Gold & Silver Daily
"Whether anything happens or not, something just doesn't smell right"
 

¤ Yesterday In Gold & Silver

Monday's trading session in gold turned out pretty much as expected, with the high tick coming just before the London open---and it was all down hill into the on-the-dot 11:00 a.m. EDT low, which was probably the close of gold trading in London as well.  From there it rallied unsteadily into the close of electronic trading.  This was same trading pattern as we've had during the last three trading days of the previous week.

The high and low ticks, such as they were once again, were reported by the CME Group as $1,163.30 and $1,149.30 in the April contract.

Gold closed yesterday at $1,154.30 spot, down $4.30 from Friday's close.  Net volume was pretty light once again at only 93,000 contracts.

Like gold, silver got sold down a bit in the first few hours of trading in the Far East on their Monday morning, but also like gold the rally ended at 2:30 p.m. Hong Kong time---and once London opened, down went the price.  The big difference was the silver really caught a bid at 8:45 a.m. EDT, about twenty-five minutes after the COMEX open.  About thirty minutes later, it got hammered flat by the-powers-that-be---and it, too, hit its low at precisely 11:00 a.m. EDT.  Silver rallied into the close as well---and had to be restrained a couple of time en route.

The high and low ticks were reported as $15.755 and $15.49 in the May contract.

Silver finished the Monday trading session in New York at $15.63 spot, down 1 whole cent, but would have obviously finished materially higher if allow to do so.  And because of the big up/down spike, silver's net volume was pretty decent at 27,000 contracts, so it's obvious that the sellers of last resort were at hand.

The platinum price also hit its high, if you wish to dignify it with that name, shortly before the London open as well, with the coup de grâce coming shortly before 10 a.m. EDT.  The low tick, like gold and silver, was also at 11:00 a.m. sharp New York time.  Platinum was closed yesterday at $1,104 spot, down 11 bucks from Friday.

Like the other three precious metals, palladium also got sold down in the first three hours of Far East trading---and its "high" came at the same time as the others as well.  The plug got pulled on this metal at the London p.m. gold fix, with the low coming at the 11:00 a.m. EDT as well.  Palladium finished the Monday session at $775 spot, down another 13 dollars.

I get the impression that despite the fact the London is not on British Summer Time [BST] yet, the precious metal markets are trading an hour earlier in order to accommodate New York.  I'm not 100 percent sure about this---and if someone has the actual times that the LBMA is open during this GMT/BST transition period, I'd love to hear from them.

The dollar index closed late on Friday afternoon in New York at 100.19---and began trending lower the moment that trading began at 6 p.m. EDT on Sunday evening.  It drifted  down to the 99.90 mark by 8:45 a.m. EDT---and then headed for the abyss.  The 99.41 interim low tick came at the London p.m. gold fix---and the subsequent rally lasted until 11:00 a.m. EDT on the dot.  It rolled over and hit its 94.37 absolute low tick within minutes of 1 p.m., before rallying a bit into the close.  The dollar index finished the Monday session at 99.70---and down 49 basis points from Friday.

Maybe it's a "black bears in dark rooms" moment for me, but it certainly appeared that "gentle hands" were around in the currency market yesterday.  The precious metal markets as well, except they weren't so gentle there.

The gold stocks opened unchanged, but headed lower immediately, with the low tick coming around 10:20 a.m in New York.  And despite the fact that gold's low price tick came at 11 a.m. EDT, the shares began to chop higher from there.  They made it back into positive territory to stay shortly before the COMEX close---and managed to finished basically unchanged.  The HUI was up a microscopic 0.06 percent.

The silver shares followed a somewhat similar pattern, but their lows were in within fifteen minutes of the open---and were in positive territory to stay just before 12:30 p.m. EDT. They were up a hair over 2 percent by 2 p.m., but faded a bit, giving up half those gains by the close.  Nick Laird's Intraday Silver Sentiment Index finished up 1.06 percent.

While on the subject of the gold and silver stocks, I forgot to post last week's data for both the HUI and the Silver 7.   The HUI finished last week down 2.95 percent---and the Intraday Silver Sentiment Index was down 2.23 percent on the week.  Considering the price action, these numbers aren't that bad at all.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. I must admit that this lack of delivery activity was rather surprising, as only one gold contract has been delivered so far this month---and there's still a big stack of silver contracts to be delivered into.  One has to wonder what the short/issuers are waiting for, because as Ted Butler has said on many occasions, there is no benefit to them by holding up delivery.

The CME Preliminary Report for the Monday trading session showed that gold open interest in March declined by one contract, the one posted for delivery today, leaving 110 contracts still open.  Silver o.i. in March fell by 113 contracts, which is also the deliveries posted for today that I mentioned in Saturday's column.  March open interest in silver is now down to 692 contracts.

There were no reported changes in GLD yesterday---and as of 8:14 p.m EDT yesterday evening, there were no reported changes in SLV, either.

It's been six business days [as of yesterday] since the big poundings that gold and silver took at the hands of JPMorgan et al's HFT boyz---plus a lot of smaller ones since---and there has only been one withdrawal from GLD, and no changes in SLV.  It should be obvious, except to those whose jobs depend on them not seeing it, that buyers unknown [albeit with very deep pockets] are gobbling up all the shares of these two precious metal EFTs that have been falling off the table for the last week or so.  There's no prize for guessing who them might be.

There was a decent report from the U.S. Mint yesterday.  They sold 5,000 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and another 412,500 silver eagles.  John Q. Public is not the buyer for most of this.

There was a decent amount of gold movement at the COMEX-approved depositories on Friday.  Nothing was reported received---and 45,010.200 troy ounces were reported shipped out.  There were 1,200 kilobars shipped out of Canada's Scotiabank---and 200 kilobars out of HSBC USA.  The link to that activity is here.

