Gold & Silver Daily
"We still haven't had that definitive wash-out to the downside"

¤ Yesterday In Gold & Silver

Not surprisingly, the gold price didn't do too much in Far East trading on their Monday, but that all changed the moment that London opened---and about an hour later the gold price had printed its low tick of the day.  The subsequent rally lasted until a few minutes after 10:30 a.m. EST, before running into the usual sellers, who sold it down to just under unchanged from Friday's close---and that's where it stayed into the 5:15 p.m. EST close of electronic trading.

The low and high ticks were reported as $1,190.60 and $1,210.30 in the April contract.

Gold closed in New York yesterday at $1,201.80 spot, down $2.10 from Friday's close.  Despite the rather interesting price action, the associated net volume was pretty light at only 107,000 contracts.

Here's the 5-minute tick chart courtesy of Brad Robertson.  The volume spikes are noticeable on the larger price moves, but it certainly wasn't big volume.  The 'click to enlarge' feature works wonder here---and don't forget to add two hours for EST.

The silver price action was similar in most respects to what happened in gold.  The only two exceptions were that the high tick of the day came at the London p.m. gold fix---and the subsequent sell-off after that finished above the unchanged price mark from Friday.

The low and highs were reported by the CME Group as $16.065 and $16.59 in the March contract---and intraday move of more than 3 percent.

Silver finished the Monday session at $16.32 spot, up 5 cents on the day.  It would have closed materially higher if allowed to do so, which it obviously wasn't  Net volume was only 23,000 contracts, but there was very decent roll-over activity, as gross volume was very high.

The platinum price followed virtually the same price path as gold---and very similar to its price path on Friday.  It finished the Monday session at the same price as Friday's close as well---$1,161 spot---and because of that, the platinum chart looks somewhat weird.

All four precious metals had tiny, but not noteworthy rallies in early Far East trading on their Monday morning, but the most noticeable one was in palladium.  Once the high tick was in around 1:30 p.m. Hong Kong time, it hit its low of the day in mid morning trading in Zurich.  From there it rallied to its high around 12:30 p.m. in New York---and that was pretty much it for the day.  Palladium closed the Monday session at $785 spot, up 8 bucks from Friday's close.

The dollar index closed late on Friday afternoon in New York at 94.32.  From there it didn't do a lot until shortly before 3 p.m. Hong Kong time.  At that point it rallied to its 94.89 high tick, which came at 11:00 a.m. GMT in London.  From there it headed lower for the next five hours, hitting its 94.46 low tick minutes before 11 a.m. EST.  Then it rallied a handful of points into the close, finishing the Monday session at 94.55, which was up 23 basis points from Friday.

The gold stocks opened down a bit more than a percent, but rallied to their highs when gold hit its peak at 10:30 a.m.  Then the not-for-profit seller appeared.  They sank back into negative territory by lunchtime---and then developed a positive bias starting around 2:40 p.m in New York trading---and manged to squeeze out a bit of a gain, as the HUI closed up 0.40 percent.

It was another big losing day for the silver equities.  Despite the fact that silver spent a decent part of the morning session in positive territory---and close up as well, their associated equities barely got a sniff of the positive side of the ledger.  They followed a virtually identical price path as their golden brethren, but they closed down 2.19 percent.

In the last three trading days, with silver closing down less than 25 cents during those days, the silver equities have lost about 10 percent of their value.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  That was a big surprise.

The CME Preliminary Report for the Monday trading session showed that February gold open interest dropped a chunky 119 contracts---and the total o.i. for February is now down to only 362 contracts.  But regardless of the number of contracts remaining in the current delivery month, the short/issuer has to post them for delivery within the next 36 hours or so.  Silver's February open interest declined by almost half---from 23 contracts, down to 12 contracts.

There were no reported changes in GLD yesterday---and as of 7:50 p.m. EST yesterday evening, there were no reported changes in SLV, either.  But when I was editing this column at 2:45 a.m. EST, I noted that the folks over at updated their website---and it showed that an authorized participant added 1,435,395 troy ounces.

There was a decent sales report from the U.S. Mint yesterday.  They sold 3,000 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---and 465,000 silver eagles.

There was no gold movement of any kind at the COMEX-approved depositories on Friday.  In silver, there 340,564 troy ounces reported received---and 349,820 troy ounces shipped out.  The link to that activity is here.

Despite by best efforts, I have a very decent number of stories for you today---and I'll leave the final edit up to you.


¤ Critical Reads

Amid Weak Supply, Existing Home Sales Hit Nine-Month Low

U.S. home resales fell sharply to their lowest level in nine months in January amid a shortage of properties on the market, a setback that could temper expectations for an acceleration in housing activity this year.

The National Association of Realtors said on Monday existing home sales declined 4.9 percent to an annual rate of 4.82 million units, the lowest level since April last year.

