Gold & Silver Daily

¤ Yesterday In Gold & Silver

Despite the fact that the dollar index got smoked in Far East trading for most of their Wednesday session, the gold price didn't react much to that fact, or wasn't allowed to---you pick.  The gold price continued to chop a few dollars around either side of unchanged until shortly before 1 p.m. in London trading.  The HFT boyz showed up ten minutes after the COMEX open---and then finished the job once the London p.m. gold "fix" was in, with the low coming just minutes before the London close, which was 11:00 a.m. EDT.  The subsequent rally didn't get far---and after the 1:30 p.m. COMEX close, it traded flat for the remainder of the Wednesday session.

The high and low ticks were reported by the CME Group as $1,204.40 and $1,185.00 in the June contract.

Gold finished the Wednesday trading day at $1,186.80 spot, down and even 15 dollars from Tuesday's close.  Net volume was pretty decent at 139,000 contracts.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  Midnight EDT/noon in Hong Kong is the vertical gray line at the 22:00 MDT mark.  You can see that the price/volume action that really mattered occurred between 6:30 and 9:00 a.m. Mountain Daylight time on this chart, with the big volume spike happening once the London p.m. fix was in and the HFT boyz spun their algorithms.  The rest really doesn't matter.  Don't forget to add two hours for EDT---and the 'click to enlarge' feature is a must.

With only one exception, the silver chart was a carbon copy of the gold chart---and the HFT boyz really smacked silver at the gold fix.  The low in silver came minutes before 10:30 a.m. in New York.  Gold's low came about thirty minutes later.

The high and low were reported as $16.075 and $15.655 in the May contract.

Silver finished the Wednesday trading session at $15.67 spot, down another 22 cents.  Net volume wasn't overly heavy, which I found surprising, as it was only  26,000 contracts, a thousand contracts more than on Tuesday.

Platinum's high came shortly after 8 a.m. in Hong Kong on their Wednesday morning---and it chopped ten bucks lower from there until the real selling began shortly before 2 p.m. Zurich time---and the same time as gold and silver got hit in London.  The HFT boyz peeled another ten bucks off the price going into the COMEX close---and it  traded ruler flat from here.  Platinum closed at $1,129 spot, down 19 bucks from Tuesday's close.

Ditto for palladium, except the selling in that metal was pretty much done by 1 p.m. EDT---and it traded flat in the 5:15 p.m. close of electronic trading as well.  Palladium got smoked for 23 dollars---and closed at $753 spot.

The dollar index closed late on Tuesday afternoon in New York at 97.99---and made it as high as 98.10 in the early going in Far East trading on their Wednesday morning.  It began to slide from there, with the 97.43 low coming just after 10:15 a.m. BST in London.  The subsequent rally made it back to within a basis point or two of unchanged by 11:00 a.m. EDT---and it chopped sideways from there into the close.  The index finished the day at 98.06---up 7 basis points.

As you can tell, there was absolute no correlation between the what the currencies were doing and what was going on in the precious metal market.

The gold stocks opened down a bit---and kept right on going, with the lows coming just before 2 p.m. EDT.  After that they didn't do much.  The HUI got hit for 3.63 percent.

It was just about as bad for the silver equities.  They opened down as well---and crashed to their low ticks minutes after 10:30 a.m. EDT.  They barely moved off their lows after that, as Nick Laird's Intraday Silver Sentiment Index closed down 3.06 percent.

The CME Daily Delivery Report showed that zero gold and 1 lonely silver contract was posted for delivery within the COMEX-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in April declined by 54 contracts---and that leaves 471 contracts still open.  Not surprisingly, the silver o.i. fell by the 150 contracts posted for delivery yesterday---and that will be delivered today.  There are 23 contracts still open in April.

There were no reported changes in GLD---and as of 9:32 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

Over at Switzerland's Zürcher Kantonalbank for the week ending Friday, April 17---they reported increases in both their gold and silver ETFs for a change.  In gold they added 15,832 troy ounces---and in silver it was 68,360 troy ounces.

There was another sales report from the U.S. Mint yesterday.  They sold 3,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 30,000 silver eagles.

It was another very busy day in gold over at the COMEX-approved depositories on Tuesday, as 141,031 troy ounces were reported received---and only 100 troy ounces were shipped out.  Most of the gold deposited disappeared into the vaults of HSBC USA.  The link to that activity is here.

