[Note: After three years without a break, I'll be taking some time off. There will be no Gold and Silver Daily next week. Ed]
The gold price got sold off a few dollars the moment that trading began at 6 p.m. in New York on Sunday evening. Then two hours later at exactly 8 a.m. in Hong Kong on their Monday morning, a rally began that got met by usual not-for-profit sellers the moment it broke above $1,300 spot---and two hours later, gold hit its low tick of the day. Volume by lunchtime in Hong Kong was north of 32,000 contracts, a spectacular amount. From there the price began to recover, but at a snail's pace---and the rally that began at the 8:20 a.m. EDT Comex open, ran into the usual sellers of last resort. The snail's pace rally then continued into the close.
The CME Group recorded the high an lows ticks as $1,302.50 and $1,281.80 in the June contract.
Gold closed in New York on Monday afternoon at $1,290.30 spot, down only $4.30 on the day. Volume, net of April and May, was 104,000 contracts---and as I pointed out above, over 30% of that occurred before lunch in Hong Kong.
The silver price action was a virtual carbon copy of what happened to the gold price. The low was in at 10 a.m. Hong Kong time, with a secondary low at 1 p.m. BST London time---20 minutes before the Comex open---and the subsequent rally from there got chopped off at the knees minutes after 9 a.m. EDT in New York. From there it got sold down a bit---and then traded flat from about 10:30 a.m. until a smallish rally began at 3:45 p.m. in electronic trading.
The high and low ticks were recorded as $19.705 and $19.23 in the May contract---an intraday move over a bit more than 2%.
Silver finished the Monday trading session at $19.44 spot, down 21 cents from Thursday's close. Net volume was pretty light at only 22,000 contracts. Gross volume was 32,000 contracts, with an incredible 11,000 of those contracts being traded by noon in Hong Kong.
Platinum's vertical price spike at the Sunday night open immediately ran into a wall of sellers of last resort---and that forced the price to chop around within a five dollar range of its Thursday close, even though it was obvious that the price want to rally strongly as well. The Far East low came shortly after 10 a.m. Hong Kong time---and from there it chopped its way higher until shortly before 10 a.m. BST London time. The selling pressure began once again at that point---and the price went into a slow decline until 12:30 p.m. in New York. From there it traded sideways, with three attempts to force the price lower after that, but all of them failed.
Palladium took off to the upside at the open on Sunday night as well---but the moment it got a sniff of the $800 spot price, a not-for-profit seller was there to put a quick end to that rally attempt. By the Comex open, palladium was down a bit more than a percent. But the HFT boyz showed up at, or just minutes after, the London p.m. gold fix---and palladium got creamed for another 2% in very short order. From there it rallied a bit into the close.
The dollar index closed at 79.85 late on Thursday afternoon in New York last week. And even though the gold markets were closed, the dollar index did trade on Friday, but didn't do much. It got as high as 79.92 in early Far East trading on their Monday morning---but began to sell off almost immediately, with the 79.80 low of the day, such as it was, coming at 10 a.m. in London. From there the index 'rallied' as high as 79.98 shortly before noon in New York---and slid a hair into the close. The index closed at 79.95---up ten basis points from Thursday's close, but the scale of the chart makes the 'action' appear far more impressive than it really was. However, it is interesting to note that the rally---such as it was---failed to break back above the 80.00 mark.
As has been the case lately, the gold stocks opened in positive territory, only to get sold down into the red almost right away---and as you can tell, this was the procedure again yesterday. The low of the day came shortly after 1 p.m. EDT in New York---and the HUI rallied for the remainder of the day, cutting its loss to only 0.23%.
And as has also been the case, the silver stocks stunk up the place once again. Even though the HUI and Nick Laird's Intraday Silver Sentiment Index had the same chart pattern, the silver stocks closed down 1.23%.
The CME's Daily Delivery Report showed that 68 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Wednesday. Jefferies was the only short/issuer of note with 66 contracts---and it was the usual two suspects as long/stoppers---JPMorgan and Canada's Scotiabank. The link to yesterday's Issuers and Stoppers Report is here.
Since I'm talking about delivery, there are still a huge number of silver contracts in the May contract---58,529 as of this writing---that have to been sold or rolled by the end of next Monday's trading day. Whoever isn't out by that time is obviously standing for delivery. But with only five trading days left between now and then, the activity in the May contract month will be fast and furious up until then.
Another day---and another withdrawal from GLD. This time an authorized participant took out 96,327 contracts. And as of 7:20 p.m. EDT yesterday evening, there were no reported changes in SLV. But when I checked back there at 9:35 p.m.----I was astonished to discover that an authorized participant had deposited 1,729,976 troy ounces. Based on current price activity, this deposit must have been used to cover an existing short position, as no other explanation is possible under the circumstances.
