As I mentioned in 'The Wrap' section of yesterday's column, gold didn't do much in Far East trading on their Wednesday...and the gold price had developed a negative bias during the first couple of hours of London trading.
Well, as you already know, the selling continued unabated up until about 12:45 p.m. in New York...and after that, the gold price didn't do much for the rest of the day.
Thanks to Australian reader Wesley Legrand, I'd heard the story about Goldman Sachs recommending a short on gold in the wee hours of yesterday morning, but it wasn't in a form I could use...insider information...and it was not yet available to the news media, so I couldn't post a story about it, as there were none to be had. Obviously it was all over the news when North America awoke yesterday morning...as was this 'rumour' about sales of Cyprus central bank gold.
Anyway, when the smoke finally cleared on Wednesday, gold closed down $25.70...giving up more than double its Tuesday gain. Gross volume was pretty hefty...around 186,000 contracts...and needless to say, I'll have more on 'all of the above' in 'The Wrap' section at the bottom of this column.
It was pretty much the same price path for silver right up until the 8:20 a.m. Eastern time Comex open. At that point, the first rally didn't get far...and met with the usual not-for-profit selling, with the last rally getting killed at the open of the equity markets in New York, which is pretty much always the pattern when you examine the long-term silver and gold charts. It was another attempt that silver made to break through the $28 spot price mark that got stopped in its tracks. The high tick at 9:30 a.m. was $28.05 spot.
Anyway, the silver price was more 'volatile' than gold after that...and traded within a one percent price range going into the electronic close.
Silver closed at $27.65...down 33 cents from Tuesday. Wednesday's net volume was around 38,000 contracts...the same as Tuesday's volume.
Lest I forget, here are the platinum and palladium charts from yesterday. The price patterns are quite different from each other...and I doubt very much that free-market forces made the charts look that way.
The dollar index opened at 82.39 on Wednesday morning in the Far East...and sold off to its low [82.24] at 8:30 a.m. in London. After that it rallied to its 82.56 high of the day, which occurred shortly after 3:00 p.m. in New York. Then the index sold off a hair going in the close...and it finished at 82.50...up a whole 11 basis points on the day.
Virtually all the gains that the gold stocks posted on Tuesday were taken away by the price action on Wednesday...as the HUI finished down 3.84%.
The silver stocks got hit as well...but Nick's Intraday Silver Sentiment Index only closed down 1.97%.
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The CME's Daily Delivery Report showed that 146 gold and 2 silver contracts were posted for delivery on Friday and...with the exception of a handful of contracts...it was "all the usual suspects" as short/issuers and long/stoppers. The link to yesterday's Issuers and Stoppers Report is here.
There was another big withdrawal from GLD yesterday, as authorized participants withdrew a total of 541,685 troy ounces...and as of 9:33 p.m. Eastern time yesterday evening, there were no reported changes in SLV.
But their were big changes in the short positions in both SLV and GLD in the latest update posted over at the shortsqueeze.com Internet site on Tuesday evening. As of the end of March, the short interest in SLV declined by a chunky 26.01%...from 8.84 million shares/troy ounces, all the way down to 6.54 million shares/troy ounces. Ted Butler pointed out that this is the lowest that the short position in SLV has been since 2010.
In gold, the decline was even more eye-opening, as the short interest dropped from 25.31 million shares...down to 15.40 million shares at the end of March...a decline of 39.16%. That's a lot, dear reader.
The short positions in both SLV and GLD are now vanishingly small and basically irrelevant in the grand scheme of things...4.05% for GLD and 1.94% in SLV.
Over at Switzerland's Zürcher Kantonalbank for the period ending on April 9th...they reported that their gold ETF declined by 65,041 troy ounces...and their silver ETF declined by 539,750 troy ounces.
The U.S. Mint had no sales report yesterday.
But over at the Comex-approved depositories on Tuesday, I was greeted with an amazing sight when I downloaded the pdf file with that day's activity. They reported receiving 1,524,661 troy ounces of silver...and shipped out a very chunky 2,657,276 troy ounces. The link to that activity is here...and it's definitely worth a look. All the silver received on that day disappeared into the JPMorgan Chase depository.
Yesterday I said that I would be tracking what was happening in the Comex-approved depositories as far as gold was concerned...and that was because of the big drop in warehouse stocks over the last three or four months that was in a story I posted in yesterday's column. Well, on Tuesday they reported receiving 164.75 ounces of gold...and shipped out 64.30 ounces of gold. Yes, you read that right. Now you know why I've never tracked gold in the Comex-approved depositories. The link to that 'action' is here.
But I will check gold every day...and if something of significance happens, I'll let you know.