Silver activity was also very decent, as 631,802 troy ounces were received---and 555,071 were shipped out.  A bit over half the silver that was shipped out came out of JPMorgan's vault.  The link to that action is here.

Over at the COMEX-approved gold depositories in Hong Kong on Tuesday, Brink's, Inc. reported receiving 8,319 kilobars, but they also shipped out a chunky 14,759 kilobars.  That's big movement, dear reader.  The link to that activity in troy ounces is here.

I have the usual number of stories for a weekday column---and I'll happily leave the final edit up to you.


¤ Critical Reads

McDonalds Reports Disturbing Numbers, Misses Across The Board; Stock Jumps

Moments ago McDonalds reported its latest sales numbers which were basically atrocious, worse than usual, and missed across the board. From BBG:


At this point the operational challenges facing the company are clearly unfixable in its current iteration which is broken beyond merely a CEO switch, and not even a "buy 1 Big Mac, get 3 Big Macs (and Joseph A Banc suits) free" strategy will fix the ailing fast food maker, whose secular collapse is best captured by the charts below.

This Zero Hedge article appeared on their Internet site at 8:42 a.m. EDT on Wednesday morning---and I thank reader M.A. for today's first story.


Flash crash arrest lays bare regulatory lapses at all levels -- starting with CME Group

CME Group Inc. concluded within four days of the 2010 flash crash that algorithmic trading on futures exchanges didn't exacerbate losses in the market.

When Washington regulators did a five-month autopsy in 2010 of the plunge that briefly erased almost $1 trillion from U.S. stock prices, they didn't even consider whether it was caused by individuals manipulating the market with fake orders.

Their analysis was upended Tuesday with the arrest of Navinder Singh Sarao -- a U.K.-based trader accused by U.S. authorities of abusive algorithmic trading dating back to 2009. Even that action was spurred not by regulators' own analysis but by that of a whistle-blower who studied the crash, according to Shayne Stevenson, a Seattle lawyer representing the person who reported the conduct.

Regulators were aware of Sarao's trading behavior as early as 2009, when officials at CME -- which runs the exchange where Sarao allegedly placed his problematic trades -- spotted him placing and then canceling large numbers of orders, and warned him against placing deceitful trades, according to an FBI affidavit. Sarao continued to manipulate markets through March 2014, the FBI said.

"How this continued for six years when the CME appeared to know about, it kind of boggles my mind," Dave Lauer, president of Kor Group, a lobbying and research firm, said by phone. "This is about as simple and easy as you can get, and it took them this long to do anything about it."

This is the same CME Group that's aiding and abetting JPMorgan et al in their precious metal price management scheme, particularly in silver.  This must read Bloomberg story showed up on their website at 1:24 p.m. EDT yesterday afternoon---and I found it in a GATA release.


JPMorgan Chase Bans Storage of Cash in its Safety Deposit Boxes

Some JPMorgan Chase customers are receiving letters informing them that the bank will no longer allow cash to be stored in safety deposit boxes.

The content of a post over on the Collectors Universe message board suggests that we may be about to see a resurgence of the old fashioned method of stuffing bank notes under the mattress.

My mother has a SDB at a Chase branch with one of my siblings as co-signers. Last week they got a letter outlining a number of changes to the lease agreement, including this:

“Contents of the box: You agree not to store any cash or coins other than those found to have a collectible value.”

Another change is that signatures will no longer be accepted to access the box. The next time they go in they have to bring two forms of ID and they will be issued a four-digit pin number that will be used to access the box then and in the future.

The letter, entitled “Updated Safe Deposit Box Lease Agreement,” was sent out to customers at the beginning of the month.

Well, dear reader, the reason that I'm posting this story is because TD/Canada Trust here in Edmonton just advised me of the same thing, so take this as sign of things to come.  This news item appeared on the Internet site on Wednesday sometime---and I thank Brad Robertson for sharing it with us.


Patriot Act extension bill introduced by Senator McConnell

Senate Majority Leader Mitch McConnell,  introduced a bill Tuesday to extend the controversial Patriot Act and its surveillance provisions until 2020.

The extension would allow the National Security Agency to continue to collect data of millions on U.S. phone records daily. The NSA does so under the authority of Section 215, which allows for secret court orders to collect "tangible things" that could be used by the government in investigations.

