It was a nothing sort of day in the gold market on Wednesday. The high, such as it was, came shortly after 2 p.m. in Hong Kong trading---and then it was a long, slow slide during the London and New York trading session. The gold price dipped under the $1,200 spot mark on a couple of occasions, but managed to close above it, but only by a whisker.
The high and low ticks are barely worth the trouble of looking up. The CME Group recorded them as $1,208.40 and $1,197.70 in the April contract.
Gold closed yesterday at $1,200.30 spot, down $3.20 from Tuesday's close. Net volume was pretty quiet at only 98,000 contracts or so.
It was more or less the same price pattern in silver and, like gold, the low tick of the day came at, or just after the London p.m. gold fix. From there it recovered about twenty cents into the close.
The high and lows were recorded as $16.36 and $16.055 in the May contract.
Silver finished the Wednesday session at $16.215 spot, down a penny on the day. Net volume was extremely light at only 22,000 contracts.
The platinum chart was a mini version of the silver chart---and that metal closed at $1,180 spot, down 2 bucks from Tuesday's close.
Palladium chopped around in a five dollar price range all day---and also closed down 2 dollars at $824 spot.
The dollar index closed late on Tuesday afternoon at 95.37---and then jumped stair-step fashion up to its 96.03 high, which came a few minutes after the London p.m. gold fix was done for the day. It held steady for a few hours, before sliding back below the 96.00 mark---and closed at 95.91---which was up 54 basis points from Tuesday.
Considering the fact that the dollar index is on a tear, the precious metal prices are certainly holding up well. But, as I've pointed out before, what the currencies are doing is of no importance, as prices are set in the COMEX futures market by JPMorgan et al.
The gold stocks traded in positive territory ever-so-briefly in the first few minutes of trading yesterday, but the sell off to gold's low of the day at the fix, took the shares with it---and they chopped sideways from there into the close. The HUI closed down again, this time by 1.71 percent.
The silver stocks opened unchanged---and headed for the nether reaches of the earth immediately, as silver also got sold down to its low of the day at, or just after, the London p.m. gold fix at 10 a.m. EST. The shares rallied a hair into the close, but Nick Laird's Intraday Silver Sentiment Index closed down another 2.37 percent, which was out of all proportion to the puny 1 cent decline in the metal itself. We've seen a lot that sort of price action lately.
The CME Daily Delivery Report showed that zero gold and 33 silver contracts were posted for delivery within the COMEX-approved depositories on Friday. Mizuho, a Japanese bank, delivered 26 contracts as the largest short/issuer---and it should come as no surprise to anyone that it was JPMorgan in its in-house [proprietary] trading account stopping 22 contracts. The link to yesterday's Issuers and Stoppers Report is here.
The CME Daily Delivery Report for the Wednesday trading session showed that March open interest in gold remained unchanged at 153 contracts, but silver's March o.i. dropped by 139 contracts, of which only 39 were delivery related. The new balance remaining is 997 contract, minus the 33 contracts posted for delivery on Friday that were mentioned in the previous paragraph.
There were no reported changes in GLD yesterday---and as of 9:32 p.m. EST yesterday evening, there were no reported changes in SLV.
Over at Switzerland's Zürcher Kantonalbank for the week ending February 27, they reported that their gold ETF declined an insignificant 185 troy ounces---and their silver ETF was down 60,990 troy ounces.
There was a tiny sales report from the U.S. Mint yesterday. They sold 21,000 silver eagles---and that was all.
There was no activity in gold at the COMEX-approved depositories on Tuesday. But it was another big in/out day in silver, as 592,542 troy ounces were reported received---and 211,816 troy ounces were shipped out. The silver received was all at Scotia Mocatta, as was a big chunk of the silver shipped out. The rest came out of the CNT Depository. The link to that activity is here.
I don't have all that many stories for you today---and I hope there's the odd one in here that you'll find of interest.
For the second year in a row, ferocious winter weather slowed U.S. vehicle sales in February, causing the major automakers to miss analysts' bullish projections.
