders Ex-Transports... never fallen for this long without a recession.

This must read Zero Hedge piece appeared on their Internet site at 8:44 a.m. Friday morning EDT---and today's first news item is courtesy of Dan Lazicki.

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Dear CFTC... Here is Today's Illegal S&P 500 "Spoofing"

Dear CFTC commissioners:

Following this week's first in a long series of articles showcasing the ongoing manipulation in the S&P courtesy of E-mini spoofing, we are delighted to inform you that even though you heroically used a whistleblower's tip to capture the sole Flash Crash mastermind, Nav Sarao, five years after a flash crash which your peers at the SEC incorrectly claimed was the work of a small Kansas City-based mutual fund, the manipulation - as you called it - of the S&P 500 continues.

By way of example, here is some very clear evidence (courtesy of Nanex) showing "spoofing" - the very charge that Sarao is being scapegoated on - occurring twice in the space of a few minutes this morning...

This brief Zero Hedge article was posted on their Internet site at 1:17 p.m. EDT yesterday afternoon---and it's another offering from Dan Lazicki.

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In an Unrigged World: Here's How a Record S&P Close Was Manufactured

Judging by the action today, all that mattered today was 2117.39 - that is the S&P 500's previous closing record high from March 2nd. One glimpse at the charts below and the VIX-slamming is evident (especially at the close) as each time it came close to losing the record high, a miraculous deep-pocketed volatility-seller stepped in...

Look at the open in VIX too!  Welcome to the new normal.

This tiny Zero Hedge piece from yesterday appeared on their Internet site at 4:19 p.m. EDT---and I thank Dan Lazicki for his third offering in a row.  The two embedded charts are definitely worth your time.

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Gold Monkey-Hammered, Crude Clubbed As NASDAQ Surges

Amid the 'glorious' earnings last night, NASDAQ is on its own today, surging to higher highs as The Dow and S&P are unchanged to down. As this exuberance exudes, gold and silver are being smashed lower... which is odd given the ECB's threat to pull Greek financing. Crude prices are also tumbling post-Durable Goods.

This short chart-laden Zero Hedge piece appeared on their website at 10:09 a.m. EDT yesterday while JPMorgan et al were putting the boots to the gold price.  It's another story courtesy of Dan Lazicki.

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Santelli Exchange: Banks---and the war on paper money?

CNBC's Rick Santelli discusses investing in banks and analyzes cash in an electric society---and he doesn't pull too many punches.

This 3:09 minute video clip appeared on the CNBC website around 10 a.m. EDT on Monday---and the stories from Dan just keep on coming.

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The Death of Cash: Could negative interest rates create an existential crisis for money itself?

JPMorgan Chase recently sent a letter to some of its large depositors telling them it didn’t want their stinking money anymore. Well, not in those words. The bank coined a euphemism: Beginning on May 1, it said, it will charge certain customers a “balance sheet utilization fee” of 1 percent a year on deposits in excess of the money they need for their operations. That amounts to a negative interest rate on deposits. The targeted customers—mostly other financial institutions—are already snatching their money out of the bank. Which is exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far.

Pause for a second and marvel at how strange this is. Banks have always paid interest to depositors. We’ve entered a new era of surplus in which banks—some, anyway—are deigning to accept money only if customers are willing to pay for the privilege. Nick Bunker, a policy analyst at the Washington Center for Equitable Growth, was so dazzled by interest rates’ falling into negative territory that he headlined his analysis after a Doors song, Break on Through (to the Other Side).

In recent months, negative rates have become widespread in Europe’s financial capitals. The European Central Bank, struggling to ignite growth, has a deposit rate of –0.2 percent. The Swiss National Bank, which worries that a rise of the Swiss franc will hurt trade, has a deposit rate of –0.75 percent. On April 21 the cost for banks to borrow from each other in euros (the euro interbank offered rate, or Euribor) tipped negative for the first time. And as of April 17, bonds comprising 31 percent of the value of the Bloomberg Eurozone Sovereign Bond Index—€1.8 trillion ($1.93 trillion) worth—were trading with negative yields. (Although dollar interest rates are higher, JPMorgan Chase’s balance sheet utilization fee fits the pattern: In today’s low-rate world, the only way it can shed deposits in response to new regulations is to go all the way to less than zero.)

This longish Bloomberg article showed up on their Internet site at 6:00 a.m. Denver time on Thursday morning---and I thank Norman Willis for his first contribution of the day.

