Gold & Silver Daily
"Silver 'analysts' of all stripes should be screaming about this from the rooftops"

¤ Yesterday In Gold & Silver

The gold price didn't do much in most of Far East trading on their Monday.  There was a bit of spike starting shortly before 2 p.m. Hong Kong time, but that was capped shortly before the London open---and it chopped lower for the remainder of the Monday session both in London and New York.

For the most part, the gold price traded within a ten dollar price range, so the highs and lows aren't worth my time to look up.

Gold finished the Monday session in New York at $1,225.80 spot, up $2.30 from Friday's close.  Net volume was 101,000 contracts, with over a third of that coming before the London open, as it took "da boyz" a fair amount of paper to keep prices in line in Far East trading.

It was more or less the same story in silver, although once it rallied, there didn't appear that any attempt was made to push prices lower in New York---and prices chopped sideways in a fairly broad range for the entire Monday session.

The low and high ticks were recorded by the CME Group as $17.475 and $17.775 in the July contracts.

Silver finished the day at $17.68 spot, up 18.5 cents from Friday.  Net volume was higher than I would like to see at 34,500 contracts.

Platinum chopped sideways until COMEX trading began---and then it tacked on 10 bucks by 11 a.m. EDT before trading sideways into the close.  Platinum finished the day $1,175 spot, up 9 dollars.

It was much the same for palladium, except its rally at the COMEX open didn't last long, hitting its low tick at 4 p.m. EDT in electronic trading in New York, closing at $785 spot, down 6 bucks from Friday.

The dollar index closed late on Friday afternoon in New York at 93.26---and began rallying almost the moment that trading began in New York on Sunday evening.  The index chopped higher, hitting its 94.27 high tick around 3 p.m. EDT.  It traded flat from there into the close.  The index finished the day at 94.16---up 90 basis points from Friday's close.

Here's the 6-month dollar index showing yesterday's gain in relation to the big sell-off that's been underway since mid March.  I would expect that a major counter-trend rally in the USD index would not help the precious metal prices, or their respective equities.  Although their performance in light of that rally was fairly impressive yesterday, but I doubt it will last.

The gold shares opened in positive territory, but traded with no enthusiasm.  The high tick came precisely at 11 a.m. EDT---and they chopped lower until around 2:45 p.m. before trading sideways into the close.  For the third day in a row the gold stocks finished down on the day, this time by 0.40 percent.

Once again the silver equities turned in a better performance than their golden brethren.  Their high came around 11:15 a.m. before they chopped lower until shortly after 3 p.m. EDT---and from there they rallied a hair into the close.  Nick Laird's Intraday Silver Sentiment Index closed up 0.55 percent.

The CME Daily Delivery Report showed that zero gold and 124 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  The surprise short/issuer was ABN Amro with 109 contracts, with Jefferies in very distant second place with 10 contracts.  Not surprisingly, JPMorgan was the biggest long/stopper with 67 contracts---33 for its client account---and 34 contracts for its own account.  HSBC USA stopped 34 contracts.  The link to yesterday's Issuers and Stoppers Report is here---and it's worth a quick look.

The CME Preliminary Report for the Monday trading session showed that for the second day in a row there was no change in gold's open interest, which still stands at 141 contracts left in the May delivery month.  Silver's May o.i. actually rose by 84 contracts---and now sits at 424 contracts, minus the 124 mentioned in the previous paragraph.

There was another big withdrawal from GLD yesterday.  This time an authorized participant removed 182,174 troy ounces.  Since May 1, there has been 755,776 troy ounces removed from GLD.   With the current gold rally about four days old, one would assume that gold should be pouring into GLD, but that's certainly not the case at the moment.  Ditto for silver.  And as of 6:40 p.m. EDT yesterday evening, there were no reported changes in SLV.

But when I checked back just before 2 a.m. EDT this morning, I saw that---surprise, surprise---there was another chunky withdrawal from SLV as well.  This time it was 1,194,813 troy ounces of the stuff.  That makes 5.1 million ounces withdrawn in the last three business days---and a stunning 12.7 million ounces since April 27.  By whom---and for what reason?

Why on God's green earth isn't anybody except Ted Butler and myself talking about this???  Gold and silver 'analysts' of all stripes should be screaming about this from the rooftops.  Please make sure you read Ted's quote in The Wrap section below that I stole from his Saturday's column.

There was a sales report from the U.S. Mint yesterday.  They sold 500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 250,000 silver eagles. 

