Gold & Silver Daily

¤ Yesterday In Gold & Silver

It was another trading day in the Far East where gold got sold down right at the open of their trading day---and after that it didn't do much until minutes after the London open.  The rally that began at that point got capped within a few hours---and from that point until noon EDT, the price got sold down to its New York low.  The tiny rally attempts after that weren't allowed to get far.

The low and high ticks were recorded by the CME Group as $1,314.50 and $1,326.60 in the August contract.

Gold closed in New York on Tuesday at $1,319.00 spot, up a whole 70 cents from Monday's close.  Volume, net of June and July, was not exactly light at 127,000 contracts.  It's obvious that it took JPMorgan et al a decent amount of Comex paper to put out the gold rally at the London open yesterday morning.

It was more or less the same chart pattern for silver, however the rally---which broke above the $21 spot level---lasted about an hour longer than the gold rally.  But, by day's end in New York, the results were the same.

The low and high tick were reported as $20.81 and $21.17 in the July contract.

Silver finished the Tuesday trading session at $20.925 spot---up 3 cents on the day---and obviously back below the $21 spot price mark.  Gross volume was over the moon, but net volume  was 33,000 contracts, which was quite heavy---and was probably the result of more Comex paper being thrown at the silver rally at the London open, just like for gold

Both platinum and palladium got sold off a hair in early trading in the Far East on their Tuesday morning, but then rallied a few dollars above unchanged.  That state of affairs lasted until the 8:20 a.m. EDT Comex open.  They both spiked up---and both got capped in short order.  Platinum finished up about a percent---and all palladium's New York gains vanished within minutes, but did finish up seven bucks.  Here are the charts.

The dollar index closed late on Monday afternoon at 80.28---and then dipped down to its 80.20 low around 11:20 a.m. in London.  The subsequent rally made it as far as 80.42---and then sold down a bit from there.  The index closed at 80.32---up 4 basis points on the day.  Nothing to see here.

The gold stocks opened in positive territory, but began to head south within fifteen minutes---and they chopped slowly lower for the entire day.  The HUI closed on its absolute low tick, down 2.99%.

The silver equities were up a bit over 2 percent within 20 minutes of the open yesterday but, like the gold stocks, it was all down hill from there, as Nick Laird's Intraday Silver Sentiment Index closed down 1.99%.

The CME Daily Delivery Report showed that only 2 gold contracts were posted for delivery within the Comex-approved depositories on Thursday.

There were no reported changes in GLD yesterday, but even I was taken aback when I saw that there had been another withdrawal from SLV.  This time it was 1,056,233 troy ounces that were shipped off to parts unknown.  Since June 2 there have been 6.8 million ounces of silver withdrawn---with 3.6 million of that being pulled out since Tuesday, June 16.  And as I said yesterday---and on Saturday---Ted Butler says that this ETF is owed about 7 million troy ounces.

The good folks over at updated their Internet site with the latest changes in the short positions of both SLV and GLD as of May 15.  In SLV, the short position declined by 4.80 percent---from 14.23 million troy ounces/shares, down to 13.55 million troy ounces/shares.  Unless the authorized participants add the approximately 7 million ounces owed to this ETF before the end of the month, we'll see a big increase in the short position in SLV as the authorized participants are forced to short the shares in lieu of depositing the physical metal.

Over at GLD, the short position increased by 7.63 percent from the the end of May to the middle of June.  The current short position in GLD is now 1.36 million troy ounces, up from 1.26 million troy ounces in the prior report.

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

There was a small amount of gold shipped out of the Comex-approved depositories on Monday, as 4,807 troy ounces came out of Scotiabank.  But it was another big day in silver, as 842,145 troy ounces were reported received---and only 1,000 troy ounces were shipped out.  The biggest chunk went into the CNT Depository.  The link to that activity is here.

I have a very decent number of stories again today---and the final edit is up to you.


¤ Critical Reads

'Prepare for the Return of U.S. Inflation': JPMorgan, Others See Global Prices Spiking

The era of slowing global inflation looks to be over.

Three years of worldwide disinflation is ending, in the eyes of economists at JPMorgan Chase & Co. Their estimates show global consumer prices accelerated 2.65 percent in May.

That’s the fastest pace since April 2012 and the level they’d targeted for the end of 2014. It marks a 0.6 percentage point jump since February, when the 2 percent rate was the lowest since November 2009.

Well, inflation has always been here, the government has just been hiding it.  They can cook the inflation books any way they want---and they definitely want to see more of it in all the economies of the world.  This news item appeared on the Internet site at 7:47 a.m. EDT Tuesday morning---and I thank West Virginia reader Elliot Simon for today's first story.


