I sort of felt like Bill Murray in the movie Groundhog Day yesterday...as Thursday was pretty much a carbon copy of what happened on Wednesday and Tuesday. The only difference on Wednesday was that the kick in the teeth for gold and silver during the Comex trading session came at noon rather than around 10 a.m. Eastern time.
The gold price traded within five bucks of the $1,660 spot price level until 10:30 a.m. in New York. Then, in the space of an hour, about seventeen bucks was carved off the price. The low price tick of $1,644.30 spot came about 11:35 a.m...and from there gained back almost all of its losses of the prior 24-hour time period.
The gold price closed at $1,661.40 spot...down seventy cents from Thursday. Yesterday was the last day of the trading month in the March contract. Gross volume was immense...and even net volume was pretty decent at around 130,000 contracts.
As usual, the silver price was more 'volatile'. When the rug got pulled on silver at 10:30 a.m. in New York, the low price tick checked in at $31.56 spot...and silver's low was less than five minutes after the rug got pulled.
From there it traded sideways until just before lunchtime. Then a rally of some substance developed that ran out of steam around 3:30 p.m. Eastern time in electronic trading.
The silver price closed just off its high at $32.26 spot, up 22 cents on the day. Net volume, as it has been all week, was pretty light...around 28,000 contracts.
The dollar index from Thursday looked identical to the dollar index on Wednesday...losing 15 basis points, gaining 40 basis points...and then losing 25 basis points to close virtually unchanged for the second day running. And as I said in Wednesday's column: "Nothing to see here, folks...please move along."
But, as I pointed as well in yesterday's column, the dollar had little to do with the price activity in the precious metals on Wednesday...and it didn't yesterday, either. All of the activity, as it always is, was strictly a Comex paper affair.
The gold stocks opened a tad lower at the start of trading at 9:30 a.m. Eastern time...and then continued lower...with the HUI's nadir coming just minutes after 12 o'clock noon in New York. I found that rather surprising considering that gold's low price tick came about half an hour before that. Normally their lows are virtually simultaneous.
From that low tick, the gold stocks worked their way slowly higher...and then caught a real bid with less than half an hour to go in the trading day...and actually closed in slightly positive territory. The HUI finished up 0.23% on the day...which is better than the alternative.
Most of the silver stocks that make up Nick Laird's Silver Sentiment Index finished in positive territory yesterday...and it closed up a very respectable 1.62%.
(Click on image to enlarge)
The CME's Daily Delivery Report had First Day Notice numbers posted as expected. In gold there 231 contracts posted for delivery on Monday. The biggest short/issuer was the Bank of Nova Scotia with 230 contracts. There were multiple long/stoppers...JPMorgan with 95 and UBS with 53...stood for delivery on over half of them.
In silver there were 155 contracts posted for delivery on Monday. Jefferies was the biggest short/issuer with 103 contracts, followed by JPMorgan with the other fifty-two. The Bank of Nova Scotia was the long/stopper on all 155 contracts. The Issuers and Stoppers Report is worth a look...and the link is here.
I had one of my readers stop by the store yesterday...and he was asking me questions about the above report. While we were talking, it suddenly dawned on me that I hadn't mentioned something that Ted Butler had pointed out to me years ago...and that I had long since forgotten about.
On Monday, when all the contracts listed in the Daily Delivery Report above are finally delivered, the equivalent number of long and short positions in the Comex futures market are extinguished...and open interest falls. So, as of the end of the Monday trading day, gold open interest will fall by 231 contracts...and silver's total open interest will decline by 155 contracts...as all the shorts have fulfilled their obligations to all the long contract holders. It's strictly a mechanical process.
There were no reported changes in GLD yesterday...but over at SLV an authorized participant added 971,132 troy ounces of silver.
There was a very small sales report from the U.S. Mint yesterday. They sold another 2,000 ounces of gold eagles...and 30,000 silver eagles.
The Comex-approved depositories showed that 594,576 troy ounces of silver were taken into inventory on Wednesday...all of it into Brink's, Inc. There was also a transfer of 605,601 troy ounces out of Scotia Mocatta and into JPMorgan's warehouse. The link to all of that activity is here.
Here's a chart that Roy Stephens sent me yesterday. Apparently it was a bad day for European banks on Thursday, as the STOXX 600 Bank Price Index fell 2.7%. Two of the worst were both Italian banks, with Unicredit and Banca Popolare di Milano Scarl down 6% and 10% respectively.