Six of the top seven manufacturers on Tuesday reported year-to-year sales increases in February, but all fell short of expectations.
"Mother Nature was just not nice to us," said Fred Diaz, U.S. chief for the Nissan brand. He expects the industry to recoup lost sales as the weather improves.
Total U.S. sales in February rose 5.3 percent to 1,257,619 vehicles, according to research firm Autodata. Analysts surveyed by Reuters had expected an increase of 7.1 percent.
It's always the weather, isn't it? This Reuters article, filed from Detroit, appeared on their Internet site at 6:38 p.m. EST on Tuesday---and I found it in yesterday's edition of the King Report.
In 2012, congressional investigators asked the State Department for a wide range of documents related to the attack on the United States diplomatic compound in Benghazi, Libya. The department eventually responded, furnishing House committees with thousands of documents.
But it turns out that that was not everything.
The State Department had not searched the e-mail account of former Secretary of State Hillary Rodham Clinton because she had maintained a private account, which shielded it from such searches, department officials acknowledged on Tuesday.
It was only last month that the House committee appointed to investigate Benghazi was provided with about 300 of Mrs. Clinton’s e-mails related to the attacks. That was shortly after Mrs. Clinton turned over, at the State Department’s request, some 50,000 pages of government-related emails that she had kept on her private account.
If this women doesn't scare the bejesus out of you, you obviously haven't been paying attention all these years. This news item, filed from Washington, showed up on The New York Times website on Tuesday---and I thank Roy Stephens for sending it.
The head of the U.S. Federal Reserve took a swipe on Tuesday at unlawful and unethical behavior at banks, saying it raises questions over whether the values embedded on Wall Street have improved enough in recent years.
Fed Chair Janet Yellen cited the many improvements since the 2007-2009 crisis at both financial institutions and the U.S. central bank that monitors them. But large banks must continue to fix their internal governance and risk controls, she said, or the Fed will take "swift and meaningful" action.
"It is unfortunate that I need to underscore this, but we expect the firms we oversee to follow the law and to operate in an ethical manner," she said in prepared remarks to the Citizens Budget Commission, which hosted a New York dinner for her.
"Too often in recent years, bankers at large institutions have not done so, sometimes brazenly," Yellen added.
This newsmax.com story from Tuesday is living, breathing proof that Yellen can lie her ass off with the best of them. It appeared on their website at 8:43 p.m. EST on Tuesday evening---and it's the first of three offerings from West Virginia reader Elliot Simon.
Jim Rickards, chief global strategist at West Shore Funds, expects oil prices to trade between $50-60 for a year or two as Saudi Arabia attempts to put the U.S. shale frackers out of business.
This very interesting 3:26 minute video interview was conducted by Bernie Lo out of the CNBC studios in Hong Kong on their Wednesday morning---which was Tuesday evening in New York. It is, of course, courtesy of Harold Jacobsen.
The death of Leonard Nimoy inspired a wonderful outpouring of affection across the world, and possibly beyond.
Nimoy was best known for playing the role of Spock in Star Trek, possibly the most beloved character in the sci-fi genre for several generations.
From our point of view, with our interest in the nature and history of money, the most interesting of these expressions is the resurgence of the phenomenon of “Spocking” in Canada.
“Spocking” is the act of defacing the Canadian $5 note by superimposing the likeness of the half-Vulcan doctor onto the image of former prime minister, Sir Wilfred Laurier. There is quite a resemblance and therefore not much art is required to transform the former prime minister into the beloved Spock.
This short, but very interesting commentary is courtesy of Mark O'Byrne over at the goldcore.com Internet site yesterday---and it's worth reading. "May the force be with you."
The Serious Fraud Office has launched an investigation into the Bank of England's money-market auctions amid fears they may have been hit by the rigging scandal that has engulfed the City.
The SFO revealed on Wednesday night that it is "investigating material referred to it by the Bank of England concerning liquidity auctions during the financial crisis in 2007 and 2008."
