Gold & Silver Daily

¤ Yesterday In Gold & Silver

Except for the spike low just after 9:30 a.m. Hong Kong time, the gold price traded mostly in a five dollar price band through all of Far East and London trading on their respective Thursday's.  Once the London p.m. gold "fix" was in, the price rallied a bit before getting sold down starting around 2:45 p.m. EDT in electronic trading.

The low and high ticks were reported by the crooks over at the CME Group as $1,183.60 and $1,197.40 in the June contract.

Gold finished the Thursday trading session at $1,193.50 spot, up $6.70 on the day---and would have obviously closed above $1,200 spot if the sellers of last resort hadn't shown up during the electronic trading session in New York.  Net volume was 112,000 contract, with 93 percent of that number trading in the current front month.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  The volume really began to pick up about 12:45 p.m. in London, when the rally that was underway at the time got turned over.  After that, heavier volume began to appear as the short sellers of last resort were on hand to provide "liquidity/price capping" against the new buying that was coming into the market.  You should also note that the price decline that started at 2:45 p.m. EDT was accomplished with very little volume.   The vertical gray line is 10:00 p.m. MST/midnight EST, so add two hours---and don't forget the 'click to enlarge' feature.

The silver price followed a similar pattern, but was much more subdued.  However, the inflection points all occurred at the same time as gold.  Silver's low came at the London p.m. fix---and not in morning trading in Hong Kong, as did gold's low.

The low and high were recorded as $15.705 and $15.92 in the May contract.

Silver finished the Thursday session in New York at $15.85 spot, up 9 whole cents.  Gross volume was very high, but once the roll-overs were netted it out, the volume was only 21,000 contracts.

The platinum and palladium prices traded similarly, with platinum closing at $1,134 spot, up 6 bucks on the day---and palladium closed at $753 spot, up 16 dollars on the day, recouping all of Wednesday's loss, plus a few dollars more.  Here are the charts.

The dollar index closed late Wednesday afternoon in New York at 98.06---and chopped higher from there, hitting its 98.40 high tick shortly after 8:30 a.m. BST in London.  The 97.15 low came at 2:30 p.m. EDT, which was about the time that gold began to get sold off in electronic trading in New York yesterday.  It rallied a bit from there---and closed at 97.31---down 75 basis points on the day.

Up until the 10 a.m. EDT London gold fix, there was absolutely no correlation allowed between the dollar index and the precious metal prices.  But the moment the dollar index bottomed out at 2:30 p.m. EDT---and then rallied a hair, there was a seller there to make sure that almost half of yesterday's gains in gold vanished before the close.

The gold stocks opened up a bit---and then rallied in a straight line until the not-for-profit seller showed up around 2:45 p.m. in the gold market---and sold the price down going into the close.  The equities followed suit, as the HUI finished the Thursday session up 2.42 percent.

The silver equities opened unchanged---and then sold down a bit, but reversed direction around 10:20 a.m. EDT.  They then followed an identical trajectory as the gold stocks---selling off at the same time was well, giving up about a percent of their gains in the last hour or so of the trading day.  As a result, Nick Laird's Intraday Silver Sentiment Index closed up only 1.60 percent.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  With only three delivery days left in the April contract, I find this lack of activity very strange.

The CME Preliminary Report for the Thursday session showed that gold open interest in April declined by 31 contract---and total o.i. left remaining is 440 contracts.  In silver, o.i. fell by 1 contract, leaving 22 left to deliver.

There were no reported changes in GLD yesterday---but there was a big deposit in SLV, as a chunky 1,912,276 troy ounces were deposited by an authorized participant.

Since yesterday was Thursday, Joshua Gibbons, the Guru of the SLV Bar List, updated his website with the current data from the Internet site---and this is what he had to report.

"Analysis of the 22 April 2015 bar list, and comparison to the previous week's list:  1,435,000.1 troy ounces were added (all to Brinks London)---and no bars were removed or had serial number changes."

"The bars added were from: Solar Applied Materials (0.7M oz), Russian State Refineries (0.6M oz), Yunnan Copper (0.1M oz), and 2 others."