Over the last couple of days I've had quite a number of readers ask me what was up with Eric Sprott selling a boat load of PSLV. When I first heard about this on Monday, I picked up the phone and asked him about it. He told me that a lot of the shares he sold were inside his charitable foundation...and he had to sell a bunch to meet some obligations there...and the rest of the units he sold were to buy shares in silver mining companies. He feels that they will outperform the metal itself on the next rally...and I agree.
Yesterday I posted a story about the big jump in gold exports from Hong Kong into China in February. I now have the usual wonderful chart from Nick Laird showing this change...and it's a sight to behold. I'd much rather do what China is doing...buying and holding physical metal, than listen to what Goldman Sachs is telling its clients to do...and that's short the metal on the Crimex. It's a good bet that if GS's clients are going short, the company itself will be on the other side of the trade.
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Here are your 'cute' photos of the day.
I took an axe to the list of stories I have for you today...and I hope you feel that what's left is a manageable number.
The Federal Reserve leaked the minutes of its last rate-setting meeting to bank lobbyists as well as congressional aides and trade associations.
On Wednesday the Fed published its March minutes in the morning rather than the afternoon as had been scheduled. The central bank said it was doing so because they had already been accidentally released on Tuesday afternoon to a distribution list, comprising "mostly congressional staffers and trade association members in Washington."
However, on Wednesday afternoon, the Fed published that list, which included lobbyists at Goldman Sachs, JPMorgan Chase, and Citigroup, among other banks.
This Financial Times story from yesterday was posted in the clear in a GATA release...but the first reader through the door with it on Wednesday was Marshall Angeles with this Zero Hedge story.
Luxembourg plans to lift bank secrecy rules for European Union citizens who have savings based in the country, the prime minister announced on Wednesday, marking a sharp shift in policy that will take effect from 2015.
The move would bring Luxembourg into line with all other EU countries bar Austria in sharing information within the European Union about bank depositors in its territory. The decision adds to pressure on Vienna to fall into line, after Austria's chancellor said on Tuesday it would join talks on the subject.
Luxembourg's decision follows lobbying by Germany and the European Commission, bolstered by the case of former French budget minister Jerome Cahuzac, who is under investigation for fraud after admitting lying about having a Swiss bank account.
This Reuters story, filed from Luxembourg, was posted on their website during the lunch hour on the East coast yesterday...and I thank U.A.E. reader Laurent-Patrick Gally for his first of three articles in today's column.
France, the eurozone's second biggest economy, has been singled out for harsh criticism by the European Commission with a warning that low French competitiveness and high debt threaten the EU's single currency.
The European Commission on Wednesday published a report on "macroeconomic imbalances" on 13 EU countries, including Britain, singling out Spain and Slovenia for warnings over "excessive" failings.
Both countries faces EU sanctions including massive fines - unless they step up structural economic reforms and take additional measures to cut debt by the end of May.
"In two member states, Spain and Slovenia, imbalances can be considered excessive," said Olli Rehn, the EU's commissioner for economic and monetary affairs.
This must read commentary was posted on the telegraph.co.uk Internet site yesterday...and I thank Roy Stephens for sending it along.
German imports fell sharply in February for the third time in the last four months and exports also declined, in a sign the euro zone's largest economy cannot be relied on to help lift the currency bloc out of recession.
Data from the Federal Statistics Office on Tuesday showed imports sliding 3.8 percent, undercutting even the lowest estimate in a Reuters poll of economists. The consensus forecast had been for imports to rise 0.5 percent.
Exports, which had been expected to remain unchanged, dropped 1.5 percent, underscoring how weakness in Germany's key European partners is affecting demand for its goods. Exports have fallen in three of the last six months.
This Reuters story was filed from Berlin in the wee hours of Tuesday morning Eastern Daylight Time...and I found it in yesterday's edition of the King Report.
The Eurozone crisis so far has resembled one of those cheesy fight scenes in a certain type of Hollywood movie. The hero is hugely outnumbered but each opponent patiently stands around looking menacing waiting to be ‘sorted out’ in turn.
Likewise Eurozone bailout candidates have lined up individually to face the Troika by rota and once ‘saved’ the ‘rescuers’ have sought to sing a little aria akin to the end of a Mozart opera noting how good has vanquished evil and all will be well in the world henceforth...Usually after an expensive meal in Brussels also paid for by E.U. taxpayers.
So, stage one of bailout mania was a process of Eurocrises in linear order, with nations bailed out to save their economies or indeed somebody else’s bankers...
This wonderful op-ed piece showed up on the Russia Today website on Tuesday afternoon Moscow time...and it's well worth your time. I thank reader U.D. for sending it our way.
Machine tool orders fell 13.1% in fiscal 2012 to 1.13 trillion yen amid an economic slowdown in China and a lull in orders for smartphones, according to preliminary data released Tuesday by the Japan Machine Tool Builders' Association.
