Gold & Silver Daily
"Should give you some indication of the power that JPMorgan et al have in the COMEX futures market"
 

¤ Yesterday In Gold & Silver

Gold rallied a bit in early Far East trading, but then got sold back down to the $1,200 spot mark just before 1 p.m. Hong Kong time.  From there it rallied to its noon high tick in London---and "da boyz" showed up at the London p.m. fix.  The subsequent rally that began thirty minutes later got capped shortly after 2 p.m. EDT in electronic trading---and despite the fact that the dollar index got crushed, JPMorgan et al managed to finish gold down on the day---and back below $1,200 spot.

The high and low ticks were recorded by the CME Group as $1,208.80 and $1,194.30 in the June contract.

Gold finished the Thursday session in New York at $1,197.80 spot, down $3.70 from Wednesday's close.  Net volume was pretty decent at 146,000 contracts.

Once again the silver chart was a virtual carbon copy of the gold chart, except the HFT boyz really did a number on the price at the London p.m. gold fix---and managed to close it down on the day as well.

The high and low tick in that precious metals was reported as $16.475 and $16.10 in the May contract.

Silver closed yesterday at $16.265 spot, down 4 cents from Wednesday's close.  Net volume was 34,500 contracts, about 50 percent more than Wednesday's volume, as it took that much firepower to first of all kill the rally, then drive it to its low tick of the day.

It was more or less the same story in platinum, with the high tick coming shortly before the COMEX open.  Then the HFT boyz did their thing at the London p.m. gold fix, like they did in gold and silver---and that, as they say, was that.  Platinum was closed down two dollars on the day at $1,158 spot.

The palladium price did precisely nothing until 1 p.m. in Zurich---and then it began to rally, but wasn't allowed above the $780 spot price mark, but did manage to close up 11 bucks on the day at $779 spot.

The dollar index closed late on Wednesday afternoon in New York at 98.40---and traded flat until it fell off a 50 plus basis points cliff at 8 a.m. Hong Kong time.  It then rallied more or less in a straight line until 10 a.m. BST---and from there began to head lower, with the 97.33 low tick coming around 1:45 p.m. EDT, which was fifteen minutes after the COMEX close.  It rallied back about 30 basis points from there, before trading sideways for the remainder of the day.  The dollar index closed the Thursday session at 97.69---down 71 basis points from Wednesday's close.

You should carefully note that there was virtually no reaction in gold allowed at 8 a.m. Hong Kong time when the dollar index got clocked for 50 basis points---and nothing was going on in the currencies at the 10 a.m. EDT London p.m. fix when gold, silver and platinum got smacked down.  The cause of all this was paper trading on the COMEX.

The gold stocks followed the gold price like a shadow all day yesterday.  They opened in positive territory, but once the powers-that-be stepped into the precious metal market at the London p.m. gold fix, down went the share prices to their lows of the day at 10:30 a.m., although they did make it back into positive territory briefly before the price got turned lower once again shortly after 2 p.m. in New York.  The HUI closed down 1.12 percent.

The silver equities started off in positive territory as well, but when they turned negative, they never got a sniff of positive territory after that, with their low ticks coming minutes after 1 p.m. EDT.  There was a rally into the secondary high minutes after 2 p.m., but it was rather anemic.  The shares got sold down from there---and closed close to their lows. 

On a 4 cent drop in price, Nick Laird's Intraday Silver Sentiment Index closed down 2.29 percent, giving back virtually all of Wednesday gains.

The CME Daily Delivery Report showed that 1 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.

The CME Preliminary Report for the Thursday trading session showed that gold open interest in April dropped by 319 contracts, which was no surprise considering the fact that the 334 contracts issued yesterday, will be delivered today.  The current gold o.i. for April now sits at 1,827 contracts.  Silver open interest for April rose 2 contracts to 172.

We've had two big delivery days in gold so far in April---and the dates were quite some distance apart.  I'm wondering out loud at this point how many more days will pass before the remaining short/issuers step up to the plate with the next tranche---and how much of that will end up in JPMorgan's vault for its own account.

So we wait.