It was another very busy day in silver, as 590,147 troy ounces were reported received---and 504,618 troy ounces were shipped out. The link to that action is here.

As it is with any Tuesday column, I have a large number of stories for you today---and hopefully there will be the odd on that you'll find worth reading.

 

¤ Critical Reads

Market Top is in! Why Buy-the-Dippers Can’t Get it Up

I am sure some chart reader can explain the S&P 500’s laborious struggle since September 2——the day it crossed the 2000 barrier—-as a classic “wall of worry”. But that event occurred nearly seven months ago and the market has dipped 15 times since then and has actually plunged six times (by more than 3%). And all it had to show for its exertions going into today’s opening was a 50 point or 2.5% gain. In this bull market, that’s a rounding error.

So we have arrived at a precarious place. After the Fed has spent six-years inflating a new and even more stupendous financial bubble—-the third this century—-the market top is in.  And after five-and-one-half years of so-called recovery from the recession’s end in June 2009, the bottom is now falling out of the economy—-both abroad and here, too.

In that context, a new form of danger arises. The Keynesian pettifoggers at the Fed have painted themselves into an epochal corner. After 78 months of ZIRP they have no idea about how and why they got here; and now,  mired deep in the lunacy of free money, they are clueless about where they are going next.

David Stockman's tomes are getting longer all the time---and although this is certainly worth reading, I'd just read it until your eyes glaze over, or your thoughts start to wander onto other things.  But, having said that, here's his 5:19 minute Bloomberg video interview from Monday as well.  It's headlined "David Stockman: The Economy is Falling Apart"---and both the video and the story are courtesy of Dan Lazicki.

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From Bubble-Blower To Energy Expert, Alan Greenspan Warns "Oil Hasn't Bottomed Yet"

Having recently explained why the stock market is extremely overvalued (in his own words by Fed-driven multiple expansion alone), Alan Greenspan - seemingly brimming over with the need to remedy his years of lies/mistruths with some uncomfortable truthiness - is now taking on the US Dollar ("it is not from a strong U.S. economy but a weak rest of the world") and oil prices (America has a massive surplus of oil and there may soon be nowhere to store all of it, "we'll be lucky if we can get $40 for it.")

Greenspan told Betty Liu that oil hasn't hit bottom yet:

"We are at the point now where, at the current rate of fill, we’re going to run out of room [at our domestic facility in Cushing, Oklahoma] by next month. And then the question is -- where does the crude go?  Because everyone's forecast as to what was going to happen when prices collapsed was a sharp curtailment in shale oil production.  That has not happened.  The weekly figures, which are produced by the Energy Information Agency through March the 6, show a continued rise in domestic crude production and it has got no place to go, because we can’t legally export the way we would for most products.  We can do a little exporting and Canada, but essentially, we’re bottling up a huge amount of crude oil in the United States."

No surprises here, as I posted a few stories about this late last week---and you really have to ask yourself why Alan is getting on his soap box about this.  This Zero Hedge article appeared on their website at 12:33 p.m. EDT on Saturday afternoon---and today's second story is also courtesy of Dan Lazicki as well.

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Oil Tumbles Under $43 As Key Support Breached; Fresh 6 Year Lows

Moments ago, soothing words by Saudi Arabians notwithstanding, both Brent and WTI, had another step move lower, with Wext-Texas Intermediate sliding under $43, a fresh 6 year low, and well below the January lows of $44.37! What may be causing it: well, aside for "more sellers than buyers", and a rumor that Genscape reporting another major inventory build at Cushing, a breach of a key support line may be the reason. BofA explains.

CLJ5 has broken down overnight, breaking the Jan-29 lows at 44.37 (CLK5 needs to break 45.52, it's not there yet). This points to a continuation of the long term bear trend, exposing the confluence of long term support between 41.15/37.80. Into here we look for greater signs of basing. especially as Brent, Gasoil, RBOB and HO are not at risk of breaking their January lows, setting up the potential for bullish price divergences.

The above two paragraphs are all there is to this brief new item that appeared on the Zero Hedge Internet site at 11:05 a.m. EDT on Monday morning, but the chart is worth the trip. It's the third offering in a row from Dan Lazicki.

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Crude Plunge Sends Energy Stocks Soaring

There are only two charts associated with this tiny Zero Hedge story---and in some ways these divergences in WTI and their stocks mirrors what's happening in the precious metal equities, GLD, SLV and U.S. silver eagles.  There are buyers out there with monstrously deep pockets buying up everything in sight---and I'll have more to say about this in The Wrap.

This is another Zero Hedge piece---this one from yesterday at 3:07 p.m. EDT---and the charts are definitely worth the trip.  It's now four in a row from Dan.

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The Last Time This Happened, the Fed Launched QE 2

The prospects of a rate hike by the Fed are looking increasingly shaky and downright laughable, not just because the start to 2015 for the U.S. economy has been the worst in "negative surprises" terms since Lehman, or because the Atlanta Fed Q1 real-time GDP forecast is about to go negative (consensus originally expected this print to be 3.5% if not higher), but because the last time this happened, the Fed launched QE2.

What is "this"?

Bank of America explains:

"Trimmed mean measures of inflation had appeared stable when cited by some FOMC participants in the January minutes, supporting the idea that soft inflation largely reflected transitory factors. But, the 12-month change in the Dallas Fed’s trimmed mean PCE measure has dropped below 1.5% after running between 1.6 and 1.7% for much of 2014. The annualized 3-month change, illustrates how sudden and sharp the deterioration has been. The last time this measure was so weak was in early 2010, when persistently low inflation helped convinced the Fed to launch QE2 later that year."

This is another tiny Zero Hedge article that deserves a quick look as well.  You've read the words already, but as is always the case, the embedded chart is worth a thousand words.  It showed up on the ZH website at 9:42 a.m. Monday morning---and it's another offering from Dan L.

