Gold & Silver Daily
"Only 2.2 million ounces has been deposited in SLV since January 21"

¤ Yesterday In Gold & Silver

The gold price ticked down at the 6:00 p.m. EST open on Sunday evening---and then traded flat until minutes after London opened.  At that point it began to sell off, with the low coming around 12:30 p.m. GMT in London.  The subsequent rally ran into a willing seller the moment the price turned positive on the day---which was around 3:15 p.m. EST in electronic trading in New York.

The low and high were reported by the CME Group as $1,266.50 and $1,283.90 in the April contract.

Gold close on Monday in New York at $1,273.80 spot, down $9.30 on the day.  Volume, net of February and March, was 124,000 contracts.

Silver's price was 'volatile' yesterday, with the low coming around 10 a.m. GMT in London---and the two attempts it made to launch skywards in price after that were met by a willing seller.  Like gold, silver was not allowed to close up on the day.

The low and high were recorded as $16.995 and $17.34 in the March contract.

Silver closed yesterday at $17.18 spot, down a nickel from Friday.  Net volume was puny at only 20,000 contracts.

Platinum traded with a negative price bias until around 11 a.m. Zurich time.  After that it chopped sideways in a tight range. The metal closed at $1,225---and down 13 bucks from Friday.

The palladium price chopped around in a ten dollar range until 9:30 a.m. in New York.  Then it rallied a decent amount until about noon EST---and didn't do much after that.  Palladium finished the Monday session at $785 spot, up 16 dollars.

The dollar index closed in New York late on Friday afternoon at 94.86---and then didn't do much until minutes before 8:30 a.m. EST yesterday.  Then it got sold down to its 94.40 low tick around 10:40 a.m. in New York.  It recovered about half that decline within thirty minutes, before chopping sideways into the close.  The index finished the Monday session at 94.56---down 20 basis points.

Not surprisingly, the gold stocks opened down a percent and change, before moving into positive territory in fits and starts.  The HUI closed up 1.27%.

It was more or less the same chart pattern for the silver equities, complete with the sell-off in the last 30 minutes of trading, as the willing seller showed up in both metals just before the close.  Nick Laird's Intraday Silver Sentiment Index finished nicely in the black as well, up 1.34 percent.  But it was up well over 2 percent at its high.

I forgot to mention this in my Saturday missive, but after making an inquiry from Nick Laird, I found out that the HUI was 23 percent in January---and his Silver Sentiment Index rose 18 percent.

The CME Daily Delivery Report for Day 3 of the February delivery month in gold showed that only 6 gold and 16 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  Nothing to see in gold once again.

The CME Preliminary Report for the Monday trading session showed that February gold open interest declined by 675 contracts, leaving 2,104 contracts still open.  In silver, the February o.i. dropped by 6 contracts, leaving 37 contracts left to deliver.  It will be interesting to see who the Issuers and Stoppers are on gold when the short/issuers finally step up to the plate and deliver.

Another day---and another big deposit in GLD.  This time an authorized participant[s] added 268,869 troy ounces.  And as of 7:07 p.m. EST yesterday evening, there were no reported changes in SLV.  But when I checked back at 12:19 a.m. EST this morning, I noted that an authorized participant had added 1,148,649 troy ounces.

The U.S. Mint started off the new month with a sales report.  They didn't sell any gold, but reported selling 391,000 silver eagles.

Friday was a slow in/out day for both gold and silver over at the COMEX-approved depositories.  In gold, only 16,075 troy ounces were reported received---all into Scotiabank's vault.  And in silver, nothing was received---and only 65,598 troy ounces were shipped out the door.  This level of activity isn't worth linking.

I have a very decent number of stories for you today---and I hope you have the time to wade through the ones that interest you the most.


¤ Critical Reads

Obama’s $4 Trillion Budget Sets Up Fight with Congress

President Barack Obama sent Congress a $4 trillion budget that would raise taxes on corporations and the nation’s top earners, spend more on infrastructure and housing, and stabilize, but not eliminate, the annual budget deficit.

The spending blueprint challenges Republicans to make politically thorny choices between defending current tax rates for the wealthy and Obama’s proposals to boost spending for the middle class, the Pentagon and companies that build domestic infrastructure.

It also plays to the president’s Democratic base with proposals to increase spending for domestic programs such as education and child care and expanding Social Security benefits for same-sex couples.

In remarks this morning, Obama said he’d reject any budget from Congress that locks in the “mindless austerity” of existing budget caps and cuts funding for his priorities.

This Bloomberg story, filed from Washington, appeared on their Internet site at 4:00 a.m. Denver time yesterday morning---and I thank Howard Wiener for today's first news item.


Obama targets foreign profits with tax proposal, Republicans skeptical

President Barack Obama's fiscal 2016 budget will seek new taxes on trillions of dollars in profits accumulated overseas by U.S. companies, and a new approach to taxing foreign profits in the future, but Republicans were skeptical of the plan on Sunday.

