The gold price jumped a bit the moment that trading began in New York at 6:00 p.m. on Sunday night, but from there got sold down to its low of the day [around $1,663 spot] which came shortly before 10:00 a.m. in London.
From that point it climbed back to almost unchanged from Friday's close by about 9:40 a.m. in New York. Then a buyer of some substance showed up...and the high of the day [$1,684.90] was in around 11:55 a.m. Eastern.
Then the buyer vanished...and gold got sold off about seven bucks from its noon high...closing at $1,677.00 spot...up $8.30 on the day. Volume was slightly elevated...around 120,000 contracts.
Silver also jumped a bit at the Sunday open...and stayed between 10 and 25 cents above its Friday closing price until the same 9:40 a.m. time in New York.
Most of silver's gains were in by 11:15 a.m. in New York, but the high price tick [$33.37 spot] came at precisely noon. Then it, too, got sold down going into the close of electronic trading at 5:15 p.m. Eastern.
Silver closed the Monday trading session at a penny under the $33 mark. Net volume wasn't overly heavy at around 32,000 contracts.
The dollar index traded within a 15 basis point price range of 79.95 through the entire Monday trading session...and is obviously just hanging onto the 80.00 level by its theoretical finger nails.
The gold stocks opened flat, but moved sharply higher once the gold buyer showed up around 9:40 a.m. Eastern time. The gold stocks hit their zenith a couple of minutes before noon in New York...and just a couple of minutes after gold hit its high tick of the day.
From that high, the stocks gave back a bit of their gains, but the HUI still closed up 1.79% on the day which, for only an $8.30 gain in gold, was pretty chunky. I was very encouraged by the price action in the stocks yesterday.
But even though the metal itself was up over 2 percent on the day, Nick Laird's Silver Sentiment Index only closed up 2.09%. Some of the juniors did slightly better than that...but some didn't do that well, either.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 38 gold and 13 silver contracts were posted for delivery on the second delivery day of April. That wasn't very many...and I was expecting a much large number in gold than this. The link to the Issuers and Stoppers Report is here.
There were no reported changes in GLD on Monday...but over at SLV, a very large 2,039,324 troy ounces were withdrawn by an authorized participant. Obviously this silver was needed elsewhere, as there was nothing in the price action of the last couple of days that would indicate the need for any fund liquidation.
The U.S. Mint had a sales report for the first business day of April. They sold 4,000 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 195,000 silver eagles.
Friday was a very busy day over at the Comex-approved depositories, as they reported receiving 1,785,106 troy ounces of silver...and shipped only 260,500 ounces out the door. All five depositories were active, which is the first time I can remember that happening. The action is worth a quick look...and the link is here.
Silver analyst Ted Butler posted his weekend commentary for his paying subscribers on Saturday...and here are two free paragraphs. Please note the one sentence that I've put in bold type. I'll have more to say about it in 'The Wrap'.
"In silver, the entire 2,400 contract decrease in the total commercial net short position (now at 29,700 contracts) can be attributed to the big 4 (read JPMorgan). Accordingly, I would now calculate JPMorgan’s concentrated silver short position as being roughly 19,000 contracts. This puts JPM’s silver short position about midway between the 13,000 contract low point of late December and the recent 24,000 contract high-water mark of late February. Minus all spreads, this means that JPM is holding 23% of the entire COMEX futures open interest. It is not possible for that percentage of concentration not to be manipulative to the price of silver."
"The bottom line is that the COT structures in gold and silver are still favorable. Can the commercials still collusively rig prices lower? Of course, they can, but that will only make the set up better. In COT terms, there is much more price room to the upside versus the downside. An added takeaway is the hint of a possible very sharp rally given how quick and forceful some technical traders entered the long side of the gold market on Monday’s [March 26th] rally. I would look at that as a harbinger of what may come, namely, strong technical-type buying once the moving averages are penetrated to the upside in gold and silver. At that point, it will become a question of how aggressively and manipulatively the commercials will be selling. Just make no mistake - this paper trading on the COMEX is the sole determinant of short term price movement. This is price setting, pure and simple. This is also about as far removed from the price discovery function of futures markets intended under commodity law as can be imagined."
