Gold & Silver Daily

¤ Yesterday In Gold & Silver

Gold began to rally the moment that trading began in New York at 6:00 p.m. on Sunday evening, but wasn't allowed to get far---and by 10 a.m. Hong Kong time on their Monday morning, the gold price was back to unchanged.  It's low tick, such as it was, came shortly before 9 a.m. in London---and from there the price chopped quietly higher in light trading, with some activity also occurring after the 1:30 p.m. EDT COMEX close.

The low and high ticks were recorded by the CME Group as $1,178.60 and $1,191.00 in the April contract.

Gold finished the Monday session in New York at $1,189.30 spot, up $6.90 on the day.  Gross volume was a bit over 200,000 contracts, but it netted out to a reasonably light 106,000 contracts, as the roll-overs out of the April contract intensify.

The price pattern in silver was very similar---and it appeared that a not-for-profit seller showed up on a couple of occasions during the Monday session to put the brakes on the price when it was about to get to frisky to the upside, especially in the thinly-traded electronic session after the COMEX close.

The low for silver came the same time as the low in gold---and the high and low ticks were reported as $16.61 and $17.09 in the May contract.

Silver closed in New York yesterday at $16.975 spot, up two bits from Friday.  Not surprisingly, the net volume was a lot heavier at 40,000 contracts as the technical funds in the Managed Money category are now covering their short positions in earnest---and possibly going long as well.

The platinum chart looked suspiciously similar to the gold chart---and that white metals closed at $1,145 spot, up 11 bucks from Friday.

The palladium price didn't do a whole heck of a lot, but rallied a bit starting at 1 p.m. Zurich time, which was 8:00 a.m. in New York.  That budding rally got cut off at the knees twenty minutes later when the COMEX opened---and by 1 p.m. was down ten bucks off its high tick, but rallied into the close, finishing the day down only a dollar at $774 spot.

The dollar index closed late on Friday afternoon in New York at 97.92---and chopped a bit higher to its 98.20 high tick which came shortly after London opened---and it was pretty much all down hill from there, as the index finished the Monday session at 96.95---and down 97 basis points on the day.

One would have thought, we some justification in a free market, that precious metal prices would have responded more favourably to such a huge down-move in the dollar index.  But these aren't free markets we're dealing with---as they are set by JPMorgan et al in the COMEX futures market.

And here's the 6-month US Dollar Index chart so you can put yesterday's action in some sort of perspective once again.

The gold stocks gapped up a bit at the open---and then chopped very quietly higher, finishing the day up 2.04 percent.

The silver equities opened unchanged, but blasted higher, only to get sold down until around 11:15 a.m. in New York.  After that they rallied slowly but steadily, finishing just off their highs when that not-for-profit seller showed up in the metal itself just before the close.  Nick Laird's Intraday Silver Sentiment closed up 2.41 percent.

Considering the price action in the metal itself, I'm somewhat disappointed in the share price action of the companies that dig the stuff out of the ground.

The CME Daily Delivery Report showed that zero gold and 106 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  Once again it was Jefferies as the only short/issuer---and JPMorgan stopped 63 contracts in its in-house [proprietary] trading account once again.  UBS was a distant second with 19 contracts stopped.  The link to yesterday's Issuers and Stoppers Report is here.

I'm amazed, that with only a week left in the March delivery month, that only 1 gold contract has been posted for delivery so far---and there's still a huge number of silver contracts [relatively speaking] still open in March left to deliver.  As I said last week, one wonder what the short/issuers have to gain by holding out until the very last minute.

The CME Preliminary Report for the Monday trading session showed that March open interest in gold remained unchanged at 108 contracts.  But in silver, March open interest actually increased by 63 contracts---and that's over an above the 39 contracts that were subtracted because of today's scheduled delivery that was posted in Friday's report.  That's over a 100 contract difference in total---500,000 ounces.  There are now 604 silver contracts remaining in March.

There were no reported changes in GLD yesterday---and as of 6:35 p.m. EDT yesterday evening, there were no reported changes in SLV, either.  But when I checked back at 3:55 a.m. EDT this morning, I noted that an authorized participant withdrew 1,434,861 troy ounces.  This is the second withdrawal in as many days.  Silver should be pouring into this ETF, not out---so it's a good bet that JPMorgan is shorting SLV shares in lieu of depositing real metal once again.

There was a sales report from the U.S. Mint yesterday.  They sold 534,000 silver eagles---and that was it.  Once again these sales weren't because John Q. Public is buying them, as retail bullion sales are tepid all across North America---and that's a generous description of the current situation.

There was no activity in gold over at the COMEX-approved depositories on Friday---kilobar stocks, or otherwise.  But it was another busy day in silver, as 537,978 troy ounces were reported received---and 601,237 troy ounces were shipped out.  The lion's share of the receipts was at Scotiabank's vault---and all of the silver shipped out came out of HSBC USA.  The link to that action is here.