There were no reported changes in GLD yesterday---and as of 9:53 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

I got ahead of myself in Thursday's column and posted Joshua Gibbons' changes to the SLV Bar List from the prior week by mistake.  I discovered my error late yesterday morning---and had the offending paragraphs removed---and here are the correct ones for the internal goings-on at SLV as posted at the iShares.com Internet site yesterday, for the week ending at the close of business on Wednesday.

"Analysis of the 15 April 2015 bar list, and comparison to the previous week's list.  3,059,139.7troy ounces were added (all to Brinks London), no bars were removed or had serial number changes."

"The bars added were from: Solar Applied Materials (1.7M oz), Kazakhmys (0.6M oz), KGHM (0.3M oz), and 15 others."

"As of the time that the bar list was produced, it was overallocated 11.2 oz.  All daily changes are reflected on the bar list."

For the second day in a row there was no sales report from the U.S. Mint.

There was no gold reported received at the COMEX-approved depositories on Wednesday, but 50,052 troy ounces were shipped out the door---and almost all of it came from the vaults of Canada's Scotiabank.  The link to that activity is here.

In silver, there was another 1,191,275 troy ounces received---and it should come as absolutely no surprise to anyone that it went straight into JPMorgan's vault.  That should just about complete the 7.5 million ounces that they had coming as the result of the March delivery month.  There were 40,076 troy ounces shipped out---and the link to the silver action is here.

And just for general interest sake, JPMorgan is now sitting on 54.51 million troy ounces of silver in their COMEX-approved depository in New York.  Here's the updated chart as of Wednesday---and as I said last week, they opened their silver warehouse for business just two days before the May 1 drive-by shooting that they themselves orchestrated.

The COMEX-approved 'Gold Kilo Stocks' warehouses in Hong Kong also had some movement.  It was at the Brink's, Inc. depository once again, as they reported receiving 100 kilobars---and shipped out 3,125 of them.  The link to the troy ounces numbers are here.

The other day I was talking about the ongoing raid against gold ETF Central Gold Trust by Cayman Island-based hedge fund, North Pole Capital Master Fund.  Here's a press release on it that came out yesterday morning.  If you are a shareholder in this ETF, it's a must read.

I don't have all that many stories again today---and I'll leave the final edit in your hands.

 

¤ Critical Reads

Dollar Dump Sends Oil, Bonds and Stocks Surging

The sudden decision to buy EUR and dump USDs (after a slew of Fed speakers spewed their usual spew) has sparked a buy everything trade across markets as bonds, stocks, and crude are surging...

Of course the only things that weren't "surging" in price were gold and silver---and we know why that was the case.  This brief Zero Hedge piece, with some excellent charts embedded, were posted on their Internet site at 1:55 p.m. EDT Thursday afternoon---and today's first story is courtesy of Dan Lazicki.

Read more...

Rubin: There's 'Realistic Possibility' Stocks Are in a Bubble

You can add former Treasury Secretary Robert Rubin to the list of those concerned that bubbles might be building in financial markets.

"I don't have a personal view on whether we now have [market] excesses or not," he said at a conference in Washington this week, MarketWatch reports.

"But it certainly is a realistic possibility when you look at the U.S. stock market, which is near all-time highs, when you look at covenant-light and now non-covenant lending, [and] a vast increase in fixed-income [exchange-traded funds]."

Another person with a keen grasp of the obvious.  This article showed up on the newsmax.com Internet site at 9:00 a.m. EDT yesterday---and it's courtesy of West Virginia reader Elliot Simon.

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Weird Walmart plumbing problem shutting down stores across America, one in Brandon, Florida

Walmart customers can't understand what's plaguing the "plumbing problems" of Walmart stores from Brandon to California.

"Must be a major plumbing problem is all I can say," would-be customer Dale White said as security guards turned him away from the Supercenter on Brandon Boulevard in Brandon.

The retail chain announced Monday that five stores are shutting down - one in Brandon, two in Texas, one in Oklahoma and one in California - due to clogging and drainage problems.

The shutdown blindsided about 400 Brandon Walmart workers who must now find another store to transfer to or receive 60-days pay for the loss of their jobs.