CNBC Viewership Drops to Lowest Since 1997, Cramer Has Worst Month Ever

While those in the financial industry who are forced to make profits by trading other people's money (note: never their own) enjoy CNBC for the comedic content and the endless barrage of humorous propaganda (while getting their actionable info from Bloomberg and sell side soft-dollar services), the retail investor has traditionally relied on the Comcast channel for news updates, biased as they may be (remember: the Fed, ECB and BOJ are only micromanaging the global economy and injecting trillions because all is swell and self-sustainingly recovering and stuff) and trading recommendations.

At least that's how it used to work. However, when one looks at the most recent CNBC ratings something odd emerges: either the "retail investor" has found an alternative media outlet for getting their financial information during the day (or simply is tired of being lied to about some magical recovery that only affects 1% of the population) or said retail investor simply no longer exists despite all the endless propaganda to the contrary spewed by CNBC itself.

The reason? According to the latest Nielsen Media Research data, in the second quarter of 2014, CNBC business day viewership for all viewers just dropped to 162,000 - a new (and depressing for Comcast) low, on par with Q2 of 1997!

And if you think those ratings stink up the place---wait till you see how Jim Cramer fared!  This Zero Hedge piece showed up on their website site at 4:33 p.m. EDT yesterday afternoon---and it's the second offering in a row from Elliot Simon.  It's worth reading---and if you don't want to read it, you should at least look at the charts.


British banker David Higgs fined for hiding $100m losses

A British investment banker has been sentenced in New York for hiding $100m in losses on sub-prime mortgage bonds in the 2007 US housing market collapse.

David Higgs, 44, had already pleaded guilty in 2012 to charges of falsifying Credit Suisse's records, and agreed to co-operate in the probe of several officials at the Swiss bank, and so was sentenced to time served, the US Justice Department said.

Higgs, formerly a managing director in the investment banking division of Credit Suisse Group, was also ordered to pay nearly $1m in fines and forfeiture of gains.

The discovery forced the bank to take a $2.65bn write down on its portfolio of asset-backed securities in its 2007 accounts.

This article was posted on The Telegraph's website at 10:29 p.m. BST on Tuesday evening---and I found it all by myself!


Russian Riddle: E.U. Can't Agree on a Natural Gas Strategy

European leaders agree that the Ukraine crisis has made natural gas supplies from Russia precarious. Yet they are divided over what to do about it. Poland wants a new European energy union, but others seem to be in no hurry.

E.U. leaders are wrangling over how to secure Europe's long-term natural gas supply. Polish Prime Minister Donald Tusk is determined to demand more solidarity from his European partners. Others too have taken up his proposal to create a so-called energy union to reduce Europe's dependence on Gazprom.

But as so often happens in the E.U., when it comes time to discuss the details, national interests diverge and friendships dissolve, particularly when money enters the picture.

Tusk envisions the creation of a kind of purchasing syndicate that would negotiate with Russia. Poland is furious that it has to pay considerably more for natural gas than major German buyers.

This short news item appeared on the German website yesterday at 5:13 p.m. Europe time---and it's the first contribution of the day from Roy Stephens.


Sikorski attacks Cameron in latest Polish leak

Poland believes the British government has “f--ked up” its E.U. policy and that the U.K. will leave the Union.

The information, and the blunt language, came out on Monday (23 June) in the Polish news magazine Wprost, which is publishing parts of private conversations held by Polish ministers in their favourite restaurants and recorded by an unknown group.

The chat, between Polish FM Radek Sikorski and the then finance minister Jacek Rostowski, is said to have taken place in spring this year.

It refers to British PM David Cameron’s promise to re-negotiate the terms of the UK’s membership in the EU and to hold an in/out referendum by 2017.

This very interesting news item showed up on the Internet site at 7:23 p.m. Europe time on Monday evening.  I posted a similar story in yesterday's column, but this one is far more comprehensive.  It's the second story in a row from Roy Stephens.


E.U. threatens more Russia sanctions, prepares to sign Ukraine pact

E.U. countries have threatened to impose more sanctions on Russia if it does not help to stop violence in the run-up to the Ukraine treaty signature on Friday (27 June).

Foreign ministers in Luxembourg on Monday endorsed Ukraine’s unilateral ceasefire and urged Russia to “adopt effective measures to stop the continued flow of illegal fighters, arms and equipment over the border into Ukraine, [and] to use its influence on the separatists to stop the violence and lay down their arms”.

They said further “targeted measures … can be taken should events in eastern Ukraine so require”.

Dutch FM Frans Timmermans and his British counterpart, William Hague, noted that E.U. leaders will decide on sanctions at the summit on Thursday and Friday.

This article put in an appearance on the Internet site at 6 p.m. Europe time on Monday evening---and once more I thank Roy Stephens for sending it our way.


