Gold & Silver Daily
"The dollar index was rescued from what looked like a near-death experience"
 

¤ Yesterday In Gold & Silver

The gold price traded in less than a five dollar price range right up until the Fed spoke.  The price blasted higher from there, but it was obvious from the chart that sellers of last resort were at the ready, with the preliminary rally, along with every subsequent rally meeting the same fate---and the gold price was closed well of its high tick.

The low and high were reported by the CME Group as $1,144.90 and $1,175.10 in the April contract.

Gold closed in New York yesterday afternoon at $1,166.90 spot, up $18.30 from Tuesday's close.  Net volume was only 150,000 contracts---and only 7,000 more than were traded on Tuesday.

Here's the 5-minute tick chart for gold---and as you can tell, most of the volume that mattered occurred between 2 and 3:30 p.m. EDT, which is noon and 1:30 p.m. on this chart, because it's scaled in MDT.  I thank Brad Robertson for sending it.  The 'click to enlarge' feature is a must.

It was the same for silver, as the not-for-profit sellers kept the silver price on a very short leash, as it followed an identical path as the gold price.  It made it through the $16 spot price mark, but wasn't allowed to close there.

The low and higher were recorded as $15.43 and $16.095 in the May contract.

Silver was closed well of its high on Wednesday at $15.89 spot, up only 36 cents.  Net volume was only 35,000 contracts---and only 4,000 contracts more than Tuesday.

Platinum and palladium price movements were similar.  Platinum finished up 22 dollars---and palladium was up 21 bucks on the day.  Here are the charts.

The dollar index closed late on Tuesday afternoon in New York at 99.65---and then didn't do much until it began to develop a negative bias around 9:00 a.m. EDT.  The roof caved in on the Fed news, but the real drop occurred minutes before 4 p.m. in New York, where the dollar index collapsed---and it was obvious that a buyer of last resort showed up at the 97.00 mark right at 4:00 p.m.   From that low, the index "rallied" into the close, finishing the day at 97.82---down 183 basis points, which is the biggest 1-day move that I can remember.

What is obvious is that if that "buyer" hadn't been waiting in the wings, the U.S. dollar would have imploded yesterday.

Here's the 1-year U.S. Dollar chart---and you can see just how close we came to a total melt-down, as the U.S. dollar basically went "no ask" until "not-so-gentle hands" showed up.

The gold stocks opened unchanged---and traded sideways until the blast-off at 2 p.m. EDT.  They hit their highs about twenty minutes later, before chopping sideways into the close.  The HUI finished up a respectable 5.06 percent.

It was more or less the same for the silver equities, although they ended up closing on their high tick of the day, which is something we haven't seen in a while.  Nick Laird's Intraday Silver Sentiment Index finished up 5.24 percent.

The CME Daily Delivery Report showed that zero gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  Not surprisingly, JPMorgan in its in-house [proprietary] trading account stopped all of them.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest for March increased by 15 contracts to 125 still open---and silver o.i. fell 118 contracts, which was the delivery posted for today.  We are down to 574 contracts still open in March, minus the 3 mentioned in the previous paragraph.

There was a surprise deposit in GLD yesterday, as an authorized participant added 57,584 troy ounces.  And as of 9:52 p.m. EDT yesterday evening, there were no reported changes in SLV.

Just as a point of interest, with the exception of a withdrawal of 125,000 troy ounces on March 3---there have been nothing but deposits into SLV since January 22.  Most of these deposits would have probably been done by JPMorgan to cover the short position that they ran up during the December/early January rally, where they had to short SLV shares in lieu of depositing physical metal.

Not to be forgotten however, is the fact that as of the close of trading on Wednesday, March 11, the price of silver had fallen by about $3.25 from its January 26 high---and only 125,000 troy ounces have been withdrawn in the interim.  The question still looking for an answer is---who has been buying all the shares of SLV that have been sold since the January 26 high if no metals has been withdrawn since?

There was no sales report from the U.S. Mint yesterday.

