Gold & Silver Daily
"There was huge deterioration in the Commercial net short positions again yesterday."
 

¤ Yesterday In Gold & Silver

Gold opened flat when trading began in New York on Wednesday evening.  Then starting just before 9 a.m. Hong Kong time, a rally began that grew stronger as the Far East trading session unfolded.  It was up a decent amount by the London open---and then went vertical at 8:00 a.m. GMT, but ran into the usual not-for-profit sellers less than fifteen minutes later---and by 9 a.m. in New York, "da boyz" had the price bank under control, as most of the gains vanished.

The low and high tick were reported by the CME Group as $1,193.80 and $1,219.50 in the April contract.

Gold finished the Thursday session in New York at $1,204.10 spot, up only $9.00 on the day.  Gross volume was over the moon at 372,000 contracts, but it netted out to only 118,000 contracts, with a decent chunk of the latter amount used up to cap and then kill the big price spike around the London open.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  The New York open on Wednesday evening shows as 16:00 on this chart, which is Denver time, so add two hours for EDT.  Don't forget the 'click to enlarge' feature.

The silver chart was similar in most respects, but came close to being closed back below the $17 spot mark, but a rally in electronic trading on Thursday afternoon EDT prevented that occurrence.

The low and high were reported as $16.91 and $17.405 in the May contract.

Silver finished the Thursday session at $17.10 spot, up 14.5 cents from Wednesday's close---and one can only fantasize what the closing price would have been if JPMorgan et al hadn't put in an appearance when they did.  Ditto for gold.  Net volume was 38,000 contracts---and about a third of that was used to put out the silver fire in early London trading.

Platinum had a similar price path---and also got capped shortly after 8 a.m. in London as well.  The secondary rally after that got dealt with at the COMEX open in New York.  Platinum as closed at $1,148 spot, up 7 dollars on the day.

Palladium was the same---and it closed at $768 spot, up 5 bucks from Wednesday's close.

The dollar index closed late on Wednesday afternoon in New York at  96.93---and immediately began to head lower.  That slide turned into a rout starting around 2:30 p.m. Hong Kong time, with the final 96.20 low tick coming at the London a.m. gold fix at 9:30 a.m. GMT.  From there it rallied strongly to its 97.53 high tick very shortly after the 1:30 p.m. COMEX close in New York.  It sold off a bit after that, but finished the Thursday session at 97.42---up 49 basis points.

Here's the 1-year U.S. Dollar Index chart.

The gold stocks opened higher---and managed to stay above the unchanged mark until 2 p.m. EDT---and then rolled over, hitting their low ticks around 2:50 p.m.  From there, they recovered a hair into the close.  The HUI finished down 1.79 percent.

The gold price has closed higher for the last three days in a row, the gold stocks have closed lower each of those days.  The only up day they had was on Monday.

The silver equities follows a very similar pattern, except they closed even lower than the gold shares, as Nick Laird's Intraday Silver Sentiment Index closed down 2.61 percent.

The CME Daily Delivery Report showed that 43 gold and 68 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In gold, the only short/issuer was HSBC USA---and the only long/stopper was Canada's Scotiabank.  In silver, there was one short/issuer---and that was HSBC USA.  JPMorgan picked up another 48 of those contracts---27 for its in-house [proprietary] trading account, along with 21 for its client account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that gold open interest for March fell by 49 contract down to 43 contracts still open.  With that amount, March delivery in gold will be done by the close of business on Friday.  In silver, March o.i. dropped by 66 contracts---and is now down to 146 contracts still open, minus the 73 contracts posted above.

There was another big withdrawal from GLD yesterday, as an authorized participant removed 191,934 troy ounces.  There was also another withdrawal from SLV.  This time it was 1,434,783 troy ounces.  The amount of gold and silver in GLD and SLV have continued to decline over the last seven days despite the fact that the prices of the underlying metals has been rallying for the past week.

There was a tiny sales report from the U.S. Mint.  They sold 1,000 troy ounces of gold eagles---and that was all.

