Gold & Silver Daily
"Well, was that the bottom? Beats me, but if I had to bet a dollar, I'd say we're pretty close...at least in gold."
 

¤ Yesterday In Gold & Silver

The gold price traded pretty flat through Far East trading on their Friday...but then dipped slightly at the London open going into the a.m. gold fix.  From there it traded flat until 1:00 p.m. GMT...8:00 a.m. in New York...and about twenty minutes before the Comex open.

By the time that JPMorgan et al were done for the day, the low tick checked in at $1,596.00 spot around 10:35 a.m. Eastern time.  From there, the price rallied back to the $1,610 spot mark, but wasn't allowed to trade above that price for the rest of the Friday session.

On an engineered price decline of this magnitude, the trading volume was immense...around 284,000 contracts, give or take...and gold closed at $1,610.10 spot...down $24.30 on the day.

Of course silver was the metal that "da boyz" were really after...and it was under light selling pressure right from the moment that Far East trading began on their Friday morning.  However, by 1:00 p.m. GMT in London, silver was only down about a dime from Thursday's close.

But once the engineered price decline began, it was sold down hard throughout the entire Comex trading session...and the low tick of the day [$29.59 spot] was set at precisely 2:45 p.m. Eastern time in electronic trading.

The subsequent rally wasn't allowed to get far...although the price did recover about 20 cents from its low.

Silver closed the Friday trading day at $29.80 spot...down 60 cents from Thursday's close.  Gross volume was around 96,000 contracts, but once the spreads and roll-overs for March were subtracted, the net volume was only 44,000 contracts.

The dollar index opened at 80.39 on Friday morning in Japan...and hit its nadir [80.22] just minutes before the London open.  The high tick [80.57] was in around 7:30 a.m. in New York...and from there the index faded a hair in the close.  The dollar index finished the day at 80.48...up about 10 basis points.

For the umpteenth day in a row, there was no correlation between the currencies and the precious metal price action.

The gold stocks gapped down and then headed for the nether reaches of the earth...and from about 10:30 a.m. Eastern time onwards, the stocks bounced along the bottom despite the fact that the gold price recovered a bit after that.  The HUI got smoked to the tune of 3.61%.

The silver stocks got hit pretty hard as well, but did a little better than their golden brethren.  Nick Laird's Intraday Silver Sentiment Index closed down 3.20%.

(Click on image to enlarge)

And here's the long-term Silver Sentiment Index so you can see how things look going back several years.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 78 gold and 65 silver contracts were posted for delivery on Tuesday within the Comex-approved depositories.  It was "all the usual suspects" in gold...and in silver it was Jefferies as the big short/issuer of note once again with 60 contracts issued...and Canada's Bank of Nova Scotia stopping 63 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changed in either GLD or SLV yesterday.

The U.S. Mint had a small sales report yesterday.  They sold 5,000 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 35,000 silver eagles.  Month-to-date the mint has sold 43,000 ounces of gold eagles...3,000 one-ounce 24K gold buffaloes...and 1,643,500 silver eagles.  Based on these sales, the silver/gold sales ratio for February to date stands at just under 36 to 1.

Over at the Comex-approved depositories on Thursday, they didn't report receiving any silver, but did ship 350,997 troy ounces of the stuff out the door...and the link to that activity is here.

I'm happy to report that were big improvements in the Commercial net short positions in both silver and gold in yesterday's Commitment of Traders Report from the CFTC.

In silver, the Commercial net short position declined by 5,149 contracts...or 25.7 million ounces.  The total Commercial net short position is now down to 234.0 million ounces of silver.

The Big 4 traders are short 256.7 million ounces of silver, or 109.7% of the entire Commercial net short position...and Ted Butler says that JPMorgan Chase is short 167.5 million ounces of that amount all by itself.

The '5 through 8' traders are short an additional 54.2 million ounces of silver, bringing the Big 8's total up to 310.9 million ounces...of which JPMorgan Chase holds over 50% of the Big 8's short position on its own.

