Gold & Silver Daily

¤ Yesterday In Gold & Silver

Gold added three bucks to its price during the first several hours of Far East trading on their Tuesday morning---but flat-lined at $1,300 the ounce until about 1:30 p.m. Hong Kong time.  Then the gold price added another eight bucks or so in pretty short order---and added about the same amount shortly after the London open as the gold price rose into the 10:30 a.m. BST London a.m. gold "fix". Volumes were enormous, as the not-for-profit sellers were everywhere. That was its high tick of the day---and from there it chopped quietly lower into the 5:15 p.m. EDT electronic close in New York.

The CME Group recorded the high and low ticks at $1,134.70 and $1,296.80 in the June contract.

Gold closed the Tuesday session at $1,308.00 spot, up $11.10 on the day---but well of its high tick.  Volume, net of April and May, was around 129,000 contracts---with more than a third of that coming before the London a.m. fix, as JPMorgan et al were the short sellers of last resort right from the moment that the price break-out started, throwing everything they had at it to prevent the price from closing about its 50-day moving average---which it broke through handily at the London morning gold fix.

With some minor exceptions, the silver price followed a similar price as gold's, with the high tick coming at the London a.m. gold fix as well.  After that it chopped lower into the close.

The CME recorded the high and low as $20.175 and $19.85 in the May contract.  Silver's volume on that early rally wasn't overly heavy---and there were no moving averages involved, so "da boyz" had a pretty easy time of it as far as price management was concerned.

Silver closed in New York at $20.06 spot, up 19.5 cents on the day.  Volume, net of roll-over, was only 14,500 contracts, which was a thousand contracts less than Monday's net volume.   Silver's gross volume on that early rally wasn't overly heavy---and there were no moving averages involved, so "da boyz" had a pretty easy time of it as far as price management was concerned.  After the price got capped, roll-over action really picked up.

Platinum traded unsteadily higher on Tuesday, with its high coming at noon in New York.  After that, the price didn't do much.

Palladium also rallied, but that rally ended at 9 a.m. in London---and the price traded sideways in a very tight range for the remainder of the Tuesday session---gaining back 2 of the 3 percentage points it got docked in Monday's trading.  It's high tick came at noon EDT as well.

The dollar index closed late on Monday afternoon at 80.22---and then traded ruler flat until around 2:45 p.m. Hong Kong time on their Tuesday.  Then the decline began---and the 79.72 bottom was painted just a few minutes after 2:30 p.m. EDT.  From there the index rallied a handful of basis points into the close.  The index finished the Tuesday trading session at 79.78---down 44 basis points on the day.

The gold stocks gapped up a bit more than 2% at the open---and then faded a bit, hitting its low tick around 11:35 a.m. EDT.  After that, the stocks rallied slowly but steadily into the close---and finished the day nearly on their high tick.  The HUI finished up 2.35%.

The silver equities gapped up as well, but put their low in much earlier in the day---and Nick Laird's Intraday Silver Sentiment Index closed up a very decent 2.11%.

The CME's Daily Delivery Report showed that 137 gold and 2 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  The only short/issuer in gold was Jefferies---and the two biggest long/stoppers were JPMorgan and Canada's Scotiabank, as they will take delivery of 105 contracts between them.  The link to yesterday's Issuers and Stoppers Report is here.

There was another withdrawal from GLD yesterday.  This time it was 86,707 troy ounces that was withdrawn by an authorized participant.  And as of 10:02 p.m. EDT yesterday evening, there were no reported changes in SLV.

The U.S. Mint had a small sales report.  They sold 308,500 silver eagles.

There wasn't a lot of in/out activity in either gold or silver on Monday over at the Comex-approved depositories.  As a matter of fact, there was no in/out activity in gold at all---and in silver, there was 39,185 troy ounces reported received---and 125,273 troy ounces shipped out.  The link to that activity is here.

Here's a chart that Nick Laird slid into my in-box just after midnight Denver time.  It's the updated "Monthly Chinese Gold Net Imports from Hong Kong" graph and, as always, it's a sight to behold.