There was very decent gold movement at the regular COMEX-approved depositories on Wednesday---and almost all of it was in in kilobar form, as 97,738 troy ounces were received---and 3,552 troy ounces were reported shipped out.  Most of the activity was at Scotiabank's depositories.  The link to that activity is here.

At the Gold Kilo Stocks depositories, there was more action once again at Brink's, Inc.---as they received 1,906 kilobars---and shipped out 6,686 kilobars.  The conversion factor from troy ounces to kilobars is 32.151.  The link to that action is here.

Ted and I have been trying to make some sort of sense out of this frantic in/out activity at Brink's since the depositories were launched ten days ago---and we're drawing a blank.

And much to my surprise, there was absolutely no in/out movement in silver at the COMEX-approved depositories on Wednesday.

I have fewer stories today, which suits me just fine.

 

¤ Critical Reads

Initial Jobless Claims Drop Back Below Dreaded "300k" Level

After last week's initial jobless claims drop - which nevertheless held the 4-wk average above 300k - this week saw the number drop once more. Against expectations of 290k, claims printed 282k, leaving the 4-week average at 297k, conveniently below the 300k mark. Continuing claims continues to flat line at an elevated level. This means that since the end of QE3, initial jobless claims are unchanged as the trend of improvement has clearly stalled.

This brief Zero Hedge article, with two excellent charts, showed up there at 8:37 a.m. EDT on Thursday morning---and today's first story is courtesy of Dan Lazicki.

Read more...

Kansas Fed Plunges to 2-Year Lows, New Orders Crash: "Economy Not as Strong as Media Portrays"

How can it be? Services PMI was at 6-month highs. The Kansas City Fed Index tumbled to -4 in March (against expectations of +1) and was last below this level in Feb 2013. KC Fed has now missed for 6 of the last 8 months and the report is a disaster across the board. New orders plunged to -20 (2nd lowest print since Lehman), order backlogs imploded, average workweek collapsed to -17 (lowest since Lehman), and future capex expectations fell to a five-year low. As one respondent noted, "we do not see the economy as being as strong as a portrayed in the national media reports."

This Zero Hedge story is also chock full of charts that are worth your while.  It was posted on their Internet site at 11:17 a.m. EDT yesterday morning.  It's another offering from Dan L.

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USA Today: The Emerging Portrait of Q1 Earnings Could Be Dismal

There might be a train wreck ahead — investors should look out for withering corporate profits when first-quarter results start pouring in, with some companies' profits expected to vanish entirely, according a USA Today review of S&P Capital IQ data.

In fact, at least 19 companies in the bellwether S&P 500 are expected to see their profits plummet by 90 percent or more, according to analyst projections.

Analysts' consensus projects that overall S&P 500 earnings will slump by almost 3 percent for the first quarter of this year. All 10 recessions since 1945 were preceded by downward trending growth in earnings per share during the previous 12-month period, said Sam Stovall, managing director of U.S. Equity Strategy at S&P Capital IQ’s Global Markets Intelligence group.

This business-related news story appeared on the newsmax.com Internet site at 6:00 a.m. EDT on Thursday morning---and I thank West Virginia reader Elliot Simon for sending it along.

Read more...

S&P Tumbles Into Red Year-to-Date, Gold Goes Green

With Trannies now down almost 6% year-to-date, the S&P just fell back below the red-line for 2015, joining the Dow.  Small Caps and NASDAQ remain up 2% for now. Bonds, gold, and silver are back in the green for 2015.

Year-to-Date, stocks not happy...as PMs and bonds push back into green.

This is another short, 2-chart Zero Hedge story from yesterday morning EDT---and this one is courtesy of Dan Lazicki as well.  It's certainly worth a peek.

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Dow Breaks Below Key "Bullard Bounce" Trend line

This is another tiny Zero Hedge article.  It's composed of two lines of text that accompany two charts---and they're definitely worth a look.  It's the third contribution from Dan Lazicki.

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Jim Grant: Still in emergency mode after seven years

James Grant of Grant’s Interest Rate Observer discusses risk in the markets and the Fed.

