The dollar index did about a 70 basis point face plant at the open of trading on Monday morning in the Far East...Sunday night in New York. The gold price blasted higher, but ran into a not-for-profit seller within twenty minutes...and it took them about four hours to beat the price back to below the $1,600 spot price mark.
Volume in the first four hours of trading was three or four times normal for that time of day...and week, so it was obvious that JPMorgan et al had their hands full getting the price back under control.
The gold price managed to sneak back above that price by shortly after 3:00 p.m. Hong Kong time...but then got sold down during early trading in London. Gold rallied a bit starting about 11:30 a.m. BST...and then got sold off again at the open of the equity market in New York at 9:30 a.m. Eastern...a pattern we've seen lots of times before over the years. I'll have more to say about that in 'The Wrap'.
The New York low...$1,581.00 spot...came at the London p.m. gold fix.
Gold made it back above $1,600 for a very few minutes around 3:40 p.m. Eastern time in the thinly-traded electronic market, but then got sold off below that by the 5:15 p.m. Eastern close.
Gold closed at $1,596.10 spot...up a whole $1.40 on the day. One can only imagine what price it might have closed at if it wasn't for the obvious interventions. Net volume was decent at around 114,000 contracts...and would have been much, much lower if you were to subtract the volume in the first couple of hours trading in the Far East.
Silver blasted through the $29 spot price mark like a hot knife through butter...but it didn't take long for the 'day boyz' to get silver back below that number...and it barely got a sniff of it again for the rest of trading day on Monday. Also note the obligatory sell-off at the 9:30 a.m. Eastern open as well.
Silver rallied into the end of Comex trading...and then mostly traded sideways into the close of electronic trading.
Silver's New York low was also at the London p.m. gold fix...and that price was $28.23 spot. From its Far East high to its New York low, silver intraday move was over a dollar.
Silver finished the Monday trading session up a whole nickel from Friday. It would have obviously done much better if it had been left to its own devices. Net volume was around 28,000 contracts.
Platinum and palladium also moved very sharply higher on Sunday night as well, but neither metal got sold off much at the open of New York trading. Gold closed up 0.09%...silver closed up 0.18%...platinum closed up 0.91%...and palladium finished up 0.82%. At one point, platinum was up over 2%...and palladium up over 3.0%...before getting sold off.
As I stated in the opening sentence of this column..."The dollar index did about a 70 basis point face plant at the open of trading on Monday morning in the Far East...Sunday night in New York."
The dollar index stayed down until its low of about 81.79 which came about 2:50 p.m. Hong Kong time. From there, the index went into rally mode...and by the close of trading in New York was up a bit over 20 basis points from Friday's close. The dollar index low corresponded almost exactly with gold's second breakthrough of the $1,600 spot price mark.
But that doesn't alter the fact that if JPMorgan et al hadn't bombed gold and silver prices at the open on Sunday night...and killed them again at the open of the New York equity markets, both [along with platinum and palladium] would have finished materially higher, regardless of what the dollar index was doing. It's that simple...and that obvious.
Despite the fact that gold got sold off hard at the 9:30 a.m. open of the N.Y. equity markets, the gold stocks opened in positive territory, with a low coming at the 10:00 a.m. Eastern time London p.m. gold fix. The absolute low for the stocks came around 11:15 a.m. Eastern time, even when the low for gold was at the gold fix...something you don't see too often.
Despite the fact that gold worked its way back into positive territory, the stocks didn't follow...and rolled over about 1:40 p.m. Eastern time...and came close to finishing on their lows of the day. The HUI finished down 1.46%. The Dow also began rolling over at the same time, so it's entirely possible that the gold stocks got sold off along with everything else.
The silver stocks didn't do particularly well, either...and Nick Laird's Silver Sentiment Index closed down 2.32%.
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The CME's Daily Delivery Report showed that 26 gold and zero silver contracts were posted for delivery tomorrow.
There were no reported changes in either GLD or SLV on Monday.