As far as concentration goes...the Big 4 are short 50.5% of the entire Comex futures market in silver...of which 33 percentage points of that amount is held by JPMorgan on its own.  Just think about that for a second....one trader is short one third of the entire silver market!  And it's my opinion the Canada's own Bank of Nova Scotia is short about 11 percentage points of the Comex silver market as well...so these two banks are short about 44% of the entire silver market between them on a net basis...and these are minimum percentages.

The '5 through 8' traders are short another 10.7 percentage points of the Comex futures market in silver.  So the Big 8 are short over 61% of the silver market on a net basis.

In gold, the Commercial net short position declined by 13,954 contracts, or 1.40 million ounces. The Commercial net short position in gold is now down to 16.07 million ounces.

The Big 4 are short 9.92 million ounces...and the '5 through 8' largest traders are short an additional 5.66 million ounces.  The Big 8 are short 15.58 million ounces of gold, or 97.0% of the entire Commercial net short position.

As far as concentration goes, the Big 4 are short 27.1% of the entire Comex futures market in gold on a 'net' basis.  The '5 through 8' largest traders are short an additional 15.4 percentage points...so, in total, the Big 8 are short 42.5% of the entire Comex futures market in gold on a net basis and, once again, those are minimum percentages.

Here's Nick's now world famous "Days of World Production to Cover Short Positions" chart.  JPMorgan is short about 87 days of world silver production...and it's my opinion that Canada's Bank of Nova Scotia is short about 27 days of world silver production.  That's two banks short 114 days of world silver production between them...just about four months.  Also note how the four short traders in silver totally dominate the short side.  The '5 through 8' trader's position...even in total...just don't matter.

If you'd like to view the interactive, long-term COT charts going back about sixteen years, you can do so by clicking here for silver...and here for gold.

It nearly goes without saying that since the Tuesday cut-off for yesterday's COT Report, there has been an even bigger improvement in the Commercial net short positions in both silver and gold than we had in this last report.  I'm guessing between 7-10,000 more contracts in silver...and 20-30,000 additional contracts in gold...especially after the engineered price declines we saw yesterday.  Yesterday was a capitulation to the down side in spades...all courtesy of JPMorgan and friends.

Further to the story about producing I.D. for buying or selling gold bullion or jewellery in the U.S.A...I got the following e-mail from reader Harry Morgan yesterday...

Hello Ed,
 
I just thought I'd let you know that yesterday I went to Ambassador Jewelers here in Tucson to sell (sadly) a measly 10 ounces of silver. To do so I had to submit to having my right index finger inked and fingerprinted. When I told them (politely) that I would prefer not to have to have my finger inked up and pressed onto a piece of paper I was informed that they would be unable to purchase the silver. I asked them when this process of finger printing became a standard step they told me January 1st of this year. 
 
Furthermore, a few months ago when I went to my bank (Wells Fargo) to cash a check from Ambassador (any time you cash in more then $600 of precious metals here in Tucson you are issued a check instead of cash) the teller at the bank asked me what the check was for. I asked the bank clerk to elaborate on what she meant by 'what the check was for'. The teller (a nice young lady) told me it was now 'required policy to ask everyone who was cashing or depositing a check from a jewelry store, coin store or a coin & stamp store'. I told this clerk that in all fairness it was none of the bank's business why the jewelry store issued me a check. At this the clerk went and got the bank manager. I told the bank manager that it was none of the bank's business why the jewelry store issued me a check. The bank manager told me that he was required to record this information otherwise he could not process the check. I asked him if he couldn't process the check or the bank couldn't process the check (I was starting to get irritated).
 
So I said I worked at the store and this was a paycheck, then said that I had robbed a home, stolen some jewelry and sold that to Ambassador, then I said I had bought them all lunch and this check was to cover my expenses. Admittedly I was being an ass but I was very agitated about this intrusion into my personal business. So we had this little stand off until I said (firmly and evenly) that I sold a couple of my watches. At this they processed my check.
 