This is the first time in three years that orders have fallen short of the previous fiscal year. Orders of tools for automobiles from the U.S. were steady, but the European financial crisis pushed down the overall figure.
Orders for March 2013 skidded 21.6% on the year to 90.37 billion yen, falling for the 11th consecutive month. A drop following a spike in January-March 2012, when rebuilding demand soared following floods in Thailand and orders for smartphones climbed in China, appears to be behind the slide. "Orders from China and Europe are slowly returning, and domestic business inquiries are increasing," according to the association.
This story was filed from Tokyo...and was posted on the nikkei.com Internet site Wednesday morning local time. It's another story I found in yesterday's edition of the King Report.
For the fourth day in a row, Japanese bond futures markets were halted due to significant (and rapid) price movements. Three of the four halts have been on downside shifts (with the upside surge driven by the BoJ's first attempt at monetization).
The daily ranges in longer-dated JGBs are incredible and certainly the last word one would use to describe the quadrillion Yen Japanese bond market since the BoJ's announcement is 'orderly'. As Kyle Bass noted, the volatility in JGBs will be the gauge of the market's qualitative perception that Abenomics can succeed; for now it appears, with longer-dated JGB yields at pre-BoJ levels, having exploded 30-40bps off the lows, and short-dated JGB yields soaring to 11-month highs, things look a little out of control.
This Zero Hedge piece was filed on their website early yesterday morning Eastern time...and I thank Manitoba reader Ulrike Marx for sharing it with us...and the charts are worth the trip.
J. Kyle Bass, head of Dallas-based hedge fund Hayman Advisors LP, talks about the outlook for Japanese government bonds, gold, and the U.S. housing market. Bass, speaking with Erik Schatzker and Stephhanie Ruhle on Bloomberg Television's "Market Makers," also discusses activist investing. Bloomberg Industries metals and mining analyst Andrew Cosgrove also speaks.
The video interview runs for 20 minutes...and any time Kyle is talking, we should be listening...and this is a must watch. I thank Laurent-Patrick Gally for bringing it to my attention...and now to yours.
The first blog is with Dr. Stephen Leeb...and it's headlined "Goldman Sachs Call to Short Gold, Triple Digit Silver and Chaos". The next interview is with Jim Sinclair. It's entitled "The Co-ordinated Attack on the Gold Market". And lastly is this commentary by Kevin Wides...and it bears the headline "The Stunning Roadmap to $500 Silver and $8,000 Gold".
Goldman has advised clients to straight up short gold, with an end-of-the-year price target of $1450/oz.
Izabella Kaminska at FT Alphaville has the full summary of the call, which actually is a follow-on to a generally bearish call that the company has had all year.
This is an interesting observation..."While there are risks for modest near-term upside to gold prices should US growth continue to slow down, we see risks to current prices as skewed to the downside as we move through 2013. In fact, should our expectation for lower gold prices continue to prove correct, the fall in prices could end up being faster and larger than our forecast, as aggregate speculative net long positions across COMEX futures and gold ETFs remain near record highs."
This story is literally 'yesterday's news'...which I mentioned at the top of this column that I knew about from Australian reader Wesley Legrand in the wee hours of yesterday morning. And as I also said further up in this blog, I'd bet money that if GS is advising it clients to short gold...the company is going long in its proprietary trading account. Scott Pluschau was the first reader through the door with this story shortly after I filed yesterday's column.
Citi Private Bank joins Goldman Sachs in raining on gold this week. The firm’s head of asset allocation says in a note that it has decided to get rid of its exposure altogether.
In the note dated April 5th, but emailed to reporters on Wednesday, the firm’s global investment committee urges investors to add to U.S., European and Japanese stock positions while cutting munis and investment grade bonds, as well as the yellow metal.
This very short piece was posted in Barron's early yesterday afternoon...and is another contribution from Scott Pluschau.
Cyprus plans to sell $530-million (400-million euros) worth of its gold reserves to finance part of its bailout, a move that marks the biggest eurozone bullion sale in four years.
Although obstacles stand in the way of eurozone central banks selling gold to meet financing needs, the Cypriot move will focus attention on other heavily indebted eurozone gold holders.
The plan, set out in a draft assessment of Cypriot financing needs prepared by the European Commission, would be the first major gold disposal by a euro area central bank since France sold 17.4 tonnes of gold in the first half of 2009.
This rather short Reuters story was picked up by Canada's National Post newspaper yesterday...and I thank Ulrike Marx for sending it along.
A spokesperson for the Central Bank of Cyprus told the Cyprus News Agency (CNA) that reports of the $523 million gold sale have not been, “raised, discussed or debated,” with the bank’s board of directors.