While on the subject of silver, reader Scott Pluschau has a few thing to say about both silver and copper in his two latest blogs from late yesterday. I've see them both...and they're worth a look. The silver blog is headline "Silver Breaks Out of Diamond Pattern"...and the copper blog is headlined "All Hands on Deck in Copper".
Here's the 3-year dollar chart. A technical analyst may see a potential head and shoulder forming...and as I pointed out further up, the dollar index is hanging on to the 80 mark by its proverbial finger nails.
Since it's my Tuesday column...I have a fairly large number of stories. And, as always, I'm more than happy to pass the final editing duties along to you.
MF Global customers who closed their accounts in the brokerage firm’s final days have been fuming for months about how the firm mailed checks to them, instead of promptly transferring the money electronically as usual. Many of those checks arrived after the bankruptcy filing, and subsequently bounced.
Now customers are taking action, trying to show that MF Global delayed the return of their money to cover the firm’s own bills and stay afloat. They are amassing client documents and submitting them to federal investigators in hopes of building a criminal case against MF Global executives.
While clients of MF Global say that it was unprecedented for the firm to abandon a longstanding business practice to wire money to customers who were closing accounts, the documents are not definite proof of wrongdoing. In recent weeks, federal authorities have come to suspect that MF Global’s actions amount to sloppy record-keeping, rather than criminal fraud.
This story appeared in The New York Times on Sunday...and I thank Phil Barlett for sending it along. The link is here.
Runaway government debts have triggered uncontrolled money printing that in turn will lead to inflation that will decimate portfolios, according to the latest forecast from "Dr. Doom" Marc Faber.
Investors, particularly those in the "well-to-do" category, could lose about half their total wealth in the next few years as the consequences pile up from global government debt problems, Faber, the author of the Gloom Boom & Doom Report, said on CNBC.
The good doctor is never one to mince words. This cnbc.com story was sent to me by West Virginia reader Elliot Simon yesterday...and the link is here.
This is Jim Rickards’ submitted testimony as a witness in the Senate Banking Committee’s Subcommittee on Economic Policy hearing entitled: “Retirement (In)Security: Examining The Retirement Savings Gap”.
It was posted over at the financialsense.com website yesterday...and I thank reader U.D. for bringing it to my attention. It's a little on the long side, but for Rickards junkies/groupies...it's probably not long enough. The link is here.
U.S. regulators are accusing one of Canada's largest banks of engaging in hundreds of millions of dollars in illegal futures trades to reap tax benefits on its holdings of company stocks.
The Commodity Futures Trading Commission filed civil charges Monday against Royal Bank of Canada, saying the bank made the sham trades with itself. The agency said it is the largest case it has brought against so-called wash trades, which cancel each other out. Royal Bank of Canada engaged in "a wash-trading scheme of massive proportion," the CFTC said.
In addition, the agency alleged that the bank concealed the true nature of the trades and made false statements to a futures trading exchange, OneChicago.
The first person through the door with this story was Florida reader Donna Badach, but I'm using this AP story that was picked up by finance.yahoo.com yesterday. Casey Research's own Jeff Clark brought it to my attention...and the link to this must read article is here.
Market analyst and financial letter writer Charles Biderman this week gave two good interviews concentrating on bailouts and market rigging, one with Dan Ameduri of Future Money Trends -- and the other with financial writer Chris Martenson.
The first interview runs 19 minutes...and the second for 36 minutes. Both are posted in this GATA release...and the link is here.
Nothing has been more disappointing and frustrating to GATA in its nearly 13 years of fighting gold and silver market manipulation than the refusal to acknowledge the issue by many of those who have affected to be devoted friends of the monetary metals and free markets.