Chartist Nick Laird lives in the tropical part of Australia...far up on the east coast...and is quite a photographer. Here's his photograph of a thumb-sized Yellow Bellied Sunbird [Nectorinia jugularis] drinking from a Mistletoe flower. If you look up in the top right hand corner you'll also see a Rhinoceros Beetle that's almost the same size as the bird.
I've tried to cut down today's list of stories to a more reasonable number, so I hope you have time for most of them.
Jefferies credit 'guru' David Zervos was on Bloomberg TV yesterday and, in part, here's what he had to say...
Although people freak out about central bank leverage, there really is no limit to what an entity that prints its own money can do.
But it's inevitable that we will pay for all this easing, most likely through inflation on the back end.
What he basically says is that the world's central banks are kicking the can down the road...and will deal with the inflation issue when it surfaces.
The link to the 6:20 minute video...plus the rest of the text...was posted over at the businessinsider.com website yesterday. I thank Roy Stephens for sending it along...and the link to this must watch video is here.
As Greece struggles to master its devastating debt problem, decades of mismanagement have taken their toll on the country's once-proud capital. Athens has degenerated into a hotbed of chaos and crime, where tensions between Greeks and immigrants have led to attacks on foreigners by the far-right.
The area around Patission Street used to be one of the most upscale parts of Athens. Maria Callas lived there, but that was a long time ago. Today there is a shoe store on the street that sells patent leather ballerina shoes from China for €5 ($7) and sneakers for €8. The columned structure of the National Archaeological Museum, which houses the largest collection of art from Greek antiquity, is also on Patission Street. A section of Aristotle Street frequented by prostitutes, who are getting ever-younger, is only 50 meters (165 feet) from the museum.
The Greeks may have come to terms with the fact that the luster of antiquity is long gone. But the notion that Athens, a once-proud city, has now become synonymous with political failure and mismanagement is difficult to take. The consequences of decades of mismanagement are most glaringly evident in the center of the Greek capital.
This spiegel.de story was posted on their website on Wednesday...and I thank Roy for sharing it with us. It's a depressing read...and the link is here.
What will eurozone leaders do to Luis de Guindos this time? Last time Spain's finance minister met with fellow finance ministers, a photographer snapped him being throttled by Jean Claude Juncker, the head of the eurogroup.
That was because he and Spain's prime minister Mariano Rajoy had demanded Brussels relax the austerity targets for their struggling nation. Just a few weeks on, de Guindos is heading to Friday's meeting in Copenhagen amid fears that Spain needs a Greek-style bail-out.
Rajoy succeeded in getting Spain's budget targets for 2012 relaxed from 4.4pc of GDP to 5.3pc. His officials told Brussels that their target of 5.8pc would be "suicidal"; Rajoy said it was a "sovereign decision, made by Spain".
Rajoy's victory served as a warning flare to markets, but it delighted Spaniards. But on Thursday it counted for nothing: as the new regime prepared to unveil its first Budget on Friday, Spain was brought to it knees by protests. The demonstrations rattled the markets and pushed Spain's shares down and borrowing costs up.
Nothing has changed...and the PIIGS are still toast. Not even the proposed $1 Trillion dollar firewall will save them. This story was posted in yesterday evening's edition of The Telegraph...and is another Roy Stephens offering. The link is here.
A draft agreement prepared for the finance ministers’ meetings reveals a plan to retain the €240bn (£200bn) rump of the European Financial Stability Fund (EFSF) until next year.
The move boosts the available bail-out funds to €740bn from this summer but falls far short of the €1 trillion firewall that international leaders have been calling for.
It marks a concession from Germany but is unlikely to stem fears over the advancing debt crisis, particularly in Spain.
This story was posted late yesterday evening on the telegraph.co.uk website...and I thank Roy Stephens once again for sending it along. This one is a must read...and the link is here.
The first is headline "BRICs nations recognize Iran's right to peaceful use of nuclear energy"...and the second is entitled "Risks of attack on Iran would be 'incalculable', Germany says". Both are worth running through...and, once again, both are Roy Stephens contributions.
Israel has access to airbases in Azerbaijan near Iran's northern border to use in a military strike against Iran's nuclear sites, sources told a U.S. magazine.
Unnamed senior diplomats and military intelligence officials were interviewed in the Foreign Policy magazine report, "Israel's Secret Staging Ground," published Wednesday.
