Gold & Silver Daily

¤ Yesterday In Gold & Silver

In the broad strokes of Far East and early London trading, the gold price really didn't do a lot when all was said and done, even though I was making a big deal out of it in The Wrap in yesterday's column.  The low tick occurred on Wednesday morning in New York at the same time as it bottomed on Tuesday---8:30 a.m. EDT.  From there it rallied a decent amount until shortly after 2 p.m. in electronic trading---and it quietly sold off a few dollars going into the 5:15 p.m. close.

The low and and high ticks were recorded as $1,188.30 and $1,204.40 in the June contract.

Gold finished the Wednesday trading session at $1,201.50 spot, up $9.60 from Tuesday's close.  Net volume wasn't overly heavy at 116,000 contracts.

Here's the 5-minute tick chart for gold courtesy of Brad Robertson.  The dark gray line is midnight EDT and, as usual, most of the price/volume action that mattered occurred during trading in New York.  Add two hours for EDT, as this chart is for Denver time---and the 'click to enlarge' feature is a must.

Silver's price during the Wednesday trading session followed a similar path's to gold and, once again, the charts are virtually interchangeable.

The low and high ticks were reported by the CME Group as $16.045 and $16.37 in the May contract.

Silver closed yesterday in New York at $16.305 spot, up 18 cents on the day.  Net volume was very light at only 23,500 contracts.

Platinum and palladium prices followed a somewhat similar chart pattern, except their respective lows came at the London p.m. gold fix.  Platinum closed at $1,160 spot, up ten dollars---and palladium finished the Wednesday session at $768 spot, up 6 bucks.  Here are the charts.

The dollar closed late on Tuesday afternoon in New York at 98.78---and made it to 99.04 by noon in Hong Kong, before selling off a bit.  Then twenty minutes before the London open---2:40 p.m. Hong Kong time---away it went to the upsides, topping out around 99.35 at 9:45 a.m. BST in London.  It was all down hill from there, with most of the damage occurring between 12:30 p.m. EDT---and the 1:30 p.m. COMEX close.  After that it traded flat for the remainder of the Wednesday session.  The dollar index closed at 98.40---which was down 38 basis points from Tuesday.

The gold stocks opened up a bit---and rallied until gold's high tick, which came minutes after 2 p.m. in New York---and they slid a hair from that point into the close.  The HUI finished up a respectable 3.42 percent]

It was the same story in the silver stocks, as Nick Laird's Intraday Silver Sentiment Index closed up 3.48 percent.

The CME Daily Delivery Report showed that 334 gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The big short/issuer was HSBC USA with 333 contracts---and the two big long/stoppers were Canada's Scotiabank---and JPMorgan in its in-house [proprietary] trading account---with 171 and 161 contracts respectively.  Along with their obvious grab for every ounce of silver in any form they can lay their hands on, it appears that JPMorgan is now "going for gold" as well.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest for April dropped by 2 contracts---and is now down to 2,146 contracts, minus the 334 posted above for delivery tomorrow.  Silver's April o.i. dropped by 23 contracts---and is now down to 170 contracts still open.

There were no reported changes in GLD yesterday---and as of 9:28 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

There was no sales report from the U.S. Mint.

There was no in/out activity in gold at the COMEX -approved depositories on Tuesday but, once again it was a different story in silver, as 1,073,627 troy ounces were reported received---and another 1,109,627 troy ounces were reported shipped out the door.  The largest withdrawal was from the CNT Depository---and it didn't quite match the almost identical number of ounces that were received by JPMorgan, which was the 1.073 million ounce number shown above.  You can check out all the silver action here.

Ted Butler mentioned in his mid-week column to paying subscribers yesterday that JPMorgan has take delivery of almost 6 million ounces of physical silver during the past week.  How much physical silver have you added to your own personal warehouse lately, dear reader???

Over at the 'gold kilo stock's COMEX-approved depositories in Hong Kong on Tuesday, Brink's, Inc. reported receiving 1,773 kilobars---and shipped out 1,377 of them.  The link to the troy ounces is here.

I have a decent number of stories for you today---and I hope you have the time to read the ones that most interest you.


