Gold & Silver Daily
"The technical funds in the Managed Money category are being let off easy"
 

¤ Yesterday In Gold & Silver

The gold price gapped up at the open of trading at 6 p.m. EDT on Sunday evening---and then chopped more or less sideways until it caught a bit of a bid shortly before COMEX trading began in New York on Monday morning.  That rally lasted until minutes after the London gold market closed, which was 4 p.m. BST/11 a.m. EDT.  From there it was under selling pressure right into the close of electronic trading---and half of Monday's price gains vanished by 5:15 p.m.

The low and high ticks were recorded by the CME Group as $1,212.60 and $1,224.50 in the June contract.

Gold closed in New York yesterday at $1,214.00 spot, up an even 12 bucks from Friday's close---and well off its high tick.  Net volume, probably because it was Easter Monday, was pretty light at only 97,000 contracts.

Here's the 5-minute gold tick chart courtesy of Brad Robertson.  As you can see, the biggest volume tick was at the gap up at the open---and even the run up/run down in the gold price during the COMEX trading session didn't happen with much volume associated with it.  Don't forget the 'click to enlarge' feature---and add two hours to the times for EDT.

Silver gapped higher as well---and then ran into resolute selling every time a rally materialized after that.  And despite the fact that the price spiked above the $17.30 spot mark, "da boyz" managed to close it below the $17 spot price mark once again.

The low and high ticks were reported as $16.935 and $17.31 in the May contract.

Silver finished the Monday session at $16.965 spot, up only 20.5 cents from Friday.  At one point it was up almost 55 cents before JPMorgan et al appeared.  Net volume was pretty light as well, at only 26,500 contracts.

Here's the 6-month silver chart---and you can see how carefully the closing price has been controlled, closing below $17 spot for 9 of the last 10 days in a row.  There's no chance that this was the result of random trading.

Platinum and palladium gapped up as well---and their respective rallies ultimately got capped in New York trading too.  Platinum closed at $1,175 spot---up 22 bucks, and palladium closed at $766 spot, up 21 dollars.  It's too bad that gold and silver weren't allowed to close up these percentage amounts.

The dollar index closed late on Friday afternoon in New York at 96.69---and was up 10 basis points by the London open---and at that point it developed a negative bias.  The 96.33 low tick came minutes before 11 a.m. EDT.  The subsequent rally hit its 97.23 high tick around 3:20 p.m.---and it sold off a bit from there, as the index closed at 97.05---up 36 basis points on the day.

Gold and silver hit their highs about ten minutes after the dollar index hit its low---and as the dollar index rallied, gold and silver prices headed south.  A cursory glace will show that this correlation didn't extend into the platinum and palladium markets.

The gold stocks gapped up---and then chopped sideways for the remainder of the Monday trading session, despite the fact that gold gave up half its gains after 11 a.m. EDT.  The HUI finished up 3.74 percent.

The silver stocks also gapped up, with almost all of the gains coming by 11:20 a.m. EDT---and after that they too traded pretty flat into the close.  Nick Laird's Intraday Silver Sentiment Index closed up a healthy 5.05 percent.

The CME Daily Delivery Report showed that 2 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  This amazing lack of delivery notices is almost unprecedented when compared to the number of gold contracts still open in the April delivery month.  Who are the short/issuers---and what are they waiting for?  But now that the Easter weekend is officially over, the deliveries may pick up.

The CME Preliminary Report for the Monday trading session showed that gold open interest for April declined by 98 contracts, leaving 2,989 contracts still open.  In silver, the April o.i. increased by 2 contracts---and now sits at 181 contracts.

There was another withdrawal reported from GLD yesterday.  This time it was 57,573 troy ounces.  And as of 7:48 p.m. EDT, there were no reported changes in SLV.

The U.S. Mint had a sales report of sorts.  They sold another 561,500 silver eagles---and no gold at all.

There was no in/out movement in gold over at the COMEX-approved depositories on Thursday---and only a bit of movement in silver, as nothing was reported received, and only 205,424 troy ounces were reported shipped out.  The link to the silver activity is here.

There were no in/out movements in the Gold Kilo Stocks at the Brink's, Inc. Hong Kong depository on Thursday, either.

As I stated in Saturday's column, I would steal what I could from silver analyst Ted Butler regarding the shocking COT Report from Friday---and here, in part, is what he had to say in his weekly review to his paying subscribers on Saturday.

