Gold & Silver Daily
"It's always the Commercials who will be going short against them"
 

¤ Yesterday In Gold & Silver

Gold rallied a bit in very early trading in the Far East---and then traded sideways until shortly after 2 p.m. Hong Kong time---and then the price began to fade along with the dollar index---and the low tick came about 11:20 a.m. EST.  From there it rallied back towards the unchanged mark, but didn't make it.

The high and low ticks were reported as $1,274.60 and $1,256.10 in the April contract.

Gold closed on Thursday in New York at $1,264.50 spot, down $4.40 from Wednesday.  Net volume was pretty light at 108,000 contracts.

The price path for silver was somewhat similar, but the low tick came at the noon silver fix in London---and the subsequent rally ran into the usual not-for-profit crowd minutes after the COMEX open.  The secondary low came at the same time as gold's low---around 11:20 a.m. EST.  The rally from that point was not allowed to get back above the unchanged mark either.

The high and lows in silver were recorded by the CME Group as $17.50 and $16.92 in the March contract.

Silver finished the Thursday trading session at $17.22 spot, down 11 cents from Wednesday's close.  Net volume was 32,000 contracts.

Platinum's high tick in the Far East came at the same time as gold and silver---and from there got sold down to its low, which came at the London p.m. gold fix.  The subsequent rally ended shortly before 3 p.m. in electronic trading---and the price did little after that.  Platinum closed at $1,250 spot, up ten bucks on the day.

The palladium chart was similar in most ways to the platinum chart, with the only real difference being the sell-off after that 3 p.m. high tick, as the metal was sold down to unchanged on the day---back at $790 spot.

The dollar index closed late on Wednesday afternoon at 94.57---it's absolute high tick of the Wednesday trading session---and it chopped lower from there during the Thursday session, with the 93.43 low tick coming minutes before 2 p.m. EST.  The index recovered a small amount from there, closing at 93.64---down 93 basis points from Wednesday's close.

Once again you should carefully note that the metals are being made to move independently of the the dollar index, because it's totally counterintuitive to see the gold price fall as the dollar index craters.  Yesterday wasn't the first time that happened, either.

The gold stocks struggled in the early going, but continued to chop higher as the trading day progressed---and the HUI closed up 0.94%.

The silver equities struggled a little harder, but finally broke into positive territory to stay about 2:45 p.m. in New York, as Nick Laird's Intraday Silver Sentiment Index closed up 0.68 percent.

The CME Daily Delivery Report showed that 57 gold and 67 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  There were no stand-out short/issuers or long/stoppers in gold.  But in silver, the two short/issuers were Jefferies with 47---and R.J. O'Brien with 20 contracts.  Canada's Scotiabank stopped 61 of them.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that February gold open interest dropped by the 368 contracts that were scheduled for delivery today---and the total o.i. is now down to only 842 contracts.  In silver, open interest for February increased by 8 contracts to 92.

There was another very decent deposit in GLD yesterday.  This time an authorized participant added 172,838 troy ounces.  Since the low in GLD on January 15, authorized participants have added 2.11 million troy ounces of gold---and that, dear reader, is a huge amount.  This trend can't continue forever.

Over in SLV, there were no reported changes as of 10:02 p.m. EST yesterday evening.  Since January 15, authorized participants have withdrawn 4.68 million troy ounces---and the question why this is occurring is still begging an answer.

While on the subject of SLV, I see that Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with the latest weekly activity over at iShares.com as of the close of business on Wednesday---and this is what he had to report.  "Analysis of the 04 February 2015 bar list, and comparison to the previous week's list:  1,013,089.3 troy ounces were added (all to Brinks London), no bars were removed or had serial number changes."

"The bars added were from the following refiners: Solar Applied Materials (0.5M oz), Kazzinc (0.3Moz), and 6 others."

"As of the time that the bar list was produced, it was overallocated 271.9 oz.  All daily changes are reflected on the bar list."

The U.S. Mint had a tiny sales report yesterday.  They sold 1,000 one-ounce 24K gold buffaloes---and that was all.