¤ Critical Reads

U.S. Industrial Production Plunges By Most Since August 2012, Utility Output Drops Most in 9 Years

Mortgage apps tumble, Empire Fed slumps, and now Industrial Production plunges... Against expectations of a 0.3% drop MoM, U.S. Factory output was twice as bad at -0.6% - the worst since August 2012 (and almost worst since June 2009). This is the 4th miss in a row. What is even more stunning is that despite the coldest of cold winters that crashed the US economy, Utilities saw their output crash 5.9% - the most in 9 years (explained as follows - largely reversing a similarly-sized increase in February, which was related to unseasonably cold temperatures). Motor Vehicles saved the data from being a catastrophe with a 3.2% rise (following a 3.6% drop In Feb).

This brief Zero Hedge piece, with three excellent charts, appeared on their Internet site at 9:24 a.m. EDT on Wednesday morning---and I thank Dan Lazicki for today's first story.


JP Morgan and Wells Fargo profits offer mixed picture of state of U.S. banks

Two of the US’s largest banks released first-quarter results on Tuesday and gave a mixed picture of the state of the banking industry.

JP Morgan Chase, the US’s largest bank by assets, announced profits had risen by 12% over the quarter, due in part to strong trading results. Wells Fargo, the fourth-largest bank by assets but the largest mortgage lender, announced a dip in profits as it struggled to make money in lending.

JP Morgan reported a profit of $5.91bn, up from a profit of $5.27bn in the same period of 2014. Revenue rose 4.1% to $24.82bn. The numbers were better than analysts had predicted.

The results were powered by a strong performance from the bank’s traditional Wall Street businesses. Trading revenue increased 9% to $5.67bn from the first quarter. The bank also benefitted from the pick-up in mergers and acquisitions. Merger advisory revenue rose 42% from a year ago.

This article showed up on Internet site at 3:25 p.m. BST on Tuesday afternoon, which was 11:25 a.m. EDT.  I found it in yesterday's edition of the King Report.


I believe we have a moral obligation to starve the beast -- Simon Black

On August 5, 1861, facing rapidly deteriorating economic conditions and a horrible defeat at Bull Run, President Abraham Lincoln signed the Revenue Act of 1861 into law.

It was the first time in US history that the federal government would charge an income tax on its citizens. But Lincoln felt that it was vital to fund what would become one of the most unconscionably costly conflicts in US history.

The original law in 1861 set a flat tax rate of 3% on incomes above $800.

(Using the gold price as a benchmark, this is equivalent to 42.26 ounces, or roughly $50,500 in today’s dollars. Not that there’s any inflation.)

The income tax was tweaked occasionally throughout the war, and it lasted for a few years afterwards to help fund reconstruction.

This commentary by Simon appeared on the Internet site yesterday, which was Tax Day in the U.S.


Your taxes have nothing to do with the government's need for money -- GATA

As this is federal and state tax deadline day in the United States, it's worth being reminded by Beardsley Ruml, the former chairman of the Federal Reserve Bank of New York and instigator of federal income tax withholding, that, in a fiat currency system, governments can create infinite money, that in doing so they are limited only by potential debasement of the currency, and that taxes thereby have nothing to do with raising revenue but rather are instruments of social policy and control.

Ruml's insightful observations were made in a speech he gave in May 1945 to the American Bar Association that was published in the January 1946 edition of the quarterly magazine American Affairs and headlined "Taxes for Revenue Are Obsolete."

"Final freedom from the domestic money market," Ruml wrote, "exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank and whose currency is not convertible into gold or into some other commodity. ..."

Ruml cautioned: "The public purpose which is served should never be obscured in a tax program under the mask of raising revenue."

This Tax Day commentary was posted on the Internet site yesterday---and both this article---and the Simon Black piece above are worth reading by all tax-paying citizens, American or otherwise.


Borderline U.S. Recession Equals Euro Short Cover -- Jim Rickards

This video interview with Jim took place on the BoomBust show on Russia Today on Tuesday.  The interview starts at the 14:05 minute mark---and runs for 8 minutes.  I thank Harold Jacobsen for bringing it to our attention.


A Powerful Weapon of Financial Warfare—The U.S. Treasury’s Kiss of Death

It’s an amazingly powerful weapon that only the U.S. government can wield—kicking anyone it doesn’t like out of the world’s U.S.-dollar-based financial system.