There wasn't a lot of gold movement at the COMEX-approved depositories on Friday.  Only 4,500 troy ounces were reported received---and nothing was shipped out.

It was a pretty decent day in silver, as 300,442 troy ounces were shipped in---and 600,439 troy ounces were shipped out the door.  Most of the 'in' activity was at the CNT Depository---and the 'out' movement all came from Canada's Scotiabank.  The link to that action is here.

It was another busy day over a the gold kilobar COMEX-approved depositories in Hong Kong on their Friday---and both depositories were involved.  At Brink's, Inc. there were 7,110 kilobars received---and 4,278 were shipped out.  At the Malca-Amit Far East Ltd depository there were 630 kilobars received---and nothing shipped out.  The link to that activity in troy ounces is here.

I have the usual number of stories for you today---and I hope you'll find a few that interest you.


¤ Critical Reads

UMich Consumer Sentiment Crashes as Surging Gas Prices Trump Stock Record Highs

Soaring gas prices dueled with soaring stock prices to leave University of Michigan Consumer Sentiment and it appears the former won. Printing at the weakest level since Oct 2014, UMich dropped to 88.6 (vs 95.9 expectations). This is the biggest miss on record.. and biggest MoM drop since Dec 2012. Both current conditions and expectations plunged despite surges in inflation expectations. Higher income expectations are starting to plunge - at their lowest in 7 months - and household finances are seen as the worst since July 2014. And finally, the survey's spokesperson says that respondents showed "concern over employment."

Gas prices are on the rise in Canada as well---and for what reason?  They started rising in this country long before the oil price began to rally off its low.  This 2-chart Zero Hedge piece showed up on their website last Friday morning---and it's something I found in yesterday's edition of the King Report.


Volumeless VIXtermination Fuels Stock-Buying Frenzy To Record Highs

This Zero Hedge piece from yesterday was posted on their website just after the closing bell.  It's loaded with charts---and it shows the madness out there at the moment.  The first two, plus the bunds chart, were the ones that really stood out for me.  As Chris Powell said: There are no markets anymore, only interventions.  I thank reader M.A. for this story.


Hedge Funds Close Doors, Facing Low Returns and Investor Scrutiny

For decades, nearly everything that the billionaire Julian Robertson touched turned to gold. Mr. Robertson, founder of the hedge fund Tiger Management, seeded a network of hugely successful “Tiger Cubs” — companies that in turn seeded more talent. It became the closest thing the hedge fund industry had to a dynasty.

Since the start of this year, however, the managers of three firms spun out of that gilded empire have called it quits after volatile performances and sometimes steep losses. They will return money to investors and focus on managing their own wealth.

TigerShark, Tiger Consumer and JAT Capital Management are just three examples among a recent wave of hedge funds that have closed their doors to investors in the face of choppy markets. They are a reminder that the hedge fund industry is not all spectacular returns.

This article appeared in The New York Times on Sunday---and I thank West Virginia reader Elliot Simon for sharing it with us.


Obama announces new police standards, bans military equipment for local police

President Barack Obama announced federal standards to improve trust between police and communities and a ban on some types of military equipment for local police agencies.

Obama spoke on the measures Monday in Camden, N.J., a city that has struggled with one of the country's highest violent crime rates.

A blueprint for improved community policing was announced that will help cities and towns "develop policing strategies that work best for building trust between law enforcement and the communities they serve while enhancing public safety," a statement released by the White House said.

This UPI story, filed from Washington, showed up on their website late yesterday afternoon EDT---and it's the first offering of the day from Elliot Simon.


Internet to Slip Out of U.S. Government Control by the End of 2015

Despite the wishes of a number of U.S. lawmakers, a plan is moving forward to transition control of the Internet away from the U.S. government and under the supervision of a global body. According to the web’s current key holder – and most of the world – that’s a good thing.

The web’s creation dates back to research commissioned by the U.S. government back in the 1960s. And besides, the government doesn’t own the Internet. No one does.

The U.S. oversees the Internet Corporation for Assigned Names and Numbers (ICANN). That nonprofit group is responsible for assigning Internet domain names and the corresponding numbers behind those addresses.

One year ago, the U.S. government announced plans to relinquish technical oversight by the Department of Commerce in favor of a "global multistakeholder community," like the United Nations.

On Thursday, the head of ICANN, Fadi Chehade, predicted that the privatization process would go through smoothly by year’s end, as all the necessary factors are nearly in place.

