Gold & Silver Daily
"It will be interesting to hear what "Helicopter" Ben has to say for himself...and how the precious metal markets will react, or be allowed to react."
 

¤ Yesterday In Gold & Silver

As has been the case for some time now, the gold price didn't do a lot during the Far East trading session on Tuesday...and was down about four dollars when London opened at 8:00 a.m. BST.  From the open, the gold price rallied slowly but surely...and spiked right at the London p.m. gold fix.  From that spike high of the day [$1,650.50 spot] the gold price then got sold down immediately...and from noon onwards in New York, gold traded flat into the close of electronic trading at 5:15 p.m. Eastern time.

Gold closed at $1,641.50 spot...down $3.20 on the day.  Net volume was very light...around 98,000 contracts.

Silver's price path was pretty much the same as gold's...except for the fact that the sell off after the London p.m. gold fix took the silver price down into negative territory on the day.  The high price tick was $31.25 spot.

Silver closed at $30.83 spot...down 4 cents from Monday's close...and well off its spike high price at the fix.  Gross volume was monstrous, but once all the spreads/roll-overs out of the May contract were subtracted, the volume dropped down to a net 22,000 contracts, which is very light.

The dollar index opened around the 79.35 mark in early morning trading in the Far East...and struggled to maintain that right up until minutes before 9:00 a.m. in New York.  Then, in the space of an hour, the dollar index fell 25 basis points...with its low price tick coming at precisely 10:00 a.m. in New York.  Gold and silver's high tick of the day came about ten minutes after that.

From there, the dollar index gained back a bit of its decline in rather erratic fashion...and finished down about 15 basis points on the day.

The gold stocks didn't rally much going into the London p.m. gold fix...and quickly got sold off after that.  From there they chopped around the unchanged mark for the rest of the Wednesday trading day...and the HUI finished flat, showing no change...0.00%...on the day.

The silver stocks finished mixed...and Nick Laird's Silver Sentiment Index closed up/down a tiny 0.41%.

(Click on image to enlarge)

The CME Daily Delivery Report was another quiet one...as it will probably be for the rest of the April delivery month...as only 25 gold and 16 silver contracts were posted for delivery on Thursday.

There were no reported changes in either GLD or SLV...and the U.S. Mint didn't have a sales report, either.

The Zürcher Kantonalbank had an updated report on their gold and silver ETFs at the end of trading last Friday.  Their gold ETF showed a small decline of 2,586 troy ounces...and their silver ETF showed a decline of only 62,761 ounces.

Monday was pretty quiet over at the Comex-approved depositories as well.  They reported receiving only 38,009 troy ounces of silver...and shipped 3,002 ounces out the door.

I have the usual number of stories for a mid-week column...and I hope you have time to go through all of them.

 

¤ Critical Reads

SEC Officially Files Charges Against Egan-Jones

U.S. securities regulators charged credit-rating firm Egan-Jones and its president Sean Egan on Tuesday with making material misrepresentations to the agency in its 2008 regulatory application to rate asset-backed and government securities.

The Securities and Exchange Commission's administrative charges, which were first reported by Reuters last week after a closed-door SEC meeting, also include allegations of record-keeping and conflict of interest violations.

Lawyers for Egan-Jones have previously said they plan to vigorously defend itself against the SEC's lawsuit.

On Monday Sean Egan told reporters what he had told CNBC Thursday, that the SEC's case will not affect the independence of the company's ratings.

This 4-paragraph story was posted over at the cnbc.com website yesterday...and you just read them all.  The link to the hard copy is here...and I thank West Virginia Reader Elliot Simon for sending it.

Read more...

'Real' trading in U.S. markets is down to 16 percent; the rest is machines

Trading by "real" investors is taking up the smallest share of US stock market volumes in more than a decade, according to a recent study.

The findings highlight how US trading activity is increasingly being fuelled by fast turnover of shares by independent firms and the market-making desks of brokerages, many using high-frequency trading engines.

The proportion of US trading activity represented by buy and sell orders from mutual funds, hedge funds, pensions, and brokerages, referred to as "real money" or institutional investors, accounted for just 16 per cent of total market volume in the form of buying, and 13 per cent via selling in the final quarter of last year, according to analysis by Morgan Stanley's Quantitative and Derivative Strategies group.

This Financial Times story was posted in the clear in this GATA release late last night...and it's a must read for sure.  The link is here.

Read more...

Bud Conrad: Interest Rates Have Nowhere To Go But Up

Jim Puplava over at financialsense.com interviewed Casey Research's own Bud Conrad. Bud sees large and growing demands for credit from the federal government, which will require the Fed to continue to create a large and growing supply. This will lead to debasement of the dollar, higher inflation, and higher interest rates, all long-term negatives for the US economy. As government debt grows, the interest to be paid grows as well. If rates rise, the scenario becomes much worse.