It’s a weapon foreign banks fear. A sound institution can be rendered insolvent at the flip of a switch that the U.S. government controls. It would be akin to an economic kiss of death. When applied to entire countries—such as the case with Iran—it’s like a nuclear attack on the country’s financial system.

That is because, thanks to the petrodollar regime, the U.S. dollar is still the world’s reserve currency, and that indirectly gives the US a choke hold on international trade.

For example, if a company in Italy wants to buy products made in India, the Indian seller probably will want to be paid in U.S. dollars. So the company in Italy first needs to purchase those dollars on the foreign exchange market. But it can’t do so without involving a bank that is permitted to operate in the U.S. And no such bank will cooperate if it finds that the Italian company is on any of Washington’s bad-boy lists.

This very worthwhile commentary appeared on the Internet site on Wednesday---and I thought it worth sharing.


Obama Yields, Allowing Congress Say on Iran Nuclear Deal

The White House relented on Tuesday and said President Obama would sign a compromise bill giving Congress a voice on the proposed nuclear accord with Iran as the Senate Foreign Relations Committee, in rare unanimous agreement, moved the legislation to the full Senate for a vote.

An unusual alliance of Republican opponents of the nuclear deal and some of Mr. Obama’s strongest Democratic supporters demanded a congressional role as international negotiators work to turn this month’s nuclear framework into a final deal by June 30. White House officials insisted they extracted crucial last-minute concessions. Republicans — and many Democrats — said the president simply got overrun.

“We’re involved here. We have to be involved here,” said Senator Benjamin L. Cardin of Maryland, the committee’s ranking Democrat, who served as a bridge between the White House and Republicans as they negotiated changes in the days before the committee’s vote on Tuesday. “Only Congress can change or permanently modify the sanctions regime.”

This news item, filed from Washington, put in an appearance on The New York Times website on Tuesday sometime---and it's the first contribution of the day from Roy Stephens.


Cuba has shown us that sanctions don’t work – so why keep using them? -- Simon Jenkins

The days are long gone when Labour was torn apart by ban the bomb. For the party leader, Ed Miliband, the Trident missile is what HS2 is for David Cameron. It is political tokenism, machismo, image candy. Am I big on defence, Miliband said to an interviewer. “Hell, yes.” Look at my weapons.

For Britain (and France), nuclear bombs are to foreign policy what Olympics are to proper sport: chauvinism bereft of intellectual justification or value for money. But what of weapons that actually hurt people? This week the United States was still refusing to lift economic sanctions on Cuba, even while admitting their failure for half a century to bring down the Castro regime. Indeed, the effect of sanctions is Cuba’s chief tourism appeal.

At the same time America and Britain are resisting Iran’s demand for sanctions to be lifted following the inspection of its nuclear plants this summer. In the case of Russia, pressure is on for sanctions to be tightened in response to Putin’s constant provocations along his western flank. They are the “something” that can always “be done”.

Sanctions remain in place against North Korea, Burma, Zimbabwe, Syria, Libya, Somalia, Congo and other weak and vulnerable states, irrespective of whether they achieve any policy goal. They have become the default mode of western diplomacy, the acceptable face of aggression, a casual flick of contempt by the rich against the poor.

This commentary by Simon appeared on Internet site at 6:09 p.m. BST on their Wednesday afternoon---and it's definitely worth reading.  I thank South African reader B.V. for his first of two contributions to today's column.


U.K. Deflation's not here yet - but that doesn't mean living costs aren't falling

Nothing to see here. The much heralded arrival of deflation failed to materialise this March. For a second month, there was no inflation, or deflation. We’re being told the U.K. is in ‘noflation’ instead.

The news might be something of a blessing for David Cameron, the Prime Minister, as the reading is the last we’ll see from the Office for National Statistics (ONS) before polls open in May.

It means the Conservatives will be spared potentially damaging headlines warning of the ills of negative inflation, which could corrupt its core message of economic competence.

Some commentators will highlight the unrounded figures, which showed the U.K. edged into deflationary territory by the slimmest of margins - with the CPI down 0.01pc in the period. But it’s nonsense to suggest that the ONS’ estimates can be this accurate.

This commentary showed up on the Internet site at 3:29 p.m. British Summer Time on Tuesday---and it's the second story in a row from reader B.V.