Anyway, the reason for my email was to let you/others know that, at least in Tucson, when you sell any precious metals (even 10 measly ounces of silver), you will be fingerprinted.
 
And so it goes ... (down the toilet).
 
All the best,
 
Harry

Considering it's a Saturday column, I don't have that many stories for you today...and I'm rather happy about that.

 

¤ Critical Reads

Wal-mart sales a 'total disaster', say leaked emails

The retailer’s shares slid after Jerry Murray, vice president of finance and logistics, also told colleagues that it was “the worst start to a month I have seen in my ~7 years with the company”. 

“Well, we just had one of those weeks here at Wal-Mart US. Where are all the customers? And where’s their money?”

Wal-Mart, which owns Asda, had been expecting a boost to February sales from the Super Bowl and other factors including milder weather across the Atlantic.

This article was posted on the telegraph.co.uk Internet site yesterday evening GMT...and I thank "David in California" for our first story of the day.  The link is here.

Read more...

JPMorgan Said to Fire Traders, Realign Pay Amid Slump

JPMorgan Chase & Co., grappling with Wall Street’s worst year for stock-trading since 2008, cut pay at the equities unit about 4 percent and pushed out about three dozen employees, people with knowledge of the moves said.

About two dozen U.S. traders and sales staff were fired, and some senior employees left voluntarily as the unit aligned pay more closely with revenue, said the people, asking to not be identified because the measures aren’t public. The bank also dismissed equity analysts last week, three people said, with one saying about a dozen were affected. Industry-wide equities- trading revenue fell 5 percent last year, the third straight annual drop, according to analytics firm Coalition Ltd.

This Bloomberg story was posted on their website late yesterday morning Mountain time...and I thank Manitoba reader Ulrike Marx for sending it our way.  The link is here.

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Matt Taibbi....Gangster Bankers: Too Big to Jail

The deal was announced quietly, just before the holidays, almost like the government was hoping people were too busy hanging stockings by the fireplace to notice. Flooring politicians, lawyers and investigators all over the world, the U.S. Justice Department granted a total walk to executives of the British-based bank HSBC for the largest drug-and-terrorism money-laundering case ever. Yes, they issued a fine – $1.9 billion, or about five weeks' profit – but they didn't extract so much as one dollar or one day in jail from any individual, despite a decade of stupefying abuses.

People may have outrage fatigue about Wall Street, and more stories about billionaire greed-heads getting away with more stealing often cease to amaze. But the HSBC case went miles beyond the usual paper-pushing, keypad-punching­ sort-of crime, committed by geeks in ties, normally associated­ with Wall Street. In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.

For at least half a decade, the storied British colonial banking power helped to wash hundreds of millions of dollars for drug mobs, including Mexico's Sinaloa drug cartel, suspected in tens of thousands of murders just in the past 10 years – people so totally evil, jokes former New York Attorney General Eliot Spitzer, that "they make the guys on Wall Street look good." The bank also moved money for organizations linked to Al Qaeda and Hezbollah, and for Russian gangsters; helped countries like Iran, the Sudan and North Korea evade sanctions; and, in between helping murderers and terrorists and rogue states, aided countless common tax cheats in hiding their cash.

Despite its length, this essay by Matt Taibbi is an absolute must read from one end to the other...and I thank Marshall Angeles for sharing it with us.  It was posted on the Rolling Stone website on Thursday...and the link is here.

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Doug Noland: Hedge Funds Gone Wild

At the same time, there is also ongoing confirmation that the incredible global policymaking and liquidity backdrop is much more successful in inflating asset markets than it is in boosting economic performance.  In particular - and especially considering policy environments - economies in Europe, Japan and the U.S. continue to un-impress.  This bolsters the view of a widening global gap between inflating financial asset prices and underlying economic fundamentals. 

