As expected, it was a pretty quiet day price wise...and gold spent the entire 24-hour period in a ten dollar price range...and closed on Thursday at $1,631.30 spot..up $10.90 on the day.
Net volume was surprisingly high at 123,000 contracts...but Ted Butler said a lot of that volume was probably carry-over from the prior two days, as the last of the leverage longs dumped their positions into the waiting arms of JPMorgan et al.
The silver price action was a little more interesting, but only just...and once the London gold fix was in around 10:00 a.m. Eastern time...silver traded basically sideways from there into the close of electronic trading.
Silver closed at $31.74 spot...up 38 cents on the day. Net volume was slightly elevated at around 31,000 contracts.
The dollar index hit its nadir about 7:30 a.m. in London...and its zenith at 9:20 a.m. in New York. But most of the gains were in by 11:00 a.m. British Summer Time...which was 6:00 a.m. Eastern. From there it pretty much traded sideways, except for the 9:20 a.m. high tick. The dollar index close up about 35 basis points...and finished 6 basis points above the 80.00 mark.
The gold stocks opened in slightly positive territory, but couldn't even hold those gains. The low for the day was in just minutes before 2:00 p.m. Eastern time...and then gained back a percent of their losses by the close of the equity markets.
It wouldn't surprise me if the gold mutual funds were being forced to sell into Thursday's market because of redemptions...so I don't read any nefarious things into yesterday's stock price action despite the fact that the physical metal finished in the black. The HUI turned in another losing day, down 0.94%.
The large cap silver producers didn't do particularly well yesterday, either...and probably for the same reason as the gold stocks. Nick Laird's Silver Sentiment Index closed down another 2.00%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 6 gold and only 2 silver contracts were posted for delivery next Tuesday. Nothing to see here.
The GLD ETF showed no change yesterday...and despite the $60 hit on Tuesday and Wednesday, has been unchanged since March 27th. But the surprise was in SLV. I was expecting the worst, but the report showed that 1,456,557 troy ounces of silver were added by an authorized participant. Go figure!
And, for the second day in a row, there was no sales report from the U.S. Mint.
Over at the Comex-approved warehouses on Wednesday, they reported receiving 1,383,434 troy ounces of silver...and shipped only 52,371 ounces out the door. The link to that action is here.
I have the usual number of stories today, so I hope you have the time to at least read the parts I've cut and paste from each.
In what appears to be surprising news for some, Reuters has an article titled "Americans brace for next foreclosure wave" whose key premise is that "a painful part two of the [housing] slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures." Thank the robo-settlement, where in exchange for a few wrist slaps, contract law was thoroughly trampled by America's attorneys general, but far more importantly to the country's crony capitalist system, the foreclosure pipeline was once again unclogged, and whether one does or does not have a legal title on a given house, the banks are now fully in their right to foreclose on it.
What this means also is that America's record shadow housing inventory, which is far greater than any fabricated number the NAR reports on a monthly basis, is about to get unleashed on buyers, shifting the supply curve much further to the right, as up to 9 million new properties slowly but surely appear on the market.
Well, there are no surprises here, at least not for me. This zerohege.com piece is rather long, but if you have any interest in the U.S. housing situation, this is a must read. I thank Phil Barlett for providing today's first story...and the link is here.
World food prices are likely to rise for a third successive month in March, and could gain further beyond that, with expensive oil and chronically low stocks of some key grains putting food inflation firmly back on the economic agenda.
Food prices grabbed world policy makers' attention after hitting record highs in February 2011 and stoking protests connected to the Arab Spring wave of civil unrest in some north Africa and middle eastern countries.
Prices later receded, but an upturn which began in January, initially seen as a pause in the overall downtrend, has persisted.
This Reuters piece was filed from Milan yesterday...and I thank reader Bob Fitzwilson for sharing it with us. It's definitely worth reading...and the link is here.
The author of the Dow Theory Letters, Russell writes on King World News that the "big money" — shorthand for savvy investors — do not like what they're seeing in the market.
"My guess is that this is the big money that has been holding off as long as it decently can -- and then dumping their goods just before the close. I don't think the big money likes this market, and I think they have been slowly exiting this market, as quietly as they can."
Russell is convinced something terrible is on the horizon for the markets. What it is ain't exactly clear — a European depression? More bad housing news? Whatever it is, it's time to plan for the worst.
This story was posted over at the businessinsider.com website yesterday...and it's Roy Stephens first offering of the day. The link is here.
Rating firm Egan-Jones cuts its credit rating on the U.S. government to "AA" from "AA+" with a negative watch, citing a lack of progress in cutting the mounting federal debt.
"When debt-to-GDP exceeds 100 percent, a country's financial flexibility becomes increasingly strained," Managing Director Sean Egan wrote in his report on the downgrade. "For the first time since World War II, U.S. debt exceeds 100 percent."
Let's call a spade a shovel. All sovereign debt...including that of the U.S.A...should be rated as junk, as it will never be paid back. If it ever is, it will be in currency that's worth only a tiny fraction of its present purchasing power. This CNBC story from yesterday was sent to me by West Virginia reader Elliot Simon...and the link is here.
For those who missed the story, a 77-year old retired pharmacist – Dimitris Christoulas – has shot himself to death in front of the Greek Parliament in Syntagma Square, protesting the degradation of his country.
It is a call to arms, a poignant moment in Europe’s unfolding drama, reminiscent of the Buddhist self-immolations of south-east Asia that so captured world attention.