It is unclear whether the probe, the first targeting the Bank in the SFO's 28-year history, will focus on traders outside the BoE or officials inside the central bank.
The move came after the SFO was handed the results of an inquiry conducted last year by Lord Grabiner into whether any senior staff at the Bank were aware its auctions may have been rigged in 2007 and 2008.
This story was posted on The Telegraph's website at 9:05 p.m. GMT Wednesday evening in London---and I found it embedded in a GATA release. This is obviously a follow-on article to another story that appeared on The Telegraph's website, this one at 5:51 p.m. GMT on their Tuesday evening. It's headlined "Bank of England hands FCA dozens of instances of potential market abuse"---and it's another news item I found in yesterday's edition of the King Report.
A running theme here over the past several weeks has been that the ECB’s €1.1 trillion foray into quantitative easing will be severely hindered by a laundry list of constraints (some of which were unwittingly self-imposed). Another topic we’ve covered exhaustively is the idea that the world’s central banks will likely all, in relatively short order, run up against the natural limits of accommodative monetary policy (indeed, even some Japanese policy makers are starting to agree on this).
Thinking about these two things in conjunction raises an interesting question for the ECB: if a tail event comes rearing its ugly head and the global central bank race to the bottom accelerates, will Mario Draghi, effectively fighting with one hand tied behind his back by virtue of Q€’s limitations, be able to fend off an outright collapse?
Here’s Financial Times with more: ...the ECB is now close to running out of ammunition. The true constraints on further ECB intervention lie in the 25 per cent issue limit and 33 per cent issuer limit on its sovereign bond purchases.
Except for Greek debt, the 25 per cent and 33 per cent caps should not prove binding in a scenario where the ECB keeps its monthly asset purchase pace of €60bn. However, the limits could be reached in worst-case scenarios where the ECB would have to boost the size of its QE programme or implement OMTs [Outright Monetary Transactions] targeted on specific sovereigns.
I sent this story off to Jim Rickards as soon as I received it---and this is what he had to say. "Thanks Ed. It's a good summary of Europe's problems. The interesting question is how can Europe have such deflation without exporting it to the U.S. via currency wars? And, if the deflation is exported to the U.S, how on earth can the Fed raise rates without making that situation worse? They probably can't, and may even have to fight back with QE4 in 2016. That could be bearish for gold in the short run (as deflation prevails), but bullish by late this year (as more Fed ease appears on the horizon). Fasten your seatbelt!"
This Zero Hedge article appeared on their Internet site at 8:30 p.m. EST yesterday evening---and it's a heavy read, but worth the effort. I thank U.A.E. reader Laurent-Patrick Gally for bringing it to our attention.
Just hours after India's 'surprise' rate cut (which saw the SENSEX surge and then dump to close red), Poland has surprised the market with a bigger-than-expected rate cut. Despite two-thirds of economists expecting a mere 25bps cut, the Polish Central Bank slashed its bench market 7-day rate to just 1.5% - the lowest on record. Today's cut "makes up for inaction in previous months" after Poland held rate flat in January and February (but echoes Poland's Oct 'surprise' greater-than-expected ease of 50bps. Polish stocks dropped on the news (but recovered), banks are weaker, and the Zloty is selling off on this news (pushing back towards record lows)...
Poland’s economy expanded 3.1 percent from a year earlier in the fourth quarter. While that’s the slowest pace in 2014, it also capped the fastest full-year expansion in three years as deflation helped increase disposable incomes and consumer confidence.
After predicting inflation of 1.2 percent in 2015, it now believes consumer prices “will probably fall on average this year,” the ministry’s Chief Economist Ludwik Kotecki said on Feb. 25.
This article showed up on the Zero Hedge website at 8:35 a.m. EST on Wednesday morning---and I thank Elliot Simon for finding it for us.
Switzerland has long been the world’s top offshore financial center. And for good reason. Its sophistication and professionalism are legendary. Plus, it has a distinct history, tradition, and culture that sincerely values privacy, neutrality, and independence.