"The general tone of this report was weak and it adds to a wide array of housing indicators that have been pointing in the wrong direction, underscoring continued sluggishness in this crucial segment of the economy," said Millan Mulraine, deputy chief economist at TD Securities in New York.

This Reuters piece was picked up by the Internet site yesterday---and I thank reader M.A. for today's first story.


Dallas Fed Manufacturing Outlook Crashes to April 2013 Lows

The Dallas Fed manufacturing outlook plunged in January - despite Richard Fisher's claims that "everything is awesome" and low oil prices are a net positive for Texas - so it is perhaps not surprising that - with a backdrop of rig count collapses and oil price lows - February's data (delivered late) plunged to -11.2 (against expectations of -4, the 3rd miss in a row, well below every economist's estimates). This is the lowest since April 2013. This is the fastest 3-month decline since April 2013.

Is anyone really surprised? Except of course Richard Fisher  and his esteemed colleagues in the business community in Texas believe that the collapse in oil prices is a net positive for Texas:

"we will lose about 150,000 [oil-based] jobs, but we will pick them up elsewhere since we are a consumer society," and low oil prices is good for everyone.

This commentary, along with some excellent charts, showed up on the Zero Hedge website at 10:45 a.m. EST on Monday morning---and it's the second offering in a row from reader M.A.


Largest U.S. refinery joins nationwide oil strike

Workers at the largest refinery in the United States on Saturday joined a nationwide oil refinery strike as the union representing them pushes for a new contract that improves wages and safety.

The United Steelworkers union, which represents about 30,000 workers at refineries, terminals, petrochemical plants and pipelines across the country, said the strike expanded at midnight Friday to include the largest refinery in the U.S., the Motiva Enterprises refinery in Port Arthur, Texas.

The union said employees at two other refineries and a chemical plant in Louisiana also planned to strike at the end of Saturday.

So far strikes are underway or have been called at 15 plants, including 12 refineries with a fifth of U.S. crude processing capacity.

This news item was posted on the Internet site on Sunday sometime---and I thank Bill Busser for sending it our way.


JPMorgan tops list of risky banks: government study

JPMorgan Chase & Co. bears the highest potential hazard to the financial system if it were to fail, a staff study released by a U.S. government research agency showed, providing a first-of-its-kind numerical risk ranking of U.S. banks.

The bank had a "systemic risk score" of 5.05 percent for 2013 in a group of 33 large U.S. bank holding companies, the study by staffers at the Treasury Department's Office of Financial Research (OFR) said.

The study's numerical score is a measure of a bank's risk as a ratio of the total risk contained by a worldwide group of banks. The scores are based on metrics such as size, interconnectedness, complexity and cross-border activities, OFR said.

The OFR said the study reflected the views of the authors, not of the office or the Treasury Department. The findings come as U.S. regulators seek to finalize rules for capital buffers big banks need to hold, to make them more resilient and contain systemic risk if one of them were to collapse.

This should come a no surprise, dear reader.  This Reuters article, filed from Washington, appeared on their website a week ago today---and I thank Karen Brown for bringing it to my attention---and now to yours.


Yellen Faces Congress Amid Direst Threat to Fed Since 2010

Chair Janet Yellen testifies before Congress this week with the Federal Reserve facing its gravest political threat since the drafters of the Dodd-Frank act tried to strip it of its supervisory powers.

The Fed is being pressured from the left and the right. Senator Elizabeth Warren of Massachusetts and other Democrats have blasted the central bank for being too cozy with the banks it oversees. Republicans, including potential 2016 presidential contender Senator Rand Paul of Kentucky, have focused on its aggressive monetary policy.

Lawmakers from both parties are demanding greater transparency and accountability from an institution that has the power to impose capital requirements for banks and influence how much Americans pay for a mortgage or an auto loan.

“They’re under attack,” said Hester Peirce, a former Republican staff attorney to the Senate Banking Committee, where Yellen begins two days of congressional testimony at 10 a.m. Tuesday.

This Bloomberg story appeared on their Internet site at 10:00 p.m. Denver time on Friday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.


Whatever Became of Economists and the American economy–Paul Craig Roberts

According to the official economic fairy tale, the US economy has been in recovery since June 2009.

This fairy tale supports America’s image as the safe haven, an image that keeps the dollar up, the stock market up, and interest rates down. It is an image that causes the massive numbers of unemployed Americans to blame themselves and not the mishandled economy.

This fairy tale survives despite the fact that there is no economic information whatsoever that supports it.

Real median household income has not grown for years and is below the levels of the early 1970s.  There has been no growth in real retail sales for six years.  How does an economy dependent on consumer demand grow when real consumer incomes and real retail sales do not grow?

Good questions from Paul.  This commentary put in an appearance on his Internet site on Monday sometime---and the first reader through the door with it was Rob Bentley.