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"I’m Not Crazy, I’m Scared" - Why For One Trader, This Time it is Different

The SPX flirted with all-time highs. The NASDAQ Index made 15 year highs; Chinese equities, and so many other equity indices are flying. Bonds sold off this week, but the German 10-year yield is still ~17bps, the U.S. 10-year yield unable to get beyond 2%, and Greek bonds had a two-day rally that would be truly impressive if it wasn’t on volume that made it just an exercise moving wide bid/offer spreads, representing sentiment not trading.

The USD is selling off on the view that Greece is saved, the Fed is scared, and a “we can’t sit with positions because it never works” mentality. The only really new thing the market needs to digest is that commodities may be nearing a bottom

Happy days seemingly, but there have been some very discordant and troubling comments from the creme de la creme of smart - and big - investors.

Over the last three days, we have reported that some of the most important investment voices in the world are more than a little scared about the ravenous appetite for risk playing out in the market, and the fact that they have been ignored is beyond unnerving. Central banks are driving all investment decisions, and what this implies is that they are in this trade so  deeply that there is no obvious or practical exit.

This commentary by Bloomberg's Richard Breslow showed up on the Zero Hedge Internet site at 9:52 a.m. EDT on Friday---and it's definitely worth reading.  I thank Dan Lazicki for finding it for us.

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Doug Noland: Pro-Bubble

Some estimates have over $1.0 Trillion of corrupt “money” having fled China. How much has made it to U.S. real estate and securities markets? For that matter, how much global finance Bubble “dirty money” has made its way to America? How much legitimate wealth has escaped local fragility for greener U.S. pastures – from China, Russia, Brazil, Venezuela, Latin America, Europe and the Middle East? And how much “hot money” has been unleashed by respective QE currency devaluations from the Bank of Japan and European Central Bank? How big are global leveraged “carry trades”? What have been the impacts and what are the ramifications from these historic flows that I view as unsound, unstable and unsustainable?

By this point, things have gone way beyond the late-nineties “king dollar” dynamic. Recent years have seen unprecedented global flow instability – literally Trillions flowing to and fro in an unremitting chase for returns. The closest parallel is the profoundly unstable global backdrop from the late-twenties. And like the “Roaring Twenties,” few today appreciate how deeply systemic all the unsound finance has become – not with stocks at record highs, bond prices at record highs and household net worth at all-time highs.

Doug's is the voice of financial sanity in a world gone mad.  His weekly Credit Bubble Bulletin was posted on his website Friday evening---and I thank reader U.D. for sending it our way.

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Here’s How to Download and Delete What Google Search Knows About You

Have you ever wondered what Google Search really knows about you? Well, now you can check, as Google has added a new feature that lets you view and download your entire search history.

Yep. Everything.

The feature, which was spotted by the unofficial Google Operating System Blog — though VentureBeat points out that the function was made available in January — gives you access to everything from what you searched for to the links you clicked on from those searches. It also shows you the addresses you’ve searched for.

I was even able to see the list of images I clicked on while searching for pictures of cats eating spaghetti. Now imagine what you’ve looked for. Oh, and clearing your browser history won’t delete this data.

But there’s no reason to panic, because in addition to being able to download your search history, you can clear it.

This interesting article put in an appearance on the yahoo.com Internet site yesterday---and it's the second offering of the day from Norman Willis.

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Wal-Mart mysteriously closed 5 stores, and some people have a wacky conspiracy theory about why

Thousands of Wal-Mart employees are fighting to get their jobs back after Wal-Mart suddenly closed five stores last week without warning.

The retailer said it closed the stores in California, Texas, Oklahoma, and Florida because of persistent plumbing issues that could take as long as six months to fix.

More than 2,200 workers were laid off as a result and given two months of severance pay.

But some critics are skeptical that Wal-Mart closed the stores because of plumbing issues.

This very interesting story is one that I was saving for my Saturday column.  It appeared on the businessinsider.com Internet site at 4:14 p.m. on Tuesday---and it's already had over 216,000 hits.  It's the first offering of the day from Roy Stephens.

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Cash Flowed to Clinton Foundation Amid Russian Uranium Deal

The headline on the website Pravda trumpeted President Vladimir V. Putin’s latest coup, its nationalistic fervor recalling an era when its precursor served as the official mouthpiece of the Kremlin: “Russian Nuclear Energy Conquers the World.”

The article, in January 2013, detailed how the Russian atomic energy agency, Rosatom, had taken over a Canadian company with uranium-mining stakes stretching from Central Asia to the American West. The deal made Rosatom one of the world’s largest uranium producers and brought Mr. Putin closer to his goal of controlling much of the global uranium supply chain.

But the untold story behind that story is one that involves not just the Russian president, but also a former American president and a woman who would like to be the next one.

