Gold & Silver Daily
"Another day...another not-for-profit seller at the Comex open."

¤ Yesterday In Gold & Silver

The gold price didn't do too much in early Far East trading, but managed to rally about five bucks as the morning advanced on their Wednesday.  But by 11:00 a.m. in London the price was back to unchanged.

At that point, a somewhat more substantial rally began, which ran into the usual willing seller at the 8:20 a.m Comex open.  From there the gold price didn't do much until 1:00 p.m. EDT, where it popped a few more dollars before trading more or less sideways into the 5:15 p.m. electronic close.

Gold closed the Wednesday session at $1,474.40 spot...up $21.80 from Tuesday's close.  Net volume wasn't very heavy...around 115,000 contracts.

Silver's price action was very similar, except far more subdued from a price standpoint.  Silver closed at $23.95 spot...down a penny from Wednesday.  Volume was decent...around 39,500 contracts.

The platinum and palladium charts were very reasonable facsimiles of what happened in gold and silver yesterday as well.

For the day, gold closed up 1.50%...platinum was up 1.35%...palladium up 2.06%...and silver finished down 0.04%.

The dollar index closed at 82.28 on Tuesday...and then began to drift slowly lower in late morning trading in the Far East.  That decline accelerated once London opened...and the low tick of the day [81.75] came shortly after 11:00 a.m. in New York.  The subsequent rally lasted until 5:00 p.m. in electronic trading...and then didn't do much into the close.  The index finished the Wednesday trading session at 81.91...down 37 basis points on the day.

The dollar index decline matched the gold price rise quite nicely.  Of course that relationship came to an unnatural end at the Comex open.

The gold shares gapped up about 2 percent at the open...and climbed higher from there...reaching their zenith shortly after 11:00 a.m. EDT...and from there they chopped sideways into the close.  The HUI finished up a very chunky 5.91%.

Despite the fact that the silver price finished basically unchanged from Tuesday, the shares themselves were swept along with the gold equities...and Nick Laird's Intraday Silver Sentiment Index closed up a decent 3.44%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 21 gold and 117 silver contracts were posted for delivery on Friday within the Comex-approved depositories.  In silver, the only short/issuer of note was ABN Amro with 113 contracts...and the two biggest stoppers were JPMorgan Chase and Canada's Bank of Nova Scotia, with 36 and 65 contracts respectively.  The link to yesterday's Issuers and Stoppers Report is here.

As has been the case for the last five months, GLD was down again...this time by 203,068 troy ounces.  SLV went the other way, as 289,715 of silver were added by an authorized participant yesterday.

The U.S. Mint had a tiny sales report yesterday.  They sold 2,000 ounces of gold eagles...and 1,000 one-ounce 24K gold buffaloes.

Over at the Comex-approved depositories yesterday, they reported receiving 5,062 troy ounces of silver...and shipped 336,441 troy ounces out the door.  The link to that activity is here.

In gold, the Comex-approved depositories reported receiving 60,729 troy ounces...and shipped 121,701 troy ounces out the door.  The link to that activity is here.

No charts today...but here's your daily "cuteness quota"

I have the usual number of stories...and a goodly number of them are gold related...and quite a few of those are must reads as well, so I hope you have the time for them all.


¤ Critical Reads

Fed Council Warned of Credit Risk, Asset Price Bubble

A Federal Reserve panel of bankers warned policy makers in February that record stimulus was pushing financial institutions to take on more credit risk and creating a “bubble” in the price of U.S. farmland.

“The margin pressures that the low-rate environment has put on financial institutions, coupled with dramatically increased compliance and other infrastructure costs, have caused many to seek higher returns by accepting greater interest-rate or credit risk,” the bankers said on Feb. 8, following a Federal Open Market Committee meeting on Jan. 29-30.

The minutes of the meeting by the Federal Advisory Council trace how the 12 bankers’ views evolved from opposition to the Fed’s announcement of new bond buying in September to support for Fed efforts in February to boost an economic expansion beset by a “drag” from fiscal tightening.

This Bloomberg story was posted on their website late on Tuesday evening MDT...and I thank Manitoba reader Ulrike Marx for today's first story.


Obama may back FBI plan to wiretap web users

The Obama administration, resolving years of internal debate, is on the verge of backing a Federal Bureau of Investigation plan for a sweeping overhaul of surveillance laws that would make it easier to wiretap people who communicate using the Internet rather than by traditional phone services, according to officials familiar with the deliberations.