The U.S. Mint had a sales report. They sold another 3,500 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and 158,500 silver eagles.
It was a quiet day over at the Comex-approved depositories on Friday. They only reported receiving 82,335 troy ounces of silver...and shipped 30,696 ounce of the stuff out the door.
Well, I knew it was going to happen sooner or later...and it finally did over the weekend. Enough of Ted Butler's paying subscribers have now complained about all the 'free stuff' that I was giving away on Tuesday and Thursday in this space that I am no longer allowed to post any information from Ted's bi-weekly column.
That's too bad, as consider Ted to be THE best silver analyst on Planet Earth by a country mile...and I've thought so from the time I read his first essay when it was posted over at the gold-eagle.com Internet site over twelve years ago. To be able to share some of his insights into the inner workings of the silver market was always a bonus in this column...but sadly, no longer. Now you have to pay for it...and if you're interested, the link to his website is here.
Here are a couple of charts for you. The first is from newsletter writer, Grant Williams, whose commentary is always entitled "Things That Make You Go Hmmm...". Australian reader Wesley Legrand stole it from his latest column...and here it is. The chart is self-explanatory.
The second is from Washington state reader S.A...and it doesn't need any embellishment from me, either.
I have the usual number of stories for a Tuesday...a lot...and the final edit is up to you.
The recent economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity, the Federal Reserve said Monday.
A hypothetical family richer than half the nation’s families and poorer than the other half had a net worth of $77,300 in 2010, compared with $126,400 in 2007, the Fed said. The crash of housing prices directly accounted for three-quarters of the loss.
Families’ income also continued to decline, a trend that predated the crisis but accelerated over the same period. Median family income fell to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted for inflation.
The new data comes from the Fed’s much-anticipated release on Monday of its Survey of Consumer Finances, a report issued every three years that is one of the broadest and deepest sources of information about the financial health of American families.
No surprises here. This story was posted in The New York Times yesterday...and I thank reader Phil Barlett for sending it along. The link is here.
North Dakota voters will decide Tuesday on the ultimate tax revolt: abolishing the property tax altogether. A citizen-led petition drive has put the daring, all-or-nothing proposal before the voters in a state flush with tax revenue, jobs and prosperity generated by an oil boom.
If the property tax is eliminated, it would be the first time since 1980 — when oil-rich Alaska got rid of its income tax — that a state has discontinued a major tax, reports the Tax Foundation, a non-partisan research group. North Dakota would become the only state not to have a property tax, a levy the state has had since before it joined the union in 1889.
"The oil boom makes it easier to get rid of the tax, but we started this before the oil boom took off," said Charlene Nelson, chairman of Empower The Taxpayer, which is leading the tax repeal effort. "Any state would benefit from this same thing."
This story was posted on the usatoday.com Internet site late yesterday evening...and I thank Washington state reader S.A. for bringing it to my attention. The link is here.
Spain is asking for an international bailout to rescue its debt-laden banking sector, its finance minister announced tonight, as sources suggested the package could total £81 billion.
"Since the funds will be asked for to attend to the financial sector's needs, it has been agreed with the eurogroup that it will be specifically for the financial system only."
No economic or fiscal reforms are attached.
He did not give a figure but said the results of independent valuations of the Spanish banking sector's needs will be made public later this month. The eurozone's bailout fund will be used to receive and disburse the money, he added.
This story was posted on the telegraph.co.uk website early Saturday evening...and it's worth skimming. It's no surprise that it's a Roy Stephens offering...and the link is here.
Savers in Spain can find their banks refusing to hand over their money, even if it is held in an instant-access account, thanks to changes to terms and conditions introduced by the government.
Should you want to see the real effects of the Spanish debt crisis, the Pluton Bar in Sant Pol de Mar, Catalonia, is a good place to start. Over morning coffees, customers discuss sovereign defaults, credit spreads and a possible euro exit.