Here's an interesting chart that Nick Laird sent my way yesterday evening---and the title pretty much says it all.  Over 90 percent of U.S. treasuries in foreign hands are held by only twenty-five countries, but over 50 percent are held by just four countries.  Note that China's holdings haven't changed much since mid 2010---and have been declining at a snail's pace for the last couple of years.  The 'click to enlarge' feature is useful here.

For a Tuesday column, I don't have all that many stories for you today---but that may change as the evening and morning progress.


¤ Critical Reads

The world's next credit crunch could make 2008 look like a hiccup: The Telegraph

A solar eclipse, a super moon, the FTSE 100 breaching 7,000 and the U.S. Federal Reserve speaking in tongues - truly some kind of financial apocalypse must be nigh. Well, maybe.

We are certainly living in strange times. An unprecedented monetary experiment is coming to a staggered end and no one knows the potential repercussions - a plague of frogs cannot be entirely ruled out.

For the time being, the markets remain sanguine, expecting, for example, a gentle increase in the Bank of England’s main interest rate to just 1.5pc by the end of the decade. And, who knows, maybe the markets are right.

But maybe it’s too quiet. Last week, Ray Dalio, the founder of the $165bn (£110bn) hedge fund Bridgewater Associates, wrote a widely-circulated note warning his clients that the US Federal Reserve risked setting off a 1937-style crash when it starts raising interest rates again.

This commentary put in an appearance on the Internet site at 7:10 p.m. GMT on Monday evening, which was 3:10 p.m. EDT.  I found it in this morning's edition of the King Report---and it's worth your time.


French Submarine 'Sinks' Entire U.S. Aircraft Carrier Group During War Games

A series of joint naval drills between the United States and France recently didn't quite turn out the way the US, no doubt, expected. The practice scenario ended with the French nuclear submarine that was acting the part of an enemy ship "sinking" the American aircraft carrier and most of its escort.

The exercises were meant to test the newly upgraded carrier, which had undergone a four year, $2.6 billion overhaul, ahead of the Strike Group's deployment.

And all those exercises went well while SNA Saphir was on the American side of the imaginary conflict, in which fictional states were attacking US economic and territorial interests. The French sub supported the American vessels in anti-submarine warfare drills. 

However, the second phase of the exercises found the French ship playing on the enemy side, charged with a mission to find and attack the Theodore Roosevelt.

And so it did, sneaking deep into the defensive screen of the Strike Group, avoiding detection by the American anti-submarine warfare assets, and, on the last day of the drill, "sinking" the Roosevelt and most of it's escort.

This cute story appeared on the Internet site back on March 6---and I got this story from a reader on Sunday who wishes to remain anonymous.


"Revolution, War, Taxes" - The Complete Paul Tudor Jones Speech

Paul Tudor Jones ruffled more than a few feathers last week when he warned first that "we're in the middle of a disastrous market mania," and second he explained that "this gap between the 1 percent and the rest of America, and between the US and the rest of the world, cannot and will not persist," concluding that "historically, these kinds of gaps get closed in one of three ways: by revolution, higher taxes or wars. None are on my bucket list." His thesis is simple and profound as the following full speech shows...

Ultimately, Tudor hopes, the free market will take hold and reward the companies that are the most just...“Capitalism has driven just about every great innovation that has made our world a more prosperous, comfortable and inspiring place to live. But capitalism has to be based on justice and morality…and never more so than today with economic divisions large and growing.

Paul's TED speech runs for 10:24 minutes---and it's definitely worth your time.  It was posted on the Zero Hedge website at 5:30 p.m. EDT on Monday---and I thank Dan Lazicki for sharing it with us.


Hacking BIOS Chips Isn’t Just the NSA’s Domain Anymore

The ability to hack the BIOS chip at the heart of every computer is no longer reserved for the NSA and other three-letter agencies. Millions of machines contain basic BIOS vulnerabilities that let anyone with moderately sophisticated hacking skills compromise and control a system surreptitiously, according to two researchers.

The revelation comes two years after a catalogue of NSA spy tools leaked to journalists in Germany surprised everyone with its talk about the NSA’s efforts to infect BIOS firmware with malicious implants.

The BIOS boots a computer and helps load the operating system. By infecting this core software, which operates below antivirus and other security products and therefore is not usually scanned by them, spies can plant malware that remains live and undetected even if the computer’s operating system were wiped and re-installed.

This very interesting article put in an appearance on the Internet site last Friday---and I thank Norman Willis for sending it along.


Ukraine oligarch ‘top cash contributor’ to Clinton Foundation prior to Kiev crisis

From 2009 up to 2013, the year the Ukrainian crisis erupted, the Clinton Foundation received at least $8.6 million from the Victor Pinchuk Foundation, which is headquartered in the Ukrainian capital of Kiev, a new report claims.