I have the usual number of stories for you today, but I'm very light on anything regarding precious metals, as there wasn't much news of that sort on the Internet yesterday.  As I've said before, it's always "feast or famine" in my Wednesday column, as most of the really big stories show up over the weekend, or on Monday.  However, there are still quite a few other stories worthy of your attention.


¤ Critical Reads

High-Frequency Trading Falls in the Cracks of Criminal Law

Words like “rigged” and “scam,” which have been used to describe how high-frequency trading firms make money in the markets, usually indicate something illegal has occurred. The attorney general, Eric H. Holder Jr., added to that perception when he confirmed at a congressional hearing on Friday that the Justice Department was investigating high-frequency trading “to determine whether it violates insider trading laws.”

Federal prosecutors will join with the Securities and Exchange Commission and the Federal Bureau of Investigation, both of which have been scrutinizing high-frequency trading for some time. The investigations are sure to pick up steam on the heels of the publicity surrounding Michael Lewis’s new book, “Flash Boys: A Wall Street Revolt.”

Mr. Lewis portrays how firms use the advantage of just a few milliseconds to trade ahead of the rest of the investing world to reap profits by snatching the best prices for stocks. This plays into what New York State’s attorney general, Eric T. Schneiderman, has called “Insider Trading 2.0,” a call for greater regulation of trading to level the investment playing field.

This story was posted on The New York Times website just before noon EDT yesterday---and I thank reader Dan Lazicki for today's first story.


Dark markets may be more harmful than high-frequency trading

Fears that high-speed traders have been rigging the U.S. stock market went mainstream last week thanks to allegations in a book by financial author Michael Lewis, but there may be a more serious threat to investors: the increasing amount of trading that happens outside of exchanges.

Some former regulators and academics say so much trading is now happening away from exchanges that publicly quoted prices for stocks on exchanges may no longer properly reflect where the market is. And this problem could cost investors far more money than any shenanigans related to high frequency trading.

When the average investor, or even a big portfolio manager, tries to buy or sell shares now, the trade is often matched up with another order by a dealer in a so-called "dark pool," or another alternative to exchanges.

Those whose trade never makes it to an exchange can benefit as the broker avoids paying an exchange trading fee, taking cost out of the process. Investors with large orders can also more easily disguise what they are doing, reducing the danger that others will hear what they are doing and take advantage of them.

This Reuters article was posted on their Internet site in the wee hours of yesterday morning, but because I was already 'full up' in Tuesday's column already, it had to wait until today.  I thank reader Harry Grant for sending it along.


SEC Goldman Lawyer Says Agency Too Timid on Wall Street Misdeeds

A trial attorney from the Securities and Exchange Commission said his bosses were too “tentative and fearful” to bring many Wall Street leaders to heel after the 2008 credit crisis, echoing the regulator’s outside critics.

James Kidney, who joined the SEC in 1986 and retired this month, offered the critique in a speech at his goodbye party. His remarks hit home with many in the crowd of SEC lawyers and alumni thanks to a part of his resume not publicly known: He had campaigned internally to bring charges against more executives in the agency’s 2010 case against Goldman Sachs Group Inc.

The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”

This Bloomberg news item appeared on their website late Monday evening MDT---and my thanks go out to U.A.E. reader Laurent-Patrick Gally.


John Crudele: Did Goldman use HFT to rig markets for the U.S. government?

Yep, the stock market is rigged.

I've been explaining this to you for nearly 20 years. But thanks to best-selling author 'Michael Lewis intriguing book "Flash Boys," which comes to the same conclusion, a much wider slice of America is talking about it now.

But Lewis' book -- as well-written and riveting as his best-seller "Moneyball" -- touched on only one way the stock market was rigged: through high-frequency trading (HFT).

And the book deals only with how manipulation has been occurring in recent years.

This must read story by John was posted on The New York Post website just before midnight on Monday evening EDT---and I found it in a GATA release last night.