The F.B.I. director, Robert S. Mueller III, has argued that the bureau’s ability to carry out court-approved eavesdropping on suspects is “going dark” as communications technology evolves, and since 2010 has pushed for a legal mandate requiring companies like Facebook and Google to build into their instant-messaging and other such systems a capacity to comply with wiretap orders. That proposal, however, bogged down amid concerns by other agencies, like the Commerce Department, about quashing Silicon Valley innovation.

The 'thought police' over at The New York Times changed the headline to read a more friendly "U.S. Weighs Wide Overhaul of Wiretap Laws".  It was posted on their website yesterday...and I thank U.A.E. reader Laurent-Patrick Gally for sending it along.


Gun crime plunges, though most Americans think it has risen

Gun-related homicides and other crimes involving guns have fallen sharply over the last two decades in the United States, but most Americans believe firearms crime is higher now than 20 years ago, according to an analysis and a separate poll released on Tuesday.

Some 11,101 gun-related homicides were reported in the United States in 2011, a figure that is down 39 percent from the 1993 peak, the Justice Department reported. Nonfatal firearm crimes declined by 69 percent to 467,300 in the same period.

Amid an intense national debate about gun control - which flared anew in the wake of a December shooting at an elementary school in Newtown, Connecticut, that left 26 people dead - some 56 percent of Americans believe that gun crime is higher now than it was 20 years ago, the Pew Research Center said its poll showed.

This Reuters piece was posted on their website late Tuesday afternoon EDT...and I found it in yesterday's edition of the King Report.


In Argentina, More Official Lying About Basic Economic Facts

How much inflation is there? Who can buy dollars legally? Who really runs the economy? All are simple questions, but in Argentina they can be major puzzles.

Lately they’ve tripped up even some top officials who are otherwise well-trained at giving shifty answers to uncomfortable issues.

Last Friday it was Angel Toninelli, one of the directors general of the Administración Federal de Ingresos Públicos, the national tax agency, who breached the government’s wall of silence. The black-market rate for buying U.S. dollars is 90 percent higher than the government rate, which means that foreign currency obtained at the official rate is a prized commodity.

Yet, speaking at a conference in the northwestern province of Tucumán that brought together top tax-agency officials and accountants from across the country, Toninelli admitted that he did not really understand the inner workings of the approval process for obtaining foreign currency to travel abroad.

“It is a formula that changes periodically,” he said in answer to a question. “It contains ingredients that come from the central bank, the A.F.I.P., and others that come from God,” he explained, adding, “It isn’t the Coca-Cola formula, but it’s very similar.”

This rather amusing story appeared on The New York Times website early yesterday morning...and now sports a shiny new headlined..."Lie to Me".  I thank Phil Barlett for sharing it.


Nigel Lawson calls time on the three-pint Eurosceptic heroes

The former Tory chancellor is right about leaving the EU, and closet sceptics will have to accept it, says Ukip's leader.

It’s a lot less lonely now. When a group of unknown political players set up Ukip in 1993, the idea that the UK might someday re-establish its independence and leave the European Union was at best a minority pursuit. Now, no less a man than Lord Lawson advocates the idea, and validates Ukip’s arguments. Clearly nobody now doubts that it is a valid position. The reaction to Lord Lawson’s view has been to ask what damage it will do internally, to David Cameron’s embattled Conservative Party, and there has been speculation about the timing of the statement.

Famously, “Dave” told his troops that they shouldn’t “bang on about Europe”. He was trying to defang an issue that had bedevilled the Tory party since the Maastricht days. But now, with this intervention, and the last week or so of headlines, the genie is well and truly out of the bottle. He might not be banging on about Europe, but everybody else decidedly is. Lord Lawson’s intervention has just added to the legitimisation of the debate and has highlighted the historic split.

This must read commentary by Nigel Farage was posted on the Internet site on Tuesday evening...and I thank Roy Stephens for bringing it to our attention.


Stodgy Netherlands is nation that'll blow up the euro

Which euro-zone country is most deeply in debt?  The profligate Greeks, with their generous state-funded pensions?  The Cypriots and their banks stuffed with dodgy Russian money?  The recession-hit Spaniards...or the boom-and-bust Irish?

None of the above.  Actually it's the sober, responsible Dutch. 

Consumer debt in the Netherlands has hit 250% of available income, one of the highest levels in the world. In Spain, by comparison, it has never gone above 125%.

The Netherlands has turned into one of the most heavily indebted countries in the world. It has slumped into recession and shows very little sign of coming out of it. The euro crisis has been dragging on for three years now but so far has only infected the peripheral nations within the single currency. But the Netherlands is a core member of both the euro and the European Union. If it can’t survive in the euro zone, then the game really will be up.

This very alarming story appeared on the Internet site early Wednesday morning EDT...and I consider it a must read.  I thank Casey Research's own Louis James for sending it around yesterday.