There was some decent in/out movement in gold over at the COMEX-approved depositories on Wednesday, as 62,304 troy ounces were reported received, but only 5,345 troy ounces were shipped out the door.  Once again there was virtually no movement in silver worth mentioning, as nothing was reported received---and only 6,141 troy ounces were shipped out.  This marked decline in silver activity over the last several weeks is something that Ted Butler may address in his weekly review to his paying subscribers tomorrow.

I'm only speculating here, but it's entirely possible that the precipitous decline in silver warehouse activity along with the monstrous decline in SLV stocks since December 1, 2014---may be events that are related in some way---and I await Monday's short interest report from the shortsqueeze.com Internet site with great interest.

Here's a chart that Nick Laird passed around last evening.  It shows gold imports and exports from Switzerland for all of 2014.

I have a decent number of stories today---and I hope you find a few that interest you, but do I have quite a number that are definitely worth your time.

 

¤ Critical Reads

RadioShack Files for Bankruptcy Protection

RadioShack Corp., the 94-year-old consumer-electronics chain, filed for bankruptcy with a plan to turn about half of its 4,000 stores into Sprint Corp. locations and close the rest.

The company said Thursday that it has an agreement to sell 1,500 to 2,400 of its locations to a unit of Standard General LP, its biggest shareholder. Standard General has a deal with wireless carrier Sprint to set up stores-within-stores at as many as 1,750 locations. The rest will be shuttered under a deal with a liquidator, Hilco Merchant Resources.

“These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders,” Chief Executive Officer Joe Magnacca said in a statement Thursday.

The Chapter 11 filing in Delaware underscores the dramatic changes U.S. retailing has undergone since online merchants and big-box stores began supplanting traditional brick-and-mortar chains. The Sprint deal is especially telling, as RadioShack was one of the first mass-market retailers of mobile phones.

No surprise to me.  This news item appeared on the Bloomberg website at 3:13 p.m. EST on Thursday afternoon---and the person who sent it to me through LinkedIn Pulse, didn't leave their name.

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Gallup CEO Fears He Might “Suddenly Disappear” for Questioning U.S. Jobs Data

Years of unending news stories on U.S. government programs of surveillance, rendition and torture have apparently chilled the speech of even top business executives in the United States.

Yesterday, Jim Clifton, the Chairman and CEO of Gallup, an iconic U.S. company dating back to 1935, told CNBC that he was worried he might “suddenly disappear” and not make it home that evening if he disputed the accuracy of what the U.S. government is reporting as unemployed Americans.

The CNBC interview came one day after Clifton had penned a gutsy opinion piece on Gallup’s web site, defiantly calling the government’s 5.6 percent unemployment figure “The Big Lie” in the article’s headline. His appearance on CNBC was apparently to walk back the “lie” part of the title and reframe the jobs data as just hopelessly deceptive.

This news item appeared on the wallstreetonparade.com Internet site yesterday---and I thank reader David Caron for passing it around yesterday.

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N.U. Post's Crudele: 'Yellen Should Be Fired'

New York Post columnist John Crudele doesn't exactly pull any punches when it comes to his view of the Federal Reserve chairwoman, as he says that "Janet Yellen should be fired. Ready, aim, fired," he writes.

And what are her transgressions? First, "she’s the chief manipulator of U.S. financial markets," Crudele says. That puts her in the same position as her predecessors Ben Bernanke and Alan Greenspan, he says.

"Bernanke should also have been fired. Greenspan should have been tarred and feathered for the way he gave in to political pressure and allowed the housing and financial markets to blow themselves into bubbles."

Second, Yellen "was lying" when she said last week that "things are going well" for the economy, Crudele says.  "There have been a slew of disappointing economic reports lately. Durable goods orders in December were abysmal. Retails sales sucked," he writes. Consumer spending dropped 0.3 percent in December.