This longish essay was posted on The New York Times on Thursday---and for length and content reasons had to wait for today's column.  I thank Roy Stephens for bringing it to our attention.  There was another story about Hillary and donations that was posted on the foxnews.com Internet site yesterday---and that one is headlined "Many Clinton charity donors also got State Department awards under Hillary".  I thank reader H.W. for sliding it into my in-box at 11:50 p.m. Denver time last night.

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Puerto Rico Warns of Imminent Government Shutdown Due to "Liquidity Crisis"

Puerto Rico's top finance officials said the government of the U.S. territory will likely shutdown in three months because of a looming liquidity crisis and warned of a devastating impact on the island's economy.

In a letter to leading lawmakers, including Governor Alejandro Padilla, the officials said a financing deal that could potentially salvage the government's finances currently looked unlikely to succeed. It warned of laying off government employees and reducing public services.

"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open is currently remote."

The letter, dated April 21, was also sent to the heads of Puerto Rico's Senate and House as well as the governor. It was signed by the government's fiscal team, including the head of the Government Development Bank and the Treasury Secretary.

This is the Zero Hedge spin on a Reuters story from yesterday.  It appeared on the ZH Internet site at 12:10 p.m. EDT yesterday---and I thank reader 'David in California' for passing it around.

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Hundreds evacuated as Chilean volcano erupts for first time in 40 years and sends huge plume of ash into the sky

Yes, I know I posted something about this in yesterday's column, but this was worth posting.  This spectacular photo essay put in an appearance on the dailymail.co.uk Internet site at 1:29 BST on Thursday morning---and they're definitely worth scrolling through.  I thank reader M.A. for bringing them to my attention---and now to yours.

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HSBC considers leaving the U.K. in wake of tax grabs

HSBC fired a warning shot to the Government on Friday by revealing that the weight of regulation imposed on Britain’s biggest bank since the financial crisis may force it to move its headquarters away from the U.K.

In a surprise announcement ahead of the bank's annual meeting, which came just two weeks before the general election, HSBC’s chairman Douglas Flint said it was launching a review into “where the best place is for HSBC to be headquartered in this new environment”.

Such a move would be likely to take several years, be extremely expensive and force the company to reapply for hundreds of banking licences, but investors celebrated the announcement, with shares in the bank rising by more than 2pc.

Hong Kong, where HSBC was domiciled until it moved to the U.K. in 1993 and which is seen as the most likely destination should it exit London, welcomed the review.

This very interesting article appeared on The Telegraph's website at 8:00 p.m. BST on Friday evening, which was 3:00 p.m. EDT.  It's obviously been edited, because I pulled it off their website just before midnight MDT on Thursday evening.

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Price of Stalling: Upkeep of Mistral Warships Costs France €5 Million a Month

France and Moscow failed to reach an agreement for the delivery of two Mistral ships during a meeting between Francois Hollande and Vladimir Putin in Yerevan, Armenia. Now, the upkeep and maintenance cost for the two ships, sitting at a French port, will cost French taxpayers €5 million per month.

Russian President Vladimir Putin met his French counterpart Francois Hollande at a commemoration event in Yerevan, the Armenian capital, for the 100th anniversary of the Armenian Genocide.

The two presidents spoke about the failed delivery of two Mistral-class helicopter carriers to Russia and attempted to re-negotiate the deal. However, the Friday meeting did not bring any results and the deal still remains frozen.

Earlier this week, Hollande said that France will return the money for the failed Mistral deal, stating that the delivery of the helicopter carriers was still not possible.

This article was posted on the sputniknews.com Internet site at 8:01 p.m. Moscow time on their Friday evening, which was 1:01 p.m. EDT in Washington.  I thank Roy Stephens for bringing it to our attention.

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Spying Close to Home: German Intelligence Under Fire for NSA Cooperation

It was obvious from its construction speed just how important the new site in Bavaria was to the Americans. Only four-and-a-half months after it was begun, the new, surveillance-proof building at the Mangfall Kaserne in Bad Aibling was finished. The structure had a metal exterior and no windows, which led to its derogatory nickname among members of the Bundesnachrichtendienst (BND), the German foreign intelligence agency: The "tin can."

The construction project was an expression of an especially close and trusting cooperation between the American National Security Agency (NSA) and the BND. Bad Aibling had formerly been a base for US espionage before it was officially turned over to the BND in 2004. But the "tin can" was built after the handover took place.

The heads of the two intelligence agencies had agreed to continue cooperating there in secret. Together, they established joint working groups, one for the acquisition of data, called Joint Sigint Activity, and one for the analysis of that data, known as the Joint Analysis Center.

But the Germans were apparently not supposed to know everything their partners in the "tin can" were doing. The Americans weren't just interested in terrorism; they also used their technical abilities to spy on companies and agencies in Western Europe. They didn't even shy away from pursuing German targets.

