Gold & Silver Daily
"It was certainly obvious that JPMorgan et al weren't going to let silver do what it really wanted to do."

¤ Yesterday In Gold & Silver

The gold price didn't do much of anything during morning trading in the Far East on Friday...and then it took from early afternoon Hong Kong time until the close of New York trading at 5:15 p.m. Eastern for gold to gain less than ten bucks.

Gold closed Friday at $1,668.70 spot...up $7.30 on the day.  Net volume was around 117,000 contracts.  I wouldn't read a lot into yesterday's trading action, but I thought the volume rather high for such a small price move.

Silver's price action was a little more structured/managed...not doing much until shortly before London opened...and by 9:40 a.m. Eastern time had reached its high tick of the day at $32.74 spot...which was 50 cents higher than Thursday's close.

Then a not-for-profit seller showed up...and by the time the next rally in silver began at 12:15 p.m. in New York, silver had given up all its previous gains.  From there, silver rallied about two bits, reaching a secondary high at the close of Comex trading at 1:30 p.m. Eastern.

At that point, the not-for-profit seller returned...and by 4:30 p.m. in electronic trading, silver had its low price print of the day at $32.06 spot.  From there it rallied a bit into the close.

It's obvious that if this not-for-profit selling hadn't occurred, the silver price would have closed with quite a nice gain.  In the end, the silver price closed at $32.28 on the day...up the magnificent sum of two whole cents from Thursday's close.  Net volume was a very light 25,000 contracts.

The dollar index opened just a hair above 79.10 before falling about 35 basis points to its low at 8:00 a.m. in London.  From there it slowly gained back some of those loses, but finished the Friday trading session just under the 79.00 level.

The gold stocks roughly followed the gold price movement yesterday...and despite the rather anemic price action, the HUI finished up 1.09% on the day.

Despite the poor finish that silver had on the day, the associated stocks for the most part, did reasonably well...and Nick Laird's Silver Sentiment Index closed up 0.97%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 1,055 gold contracts were posted for delivery on Tuesday.  The biggest short/issuer was Deutsche Bank with 926 contracts...and the biggest long/stopper was JPMorgan with 481 contracts in its customer account...and 408 contracts in its in-house account.  There were no deliveries reported in silver.  The link to the Issuers and Stoppers Report is here...and it's definitely worth a few seconds of your time.

There were no changes in either GLD or SLV yesterday, either.

The U.S. Mint had a small sales report for the last day of March.  They sold another 100,000 silver eagles and nothing else.  The month ended up with the mint selling 62,500 ounces of gold eagles...26,000 one-ounce 24K gold buffaloes...and 2,542,000 silver eagles.

The Comex-approved depositories reported receiving 596,947 troy ounces of silver on Thursday...and shipped just about the same amount out the door...634,634 ounces.  The link to that action is here.

I must admit that I was rather astonished by yesterday's Commitment of Traders Report.  Silver's numbers were even better than I dared hoped.  The Commercial net short position declined by 2,448 contracts, which represents 12.24 million ounces.  The Commercial net short position is now down to 148.4 million ounces of silver...and although not a record low, it's still a very low number.

The four largest traders on the short side of the silver market are currently short 40.6% of the entire Comex futures market in that metal, once the market-neutral spread trades are subtracted from the Non-Commercial category of the COT.  Wow!  And the concentration is even higher than that if you start digging into the disaggregated COT report and subtracting some of the spread positions that it shows that don't show up in the legacy report that I use.

On the other hand, the COT numbers for gold were worlds away from the silver's change in open interest.  Gold's Commercial net short position increased a whopping 18,938 contracts...or 1.89 million ounces of gold.

Ted says that it had to do with the price action of gold on its two big up days during the reporting period.  From its low to its high last week, gold was up about $65...and Ted Butler says that both the key 20 and 200-day moving averages in gold were breached...and the technical funds and small traders came pouring back into the gold market...and JPMorgan et al went short against all comers.  This didn't happen in silver.  I asked him if there could be a mistake with the gold data...and he said 'no'.

I have never seen a more bifurcated COT report than that one.

Here's a chart that Washington state reader S.A. sent me yesterday...and it requires no further explanation from me.