There was a pretty decent sized gold withdrawal from Canada's Scotiabank yesterday, 96,450.000 troy ounces were reported shipped out of the COMEX-approved depositories on Tuesday.  That works out to precisely 3,000 kilobars.  The link to that activity is here.

There was decent movement in silver as well, as 604,243 troy ounces were reported received---and 111,502 troy ounces were shipped out the door.  The link to that action is here.

I've taken an axe to the stories that were sent to me today, so I hope you'll find some you like.

 

¤ Critical Reads

The Fed Speaks---and Zero Hedge has a lot to say about it

Rather than post each individual story from the Zero Hedge website---all of which pertain to the same thing, I thought I'd just post the hyperlinked headline and let you decide.  Although I've marked the ones that I considered the most important---especially #4 and #5.

1.  FOMC Reaction: Buy Stocks, Buy Bonds, Buy Gold, Buy Crude Oil, Sell Dollars
2.  "Flexible" Fed Loses "Patience"; Cuts Growth, Inflation Forecasts: Redline Comparison
3.  Here is the Reason Why Stocks Are Soaring, or Farewell "Recovery"... Again
4.  Liquidity Alert - Treasury Market Depth Hits New Low Ahead of FOMC [Must Read]
5.  Dollar Flash Crashes: Currency Market Pulverized as Dollar Implodes After Close [Must Read]
6.  Fed Growth Cut Unleashes Panic Buying of Everything; Dollar Plunges Most Since 2009
7.  Here is Why the Fed Can't Hike Rates by Even 0.25% [Worth Reading]

All stories courtesy of Dan Lazicki, except story #5 which reader M.A. sent our way.

Read more...

Ray Dalio: Fed Rate Hike Risks 1937-Style Stock Crash

When the Federal Reserve finally raises interest rates, there could be heck to pay in the stock market, says Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund manager.

Indeed, we could see a repeat of 1937, he and colleague Mark Dinner wrote in a note to investors obtained by the Financial Times. In that year, the Fed tightened policy prematurely after the crash of 1929. This led to the Dow Jones Industrial Average falling by one-third in 1937 and continuing to decrease in 1938.

"We don't know — nor does the Fed know — exactly how much tightening will knock over the apple cart," the duo said.

"If one agrees that either a) we are near the end of the developed country central bankers' ability to be effective in stimulating money and credit growth or b) the dollar is the world's reserve currency and that the world needs easier rather than tighter money policies, then one would hope that the Fed will be very cautious about tightening."

This business news item appeared on the newsmax.com Internet site at 1:15 p.m. EDT on Wednesday afternoon---and it's worth reading.  I thank West Virginia reader Elliot Simon for sharing it with us.

Read more...

Low rates will trigger civil unrest as central banks lose control, BIS says

Low inflation, bond yields and interest rates around the world will push the boundaries of economic and political stability to breaking point if they continue on their downward trajectory, the Bank for International Settlements has warned.

The Swiss-based "bank of central banks" said the "sinking trend" of global rates would push countries further into uncharted territory.

It highlighted that $2.4 trillion (£1.6 trillion) of long-term global sovereign debt was now trading at negative yields, with an increasing number of investors willing to pay governments for the privilege of lending to them.

"As bond markets show us day after day, the boundaries of the unthinkable are exceptionally elastic," said Claudio Borio, head of the Monetary and Economic department at the BIS.

This commentary appeared on the telegraph.co.uk Internet site at 11:00 a.m. GMT yesterday morning U.K. time---and I found it embedded in a GATA release.

Read more...

Fed won't raise interest rates this year: Marc Faber

"In my view, the Fed will not increase interest rates this year," the editor of the Gloom, Boom & Doom Report editor said Wednesday on CNBC's "Squawk Box," pointing to dollar strength and recent disappointing economic data. "The economy simply [is] not taking off, so I don't see there will be an interest rate increase."

Faber made his comments ahead of a scheduled Wednesday afternoon statement from the Federal Open Market Committee and a news conference by Chair Janet Yellen. Some investors expect the central bank will indicate it will begin hiking short-term interest rates from near zero.