Reviving a long-running debate about corporate tax avoidance, Obama will target a loophole that lets companies pay no tax on earnings held abroad, the White House said. But his proposal was certain to encounter stiff resistance from Republicans.

In his budget plan to be unveiled on Monday, Obama will call for a one-time, 14 percent tax on an estimated $2.1 trillion in profits piled up abroad over the years by multinationals such as General Electric, Microsoft, Pfizer Inc and Apple Inc.

He will also seek to impose a 19 percent tax on U.S. companies' future foreign earnings, the White House said.

This Reuters article, also filed from Washington, is very similar to the prior Bloomberg story, it's just spun differently.  It appeared on their website at 3:24 p.m. EST yesterday afternoon.  The reader that sent me this story didn't leave their name.


Workers on strike at 9 oil refineries producing 10% of U.S. fuel

Workers at nine U.S. oil refineries and chemical plants across four states, producing some 10 percent of the country’s fuel, went on strike after their union announced that negotiations on their salaries and safety concerns failed.

The mass walkout of refinery workers – the first since 1980 – took place on Sunday, after the United Steelworkers union (USW) rejected the fifth offer by the industry’s main negotiator, Royal Dutch Shell Plc, which in turn halted talks.

Shell refused to provide us with a counter-offer and left the bargaining table," USW International President Leo Gerard said. "We had no choice but to give notice of a work stoppage.”

This news item found a home over at the Russia Today website at 4:17 a.m. Moscow time on their Monday morning, which was 8:17 p.m. in New York on their Sunday evening.  I thank Bill Busser for sending it our way.


Exxon, Chevron Set to Boost Production Just as Prices Fall

Exxon Mobil has been working for years on a fleet of enormous new oil and gas projects in places such as Abu Dhabi, Russia, Papua New Guinea, and the Gulf of Mexico designed to turn around what has been a consistent and alarming slide in oil and gas production.

A record eight of these mega-projects came on-line last year, Exxon said Monday — just as oil prices were falling by more than half.

"Investors would be more than happy to see production decline but oil prices higher," said Fadel Gheit, an analyst at Oppenheimer & Co.

No such luck this year. These enormous projects were conceived and started years ago, as prices were rising. Now they are starting to produce oil and gas at a time when the price of global crude has been eviscerated by rising supplies and weak growth in demand.

This AP story was picked up by the Internet site at 6:18 p.m. EST on Monday evening---and I thank West Virginia reader Elliot Simon for sending it along.


Campaign to audit Federal Reserve gathers pace

The U.S. Federal Reserve is coming under the most political pressure it has faced since the financial crisis, as Republicans who say it lacks transparency attempt to subject its monetary policy deliberations to external audit.

Republicans who took control of both houses of Congress this year want to use their new power to push for laws that would expose the Feds rate-setting and quantitative easing policies to formal review.

The Fed has long been a whipping boy of anti-government conservatives who dislike its power and perceived opacity. But interest in reforming the central bank is now spreading to the Republican establishment.

Janet Yellen, who chairs the U.S. central bank, is likely to face questions on the topic this month in congressional testimony. Bill Huizenga, the Republican vice-chairman of the House subcommittee on monetary policy and trade, said the Fed was a "massive labyrinth of very opaque gears and levers" and that "very few people understand the why; the how."

This article was posted on the Financial Times of London website on Monday---and it's posted in the clear in this GATA release.


Jim Rickards: Nine Years on, People Forget How Nasty a Rate Increase Can Be

It’s unfortunate that we have to be spending so much time on the Federal Reserve. It’s the place to start if you want to understand a lot of what’s going on in the markets. In fact, nothing is more important — but I wish that weren’t true.

I wish the central banks could go back to just being boring, opaque, marginal institutions that took care of money supply and acted as a lender of last resort instead of monstrosities that seem to manipulate and invade every corner of every market in the world. But unfortunately, that is what we have today.

When the Fed manipulates the dollar and dollar interest rates, they are directly and indirectly affecting every market in the world — equities, gold, real estate, other commodities, junk bonds, corporate debt, etc. So even though I wish it wasn’t the case, understanding what the Fed will do next is the big question.

This commentary by Jim put in an appearance on the Daily Reckoning website yesterday---and I thank Harold Jacobsen for finding it for us.


Jim Rickards: Bitcoin---and fighting the Islamic State with Special Operations

Recently I traveled to Tampa, Florida to meet with senior officers of the U.S. Special Operations Command (USSOCOM) in a secure location near their headquarters at MacDill Air Force Base. USSOCOM includes the Navy SEALS, DELTA Force, Green Berets, and other highly trained and specialized units operating under joint military command to carry out the most difficult combat and intelligence missions. They conduct these missions both alone, and in conjunction with CIA paramilitary units depending on the theatre of operations.

The particular unit of USSOCOM that sponsored our meeting was “J36,” the Transnational Threats Division. J36 is commanded by U.S. Army Lt. Col. Joshua J. Potter, and is assigned the task of detecting, disrupting and defeating threat networks that transcend geographic and regional boundaries. Such networks are both criminal and terrorist in nature, and may be involved in narco-terrorism and terrorist finance among other activities.