GATA Chairman Bill Murphy long has called this the 'Not Invented Here Syndrome', a matter of the intellectual vanity of prima donnas who can't bring themselves to admit that mere upstarts might discover anything profound in the prima donnas' field. From 45 years in journalism the experience of your secretary/treasurer is that most endeavors are full of people whose success has made them so arrogant that they think that nothing could be happening if they don't know about it already. (While journalism inclines its practitioners to the exactly opposite position -- to realize every day how much more they don't know -- it doesn't necessarily give them the courage to report what they learn.)
This GATA dispatch is an absolute must read from one end to the other...and the link is here.
This 15-minute video was posted over at goldseek.com yesterday...and I thank Roy Stephens for sending it along. The link is here.
The first one bears the title of "Iran oil embargo raises threat of new global recession"...the second is headlined "Iran bids barewell to sanctions on oil industry: oil minister". And lastly is this story headlined "Indian budget 2012 exempts Iranian oil payments from income tax". All are courtesy of Roy Stephens, for which I thank him. The last one is the most interesting.
German Finance Minister Wolfgang Schäuble ultimately had to concede defeat. Last Friday, Schäuble, a member of Chancellor Angela Merkel's conservative Christian Democratic Union (CDU), voted in favor of the massive euro-zone bailout packages whose sheer size makes most people's heads spin. "The euro area is mobilizing an overall firewall of approximately €800 billion, more than $1 trillion," the Euro Group, which consists of the euro-zone finance ministers, proudly announced.
But this breakthrough could soon be reversed by further setbacks. There's a good chance that the beefed-up bailout fund won't work, despite its billions of euros in firepower.
This time the problem won't be the German government but rather the German parliament, the Bundestag. Since the Bundestag insists on having a say on every minute detail involving the rescue fund, it's making life more difficult for the would-be euro rescuers. A number of instruments that the euro-zone governments only agreed to after fierce wrangling will thus probably remain permanently toothless, and possibly never be implemented.
This story was posted over at the German website spiegel.de yesterday...and is certainly worth skimming. I thank Roy Stephens for sharing it with us...and the link is here.
Europe’s long-running euro crisis may be cooling. But the economic distress it has left in its wake is pushing a rising tide of workers into precarious straits in France and across the European Union. Today, hundreds of thousands of people are living in campgrounds, vehicles and cheap hotel rooms. Millions more are sharing space with relatives, unable to afford the basic costs of living.
These people are the extreme edge of Europe’s working poor: a growing slice of the population that is slipping through Europe’s long-vaunted social safety net. Many, particularly the young, are trapped in low-paying or temporary jobs that are replacing permanent ones destroyed in Europe’s economic downturn.
Now, economists, European officials and social watchdog groups are warning that the situation is set to worsen. As European governments respond to the crisis by pushing for deep spending cuts to close budget gaps and greater flexibility in their work forces, “the population of working poor will explode,” said Jean-Paul Fitoussi, an economics professor at L’Institut d’Études Politiques in Paris.
This story appeared in the Sunday edition of The New York Times...and is another Roy Stephens contribution to today's column. The link is here.
Tensions over tax evasion have flared up between Germany and Switzerland once again with the weekend announcement of Swiss arrest warrants for German tax inspectors accused of industrial espionage. The spying charges have opposition politicians so riled up that a tax evasion prevention deal currently under negotiation between the neighboring countries may now be at risk.
While both countries have signalled their willingness to sign the deal, they still need parliamentary approval -- which is now at risk after Swiss prosecutors on Saturday issued arrest warrants for three German tax inspectors from the state of North Rhine-Westphalia. The officials had federal approval to buy stolen bank information leaked from Credit Suisse in 2010, a move that triggered a wave of tax declarations by Germans seeking to avoid tax evasion charges.