The Germans noticed -- in 2008, if not sooner. But nothing was done about it until 2013, when an analysis triggered by whistleblower Edward Snowden's leaks showed that the US was using the facility to spy on German and Western European targets.

This very interesting article put in an appearance on the German website spiegel.de at 7:20 p.m. Europe time on Friday evening---and it's definitely worth reading if you have the interest.  It's another offering from Roy Stephens.

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On the #Gredge: Greece and E.U. finance ministers fail to reach deal in Riga

Grexit? Gredge? Graccident? Grimbo? Each clever hashtag to describe Greece defaulting and leaving the eurozone is becoming more a reality, after talks between Greece and its EU creditors to unlock €7.2 billion for Athens to pay off its IMF debt failed.

"A comprehensive deal is necessary before any disbursement can take place," Eurogroup President Jeroen Dijsselbloeme said at the press conference in Riga following the meeting Friday. "Responsibility for that relies mainly on Greece," he said, adding that too much time was lost during the past 2 months.

Greece’s four month bailout extension expires in June.

Eurozone finance ministers held Greek debt talks in Riga, Latvia to discuss unlocking bailout funds, so Greece can pay its next $450 million repayment on an IMF loan. The bailout will help Greece’s struggling economy live through several debt repayments due over the course of the next two months. The euro declined on the news of no deal.

This news story showed up on the Russia Today website at 11:15 a.m. Moscow time on their Friday morning---and once again it's courtesy of Roy Stephens.  Another story on the same issue appeared on the irishtimes.com Internet site at 7:52 a.m. BST yesterday morning---and it's headlined "Euro zone warns Greece no cash till full reform deal"---and my thanks go out to Roy S. once again.

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U.S. alarmed by Greek energy alliance with Russia

The US is scrambling to head off a Greek pipeline deal with Russia, fearing a disastrous change in the strategic balance of the Eastern Mediterranean as Greece’s radical-Left government drifts into the Kremlin’s orbit.

Ernest Moniz, the US Energy Secretary, said his country is pushing for an alternative gas pipeline from Azerbaijan that would help break the stranglehold that Russian state-controlled firm Gazprom has on European markets.

“Diversified supplies are important and we strongly support the ‘Southern Corridor’ to bring Caspian gas to Europe,” he told a group of reporters on the margins of CERAWeek oil and gas forum in Houston.

He insisted that it was vital to uphold “collective energy security” in Europe.

Greece’s foreign minister, Nikos Kotzias, said Gazprom made a “very good offer”, with guaranteed gas supplies for 10 years at good prices. He asked how his Syriza government could justify turning down such an opportunity unless the Western powers could come up with something better.

This commentary by Ambrose Evans-Pritchard appeared up on the telegraph.co.uk Internet site at 7:57 p.m. BST on Thursday evening---and it's another story courtesy of Roy Stephens.

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One Hundred Years of Silence: Turks Slowly Take Stock of Armenian Genocide

A church like that can help a person, says Armen. It can help them from giving up hope -- and that is indeed something.

The fact that the church is even standing here -- beautiful and steadfast in a place that was only recently the site of ruins -- instills a sense of courage, says Armen. And courage is something that is badly needed in these parts, especially in Diyarbakir.

The city is located in southeastern Turkey, deep in the Anatolian mountain region. Diyarbakir is gray, loud and lackluster. But it does have one special landmark -- the stylishly restored St. Giragos Church, located in the Old Town, a labyrinth of crumbling homes and alleys that reverberate with children's shouts as they kick around a soccer ball.

It's a Christian-Armenian church, the first of its kind to be rebuilt and highly symbolic in a city like Diyarbakir. The builders say that attempts were made to prevent the reconstruction, hinting that they may have been linked to some of the politicians involved in the project. Indeed, some felt provoked by the restoration of the church.

For others, the church is a symbol of a major political shift that has gripped Turkish society, a symbol of a willingness to confront its history. The church also helps people to remember and reaffirm their true identity. People like Armen.

This very interesting article was posted on the spiegel.de website back on Tuesday---and is another one of those stories that had to wait for my Saturday column.  I haven't read it yet, either, but it's certainly on my must read list today or tomorrow.  Once again I thank Roy Stephens for finding it for us.

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All aboard the Lisbon to Vladivostok train, no stops in Kiev or Warsaw

In recent days the German Chancellor Angela Merkel again allowed herself to talk about a common geopolitical and economic European space, including Russia. In my opinion this statement could be regarded as a feat, considering all the pressure that Washington has been exerting on Germany.