Doubting Putin, Obama Prepares to Add Pressure

The Obama administration has drawn up plans to escalate sanctions against Russia by targeting its financial, energy and defense industries, but faces resistance from European allies hoping to avoid a broader economic clash with Moscow that would hurt their own businesses.

Even as the Kremlin voices support for a cease-fire in eastern Ukraine, American officials remain unconvinced that it has backed up words with deeds. Russia has moved troops back to the border and positioned heavy artillery there in what American officials consider an effort to help the separatists, who on Tuesday shot down a Ukrainian military helicopter.

But President Obama faces hurdles as he tries to keep the pressure up on the government of President Vladimir V. Putin. European Union leaders, who are scheduled to meet Friday in Brussels, are reluctant to go along if it looks like Mr. Putin may be backing down. And American business leaders objecting to unilateral actions that would hurt their companies are kicking off an advertising campaign to oppose Mr. Obama’s plans.

This article appeared on The New York Times website sometime yesterday---and I thank Phil Barlett for passing it along.


Putin Scores Another Historic Victory: Austria Signs South Stream Pipeline Deal in Defiance of Europe

As the war of words between Europe and Russia has escalated, one of the outcomes that has emerged is that just like in false flag war over Syria, the Ukraine war was about the simplest possible thing, and yet so very complicate: a gas pipeline. Of course, it was never a secret that the prize in controlling Ukraine was possession of the vast pipeline infrastructure that left Russia and entered Europe, but since it was all Gazprom's gas in the first place, it didn't really matter if Kiev had possession of the gas as it transits to Europe, or if, as the case is now, Ukraine is merely a transit hub with all Russian gas delivered to European countries and none of it staying in the civil war torn country. After all as of this moment Ukraine can't afford any Russian gas, and if it siphons off any of the product destined for Germany and beyond it would simply antagonize its new NATO best friends, who also happen to be Gazprom clients.

No, the pipeline that has emerged with a starring role in the Ukraine conflict has nothing to do with Ukraine, but is a pipeline that crosses several hundred kilometers south of Ukraine - the South Stream project, which leaves the Russian black sea coast south of Crimea, crosses the black sea, and traverses Bulgaria, Serbia, Hungary and ends up in the gas hub in Baumgarten, Austria from where it proceeds to all points in central Europe, mostly Germany.

This very long Zero Hedge article was posted on their website at 8:23 p.m. EDT Tuesday evening---and I thank reader M.A. for sharing it with us.  It's worth reading---if you have the time.


Four Iraq/ISIL-related stories

1. U.S. Drones Strike ISIS Targets BBC Reports; Pentagon Denies: Zero Hedge  2. ISIS: Iraq today and possibly Jordan tomorrow:  3. Iraq, ISIL and the region's choices: Al Jazeera [12 June]  4. The view from Kurdistan: Divide Iraq in order to save it: Al Jazeera [13 June]

[The above stories are courtesy of Ulrike Marx---and South African reader B.V.]


Three King World News Interviews

1. Ronald-Peter Stoferle[#1]: "Debt, Gold, Crisis---and Two Absolutely Astonishing Charts"  2. Ronald-Peter Stoferle[#2]: "Jim Grant---and a Look at Some Truly Unbelievable Gold Charts"  3. Richard Russell: "Gold Stampede---and My Biggest Fear For the U.S."

[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]


Stoferle report finds gold spectacularly undervalued, manipulated, but being remonetized

The annual "In Gold We Trust" report on gold by market analyst Ronald-Peter Stoferle of Incrementum AG in Lietchtenstein, was published on Tuesday morning---and asserts that gold is spectacularly undervalued but already being remonetized even as its market is manipulated as governments pursue a policy of "financial repression." Stoferle's report is comprehensive and encouraging for mining share ownership as well as ownership of the metal itself.

With his kind permission this 94-page document is posted in PDF format at GATA's Internet site.  I thank Chris Powell for wordsmithing "all of the above."


South Africa platinum union, mines sign wage deal but job cuts loom

The world's three biggest platinum firms signed a wage deal with South Africa's AMCU union on Tuesday but said that fallout from a five-month strike made job cuts and restructuring inevitable, setting the scene for more labour turmoil.

The three-year agreement with Anglo American Platinum , Impala Platinum and Lonmin ended South Africa's longest and costliest strike. The union's 70,000 striking members will return to work on Wednesday.

Association of Mineworkers and Construction Union (AMCU) president Joseph Mathunjwa told Reuters the companies had committed to "no retrenchments" for the duration of the deal, although his comment was at odds with statements from the firms.

Lonmin, the smallest of the three producers, said restructuring was "inevitable" to ensure its business remained afloat, especially while industrial demand for platinum in vehicle catalytic converters remained subdued.