Faber reiterated his opinion that the zero interest rate policies of central banks around the world have "grossly distorted financial markets and misallocated capital."

Marc is sounding more like Jim Rickards all the time.  This 3:23 minute video clip, including a transcript, came from CNBC Hong Kong early yesterday morning local time---and I thank reader Ken Hurt for sending it.

Read more...

Fannie, Freddie could need another bailout as risks rise -watchdog

U.S. housing finance companies Fannie Mae and Freddie Mac could require more bailouts from U.S. taxpayers as risks are rising due to shrinking reserves, an internal watchdog for the firms' regulator said on Wednesday.

Washington bailed out the two firms in 2008 at the height of the financial crisis and has since seized all their quarterly profits while demanding the firms reduce their capital buffers.

"Future profitability is far from assured," Federal Housing Finance Agency Office of Inspector General said in a report, pointing out that the firms could again chalk up losses on their derivatives portfolios, similar to those they reported in the fourth quarter.

This Reuters article filed from Washington, appeared on their website one minute after midnight on Wednesday morning---and it's another contribution from Elliot Simon.

Read more...

Oil Bonds Lose Investors $7 Billion in 10 Days

Investors lured back into junk-rated energy bonds by their juicy yields are getting burned.

Oil prices have fallen more than 15 percent since March 4 to a six-year low of $42.3, wiping out $7 billion of market value of high-yield debt issued by energy companies. Prices on $1.45 billion of notes sold less than two weeks ago by Energy XXI Ltd., an oil producer that was being squeezed by its lenders, have fallen by as much as 10 percent. Comstock Resources Inc.’s $700 million of securities have declined by more than 7 percent since March 6.

The latest slump in crude is rekindling concern that oil companies will struggle to service the $120 billion of high-yield, high-risk debt they took on in the past three years amid the U.S. shale boom. That’s a sharp reversal from February when yield-starved bond investors were loading up on the debt again, pushing down borrowing costs to a two-month low.

This Bloomberg article, filed from New York, was posted on their Internet site at 5:15 p.m. MDT on Tuesday afternoon---and it's the second offering in a row from Elliot Simon.

Read more...

Doug Noland: Financial Repression Authority

This 28:09 minute video/audio interview with Doug Noland of Credit Bubble Bulletin fame is the first I've ever seen him involved with.  It was conducted by Gordon T. Long on March 15---and I thought I'd post it in today's column rather than wait for the weekend.

I haven't listened to it yet, but it will get done at my earliest possible convenience.  It was posted on the youtube.com Internet site on Sunday.  I thank Dennis Meredith for finding this one for us.

Read more...

Venezuela puts debt service before food imports as cash dries up: sources

Venezuela's government has told the country's food industry that it is limiting dollar disbursements for food imports so that it can pay down foreign debt amid low oil prices, according to two sources with direct knowledge of the situation.

The government of socialist President Nicolas Maduro administers most of the country's dollars through a currency control system and must pay $8.4 billion in debt service on foreign bonds by the end of the year.

Restrictions on dollars for imports have already caused shortages of basic goods including meat and olive oil, and the scarcity is weighing on the government ahead of parliamentary elections.

At the same time, concerns Venezuela could default on foreign debt have pushed its yields to the second highest of any emerging market nation, despite government assurances it is committed to servicing the bonds.

This Reuters news story, filed from Caracas, put in an appearance on their website on Monday evening EDT---and I thank reader U.D. for sending it our way.

Read more...

Swedish central bank cuts key rate further below zero

Sweden's central bank took its key interest rate further into negative territory Wednesday in a surprise move aimed at supporting a return to inflation.

The Riksbank cut its repo rate by 0.15 percentage points to -0.25 percent and said it was buying government bonds worth 30 billion kronor ($3.4 billion, 3.2 billion euros) to prevent an appreciating krona from hindering an uptick in inflation.

"The executive board of the Riksbank assesses that an even more expansionary monetary policy is needed to support the upturn in inflation and ensure that long-term inflation expectations are in line with the inflation target," the bank said in a statement.