In 2008, Viktor Pinchuk, who made a fortune in the pipe-building business, pledged a five-year, $29-million commitment to the Clinton Global Initiative, a program that works to train future Ukrainian leaders “to modernize Ukraine.” The Wall Street Journal revealed the donations the fund received from foreigners abroad between 2009-2014 in their report published earlier this week.

Several alumni of the program have already graduated into the ranks of Ukraine’s parliament, while a former Clinton pollster went to work as a lobbyist for Pinchuk at the same time Clinton was working in government.

Between 2009 and 2013, the very period when Hillary Clinton was serving as U.S. secretary of state, the Clinton Foundation appears to have received at least $8.6 million from the Victor Pinchuk Foundation.

This interesting, but not surprising article appeared on the Russia Today website on Sunday afternoon Moscow time---and my thanks to Roy Stephens for his first contribution to today's column.


Bank of Canada, Finance Minister, and Others Face Lawsuit for Alleged IMF Conspiracy

It would be easy to assume the people suing the Queen of England, the Bank of Canada, and three ministers for a conspiracy against “all Canadians” wear tinfoil hats.

They don’t. They may be conspiracy theorists, but they are also intelligent, thoughtful people who have a lawyer with a history of winning unlikely cases.

And despite the government’s best efforts to have this case thrown out, it’s going ahead after winning an appeal that overturned a lower court’s ruling to have it tossed and surviving a follow-up motion to have it tossed again.

The government has one more chance to have it thrown out through an appeal at the Supreme Court, but that has to be filed by Mar. 29 and that looks unlikely.

This story, filed from Toronto, easily falls into the must read category---and it was posted on Internet site last Thursday---and I thank Ken Metcalfe for bringing it to our attention.


‘Can’t take any more’: Thousands protest in Dublin against proposed water charges

Tens of thousands of protesters took to the streets of Dublin on Saturday to demand the government drops its plan to introduce new water charges. Opponents say they can’t afford to pay and it is an austerity measure by the Irish government.

The organizers of the rally, ‘Right2Water’ said around 80,000 attended the protest. However local police said the figure was nearer 20,000 to 30,000, according to the Irish Times. This was the fourth and largest mass protest since October, when the Irish government, which is seeking re-election next year, decided to start charging the public for the water they use.

Irish politician Ruth Coppinger urged the protesters not to give in and pay the water charge. She believes that if people do not pay up, then the government will eventually be forced to drop the controversial charge.

This article showed up on the Russia Today website on Sunday at 9:55 a.m. Moscow time, which was 2:55 a.m. in Washington.  I thank reader M.A. for finding it for us.


French President: Russia Is a "Friendly Country"

Russia is a "friendly country" for France, French President Francois Hollande told the Society magazine in an interview published on Friday.

"For me, Vladimir Putin is first of all the president of Russia," Hollande stressed, commenting on his relations with the Russian leader. "When I talk to him, I talk to Russia, and this is the country that I respect, a great country, a friendly country," he said.

Hollande admitted there are some disagreements between Moscow and Paris. "President Putin has his own interests, own vision, his own methods and things he says are not always commonly accepted," the French leader noted. "That is why I decided to talk openly with the head of state who is always speaking directly," he added.

This short article, filed from Paris, was posted on the website on Saturday---and it's the second offering of the day from Roy Stephens.


Switzerland, Luxembourg apply for China-led infrastructure bank

Despite negative noises from the U.S., Switzerland and Luxembourg have become the latest European nations to apply to join the Beijing-led Asian Infrastructure Investment Bank (AIIB), the Chinese Finance Ministry announced.

Earlier in March, the E.U.’s leading economies – the U.K., France and Germany –announced plans to participate in the new international financial institution.

China's Finance Ministry released a statement on Friday saying it welcomes the Swiss decision to apply.

Switzerland is to become the bank’s founding member later this month if other nation members involved approve its candidacy.

This news story, was posted on the Russia Today website on Saturday afternoon Moscow time---and it's another offering from Roy Stephens.


Nazi Extortion: Study Sheds New Light on Forced Greek Loans

Loukas Zisis, the deputy mayor of Distomo, a village nestled in the hills about a two hour drive from Athens, says he thinks about the Germans every day. On June 10, 1944, the Germans massacred 218 people in Distomo, including dozens of children. Zisis, who is just 48 years old, wasn't yet born at the time of the attack.

"We can't forget the Germans," Zisis says. They came to Distomo 71 years ago with their guns. "Today they are exerting power over our village with their banks and policies," he adds. He's standing in the wind on a rocky ledge, a small man in a leather jacket, and looking out over the town. Two-thousand people live here.

The massacre, which continues to shape the place today, was one of the most brutal crimes committed by the Nazis in Greece, with the carnage lasting several hours. For decades, a trial over the massacre wound its way through the courts at all levels in Greece and Germany. Greece's highest court, the Areopag, ruled in 2000 that Germany must pay damages to Distomo's bereaved.