"In the future we see a major economic trading zone, which includes Russia.” - said Frau Merkel on April 17th at an economic forum in Stralsund. And taking a deep breath, boldly added, "We progress step by step, and move closer to a common economic space, and just like Vladimir Putin once said, it will be 'from Vladivostok to Lisbon.' "

Angela Merkel of course mentioned Putin, hated in the USA, for a reason. Yet despite of that, the Chancellor made it clear that Germany will try to defend its sovereignty. After all, only Americans share the view that the Russian President is the devil incarnate.  The steps towards an economic Euro-Asian trade zone seem logical and consistent for the Europeans.

Having said that, Washington's goal for the Europeans is not a big family secret.

At an accelerated pace, the plans are to complete the construction of a "Hate Belt," that includes various Russophobic States from the Baltic all the way to the Black sea, states that would hinder the development and strengthening of economic relations between Russia and the European Union. In fact, there are only two ways left through which you can deliver and trade goods: across land through Belarus and then through Poland, or by sea through St. Petersburg. At this moment and time, no sane businessman would attempt to deliver and trade goods via Ukraine.

This very interesting commentary was posted on the fortruss.blogspot.co.uk Internet site on Tuesday---and it's definitely worth reading if you're a serious student of the New Great Game.

It's courtesy of Roy Stephens, of course.

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What does Putin want? A major analysis by Rostislav Ishchenko

The analysis below is, by far, the best I have seen since the beginning of the conflict in the Ukraine.  I have regularly posted analyses by Ishchenko on this blog before, because I considered him as one of the best analysts in Russia.  This time, however, Ishchenko has truly produced a masterpiece: a comprehensive analysis of the geostrategic position of Russia and a clear and, I believe, absolutely accurate analysis of the entire “Putin strategy” for the Ukraine.  I have always said that this conflict is not about the Ukraine but about the future of the planet and that there is no “Novorussian” or even “Ukrainian” solution, but that the only possible outcome is a strategic victory of either Russia or the USA which will affect the entire planet.  Ishchenko does a superb overview of the risks and options for both sides and offers the first comprehensive “key” to the apparently incomprehensible behavior of Russia in this conflict.  Finally, Ishchenko also fully understands the complex and subtle dynamics inside Russian society.  When he writes “Russian power is authoritative, rather than authoritarian” he is spot on, and explains more in seven words than what you would get by reading the billions of useless words written by so-called “experts” trying to describe the Russian reality.

We all owe a huge debt of gratitude to Denis, Gideon and Robin for translating this seminal text, which was very difficult to translate.  The only reason why we can read it in such a good English is because the innumerable hours spent by these volunteers to produce the high quality translation this analysis deserves.

I strongly recommend that you all read this text very carefully.  Twice.  It is well worth it.

The Saker

That was the introduction to this essay that was posted on thesaker.is Internet site on Wednesday---and without doubt, it's the most important must read in today's column.  Please do yourself a favour and give it the time it deserves.

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Pepe Escobar: Pakistan enters the New Silk Road

Now how do you top this as a geopolitical entrance? Eight JF-17 Thunder fighter jets escorting Chinese President Xi Jinping on board an Air China Boeing as he enters Pakistani air space. And these JF-17s are built as a China-Pakistan joint project.

Silk Road? Better yet; silk skyway.

Just to drive the point home – and into everyone’s homes – a little further, Xi penned a column widely distributed to Pakistani media before his first overseas trip in 2015.

He stressed, “We need to form a ‘1+4′ cooperation structure with the Economic Corridor at the center and the Gwadar Port, energy, infrastructure and industrial cooperation being the four key areas to drive development across Pakistan and deliver tangible benefits to its people.”

Quick translation: China is bringing Pakistan into the massive New Silk Road(s) project with a bang.

This must read article by Pepe was posted on the Asia Times website on Friday sometime---and it's the final offering in today's column from Roy Stephens.  I thank him on your behalf.

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Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on this weeks release of current U.S. economic data, the Greek debt crisis and the Eurogroup meeting this weekend in Riga, the farce of high frequency trading and the lack of responsible regulation, and Swiss gold exports and global demand.

This 8:01 minute audio interview with host Geoff Rutherford was posted on the sprottmoney.com Internet site on Friday afternoon---and it' worth your while.

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UBS' commodities team, bullish on gold, sees equities and gold driving up

This year credit conditions in the U.S. look to be worsening, possibly dramatically. Of that the National Association of Credit Management (NACM), which surveys credit companies in the US about debt, has become increasingly convinced. In February NACM warned of deteriorating conditions, though there was some question if the decline in its index was temporary.