Chip Maker to Investigate Claims of Hacking by N.S.A. and British Spy Agencies

Gemalto, a French-Dutch digital security company, said on Friday that it was investigating a possible hacking by United States and British intelligence agencies that may have given them access to worldwide mobile phone communications.

The investigation follows news reports on Thursday that the National Security Agency in the United States and the Government Communications Headquarters in Britain had hacked Gemalto’s networks to steal SIM card encryption codes.

The claims — reported on a website called The Intercept — were based on documents from 2010 provided by Edward J. Snowden, the former N.S.A. contractor.

The American and British intelligence agencies are said to have stolen the encryption key codes to so-called smart chips manufactured by Gemalto, which are used in cellphones, passports and bank cards around the world.

This story, filed from London, was posted on The New York Times website last Friday---and it's the first offering of the day from Roy Stephens.


This is the Biggest Problem Facing the World Today: 9 Countries Have Debt-to-GDP Over 300%

If anyone has stopped to ask just why global central banks are in such a rush to create inflation (but only controlled inflation, not runaway hyperinflation... of course when they fail with the "controlled" part the money para-drop is only a matter of time) over the past 5 years, and have printed over $12 trillion in credit-money since Lehman, the bulk of which has ended up in the stock market, and which for the first time ever are about to monetize all global sovereign debt issuance in 2015, the answer is simple, and can be seen on the chart below.

It also shows the biggest problem facing the world today, namely that at least 9 countries have debt/GDP above 300%, and that a whopping 39% countries have debt-to-GDP of over 100%!

We have written on this topic on countless occasions in the past, so we will be brief: either the Fed inflates this debt away, or one can kiss any hope of economic growth goodbye, even if that means even more central bank rate cuts, more QEs everywhere, and stock markets trading at +? while the middle class around the globe disappears and only the 0.001% is left standing.

This brief article, with two excellent tables of numbers, was posted on the Zero Hedge website at 11:20 a.m. EST yesterday morning---and the first person through the door with this particular story was reader M.A. once again.  It's worth a minute of your time.


Which New World Order Are We Talking About? - International Man

Those of us who are libertarians have a tendency to speak frequently of “the New World Order.” When doing so, we tend to be a bit unclear as to what the New World Order is. Is it a cabal of the heads of the world’s governments, or just the heads of Western governments? Certainly bankers are included somewhere in the mix, but is it just the heads of the Federal Reserve and the IMF, or does it also include the heads of JPMorgan, Goldman Sachs, etc.? And how about the Rothschilds? And the Bundesbank—surely, they’re in there, too?

And the list goes on, without apparent end.

Certainly, all of the above entities have objectives to increase their own power and profit in the world, but to what degree do they act in concert? Although many prominent individuals, world leaders included, have proclaimed that a New World Order is their ultimate objective, the details of who’s in and who’s out are fuzzy. Just as fuzzy is a list of details as to the collective objectives of these disparate individuals and groups.

So, whilst most libertarians acknowledge “the New World Order,” it’s rare that any two libertarians can agree on exactly what it is or who it’s comprised of. We allow ourselves the luxury of referring to it without being certain of its details, because, “It’s a secret society,” as evidenced by the Bilderberg Group, which meets annually but has no formal agenda and publishes no minutes. We excuse ourselves for having only a vague perception of it, although we readily accept that it’s the most powerful group in the world.

Nick Giambruno, the senior editor over at the International Man website sent this my way yesterday, suggesting that you might find it of interest---and it certainly falls into the absolute must read category as far as I'm concerned.


Three E.U. dreams that have turned into nightmares

Three stories that were making daily headlines last week all had one very important thing in common. One was the shambles unfolding over Ukraine. The second was the ongoing shambles over Greece and the euro. The third was the ever-growing flood of refugees from Africa and the Middle East desperately trying to escape to safety in Europe.

Over Ukraine, I cannot recall any issue in my lifetime when the leaders of the West have got it so hopelessly wrong. We are treated to babyish comparisons of President Putin to Hitler or Stalin; we are also told that this crisis has only been brought about by Russia’s “expansionism”. But there was only one real trigger for this crisis – the urge of the E.U. continually to advance its borders and to expand its own empire, right into the heartland of Russian national identity: a “Europe” stretching, as David Cameron once hubristically put it, “from the Atlantic to the Urals”.

The “expansionism” that was the trouble was not Putin’s desire to welcome the Russians of Crimea back into the country to which they had formerly belonged; or to assist the Russians of eastern Ukraine in their determination not to be dragged by the corrupt government in Kiev they despised into the E.U. and NATO. It was that of an organisation founded on the naive belief that it could somehow abolish nationalism, but which finally ran up against an ineradicable sense of nationalism that could not simply be stream-rollered out of existence. We poked the bear and it responded accordingly.

