Casey Research Publication
Gold & Silver Daily
"As I said yesterday, some sort of end game is inevitable...and fast approaching."
 

¤ Yesterday In Gold & Silver

The gold price rallied a bit during Far East trading on their Tuesday...but the rally ran into a not-for-profit seller at the London open and, except for the spike high of the day, the gold price barely made it over the $1,664 spot price range for the rest of the day.

The high tick...$1,667.00 spot...came moments after the equity markets opened in New York at 9:30 a.m. Eastern time.  The low was around $1,654 at the start of trading in New York on Monday evening.

Gold closed on Tuesday a $1,633.90 spot...up $9.40 on the day.  Gross volume was immense...and was virtually all roll-overs out of the February contract...as there were only a few thousand contracts of net trading when the smoke cleared.

Silver rallied a bit in very early morning trading in the Far East...and then chopped sideways until about 1:30 p.m. in Hong Kong.  A rally began at that point that made it all the way up to about $31.20 spot.  That ended at 9:00 a.m. in London...and down went the price for a couple of hours.

Then minutes after 11:00 a.m. GMT...away the price went to the upside...rallying all the way through the Comex session...and then tacked on a quick thirty cents between 1:15 and 2:45 p.m. in New York.  After that, silver got sold down a bit into the close.

Silver finished the day at $31.38 spot...up 54 cents.  Volume was around 34,000 contracts.

The dollar index opened at 79.77...and the traded sideways until 9:00 a.m. in New York.  Then, in the space of an hour, the index fell about twenty basis points...and drifted lower from there, before recovering a hair into the close.  The index finished the Tuesday session at 79.57...down an even 20 basis points from Monday's close.

The gold stocks gapped up...and stayed up.  The HUI finished up 1.50%.

The silver stocks turned in a solid performance as well...and Nick Laird's Intraday Silver Sentiment Index closed up a healthy 2.30%.

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Not surprisingly, the CME's Daily Delivery Report was quiet...as only 6 gold and 6 silver contracts were posted for delivery on Thursday from within the Comex-approved depositories.  The link to yesterday's Issuers and Stoppers Report is here.

And, for a change, there were no reported additions or withdrawals from either GLD or SLV yesterday.

The U.S. Mint had a long-anticipated sales report.  They sold 8,000 ounces of gold eagles...5,000 one-ounce 24K gold buffaloes...and a very chunky 1,413,000 silver eagles.  That new silver eagles sales figure puts the year-to-date sales number at 7,420,000 coins.  That is, of course, a new monthly record high sales figure.  We'll see if they add any more during the last two days of the month.

Over at the Comex-approved depositories on Monday, they reported receiving 932,518 troy ounces of silver...and shipped 717,847 troy ounces of the stuff out the door.  The link to that activity is here.

I got an e-mail from chartist Nick Laird over at sharelynx.com yesterday...and he has a request...and wonders if anyone can help him.  He's looking for an old historical database of Canadian Mining Stocks TSX/VXS/MSX from earlier than the 1990's...preferably going back to the 1950s and 1960s.  If you can help, then please e-mail him at nick@sharelynx.com.

I have quite a few stories again today...and a lot of them are must reads, so I hope you can find the time for them all.

 

¤ Critical Reads

MF Global’s Bankruptcy Nears a Happy Conclusion

When Mahesh Desai checked his MF Global account 15 months ago, his $580,000 nest egg was gone.

Like thousands of investors and farmers who had their savings with MF Global, Mr. Desai lost his money in the brokerage firm’s chaotic final days. Regulators discovered that $1.6 billion was trapped in a web of improper wire transfers, a stunning breach that sent federal investigators scrambling to build a case.

On Thursday, a bankruptcy court will review a proposal that would return 93 percent of the missing money to customers like Mr. Desai. And the trustee who has submitted the proposal, James W. Giddens, has quietly identified a way that, if sent to the judge and approved, could plug the remaining shortfall for customers in the United States, according to people involved in the case.

“I’m surprised that, magically, the money has shown up,” said Mr. Desai, a software account executive who, like most customers in the United States, has only 80 percent of his money. “I feel very relieved.”

This doesn't alter the fact that the CME Group should have made all customers whole the moment that the bankruptcy occurred.  Maybe they were the mystery source of the "Magic Money" that showed up at this particular moment?  This story was posted on The New York Times website late last night...and we have Phil Barlett to thank for today's first story.  The link is here.

Read more...

