Gold & Silver Daily
"Unfortunately, none of these budding rallies were allowed to get far"
 

¤ Yesterday In Gold & Silver

The gold price got sold down about five dollars starting around 9 a.m. Hong Kong time in Far East trading on their Tuesday morning.  The low tick of the day came at, or just after, the morning gold "fix" in London at 10:30 a.m. BST.  The subsequent rally got sold down at 10:45 a.m. EST, the same time as it got sold down in Monday trading.  The New York low came about twenty minutes after the COMEX close---and it rallied a few dollars into the 5:15 p.m. close of electronic trading.

The high and low tick were reported as $1,190.10 and $1,178.20 in the April contract.

Gold closed in New York at $1,182.70 spot, down $2.30 from Monday's close.  Net volume was around 104,000 contracts.

The silver price rallied a few cents in early Far East trading before the not-for-profit sellers appeared at 9:00 a.m. Hong Kong time---just like in gold.  The low tick came shortly before noon over there---and it crawled higher until the London a.m. fix was put to bed and rallied until "da boyz" showed up at 10:45 a.m. EDT, just like gold---and just like what happened to the silver price on Monday.  The low in New York came just before the COMEX close---and it rallied about a nickel as the electronic trading session wound down.

The low and highs were recorded by the CME Group as $16.435 and $16.82 in the May contract.

Platinum's tiny rally in early Far East trading also got sold off starting around 9 a.m. Hong Kong time---and then starting at 10 a.m. Zurich time, the platinum price began a rally that had mostly topped out by noon in New York.  From there it chopped sideways into the 5:15 p.m. EDT close of electronic trading.  Platinum closed on Tuesday at $1,141 spot, up 23 dollars on the day---gaining back everything it lost on Monday, plus a few dollars extra.

The palladium price had rallied five bucks up until 9 a.m. in Hong Kong trading---and then it chopped sideways until the COMEX opened.  It got sold back down below Monday's close in very short order, but quickly rebounded and finished the Tuesday session at $734 spot, up 8 bucks on the day.

The dollar index closed late on Monday afternoon in New York at 97.96---and chopped down to its 97.88 low minutes before 9 a.m. Hong Kong time, which occurred at the high tick for all four precious metals in Far East trading on their Tuesday.  The 98.63 high that followed came around 10:35 a.m. BST in London, which was right at the London a.m. gold fix.  From that high, the index was sold down about 25 basis points by 12:20 p.m. BST---and from there chopped sideways for the remainder of the Tuesday session, closing at 98.38, which was up 42 basis points on the day.

The gold stocks opened in slightly positive territory, but once the gold price was turned lower at 10:45 a.m. EDT, the stocks followed and never recovered, as the HUI closed down another 1.67 percent, it's sixth losing session in a row.

The silver equities got a taste of positive territory, but the roof caved in at 10:45 a.m. in New York, just like for the gold stock---and the silver shares hit their low at the 1:30 p.m. COMEX close.  They managed to struggle higher, cutting their losses on the day by just over a percent, but Nick Laird's Intraday Silver Sentiment Index still closed down another 1.96 percent.

For the month, Nick advised me that HUI was down 16.94 percent---and his Intraday Silver Sentiment Index closed lower by 13.33 percent.  Year-to-date [Q1] the HUI is down 2.70 percent---and his silver stock index is down 3.68 percent.

The CME Daily Delivery Report for Day 2 of the April delivery month was another surprise, as it showed that only 1 gold, along with zero silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  I'm wondering out loud why the short/issuers are sitting on their hands.  They're the ones that are under the gun to deliver the physical metal to the long/stoppers---and as Ted Butler has pointed out, there is no benefit whatsoever for them to hold out.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in April fell by 1,925 contracts---and now sits at 5,423 contracts still open.  Silver o.i. in April increase by 20 yesterday---and is now up to 130 contracts open in the current delivery month.

There were no reported changes in GLD yesterday, but there was another big withdrawal from SLV, as 1,912,954 troy ounces were reported taken out by an authorized participant.