This commentary appeared on the Internet site at 7:57 p.m. GMT on Saturday---and I thank Rob Malek for sending it our way.


Reports of Clashes Between Kiev and DPR Forces Close to Mariupol

Clashes between government forces and the militia of the Donetsk People's Republic [DPR] are continuing on Sunday in the village of Shyrokyno close to Mariupol, representatives of the DPR have told RIA Novosti. According to information from medics, two separatist fighters have been wounded in the fighting.

The village of Shyrokyno is located on the coast of the Sea of Azov in the Donetsk region, between the towns of Mariupol, which is controlled the government forces, and Novoazovsk, which is under the control of the self- proclaimed DPR. In autumn, the town was under DPR control, but then became neutral territory before the Ukrainian government's Azov battalion took control in February. 

On Sunday a DPR representative released a statement reporting the death of one DPR fighter, and two more wounded after an attack from Kiev government forces, while the Ukrainian National Guard reported two fatalities in the course of fighting on Sunday.

This news item showed up on the Internet site at 6:41 p.m.Moscow time on their Monday evening, which was 10:41 a.m. EST.  It's another offering from Roy Stephens.


Putin: France, Germany genuinely want to find compromise over East Ukraine

The leaders of France and Germany genuinely want to find a compromise that would help end the conflict in eastern Ukraine, Russian President Vladimir Putin said in his latest interview.

Speaking to Rossiya 1 TV channel on the conflict and the breakthrough of the Minsk agreement, Putin said that “it seemed to me [the leaders of France and Germany], have a genuine desire to find such compromise solutions that would lead to the final settlement [of the conflict]...”

He cited the Minsk protocol which includes the decentralization of power in Ukraine and a “reference explaining what it implies.” The authors of the reference are "our German and French partners,” he said, adding that this speaks of their sincerity in finding a compromise.

“I had the impression that our partners have more trust in us than distrust, and in any case believe in our sincerity,” Putin said on Monday.

This article was posted on the Russia Today website at 7:25 p.m. Moscow time on their Monday evening---and it's the second contribution in a row from Roy Stephens.


France to host meeting on Ukraine crisis on Tuesday

France will host a meeting on Tuesday on Ukrainian crisis in a fresh diplomatic move to enforce the ceasefire deal agreed a week ago despite escalating violence in the country, a government source said on Monday.

A source from Quai d'Orsay press centre told Xinhua that top diplomats of France, Germany, Russia and Ukraine will try to push trough the peace accord breached with recent fighting which claimed two victims on Monday.

More than a week after Minsk agreement, Ukraine's military refused to start withdrawing heavy weapons from the front line in the east as independence-seeking insurgents had not stopped attacking government positions.

The above three paragraphs are all there is to this news item posted on the Internet site at 10:15 p.m. Europe time [I believe] on their Monday evening---and I thank Bill Busser for sending it our way shortly after I'd filed today's column.


Lavrov: Time to decide if we want U.N. focused and effective or on the sidelines

The U.N. would be effective in settling international disputes, if some member-states didn’t try to use it for dominating world affairs, Russian Foreign Minister believes, adding that such efforts led to bombings in Serbia, war in Iraq and chaos in Libya.

Sergey Lavrov has called for the U.N., about to celebrate its 70th anniversary, to be an independent and effective leader in global decision-making, despite attempts by some of its members to usurp the organization’s functions.

“It’s time to answer the question: do we really want the see the U.N. an effective and influential instrument of preserving peace and security or are we ready to allow it turn into the arena of propagandist struggle, with the U.N. being excluded from the process of finding key solutions to international problems,” Lavrov said, at the open debate for the United Nations Security Council (UNSC), held on Monday in New York.

Sergey is right on the money in this blunt speech---and it's certainly worth reading if you have the time.  It was posted on the Russia Today website at 4:15 p.m. Moscow time on their Monday afternoon---and that makes it three stories in a row from Roy.


Russia Ratifies $100 Billion BRICS Bank

A BRICS Bank - as an IMF alternative and to enable nations to become less dependent on the global reserve currency - was originally discussed at The BRICS Summit in 2012.  Then at the 2014 BRICS Summit, the framework for The BRICS Bank was approved as "a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies."

Headquartered in Shanghai and chaired by Russia, this week saw what appears to be the final step in the creation of BRICS New Development Bank as RT reports, The Russian State Duma has ratified the $100 billion BRICS bank that will serve as a pool of money for infrastructure projects in Russia, Brazil, India, China and South Africa. It is expected to start fully functioning by the end of 2015.

As Russia Today reports:  The Russian State Duma has ratified the $100 billion BRICS bank that’ll serve as a pool of money for infrastructure projects in Russia, Brazil, India, China and South Africa, and challenge the dominance of the Western-led World Bank and the IMF.

The New Development Bank is expected to start fully functioning by the end of 2015, according to the Russian Finance Ministry.