"But we are still waiting," says Zisis. "There has been no compensation."

This very interesting essay appeared on the German website on Saturday---and I thank Roy Stephens for his second story in a row.  The original headline read "Greek Study Provides Evidence of Forced Loans to Nazis".


Tsipras Heads to Berlin as Greece Prepares for Decisive Week

German Chancellor Angela Merkel welcomed Greek Prime Minister Alexis Tsipras to Berlin with military honors amid growing speculation that the meeting will ease a deadlock between Greece and its creditors and help unlock aid.

Stocks and bonds rose on Monday ahead of Tsipras’s arrival at the Chancellery, the first official visit by the Syriza leader since his Jan. 25 election on a platform of ending the German-led austerity tied to Greece’s 240 billion-euro ($262 billion) bailouts.

After the anthems of each country were played by the German military band, Merkel led Tsipras up the red carpet and into the Chancellery, where the two leaders are holding talks, followed by a press briefing and then a working dinner.

This Bloomberg story, filed from Athens, was posted on their Internet site at 6:29 a.m. Denver time yesterday morning---and the contents of the 2:54 minute video clip---and the story underneath it---vary by quite a bit.  I consider the video clip to be worth watching, especially at the end when they start talking about the cash drain on Greece's banks last week.  The story also sports a new headline "Merkel Treats Tsipras to Red Carpet in Sign Tensions Ease".  I found this news item in yesterday's edition of the King Report.


'There are no madmen in E.U.' to send peacekeepers to Ukraine – Lavrov

The E.U. would not send a peacekeeping force to Ukraine unless the rebels endorse such a mission, Russian Foreign Minister Sergey Lavrov said, commenting on Kiev’s request for a foreign ‘police force.’

"I believe there are no madmen in the E.U. [Previously the E.U. deployed peacekeepers] only in situations in which, as in the Balkans, all sides of a conflict agreed to it. The E.U. would never go to any region – be it southeastern Ukraine or anywhere else – unless the conflicting sides agree to such a mission," Lavrov said in an interview to Rossiya 1 channel's Sergey Brilev on Saturday.

Russia's foreign minister added that Kiev should talk to the self-proclaimed Lugansk and Donetsk People’s Republic rather than Moscow to secure their backing for peacekeepers and not ignore them as it is doing at the moment.

This is another story from the Russia Today Internet site---and this one appeared there on Saturday morning Moscow time---and once again it's courtesy of Roy Stephens.


Top Russia Scholar Stephen Cohen: War between NATO and Russia a Real Possibility

Professor Stephen Cohen is one of the most respected authorities on Russia among American and Western scholars. He is an American scholar of Russian studies at Princeton University and New York University. His academic work concentrates on modern Russian history and Russia's relationship with the United States.

This 14:57 minute video speech showed up on the website on Sunday sometime--and it's a must listen for sure---and my thanks go out to Roy Stephens once again.


Russia threatens to aim nuclear missiles at Denmark ships if it joins NATO shield

Russia threatened to aim nuclear missiles at Danish warships if Denmark joins NATO's missile defense system, in comments Copenhagen called unacceptable and NATO said would not contribute to peace.

Denmark said in August it would contribute radar capacity on some of its warships to the missile shield, which the Western alliance says is designed to protect members from missile launches from countries like Iran.

Moscow opposes the system, arguing that it could reduce the effectiveness of its own nuclear arsenal, leading to a new Cold War-style arms race.

This Reuters article, filed from Copenhagen, showed up on their Internet site at 2:46 p.m. EDT on Sunday afternoon---and I thank West Virginia reader Elliot Simon for sending it.


Alasdair Macleod: The New Order Emerges

China and Russia have taken the lead in establishing the Asian Infrastructure Investment Bank (AIIB), seen as a rival organisation to the World Bank and the Asian Development Bank, which are dominated by the United States with Europe and Japan.

These banks do business at the behest of the old Bretton Woods order. The AIIB will dance to China and Russia's tune instead.

The geopolitical importance was immediately evident from the U.S.'s negative reaction to the U.K.'s announcement this week that it would join the AIIB. And very shortly afterwards France, Germany and Italy also defied the US and announced they might join. In the Pacific region, one of America's closest allies, Australia, says she is considering joining too along with New Zealand. The list of U.S. allies seeking to join is growing. From a geopolitical point of view China and Russia have completely outmanoeuvred the U.S., splitting both NATO and America's Pacific alliances right down the middle.

This is much more important than political commentators generally realise. We must appreciate that anything China does is planned well in advance. Here is the relevant sequence of events:

This commentary by Alasdair showed up on the Internet site last Friday---and I thank reader M.A. for finding it for us.  It's not overly long---and it's worth reading.


China's premier asks IMF to include yuan in SDR basket

Chinese Premier Li Keqiang has asked the head of the International Monetary Fund to include China's yuan currency in its special drawing rights basket, state news agency Xinhua said.