Over at Switzerland's Zürcher Kantonalbank for the week ending on Friday, March 27, they reported a small increase in their gold ETF---but a big decline in their silver ETF.  They added 7,210 troy ounces of gold, but a whopping 750,931 troy ounces was removed from their silver ETF---and that was after an addition in the prior week, the first one in years.

The U.S. Mint had a sales report for the last trading day of the month.  They 2,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and another 314,000 silver eagles.

For the month of March, the mint sold 46,500 troy ounces of gold eagles---9,500 one-ounce 24K gold buffaloes---and a very healthy 3,519,000 silver eagles.  Based on these sales, the silver/gold ratio works out to just under 63 to 1.  I would guess that JPMorgan, or other large buyers, own more than half of all the silver eagles produced this year, as they're not being purchased the general investing public.

Year-to-date [Q1] the mint has sold 12,071,000 silver eagles---146,000 troy ounces of gold eagles---and 56,000 one-ounce 24K gold buffaloes.

Over at the North American COMEX-approved depositories, there was 32,150.000 troy ounces reported received---1,000 kilobars---and 2,411.250 troy ounces [76 kilobars] were shipped out.  All of the activity was at Canada's Scotiabank.  The link to that activity is here.

At Brink's, Inc. Hong Kong, they reported receiving 2,797 gold kilobars---and shipped out 6,250 gold kilobars.  The link to that activity in troy ounces is here.

In silver, nothing was reported received---and 429,177 troy ounces were shipped out the door.  The link to that action is here.

I have a more reasonable number of stories for you today---and I hope you'll find a few in here that you like.

 

¤ Critical Reads

Chicago PMI Fails To Bounce Back, Hovers Near 6-Year Lows

Despite the hockey-stick-like expectations of all the clever economists, Chicago PMI failed to bounce back from its total carnage in February. Printing 46.3 against expectations of 51.4, the index remains at near six-year lows. Must be the weather... oh apart from the massive surge in Midwest pending home sales...? This is the biggest 5-month plunge since Lehman.

This commentary showed up on the Zero Hedge website at 9:52 a.m. EDT yesterday morning---and today's first story is courtesy of Dan Lazicki.

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JP Morgan CEO Jamie Dimon once told Elizabeth Warren to 'hit' him with a fine because the bank could 'afford it'

In early 2013, JPMorgan's outspoken chief Jamie Dimon trolled Sen. Elizabeth Warren (D-Mass.) when he told her to "hit" him with a fine because his bank could "afford it." 

Dimon has been a major critic of increased regulations on the financial services industry.

Warren, on the other hand, is a huge advocate for financial reform. She's the former head of the Congressional Oversight Panel for TARP and she also established the Consumer Financial Protection Bureau.

In a new afterword in the paperback version of her book "A Fighting Chance" she writes about Dimon's visit to her office and their heated discussion.

This interesting article appeared on the businessinsider.com Internet site at 11:24 a.m. EDT on Tuesday morning---and I thank Roy Stephens for sending it along.

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Bank threat to Democrats backfires

If Citigroup, JPMorgan Chase and other big banks wanted to send a message to congressional Democrats with a "symbolic" withholding of donations, they can rest assured it was heard — but not in the way they intended.

The gesture by the banks to each withhold $15,000 in donations to the Democratic Senatorial Campaign Committee until lawmakers like Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio softened their tone on Wall Street was first reported last week by Reuters.

The big banks have thrown around money for years," she wrote in an e-mail posted on her blog. "But they are moving out of the shadows. They have reached a new level of brazenness, demanding that Senate Democrats grovel before them."

This story appeared on the usatoday.com Internet site at 7:33 p.m. EDT yesterday evening---and it's something I found in this morning's edition of the King Report.

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Beware the Money Illusion Coming to Destroy Your Wealth -- Jim Rickards

Stage three is when inflation begins to run away and central banks lose control. Now the illusion wears off. Savings and other fixed-income cash flows such as insurance, annuities and retirement checks rapidly lose value. If you own hard assets prior to stage three, you’ll be spared. But if you don’t, it will be too late because the prices of hard assets will gap up before the money illusion wears off.