You’ll recall that last week’s report was shockingly bullish for gold and so unexpected by me that it was the largest miss I ever made in predicting a COT report. But I did allow for the possibility that there was a major reporting error although I intended to treat the report as accurate. It’s clear now that last week’s data was not accurate in that it was not timely. Based upon actual trading statistics, it is virtually impossible that the CFTC reported data on a timely basis last week. Simply put, I still believe the data are accurate, but not necessarily as of the date indicated.

The CFTC has had past problems with the timeliness of its reports and it is clear that occurred in last week’s report. There is absolutely no chance that the agency will ever admit to any of this, so I suppose you will have to take my word for it. I still believe the actual data are accurate and important, even if the as of date is misstated and that the data be relied upon, albeit with the filter of being a few days late at times. And I don’t see any intent or motive to misreport on the part of the agency, it seems more a case of not being able to efficiently process and report in a timely manner than anything else.

The best way of looking at this is to take the last two COT reports as one, as that will minimize the distortion in last week’s report. Originally, I thought I was fairly close to my previous prediction for silver, but wrong off the charts in gold. As it turns out I was actually more wrong in silver than I was in gold. I had originally expected (and hoped for) no more than a 10,000 contract increase in the total commercial net short position in silver and no more than 40,000 contracts in gold for the previous report. When that report showed a 9,000 contract increase in silver my prediction seemed close but the 3,600 contract actual decline in gold had me off by a country mile. Yesterday’s report changes all that.

The COT report issued yesterday and supposedly covering positions thru the close of business on Tuesday, March 31, indicates a further increase of 10,600 contracts in the silver total commercial net short position and a 28,200 contract increase in COMEX gold futures. So, for the two weeks combined, the headline number in silver increased by 19,600 contracts (98 million oz), while the total commercial net short position in gold increased by 24,600 contracts. By combining the two weeks, I was off by almost 10,000 contracts in silver and only 15,000 contracts in gold (instead of more than 43,000 contracts on just last week’s report). End

I have the usual number of stories for a weekday column---and I hope you find a few that are of interest.

 

¤ Critical Reads

Americans Watched Their Incomes Shrink, Except For the Highest-Earners

Americans are earning less than they did in 2013, with one notable exception: the rich. 

Average incomes before taxes fell for a second year in the year ended July 2014, down 0.9 percent, while expenditures were up 1 percent on average, according to data from the Bureau of Labor Statistics mid-year consumer expenditures update, released Thursday.

Only the top 20 percent of American earners experienced income growth in that time period, swelling 0.9 percent. Their annual pre-tax income increased to $166,048. Meanwhile, every other income group shed 2 percent or more. The lowest quintile, which earned $9,818 on average, lost the most ground.

This short, but interesting Bloomberg article showed up on their Internet site last Thursday---and I thank reader 'G.T.' for today's first story.

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This is Why The U.S. Just Lost Its Superpower Status According to Larry Summers

If Larry Summers were a country, he would have joined the Asian Infrastructure Investment Bank. With a backpedaling Washington now completely isolated in its opposition to the China-led venture and with support and enthusiasm running so high that even Beijing itself is apparently surprised, none other than “the hawk” that was almost, kind of considered for the chairmanship of the Fed is out with a sharp rebuke of the US stance calling March “the moment the United States lost its role as the underwriter of the global economic system.” Of course we’ve been persistent in our contention that the AIIB represents much more than an attempt on China’s part to provide an alternative source of infrastructure financing to fill the gaps left by the ADB, and as is made abundantly clear by the following, the “secret” is certainly out...

This short commentary by Larry Summers appeared on the Zero Hedge website at 8:12 a.m. EDT on Monday afternoon---and it's certainly worth reading.  I thank Dan Lazicki for sharing it with us.

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Hedge Fund Legend Julian Robertson Warns of "Complete Explosion" Unless Fed Contains "Boiling, Bubble" Market

Legendary hedge fund manager Julian Robertson, who has been conspicuously absent from CNBC in recent months, spoke with Fox Business' Maria Bartiromo about his take on markets. He was hardly bullish, which may explain his absence from the cadre of CNBC bubble cheerleaders.