The U.S. Mint had a sales report. They sold 691,500 silver eagles---and that was it.
Over at the Comex-approved depositories on Friday, they reported receiving 16,557 troy ounces of gold---and shipped out 32,092 troy ounces. All the activity was at Brink's, Inc. and HSBC USA. The link to that is here.
There wasn't much activity in silver, as nothing was reported received---and only 104,747 troy ounces were shipped out the door. All the activity was at CNT---and the link to that activity is here.
The Commitment of Traders Report [for positions held at the close of Comex trading on Tuesday, April 15] was more or less what I was hoping to see---as it appeared most, if not all, of the volume from Tuesday's big price hit in both gold and silver showed up in the numbers. There will most likely be some spill-over into this Friday's report, but it shouldn't be a huge amount.
Because I didn't have a column on Saturday, I'm "borrowing" a decent amount of stuff from Ted Butler's COT commentary to his paying subscribers on the weekend, which is a luxury I can't remember ever enjoying before.
In silver, the Commercial net short position declined by a chunky 5,611 contracts, or 28.1 million troy ounces. The Commercial net short position now sits at 116.5 million troy ounces. Ted says that JPMorgan covered 1,700 short contracts---and pegs JPMorgan's concentrated net short position around 20,000 contracts, or 100 million troy ounces. JPMorgan's short position represents about 86% of entire short position in the Commercial category.
Ted mentioned last week that there was obviously a 9-10,000 contract "value investor" embedded on the long side of the Managed Money/Technical Fund/Non-Commercial category that has been there since October of last year---regardless of what was happening price wise---up or down. Even after last Tuesday's big sell-off, that long position was still intact in this report.
Unless "da boyz" can force the holder[s] of this position to liquidate, Ted feels that the bottom in silver is within a handful of contracts of being in---and that should most likely be confirmed by this coming Friday's COT Report.
In gold, the Commercial net short position declined by 14,138 contracts, or 1.41 million ounces. The Commercial net short position is now down 87,605 contracts, or 8.76 million troy ounces. Ted said that the eight largest Commercial traders bought back 3,200 contracts---and their net short position is now the lowest in nearly a year---and that JPMorgan purchased "up to" 2,000 new long contracts---and their long-side corner in the Comex gold market is up to 38,000 contracts, or 3.8 million ounces.
About gold's current situation, silver analyst Ted Butler had this to say---"Looking under the hood in the disaggregated report at the managed money category of gold and comparing the current technical fund position with historical levels, there doesn’t appear to be much room for further technical fund long liquidation; no more than 5,000 to 10,000 contracts of gross long liquidation compared to previous record low readings."
Ted also said that "The concentrated net short position in silver is the largest of any regulated commodity by a wide margin at the equivalent of nearly 320 million troy ounces, or 40 percent of world's yearly silver production---and it remains an oddity that the concentrated short position in Comex gold is closer to its historical low, while the concentrated short position in silver is nearer the high."
Here's Nick Laird's "Days of World Production to Cover Comex Short Positions" chart updated with Friday's numbers. In silver, JPMorgan's current Comex short position is 50 days of world silver production in both the red and green bars. How's that for concentration?
Ted's comments about the oddity of the the short position of the Big 8 in silver and the Big 8 in gold being at such extremes is very noticeable in this chart.
Here's another chart from Nick Laird. This is for silver only---and is the same data that appears in the "Days to Cover" chart above. The only difference being that it shows the short positions of the Big 4 and Big 8 traders going back seven years---and not just the current week as the "Days to Cover" chart does. And as Ted has pointed out, as silver's price has declined, the short positions of the Big 4 and 8 traders has blown out as well, which makes no sense at all. It's exactly the opposite in gold---and I'll have those charts for you tomorrow.
Here's a chart that skipped my mind in my Friday column. Since the 20th of the month fell on a weekend, The Central Bank of the Russian Federation updated their website with their March data---and it showed no change in their gold reserves which still sit at 33.5 million troy ounces. Here's Nick Laird's most excellent chart.
Since it was four days since my last column, I have a large number of stories for you today. I've already hacked and slashed more than I wanted to, so I'll happily leave the final edit up to you.
The average price for regular gasoline at U.S. pumps jumped 8.5 cents in the past two weeks to a 13-month high of $3.6918 a gallon, according to Lundberg Survey Inc.
The survey covers the period ended April 18 and is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company.
Prices are the highest since March 22, 2013. The average is 15.55 cents higher than a year ago, Lundberg said. Gasoline has risen 39.74 cents a gallon since bottoming out in February and is up 43 cents this year.
“The most important factor right now in this rise is crude oil, which rose by a very similar amount to the street-price move,” Trilby Lundberg, the president of Lundberg Survey, said in a telephone interview Sunday. “From here, we will probably see very little increase, if any, with the big caveat of course being crude. If crude prices climb even higher, then this may not be the peak.”