However, 8 On Your Side has found no paperwork and no work done on the plumbing. According to Hillsborough County, Walmart didn't notify the county's permit department either. No one there has heard a peep from Walmart about any major repairs.

On Tuesday, 8 On Your Side stopped by the Walmart, and found no plumber in sight at the Brandon Supercenter, just hundreds of confused and concerned customers.

I had this rather odd story sent to me by a number of readers yesterday---and I must admit that even I don't know what to make of this.  I picked a story close to the source in Brandon, Florida.  It was posted on the wfla.com Internet site on Wednesday afternoon---and I thank Roy Stephens for sending it.

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Ex-JPMorgan Banker Charged With Stealing $20M From Clients

A former JPMorgan Chase & Co. banker was arrested Thursday on charges he stole $20 million from clients over a four-year period, using some of the money to make personal investments and pay a home loan.

Bail was set for Michael Oppenheim, 48, of Livingston, New Jersey, at $1 million by a magistrate judge who also required home detention and electronic monitoring.

Oppenheim's lawyer, Richard Gamburg, said his client would plead not guilty to charges including wire fraud, embezzlement, investment adviser fraud and securities fraud. He said he expected Oppenheim to be released Friday.

Mike Fusco, a JPMorgan spokesman, said the bank alerted authorities to the crimes and worked closely with officials. He said Oppenheim was a financial adviser at a Manhattan branch.

Criminality is pretty much the modus operandi at JPMorgan---and stories like this are now met with little more than a "what else is new?" look.  In actual fact, Jamie Dimon should be in an orange jump suit already.  This particular AP story appeared on the abcnews.go.com Internet site at 6:46 p.m. EDT yesterday---and it's the second offering of the day from Elliot Simon.

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Barron's: Buffett Avoids Taxes, But Obama Still Loves Him

Warren Buffett is the world's third richest man with a fortune estimated at $71 billion, yet he is able to exploit a loophole and pay a ridiculously small amount in federal taxes.

This week’s Barron’s sheds light on why Buffett has evaded the IRS’ snare for so long.

Buffett, chairman and CEO of the Berkshire Hathaway conglomerate, does not publicize his tax returns. But for the tax year 2010, he reportedly paid $6.9 million on taxable income of $39.8 million.

For many years, he boasted his tax rate was lower than his secretary’s, largely due to the fact he took so little income from Berkshire.

This interesting article put in an appearance on the newsmax.com Internet site at 10:48 a.m. EDT on Wednesday morning---and it's the third offering of the day from Elliot Simon.

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Wary of natural disaster, New York Fed bulks up in Chicago

The New York branch of the U.S. Federal Reserve, wary that a natural disaster or other eventuality could shut down its market operations as it approaches an interest rate hike, has added staff and bulked up its satellite office in Chicago.

Some market technicians have transferred from New York and others were hired at the office housed in the Chicago Fed, according to several people familiar with the build-out that began about two years ago, after Hurricane Sandy struck Manhattan.

Officials believe the Chicago staffers can now handle all of the market operations that are done daily out of the New York Fed, which is the U.S. central bank's main conduit to Wall Street.

Well, dear reader, if you believe that bulls hit story, I've still got that bridge that's looking for a good home.  I lifted this Reuters story from yesterday's edition of the King Report---and this is what Bill King had to say about it: "When the Fed had to save the stock market in 1987, it used the Major Market Index futures, which were traded on the CBOT.  Does the Fed want close proximity to the Chicago derivative exchanges for some reason? Is Yellen a closet Cubs fan? This move appears to create another Plunge Protection bunker."  That last reason is probably much closer to the truth.

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Ben Bernanke to Join World's Most Levered Hedge Fund: Chicago-Based HFT Powerhouse Citadel

Several years ago, Zero Hedge first, and to our knowledge only, reported that when it comes to unofficially executing trades in the equity market the New York Fed - through a slightly more than arms-length arrangement - does so using Chicago HFT powerhouse Citadel. In other words, while Citadel was instrumental in preserving the smooth, diagonal ramp in stocks since 2009 and igniting upward momentum just as everyone else stared to sell when the Markets Group of the New York Fed called, it was also paid handsomely: after all, nobody checks the Fed's broker commission statement. In fact according to some, indirect Fed compensation to what is the world's most leveraged hedge fund has been in the billions over the past decade.