I seem to remember posting a story about this very recently, but I couldn't find it in my last three columns, so here it is again---maybe.  This Zero Hedge piece is their spin on a Russia Today story from Saturday---and once again I thank reader M.A. for sharing it with us.


Pepe Escobar: China -- Year of the Sheep, Century of the Dragon?

Seen from the Chinese capital as the Year of the Sheep starts, the malaise affecting the West seems like a mirage in a galaxy far, far away. On the other hand, the China that surrounds you looks all too solid and nothing like the embattled nation you hear about in the Western media, with its falling industrial figures, its real estate bubble, and its looming environmental disasters. Prophecies of doom notwithstanding, as the dogs of austerity and war bark madly in the distance, the Chinese caravan passes by in what President Xi Jinping calls “new normal” mode.

“Slower” economic activity still means a staggeringly impressive annual growth rate of 7% in what is now the globe’s leading economy. Internally, an immensely complex economic restructuring is underway as consumption overtakes investment as the main driver of economic development. At 46.7% of the gross domestic product (GDP), the service economy has pulled ahead of manufacturing, which stands at 44%.

Geopolitically, Russia, India, and China have just sent a powerful message westward: they are busy fine-tuning a complex trilateral strategy for setting up a network of economic corridors the Chinese call “new silk roads” across Eurasia. Beijing is also organizing a maritime version of the same, modeled on the feats of Admiral Zheng He who, in the Ming dynasty, sailed the “western seas” seven times, commanding fleets of more than 200 vessels.

This longish essay by Pepe, filed from Beijing, certainly falls into the absolute must read category---and it was posted on the Internet site on Sunday sometime---and I thank reader M.A. for his final contribution to today's column.


Jim Rickards --- China: Profit from the Greatest Unwind in Economic History

Early signs indicate that the greatest unwind in modern economic history could begin this year in China. For many investors, the fallout will be painful. If you’re properly positioned ahead of time, however, I believe you can profit.

To do so, it’s important to understand the dynamics in play. Bubbles have three consistent characteristics: They are easy to spot; they persist longer than most investors expect (that’s why they’re bubbles in the first place); and they end badly with massive losses for investors who are still in at the top.

These three traits are related in terms of investor psychology and behavior. Even when investors see a bubble, they often cannot resist riding the wave, because they assume they’ll be smart enough to get out at the right time. The fact that bubbles last longer than most analysts expect tends to validate this investor assumption. People waiting on the sidelines for bubbles to pop are routinely ridiculed by those reaping large gains as the bubble expands.

But in the end, the bubble profiteers tend to stay too long at the party and suffer massive losses, as bubble markets can easily lose 30% or more in a matter of months, sometimes weeks, as assets are dumped and investors head for the exits. Today, the greatest bubbles in modern economic history are in China.

This commentary by Jim appeared on the Internet site on Monday---and I thank Nitin Agrawal for sliding it into my in-box in the wee hours of this morning.  It's certainly worth reading as a contrast piece to the Pepe Escobar article that precedes it.


CFTC subpoenaed HSBC Bank USA for documents on precious metals trading

The Commodity Futures Trading Commission issued a subpoena to HSBC Bank USA in January seeking documents related to the bank's precious metals trading operations, HSBC said in its annual report and accounts statement on Monday.

The U.S. Department of Justice also issued a request to HSBC Holdings in November seeking documents related to a criminal antitrust investigation that the DoJ is conducting in relation to precious metals, it added.

"HSBC is cooperating with the U.S. authorities in their respective investigations," the bank said. "These matters are at an early stage."

HSBC was one of a number of banks named in lawsuits filed in U.S. courts last year alleging a conspiracy to manipulate gold, silver, platinum and palladium prices, plus precious metals derivatives, during the daily precious metals fixes.

Well, dear reader, HSBC USA---which is an entirely different legal entity than the U.K.'s HSBC---is up to their neck in the gold price management scheme.  I would think that they also have their nose in silver as well, but not as much as in the past.  It's impossible to tell if they're involved in platinum and palladium, but it would be no surprise if they were, as the Bank Participation Report states "3 or less" U.S. banks---and you can safely bet your entire net worth that HSBC USA is on that very short list.

This Reuters story, filed from London, appeared on their website at 9:44 a.m. EST on Monday morning---and it's an item I found on the Sharps Pixley website.


Ten Banks, Including JPM, Goldman, Deutsche, Barclays, SocGen and UBS, Probed For Gold Rigging

No matter how many times the big banks are caught red-handed manipulating precious metals, some failed former Deutsche Bank prop-trader (you know who you are) will take a vociferous stand based on ad hominem attacks and zero facts that no, what you see in front of you is not precious metal rigging at all but a one-off event that has nothing to do with a criminal banking syndicate hell bent on taking advantage of anyone who is naive and dumb enough to still believe in fair and efficient markets.