Switzerland’s culture is its rare, secret sauce. That’s something that cannot be easily replicated by other jurisdictions. In my view, it’s what really sets Switzerland apart.
Recently I spoke with Roland Meier, who has been a Swiss banker for decades. Roland and I touch on some important topics, including the U.S.’s assault on the Swiss banking system, GATCA, and attempts to create a centralized one-world government.
This very excellent and educational interview with Roland was conducted by International Man's senior editor Nick Giambruno---and it's definitely worth reading if you have the interest.
Reserve Bank of India Governor Raghuram Rajan cut interest rates in an unscheduled move days after the government agreed for the first time to give the central bank a legal mandate to target inflation.
Rajan, citing weakness in Asia’s third-largest economy, lowered the benchmark repurchase rate by a quarter percentage point to 7.5 percent, the second such move this year. Economists at banks including Goldman Sachs Group Inc. had anticipated the RBI to hold off until the next meeting, on April 7.
India’s move is the latest salvo in an onslaught of global easing outside the U.S., with more than a dozen central banks adding stimulus so far this year. The central bank alluded to the need to keep up with counterparts in the easing cycle, saying the rupee remained strong relative to peers.
The decision also followed quickly on Prime Minister Narendra Modi’s agreement to a yearlong quest by Rajan to boost the central bank’s independence and focus on price stability in the nation with one of Asia’s fastest inflation rates. The agreement calls for an inflation target of four percent, with a band of plus or minus two percentage points.
This Bloomberg article, co-filed from Mumbai and New Delhi, appeared on their Internet site at 8:17 p.m. Denver time on Tuesday evening---and it's the second offering of the day from Elliot Simon.
The Australian Securities and Investments Commission is investigating suspicious trading in foreign exchange markets after the Australian dollar spiked sharply in the seconds before the Reserve Bank of Australia announced its surprise decision to hold interest rates in March.
It is the second month in a row that irregular trading has occurred in the moments before the release of the RBA's monetary policy statement.
The Australian dollar, as valued against the United States dollar, jumped 0.5 percent exactly 37 seconds before the March interest rate decision was released at 2:30 p.m. AEDT on Tuesday, sparking speculation of insider trading.
This article put in an appearance on The Sydney Morning Herald website on their Wednesday sometime---and I found it on the gata.org Internet site.
Nobody can fault China's leaders for lack of bravery. The Politburo has kept its nerve as the world's most giddy experiment in credit-driven growth faces assault on three major fronts at once.
Real interest rates have rocketed. The trade-weighted rise in the yuan over the past two years has been spectacular. Fiscal policy is about to tighten drastically as the authorities clamp down on big-spending local governments.
Put together, China is pursuing the most contractionary mix of economic policies in the G20, relative to the status quo ante. Collateral damage is already visible in the sliding global prices of iron ore, copper, nickel, lead and zinc over recent months, as well as thermal coal, oil, corn and even sugar.
Zhiwei Zhang, from Deutsche Bank, says China faces a "fiscal cliff" this year as Beijing attempts to rein in spending. "This year, China will likely face the worst fiscal challenge since 1981. This is not well recognised in the market," he said.
This commentary by Ambrose Evans-Pritchard, which is certainly worth reading, made an appearance on the telegraph.co.uk Internet site at 10:13 p.m. GMT yesterday evening London time---and it's the final contribution of the day from Roy Stephens, for which I thank him.
Richard Maybury has been predicting ‘black swan’ events in his newsletter Early Warning Report for the last two decades.
In a recent conversation, he put his finger on something happening around the world. He sees a growing anxiety about global events – “everybody knows there’s something seriously wrong but they don’t know what is really happening,” he said.
A reckoning with policies that have been in place since the 1940’s is taking place, according to Richard. The fallout, he says, has implications for currencies, the military hegemony of the U.S., and political stability around the world.
This commentary by Richard appeared on the sprottglobal.com Internet site yesterday---and it's worth a few minutes of your time.