Sweden is a member of the European Union but not of the eurozone and so retains control, via its central bank, of monetary policy and interest rates.

This AFP news item, filed from Stockholm, was picked up by the news.yahoo.com website yesterday---and I thank Howard Wiener for finding it for us.

Read more...

Greece adopts anti-poverty law in face of E.U. opposition

The Greek parliament approved a “humanitarian crisis” bill Wednesday, the first of a raft of social measures proposed by new Prime Minister Alexis Tsipras, despite stiff opposition from the European Commission, who called the law a “unilateral” action.

The bill, which adopted housing allowances and emergency food aid for the poorest Greeks, was passed with support from conservative New Democracy lawmakers, as the government snubbed efforts by the European Commission to scupper it.

"If they're doing it to frighten us, the answer is: we will not be frightened. The Greek government is determined to stick to the Feb. 20 agreement. However, we demand the same from our partners. Let them stop unilateral actions, respecting the agreement they signed,” Tsipras told parliament.

This article showed up on the Russia Today website at 5:06 p.m. Moscow time on their Wednesday afternoon, which was 10:06 a.m. in Washington.  I thank Roy Stephens for bringing it to our attention.

Read more...

‘Glaring breach’: Minsk ‘violation’ sees Russia urge France, Germany to act on Ukraine

Moscow has called on Berlin and Paris to take action in regards to Kiev's non-compliance with the Minsk peace agreement, in what Russia's Foreign Minister has called a “glaring breach of the first steps of the Minsk package.”

I don't know how the political process will unfold now,” Lavrov told a news conference on Wednesday. “Yesterday I sent special notes to the foreign ministers of France and Germany, and drew their attention to the glaring breach of the first steps of the political part of the Minsk package by Kiev. I urged them to take a trilateral joint demarche in regards to our Ukrainian colleagues in order to encourage them to implement agreements which they signed, and what was supported by the leaders of Germany, France, Russia and Ukraine."

Kiev didn't even take an effort in an attempt to start dialogue with the self-proclaimed republics of Donetsk and Lugansk on the modalities of elections there, Lavrov said after negotiations with his Gabonese counterpart, Emmanuel Issoze-Ngondet.

I posted a similar story to this in yesterday's missive, but this one is far more comprehensive.  It appeared on the Russia Today website at 2:04 p.m. Moscow time on their Wednesday afternoon---and I thank Roy Stephens for finding it for us once again.

Read more...

Russia Ready to Give a Helping Hand to Ukraine to Overcome Ordeal - Putin

Russia will do everything in its power to help Ukraine overcome the current crisis and to re-establish normal bilateral relations as soon as possible, President Vladimir Putin said Wednesday.

"On our part, we will do everything in our power to help Ukraine pass this difficult period in its history as quickly as possible, and everything to re-establish normal bilateral relations," Putin said addressing a concert-meeting for commemoration of the first anniversary of Crimea's reunification with Russia.

"Extreme nationalism is, certainly, very dangerous and harmful. And I am sure the Ukrainian people will give a deserved and objective assessment of the actions carried out by those who brought the country to the current state of affairs," Putin added.

This story appeared on the sputniknews.com Internet site at 6:26 p.m. Moscow time Wednesday evening local time---and that makes it three in a row from Roy Stephens.

Read more...

100,000 gather in central Moscow to celebrate Crimea reunification

Some 100,000 people, according to police estimates, gathered near Red Square in Moscow on Wednesday to celebrate the anniversary of Crimea's reunification with Russia. President Putin joined the event and sang the Russian national anthem on stage.

The gala show, titled "We are together", included a rally and a concert. It was organized by Moscow City Hall---and marked a year since Crimea joined Russia.

"A year ago, the Russian people demonstrated amazing equanimity and patriotism in supporting the people of Crimea and Sevastopol in returning to their native land. We, all together, then realized and felt with our hearts and minds how important the link of history and generations is," Putin said, adding that such historical and "spiritual" connections make people a united nation.

This colourful photo essay appeared on the Russia Today website at 6 p.m. Moscow time yesterday local time, which was 11 a.m. in Washington.  That makes it four in a row from Roy.