This interesting article was posted on the Internet site very early Saturday morning Moscow time---and I thank South African reader B.V. for finding it for us.


Belligerent U.S. Refuses to Cede Control Over IMF in Snub to China

The Obama administration signaled it won’t jeopardize the U.S. power to veto IMF decisions to achieve its goal of giving China and other emerging markets more clout at the lender, according to people familiar with the matter.

That message was delivered at the International Monetary Fund’s spring meetings in Washington last month, the people said, where officials discussed how to overcome congressional opposition to a 2010 plan to overhaul the lender’s voting structure.

A solution backed by Brazil would have enabled an end-run around Congress -- while potentially sacrificing the veto the U.S. has held since World War II. With that option off the table, the people said, IMF member nations are considering a watered-down proposal that risks alienating China and India, which are already challenging the postwar economic order by setting up their own lending and development institutions…

This is another piece from the Zero Hedge Internet site.  It's their spin on an embedded Bloomberg story.  It was posted on their website at 2:15 p.m. EDT on Sunday---and it's worth reading.  It's another contribution from reader B.V.


Ratings agency Fitch to downgrade many European banks - newspaper

Ratings agency Fitch will soon downgrade European banks en masse, possibly even at the start of the week, German newspaper Handelsblatt said, citing unnamed financial sources.

In most cases the banks will be downgraded by between one and a maximum of four levels, according to an advance copy of an article due to be published on Monday.

Fitch was not immediately available to comment when contacted by Reuters. Handelsblatt said a spokesman did not want to comment on the report.

The move would be a reaction to European governments having become less willing to prop up banks if they get into a crisis, the newspaper said.

This short Reuters news item, filed from Berlin, put in an appearance on their website early Sunday afternoon EDT---and it's the second contribution of the day from Elliot Simon.  It's certainly worth skimming.


Juncker denies Greek rescue plan as negotiations reach 'final stages'

The president of the European Commission has reportedly intervened in Greece's bail-out negotiations, proposing a reduction in Troika-imposed budget targets and a release of emergency cash to prevent Greece going bankrupt in the summer.

According a blueprint leaked to Greek media, Jean-Claude Juncker's "plan" to break Greece's deadlock includes a relaxation of Athens' primary budget surplus target to 0.75pc this year - half that previously sought by Greece's paymasters.

The proposals also include releasing €5bn to the government in June, and delaying a number of fiscal austerity measures until October. However, the blueprint maintained that Greece would have to retain a controversial property tax and push for flexible labour market reforms.

Despite refusing to confirm the plan, a spokesman for Mr Juncker said the EU chief was now "personally involved" in Greece's talks.

This story showed up on The Telegraph's website at 6:30 p.m. BST yesterday evening, which was 1:30 p.m. EDT in Washington.   It's the second offering of the day from Roy Stephens. [Note: This story has been totally re-written since I posted it early yesterday evening---and I discovered the change when I was editing today's column at 4 a.m. EDT this morning.  It used to be headlined "Juncker steps in with emergency Greek rescue as negotiations reach 'final stages'"---and you'll note that the text has been changed from what's posted above as well. - Ed]


Europe should overcome U.S. pressure, resume cooperation with Russia - Duma chief

State Duma Speaker Sergey Naryshkin has urged European politicians to stop listening to U.S. propaganda and start working on common Eurasian economic interests with Russia.

Naryshkin expressed his views on the best possible course for European politics in an article entitled “Natural Allies”, published on Monday in the Russian government daily Rossiiskaya Gazeta.

He wrote that the foundations of the European Union or “Big Europe” had been laid by people who remembered the lessons of the First and Second World Wars and these people still assert NATO’s eastward expansion was a mistake. Europe is taking great risks if it remains in the political wake of a nation located thousands of miles from the European continent. The Ukrainian crisis is yet another confirmation of the fact that E.U. member countries must decide on their foreign policies without any foreign interference, he noted.

Another voice of reason and common sense, but the Americans aren't listening.  Let's hope the Europeans come to their senses.  This article showed up on the Russia Today website at 12:13 p.m. Moscow time on their Monday, which was 5:13 a.m. in New York.


'Macedonia unrest - another episode of West-Russia geopolitical battle'

The anti-governmental protests taking place in Macedonia is a sustained regime change attempt driven and financed by Western countries, Srdja Trifkovic, foreign affairs editor at Chronicles magazine, told RT.