The Patriot Act was enacted after the September 11 attacks to combat terrorism. McConnell used a Senate rule that will take the bill's extension straight to the floor for voting, a move that would bypass traditional committee vetting process.

Section 215 expires on June 1. The NSA's mass collection program was revealed by former contractor Edward Snowden, sparking a debate about privacy, security and the reach of government surveillance.

This UPI news item was posted on their Internet site at 9:34 a.m. EDT yesterday morning---and it's courtesy of Roy Stephens.


Securing Your Assets When Financial Privacy Is Dead

Daily Bell: Hi, Nick. It’s a pleasure to have another opportunity to speak with you. Last time we interviewed you, you dug into the U.S. government’s new FATCA rules and how they will impact Americans who invest outside the country. At, you often deal with the broad topic of privacy. Do you truly believe that Western governments have embarked on a coordinated attack on the private lives of their citizens?

Nick Giambruno: Not only have they embarked, but they have succeeded in killing off financial privacy. But before we go into details of why I say that, it’s important to identify the countries that are and are not responsible for this push, as it gives a clue to the motive. You never hear of financially sound countries, like Switzerland, Singapore, or Hong Kong advocating privacy-killing measures like FATCA. You never hear their governments denouncing the supposed “danger” of tax havens. It’s only the bankrupt states drowning in debt—like the U.S., France, and the U.K.—that have become hostile to privacy. The hostiles have won. Practically speaking, financial privacy is dead.

Given what has happened, it’s only prudent to assume that sooner or later all the details of your financial life will come to rest in a government computer—if they’re not sitting there already. You should plan accordingly. We live in a world where pretty much every penny you earn, save, and spend leaves a permanent record somewhere, and that can be retrieved for scrutiny by government employees at any time.

This interview appeared on the Internet site yesterday---and I thank senior editor Nick Giambruno for passing it around.


Deutsche Bank sets aside €1.5 billion as Libor settlement looms

Deutsche Bank will take a litigation charge of "approximately €1.5 billion," it said on Wednesday as the German lender nears settlement of claims that it tried to manipulate interbank lending rates.

A resolution of the long-running saga could come as early as Thursday, and the banks total fine is likely to be more than €2 billion, according to people familiar with the situation.

That total would represent the largest penalty meted out so far in connection with the scandal over the manipulation of the London interbank offered rate (Libor) and other interbank borrowing rates.

The above three paragraphs from this Financial Times story from Wednesday are all that were posted in the clear in this GATA release from yesterday---and I thank Chris Powell for posting it.


The Swiss Franc Is Plunging After Swiss National Bank Comments

As Bloomberg reports, Swiss National Bank says its reduced the group of sight deposit account holders that are exempt from negative rates.

Says negative rates to apply to sight deposit accounts held at SNB by enterprises associated with federal govt, including pension fund PUBLICA.

Accounts will have minimum exemption threshold of CHF10m, to which negative interest does not apply.

Accounts of cantons of Geneva and Zurich, City of Zurich to be wound up---and account of SNB pension fund will also be subject to negative rates.

This Zero Hedge article is definitely worth your while.  It appeared on their website at 8:33 a.m. EDT on Wednesday morning---and it's another offering from reader M.A.  There was also a Reuters story on this posted at the Internet site yesterday---and it's headlined "Swiss central bank reduces exemptions from negative interest rates".


Ukraine, in snub to Moscow, to adopt British war-time symbol, ditch Soviet war name

Ukraine, in a break with tradition that is certain to rile Moscow, is ditching the Soviet name for World War Two and aims to adopt the poppy, a mainly British wartime symbol, to mark the 70th anniversary of the victory over Nazi Germany.

The moves, signaled by Prime Minister Arseny Yatseniuk on Wednesday, marked an attempt by Kiev to distance itself from Moscow's Soviet-style celebrations, planned for May 9, as the conflict with Russian-backed separatists in eastern Ukraine drags on.

In another break with the Soviet past, Kiev will align its calendar with that of its European allies by adding for the first time May 8 - known in the West as Victory in Europe Day - as a national holiday.

A decree signed by President Petro Poroshenko fixed May 8 as a day for reconciliation between those Ukrainians who fought only the Nazis with those who, after the war, went on to fight Soviet rule also.