ECB looking at buying bad loans from southern Europe: report

The European Central Bank is looking into buying bad loans from southern Europe to relieve the pressure on banks in crisis-stricken countries, the German newspaper Die Welt reported.

The ECB wants to revive asset-backed securities (ABS) which allow banks to pass at least some of the credit risk on to other investors as they try to boost their capital and liquidity buffers to adapt to new regulatory standards - one reason for their reluctance to lend.

In an advance copy of a report due to be published on Wednesday, Die Welt said the ECB not only wanted to improve the framework for asset-backed securities but, citing central bank sources, said the ECB's Governing Council was also discussing whether the central bank could itself buy these securities.

This Reuters story was posted on their website early Tuesday morning Eastern Daylight Time...and it's another news item I found in yesterday's edition of the King Report.


Bulgarian Spring: Self-Immolations Highlight a Desperate Electorate

Protests over the last three months in Bulgaria have included several self-immolations meant to draw attention to corruption among political elites with ties to organized crime. But few expect Sunday's parliamentary elections to change much.

At a little before 7:30 a.m. on February 20, Goranov turned up in front of the mayor's office carrying a gas canister and a banner. The city council should resign, he shouted before pouring gasoline over his body and setting himself on fire.

Goranov was not the first or last person to set himself on fire in Bulgaria recently. Five other desperate men have also committed suicide by self-immolation, but the case of the 36-year-old was the most widely publicized. He had long been an activist against corruption and the abuse of power, and his intention had been to protest against the government.

Prime Minister Boiko Borisov was already forced to resign in February in response to pressure from the street. Two weeks ago, a scandal broke that also weighs heavily on the former premier. A wiretapped conversation reveals that he apparently tried to cover up a corruption case. Bulgaria will vote for a new parliament this Sunday, but according to a poll by the news agency Novinite, some 41 percent of citizens are convinced that the election will be rigged. Indeed, there is little hope that it will bring real change. Borisov is running again, but the opposition is seen as being equally corrupt.

This article was posted on the German website yesterday...and is a very disturbing read.  I thank Roy Stephens for his second offering in today's column.


China Opens New Front in Currency War as Yuan Speculation Distorts Export Data

China's central bank signaled on Wednesday it was prepared to change its monetary strategy to fend off inflows of speculative capital, as Beijing struggles to control a tide of cash washing in from overseas markets.

The move came as April exports blew past expectations, which appeared on the surface to indicate that both China's economy and global demand were on the mend. But economists were quick to suspect the figures were artificially inflated by investors who were disguising speculative bets on the yuan currency as trade payments.

Faced with the risk that such inflows could cause the yuan to appreciate so quickly that it destabilizes exports and the broader economy, the People's Bank of China (PBOC) has begun intervening heavily in the domestic currency market this year, buying up dollars and selling yuan.

This article from yesterday was sent to me by West Virginia reader Elliot Simon...and it's worth skimming.


Bank Of Korea Delivers The Latest In A Wave Of Surprise Interest Rate Cuts To Hit Global Markets This Week

The Bank of Korea just unexpectedly cut its key interest rate to 2.5% from 2.75%.

This is pretty remarkable, considering that market economists have already been surprised by two other central bank rate cuts this week.

On Monday, the Reserve Bank of Australia unexpectedly lowered its key interest rate to 2.75% from 3%.

Earlier Wednesday, the National Bank of Poland unexpectedly cut its key interest rate to 3% from 3.25%.

These three surprise rate cuts follow two rate cuts made last week: on Thursday, the ECB cut to 0.5% from 0.75%, and on Friday, the Reserve Bank of India cut to 7.3% from 7.5%.

You've already read most of this very short story that was posted on the Internet site yesterday evening...but the rest is worth reading as well.  I thank Roy Stephens for his final offering in today's column.


Two King World News Interviews

The first is with Dr. Stephen Leeb...and it's headlined "China Moving to Dominate the World With Gold Purchases".  The second commentary is with Jeffrey Saut.  It's entitled "ECB to Stun the World With Surprise Q.E...and Gold's Next Move".


Vietnamese sees Gold as foreign currency

Lack of inter connectivity for Vietnam's currency, the dong could be the reason for large price gap between global and domestic gold prices, SBV chief said.

According to State Bank of Vietnam governor Nguyen Van Binh, if the foreign exchange market is not interconnected, why should the gold market be interconnected.

The Vietnam dong has not been floated on the international foreign exchange market yet. As a result, the domestic and international foreign exchange markets are not interconnected, Binh said.

Gold, in fact, can essentially be considered a foreign currency here, because by nature Vietnam is a net gold importer.