Today's first news item, which is courtesy of West Virginia reader Elliot Simon, was posted on the moneynews.com Internet site on Sunday afternoon EDT.
The U.S. economy may not mend its woes soon and instead may suffer a bout of "secular stagnation," Brown University economists Gauti Eggertsson and Neil Mehrotra maintain in a recent paper.
A deleveraging shock, a drop in population growth, or an increase in income inequality could shift people from borrowing to savings, the economists say. Essentially, there simply aren't enough promising real-world investments, forcing investors to put their money into stocks, junk bonds, etc. — and not investments that create demand for a product. This weak demand results in economic stagnation.
And with a short-term interest rates already at zero, the Fed will be "unable to generate a sufficient monetary stimulus," they assert. The outcome: a "permanent slump in output," Eggertsson and Mehrotra write.
"It's not a baseline scenario, but I think people should at least be starting to consider the possibility that this could go on for a while," Eggertsson told CNBC.com.
This short article also showed up on the moneynews.com Internet site, but this one is from last Friday morning EDT---and it's also courtesy of Elliot Simon.
From Yellen: “If the public understands and expects policymakers to behave in this systematically stabilizing manner, it will tend to respond less to such developments. Monetary policy will thus have an ‘automatic stabilizer’ effect that operates through private-sector expectations.”
The traditional gold standard was so effective because it in fact provided an “automatic stabilizer.” If Credit was created in excess, an economy would suffer a loss of gold. The reduced gold reserve would dictate higher rates and a (stabilizing) contraction in lending. Bankers and politicians understood the mechanics of the system (and were committed to sustaining the monetary regime), so they would tighten their belts when excess first emerged. In this way, the gold standard for the most part provided a stabilizing and self-correcting system. These days, everyone knows the Fed will not respond to excess. Our central bank, however, will be predictably quick to print additional “money” at the first sign of a faltering Bubble, liquidity that will further reward financial speculation. Excess begets excess. Today’s system is the very opposite of “automatic stabilizer.”
This all could sound too theoretical. But with the Fed intending to conclude balance sheet leveraging later in the year, this theory might soon be tested.
For obvious reasons, Doug's Friday commentary had to wait until today. It's always worth reading---and this one is no exception, as I read it over the weekend.
On March 30, Michael Lewis went on "60 Minutes" and said that the stock market is "rigged." This past Friday, some plaintiffs' lawyers filed a lawsuit against, um, the stock market. This raises many questions, of which the most pressing is, what took so long? The lawsuit is basically just a synopsis of Lewis's book, "Flash Boys," and, I mean, how long can that take? I feel like plaintiffs' lawyers by now must have algorithms to transform news articles into lawsuits, so what was the holdup here?
The other problem with the lawsuit is that it pretty much sues the stock market for being the stock market. So the defendants include pretty much every stock and options exchange, and also literally every brokerage, and literally every high-frequency trading firm. There's a long list of brokerages and HFT firm.
Every brokerage firm that transacted for clients since April 2009 is (supposedly!) a defendant in this lawsuit, including just for instance noisy HFT critics Themis Trading. And everyone who "operated alternative trading venues which provided venues for the anonymous placing of bids and offers" is (supposedly!) a defendant, including just for instance Michael Lewis's heroes at IEX.
This Bloomberg story showed up on their website late yesterday morning EDT---and it's the first offering of the day from Roy Stephens.
Sweden has become the first country in northern Europe to slide into serious deflation, prompting a blistering attack on the Riksbank’s monetary policies by the world’s leading deflation expert.
Swedish consumer prices fell 0.4pc in March from a year earlier, catching the authorities by surprise and leading to calls for immediate action to avert a Japanese-style trap.
Lars Svensson, the Riksbank’s former deputy governor, said the slide into deflation had been caused by a “very dramatic tightening of monetary policy” over the past four years. He called for rates to be slashed from 0.75pc to -0.25pc to drive down the krona, and advised the bank to prepare for quantitative easing on a “large scale”.
Prof Svensson said Sweden was at risk of a “liquidity trap” akin to the 1930s, with deflation causing debt burdens to ratchet up in real terms. Swedish household debt is 170pc of disposable income, among Europe’s highest.
This Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site late Friday evening BST---and it's definitely worth reading. It's the second offering in a row from Roy Stephens.
Royal Dutch Shell’s new CEO Ben Van Beurden met with Russian President Vladimir Putin on Friday, signaling Ukraine tension has not affected investment in Russia, and that energy contracts won't be derailed by international politics.
Chief executive Van Beurden met with the president at his residence outside of Moscow and reaffirmed the company’s commitment to develop Russia’s only liquefied natural gas (LNG) plant with Gazprom.