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Surprise: U.S. Economic Data Have Been the World's Most Disappointing

It's not only the just-released University of Michigan consumer confidence report and February retail sales on Thursday that surprised economists and investors with another dose of underwhelming news. Overall, U.S. economic data have been falling short of prognosticators' expectations by the most in six years.

The Bloomberg ECO U.S. Surprise Index, which measures whether data beat or miss forecasts, fell to the lowest since 2009, when the nation was in the deepest recession since the Great Depression.

Citigroup keeps economic surprise indexes for the world, and its scoreboard shows the U.S. is most disappointing relative to consensus forecasts, with Latin America and Canada next, as of March 12. Emerging markets were supposed to be hurt by falling oil prices but are now delivering positive surprises. U.S. policymakers frequently talk about weakness in Europe and China, though both are exceeding expectations.

This Bloomberg article showed up on their website at 9:47 a.m. EDT on Friday afternoon---and I found it in yesterday's edition of the King Report.

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Homebuilder Sentiment Tumbles to October Lows (and No, it's Not the Weather)

Homebuilder Sentiment tumbled for the 2nd month to October lows, missing expectations for the 3rd month in a row, as buyer traffic and sales expectations both fell. The weather-crushed Midwest saw sentiment surge from 48 to 61 and the sun-soaked home-sales-destroyingly warm West region saw sentiment collapse from 64 to 53.

Another short and sweet story from the Zero Hedge Internet site and, once again, the best part is to be found in the two embedded charts, which will take seconds of your time---and I thank reader M.A. for sending it along.

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How Scary Is the Bond Market? -- Robert Schiller

The prices of long-term government bonds have been running very high in recent years (that is, their yields have been very low). In the United States, the 30-year Treasury bond yield reached a record low (since the Federal Reserve series began in 1972) of 2.25% on January 30. The yield on the United Kingdom's 30-year government bond fell to 2.04% on the same day. The Japanese 20-year government bond yielded just 0.87% on January 20.

All of these yields have since moved slightly higher, but they remain exceptionally low. It seems puzzling – and unsustainable – that people would tie up their money for 20 or 30 years to earn little or nothing more than these central banks' 2% target rate for annual inflation. So, with the bond market appearing ripe for a dramatic correction, many are wondering whether a crash could drag down markets for other long-term assets, such as housing and equities.

It is a question that I am repeatedly asked at seminars and conferences. After all, participants in the housing and equity markets set prices with a view to prices in the bond market, so contagion from one long-term market to another seems like a real possibility.

This commentary by Mr. Schiller is worth reading---and it appeared on the project-syndicate.org Internet site yesterday---and I thank Dan Lazicki for sending it.

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What Can You Trust When Trust Disappears? -- Bill Bonner

U.S. stocks went up big-time [last] Thursday. Why? We don’t know. But sooner or later, we know they will go down. And the Fed will print money to buy stocks. Sound crazy? Tune in tomorrow…

In the meantime, more about what will happen when a real crash comes. In a real financial crisis, people reach for something real to hold on to. Following the Crash of 1929, for instance, Americans ran to their banks and took out so much cash that 10,000 banks closed. They were out of money.

In the crisis of 2008, people were confused. In an era of credit money, what is real? In the event, they too rushed to take out cash. According to former congressman Paul Kanjorski, a member of the House Banking Committee, depositors took out $550 billion in less than two hours.

Had the authorities not stepped in with a massive cash injection … this would have bankrupted every bank in the nation in less than 24 hours.

To remind readers, we have set off on a long, winding road. We are skipping along it, cheerfully anticipating the end of the world. What we are trying to figure out now is how our modern credit-based money system will survive the next crisis.

This commentary by Bill appeared on the acting-man.com Internet site on Monday sometime---and it, too, is worth reading.  It's also courtesy of Dan Lazicki, for which I thank him.

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What Will Happen to You When the Dollar Collapses?

Historically, when a nation’s debt exceeds its ability to repay even the interest, it can be assumed that the currency will collapse. Typically, governments exacerbate the situation by printing large amounts of currency notes in an effort to inflate the problem away, or at least postpone it.

The greater the level of debt, the more dramatic the inflation must be to counter it. The more dramatic the inflation, the greater the danger that hyperinflation will take place. No government has ever been able to control hyperinflation. If it occurs, it does so quickly and always ends with a crash.

Although there are observers (myself included) who frequently discuss what a reserve-currency crash would mean to the world, there is little or no discussion as to how this would impact people on the street level, and perhaps that discussion should begin.

This very interesting essay by guest columnist Jeff Thomas appeared on the International Man Internet site yesterday.

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Jim Rickards Reveals What He Does Differently in Exclusive Interview With Keith McCullough

James Rickards, best-selling author of Currency Wars, spoke with Hedgeye CEO Keith McCullough about how he finds the truth, the continuation of the currency wars, what the Fed gets wrong and much more in this exclusive interview.

Jim’s first appearance on Hedgeye TV in May 2014 was met with wide acclaim, and he did not disappoint in his return to Stamford for Hedgeye’s first ever live “Market Marathon” held in January. After 45 minutes of raw & unfiltered commentary on markets and the people that move them, Rickards and McCullough turned it over to the viewers, offering an extended viewer Q&A session powered by user-submitted questions.

This very long video interview runs for 73 minutes, so pop the top off a cool one before you hit the play button.  It was posted on the hedgeye.com Internet site yesterday---and I thank Harold Jacobsen for digging it up for us.

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Jim Rogers: Greek Predictions, Interest Rates---and the Pressure on Gold

Listen to our special guest, Jim Rogers, share his thoughts on the ongoing debt discussions with Greece and the European Union, the effect of potential Chinese and U.S. interest changes, and the movements of gold this week.