RT: The protesters have vowed to stay on the streets until the government resigns. Will it go this far?

Srdja Trifkovic: It’s a classic regime change scenario as outlined by Gene Sharp many years ago. I don’t think that it will work this time round because first of all we are talking about thousands of protesters, not tens of thousands. In a country like the former Yugoslavian Republic of Macedonia with its 2 million people, tens of thousands might have provided the critical mass needed. I do not believe that Zoran Zaev, the socialist leader, has reason to believe that [Prime Minister] Nikola Gruevski will simply pack up and go. He knows that he is under attack both by the Western powers which have provided materials to be leaked to the opposition, and by the Albanian terrorists and he knows that his .. maneuvering space is extremely limited. So I don’t think that it will end in 24 or 48 hours with yet another president resigning.

This Russia Today article is a must read for all serious students of the New Great Game.  It was posted on their Internet site at 4:11 p.m. Moscow time on their Monday afternoon.  I thank Roy Stephens for bringing it to our attention.


‘Bigger role’ for U.S. in Minsk II accords: Are you sure, Ms. Nuland?

One year into the Ukrainian crisis, Washington reveals a desire to jump on the bandwagon of the Minsk peace accords – brokered by France and Germany. Not bad news, after all, but when it comes from Victoria Nuland...

News that US Secretary of State John Kerry flew to Sochi to meet with Russian Foreign Minister Lavrov and President Putin came as only a small surprise this week. In the wake of the most impressive Victory Day celebration ever across Russia, most experts agreed that the Russia people’s vigilance held a fairly massive sway over world public opinion afterwards. Western media was not oblivious to this either.

However much of a positive this trend may be, news that the Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland and sidekick Ambassador Geoffrey Pyatt are on the loose again tends to quell hopes of peace.

The U.S.---always sticking its nose in where it's neither wanted, needed---or appreciated.  This Op-Edge piece appeared on the Russia Today website very early Sunday morning Moscow time---and in my opinion it's certainly worth your while.  Once again I thank Roy Stephens for sending it our way.


Too early to speak of decisions on Ukraine after meeting with Nuland — Russia's deputy FM

It is too early to talk about any decisions on the Ukrainian conflict resolution after the Moscow meeting with US Assistant Secretary for European and Eurasian Affairs Victoria Nuland, Russian Deputy Foreign Minister Grigory Karasin told TASS on Monday.

"We have the Russian president's orders to establish bilateral contacts after the meeting with the [U.S.] state secretary [John Kerry] to discuss certain issues of the Ukrainian crisis resolution," Karasin said. "That's exactly what we are doing."

"We are trying to find those forms of cooperation that would, first of all, prevent a new round of the armed conflict in [Ukraine's] southeast and help launch a real dialogue between the Kiev government and representatives of the DPR and LPR [self-proclaimed Donetsk and Luhansk republics]," he said. "So far, this goal has not been achieved. Kiev is ignoring all the initiatives coming from Donetsk and Luhansk."

This news item, filed from Moscow, was posted on the Internet site at 9:48 p.m. Moscow time on their Monday evening, which was 2:48 p.m. EDT in Washington.  Once again I thank Roy Stephens for sending it along in the wee hours of Tuesday morning.


Paul Krugman Drops Epic Truth Bomb on Latest Round of Lies About Iraq War

"Mistakes were made" just doesn't get at the truth about how America was coerced into the disastrous war in Iraq,and the horrific consequences that are still unfolding. Paul Krugman sets the record straight in Monday's column, beginning with the ironic statement, that "there’s something to be said for having the brother of a failed president make his own run for the White House."

The Iraq War was no innocent mistake based on faulty intelligence, Krugman argues compellingly. "America invaded Iraq because the Bush administration wanted a war," he writes. "The public justifications for the invasion were nothing but pretexts, and falsified pretexts at that. We were, in a fundamental sense, lied into war."

And we knew it—or certainly should have.

This should be no surprise to anyone.  It's just the same as the Lusitania, Pearl Harbor, Iran, 9/11, Bosnia, Libya, Syria, Ukraine---the list is nearly endless.  This absolute must read article appeared on the Internet site yesterday sometime---and I thank Roy Stephens for sliding it into my in-box yesterday evening Denver time.