"China will speed up the basic convertibility of yuan on the capital account and provide more facility for domestic individual cross-border investment and foreign institutional investment in China's capital market," Xinhua paraphrased Li as telling IMF Managing Director Christine Lagarde, in a report late Monday.

Li added that "China hoped to, through the SDR, play an active role in the international cooperation to maintain financial stability and promote the further opening of China's capital market and financial area," the report said.

China's yuan at some point would be incorporated in the SDR currency basket, Lagarde said on Friday.

This Reuters article, filed from Beijing, showed up on their website at 10:00 p.m. EDT yesterday evening---and I found this in a GATA release just after midnight Denver time.


Pepe Escobar: Westward ho on China’s Eurasia BRIC road

“…it is imperative that no Eurasian challenger (to the U.S.) emerges capable of dominating Eurasia and thus also of challenging America” -  Zbigniew Brzezinski, The Grand Chessboard, 1997

What’s in a name, rather an ideogram? Everything. A single Chinese character – jie (for “between”) – graphically illustrates the key foreign policy initiative of the new Chinese dream.

In the upper part of the four-stroke character – which, symbolically, should be read as the roof of a house – the stroke on the left means the Silk Road Economic Belt, and the stroke on the right means the 21st century Maritime Silk Road. In the lower part, the stroke on the left means the China-Pakistan corridor, via Xinjiang province, and the stroke on the right, the China-Myanmar-Bangladesh-India corridor via Yunnan province.

Chinese culture feasts on myriad formulas, mottoes – and symbols. If many a Chinese scholar worries about how the Middle Kingdom’s new intimation of soft power may be lost in translation, the character jie – pregnant with connectivity – is already the starting point to make 1.3 billion Chinese, plus the overseas Chinese diaspora, visualize the top twin axis – continental and naval – of the New Silk Road vision unveiled by President Xi Jinping, a concept also known as “One Road, One Belt”.

This rather short commentary, at least for Pepe, put in an appearance on the Asia Times website on Saturday---and it's certainly worth reading as well.  It's the second offering of the day from reader M.A.


Does Washington Intend War With Russia–Paul Craig Roberts Interviewed by The Saker

The Saker: It has become rather obvious to many, if not most, people that the USA is not a democracy or a republic, but rather a plutocracy run by a small elite which some call “the 1%”. Others speak of the “deep state”. So my first question to you is the following. Could you please take the time to assess the influence and power of each of the following entities one by one. In particular, can you specify for each of the following whether it has a decision-making “top” position, or a decision-implementing “middle” position in the real structure of power (listed in no specific order)

Federal Reserve, Big Banking, Bilderberg, Council on Foreign Relations, Skull & Bones, CIA
Goldman Sachs and top banks, “Top 100 families” (Rothschild, Rockefeller, Dutch Royal Family, British Royal Family, etc.), Israel Lobby, Freemasons and their lodges, Big Business: Big Oil, Military Industrial Complex, etc.---and other people or organizations not listed above?

Who, which group, what entity would you consider is really at the apex of power in the current U.S. polity?

Paul Craig Roberts: The U.S. is ruled by private interest groups and by the neoconservative ideology that History has chosen the U.S. as the “exceptional and indispensable” country with the right and responsibility to impose its will on the world.

Wow!  It doesn't get any more bare knuckles than this.  Paul holds nothing back.  And whether you agree with him or not, this is, without doubt, one of the most important articles that I've ever posted in this column---and easily falls into the ABSOLUTE MUST READ category.  However, as Chris Powell pointed out [and correctly so] when I sent him the story  "the intelligentsia in the U.S. has been extremely anti-Israel for years now."  That was more than apparent to all during the Israeli elections just past, so PCR is on the wrong side of this particular issue.  But, having said that, he's not far off the mark with everything else.  I thank Roy Stephens for bringing it to my attention---and now to yours.  If this doesn't scare you to death, you obviously don't understand the gravity of the situation.


Ethiopian warplanes reported to have attacked Nevsun gold mine in Eritrea

Ethiopian fighter planes bombed the site of Eritrea's Bisha gold mine, reported Al-Sahafa, a leading Sudanese Arab daily in its March 21 edition.

According to the newspaper, heavy plumes of smoke and fire bellowed from the mine, located 150 kilometers from the capital city, Asmara.

At $300-$400 million in annual earnings, the gold mine is Eritrea's only source of revenue, the newspaper added.

The paper speculated that the raid might have been intended to distract public attention from the upcoming Ethiopian elections.

This story was posted on the Internet site on Saturday---and I extracted it from a GATA release that Chris Powell filed from Hong Kong.  This may have been a propaganda piece as the story over at the Internet site is totally different.  It's headlined "Nevsun Provides Further Update on Operations"---and they describe it as an act of vandalism.