German 10 Year Bond Yield Plunges to 10bps, Negative to 8 Years

German yields cratered today (as DAX flash-crashed into the close). 10Y yields are now at 10.5bps - record lows - and the entire German yield curve is now at negative rates to 8 year maturity. 3-Month German bills hit -42bps!! Must all be a signal of the economic success of Q€ right?

This tiny Zero Hedge story, with two must see charts, was posted on their website at 12:21 p.m. Wednesday afternoon EDT---and I thank Dan Lazicki for sending it our way.


Germans downbeat on chances of Greek deal next week

Germany's finance minister said on Wednesday there was no prospect of the euro zone reaching a deal with Athens next week on economic reforms that would unlock bailout funds, potentially leaving Greece perilously short of money.

Both the Greek government and its creditors have said they need to reach at least an outline agreement at an April 24 meeting of euro zone finance ministers in Latvia's capital Riga.

But Athens, which has signaled it may not have enough cash to keep up payments to international creditors in May, has yet to produce a program of reforms that is deemed acceptable.

German Finance Minister Wolfgang Schaeuble told the Council on Foreign Relations in New York that no one expected a deal at the Riga meeting or in the coming weeks.

This Reuters article, co-filed from New York and Athens---showed up on the Internet site early yesterday afternoon---and it's courtesy of Orlando, Florida reader Dennis Mong.


Greek banks tap more ELA funds in March as deposits drop

Greek banks made more use of so-called emergency liquidity assistance (ELA) in March, increasing their borrowing by 4.4 percent from the previous month as an outflow of deposits continued, Bank of Greece data showed on Wednesday.

Banks switched to using ELA, provided by the Greek central bank, in February after being cut off from the ECB's funding window after the new government stalled the country's bailout program - a condition for access to direct ECB funding.

Emergency funding from the Greek central bank, which is more costly than borrowing from the European Central Bank, rose to 68.51 billion euros ($72.6 billion) last month from 65.64 billion in February, the data showed.

Banks suffered deposit outflows of 24 billion euros over December to February as jitters over the government's standoff with euro zone partners on required reforms prompted savers to withdraw cash to stash at home or to send abroad.

This is another Reuters article, also filed from Athens---and it appeared on the Internet site around noon EDT on Wednesday---and it's also courtesy Dennis Mong.


Ahead Of Varoufakis' Meeting With Famous Sovereign Bankruptcy Lawyer S&P Downgrades Greece To CCC+

To think it was just recently in September of last year when the S&P, seemingly unaware of the tragic reality facing Greece in just a few months (by reality we mean democratic elections which overthrew the previous regime which was merely a group of Troika picked technocrats), upgraded Greece to B and said "The upgrade reflects our view that risks to fiscal consolidation in Greece have abated."

Well, the risks have unabated, and two months after S&P flip-flopped and downgraded Greece back to B- on February 6, moments ago it downgraded it again, this time to triple hooks, aka the dreaded CCC+.

S&P said that without deep economic reform or further relief, S&P expects Greece’s debt, other financial commitments to be unsustainable. S&P views that Greece increasingly depends on favorable business, financial, and economic conditions to meet its financial commitments.

But, as City AM reports, the biggest news is that the Greek Finance Minister "will on Friday meet with infamous sovereign debt lawyer Lee Buchheit, who has helped numerous countries restructure their debt. Buchheit is a partner at top US law firm Cleary Gottlieb."

This Greece-related article was posted on the Zero Hedge website at 12:10 p.m. EDT yesterday afternoon.


"Why do they keep shooting?" Violence spikes in East Ukraine, OSCE blames Kiev forces

The latest OSCE mission report on the Ukrainian conflict has recorded a spike in violence, with monitors largely blaming Kiev. However, RT’s correspondent says the shooting pales in comparison to what locals went through before the Minsk deal.

“By and large, the ceasefire is holding,” RT’s Murad Gazdiev reports from the Donetsk region in eastern Ukraine. “The exchanges are a shadow of what they were before the Minsk deal took hold.”

Military action between the Ukrainian troops and the self-defense fighters has renewed in the vicinity of Shirokino, following intense strikes from Kiev’s military, the daily report by Organization for Security and Co-operation in Europe (OSCE) stated on Tuesday.