The last time this happened was in November when we learned that "UBS Settles Over Gold Rigging, Many More Banks To Follow", and sure enough many more banks did follow, because in Europe, where the stench of gold market manipulation stretches far beyond merely commercial banks, and rises through the central banks, namely the BoE and ECB, culminating with the Head of Foreign Exchange & Gold at the BIS itself, all such allegations have to be promptly settled or else the discovery that the manipulation cartel in Europe involves absolutely everybody will shock and stun the world, which heretofore was led to believe that such things as gold market (not to be confused with Libor or FX) manipulation only exist in the paranoid delusions of a few tinfoil fringe-blogging lunatics.

However, as usually happens, someone always fails to read the memo that when it comes to gold-market manipulation one must i) find nothing at all incriminating if one is a paid spokesman for the entities doing the manipulation such as former CFTC sell-out Bart Chilton or ii) if one can't cover it, then one must settle immediately or else the chain of revelations will implication everyone.

This Zero Hedge gold-related news item appeared on their website at 10:17 p.m. EST last night---and I thank Elliot Simon for digging it up for us.  It's certainly worth reading.


Ask the Expert: Hugo Salinas Price

In an interview with Geoff Rutherford of Sprott Money News, Hugo Salinas Price, president of the Mexican Civic Association for Silver, describes his plan for introducing an undenominated silver coin for savings and emergency money in Mexico. He adds that countries buying gold, such as Russia and China, are preparing for war if one that is forced on them by Western meddling, and don't want to have to rely on the currency of a potential enemy.

This longish audio interview, complete with an equally longish audio transcript, appeared on the Internet site yesterday---and it's certainly worth your time.  I stole the above paragraph of introduction from a GATA release.


Jim Grant: It's Clear Why Gold Should Be Better

Gold Stock Analysts' keynote speaker is Jim Grant and Kitco News sits with the interest rate guru himself to see how he sees central bankers affecting gold prices this year. "My hunch is that [the Fed] will be very slow to raise its rate," he says, adding that it will prove to be difficult for the central bank this year. "I think central banks are mainly marching to the same beat of the same drummer. The drummer is of radical intervention," he says. Looking to gold prices, Grant says he is frustrated because he sees "clearly why gold ought to be doing better." He says he can't imagine how anyone can have confidence in the current doctrines of central bankers. "It seems to me that the world will eventually see that these policies are non-starters, or if they are starting they won't end well...that for me is a simple case for gold."

This 7:27 minute video interview appeared on the Internet site yesterday sometime---and my thanks go out to Dan Lazicki for sending it our way.


Why the "1%" Hates the Gold Standard

By now everybody knows that the primary consequence, one which we originally predicted back in 2009 - and many have since agreed - was completely intended, of the past 6 years of unprecedented monetary policy has been to push wealth inequality to record levels, not just in the US but across the world. What may not be so clear is precisely when this period of unprecedented wealth disparity started. The answer, as the following handy chart from NPR shows, is that long before QE, the wealth gap for the 1% really started in the early 1980s, courtesy of none other than Greenspan's "great moderation."

More importantly, and what is certainly not known, is that between 1930 and 1970, it was only the "bottom 90%" that saw their incomes rise.

This is how the NPR qualified this dramatic variance in wealth gaps, the first of which benefited most Americans, especially the middle-class, and which ended with a thud in the early 1970s, and the second which was unleashed in the early 1980s.

This brief Zero Hedge piece, with a couple of embedded charts, appeared on their website at 5:16 p.m. EST last Friday---and I thank reader Norman Willis for sharing it with us.


No wonder The Telegraph won't touch gold price suppression

If you're wondering why mainstream financial news organizations refuse to report the biggest financial news story in history -- the rigging of all major markets by Western central banks -- another reason has emerged in the last few days with the resignation of the chief political writer of the London Telegraph, Peter Oborne.

The Telegraph is a great newspaper with a wide scope, the standard bearer of the British Conservative Party, whose reporting is often cited favorably by GATA and frequently has been brave, as when a couple of years ago it exposed the scandal of expense padding by members of Parliament, including Conservative members.

But The Telegraph won't touch surreptitious intervention by Western central banks in the gold market any more than any other respectable Western financial news organization will, and departing The Telegraph, Oborne complained that the newspaper had gone soft in its reporting about a big investment bank that is a major advertiser, HSBC. Reports about Oborne's resignation are collected at the Google news archive.

This very interesting GATA release, along with a few critical read links, appeared on their website yesterday---and it certainly falls into the absolute must read category.


Fears of Greek exit spark Gold rush for the rich

Panicked investors are rushing to buy gold bullion on growing fears that Greece could be forced out of the Eurozone and currency wars devalue savings held in bank accounts.

BullionByPost has seen the highest demand for gold bullion in its six year history, an exclusive report for the Sunday Telegraph can reveal.