Our meeting was attended not only by USSOCOM operators but also by members of other combat commands including CENTCOM and AFRICOM, and other government agencies including the U.S. Treasury, CIA and the Federal Reserve. Our purpose was to consider ways to disrupt financial support for the Islamic State and other transnational actors.

In particular, the Islamic State and associated terrorist groups have the ability to use crypto-digital currencies such as Bitcoin to transfer funds from wealthy Saudi Wahhabi supporters to arms dealers and other suppliers of provisions and services. We had assembled financial and computer experts to work with the USSOCOM operators to disrupt the use of Bitcoin by terrorists.

Jim has been a busy boy lately.  This article appeared on the Dairen Times website yesterday as well---and it's also courtesy of Harold Jacobsen.


Bitcoin: Dead Currency Walking?

The concept of crypto-currencies is in many ways a truly wonderful idea. Unfortunately, most all reports and articles that support crypto-currencies in general and Bitcoin in particular focus on the potential of the currency.

They are entirely correct about the potential; however, they rarely, if ever, move forward to the next logical consideration, which is the likelihood of the currency living long enough to see its potential realised.

This consideration can be simplified into two questions:

  1. Is Bitcoin’s ability to compete with and/or replace existing forms of currency threatening to the powers that produce those other forms of currency?
  1. Do those powers have the ability to discredit and/or outlaw Bitcoin?

This commentary about Bitcoin appeared on the Internet site yesterday---and I thank senior editor Nick Giambruno for sending it our way.


Baltic Dry Plunges at Fastest Pace Since Lehman, Hits New 29 Year Low

The Baltic Dry Index dropped another 3% today to 590 - its first time below 600 since 1986 and not far from the all-time record low of 554 in July 1986. Of course, the absolute level is shrugged off by the over-supply-ists and the 'well fuel prices are down'-ists but the velocity of collapse (now over 60% in the last 3 months) suggests this far more than some 'blip' discrepancy between supply and demand - this is a structural convergence of massive mal-investment meets economic reality.

The Baltic Dry Index drops even more... new 29 year lows...

This tiny Zero Hedge story, along with some excellent charts, appeared on their Internet site at 2:17 p.m. EST yesterday afternoon---and the first person through the door with it was Brad Robertson.


Delusional America — Paul Craig Roberts

The pattern since Milosevic (and before) has been to demonize a foreign head of state and to take the U.S. to war to get rid of him. That way the secret agenda is achieved under the cover of the necessity of deposing a bad or dangerous ruler.

Parry describes this well. Group-think plays the important role of preventing any dissent, any suspicion of the case against the demonized person, and any examination of the real agenda that is being pursued.

Now it is Russian President Vladimir Putin who is being demonized. As Parry and I and Stephen F. Cohen, the most knowledgeable of the Russian experts, appreciate, Putin is not Saddam Hussein and Russia is not Iraq, Libya, Syria, Serbia, or Iran. To foment conflict with Russia that could lead to war is worse than irresponsible. Yet, as Parry writes, “from the start of the Ukraine crisis in fall 2013, the New York Times, the Washington Post and virtually every mainstream U.S. news outlet have behaved as dishonestly as they did during the run-up to war with Iraq.”

When Professor Cohen pointed out, correctly, that the lies about Russia, Ukraine, and Putin were hot and heavy, the propagandists had to get rid of the man with the facts. The New Republic, a hang-out for low I.Q. fools, called America’s leading Russian expert “Putin’s American toady.”

This short commentary by Paul is your only absolute must read story of the day, especially if you're a serious student of the New Great Game.  The first person through the door with this story was reader U.D.


Larry Summers: Europe, U.S. on Brink of Deflationary Spiral for Next Decade

Both Europe and the United States are on the brink of a "deflationary spiral," with Europe's economic morass possibly lingering for a decade,  former Treasury Secretary Larry Summers has warned.

The European Central Bank (ECB)'s €1.1 trillion (US$1.23 billion) quantitative easing (QE) program represents a positive step, but won't be enough to repair the damaged eurozone economy, said Summers, speaking at the World Economic Forum in Davos.

"Europe is on the brink of a deflationary spiral that could be gravely threatening to the process of growing standards of living, not for a year, but for a decade," he recently told Bloomberg TV.  "Europe is lagging relative to every other region of the world. And the situation is getting worse."

In a deflationary spiral, households and firms cut spending while they wait for prices to fall further, causing the economy to slump, according to The Guardian.

The man has a keen grasp of the obvious, especially considering the fact that others have been talking this scenario for the last year or so.  This story was posted on the Internet site back on January 25---and it's another offering from reader Brad Robertson.


U.K. Hedge-Fund Star Odey: Coming Recession Will Be 'Remembered in 100 Years'

U.K. hedge fund heavyweight Crispin Odey, founder of Odey Asset Management, warns that current global economic weakness will lead to a recession that will be remembered for the next century.