An Eye To Iran: European Businesses Prepare for Life After Sanctions

When Iran's oil minister receives visitors, he wears the usual insignias of the Iranian Revolution: an open shirt with a dark suit, five o'clock shadow and no tie. He holds Tasbih prayer beads in his left hand.

But Bijan Zanganeh is one of the Iranian pragmatists who would like to see a change in relations with the West. His schedule during a visit to Berlin the week before last was accordingly jam-packed with meetings.

He had breakfast with company representatives from Volkswagen and Linde, the world's largest gases and engineering company; held discussions with owners of small- and medium-sized businesses and also showed German Economics Minister Sigmar Gabriel the enormous possibilities that lie in the expansion of the Iranian energy sector.

The Tehran official found attentive listeners. Officials in Gabriel's ministry estimate that Iran has investment needs of around $100 billion per year. The country needs to update aging infrastructures, it needs modern automobiles, heavy machinery and pharmaceuticals -- all segments in which Germany is a global market leader.

This very interesting story was posted on the German website at 3:54 p.m. Europe time on Monday afternoon, which was 9:54 a.m. in Washington.  It's the final contribution of the day from Roy Stephens---and I thank him on your behalf.


Stung by its neighbour's reaction, India plays it cool after 2nd quake hit Nepal

Stung by Nepal's reaction to India's over-generous assistance in the immediate aftermath of the April 25 earthquake, this time India is playing it slightly cool with its smaller, prickly neighbour.

On Wednesday, Prime Minister Narendra Modi spoke to his counterpart in Nepal Sushil Koirala, a conversation very different from the one that fateful Saturday​ two weeks ago​.

Yesterday's had the air of a ​caring but ​cool neighbour. "PM Sushil Koirala and I had a telephonic conversation. We reviewed the situation arising due to yesterday's tremors." said Modi in a tweet, before going on to promise assistance.

No good deed ever goes unpunished.  This interesting article, filed from New Delhi, put in an appearance on the Times of India website late Thursday morning IST [India Standard Time]---and I thank Kathmandu, Nepal reader Nitin Agrawal---who is still with us after the big quake---for passing it around on Saturday.


SGE Withdrawals vs. WGC Demand Q1 2015

SGE withdrawals from May 4 until May 8 (week 18) accounted for 37 metric tonnes. As a rule of thumb, this amount of gold is equal to Chinese wholesale gold demand – read this post for a comprehensive analysis of the mechanics of the Chinese gold market and all metrics used to measure demand. Year to date an incredible 858 tonnes has been withdrawn from SGE designated vaults, up 9 % y/y from 2013, up 19 % y/y from 2014.

Just three countries have exported 320 tonnes to China in three months. Chinese gold import added by mine supply (111 tonnes) and a little scrap easily exceeds 460 tonnes. So, 460 tonnes is the minimum of Q1 total supply for China, yet, demand as disclosed by the World Gold Council (WGC) was 273 tonnes; the mystery continues.

From what I’m seeing Chinese gold demand in Q1 was 500-600 tonnes, though the WGC wants us to believe it’s only slightly more than half of this (273 tonnes). The gap, as I’ve previously called it, has mushroomed to over 3,000 tonnes of gold in total since 2009!

This commentary by Koos appeared on the Singapore Internet site on Saturday---and it's definitely worth reading.  I thank Dan Lazicki for pointing it out before Koos let me know.


'Central banks aren't trading the gold market the way they used to' -- Financial Times

A few years ago London's precious metals traders would arrive at their desks to find the phones flashing. On the other end of the line were rival banks looking to buy and sell gold. Today the trading floors are a lot quieter.

Not only is most trading screen-based but there has been a decline in bank-to-bank activity -- the anchor of the over-the-counter (OTC) billion market -- as many institutions have scaled back or exited commodities.

This has made the gold market more frenetic and pushed up the costs of hedging and doing larger trades, according to market participants.

"If you're just transacting in small sizes then probably you have benefited from the changes as you can transact directly through a bank's electronic platform," says one veteran trader.

"The issue is if you want to transact in a decent size, which used to be 100,000 to 200,000 ounces. That has become harder to get away with without influencing the price unduly."

I would guess that physical gold in size is a pretty scare commodity these days---and I would guess that silver would be the same.  And as Ted Butler pointed out, the COMEX futures market is very illiquid, as most of the trading is for price management purposes between the commercials and the Managed Money. This worthwhile read appeared on the Financial Times website on Monday---and it's posted in the clear in this GATA release.