How the CIA Made Dr. Zhivago Into a Weapon — Paul Craig Roberts

When Soviet authorities refused to publish prominent Soviet writer Boris Pasternak’s masterpiece, Dr. Zhivago, the CIA turned it into a propaganda coup. An Italian journalist and Communist Party member learned of the suppressed manuscript and offered to take the manuscript to the Italian communist publisher in Milan, Giangiacomo Feltrinelli, who published the book in Italian over Soviet objections in 1957. Feltrinelli believed that Dr. Zhivago was a masterpiece and that the Soviet government was foolish not to take credit for the accomplishment of its greatest writer. Instead, a dogmatic and inflexible Kremlin played into the CIA’s hands.

The Soviets made such a stink about the book that the controversy raised the book’s profile. According to recently declassified CIA documents, the CIA saw the book as an opportunity to make Soviet citizens wonder why a novel by such a prominent Russian writer was only available abroad.

The CIA arranged for a Russian language edition to be published and distributed to Soviet citizens at the World Fair in Brussels in 1958. The propaganda coup was complete when Pasternak received the Nobel Prize for literature in October 1958.

The use of Pasternak’s novel to undermine Soviet citizens’ belief in their government continued as late as 1961. That year I was a member of the US/USSR student exchange program. We were encouraged to take with us copies of Dr. Zhivago. We were advised that it was unlikely Soviet customs inspectors would know English and be able to recognize book titles. If asked, we were to reply “travel reading.” If the copies were recognized and confiscated, no worry. The copies were too valuable to be destroyed. The custom officials would first read the books themselves and then sell them on the black market, an efficient way to spread the distribution.

This amazing, but obviously very true story showed up on Paul's website yesterday---and my thanks go out to South African reader B.V. for bringing it to our attention.  It's a short and fascinating read.


No legal means exist to challenge mass surveillance - Snowden

No legal means exist to challenge mass surveillance, said NSA whistleblower Edward Snowden, testifying to the Parliamentary Assembly of the Council of Europe.

A former NSA contractor, Snowden was speaking to the PACE session in Strasbourg via a video link-up from Moscow.

Wanted in the US on treason charges, he sparked a huge international scandal last year he leaked to the media classified evidence of American government spying programs.

This is an unprecedented form of political interference that I don’t believe can be seen elsewhere in western governments,” he went on. “But no legal means currently exist to challenge such activities or to see penalties for such abuses,” he said.

This Russia Today story was posted on their website during the Tuesday lunch hour in Moscow---and it's the first of many offerings from Roy Stephens.


E.U. court scraps data surveillance law

The E.U. court in Luxembourg has struck down a law on internet and phone surveillance, saying its loose wording opens the door to untoward snooping on private lives.

It said in its verdict on Tuesday (8 April) the “data retention directive” constitutes a “particularly serious interference with the fundamental rights to respect for private life and to the protection of personal data” in Europe.

It also said Europeans are likely to feel “their private lives are the subject of constant surveillance” if the bill is left intact.

The directive, passed in 2006, has already been transcribed into national law in most member states.

The article, filed from Brussels, was posted on the Internet site late yesterday morning Europe time---and it's the second contribution in a row to today's column from Roy Stephens.


Euro-Catch 22: Mario Draghi’s woes over Q.E.

Actually, Super Mario faces an incredible dilemma - damned if he does and damned if he doesn’t. To work, Q.E. must trickle into the real economy. Even in U.K./U.S. schemes, often the cash has remained stubbornly within the investment world chasing paper assets as opposed to invigorating the manufacturing and service economy.

Within the E.U. the problem is not just this trickle down aspect. Rather vital issues with the banks themselves have not been addressed. Put simply: the political class remain in denial at the extent of banks’ problems. Many EU banks may fail the autumn round of stress tests. Gutless eurozone governments have palpably failed to take control of the economic situation, wrapping bandages around vast festering wounds.

Thus throughout the eurozone, there are many zombie banks, de facto insolvent entities being protected by stubborn (scared) politicians. These walking dead institutions are not merely in the depressed Mediterranean nations with rampant unemployment, they even exist in Angela Merkel’s otherwise prosperous German hinterlands. Given how she has sought to ‘punish’ incompetent governments, her hypocrisy in punishing other citizens (e.g. in Ireland) to protect her banks is rather incredible. It also threatens the long-term survival of the euro, let alone the EU.