Aliki Stylianou told CNA this Wednesday after reports on Reuters surfaced that Cyprus officials had agreed to sell around 400 million euros in excess gold reserves to contribute to the country's bailout. Stylianou said that the gold sale was, “never discussed nor are there current or future plans to do so on the board’s agenda.” Reuters based its story on a draft report from the European Commission which assessed the nation's financing needs.
This article appeared on the kitco.com Internet site late yesterday afternoon and refers to the previous Reuters story. It's a must read...and is the third and final offering from Laurent-Patrick Gally in today's column.
GEOFF CANDY: Hello and welcome to this Mineweb.com Gold Weekly podcast and joining me on the line is John Embry – he’s the Chief Investment Strategist for Sprott Asset Management. John so far this year it’s been a pretty tough year for gold bugs in terms of what gold prices have done. How do you see the marketplace at the moment? In your latest investor report you do mention the level of market manipulation at the moment. Where do you think...?
JOHN EMBRY: Well basically the manipulation – it’s been going on for years, but the fact is its becoming more widely recognised... since the Treasury Secretary Paul Craig Roberts wrote a really good piece the other day he called “The Assault on Gold” and basically it’s really picked up steam in the wake of the downgrade of the US debt back in August 2011.
This excellent interview with John was posted on the mineweb.com Internet site yesterday...and I thank Marshall Angeles for sharing it with us.
Gold and the mysteries about its trading will be the subject of a documentary to be broadcast by the Canadian Broadcasting Corporation on Thursday, April 18.
The documentary, "The Secret World of Gold," will be broadcast on CBC's premier investigative program, "Doc Zone," and it seems to have a clue about market manipulation.
The CBC's announcement of the program says in part: "Some claim that much of the gold held by the Bank of Canada, the Bank of England, the Federal Reserve, and Fort Knox is gone -- that for every 100 ounces of gold traded, there exists only 1 ounce of real, physical gold. So where is the gold -- and who really owns it?"
The rest of this introduction by Chris Powell...plus the link to the CBC announcement about the program...was posted over at the gata.org Internet site yesterday...and it's definitely worth the read.
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Governments and the paper markets have a LOT of practice at "dissuading" people from buying Gold. They can't stand the monetary heat Gold gives off so their solution is to keep everybody out of the kitchen. - Bill Buckler...Gold This Week...06 April 2013
That was a pretty well executed bear raid on the precious metals yesterday...and I have to agree with Jim Sinclair that it was "massive and co-ordinated attack on gold." But it wasn't just gold they were after, as they took all four precious metals down. I don't remember Goldman Sachs mentioning that they were recommending a short on platinum or silver...and the 'announcement' that Cyprus was going to sell gold didn't coincide with news that they were going to be selling any palladium.
The 'powers that be' must have some clue by now just how pathetic their stories for covering an engineered price decline have become. Of course they only have to fool 'Joe Six-Pack' and the precious metal miners...but with their similar intellects, that's not hard to do.
Since this bit of nonsense occurred on a Wednesday, it won't be in tomorrow's Commitment of Traders Report. And don't forget that we had a similar incident last Wednesday...April 3rd. On that day, the gold chart looked like this...
The results of that April 3rd engineered price decline will show up in tomorrow's COT Report, but will be buried by events up to and including the Tuesday cut-off. The same can be said for yesterday's price action...and next Friday's COT Report. As I've said many times in the past..."Da Boyz" know how to cover their tracks if they want to.
As the stories of this in today's column indicate, the world is very close to a economic, financial and monetary implosion...and the only way that they might be able to extricate themselves is to finally play the gold card.
It's still my opinion that we're about to see a major repricing of the precious metals...and the news like we had yesterday is meant to keep the public at bay until it's too late. Bill Buckler's quote of the day reflects that exactly.
But it's the timing that's uncertain. As Ted Butler points out, we are all set up for a NASA-type space launch especially if JPMorgan Chase, the Bank of Nova Scotia and HSBC USA decide not to go short the next rally in silver...and if the raptors decide not to sell their long positions and let the short holders cover in an orderly manner. If this turns out to be the case, the market will go 'no ask' in a heartbeat...and then you can pick your prices in both silver and gold. If that turns out to be the scenario, then all we await is the triggering event.
Both gold and silver were down a bit in Far East and early London trading...and the dollar index is down about 20 basis points as well. Volumes, as I edit this paragraph at 5:04 a.m. Eastern time, are fairly chunky already...and I can tell that most of it is of the high-frequency trading variety.
As Ted mentioned on the phone yesterday, with gold and silver well under their respective 20-day moving averages once again, there's nothing to really move prices until the technical funds are forced to cover as this [and the 50-day] are penetrated to the upside. So if JPMorgan et al can keep the price action subdued, we could wander in the wilderness for quite some time, or until that trigger event I spoke of make an unexpected [or planned] appearance.
I look forward to the New York price action with some interest.
See you on Friday...or Saturday if you live just west of the International Date Line.