Book review: 'The Floating Kilogram' -- the Federalist Papers for a gold standard

A recent article in The Week by progressive columnist Jeff Spross, "How Modern Capitalism Killed Self-Reliance," observed that "the gold standard is a niche enthusiasm rejected by most economists." Why that is so is curious. The hyperlink to his observation goes right to Episode 252 of NPR's "Planet Money," an interview with "charming curmudgeon" James Grant, which first aired in February 2011.

This is the same James Grant who furnished the foreword to Seth Lipsky's delightful new book "The Floating Kilogram ... and Other Editorials on Money from The New York Sun."

"The Floating Kilogram" was described by Steve Forbes: "This brilliant book is The Federalist Papers for a gold standard. It succeeds, dazzlingly -- and convincingly -- making the irrefutable case for re-linking the battered dollar to gold."

This very interesting book review/commentary showed up on the Internet site yesterday morning EDT---and I found it on the Internet site.


Peru is another rich country insisting on being poor and pockmarked

National Public Radio broadcast and published a long report about the environmental devastation done by wildcat gold miners in Peru, a phenomenon common throughout the part of the developing world that has mineral resources:

What the NPR report missed is that this devastation is to a great extent the consequence of gold price suppression by Western central banks.

Yes, while the extractive industries are the prerequisites of modern civilization, they can damage the environment. Gold mining is only one of those industries. As with all extractive industries, the costs of environmental safeguards and remediation must be built into the price of their products.

When the gold price is suppressed by central banks, corporations -- which government easily can regulate and through which government enforces environmental safeguards and remediation -- won't mine as much of the metal and won't employ as many people. For amid price suppression, the metal can't be mined legally and responsibly; its price won't support responsible practices.

This story appeared on the Internet site very early Sunday morning EDT---and it's actual headline reads "Who Did This to Peru's Jungle?"  The one shown above is from Chris Powell---and it's a gold related story that was posted in a GATA release.


To central bankers, these deaths are just collateral damage of currency market rigging

Peter Kollie was digging for gold in the forests of southeastern Liberia when the deep shaft he had carved out of the earth collapsed, turning into a dark, airless tomb.

But that was a risk the 20-year-old, like thousands of desperate and impoverished young men working the illegal gold-mining camps of the border region by Ivory Coast, had been prepared to take.

"In such cases there is nothing we can do. We leave the body there and abandon the area for a while," Lomax Saydee, a fellow miner and youth welfare volunteer, told AFP a few days after Kollie's death. "After a certain period of time we go back and re-open the place and generally in that case you discover a huge quantity of gold in the area where the person died underground.

"So it is like you are digging your own grave sometimes, because if it closes on you no one can help you."

The actual headline to this AFP story reads "Buried Alive: Young Liberians Risk All in Deadly Mines".  It was picked up by the Internet site at early Sunday afternoon EDT---and it's another unhappy gold-related story that I found on the Internet site.


Open-Pit Gold Mine Collapse in Guyana Traps 10 Miners

An open-pit gold mine in remote southern Guyana has collapsed and buried up to 10 miners in debris.

Police spokesman Ivelaw Whittaker says authorities are digging through the mud in an attempt to rescue the men but it appears unlikely any survived. Seven miners were injured and treated at a hospital in the nearest town.

The collapse occurred Sunday in the densely forested Potaro-Siparuni region near the border with Brazil. The region has many informal, open-pit gold mines run by small operators.

Miners Association President Patrick Harding said recent heavy rains have made the work especially treacherous. He said his organization has been working to persuade operators to provide adequate support for the mud walls but said many disregard those precautions.

This AP story, filed from Georgetown, Guyana, was picked up ABC News on Monday---and it's another story that showed up in a GATA release.


Platinum supply still in deficit but not as large – WPIC

The latest Q1 analysis of global platinum supply and demand from the World Platinum Investment Council (WPIC) suggests a much lower supply deficit this year than the recent GFMS analysis but unlike the GFMS report, perhaps advisedly, makes no forecasts on what the effects on pricing might be as there are factors other than supply/demand fundamentals at play here.

Data for the WPIC survey is provided by commodities analysts from SFA (Oxford) and there certainly are some broad disparities from the GFMS Q1 report. GFMS puts the overall supply deficit this year as being in the order of 670,000 ounces, down from 1.016 million ounces in 2014. The WPIC report suggests a 190,000 ounce deficit this year, down from a 670,000 ounce deficit last – a considerable difference between the two analyses. GFMS also suggests the platinum market could move into surplus in 2016, and while the WPIC makes no such projections of the likely position a year hence, the implications of its latest analysis certainly suggests at least a more balanced supply/demand outlook ahead.