There is certainly plenty to talk about – and complain about too. Local property taxes are set to rise by 15pc, on top of recent state income and capital gains tax increases. The national tax increase is supposed to be temporary, but no one believes rates will come down any time soon.
Banks also come in for a lot of stick. A local restaurant owner complained that her savings bank manager refused to let her take €30,000 out of her account. The money was needed to get the restaurant ready for the summer rush. New small print lets the bank block withdrawals, even on instant-access accounts. It took two weeks for the bank to relent. Apparently, it could block savings for two years if it wanted.
This is another Roy Stephens offering from The Telegraph, this one from early yesterday morning. The link is here.
Spain faces supervision by international lenders after a bailout for its banks agreed at the weekend, EU and German officials said, contradicting Prime Minister Mariano Rajoy who had insisted the cash came without such strings.
Mr Rajoy said on Sunday that Madrid had scored a victory by securing aid from eurozone partners without having to submit to a full state rescue programme, saying Spain's rescue had "nothing to do" with the procedures imposed on Greece, Ireland and Portugal.
But EU Competition Commissioner Joaquin Almunia and German Finance Minister Wolfgang Schaeuble said that as in those other bailouts, a "troika" of the International Monetary Fund, the European Commission and the European Central Bank would oversee the financial assistance.
"Of course there will be conditions," Mr Almunia told Spain's Cadena Ser radio. "Whoever gives money never gives it away for free."
This story was posted on The Telegraph website at 2:45 p.m. BST...and I thank Roy Stephens for sending it along. The link is here.
Ireland wants to renegotiate its rescue plan to benefit from the same treatment as Spain, which looks set to win a bailout for its banks without any broader economic reforms in return, European sources said on Saturday.
"Ireland raised two issues: one is the need to ensure parity of the deal with Spain retroactively on its bailout from EFSF," one European government source told AFP, referring to the temporary rescue fund, the European Financial Stability Facility.
Another European government source confirmed the information.
This AFP story was picked up by the france24.com website on Saturday...and it's a piece I borrowed from yesterday's edition of the King Report. The link is here.
The hastily arranged bailout of Spain's banks on the weekend won't calm financial markets for long, write German commentators on Monday. The move exposed shortcomings in Europe's crisis-management system and is already being overshadowed by the make-or-break election in Greece next week, they say.
After Greece, Ireland and Portugal, Spain became the latest -- and largest -- euro zone member to seek aid in the debt crisis at the weekend, the only difference being that the money will be confined to recapitalizing its ailing banks, and will not involve the humiliation of European Union or International Monetary Fund controllers being dispatched to Madrid to make sure the government is doing its homework.
After month of refusing assistance, the Spanish government swallowed its pride following massive pressure from its partners, especially Germany, desperate to stabilize the fourth-largest economy of the euro zone ahead of the Greek election on June 17. The vote could trigger a new round of turmoil if it produces a government bent on cancelling the terms of the international bailout -- a move that could lead to Greece leaving the single currency.
This article from yesterday's edition of spiegel.de yesterday is worth reading. It's another offering from Roy Stephens...and the link is here.
European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks, and introducing euro-zone capital controls as a worst-case scenario should Greece decide to leave the euro.
EU officials have told Reuters the ideas are part of a range of contingency plans. They emphasized that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen -- no one Reuters has spoken to expects Greece to leave the single-currency area.
But with increased political uncertainty in Greece following the inconclusive election on May 6 and ahead of a second election on June 17, there is now an increased need to have contingencies in place, the EU sources said.
This Reuters story was filed from Brussels during their lunchtime yesterday...and I plucked it from a GATA release. It's a must read...and the link is here.
On Monday, investors breathed a sigh of relief after the EU agreed to lend $125 billion to Spain’s banks.
But billionaire investor Jim Rogers wasn't relieved. He thinks the bailout is misguided – even the worst possible thing that could have happened.
“Let them go bankrupt. Let them all go bankrupt!” he exclaimed on CNBC's Fast Money Halftime Report.
