Gold & Silver Daily
""Da boyz" will be on the opposite side of that trade for fun, profit---and price management"
 

¤ Yesterday In Gold & Silver

Once again the gold price didn't do much in either Far East or early London trading.  However, that all changed when trading got under way on the Comex.  The gold price rolled over into the London p.m. gold fix---and then hit its low of the day [a hair below $1,300 spot] at exactly 3:30 p.m. EDT in electronic trading.  Then the price recovered a handful of dollars going into the close.

The CME Group reported the high and low ticks at $1,317.10 and $1,299.30 in the April contract.

Gold finished the Wednesday session at $1,305.80 spot, down $5.90 from Tuesday's close.  Gross volume was over 200,000 contracts once again, but once the roll-overs were subtracted out, net volume crashed all the way down to 86,000 contracts.

The silver price chart was a carbon copy of the gold chart, so there's nothing left to talk about, as it was all so orchestrated.

The high and low were recorded as $20.145 and $19.68 in the May contract.

Silver closed yesterday at $19.735 spot, down 26.5 cents from Tuesday's close.  Volume, net of March and April, was 42,000 contracts.

Platinum and palladium didn't do much until London opened---and then both began to slide from there.  Both finished with loses on the day as well.  Here are the charts.

The dollar index closed at 79.94 on Tuesday afternoon in New York, rose to its 80.13 high at 9:30 a.m. EDT in New York---and closed at 80.006.  Nothing to see here.

The golds stocks started in positive territory, but that only lasted about 20 minutes---and then they began to head lower---and by the time trading was done at 4 p.m. EDT, the HUI was down 3.73%---out of all proportion to the six dollar decline in the gold price.

It was the same thing in silver, another decline out of all proportion to the decline in the metal itself.  Nick Laird's Intraday Silver Sentiment Index closed down 4.62%.

The CME Daily Delivery Report showed that 1 gold and 56 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  The short/issuer on all of the above contracts was JPMorgan Chase---and the biggest long/stopper in gold was Canada's Scotiabank with 52 contracts.  The link to yesterday's Issuers and Stoppers Report is here.  And looking at the preliminary volume/open interest figures for yesterday's trading from the CME at 3:33 a.m. EDT earlier this morning, it appears that these contracts are the last of the March deliveries in both metals.

Another day---and another withdrawal from GLD.  This time it was 57,813 troy ounces.  After one deposit and two withdrawals in the past week, GLD is now back within 2 troy ounces of the amount of gold it held on March 21.  As of 10:41 p.m. EDT yesterday evening, there were no reported changes in SLV.

Over at Switzerland's Zürcher Kantonalbank they reported a decline in their gold ETF---and a tiny increase in their silver ETF for the week ending March 21.  Their gold ETF dropped by 34,456 troy ounces---and their silver ETF gained 7,362 troy ounces.

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

Over at the Comex-approved depositories on Tuesday, there was 71,542 troy ounces of gold reported received---and 204 troy ounces were shipped out.  The link to that activity is here.

After two frantic days in a row, it was much quieter in silver on Tuesday, as only 4,185 ounces were received---and 136,149 troy ounces were shipped out.  The link to that action is here.

Here's a photo that I ripped from a Zero Hedge posting yesterday---and I thank reader M.A. for sharing it with us.  As I've said on countless occasions, Putin could bring the West to it's financial and monetary knees overnight, as he knows all about the Anglo/American price management scheme in the precious metals.

I don't have that many stories today, so I hope you find some that interest you.

 

¤ Critical Reads

BofA to Spend $9.33 Billion in FHFA Settlement

Bank of America will spend $9.33 billion to resolve a dispute over mortgage securities with the Federal Housing Finance Agency, the regulator that oversees Fannie Mae and Freddie Mac.

The agency sued 18 financial institutions in 2011 over their sales of mortgage securities to Fannie and Freddie. It alleges many banks falsely represented the mortgage loans behind the securities. These soured after the housing bubble burst and lost billions in value.