"The Israelis have bought an airfield…and the airfield is called Azerbaijan," a senior administration official was quoted as saying.
The Azeri military has four abandoned Soviet-era airfields that would potentially be available to Israel and four air bases for their own aircraft, the report says, quoting details from Military Balance 2011 from the International Institute for Strategic Studies in London.
This UPI story was filed from Washington yesterday morning...and is Roy's second-last offering in today's column. The link is here.
For weeks, China's communist leaders have been embroiled in a bitter power struggle that could jeopardize a carefully planned transition in the national leadership and the course charted by more moderate reformers. Although the state has tried to keep the feuding under wraps, the Internet is awash with rumors -- including those of a possible coup.
The rest of the world, alarmed by reports from bloggers, also looked to China with concern. The country has enjoyed enviable successes for the last three decades. It has become the world's second-largest economy, it now has the largest foreign currency reserves (about $3.2 trillion, or €2.4 trillion) and it controls the most dynamic growth market in the world -- and one that German industries are increasingly dependent on.
Some Western businesspeople have even come to believe that the Chinese economic miracle is proof of the superiority of its authoritarian system. They have raved that the Chinese -- unlike their counterparts in the West -- don't waste time in endless debates but, instead, make quick and clear decisions, thereby enabling them to govern more efficiently. And hasn't it been true, they have argued, that the top political players are selected much more carefully and are not brought into senior government positions until they have proven their worth in the provinces?
It certainly seemed that way. But, in reality, China's communist leaders have been embroiled in bitter power struggles for weeks, the details of which are only gradually reaching the outside world.
This must read story about China was posted on the spiegel.de website yesterday...and is Roy Stephens final offering of the day. The link is here.
Canada is scrapping the penny, ending production this year of a coin that weighs down consumers’ pockets while adding little to their purchasing power.
The government announced in Thursday’s federal budget that it will shortly jettison the one-cent coin – a casualty of Ottawa’s drive for efficiency and thrift.
The last one-cent coin will be minted this April, ending what federal officials say is close to 150 years of Canadian penny production. The Royal Canadian Mint will stop distributing pennies to financial institutions in the fall of 2012 and the government will work to withdraw one-cent coins from circulation.
I'm old enough to remember when you could mail a first class letter in this country for five pennies. Second class mail was just three cents. Jawbreakers were three for a penny...and Kraft caramels were two cents apiece out of the candy jar in Duncan's General Store in my home town of Glenboro, Manitoba back in the late 1950s.
With Nixon ripping the world off the gold standard back in 1971, it was only a matter of time before currency debasement did the rest. One wonders how long Canada's nickel...our five cent piece...will last? This story was posted in Toronto's Globe and Mail newspaper yesterday...and I plucked it from a GATA release. The link is here.
The first is with Dan Norcini...and it's headlined Trading "Extremely Violent" & Will end in "Disaster". The second one is with James Turk...and it's entitled "Quiet Gold Market Masks Important Development". And lastly is this blog featuring Rob Arnott. It's headlined "Arnott & Buffett: Know When to be Greedy or Terrified".
India’s jewelers went on their first strike in seven years on March 17 to protest a doubling of taxes on gold imports to 4% and a 1% excise duty on jewelry in the government’s budget plan for the coming year which starts in April.
Speaking during a review of the government’s budget plan in Parliament Tuesday, Finance Minister Pranab Mukherjee said he might reconsider the inclusion of so-called “non-branded” jewelry in the excise tax.
Representatives of small jewelers across India said the tax would put a particularly heavy burden on them and their clients. An excise tax is a levy on a good produced for sale domestically, which typically leads sellers to raise prices.
This marketwatch.com story was filed from Mumbai on Wednesday morning. It's a must read...and I thank Florida reader Donna Badach for sharing it with us. The link is here.
MineWeb's Lawrence Williams noted financial writer Paul Mylchreest's new Thunder Road Report on gold market manipulation yesterday. Williams writes: "The report demonstrates a huge number of specific occurrences where the price patterns are virtually identical in timing, supporting the algorithmic trading arguments, as well as others where the good gold news has been immediately smashed down by massive paper sales of gold. Note that seldom does metal actually change hands in these." Williams' commentary is headlined "Thunder Road Report Details Continuing Gold Price Manipulation".