“The way system is supposed to work – when you fail you fail – competent people come in and take over the assets. But what they’re doing is taking assets from the competent people and giving them to the incompetent people – it’s absurd economics and absurd morality.”
Amen to that! This CNBC video clip was posted on their website yesterday morning...and I thank reader Randall Reinwasser for sharing it with us. The link is here.
The 100 billion-euro ($126 billion) rescue for Spain’s banks moved Italy to the front line of Europe’s debt crisis, as the country’s bonds and equities slumped on concern it may be the next to succumb.
Italy’s 10-year bonds reversed early gains today in the first trading after the Spanish bailout. Their yield rose by the most in a day since Dec. 8, adding 27 basis points to 6.04 percent. Shares of UniCredit SpA, the country’s largest bank, had their steepest decline in five months.
“The scrutiny of Italy is high and certainly will not dissipate after the deal with Spain,” Nicola Marinelli, who oversees $153 million at Glendevon King Asset Management in London, said in an interview. “This bailout does not mean that Italy will be under attack, but it means that investors will pay attention to every bit of information before deciding to buy or to sell Italian bonds.”
This Bloomberg story was filed from Rome...and was posted on their website around lunchtime yesterday. I thank Washington state reader S.A. for sending it...and the link is here.
Britain and Europe are failing to tackle the problem of technically insolvent banks and are trying to buy time with QE, summits, and other can-kicking measures.
British banks are sitting on “£40 billion of undeclared losses”. So says Pirc, the UK’s leading shareholder advisory group. What’s more, Pirc argues, the massive backlog of undisclosed bad debts is preventing our banking sector from making vital, growth-boosting loans to creditworthy businesses and households.
It doesn’t surprise me that some of the UK’s leading banks are technically insolvent. What does surprise me is that it’s taken until last week for a respected professional body such as Pirc to state the obvious.
It’s not that I don’t congratulate Pirc for what it has just said. A relatively small organisation, after all, is now openly defying what is probably the UK’s most powerful lobby. Yet Pirc, and others, should still have called the Western world’s banks on their vast, undeclared losses a very long time ago. Some of us have been banging on, for years, about banking black holes blocking an economic resurgence — ever since this ghastly crisis began, in fact, in mid-2007.
Only £40 billion? I would bet serious coin that the loses are many multiples of that. This story appeared on the telegraph.co.uk website late on Saturday night. Once again I thank Roy Stephens for sending it along. The first half a dozen paragraphs are worth reading...and the link is here.
In around six months’ time, £200 of unearned cash will plop into my bank account: an unsolicited gift from HM Treasury because, in spite of being a highly paid journalist, I am over 60 years old and therefore must be in need of a Winter Fuel Payment. This is clearly ridiculous. I would happily hand over my rights to this sum – as well as the value of my free prescriptions, eye tests and (unclaimed) bus pass – to those who actually need them. Perhaps more to the point, I would be particularly delighted to give them up in return for my daughters being allowed to keep the Child Benefit which the Chancellor has decided they can do without.
This brings us to the real problem with the principle of universal benefits, which is obviously overdue for re-examination. Iain Duncan Smith has now gone semi-public with the suggestion that it is both unaffordable and unjust to hand out cash (or free services) to well-off people who happen to be past what used to be – but is no longer – the expected age of retirement. He is arguing that such payments should be means tested. The simplest mechanism for this would be to remove the entitlements from any pensioner (or rather, person over 60) paying higher rate tax. There are some problems with this, the most important being that those whose wealth resides in assets such as valuable property which is untaxed, rather than income, would be untouched. But these quibbles could probably be rectified. The basic proposition is sound. The state can no longer afford blanket cash handouts to whole swaths of the population, based on quite arbitrary criteria (an age which is not even the normal retirement point) and regardless of their individual means.
This rather longish read was posted on The Telegraph's website late on Saturday evening...and is another story that Roy sent our way. The link is here.