This 6:05 minute audio interview with Jim was something that Geoff Rutherford over at Sprott Money News sent me in the wee hours of Saturday morning, but it was way too late to make that column, so here it is now.

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CNN is Beating the Drums of War — Paul Craig Roberts

President George W. Bush’s national security advisor, Condi Rice, warned Americans that Saddam Hussein’s (non-existent) weapons of mass destruction could result in a mushroom cloud going up over an American city. No such threat existed. But today a very real threat exists over all American cities, and the national security advisor does not notice.

The threat issues from Washington and arises from the demonization of Russia and its leadership.

Wolf Blitzer (CNN, March 13) used the cover of a news program to broadcast a propaganda performance straight out of the Third Reich or perhaps from George Orwell’s 1984. The orchestration presented Russia as a massive, aggressive military threat. The screen was filled with missiles firing and an assortment of American General Strangeloves urging provocative measures to be deployed against the Russian Threat. Blitzer’s program is part of the orchestrated propaganda campaign whose purpose is to prepare Americans for conflict with Russia.

It was such irresponsible propaganda and so many blatant lies for a media organization to sponsor that it was obvious that CNN and Wolf Blitzer had no fear of being called on the carpet for spreading war fever. The so-called “mainstream media” has been transformed into a Ministry of Propaganda.

This absolute must read by Paul appeared on his website on Saturday---and I thank Roy Stephens for finding it for us.

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Truth Is Our Country — Paul Craig Roberts

Thank you for this recognition, for this honor. As Jesus told the people of Nazareth, a prophet is without honor in his own country. In the United States, this is also true of journalists.

In the United States journalists receive awards for lying for the government and for the corporations. Anyone who tells the truth, whether journalist or whistleblower, is fired or prosecuted or has to hide out in the Ecuadoran Embassy in London, like Julian Assange, or in Moscow, like Edward Snowden, or is tortured and imprisoned, like Bradley Manning.

Mexican journalists pay an even higher price. Those who report on government corruption and on the drug cartels pay with their lives. The Internet encyclopedia, Wikipedia, has as an entry a list by name of journalists murdered in Mexico. This is the List of Honor. Wikipedia reports than more than 100 Mexican journalists have been killed or disappeared in the 21st century.

Despite intimidation the Mexican press has not abandoned its job. Because of your courage, I regard this award bestowed on me as the greatest of honors.

In the United States real journalists are scarce and are becoming more scarce. Journalists have morphed into a new creature. Gerald Celente calls U.S. journalists “presstitutes,” a word formed from press prostitute. In other words, journalists in the United States are whores for the government and for the corporations.

This is your second absolute must read commentary by Paul---and this one appeared on his Internet site on Sunday---and it's a short speech he gave in Mexico last Thursday.  I thank reader M.A. for his second contribution of the day.

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U.S. Is Seeking Billions From Global Banks in Currency Manipulation Settlement

The U.S. Justice Department is seeking about $1 billion each from global banks being investigated for manipulation of currency markets, according to two people familiar with the talks.

The figure is a starting point in settlement discussions, with some banks being asked for more and some less than $1 billion. One bank that has cooperated from the beginning is expected to pay far less, one of the people said. Penalties of about $4 billion are on the table, according to one of the people, though the number could change markedly.

Banks are pushing back harder than in some previous negotiations, including those for mortgage-backed securities, and the final penalties could be lower, people close to the talks said.

The discussions, which have begun in earnest in recent weeks, could lead to settlements that would resolve U.S. accusations of criminal activity in the currency markets against Barclays Plc, Citigroup Inc., JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and UBS Group AG. The government has also said it is preparing cases against individuals.

This Bloomberg story, filed from New York, was posted on their Internet site at 1:20 p.m. Friday afternoon Denver time---and I found it embedded in a GATA release.

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Swiss Bank UBS Settles Currency-Rigging Claims for $135 Million

Switzerland's largest bank, UBS, has agreed to pay $135 million to settle claims that it helped rig currency-exchange rates in a scheme involving some of the world's biggest banks.

The settlement announced Friday by the lead law firm in the case resolves a class-action lawsuit against UBS by pension funds and other investors that engaged in foreign currency transactions with the bank. The investors also sued 11 other major banks, accusing them of colluding together to fatten their profits by manipulating currency rates.

Authorities in the U.S., Great Britain and Switzerland have put banks' conduct in the multi trillion-dollar currency market under scrutiny. UBS, Citigroup, JPMorgan Chase, Bank of America and two other banks were recently fined a total $4.3 billion in civil settlements with regulators in those countries. The U.S. Justice Department is conducting its own criminal investigation of foreign-exchange rate setting.

The investors in the class action reached a settlement in January with one of the other banks, JPMorgan, for $99.5 million.

This AP story, filed from Washington, put in an appearance on the abcnews.go.com website at 7:06 p.m. EDT on Friday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.

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Argentina warns Citibank it could lose banking license

Argentina threatened Friday to revoke Citibank's operation license if it refuses to process payments to bondholders, a move ordered by a New York judge presiding over a long fight between the country and a U.S. investment group.

In a statement, the Ministry of Economy said failure to process the payments could lead to criminal charges against Citibank's employees in Argentina. The warning came a day after U.S. District Judge Thomas Griesa told Citibank that it cannot let its Argentine branch process payments to bondholders unless U.S. investors are paid as well.

In a statement sent to The Associated Press late Friday, Citibank said it planned to appeal the decision and would "pursue all legal measures available to comply both with this decision and Argentine legislation."

This AP story, filed from Buenos Aires, appeared on the news.yahoo.com website at 8:04 p.m. Friday evening EDT---and it's the second offering in a row from Elliot Simon.