"As of the time that the bar list was produced, it was overallocated 699.3 oz.  All daily changes are reflected on the bar list."

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

There was no in/out movement in gold at all at the COMEX-approved depositories on Wednesday---and not a lot of activity in silver, as only 5,772 troy ounces were reported received---and only 53,779 troy ounces were shipped out the door.  The link to the silver activity is here.

It was a another monster day over at the COMEX-approved gold kilobar depositories in Hong Kong on Wednesday.  Brink's, Inc. reported receiving 10,288 kilobars---and shipped out 8,100 kilobars.  One wonders if this level of hyperactivity is a permanent feature of this newly-created depository.  Time will tell, I suppose.  The link to the above activity in troy ounces is here.

Here are a couple of charts that Nick Laird passed around yesterday evening while I was working away on today's column---and I hope you find them as interesting as I did.  They show Switzerland's gold imports and exports for March.  Nick says that the export number to China would include Hong Kong's imports as well.  There's a story about this further down in the Critical Reads section.

I have a very decent number of stories for you today---and I will ruthlessly edit any further news items that come in over the remainder of Thursday evening.


¤ Critical Reads

Bankruptcies Suddenly Soar Across Corporate America, Worst Since Q1 - 2009

"Come down to Houston," William Snyder, leader of the Deloitte Corporate Restructuring Group, told Reuters. "You'll see there is just a stream of consultants and bankruptcy attorneys running around this town."

But it's not just in Houston or in the oil patch. It's in retail, healthcare, mining, finance. Bankruptcies are suddenly booming, after years of drought.

In the first quarter, 26 publicly traded corporations filed for bankruptcy, up from 11 at the same time last year, according to data from Six of these companies listed assets of over $1 billion, the most since Financial-Crisis year 2009. In total, they listed $34 billion in assets, the second highest for a first quarter since before the financial crisis, behind only the record $102 billion in 2009.

The largest bankruptcy was the casino operating company of Caesars Entertainment. Next in line were Doral Financial, security services firm Altegrity, RadioShack, and Allied Nevada Gold. The first oil-and-gas company showed up in sixth place: Quicksilver Resources. It joined privately owned natural-gas drillers in crushing their investors.

This very interesting article was posted on Internet site a week ago today---and I thank Casey Research's BIG GOLD editor Jeff Clark for sending it our way yesterday.


How 'Spoofing' Might Have Crashed the Market

Earlier this week a trader was arrested in London and accused of "spoofing." What's spoofing and what does it have to do 2010 flash crash? Bloomberg View's Matt Levine explains. (Levine is a Bloomberg View columnist. The opinions expressed are his own.)

Well, dear reader, if you want to know exactly how JPMorgan et al---along with their HFT buddies---rig silver and gold prices lower, all you have to do is watch this 1:19 minute video commentary posted on the Bloomberg website at 5:39 a.m. Denver time yesterday morning---and you'll have your answer.  I thank Dan Lazicki for sending it along---and it's an absolute must watch.  Ted Butler has something to say about this in the quote in The Wrap.


Initial Claims Worse Than Expected (Again), Remain Flat For 2015

For the second week in a row, initial claims were worse than expected and increased year-to-date, While still below the magic 300k levels, claims printed 295k against expectations of 288k confirming the stagnation of the job market since the end of QE3 and the government's fiscal year. California and New York saw the biggest rise in initial claims with only Illinois seeing a drop; notably Texas saw layoffs across various sectors, as it seems it is not as 'diverse' as Richard Fisher propagandized. After 4 straight weeks of decline, continuing claims rose this week by the most in almost 3 months (but remains close to 15 year lows).

This tiny Zero Hedge story, along with a most excellent chart, appeared on their Internet site at 8:38 a.m. Thursday morning EDT---and it's the second story in a row from Dan Lazicki.