This begs the question: how might the emboldened “global macro” community play this divergence?  Will they play policymaking and the inflating Bubble for all it’s worth?  Or will they begin to approach speculative markets with a more contrarian bent?  With some funds emboldened and still so many others desperate for performance, it seems reasonable to assume that markets become even more speculative – a game of trying to catch folks on the wrong side of trades (i.e. Apple, gold, etc.), underexposed to outperforming sectors (i.e. homebuilders and “short” stocks) and overexposed to the underperforming (i.e. “defensive”).  Most call it a “new bull market”.  I’ll stick with “inflating speculative Bubble”.

Doug Noland's weekly Credit Bubble Bulletin falls into the must read category for me every week.  Yesterday's edition is posted at the prudentbear.com Internet site...and the link is here.

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G20 set to dilute big powers' demands on currencies

The Group of 20 nations will not single out Japan over the weak yen and will disregard a call from G7 powers to refrain from using economic policy to target exchange rates, according to a text drafted for finance leaders.

A G20 delegate who has seen the communiqué - prepared by finance officials for their bosses - also said it would make no direct mention of new debt-cutting targets, something Germany is pressing for but which the United States wanted struck out.

If adopted by G20 finance ministers and central bankers meeting in Moscow on Friday and Saturday, Japan will escape any censure for its expansionary policies which have driven the yen lower and drawn demands for action from some quarters.

"There will not be a heavy clash about currencies in the end, because nobody can risk such a negative signal," said another G20 delegation source.

This Reuters story, filed from Moscow, was posted on their website mid-afternoon yesterday Eastern time...and I thank Ulrike Marx for her second offering in today's column.  The link is here.

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'Significant Thermal Explosion': Meteorite Strike in Russia Injures Almost 1,000

Suddenly, there was a flash of light and then a loud explosion bursting windows across the Russian city of Chelyabinsk. A large meteorite detonated over the city on Friday morning, injuring almost 1,000. The disaster could have been much larger.

"There was a very loud noise, similar to the roar of an airplane, and then a detonation and the shattering of glass," one of the school pupils told the Russian news website Lifenews.ru. "We've never seen anything like it in our lives. We had the feeling that something very large had landed in the neighboring courtyard." According to initial media reports, some 20 pupils in the school and in a neighboring kindergarten were injured.

What caused the windows in Chelyabinsk to shatter was documented in numerous videos and photos. A meteor pushed its way through the atmosphere on Friday morning and broke up some 30 to 50 kilometers above the Earth's surface before several piece crashed to the ground. Across the region, people on their way to work became witnesses to the rare phenomenon. Numerous commuters filmed the meteorite, many of them more by chance than intent: Many Russians have installed video cameras, called dashcams, in their cars in order to help prove their innocence in the case of accidents or to document corrupt traffic cops.

It should come as no surprise that this story went viral on the Internet yesterday...and rightly so.  This coverage was posted on the German website spiegel.de yesterday...and I thank Roy Stephens for sending it along.  The link is here.  And if you want to pig out on videos of the event...there are lots linked here.

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Iraq back at the brink

It was Britain that triggered Iraq's modern tragedy, starting with its seizure of Baghdad in 1917 and the haphazard reshaping of a country to fit the colonial needs and economic interests of London. One could argue that the early and unequalled mess created by the British invaders continued to wreak havoc, manifesting itself in various ways - spanning sectarianism, political violence and border feuds between Iraq and its neighbors - until this very day.

But of course, the US now deserves most of the credit of reversing whatever has been achieved by the Iraqi people to acquire their ever-elusive sovereignty. It was US secretary of state James Baker who reportedly threatened Iraqi foreign minister Tariq Aziz in a Geneva meeting in 1991 by saying that the US would destroy Iraq and "bring it back to the stone age".

The US wars that extended from 1990 to 2011 included a devastating blockade and ended with a brutal invasion. These wars were as unscrupulous as they were violent. Aside from their overwhelming human toll, they were placed within a horrid political strategy aimed at exploiting the country's existing sectarian and other fault lines, therefore triggering civil wars and sectarian hatred from which Iraq is unlikely to cover for many years.