And, to his credit, Lawrie points out the obvious---"But platinum is also classified as a precious metal and as such the price may move broadly in tandem with gold despite it having no real monetary element in its demand. Further, its price fate is seen by many, like gold, as being in the hands of COMEX speculators rather than in terms of supply/demand fundamentals."

Amen to that!  Except the 'speculators'---according to the latest Bank Participation Report---are '3 or less' U.S. banks.  This commentary appeared on the Internet site at 2:05 p.m. BST in London on Monday.  It's definitely worth reading if you have the interest.


Perth Mint Gold Bullion sales up 13.5% Y/Y in April

Australia's Perth Mint has sold 26,545 ounces of gold coins and bars during April, advanced 13.5% from the sale of 23,461 ounces a year earlier, latest figures from the Perth Mint showed.

Although, sale of gold coins and bars down 22.5% as compared to the sale of 34,260 ounces a month earlier.

Perth Mint's sales of silver coins recorded at 472,273 ounces in April, tumbled 26% from the prior month’s total of 638,557 ounces but they marked a 30.5% increase from 361,988 ounces sold in April of last year.

Year-to-date, the Mint’s silver sales totalled 2,088,897 ounces, declined 5.6% as compared to 2,211,629 ounces in the corresponding period last year.

The above four paragraphs are all there is to this brief news item that appeared on the Internet site at 10 a.m. IST on their Saturday morning.  I found it on the Sharps Pixley website yesterday.


Why Most Gold Bugs Are Dead Wrong -- Jim Rickards

One of the most persistent story lines among gold bugs and market participants who foresee the collapse of the dollar goes something like this:

China and many emerging markets including the other BRICS are looking for a way out of the global fiat currency system.

That system is dominated today by the U.S. dollar. This dollar dominance allows the U.S. to force certain kinds of behavior in foreign policy and energy markets.

Countries that don’t comply with U.S. wishes find themselves frozen out of global payment systems and find their banks unable to transact in dollars for needed imports or to get paid for their exports. Russia, Iran, and Syria have all been subjected to this treatment recently.

China does not like this system any more than Russia or Iran but is unwilling to confront the U.S. head-on.

This must read essay put in an appearance on the Internet site on Saturday---and the first reader through the door with it was Harold Jacobsen.



¤ The Funnies

This past weekend was a long weekend here in Canada, so I was out and about with my camera.  This flowering bush was in someone's yard and since no one was around....  Both are cropped from the same photo, it's just that the second one is more heavily cropped to show the intricate detail of these tiny flowers at the macro level.  In real life, each flower you see here is a little smaller than a nickel.

Arena Minerals has adopted a project generator model which will greatly reduce potential dilution and allow the company to deploy budget and expertise of exploration that it could not have achieved on its own. Recently, the Company has partnered with B2Gold for a commitment of $20M in exploration and is working on other joint ventures for other parts of the property, which is located in Chile in the hearth of the world’s most prolific mineral belt. The land has been in the hands of an industrial mineral conglomerate for a century and hasn’t been explored for metallics. Several high potential targets have already been identified. Please follow us for continual updates on drilling activity.


¤ The Wrap

Once again, the standout physical development [last week] was what occurred in the big silver ETF, SLV. After a one million oz deposit to start the week, close to 4.5 million oz were withdrawn from the trust (on Thursday and Friday). Particularly in light of the very high trading volume, mostly on Wednesday but extended into Thursday, the two days in which silver prices advanced the most, the big withdrawals must be considered shocking. I’ve been using the word counterintuitive to describe the unusual metal withdrawals from SLV on price strength and deposits on price weakness for a number of years now, but once again, that description is inadequate. Interestingly, the shocking two day withdrawal in SLV connects many things I’ve discussed recently, including my speculation that JPMorgan has amassed a mountain of physical silver.

Because of the unique open-ended feature of SLV (and GLD), when there is net new investor buying in SLV that causes the price to rise, the prospectus dictates that actual new metal must be deposited that day to match the amount of new net investor buying of shares. (Short selling may frustrate and prevent the deposit of new metal, but wouldn’t result in a withdrawal of metal.) To keep it simple – net new investor buying in SLV causes the price to rise and requires the appropriate amount of new metal be deposited to back up the newly created shares. If there wasn’t net new investor buying to begin with, it is very unlikely that prices would have risen, particularly on a repeated basis (as has been the case in SLV for the past few years). Therefore, even though I am the only one raising this issue, any observer of the silver scene should be asking out loud – how the heck can there be a massive withdrawal of metal in SLV on a high volume price advance.