This news item showed up on the moneynews.com Internet site at 6:20 a.m. EST yesterday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

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The Cowardly and Despicable American Presstitutes - Paul Craig Roberts

There is a brouhaha underway about an American journalist who told a story about being in a helicopter in a war zone. The helicopter was hit and had to land. Which war zone and when I don’t know. The US has created so many war zones that it is difficult to keep up with them all, and as you will see, I am not interested in the story for its own sake.

It turns out that the journalist has remembered incorrectly. He was in a helicopter in a war zone, but it wasn’t hit and didn’t have to land. The journalist has been accused of lying in order to make himself seem to be “a more seasoned war correspondent than he is.”

The journalist’s presstitute colleagues are all over him with accusations. He has even had to apologize to the troops. Which troops and why is unclear. The American requirement that everyone apologize for every word reminds me of the old Soviet practice, real or alleged by anti-communists, that required Soviet citizens to self-criticize.

This right-on-the-money commentary by Paul showed up on his website on Thursday sometime---and it's definitely worth reading.  South African reader B.V. sent it to me in the wee hours of this morning MST, which was mid-morning in South Africa.

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Jim Rickards: Take ECB news with a pinch of salt

Jim Rickards, Chief Global Strategist at West Shore Funds, says investors shouldn't panic about the ban of Greek government bonds as collateral for cash since the euro zone has made it clear it doesn't want a 'Grexit.'

This 3:43 minute video interviews is worth watching.  Jim also speaks about the dire financial situation in China as well.  This video was posted on the CNBC's website at 5:10 p.m. EST on Tuesday afternoon, but I had already filed yesterday's column by the time I received it from reader Harold Jacobsen.

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Greek and German finance ministers clash at debt relief talks

Greece’s radical Syriza government remained locked in a bitter standoff with its German paymasters, as finance minister Yanis Varoufakis issued a stark warning of the rise of nazism in his country if the eurozone fails to heed the democratic voice of Greek voters.

As Varoufakis completed the last leg of a whistle-stop round-Europe tour to seek support for Syriza’s plans to halt austerity and renegotiate the country’s debts, he told a tetchy press conference on Thursday in Berlin that Greece had a proud record in fighting Nazis, but ignoring the clear message from Greek electors could feed far-right forces.

“No one understands better than the people of this land how a severely depressed economy, combined with a ritual national humiliation and unending hopelessness, can hatch the serpent’s egg within its society. When I return home tonight, I will find a country where the third-largest party is not a neo-Nazi party, but a Nazi party,” he said, referring to the far-right Golden Dawn. “We need the people of Germany on our side.”

This news item was posted on theguardian.com website at 10:09 p.m. GMT last night---and doesn't quite jibe with the france24.com story posted below which was posted much earlier in the day Europe time.  The Guardian story is courtesy of South African reader B.V.

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ECB approves €60 billion in emergency funds for Greek banks

The European Central Bank has given the green light to make up to 60 billion euros ($68.5 billion) in emergency liquidity available to Greek banks, a source close to a national central bank told AFP on Thursday.

The day before, the ECB had effectively shut off Greek banks from a different channel of financing by saying it would no longer accept Greek sovereign bonds as collateral for loans in its normal refinancing operations.

These two paragraphs are all there is to this AFP story [filed from Frankfurt] that was posted on the france24.com Internet site at 3:46 p.m. Europe time on their Thursday afternoon---and it's the second contribution in a row from South African reader B.V.

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‘Greece won’t be blackmailed’: Banks get additional €10bn to counter ECB pressure

Banks in Greece have been given the go ahead to access an additional €10 billion in emergency funding from the Bank of Greece, according to a government official. This is a push-back from Athens demonstrating its intent to roll back austerity measures.

"Greece does not aim to blackmail anyone but will not be blackmailed either," the government official, cited by Reuters, said.

Emergency Liquidity Assistance funds will be sourced from the Greek Central Bank. Previously it was capped at €15 billion, and this has been raised to €25 billion.

The European Central Bank has stepped up pressure on Greece by suspending a waiver that had allowed it to swap its junk-rated debt for loans. This means Greece could run out of cash by the end of February.