This Asia Times story from earlier this week was sent to me by Roy Stephens...and it's a must read for all students of the New Great Game.  The link is here.

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George Soros 'makes $1 billion betting against yen'

The yen lost nearly 20pc against the dollar between November and early February, picking up speed as Japan's new government put pressure on the Bank of Japan to ease monetary policy more aggressively to defeat deflation.

Soros Fund Management's internal portfolio, which has been led by Scott Bessent since last summer, holds about 10pc Japanese shares, the Wall Street Journal claimed.

Investors including David Einhorn's Greenlight Capital, Daniel Loeb's Third Point LLC and Kyle Bass's Hayman Capital Management LP also made big trading profits by riding the yen down, WSJ said.

This very short story was posted on The Telegraph's website early Thursday evening London time...and it's courtesy of Roy Stephens.  The link is here.

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Charles Hugh-Smith: The Global Endgame in Fourteen Points

An over-indebted, overcapacity economy cannot generate real expansion. It can only generate speculative asset bubbles that will implode, destroying the latest round of phantom collateral.

I have endeavored to lay out the global endgame in four recent entries:

Is This the Terminal Phase of Global Capitalism 1.0?

Note to Fed: Giving the Banks Free Money Won't Make Us Hire More Workers. Cheap, Abundant Credit Creates a Low-Return, Bubble-Prone World

Europe Is Not "Fixed": Two Charts

For those seeking a summary, here is the global endgame in fourteen points...

This Zero Hedge commentary from yesterday was sent to me by Ulrike Marx...and the link is here.

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A Real Hoot: Great Horned Owl and an SUV collide in central Florida

A Great Horned Owl in central Florida went for the ride of its life last week after it got caught behind the grille of an SUV when it collided with the vehicle.

“I was driving about 60 miles per hour, and he never moved,” said driver Sonji Coney Williams. “And so I said, ‘Oh my god, I hit a bird!’ And I felt so bad, but it was very dark. And I didn’t pull over.”

Williams was running errands the next day when a family flagged her down and told her there were two enormous yellow eyes peering out from behind her grille.

Wildlife service officials arrived shortly and helped rescue it.

The photos, along with the rest of the story, was posted on the New York Daily News website this past Monday...and I've been saving it for today.  I thank Casey Research's own Doug Hornig for bringing it to our attention...and the link is here.

Read more...

The Doorbell

A few years back, the linked video in this story was making the rounds on the Internet...and after a while it disappeared.  I always thought it was first rate...and was delighted to see that someone had saved it and posted it again.  It's only 59 seconds long...and it's fantastic.

I thank Bill Busser for sending it to me a while ago...and I finally have space for it today.  The link is here.

Read more...

Four King World News Blogs/Audio Interviews

The first blog is Part III of the Felix Zulauf interview.  It's headlined "We Have Never Seen Anything Like This in History".  The last blog is with Tom Fitzpatrick and Egon von Greyerz.  It's entitled "Fantastic Gold Chart and Commentary".  The first audio interview is with John Hathaway...and the second audio interview is with Felix Zulauf.

Read more...

JPMorgan Sells Largest Structured Note Tied to Gold Since 2010

JPMorgan Chase & Co. sold $35 million of one-year notes linked to the price of gold, the bank’s largest offering tied to the precious metal in at least three years.

The securities, issued Jan. 2, yield three times the gains of the price of gold in London up to 15.6 percent, with no protection against losses and all capital at risk, according to a prospectus filed with the U.S. Securities and Exchange Commission. The metal’s price increased 8.3 percent last year in London.

This short story appeared on the Bloomberg website last weekend...and I thank Washington state reader S.A. for sending it.  The link is here.

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How gold will benefit from a currency war

Talk of a so-called currency war has been heating up, and it might finally light a fire under gold, too.

Efforts by countries such as Japan to boost growth with massive stimulus programs — which in turn have devalued their currencies, an aid to exports — can benefit prices for gold. These have started to alter the precious metal’s relationship with the foreign-exchange market and expand its role as a safe-haven asset.