Since it's Saturday, I've been saving a few extra stories for today's column that were either too long, or too off-topic to include in my regular weekday columns.  I hope you have the time to look through all of them over the next couple of days.


¤ Critical Reads

Maneuvering for an Immunity Deal

When a witness has valuable information and may be implicated in a violation, there are delicate maneuvers between prosecutors and defense lawyers. That is playing out behind the scenes for Edith O’Brien, an assistant treasurer at MF Global, who could have crucial information about how millions of dollars of customer money went missing in the firm’s final days.

Ms. O’Brien asserted her Fifth Amendment privilege against self-incrimination at a House subcommittee investigating MF Global’s collapse, but The Wall Street Journal reports that her lawyers are discussing with prosecutors her possible cooperation in the investigation. Until an agreement is reached with the Justice Department, however, she will maintain her silence.

This story was posted in The New York Times on Thursday...and I thank Phil Barlett for sending it along.  The link is here.


After First-Quarter Rally, Prospect of a Slip Looms

Stocks shot out of the gate in 2012 to post their best first quarter in 14 years, but a familiar anxiety is creeping back into the markets.

But the widespread optimism that began the year is fading to some degree. The data pointing to the economic recovery is leveling off, showing weaker manufacturing activity and stagnant personal income.

The S.& P. 500 fell during 6 of the last 10 trading days in March. April has traditionally been the best month for blue-chip stocks, and among the best for other public companies. But over the last two years, April has also been the time when early-year rallies gave way to big summer drops. Even investors and strategists who do not expect a big pullback think that at least a short-term decline is in the cards.

This is a story from yesterday's edition of The New York Times...and is another Phil Barlett offering.  The link is here.


Richard Russell: A Massive Stock Market Collapse Will Wipe Out 60 Years Of Inflation And Leveraging

Richard Russell, writer of the Dow Theory Letters, is just looking for the right time to buy stocks.

But that time isn't now.  And until that time comes, Russell will be keeping his wealth in gold.

He writes in King World News: "What I want to illustrate is that great fortunes are made at super-bear market lows.  But you must have the money at the lows.  Which is why gold is so singular and valuable.  If you have gold at the bottom of the next bear market, you can exchange it for a collection of great common stocks or funds, and then sit back and relax."

This story was posted on the website last night.  It's a short read...and certainly worth your time. It's Roy Stephens first offering of the day...and the link is here.


Moody's May Downgrade 17 Banks, Securities Firms

Moody's warned on Thursday it may cut the credit ratings of 17 global and 114 European financial institutions in another sign that the impact of the euro zone government debt crisis is spreading throughout the global financial system.

The U.S. rating agency said its action on financial institutions from 16 European nations reflected the impact of the debt crisis and deteriorating creditworthiness of its governments.

Moody's said it was reviewing the long-term ratings and standalone credit assessments of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Royal Bank of Canada.

This short story was posted over at yesterday...and I thank West Virginia reader Elliot Simon for sending it our way.  It's worth running through...and the link is here.


James Grant Speaks at the Fed...and then to CNBC

Jim had the opportunity to lay it on the line when he spoke at the Federal Reserve on March 12th...and he made the most of it.  Here's a 6:19 minute absolute must watch CNBC interview  from Thursday where he goes over the highlights of his speech with Maria Bartiromo.  The speech was posted over at the website in its entirety yesterday.  It's headlined "Must Read: Jim Grant Crucifies The Fed; Explains Why A Gold Standard Is The Best Option".and the link to that story is here.  I thank Phil Barlett for providing both stories.


Bill Gross bullish on real assets

For a generation of investors, the standard approach to allocating assets has been to invest the bulk of their holdings in equities and bonds and leave only a small percentage, usually 5% to 10% in cash. This strategy has worked well for the better part of four decades, because of the heavy use of credit by capital markets to generate profits and growth.

As a result, stocks and bonds have been the backbone of most investment portfolios, but Bill Gross, managing director of PIMCO, the well-respected investment firm headquartered in Newport, Calif., believes metals and minerals as well as real assets such as land, buildings and machines should take precedence over the next few years as individuals, companies and governments around the world continue the arduous process of paying down their debts.