New York Sun: The Fiat Dow

While the Dow Jones Industrial Average is approaching 14,000, nearly twice what it was four years ago, the New York Sun notes today that the Dow is actually worth substantially less over four years in terms of gold. Economic growth won't be likely, the Sun argues, until the Dow is rising when priced in gold.

I borrowed all of this from a GATA release yesterday.  The Sun's editorial is headlined "The Fiat Dow" and it's posted at the nysun.com Internet site...and the link is here.

Read more...

May 2013 – End of the Road: John Williams

Anybody who thinks the U.S. is in a so-called recovery isn’t listening to economist John Williams. He contends, “We haven’t had a recovery and we’re not about to have one, and it’s getting worse.” Williams says it’s because, “The consumer is in very serious trouble...The average guy is not making it. His income is not keeping up with inflation.” As far as Congress getting the budget and debt ceiling under control, Williams says, “Both sides are faced with devil’s choices.” If Congress does not get its financial house in order by the new deadline in mid-May 2013, Williams predicts, “It will be the end of the road...They are not going to have another opportunity...they are pushing the limit as it is now.”

Williams says he expects, “...a negative reaction in the next 3 or 4 months to the dollar.” Williams adamantly calls for hyperinflation to the U.S. dollar by the end of 2014. Join Greg Hunter as he goes One-on-One with John Williams of Shadowstats.com.

The video interview runs 16:40 minutes...and I thank Rob Bentley for bringing it to our attention.  It's posted on the lewrockwell.com Internet site...and the link is here.

Read more...

Honduras 'no longer functioning' after plunging over fiscal cliff

Street surveillance cameras in one of the world's most dangerous cities were turned off last week because Honduras' government hasn't paid millions of dollars it owes. The operator that runs them is now threatening to suspend police radio service as well.

Teachers have been demonstrating almost every day because they haven't been paid in six months, while doctors complain about the shortage of essential medicines, gauze, needles and latex gloves.

This Central American country has been on the brink of bankruptcy for months, as lawmakers put off passing a budget necessary to pay for basic government services. Honduras is also grappling with $5 billion in foreign debt, a figure equivalent to last year's entire government budget.

The financial problems add to a general sense that Honduras is a country in meltdown, as homicides soar, drug trafficking overruns cities and coasts and the nation's highest court has been embattled in a constitutional fight with the Congress.

This AP story, posted on the nbcnews.com Internet site late last week, is ugly...and the first I've heard of this situation.  It's a must read for sure...and I thank reader U.D. for sharing it with us.  The link is here.

Read more...

Envelopes of Cash: Corruption Charges Put Madrid on Defensive

New revelations about the corruption scandal that is rocking Spanish politics has put conservative Prime Minister Mariano Rajoy and his party on the defensive. Voters are beginning to lose patience.

The powerful reacted the way powerful people react when they are in a tight spot. Former Prime Minister José María Aznar instructed his attorneys to sue the newspaper El País. Current Prime Minister Mariano Rajoy, a conservative like Aznar, threatened to sue anyone who leveled accusations at his People's Party (PP).

For weeks, Spanish newspapers have published new details about one of the country's biggest ever corruption scandals, called "Gürtel affair," named in German after businessman Francisco Correa, whose last name means "belt". For years Correa allegedly bribed PP officials with money and gifts in return for public contracts.

The general outline of the affair was known, but not the fact that the former treasurer of the People's Party, Luis Bárcenas, had amassed up to €22 million ($30 million) from dubious sources in accounts with Dresdner Bank in Geneva. The judge on the Spanish National Court only learned of this as a result of legal assistance from Switzerland. Even the conservative newspaper El Mundo could no longer refrain from delving into the scandal.

This article showed up on the German website spiegel.de yesterday...and it's Roy Stephens first offering of the day.  The link is here.

Read more...

Calls for EU Reform: Some German Politicians Agree With Cameron

Chancellor Angela Merkel may have given a non-committal response to British Prime Minister David Cameron's call for EU reform and a British referendum on EU membership, but several politicians from her center-right coalition have voiced support for him.

"It would be totally wrong to react with kneejerk refusal to the initiative of Prime Minister Cameron," said Alexander Dobrindt, the general secretary of the Christian Social Union (CSU), the Bavarian sister party of Merkel's Christian Democratic Union. "If you condemn Cameron's idea of a referendum on Europe outright, you will fan mistrust of Europe, as if Europe has to hide from the people."

Dobrindt said Cameron had addressed many points in his speech "that could really bring Europe forward." Those points included strengthening national parliaments, clawing back powers from Brussels and making EU institutions more transparent.