Read more...

Obama Should Take Into Consideration Russia's Interests – Dr. Brzezinski

Zbigniew Brzezinski, former national security adviser and influential American geostrategist, believes that the deal over Ukraine's crisis should reflect Russia's interests. Instead of simply expanding sanctions against Russia, President Barack Obama should propose a comprehensive agreement, acceptable for both sides. Particularly, US leadership must provide Moscow clear reassurances that NATO will never incorporate Ukraine.

Washington has repeatedly warned the Kremlin about "the costs" Russia would pay if it did not change its stance regarding Ukrainian affairs. Over the year, as anti-Russian rhetoric grew in the US, prominent officials in the Obama administration have started openly discussing defensive and lethal weaponry supplies to Ukraine. Zbigniew Brzezinski emphasized that Washington should not step in while the ceasefire in eastern Ukraine appears to be holding. The former national adviser warned that the US involvement could be exploited "to justify a resumption of conflict."

According to Dr. Brzezinski, Washington ought to try to make an agreement in which some of Moscow's interests and some of American interests are rendered mutually compatible. Although Ukraine will most likely become a democratic member of the European Union one day, NATO should send a clear signal to Russia that Ukraine will preserve its non-aligned status, Zbigniew Brzezinski emphasized.

As I've said before, I'm not sure anyone in Washington is listing to Brzezinski anymore.  I'm not in love with this guy myself, but in this instance, it's really too bad that they aren't.  This commentary was posted on the sputniknews.com website at 7:53 p.m. on Wednesday evening local time in Moscow---and the stories from Roy just keep on coming.

Read more...

China’s biggest rating agency gives Russia’s #3 lender high investment grade

The largest ratings agency in China, Dagong has given a high A- investment rating to Russia’s Gazprombank which is intending to extend its ties to China and other countries in Asia.

"The assigned credit rating from Dagong will foster further development of Gazprombank’s business network in Asia and other countries in the Asia-Pacific region,” the company quotes Gazprombank’s Deputy Chairman Oleg Vaksman in a press release on Wednesday

Dagong assigned the high A- credit rating to Gazprombank for foreign and local currencies, with a stable outlook. The rating is one notch below the sovereign rating of Russia, and at the same level as US.

Gazprombank has said it is considering placing bonds on China’s domestic debt market. The so-called ‘Panda Bonds’ can be placed by foreign companies and banks only in case the borrower receives a rating from a Chinese rating agency.

This Russia Today article appeared on their Internet site at 1:50 p.m. yesterday evening Moscow time---and it's the final offering of the day from Roy Stephens.

Read more...

China likely to ‘dominate’ global gold pricing in future: ANZ

As China’s financial exchanges continue to grow and expand the country is likely to “dominate” global gold price discovery in the future, ANZ said Wednesday in a research note.

“Beyond its role as the world’s largest producer and [a top] consumer of physical gold, we believe China will eventually dominate the price discovery process too, as Asia’s financial centres gradually open up. There is no reason why Shanghai should not become a major centre for gold trading provided the appropriate institutional and legal reforms take place,” the Australian bank noted.

“As Asia will comprise over half of the global economy by 2050, the rise in regional incomes will support the demand for gold investments. China and India are already the world’s largest gold consumers and incomes still have a long way to rise before reaching developed-world levels,” ANZ said.

The bank believes that Central banks are likely to continue adding to gold holdings over the long term.

What a bulls hit piece of "research" this is.  Who the hell knows that the price of anything will be ten months down the road, let alone ten years?  The gold price will be far higher than $2,000 the ounce long before 2025---as mine production will have fallen off a cliff long before then---and the precious metal price management scheme will also be history.  This piece of trash was one that I picked up off the Sharps Pixley website early this morning.

Read more...

Chinese banks won't be part of new gold benchmarking at start, source tells Reuters

A handful of banks will start setting gold prices electronically on Friday, sources with direct knowledge of the matter said, as Intercontinental Exchange completes a sweeping change to London's bullion benchmarks and dispenses with the century-old gold "fix."