The precious metal dealer, which sold £96m worth of coins and bars last year, said demand during the first five weeks of the year was up 40pc, when compared to the same period a year earlier.

Demand for 1kg gold bars, worth an estimated £26,000 each, has increased by 74pc when compared to 2014.

This gold-related story appeared on The Telegraph's website at 1 p.m GMT on Saturday afternoon---and I thank South African reader B.V. for sending it along.


South African gold miners rescued after a fire at Harmony Gold

South Africa's Harmony Gold said on Sunday all 486 miners who were trapped underground following a fire had been rescued.

The blaze occurred about 2.3 km (1.43 miles) underground during maintenance on an air cooler at the Kusasalethu mine, a deep level operation west of Johannesburg that is Harmony's single largest gold producer.

The fire started around 0800 GMT and initially some 200 miners were unaccounted for. All operations other than essential services at the mine had been suspended, the company said.

"All 486 employees have been brought to the surface safely," company spokeswoman Charmane Russell said.

This Reuters article, filed from Johannesburg, appeared on their Internet site at 3:02 p.m. EST on Sunday afternoon---and I found it on the Internet site.  An AFP/Reuters article on this subject appeared on the Australian Internet site at 12:46 p.m. ACDT on Sunday---and it's headlined "South Africa mine fire: Nearly 500 workers rescued after blaze contained".  I thank Brad Robertson for finding it for us.


Shanghai Gold Exchange Chairman: India Will Become SGE’s Largest Partner

The latest Indian Bullion Bulletin has just been released wherein the chairman of the Shanghai Gold Exchange (SGE) Xu Luode presents the SGE’s international ambitions.

"The Chinese government regards the gold market as an indispensable component of China’s financial market and attaches great importance to its growth and development."

Xu provides an excellent all round update of the SGE, though he’s somewhat exaggerating the performances of the SGE International Board (SGEI) up until now IMVHO. I don’t blame him though, the SGEI has great potential!

One way to enhance SGEI trading would be to allow individual foreign investors to have easy access to the international exchange and its wide range of products, which is currently limited to SGEI members (banks, refineries, etc). Xu notes this will change soon.

This longish, but very worthwhile read by Koos Jansen, appeared on the Internet site yesterday sometime---and I thank Dan Lazicki for digging it up for us.


Gold Meeting: Nixon & Pompidou -- 1971, Azores

President of France Georges Pompidou, President of the United States Richard Nixon and National Security Advisor of the United States Henry Kissinger met on December 13 and 14, 1971, at the Azores to negotiate the value (rigging) of gold and all other major currencies in the world at the time.

Three months prior to the meeting Nixon had halted the convertibility of US dollars into gold for foreign nations at the US Treasury. The French were the most vocal critics of the United States’ flexible monetary policy, or what some people call endless money printing.

This very long essay by Koos appeared on the Singapore website on Sunday sometime---and it's the final offering of the day from Dan Lazicki.



¤ The Funnies

This was still Day One at Grand Canyon.  It was wet, cold and miserable---and the humidity was 100 percent, with a temperature barely above freezing.  The altitude on the South Rim, somewhere between 6,800 and 7,400 feet ASL [2,072m/2,255m] didn't help either---and altitude sickness could certainly be an issue for some.  The air is thin---and that's being kind.  Here are a couple of photos of elk, or wapiti, a very common animal in some parts of Arizona---and common in Alberta as well.  The Arizona variety is somewhat smaller than their more northern cousins in the U.S. and  western Canada.  The 'click to enlarge' feature helps here.

This fellow is a red-breasted nuthatch climbing around on a Utah Juniper.  Because they climb vertically either up or down, here's a rarely seen "back" shot of this critter.  A different lens and a flash would have been useful here.  They're very common in Edmonton as well, so one of these days, these particular photos are going to end up in the trash, as the fall into the "barely acceptable" category.

This creature is a rare albino alligator.

Alexandria Minerals Corporation (TSX VENTURE:AZX) and Murgor Resources Inc. (TSX VENTURE:MGR) are pleased to announce that they have entered into an arrangement whereby Alexandria will acquire all of the outstanding common shares of Murgor.

Here are some of the benefits for Alexandria's shareholders:

  • Substantial increase in Alexandria's mineral resources
  • Alexandria’s cost of discovering gold is already low, at approximately $15.00/oz. The cost of acquiring Murgor’s gold assets is even lower, at approximately $3.00/oz.;
  • Alexandria will have larger strategic land packages in the well-known and prolific mining camps of Val d’Or and Chibougamau in Québec; Red Lake and Matachewan in Ontario; and Flin Flon-Snow Lake in Manitoba;
  • Alexandria management knows how to capitalize on its strategic assets, as evidenced by Alexandria’s successful track record in discovering its West Zone Au-Cu deposit and then monetizing this exploration project in the sale to Agnico-Eagle  (Alexandria Press Release January 14, 2014);

On January 30 Alexandria closed a non-brokered private placement of $500,000 at a price of 10 cents.  There are neither Finder’s Fees nor Commissions associated with this financing.  Proceeds from the sale of the shares will be used for exploration on its Cadillac Break property group in Val d'Or, Québec and general corporate purposes. Call or email Mary Vorvis, 416-305-4999/, for more information on Alexandria Minerals.  