This is another story from the spiegel.de Internet site yesterday...and Roy Stephens' second offering in a row.  The link is here.

Read more...

A third of Europeans have no savings

A third of Europeans have no savings at all, while in Spain and Italy half of the population is using up money put aside, a survey carried out by the German pollster TNS on behalf of ING Bank shows.

The study was carried out on over 14,000 adults in Austria, Belgium, Czech Republic, France, Germany, Italy, Luxembourg, the Netherlands, Poland, Romania, Slovakia, Spain, Turkey and the UK.

The country with the fewest savers was Romania, where almost half (48%) of respondents said they have no savings, while Luxembourg had the most (89%).

This article was posted on the euobserver.com Internet site early yesterday morning Europe time...and it's courtesy of Roy Stephens once again.  The link is here.

Read more...

France 'totally bankrupt', says labour minister Michel Sapin

France's labour minister sent the country into a state of shock on Monday after he described the nation as “totally bankrupt”.

Michel Sapin made the gaffe in a radio interview, which left French President Francois Hollande battling to undo the potential reputational damage.

“There is a state but it is a totally bankrupt state,” Mr Sapin said. “That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.”

The comments came as President Hollande attempts to improve the image of the French economy after pledging to reduce the country’s deficit by cutting spending by €60bn (£51.5bn) over the next five years and increasing taxes by €20bn.

What was that George Orwell comment about "speaking the truth was a revolutionary act"?  It's refreshing to see...and let's hope there's more to come.  He and Ron Paul would be mates. This story appeared on the telegraph.co.uk Internet site on Monday evening GMT...and I found it buried in yesterday's King Report.  It's well worth reading...and the link is here.

Read more...

How Safe Is the Suez Canal?

As darkness fell upon Egypt on Tuesday, protesters in Port Said prepared for their second night of defying the curfew that President Mohammed Morsi imposed on Port Said, Ismailia, and Suez, the three major cities along the Suez Canal that seem to have fallen out of government control.

On Tuesday, the head of the country’s army warned of a “collapse of the state” if a political solution to clashes that have engulfed the nation since the second anniversary of the Jan. 25 uprising is not soon achieved.

On Tuesday, the government issued a statement denying that the current unrest had affected one of the country’s major earners of foreign currency, the Suez Canal and connected ports. “The circulation rate [at the ports along the canal] are equivalent to the same period at the month of December 2012, or the same period during the last year. This proves that the performance rates in the port Authority were not affected so much under the current situation,” read an English-language statement from the Egyptian Ministry of Transportation.

Suez Canal revenue has been one of Egypt’s only stable sources of foreign currency, rising 4 percent to $424.6 million in December 2012, compared to the previous month. Tourism and oil-and-gas exports, additional major sources of foreign currency, have fallen since the uprising that deposed Hosni Mubarak in 2011, while the canal consistently rakes in roughly $5 billion in annual revenue, according to analysts.

This short story was posted on the businessweek.com Internet site yesterday...and it's courtesy of Washington state reader S.A.  The link is here.

Read more...

Zimbabwean Finance Minister Says the Country Has Just $217 In The Bank

After paying public workers' salaries last week, the balance in cash-strapped Zimbabwe's government public account stood at just $217, Finance Minister Tendai Biti said Tuesday.

"Last week when we paid civil servants there was $217 (left) in government coffers," Biti told journalists in the capital Harare, claiming some of them had healthier bank balances than the state.

"The government finances are in paralysis state at the present moment. We are failing to meet our targets."

Zimbabwe's economy went into free-fall at the turn of the millennium, after President Robert Mugabe began seizing white-owned farms.

This AFP story showed up on the businessinsider.com Internet site yesterday afternoon after the markets closed in New York...and the first reader through the door was Matthew Nel.  The link is here.

Read more...

Welfare payments to be slashed ¥74 billion to root out the "comfortably poor" in Japan

Welfare benefits will be slashed by ¥74 billion over a three-year period starting from fiscal 2013, after a government panel found that some people are making more on the dole than the average low-income person who is not spends on living costs, it was learned Sunday.

The decision to lower standard benefit payments by 6.5 percent was made by welfare minister Norihisa Tamura and Finance Minister Taro Aso. The reduction will hit in August.

Since the standard benefit payment provides the basis for determining other levels of public assistance, such as subsidies for school expenses, reducing it may also affect low-income earners even if they are not on welfare.

This article showed up on the japantimes.co.jp Internet site on Monday...and is another story from yesterday's edition of the King Report.  The link is here.

Read more...