New Home Sales Tumble by Most in Almost 2 Years as Northeast Crashes

After existing home sales sent stocks vertical on great news, so new home sales plunge has sent stocks vertical on bad news. An 11.1% drop MoM - the biggest since July 2013 - dragged new home sales back below 500k to 481k SAAR - the biggest miss in a year. Sales of new homes collapse 33.3% in The Northeast and The South saw new home sales crash 15.8%.

This is another brief Zero Hedge piece---and this one is courtesy of reader M.A.  It appeared on their website at 10:07 a.m. EDT yesterday---and the three embedded charts are definitely worth your while.


U.S. Manufacturing PMI Misses by Most on Record as New Orders Tumble

On the heels of weak PMIs from Europe and Asia, Markit's US Manufacturing PMI plunged to 54.2 in April (from 55.7). Against expectations of a rise to 55.6, this is the biggest miss on record. Of course, this is 'post-weather' so talking heads will need to find another excuse as New Orders declined for the first time since Nov 2014.

This Zero Hedge commentary from Thursday morning EDT is built around a Bloomberg story.  It---and the ZH piece---are both worth your time---and it's the second offering in a row from reader M.A.


Stockman: Global 'Mania' in Government Bonds is Veering Toward Disaster

The world's central banks have managed to brew up a "planet-wide mania" in government bonds that are trading at dangerous negative yields and could lead to a meltdown, according to David Stockman, White House budget chief in the Reagan administration.

Stockman said the level of complacency in world financial markets is "downright astounding — even stupid."

He cited data from BlackRock Investment Institute and Thomson Reuters that there are now $5.3 trillion in government bonds trading at negative yields, mostly in Europe, with already-low U.S. Treasury yield levels being pushed lower by the strength of the dollar.

"The central banks are just mechanically and blindly pushing on a string of monetary expansion that is levitating not the main street economy but only financial asset prices in the canyons of Wall Street," Stockman wrote on his Contra Corner blog.

This article showed up on the Internet site at 6:40 a.m. EDT on Thursday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.


Marc Faber: 'Global Economy is Weakening'

The global economic picture isn't bright, and central banks are largely to blame, says Marc Faber, publisher of the Gloom, Boom & Doom Report.

"The global economy is not strengthening. It is weakening," he told CNBC. "China is weakening. The U.S. economic statistics recently have been on the weak side."

China's economy grew 7 percent in the first quarter, its worst showing in 6 years, and the Atlanta Federal Reserve's forecasting model shows growth of only 0.1 percent for U.S. GDP last quarter.

The Fed made a mistake in cutting short-term interest rates to almost zero, Faber argued. "The monetary policies as conducted by the Fed have created a lot of unaffordability in the system."

This is another story from the Internet site.  This one was posted there on Monday morning---and it's another story from Elliot Simon.


Oil slump may deepen as U.S. shale fights OPEC to a standstill

The U.S. shale industry has failed to crack as expected. North Sea oil drillers and high-cost producers off the coast of Africa are in dire straits, but America's "flexi-frackers" remain largely unruffled.

One starts to glimpse the extraordinary possibility that the U.S. oil industry could be the last one standing in a long and bitter price war for global market share, or may at least emerge as an energy superpower with greater political staying-power than OPEC.

It is 10 months since the global crude market buckled, turning into a full-blown rout in November when Saudi Arabia abandoned its role as the oil world's "Federal Reserve" and opted instead to drive out competitors.

If the purpose was to choke the U.S. "tight oil" industry before it becomes an existential threat - and to choke solar power in the process - it risks going badly awry, though perhaps they had no choice. "There was a strong expectation that the U.S. system would crash. It hasn't," said Atul Arya, from IHS.

This longish, but very interesting commentary by Ambrose Evans-Pritchard put in an appearance on the Internet site at 8:59 p.m. BST in London on Wednesday evening---and it's the first contribution of the day from Roy Stephens.  It's worth reading if you have the interest.


These Two Assets---Coal and Oil---Shows Us That a Crash is Coming

If the foundation of the financial system is debt… and that debt is backstopped by assets that the Big Banks can value well above their true values (remember, the banks want their collateral to maintain or increase in value)… then the “pricing” of the financial system will be elevated significantly above reality.