This audio interview runs a hair over 18 minutes...and is certainly worth your time if you have it.  The link is here.

Read more...

Jim Rogers: Something Is Wrong In The Stock Market And You Better Be Worried

Commodities guru Jim Rogers was on Fox Business News yesterday afternoon predicting disaster for 2013.

"First of all, we have tax increases January 1," warned Rogers. "Secondly, we've had recession every four to six years...  Next year, it's four to six years."

"Now I've been investing for a long time and I have noticed when good news comes out and stocks go down, something's wrong. So you better be worried," warned Rogers.  "I don't know what's wrong.  But I know we've had a great first quarter.  One of the best first quarters in history.  And now good news is coming out and stocks are going down."

This video interview with Jim Rogers is imbedded in this story that was posted at the businessinsider.com website yesterday...and I thank reader Donald Sinclair for bringing it to my attention.  The link is here.

Read more...

Marc Faber Discusses Imminent Market Crash, a Recession in China, Says Fiscal Condition of US a 'Catastrophe'

This 6:28 minute video is imbedded in a Mike Shedlock article on this subject that was posted over at the safehaven.com website yesterday...and I thank Roy Stephens for his first story of the day.  The link is here.

Read more...

Nightmare week for Angela Merkel as austerity bloc crumbles

Europe's political centre is starting to crumble, replicating the pattern of the early 1930s as the crisis ground into its third year under a similar mix of fiscal and monetary contraction.

Elected governments have already been swept away - or replaced by EU technocrats without a vote, indeed to prevent a vote - in every eurozone state where unemployment has reached double-digits: Spain (23.6pc), Greece (21pc), Portugal (15pc), Ireland (14.7pc) and Slovakia (14pc).

The political carnage has been striking. Ireland's Fianna Foil, creator of the Irish free state, has lost every seat in Dublin. Greece's Panhellenic Socialist Movement (PASOK) - torch-bearers of Greek democracy since the Colonels - has fallen to 14pc in the polls and faces ruin next month.

This week the tornado has smashed into the core, bringing down Holland's government and probably the French leader Nicolas Sarkozy as well in a cacophony of anti-EU diatribes.

This Ambrose Evans-Pritchard blog was posted in The Telegraph yesterday evening...and is Roy Stephens second offering of the day.  The link to this very worthwhile read is here.

Read more...

German Chancellor Angela Merkel defends austerity in face of open rebellion in Europe

In a rare concession, the German Chancellor admitted that austerity alone would not solve the crisis but she insisted that the wave of political opposition to fiscal discipline was wrong.

"We're not saying that saving solves all problems," Ms Merkel said at a conference in Berlin. "[But] you can't spend more than you take in. You can't live your whole life this way. Everybody knows this."

Mark Rutte, the deposed Dutch prime minister, made a passionate plea to politicians to stick to his proposed budget cuts. "The problems are serious, the economy is stalling, employment is under pressure and government debt is growing faster than the Netherlands can afford," he said. "Those are the facts and nobody can run away from them. I'm standing here without pretences, it is up to parliament and the voters."

This is another item that was posted in The Telegraph yesterday evening...and is Roy Stephens third story in a row.  The link is here.

Read more...

Going Dutch: The Netherlands to abandon the euro?

The Dutch government has collapsed after failing to win coalition support for its austerity plans. Elections are set to be held in September and analysts say one of the EU’s strongest economies may bring the unified currency’s demise

Prime Minister Mark Rutte, a strong advocate of the Euro, has been trying to get the Parliament to adopt 14-16 billion euros worth of austerity cuts. The deficit slashing is aimed at getting the Dutch budget deficit under the three per cent of deficit to GDP limit established by the new EU fiscal pact.

Rutte was unable to win the support of the far-right Freedom Party, whose leader Geert Welders said his country should not fund the new European Stability Mechanism and, at the same time, be expected to implement Brussels’ budget deficit caps.

We don't want to cut spending by 14 billion euros and at the same time transfer billions of euros to Brussels for the horrible ESM emergency fund and the weak Greeks,” Welders noted.

This story was filed from somewhere in Europe in the wee hours of this morning...and is Roy's fourth offering in a row.  It's posted over at the Russian Times...and the link is here.

Read more...

La Liga debt crisis casts a shadow over on-pitch domination

This past Saturday, all eyes were on El Clasico, the showpiece event of world club football. And what an occasion it was, with the league title up for grabs. However, all is not as it seems in La Liga.