"We also know that this is going to be a project that will need strong support to succeed. So one of my purposes of meeting with you, Mr. President, is to also secure support for the way forward on this project," Van Beurden said.
“Now is the time to expand this lucrative project, we will need strong support to make it a success,” the oil chief said.
This news item showed up on the Russia Today website on Friday afternoon Moscow time---and I thank South African reader B.V. for sending it our way.
The deadly shootout near the eastern Ukrainian city Slaviansk during the early hours of Sunday has sparked a heated international war of words in the wake of a deal signed in Geneva aimed at averting a broader conflict in the region.
At around 2am (11pm GMT), four vehicles rolled up to a separatist checkpoint near Slaviansk where they opened fire, pro-Russian militants reported. Three people were killed and three more wounded, police in Ukraine’s capital Kiev confirmed.The exact details and who was responsible for the incident are still unclear.
The deaths were the first from armed clashes in eastern Ukraine since Russia, Ukraine, the European Union and the United States signed a truce agreement in Geneva on Thursday calling for all illegal armed groups to surrender their weapons and vacate public buildings in Ukraine.
Sunday’s shootout, however, triggered a war of words between Russia and Ukraine’s government, with each questioning the others commitment to the Geneva deal, which sought in part to bring an end to the worst crisis between the West and Russia since the end of the Cold War.
This news item showed up on the france24.com Internet site early yesterday morning sometime---and it's another contribution from Roy Stephens.
Russia and the U.S. traded blame for failing to rein in extremists in Ukraine, as a diplomatic accord reached last week all but collapsed.
U.S. Secretary of State John Kerry warned Russian Foreign Minister Sergei Lavrov today that “there will be consequences” if Russia fails to act “over the next pivotal days” to restrain pro-Russian militants in eastern Ukraine, spokeswoman Jen Psaki said in Washington. In Moscow, Lavrov called on the U.S. to hold Ukraine’s interim government accountable for curbing what Russia portrays as right-wing militias.
The agreement signed in Geneva by Ukraine, the European Union, the U.S. and Russia on April 17 calls for all illegal groups to give up their arms and return seized buildings. Pro-Russian forces held their ground in several eastern cities, as their leaders denied they were bound by the accord. The government in Kiev has said Russia is behind the unrest, exploiting the situation to prepare a potential invasion.
This Bloomberg story, co-filed from Moscow and Kiev, was posted on their Internet site early yesterday afternoon Denver time.
If the Ukrainian government in Kiev thinks that the truce signed last week in Geneva will make pro-Russian rebels go away, it had better think again.
Developments before and since the Geneva agreement, signed on April 17, demonstrate that Ukraine is a genuinely divided nation, in which Russian interference is merely a catalyst of resentment. Observers from the Organization for Security and Cooperation in Europe, led by the pedantic German diplomat Klaus Zillikens, have reported that neither side is following the agreement. As of April 19, pro-Russian rebels were still holding on to buildings in Donetsk, Lugansk and surrounding small towns, and Ukrainian "self-defense" paramilitaries in Dnepropetrovsk and Kherson were refusing to give up weapons or "regularize."
This should come as no surprise, given that no one in Geneva fully represented the sides in the actual conflict. The interim government is uneasy about the paramilitaries left over from the Maidan revolution that brought it to power. Russia has never admitted it had enough influence over the rebels in the east to make them lay down their arms. To Zillikens the stickler for precision, Russian presence in eastern Ukraine is not even an established fact. "There are signs that foreign consultants worked in Ukrainian territory," he told Echo Moskvy radio. "We do not, however, have any clear proof of that."
This very short Bloomberg op-ed piece showed up on their website yesterday sometime, I believe. But it's hard to tell, as there's no dateline. I thank Roy Stephens for sharing it with us---and it's worth reading.
1. Pro-Russian Insurgents Balk at Terms of Pact in Ukraine: The New York Times 2. Europe’s hawks, doves, and a lot of posturing on Russia: The Telegraph 3. E.U. replies to Putin: Remaining a reliable supplier in Russia's interest: Russia Today 4. U.S. Said to Warn Firms of More Russia Sanctions Before Deal: Moneynews 5. Why Putin Isn’t Scared by $115 Billion of Debt: Russia Credit: Bloomberg 6. Lavrov: U.S. should face responsibility for powers it installed in Kiev: Russia Today 7. Kiev desperately pushing for greater conflict with Russia: Russia Today 8. NATO's task is to drive wedge between Russia and its allies - deputy DM: The Voice of Russia 9. Russia returns 13 out of 70 navy ships in Crimea to Ukraine: The Voice of Russia 10. ‘Ukrainian crisis puts China in a very advantageous position’: Russia Today
[The above stories are courtesy of Elliot Simon, South African reader B.V.---and Roy Stephens]
Ukraine is for all practical purposes broke. The Kremlin's consistent position for the past three months has been to encourage the European Union to find a solution to Ukraine's dire economic mess. Brussels did nothing. It was betting on regime change to the benefit of Germany's heavyweight puppet Vladimir Klitschko, aka Klitsch The Boxer.