Finally, stage four can take one of two paths. The first path is hyperinflation, such as Weimar Germany or Zimbabwe. In that case, all paper money and cash flows are destroyed and a new currency arises from the ashes of the old. The alternative is shock therapy of the kind Paul Volcker imposed in 1980. In that case, interest rates are hiked as high as 20% to kill inflation… but nearly kill the economy in the process.

Right now, we are in late stage one, getting closer to stage two. Inflation is here in small doses and people barely notice. Savings are being slowly confiscated by inflation, but investors are still comforted by asset bubbles in stocks and real estate. Be nimble and begin to buy some inflation insurance in the form of hard assets before the Stage Three super-spike puts the price of those assets out of reach.

This longish commentary by Jim appeared on the dailyreckoning.com Internet site yesterday sometime---and it's the second offering of the day from Roy Stephens.  It's certainly worth reading.

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CNBC's SquawkBox Has Lowest Nielsen Rating In Its History

Days after Zero Hedge broke the news that CNBC had just suffered its worst ever ratings year in 2014, we weren't at all surprised to read in the WSJ that "CNBC will no longer rely on TV ratings specialist Nielsen to measure its daytime audience, beginning later this year. Instead, it has retained marketing and research firm Cogent Reports for the task."

WSJ further reported that "CNBC’s daytime Nielsen ratings, which always have been relatively small, have fallen sharply over the past decade. In 2014—its least-watched year since 1995—CNBC had an average audience of 177,000 people from the hours of 9:30 a.m. and 5 p.m., according to Nielsen. That is down 17% from an average of 214,000 viewers in 2004, and it is a drop of 13% from 2013."

It has gotten so bad WSJ is now actively losing leverage, and money, when discussing ads: "Executives at CNBC said they were leaving money on the table with advertisers and they needed to make a change. “Nielsen has never measured us accurately,” said CNBC President Mark Hoffman. “If we can’t count the people the right way we can’t get paid the right way.”"

As the following update of CNBC's perhaps most popular (if least watched, lagging even Mad Money) day breaking segment, SquawkBox, the show that features Joe Kernen, Becky Quick  and Andrew Ross Sorkin just suffered its worst quarterly Nielsen rating in the prime, 25-54 demo, in the show's history.

I think the CNBS moniker says a lot as to why nobody rates this network highly---and it's well deserved.  Joe---and the program---should have been put out to pasture years ago.  This Zero Hedge piece, courtesy of Dan Lazicki, showed up on their Internet site at 5:34 p.m. EDT yesterday afternoon---and the embedded charts are worth a look.

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Former Fed Governor Admits Market Controlling The Fed is a "Very Dangerous Development"

"The markets think they have Yellen's number," that she will never allow markets to go down, Kevin Warsh warns "that is a very dangerous development."

"This is an experiment we should be taking with great care without some obvious conviction that there is no financial stability risks."

Investors "think good times can last forever," he warns... they can't...

Amid all the turmoil in global geopolitics, "you still don't see any of those risks in financial markets.. and I cant help but think aggressive central banks are responsible for that."

This worthwhile Zero Hedge piece appeared on their Internet site at 8:20 a.m. EDT on Tuesday morning---and it's another contribution from Dan Lazicki.  The embedded CNBC video interview with Warsh runs for 8:23 minute.

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Dr. Dave Janda Interviews Your Humble Scribe

Dave and I had a 25-minute chat on Sunday afternoon on all-talk radio WAAM 1600 out of Ann Arbor, Michigan---and if you have the time, it went pretty well.

But you can be the judge, jury---and executioner on this one.

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Iceland looks at ending boom and bust with radical money plan

Iceland's government is considering a revolutionary monetary proposal -- removing the power of commercial banks to create money and handing it to the central bank.

The proposal, which would be a turnaround in the history of modern finance, was part of a report written by a lawmaker from the ruling centrist Progress Party, Frosti Sigurjonsson, entitled "A Better Monetary System for Iceland."

"The findings will be an important contribution to the upcoming discussion, here and elsewhere, on money creation and monetary policy," Prime Minister Sigmundur David Gunnlaugsson said.