Well, now it's payback time, and as The New York Times reported overnight, the Brookings Institution's favorite blogger, former Fed Chairman Ben Bernanke, has joined none other than Citadel as an advisor.

According to the NYT, "while Mr. Bernanke will remain a full-time fellow at the Brookings Institution, the new role represents his first somewhat regular job in the private sector since stepping down as Fed chairman in January 2014.  His role at Citadel was negotiated by Robert Barnett, the Washington super-lawyer who also negotiated a deal for his book, “The Courage to Act,” which Mr. Bernanke recently submitted to his editor and will be published in October."

This very interesting article was posted on the Zero Hedge Internet site at 6:37 a.m. EDT yesterday morning---and I thank Dan Lazicki for sending it our way.  There was another Zero Hedge story from Dan on this subject from yesterday as well---and it's headlined " 175,846,629,768 Reasons Why Ben Bernanke Joined Citadel".

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Another Former IMF Head Arrested: Rodrigo Rato Perp Walked In Madrid

As we reported earlier, the former chief of the IMF Rodrigo Rato, who was succeeded in 2007 by another scandalous figure, Dominique Strauss-Khan, was recently put under investigation by Spanish authorities for money-laundering, benefiting from a tax amnesty to repatriate previously undeclared offshore funds. This is in addition to at least one previous investigation into his role as chairman of Caja Madrid, the failed savings bank, and its successor Bankia.

And, unlike every single JPM banker pretty much ever, moments ago Rato became the second former IMF head in several years (following DSK), to be placed under arrest.

While it is notable that Rato apparently did not have enough cash with which to pay off the prosecuting judge and have the case against him dropped, one wonders what the odds are for Christine Lagarde to complete the trifecta of arrests of people who are in the one position which has become the most cursed in the New Paranormal world.

Because while the IMF was originally created to pay for "bail outs", in recent years its former heads are far more concerned with paying just the "bail."

This Zero Hedge article showed up on their Internet site at 3:21 p.m. EDT on Thursday afternoon---and it's another story courtesy of Dan Lazicki.

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Contagion Arrives: European Peripheral Bond Risk Soars

Just yesterday, German Finance Minister Schaeuble bent the truth, proclaiming that there was no sign of contagion from Grexit concerns. Today, it appears, he will be eating his words, as Italian, Spanish, and Portuguese bond spreads have exploded higher (up 15-30bps this week) amid the collapse of Greek sovereign and bank bonds.

It's not just Greek Sovereigns that are plunging, Greek Bank Bonds have collapsed...

It's not just Schaeuble that doesn't see any problems. Stan Druckenmiller, the Chairman and CEO of Duquesne Family Office, said that with regard Greece leaving the euro: "Draghi has QE at his disposal.  My guess is there won’t be contagion, but even if there is, he can contain it, and soon as market participants see that, you won’t get contagion."

All we need now is for some E.U. leader to claim "Grexit risk is contained," and we know trouble is ahead.

This is another Zero Hedge story from late yesterday morning EDT---and it's also courtesy of Dan L.  It's worth reading---and the charts are worth a look as well.

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Greece pushed a step closer to Grexit after IMF snub

Greece has been pushed a step closer to default and potential exit from the euro after one of its main lenders, the International Monetary Fund, all but ruled out allowing the cash-strapped country to delay repaying the €1bn (£722,000) due next month.

The head of the IMF, Christine Lagarde, said delaying the payments would be an unprecedented action that would only make the situation worse.

Speaking at the organisation’s spring meeting, she said: “Payment delays have not been granted by the board of the IMF in the last 30 years.”

Her intervention is likely to heighten fears that senior policymakers in the US and Europe are preparing for Greece to leave the eurozone.

This Greece-related story appeared on theguardian.com Internet site at 6:54 p.m. BST in London yesterday evening---and I thank Roy Stephens for sliding it into my in-box late last night Denver time.  Here's the Ambrose-Evans Pritchard spin on this from 7 p.m. EDT last night---midnight in London---and The Telegraph article is headlined "Grexit dangers mount as Greece's Yanis Varoufakis warns of 'liquidity asphyxiation'"---and it's also courtesy of Roy Stephens.