This 4:41 minute video clip took place on the Fox Business website on Wednesday---and once again I thank Dan Lazicki for sharing it with us.

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Three black crows' could spell doom for the market

Something highly unusual, and potentially quite bearish, has just happened to the stock market.  The S&P has closed on its absolute low three days in a row---and the pundits over at CNBS are fraught with worry.

But never fear, the President's Working Groups on Financial Markets---a.k.a. The Plunge Protection Team---will not allow things to get out of hand in the equity or bond markets to the downside, just like they're not prepared to let the precious metals get away to the upside.

This 2:36 minute video was posted on the CNBC website yesterday---and once again I thank Dan Lazicki for sharing it with us.

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Manufacturing Dissent — Paul Craig Roberts

Professor Michel Chossudovsky is the author of many important books. His latest is The Globalization of War: America’s Long War Against Humanity. Chossudovsky shows that Washington has globalized war while the US president is presented as a global peace-maker, complete with the Nobel Peace Prize. Washington has military deployed in 150 countries, has the world divided up into six US military commands and has a global strike plan that includes space operations. Nuclear weapons are part of the global strike plan and have been elevated for use in a preemptive first strike, a dangerous departure from their Cold War role.

America’s militarization includes military armament for local police for use against the domestic population and military coercion of sovereign countries in behalf of US economic imperialism.

One consequence is the likelihood of nuclear war. Another consequence is the criminalization of US foreign policy. War crimes are the result. These are not the war crimes of individual rogue actors but war crimes institutionalized in established guidelines and procedures. “What distinguishes the Bush and Obama administrations,” Chossudovsky writes, “is that the concentration camps, targeted assassinations and torture chambers are now openly considered as legitimate forms of intervention, which sustain ‘the global war on terrorism’ and support the spread of ‘Western democracy.’”

Chossudovsky points out that the ability of US citizens to protest and resist the transformation of their country into a militarist police state is limited. Washington and the compliant foundations now fund the dissent movement in order to control it.

This absolute must read commentary by Paul showed up on his Internet site yesterday sometime---and I thank Roy Stephens for bringing it to our attention.

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Bank of Canada says foreign buyers complicate housing market

A lack of data on foreign buyers scooping up property in Canada has made it tougher for the central bank to understand housing market and financial system risks, a senior bank of Canada official said on Wednesday.

Overseas home owners could respond more quickly to house price shocks, potentially exacerbating price moves, Deputy Governor Tim Lane said.

But he also noted any indebtedness they have would have less impact on the Canadian financial system assuming their money comes from abroad.

Foreign buying has helped pump up Canada's housing market, particularly in major centers like Toronto and Vancouver.

This Reuters article appeared on their Internet site at 5:40 p.m. EDT yesterday afternoon---and it's the second offering of the day from Elliot Simon.

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Low rates causing 'huge problems' for Germany

"We have an interest rate environment that is causing huge problems for us in Germany," Wolfgang Schaeuble said at a banking event in Berlin.

However, he added that he was not criticising the European Central Bank (ECB), which needed to defend its inflation target.

"A low interest rate leads to a misallocation of resources with all the risks and side-effects that you see when bubbles are forming," he said, adding that there was too much central bank money and debt in the world.

Mr Schaeuble also said that bond buying by the European Central Bank meant countries had less incentive to reform.

This Reuters article found a home over at the telegraph.co.uk Internet site at 4:37 p.m. GMT yesterday afternoon, which was 12:37 p.m. in New York.  It's courtesy of South African reader B.V.---and it's worth reading.

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One Month After Austria's Black Swan Shocker, the ECB Quietly Asks Banks to "Detail Their Exposure"

Nearly a month after the Hype Alpe Adria bad bank Heta Asset Resolution "unexpectedly" imploded under a house of non-GAAP and misreported cards, and which led to only the second European creditor bail-in after Cyprus in what until then was considered the safest European nation, unleashing a herd of black swans which will result in not only the insolvency of one of Austria's provinces, Carinthia, but a week ago led to its first foreign casualty, German Duesseldorfer Hypothekenbank AG which had to be bailed out by the German FDIC-equivalent, the ECB has finally realized it may have a major problem at hand.