This Russia Today news item appeared on their website at 10:53 a.m. Moscow time on their Thursday morning, which was 2:53 a.m. EST.  It's the first offering of the day from Roy Stephens.

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Greeks Spooked by Debt Clashes Put Cash Under Bathroom Tiles

Georgios Karavelas drives a taxi in Athens and for the past month has been a silent witness to what ordinary Greeks are doing with their cash.

One passenger, he said, told someone on his mobile phone that he’d withdrawn 25,000 euros from the bank, taken it home, worked loose a tile in the bathroom and stashed the money there. Another took the cash to his village and buried it in the garden. Yet another fashioned a small safe box in the air-conditioning unit on his balcony.

“I can’t fault these people,” said Karavelas, 37. “They were obviously people who had worked hard for their money, with families and jobs, not oligarchs.”

Withdrawals from Greek banks may have exceeded 15 billion euros ($17.2 billion) in the run-up to the elections that catapulted Alexis Tsipras and his anti-austerity Syriza party to power, including at least 11 billion euros in January, according to four bankers citing preliminary data. Tensions between the new government, which won on a platform of debt relief, and Greece’s creditors, including Germany, may keep up the pressure.

This Bloomberg article, filed from Athens, appeared on their Internet site at 4:01 p.m. Denver time yesterday afternoon---and I thank Dan Lazicki for sending it.

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Putin Invites Tsipras to Visit Russia

While Greek finance minister Yanis Varoufakis' comments that "we will never ask for financial assistance in Moscow," which notably does not deny acceptance of aid if offered, and Greek Minister of Energy Panagiotis Lafazanis adding that Athens opposes the embargo imposed on Moscow, "we have no disagreement with Russia and the Russian people," it is perhaps not surprising that, as Vedemosti reports, Russian President Vladimir Putin spoke by phone with the new Prime Minister of Greece Alexis Tsipras, congratulated him on taking office, and invited him to Russia.

The situation in Ukraine and other international issues, among them, “the South Stream and Turkish Stream pipeline projects, dominated a telephone call between Russian President Vladimir Putin and Greek Prime Minister Alexis Tsipras earlier on Thursday, the Kremlin announced.

Putin invited Tsipras to visit Moscow on May 9 when celebrations will take place, commemorating the peoples' victory over fascism. On his part, the Greek prime minister underlined the importance he attributes to the fight against Nazism, expressing his intention to accept the invitation.

This Zero Hedge offering appeared on their website at 10:45 a.m. EST on Thursday morning---and I thank reader M.A. for bringing it to our attention.

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Ukrainian hryvnia in free fall after Central Bank scraps currency support

The hryvnia lost 34 percent against the U.S. dollar after the head of the central bank signaled it can no longer support the currency with regular interventions and will allow greater fluctuations. The hyrvnia hit a historic low of 24.5 per 1 USD.

“Get used to market volatility," National Bank of Ukraine (NBU) Governor Valery Gontareva told reporters in Kiev on Thursday.

With foreign exchange reserves at only $7.5 billion, the central bank “is changing its approach to monetary policy, while strengthening its rigidity,” according to a statement published Thursday.

This currency-related story showed up on the Russia Today website at 11:52 a.m. Moscow time on their Thursday morning---and I thank Roy Stephens for finding it for us.

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Ukrainian parliament passes law allowing army deserters to be shot

Ukraine’s parliament has passed a law which authorizes commanding officers to use physical force against army defectors. It comes as the latest military draft has seen a lack of enthusiasm on the part of potential soldiers.

Ukraine’s parliament voted on Thursday with 260 MPs in favor - only 226 votes were needed to pass the law. The new article 22(1) added to the charter regulating service in the armed forces of Ukraine states that commanders “have the right to personally use physical force, special means, and weapons when in combat” against soldiers who commit “criminal acts.”

Under criminal acts the law lists “disobedience, resistance or threat to use force against the commander, voluntary abandonment of military positions and certain locations of military units in areas of combat missions.