Regime change did happen, but orchestrated by the Khaganate of Nulands - a neo-con cell of the State Department and its assistant secretary of state for European and Eurasian Affairs Victoria Nulands. And now the presidential option is between - what else - two US puppets, choco-billionaire Petro Poroshenko and "Saint Yulia" Timoshenko, Ukraine's former prime minister, ex-convict and prospective president. The EU is left to pick up the (unpayable) bill. Enter the International Monetary Fund - via a nasty, upcoming "structural adjustment" that will send Ukrainians to a hellhole even grimmer than the one they are already familiar with.
Once again, for all the hysteria propagated by the US Ministry of Truth and its franchises across the Western corporate media, the Kremlin does not need to "invade" anything. If Gazprom does not get paid all it needs to do is to shut down the Ukrainian stretch of Pipelineistan. Kiev will then have no option but to use part of the gas supply destined for some EU countries so Ukrainians won't run out of fuel to keep themselves and the country's industries alive. And the EU - whose "energy policy" overall is already a joke - will find itself with yet another self-inflicted problem.
This absolute must read commentary by Pepe was posted on the Asia Times Internet site last Thursday---and it's another contribution to today's column from reader B.V.
The BRICS bloc of emerging economies will have all preparatory work done for setting up its development bank by the group's summit in July, South African Finance Minister Pravin Gordhan said on Thursday.
The bank Brazil, Russia, India, China and South Africa plan to support infrastructure projects has been slow in coming, with prolonged disagreements over its funding, management and headquarters.
The group, which has struggled to take coordinated action on most issues in the past year after the scaling back of U.S. stimulus prompted an exodus of capital from their markets, is hoping their leaders will officially launch the bank at their July meeting in Brazil.
"We've made very good progress on the new development bank and most of the formal documentation is ready," Gordhan told journalists after a meeting of the BRICS finance ministers in Washington.
This Reuters story, filed from Washington, is 11 days old but dovetails nicely with the Escobar commentary above---and it's also courtesy of reader B.V.
President Obama has warned that Iran is not open for business, even as the United States has loosened some of its punishing economic sanctions as part of an interim nuclear pact.
Yet on Tuesday morning, Iran had an unlikely visitor: a plane, owned by the Bank of Utah, a community bank in Ogden that has 13 branches throughout the state. Bearing a small American flag on its tail, the aircraft was parked in a highly visible section of Mehrabad Airport in Tehran.
But from there, the story surrounding the plane, and why it was in Iran — where all but a few United States and European business activities are prohibited — grows more mysterious.
While federal aviation records show the plane is held in a trust by the Bank of Utah, Brett King, one of its executives in Salt Lake City, said, “We have no idea why that plane was at that airport.”
This very interesting story showed up on The New York Times website last Friday---and is certainly worth your time, if you have it. Once again my thanks go out to Roy Stephens for digging it up for us.
A federal judge has approved plans to sell a 36-story Manhattan office building and other properties owned by Iran nationwide in what will be the largest terrorism-related forfeiture ever, a prosecutor said Thursday.
U.S. Attorney Preet Bharara said Judge Katherine Forrest approved the deal between the U.S. government and 19 holders of more than $5 billion in terrorism-related judgments against the government of Iran, including claims brought by the estates of victims killed in the Sept. 11, 2001, terrorist attacks.
The deal calls for the Manhattan building and other forfeited assets to be sold by the U.S. Marshals Service, with the U.S. government receiving reimbursement for litigation expenses and any costs of the sales before the rest is distributed to victims of terrorist attacks. The agreement stems from a 2008 lawsuit by the government against the building's owners.
Bharara said the settlement is an important step toward "completing what will be the largest ever terrorism-related forfeiture and providing a substantial recovery for victims of terrorism."
Excuse me for bringing up an "Inconvenient Truth"---but most of the "hijackers" involved in 9/11 were from Saudi Arabia---that's if you believe the American government's fairy tale about what happened on that day. This AP story was picked up by Fox News---and posted on their Internet site on Thursday sometime---and I thank internationalman.com senior editor Nick Giambruno for bringing it to our attention.
A Shanghai court ordered the seizure of a Japanese ship owned by Mitsui OSK Lines Ltd. as compensation for the loss of two ships leased from a Chinese company before the two countries went to war in 1937.
The 226,434-ton Baosteel Emotion was impounded on April 19 at Majishan port in Zhejiang province as part of a legal dispute that began in 1964, the Shanghai Maritime Court and Mitsui OSK said in notices on their websites.