Bank of America said that it will make cash payments of roughly $6.3 billion and also purchase securities from Fannie and Freddie worth more than $3 billion. It is one of several banks to settle with the FHFA, which announced the agreement Wednesday.

This AP story was picked up by the abcnews.com Internet site yesterday---and today's first news item is courtesy of West Virginia reader Elliot Simon.

Read more...

Citigroup Fails Federal Reserve’s Stress Test for Second Time in 3 Years

The Federal Reserve dealt an embarrassing blow to Citigroup on Wednesday, attacking the bank’s financial projections for its sprawling operations and denying the bank’s plan to increase dividends and repurchase stock.

In a report, the Fed rejected Citigroup’s plans to manage its capital, citing concerns about the “overall reliability of Citigroup’s capital planning process.” It was the only one of the nation’s top five banks that failed to persuade the Fed to bless its plans for shareholder payouts.

The Fed did not give many details behind its rejection, which was the second denial of Citigroup’s capital plan in the past three years. But analysts and investors said the message from the regulator was clear.

“The Fed is saying that the bank’s financial processes are not where they should be, and this is five years after the crisis,” said Mike Mayo, the CLSA banking analyst. “It is not as though they haven’t had time to clean up their act.”

This news item showed up on The New York Times website a couple of minutes after the markets closed yesterday---and I thank Phil Barlett for sending it our way.

Read more...

‘Too big to fail’ status gives US banks ‘free pass’ – Fed study

While admitting that large US banks enjoy a natural advantage in financial markets, the new study fails to answer the question if new regulations on Wall Street will be able to tame the “too-big-to-fail” financial institutions.

The series of research papers, published on Tuesday by the US Federal Reserve, arrived at conclusions that sound more like good common sense in these post-crisis times: The larger financial institutions can do better business, as well as withstand sudden fluctuations in the markets compared to smaller banks simply because the bigger banks enjoy “too-big-to-fail” status.

Due to their sheer size, the economy can ill-afford for these institutions to be washed away in times of financial crisis, with critics fearing that the system has become dependent on taxpayer bailouts to keep the economy afloat.

The new research shows "it is improper to ask the taxpayer to underwrite the non-commercial banking operations of a complex bank holding company," Dallas Fed President Richard Fisher told Reuters in an interview.

This Russia Today article appeared on the Internet site yesterday morning Moscow time---and I thank reader Harry Grant for sliding it into my in-box in the wee hours of this morning.  It's worth reading.

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The Real Inflation Fear - U.S. Food Prices Are Up 19% In 2014

We are sure the weather is to blame but what happens when pent-up demand (from a frosty east coast emerging from its hibernation) bumps up against a drought-stricken west coast unable to plant to meet that demand? The spot price (not futures speculation-driven) of U.S. Foodstuffs is the best performing asset in 2014 - up a staggering 19%.

That's all there is to this very brief Zero Hedge piece from yesterday morning---but the embedded chart is worth the trip, and I thank reader M.A. for sharing it with us.
 

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'Very painful': World heading for bust 'unlike any other', says Jeremy Grantham

Legendary investor Jeremy Grantham says the US Federal Reserve is killing the recovery of the world's biggest economy and the ''next bust will be unlike any other''.

Mr Grantham – the co-founder and chief investment strategist at the $US112 billion ($123 billion) Boston-based fund manager GMO –said he wouldn't invest his clients' money in US stocks for at least the next seven years because of the Fed's ''misguided policies''.

Mr Grantham has an impeccable track record, having called both the internet bubble and then the US housing bubble. In November he said he believed the U.S. share market could rise another 30 per cent, although he believed it was overvalued, before crashing again.

''Over the next seven years we think the market will have negative returns. The next bust will be unlike any other because the Fed and other central banks around the world have taken on all this leverage that was out there and put it on their balance sheets. We have never had this before.

This must read commentary showed up on The Sydney Morning Herald on Tuesday local time "down under"---and I thank reader Brad Robertson for finding it for us.