On April 11, monitors witnessed “an escalation of hostilities, with a tank round being fired and small-arms and machine-gun fire exchange between forces in government-controlled [town of] Berdyansk and Shirokino [village].”

This Russia Today news item put in an appearance on their Internet site at 3:43 p.m. Moscow time on their Wednesday afternoon, which was 8:43 a.m. EDT in Washington.  I thank Jim Skinner for digging it up for us.


U.S. Soldiers, Back in Iraq, Find Security Forces in Disrepair

Lt. Col. John Schwemmer is here for his sixth Iraq deployment. Maj. James Modlin is on his fourth. Sgt. Maj. Thomas Foos? “It’s so many, I would rather not say. Sir.

These soldiers are among 300 from the 5-73 Squadron of the 82nd Airborne Division of the United States Army, about half of them trainers, the rest support and force protection. Stationed at this old Iraqi military base 20 miles north of Baghdad, they are as close as it gets to American boots on the ground in Iraq.

Back now for the first time since the United States left in 2011, none of them thought they would be here again, let alone return to find the Iraqi Army they had once trained in such disrepair.

Colonel Schwemmer said he was stunned at the state in which he found the Iraqi soldiers when he arrived here. “It’s pretty incredible,” he said. “I was kind of surprised. What training did they have after we left?

Apparently, not much. The current, woeful state of the Iraqi military raises the question not so much of whether the Americans left too soon, but whether a new round of deployments for training will have any more effect than the last.

This essay was posted on The New York Times website on Wednesday---and my thanks go out to Ken Hurt for bringing it to our attention.


Saudi Arabia Leads OPEC Oil Boom as U.S. Shale Growth Slows

Saudi Arabia pumped close to a record amount of crude oil last month, leading the biggest surge in OPEC output in almost four years just as the U.S. shale boom shows signs of slowing, the International Energy Agency said.

The Organization of Petroleum Exporting Countries may extend its biggest output gain since June 2011 into next month as recovery in Libya and Iraq adds to the Saudi increase, the IEA said. Average U.S. oil production of 12.6 million barrels a day in the first six months of 2015 will slide to 12.5 million by the fourth quarter as companies curb drilling, the agency said.

Oil prices are about 45 percent lower than a year ago as OPEC keeps output elevated in response to booming shale production and rising Russian supplies. While the U.S. will still pump an extra 710,000 barrels a day of oil this year, unprecedented reductions in drilling mean growth will be about 25 percent lower than the IEA projected in November, before OPEC embarked on its policy to defend market share.

“OPEC’s core Gulf producers -- led by Saudi Arabia -- appear to be sticking with their defense of market share,” the Paris-based adviser to 29 nations said in its monthly oil-market report. “Lower oil prices and cuts in capex are starting to take their toll” on U.S. production.

This oil-related news item appeared on the Bloomberg website at 2:00 a.m. Denver time on Wednesday morning---and I thank West Virginia reader Elliot Simon for digging it up for us.


The Collapse of the Petrodollar: Oil Exporters Are Dumping U.S. Assets at a Record Pace

Back in November we chronicled the (quiet) death of the Petrodollar, the system that has buttressed USD hegemony for decades by ensuring that oil producers recycled their dollar proceeds into still more USD assets creating a very convenient (if your printing press mints dollars) self-fulfilling prophecy that has effectively underwritten the dollar’s reserve status in the post WWII era. Here’s what we said last year:

Two years ago, in hushed tones at first, then ever louder, the financial world began discussing that which shall never be discussed in polite company - the end of the system that according to many has framed and facilitated the US Dollar's reserve currency status: the Petrodollar, or the world in which oil export countries would recycle the dollars they received in exchange for their oil exports, by purchasing more USD-denominated assets, boosting the financial strength of the reserve currency, leading to even higher asset prices and even more USD-denominated purchases, and so forth, in a virtuous (especially if one held U.S.-denominated assets and printed U.S. currency) loop...

Few would have believed that the Petrodollar did indeed quietly die, although ironically, without much input from either Russia or China, and paradoxically, mostly as a result of the actions of none other than the Fed itself, with its strong dollar policy, and to a lesser extent Saudi Arabia too, which by glutting the world with crude, first intended to crush Putin, and subsequently, to take out the US crude cost-curve, may have Plaxico'ed both itself, and its closest Petrodollar trading partner, the U.S. of A.