“We are now moving irrevocably to a time when gold will measure currencies, not currencies measure gold,” said Julian Phillips, a South Africa-based contributor and founder at GoldForecaster.com.

Of course one has to take into account the fact that as long as JPMorgan et al are given the green light to suppress the price in the futures market, nothing will happen...or will be allowed happen...with this past week's price action being a case in point.  This marketwatch.com story from yesterday is courtesy of West Virginia reader Elliot Simon...and the link is here.

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January gold imports into India surge 23 percent, hit 18-month high

India's gold imports in January surged 23 percent from a year ago to their highest in 18 months as traders snapped up supplies ahead of a hike in duty, undermining the government's efforts to control a ballooning current account deficit.

The world's top bullion buyer imported 100 tonnes of gold last month, the head of the Bombay Bullion Association said on Friday. This is about 40 percent more than the country's average monthly imports last year.

"The total imports figure for 2012 was around 860 tonnes, so 100 tonnes in a month is too high. Also oil is trading firm above $95 (per barrel), so this will impact the oil import bill and overall deficit targets," said Navneet Damani, associate vice president with Motilal Oswal Commodities.

This Reuters story was filed from Mumbai early yesterday evening India Standard Time...and my thanks go out to Ulrike Marx for bringing this article to my attention...and now to yours.  The link is here.

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South Africa’s gold output down 21.2% in December

South Africa's gold output fell by 21.2 percent in volume terms in December, while total mineral production fell 7.5 percent compared with the same month last year, data showed on Thursday.

Production of non-gold minerals was 5 percent lower, Statistics South Africa said. Production of platinum group metals plunged 23.2 percent in December.

This 2-paragraph Reuters story was filed from Johannesburg...and you just read it. It was posted on the mineweb.com Internet site on Thursday...and the link to the hard copy is here.

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Turkey to Iran gold trade wiped out by new U.S. sanction

Tighter U.S. sanctions are killing off Turkey's gold-for-gas trade with Iran and have stopped state-owned lender Halkbank from processing other nations' energy payments to the OPEC oil producer, bankers said on Friday.

U.S. officials have sought to prevent Turkish gold exports, which indirectly pay Iran for its natural gas, from providing a financial lifeline to Tehran, largely frozen out of the global banking system by Western sanctions over its nuclear program.

Turkey, Iran's biggest natural gas customer, has been paying Iran for its imports with Turkish lira, because sanctions prevent it from paying in dollars or euros.

This Reuters piece, filed from Istanbul early Friday morning Eastern time, is a rehash of a story that I posted earlier this week, but it does have some more up-to-date information in it.  I thank Marshall Angeles for sending it...and the link is here.

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John Kaiser: Can the TSX Venture Exchange Be Saved?

Is the end near for the TSX Venture Exchange, the victim of "algo traders," low volume and lack of institutional investors? If newsletter writer John Kaiser is right, as many as 500 of the 1,484 resource companies listed on the Venture Exchange will go under this year due to lack of money in the bank. In this Gold Report interview, Kaiser suggests that a crowd-sourced valuation system may give the investors the information they need to invest with confidence and fend off the proprietary traders.

This VERY long interview was posted on the aureport.com Internet site on Friday...and I suggest you top up your coffee [or wine glass] before you start.  The link is here.

Read more...

"To Get the Gold, They Will Have to Kill Every One of Us First” -- Tribal Leaders Fight Gold-Hungry Investors

Ecuadorian officials want to sell gold-laden land to China, but not without a fight from the legendary Shuar tribe.

Of the thousands of “Avatar” screenings held during the film’s record global release wave, none tethered the animated allegory to reality like a rainy day matinee in Quito, Ecuador.