But after March data, it decided it wasn’t a one off.”There is quite obviously some serious financial stress manifesting in the data and this does not bode well for the growth of the economy going forward,” NACM wrote in late march. “These readings are as low as they have been since the recession started and to see everything start to get back on track would take a substantial reversal at this stage. The data from the CMI is not the only place where this distress is showing up, but thus far, it may be the most profound.”

In a recent note UBS’ commodities team took this, among other factors, as a “flashing red” signal that credit conditions in the US have gone sour and that the US Federal Reserve will be forced back to loosening its belt again. As UBS has argued for some time, it sees this as making for a bull run in gold, and gold equities in particular.

As mild warning: UBS’ commodities team acknowledges that in its thinking on debt/gold it is at odds with consensus view on debt conditions in the US and the broader in house view at UBS. That is, that they are not dire. But the UBS’ commodities team argues the US economy is not as healthy as it may seem. It says, “broad US economy returns (over the cost of capital) are in structural and cyclical decline, credit appetite is deteriorating, and that will lead to a trend widening of spreads, deteriorating credit availability and uptake, slowing growth and a new round of Fed reflation.” Under these conditions it notes that gold and gold equities do well.

This commentary was posted on the moneyweb.com Internet site on Thursday morning---and it's something I found on the Sharps Pixley website.  The actual headline reads "Signs ‘flashing red’ on debt, Fed’s return".

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Gold Is Near an All-Time Inflation-Adjusted Low -- Jeff Clark, Casey Research

Adjusted for the 1980 inflation measure, the gold price is approaching its bear market low of 2001. In fact, gold is now below the 1975 price when it became legal to own it again!

These data clearly show that when measured against a more realistic view of inflation, gold is dramatically undervalued.

And with total worldwide debt levels up by a whopping $57 trillion since the end of 2007, the need to own it is as important as ever.

Don’t worry about the current range bound price. Buying now represents tremendous value and tremendous protection against the next economic crisis.

Of course we all know why the gold price is that low, but there's not a word about it here.  This short commentary appeared on the Casey Research website yesterday---and it's worth your while.  Buy with both hands, dear reader!

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Gold Newsletter's Brien Lundin: Gold market gets 'curiouser and curiouser'

"Curiouser and curiouser," cried Alice, in a statement that could be readily applied to today's gold trading session.

Granted, she was referring to talking rabbits and litigious queens, but that the dollar took a sizeable turn to the downside today, and gold followed it even further into the red, has to rank as a similarly fantastic occurrence.

The the dollar is down about 0.4 percent at last check, but June gold is down considerably more -- as much as 2 percent off from the day's highs for the yellow metal.

That's not an easy thing to do. Not only are the fiat dollar and gold at opposite ends of the philosophical spectrum, they are also at opposite ends of the mathematical see-saw: Since gold is priced in U.S. dollars, every tick down in the dollar against its trade partners puts an equal amount of pricing pressure on gold in the upward direction.

So there have to be some very powerful forces at work to push gold lower along with the dollar ... just as it takes a special situation to drive gold and the dollar upward in unison.

This must read commentary by Brien from his latest newsletter was posted in the clear in this GATA release yesterday.

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Venezuela pawns nearly $1 billion in gold reserves

The Central Bank of Venezuela has pawned nearly $1 billion of its gold reserves, sources close to the central bank say. The swap operation, as it is called in the financial markets, was signed with the US bank Citibank, which was chosen from a group of five international organizations, which also aspired to structure this financial instrument.

Although details of the operation are unknown, experts have estimated that the U.S. bank will charge a fee of between 6 and 7 percent for preparing the swap. The gold remains in the vaults of the Bank of England. But it would be taken as collateral in case the Central Bank of Venezuela does not pay on time the amount borrowed from Citibank.

It was thought that the swap's value would be $1.5 billion, but in the end a lower figure was achieved. The funds will be used to pay for imports, an unofficial source said.

What's this gold doing at the Bank of England?  I thought they brought all their gold home years ago?  Obviously they had to move it if they wanted to do the swap.  This story, in Spanish, appeared on the el-nacional.com Internet site yesterday---and it's posted in the clear---and in English---at the gata.org Internet site.

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Up to $1 trillion in gold is held by temples in India. Now Modi wants them to monetize this vast hidden wealth

Workers for the centuries-old Shree Siddhivinayak Temple here spent hours unpacking gold coins, heavy wedding necklaces and lustrous pendants from a closely guarded “strong room.” By the time gold-buyers began mingling with worshippers at the sweltering sanctuary on Tuesday, the jewelry auctioneers were ready.

“This is not a regular gold coin that you would buy from a gold shop — it contains the Lord’s blessing,” a temple board member said, holding up a tiny coin, probably left by a devotee years ago. It eventually sold for four times its face value.