Although it boasts some of the world's biggest stars in Lionel Messi and Cristiano Ronaldo, Spanish football's debt crisis has put the league on course for economic ruin.

Both Barcelona and Real Madrid have reached the Champions League semi-finals (although both take a one-goal deficit into the second legs), and could meet in the final on May 19 in Munich. Domestic rivals Atletico Madrid, Valencia and Athletic Bilbao are in the Europa League semi-finals.

Real Madrid, which lead the Spanish league by four points, has debts of €589m (£477m), while Barcelona's stands at €578m (£473m) and Atletico's is €514m (£420m). Valencia have sold star players like David Villa, David Silva and Juan Mata to drop its own debt to €382m (£312m).

If you're a football fan [what we call soccer here in North America] this is a must read...and I thank reader Graeme Guthrie for sending me this story yesterday, which was posted over at the dailymail.co.uk website last Thursday.  The link is here.

Read more...

Dubai Debtors Go on Hunger Strike

About 20 jailed foreign businessmen have gone on hunger strike in Dubai to protest against lengthy sentences for writing checks that bounced, a criminal offence in the United Arab Emirates.

“I’ve exhausted every avenue that I can see,” Peter Margetts, 48, a former property developer, told the Financial Times from a prison pay phone. “I’ve exhausted the legal system, the lawyers have their hands tied here and they’re not going to rock the boat.”

Mr. Margetts is one of three British prisoners who started a hunger strike on Sunday. Other jailed businessmen come from Ireland, Saudi Arabia, Bahrain, Lebanon, India and Pakistan.

Many of the hunger strikers fell victim to Dubai’s once-thriving real estate market, struggling to meet their payments when boom turned to bust in 2008. Twelve face sentences of more than 20 years because each bounced check can translate into a jail term of up to three years.

This very interesting Financial Times story from yesterday ended up as a posting over at the cnbc.com website yesterday...and I thank reader Randall Reinwasser for sharing it with us.  The link is here.

Read more...

Disqualified Islamists: Egypt's Search for a Leader Plunges into Chaos

Despite its victory in parliamentary elections, Egypt's Muslim Brotherhood has been weakened in the race to elect a successor to former President Hosni Mubarak, after its two most promising candidates were disqualified. Meanwhile ordinary Egyptians, who care more about making a living than about religion, are looking for a strong leader for the country.

This very interesting read was posted on the German website spiegel.de yesterday...and gives some indication of just how deep the problems run in Egypt these days.  As one citizen put it in this article..."Egypt needs a new pharaoh."  I thank Roy Stephens for this, his last offering in today's column...and the link is here.

Read more...

Good news for gold bulls - it could be time to start buying again

The website www.sharelynx.com is a treasure trove of weird and wonderful charts, most of them gold-related.

It’s the only site I know where you can find the historical ratio of gold-to-milk prices, for example. Or where you can look at a measure of sentiment in the gold market from, say, 1983.

Nick Laird, who runs the site, pinged me an e-mail last week, which read: “This must be the low. I have rarely seen it so quiet. Normally I get at least a couple of visitors a day looking for a trial of my website. The last ten days, I’ve had two people asking”.

This article, authored by Dominic Frisby, was posted over at the moneyweek.com website yesterday...and the link is here.

Read more...

SHFE paves the way for silver futures

The Shanghai Futures Exchange (SHFE), China's largest market for commodities, issued a draft Tuesday, outlining the upcoming launch of the exchange's silver contract, China Securities Journal reported Wednesday.

The launch of silver futures trading on the SHFE will help silver-related companies hedge against silver fluctuations in the world market, give China more sway in determining global silver prices, and offer another investment option for the nation's small investors, experts told the Global Times.

China's miners, manufacturers, retailers and other enterprises, which rely on the precious metal, will undoubtedly welcome the start of domestic silver futures trading, which will allow them to hedge against fluctuating global silver prices, Li Ning, a gold analyst from Shanghai Cifco Futures, told the Global Times.

There has been a lot of talk about the silver trading platform on this exchange, I certainly hope that it lives up to its advance billing.  We'll find out soon enough, although the article doesn't mention when trading on this new futures market will begin.  I thank Washington state reader S.A. for bringing this story to our attention...and the link is here.

Read more...

Three King World News Blogs

The first blog is from Jim Sinclair...and Eric King has headlined it "Shorts Now Trapped and Gold Could Gap Up to $3,000".  The second blog is with Caesar Bryan...and it's entitled "Asia to Deploy Stunning and Massive QE".  The third blog with Richard Russell was posted on the KWN website shortly after midnight last night.  It's headlined "After the Calm Comes the Storm".

Read more...