Four King World News Blogs/Audio Interviews

1. William Kay [Part I]: "Coming Short Squeeze in Gold to Shock the World".  2. William Kay [Part II]: "We Will See a Global Financial Meltdown".  3. William Kay [Part III] "Expect a Massive Silver Short Squeeze".  4. The audio interview is with John Embry.

[All four of these KWN commentaries are worth your time. - Ed]

Read more...

Two major Swiss banks nudge customers into allocated gold

The wealthy have for centuries turned to Switzerland as a safe and convenient place to stash their gold. But Swiss banks are now demanding higher fees to accept the world's bullion, as they seek to reduce the size of their balance sheets.

UBS and Credit Suisse, which dominate the powerful Zurich-based physical gold market, have hiked their charges for holding the metal, according to clients and people familiar with the banks.

The move is an attempt to persuade their biggest clients -- including other banks, hedge funds, and institutional investors -- to take direct ownership of their gold in so-called "allocated" accounts, with the bank simply acting as a custodian.

Well, the move to physical ownership is starting to develop real legs since German announced the repatriation of part of its gold.  This is just another brick in the wall for JPMorgan Chase et al.  This Financial Times story from yesterday is posted in the clear over at the gata.org Internet site...and the link is here.

Read more...

Germany's gold at NY Fed may be impaired, Centennial's analysts agree

Repatriation of Germany's gold from the Federal Reserve Bank of New York may be so limited and slow because the gold is tied up by leases that will require years of unwinding, three market analysts at Centennial Precious Metals in Denver agree in a panel discussion broadcast yesterday.

The analysts -- Peter Grant, Jonathan Kosares, and George Cooper -- also discuss the U.S. Mint's erratic production of silver eagle coins.  I stole 'all of the above' from a GATA release yesterday. The discussion is a half hour long and can be viewed at Centennial's Internet site, USAGold.com, here.

Read more...

81 gold coins found during pub work in Ireland

Builders carrying out stabilisation work on an old pub building have unearthed one of the most significant finds of gold coins ever recorded in Ireland.

Eighty-one coins, mostly guineas and half guineas dating back to the 17th century, were dug up from clay underneath floorboards in a fire-damaged premises on Main Street, Carrick-on-Suir, Co Tipperary.

Marie McMahon, curator at South Tipperary Museum in Clonmel, held the coins in storage before they were handed over to the National Museum of Ireland.

This short story, with a wonderful photo embedded, was posted on the belfasttedlegraph.co.uk Internet site yesterday.  This item is courtesy of West Virginia reader Elliot Simon...and the link is here.

Read more...

Gold imports soar in India as wedding season approaches

Bullion traders across the country are one step ahead of the Indian government. Even as the government was pondering a proposal to hike customs duty on the import of gold this month, gold imports soared by 15% to 75 tonnes in January.

Though the government did go ahead and ultimately raise duties by 50% from 4% to 6% on January 21, bullion traders cornered most of the precious metal in the first three weeks of the month in anticipation of the hike in customs duty.

India's gold imports climbed to $56 billion from $21 billion between 2009 and 2012, despite an 81% price hike in domestic prices. The country's Finance Minister has also indicated that the government is considering stringent measures to curb gold imports.

This must read story was filed from Mumbai on Tuesday morning IST...and was posted on the mineweb.com Internet site.  The link is here.

Read more...

GATA favorites to speak at SilverSeek's online conference Thursday

GoldSeek's companion Internet site, SilverSeek, will hold its 4th Virtual Silver Investment Conference online Thursday from 9:30 a.m. to 4:30 p.m. Eastern time featuring four GATA favorites: our consultant, GoldMoney founder James Turk; Sprott Asset Management CEO Eric Sprott; Silver-Investor.com's David Morgan; and GoldSeek and SilverSeek proprietor Peter Spina. Attendance is free for those who register in advance. The conference's Internet site is here.

Read more...

Yikes! Financial Times makes GATA's case comprehensively

The gold market barely shrugged when the Bundesbank announced it would move 674 tonnes of the stuff from Paris and New York to Frankfurt.

But the move is important: not for what it says about Germany's faith in French or American vaults; nor for the cost of shifting 674 tonnes of gold; but because it is a major victory for transparency in the gold market.

Central banks are notoriously secretive about their gold-trading activities.

Most report, on a monthly basis, their gold reserves to the International Monetary Fund. But these data fall a long way short of full transparency. They tell us nothing about derivative positions in the gold market -- for example, gold loans, agreements for future sales, or options transactions.