This hour long video interview/Q&A session with Rick appeared on the bnn.ca Internet site at 1:00 p.m. EST on Monday---and I thank Ken Hurt for sharing it with us.
Dr. Faber believes the People's Bank of China may have accumulated thousands of tons of gold bullion reserves, many fold the official figure, in anticipation of a gold backed Yuan/renminbi. China boasts the most trading partners of any nation---124; making a sound and readily acceptable currency an essential ingredient for global expansion. The modus operandi includes a gradual weakening of the Yuan, to the benefit of the manufacturing and exporting sectors, followed by the introduction of gold backing. En passant, the Yuan devaluation will be offset by the increased value of the massive PBoC gold stockpile.
This 29-minute audio interview showed up on the goldseek.com Internet site yesterday---and it's the second offering in a row from reader Ken Hurt.
Russian exports of palladium to Switzerland in January jumped to their largest since May 2014, making for the strongest start to any year since 2010, according to Swiss trade data.
Russia exported 21,600 ounces of palladium to Switzerland in January, more than three times the average monthly run rate of the past year of 6,000 ounces, Barclays said in a note on Monday.
“Notably, it is a pickup in powder as opposed to semi-manufactured imports which has accounted for the bulk of shipments in recent months,” the bank said. “The increase in shipments in April and May last year were also in powder form. A pickup in the winter months is not uncommon but in absolute terms the volumes are still light.”
This therefore does not alter Barclays’ forecast of a sizeable deficit in 2015 of 558,000 ounces, it added.
This short, but very interesting article, was posted on the mineweb.com Internet site at 11:31 a.m. GMT on Tuesday morning---and I found it all by myself.
Turkey imported just 2.1 tonnes of gold in February, according to data from the Turkish bourse, down from 2.26 tonnes in January and the lowest inflow in seven months although it was up slightly from just 1.2 tonnes in the same month in 2014.
At an average of 181 tonnes per year over the past 10 years, Turkey is the world’s fourth-largest consumer of gold, the World Gold Council said.
The physical premium for 0.995 LBMA gold for immediate delivery nonetheless remains at parity, according to Troy Precious Metals GoldTakas system.
Early in February, Metals Focus said that the key driver of the drop in January’s figure was a surge in jewellery scrap supply in Turkey. Domestic refiners were working at full capacity, causing local premiums to move to a discount over the price on international markets, it also said.
This short gold-related story put in an appearance on the mineweb.com Internet site at 2:54 p.m. GMT on Wednesday---and I came across it the same time as the previous story. It's worth your while.
Telling Indians not to buy gold is like asking Americans not to consume liquor, billionaire investor Thomas Kaplan has said.
Appreciating Indians' appetite for gold, Kaplan said the precious metal has historically been a very good way to store wealth for India and pointed out that China is "specifically and overtly" encouraging its people to buy gold.
India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tonnes of gold each year.
"I think trying to ban gold or to ban gold imports, you know, would have about as much success as trying to tell Americans not to drink alcohol. And prohibition did not work and eventually someone had to accept the reality," he told PTI on the sidelines of a CII event when asked whether India's efforts to curb gold imports would work.
This commentary, filed from New Delhi, showed up on The Economic Times of India website at 12:22 p.m. IST yesterday afternoon---and it's another story I found embedded in a GATA release. It's definitely worth reading.
One of the 'must see' things when you're in Sedona is the Chapel of the Holy Cross. To say that its setting is spectacular is somewhat of an understatement.
The first photo is from a distance, so you're able to put the church [center right] in a 'big picture' perspective, as the two following shots are from close in. Note in the first photo that they even paint the lamp standards/street light poles the same colour as the sandstone. The church is just off a main road in a rather upscale residential neigbourhood---and I had to stand in some pretty creative spots in order to make sure that it didn't intrude on the photos. The last picture was taken close to the chapel entrance at the top of the rock it's built on. I'll have an interior shot in tomorrow's column. Don't forget to use the 'click to enlarge' feature. It helps to a certain extent, but it still doesn't do the photos justice.