The pending deal would require Switzerland to impose taxes on accounts held by Germans, in addition to handing out fines for undeclared assets, but would spare the country from having to reveal the identities of its valuable wealthy banking customers. With this, Berlin hopes to collect unpaid taxes on an estimated €130 billion to €180 billion socked away in the Alpine haven by its citizens.
This story was posted over at the spiegel.de website yesterday...and is worth the read. It's also Roy's last story in today's column. The link is here.
The first blog is from Ross Clark of CIBC [Canadian Imperial Bank of Commerce]. It's headlined "Gold Bull Market set up for a Spectacular Move". The second blog is with Jim Sinclair...and it bears the title "Central Banks Buying Gold as Part of the Cure". The third is a blog with Robert Fitzwilson of The Porta Group. It's headlined "Central Banks Stockpiling Gold & Governments Hoarding Oil". The fourth blog is from John Williams. It's titled "Consumers Crushed & Economy Collapsed". It's worth the read. And lastly is the audio interview with Hugo Salinas Price. The blog of this interview appeared in this space on Saturday.
The state treasurer's office seems to have discovered GATA's work and to have fully adopted our conclusions, as it tells the legislature: "Similar to other commodities, the value of gold and silver is determined by supply and demand, as well as speculation. The Federal Reserve, London Bullion Market Association, JP Morgan Chase, and HSBC Holdings have practiced fractional-reserve banking and engaged in naked short selling causing artificial price suppression."
The report was about the advisability of investing state funds in gold and silver.
Chris Powell has posted the South Carolina treasurer's 6-page report on the GATA website just in case it goes 'missing' from the official government website...and the link is here.
It may be more desirable than ever, but gold is so expensive that more of us are selling jewellery rather than buying it. Emma John goes on the trail of the precious metal and discovers who's getting their fingers on it
This longish article about gold that showed up in The Guardian on Saturday bearing the headline "Gold Rush: what happened to bling?". It's a very interesting read...and I borrowed the headline from a GATA release. The link is here.
Interviewed by Dan Ameduri of Future Money Trends, Endeavor Silver and Canarc Resource Corp. CEO Bradford Cooke explains Endeavor's concurrence with Sprott Asset Management CEO Eric Sprott's call for gold and silver mining companies to start treating their metal inventories as money. I lifted this from another GATA release yesterday. The interview is in two parts and can be watched at the futuremoneytrends.com website. The two interviews run about 14 minutes in total...and the link to both is here.
Reader Drew Mason had this op-ed piece posted over at the forbes.com website back on March 25th...and he sent it my way yesterday. It's certainly worth reading...and the link is here.
The latest episode of the History Channel program "America's Book of Secrets" was broadcast on Saturday night...and GATA and our secretary/treasurer, Chris Powell, played a big part at its beginning and toward its end, separated by a lot of odd tangents that, while they do not involve GATA's work, may keep the lay viewer engaged until GATA's main points are pressed emphatically: market rigging and the likely encumbrances on the U.S. gold reserve. The program is 44 minutes long and, for the time being at least, full video of it is posted over at the hulu.com website...and the link is here. [NOTE: At the moment, this video is only available to viewers inside the United States. If/when it becomes available in the public domain elsewhere on Planet Earth, I'll be sure to bring it to your attention]
This story was posted over at the marketwatch.com website yesterday...and I borrowed it from another GATA release. It's certainly a must read...and the link is here.
"Sometimes people call us gold bugs. I can understand why, since gold and silver and related equities are our favorite investments at this time. But of course, the term suggests a semi-religious attitude about gold and an unwillingness to move on, even when it becomes obvious that it is time to move on."
"Doug Casey likes to say that he'll know it's the top of the market when there's an image of a golden bull tearing up the NYSE on the cover of SLIME (TIME) magazine - and that he can't wait to blow out his portfolio at some high multiple of its current value... hardly the words of a fanatic who will never change course."
These are two paragraphs from the introduction to yesterday's edition of Casey's Daily Dispatch as written by Louis James, the senior metals investment strategist over at Casey Research.