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Brazil at risk of recession as S&P downgrades debt to near junk

Brazil’s sovereign debt is one step away from junk after Standard & Poor’s downgraded Latin America’s powerhouse economy, prompting a furious reaction from the Brazilian treasury.

The rating agency cut Brazil’s debt one notch to BBB-, citing “fiscal slippage”, bad economic management, and one-off tricks that flattered the public accounts. It warned of a widening trade deficit and weak growth for years to come.

Marcelo Carvalho from BNP Paribas said the former darling of the BRICs quartet is staring “down the barrel of a recession”, a viewed echoed on Tuesday by Mark Mobius from Templeton Emerging Markets.

This Ambrose Evans-Pritchard commentary was posted on The Telegraph's website late Tuesday evening GMT---and it's the first offering of the day from Roy Stephens.  It's worth reading as well.

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Brazil to pass anti-spy bill in victory for net neutrality

Brazil has scored big for net neutrality after its lower house of Congress approved a groundbreaking post-Snowden bill that protects its users’ privacy rights, albeit with some sacrifices.

The measure did not go as smoothly as could have. To ensure success, President Dilma Rousseff had to let it through at the cost of allowing companies such as Google and Facebook to store user information outside Brazil’s servers.

However, other provisions, which ensured that internet providers gave equal privileges to all web traffic, were left in place. This went ahead despite contrary pleas by big local phone carriers who wanted to continue charging users higher prices for separate content, such as video streaming or Skype-like services.

This news item was posted on the Russia Today website late yesterday morning Moscow time---and it's the second offering in a row from Roy Stephens.

 

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The West and Russia: Why Obama's Legacy Hinges on Europe

Barack Obama has labeled Russia a "regional power" that is acting out of weakness rather than strength. That may be so. But the U.S. president's own foreign policy legacy depends heavily on Vladimir Putin -- and Europe.

From the very beginning of his presidency, Obama has been more focused on consolidating US forces rather than embarking on new international adventures. He has significantly reduced America's military footprint overseas, vocally demanded more help from US allies, emphasized the need for multilateral conflict solutions and preferred to focus on domestic issues as much as possible. Obama's retrenchment largely reflects the desires of the American electorate after eight years of George W. Bush.

What does it mean for the current crisis, though? Does his cautious approach to foreign policy automatically mean he is a weak president? And was it a factor in Putin's decision to act in Crimea?

No matter how Obama views Russia, the Ukraine crisis and how he chooses to confront Putin will be decisive for his foreign policy legacy.

This very interesting commentary showed up on the German website spiegel.de yesterday afternoon Europe time---and I thank Roy Stephens for another contribution to today's column.

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Putin's Russia caught in U.S. and Chinese double-pincer

Russia's Vladimir Putin has committed a grave strategic blunder by tearing up the international rule book without a green light from China. Any hope of recruiting Beijing as an ally to blunt Western sanctions looks doomed, and with it the Kremlin's chances of a painless victory, or any worthwhile victory at all.

Mr Putin was careful to thank China's Politburo for its alleged support in his victory speech on Crimea. Foreign minister Sergei Lavrov has been claiming with his usual elasticity that “Russia and China have coinciding views on the situation in Ukraine.”

This is of course a desperate lie. China did not stand behind Russia in the UN Security Council vote on Crimea, as it had over Syria. It pointedly abstained. Its foreign ministry stated that “China always sticks to the principle of non-interference in any country’s internal affairs and respects the independence, sovereignty, and territorial integrity of Ukraine.”

We don't know exactly what China's Xi Jinping told President Barack Obama at The Hague this week it clearly had nothing in common with the deranged assertions of the Kremlin. The US deputy national security adviser Ben Rhodes appeared delighted by the talks, claiming afterwards that Russia could no longer count on backing from its "traditional ally".