This very interesting story showed up on the telegraph.co.uk Internet site 8:18 p.m. BST yesterday evening, which was 3:18 p.m. in Washington.  I found it embedded in a GATA release early yesterday evening Denver time---and it's certainly worth reading.

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Three weeks into ECB quantitative easing, markets begin taper talk

Just three weeks into the European Central Bank's 19-month bond-buying programme, analysts are already speculating that it may throttle back the pace of purchases early, possibly even this year.

An upturn in growth or inflation, a dramatic rise in asset prices and a scarcity of bonds have all been cited as factors that could prompt the ECB to "taper" its purchases.

"We expect the ECB will decide to cut back its bond purchases as early as the second half of this year," said DZ Bank analyst Hendrik Lodde, adding the economy could improve towards year-end.

This Reuters article, filed from London, was posted on their website at 6:48 a.m. BST on their Tuesday morning---and it's another article I found in yesterday's edition of the King Report.

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Even With Free Money, Merkel Still Reluctant to Spend

In Germany there’s no such thing as guilt-free borrowing.

Even when it’s the lenders who pay the borrower.

“In German, debt is the same word as guilt,” former Italian Prime Minister Mario Monti said in an interview. The word is “Schuld.”

Monti is among the critics who say Chancellor Angela Merkel’s unwillingness to pull out the credit card is holding back the euro-area economy and making it harder to overcome the financial-crisis aftermath. By sitting on the fiscal sidelines even with a budget surplus, Berlin has put virtually the entire response to the threat of deflation on the European Central Bank.

Good for her!  Keep that credit card in your wallet Angela baby!  If you borrow it, you have to pay it back at some point.  This Bloomberg news item, filed from London put in an appearance on their Internet site at 12:56 a.m. MDT---and it's courtesy of West Virginia reader Elliot Simon.

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Merkel Fears Split in E.U. Regarding Anti-Russian Sanctions – German Media

Statements made by the German Chancellor during her visit to Finland demonstrate her concerns about a split among European countries, arising from their different stances towards Russia, Deutsche Wirtschafts Nachrichten wrote.

Europe should pursue a unified policy towards Russia in the context of the Ukrainian crisis, German Chancellor Angela Merkel said during her visit to Finland, where she met with the country’s Prime Minister Alexander Stubb, German media reported.

There should be no individual approach of the E.U. states with regard to this issue, the German politician said during her speech at the University of Helsinki.

"We want to cooperate with Russia, but on the basis of certain principles,” Merkel stated, cited by the German newspaper “Hamburger Abendblatt”. If Europe continues to act in a common way, then the desired impact of anti-Russian sanctions will be achieved, the German politician said.

This sanctions thingy is such bulls hit---and it wouldn't surprise me in the slightest if some countries broke ranks on this issue in the future.  This article was posted on the sputniknews.com Internet site at 9:24 p.m. Moscow time on their Tuesday evening, which was 1:24 p.m. EDT in Washington.  I thank South African reader B.V. for finding it for us.

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Pepe Escobar in eastern Ukraine: Howling in Donetsk

Asia Times’ roving correspondent Pepe Escobar just returned from a reporting trip to the Donetsk People’s Republic (DPR), the pro-Russian enclave in the Donetsk Oblast province of eastern Ukraine. The area’s been the scene of heavy fighting between pro-Russian rebels and the Ukrainian military. Escobar traveled to Donetsk at the invitation of  Europa Objektiv, a German-based non-governmental media project. He traveled at his own expense.

I’ve just been to the struggling Donetsk People’s Republic. Now I’m back in the splendid arrogance and insolence of NATOstan.

Quite a few people – in Donbass, in Moscow, and now in Europe – have asked me what struck me most about this visit.

I could start by paraphrasing Allen Ginsberg in Howl – “I saw the best minds of my generation destroyed by madness.”

This boots-on-the-ground commentary appeared on the Asia Times website on Tuesday Hong Kong time---and it's definitely worth reading if you have the interest.  I thank reader M.A. for finding it for us.