An explanatory note to the document says that currently there are mass violations of military discipline, in particular, desertion from units and drinking alcohol, as well failure to execute commanders’ orders.

This very interesting, but depressing story found a home on the Russia Today website as well.  It was posted there at 7:44 p.m. Moscow time on their Thursday evening, which was 11:44 a.m. in New York.

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Russia warns U.S. arms to Kiev will cause 'colossal damage' to ties

Russia on Thursday warned the United States against sending weapons to Ukraine, saying such action would cause "colossal damage" to ties between the former Cold War foes.

Moscow is "seriously concerned" by discussions in the West about possible arms supplies to Ukraine which is battling a pro-Kremlin insurgency in the east, said foreign ministry spokesman Alexander Lukashevich, adding that any decision could "cause colossal damage to US-Russian relations".

This tiny 2-paragraph AFP new item appeared on the france24.com Internet site at 1:51 p.m. Europe time yesterday afternoon---and it's another contribution from reader B.V.

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Russia Deploys Nuclear ICBM Launchers on Combat Patrol

Perhaps it is a coincidence that a day before John Kerry's arrival in Kiev (a visit which "coincided" with a 35% devaluation of the local currency) where among other things the U.S. statesman discussed the possibility of official (as opposed to unofficial) deliveries of U.S. "lethal support" to the civil war torn and now hyperinflation country, that Russia decided to put its nuclear ICBMs on combat patrol missions in various Russian regions. Specifically, according to TASS, "About 700 units of military equipment, including launchers are deployed in the positioning areas in the Tver, Ivanovo, Kirov, Irkutsk regions, as well as in Altai Territory and the Mari El republic."

Topol is a ground-based mobile strategic intercontinental ballistic missile system. The Topol-M ICBM system belongs to the fifth generation of strategic missiles. The three-stage solid-propelled single warhead missile has a silo and mobile version. Yars is a solid-propelled mobile and silo-based intercontinental ballistic missile with multiple warhead.

This news item showed up on the Zero Hedge website at 12:56 p.m. EST yesterday afternoon---and it's from reader Dan Lazicki.

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Hollande, Merkel go to Moscow to discuss Ukraine without consulting U.S. – report

German Chancellor Angela Merkel and French President Francois Hollande did not consult Washington before deciding to visit Moscow to hold talks on the Ukrainian crisis, a source in the French government told AP.

The two leaders, who are part of the so-called ‘Normandy Four’ group along with Moscow and Kiev, decided on a trip on Wednesday night, an unnamed French government official said. Merkel and Hollande are due to arrive to the Russian capital on Friday, the next day after visiting Kiev.

“Together with Angela Merkel we have decided to take a new initiative,” Hollande told a news conference on Thursday.

Russian presidential spokesman Dmitry Peskov said that “the leaders of the three states will discuss what specifically the countries can do to contribute to speedy end of the civil war in the southeast of Ukraine, which has escalated in recent days and resulted in many casualties.”

This must read Zero Hedge piece showed up on their website at 11:11 p.m. Moscow time on their Thursday evening, which was 3:11 p.m. in New York.  I thank Roy Stephens for finding it for us.

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A divided Western front is playing towards Putin’s endgame

Since Russia’s annexation of Crimea last March, the European Union, Canada and the United States have sought to maintain a united front aimed at pressuring the Kremlin to reverse course in Ukraine.

Over those eleven months, Russian President Vladimir Putin has refused to blink, despite the widening range of economic sanctions aimed at Moscow as more and more evidence emerged that Russia was providing direct military aid to separatists fighting in the Donetsk and Lugansk region of southeastern Ukraine.

Now, with the pro-Russian rebels again on the advance in the east – and the Ukrainian economic free fall exceeding even Russia’s own economic troubles – there appear to be cracks in that Western unity, with European leaders seeking a peace that many in Ukraine might find difficult to accept. The United States, meanwhile, is considering arming the Ukrainian army in apparent anticipation of a longer and bloodier conflict.