My goodness sakes alive, dear reader, how petty/childish can one get?  Of course sociopaths are like that---and I know quite a few.  So do you if you know the checklist for them.  This Reuters article, filed from Kiev, put in an appearance on the Internet site around 7 a.m. EDT yesterday morning---and I thank Jim Skinner for passing it around.


U.S. uses Ukraine crisis to derail Russia-Germany partnership – Lavrov

Washington’s strategy is to sow discord throughout the world to keep itself in the loop in every region, Russian Foreign Minister Sergey Lavrov told Russian media. The Ukrainian crisis was initiated to prevent an alliance between Russia and Germany.

“Strategically [the U.S.] don’t want to allow a situation in which important regions of the world live and prosper without them, without the Americans. That is why it is important for them to keep people dependent of them,” he said.

The assessment was voiced by Lavrov during a two-hour marathon Q&A session with three Russian radio stations: Echo of Moscow, Moscow Speaks and Sputnik Radio. They were represented by their respective chiefs, Aleksey Venedictov, Sergey Dorenko and Margarita Simonyan, who also heads Russia Today.

The Ukrainian crisis is used by the U.S. to derail Russia’s partnership with the E.U. and particularly Germany, Lavrov stressed.

This right-on-the-money Russia Today news item, which is definitely worth reading, showed up on their Internet site at 3:05 p.m. Moscow time on their Wednesday afternoon, which was 8:05 a.m. EDT in Washington.  It is, of course, courtesy of Roy Stephens.


Washington prepares for diplomatic war of attrition with Russia

The U.S. reportedly expects that the ongoing confrontation with Russia would continue until at least 2024 and involve many directions. Washington wants to rally support of its European allies to continue mounting pressure on Moscow.

The expected diplomatic and economic war of attrition is being outlined in a Russia policy review currently prepared by Celeste Wallander, special assistant to President Barack Obama and senior director for Russia and Eurasia on the National Security Council, reports Italian newspaper La Stampa. The publication said it learned details of the upcoming policy change from a preview that Washington sent to the Italian government to coordinate the future effort.

U.S. diplomats say Russia changed the cooperative stance it assumed after the collapse of the Soviet Union and is now using force to defend its national interests, the paper said. The change is attributed to the personality of Russian President Vladimir Putin, who, Washington expects, will remain in power until at least 2024.

This is the second story in a row from the Russia Today Internet site.  This one appeared there at 7:26 a.m. Moscow time on their Wednesday morning, which was 26 minutes after midnight in Washington.  It's also courtesy of Roy Stephens.


E.U. Effort to Punish Gazprom by Retroactive Antitrust Case Absurd – Expert

Ben Aris, editor in chief of Business New Europe magazine, says that the European Union's decision to serve Gazprom with a retroactive an anti-monopoly case is a foolish thing to do, adding that it seems to be a politically motivated decision.

Speaking to Radio Sputnik on Wednesday, Aris explained that while Gazprom's network of fixed pipelines makes it a natural monopoly, and that "from a business point of view, if you introduce new regulations, you can't turn around and implement them retroactively on contracts that were signed in compliance with existing regulations."

Aris noted that even if Gazprom "may have been charging economic rent for some of the gas deliveries…those deals were cut under existing regulations and European countries signed them, agreeing to the prices."

The expert explained that while "it's normal for governments to want to regulate natural monopolies…this should be done at the level of an intergovernmental agreement, rather than introducing legislation and then applying it retroactively."

This very interesting article put in an appearance on the Internet site at 8:05 p.m. Moscow time yesterday evening---and it's also courtesy of Roy Stephens.


Putin, Hollande to discuss Ukraine, Middle East, Mistrals in Yerevan

Russian presidential aide Yuri Ushakov has confirmed that Russian President Vladimir Putin and French President Francois Hollande will meet during a visit to Armenia’s capital Yerevan on April 24. Ukraine will be one of the main themes in focus.

Also, presidents may discuss the situation in the Middle East and the delivery of Mistral amphibious assault ships to Russia.

"I proceed from the assumption that the theme of Mistrals may be raised during the talks in Yerevan. There are quite a few other issues for discussion, Ukraine in the first place," Ushakov said.

"It is very important for all parties to step up the implementation of the Minsk Accords," he said.