Major economies are on the precipice of another financial crisis, he wrote in a letter to shareholders obtained by the (London) Daily Mail.

"‘This down-cycle is likely to be remembered in 100 years, when we hope it won’t be rated for ‘How good it looks for its age!’"

Another day---and another dire warning from a credible source.  It would all come true of course if the central banks of the world weren't rigging every financial and commodity market on Planet Earth.  This item showed up on the Internet site last Friday afternoon EST---and it's the third and final offering from Brad Robertson, for which I thank him.


Spain’s anti-austerity Podemos stages show of force before elections

Tens of thousands marched in Madrid on Saturday in the biggest show of support yet for Spanish anti-austerity party Podemos, whose policies and surging pre-election popularity have drawn comparisons with Greece’s new Syriza rulers.

Crowds chanted “yes we can” or “tic tac tic tac” to suggest the clock was ticking for Spain’s scandal-ridden political elite. Many waved Greek and Republican flags and banners reading “the change is now” or “Pablo president”.

Podemos (“We Can”) was formed just a year ago by university professor Pablo Iglesias, but produced a major shock by winning five seats in elections for the European Parliament in May.

Tapping into Spaniards’ austerity fatigue and widespread anger at “la casta”, as it calls the country’s business and political elites, it is currently topping opinion polls in the run-up to local, regional and national elections this year.

This Reuters story, filed from Madrid, appeared on the website early Saturday evening Europe time---and I thank Casey Research's Louis James for passing it around yesterday.


A Portuguese Syriza? Lefist parties aspire to Greek model

There’s a new political movement in Portugal which aims to be just like Syriza, the radical left party that has come to power in Greece.

Portugal’s version is called Tempo de Avancar (Time to Advance) and combines four leftist political groups, the main one being Livre (Free Party), founded last year by Portuguese MEP Rui Tavares.

Tempo de Avancar is not anti-European but is strongly anti-austerity, and this weekend (31 January) is holding an open meeting in Lisbon to start preparing a government programme.

"We are looking for new forms of political participation that respond to the crisis of recent years, just like Podemos is doing in Spain and Syriza did in Greece", says Ana Drago, one of the leaders of Tempo de Avancar.

This news item, filed from Lisbon, put in an appearance on the Internet site last Friday morning---and I thank Roy Stephens for digging it up for me.


Greece Changes Strategy: No Longer Demands Debt Write Off, Ask For Debt Exchange Instead

Update, and in line with the Financial Times report, here's Bloomberg:


So all it took for Greece to withdraw its demands was "opposition"?

Over a week after the new Greek government came to power, it has presented its first actual proposal of how it hopes to negotiate with Europe that does not involve the infamous "debt write off", which as both Germany and the ECB have made clear, is a non-starter as it impairs the ECB's balance sheet and leads to a loss of "faith" in the money printer, the legacy monetary system and so on. So instead of yet another debt restructuring, the FT reports that Yanis Varoufakis "would no longer call for a headline write-off of Greece’s €315bn foreign debt. Rather it would request a “menu of debt swaps” to ease the burden, including two types of new bonds." Actually he still does, only he is not calling it as such.

Still, while the proposal is surely another non-starter for Europe, what is most substantial in the FT report is that, like it or not, the Greek government has decided to play ball with Europe and is slowly but surely willing to concede to the Troika's demands. Which means that any expectations of a sharp standoff between Greece and the ECB can now be written off, as the new Greek finance minister has just made it clear that despite the bluster and rhetoric, he will ultimately accept whatever terms Europe offers him.

Perhaps most ironic, while Greece has proposed a debt haircut in all but name, what it now seems almost assured to end up with is a continuation of the current status quo. In all but name.

This surprising story appeared on the Zero Hedge website at 3:24 p.m. EST on Monday afternoon---and our man in Greece, Harry Grant sent it to me just after midnight local time here in Edmonton, which was long after I'd posted the 8 stories above this one.  This article is on the longish side, but worth wading through.  I'm sure there will be more developments as Tuesday unfolds in Europe.


Lining Up to Receive Aid in Ukraine, Crowd Is Devastated by a Mortar Attack

Seven people were killed and at least three wounded in a pair of mortar attacks on the city’s west side Friday, including one that hit a crowd of people waiting in line to receive humanitarian aid as fighting raged outside of town.

The carnage ended nearly a day and a half of relative calm in the region controlled by pro-Russian separatists, where fighting between the rebels and the Ukrainian military has spiked sharply since a shaky cease-fire broke down this month.

Officials of the Donetsk People’s Republic were quick to attribute the attacks to Ukrainian “saboteurs” who they said had infiltrated the city. “Once again we have the baseness and the meanness of the Ukrainian sabotage groups,” they said in a statement.

This story appeared on The New York Times website on Friday morning sometime---and I thank Roy Stephens for sharing it with us.