German Chancellor Angela Merkel and French President François Hollande flew to Kiev on Thursday and will continue on to Moscow Friday for a meeting with Mr. Putin, hoping to get him to agree to a new peace plan that would reportedly include the deployment of United Nations peacekeepers in eastern Ukraine.

This article, filed from London, appeared on Canada's national newspaper The Globe and Mail's website at 8:04 p.m. EST yesterday evening---and it's worth your while as well.  It's the final offering of the day from Roy Stephens.

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CME Group to close most futures trading pits

Chalk up another victory of the machines over humans.

The parent company of the Chicago Board of Trade and other exchanges is ending most trading involving people on the floor who establish prices by flashing hand signals and shouting at each other.

CME Group said Wednesday it that it will close most of its futures trading pits in Chicago and New York by July 2.

The move comes as so-called "open outcry" futures trading has fallen to 1 percent of CME Group's futures volume. Most of the trading is now done electronically.

This AP news item, filed from Chicago at 8:30 p.m. EST on Tuesday evening, was picked up by the finance.yahoo.com Internet site---and it's another offering from reader B.V.

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Gold, Dollar Buck Trend to Shine Together

Gold’s run-up so far this year has put it among the best-performing assets globally. But it is fear, not glitter, that is behind the yellow metal’s appeal for investors.

As market jitters persist, thanks mainly to renewed economic uncertainty in the eurozone following the recent Greek elections, gold’s traditional role as a store of value in times of turbulence, rather than physical demand for the metal, has been more prominent.

That has given rise to an unusual trading pattern. Both gold and the U.S. dollar are on the rise, with the metal up 6.5%, and the greenback up 3.2 % against a basket of currencies in 2015.

“Risk aversion is pushing investors to buy gold, yen and dollars, all at the same time. It is a very strange phenomenon,” said Gnanasekar Thiagarajan, director of Mumbai-based Commtrendz Research.

This is a phenomena that I've already pointed out---and as you've seen this week, the gold price and the dollar can go down together as well.  But that has nothing to do with "risk aversion"---and everything to do with the fact that JPMorgan et al can do whatever they want in the COMEX futures market, as the buying and selling there dictates the prices for the precious metals regardless of what the currencies are doing.  I thank Ken Hurt for sending this Wall Street Journal article our way.

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Belgium Denies Plans to Repatriate Gold From the U.K.

Belgian newspaper Het Nieuwsblad was reporting on Wednesday Belgium will repatriate 200 tonnes of gold from the Bank of England (BoE). De Tijd is now stating the opposite, quoting the governor of the Belgian Central Bank (NBB) Luc Coene:

The repatriation from the UK is not true…. There are other and more effective ways to verify if the gold in London is really ours. We have an audit committee that inspects the Belgian gold in the U.K. regularly…. Repatriating would be more expansive with transport, storage and security costs.

One thing is for sure, the Belgians are nervous about their gold (227 tonnes) held abroad. In December 2014 Luc Coene admitted he was investigating to repatriate all Belgian gold reserves, on TV-network VTM Nieuws: "If one feels that in surrounding countries these decisions are taken, one knows that this question will be asked to us as well. We’re pro-active investigating all the elements, so when the question will be asked, we can answer it."

This interesting gold story by Koos Jansen appeared on the Singapore website bullionstar.com yesterday sometime---and it's the final offering of the day from Dan Lazicki, who sent it our way early Thursday morning EST.

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Germany's gold repatriation campaign celebrated in long profile by Bloomberg News

Almost half of Germany’s gold is stored in vaults under the streets of Manhattan. Or is it?