So, doing what it does best, a month after the fact and long after the black swans have left the stable so to speak, Mario Draghi's ECB has asked Eurozone banks "to detail their exposure to Austria and provisions they plan to make after the country halted debt repayments by a "bad bank" winding down defunct lender Hypo Alpe Adria," financial sources told Reuters.

This Reuters article from yesterday gets the Zero Hedge treatment.  It was posted on their Internet site at 10:36 a.m. EDT yesterday---and it's another contribution from reader Dan L.  It's also worth reading.

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Putin Is Becoming A "Vulture" Bond Investor in Ukraine

With Washington throwing its full faith and credit behind a new Ukrainian bond issue, it appears it’s time for Moscow to play spoiler to current debt restructuring talks between Kiev and its creditors. Russia is the country’s second-largest creditor after buying $3 billion in bonds back in the days of Viktor Yanukovych (who was once the victim of an attempted assassination by egg and who famously fled the country amid widespread protests last year) and now the Kremlin wants its money and isn’t likely to be amenable to any haircuts imposed on private creditors. Here’s more from Bloomberg:

Ukraine, after gaining a lifeline from the International Monetary Fund, included Russia’s bond among the 29 securities and enterprise loans it seeks to renegotiate with creditors before June. Finance Minister Natalie Jaresko has promised not to give any creditor special treatment. The revamp will include a reduction in the coupon, an extension in maturities as well as a cut in the face value, she said.

Russian Deputy Finance Minister Sergey Storchak said March 17 that the nation isn’t taking part in the debt negotiations because it’s an “official” creditor, not a private bondholder.

Should Russia decide to stick with a hardline stance on the negotiations (and it’s likely they will) it could not only embolden other prospective holdouts, but may indeed force Ukraine into a default.

This very interesting news item appeared on the Zero Hedge Internet site at 11:30 a.m. EDT yesterday morning---and I thank Dan Lazicki for digging it up for us.

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The Central Banker Who Saved the Russian Economy From the Abyss

Panic reached the inner sanctum of the Russian central bank.

It was Dec. 16 -- the day Russian traders would later christen Black Tuesday -- and the ruble was in a free fall.

“Intervene! Intervene!” a central bank official shouted.

Governor Elvira Nabiullina watched the currency on her tablet screen react to her emergency rate increase. No, she said, not this time: Russia would no longer fight the market. Speculators needed a cold shower, she said.

That daring decision, related by two people with knowledge of the meeting, has begun to pay off for Nabiullina, 51, and her patron, President Vladimir Putin. Despite sanctions meant to punish Russia for its foray into Ukraine a year ago, the ruble has stabilized. Since Black Tuesday, when it plunged to a record low, the ruble has rebounded 19 percent against the dollar, the most among 24 emerging-market currencies.

As this Bloomberg article states shortly afterwards---"While her central bank is nominally independent, analysts agree Putin is ultimately in charge. Yet Nabiullina has emerged as a power in her own right, with a direct line to the president."  This very interesting article, filed from Moscow, appeared on their Internet site at 3 p.m. Denver time on Wednesday afternoon---and I thank Elliot Simon for his third offering of the day.

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Iran, Russia demand immediate halt to Saudi-led intervention in Yemen

Iran and Russia have called on Saudi Arabia to halt airstrikes on Yemen as supporters of Yemen’s ruling Houthi militants stage demonstrations throughout the country, protesting against the Saudi-led military intervention.

Speaking to Iranian President Hassan Rouhani, Russia’s Vladimir Putin called for an "immediate cessation of military activities" in Yemen and increased efforts to find a peaceful solution to the crisis, the Kremlin said in a statement on Thursday.

Iranian Foreign Minister Mohammad Javad Zarif said that military operations against Yemen will only lead to further destabilization of the region, which has fallen under Houthi control after an onslaught of increased violence in recent months.