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Iran nuclear talks miss deadline; Russia says 'key aspects' agreed

Six world powers and Iran missed a Tuesday deadline to reach an outline accord reining in Tehran's nuclear program, extending talks into an extra day as they edged toward a deal but failed to agree crucial details such as the lifting of U.N. sanctions.

The negotiators ended talks in the Swiss city of Lausanne in the early hours of Wednesday and said they would reconvene later in the day, with Iran and Russia expressing optimism that an initial agreement was within reach.

The preliminary deal is a major milestone toward a final accord, with an end-June deadline, that could end the 12-year-old standoff and reduce the risk of another Middle East war.

With Iran asserting its "nuclear rights" and the United States threatening on Tuesday to abandon the negotiations, the talks have been bogged down on the issues of nuclear research, the lifting of U.N. sanctions and their restoration if Iran breaches the agreement.

This very interesting Reuters article appeared on their website yesterday evening, but was updated just before 1 a.m. EDT this morning---and is almost a completely different article than was posted earlier.  Obviously the situation is very fluid at the moment.  I thank Orlando, Florida reader Dennis Mong for sharing it with us.  It's original headline was "Iran nuclear talks miss deadline; U.S. Threatens to walk away".  There was a story about this issue in the Tehran Times late yesterday evening local time---and it's headlined "Minor issues remain on Iran bans in nuclear talks: Iran negotiator".  This article is courtesy of Roy Stephens.

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The Middle Eastern Balance of Power Mature: George Friedman

Last week, a coalition of predominantly Sunni Arab countries, primarily from the Arabian Peninsula and organized by Saudi Arabia, launched airstrikes in Yemen that have continued into this week. The airstrikes target Yemeni al-Houthis, a Shiite sect supported by Iran, and their Sunni partners, which include the majority of military forces loyal to former President Ali Abdullah Saleh. What made the strikes particularly interesting was what was lacking: U.S. aircraft. Although the United States provided intelligence and other support, it was a coalition of Arab states that launched the extended air campaign against the al-Houthis.

Three things make this important. First, it shows the United States' new regional strategy in operation. Washington is moving away from the strategy it has followed since the early 2000s — of being the prime military force in regional conflicts — and is shifting the primary burden of fighting to regional powers while playing a secondary role. Second, after years of buying advanced weaponry, the Saudis and the Gulf Cooperation Council countries are capable of carrying out a fairly sophisticated campaign, at least in Yemen. The campaign began by suppressing enemy air defenses — the al-Houthis had acquired surface-to-air missiles from the Yemeni military — and moved on to attacking al-Houthi command-and-control systems. This means that while the regional powers have long been happy to shift the burden of combat to the United States, they are also able to assume the burden if the United States refuses to engage.

This commentary, which is a hair on the longish side, appeared on the stratfor.com Internet site at 8:01 a.m. BST yesterday---and I said about the stories [and cartoons] about Yemen on Saturday, you really do need a program to keep up with the "who and what".  But it's definitely worth reading if you have any interest at all in the situation over there.  It's courtesy of Dan Lazicki. 

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China to Insure Deposits in Move Toward Scrapping Rate Curbs

China said an insurance system for bank deposits will start on May 1, a step toward scrapping remaining controls on interest rates and allowing lenders to fail in a more market-driven economy.

Deposits and interest up to 500,000 yuan ($81,000) will be fully covered, the State Council said in a statement on its website on Tuesday. Over that level, compensation would be according to the amount available from a bank’s liquidated assets, it said.

China is pressing ahead with rate liberalization just as bad loans at a six-year high and forecasts for the weakest economic growth since 1990 raise the stakes for ensuring that reform progresses without financial turbulence. The dominance of state-controlled lenders has previously left savers believing in an implicit government guarantee in the only major economy in Asia to lack a formal deposit insurance system.

“The deposit insurance scheme is a very crucial step toward interest-rate liberalization,” Ma Kunpeng, a Shanghai-based analyst at Sinolink Securities, said by phone. “Without deposit insurance, you can’t set the deposit rates free.”