Peter Boehringer hates the word “conspiracy.” It implies something crazy, and if you spend even a little time with the 45-year-old German, it becomes clear he’s driven by a desire for order. On a recent morning in Munich, he’s dressed in a cobalt blue shirt that matches his blue tie and blue eyes. His black hair is cropped close above his receded hairline. In his gray Volkswagen minivan, the cup holder contains two identical water bottles, each filled to the same level. At the end of a daylong interview, for which Boehringer has arranged an hour-by-hour itinerary, he sends a follow-up e-mail with a numbered summation of points he’s made. No. 2 says that the crusade he’s been waging for the last three years is simply about transparency. “Questions,” he writes, “by definition cannot be ‘conspiracy theories.’ ”

Boehringer is a gold bug, a member of the impassioned tribe of investors and academics who distrust central banks and paper money, unless the governments that print it will exchange the cash for gold or silver from their vaults. He has an asset management firm that invests his own money and that of clients in gold, silver, and mining stocks, and he’s a founder of the nonprofit German Precious Metal Society, which educates the public about “the craziness of unbacked monetary systems,” he says. In short, Boehringer is worried that the global economy is built on a fiction of currencies that aren’t backed by precious metals. Which is why he set out to make sure the gold that Germany and other nations say they have actually exists.

This absolute must read essay appeared on the Bloomberg Internet site yesterday---and I found it embedded in a GATA release.

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Russia stashes 55 tonnes of gold in Switzerland

Roughly a third of Switzerland's imports came from the UK, followed by the US with 211.5 tonnes. As expected India was the top importer with 471.2 tonnes, followed by Hong Kong and China which combined topped the subcontinent with 590 tonnes. Singapore was third with 134 tonnes.

The flows of Russian gold raises questions (if not eyebrows): Russia exported 58.3 tonnes to Switzerland, but only 2.6 tonnes made its way back into the country.

The 55 tonnes of Russian gold that stayed behind is worth some $2.3 billion. Goldreporter asks the question: "Are they stored in the high security vaults in the Swiss Massif Central?"

Russia is the world's second largest producer of gold behind China, with an estimated 272 tonnes mined last year – an increase of 9% from the year before.

This very worthwhile story appeared on the mining.com Internet site on Tuesday sometime---and my thanks go out to reader M.A. for sending it along.

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Chinese herdsman stumbles onto a 17-pound gold nugget

Imagine it! You’re walking along and nearly trip over a 17-pound (7.85 kilograms) gold nugget. File that under a most improbable gold bonanza.

But that’s exactly how it played out for one lucky sun-of-a-gun farmer in China.

Berek Sawut, a Kazak herdsman from Qinghe County in Altay Prefecture told Chinese news agency Xinhua that he found the giant nugget “practically lying on bare ground.” The area is in China’s far western Xinjiang Uygur region.

That gold nugget, assuming it’s at least 80% pure, would be worth 1.6 million yuan ($255,313 U.S. dollars), says Xinhua, which also points out that a 1.84 kilogram nugget was discovered in the region in 2010. Gold for April delivery was trading at $1,261 an ounce on Thursday.

This very interesting story appeared on the marketwatch.com Internet site at 10:45 a.m. EST Thursday morning---and I thank Casey Research's own John Grandits for bringing it to my attention---and now to yours.  The photo is worth the trip.

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¤ The Funnies

The first two photos below are of a male and female Gambel's quail---and I found these rather shy birds wandering around the Desert Botanical Garden in Phoenix on the same day that I took the other wildlife photos I've been posting the last few days.  I first assumed they were California quail, as that's the only quail I know, but the on-site ornithologist set me straight when I asked him.

The other thing of note about these photos is the composition of the desert floor.  When one hears the word desert, one assumes lots of sand.  That's certainly not the case in Arizona, as these photos show---and a walk in the desert in this state is definitely not like a walk in the woods!  I'll have more on that some other day.

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¤ The Wrap

Leaving aside my speculation that JPMorgan has used the depressed price of silver over the past four years to amass the largest physical silver stockpile in history (which I still believe), there is a more compelling explanation for why the concentrated short position in COMEX silver has remained the largest (in terms of annual production) of all commodities, no matter what the price may be.  The real reason for the continued existence of the concentrated short position in COMEX silver is because it can’t be dissolved without fireworks to the upside. In simple terms, the big shorts are stuck---and have been stuck for many years, even as they continued to rake in profits.