This news story, filed from Moscow yesterday, showed up on the Internet site at 4:15 p.m. local time---and once again I thank Roy Stephens for finding it for us.  It's worth reading.


Russia Says No to One-World Government

Victor Olevich: Almost a quarter century has passed since the end of the Cold War. Yet, both Russia and the West once again find themselves at the precipice of a new Cold War. Why did Washington choose to pursue an aggressive foreign policy towards Moscow after the Soviet Union dissolved in 1991? Could these developments have been prevented?

William Lind: The Washington establishment, which is bipartisan, thought that now we could rule the world. It could dictate to everyone and it could force its ideology, which is sometimes called globalism or liberal democracy, but is in fact the soft totalitarianism of Brave New World, on everyone in the world. If necessary, with military force. This is the classic hubris that has destroyed one great power after another. There is nothing new about it.  

Victor Olevich:  Why has Washington chosen Ukraine as a battleground in its new Cold War against Russia?

William Lind: Russia under President Putin represents the state system and the way states normally act within the state system, based on their interests. The ideology of the Washington establishment says that is not how the world is going to work anymore.  It is instead going to be essentially a one world government based in Washington. This ideology includes such concepts as the feminist definition of women’s rights, devaluation of all religions, so called gay rights, and the belief that this must be universal.  Russia is saying no to this.  It is saying that it still believes in the state system and is going to pursue its own interests on the world stage.  So when Russia asserted its interests in the face of Ukraine threatening to join NATO, then Washington reacted very strongly.

This is the most important non-gold related commentary in today's column---and if you want to understand the world's power structure as it exists today, then it's definitely a must read.  It appeared on the Internet site early Wednesday afternoon Moscow time---and it's also courtesy of Roy Stephens.


Morgan Stanley remains bearish on Gold for next 2 years

Greece’s uncertain future in the eurozone, global quantitative easing, loose monetary policies and continued demand out of Asia will all provide much needed support for the gold market, but these factors might not be enough to create another bull market, said Morgan Stanley in a snippet.

Analysts at Morgan Stanley expect prices to fall over the next two years as investors leave the marketplace.

“Our Global Cross Asset team highlight in their report that negative rates will continue to drive flow into USD credit, supporting both the house view of ongoing USD strength and our unchanged generally subdued gold price outlook,” analysts added.

This is the sort of drivel that passes for main stream thinking in the gold market---and I would be prepared to bet some serious coin that they are one of the Big 8 traders in the COMEX futures market that's short precious metals.  It was posted on the Internet site at 9:10 a.m. BST on Tuesday---and I found it on the Sharps Pixley website in the wee hours of yesterday morning.  I had it in lots of time for yesterday's column, but thought I'd save it for today.  Don't believe a word of it.


Chilean regulator seeks new sanctions against Barrick's Pascua-Lama

Chile's environmental regulator SMA said on Wednesday it will seek new sanctions against Barrick Gold Corp's massive Pascua-Lama gold and silver project, complicating the possibility that the suspended mine might resume construction.

The regulator already fined Barrick $16 million in May 2013 for not complying with some of the country's environmental requirements at Pascua-Lama, which was put on hold indefinitely in October 2013.

Inspections that took place between 2013 and 2015, some of which were scheduled and others triggered by complaints from the local community, had revealed 10 new infractions, the SMA said.

This short Reuters article put in an appearance on their website at 5:39 p.m. EDT yesterday---and it's another gold-related story I found on the Internet site.


No Such Thing As a Sure Thing—But Sometimes It’s Close: Louis James

In the investment world, there’s no such thing as a sure thing, and if anyone tells you they have such an investment, you should run the other way. Fast. But sometimes, the odds are so clearly stacked in one direction that it comes pretty close.

How can one be so sure? Due diligence, of course; the devil is in the details—and so is the profit.

It’s impossible to illustrate this without tooting my own horn a bit, so please bear with me on that. The point of the story is critical to investments in all sectors and should help you with your own.

My sector—my specialty—is mining. I’ve been kicking rocks around the world for more than a decade now, learning geology and engineering and metallurgy from world-class experts in their fields. But the point is to make money, not just to figure out nature’s geological puzzles, so I’ve also immersed myself in the world of legendary investors, learning all I can from their successes and failures.