Ukrainian Government: “No Russian Troops Are Fighting Against Us”

The Chief of Staff of Ukraine’s Armed Forces, General Viktor Muzhenko, is saying, in that news-report, which is dated on Thursday January 29th, that the only Russian citizens who are fighting in the contested region, are residents in that region, or of Ukraine, and also some Russian citizens (and this does not deny that perhaps some of other countries’ citizens are fighting there, inasmuch as American mercenaries have already been noted to have been participating on the Ukrainian Government’s side), who “are members of illegal armed groups,” meaning fighters who are not paid by any government, but instead are just “individual citizens” (as opposed to foreign-government-paid ones). General Muzhenko also says, emphatically, that the “Ukrainian army is not fighting regular units of the Russian army.”

In other words: He is explicitly and clearly denying the very basis for the EU’s sanctions against Russia, and for the U.S.’s sanctions against Russia: all of the sanctions against Russia are based on the falsehood that Ukraine is fighting against “the regular units of the Russian army” — i.e., against the Russian-Government-controlled-and-trained fighting forces.

No surprises here, as this has been a well-known fact since the beginning of hostilities, but a fact that the Western press won't print.  This appeared on the Internet site on Saturday---and I thank Malcolm Roberts for bringing it to my attention---and now to yours.  It's worth skimming.


U.S. Considers Supplying Arms to Ukraine Forces, Officials Say

With Russian-backed separatists pressing their attacks in Ukraine, NATO’s military commander, Gen. Philip M. Breedlove, now supports providing defensive weapons and equipment to Kiev’s beleaguered forces, and an array of administration and military officials appear to be edging toward that position, American officials said Sunday.

President Obama has made no decisions on providing such lethal assistance. But after a series of striking reversals that Ukraine’s forces have suffered in recent weeks, the Obama administration is taking a fresh look at the question of military aid.

Secretary of State John Kerry, who plans to visit Kiev on Thursday, is open to new discussions about providing lethal assistance, as is Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, officials said. Defense Secretary Chuck Hagel, who is leaving his post soon, backs sending defensive weapons to the Ukrainian forces.

This New York Times article showed up on their Internet site on Sunday sometime---and I thank Roy Stephens for sending it along.


Obama openly admits 'brokering power transition' in Ukraine

In an interview with CNN’s Fareed Zakaria, Barack Obama acknowledged that the United States had "brokered a deal to transition power in Ukraine," thus admitting to a high level of democratic impropriety.

Before we consider Obama’s revealing remarks, and how the Ukrainian people sold their country for a song, let’s rewind to November 2013, when then-President Viktor Yanukovich had shocked western capitals - and, more importantly, western markets - by suspending plans for an association agreement with the European Union.

As if on command, thousands of Ukrainians suddenly poured into the streets of Kiev to protest the decision. Such a rapid reaction should not have come as a surprise. After all, a multitude of US government agencies – most notably, USAID - had been operating in Ukraine since the collapse of the Soviet Union, investing billions on its latest "democratic" pet project.

This is no conspiracy theory. On December 13, 2013, Assistant Secretary of State Victoria Nuland, following her third trip to Ukraine in five weeks, told the National Press Club: "Since Ukraine's independence in 1991 the United States has…invested over $5 billion to assist Ukraine in needs and other goals."

Exactly what those "other goals" may have been, and who helped underwrite them, seem rather obvious today.

This op-edge piece appeared on the Russia Today website at 6:32 p.m. Moscow time on their Sunday evening, which was was 10:32 a.m. in New York.  It's worth reading---and I thank Roy Stephens for another contribution to today's column.


Constant shelling in Donetsk as peace talks in Minsk end in blame game

Shelling of the eastern Ukrainian city of Donetsk is continuing practically non-stop with shells landing in civilian areas after mediators’ talks failed Saturday. Militia and Kiev forces are fighting for the strategically key area of Debaltsevo.

Officials of the self-proclaimed Donetsk People’s Republic (DPR) said at least three civilians have been killed by Ukrainian artillery fire targeting residential areas overnight.

“Overnight, the Ukrainian troops fired about 30 barrages at DPR cities. The night shelling injured 14 civilians” in two of the city’s neighborhoods, reported Eduard Basurin, deputy defense minister in the DPR.

This is another Russia Today news item---and this one was posted on their Internet site at 1:36 p.m. Moscow time on their Sunday afternoon.  Once again it's courtesy of Roy Stephens.


Documenting the raging civil conflict on the front lines in Donetsk, Ukraine

Experienced conflict photographer Manu Brabo has been embedded in Ukraine covering the conflict in and around Donetsk for several weeks. In Sight first spoke to Brabo during his first week in Ukraine.

Since it’s my first week here I’ve been mostly trying to get into the story. I’ve been visiting many areas of the town and trying to get the right contacts in order to get better access and bring a deeper, as well as tell a more human story to the readers. I’ve been shooting mostly in Kiesky, Petrovska, Shimaska. Kievsky is the closest point I’ve been to the airport. The area is being under intense Ukraine artillery fire in the last week. The situation that the civilian population is facing has been taking my energies since the winter has become another threat to their lives.