Nevsun reports vandalism at Eritrea mine but nothing about air raid

Nevsun Resources Ltd. is describing an attack on its Bisha mine in Eritrea as an "act of vandalism," an account that contrasts starkly with African media reports saying the mine was bombed by Ethiopan fighter jets.

In a statement released Sunday, Nevsun said vandals caused minor damage to the base of a tailings thickener at the mine during the night shift on Friday, releasing water into the plant area.

But the Ethiopian news site Tigrai Online said it had confirmed a report that the Ethiopian air force bombed the mine on Friday. Sudanese newspaper Al-Sahafa was the first to report that the attack was a military operation from Ethiopia.

A source close to Nevsun said the company is not sure what happened and isn't ruling out any possibilities until it completes an investigation. Nevsun's statement said the company has implemented additional safety precautions and no employees were harmed.

Chris Powell posted this on the Internet site shortly after I posted the above story, so I thought I'd stick this one in here without comment while we await "clarification" of the situation.
This story appeared on the Internet site at 7:57 p.m. yesterday evening EDT.


Lawrence Williams: South African gold mining’s fall from grace

South Africa may have regained its position as the world’s fifth largest gold producer in 2014 when all the figures have been tallied. One estimate of global gold output in 2014 records that the country produced 168 tonnes, a small increase on 2013’s 164.5 tonnes. Not so many years ago, South Africa had totally dominated world gold production producing 1,000 tonnes a year. But latest output figures from Statistics South Africa show a serious continuing decline in monthly gold production. With new across-the-board wage negotiations coming up over the next couple of months, some suggest that this year could, as a result, see a further sharp slump in output. Initial indications suggest that the wage talks may be extremely difficult. And difficult wage negotiations in the South African context can get out of hand as witness the virtual four month shutdown of much of the country’s platinum sector in 2012. This was coupled with some horrendously violent events (including the Marikana massacre when police opened fire on striking miners killing 44) and continued reports of other violence and intimidation throughout.

It’s not that we necessarily expect this to be replicated in the gold mining sector negotiations, but inter-union rivalries between the NUM, which represents around 57% of gold sector workers, and AMCU, which tends to be more militant in its approach, which currently looks after the interests of around 25% and is seeking to replace the NUM as the industry’s main union, could add another dimension – and probably not a positive one.

This commentary by Lawrie was posted on the Internet site last Wednesday---and somehow I missed it.  He was kind enough to point that out on the weekend, so I'm making amends now---and it's worth reading.


Sprott Money: Ask the Expert -- Jim Rogers

Geoff: Hello, and welcome back to Ask the Expert here on Sprott Money News. I’m your host Geoff Rutherford, and on line today we have Mr. Jim Rogers. Jim Rogers is a critically acclaimed author, financial commentator, and successful international investor. He’s frequently featured in such publications as The New York Times, Barron’s, Forbes, The Wall Street Journal, and Financial Times, and is a regular guest on television shows around the world. Mr. Rogers is a co-founder of the Quantum Fund, a global investment partnership. After electing to retire at the age of 37, Mr. Rogers has served as a professor of finance at Columbia University School of Business, and has written four books on investment, including Hot Commodities, Adventure Capitalist, and Investment Biker. Mr. Rogers also designed the widely followed Roger’s Commodity Indices and travels the world highlighting the case for investment in commodities as an asset class. And with that, we’d like to welcome Mr. Jim Rogers. Good morning, or good night James. How are you doing today, sir?

Jim: I’m delighted. It’s actually morning here, Geoff. You’re in the night time, I think, but I’m in the day time.

Geoff: That’s right, that’s right. So Jim, we have a number of questions here from our listeners, so let’s get started here. We’ve been looking at what’s been happening with gold over the last week or so, even the last two weeks, and we’ve seen the price slide, we’ve seen the price go up. The question is, what conditions would prompt for you to sell your gold?

This 11:22 minute audio interview, complete with transcript, appeared on the Internet site on Monday---and I thank Dan Lazicki for sending it along.


China's Zijin in talks to buy gold, copper mines abroad

China's Zijin Mining Group Co. Ltd. is in talks to buy gold and copper mining assets abroad and expects to finalise some acquisitions this year, its chairman said on Monday.

Chen Jinghe said that current market conditions were favourable for acquisitions but did not identify targets.

Some talks "have almost reached maturity. ... This year there will be some important results," Chen told a news conference in Hong Kong after the company's 2014 earnings.

This Reuters article appeared on their website at 4:10 a.m. EDT yesterday, so it was obviously filed from China, but the story doesn't say where.  I found it on the Internet site.


Koos Jansen: Will The Shanghai International Gold Exchange Facilitate Gold Inclusion Into The SDR?

The Shanghai International Gold Exchange (SGEI) was launched in September 2014, to internationalize the Chinese gold market and the renminbi. The timing of the launch is quite remarkable though, in the context of changes in the international monetary system (IMS).