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Thousands Crowd Brazil's Streets: Demand Military Intervention & Rousseff Resignation, Impeachment

It appears the 'people' are growing more and more dissatisfied with their corrupt and greedy leaders across the world. As we noted recently, Brazil's economy is imploding, consumer sentiment is at record lows, and with the Petrobras scandal providing a glimpse at just how deep the corruption might go, Brazilians are revolting. Hundreds of thousands are crowding the streets in several regional Brazilian capitals, dominated ironically by the middle and upper classes. Demands for "Dilma Out" and "Impeach Dilma" are also interspersed with calls for a quasi-coup and "military intervention."

This story/photo essay showed up on the Zero Hedge Internet site at 1:24 p.m. EDT on Sunday afternoon---and it's another contribution from reader M.A.

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Europeans defy U.S. to join China-led development bank

France, Germany, and Italy have all agreed to follow Britain's lead and join a China-led international development bank, according to European officials, delivering a blow to US efforts to keep leading Western countries out of the new institution.

The decision by the three European governments comes after Britain announced last week that it would join the $50 billion Asian Infrastructure Investment Bank, a potential rival to the Washington-based World Bank.

Australia, a key U.S. ally in the Asia-Pacific region that had come under pressure from Washington to stay out of the new bank, has also said that it will now rethink that position.

This news story appeared on the Financial Times website yesterday---and unless you're a subscriber, the above three paragraphs are all you're going to see.  I have much more to say about this in a similar story about Australia further down.  I found this on the gata.org Internet site just after midnight Denver time this morning.

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Ukrainian Parliament to debate Resolution on the Status of Donetsk and Lughansk

Ukrainian President Petro Poroshenko followed up on the Minsk Accord by submitting a draft resolution on the future status of southeastern Ukraine’s regions of Donetsk and Lughansk. A resolution should have been adopted by March 14.

President Poroshenko’s draft resolution is reportedly scheduled for discussion during the Ukrainian Parliament’s plenary session on March 17.

The draft resolution pertains the granting of a special status to districts, cities, villages and settlements within the regions of Donetsk and Lughansk.

The special status would grant a measure of self-governance in accordance with the agreements brokered in the Belarus capital Minsk.

This news item appeared on the newswatchreport.com Internet site on Sunday sometime---and it's courtesy of Jim Skinner.

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DPR says amendments to law on Donbas special status are violation of peace plan

The authorities of the self-proclaimed Donetsk People’s Republic (DPR) said on Monday a bill on amendments to the law on Donbas special status that has been submitted to the Verkhovna Rada (parliament) is a blatant violation of the complex of measures to implement the Minsk agreements.

"We consider Rada’s draft resolution and a bill on amendments to article 10 of the law on the special status of Donbas as flagrant violation of the peace plan approved by the Contact Group and endorsed by the leaders of the Normandy Four. If these documents are passed, it might end up in the frustration of the implementation of the complex of measures and peace settlement in general," Denis Pushilin, DPR’s representative in the Contact Group in Ukraine, said in a statement posted on the website of the Donetsk News Agency.

He reminded that in line with provision 4 of the complex of measures the Rada was to issue a list of district enjoying a special status under the law on Donbas special status. "But the draft resolution has no mention of any settlements endowed with a special status," Pushilin said.

This news item goes hand-in-hand with the previous story.  This one showed up on the tass.ru Internet site at 7:53 p.m. Moscow time on their Monday evening, which was 12:53 p.m. EDT in Washington---and it's another offering from Roy Stephens.

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Ukrainian police get ‘shoot-to-kill orders’ amid unrest over army hit and run killing of 8 year old

Police have reportedly been allowed to use live rounds as tensions flare in the eastern Ukrainian town of Konstantinovka, where an eight-year-old girl was killed in a hit-and-run accident by an Ukrainian forces’ armored vehicle.

Tensions have been boiling in Konstantinovka after Ukrainian soldiers driving through the town at high speed lost control of their vehicle and ran into a crowd of pedestrians, hitting a woman with a baby in a stroller and an 8-year-old girl.

“The accident occurred at the Lomonosov Street near city hospital no. 5. Three pedestrians suffered under the wheels of the fighting vehicle: A girl of eight years died on the spot, the woman and child who was in a stroller were taken to the hospital,” Ukraine's Interior Ministry reported Monday night.

Locals believe that the driver of the vehicle was drunk at the time of the accident. According to local press, the perpetrators barely escaped the scene of the crime, as the fury of the locals erupted in clashes, with stones being thrown at security vehicles. Other residents were quick to surround the army barracks, where warning shots were reportedly fired.

This news item was posted on the Russia Today website at 9:55 p.m. Moscow time on their Monday evening---and it's the second story of the day from Jim Skinner.

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Sanctions to Remain Until Crimea Returned to Ukraine - State Department

U.S. sanctions imposed against Russia because of Crimea’s reunification with Russia will continue until the peninsula returns to Ukraine, the U.S. Department of State said in a release on Monday.

“This week, as Russia attempts to validate its cynical and calculated ‘liberation’ of Crimea, we reaffirm that sanctions related to Crimea will remain in place, as long as the occupation continues,” the statement read.

March 16 marks one year since the Crimea seceded from Ukraine and became a part of Russia after more than 96 percent of local voters supported the move in a referendum.

What bulls hit!  This news item, filed from Washington, appeared on the sputniknews.com Internet site at 12 minutes after midnight Moscow time this morning, which was 5:12 p.m. EDT.  I thank Roy Stephens for sharing it with us.

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Foreign Investment Into Russia Grows, $500 Million in Seven Weeks of 2015

Investment into Russia has grown as the situation in Ukraine has stabilized and the ruble has strengthened while other countries' currencies have weakened.

In the past seven weeks, over $500 million of foreign investment has come into Russia according to data from Emerging Portfolio Fund Research (EPFR).