Robertson (in addition to some generic comments on the weather impacting the jobs numbers: apparently the weather only impacted the warmer March, not the freezing January and February) said that "the thing that worries me the most are the twin bubbles that are developing, certainly the Federal Reserve, the people that run their Treasury operations, are trying to create a bubble in bonds and they are doing it."

The other implied bubble of course is that of stocks, because with no upside left in bonds, capital appreciation starved investors have no choice but to go into stocks which as of today just hit 21x on a forward GAAP PE multiple surpassing even David Tepper's 20x bogey.

Asked how the bubble will end, Robertson notes that "nobody knows when bubbles are gonna burst. As a child when you are blowing a bubble you don't know when it's gonna burst and that's part of the fun of the "bubble" bubbles, but this is more serious and I am very worried about it."

This Zero Hedge piece appeared on their Internet site at 4:28 p.m. EDT yesterday afternoon---and I thank Dan Lazicki for his second contribution in a row.

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Prove You’re Not a Terrorist: International Man

Recently, France decided to crack down on those people who make cash payments and withdrawals and who hold small bank accounts. The reason given was, not surprisingly, to “fight terrorism,” the handy catchall justification for any new restriction governments wish to impose on their citizens. French Finance Minister Michel Sapin stated at the time, “[T]errorism feeds on fraud, money laundering, and petty trafficking.”

And so, in future, people in France will not be allowed to make cash payments exceeding €1,000 (down from €3,000). Additionally, cash deposits and withdrawals totaling more than €10,000 per month will be reported to Tracfin—an anti-fraud and money laundering agency.

Currency exchange will also be further restricted. Anyone changing over €1,000 to another currency (down from €8,000) will be required to show an identity card.

Do you need to make a deposit on a car? That might be suspect. Did you just deposit a dividend you received? It might be a payment from a terrorist organisation. Planning a holiday and need some cash? You might need to be investigated for terrorism.

This short International Man article from yesterday is definitely worth reading---and I thank their senior editor Nick Giambruno for sending it along.

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Desert deluge: Cars, entire houses swept away by freak mudslides in Atacama, Chile

Dramatic footage of cars, trucks and whole buildings being washed away in muddy water has emerged online after thunderstorms and abnormal rainfall in Chile’s desert Atacama region caused the Copiapo River to break its banks last week.

At least 25 people were killed and 125 others are missing as the floods ravaged the area known as one of the driest places on Earth.

This short Russia Today story appeared on their Internet site at 6:01 p.m. Moscow time on their Monday evening, which was 10:01 a.m. EDT in Washington.  The 2:10 minute embedded video clip is definitely worth watching---and I thank Roy Stephens for his first offering of the day.

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Citibank's headquarters in Argentina inspected after CEO suspended in fallout from debt fight

The central bank sent regulators to inspect Citibank's local headquarters Monday after the leader of the branch was suspended amid a legal battle over Argentina's debt.

Regulators are working to verify whether the bank was able to maintain normal operations following CEO Gabriel Ribisich's suspension last week, the government news agency Telam said.

A Citibank spokesman reached Monday declined comment.

The dispute is the latest fallout from a long-standing legal battle between Argentina and a group of U.S. creditors that refused to accept debt swaps in 2005 and 2010.

This AP story, filed from Buenos Aires, was picked up by the usnews.com Internet site at 6:56 p.m. EDT yesterday evening---and I thank West Virginia reader Elliot Simon for sending it along.

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IMF chief Christine Lagarde: Greece will pay us back

Greece's finance minister has reassured the International Monetary Fund that his government will make a key debt repayment this week after meeting with chief Christine Lagarde in Washington.

Following two hours of talks, Lagarde said she had received "confirmation by the minister that payment owing to the fund would be forthcoming on April 9."

Greece's growing insolvency problems have raised fears the country would become the first developed nation to ever fall into an arrears process with the IMF.

This news item appeared on the telegraph.co.uk Internet site at 2:20 a.m. BST on Monday morning, which was 9:20 a.m. EDT on Sunday evening in New York.  I found it embedded in a GATA release.

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Isolated Greece pivots east to Russia, China and Iran. But will it work?

Greece's bail-out drama is threatening to take a geostrategic turn to the east.

A mere three weeks after his maiden trip to Berlin, Prime Minister Alexis Tsipras is on the road again, this time heading for Greece's eastern hegemon.

On Wednesday, the 40-year-old premier will sit down for his first official meeting with Russian counterpart President Vladimir Putin at the Kremlin.