Put simply, a false “floor” was put under asset prices via fraud and funny money.  Consider the case of coal.

In the U.S., coal has become a political hot button. Consequently it is very easy to forget just how important the commodity is to global energy demand. Coal accounts for 40% of global electrical generation. It might be the single most economically sensitive commodity on the planet.

With that in mind, consider that coal ENDED a multi-decade bull market back in 2012. In fact, not only did the bull market end… but coal has erased virtually ALL of the bull market’s gains (the green line represents the pre-bull market low).

This short, but must read article [courtesy of Phoenix Capital Research] showed up on the Zero Hedge website at 10:12 a.m. EDT on Thursday morning---and the charts alone are worth the trip.  It's the third offering of the day from reader M.A.


Deutsche Bank to pay record $2.5 billion to resolve LIBOR rigging

Deutsche Bank AG today was ordered to pay a record $2.5 billion fine and fire seven employees to settle U.S. and U.K. investigations into its role in manipulating Libor.

Deutsche Bank must terminate six London employees and one in Frankfurt who engaged in wrongful conduct, the New York Department of Financial Services said in a statement. The DFS didn't identify them by name and said one is a managing director, four are directors, and two are vice presidents.

"Deutsche Bank employees engaged in a widespread effort to manipulate benchmark interest rates for financial gain," DFS Superintendent Benjamin Lawsky said in the statement. "We must remember that markets do not just manipulate themselves: It takes deliberate wrongdoing by individuals."

Of course that last statement is equally true about the precious metal market as well.  This news item appeared on the Bloomberg website at 6:00 a.m. Denver time yesterday morning---and I found it in a GATA release.


Greece's Piraeus Bank offers relief to poverty-stricken

Piraeus Bank will write off credit cards and retail loans up to €20,000---(US$21,484) for Greeks who qualify for help under a law the leftist government passed to provide relief to poverty-stricken borrowers, it said on Thursday.

Greece has received two E.U./IMF bailouts totalling €240 billion since it was hit by a debt crisis. The austerity programme imposed as a condition of the rescue has left one in four people out of work, and thousands struggling to pay debts.

The Syriza party was elected in January on a promise to end the belt-tightening. Its first legislative act was to pass a bill offering free food and electricity to thousands of struggling Greeks.

Piraeus said it would also write off interest on mortgages for qualifying borrowers, but did not provide details on how many people might benefit.

The above four paragraphs is all there is to this tiny Reuters article from Thursday morning EDT.  It was posted there at 9:56 a.m.---and I thank reader 'David in California' for finding it for us.


Bulgaria to build new $236mn ‘gas corridor’ with Romania and Greece

Bulgaria has reportedly inked a deal on a new “gas corridor” with Romania and Greece which will be completed in 2018, and is expected to cut the country’s almost total dependency on Russian natural gas.

The agreement on the $236.2 million link between Bulgaria, Romania and Greece, which is also known as a vertical gas corridor, has been signed by the energy ministers of the three countries in Sofia, the Wall Street Journal reported on Wednesday. Bulgaria will also be able to buy about 3-5 billion cubic meters of gas annually from Azerbaijan and from Greece’s liquefied natural gas terminals.

“We are finally getting a new source of gas because until now we were totally reliant on one source—Russia,” Bulgaria’s Deputy Energy Minister Zhecho Stankov was cited as saying by WSJ.

Bulgaria consumes about 3 billion cubic meters of natural gas, 95 percent of which is imported from Russia, and the majority of that comes through Ukraine which is seen as an unreliable transit country. It has been cut off from Russian supplies twice, in 2006 and 2009. Bulgaria has been seeking to diversify its gas supply by building interconnection links with neighbors.

This Russia Today story put in an appearance on their Internet site at 12:12 p.m. Moscow time on their Thursday afternoon, which was 5:12 a.m. EDT in Washington.


U.S. military instructors in eastern Ukraine combat zone – Russian military

The Russian Defense Ministry said the U.S. military instructors have been spotted in the combat zone in eastern Ukraine, training the country’s National Guard in the field, despite promises to hold the exercises at a remote range in Lvov.