The trend comes as investors pull their money from emerging markets, which lost $3.5 billion in the past week. The recent rally of the U.S. dollar has devalued assets in many countries, as their currencies depreciated in relation to the dollar.

This brief article put in an appearance on the sputniknews.com  Internet site on Saturday evening Moscow time---and I thank reader M.A. for sending it our way.

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Putin reappears after 10-day absence, invalidates health rumors

Russian President Vladimir Putin has made a scheduled public appearance after a 10-day absence that sparked countless rumors about his health.

He recently met with Kyrgyzstan President Almazbek Atambayev in St. Petersburg, who tweeted that Putin had taken him out "for a little drive."

"He was at the wheel -- nearby here, and I can confirm that he's in excellent form," the rest of Atambayev's tweet read.

This UPI story, filed from Moscow, was posted on their website at 9:15 a.m. [EDT, I would assume]---and I thank Roy Stephens for finding it for us.  There was another article about this on the Russia Today website yesterday as well.  It's headlined "Putin looking very well for a man who died last week"---and it's also courtesy of Roy Stephens.

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"Colossal Defeat" For Obama as Australia Joins China's Regional Bank

Having attacked its "closest ally" U.K. for "constant accommodation" with China, we suspect President Obama will be greatly displeased at yet another close-ally's decision to partner up with the Chinese-led Asian Infrastructure Investment Bank (AIIB).  As The Australian reports, "make no mistake," the decision by Australia's Abbott government to sign on for negotiations to join China’s regional bank, foreshadowed by Tony Abbott at the weekend,  "represents a colossal defeat for the Obama administration’s incompetent, distracted, ham-fisted dip­lomacy in Asia."

The Obama administration didn’t want Australia to sign up for the China-led AIIB. The Abbott government rightly feels that it owes Obama nothing.

"Colossal" is one of many over-the-top adjectives one could chose from at an historic moment like this.  It's not only a defeat, it's an outright rejection of the U.S. on all fronts.  This is the first of many dominoes that are going to fall---and the only difference going forward is that they'll begin to fall much faster now.  This news item showed up on the 11:15 p.m. EDT last night---and falls into the must read category.

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Gold flirts with three-month low, eyes on Fed meeting

Gold fell on Monday, trading just above its lowest level in more than three months, due to stronger European shares and expectations that this week's Federal Reserve meeting could hint at the timing of any hike in U.S. interest rates.

Spot gold was down 0.5 percent at $1,153.26 an ounce by 12:29 p.m. EDT (1629 GMT), just above last week's three-month low at $1,147.10. The metal had fallen for nine consecutive sessions up to Thursday, its longest losing streak since 1973.

"Speculative investors are quite clearly out of love with gold at the present time and as long as we have this meteoric rise in the U.S. dollar going on, it's difficult to see a change in gold's fortunes," bullion broker Sharps Pixley CEO Ross Norman said.

Investors were looking at the Fed's two-day policy meet that begins on Tuesday for clues on how soon it could raise interest rates. Higher rates could dent demand for gold, which does not pay any interest.

"The only thing that could cause shorts to rethink their positions at the moment would be if the Fed didn't raise rates in June," Deutsche Boerse's MNI senior analyst Tony Walters said. "But if the Fed removes 'patient' from its (statement) then I'd expect more selling."

It's embarrassing to post stuff like this, but the main stream media are such whores---and with gold "analysts" such as these as the "market gurus"---who needs enemies?  This Reuters article, co-filed from New York and London, appeared on the news.yahoo.com website  on Monday sometime.  I found it on the Sharps Pixley website.

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A simple test to see if gold is at a bottom

The Gold Report: Since we last talked in August, have precious metals bullion and mining shares bottomed?

John Hathaway: It looks as if they are trying to make a stand. In early November, we got down to $1,140/ounce ($1,140/oz). Only time will tell for sure.

What we do know is that the industry can’t produce any more gold at these prices or lower prices, so that impacts the supply side of the picture. It certainly meets the test of being a contrarian investment. In our opinion, sentiment is pretty much rock bottom. It has gotten better with this rally, but in the bigger scheme of things, people still scoff at the idea of gold. That is one sign of a bottom.

TGR: What is the range you expect for gold in 2015?

JH: The 200-day moving average right now is $1,244/oz. If gold can break above that, I think it would gather strength and surprise people on the upside. Seeing as how so many people are betting the other direction, I think you’d have a lot of short covering. So $1,400/oz or $1,500/oz wouldn’t surprise me.

As both Ted Butler and I said on Saturday, the bottom will be in when the last technical fund in the Managed Money category of the COT Report can be tricked into putting on a short position.  This interview with John by Doug Groh appeared on the mineweb.com Internet site at 11:21 a.m. GMT yesterday---and once again I thank Dan Lazicki for sending it our way.

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Ireland's Minister of Finance Dumps Stocks to Buy Gold

The Minister for Finance bought the traditional hedge against tough times by buying into the SPDR Gold shares exchange fund over the last year, according to Noonan's latest declaration to the Oireachtas, [the Irish Legislature. - Ed] which detail his private financial interests.

The grim outlook for Europe's economy last year seems to have inspired the minister's decision to sell out of a fund that tracked top European shares.

Noonan's personal investments give an insight into his thinking and his views on the risk and opportunities facing the global and European economies and markets. He has a track record stretching back decades of canny private investments.

Oireachtas members must declare any shares or financial interests they hold with a value of over €13,000 each year.

This interesting news item showed up on the independent.ie Internet site at 2:30 a.m. GMT on Sunday morning in Dublin---and I thank Brad Robertson for sending it---and in turn he stole it from Mark O'Byrne's column over at goldcore.com yesterday.