The result is that I now have an encyclopedia of mineral exploration and exploitation projects in my head, as well as experience with thousands of companies in the field—and the outcomes of their efforts. This enables me to very quickly sort the wheat from the chaff.

This commentary by Casey Research's own Louis James appeared on the CR website yesterday sometime---and it's worth reading.


China’s Stealth Gold Reserves to Quadruple as IMF Seek Answers

Enter the Dragon.

China’s push to challenge U.S. dominance as the global economic superpower and to challenge the dollar as a global reserve currency involves gold – “a lot of gold.”

China may soon make public that it has quietly accumulated a massive hoard of gold in recent years. This was done in order to bolster their bid to have the yuan included in the basket of currencies that make up the IMF’s Special Drawing Rights (SDRs) according to an article by Bloomberg.

This is something Jim Rickards, ourselves and many analysts in the gold sector have said would happen for some time. The People’s Bank of China’s (PBOC) quiet ongoing accumulation of gold is something we frequently cover as we believe it is an important demand factor in the market that is largely ignored by most analysts and in most coverage of the gold market.

Everything in this commentary by Mark has already been posted in my column over the last couple of days, so there's nothing really new here.  But Mark looks at the stories through different eyes---and for that reason, his commentary on them is worth you while.  It was posted on the Internet site yesterday.


Downwards price manipulation of gold to Asian buyers’ big advantage -- Julian Phillips

It is felt by many that the gold markets are manipulated. The direction of this manipulation is downwards, or just to hold the gold price at current levels.  Certainly it appears that the banking system in the developed world is getting a big advantage in this. On the other side we have a most extraordinary picture. Chinese and Indian demand alone has in the last two years exceeded newly mined gold supplies. That’s around 3,300 tonnes. And Asia is getting it all, at prices down 37.5% from its peak level. Doesn’t this strike you as odd?

Demand such there has never been seen before emanating out of Asia, is not driving up prices? Instead they are getting all this gold at a deep discount? Who’s really getting the big advantage? Why should Asia want to see higher prices? When you can get the entire available stock that comes to the market at these prices, why chase prices?

As it is, more and more mines in South Africa and elsewhere in the world are being taken over by the Chinese. The production of these mines goes straight to China and not through the London and New York markets. It means the physical volumes of gold going through London and New York are shrinking but still enough to allow these markets to keep prices low.

This brief commentary by Julian appeared on Lawrie Williams' website yesterday---and it's certainly worth reading.


BIS president in 1981: We've got to start rigging the gold market

"Regulating the gold price in the free market" was recommended to central banks by the president of the Bank for International Settlements," Jelle Zijlstra, in a speech at International Monetary Fund headquarters in Washington in September 1981.

The speech, located this week by gold researcher and GATA consultant Ronan Manly, was given as a lecture memorializing the former managing director of the IMF, Per Jacobsson.

Those who follow GATA may recall that Zijlstra, who was president of the Netherlands Central Bank simultaneously with his holding office at the BIS, wrote in his memoirs in 1992 that the price of gold long had been held down by central banks at the behest of the United States, which sought to minimize competition for the dollar as the international reserve currency:

In his speech at the IMF in 1981, Ziljstra said: "I feel that it is necessary for us, within the Group of Ten and Switzerland, to consider ways to regulate the price of gold, admittedly within fairly broad limits, so as to create conditions permitting gold sales and purchases between central banks as an instrument for a more rational management and deployment of their reserves."

Ziljstra added: "On the occasion of the annual meeting of the IMF in Belgrade in 1979 this was brought up, but regrettably, insufficient agreement could be reached to make even a modest start with regulating the gold price in the free market. It is my conviction that relatively small-scale interventions, though not forestalling the subsequent explosion in the gold price, would at least have reduced it to more manageable proportions. Now that the turbulent emotions seem to have quieted down, we would be wise to reflect anew and without prejudice on these subjects."

This absolute must read GATA release appeared on their website yesterday.



¤ The Funnies

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The Company’s primary focus is on production planning for its high-grade Lamaque South project. The Lamaque South property is divided into three clusters, the North, South and West cluster. The primary targets are the high-grade Parallel Zone in the North Cluster and the Triangle Zone in the South Cluster. The acquired Sigma Mill, located 1 kilometer from the Parallel Zone and 3 kilometers from the Triangle Zone, is a fully-permitted, 2,200 ton per day mill and tailings facility. The Sigma-Lamaque Mill and Mining Complex include the historic Sigma and Lamaque Mines which operated for 75 and 52 years respectively and produced more than 9 million ounces of gold in total. Please visit our website for more information.