Defense Ministry spokesman Major General Igor Konashenkov slammed Washington’s claims of increased presence of Russian air defense units in the Donetsk and Lugansk Regions of Ukraine as “astonishing in its incompetence,” TASS reported.

On Wednesday, U.S. State Department spokeswoman Marie Harf said that it’s currently “the highest amount of Russian air defense equipment in eastern Ukraine since August,” without providing any evidence to substantiate the claim.

Konashenkov explained that Harf’s statement was just an attempt to “warm up” the general public ahead of the NATO summit, scheduled to take place in Antalya, Turkey on May 13-14.

This Russia Today article was posted on their website at 5:52 p.m. Moscow time on Wednesday afternoon---and it's another offering from Roy Stephens.


Pepe Escobar -- Brzezinski Bye, Bye: Eurasia as the U.S. Knew it is Over Forever

Move over, Cold War 2.0. The real story, now and for the foreseeable future, in its myriad declinations, and of course, ruling out too many bumps in the road, is a new, integrated Eurasia forging ahead.

China’s immensely ambitious New Silk Road project will keep intersecting with the Russia-led Eurasia Economic Union (EEC). And that will be the day when the EU wakes up and finds a booming trade/commerce axis stretching from St. Petersburg to Shanghai. It’s always pertinent to remember that Vladimir Putin sold a similar, and even more encompassing, vision in Germany a few years ago – stretching from Lisbon to Vladivostok.

It will take time – and troubled times - but Eurasia’s radical face lift is inexorable. This implies an exceptionalist dream – the U.S. as Eurasia hegemon, something that still looked feasible at the turn of the millennium – fast dissolving right before anyone’s eyes.

This commentary by Pepe certainly falls into the absolute must read category, especially for all serious students of the New Great Game.  It appeared on the Asia Times website on Thursday sometime---and this particular iteration is posted on the Internet site.  The first person through the door with it was South African reader B.V.---and I thank him for this.


Surreal! Sunset turns massive Chilean Calbuco volcanic eruption into amazing scene

The record-breaking volcanic eruption in southern Chile is dramatically altering skies, as spectacular views emerge of white plumes creeping miles up into the sky after coloring the night orange. A second blast took place hours ago.

Nature’s colossal power was aptly demonstrated by Calcubo, which erupted a second time just a few hours ago, with agencies reporting a stronger eruption than the first.

This extremely interesting news item, courtesy of Russia Today, was posted on their website at 9:02 a.m. Moscow time on their Thursday morning, but was updated at 2:05 a.m. Moscow time on their Friday morning with new photos and videos from the second eruption.  Several readers were kind enough to send me stories on this, but this is the best one---and I thank Roy Stephens for digging it up for us.  The last video clip is amazing.


Stricter anti-money laundering regulations derail gold trading in Belgium

"The Metals Focus team has just returned from a trip to Belgium. Our meetings and discussions with local players have confirmed that the local gold market has continued to suffer from stricter anti-money laundering measures that have been introduced in recent years.

"It is important to highlight the importance of the Belgian bullion market in Europe. Due to competitive prices being offered by local players, Belgium has for long been an active place of physical gold trading in Europe. This has been particularly the case during 2008-12 when the Belgian gold market witnessed a significant rise in volumes on both sides of the market. On the one hand, a surge in demand for physical gold across Europe in the aftermath of the financial crisis and the sovereign debt problem led to a rise in hand-carried purchases of gold bar and coins by the non-Belgian trade. On the other hand, a sharp rise in jewellery recycling in debt-ridden southern European countries saw an increasing amount of gold being shipped to Belgium for remelting.

"However, the size of the local market has shrunk considerably over the last couple of years, as the regulations on cash transaction payment became tighter .... Since April 2012, traders in Belgium have no longer been allowed to pay or be paid in cash for the trading of precious metals for an amount of €5,000 or more (€3,000 or more from the start of 2014), both in the case of a sale or a purchase of such metals. Prior to that, the upper limit for cash transactions was €15,000.