Wealthy Hindu temples such as this one are repositories for much of the $1 trillion US worth of privately held gold in India — about 22,000 tons, according to an estimate from the World Gold Council. In 2011, one temple in south India was found to have more than $22 billion in gold hidden away in locked rooms rumoured to be filled with snakes. Another has enough gold to rival the riches stashed at the Vatican, experts said.

But little of it is contributing to the Indian economy, and now Prime Minister Narendra Modi’s government is looking to monetize India’s vast hidden wealth. In coming weeks, the government plans to begin a program that will allow temples to deposit their gold into banks to earn interest and circulate in the economy, rather than sit idle in musty vaults. The gold, officials said, would be melted down and sold to jewellers.

This very interesting story, which is partly what you already know, but there have been some developments since I last posted a story on this issue---and it's worth reading if you have the interest.  It originally appeared on The Washington Post website, but was picked up by the vancouversun.com Internet site yesterday---and I found it on the Sharps Pixley website.

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Epoch Times: China uses gold to pursue global power

China's strategy in acquiring substantial amounts of gold, possibly as support for the inclusion of the country's currency in the Special Drawing Rights issued by the International Monetary Fund, is the topic of a report by Valentin Schmid in today's edition of The Epoch Times.

GATA secretary/treasurer Chris Powell is quoted about the longstanding recognition by the United States that whichever nation has the most gold can control its price and thereby control the value of all other currencies.

The Epoch Times' report is headlined "China Uses Gold to Pursue Global Power" and it was posted on the newspaper's Internet site yesterday.  It's definitely worth reading---and the photo alone is worth the trip.

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How central banks mislead on gold reserve reporting -- Lawrence Williams

Since writing yesterday’s article on scepticism regarding central bank gold reporting (see: Does any nation hold the gold it says it does?), I have had my attention drawn to the publication by The Gold Anti Trust Action Committee (GATA) around 2 ½ years ago of a leaked IMF confidential document on central bank reporting of gold reserves.

I append the GATA article, with a link to the full IMF document, on this below and from it it can be seen how non-transparent such reporting has become – in the interests of protection of bank-sensitive data – when it comes to central banks hiding leasing and swap agreements for their gold in their overall reserve figures. This can, as my earlier article pointed out, mean that what is actually reported as being a nation’s physical gold reserve at a specific point in time may, in fact, be an extremely misleading figure given the amount of gold swap and leasing activity which may have been being undertaken.

Admittedly the IMF document referred to is now 16 years old, but there is no reason to believe reporting by the individual banks of their gold reserve figures to the IMF are any more transparent now than then – indeed they may even be less so.

This must read commentary by Lawrie, filed from London, appeared on the mineweb.com Internet site at 10:17 a.m. BST on Friday morning.

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¤ The Funnies













Alexandria Minerals Corporation (TSX VENTURE:AZX) and Murgor Resources Inc. (TSX VENTURE:MGR) are pleased to announce that they have entered into an arrangement whereby Alexandria will acquire all of the outstanding common shares of Murgor.

Here are some of the benefits for Alexandria's shareholders:

  • Substantial increase in Alexandria's mineral resources
  • Alexandria’s cost of discovering gold is already low, at approximately $15.00/oz. The cost of acquiring Murgor’s gold assets is even lower, at approximately $3.00/oz.;
  • Alexandria will have larger strategic land packages in the well-known and prolific mining camps of Val d’Or and Chibougamau in Québec; Red Lake and Matachewan in Ontario; and Flin Flon-Snow Lake in Manitoba;
  • Alexandria management knows how to capitalize on its strategic assets, as evidenced by Alexandria’s successful track record in discovering its West Zone Au-Cu deposit and then monetizing this exploration project in the sale to Agnico-Eagle  (Alexandria Press Release January 14, 2014);

On January 30 Alexandria closed a non-brokered private placement of $500,000 at a price of 10 cents.  There are neither Finder’s Fees nor Commissions associated with this financing.  Proceeds from the sale of the shares will be used for exploration on its Cadillac Break property group in Val d'Or, Québec and general corporate purposes. Call or email Mary Vorvis, 416-305-4999/MVorvis@azx.ca, for more information on Alexandria Minerals.  

 

¤ The Wrap

I also detect the continued presence of a single big buyer in Silver Eagles from the U.S. Mint due to the large but erratic pace of reported sales. Whereas the Mint has been reporting regular but very low sales of Gold Eagles relative to sales of Silver Eagles, in addition days can go by with no sales of Silver Eagles, but with reported sales of Gold Eagles. Particularly against a backdrop of weak retail sales, the spurts in reported sales of Silver Eagles is notable. As I’ve remarked previously, it’s as if the big buyer is waiting for the Mint to build up a few days of production before placing a big buy order, rather than buy what’s produced on a daily basis.