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The decreasing importance of gold to South African economy

Readers of LawrieOnGold.com may be interested in the following note from Statistics South Africa (the SA government statistical body) drawing further attention to the continuing decline in the once dominant South African gold mining industry.

When I worked in the South African gold mining industry in the late 1960s it was producing over 70% of the world’s gold at over 1,000 tonnes a year.  Today South Africa is moving down the table of global gold miners and was estimated by consultancy GFMS as to only have produced 164.5 tonnes in 2014 and in danger of dropping below Canada currently lying in 7th place.

Of course if gold---along with platinum and palladium---were selling for their real free-market prices, I can absolute guarantee that precious metal mining would be top of mind once again in South Africa, along with a whole boat load of rich countries that insist on being poor.  This worthwhile commentary by Lawrence Williams showed up on his website on Saturday GMT sometime---and it's another offering from Dan Lazicki.

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China seems to be claiming 88 percent of world gold mine production

Bullion Star market analyst and GATA consultant Koos Jansen reports that the international division of the Shanghai Gold Exchange is not moving gold out of China but rather supplementing the country's gold imports. As a result, Jansen writes, withdrawals from the Shanghai Gold Exchange remain a good proxy for China's domestic gold demand, and 456 tonnes have been withdrawn this year through March 6.

If annual gold mine production is around 2,800 tonnes and monthly mine production averages 233 tonnes and weekly production averages 54 tonnes, the Shanghai figures suggest that, as Jansen's chart shows, Chinese demand is running at about 47 tonnes per week, or about 88 percent of world mine production.

Of course gold possession is not static; the metal doesn't disappear but rather is always available to the market at the right price. People and institutions throughout the world may be selling even as China may be buying. But that a single nation has started to buy so much relative to mine production suggests that inventories elsewhere are getting drawn down.

The obvious place to look for such inventories would be those central banks that purport to be major gold holders and that may be swapping and leasing gold for currency market management purposes.

The preamble by Chris Powell---and the article by Koos Jansen---were contained in a GATA release that Chris filed from Ho Chi Minh City at 11:31 ICT on their Sunday afternoon.  It's certainly worth reading.

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Koos Jansen: Yuan's inclusion in SDRs likely will carry gold with it

Drawing upon official statements and comments, Bullion Star market analyst and GATA consultant Koos Jansen writes today that the Chinese yuan's imminent inclusion in the International Monetary Fund's calculation of special drawing rights will probably carry gold into the SDR too.

This is just an extension of what Jim Rickards and others [including myself] have been saying for a decade or more.  But, having said that, it's still very much worth your while.  Jansen's longish commentary is headlined "China, Gold, SDRs, and the Future of the International Monetary System" and it was posted at Singapore website bullionstar.com on Monday local time.  I thank Koos for sending it my way---and Chris Powell for the headline and the preamble.

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Chinese gold demand 456 tonnes at 9 weeks. On track for another strong year

With Shanghai Gold Exchange (SGE) withdrawals for the week ended March 6th at 45 tonnes – up 7 tonnes from the 5 days straddling the Chinese New Year holiday – withdrawals for the year to date are almost exactly on a par with 2014, when Chinese demand, as represented by SGE withdrawals, was the second highest on record at a little over 2,100 tonnes for the full year.  Thus year to date withdrawal figures are 456 tonnes as opposed to 454 tonnes a year ago.  The figures to date suggest that Q1 SGE withdrawals will come to around 580 tonnes – possibly higher if the lower gold prices currently prevailing serve to stimulate Chinese demand as low prices have often done in the past.

The latest SGE figures show that Chinese demand for gold – in comfortably the world’s largest current gold consumption market – remains alive and strong and is continuing to lead the flow of physical gold from West to East which seems to be continuing unabated.

This commentary by Lawrie on Chinese gold demand appeared on his website on Monday sometime and, like Koos Jansen's commentary above, it's worth your while as well.  I thank Dan Lazicki for his final contribution to today's column.

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Lawrence Williams: Fixing the Gold Fix – with or without the Chinese banks?

The end of this week will see the end of an era in London-based gold price benchmarking when the rather archaic London Gold Fixing system, which has been in place little changed for most of the past 100 years (since 1919), will come to an end and be replaced by the new LBMA Gold Price electronic system which is being set up in its place. The new price setting mechanism will be launched on the March 20 – this coming Friday.

I would commend readers to check out two detailed analyses of the implications of the new gold pricing systems, which in part do disagree with each other on the possible role of Chinese banks within the new process and whether this may end up sidelining the bullion banks in gold price benchmarking. The first of these analyses is from Alasdair Macleod of Gold Money – who does indeed suggest that the new era will bring an end to the control of the gold price benchmarking process by the bullion banks, with the Chinese banks ultimately exerting overall pricing control.

The second is a very long analysis by Ronan Manly on Bullionstar which doesn’t quite reach the same conclusions and suggests instead that the LBMA and the bullion banks may remain firmly in control of the new pricing mechanism. 

To an outside observer it would seem inconceivable that none of the three Chinese banks which are seen to meet the qualifications for inclusion – Bank of China, Industrial and Commercial Bank of China (ICBC) and China Construction Bank – will be included from the start, but the bullion banking sector and the LBMA may well be arrogant enough in their approach to exclude them and ride out any resultant storm, which would likely soon blow over.

I've posted Macleod's and Manly's comments in this space already---and it's interesting to see Lawrie's thoughts on all of this.  But we'll find out on Friday for sure. This interesting article put in an appearance on the mineweb.com Internet site at 7:18 p.m. GMT on their Sunday evening---and I found it all by myself.