What the story doesn't say, dear reader, is that these are probably daily cash limits---and it wouldn't deter any serious buyer.  We have a $10,000 per day cash limit in Canada---and it's hardly ever an issue.  The cash rules we have at our store are far stricter than that.  It's $9,500 per person, per week.  I thank Casey Research's own Doug Hornig for passing this story around---and it was posted on the Internet site on Wednesday.


Sprott said planning unsolicited bid for Canadian metals trusts

Sprott Asset Management LP is planning to make an unsolicited offer to acquire Central GoldTrust and Silver Bullion Trust valued at $800 million, a person with knowledge of the matter said.

An offer at that level would reflect a 3.5 percent discount to the combined market value of the trusts at the close Wednesday of about $829 million. The proposal could come as early as today, said the person, who asked not to be identified because the information is private.

The trusts, which buy and hold substantially all of their assets in respective metals in bullion and certificates, have been under pressure from investor Polar Securities Inc., the Toronto-based hedge fund. Polar has been urging the trusts to change how unit holders can redeem their investment as a means of closing their trading gaps.

I've posted a few things about this already that Stephan Spicer sent our way.  Now here are the current developments in the main stream media.  This Bloomberg news item showed up on their website at 7:25 p.m. MDT on Wednesday evening---and it's a story I found on the Internet site.  It's worth skimming if it concerns you.


2014 FULL YEAR RESULTS: Top Primary Silver Miners Lost $1.9 Billion

With the last remaining company finally releasing their year-end results, my top primary silver miners lost a combined $1.9 billion in net income in 2014.  While two-thirds of the group reported significant write-downs (impairments),  two of the largest companies suffered the highest losses.

Even though the group experienced record net losses, seven of the twelve actually enjoyed positive adjusted income.  Let me explain.  Companies report net income and adjusted income.  Net income includes various items such as impairments, losses (or gains) on derivatives, hedges, investments or financial exchange losses (gains), and etc.

While these financial items are apart of their profit and loss statement, I like to focus on their adjusted income which removes these items in order to get a better idea of how successful they are at MINING SILVER.  As I mentioned before, two of the largest silver producers in the group suffered huge net income losses due to large impairments, but their adjusted income wasn’t as bad.

I'm certainly not prepared to vouch for the financial numbers that are reported in this silver-related story, but they should come as no surprise to anyone.  And even though every single primary silver miner knows that JPMorgan and Scotiabank are short the COMEX futures market in silver up the wazoo, they won't do a thing about it.  Why their senior shareholders stand for it is beyond me.  But it is what it is.  This article appeared on the Internet site on Monday---and I thank reader U.D. for sending it our way yesterday.  It's worth reading.


Swiss gold exports show Asia buying more as investors sell bars

China and India helped buy up investors' biggest gold sales in more than a year.

Gold exports to China from the refining hub of Switzerland almost doubled to 46.4 metric tons in March, the most among monthly data starting in January 2014, according to the Swiss Federal Customs Administration. Shipments to India more than doubled to 72.5 tons as imports from the U.K. climbed sixfold.

That's an indication that gold bars are leaving U.K. vaults for Switzerland, where they're refined and sent to Asia. India and China, the biggest buyers, boosted purchases in 2013 when investors dumped the metal amid the biggest price rout in three decades. Global sales from gold-backed funds totaled 55.7 tons in March, the most since 2013, data compiled by Bloomberg show.

"The big investor outflows from the U.K. via Switzerland to China and India are a continuation of the flow of metal from West to East," Matthew Turner, an analyst at Macquarie Group Ltd., said by phone from London. "Short-term, it is a sign of weakness, not of strength in the market."

I posted two of Nick's charts on Swiss gold imports and exports just before the Critical Reads section, so you wish to refresh your memory, you can check them out again.  This short Bloomberg story was posted on their Internet site at 3:55 a.m. Denver time on Thursday morning---and I found it embedded in another GATA release.  It's worth reading.