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For Greece All Bets Are (Literally) Off: Bookie Closes Grexit Market

Bookmakers William Hill have closed their markets on whether Greece will leave the Eurozone during 2015 and on which country would be first to leave the Eurozone.

'Greece had been heavily backed down to 1/5 to be the first to quit the Eurozone, and we'd also been shortening the odds for Greece to leave during 2015. They'd come down from 5/1 to 3/1.' said William Hill spokesman Graham Sharpe, 'It is now looking increasingly likely that they could begin the process of departing very shortly'

'No one is interested in backing Greece to stay in the Eurozone until the end of the year, so we decided to pull the plug on the markets until either the decision to leave is taken, or the crisis point passes and a plan is put in place enabling the country to remain in' added Sharpe.

This brief news item is also from the Zero Hedge website on Wednesday morning---and the first reader through the door with it was Dan Lazicki.

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Greece plans to raid coffers as creditors dash hopes of resolving cash crisis

Cash-strapped Greece is planning to resort to drastic measures to stay afloat, as the country's bail-out drama moves to Washington today.

Finance minister Yanis Varoufakis is due to drum up support for his debt-stricken nation when he meets with President Obama at the White House later today.

The meeting with the world's most powerful leader comes as a desperate Athens could raid the country's pensions funds in order to continue paying out its social security bill.

The story appeared on the telegraph.co.uk Internet site at 5:15 p.m. on Wednesday evening BST---and my thanks go out to Roy Stephens for sharing it with us.

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Three Prominent Poroshenko Critics Killed in Kiev in Three Days

A prominent Ukrainian journalist, known for his critical views of Poroshenko's government was shot dead in Kiev on Thursday, in the latest series of suspicious deaths of opposition supporters.

Oles Buzina, 45, a supporter of ex-president Viktor Yanukovych, was shot in the street. Buzina's body was found on the ground nearing his apartment building close to the city center. The head of Kiev’s police department Alexander Tereschuk said that a TT gun was allegedly used in the crime.

According to the neighbors, the journalist was probably shot while jogging. He was found wearing a sports outfit. The 45-year-old was shot by two men in masks who disappeared from the crime scene in a Ford Focus car with either Latvian or Belarusian number plate.

This story was posted on the sputniknews.com website at 7:55 p.m. Moscow time on their Thursday evening, which as 12:55 p.m. EDT in Washington---and I thank Jim Skinner for sending it our way.  It's worth reading.

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E.U. hiring 'myth-busters' on Russian propaganda

The E.U. foreign service is recruiting a handful of new experts to help counter Russia’s anti-Western propaganda.

The job description, sent out on 20 March to E.U. states’ embassies in Brussels, says their task will be “correction and fact-checking of misinformation/myths”.

It will also involve “development and regular updating of E.U. ‘narrative’ via key messages/lines to take, articles, op-eds, factsheets and info-graphics, with an emphasis on communicating the benefits of the EaP”.

The new staff are to be Russian speakers and to do “analysis/monitoring of reporting on E.U. policies” in Russian language media.

How can this be???  This is so far beyond laughable that it has to be seen as pathetic desperation---and it just remains to be seen how total the failure of this exercise in futility will be.  It is, of course, courtesy of Roy Stephens.  It was filed from Brussels---and posted on the euobserver.com Internet site at 6:20 p.m. Europe time on Thursday evening, which was 12:20 p.m. EDT in New York.

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After Rescuing Ukraine, U.S. Taxpayers to Bail Out Iraq Next

Having generously (if not obliviously) stepped up to the plate to bail out Ukraine (with open-ended bond guarantees), U.S. taxpayers are opening their wallets again - this time for Iraq. As Reuters reports, cheap oil has ravage Iraq's state finances just as the government faces rising military spending from the war it is waging against ISIS; and so it has decided to issue $5 billion in international bonds. However, Iraq is considering other ways to cover its budget deficit, including asking the IMF (i.e. U.S. taxpayers) for relief funding and also requesting the controversial U.S. Export-Import Bank (U.S. Taxpayers) finance the purchase of 10 planes from Boeing Co, which cost the government $500 million.