Daily life here its weird. People seem to be used to the shelling, and they try to continue with their life. Downtown is silent and quiet, but you can still develop a normal life. Coffee shops, restaurants and some stores are still open, while just a few kilometers away, in the outskirts (Kievsky district is the better example) people are under constant punishment. The modern downtown is barely affected by war. In the outskirts, close to the lines, humble residential areas with soviet architecture and populated by the working class have become a war landscape. Very few neighbors — mostly elders unable to leave the area or with no other place to go — still live there with no water, light or heat. Only charities are giving them some chance to survive the winter.

This must view photo essay appeared on The Washington Post website at 11:10 a.m. EST yesterday morning---and my thanks go out to Dan Lazicki for digging it up for us.


Ukrainian border sealed to hold 80% of men fleeing mobilization - Minister of Defense

All regions of Ukraine managed to recruit only 20% of the necessary number of soldiers during mobilization. This was stated by the Minister of Defense of Ukraine, Stepan Poltorak. He proposed to limit the travel abroad of all men from 18 to 60 years old.

He explained that many Ukrainians are trying to avoid mobilization and migrate to other countries, RIA Novosti reported with reference to the Ukrainian media.

According to the head of the Defense Ministry, because of this, travel abroad of all men from 18 to 60 years old will be limited. "That's the reason for introduction of certificates at the border. All men who will fall under this category must provide a certificate, showing the cause of departure was approved. This should be done not only by those who have received the summons," - said Poltorak.

This short but incredible story appeared on the Internet site yesterday---and I thank Roy Stephens for sliding it into my in-box just after midnight.


Australia's central bank cuts rates to record low; currency plunges and stocks spike

Australia's central bank cut its cash rate to an all-time low of 2.25pc on Tuesday, breaking an 18-month hiatus on stimulus as it seeks to spur a sluggish economy while keeping downward pressure on the local dollar.

The Australian dollar duly sank more than a full US cent after the Reserve Bank of Australia (RBA) ended its first policy meeting of the year by announcing the quarter point cut.

"Overall, the Bank's assessment is that output growth will probably remain a little below trend for somewhat longer, and the rate of unemployment peak a little higher, than earlier expected," said RBA Governor Glenn Stevens in a brief statement.

"This action is expected to add some further support to demand, so as to foster sustainable growth and inflation outcomes consistent with the target."

I found this story on The Telegraph's website in the wee hours of this morning.  It was posted there at 7:09 a.m. GMT this morning.


U.S. Mint gold coin sales weakest for January since 2008

U.S. Mint American Eagle gold coin sales in January rose from December but were the lowest for that month since 2008, as a rally in prices discouraged collector buying in what is typically a period of peak demand, data showed on Friday.

The U.S. Mint sold 81,000 ounces of gold bullion coins this month, down from 91,500 ounces in the first month of last year and the lowest since 2008 when 26,000 ounces were sold.

Sales were still more than four times December’s total of 18,000 ounces.

Silver also had a slow start to the year, with 5.53 million ounces sold in January, more than double December’s total but the lowest for January since 2010.

This brief Reuters article is something I found on the Internet site last last night MST.


Koos Jansen: German, Dutch gold repatriation totals don't match New York Fed's numbers

Gold arrival totals for the German Bundesbank and the Netherlands central bank for 2014 don't match gold departure totals for the Federal Reserve Bank of New York, Bullion Star market analyst and GATA consultant Koos Jansen reports today.

Jansen plans to ask the central banks next week if they can explain the seeming discrepancy.

Jansen's report is headlined "Federal Reserve New York Gold Withdrawal Numbers 2014 Don't Match Dutch-German Repatriation Claims" and it was posted on the website on Saturday---and I found it embedded in a GATA release on the weekend.


China’s SGE gold withdrawals already 202 tonnes in just 3 weeks

Many believe there has been a concerted programme to suppress the gold price through paper gold manipulation on COMEX.  Some also believe that China is happy with this given that it has enabled gold purchases at a level which it considers cheap in the long term.  This accompanied by the suggestion that China has been surreptitiously using its vast foreign currency related holdings – estimated at over $3 trillion – to quietly build its own gold reserves with the aim of surpassing the U.S.’s reported 8,133.5 tonnes as reported to the IMF, and may only disclose its true gold holding when it has reached, or breached, this level.

The latest reported Chinese buying, though, which has reached 202 tonnes in just 3 weeks, must be significant in global gold supply/demand patterns, although this tends to be hugely downplayed by most mainstream analysts.  As we have noted before, we consider SGE withdrawals as representing true Chines gold consumption.  We are also given to believe that the Chinese Central Bank does not purchase gold through the SGE, although if it does then that could account for the apparent huge disparity between mainstream analysts’ projections and the SGE withdrawal figures.  But either way there is still obviously a huge physical gold flow from the West into China and one wonders how much longer this can go on until shortages of physical metal start to impact the western gold markets in a very big way!

We do expect Chinese gold demand to fall off sharply, though, once the Lunar New Year is past, but China probably only accounts for half global gold demand anyway so there will remain what we see as a big new supply/demand imbalance regardless.