As Reuters reports, for the first time in almost two decades, energy-exporting countries are set to pull their "petrodollars" out of world markets this year.

This very interesting Zero Hedge piece was posted on their Internet site with a time-line of 10:42 p.m. last night EDT---and it has obviously been edited, because Dan Lazicki sent it to me six hours before that.


Stanley Druckenmiller Bullish Chinese Equities and Oil and Doesn’t Expect Rate Cut Anytime Soon

The economy appears to be full of surprises, according to billionaire investor Stanley Druckenmiller. He has one of the best long-term track records in money management and he’s planning for the unexpected.

Most investors predict the Federal Reserve to raise interest rates in September, after keeping them near zero for six years. But Druckenmiller rejects that forecast.

I have no confidence whatsoever that we’ll see a rate hike in September or December,” says Druckenmiller, who is worth $4.4 billion according to the Bloomberg Billionaires Index.

And there are other surprises. He expects oil prices will rise and the Chinese will be smiling with an improving economy. Chinese leaders are forecasting growth this year of 7 percent. That’s the lowest in 7 years, but the Shanghai Composite Index has doubled in the last 12 months as Chinese stocks have soared.

This item appeared on the Zero Hedge website at 4:20 p.m. EDT---and it's the final contribution of the day from Dan Lazicki, for which I thank him.


China accepts 57 founding members for new Asian Infrastructure Investment Bank

China-led Asian Infrastructure Investment Bank finalized a list of 57 founding member states on Wednesday.

The announcement came after China accepted the last group of nations that includes Sweden, Israel, Poland and South Africa, reported The South China Morning Post.

Founding members have the right to establish the rules for the bank's activities. They hold other privileges that will not be available to countries that may opt to join the bank at a later point.

The United States and Japan have abstained from joining the AIIB, but South Korea, a key U.S. ally in the region, has agreed to join as a founding member along with Australia, New Zealand, Canada, Britain, France and Germany.

This UPI news story, filed from Beijing, appeared on their website yesterday---and it's worth reading.  I thank Roy Stephens for finding it for us.


The Gold Chronicles: April 9, 2015 Interview with Jim Rickards

This 56:08 minute audio interview covers the entire range of topics that Jim always spends time on and, as usual, his comments regarding gold come towards the end.

As the headline says, the interview was conducted on April 9---and was posted on the Internet site yesterday.  I thank Harold Jacobsen for sending it our way.


Asian demand turns Massachusetts into major gold exporter

Massachusetts' top export is not sleek medical devices, cutting-edge machinery, or life-saving pharmaceuticals. It is something more intriguing: gold.

In a state devoid of gold mines, Massachusetts exported nearly $2 billion in gold last year to places such as the United Kingdom, Switzerland, and Hong Kong, according to, a Leverett trade research group. And these were not paper transactions but 62,500 pounds of the glittery metal -- roughly the weight of a herd of more than two dozen rhinoceros.

But exactly who is exporting this gold has stumped even specialists studying the Massachusetts economy, who can talk knowledgeably about almost any product that leaves the state, from semiconductors to seafood to colon cancer tests.

As it turns out, much of the gold leaving the state appears to be just passing through. In 2014, Massachusetts was not only the nation's fifth-largest gold exporter but also its fourth-largest importer, accepting about $1.5 billion from countries such as Canada, Colombia, and Mexico.

This interesting gold-related story put in an appearance on the Internet site on Tuesday---and I found it embedded in a GATA release yesterday.


Record dive recovers $50 million in wartime silver from ocean floor

In the deepest salvage operation in history, a British-led team has recovered a $50 million (£34 million, €47 million) trove of coins that has lain on the seabed since the steamship carrying them from Bombay to England was sunk in 1942.

The S.S. City of Cairo was torpedoed 480 miles south of St. Helena by a German U-boat and sank to 5,150 meters. Its precious cargo -- 100 tonnes of silver coins -- belonged to HM Treasury. The silver rupees had been called in by London to help fund the war effort.

But they never made it. The steamship's tall plume of smoke was spotted by a U-boat on 6 November 1942 and it was torpedoed.