The timing is not fortuitous.

I've posted several stories about this Greece/Russia "summit" in the last few commentaries.  This one appeared on The Telegraph's website at 11:00 a.m. BST on Monday morning---and it's the second offering of the day from Elliot Simon.

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Ukrainian president says he’s open to referendum on regional powers

The Ukrainian president said he doesn’t object to a referendum on the decentralization of Ukraine, which could give greater powers to the Donbass region. However, the rebels in eastern Ukraine have denounced Petro Poroshenko’s promises as ‘meaningless.’

On Monday, Poroshenko said his government’s previously unfavorable stance on autonomy for the Donetsk and Lugansk regions has shifted.

“I'm ready to launch a referendum on the issue of state governance if you decide it is necessary,” he told the parliamentary commission, which is working on relevant amendments to the Ukrainian constitution.

This man is a pathological liar---and really only president in name only, as he has many other masters, so until this is a done deal, it's only talk.  This Russia Today story showed up on their website at 5:25 p.m. Moscow time on their Monday afternoon---and my thanks go out to Roy Stephens.

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Ukraine has key to better Russia-E.U. relations - Lavrov

Relations between Russia and the E.U. depend on the implementation of Minsk documents, Russian FM Sergey Lavrov said on Monday. By "blocking" the agreements, Kiev prevents the "normalization" of the relations, he said.

"The Minsk agreements are being blocked by Ukraine. Thus, Ukraine now holds the key to normalization of relations between Russia and the European Union," Russia's Foreign Minister Sergey Lavrov said in an interview with the head of Rossiya Segodnya news agency, Dmitry Kiselyov.

With the E.U. leaders having failed to agree on automatically extending Russian sanctions or exerting more pressure on Moscow as long as the ceasefire is holding, Europe's decision to link its policy towards Russia to the implementation of the Minsk agreements is being used by Kiev, Lavrov said.

This is another story from the Russia Today website.  This one showed up there at 9:15 p.m. Moscow time on their Monday evening---and it's also courtesy of Roy Stephens.

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Ruble whipsaws top forecasters as worst currency becomes best

As Russia's currency went from the world's worst performer to the best in the first three months of this year, it caught out even the most accurate forecasters. Oil's drop to near a six-year low and cuts in interest rates, previous indicators of a weakening ruble, were swept aside as the cease-fire in Ukraine became the bigger determinant.

"None of my expectations regarding the ruble came true," Evgeny Shilenkov, the head of trading at Veles Capital LLC in Moscow, said by phone on Thursday. Shilenkov had forecast that the ruble would weaken as much as 3.6 percent in the quarter.

"This is our new reality -- there are too many different factors affecting the ruble, there are too many elements in the ruble matrix. The ruble is completely unpredictable.

This Bloomberg news item appeared on their Internet site at 3:01 p.m. Denver time on Sunday afternoon---and I found it on the gata.org Internet site.  There was also a Russia Today story about this yesterday---and it was headlined "Russian ruble seen as world’s best performing currency, hits 2015 high"---and it's courtesy of Roy Stephens.

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Justin Raimondo: The Deal

The announcement of a “framework” for an agreement with Iran to limit its nuclear research and development had all the drama of a thriller – the extended negotiations, dragging out over several days and deadlines, the anticipation, the furor surrounding the process, and of course the naysayers carping from the sidelines, all focused the attention of the world like a laser.

President Obama did a masterful job in presenting the basic parameters of the deal in his speech: unlike his critics, he sounded like a true statesman, one who is looking to history, and not the next election or the next day’s headlines.

He stated clearly what are the alternatives to the peaceful resolution of this brewing conflict: war, or walking away from the negotiations – imposing heavier sanctions, blinding ourselves to what is going on in Iran, and following a course that eventually leads us back down the road to war. And he made a very important point, one that is not often brought up these days: we have been here before.

This absolute must read by Justin showed up on the antiwar.com Internet site on Good Friday---and I thank Casey Research's own Martin Fluck for passing it around on Saturday.

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Sanctions can’t be re-imposed after final deal: Zarif

Iranian Foreign Minister Mohammad Javad Zarif has reassured that sanctions imposed against Iran can never be re-imposed once the tentative agreement between Iran and the world powers in Lausanne is finalized. 