Here's Ambrose Evans-Pritchard talking trash again late yesterday evening GMT over at the telegraph.co.uk Internet site.  I don't know whether he's making this stuff up, or he's being forced to print it.  Anyway, if you do decide to read it, I'd take it with a big grain of salt.  I thank Roy Stephens for bringing it to our attention.

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UBS said to suspend FX traders in New York, Zurich, and Singapore

UBS suspended foreign-exchange traders in the United States, Singapore, and Switzerland as its investigation into the alleged rigging of currency markets widened, according to a person with knowledge of the matter.

They include Onur Sert, an emerging-markets spot trader based in New York, and at least three more worldwide, said the person, who asked not to be identified because of the probe. Sert and Dominik von Arx, a spokesman for UBS in London, both declined to comment on the suspensions.

Switzerland's largest bank opened a review of its currency operations last year after Bloomberg News reported in June that traders in the industry had colluded to rig the WM/Reuters rates, a benchmark used by investors and companies around the world.

This Bloomberg story, filed from London, was posted on their Internet site very early yesterday evening Denver time---and I found it embedded in a GATA release.

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Spanish top court rules Catalonia referendum unconstitutional

Spain’s Constitutional Court has ruled that a referendum in Catalonia on independence from the rest of the country would violate the law, saying that regions within Spain “cannot unilaterally call a referendum on self-determination.”

According to a summary of the ruling, any “right to decide” their future by Catalans has to be in accordance with Spain's 1978 constitution, which stipulates Spanish unity.

The Constitutional Court ruled “unconstitutional and null” a declaration by the regional parliament in Barcelona which claimed that Catalonia has the right of self-determination.

The fate of the region rests on the power struggle between Catalan President Artur Mas who had promised a referendum on independence from Spain on November 9 and the Spanish Prime Minister Mariano Rajoy who insists that such a vote would be illegal.

This Russia Today news item was posted on their website early yesterday afternoon Moscow time---and I thank reader M.A. for sharing it with us.

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Push in Sardinia for online vote on independence from Italy

The island of Sardinia plans to hold an online referendum on independence from Italy, following in the footsteps of country’s northeastern Veneto region, where a similar vote revealed high separatist moods.

PSdAz advocates withdrawal from Italy and the cultivation of Sardinian traditions and values.

“We’ll just ask the Sardinians if they want independence,” said John Hills, the Sardinian Action Party’s national secretary. “Their opinion is important. We believe that this issue has become very relevant today and we want to clarify what exactly is the will of the people.”

A motion to stage an online referendum will be presented before the regional council in Sardinia on Thursday.

This very interesting news item showed up on the Russia Today Internet site yesterday afternoon Moscow time---and once again I thank Roy Stephens for bringing it to our attention.

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Bank of England agrees Chinese London currency clearing hub

The Bank of England has agreed a deal with the People's Bank of China to make London a hub for Chinese currency dealing.

The memorandum of understanding, to be signed on Monday, sets out settlement and clearing arrangements for the renminbi, or yuan, in London.

The signing is expected to be followed by the appointment of a London clearing bank for yuan.

62% of yuan payments outside of China already take place in London.

This news item was posted on the bbc.co.uk Internet site yesterday morning EDT---and I thank Brad Robertson for his second contribution to today's column.

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Four King World News Blogs

1. James Turk: "The West's War on Gold is Raging---and There Are New Casualties"  2. Art Cashin: "Comments By Bank of England 'Bizarre' and Concerning"  3. Dr. Paul Craig Roberts: "The Greatest Crisis in Mankind's History"  4. Robert Fitzwilson: "This is What is Going to Destroy the World's Financial System"

[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]

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Jim Rickards: The Death of Money

Jim is on the interview circuit these days because his new book "The Death of Money: The Coming Collapse of the International Monetary System" is due to hit the bookshelves on April 3.  I was fortunate enough to get an advanced copy of the book---along with a hardcover copy that came in yesterday's mail---and I can tell you right now it's an absolute must read, as I've already read it from cover to cover.  I'll have more on Jim's book later this week, or in my Saturday column.  But if you want to order an advanced copy, you can do so by clicking here.