This op-ed piece appeared on the Russia Today Internet site early yesterday morning Moscow time---and it's the third offering in a row from Roy.


Moscow warns Kiev against using military, mercenaries in southeastern Ukraine

The Russian Foreign Ministry has voiced concerns over the buildup of Ukrainian forces and US mercenaries in the southeastern part of the country, calling on Kiev to immediately cease military preparations which could lead to a civil war.

As parts of Ukraine push for greater autonomy – with Donetsk and Kharkov declaring independence on Monday – the self-imposed government in Kiev is reportedly dispatching additional forces in turbulent regions to avoid potential disobedience by local law enforcements.

“We are particularly concerned that the operation involves some 150 American mercenaries from a private company Greystone Ltd., dressed in the uniform of the [Ukrainian] special task police unit Sokol,” the Russian Foreign Ministry said in a statement. “Organizers and participants of such incitement are assuming a huge responsibility for threatening upon the rights, freedoms and lives of Ukrainian citizens as well as the stability of Ukraine.”

This must read news item showed up on the Russia Today website in the very wee hours of yesterday morning Moscow time---and this story is the second story of the day from reader B.V.


Russian F.M. calls on Kiev, Washington to recognize interests of all Ukraine regions

Moscow is urging to provide for Ukraine’s eastern and southern regions to take part in the upcoming talks with Kiev, Russia, the US, and EU on the current crisis, says FM Sergey Lavrov.

“We are ready for multilateral talks with the US, EU and Ukraine,” said Lavrov during a news conference in Moscow with his Angolan counterpart, Georges Rebelo Chicoti. Though the particular date of the talks has not been set up, Russia is ready to start negotiations within 10 days, Lavrov said.

The southeastern regions of Ukraine should also take part in the negotiations, he said. Following the coup in Kiev, Ukraine’s southeast saw a wave of anti-Maidan, and in many cases also pro-Russian, rallies. In cities such as Kharkov and Donetsk, activists went as far as attempts to proclaim independence.

This Russia Today story posted on their website yesterday morning Moscow time, is also worth reading---especially if you're a student of the New Great Game.  There was a similar story on the Internet site yesterday morning as well---and both stories are courtesy of Roy Stephens.



U.S. reportedly starts supplying Syrian rebels with anti-tank weapons

Rebels embattled against the regime of Syrian President Bashar Al-Assad have reportedly come into possession of high-powered anti-tank weaponry, the likes of which may have been supplied by the United States.

Images of rebels equipped with heavy arms have begun to circulate in recent days, and at least one news site has claimed that the source responsible is the US government.

On Monday, Israel’s Debkafile website reported that two moderate Syrian rebel militias — the Free Syrian Army and the Syrian Revolutionary Front — have been supplied with advanced US weapons, including armor-piercing, optically-guided BGM-71 TOW missiles, thanks to the Pentagon.

This news item, also from the Russia Today website, was posted there late Monday afternoon Moscow time---and it's courtesy of Roy Stephens as well.


U.S. supply of heavy weapons to Syria will ‘escalate slaughter’

The sudden shipment of anti-tank missiles to Syrian rebels from the US, which has so far been reluctant to supply any heavy weapons, is Washington's way of getting back at Russia by hitting the Assad government, political analyst Chris Bambery told RT.

On Monday, Israel’s Debkafile website reported that two moderate Syrian rebel militias, the Free Syrian Army and the Syrian Revolutionary Front, have been supplied with advanced US weapons — including armor-piercing, optically-guided BGM-71 TOW missiles.

RT: The US has been apparently reluctant since the start to send heavy weapons to Syria. Why would Washington be changing its mind now, if that is the case?

Chris Bambery: I think the answer is because of the cold war which is taking place between Russia and the United states over the whole question of Ukraine and Crimea, and I think once again the Americans see hitting the Assad regime as a way of getting back at Russia. So I think that’s a simple answer. I have to say I find it strange that we are hearing reports of these anti-armor weapons being given to these groups in Syria.