It was late January 2010 when a non-governmental organization bused Indian chiefs from the Ecuadorean Amazon to a multiplex in the capital. The surprise decampment of the tribal congress triggered a smattering of cheers, but mostly drew stares of apprehension from urban Ecuadoreans who attribute a legendary savagery to their indigenous compatriots, whose violent land disputes in the jungle are as alien as events on “Avatar’s” Pandora.

The chiefs — who watched the film through plastic 3-D glasses perched beneath feathered headdress — saw something else in the film: a reflection. The only fantastical touches they noticed in the sci-fi struggle were the blue beanstalk bodies and the Hollywood gringo savior. “As in the film, the government here has closed the dialogue,” a Shuar chief told a reporter after the screening. “Does this mean that we do something similar to the film? We are ready.”

Well, if you thought that the John Kaiser interview was long, you haven't seen anything yet.  This lengthy essay was posted on the alternet.org Internet site...although it doesn't say when, as it is undated.  From what I've read up to this point, it's a great read...and I thank Roy Stephens for today's final offering, which I've been saving since Tuesday...and the link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

You've never been lost until you've been lost at Mach 3. - Paul F. Crickmore...SR-71 test pilot

Today's pop 'blast from the past' is almost fifty years old...scary stuff, as I remember this song all too well.  I'm sure you will as well...and the link is here.

Today's classical 'blast from the past' is an old chestnut from the master of the romantic era...Pyotr I. Tchaikovsky and, after two unsuccessful attempts, was rewritten in the form we know it today way back in 1880.  Whenever this was programmed in the Edmonton Symphony Orchestra's season, it was pretty much guaranteed to be a sold-out house...and a standing ovation at the end.  This performance is with the London Symphony Orchestra with Russian Maestro Valery Gergiev conducting.  The run time on this is a hair over 20 minutes...and the link is here.  Enjoy!

Well, was that the bottom?  Beats me, but if I had to bet a dollar, I'd say we're pretty close...at least in gold.  Both Ted Butler and I are still concerned about silver, because the short position is still massive, even if JPMorgan et al took another 10,000 contract off the Commercial net short position during the last three days of the week.  If you remember, I've been commenting on the lack of silver volume all week long during this engineered price decline.  Even yesterday's net volume was underwhelming.

In June of last year, the Commercial net short position in silver got down around the 12,000 contract mark...and even with those estimated 10,000 contracts removed from the current Commercial net short position, it still stands at 36,000 at the moment...and that's light years off that June 2012 low.

Can JPMorgan et al get the liquidation necessary to get their short positions that low again?  I don't know.  But if they tried, we'd have to see significantly lower silver prices to get there.  But can they, or will they?  That is the $64,000 question at the moment.

Of course the other question that has to be answered is this.  If we have seen the bottom, either yesterday...or early next week, what will "da boyz" do on the next rally?  Will they be the short sellers of last report as they have been for the last twenty-five years, or will they stand aside at let the prices go?

The answers to both those question should be known in the not-to-distant future.  So, in actual fact, there are two $64,000 questions floating around out there...and nothing else matters except the answers to those two questions.

Here are the 3-year charts for both silver and gold.  As you can see, we are pretty close to what I consider to be a major bottom...and once "da boyz" can't get any more technical fund long liquidation, the bottom will be in, regardless of the price...or the size of the Commercial net short position at the time.

So we wait.

(Click on image to enlarge)

(Click on image to enlarge)

In closing today's column, I'd like to point out one more time that the world's fiat currency system...and the financial and economic system that has risen out of it since August 15, 1971...is pretty much on its last legs.  What will replace it is still unknown...but the powers that be know all too well that they can't muddle along much further without everything either blowing up or melting down...and the ever-increasing signs of that are all around them.

As GATA's Chris Powell said many years back..."There are no markets anymore, only interventions"...and that pretty much describes what passes for monetary, financial and economic policy on Planet Earth today.

It can't...and won't...last much longer.

Because of the President's Day holiday in the U.S. on Monday, I may or may not have a column on Tuesday...so if there isn't one posted on this website by 7:00 a.m. Eastern time on that day, you'll know why.