That doesn’t mean that these big 8 shorts won’t engineer a sharp sell-off in which they buy back and cover a good number of newly shorted contracts; based upon past experience, that has to be the odds on favorite short term outcome. But John is asking, in essence, the most important question, namely, why do these 8 big traders remain so heavily short? The answer is that they have no choice. Forget about them buying to the upside causing silver prices to explode, even if they simply refrained from adding new silver shorts on price rallies, the price would explode.

That’s why I have been so repetitive over the years, whenever silver prices have declined and the 8 big shorts have bought back a good number of their short positions, that all that matters on the next rally is whether the big shorts then add to their concentrated short position or not. On more occasions than I care to remember, it always came down to the price would get capped if they did add shorts or explode if they didn’t. Unfortunately, these crooks, led by JPMorgan, always did add shorts and succeeded in capping the price and prolonging the manipulation. And, as I have remarked previously, the additional concentrated short selling has occurred on lower and feebler rallies. This last burst of concentrated short selling occurred below the average primary cost of production, emphasizing the uneconomic and manipulative nature of the selling. - Silver analyst Ted Butler: 04 February 2015

Wednesday was another down day for both gold and silver, even though the dollar index did another face plant.  As I keep saying, it matter not what the currencies do, it only matters what the Big 8 short holders are doing in the COMEX futures market---as Ted Butler makes all too clear in his quote above.

That's all there is---there ain't no more.

Here are the 6-month gold and silver charts updated with Thursday's price and volume data.

And as I write this paragraph, the London open is about twenty minutes away.  With the exception of silver of course, the other three precious metals are up a hair on the day---but all four are trading without much direction.  Net gold volume is microscopic at around 12,200 contracts---and silver's net volume is 2,700 contracts, so nothing should be read into the current price action.  The dollar index isn't doing much either---and is up about 6 basis points at the moment.

Today we get two reports---the weekly Commitment of Traders Report, along with the companion Bank Participation Report.  Both will be ugly, even if there is an improvement in the COT Report during the last reporting week, which ended at the close of COMEX trading on Tuesday.

Can we move higher in price from here regardless of the monstrously large short positions in both silver and gold?  Sure, but as the speculators and technical funds go long, it's always the Commercials who will be going short against them, thus driving the cumulative short positions in both metals to even more obscene extremes.

As Ted says so clearly in the quote above, the 'Big 8' have no choice, because if they weren't there as sellers of last resort, the prices of all four precious metals would explode to the outer edges of the known universe in very short order.

And as I send today's column out the door at 5:15 a.m. EST, I see that there still isn't much going from a price perspective in any of the four precious metals.  Net gold volume is barely over 17,000 contracts---and silver's net volume is at the 4,000 contract mark. The dollar index is back to unchanged on the day.  Nothing to see here.

Before heading off to bed, I've got a Casey Research offering that might interest those of you who have VERY deep pockets.

Casey Research is opening Casey's Club to new members through February 20. This is our annual opening and we won’t likely open it again in 2015.

All of our markets have taken a beating of late, but that’s not the time to back away.  On the contrary, it means many incredible companies are extremely undervalued and selling for a fraction of their worth. This is a great time to buy into the right junior resource stocks at bargain prices---and we’re opening Casey’s Club with a special report that outlines our top 11 undervalued companies to get started with. Membership in Casey’s Club gives members access to all the sectors we cover and they’ll get updates on these 11 companies, as well as others, as the markets do begin to recover and prices go up.

It costs absolutely nothing to check this out, dear reader, which you can do so by clicking here.

Today is Friday---and I have no idea what may happen in the precious metal market for the remainder of the day.  We got a surprise to the upside last Friday---and hoping for a repeat may be wishful thinking this time around, but you just never know.

But whatever does happen, either up or down in price, will have nothing whatsoever to do with free markets, as it will just be more paper games on the COMEX.

That's all I have for today.  I hope you have a good 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