This is a follow-up story to the one posted above.  It's also from the Russia Today Internet site---and this one showed up in the very wee hours of yesterday morning Moscow time.  It also represents the final offering of the day from Roy Stephens.


Two King World News Blogs

1. The first interview is with Dr. Stephen Leeb---and it's headlined "Collapse of the United States---and a New Economic World Order"  2. The second commentary is with Sean Boyd, the CEO of Agnico Eagle.  It's entitled "Stunning Reasons for Gold to Smash Through $2,000"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]


U.K.’s Royal Mint strikes special shipwreck silver coin

More than 70 years after the Royal Mint ordered silver supplies from India after England’s silver stocks were depleted due to war, the Royal Mint has announced it is offering a silver coin made from the sunken merchant ship, S.S. Gairsoppa.

The ship was carrying a large shipment of silver bullion, pig iron and tea and was sailing under the protection of naval convoys when a storm forced the S.S. Gairsoppa to break free and head for the safety of Galway Harbor off the coast of western Ireland.

The ship was torpedoed by a German U-Boat on February 17, 1941; only one person ultimately survived after it sank within 20 minutes and crew members took refuge in a rubber raft.

Florida-based Odyssey Marine Exploration finally located the ship 300 miles off the Irish coast at a depth of three miles in September 2011. Odyssey recovered 2,792 silver ingots, or more than 99% of the insured silver reported to be aboard the S.S. Gairsoppa when she sank.

This very interesting story appeared on the Internet site on Monday.


Koos Jansen: China gold demand fell in last week of March but remains high

Updating the Chinese gold demand figures, gold researcher and GATA consultant Koos Jansen reports that demand for the last full week in March declined a bit over the year-to-date weekly average, but remained high.

This commentary was posted on the Jansen's website yesterday---and it's the second item of the day that I found embedded in a GATA release.


Turkey's gold imports nosedive amid graft scrutiny

Turkey's gold trade boomed for over a year while Ankara was paying Iran in gold for natural gas and oil imports.

The Turkish government found it easier to import large amounts of gold and then send these to Tehran as payments for natural gas and oil purchases from Iran.

In the first three months of this year, however, Turkey's gold imports declined by 80 percent to 9.3 tons, data from Borsa İstanbul shows. Observers said the decline is largely due to the government suspending its gold-for-oil trade. The gold-for-oil strategy has come under close scrutiny by the opposition and prosecutors following a corruption probe that went public in Turkey on Dec. 17 last year. The probe saw a number of prominent businesspeople and politicians close to Prime Minister Recep Tayyip Erdoğan's ruling Justice and Development Party (AK Party) being accused of corruption -- including export fraud, forgery of documents and gold smuggling. The investigation alleges that Iranian-Azerbaijani businessman Reza Zarrab and certain bureaucrats collaborated with Iranian businessman Babak Zanjani -- who has been blacklisted by both the E.U. and the U.S. government -- to smuggle gold into Iran.

This very short story, filed from Istanbul, was posted on the Internet site yesterday---and I found it on the Sharps Pixley website.  It's definitely worth reading.



¤ The Funnies

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¤ The Wrap

I know many are fed up, tired and worn out with the long-running silver manipulation, particularly with the price events over the past three years. So am I. Many are reaching the conclusion that the manipulation is so well entrenched (and government supported) that it will continue indefinitely. However, I do have the advantage of studying silver intensely for almost 30 years, so I can’t help but see things in a different perspective than someone with a much shorter time frame. I also have the advantage of experiencing along the way enough instances of confirmation for what were originally “kooky” ideas of mine (such as the whole premise of a COMEX silver manipulation in the first place) that I “know” that the manipulation must end. - Silver analyst Ted Butler: 05 April 2014

It was another day where JPMorgan et al had to step in front of rallies in all four precious metals, or watch them explode to the upside and, for the most part, they had the deed done by the London a.m. gold "fix".  Despite the fact that there are ongoing investigations into insider trading at the gold fixes, "da boyz" appear to be unfazed---and are just as in-your-face as they've always been.

Here are the gold and silver charts updated with yesterday's price data.