This short Bloomberg story, co-filed from Shanghai and Beijing showed up on their Internet site at 3:13 a.m. Denver time on Tuesday morning---and it's another contribution from Elliot Simon.

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China Gloats

It would appear de-dollarization among America's "allies" is accelerating...

As of 6 p.m. Tuesday, a total of 46 countries had applied to be founding members of #AIIB. Founding membership will be finalized on April 15.

This must read story put in an appearance on the zerohedge.com Internet site at 4:52 p.m. EDT yesterday afternoon---and I thank Dan Lazicki for sending it our way.

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Beijing May Not Allow Taiwan to Join AIIB to Avoid 'Two Chinas' Situation

China may not allow Taiwan to join the Beijing-led Asian Infrastructure Investment Bank (AIIB), the country's foreign ministry spokeswoman Hua Chunying said in a briefing Tuesday.

As for Taiwan joining [the AIIB], we maintain that we should avoid the 'two Chinas' and 'one China, one Taiwan' situation," Chunying said, as quoted by Business Times.

According to the media outlet, Beijing frequently affirms the importance of its "one China" policy and cuts short Taiwanese involvement in international deals, as it considers the island to be a territory-in-waiting for reunification.

Earlier in the day, Taiwanese presidential spokesman Charles I-hsin Chen expressed Taipei's desire to join the bank.

This news item was posted on the sputniknews.com website at 3:52 p.m. Moscow time on their Tuesday afternoon, which was 7:52 a.m. EDT in Washington.

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Crowded Trade 2.0: Specs Have Never Been More Short Gold or the Euro

The long U.S. Dollar, Short U.S. Treasuries trades were the 'most crowded' earlier this year and while both have derisked modestly from record highs, this week saw the net speculative position in EURUSD futures surge more negative and has never been shorter.

Along similar 'strong dollar' lines, as Bloomberg reports, net long positions in Gold have dropped to their lowest since Dec 2013 and outright Gold short positions rose for the seventh week in a row to the highest since data began in 2006.

As I said on Saturday, the short position in gold by the technical funds in the Managed Money category of the Disaggregated Commitment of Traders Report is at all-time record high.

This tiny story has two excellent charts embedded---and they're well worth a quick look.  It appeared on the Zero Hedge website at 2:10 p.m. EDT on Tuesday afternoon.  It's another contribution from Dan Lazicki.

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Will Gold Win Out Against the U.S. Dollar? -- Louis James

It is an essential impossibility to solve problems created by excess debt and artificial liquidity with more of the same. That’s our credo here at Casey Research, and the reason why we believe the gold price will turn around and not only go higher, but much, much higher.

While fellow investors around the world may not agree with gold-loving contrarians like us, they are buyers: gold is up in euros and almost everything else, except the dollar.

The dollar’s rise has been strong and seems all but unstoppable. But look at it in big-picture terms, as in the chart below, and ask yourself how sustainable the situation is.

I’m skeptical of reading too much into such charts. A peak like the one in the early 1980s would certainly take the USD much higher, and for several years to come. But still, this is an aberration. It’s not the new normal, but rather the new abnormal.

This commentary by Louis James appeared on the Casey Research website yesterday.

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Bullish on Long-Term Outlook for Gold: Gersch

Altimus Capital Director of Portfolio Management Chris Gersch discusses the price of gold. He speaks on Bloomberg's “In The Loop.”

This 3:40 minute video clip from Bloomberg appeared on their website way back on March 2---and it's only because I'm short on precious metal stories that I'm posting it at all.

Of course the real reason that gold is priced where it is, is never discussed---and that's the trading positions of the Big 8 traders.  Of course the COT Report is now wildly bullish, so if the price does fly, it won't because of any reasons that the talking heads are discussing here, it will because JPMorgan et al allow it.  I thank reader David Caron for passing it around yesterday.

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UBS bullish again on gold, gold miners

UBS is back as gold bull, particularly on the equities side.

In a note to clients UBS analyst Julian Garran makes the case that the U.S. Federal Reserve will be forced to continue easing thus boosting international liquidity in US dollars and, by consequence, demand and speculation in gold.