Who would undertake such an unusual trading approach of buying shares in SLV and immediately converting those shares into metal and why? The only explanation I can come up with is a large entity seeking to accumulate silver without the accumulation becoming widely known. If the newly purchased shares of SLV weren’t quickly converted into metal then it would quickly be revealed by SEC reporting requirements for acknowledging large share ownership (over 5%). Leave it in the form of accumulated shares and the buyer would soon need to reveal ownership; convert the accumulated shares to metal and no revelation is required.  I continue to believe that the large buyer of shares of SLV which is quickly converting those shares into metal is JPMorgan. - Silver analyst Ted Butler: 15 May 2015

Monday was a nothing sort of trading day.  It showed potential in the Far East, but as I mentioned at the top of this column, the volume before the London open was pretty heavy, so JPMorgan et al used whatever COMEX paper necessary to put out those particular fires---and that was more or less it for the remainder of the day, as volume was pretty light after that.

I was somewhat relieved to see that the precious metals didn't get smoked in the face of that big dollar rally yesterday, but that's just more proof that precious metal prices are totally controlled by what's going on in COMEX paper trading---and not in the real world.  If all markets were allowed to trade freely, then the movements in the currencies would make a difference.  Under current circumstances where "there are no markets anymore, or only interventions"---it matters not.

Here are the 6-month charts for all four precious metals.

As I said in my Saturday column---and I saw nothing in yesterday's trading action to change my mind---it's my opinion that the current rallies in all four precious metals are done for the moment.  The only thing I don't know is how much backing and filling we'll be doing going forward, or how long "da boyz" might take to do it.

However, as I also pointed out on the weekend, we're nowhere near being overbought [except silver], but in a managed market such technical indicators are of dubious value, as these charts are all painted by JPMorgan et al---and they can [and do] paint whatever price charts they want.

And as I write this paragraph, the London open is about five minutes away.  Gold was under some selling pressure in Far East trading---and was down about six bucks at one point.  Not surprisingly, silver got it in the neck once again---and was down about 30 cents around 2:30 p.m. Hong Kong time on their Tuesday afternoon.  Platinum suffered the same fate---and palladium had a down/up move---and is back to almost unchanged.

Net gold volume is about 16,000 contracts, which is quite a bit for this time of day.  For a change, there's a decent amount of roll-over activity, but with only a week left to go before the big traders have to be out of the June contract on the COMEX, this should not be a surprise.  Silver's volume is getting up there at 7,000 contracts---and it's all of the HFT variety.

The dollar index has been chopping around all through Far East trading---and with London now open a couple of minutes, it's up 12 basis points.

Today, at the close of COMEX trading, is the cut-off for this Friday's Commitment of Traders Report and, unless there's been some jiggery-pokery going on under the surface that has been well hidden, I expect the report to be butt-ass ugly.  Of course today's price price/volume action should be included.  But as you already know, dear reader, not all of it may be reported in a timely manner---especially if it's a wild trading session.

And as I fire today's column off to Stowe, Vermont at 5:15 a.m. EDT, I see that the tiny dollar rally that began shortly before the London open has really caught fire---and is currently up 75 basis points---and appears to have leveled off [at least for the moment] just under the 95.00 mark.

In the face of that, all four precious metals got sold down some more.  At the moment, gold is down less than 3 bucks now---and well off its low.  Ditto for silver which is down 'only' 26 cents the ounce.  Platinum is lower by 10 bucks---and palladium by 2 dollars.

Gold's net volume is a bit over 30,000 contracts at this point---and silver's net volume is around 12,500 contracts.  No doubt the technical funds in the Managed Money category are pitching their newly-acquired long contracts from last week---and maybe going short a bit as well.  JPMorgan et al are, as always, on the other side of those trades.

As for the rest of the Tuesday session, I haven't the foggiest.  However, I'll be more than surprised if the bulk of the price/volume action doesn't occur during the COMEX trading session in New York.

That's all I have for today, which is more than enough---and nothing will surprise me when I check the charts later this morning.

See you tomorrow.

Ed Steer