“Commodities and real assets become ascendant, certainly in relative terms, as we by necessity de-lever or lever less,” Mr. Gross said in his April outlook published this week.

This must read story was posted in Canada's Financial Post yesterday...and I thank Elliot Simon for sharing it with us.  The link is here.


Bank of America: Too Crooked to Fail: Matt Taibbi

At least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hyper-gluttonous ward of the state whose limitless fraud and criminal conspiracies we'll all be paying for until the end of time. Did you hear about the plot to rig global interest rates? The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemployment checks of jobless workers? Take your eyes off them for 10 seconds and guaranteed, they'll be into some #%!@ again.

This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard.

This 5-page article was posted over at the Rolling Stone website earlier this month...and I thank Australian reader Wesley Legrand for bringing it to my attention.  This long read is "R" Matt uses his usual pithy prose to make his points.  It's definitely worth the read if you have the time...and the link is here.


Martial Law by Executive Order

President Obama's National Defense Resources Preparedness Executive Order of March 16 does to the country as a whole what the 2012 National Defense Authorization Act did to the Constitution in particular -- completely eviscerates any due process or judicial oversight for any action by the Government deemed in the interest of "national security."

Like the NDAA, the new Executive Order puts the government completely above the law, which, in a democracy, is never supposed to happen. The United States is essentially now under martial law without the exigencies of a national emergency.

If you're an American citizen, this rather short Huffington Post article from March 21 is a must it's just plain terrifying.  I thank reader Bruce Brantley for sending it along...and the link is here.


The Lost World of Lake Vostok

It sometimes seems as if our planet has no secrets left – but deep beneath the great Antarctic ice sheet, scientists have made an astonishing discovery. They’ve found one of the largest lakes in the world. It’s very existence defies belief. Scientists are desperate to get into the lake because its extreme environment may be home to unique flora and fauna, never seen before, and NASA are excited by what it could teach us about extraterrestrial life. But 4 kilometers of ice stand between the lake and the surface, and breaking this seal without contaminating the most pristine body of water on the planet is possibly one of the greatest challenges science faces in the 21st century.

In 1957 the Russians established a remote base in Antarctica – the Vostok station. It soon became a byword for hardship – dependent on an epic annual 1,000 km tractor journey from the coast for its supplies. The coldest temperature ever found on Earth (-89°C) was recorded here on the 21st July 1983. It’s an unlikely setting for a lake of liquid water. But in the 1970’s a British team used airborne radar to see beneath the ice, mapping the mountainous land buried by the Antarctic ice sheet. Flying near the Vostok base their radar trace suddenly went flat. They guessed that the flat trace could only be from water. It was the first evidence that the ice could be hiding a great secret.

This 49-minute BBC documentary is beyond least to me.  So even though it's way off-topic for this column, I thought I'd post it anyway.  I'm grateful to Wesley Legrand for sharing this incredible story with us...and the link is here.


Global Bond Offerings Set $1.16 Trillion Record in Quarter

Bond sales globally have exceeded a record $1.16 trillion in the first three months of 2012 as moves by global central banks along with reduced risk from Europe’s sovereign debt crisis drive credit-market optimism.

Offerings by companies from Europe to Asia and the U.S. have surpassed the previous record of $1.155 trillion reached in the first quarter of 2009, according to data compiled by Bloomberg. Yields on global corporate bonds fell to 4.12 percent on March 29, within 15 basis points of the lowest yield in records going back to 1997, Bank of America Merrill Lynch Index data show.

Issuance has climbed as the Federal Reserve holds borrowing rates near zero and after the European Central Bank’s Long-Term Refinancing Operations have supplied more than a trillion euros ($1.3 trillion) of three-year loans to banks since December. The efforts by the central banks along with the successful restructuring of Greek bonds have helped improve confidence in credit markets.

This is, of course, pure there isn't a snowball's chance in hell that these bonds will ever be repaid...and if they are, they will be repaid in money that's not worth anything near its current purchasing power.  This Bloomberg piece from yesterday was sent to me by Washington state reader S.A...and the link is here.