This commentary by Lawrence Williams appeared on his website on Saturday.  It's worth reading---and I thank Dan Lazicki for sharing it with us.


Koos Jansen: Thompson Reuters GFMS double-counts Shanghai gold trading

Bullion Star market analyst and GATA consultant Koos Jansen discloses today that the leading precious metals consultancy, Thompson Reuters GFMS, has doubled-counted gold trading on the Shanghai Gold Exchange. People pay big fees for the Thompson Reuters GFMS data, while Jansen's analysis remains free to all. What a world.

This analysis showed up on the website on Saturday Singapore as well---and it's another story I found on the Internet site.


Chinese banks to join new gold fix in March

The replacement for the near-century old London gold fix will start in March, with the hope of attracting at least 11 members, including Chinese banks for the first time.

U.K. financial authorities are undertaking an assessment of financial benchmarks in the wake of a series of scandals, including the gold fix.

The presence of Chinese banks would give the world's second-largest consumer of the yellow metal a greater say in the global gold price. Participants in the fix aggregate orders from clients on to a platform to determine the price.

The above three paragraphs are all there is posted in the clear from this Financial Times news item that showed up on their website on Monday sometime---and it's another gold-related news item I found on the Internet site.



¤ The Funnies

Ordinarily I wouldn't pick up my camera for an English house sparrow, but when this male landed on a leaf of this plant---how could I resist?  Except for some minor cropping, this photo is straight out of the camera.  It took it while eating lunch outside at the Desert Botanical Garden in Phoenix, Arizona last month.

This second photo is of wigeons, or widgeons---all males, except for one.  There are three types of wigeons/widgeons---this one is the American variety.  They breed in Canada and the northern U.S. in the summer, but this group, along with several hundred others I saw, were spending their winter at the large man-made lake in Fountain Hills, Arizona---which is on the northeast outskirts of Phoenix.

Cypress Development Corp. is a Canadian gold, silver and base metals exploration company developing projects in Red Lake, Ontario, Canada, and in Nevada, U.S.A.

Cypress holds a 100% interest in the approximately 1140 acre Gunman Zinc-Silver Project located in White Pine County, northeast of Eureka, Nevada. Three RC drill programs totaling approx. 38,000 feet have been completed by Cypress on the Gunman project with significant grades between 5% to 33% per ton zinc and 0.5 to 15.0 oz per ton silver over considerable widths encountered. Zinc could represent the next big base metal play due to ongoing demand growth and the closures of 3 major mines in Canada, Australia and Ireland and not enough supply coming on stream from new projects. Sentiment could shift towards zinc, with prices potentially rallying in anticipation of tightening supplies.


¤ The Wrap

In last Friday's COT Report, the CFTC reported that eight traders on the COMEX held 65,301 contracts of silver net short, close to the highest level in years. That is the equivalent of more than 326 million ounces of silver. It is also the equivalent of more than 40% of world annual mine production and 150 days of world mine production, an amount unequalled among all commodities. By comparison, the concentrated short position in COMEX copper is less than 10 days of world production. With silver priced close to the lowest level in years and below the average primary cost of production, it is hard, if not impossible, to explain the existence of the largest concentrated short position in terms of hedging by mining companies or other legitimate hedgers.

Moreover, the concentrated short position in COMEX silver is mostly held by U.S. and foreign banks, according to data in the Bank Participation Report. There are not many physical commodities where the banks control a larger share of market concentration than they do in COMEX silver futures and those few markets are run by the CME Group, the same self-regulatory organization that is supposed to be the front line regulator in silver.

Again, the issue is not that there are 326 million ounces held short in COMEX silver futures. The issue is that the 326 million oz are held short by only eight traders and there is good reason to believe that this position is responsible for an artificially low price. Certainly, no one would argue that silver prices appear artificially high based upon all the documented evidence, but if silver prices did move to extremely high levels and there was a documented concentrated long position, no one would need to petition the regulators for answers about that concentration. And you’ll notice that the few remaining deniers of the silver manipulation, never dare utter the word concentration (if they even grasp the meaning of the word) because it would expose the matter once and for all. - Silver analyst Ted Butler: 31 January 2015

I'm not sure what to make of yesterday's price action, although it certainly appeared that the only sellers in silver on a couple of occasions on Monday were of the not-for-profit variety.

I was certainly happy to see the precious metal equities finish in positive territory again, but as I've been saying for many months, we're seeing a lot of counterintuitive price action in both gold and silver equities, both to the upside and downside---so I'm not prepared to read much into yesterday's share price action.

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

I note that Ted had something to say about the obscene and grotesque short position in the COMEX silver futures market in his Saturday commentary to his paying subscribers.  I did as well, but his explanation is so much better than mine that I thought I'd steal it as the quote in today's column---and you should go back and read it again before proceeding further.

Once again, here's Nick Laird's most excellent chart---"Days of World Production to Cover COMEX Short Positions"---in all the physically traded commodities on the COMEX---updated with the data from last week's COT Report.  It's the same chart that appeared in my Saturday column.  These are the Big 4 and Big 8 traders that Ted and I are always going on about.