Greece's unemployment rate shot up to 21.9pc in March, rising sharply from the 15.7pc rate in the same month last year and up from 21.4pc in February, the country's statistics agency said.
Almost 1.8m people were registered as unemployed in the nation of 11.3m, according to Greece's Ase statistics agency.
Elsewhere in the crisis-hit eurozone, France's unemployment rate rose to about 10pc in the first quarter, up from 9.8pc in the previous three months, according to Bloomberg.
Some of France's largest companies, including Air France, Peugeot and Carrefour SA have been looking to reduce costs, leading labour unions to urge Mr Hollande to make good on a campaign to prevent a wave of firings.
This story was posted on The Telegraph's website last Thursday...and is Roy's second-last offering in today's column. The link is here.
Felix Zulauf, a Swiss hedge fund manager, has an extremely dark forecast for the world.
He recently participated in Barron's Roundtable. As for the euro, it is a misconstruction. As I said in January, I expect the disintegration to begin in the second half of this year. That should lead the world into financial and economic chaos. My two major themes into 2013 are euro disintegration and China weakness, due to the bursting of a real-estate boom.
This businessinsider.com story from yesterday...and I thank reader Bill Busser for sending it along. The link is here.
As Julian Leidman packed up more than $4 million in rare coins after a Connecticut show, the thieves probably already had the prominent collector under surveillance and had laid plans for one of the biggest coin heists in U.S. history.
Leidman eased his minivan onto Interstate 95 south toward his Maryland home and the thieves probably followed, waiting and watching for dozens of miles. Then they saw their opening.
When Leidman stopped for dinner at Tiffany’s restaurant in Pine Brook, N.J., he took a table near a window so he could keep an eye on his vehicle. The thieves sneaked around the side he couldn’t see, smashed a window and took at least five cases.
This Washington Post story from Sunday was sent to me by Edmonton reader Ray Hay...and the link is here.
Although he does some great work, I find that Max grates on me after a very short while...and this video clip is no exception. He has a few things to say about JPMorgan, wash trades, and how it is used by them and their minions to control the prices of gold and silver. The pertinent details begin at the 2:20 mark...and runs a bit over seven minutes. It's a must watch for sure...and I thank West Virginia reader Elliot Simon for sending it along. It's "Market Manipulation 101"...and the link to the youtube.com video is here.
Partners in the Marikana mine "have agreed in principle to place the operations on care and maintenance, due to the enduring low platinum group metals basket price environment", Aquarius Platinum said on its website.
"Trading conditions in the platinum industry are expected to remain difficult in the short- to medium-term and these conditions have rendered the operations at the [mine] uneconomic."
Aquarius owns 50pc of the venture in northwestern town Rustenburg.
The company did not say how many jobs would be affected, estimated at 1,500 by Business Day newspaper.
Like gold and silver, the reasons for the lows price in platinum is the same. This story was posted on The Telegraph website early yesterday morning...and is Roy Stephens final offering in today's column, for which I thank him. It's a very short story and certainly worth skimming. The link is here.
The first blog is with Bill Fleckenstein. It's headlined "Stock Market Is A Farce, We're At The End Game". The second is with James Turk...and the headline there reads "Capital Controls, Bank Bailouts & Escalating Fear". The third blog is with Michael Pento...and it's entitled "This is How the Spanish Bailout Will Impact Key Markets". The fourth blog arrived in my in-box in the wee hours of this morning. It's with Bob Fitzwilson of The Portola Group...and the headline states "World Chaos Erupting as Governments & Institutions Collapse". And lastly is this audio interview with Egon von Greyerz...and his blog on the weekend was headlined "Massive Worldwide Package Coming From Fed, ECB & IMF".
This commentary by Louis was in yesterday's edition of Casey's Daily Dispatch...and is certainly worth the read. The link is here.
In recent conference call to clients, BMO Global Strategist Don Coxe advised, "One way or another I think gold is going to be more important from now on than it is today, and I'd like to see you people share in that."