Cheap oil is ravaging Iraq's state finances, just as the government faces rising military spending from the war it is waging against Islamic State militants. As Reuters reports, Iraqi Finance Minister Hoshyar Zebari said the government was facing a budget deficit of $25 billion, out of a budget of approximately $100 billion. Iraq's 2015 budget is based on an oil price of $56 per barrel, he said.

Iraq has decided to issue $5 billion in international bonds and is negotiating the terms as one of several measures as it seeks to relieve the pressure of low oil prices on its finances.

Iraq is considering a number of other measures to cover its budget deficit, including asking the International Monetary Fund for relief funding of between $400 million and $700 million, Zebari said.

This news item appeared on the Zero Hedge website at 3:07 p.m. on Thursday afternoon EDT---and once again I thank Dan Lazicki for finding it for us.

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Iran’s negotiating side is 5+1 not U.S. Senate: Rouhani

President Hassan Rouhani says Iran’s negotiating side in the nuclear talks is the 5+1 group of world powers and not the U.S. Senate or the House of Representatives.

He made the remarks during an address to an audience of people in Rasht, the capital of the northern province of Gilan, on Wednesday.

Rouhani stressed that whatever hardliners in the U.S. and the Senate, as well as the allies of the U.S. in the region say is of no concern to the Iranian nation and administration.

This article put in an appearance on the Tehran Times on Thursday local time---and it's the third contribution of the day from Roy Stephens.

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Afghan opium cultivation ‘grew 40-fold’ during US operation - Russia Security Council chief

Opium production in Afghanistan has “grown forty fold” in the 13 years of US Operation Enduring Freedom, according to the head of the Russian Security Council. The intervention has “exacerbated existing problems,” rather than solved them.

“Unfortunately, the failed policy of Washington did not solve, but on the contrary exacerbated, the existing problems,” Nikolai Patrushev has said while addressing the heads of the Shanghai Cooperation Organization Security Council.

At the same time, the aims of introducing foreign military to Afghanistan, including the destruction of Al-Qaeda and Taliban, were not accomplished, he added.

According to Patrushev, Afghan extremists’ organizations benefit from lax law enforcement and use their positions in northern Afghanistan to enter neighboring countries in Central Asia.

This interesting story appeared on the Russia Today website on Wednesday afternoon Moscow time---and I thank Norman Willis for bringing it to our attention.  And even more disturbing story about the Afghanistan and opium---which was only hinted at in the above RT story---can be found linked here.

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Deal Reached on Fast-Track Authority for Obama on Pacific Trade Accord

Key congressional leaders agreed on Thursday on legislation to give President Obama special authority to finish negotiating one of the world’s largest trade accords, opening a rare battle that aligns the president with Republicans against a broad coalition of Democrats.

In what is sure to be one of the toughest fights of Mr. Obama’s last 19 months in office, the “fast track” bill allowing the White House to pursue its planned Pacific trade deal also heralds a divisive fight within the Democratic Party, one that could spill into the 2016 presidential campaign.

With committee votes planned next week, liberal senators such as Sherrod Brown of Ohio are demanding to know Hillary Rodham Clinton’s position on the bill to give the president so-called trade promotion authority, or T.P.A.

Trade unions, environmentalists and Latino organizations — potent Democratic constituencies — quickly lined up in opposition, arguing that past trade pacts failed to deliver on their promise and that the latest effort would harm American workers.

This New York Times article, filed from Washington, appeared on their Internet site yesterday---and it's another offering from Roy Stephens.

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A Brief History of Currency Wars -- Jim Rickards

There have been three currency wars in the past one hundred years. Currency War I covered the period from 1921 to 1936. It really started with the Weimar hyperinflation. There was period of successive currency devaluation.

In 1921, Germany destroyed its currency. In 1925, France, Belgium and others did the same thing. What was going on at that time prior to World War I in 1914? For a long time before that, the world had been on what’s called the classical gold standard. If you had a balance of payments, your deficit, you paid for it in gold.