Zarif, who has been leading the Iranian nuclear negotiating team in the talks with the 5+1 group of world powers, made the remarks late on Saturday in a live television interview.

“If the deal is finalized and is ratified by the [U.N.] Security Council, the issue raised by the Republicans in the [U.S.] Congress that any deal at the term of [U.S. President] Obama would have credit only in his term” would be irrelevant, Zarif highlighted.

He said after the Lausanne agreement is finalized and approved by the International Atomic Energy Agency, all sides, including the United States, are obligated to remove economic and financial sanctions imposed against Iran.

This item was posted on the Tehran Times Internet site at 5:33 p.m. IRDT [Iran Daylight Time] on their Sunday afternoon, which was 9:33 a.m. EDT in New York.  It's another contribution from Roy Stephens, for which I thank him.

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Unsmiling Gen. Buhari Takes Charge in Nigeria

Africa’s most populous nation has just achieved something very important. This week Nigeria’s voters handed a landslide victory to former president, Muhammadu Buhari.

Equally impressive, the incumbent president, Goodluck Jonathan, became the first Nigerian leader in 55 years to democratically cede power to his rival.

President-elect Buhari, a dour, ascetic, unsmiling former general, proclaimed his primary goal is to attack all-pervasive corruption and crush the Boko Haram uprising in the north. Interestingly, Buhari, a Muslim, received substantial support in the Christian south in this normally religiously-divided nation of 177 million.

Nigeria is one of the world’s most corrupt nations. The rating site Transparency International puts it 144 out of 177 most corrupt nations,  just ahead of DR Congo and Haiti. But I disagree. I think Nigeria may be the most corrupt nation in Africa and likely on earth.

This very interesting article appeared on the lewrockwell.com Internet site of all place---and for that reason alone it's worth reading.  It appeared there on Saturday sometime---and I thank Nitin Agrawal for passing it around in the wee hours of Monday morning Denver time.

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Vietnam to Join Free Trade Area with Russian-led Economic Bloc

All of the principle aspects in creating a free trade zone between the countries of the Eurasian Economic Union and Vietnam have been agreed, Russian Prime Minister Dmitry Medvedev said Monday.

“Almost all of the parameters have been agreed, and the preparation of documents have reached the final stage," Medvedev said after negotiations in Vietnam's capital of Hanoi.

Medvedev stated that a contract will soon be signed between Moscow and Hanoi.

Hanoi plans to sign an agreement with the Eurasian Economic Union on a free trade zone by the middle of this year, Vietnamese Prime Minister Nguyễn Tấn Dũng said.

This article, filed from Hanoi, showed up on the sputniknews.com Internet site at 9:05 a.m. Moscow time on their Monday morning---and I thank South African reader B.V. for bringing it to our attention.

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Retired Japanese Fighter Pilot Sees an Old Danger on the Horizon

Kaname Harada was once a feared samurai of the sky, shooting down 19 Allied aircraft as a pilot of Japan’s legendary Zero fighter plane during World War II. Now 98 years old and in failing health, the former ace is on what he calls his final mission: using his wartime experiences to warn Japan against ever going to war again.

This has become a timely issue in Japan, as the conservative prime minister, Shinzo Abe, has called for revising Japan’s pacifist Constitution. On a recent afternoon in this alpine city near his home, Mr. Harada was invited to address a ballroom filled with some 200 tax accountants and their business clients.

After slowly ascending the stage with the help of his daughter, he stopped to hang up hand-drawn war maps and a sepia-toned photo of himself as a young pilot in a leather flight suit glaring fearlessly into the camera.

It was the same face that now turned to look at the audience, creased by age, and somehow softer and wiser. His body was so frail that his suit hung loose like a sail, but he spoke with a loud voice of surprising vigor.

This amazing article, filed from Nagano, Japan, appeared on The New York Times website on Good Friday---and it's certainly worth your while.  I thank Roy Stephens for finding it for us.

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Gold market manipulation cited in discussion of Sun editor's 'The Floating Kilogram'

Manipulation of the gold market by the Federal Reserve is a major subject of a March 8 interview with New York Sun editor Seth Lipsky about his new book, "The Floating Kilogram," a collection of essays about the U.S. monetary system.

The interview was conducted by radio journalist Dawn Bennett---and it was posted at The Sun's Internet site on April 5.  I found "all of the above" embedded in a GATA release yesterday morning MDT.