"I would like to think (there will be) more than the current (four) ... but we'll have to wait and see," a source with direct knowledge of the matter said.

The LBMA, which will retain intellectual property of the new benchmark, had said that 11 entities intended to participate in the new mechanism from the start.

Industrial and Commercial Bank of China, Bank of China International and China Construction Bank, which are ordinary members of the LBMA, were unlikely to be in the list of new participants at this stage, the first source said.

This Reuters article, filed from London very early this morning GMT, appeared on their website at 8:01 p.m. EDT yesterday evening---and I found it over on the gata.org Internet site where Chris Powell filed it from Singapore on their Thursday afternoon.

Read more...

Hugo Salinas Price: Greece's currency options go beyond predatory euro and laughable drachma

Greece's options go beyond a currency controlled by its stupid creditors, the euro, and re-establishing a domestic currency, the drachma, which would purport to draw value from an economy whose main enterprises are welfare and tax evasion.

That is, as Mexican Civic Association for Silver President Hugo Salinas Price writes this week, Greece could issue a commodity currency with intrinsic value, a silver coin whose value in drachmas would be guaranteed by the nation's central bank never to fall.

The idea, of course, is a perfect solution for all nations.  Salinas Price's commentary is headlined "Letter to Alexis Tsipras from Hugo Salinas Price, Dated July 25, 2012"---and it was posted on the plata.com.mx website on Wednesday.  It's a must read for sure---and I found it on the gata.org Internet site just after I filed today's column.

Read more...

 

¤ The Funnies

Here are the last four photos from my Phoenix trip.  Like the photos from yesterday, these were also taken around the lake at Fountain Hills as well.  The first two are of the American coot---a.k.a. a mud hen.  They look like a duck, but they aren't.  They aren't the prettiest bird in the world---and have the strangest feet, which you can see in the second photo.  They're very common in Alberta---and you can't get within a country mile of them here when they're breeding.  But they came running up in Phoenix the moment that they felt there was any chance that you might feed them, which I thought an amazing behavioral change from one part of North American to another.  No telephoto lens was necessary for these pictures.  The 'click to enlarge' feature really helps here.

This flock of American wigeons, or widgeons, flew past my head---and this was the best shot I could get with no prior warning---and it's a "rear view" shot as well.  The second one shows some of them resting quietly.  There was a limit to how close they would allow you to get, so I had to crop the second photo a decent amount.

PERUVIAN GOVERNMENT AWARDS DYNACOR PERMIT TO BUILD NEW LARGER-SCALE MILL AT CHALA

Dynacor’s newly approved, second gold processing plant will create value for many years as a direct result of production increases and lower cost/units.

Another near term catalyst exists in the form of exploration results at our high-grade gold project, Tumipampa.  As the steady flow of news hits the wire, value will be added to the asset through demonstration of the economic viability and a growing resource base.

Dynacor is debt-free, results driven company proving its mettle year after year with or without a ‪bull market. The company exercises discipline in its strategy to build growth by eliminating the risk of having to sell equity to the public to raise cash for operations or pay back debt payments.

With zero debt, solid working capital of $21 million and a consistent flow of cash coming from operations even in a low gold price environment, Dynacor is in a unique and strong position to advance both of its divisions, production and exploration/development.

Dynacor, with its last equity financing over five years ago, is a shareholder-first company focusing on delivering real value. Please contact Dale Nejmeldeen with questions or to learn more about the company.

 

¤ The Wrap

When JPMorgan took over Bear Stearns’ giant short position in COMEX silver (and gold) in early 2008, it had every incentive to force prices lower; which it did. What would you do if you were short tens of thousands of silver contracts and owned no physical? But as a growing physical silver shortage developed into early 2011 and prices soared, JPMorgan realized it was on the wrong side of the market equation and made the conscious decision to get on the right side of silver. So it began to use its dominant control of prices on the COMEX, not just to continue to profit on short side paper speculations, but with the added goal of picking up physical silver on the cheap. To just say that JPMorgan succeeded would be the understatement of all time.