UBS said the key issues for gold are that with a strong US dollar “excess returns in the US are under pressure” and that dropping energy prices are putting the squeeze on corporate cash flows.

This is more main stream gold b.s., except this bulls hit is dated March 31---and it was posted on the mineweb.com Internet site yesterday.

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Gold in Fed Vault Drops Under 6,000 Tons For the First Time, After 10th Consecutive Month of Redemptions

Two months ago, when looking at the most recent physical gold withdrawal numbers reported by the Fed, we observed something peculiar: between the publicly reported surprise redemption by the Netherlands (122 tons) and the just as surprise redemption by the Bundesbank (85 tonnes), at least 207 tonnes of gold should have vacated the NY Fed's gold vault. Instead, the Fed reported that in all of 2014 "only" 177 tonnes of gold were shipped out of the massive gold vault located 90 feet below 33 Liberty Street. Somehow the delta between what we "shipped" and what was "received" in the past year was a whopping 30 tonnes, or about 15% of the total - a gap that is big enough to make even China's outright fraudulent trade numbers seems sterling by comparison.

According to the most recent earmarked gold data reported by the Fed, in the month of February another 10 tonnes of gold departed the NY Fed, following 20 tonnes in the month before - the tenth consecutive month of redemptions - which if one assumes is merely the delayed relocation of gold previously demanded for delivery, has crossed the Atlantic and is now to be found in Frankfurt.

it means that all of the 207 tonnes in Dutch and German withdrawals are now accounted for with a matched and offsetting "departure" at the Fed. Which is why the next monthly update of the Fed's earmarked gold will be especially interesting: if March data shows that the withdrawals continue, it will mean that either Germany, or some other sovereign, has continued to redeem their gold which for some reason they no longer trust is safe lying nearly 100 feet below street level on the Manhattan bedrock.

I posted Nick Laird's chart of this in yesterday's column, but this Zero Hedge story from 3:30 p.m. EDT yesterday is definitely worth reading nonetheless---and I thank Dan Lazicki for his final contribution to today's column.

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VTB is first Russian bank to enter LBMA

VTB announced Monday it has become the first Russian bank to become a full member of the London Bullion Market Association (LBMA).

The bank has an active presence in the international market for precious metals and was considered the top bank in the Russian Bullion Forum in 2013 and 2014. They hold approximately 110 tonnes of gold and 550 tonnes of silver.

Full membership in the LBMA allows VTB to expand its operations across the emerging markets, especially in Asia, further boosting the strategic diversification of its markets and client base, VTB Chairman Yuri Soloviev said. The bank hopes to increase transactions of precious metals and expand into global markets.

VTB is also now able to have representation on certain committees within LBMA and to vote on measures and other items the association takes on.

The above four paragraphs are all there is to this tiny story that showed up on the cistranfinance.com Internet site this morning at 6:00 a.m.---but it doesn't state a time zone.  I found it on the Sharps Pixley website shortly after 1 a.m. Denver time this morning.

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¤ The Funnies

Sunday was the first day where we had reasonable weather on the same day that I didn't have to write a column, so out I went, camera in hand after I'd done the radio interview with Dave Janda I posted in the Critical Reads section above.  There were lots of chickadees, nuthatches, downy woodpeckers---and squirrels.  Even a rabbit put in an appearance.  I used a 400 mm lens for all these shots---and most are taken at its minimum focus distance which is just under 4 meters, or 11.5 feet, so there's less than 3 inches/7 cm of usable depth of field in almost all these shots.  It was cloudy, so I was using a flash for fill light.

Here are three shots of downy woodpeckers.  The first two are of different females---and the last one is obviously the male.  I would rather have photographed it with something other than a suet cage in the photo, but he never presented himself in a position where I could, so this the only shot I have.  Maybe next time I'll get luckier.

Uranium Energy Corp. (NYSE MKT: UEC) is pleased to announce that the final authorization has been granted for production at its Goliad ISR Project in South Texas.  As announced in previous press releases, the Company received all of the required authorizations from the Texas Commission on Environmental Quality, including an Aquifer Exemption which has now been granted concurrence from EPA Region 6.