If you had a balance of payment surplus, you acquired gold. Gold was the regulator of expansion or contraction of individual economies. You had to be productive, pursue your comparative advantage and have a good business environment to actually get some gold in the system — or at least avoid losing the gold you had. It was a very stable system that promoted enormous growth and low inflation.

That system was torn up in 1914 because countries needed to print money to fight World War I. When World War I was over and the world entered the early 1920s, countries wanted to go back to the gold standard but they didn’t quite know how to do it. There was a conference in Genoa, Italy, in 1922 where the problem was discussed.

This slightly longish, but must read commentary from Jim appeared on the dailyreckoning.com Internet site yesterday---and it's the final offering of the day from Dan Lazicki, for which I thank him on your behalf.

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IMF warns global financial risks are rising

The International Monetary Fund (IMF) has urged countries to “safeguard” global financial stability following its report that financial risks are on the rise.

According to the IMF’s latest Global Financial Stability Report, since October 2014 financial risks have risen and rotated to parts of the financial system that are harder to assess.

It warned that risks had increased amid a “moderate and uneven” global economic recovery, with rates of inflation “too low” in many countries.

The IMF cited divergent growth and monetary policies as having increased tensions in global financial markets, resulting in “rapid and volatile moves” in exchange rates and interest rates over the past six months.

This very worthwhile article appeared on the ftadviser.com Internet site yesterday sometime

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‘Three more banks’ to join ICE’s gold price benchmark

Three more banks are waiting in the wings to join ICE’s gold price benchmark, a well-informed source claimed, without disclosing their identities.

The banks will join JP Morgan Chase Bank, Scotiabank, HSBC, Société Générale, UBS, Barclays and Goldman Sachs in the LBMA Gold Price, which formally replaced the near-century-old London Gold Fix on March 20, bringing the number of participants to 10 once all the necessary formalities have been completed, the source said.

Many had been expecting some Chinese banks to be taking part in the new system when it launched, although some of the newer participants were reportedly struggling to meet both internal sign-offs and the paperwork required to join in time for the first auction.

Industrial and Commercial Bank of China (ICBC), one of the biggest banks in the world and a major participant in the gold market, is widely believed to be one of those interested.

This gold-related news item originally appeared on the bulliondesk.com Internet site on Wednesday---and it found a home over at the mineweb.com Internet site yesterday at 2:59 p.m. BST.

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World Gold Council: Chinese Gold demand may shoot up 25 percent in coming years

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

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

One wonders from which central bank vaults this new gold demand will be coming from, because current physical demand exceeds world supply by a goodly bit already.  This short article, filed from Shanghai, appeared on the bullionstreet.com Internet site at 10:23 a.m. Friday morning India Standard Time---and it's definitely worth reading.

Read more...

 

¤ The Funnies

Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization

Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.

Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.”

Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained.

Please visit our website for more information about the project.

 

¤ The Wrap

Not unexpectedly, for the first three days this week, another 2.3 million ounces were moved into the JPMorgan COMEX silver warehouse, bringing to nearly 6 million oz the total amount of silver flowing to this warehouse over the past six business days. [Plus another 1.19 million troy ounces on Thursday. - Ed]  If this isn’t directly related to JPM taking the maximum amount of silver allowed (7.5 million oz) in the March futures contract, then the moon isn’t directly related to the tides. As far as I’m concerned, enough metal has flowed to the JPM warehouse to establish the connection, but a bit more may come. [It has---another 1.19 million troy ounces were added on Thursday. - Ed]

Also, upon further review, I find it interesting that the 1,500 contracts that JPMorgan stopped (in its personal trading account) were the only silver deliveries made or taken by JPMorgan in its proprietary account this year (including the big December 2014 COMEX delivery month. I’m sure that JPMorgan holds a get-out-of-jail-free card from the CFTC (or higher agency) because after alleging for quite some time that JPMorgan was accumulating an historically massive physical silver holding over the past 4 years, one would think the bank might be somewhat more discreet than in suddenly taking the maximum amount and wave the red flag that might represent. I was certainly surprised that JPMorgan would appear that open and brazen (although I was very pleased to have it confirm my ongoing speculation), but I suppose that’s what get-out-of-jail cards are for.