Also notable is that when one adjusts for the premium the Mint applies to Silver Eagles, more money is being spent on Silver Eagles than is being spent on Gold Eagles. Except for 2014, this had never occurred in the 29 year history of the Mint’s bullion coin program. Considering the low to almost non-existent collective investor sentiment towards silver, it is almost shocking that the Mint is selling more Silver Eagles relative to Gold Eagles than ever before, including 2014. - Silver analyst Ted Butler: 22 April 2015

Today's pop 'blast from the past' is the greatest hit of the Canadian-American hard rock band Steppenwolf.  The piece hit the airwaves in 1968---and needs no introduction at all.  The link is here.

Today's classical 'blast from the past' is one I've posted before, but I never tire of---and I hope you're of the same mind.  It's Max Bruch's Kol Nidrei Op.47.  This recording has been on youtube for a while, because it's in two parts, when it will easily fit in one video now.

But, having said that, the quality of the audio recording is luscious---and certainly the best one available on the Internet. I listened to the Maisky recording---and thought it too fast and I certainly didn't like his interpretation.  However, here is cello soloist Teodora Miteva, with the Vienna Philharmonic Women´s Orchestra at the St. Thekla Church in Vienna. Conducted by Izabella Shareyko.  This is as good a performance of this classical work as you'll hear anywhere by any soloist or orchestra.  It is divine---and that's probably the reason that it's had 464,000 hits, which is over the moon for any classical work. Enjoy---and the link to Part 1 is here---and the link to Part 2 is in the right sidebar.

Another day---and more slices.

As I've commented on before, the latest being in yesterday's column---and which Brien Lundin mentioned in the Critical Reads above---the downside price action in the precious metals in the face of a declining dollar index didn't happen without some help from JPMorgan et al.

Here are the 6-month charts for all four precious metals as of the close of trading yesterday.

Of course options and futures expiry for the May contract is early next week---and I'm sure that the HFT boyz were gunning for the stops held by the brain-dead technical funds in the Managed Money category---and it worked like a charm, as it always does.  It was just more proof positive the price of the precious metals is being set by two different sets of speculators---JPMorgan et al in the Commercial category---and the brain dead technical funds in the Managed Money category.

Nowhere to be found in this price-setting mechanism are the producers or the consumers---and if they are there, they represent a very tiny fraction of the current open interest in any of the precious metals, so supply/demand fundamentals are totally overridden by the powers-that-be.  The producers and consumers would show up in the Commercial category, but they were hijacked by the bullion banks years ago for price management purposes---and JPMorgan et al have been there ever since.

Ted says that silver is already back to where it was from a COT perspective five weeks ago---and any price declines since then---and we've had two in the last three days---will just be icing on the cake.

As Ted also mentioned on the phone yesterday---and I spoke of it in my COT comments further up, even with improvements in the Commercial net short position in gold since the Tuesday cut-off, he feels that there still could be 30,000 contracts worth of long liquidation left in gold in the Managed Money category.

But will "da boyz" press their advantage at this point?  If they do, they'll certainly use the opportunity to not only reduce their short positions in gold, but also continue to beat the living snot out of the silver price.  As Ted has been saying for decades now, silver is the critical metal---and JPMorgan won't hesitate to use gold as a hammer to beat it lower if they can.

That's probably the number one reason that Jamie Dimon has been so publicly bemoaning the takeover of Bear back in 2008.  He got stuck with their outrageous short position in silver that he just can't get out of---and that's why he's loaded to the gunwales in physical silver bullion.

The precious metal picture is crystal clear---except for those whose jobs depend on them not seeing it---that Jim Rickards was right in saying that these guys should be embarrassed by how obvious their price management scheme has now become.

I await the Sunday evening open in New York with great interest.

Before heading off to bed, I'd like to remind you again that Casey Research's own Louis James has been watching a company that he is convinced will be the world's next high-grade gold producer.

It’s an extremely well-funded operation working a high-grade gold deposit 8x richer than the average mine---and that’s scheduled to throw the switch on a brand-new mine and start producing gold for the very first time.

Up to this point, the market is largely ignoring it, so shares of this company are currently trading well below book.  This is your chance to invest in an advanced-stage producer at a dramatic discount... just before its true value is realized. But you must act before April 30.

That's First Notice Day for delivery into the May silver contract.

If you want to find out more, you can do so by clicking here.

I'm done for the day---and the week.

See you on Tuesday.

Ed Steer