Iran is suspected of providing supplies and training to the Houthi rebels, but Tehran has publicly denied these claims.

This news item put in an appearance on the Russia Today Internet site at 5:34 p.m. Moscow time on their Thursday afternoon, which was 9:34 a.m. in Washington.  I thank Casey Research's own Bud Conrad for passing this story around yesterday.

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U.S. Policies in Yemen, Ukraine Double Standard -- Lavrov

The U.S. approaches towards the ousted Yemeni President Abd Rabbuh Mansur Hadi and the former President of Ukraine Viktor Yanukovych represent double standards, Russian Foreign Minister Sergei Lavrov said Thursday.

"A much-employed cliche has to be used: obvious double standards, but we clearly did not want neither what is happening in Ukraine, nor what is happening in Yemen," Lavrov said at a press conference.

On Wednesday, Saudi Arabia-led coalition which includes Bahrain, Qatar and Egypt launched airstrikes against Houthi rebel positions in Yemen following a request by Hadi.  The United States is not participating in the military operation, but agreed to provide logistical and intelligence support.

It is necessary to renew the negotiations process in Yemen, as playing political games between Shiite and Sunni Muslims is too dangerous, Russian Foreign Minister said.

This story showed up on the sputniknews.com Internet site at 12 minutes to midnight Moscow time on their Thursday evening---and it's another article that's courtesy of Roy Stephens.

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Saudi battle for Yemen exposes fragility of global oil supply

The long-simmering struggle between Saudi Arabia and Iran for Mid-East supremacy has escalated to a dangerous new level as the two sides fight for control of Yemen, reminding markets that the epicentre of global oil supply remains a powder keg.

Brent oil prices spiked 6pc to $58 a barrel after a Saudi-led coalition of ten Sunni Muslim states mobilized 150,000 troops and launched air strikes against the Iranian-backed Houthi militias in Yemen, prompting a furious riposte from Tehran.

Analysts expect crude prices to command a new “geo-political premium” as it becomes clear that Saudi Arabia has lost control over the Yemen peninsular and faces a failed state on its 1,800 km southern border, where Al Qaeda can operate with near impunity.

Over 3.8m barrels a day (b/d) pass through the 18-mile Bab el-Mandeb Strait off Yemen, one of the world's key choke points for crude oil supply. While there is little likelihood of disruption to tanker traffic, Saudi Arabia is increasingly threatened by Shiite or Jihadi enemies of different kinds.

The Ambrose Evans-Pritchard offering turned up on the telegraph.co.uk Internet site at 8:41 p.m. GMT last night, which was 4:41 p.m. EDT.  Once again I thank Roy Stephens for sending it our way.  It's certainly worth reading, but it's hard to keep all the waring factions straight as you read on.  A printed program would be nice.

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China wants to compel U.S. to engage it as an equal partner in AIIB

The AIIB Charter is still under discussion. The media report that China is not seeking a veto in the decision-making comes as a pleasant surprise.

Equally, China is actively consulting other founding members (who now include U.K., Germany, France, Italy, etc). These would suggest that Beijing has a much bigger game plan of scattering the U.S.’ containment strategy. Clearly, the Trans-Pacific Partnership free-trade deal is already looking more absurd if China were to be kept out of it. The point is, AIIB gives financial underpinning for the ‘Belt and Road’ initiative, which now the European countries and Russia have embraced, as they expect much business spin-off.

China has said that its Silk Road projects are not to be confused as a latter-day Marshal Plan for developing countries, and that, on the contrary, the projects will be run on commercial terms. Which opens up enormous opportunities for participation by western companies. In geopolitical terms, therefore, China hopes that the ‘win-win’ spirit that permeates the AIIB and ‘Belt and Road’ will render ineffectual the American attempts to hem it in on the world stage and compel Washington to revisit a ‘new type of relations’ with China.

This short commentary by career Indian diplomat M.K. Bhadrakumar appeared on the Asia Times website yesterday---and it's a must read.  I thank reader M.A for finding it for us.