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LBMA admits London gold market can't be transparent with central banks in it

Central bank involvement may prevent the London gold market from ever becoming really transparent, the chief executive of the London Bullion Market Association has told a Bank of England study group.

The LBMA chief executive, Ruth Crowell, made the assertion in a long statement dated January 30 and sent to the bank's "Fair and Effective Market Review" committee, which is studying regulation of the currency and commodity markets. The LBMA statement was found on the bank's Internet site by gold researcher and GATA consultant Ronan Manly.

But if the foremost providers of "liquidity" are central banks, their provision of "liquidity" is likely the leading mechanism of market manipulation, as central banks have not just access to effectively infinite financial resources but also the powerful motive to manipulate the markets in which their currencies and bonds trade.

Thus the LBMA has made the same bogus and self-serving claim that was made by futures exchange operator CME Group in January in support of the volume trading discounts CME Group gives to central banks for secretly trading the U.S. futures markets it operates -- the claim that secret trading by central banks deters market manipulation rather than constitutes it.

This commentary by Chris Powell, with quite a number of embedded links, appeared on the gata.org Internet site very early yesterday afternoon EDT---and it's worth reading.

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Streamline fixing of gold price in India

As the curtain comes down on the century-old London gold fix, the spotlight is on the opaque and random manner in which Indian spot gold prices continue to be determined.

Gold prices in London are now fixed by an independent provider, the ICE Benchmark Administration. The new system will ensure an audit trail that will make it easy for regulators to track the fixing process. The participating banks will bid through an online electronic platform where orders will be matched transparently.

Sadly, the gold price fixing process in India remains archaic and arbitrary. Despite being the largest market for gold, India doesn't have a benchmark for gold in rupees. Gold prices are fixed by the Indian Bullion Jewellers Association. The price is based on calls made to the members of the association twice a day that reveal the quantities and price at which members want to buy and sell gold.

This gold related story put in an appearance on The New India Express website at 6:00 a.m. IST on Saturday morning---and it's another item I found in a GATA release.

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Indian jewellery billionaire Rajesh Mehta to buy Australian gold assets

India's biggest jewellery maker, billionaire Rajesh Mehta, wants to deepen his relationship with Australia's gold industry by buying stakes in Australian mines and potentially opening retail jewellery stores in the country.

Speaking on a rare visit to Melbourne, Mr Mehta said his company wanted to spend up to $US700 million ($921 million) growing its presence in Australia, with mines the primary focus.

'We have been importing gold from Australia on and off in the past, but now we want to have a formal presence in Australia," he told Fairfax Media.

"We are setting up a subsidiary in Melbourne primarily to look into acquiring interests into the gold sector of Australia, looking at gold mining assets in terms of equity or loan or whatever is feasible for us so we can ensure a reliable and permanent gold supply-line to our company.

This news item was posted on The Sydney Morning Herald website last Thursday---and it's the second offering of the day from reader B.V.

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The Philippines, another rich country insisting on being poor

The Philippines holds the world's second largest gold reserves, and applications from foreign mining firms are piling up to tap that plus a list of other metals that basically just sit under the ground now.

Mining made up just 0.72 of the impoverished Southeast Asian country's economy in 2012 as gold production fell back that year. Access to the $1.4 trillion Philippine mining sector, rich also in copper and nickel, has been mired since the 1980s in klutzy laws, environmental battles, and land rights issues. It may be on its way out of the pit this year.

Officials in Manila see mining as an untapped treasure that could help sustain recent annual economic growth of about 6 percent and bring in foreign investment -- a national priority since 2010. It's one of the country's next boom sectors, forecasts Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in metro Manila.

This very interesting Forbes article has already had 128,000 views---and you should add your name to the list.  It was posted on their Internet site at 10:00 p.m. EDT on Sunday.  It's real headline is "Trillion-Dollar Philippine Economic Goldmine Emerging From Murky Pit"---and it's another gold-related story that showed up on a GATA release yesterday morning EDT.

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Koos Jansen: Thoughts on the price of gold

Derivatives trading can influence gold prices, Bullion Star market analyst and GATA consultant Koos Jansen writes, but in the end, price suppression by central banks requires someone to supply gold to the market, likely either central banks themselves or bullion banks in London. Jansen notes that central banks have admitted supplying that gold in recent years. He wonders: Who is supplying it now?