South African gold miners union plans to demand wage hikes of 75%

South Africa's National Union of Mineworkers is planning to submit demands to the gold sector next week calling for a 75-percent hike in the basic pay for entry-level workers, according to union sources familiar with the matter.

"For the basic wage at the entry level, we are planning to demand a raise to 10,000 rand ($823) a month in the first year from 5,700 rand at present," said a union source, who asked not to be named. This was confirmed by a second source in the union.

That would set the stage for tough negotiations and a potentially protracted dispute with companies in South Africa's gold sector, where profit margins are under pressure.

This gold-related news item put in an appearance on the Reuters website at 1:47 p.m. EDT yesterday afternoon---and it's another story that I found on the Internet site.


Alasdair Macleod: Gold, the SDR, and BRICS

If gold doesn't break into the Special Drawing Rights of the International Monetary Fund along with China's currency, the monetary metal might be incorporated into a similar international currency created by the New Development Bank, an institution being established by developing countries, GoldMoney research director Alasdair Macleod writes.

Macleod's analysis is headlined "Gold, the SDR, and BRICs"---and it appeared on the Internet site yesterday.  It's worth reading as well.  Once again it's a gold-related story I found in a GATA release yesterday.


Lawrence Williams: Does any nation hold the gold it says it does?

Official central bank gold reserve figures as reported to the International Monetary Fund are at best unreliable---and at worst active deceptions concealing market interventions, Mineweb's Lawrence Williams acknowledged yesterday.

"China has 1,054.1 tonnes of gold in its official reserves. Yeah right! The USA has 8,133.5 tonnes in its reserves – the world’s largest. But forgive me if I treat this figure, and those reported by some other central banks, with about as much scepticism as I treat the official Chinese figure. Much is made of the fact that China has not updated its official reserve figure since 2009 – but then the US has not updated its figure for nearly 40 years. Something similar applies to many other central banks which report identical gold volumes year in, year out."

"It’s all a question of accounting and presentation of statistics. In truth the major central bank holders of gold only tell the IMF what they want the world to believe are their actual attributable gold holdings and the true amounts of accessible physical gold currently held on their own behalf are quite probably somewhat different in a number of cases."

This must read commentary by Lawrie showed up on the Internet site late Thursday morning London time---and it's another story I found in a GATA release, as I was sound asleep when it was first posted.



¤ The Funnies


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

The big news event, of course, [was Tuesday's] joint filing of civil charges by the CFTC and criminal charges by the Justice Department against a London trader for his participation in the infamous “Flash Crash” in the stock market on May 6, 2010. That was when the Dow Jones Average fell 1,000 points in a very short period of time before recovering almost as sharply. Yesterday’s filing places much of the blame for the crash on this London trader who “spoofed” the market, by entering and immediately canceling large orders on stock index futures contracts whose prime intent was to manipulate prices. (I suppose he’s not the one spoofing prices lower in COMEX gold and silver today, Wednesday, but someone certainly is).

According to Eric Hunsader, from the market data company, Nanex, “I’m dumbfounded that they missed this until now.” After watching the agency’s handling of the increasingly obvious silver manipulation, I’m less surprised and I am left with the feeling that the evidence provided by the unnamed whistleblower must have been overwhelmingly convincing for the CFTC to change its tune so radically.

I am not at all surprised at the article’s negative portrayal of the role of the CME in this matter. The article quotes the London trader, in an e-mail more than four years ago, as having told the exchange who was inquiring into his activities, “to kiss my ass.” I’m sure that wasn’t what took the CME so long to crack down on the trader, since there is no evidence the CME ever cracked down on him. The CME hasn’t cracked down on High Frequency Trading, no matter how egregious it has become for the simple reason it is the greatest beneficiary of the mindless and manipulative trading in the form of exchange fees. The CME is the prime promoter of HFT. That’s the problem with self-regulation when the regulator is a beneficiary of the manipulative trading – it will never be ended by the conflicted regulator.