In the meantime, here's a 38:42 minute audio interview with Jim over at the mcalvanyweeklycommentary.com Internet site, which was posted there yesterday sometime---and I thank reader Joe Nordgaard for being the first one through the door with it.

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Mike Kosares: Volcker Rule starts April 1 and might push big banks out of gold

Speculative trading by banks is to end in the United States on April 1 upon implementation of the "Volcker Rule," Mike Kosares of Centennial Precious Metals in Denver notes today, with implications for the gold market.

"The big trading banks traditionally have occupied the short side of the paper gold market," Kosares writes. "Some analysts feel that those positions will be handed off to the hedge fund business so things won't change much. On the other hand, hedge funds are not considered too big to fail, so their bets could be placed more evenly on either side of the market."

Kosares' commentary is headlined "April Fools Drop-Dead Date for the Volcker Rule -- What It Might Mean for Gold" and it was posted at Centennial's Internet site, USAGold.com yesterday sometime---and I thank Chris Powell for wordsmithing 'all of the above'.

Read more...

Total gold holdings in stark contrast to past decades and should change - WGC

Financial assets have ballooned 10-fold over the last 20 years and with the continued presence of ultra-loose monetary policy, and only slow signs of economic recovery, this is unlikely to diminish soon.

As a result of this, according to the World Gold Council, gold is increasingly being looked at as a valuable string to add to one's risk management and wealth preservation bow.

And, that gold holdings account for 1% of all financial assets, is a situation that is unlikely to continue into the future and stands in "stark contrast to levels seen in past decades, as well as what research suggests optimal gold allocations should be."

This gold-related news story showed up on the mineweb.com Internet site yesterday---and it's another offering from reader M.A.

Read more...

South Africa's platinum strike causing ‘irreparable’ damage - producers

Platinum producers Anglo American Platinum, Impala Platinum and Lonmin said on Tuesday a strike now in its ninth week at their South African mines was causing irreparable damage to the sector and local economy.

Wage talks have broken down between the companies and the striking AMCU union, which is demanding a doubling of basic wages, although the world's top three platinum producers said they were open to talks "within a reasonable settlement zone".

In a joint statement, the companies said they had lost nearly 10 billion rand ($921 million) in revenues, but also pointed to the cost to communities around the mines in the platinum belt northwest of Johannesburg.

South Africa's biggest post-apartheid mine strike, which has hit 40 percent of global production of the precious metal, is also seen denting sluggish economic growth and widening the current account deficit as its effects ripple from the platinum communities throughout the wider economy.

This Reuters piece, filed from Johannesburg, showed up on the mineweb.com Internet site on Tuesday sometime---and it's worth skimming.  It's also the final contribution of the day from reader M.A.

Read more...

Fear of deadly reprisal, hunger, in Rustenburg as South Africa's platinum strike marches on

When workers sell their hard earned possessions to buy food in the platinum belt of Rustenburg for lack of earnings after nine weeks of a brutal strike one can conclude bread-and-butter politics truly have the region in its grip.

Many stores are shuttered, except pawn shops, which are overflowing with household items that have been sold for next to nothing.

In Rustenburg homes, cooking pots once filled with solid chicken cuts now swim with chicken heads and feet instead.

“I would love to talk to you about what is going on but the problem is that I am just too hungry and I need to look for something to eat. The problem is here,” says a middle-aged man, pointing to his abdomen.

This news item, filed from Rustenburg, was posted on the mineweb.com Internet site yesterday---and it's definitely worth reading.

Read more...

 

¤ The Funnies

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¤ The Wrap

The biggest problem of all is that technical fund activity is often at odds with real world supply and demand fundamentals. What difference does it make if silver’s long term fundamentals are spectacularly bullish if the technical funds go on a selling binge? If the technical funds sell aggressively and collectively, the price of any market is going lower until that selling is exhausted. This is how these markets work. Knowing that, what’s the long term investor to do? It seems to me that, at a minimum, the long term investor should be aware when the technical funds are in position to sell so as not to be blindsided emotionally.