His commentary is headlined "Thoughts on the Price of Gold" and it's posted at it was posted on the Singapore-based bullionstar.com Internet site on Saturday.  I thank Chris Powell for providing the above preamble.

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Lawrence Williams: Shanghai Gold Exchange Q1 gold withdrawals ca. 625 tonnes

It now looks as though Q1 gold withdrawals from the Shanghai Gold Exchange (SGE) will have reached around 625 tonnes – a 10.8% increase on last year’s record figure of 564 tonnes.  The actual figure for the week ending March 27 (no Easter holiday in China) was just under 46 tonnes bringing the year to date figure to 607 tonnes (already a new Q1 record) and with 2 trading days to go until the quarter end.

While mainstream analysts seem to discount SGE withdrawals as being a true representation of actual Chinese demand – although China gold watcher Koos Jansen is adamant from his questioning of Chinese officials that SGE withdrawals and Chinese gold demand are in effect the same.  The argument continues.  But be that as it may SGE withdrawals, whether the same as total Chinese demand or not, are very certainly a strong indicator of year on year Chinese gold flows, so it is very apparent from the latest figures that Q1 demand is very likely to be substantially higher than a year earlier.

It should be recalled though that last year, although Q1 SGE withdrawals reached the previous record level for the period, full year figures fell short of those for 2013 as demand tends to dip through the middle months of the year and in 2014 the mid-year dip was far greater than a year earlier, although the tail end of the year was particularly strong.  It had been thought perhaps that the higher gold prices of the week of March 27th might have put a bit of a dent in Chinese demand, which can be affected by gold price levels, but it obviously still remained strong.

This short commentary appeared on Lawrie's website very early this morning EDT.

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Fund manager William Kaye gives Grant Williams of Real Vision the case for gold without being a gold bug

Interviewed by Grant Williams, lately editor of the "Things That Make You Go Hmmm..." letter, for his new Real Vision series of video interviews by subscription, fund manager William Kaye of Pacific Group in Hong Kong observes that markets are now completely manipulated by high-frequency trading and derivatives.

Kaye adds that it is hard to make a case for gold on the basis of currency fundamentals without being disparaged as a gold bug, even as Williams notes that many serious investment professionals like Kaye are starting to recognize that case. Kaye argues that the volume of derivatives linked to the currently artificially low interest rates is so huge that it would threaten the world financial system if rates rise.

The embedded youtube.com video runs for 61 minutes---and is the most important item in today's column.  It was conducted back in December, but only showed up in the public domain on Sunday, so keep that in mind when they're talking about "current events".  It's an absolute must watch!

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¤ The Funnies

Reader Mark O'Brien, who I had the pleasure of meeting when I was at the Casey Summit in San Antonio last September, is a photographer after my own heart.  He took these four photos of brown pelicans in the everglades just outside of Everglade City, Florida early last Wednesday morning---and I thought they were worth sharing.

With no EXIF data included with these shots, I'm only guessing, but to stop wing/feather action like this on a bird this size, he'd be shooting at, or close to 1/8,000 of a second, which is the fastest shutter speed available on most top-of-the-line 35mm cameras these days.









Alexandria Minerals Corporation (TSX VENTURE:AZX) and Murgor Resources Inc. (TSX VENTURE:MGR) are pleased to announce that they have entered into an arrangement whereby Alexandria will acquire all of the outstanding common shares of Murgor.

Here are some of the benefits for Alexandria's shareholders:

  • Substantial increase in Alexandria's mineral resources
  • Alexandria’s cost of discovering gold is already low, at approximately $15.00/oz. The cost of acquiring Murgor’s gold assets is even lower, at approximately $3.00/oz.;
  • Alexandria will have larger strategic land packages in the well-known and prolific mining camps of Val d’Or and Chibougamau in Québec; Red Lake and Matachewan in Ontario; and Flin Flon-Snow Lake in Manitoba;
  • Alexandria management knows how to capitalize on its strategic assets, as evidenced by Alexandria’s successful track record in discovering its West Zone Au-Cu deposit and then monetizing this exploration project in the sale to Agnico-Eagle  (Alexandria Press Release January 14, 2014);

On January 30 Alexandria closed a non-brokered private placement of $500,000 at a price of 10 cents.  There are neither Finder’s Fees nor Commissions associated with this financing.  Proceeds from the sale of the shares will be used for exploration on its Cadillac Break property group in Val d'Or, Québec and general corporate purposes. Call or email Mary Vorvis, 416-305-4999/MVorvis@azx.ca, for more information on Alexandria Minerals.  