An Open Letter to President Obama

Dear Mr. President,

It seems to me that you opened up a very large can of worms last week when you sought to combat price manipulation in the energy markets. Within that now-opened can, I believe you will find one worm made of gold and another cast in silver.

Because I prefer fair markets to the perpetually rigged variety, I do applaud the aspect of your proposal that would combat price-manipulating behavior in the futures markets by the hand of "an irresponsible few." I find it highly questionable, however, that you would limit the scope of such efforts exclusively to the energy markets, while turning a blind eye to similar abuses in other segments of the futures markets.

My friend Christopher Barker over at the Motley Fool website sent me his latest commentary that was posted on that website yesterday.  It's certainly worth the read...and the link is here.

Read more...

James Turk: Gold and Silver are still undervalued

Michael Harwath over at the German website metallwoche.de conducted an interview with GoldMoney's James Turk on the weekend...and the link to this 32-minute audio presentation is here.

Read more...

Mexico, Russia, Turkey, Kazakhstan raised gold reserves in March

Mexico added 16.8 metric tons of gold valued at about $906.4 million to its reserves in March as nations including Turkey, Russia, and Kazakhstan increased their holdings of the metal, International Monetary Fund data show.

Mexico raised its reserves to 122.6 tons last month when gold averaged $1,676.67 an ounce, data on the IMF's website showed. Turkey added 11.5 tons, Kazakhstan 4.3 tons, Ukraine 1.2 tons, Tajikistan 0.4 ton, and Belarus 0.1 ton, according to the IMF. The data shows Russia boosted gold reserves by about 16.5 tons after its central bank said on April 20th they were higher. The Czech Republic reduced bullion reserves by 0.1 ton.

This Bloomberg story was sent to me by Washington state reader S.A. yesterday...and it's certainly a must read.  The link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

The entire world economy rests on the consumer; if he ever stops spending money he doesn't have on things he doesn't need, we're done for. - Bill Bonner

With volume being as low as it was yesterday, I wouldn't read too much into Tuesday's price action in either gold or silver.  But it's tempting to fantasize how high both silver and gold would have risen if both metals hadn't run into a willing seller once the London gold 'fix' was in at 10:00 a.m. New York time.

Yesterday, at the close of Comex trading at 1:30 p.m. Eastern time, was the cut-off for this Friday's Commitment of Traders Report.  All of Monday's price action in both gold...and particularly in silver...will be in this report.  Both Ted and I were speculating about how much of an improvement we would see in the Commercial net short position in silver...and if JPMorgan et al were able to trick a bunch of the technical funds into going short during Monday's engineered price decline in that metal.  In two days we'll have our answer.

Far East price action on their Wednesday was absolutely dead.  Volumes were the lowest that I've ever seen in all my years of watching the overnight markets.  Gold volume, up until the London open, was under 7,000 contracts...and silver's net volume was still well under 800 contracts thirty minutes after trading began in London!  I would guess they would be record low volumes.  And as I hit the send button on today's missive at 5:17 a.m. Eastern time, I note that neither gold nor silver are doing much price-wise.  Although trading volumes have picked up substantially in both metals, they're still incredibly light.

It's eerily quiet out there...and I'm not exactly sure what to make of it...and I certainly have no idea which way prices are going to go from here.  But if I was forced to bet ten bucks, I'd say that we saw the lows for both gold and silver during the Comex session on Monday.  And as I said yesterday, I wouldn't bet the ranch on it, as a ten spot is all I would care to lose if I'm wrong.

If we do go lower from here, it will have nothing to do with what's happening in the real world of supply and demand...or the current goings-on in the fiat currency world...it will all have to do with the what 'da boyz' are up to.  That's the long and the short of it.

Today is the last day of the FOMC meeting...and it will be interesting to hear what "Helicopter" Ben has to say for himself...and how the precious metal markets will react, or be allowed to react to whatever he says.  So I await the Comex trading session in New York today with special interest.

Before I close, I would like to remind you one last time that, starting on Friday, Casey’s spring summit..."Recovery Reality Check"...will be held in Florida. If you’re not registered to attend, you may want to purchase the complete audio collection (available in a 20-CD set and/or MP3 downloads) so you can listen at home. The faculty presenting includes David Stockman, director of the Office of Management and Budget under President Reagan; resource investing legend Rick Rule; Casey Research Chairman Doug Casey; Harry Dent, best-selling author of The Crash Ahead; Lacy Hunt, executive VP of Hoisington Investment Management...and 26 other financial luminaries. And they are telling me if you order before the show starts on April 27th...you’ll save $100.  To learn more about the 31 financial experts and what they are presenting, you can click here...and it costs nothing to check it out.

See you on Thursday.