If my speculation is correct and JPMorgan has acquired upwards of 300 million ounces of physical silver, it would not be an overstatement to call this the commodity coup of all time. Not only did JPMorgan buy three times as much silver as did the Hunt Brothers or Warren Buffett, it did so on sharply declining prices as opposed to the sharply rising prices caused by the Hunts and Buffett. And there was a lot more silver in the world at the time of the Hunts and Buffett’s acquisitions, making the JPMorgan feat that much more spectacular. Almost unbelievably, JPMorgan bought roughly a third of all the silver bullion in the world at progressively lower prices. Of course, it did take JPM four years to do so and involved a blatant downside price manipulation on the COMEX, not something attributable to the Hunts or Buffett.

If JPMorgan has acquired the amount of physical silver that I have speculated, what is the bank’s likely ultimate plan and motive? Considering that this is an organization devoted to maximum profit at the core of its purpose, it seems undeniable to me that it would seek maximum profit on its silver position. And whereas JPMorgan’s accumulation of physical silver was in conflict with the interests of silver investors over the past four years, JPM’s ultimate liquidation of its silver position is now very much in accordance with the interests of silver investors. I don’t think this makes JPMorgan any less of the market crook I have always held them to be; this is just an acknowledgement that sometimes the interests of the legitimate and illegitimate can be aligned. - Silver analyst Ted Butler: 18 March 2015

It was a wild and crazy two hour trading period from the 2 p.m. Fed announcement, until the dollar index was rescued from what looked like a near-death experience at 4 p.m. EDT.  Please note the USD chart posted in the first part of this column---and also below.  It's equally obvious that JPMorgan et al were at the ready when precious metal prices exploded, as they certainly weren't allowed to get very far on any rally attempts that were made.

It was very much a case of everything that wanted to melt up, wasn't allowed to---and everything that wanted to melt down, wasn't allowed that luxury either.  It just goes to show how fragile the current financial and monetary system really is.  Free markets where nowhere to be found yesterday once again, as the Plunge Protection Team was everywhere.

Here are the 6-month precious metal charts once again, along with WTIC.  I've also posted the 1-year U.S. Dollar chart again so you can see how far it went over the proverbial cliff before being hauled back.

And as I type this paragraph, the gold market open in London is ten minutes away---and there certainly isn't much going on.  The price popped five bucks in early Far East trading on their Thursday morning---and that was it.  The same can be said for the other three precious metals---and palladium is actually down from Wednesday's close in New York.

Net gold volume is already pretty chunky, so it appears that what little price action there was in morning trading in Hong Kong met with the usual cadre of not-for-profit sellers.  The same can be said for silver, as net volume there is 5,500 contracts. 

The dollar index, which rolled over pretty hard starting around 8 a.m. Hong Kong time, appeared to get rescued once again---and it's currently up 41 basis points.

With the Fed meeting out of the way, we have one more gold-related event to deal with---and that the new London gold fix that starts tomorrow.  With Chinese banks not involved---and the usual suspects still holding the price reins, I'm not expecting much.  If it's anything other than a non-event, I'll be amazed.  But since it's happening on a Friday, I guess nothing would surprise me.

And as I fire today's effort off into cyberspace at 5:15 a.m. EDT, I note that the bullion banks have been hard at work selling down all four precious metals after their respective 9:00 a.m. Hong Kong time high ticks.  All of gold's Far East gains have disappeared, as have silver's---and palladium has had almost half of its Wednesday gains taken back already.  Only platinum is up a couple of bucks at the moment.

Gold's net volume is now a bit north of 42,000 contracts---and almost all of it is of the HFT variety in the current front month---and silver's net volume is a hair over 9,000 contracts, with 98 percent of that amount in the May contract.  The dollar index is now up 122 basis points---and will back to unchanged in no time at this rate.

That's all I have for today which, once again, is more than enough---and I'll be eager to see what JPMorgan et al have been up to when I check the charts around noon EST this morning, but at the moment it isn't looking that good.

I'm off to bed---and I'll see you here tomorrow.

Ed Steer