The irony, of course, with the charges of manipulation in the stock market that occurred five years ago is that the same manipulation is occurring in COMEX silver and gold today [Wednesday - Ed] as I write this. As I’ve written previously, the HFT computer jocks have been careful not to trip off another stock market crash because they know it will not be tolerated. But because both the CFTC and the CME have openly signaled that high speed computer manipulation is OK in COMEX silver and gold, the manipulative practice has actually intensified. Whereas crashing the stock market damages too many investors, the number of investors hurt in the silver manipulation is so small in comparison that the CFTC and the CME look the other way. Th at's the way these regulators swing – they only do what they are forced to do. - Silver analyst Ted Butler: 22 April 2015

I was happy to see that the precious metals rallied yesterday, but as I pointed out earlier, it had nothing whatsoever to do with what was going on in the currency markets, as the dollar index was in the dumpster during the whole time they were trading flat---and the only time that they were allowed to rally meaningfully was once the London p.m. gold fix was in.  They even capped those rallies in electronic trading in New York, so they were modest, at least in gold and silver---and that's being kind.

Gold made it to its 50-day moving average, but didn't close above it.  Silver hasn't been above its 50-day moving average for over two weeks, so there wasn't much damage done from a Commitment of Traders perspective.

Here are the 6-month charts for all four precious metals as of the close of trading yesterday.

And as I write paragraph, the London open is about fifteen minutes away.  Gold sold down a few dollars in Far East trading on their Friday, with the low over there coming at 1 p.m. Hong Kong time---and at the moment it has rallied a buck above unchanged.  Silver, platinum and palladium have erased their tiny losses as well during the last hour or so.

Net gold volume is 11,000 contracts, with 99.9 percent of that occurring in the current front month, so it's all of the HFT variety.  Net silver volume is around 2,700 contracts, with roll-overs out of the May contract in that metal about 25 percent of the gross volume.  The large traders have to be out of the May contract by the close of COMEX trading on Tuesday---and the rest by the COMEX close on Wednesday---and first day notice for delivery in May silver is Thursday.  All eyes should be on JPMorgan at that time.  Mine certainly will be.

The dollar index rallied to around 97.57 just before lunch in Hong Kong on their Friday morning---and began to slide from there.  It then did a 35+ basis point face plant about 2:15 p.m. Hong Kong time, about forty-five minutes before the London open.  It's sitting at 97.04 right now, down 27 basis points from Thursday's close in New York, but over 50 points off its Far East high.

Today at 3:30 p.m. EDT we get the latest COT Report from the CFTC's website for positions held at the close of COMEX trading on Tuesday---and as I said yesterday, gold is a tough call.  I'd guess that we'll see some deterioration because of the upward penetration of the 50-day moving average during the reporting week, but I wouldn't bet the ranch on that.  Silver is much easier, as there will be further improvement in the Commercial net short position in that metal, as prices are down on the week.  And as I also said yesterday, it's too bad that Wednesday's price action won't be in it, as we would have substantial improvements in both metals---so in a way, today's COT Report is already yesterday's news.  I'll have all the details tomorrow.

And as I hit the 'send' button on today's column at 5:10 a.m. EDT, I see that with the exception of palladium, which is only up two bucks at the moment, the other three precious metals are now down a bit on the day even though the dollar index is 38 basis points lower at the moment---and was down over 50 earlier.  Net gold volume is around 19,500 contracts---and silver's net volume is at 3,600 contracts.  This is very light volume.

Here's the 1-year dollar index chart---and it's current as of 5:10 a.m. EDT this morning---and it certainly looks toppy to me.  But so far, the powers-that-be have not allowed precious metal prices to reflect the decline of the last few weeks---and it remains to be seen how the dollar/gold ratio unfolds if this dollar decline really develops some legs.

As to what may happen during the rest of the Friday session, I haven't a clue---although I'm somewhat apprehensive because of the punk price action on the big drop in the dollar index, the second one in as many days.   And as I've pointed out on many occasions, we've still got a ways to go in both metals to the downside before JPMorgan et al can get maximum long and minimum short in all four precious metals, so nothing will surprise me, up or down, when I crawl out of bed later this morning.

Enjoy your weekend, or what's left of it---and I'll see you here tomorrow.

Ed Steer