I was hoping to save this monstrous 57-page report until my Saturday column, but it's been all over the Internet for the last couple of days, so I guess there's no point in holding off. I thank Chris Powell for writing the above introduction for me...and the link to the mineweb.com article, and Paul Mylchreest's monster report, is here. Top up your coffee and pack a lunch.
A collapse in gold producers lofty valuations has sparked soul searching about an exodus of restive shareholders, forcing them to tighten operations and boost dividends to lure investors.
Executives of top gold firms acknowledged during the Reuters Mining and Metals Summit this week that they bear blame for losing some investors who have switched to putting cash in gold bullion itself instead of companies that dig it up.
"Over the last year or two, investors who love gold... have been quite disappointed in the general gold sector's performance in terms of execution, be it capital blowouts, or a range of operating issues," Chief Executive Greg Hawkins of African Barrick Gold (ABGL.L) told the summit in London.
If they were really interested in helping their respective shareholders, they would be pounding at the gates of the CFTC and the CME to put an end to this Anglo/American gold and silver price fixing scheme. But most of these large cap gold and silver companies are in tight with the World Gold Council, The Silver Institute, GFMS, or CPM Group...so these questions would never be asked.
As John Embry has stated on several occasions..."The miners are either, ignorant, naïve...or complicit." Most are complicit in a grand conspiracy of silence...as they all know what's going on. John is also of the opinion that the share prices are being managed as well...and I agree. The miners would like us to believe that their poor share price performance is some great mystery that higher dividends will solve, but we all know perfectly well that the answer is hiding in plain sight.
And as Sir Winston Churchill said about Stanley Baldwin..."He occasionally stumbled over the truth, but hastily picked himself up and hurried on as nothing had happened." This is the category that virtually all gold and silver mining companies are in...and most of the large cap gold and silver mining companies are strong with the dark side of The Force as well.
This Reuters story was sent my way yesterday by reader U.D. It's well worth your time...and the link is here.
Aben Resources (TSX.V: ABN) is a Canadian gold and silver exploration company with a focus on developing properties in the Yukon. The Company's flagship project is its 100% owned Justin Gold Project located 35 kilometres southeast of the Cantung Mine and has an all season road running through its claims. A phase one drill program was carried out in 2011 on the 18,314 acre Justin Project in which a significant new greenfields gold discovery was made at the property’s POW Zone. The Company intercepted 60 metres of 1.19 g/t gold in hole JN11009 at a vertical depth of 113 metres. Additionally, a new high grade silver-copper zone was discovered at the Kangas Zone with hole JN11003 returning 1.07 metres of 7320 g/t silver (234 oz/ton) and 3.52% copper near surface. As a result of these discoveries on the Justin Project, Aben acquired 14,274 additional acres of mineral tenure in the immediate vicinity of the project to facilitate a more aggressive work program this upcoming season. The Company has four other prospective Yukon and NWT projects in its portfolio along with a seasoned management and geological team. Aben’s chairman, Ron Netolitzky, is credited with exploration success on numerous properties including three Western Canadian gold and silver projects which became producing mines. Please visit our website to learn more about the company and request information.
As I mentioned at the top of this column, yesterday was the last trading day in the March contract...and today was First Day Notice for delivery into the April contract. All precious metals are now trading the new front months...which is May for silver and June for gold.
And as you can tell, JPMorgan et al took one more chunk out of gold and silver yesterday. I'm only guessing, but it's my opinion that the rallies off the lows on Thursday were of the short-covering variety. It remains to be seen how prices will be allowed to unfold during April now that March trading is done with.
We also get the new Commitment of Traders Report this afternoon at 3:30 p.m. Eastern time...and I must admit that I really don't know what to expect. But I do know that the $40 decline in gold...and the approximately $1.10 drop in silver since the Tuesday cut-off, won't be in it.
Not much happened during the Far East trading day on their Friday...and the smallish rallies in both metals going into the London open didn't last for very long. Volume is on the lighter side as of 5:12 a.m. Eastern...but not as light as Wednesday at this time. The dollar index is down about 30 basis points...and hovering just under the 79.00 mark. As I hit the 'send' button at 5:17 a.m. Eastern time...gold is unchanged from Thursday's New York close...and silver is up a bit more than a dime.
Since today is Friday...and also the last business day of the month...and the quarter...I'm prepared for anything when I power up my computer later this morning.
I hope you have a great weekend...and I'll see you on Saturday sometime...or Sunday if you're west of the International Date Line.