The World from Berlin: 'Even a 1-Trillion Euro Firewall Wouldn't Be Enough'

German Chancellor Angela Merkel and her finance minister, Wolfgang Schäuble, have been accused of crossing many of the "red lines" that they have set for themselves over the course of the euro crisis, making U-turn after U-turn as the crisis escalated. They officially stepped over the latest red line on Friday, when European Union finance ministers meeting in Copenhagen agreed to boost the scope of the euro zone's firewall to over €800 billion ($1 trillion). Berlin had long rejected such an expansion out of hand.

Austrian Finance Minister Maria Fekter announced on Friday that the permanent euro rescue fund, the European Stability Mechanism (ESM), would be expanded, by considering the around €200 billion in current bailouts as being separate from the €500 billion earmarked for the ESM -- originally, the €500 billion figure was to have included the €200 billion in existing aid. The ESM, which is due to come into operation in mid-2012, will also be boosted by including around €100 billion in bilateral aid that was given to Greece in 2010, as well as aid from other EU funds, bringing the firewall's total capacity to over €800 billion.

Fekter expressed her confidence that Friday's move would be enough to calm the financial markets. "The markets are already signaling relative calm," she said. "That shows that the markets can work with what we have set up here." But German commentators warn that even the new firewall may still be too small.

Too small it is...and I said so earlier this week.  It's going to take many, many trillions...if not tens of do the job, and that's just in Europe.  In the end, all they're doing is kicking the can further down the road.  This Roy Stephens offering was posted on the German website yesterday...and the link is here.


'Furious' Eurogroup chairman Jean-Claude Juncker ends key meeting early

As tempers ran high among eurozone policymakers, their agreement to boost the support available to the region's debt-laden nations was clouded by infighting over how the decision was announced.

However, Mr Juncker, who is also Luxembourg's prime minister, cancelled a planned news conference to announce the move after the Austrian finance minister Maria Fekter revealed the decision to the media herself.

The ministers were warned that the underlying causes of the debt crisis have not been resolved. Documents distributed at the meeting said that “contagion at very short notice”, with warnings over “new sources of instability” as European banks have turned to “more volatile sources of funding”.

European Central Bank policy maker Marko Kranjec said he saw no clear end to the debt crisis. “I personally still do not see the light at the end of the tunnel,” he said in an interview published on Saturday.

As I've said before, there's no way out of this mess except default or hyperinflation.  This story was posted in The Telegraph at midnight last night...and is a must read in my opinion.  I thank Roy Stephens once again...and the link is here.


Spain unveils 'most austere' Budget in democratic history

Spain unveiled "the most austere budget in democratic history" with €27bn of cuts and a 7pc rise in utility bills but still failed to win over economists. 

The cuts fell short of the €34bn experts said were required to reduce the budget deficit from 8.5pc to 5.3pc of gross domestic product (GDP).

By targeting businesses rather than individuals the Government was accused of short-termism.

Christian Schulz, senior economist at Berenberg Bank, said: "If the UK has put up a sign saying 'open for business', then Spain has put up a sign saying 'siesta'.

"They’ve really tried to spare consumption, but since they’ve had to cut somewhere, they’re really hurting corporations."

This was posted in The Telegraph yesterday evening...and I thank Roy for sending it to me.  The link is here.


Norway's sovereign wealth fund to reduce European exposure

Norway's $610 billion sovereign wealth fund, Europe's biggest equity investor, plans to sharply reduce its European exposure while raising investments in emerging markets and Asia-Pacific, the finance ministry said on Friday.

Of its entire bond, fixed income and real estate portfolio, European investments will be "gradually" reduced to 41 percent from 54 percent, while Asia-Pacific's share will rise to 19 percent from 11 percent, Finance Minister Sigbjoern Johnsen told a news conference.

"We're reducing our European exposure because we see that economic development in the global economy is changing and this should also be reflected in our investment strategy," Johnsen said. "Most likely we'll have to sell some assets in Europe."

Personally, I wouldn't own any European assets...if one wishes to dignify them with that description.  I found this Reuters story posted in a GATA release yesterday...and the link is here.


Bank of Korea cuts dollar reserves by 3%

South Korea, Asia's fourth-largest economy, pared the share of dollars in its foreign-exchange reserves to the lowest level since the global financial crisis erupted in 2007.

Dollar holdings dropped to 60.5 percent of foreign- exchange reserves at the end of last year from 63.7 percent in 2010, the central bank said in its annual report for 2011 released today.