I also took note that the investment bank Jefferies agreed to sell its Prudential Bache commodities unit for undisclosed (but obviously puny) terms after acquiring the unit with much fanfare (and for $430 million) four years ago. Jefferies has been one of the biggest issuers of silver deliveries on the COMEX, if not the biggest, since it announced it was buying the business in April 2011. (There we go with another unusual development dating to April 2011). I can’t know what impact Jefferies' exit from COMEX silver dealings will have on price, but it’s got to be better than any impact it had over the past 4 years. - Silver analyst Ted Butler: 15 April 2015

Yesterday's price action in the precious metals in the face of a dollar in the dumpster should give you some indication of the power that JPMorgan et al have in the COMEX futures market.  They can, as Ted Butler says, do whatever they want, whenever they want---and without fear of reprisal because of their "Get-Out-of-Jail-Free" card they were issued when they took over Bear Stearns.

How long this can go on remains to be seen, but what can be seen for sure is that they have total control over these or any other commodity that have to be "managed".

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

And as I type this paragraph, the London open is fifteen minutes away.  I see that the gold price poked its nose above the $1,200 spot mark in early Far East trading, however that wasn't allowed to last.  But starting at noon Hong Kong time on their Friday, gold began to rally anew---and is currently back above the $1,200 spot price, albeit by only a whisker.  It's the same price pattern for silver and platinum as well, so it's more than obvious that their respective prices are being micromanaged, as all three of these precious metals have different supply/demand fundamentals---and would never trade in unison like this in a free market.

Net gold volume is around 14,200 contracts, with 99.9 percent of it in the current front month, so it's all of the HFT variety.  The net volume in silver is barely fogging the mirror at 2,200 contracts, so not much should be read into their current price action, except for my comments on this issue in the previous paragraph.

The dollar index hasn't done a thing since it opened in New York yesterday evening---and is virtually unchanged, down 3 basis points.

I sent Jim Rickards the link to the story---"LSE's Lord Desai Warns Gold-Backed SDR Is Quite Likely to Happen"---which was the headline to my Thursday column---and asked for his opinion.  He got back to me last night about it---and here are his thoughts---"Thanks Ed. We're a long way from a gold-backed SDR. Next step is to include the Chinese yuan in the basket, probably late this year and early 2016. Then the IMF will sit tight until the next global liquidity crisis, at which point there will be massive issuance of new SDRs (in effect, world money from a world central bank). Only in the end stage when inflation breaks out and confidence in the SDR itself is threatened, will they move to gold in some form."

Today we get the Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday.  Just eye-balling the above charts, I would guess that we'll see some sort of improvement in the Commercial net short position in both gold and silver---and particularly in silver, as "da boyz" took the silver price back below its 50-day moving average during the reporting week.  That got the Managed Money puking longs and maybe even going short---and we'll know by how much at 3:30 p.m. EDT this afternoon.  And this hangs on the assumption that all the trading volume during the reporting week was reported in a timely manner.

And as I send today's column off into cyberspace at 5:35 p.m. EDT, I note that once again gold, silver and platinum began to rally starting at noon Hong Kong time---and all three are up a bit from Thursday's close in New York.  Palladium isn't doing much, but it is up a dollar or so the ounce as well.

Net gold volume is around 26,800 contracts at the moment, which isn't overly heavy---and silver's net volume is around 5,700 contracts, which is very much on the lighter side considering the price activity in the last three and a half hours.

The dollar index has been trending lower---and like on Thursday, began heading lower in earnest shortly before the London open.  It's currently down 36 basis points.  The dollar index is down over 200 basis points in the last forty-eight hours, but JPMorgan et al certainly haven't been allowing it to show up in the precious metal prices---and based on yesterday's price action, one wonders how will they will be allowed to 'perform' once COMEX trading begins this morning.

Today we get the not-so-secret meeting in Washington between the World Gold Council and selected central banks---and that story is linked here if you wish to refresh your memory.  I'd love to be a fly on the wall at that one.

With all these balls in the air, I shan't hazard a guess as to how the remainder of the Friday trading session will turn out.  But at times like this I always hope for the best, but expect the worst---and as always, I'd like to be proven spectacularly wrong about the latter.

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

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