The holding of the ship reflects strained ties between China and Japan amid a territorial dispute over an island chain and visits by Japanese politicians to a Tokyo shrine honoring that country’s war dead. The move is the first time a Chinese court has ordered the seizure of Japanese assets connected to World War II, and could cast a pall over the countries’ trade, according to Shogo Suzuki, a senior lecturer at the University of Manchester in the U.K. who studies China-Japan relations.
Wow! This is an ugly turn of events---and certainly turns up the tension level more than a notch. This Bloomberg news item, filed from Beijing, was posted on their website in the wee hours of yesterday morning MDT---and it's definitely worth reading. It's also courtesy of Roy Stephens.
Japan’s weakest export growth in a year spurred a wider-than-forecast trade deficit in March, adding to challenges for Prime Minister Shinzo Abe in steering the economy through the aftermath of an April 1 sales-tax rise.
The 1.8 percent rise in the value of shipments overseas from a year earlier, reported today by the Ministry of Finance, compared with a 6.5 percent median estimate of 27 economists in a Bloomberg News survey. An 18.1 percent jump in imports helped widen the deficit to the biggest ever for the month.
Exports by volume fell the most since June last year, suggesting external demand may fail to provide much support for an economy set to contract this quarter. A spending spree ahead of the tax increase boosted imports, already swollen by a surge in energy costs due to the yen’s slide and nuclear shutdowns.
This Bloomberg news item, filed from Tokyo, was posted on their Internet site late on Sunday evening Mountain Daylight Time---and I found it in yesterday's edition of the King Report.
1. Victor Sperandeo [#1]: "Legend Who Predicted 1987 Crash Warns "This Will End Badly" 2. Egon von Greyerz: "A Bankrupt World---$26,000 Gold---and the Destruction of Wealth" 3. James Turk: "Gold Market Now Seeing Deepest Backwardation in 8 Months!" 4. Victor Sperandeo [#2]: "The Catastrophic End Game---and Skyrocketing Gold Prices" 5. Ronald-Peter Stoferle: "Two of the Most Remarkable Charts We've Seen This Year" 6. Robert Fitzwilson: "Shocking Events Rapidly Unfolding Around the World" 7. Richard Russell: "The Dollar Will Crash in a Matter of Months" 8. The first audio interview is with Victor Sperandeo---and the second audio interview is with Dr. Philipa Malmgren
[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]
Gold has made its way down again, to around 1,300 per ounce this month. Rick Rule, Chairman of Sprott Global Resource Investments Ltd. says that a few years out, you will be happy you stuck with gold.
For context to today’s downturn, look back at the great bull market for gold in the 1970s’.
As Rick recently put it to King World News, “that is the kind of regret that no investor wants to live with for the rest of their lives.”
Rick believes the overall bull market will return and produce substantial returns to investors who own gold.
Copper fabricators in China, the biggest consumer, are paying the highest premium in 29 months to secure delivery of the metal that’s used in everything from electric wires to water pipes.
Chinese smelters are hoarding the metal in bonded warehouses in an attempt to drive up the local price against the rate in London and sell it abroad at a profit, according to SMM Information & Technology Co. At the same time, local traders have locked up as much as 1 million metric tons as collateral to get credit for other investments, Goldman Sachs Group Inc. said on March 18.
The CHART OF THE DAY tracks spot prices in Shanghai and the futures contract for immediate delivery on the Shanghai Futures Exchange. The lower panel shows the premium reached 585 yuan ($94) a ton on April 16, the highest level since November 2011.
“The premium has surged while stockpiles in the physical market are decreasing rapidly as Chinese smelters are selling their copper to bonded zones,” said Jiang Ning, a senior analyst with Shanghai-based SMM Information.
This Bloomberg piece, filed from Shanghai, was posted on their Internet site at noon in Denver on Sunday---and it's the final offering of the day from Elliot Simon.
In terms of public policy, though, we favor honest money. It works out better for more people. And there is a moral dimension to the question of honest money. This was a matter that was understood — and keenly felt — by the Founders of America, who almost to a man (Benjamin Franklin, a printer of paper notes, was a holdout), cringed with humiliation at the thought of fiat paper money. They’d tried it in the revolution, and it had been the one embarrassment of the struggle. They eventually gave us a Constitution that they hoped would bar us from ever making the same mistake.
There is an irony here for Monsieur Piketty. It was France who gave us Jacques Rueff, the economist who had the clearest comprehension of the importance of sound money based on gold specie. He was, among other things, an adviser of Charles de Gaulle. It was de Gaulle who in 1965, called a thousand newspapermen together and spoke of the importance of gold as the central element of an international monetary system that would put large and small, rich and poor nations on the same plane. We ran the complete text of Professor Piketty’s book “Capital” through the Sun’s own “Electrically-operated Savvy Sifter” and were unable to find, even once, the name of Rueff.