2015 is likely to force a major shift in the IMS. Two developments are worth watching, the SDR basket will be reviewed, the renminbi will probably be adopted later this year, and the rise of the Asian Infrastructure Investment Bank (AIIB), an international financial institution proposed by China with many Western members; currently France, Germany, Italy, Luxembourg, Switzerland, New Zealand and the UK. Both developments are severe blows to the US dollar hegemony.

Last week I reported on, (i) the IMF terms for the renminbi to be adopted into the SDR, (ii) if these terms can be met this year, and (iii) what the role of gold will be in the process (read China, Gold, SDRs And The Future Of The International Monetary System). Since then there has been more confirmation of renminbi adoption in the media.

This commentary by Koos showed up on the Internet site on their Monday sometime---and it too is worth reading.


Lawrence Williams: China gold demand ups when price dips

Week 10 saw gold withdrawals from the Shanghai Gold Exchange at an impressive 51 tonnes bringing the total for the year to March 13 to a shade under 508 tonnes. Thus it looks as if Q1 withdrawals are heading for somewhere around 600 tonnes plus or minus. This compares with around 564 tonnes in Q1 2014 – the highest Q1 figure recorded to date. In 2013, which turned out to be a record full year for SGE withdrawals, the Q1 figure was only 463 tonnes, but 2013 figures soared from April onwards when a very sharp gold price drop stimulated huge Chinese demand – largely satisfied by outflows from the West’s big gold ETFs. The early March downturn in the gold price this year may thus have seen increased buying by Chinese consumers yet again.

But this year one doubts ETF outflows will really figure much in the gold flow equation. Indeed so far gold ETFs have seen small inflows since January 1. If total Chinese demand, as represented by SGE withdrawals, holds up as it well may, we could be in for another boom year for continuing physical gold flows from West to East, but without net ETF liquidations one may ask from where this physical metal will materialise?

This gold-related commentary by Lawrie appeared on the Internet site at 11:17 a.m. in London yesterday morning.


Lawrence Williams: Bank analysts predicting gold price and demand growth, but not nearly enough

It is so frustrating when top bank analysts ignore the data from the Shanghai Gold Exchange (SGE) and instead rely totally on data from the World Gold Council as supplied by GFMS.  The WGC admits itself that its figure of Chinese gold consumption ignores an important proportion of the gold flows into China.  Thus in its latest analysis, Barclays comes up with the WGC line that China is back to being the world’s second largest gold consumer after India, having fallen from first place 1n 2013, and then bases its assumptions as to China’s gold consumption growth accordingly.  Barclays Bank analyst, Suki Cooper, continues on this path and states that perhaps by 2020 China could be consuming half the world’s gold output.  By our reckoning it already is – and more!

Last year’s withdrawals out of the SGE, which by law handles all China’s gold imports and domestic production, came to 2,102 tonnes – down from 2,197 tonnes in 2013 – which is already equivalent to around two-thirds of global new mined gold output.  Cooper relies on the WGC data for her analysis which puts Chinese consumption at a miserly 814 tonnes, but this ignores financial elements of demand and gold disappearing into the Chinese banking system which the WGC admits may be substantial.  If these are not elements of ‘Chinese consumption’ – a matter of semantic interpretation of what is ‘consumption’  – they are certainly relevant as gold flows, and it is gold flows into Chinese hands which have to be the most important statistical data in terms of the global gold market.

Lawrie sounds more than a bit miffed in this must read article that appeared on this website yesterday.  The media isn't paying attention to the real facts of the situation regarding China and gold---and he's annoyed.  Now he has some inkling as to how Ted Butler and GATA feel as the years---and decades---slide by.  But as I've stated for years now, the WGC, GFMS, the CPM Group, The Silver Institute---they're all in bed with the powers-that-be---and anything they publish should be read for entertainment purposes only, because as a group, they all ignore the 800 pound gold and silver gorilla COMEX short positions that are sitting in the living room with them.


On CNBC Asia, GATA secretary discusses gold market rigging and its consequences

GATA's secretary/treasurer Chris Powell was interviewed on Monday morning in Hong Kong by Bernie Lo on CNBC Asia's "Squawk Box" program, discussing gold market manipulation, the failure of mainstream financial news organizations to put critical questions to central banks about their surreptitious intervention in the gold market, the "new" gold fix in London, the market-destroying and imperialistic results of gold price suppression, and the general subversion of democracy by central banking.

A five-minute excerpt from the interview has been posted at the CNBC archives.  It's certainly worth five minutes of your time.


Ted Butler Interview: Demeter Research

Matt and Alex interview Ted Butler, long-time silver expert and analyst. Ted discusses the issue of manipulation in the precious metals futures markets, the unusual level of movement of physical silver in and out of the COMEX warehouse system, and the unusual short-side concentration of commercial banks in Dollar Index futures.