And as I said on Saturday----"What I had to say about the two biggest short holders in silver still stands—and that is that JPMorgan and most likely Canada’s Scotiabank combined, hold more than 50 percent of the COMEX short position in silver between them in the Big 8 category—and about 80 percent of the short position in the Big 4 category."

I also had this to say as well---"And, for the first time in about a decade, the four precious metals now occupy the four consecutive spots on the very far right of this chart.  These four precious metals continue to be the most manipulated commodities on Planet Earth, with silver holding top spot---a position it has held for most of the last 30 years."

Everybody else thinks that this is perfectly OK---and it's never mentioned when the so-called gold and silver "analysts" discuss future prices.  The COMEX short positions in the four precious metals is the big 800-pound gorilla in the living room, but nobody will admit it's there.

How stupid is that?

And as I write this paragraph, the London open is about an hour away.  After doing nothing for the first half of the Far East trading session on their Tuesday, gold and silver have popped a bit in price starting around 1 p.m Hong Kong time---and platinum followed an hour later.  Palladium is up a couple of bucks, but really hasn't done much up to this point.  Gold volume is only 16,000 contracts---and silver's net volume is pretty light as well, only 3,100 contracts.  The dollar index hasn't done much---and is currently up 5 basis points at the moment.

With the whole world firmly in the grip of a deflationary spiral that no amount of money printing will alleviate, there's still the gold card to be played.  Rising precious metal prices have been the inflation barometer for a century or more until it was silenced about thirty years ago.  If the powers-that-be want the world to wake up to real or imagined inflation, letting the precious metal prices run to the upside would be useful.

Of course that unleashes a whole new set of problems for the world's central banks, as precious metal ETFs would begin gobbling up prodigious amounts of the stuff---not to mention the physical market itself by newly-awakened retail demand in the West.

And although retail demand in North America continues to be very soft, that's not the case for the world's premier gold ETF, GLD---as 1.9 million ounces of gold have been deposited there since January 15.

Piling that kind of demand on top of what China, Russia and India are already reported to be consuming, is not a trend that can continue without drawing down central bank gold inventories even more.

Of course the biggest problem lies in silver, as the physical metal does not exist to meet the demand of the world's largest silver ETF---and that's SLV---let along the other silver ETFs out there.  Only 2.2 million ounces has been deposited in SLV since January 21---and much more is owed.

Not to be forgotten in silver is the fact that despite the 2.2 million ounces deposited in the last few weeks, there has been a net withdrawal of 29.5 million troy ounces from that ETF since December 1---and not a soul, except for Ted Butler, is asking what the hell that's all about.

Why not?---is the question that still goes begging an answer.

And as I hit the send button on today's column at 4:50 a.m. EST, I note that all four precious metals are now in rally mode, all with spikes up that began about ten minutes before London opened.  Gold is up nine bucks, but silver is up almost 50 cents.  Platinum is up 11 dollars---and palladium is up 8 dollars.

Gold volume is double what it was an hour before the London open---and is now at 32,000 contracts net.  Silver's net volume has tripled---and is now up to 9,500 contracts, so it's obvious that these rallies are not going unopposed, especially silver.

Here's the Kitco silver chart as of 4:45 a.m. EST---9:45 a.m. GMT in London

The dollar index still isn't doing much---and is now up 7 basis points, which is basically unchanged from three hours ago.  I also note that crude oil is up a bit over 3 percent at the moment.

Before heading out the door, I'd like to point out once again that Casey Research's "Going Global---the 2015 Edition" is now available.

As Doug Casey said in the past---"Remember, your government---considers you a milk cow. And history has shown, if they need to, they'll use you as a beef cow, as well---".

Washington is desperately looking for ways to bail out troubled union pension funds… and one of those ways is to take over 401(k) plans and IRAs.  Sounds preposterous, but it’s true.  In fact, in October 2010, Congress held a hearing on a proposal to do exactly that.  The talks went nowhere, but now they’re resurfacing again, raising the specter of every American losing control of their retirement funds. This $99 special report Going Global special report will show you how to protect yourself now.

Going Global 2015 is an updated version of the original Going Global 2014 special report. It has many updates and is definitely still valuable to people who purchased the original report. Because, however, we realize there are some similar subjects, we’ve structured the pricing as follows:

  • $99 for people who never purchased Going Global 2014
  •  $29 for people who purchased Going Global 2014 in the past

And you can find out all you need to know by clicking here.

Today, at the close of COMEX trading, is the cut-off for this Friday's Commitment of Traders Report, along with the companion Bank Participation Report.  How much of today's price/volume action will be in these reports is open for debate, as there are times when not all the data appears in a timely manner, particularly when there's been a heavy price action/volume day on the day of the cut-off.  So we wait.

And I'll be more than interested in what the precious metal charts look like when I roll out of bed later this morning.

See you tomorrow.

Ed Steer