Reflecting on French economist Thomas Piketty's new book, "Capital," The New York Sun offers a most politically incorrect explanation for the explosion in income inequality and unemployment in the United States since the 1970s: the end of the dollar's gold convertibility and the unleashing of the age of infinite fiat money. I found this N.Y. Sun editorial embedded in a GATA release yesterday---and it's worth reading.
Talks between Barrick Gold Corp and Newmont Mining Corp about a potential merger have hit a snag, but sources close to the situation say the companies remain keen to reach a deal and discussions are likely to resume.
The talks had been on for a few weeks, and the two sides had broadly agreed to a transaction under which Toronto-based Barrick would acquire Denver-based Newmont in an all-stock deal, said one source close to the matter.
That source said the deal would offer Newmont shareholders a slight premium to its current share price. Newmont shares rose 6.4 percent to close at $25.05 on the New York Stock Exchange, while Barrick's shares edged down 78 cents Canadian to C$19.03.
The sources, who asked not to be named due to the sensitive nature of the situation, said the talks have stalled over the issue of the spin-out of some assets from the combined entity, which is among the hurdles to a deal.
This gold-related story showed up in a Reuters piece filed from Toronto very early yesterday evening---and another item I found over at the gata.org Internet site yesterday.
The first lesson to file for future reference is that major banks with huge balance sheets and big-name consultants do not necessarily have a better crystal ball on the gold price than anyone else. The second is that, when it comes to gold reporting, one should not accept as gospel everything one sees or reads in the mainstream media. Its traditional anti-gold bias bleeds from its pages, so to speak, and should be taken with a grain of salt.
The mainstream media, for whatever reason, continues to believe that it can scare potential gold owners away with its consistently negative coverage, but as a recent Gallup Poll suggests, such tactics no longer work all that well. That poll ranks gold the second best option among long-term investments behind real estate and tied with stocks.
What makes gold’s poll performance interesting is that it reflects public opinion on gold after a more than two year decline that began in 2011 and at a time when real estate and stocks have enjoyed strong performances. In 2011, after ten straight years of annual gains, the public ranked gold the number one investment. Prior to 2011 gold was not included in the Gallup survey.
This commentary by Mike Kosares, was posted on the usagold.com Internet site on Sunday---and it's certainly worth skimming.
Interviewed by Sprott Money News, Sprott Asset Management CEO Eric Sprott cites gold researcher and GATA consultant Koos Jansen and GoldMoney's Alasdair Macleod in support of his belief that the World Gold Council's estimates of China's gold demand are grossly understated. Sprott also discusses last week's manipulation of the gold market via the dumping of a huge amount of paper gold.
The interview, which was posted on the sprottmoney.com Internet site last Thursday, runs for 10:28 minutes.
Editor's note: A previous version of this article titled "Platinum producers capitulate on union pay demand" updated by Mineweb's Kip Keen incorrectly stated Impala Platinum and Anglo American had met Association of Mineworkers and Construction Union (AMCU) demands. Mineweb apologises for any confusion it created.
While the platinum producers new offer is significant and guarantees more years of higher wage increases, it does not fully meet AMCU demands.
The AMCU has asked for an increase in basic pay to R12,500 over a 4-year period for entry-level workers.
Impala and Anglo American are now offering R12,150 in cash remuneration - which includes basic pay but also a living allowance and holiday pay - over a five year period for entry-level workers. The new offer would be reached by 2017 and, as previous offers, would be back dated to mid 2013.
It's obviously back to the drawing board for negotiations between the platinum producers and their workers in South Africa. This correction to the mineweb.com's Thursday story was posted on their website shortly after the original news item showed up there.
China’s Ministry of Commerce (MOFCOM) announced Thursday that it will appeal a World Trade Organization ruling that China’s restrictions on rare earths, molybdenum and tungsten exports violate global trade rules.
In response to a reporter’s question during a press briefing Thursday, Ministry of Commerce spokesman Shen Danyang told reporters China would present its cross appeal to the WTO Thursday.
No matter what the outcome of the appeal, Shen said, China will continue to protect resources and environmental policy objectives will not change. China will continue to comply with the WTO rules on strengthening the management of resources products and maintaining fair competition, he stressed.
This news item showed up on the mineweb.com Internet site last Friday.
China has begun allowing gold imports through its capital Beijing, sources familiar with the matter said, in a move that would help keep purchases by the world's top bullion buyer discreet at a time when it might be boosting official reserves.
The opening of a third import point after Shenzhen and Shanghai could also threaten Hong Kong's pole position in China's gold trade, as the mainland can get more of the metal it wants directly rather than through a route that discloses how much it is buying.
China does not release any trade data on gold. The only way bullion markets can get a sense of Chinese purchases is from the monthly release of export data by Hong Kong, which last year supplied $53 billion worth of gold to the mainland.