¤ The Wrap

Regular readers know that I am convinced that the changes in positions on the COMEX are the driving force behind changes in gold and silver prices. Essentially, up until the present, very little else matters in gold and silver prices. Not what China or India are buying, not changes in currencies, not what’s going on in the Ukraine or Greece and not what the Fed says or does. What determines gold and silver prices are position changes on the COMEX and the COT report bears that out. I know I appear to write this incessantly, but because this simple fact is not yet universally accepted, to me it means I haven’t been incessant enough. That’s where the predictions of what new COT reports will show come in.

I know most folks who look at the COT reports for the first time have their eyes glaze over. It’s not an easy report to read because unless you are well-versed in the intricacies of futures trading, it is virtually impossible to fully comprehend on a quick study basis. I would estimate that most subscribers fall into that camp. Further, even many of those who comment on gold and silver on a regular basis are not comfortable in analyzing the reports with some even resorting to claiming the data are unreliable (as a self-defense mechanism in lieu of an admission of not understanding the data).

But the COT reports are the very best of all government statistical reports and, as it turns out, explain most, if not all price movements in gold and silver. In addition, this is the data that prove the price manipulation on the COMEX. The trick is for me to make it as simple as possible for those with no need to understand the intricacies of futures trading and at the same time provide the detailed data desired by those who are intensely familiar with futures trading. That why I make “predictions” from time to time; it’s a way of bringing real time credibility, not so much to myself, but to the premise that this is what controls prices. And the basic premise is that the COMEX commercials rig prices lower to force the technical funds to sell so that the commercials can buy and vice versa. Certainly, if I was consistently wrong in those expectations I would stop issuing them, as who wants to be embarrassed by faulty predictions? - Silver analyst Ted Butler: 21 February 2015

Even though we saw new lows for this move down in three of the four precious metals, I wouldn't read much into that, as the associated volumes were very low.  And as Ted Butler pointed out on the phone yesterday, there was a lot of price activity well off the lows [and Friday's closes] as well, so that may have negated any improvements in the Commercial net short positions in either or silver or gold.

Here are the 6-month charts for both gold and silver with yesterday's data included.

First Day Notice for delivery into the March silver contract is only days away---and all the traders have to be out of these contracts by Thursday at the latest, unless they're standing for delivery.  The big traders have to be out by the close of trading tomorrow---and the rest by the COMEX close on Thursday.  Friday is first day notice---and those numbers should be up on the CME's website late on Thursday evening, so I should have them for you in Friday's column.

And as I write this paragraph, the London open is about forty minutes away.  Like Monday, all four had tiny rallies that lasted until just after 1 p.m Hong Kong time---and most of those gains have vanished.  Basically there's nothing going on.  Net gold volume is around 8,100 contracts---and silver's net volume is barely discernible at 1,300 contracts, as well over 50 percent of the current gross volume of 3,100 contracts is roll-overs out of March.  As I said in the previous paragraph, the rolls out of March are going to be super heavy for the next three trading days---and it's in full swing now, but it's unusual to see in Far East trading.  The dollar index has a positive bias at the moment---and is currently up 7 basis points.

Today, at the close of COMEX trading, is the cut-off for this Friday's Commitment of Traders Report.  We still haven't had that definitive wash-out to the downside with the associated big price moves---and volumes to match.  Along with that would come RSI readings of well under 30---and as you can see from the gold and silver charts posted above, we aren't even close---and it would take a number of big down days in a row to get us that low as well.

I suppose the bottom could be in now, but using the past as prologue---and if forced to bet ten bucks---I'd say that event lies in our future somewhere.  The only unknown is just how ugly JPMorgan et al are going to make it.

And as I said on Saturday---"So we wait some more."

And as I send this off into cyberspace at 4:50 a.m. EST, I see that all four precious metals continue to work their way quietly lower in price---and all are down a bit from Monday's New York close.  Gold's net volume is just north of 15,500 contracts---and silver's net volume is around 2,500 contracts.  Silver's gross volume is approaching 6,000 contracts.  For both metals, this is very quiet volume for this time of day.  The dollar index is up 27 basis points.

I have no idea what to expect as the Tuesday trading session unfolds in London and New York, but a big down move wouldn't surprise me at all.  However, I'd love to be proven spectacularly wrong.

That's more than enough for one day---and I'll see you here tomorrow.

Ed Steer