As you can see from the chart---and as I mentioned further up in the column---the gold price was prevented from closing above its 50-day moving average.  It will be interesting to see if we rally from there, or have another price "failure" at this point.

Silver's rally wasn't allowed to get far, either---but as Ted Butler mentioned on the phone yesterday, there weren't any major moving averages broken to the upside, so there was no incentive for the technical funds to come back into the market on the long side, so JPMorgan et al had a pretty easy time of it in silver yesterday.  And as I mentioned further up, volume during that big rally very early yesterday morning wasn't overly heavy to begin with, at least not compared to gold.  But the early volume, just like in gold, was virtually all of the HFT variety.

However, one thing I have noticed, is the heavy roll-over volume in silver during the first two trading days of the week.  May is a delivery month in silver, but I don't remember seeing the Comex futures holders in silver exiting the delivery month so far in advance of options and futures expiry.  But then again, maybe I'm just imagining things, but it will be something that I'll keep an eye on over the next few days.

And as I write this paragraph, London has been open about 10 minutes.  Gold rallied about five bucks or so in Far East trading, but has been sold back down a bit going into the London open.  I wouldn't read much into this.  Silver's sojourn above the $20 spot price mark didn't last long---and has been sold down about 15 cents from yesterday's close---and back below the $20 mark.  Gold volume is about average for this time of day---and is all of the HFT variety.  Gross volume in silver is already north of 17,000 contracts, which is enormous.  A lot of that is roll-overs out of the May contract, but I can tell you that this roll-over activity is highly unusual for this time of day---so maybe I'm not "imagining things" as I mentioned in the previous paragraph. Platinum prices are up a bit---and palladium prices have been comatose since trading began in New York at 6 p.m. Tuesday evening.  The dollar index isn't doing much of anything, either.

Today, at the close of Comex trading, is the cut-off for this Friday's COT Report so, hopefully, all of the reporting week's data, including everything that happens today, will be in it.

If you took the time to read the King World News interview with Agnico Eagle CEO Sean Boyd, you'll note that right up front he admits that the price of gold is being actively "managed".  He, along with every other precious metal miner on Planet Earth knows exactly the same thing---and quite a large number of them have admitted to in private---and it's nice to see Sean state the obvious.

But will he or any other precious metal mining company do anything about it?  No, they won't do a thing.  But what about their fiduciary responsibility to their stockholders you might ask---and rightfully so.  As I've said countless times over the years---the miners don't give a flying #%&$ about their shareholders---and that would be all of us.  And as I've also said, when gold and silver prices finally do rise to some sort of free-market price, or as high as I think that JPMorgan et al will allow them to rise, I'll be selling every one of my precious metal stocks---and I'll never own one again as long as I live.

And as I hit the send button at 5:15 a.m. EDT, I note that both gold and platinum have given back what little gains they had now that London has been trading a bit more than two hours.  Silver is now down 20 cents---and palladium is still trading flat.   Volumes in both gold and silver have dropped off to just about nothing---and all is quiet at the moment. The dollar index isn't showing any signs of life, either.

Gold and silver prices could go either way from here, but after gold's "failure" to break above its 50-day moving average yesterday, a down-side move going forward wouldn't surprise me in the slightest, even though I'm hoping for the alternative.

Before heading off to bed, I'd like to mention the Casey Researchproduction entitled "Meltdown America: Exclusive Documentary World Premiere.  It runs almost 29 minutes and features the harrowing tales of three people who survived economic and political collapse in Zimbabwe, Yugoslavia, and Argentina… with guest commentators, Doug Casey; Jeff Opdyke from Sovereign Society; David Walker, former U.S. Comptroller; Jane Kokan, former BBC/CNN journalist; Dr. André Gerolymatos, former member of the Canadian Advisory Council on National Security; and Scott Taylor, war correspondent and Publisher, Esprit de Corps magazine---discussing how these powerful stories of hardship foreshadow what soon could be happening in the U.S.

This absolute must watch documentary was posted on the Casey Research website yesterday---and the link is here.

I hope your day goes well---and I'll see you here tomorrow.