As the entire banking system in the Eurozone remains at risk from Eurozone crisis, Coxe doesn't "see a way of getting out of this without bringing gold back in somehow-I will applaud them if they can find a way to do that-- but in the meantime it's another reason for our continued support of investing in gold..."
However, Coxe believes "the best way to do this is no longer the bullion, it's the stocks, and we've given you a variety of reasons for it."
I posted that conference call in this column last week...and even if you listened to it, this article...which was posted over at the mineweb.com yesterday...is well worth reading. I thank Bob Fitzwilson for bringing it to my attention...and now to yours. The link is here.
Gold and silver have continued to take it on the chin in the paper markets. The upshot? Renewed confirmation that predicting short-term price movements in precious metals is truly a mug's game.
Still, there is good news for those who view gold and silver as true repositories of wealth amid failing national currencies.
The two metals are becoming cheaper as developments in the real world increasingly point to dramatic price hikes later on.
This essay appeared in the June 1st edition of Investor's Digest of Canada...and I found it posted on the sprott.com Internet site yesterday evening. Anything John has written is worth the read, in my opinion...as is this...and the link is here.
In his latest commentary Jim Sinclair discusses the struggle between, on one hand, the U.S. Exchange Stabilization Fund and its associated bullion banks and, on the other, central banks around the world that are realizing that they've got too much paper money and not enough gold. "The secret that the manipulators must keep quiet is that the physical market for gold is very thin on the sell side," Sinclair writes. "Whatever is offered, be it 500 tons or more in manipulation from paper, has been and will continue to be taken." Sinclair's commentary is headlined "Stay the Course as Gold Continues Its Progressive March".
I borrowed the headline...and the introductory paragraph...from a GATA release that Chris Powell filed from Hong Kong earlier today. It's posted on the jsmineset.com website...and it's certainly worth reading. The link is here.
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Well, it was another of the same old, same old kind of day for a Monday...the precious metals move sharply higher for all the right reasons at the open on Sunday night in New York...and the not-for-profit sellers beat them back in the same old way.
The 9:30 a.m. smack-down for both gold and silver was no surprise, as that is one of their favourite times to do the dirty...right at the opening of the equity markets in New York.
As I explained from the podium at the last two Vancouver gold shows...one just past and the other in January...this is what is called "The London Bias". It lays bare the entire Anglo/American gold price fixing scheme for all to see.
If you go back through 42 years of LBMA gold data, you find that in only five of those years did the gold price ever finish in positive territory year-over-year. And since the 1999 Washington Accord, London has had a negative close in gold every year in what is the biggest gold bull market in history. The odds of that being a random free-market event must be millions to one...if not more. In actual fact, it's just not possible in a free market.
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I'll leave this last chart for you to figure out on your own...and it requires very careful study. You must use the 'click to enlarge' feature for this graph [and also on the two above] to see all the details. One of many stand-out features is the what occurred when the price blew up when the Washington Agreement on Gold was signed on September 26, 1999. As you can see from the chart, it brought on big changes.
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In Far East and early London trading earlier today, the gold price was trading within about five bucks of its closing price in New York on Monday...but never traded above that close. It's obvious to me...as it is to Jim Sinclair...that the $1,600 price mark is being defended. We'll see how long that lasts.
Silver was under pressure most of Far East and early London trading...and was down a bit over a percent at one point...and is now trading about 15 cents below Monday's close.
Volume in gold is about average for this time of morning in London trading...and silver's volume is getting up there, with no roll-overs worth mentioning. That will change once New York starts to trade. The dollar index hit its zenith about 6:30 p.m. last night in New York before trading began in the Far East...and is down a hair as I hit the 'send' button at 5:20 a.m. Eastern time.
Today, at the close of Comex trading, is the cut-off for this Friday's Commitment of Traders Report...and I'm really interested to see what sort of price activity we have in gold and silver both before and after the 1:30 p.m. Eastern time close.
That's all I have today, which is more than enough.
I'll see you here tomorrow.