Ten minutes later, amid efforts to abandon ship, the City of Cairo was hit with a second torpedo which sealed its fate.

The ship and its cargo was presumed lost until 2011, when a team led by British salvage expert John Kingsford located an unnatural object among the ridges and canyons of their South Atlantic search area.

This very interesting article showed up on the Internet site yesterday---and it's another story I found posted on the Internet site.


John Embry Interviewed on Radio

This 13:17 minute audio interview with John appeared on the website yesterday sometime---and I thank reader Dennis Meredith for bringing it to my attention---and now to yours.


LSE’s Lord Desai Warns: Gold-Backed SDR Is Quite Likely to Happen

As many are increasingly coming to terms with the ‘obvious failure of fiat currency’, the inevitable question arises “what next?” Earlier this year, we discussed the possibility of a Chinese- or Russian-currency backed by gold, amid the increasing calls (domestically and abroad) for an end to USD Reserve hegemony; but this weekend, as Bloomberg reports, Lord Meghnad Desai, chairman of The Official Monetary and Financial Institutions Forum, stated that IMF Special Drawing Rights (SDR) should contain some gold to help stabilize the currency.

As Bloomberg reports,

A bit of gold” could help stabilize SDRs, Lord Meghnad Desai, chairman of Official Monetary and Financial Institutions Forum, says at precious metals conference in Dubai."

We could ask that gold be nominated as part of the SDR. That is one thing I think is quite likely to happen

This will be easier if China increases its official gold holdings.

A subject near and dear to Jim Rickards' heart.  This absolute must read article, which was originally posted on Zero Hedge, appeared on the Internet site on Tuesday sometime---and I found it on the Sharps Pixley website yesterday.



¤ The Funnies

The Oldest Bird in the Northern Hemisphere Raises a Chick

Below is a photo of "Wisdom".  She's a female Laysan albatross---and was first banded by USGS scientist Chandler Robbins in 1956 as she was incubating an egg.  This is a picture of her brooding her month-old chick on Midway Island in early March of 2011.  Since then, she has raised another chick on Midway Atoll, this time in 2014.  These birds must be at least five years old before they're capable of breeding, but they more typically breed at 8 or 9 after an involved courtship lasting several years.

So, assuming the egg she was sitting on in 1956 was her first one, and that's no guarantee---and adding eight years to that, you come out with a hatching date for Wisdom somewhere in very early 1948.  That means that when she raised her latest chick in 2014 she was 65 years old.

I was born in October of 1948---so it's a near certainty that Wisdom is older than I am.

The photo credit belongs to John Klavitter---and you can read more about Wisdom here.  If you want to follow these birds from egg to adult, there's live webcam for that linked here---and I have it on audio background to listen to the adult birds as they carry on until the sun sets in Kau'i in the Hawai'ian Islands, where a small portion of this years brood is currently being raised.

Avnel Gold (TSX:AVK) is a gold mining, exploration, and development company with operations in south-western Mali. The Company’s focus is to develop its 80%-owned Kalana Main Project into a low-cost, open-pit mining operation.

In Q1-2014, the Company reported the results of a PEA based upon a Mineable Resource of 1.58 million ounces at a diluted grade of 3.1 g/t. The PEA outlines a 14-year mine life recovering 1.46 million ounces at an average “AISC” of $577/oz with a capex of $149 million. At $1,110/oz and a 10% discount rate, the NPV was $194 million after-tax and imputed interest with an IRR of 53% on a 100% project basis. Similarly, at a 5% discount rate and at $1,300/oz, the NPV was $424 million with an IRR of 74%. Since the PEA, the open-pit diluted Indicated Resource has increased to 2.2 million ounces at a diluted grade of 3.06 g/t.

Avnel plans to complete its fully-funded 141-hole, 23,500-metre drill program in mid-2015, which is expected to provide for a steady flow of news over the coming months. This drilling will be form the basis for an updated Resource Estimate in Q3-2015 and DFS that is scheduled to be completed in Q1-2016. Please contact Jeremy Link with questions or for more information.