"We have already started shipping material in directly to Beijing," said an industry source, who did not want to be named because he was not authorised to speak to the media. The quantities brought in so far are small, as imports via Beijing have only been allowed since the first quarter of this year, sources said.
This very interesting Reuters story, filed from Singapore yesterday, is definitely a must read. Zero Hedge also had something to say about this story as well. It's headlined "China Goes Dark: PBOC to Keep Goldbugs Clueless About Its Gold Buying Spree"---and is courtesy of reader Bill Crampton.
Freegold Ventures Limited is a North American gold exploration company with three gold projects in Alaska. Current projects include Golden Summit, Vinasale and Rob. Both Vinasale and Golden Summit host NI 43-101 Compliant Resource Calculations.
An updated NI 43-101 resource was calculated on Golden Summit in October 2012 and using 0.3 g/t cutoff the current resource is 73,580,000 tonnes grading 0.67 g/t Au for total of 1,576,000 contained ounces in the indicated category, and 223,300,000 tonnes grading 0.62 g/t Au for a total of 4,437,000 contained ounces in the inferred category. In addition to the Golden Summit Project the Vinasale also hosts a NI 43-101 resource calculation which was updated in March 2013. Indicated resources are 3.41 million tonnes averaging 1.48 g/t Au for 162,000 ounces, and Inferred resources are 53.25 million tonnes averaging 1.05 g/t Au for 1,799,000 ounces of gold utilizing a cutoff value of 0.5 grams/tonne (g/t) as a possible open pit cutoff. Please send us an email for more information, email@example.com
There is potentially more substantial capacity for new technical fund short gold contracts to be added before we hit historical extremes. Therein lies the only real threat to lower gold prices, namely, can the commercials lure the technical funds onto the short side of COMEX gold? I don’t have the answer to that question but I can assure you that if we do go lower in the gold price in the immediate future, this will be the only explanation for the decline. - Silver analyst Ted Butler: 19 April 2014
Well, it was pretty much the usual hatchet job by JPMorgan et al in the precious metal markets again yesterday. Gold, as Ted Butler mentioned, is still 5-10,000 contracts off its low point---and it remains to be seen if they can, or will, finish the job in the days ahead. I noted that despite the pounding that silver took in early Far East trading on their Monday morning, that it did not take out its Thursday low---and as Ted has said, that metal is pretty much done to the downside, unless "da boyz" can blow out that 9-10,000 long position in the Managed Money category.
And as I noted further up, there are still about 58,000 silver contracts still open in the May contract, so there have to be some serious roll-overs between now and the end of trading next Monday. I'll be interested in seeing what sort of price action accompanies that activity.
Here are the 6-month charts updated with Monday's data.
With all the 'stuff' going on in the world at the moment, it's amazing to watch how easily that JPMorgan et al can still control world prices in all four precious metals. The world's financial, economic, monetary---and now political---situations are well into the ditch. And that doesn't include the ongoing strike in South Africa which is fast approaching its 11th week. It's obvious that if the powers that be weren't ridding shotgun on these market 24/7---that the rush to precious metals would be on in earnest. This is obviously a situation that they don't want to happen---and if there is a way out, it would be the simultaneous repricing of all four precious metals at a time when no one was able to react. The Easter weekend would have been a terrific time fore that, but if it's in the cards at all, it's obvious that the event is still in the future at some point.
Not much happened in Far East trading on their Tuesday---and most of the lows of the day, at least up until now, came in early afternoon trading Hong Kong time. I note once again that silver did not breach its Thursday low. Once these lows were in, all the metals rallied a bit going into the London open, but are now all of their highs of the day. Both gold and silver are down a bit from Monday's New York close---and platinum and palladium are up. Gold and silver volumes are pretty light for this time of day---and light years away from where they were this time yesterday.
Today is the cut-off for this Friday's Commitment of Traders Report. The previous Tuesday we had a huge engineered price decline in both gold and silver, but most of that volume/price data was in last Friday's COT Report---and whatever data didn't make it by the cut-off will be in this Friday's report. I'm hoping that we won't see a repeat of a week ago during the New York session today, but you just never know with both options and futures expiry coming up hard in the next day or so---and still more down-side work in the gold price left unfinished.
And as I hit the send button on today's column at 5:30 a.m. EDT, I see that gold is rallying a bit---and is a dollar or so above yesterday's close in New York---and silver is back to yesterday's closing price as well. Platinum and palladium are still up on the day. Gold volume is about 'normal'---with virtually all of it in the current front month.
Net volume in silver is not very heavy, with decent roll-over activity already in progress. The dollar index has rolled over a bit---and is down 6 basis points at the moment.
I haven't a clue what the rest of the trading day will be like, but I'll be watching the trading activity for the rest of the week with great interest.
That's all I have for today, which is more than enough---and I'll see you here tomorrow.