Amir Adnani, President and CEO, stated, “We are very pleased to have received this final authorization for initiating production at Goliad. Our geological and engineering teams have worked diligently toward achieving this major milestone and are to be truly commended. We are grateful to the EPA for its thorough reviews and for issuing this final concurrence. The Company’s near-term plan is to complete construction at the first production area at Goliad and to greatly increase the throughput of uranium at our centralized Hobson processing plant.” Please contact Investor Relations with questions or to request additional information, info@uraniumenergy.com.

 

¤ The Wrap

The unusual physical movement in the COMEX silver warehouses was joined this past week by the unusual withdrawals in metal in the big silver ETF, SLV. Close to 3.5 million oz were removed from the trust’s holdings over the past week or so. What makes it unusual is that silver prices were notably strong over this period, most plausibly caused by net new buying. (If the rise was caused by short covering, there would be no change in metal holdings). The mechanical structure of SLV dictates that net new buying must result in additional deposits of metal into the trust (unless shares are sold short). The only possible explanation that comes to mind for the net new buying of shares resulting in metal being withdrawn would be if the net new buyer quickly redeemed new shares purchased into actual metal. That’s exactly what I think occurred this week and what has occurred frequently in the past in SLV. And my best guess is that JPMorgan is the big SLV buyer.

The frequent and extremely counterintuitive circumstance of apparent net new buying of shares of SLV resulting in withdrawals (instead of deposits of metal) seems motivated by the large buyer desiring to avoid disclosing ownership when the 5% share ownership is exceeded and must be reported by SEC rules. By converting shares of SLV into actual metal, the metal ownership can grow to any large level imaginable and remain unknown and unreported to the rest of the investment world. And no one would be in a better position to pull this off than JPMorgan. I suppose that’s why I’m the only one to point out that JPMorgan holds a larger physical silver position than ever held privately in history. - Silver analyst Ted Butler: 28 March 2015

I must admit that I was expecting worse than we got during the New York session yesterday, as there was decent positive price action in both gold and silver on the last trading day of the month.  Unfortunately, none of these budding rallies were allowed to get far---and both metals were closed down on the day, as were there respective equities.  That problem didn't exist for platinum.

Here are the 6-month charts for all four precious metals once again.

And as I write this paragraph, the London open is ten minutes away.  After doing nothing in the first two hours of trading in the Far East on their Wednesday morning, a rally began that ended at 11 a.m. Hong Kong time---and it's been chopping lower ever since, but is still up a couple of bucks from Tuesday's close.  The price path for silver was similar, but more subdued---and it's back to close to unchanged as well.  Platinum and palladium have shown no signs of life at all, in either direction.

Net gold volume is a hair under 16,000 contracts---and silver's net volume is sitting at 4,000 contracts.  The dollar index chopped more or less sideways until 8:30 a.m. Tokyo time---and began to slide from there---and is currently down 25 basis points, and just above the 98.00 mark.

Yesterday was the cut-off for this Friday's Commitment of Traders Report---and I expect that all of yesterday's price/volume data will show up in it.  Just eye-balling the two charts above for the reporting week just past, it would be logical to assume that we'll see further improvement in the Commercial net short positions in both metals.  It's a certainty in silver, but after last week's COT Report in gold, I'm not about to stick my neck out, as both Ted and I were wrong by more than the proverbial country mile last week.

And as I hit the send button on today's missive at 5:15 p.m. EDT, I note that gold, silver and platinum are trending lower---and are all back below their Tuesday closing prices in New York---and palladium is up five bucks.  Net gold volume is around 23,000 contracts---and silver's net volume is 7,600 contracts.  The dollar index, which had been down 23 basis points earlier, is now up 20 points---and almost back at yesterday's high.

With March and Q1 now in the rear-view mirror---and the COT Report showing things more or less locked and loaded for a rally of some sort---we now await developments.  I'm not sure what to expect, or when, but I doubt we'll be kept in suspense for long.

I'm off to bed---and I'll see you here tomorrow.

Ed Steer