This very interesting read, filed from Hanoi yesterday, was posted on the Internet site yesterday afternoon IST.  I thank Ulrike Marx for her final contribution to today's column.


Chinese women aren't taking Buffett's advice on gold

On Sunday afternoon a microblogger in Beijing logged into Sina Weibo, China's leading social media platform, to gossip about the "auntie" next door. It's a broad term of respect for an older woman, and his followers understood precisely what he meant when he tweeted, "The auntie next door used all of her retirement savings to buy gold. When asked what she'd do if prices keep dropping, she replied that if everyone kept buying gold, the price wouldn't drop. ..."

This might strike a conservative investor as reckless. But in China, where gold has long been a national obsession, a mid-April record crash in global gold prices has been seen as an unprecedented buying opportunity. According to reports in China, Chinese have purchased 300 tons of gold worth more than $16 billion since the crash.

Photos of crowds packing jewelry shops and emptying their shelves are now regular features in the news media. On Monday a police officer in Shanxi province tweeted, in regard to his actual aunt: "My aunt's family has a gold store, and my colleague who's in the market for some gold for his mother asked if I could get him a cheap price. I asked, and my aunt said first come and take a look to see if anything catches your eye. But at the moment the display cases are empty, and they are unable to get new inventory. All I can say is that the power of the Chinese is frightening."

This article, filed from Shanghai, was posted on the Bloomberg website mid-afternoon Mountain Daylight Time yesterday...and it definitely falls into the must read category.  I borrowed it from a GATA release yesterday.


Bill Holter: Yes, Please Investigate

Yesterday (as reported by Zero Hedge) Bart Chilton, one of the CFTC commissioners said that they need to investigate “Bitcoin” because as he put it, “This is not monopoly money – real people have real risk in these instruments.”  Yes very “real” so to speak.  This is a “cyber” currency with no “touchy feely” actual coins, there are no derivatives (yet) like options or futures and as for the “size” of this market we are talking about just north of a whopping $1 billion.  I don’t mean to sound crass here but $1 billion?  Jon Corzine stole $1.6 billion just a couple of years ago.  He took this money from “real people” unless you think of farmers as alien holograms.  Here we are nearly 2 years later and we hear nothing but crickets about MF Global and the dishonorable Jon Corzine walks the streets a free man.  What’s up with this?

No I haven’t forgot about the other investigation, you know… the one nearly 5 years old looking into the forced silver crash of 2008.  I was worried a month or two back that the statute of limitations would run out before the CFTC finished their “extensive” investigation and let the culprits off the hook, that’s no longer a problem as the clock just got reset with the latest blatant manipulation.  How do Bart Chilton and the rest of the regulatory crew explain the 2013 instant replay of 2008?  Price gets crashed from “sellers” yet what supposedly was sold can only be bought at a 30% premium… IF you can find it at all?  We are still waiting… and now “Bitcoin” is on the front burner I’m sure that silver (and gold) will not be addressed until AFTER exchange defaults occur.  For that matter, they won’t be reported on after the fact either because we will then have bigger, MUCH BIGGER problems facing us… like where the next meal will come from.

On Saturday...and again yesterday in his mid-week commentary...Ted Butler railed against the CFTC...taking direct aim at both Gary Gensler and Bart Chilton.  Maybe he'll post his commentary about this in the clear at some point.  But for the time being, this piece by Bill Holter is well worth reading...and spot on as well.  It was posted on the Internet site on Tuesday...and I thank Washington state reader S.A. for pointing it out.


Jim Sinclair: Liberation of gold from the paper market is at hand

Jim Sinclair writes tonight that the emancipation of the physical gold market from the fraudulent paper market is at hand. "Cyprus was the key that opened the door to the end," Sinclair writes. "The knuckle draggers at the Comex who are the gold banks have more than shot themselves in the foot with their gold sale. They have taken a direct hit in the head."

The very brief commentary is headlined "Emancipation Of Physical Gold From Paper Gold Is At Hand"...and it was posted on the Internet site yesterday.  It's another piece that I extracted from a GATA release yesterday evening.


Gold plunge was not natural market event, fund manager Auerback says

The recent plunge in the gold price was not a natural market event but likely the product of "collusion" between bullion banks and hedge funds, market analyst and fund manager Marshall Auerback tells financial writer Lars Schall. The interview was conducted for Matterhorn Asset Management's GoldSwitzerland Internet site.  I thank Chris Powell for wordsmithing this introductory paragraph.