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Gold market manipulation raised by Euronews broadcast

Bullion Star market analyst and GATA consultant Koos Jansen calls attention to a segment of the "Business Middle East" program on the French-based Euronews television network that this week asked whether gold market manipulation would diminish under the new gold price-fixing mechanism in London. Looks like gold market manipulation can get into the mainstream financial news media ... at least in Arabic.

The video clip has an English voice-over translation, so you can follow along. This news item was embedded in an article that Koos Jansen posted on the Singapore website bullionstar.com yesterday.  I found it in a GATA release---and I thank Chris Powell for the above paragraph of introduction.

Read more...

China should boost gold reserves to 5 percent, says World Gold Council

China should increase its gold holdings to around 5 percent of its total foreign exchange reserves to help diversify currency risks, the World Gold Council (WGC) said.

China currently holds about 1.6 percent of its foreign exchange reserves in gold, which is relatively low compared with developed countries and some developing countries, WGC China managing director Roland Wang said.

"The ideal amount should be at least 5 percent of its total forex reserves," Wang told Reuters in an interview in Hong Kong.

China's holdings as a percentage of total reserves in Q4 2014 compare with 2.4 percent for Mexico, 5.7 percent for Australia, 6.7 percent for India and 12.1 percent for Russia, according to WGC figures.

Of course we know what the World Gold Council's "figures" are worth, don't we dear reader?  I would guess that China holds at least 5 percent already, if not more---and probably much more.  They'll let the world know the exact amount when it suits them.  This Reuters article, filed from Hong Kong, showed up on their website at 2:19 a.m. EDT on Thursday morning---and I found it on the Sharps Pixley Internet site.  Most of the article is the usual main stream media bulls hit, so be warned of that fact if you decide to read it.

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Gold market manipulation is 'too inflammatory' to be debated at Hong Kong conference

Yesterday's concentration on gold at the spectacular Mines and Money Hong Kong conference may have inadvertently proved GATA's longstanding contention that gold market manipulation simply can't be discussed in polite company almost anywhere in the world.

For at the outset of a panel discussion described as a debate about the direction of the gold price, its moderator, Rod Whyte, a longtime gold advocate and member of the Board of Directors of Australia-based business information provider Aspermont Ltd., announced that the panelists had agreed that gold market manipulation would not be discussed because the topic is "too inflammatory."

Since Whyte has expressed support for GATA at other venues, the calculated avoidance of the manipulation issue would seem to have been someone else's idea. In any case the panel included two members who could not have been expected to want to discuss the issue: Philip Klapwijk, formerly an analyst for Gold Fields Mineral Services, now managing director of Precious Metals Insights Ltd. in Hong Kong, and Albert Cheng, Far East managing director for the World Gold Council.

While Klapwijk predicted that the price of gold will fall substantially, predictions for the gold price are of no particular concern to GATA. We recognize that as long as the futures markets are operating, central banks can drive the price down to zero or up to infinity.

This commentary by Chris Powell was posted on the gata.org Internet at 6:51 p.m. Hong Kong time on their Thursday evening---and it's a must read.

Read more...

 

¤ The Funnies

This fellow is a Costa's hummingbird.

And one of the rarest hummingbirds is the Marvelous Spatuletail, as it's only found in one small area of Peru---and its home turf is now very protected, as it's estimated that there are less than 1,000 of these birds left on Planet Earth.  There's a short but excellent video of the male courting display linked here.

Avnel Gold (TSX:AVK) is a gold mining, exploration, and development company with operations in south-western Mali. The Company’s focus is to develop its 80%-owned Kalana Main Project into a low-cost, open-pit mining operation.

In Q1-2014, the Company reported the results of a PEA based upon a Mineable Resource of 1.58 million ounces at a diluted grade of 3.1 g/t. The PEA outlines a 14-year mine life recovering 1.46 million ounces at an average “AISC” of $577/oz with a capex of $149 million. At $1,110/oz and a 10% discount rate, the NPV was $194 million after-tax and imputed interest with an IRR of 53% on a 100% project basis. Similarly, at a 5% discount rate and at $1,300/oz, the NPV was $424 million with an IRR of 74%. Since the PEA, the open-pit diluted Indicated Resource has increased to 2.2 million ounces at a diluted grade of 3.06 g/t.