This Reuters article, filed from Johannesburg, was posted on their website at 11:29 a.m. EDT on Tuesday morning---and it's courtesy of Ulrike Marx.


CPM predicts largest-ever platinum market deficit in 2014

Regardless of Monday’s announced end of the South African platinum strike, New York-based commodities research firm, CPM Group, forecasts that the platinum market is expected to record the largest deficit ever this year, as the shortfall of total supply of newly-refined platinum relative to fabrication demand is estimated at 818,823 ounces this year.

In the CPM Group Platinum Group Metals Yearbook 2014 made public Tuesday morning, CPM estimated that total refined platinum supply rose 2.6% to 7.2 million ounces last year. Most of the supply increase was from higher mine supplies, which rose 4.8%.

“Despite this positive growth recorded last year, platinum mine supplies remain vulnerable to problems in South Africa,” CPM observed. “The country, which accounts for 73% of the world’s platinum mine supply , has been experiencing mine closures, safety stoppages, lower ore grades, and operational disruptions caused by labor disputes and geological complexities.”

I'm sure that nowhere in that report was any mention made of the rather large Comex short positions held by four U.S. banks in platinum---and three or less U.S. banks in palladium.   This commentary was posted on the Internet site yesterday---and is definitely worth reading if you have any serious interest in the PGMs.  It's also another contribution from Ulrike Marx.


Singapore to launch gold contract as Asia eyes price alternatives

Singapore is set to announce the launch of a gold futures contract on Wednesday, two sources familiar with the matter said, joining a race in Asia to provide a viable alternative to the metal's global benchmark which is under regulatory scrutiny.

The physically settled contract will trade on the Singapore Exchange. This and other planned contracts in Hong Kong and China could cut Asian reliance on gold's spot price benchmark in London and futures bellwether in New York.

"Having a local price for local markets ensures that markets are more efficient and that the price accurately reflects where the metal is locally trading," said Ruth Crowell, chief executive of industry group London Bullion Market Association.

This Reuters piece, filed from Singapore, showed up on their Internet site at 7:40 a.m. EDT on Tuesday---and I found it embedded in a GATA release.



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¤ The Wrap

If we do witness a sharp growth in the short position of SLV, I’m prepared to take the matter up again with BlackRock (the trust’s sponsor) and their very aggressive lawyers. The bottom line is that the lack of deposits/delay in SLV fully supports the COMEX silver warehouse turnover as an indicator of extreme tightness in physical silver. As much as I study the COTs, as and when a pronounced physical shortage of silver appears, I’m prepared to disregard the COTs as physical will trump paper. Again, both the COMEX warehouse turnover and the deposit story in SLV are specific and unique to silver and not any other commodity, including gold. - Silver analyst Ted Butler: 21 June 2014

It was just another day off the calendar yesterday---and another day where every rally, no matter how small in all four precious metals, got capped.   And as I mentioned at the top of this column, it took a decent amount of Comex paper for "da boyz" to put out those gold and silver rallies in London yesterday morning.

Here are the 6-month charts for both silver and gold once again---and not a thing has changed since I posted Monday's charts in yesterday's column, as both are still in overbought territory.

Once again I was bowled over by the fourth withdrawal from SLV in the last six business days.  If anyone has any explanation other than "acute physical silver shortage," I'd love to hear it.

I was not amused by the price action in the precious metals yesterday.  I'm always suspicious of future price events in the metals themselves when there is counterintuitive action in the shares.  Maybe I'm just imaging things, but this overbought situation has to be resolved, so I doubt that we'll have to wait much longer for some sort of resolution.

As I write this paragraph, the London open is about 20 minutes away.  As has been the case recently, all four precious metals got sold down in morning trading in the Far East on their Wednesday.  And also like yesterday, all four are rallying into the London open, but all have a ways to go to get back to unchanged from Tuesday's close in New York.  Volumes are already pretty heavy in both metals.  There is some roll-over action in silver, but even the net volume is pretty chunky for this time of day and, not that it matters, the dollar index is trading ruler flat.

We've got three more trading days in the July silver contract before it goes off the board on Monday.  All the big boys have to be out by the end of trading on Thursday, with the balance of the traders on Friday.  Monday is First Notice Day, but I would think that the CME Group will have the delivery numbers up on Friday evening EDT.

And as I prepare to send today's column out the door, the London market has been open an hour.  The tiny rallies going into London open all got sold down---and all four precious metals are back to more or less where they started at, or before, the London open.  Volumes in both gold and silver are higher than I like to see, especially considering the lack of price action.  The dollar index is still trading flat from its close in New York yesterday afternoon.

That's all I have for today---and nothing will surprise me from a price perspective when I power up my computer later this morning.

Enjoy your day---and I'll see you here tomorrow.