The run up in gold and lesser run up in silver prices this year was entirely due to technical fund buying, as I hope I have reported all along. After such buying is concluded, the odds rise that the technical funds can or will be induced into selling by the commercials.  It’s hard to predict in advance when technical fund buying will be concluded and when the funds may be induced to sell, but that is much more likely after large ownership changes, like now. - Silver analyst Ted Butler: 26 March 2014

It was another day of exceptionally low net volume---and no price action to speak until trading began on the Comex in New York yesterday.  Once again I was surprised that both gold and silver weren't pounded into the ground, but the rotten share price action more than made up for it.

Once again I present you with the 6-month gold and silver charts so you can see how this commercial trader-induced engineered price decline is progressing.

As you can deduce from the above chart, the price bounced off its 50 and 200-day moving averages yesterday, but if/when JPMorgan et al run the sell stops at this price and lower using their HFT boyz, the technical funds will dump their longs en masse---and if the price gets low enough, they may be even enticed into going short.  The very act of dumping longs and buying short positions is what causes the price to fall, once JPMorgan et al get the ball rolling down the hill---and with the current chart set-up, which I'm guessing was painted to perfection, the decline, once these moving averages are broken, will be ugly.

And what the technical funds are selling or buying---"da boyz" will be on the opposite side of that trade for fun, profit---and price management.

Here's the silver chart.  We are miles below the 50 and 200 day moving averages already, but JPMorgan et al could easily peel another buck or so off the price---and set new lows as well---if the technical funds can be tricked into going short on top of puking up what existing long positions they have left.

Of course, I could get fooled entirely---and we could get a rally from this point as well, because from a T.A. perspective, one is possible because we could "bounce" off these moving averages.  But if I was forced to bet a dollar, that's not how I would bet it.  So we wait.

As I type this paragraph, the London open is about 35 minutes away.  With the exception of platinum, all the other precious metals are down a bit from Wednesday's New York close.  Net volume in gold is fumes and vapours---and silver's volume is almost as low.  The U.S. dollar continues to hang onto the 80.00 level by its proverbial fingernails.

I was just looking at the CME's Preliminary Daily Bulletin for gold and silver volume on Wednesday---and I note that there are still 78,864 contracts open in April.  Except for those standing for delivery, all of that open interest has to disappear in the next two business days---and I'm sort of wondering out loud why it's being left to the very last moment.

And as I hit the send button on today's efforts at 5:20 a.m. EDT, I note that all four precious metals came under more selling pressure either at, or just before the London open. Both gold and silver are down a bunch more than before---gold down 12 bucks and silver down 20 cents---but platinum is still in the plus column, at least for the moment.  But palladium got bludgeoned.  At 5:08 a.m. EDT, this is what the Kitco palladium chart looked like---down more than 3%.

Gross volume in gold is more than double what it was less than an hour ago, but once the roll-overs out of April are subtracted out, volume is still pretty light---all things considered at the moment.  Silver's volume is almost double what it was, with virtually no switching.  The dollar index is in "rally" mode, up a whole 10 basis points.

Well, with two trading days left to roll out of the April contract---and  three trading days left in the month of March and the first quarter of 2014---nothing will surprise me as the rest of this month winds down.

Before signing off, I'd like to point out that Casey Research just opened up its Casey OnePass service for a limited time.  The deal includes subscriptions to eight of CR's newsletter all rolled into one [very] cheap price PLUS the Casey Compendium (only available to lifetime and OnePass members.)  If you have any interest, you can find out more by clicking here, and it doesn't cost a thing to check it out.  Naturally, Casey Research's 90-day risk-free policy applies in full.

That's it for another day.  I must admit that I'll be powering up my computer later this morning with some fear and trepidation as to what sights may await me.

See you tomorrow.