The drop underscores a shift among reserve managers to diversify assets, with China's yuan and Australia's dollar among the beneficiaries. South Korea's government earlier this year announced plans to invest in Chinese equities as well as bonds as the yuan's international role increases.

This Bloomberg story is another that I found posted in a GATA release yesterday...and the link to that is here.


BRICS agree to local currency credits to ease dollar dependency

The BRICS - Brazil, Russia, India, China and South Africa - have agreed to provide credit to each other in local currencies. Officials say the deal will facilitate economic growth in times of crisis.

­The currency swap deal is aimed at promoting trade and investment in local currencies as well as to cut transaction costs.  It’s also seen as a step to replace the dollar as a reserve currency in trade between BRICS.

“The idea is in line with many interests and economic exigencies in the world economy,” Yaroslav Lissovolik, the chief economist at Deutsche Bank told RT. “The euro and dollar are no longer seen as unquestionable monopolies in the role of reserve currencies. Clearly the world needs more reserve currencies.”

This story was posted over at the Russia Times website on Thursday...and I thank reader Doug Beiers for bringing it to my attention.  The link is here.


Three King World News Audio/Blogs

The first is the Richard Russell blog that was quoted in a story further up in this column.  It's headlined "Hang onto Gold, Massive Collapse Coming".  The second is the audio interview with Rob Arnott...and it's linked here.  And lastly is the audio interview with ERIC SPROTT.  The blog of both these interviews was posted in Friday's column.


German website Metallwoche interviews your humble scribe

This interview took place last Sunday...and is a transcription of the audio interview that we did on that date.  The audio track is imbedded in the interview as well...but it takes less time to read it than it does to listen to it.  The interview runs about 31 minutes...and is posted over at the website...and the link to all of this is here.


The Lasqueti Mint: The early years

I posted a story about this firm several weeks back and it received a fair amount of interest, so I thought I'd post this article that was written about them last year.  Their mintings for each coin/medallion run in the hundreds, not the tens of thousands.  This is even more amazing when you consider the fact that this mint is located on an island that is off-grid...and has no road access or car ferry.  It's posted over at the website...and the link is here.


Hugo Salinas Price: Civilization is at stake...along with currencies

Industrialist and economist Hugo Salinas Price, president of the Mexican Civic Association for Silver, told King World News yesterday that gold and silver will be the only currencies to endure and will offer some protection to their owners but that this protection won't be enough if civilization fails...and civilization is very much at stake in the world financial turmoil. Salinas Price sees protectionism as the next phase of that turmoil.

I borrowed the introduction from Chris Powell...and the link to the KWN blog is here.



¤ The Funnies

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¤ The Wrap

These are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. - Thomas Paine

As usual, today's 'blast from the past' needs no introduction at all, as it's instantly recognizable from the opening handful of notes.  I've posted this piece before, but this is an updated [and vastly improved] version.  This live video recording was made at an open-air concert in Denmark back in 2006.  I've heard this group play this song live on two different occasions...both with the Edmonton Symphony Orchestra.  I note that they've written new charts for the orchestral introduction...and I think it's sensational...the best ever...especially the part for oboe.  It's a classic for sure...and Gary still has the pipes.  So turn up your speakers and then click here.  Enjoy!

With Friday being the last day of the week, the month and the quarter...I'm not prepared to read much into yesterday's price action in either metal...although it was certainly obvious that JPMorgan et al weren't going to let silver do what it really wanted to do.

I'm still scratching my head about yesterday's COT report, for positions held at the close of Comex trading on Tuesday.  If gold's 19,000 contract deterioration is correct, that means that the big rallies we had last week did not involve short covering at all...and 'da boyz' were the short sellers of first and last resort, which is not an encouraging sign.  But, on the other hand, I was delighted with what the report for silver had to show.

With the new month and new quarter about to begin on Monday, I doubt we'll have long to wait to see how the action unfolds going forward, so I will be looking forward to the Sunday night open in New York with great interest.

Before I sign off, I want to remind you one more time that with the precious metals and their shares still on sale...but for how much longer, nobody knows...there's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

That's more than enough for today.  See you on Tuesday.