¤ The Wrap

Along with the growing awareness of the COT report and what that portends for the termination of the manipulation, there are other strong signs that even those not well versed on the intricacies of the report are seeing that something is very wrong with the price discovery process in silver. Back in the fall, the CEO of silver miner First Majestic, Keith Neumeyer, made waves when he suggested the price of silver was too low and openly suggested that silver miners band together to restrict production to counterbalance what he thought was too low of a silver price. I remember writing about it at the time and both congratulated and encouraged Mr. Neumeyer to continue pursuing the artificial pricing issue in silver, but to shy away from attempting to form a producers’ cartel as that appeared to be against antitrust law. While silver is clearly manipulated in price, you shouldn’t try to manipulate it higher – two wrongs don’t make a right and all that.

I hadn’t heard much from Mr. Neumeyer on the artificial pricing of silver since then, so I was somewhat surprised when I ran across a very recent interview in which he discussed his opinions in straightforward terms. He questioned the price discovery process for silver on the COMEX and characterized the process in terms that should be familiar to anyone reading these pages. In the interest of time and to drill down to the price discovery discussion, you can fast forward to the 21:25 minute mark.

The important point is that here we have the CEO of an important primary silver producer deeply questioning how silver prices are derived. According to Mr. Neumeyer, actual supply and demand have little to do with current silver prices and I, for one, would not argue with him. Although Mr. Neumeyer, much to his credit, has spoken to the issue of artificial pricing in silver previously, I must point out just how rare and unusual it has been for a primary silver miner to raise such concerns over the past 30 years in which I have alleged a COMEX silver manipulation has existed. I’m still shaking my head in disbelief that silver miners heretofore always denied prices were manipulated, even though their shareholders were obvious victims, but I am more encouraged by Neumeyer’s words than anything else.

Taken with the growing attention being placed upon the COT Report and the Managed Money category, Mr. Neumeyer’s sentiments are reason to believe the ongoing silver manipulation is on its last legs. It’s hard to run any scam where the scam becomes common knowledge. I’ve always maintained that in matters related to the price of silver, all roads lead to the COMEX. I would revise that to all silver roads lead to the COMEX and JPMorgan, but that is a distinction without a real difference.  I actually look forward to the day when someone admits that paper speculators on the COMEX do set and have every right to set the price of silver and that actual producers should butt out and be happy with the prices given to them by the speculators. It has become nearly that crazy. - Silver Analyst Ted Butler: 15 April 2015

I was certainly happy to see the precious metal price action when I got up yesterday morning, but it was far from the spectacular variety, as gold wasn't even allowed to rise one percent.  It's the old-as-dirt "1 Percent Rule" that my compatriot GATA Chairman Bill Murphy over at likes to mention at moments like this---and he'd be right on the money once again.

Here are the updated 6-month charts for all four precious metals once again---and the charts, as usual, are courtesy of

And as I write this paragraph, the London open is five minutes away.  Three of the four precious metals are in positive territory---and only palladium is down on the day, but only by a buck.  Net gold volume is already sky high at 36,000 contracts---and silver's net volume is a hair over 4,000 contracts.  The dollar index, which got smoked at 8:00 a.m. Hong Kong time on their Thursday morning, has now rallied back into positive territory---and is currently up 9 basis points.

I would guess that a lot of yesterday's price action was currency related, but not all of it.  Behind all of this is a precious metal market that would explode in price to the outer edges of the known universe if given the opportunity.  Someday it will, but it wasn't yesterday.

And as I send today's column off to Stowe, Vermont at 5:15 a.m. EDT, I note that gold rallied a bit more going into the London open, but appears to have been capped [at least for the moment] as of 9:00 a.m. BST.  Whether that was the end of it all, or there's more rally to come, is hard to say---so we'll have to see what the rest of the Thursday session brings, especially the New York session.

It's the same chart pattern in both silver and palladium as well---and palladium is still chopping sideways, a dollar or so either side of unchanged.

Net gold volume is just north of 52,000 contracts---and it's fairly obvious that this Far East/early London gold rally has run into pretty impressive resistance from "da boyz".  Silver's net volume is around 5,800 contracts, which isn't a lot---and a decent amount is roll overs as well.  The dollar index is now up 25 basis points in an almost straight-line move from its 8 a.m. Hong Kong low.

It beats the hell out of me as to how the rest of the Thursday trading session will unfold---and after yesterday's price action, it's probably best that I make no prediction at all, and let the chips fall where they may.

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

Ed Steer