The introduction...along with the essay itself...are must reads...and the link is here.
Tosca Mining Corporation's goal is to acquire advanced stage projects that can be placed into production quickly. The company's primary asset is the Red Hills Molybdenum/Copper project located in Presidio County, Texas. A program to confirm, and expand the considerable size and potential of the project and evaluate various economic scenarios was completed in 2011.
Tosca recently received results from the 13 remaining holes from its phase two, 16,000 M (4,873 m) diamond drill program. Per Tosca’s Chairman, Dr. Sadek El-Alfy, “the drill program has successfully verified historic drill results of the shallow Copper-Molybdenum cap and confirmed the presence of a deeper, well mineralized Molybdenum Porphyry deposit.” The results of 21 holes drilled through the copper/moly cap in Tosca's 2011 drill program give a weighted average grade of 0.39 % Cu over a core length of 113 feet (34.5 m). Since the copper cap is subhorizontal, the average core length can be interpreted as being approximately equivalent to true width. The copper/moly cap is crescent shaped, approximately 4,000 feet (1220 metres) long and 400 feet (122 m) to 1000 feet (305 m) wide.
The 2011 program encountered numerous thick Molybdenum mineralized intervals including Hole TMC-25 wich intersected 1,189 feet (362.4 m) averaging 0.089 per cent Mo including 830 feet (253 m) of 0.1 per cent Mo from 359 feet (109.8 m) to the bottom of the hole. Hole TMC-29 cut 989 feet (301.4 m) averaging 0.09 per cent Mo including 139 feet (42.4 m) of 0.16 per cent Mo. The molybdenum grades are similar and in some cases higher than those of projects currently considered of potential economic interest."
It's interesting that many of the same people who are now abandoning stock markets because of their 'volatility' over the last few years are the same people who become affronted at the slightest mention of the possibility of precious metals price manipulation. A moment's serious contemplation should make things clear. The precious metals and gold in particular have always been the 'alternative' to government promise based on and created out of thin-air money. As such, the precious metals have always been Public Enemy No. 1 as far as the money manipulators are concerned. Anyone who aspires to intervention in an economy and the political power that it gives, is and always has been an enemy of gold. As long as there is a central bank manipulating money and interest rates, all markets are manipulated by definition. To imagine that the precious metals would be overlooked is ridiculous. - Bill Buckler, Gold This Week, 31 March 2012
Although the jump in the gold price looked particularly impressive on the Kitco gold chart, it was only a bit more than a one percent move. Ted Butler and I were discussing the possibility that it may have been a short covering rally...but it really is hard to tell, although Friday's Commitment of Traders Report may be a bit more helpful.
Silver's move was bigger, of course...but we've seen moves that size before...and larger, so I'm not going to break out the part favours for the moment. I am, however, encouraged by yesterday's turn of events.
But, as Ted Butler pointed out in the sentence I put in bold type in his commentary further up...what happens from here on this price rally once we break through the moving averages to the upside, depends 100% on what the not-for-profit Commercial traders do as the technical funds and small traders pour back in on the long side. Since there are no legitimate short sellers at these prices in any of the precious metals...how high we get and how fast we get there, remains entirely in their hands.
Ted has been pounding that into my brain for more than ten years...and I'm doing the same with you, dear reader. If you still don't get it no matter how many times both Ted and I have explained it, then please click here.
The overnight markets in both gold and silver were as dead as doornails...although platinum is up about a percent. The dollar is doing nothing...and volume in both is vanishingly small. As a matter of fact, net volume over the last couple of weeks has not been that heavy at all. It's eerily quiet out there. I heard a saying on the Internet many years ago that one should never short a quiet market. That might turn out to be sage advice at this particular point in time. We'll find out soon enough I would think.
As I hit the 'send' button at 5:19 a.m. Eastern time, gold is down a dollar or so...and silver is down about 15 cents. Volume is still unbelievably light, so I wouldn't read a thing into these moves.
See you on Wednesday.