This must read story in yesterday's edition of the FT was one of the items that was sitting in my in-box when I got up yesterday morning.  It's nice to see a major main stream media newspaper finally admit that the Emperor has no clothes...especially when it's coming from the hallowed halls of the Financial Times of London.  They obviously see the handwriting on the wall.  This is a very big deal, dear reader...and the story, headlined "Buba's New Era of Openness on its Gold", is posted in the clear on the gata.org Internet site.  The link is here.

Read more...

Astonished gold market analysts note FT's praise for GATA

Astonished notice of today's praise of GATA by the Financial Times has begun to come in from those gold market analysts who have managed to pick themselves up off the floor.

The daily note from John Brimelow's Gold Jottings says: "In a development which will be astonishing to veterans of the Gold Wars, the Financial Times today, in a discussion emphasizing how drastic the Bundesbank's shift to transparency about its gold activities has been, salutes the Gold Anti-Trust Action Committee. ... GATA has been completely justified in its complaints that its views have been excluded from the mainstream media for years. This is a remarkable development."

And there's much more in this GATA release from yesterday...and the link is here.

Read more...

'…Impossible to conceive of a more bullish long-term backdrop for gold' — Don Coxe

In the final issue of his “Basic Points,” publication global commodities strategist Don Coxe has once again stressed the importance of maintaining a portfolio investment in gold—primarily through gold mining stocks.

Although commodity speculators’ gold interest has waned, along with the bullion price, Coxe noted, “The astonishing recent increase in Chinese and Indian economic power and personal wealth have naturally meant that interest in gold as an investment among citizens in those countries has surged.”

Coxe insists that the likelihood the S&P will perform as well as gold in the next three years is remote.

“It is almost impossible to conceive of a more bullish long-term backdrop for gold,” Coxe declared. “The good mining stocks should be core investment for almost any long-term oriented portfolio.”

This short article was posted on the mineweb.com Internet site on Monday...and the link is here.

Read more...

 

¤ The Funnies

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  • Antofagasta has provided US$ 350,000 for all anticipated Alvalade JV expenses for Q1 2012.

Please visit our website for more information.


 

¤ The Wrap

Probably fewer than 2% of handguns and well under 1% of all guns will ever be involved in a violent crime. Thus, the problem of criminal gun violence is concentrated within a very small subset of gun owners, indicating that gun control aimed at the general population faces a serious needle-in-the-haystack problem. -- Gary Kleck, Point Blank: Handgun Violence in America

I wouldn't read much into yesterday's gold price action, as virtually all the volume involved rolls out of the February contract and into future months...mostly the next front month for gold, which is April.  The silver price action was more interesting because the next delivery month is March...and virtually none of the January's volume is roll-overs, it's just straight trading, so it's business as usual...so to speak... wink

One thing is for sure, both gold and silver have moved well off their lows...and it still remains to be see if there is more downside pain to come, or whether we've already seen the bottom for this move.

Here are the 6-month charts for all four precious metals...and as I mentioned the other day, never have I seen such a dichotomy between all four...and I wouldn't want to hazard a guess as to where prices are going in any of them...or be allowed to go.

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But as the pundits have been saying, both platinum and palladium are having supply issues...and higher prices are forecast.  Of course the same can be said about silver and, to a certain extent, gold...but JPMorgan et al are not allowing these shortages to show up in their respective prices, at least not at the moment.

Today the FOMC will not say anything important when they issue their statement.  Why they are even having these meetings is beyond me.  I don't think much is going on behind the curtain...as they are like deer in the headlights...and they have already put the world on notice that they are going to run the printing presses white hot.  What else can they say...and why would anyone with two synapse to rub together even pay attention?  It's all a charade...and the movie "The Wizard of Oz" comes to mind at this moment.

As I said yesterday, some sort of end game is inevitable...and fast approaching.  And like others have said, it will end in the meltdown of everything paper...and the melt up of anything tangible.  All we can do is hope that we're on the right side of this when it all hits the fan.

In Far East trading on their Wednesday, all four precious metals were generally in positive territory as the London open approached...and nothing much happened during the first two hours of London trading, either.  The CME's website is having some issues at the moment...and I don't have any volume numbers.  But everyone has to be out of the February contract in gold by the 1:30 p.m. Comex close in New York today...so I expect trading activity to be brisk. First day notice numbers for delivery into the February gold contract will be posted on the CME's website late this evening Eastern time...and I'll have all that data in tomorrow's column.  The dollar index isn't doing much of anything as I hit the 'send' button at 5:10 a.m. Eastern time.

I hope your day goes well...and I'll see you here tomorrow.