Well, I don't have to steal any 'big picture' stuff from Ted for now, as he pretty much lays it all out in this longish, but must listen interview that was posted on the Internet site on Sunday.  The actual interview itself begins at the 4:35 minute mark.



¤ The Funnies

Here's a photo of the International Space Station as it passed across the sun during the solar eclipse in Europe last week.  You can read all about it at the Internet site linked here.  I'd sure like to know what frame rate this guy's camera was shooting at to get as many images of the ISS that he did.

First Majestic is a mining company focused on silver production in México and is aggressively pursuing the development of its existing mineral property assets. The Company presently owns and operates five producing silver mines; the La Parrilla Silver Mine, the San Martin Silver Mine, the La Encantada Silver Mine, the La Guitarra Silver Mine, and the Del Toro Silver Mine. Production from these five mines is anticipated to be between 11.8 to 13.2 million ounces of pure silver or 15.3 to 17.1 million ounces of silver equivalents in 2015.


¤ The Wrap

What’s most remarkable about the price action over the past two days in silver is that the speed and force of the two and a half day rally does not appear to be in keeping with the four previous anemic $3 silver rallies dating back to the beginning of last year. Plus, as I mentioned earlier, silver has acted funny over the past six or seven weeks in that it was not as relatively weak compared to gold on the downside as it had been in the past.

I know I warn against relying on price action in a manipulated market, but there’s something different this time – silver wasn’t as weak as it usually has been and is out of the gate quicker and stronger than it has been recently as well. To that I would add the masterful work of art, worthy of Picasso himself that the commercials rigged in getting the technical funds as short as they were in the current COT, to say nothing of JPMorgan’s accumulation of a massive amount of physical silver.

I suppose it’s possible for the commercials to slam on the price brakes at any time, but usually there is a cycle and season to price capping that evolves over time periods longer than a few days or weeks. And in order to lure the technical funds back onto the short side the commercials would have to rig a sudden and violent drop in the price of silver below recent lows and even if the commercials did rig such a price drop (this is still a manipulated market after all), it probably wouldn’t lure near enough technical funds back to the short side as existed as of Tuesday. The technical funds are much more comfortable in building big short positions on salami slicing-like price declines, rather than on big chunks to the downside---and for a variety of reasons, including expecting it for many years, I’m inclined to view this budding rally in silver as the big one. - Silver analyst Ted Butler: 21 March 2015

I was happy to see both gold and silver post decent gains on Monday, but I'm careful not to read too much into this at the moment, as this is roll-over week out of the April gold contract---and all the large traders have to be out by the close of COMEX trading on Friday, with the balance out by the end of trading on Monday.  There is still a lot of open interest yet to go before first notice day on Tuesday.

Gold's net volume continues to be reasonably light---and that's because the 50-day moving average hasn't been penetrated to the upside yet.  However, gold closed above it's 20-day moving average on Monday---and that fact is certainly reflected in the volume numbers in today's Preliminary Report from the CME Group early this morning.

In silver, volume was much heavier again yesterday as the technical funds in the Managed Money category continue to cover their short positions on one hand---and go long with the other.

Here are the 6-month charts for all four precious metals once again---and once again I've included the 6-month charts for the U.S. dollar index.

As I type this paragraph, the gold market open in London is about fifteen minutes away.  After getting sold down a few dollars to its Far East low at noon Hong Kong time, gold is almost back to unchanged.  The price pattern is the same for silver and platinum as well.  Palladium hit its low at noon in Hong Kong as well---and the price has flatlined since.

Gold volume is very light, with more than a third of it being roll-overs out of the April contract, which is an unusual amount for this time of day.  Silver's net volume is 3,700 contracts, with virtually of it in the current front month, which is May.  All in all, there's nothing going on.

The dollar index rallied a decent amount in Far East trading on their Tuesday morning, but rolled over at noon Hong Kong time---and is only up 11 basis points at the moment.

Today, at the close of COMEX trading, is the cut-off for this week's Commitment of Traders Report.  I'm not expecting big price activity for the remainder of the Tuesday session, but with circumstances on Planet Earth the way they are at the moment, nothing would surprise me, particularly to the upside.

And as I hit the send button on today's column at 5:30 a.m. EDT, I see that the smallish rallies in all four precious metals haven't gone too far now that the market has been open in London for a few hours, but the trading day is still young.

Gross volume in gold is just over 44,000 contracts, but almost half of that is roll-overs out of April and into the new front month, which is June.  Silver's net volume is barely over 6,000 contracts, with virtually all of that in May.  The dollar index is continuing to chop lower---and is down 20 basis points at the moment.

As I said earlier, I have no idea what the rest of Tuesday's trading action will bring, but with the dollar index trending lower, it's reasonable to assume that the precious metals should continue to trend higher.  But how fast and how high will be up to JPMorgan et al---and I'll be more than interested in what the charts show when I power up my computer later this morning.

I'm off to bed---and I'll see you here tomorrow.

Ed Steer