Avnel plans to complete its fully-funded 141-hole, 23,500-metre drill program in mid-2015, which is expected to provide for a steady flow of news over the coming months. This drilling will be form the basis for an updated Resource Estimate in Q3-2015 and DFS that is scheduled to be completed in Q1-2016.Please contact Jeremy Link with questions or for more information.

 

¤ The Wrap

Undoubtedly, there has been deterioration or an increase in the total commercial net short positions in COMEX gold and silver as a result of the sharp increase in price in both markets during the reporting week that ended [on Tuesday at the close of COMEX trading]. It would almost be impossible that the technical funds weren’t buying or that the commercials weren’t selling on the price rise. It’s only a matter of how many contracts were positioned and who among the commercials the sellers were – the big shorts or the raptors. I’m hoping for an increase of no more than 10,000 contracts in silver and no more than 40,000 contracts in gold---and really hoping for no large increase in the big four short position in both COMEX gold and silver. - Silver analyst Ted Butler: 25 March 2015

The rallies and spikes in all four precious metals in the Far East and early London trading session yesterday were met by "all the usual suspects"---and they did what they always do.

Volume was very heavy during this time period---and it almost goes without saying that the Commercial traders, as sellers of last resort, were taking the other side of the trade against all comers in the precious metals, as the technical funds and small traders sold short positions and/or went long.  Without doubt there was huge deterioration in the Commercial net short positions again yesterday, but that won't show up until next Friday's Commitment of Traders Report.

Here are the 6-month charts for both gold and silver---and as you can see, gold touched its 50-day moving average yesterday, but wasn't allowed to penetrate it,as JPMorgan et al showed up across the board in all the precious metals at that point.

As I type this paragraph, the London gold market open is about twenty minutes away.  Needless to say, the price activity in Far East trading on their Friday was deathly quiet.  Gold and silver got sold down a bit in the early going in Hong Kong trading, but have now 'rallied' back to unchanged.  Platinum and palladium are each down a dollar or so.

Net volume in gold is the lowest I've ever seen it for this time of day, or month---around 7,200 contracts.  Silver's net volume is 3,700 contracts.  The dollar index has been chopping sideways since its close in New York late on Thursday afternoon---and is currently up 3 basis points.

All is quiet.  Almost too quiet.

Today we get the latest  COT Report for positions held at the close of COMEX trading on Tuesday afternoon.  And as Ted said in his quote further up---"It would almost be impossible that the technical funds weren’t buying or that the commercials weren’t selling on the [5-day price rise during the reporting week]. It’s only a matter of how many contracts were positioned and who among the commercials the sellers were – the big shorts or the raptors."  And that, dear reader, is the long and the short of it.  I'm hoping for the best, but expecting the worst.

Unless they're standing for delivery, today is the last day for the big boys to get out of the April gold contract---and that's why I'm rather surprised at how quiet the volume is, in that metal at the moment.  I expect that to change dramatically once London opens.  However, looking at yesterday's monstrous volume numbers, a pretty decent percentage of these traders appeared to have hit the exits on Thursday.

And as I sent today's column out the door at 5:20 a.m. EDT, I see that all four precious metal prices are back to just about where they closed on Wednesday.  It's almost like the early morning price action on Thursday never happened.  Gold is back below $1,200 the ounce---and silver below $17 spot.  Platinum and palladium are actually below their Wednesday closes.

Gross gold volume is sitting at 30,000 contracts, but over half of that is roll-overs out of the April contract, so net volume is extremely light.  Based on that, not much should be read into the current price action in this metal.  Silver volume is fairly decent at 7,200 contracts.

The dollar index caught a bid shortly after 3 p.m. Hong Kong time---and is currently up 38 basis points.

I'm not sure what to expect during the Friday session in London trading, or what might follow during the COMEX session in New York. But from what I see now, I'm prepared to be underwhelmed.

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.

Ed Steer