This next photo is courtesy of chartist extraordinaire, Nick Laird, which he took near his house in Cairns the other day. "Down Under" they call it a goanna. But in actual fact, it's a member of the monitor lizard family---and this fellow is a Lace monitor---the second-largest of the monitor species in Australia after the perentie. Nick said this fellow was approaching 2 meters long---and mentioned that they taste like chicken when prepared properly.
Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization
Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.
Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.”
Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained.
Please visit our website for more information about the project.
But the improvements [in the current COT structure - Ed] does not take us back to the favorable set up at the beginning of the year---and certainly not back to the even more bullish readings in November. Therefore, I still sense the possibility of one more shot to the downside in which whatever technical funds can be persuaded to sell (on lower prices) are persuaded to sell. I hope and believe that is what I have conveyed recently.
What’s bothering me about the set up I imagine in the short term---and that has worked up until now (although I ask you not to rely upon it)---is that there have been a number of occasions in the past few days where I would have imagined the technical funds would have come in as strong sellers (as prices declined) and yet there has been no apparent new tech fund selling. For instance, there was a sharp sell-off in the wee hours the other night in which gold dropped a quick $15 and silver by 40 cents to new lows and there was no follow thru to the downside---and prices quickly snapped back. On Wednesday, prices acted crummy, but again no follow thru to the downside. Or at least no downside follow thru yet.
I’ve tried to narrow the market equation to the downside, should it occur, as being solely dependent upon whether the commercials could lure what may be a limited number of technical fund short positions into the market on lower prices. That opens the possibility that new technical fund short sales may even be more limited than I imagine. And I can’t help but think that even more as the downside breaks occur with no follow thru. Maybe the commercials are just toying with short term price appearances to lower the boom once again, but if there are not significant numbers of short technical fund short contracts to be put on, then there is, effectively, no reason for silver prices to go lower. - Silver analyst Ted Butler: 04 March 2015
With such low volume, I'm not prepared to read much into yesterday's price action but, like Ted, I'm amazed that JPMorgan et al haven't hammered the crap out the precious metals this week. Of course they tried early Tuesday morning in Far East trading and promptly go their heads handed to them. Then yesterday when the gold price dipped below the $1,200 spot mark---and silver hit $16 the ounce, I thought the roof would cave in at that point. But nada!
We get the job numbers tomorrow at 8:30 a.m. EST, so maybe they're waiting until then---or not.
But, on the other hand, I am more than impressed by the price strength in all the precious metals in the face of this ongoing U.S. dollar melt-up.
Here are the 6-month charts for all four precious metals once again.
As I type this paragraph, the London open is under twenty minutes away---and I see that the price pattern in Far East trading on their Thursday is virtually identical to the price pattern there on Tuesday, at least in gold and silver. Needless to say, this didn't happen under free-market conditions. Net gold volume is just over 15,500 contracts---and silver's net volume is around 3,200 contracts. Not much to see here. The dollar index is currently up 25 basis points.
There's not much going on in the precious metal world this week. JPMorgan et al are keeping the precious metal prices on a short leash at the moment---and it just remains to be see whether we're going to rally from this point, or get another quick, sharp engineered price decline before that rally.
In the story on palladium in today's column, along with the two stories on platinum during the last week, it was pointed out that both these precious/industrial metals are in a supply deficit again this year. Of course you'd never know it by looking at the price charts, but it should be no surprise as to why that is the case. The COMEX paper tail, continues to wag the supply/demand fundamentals dog---and until that changes, nothing changes.
And as I send this off to Stowe, Vermont at 5:05 a.m. EST this morning, I see that all four precious metals are trading slightly below their respective closes in New York on Wednesday afternoon---and that was after all four of them were up decent amounts until 1 p.m. Hong Kong time on their Thursday. Net gold volume is barely 22,000 contracts---and silver's net volume is 4,200 contracts. Like it was this time on yesterday morning, there's nothing to see here. The dollar index is now up 31 basis points.
That's all I have for today---and I'll see you here tomorrow.