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¤ The Funnies

Our trip from Jerome was meant to bypass Prescott on the way back to Phoenix, but I got semi lost and took a wrong exit, ending up in its suburbs before turning around and going back.  But on the return trip, these rocks presented themselves---and even though all three of these shots are through the windshield at speed, there were worth the effort.  The red truck added a 'center of interest' in the second photo---and the third photo was taken back on the Interstate.  The town of Jerome, which we'd just left an hour or so earlier, is on the other side of the mountain range in this photo.  I had to crop all three a bit to get rid of part of the car hood---and remove some excess asphalt in order for the photos to appear more dramatic.  Don't forget the 'click to enlarge' feature.

















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¤ The Wrap

Admittedly, the popular sentiment is not bullish for silver or gold at this time and how could it be? Unless my eyes have deceived me, this [last week's] close for gold may have been the lowest in five years, and silver is only barely above setting new lows. Despite a minor rally on Friday, gold and silver prices were lower each day for nearly two weeks. Izzy’s old term, "salami slicing" was the apt description, because this was a classic display of the commercials luring the technical funds to the sell side by rigging prices lower, as the commercials gathered up all speculative contracts available for sale on the COMEX. This is the reason---and the only reason---for the $150 decline in gold and near $3 drop in silver over the past seven weeks.

I recognize that such price declines, particularly since they began at such low price levels to start with, especially in silver, naturally create gloom and even despair among many precious metals investors. For sure, the dismal price action has brought out those disdainful of precious metals in droves, even though “I told you so” is among the most repugnant human traits of all. Interestingly, those most hostile to precious metals never come close to truly explaining why prices declined, they just revel in the celebration of low prices.  Of course, I’m speaking of the sole reason for the price drop – COMEX positioning. Ironically, that is the also the main reason to be optimistic about future price prospects for gold and silver. - Silver analyst Ted Butler: 14 March 2015

Another Bill Murray "Ground Hog" type of day, where the price action yesterday was more of what we saw during the last three trading days of the prior week.  It was certainly more of the same type of price management we've seen so much of in the past---and on top of that, both platinum and palladium made new lows for this move down.

Here are the 6-month charts for the precious metals---and I thought I'd toss in crude oil as well, as it hit a new low for this move down too.

In a story in the the Critical Reads section about crude oil prices going down as their respective equities were heading up, I made the comment that more or less the same thing had been happening in the gold and silver equities as well---and along with the fact that there has been little or no out activity in either GLD or SLV since the big smack down six business days ago, I'm getting the impression that something may be going on under the hood that only insiders are aware of.  In response they're buying oil and gas stocks, along with SLV and GLD shares---and in the case of JPMorgan, silver by the hundreds of tonnes.

We have the FOMC meeting results on Wednesday, coupled with the start of the new gold fix on Friday---and my spidey senses are tingling.  Whether anything happens or not, something just doesn't smell right.

We are at, or within spitting distance of a major bottom in all four precious metal, plus crude oil---and I've said before that we're just waiting for a catalyst for the precious metal market to turn around.  And since last Wednesday, it feels like we're in some sort of holding pattern in both gold and silver, as the trading pattern, including yesterday, have all been virtual carbon copies of each other.

So we wait.

And as I write this paragraph, precious metal trading has just begun in London, even though the equity market don't open for another hour. The gold price has been held in a two dollar price range through all of Far East trading on their Tuesday---and it will be interesting to see if the 'rally' that began at 2 p.m. Hong Kong time is allowed to last.  The silver price printed a double bottom at $15.50 spot just moments before 2 p.m. Hong Kong time---and its subsequent "rally" hasn't yet made it back to unchanged.  Platinum and palladium both set new lows for this move down about the same time as well.

Net volume in gold is just under 17,000 contracts---and virtually all of it is in the current front month, so this shows that almost all the trading is of the HFT variety.  Ditto for silver, where the net volume is 3,500 contracts.  The dollar index traded pretty flat in the Far East on their Tuesday, but is now down 8 basis points in the last forty-five minutes.

Today, at the close of COMEX trading in New York, is the cut-off for this Friday's Commitment of Traders Report---and as I said on Saturday, if we make it through the Tuesday trading session without incident, we'll get a clear look at what might turn out to have been the lows in both gold and silver for this move down---providing they don't get hit for new lows tomorrow afternoon on the FOMC news.

And as I hit the 'send' button on today's column at 5:30 a.m. EDT, I note that gold and silver haven't done much since I reported on them two and a half hours ago, but platinum and palladium are inching back towards unchanged.

Net gold volume is something under 23,000 contracts, which isn't a lot---and silver's net volume is up around 5,300 contracts.  The dollar index is off its earlier low---and is currently down 14 basis points.  Not much is going on---and I'm wondering if we'll have another Bill Murray/Groundhog Day during the rest of the Wednesday session.

I want to close today's column with a quote from John Hussman that came from his commentary yesterday that was headlined "Extremes in Every Pendulum"---and it's courtesy of reader U.D.

"Whether or not it is fully appreciated, we are observing extremes in nearly every pendulum of the global financial markets. The situation is likely to be seen in hindsight as one of the broadest points of financial distortion in history. Broadest, because unlike the 2000 peak when technology and large capitalization stocks were more overvalued on reliable measures than they are today, the median stock is now more overvalued than in 2000."

"It’s true that on historically reliable valuation measures that are best correlated with actual subsequent total returns on stocks, the 2000 peak remains the most overvalued point for the S&P 500 in U.S. history, though only about 20% above present valuation levels on those measures (there are certainly many popular but unreliable measures that suggest only moderate overvaluation here). Aside from that 2000 peak, the S&P 500 itself is now more overvalued than at the 1929 peak, not to mention the lesser 1972, 1987 and 2007 extremes. We estimate that the S&P 500 Index is likely to be below its present level a decade from now, though adding dividends is likely to raise the nominal total return to about 1.6% annually on a 10-year horizon.

That's all I have for today---and I look forward to the remainder of today's price action in all markets with more than the usual amount of interest.

See you tomorrow.

Ed Steer