¤ The Wrap

[Last] Wednesday, I commented that the COMEX is artificially setting the price of silver and gold by means of a purely private betting game (aka bucket shop) comprised exclusively of speculators with no real producer or consumer participation. I attempted to prove this by pointing out that the Managed Money category accounts for 90% of contract position change on both price declines and increases. Since Managed Money traders are defined by the CFTC and the exchange as being pure speculators (as opposed to legitimate hedgers) there can be little doubt that they are just that – speculators. And the same can be said of the financial institutions trading against the managed money traders; since no legitimate producers (miners) or users are involved in the game, the commercial traders are also nothing more than speculators.

I hope you recognize that the 90% figure of all positioning is a very conservative estimate on my part, when it comes to typical managed money participation. In fact, the percentage is, at times, much greater than 100%. In recapping last week’s COT Report and compared to their commercial counterparties, the Managed Money traders in gold accounted for 160% of commercial positioning (7,600 contracts vs. 4,700 commercial contracts) and in silver, the managed money traders accounted for 130% of commercial positioning (8,600 contracts vs. 6,600 commercial net contracts). I’d like to see someone from the CFTC or the CME Group try to explain how this wasn’t proof of manipulation on its face, but neither appear to be forthcoming on any serious market matter. - Silver analyst Ted Butler: 18 April 2015

Another day---and more salami slicing---the same old, same old.

Taking another look at the gold and silver charts, it's easy to see that we still have 40 dollars or so to go in gold---and about 50 cents in silver at the most to get back to where we were about five weeks ago.

Of course, it's never the price that matters.  As Ted Butler continually points out, it's the number of long contracts that JPMorgan et al can get the technical funds in the Managed Money category to sell---and then how much they can get them loaded up on the short side on top of that.  When those two numbers are reached in both gold and silver, the bottom will be in---and we're not there yet.

Here are the 6-month charts for all four precious metals, updated with yesterday's damage.

Of course outside circumstance may intervene at some point---and we could get rallies regardless, but at the moment one must assume that nothing has changed in the short to medium term---and that "da boyz" and their algorithms are still the masters  of the precious metal market.

And as I type this paragraph, the London open is about ten minutes away.  Gold hit a new low for this move down shortly before 10 a.m. Hong Kong time on their Thursday morning.  The metal rallied above unchanged for a while, but has begun to head lower in the last hour of trading.  The silver price hasn't done much at all during Thursday trading in the Far East---and is basically unchanged from it's Wednesday close in New York.   Platinum and palladium have been chopping around unchanged as well.

Gold's net volume is getting very close to the 20,000 contract mark---and 99.9 percent of it is in the current front month, so it's all of the HFT variety.  Silver's net volume is at the 2,400 contract mark, with very decent roll-over volume.  The dollar index is chopping higher---and is currently up 13 basis points.

It's unfortunate that yesterday's trading volume won't be included in tomorrow's Commitment of Traders Report as there certainly was improvement in the Commercial net short positions in both silver and gold.  This would be especially true in gold, as JPMorgan et al closed it well below its 50-day moving average---and back below $1,200 spot.

And as I send today's effort out the door at 5:20 a.m. EDT, I see that gold and silver aren't doing much, or aren't being allowed to do much, although silver is up about a dime at the moment.  Both platinum and palladium set minor new lows for this move down---and are trading about unchanged.

Gold's net volume is at 29,500 contracts, which is pretty heavy for such tiny moves in the gold price, so it appears that whatever rally attempts are being made, the price is not being allowed to get far.  Silver's net volume is around 4,500 contracts---and a decent amount is roll-overs out of the May contract.  The dollar index, which had been up earlier, is now down a hair.

I'm done for another day.  It remains to be seen how the rest of the Thursday trading session turns out.  It appears that despite what the dollar index is doing, the precious metal prices are being totally controlled by JPMorgan et al in the COMEX futures market---and unless something comes out of left field, I expect that the current trend will continue.

See you tomorrow,

Ed Steer