Casey Research: Official Gold Numbers Don’t Add Up...Chris Martenson

Having just put the finishing touches on this month's The Casey Report – for which Casey Research Chief Economist Bud Conrad combed through reams of data to figure out what really caused gold's recent precipitous drop (as well as predict where gold is going next) – the specter of paper-gold market manipulation is fresh in my mind.

This week's article touches on that very topic, examining the possibility that the Fed or Treasury may have leased out over 4,000 tonnes of US gold unbeknownst to the public, and thus holds much less gold than we've been told.

Before I go any further, let me acknowledge the treacherous waters into which I'm wading. I realize that by discussing gold manipulation, I'm begging for controversy. Both sides of this debate feature passionate believers, and personally, I find both sides convincing. But in the interest of full disclosure, I do think gold is manipulated to some extent, if only because every other investment – stocks, housing, bonds (via interest rates) – is too. Why should gold be any different, especially when a rising gold price represents the single most credible threat to the US government's fiat hegemony?

This lengthy commentary was posted in yesterday's edition of the Casey Daily Dispatch.  If you've been in the GATA camp for the last ten years or so, you won't find anything new here, as it's basically a re-hash of other researcher's findings.  But don't let that fact discourage you from giving it the attention it deserves, as it's definitely worth reading...especially Martenson's concluding comments.


MineWeb's Lawrence Williams: GATA gaining credence

MineWeb's Lawrence Williams expresses puzzlement that immense demand for real metal seems to be having no effect on what is quoted as the price of gold. "All this gives more and more credence to the GATAs of this world who genuinely believe that the gold price is suppressed by governments, some central banks, and their bullion bank allies," Williams writes. "Sales of paper gold to suppress the futures market do seem to be key to the current price patterns -- and the amounts of money (admittedly paper again) which are required to do this would seem to suggest some kind of 'conspiracy' to keep the gold price under control as an economic weapon."

Lawrie's commentary is headlined "Mr. Spock Would Definitely Find Current Gold Price Levels Illogical"...and it must have been posted on the Internet site shortly after I filed yesterday's column, or I would have picked it up, as their Internet site is the last news source I check before I hit the 'send' button.  It's another story I borrowed the Internet site...and I thank Chris Powell for doing all the heavy lifting on our behalf...and It's almost pointless to say that it's a must read from one end to the other.  I consider this essay to be one of the best commentaries that Lawrie has written since I've been following his work.



¤ The Funnies

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¤ The Wrap

It's time for the CFTC to come clean about silver and stop pretending it is investigating. It will be better for everyone (except holders of long COMEX contracts) for the CFTC to simply shut down this crooked exchange instead of letting the manipulation continue. At one time I did think the exchange could be reformed, but I no longer feel that is possible. The corruption goes too deep. It’s bad enough that an important American financial institution is corrupt beyond repair, but it is more a loss that the COMEX has dragged the CFTC down with it.

In my latest article, I referred to the commissioners and other high officials of the agency as traitors to the American people. I still feel that way. Not only are none of them fit to hold their current positions, they should never hold any other public office again. - Silver analyst Ted Butler...08 May 2013

Another day...another not-for-profit seller at the Comex open.  We've seen it all before.

As you can tell from the quality and quantity of stories that have appeared on the Internet since the engineered price declines in mid-April; any precious metal commentator...except those from the willfully acknowledge the presence of a not-for-profit seller in certain commodities, particularly the precious metals.  This fact has now become so widespread, that sooner or later someone [or a government or two] are going to put the paper market to the test...and that may be underway right now.  And if you haven't read Lawrie Williams' excellent commentary on this issue posted above, now would be a good time to rectify that situation.

The speculation swirling around the World Wide Web yesterday from several quarters is that all this gold coming out of GLD is heading for the Far East in general...and China in particular.  The off-take we know the off-take that has yet to be a staggering amount...and you have to ask yourself the question..."Where the #%*& is all this gold coming from?  Once again we have questions with no answers...only speculation.

How this situation resolves itself in the fullness of time is the big unknown...but when it does come to a head, I expect it to do so in rather spectacular fashion.

Not much happened in gold in Far East trading on their Thursday...but not quite the same thing can be said for silver.  Volumes were 'average' in gold...and mostly of the HFT variety.  But silver's volume was much heavier, as a strong rally that began around 10:00 a.m. in Tokyo took a few hours to get under control...but 'da boyz' got the job done.  Heaven only knows how high silver would have risen if given free rein, which it obviously wasn't. The dollar index is comatose.

And as I hit the 'send' button at 5:10 a.m. Eastern time, gold is down about five bucks...and silver is back to about unchanged.  Volumes have changed very little from an hour or so ago, so all is quiet...for the moment.  The dollar index is now down about 10 basis points.

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