 

¤ The Wrap

The two week increase in the total commercial net short position in COMEX silver is among the largest in history and is bad news, perhaps for future prices, but certainly for the free and fair functioning of the market. In a matter of a few trading days, roughly 100 million oz of silver were bought by small a group of technical funds and sold by a small group of different speculators called commercials. All on a price rise of up to $1.50 and still below the average primary cost of production.

First and foremost, this is the largest quantity of paper silver sold by the commercials at such low prices ($17 or less) in more than five years. As such, it certifies that trading and positioning in COMEX silver futures contracts sets the price for actual silver. It takes all the world’s silver mines 45 days to produce 100 million oz of metal. It takes only a few days for a few commercial speculators to sell that quantity of silver derivatives on the COMEX. There is a basic misbalance between the influence that COMEX futures trading has on the actual world of silver production, consumption and investment that can’t be legitimately explained.

To be sure, not all the nearly 20,000 silver contracts sold by the commercials were new short sales, but too many were. Over the two reporting weeks, the 8 largest shorts sold 7,400 new silver contracts short, with the Big 4 accounting for 6,100 contracts of that. I won’t know for sure how many new short contracts JPMorgan accounted for until this week’s Bank Participation Report on Friday, but it could be close to all the 6,100 new contracts sold short by the Big 4. At this point it looks like JPMorgan is up to 18,000 contracts net short and maybe more. - Silver analyst Ted Butler: 04 April 2015

Although I was happy to see the gaps at the open in New York on Sunday, I was less than happy to see a lot of those gains vanish during the COMEX session in New York.  Yes, I know the dollar index began to rally minutes before both gold and silver began to head south, but that doesn't explain why platinum and palladium didn't follow the same price paths.

It also doesn't explain why silver has been deliberately closed below the $17 spot mark for the last 9 out of 10 trading days, regardless of how high it gets intraday---and as the 6-month chart below indicates, there's nothing free market about this.  Ted Butler's quote above says it all.

It appears that the technical funds in the Managed Money category in silver are being let off easy once again by JPMorgan et al---and the price is being capped at $17.  Yesterday was just another day in the process.  All graphs courtesy of stockcharts.com.

And as I type this paragraph, the London open is fifteen minutes away.  All four precious metals got sold down a bit during early trading in the Far East on their Tuesday morning---and silver's price was almost driven back to the Sunday night open in New York---and is still down on the day, as are gold and platinum.  Palladium is up a few dollars.  Volumes are very much on the lighter side.  Gold's net volume is just under 15,000 contracts---and silver's net volume is around 4,500 contracts.  The dollar index isn't doing much---and is currently chopping around unchanged.

Today at the close of COMEX trading is the cut-off for this Friday's Commitment of Traders Report.  Let's hope that everything for the reporting week will be included.  Along with that report comes the companion Bank Participation Report which shows the long and short positions of all the banks, both U.S. and foreign, that they currently hold in the COMEX futures market.  This once-a-month peek gives Ted Butler the opportunity to recalibrate JPMorgan's short-side corner in the COMEX silver market, plus the opportunity to see what the banks have been up to in all four precious metals during the preceding month---and it's usually quite a bit.

And as I fire today's column off to Stowe, Vermont at 5:18 a.m. EDT, I see that with the dollar index back in major rally mode, the precious metals are getting it in the neck once again.

The rally in the dollar index began fifteen minutes before London opened---and is currently up 59 basis points---and off its high tick by a bit.  Gold is down 6 bucks from Monday's close, silver is back to where it closed on Thursday afternoon in New York---and for a brief time was lower that.  Platinum is down 10 dollars---and palladium is still up on the day, but well off its high.  And now that the dollar index has backed off a hair, the precious metals are all ticking higher.  Gold's net volume is just over 25,000 contracts, which isn't overly heavy---and silver's net volume checks in at 7,900 contracts.  This isn't big volume for price moves of this size.

Here's the 3-day dollar index as of 5:15 a.m. EDT.

I have no idea what to expect when I switch on my computer later this morning, but more of this ongoing insanity wouldn't surprise me at all---and the only question is, when will it all end?

See you tomorrow.

Ed Steer