It is loose talk to compare the democratic, well-intentioned Germany of 2012 with the rabble of gangsters who hijacked the Weimar state in 1933. Germany’s Angela Merkel too is doing what she thinks to be the best for both her country and for Europe (and which I think is deeply misguided, especially for Germany itself)
But the event has happened, and such events have consequences.
This short piece, posted in The Telegraph yesterday, is worth reading...and I thank Roy Stephens for bringing it to my attention. The link is here.
The IMF quoted its new mission chief for Portugal, Abebe Selassie, as saying that "the main risk is that the recession turns out deeper than projected", partly due to a mild recession in the eurozone, where Portugal sells most of its products.
"In that case, we think that chasing after fixed nominal deficit targets may not be the best policy," Selassie said.
Still, Selassie made clear that Portugal could not afford to miss any targets due to policy slippages as that would damage the programme's credibility. Right now, he said, this year's targets of 4.5pc of GDP deficit "remains within reach".
Without doubt the recession in Portugal will turn out to be much worse than forecast...and equally without doubt, Portugal will be looking for another bailout within the next twelve months. This story was posted in The Telegraph yesterday...and is another Roy Stephens offering. The link is here.
Spain is frantically trying to reduce its debts. While conservative Prime Minister Mariano Rajoy is doing so at the national level, Ana Botella is slashing away at spending in Madrid, Spain's most heavily indebted city. In the process, the mayor is blazing her own path.
Ana Botella, 58, the wife of former conservative Prime Minister José María Aznar, has been Madrid's mayor since the end of December. Before that, she had served eight years as a city councilor, initially for family and social affairs and, most recently, for transportation and the environment. Rather than being elected to the office, Botella inherited it from her predecessor after he was brought into the administration of Mariano Rajoy, a fellow party member who became Spain's prime minister in November.
Botella inherited not only the office with the best view, a room larger than the Oval Office in Washington, in a 1917 palace that was converted into the city hall at a cost of €500 million, but also the services of a butler whose sole duty is to serve coffee to her and her guests. But she has also inherited close to €6.4 billion in debts.
This story was posted over at the German website spiegel.de yesterday...and is also courtesy of Roy Stephens. The link is here.
Employers are loathe to cut to nominal wages because this "can reduce morale and prompt resistance even in difficult economic times (Kahneman, Knetsch, and Thaler 1986)".
So how on earth is this going to play out across Europe’s Arc of Depression, with Franco-era labour laws still only partially reformed in Spain, and Mario Monti struggling to push through reform of Article 18 of the labour code?
Portugal, Italy, and Spain need an "internal devaluation" of around 20pc to claw back competitiveness within EMU. This means draconian wage cuts for year after year.
This rather timely Ambrose Evans-Pritchard offering was posted in The Telegraph yesterday evening...and is a must read in my opinion. I thank Roy Stephens for this story...and the link is here.
Prices at German gas pumps oscillate wildly, sometimes changing several times a day. The rises and falls are far from random, however. Studies and market observers say it is an attempt by big oil to ratchet up the cost of a fill-up as high as possible.
It's Easter weekend and, if all goes as usual, motorists will be hopping mad during the holiday. Their frustration will boil over when the needle reaches the red zone and they pull into the nearest filling station: first at the pump, then at the cash register.
That's where they'll note with dismay that the oil companies never tire of playing the same old game in the run-up to Easter. As in previous years, gas prices soared in the days leading up to the Friday before Easter -- just when millions of Germans head off on vacation.
If Americans think they're paying a lot for gas at the pumps...the price is about double that in Germany. This 3-page essay is posted over at spiegel.de...and is well worth your time, if you have it. I thank Roy once again for sending it our way...and the link is here.
The first is from Richard Russell...and is the one referenced in the businessinsider.com story that I posted further up. The KWN headlined reads..."Richard Russell: Europe Headed into Massive Collapse". The second is by Jean-Marie Eveillard, who oversees $50 billion at First Eagle Funds. It bears the title..."Massive Government Debt Underpinning Gold Market". And lastly is this blog whose headline reads "London Trader: Fed's Global War Against Gold Escalating".
In a story posted over at mineweb.com.za yesterday, Lawrence Williams asks whether gold and silver investors are "clutching at straws"...but acknowledges the likelihood of market manipulation by central banks and big investment houses as well as naked short positions in the monetary metals.
I borrowed the above introductory paragraph from a GATA release...and the link to this rather long must read MineWeb article is here.
In an article posted on the Zero Hedge website yesterday, they cite gold market manipulation in its commentary headlined "Meet the People Bringing You Currency Manipulation on a Daily Basis".
I plucked this story posted from a GATA release...and the link is here.
Frank Holmes, the CEO and Chief Investment Officer at U.S. Global Investors, posted this fairly long piece on their website yesterday. It contains lots of excellent charts...and is well worth reading. The story is posted at usfunds.com...and I thank Elliot Simon for his second offering in today's column. The link is here.
The video clip to which this story refers was all over the Internet yesterday. Ted Butler thinks that JPMorgan is starting to feel the heat about their short-side corner of the silver market...and trotted out Blythe Masters to say that they were innocent. It was obvious to both of us that the questions asked by the interviewer were most likely proposed in advance by Masters herself, as no interviewer would ever dream up questions like that on their own. No wonder that Blythe said they were "good questions".
I would have asked her some slightly different questions myself...and not the softball ones that she got. I'm sure Ted would liked to have had a shot at her as well and, without doubt, he will have much more to say about this in his comments to his paying subscribers on Saturday.
Reader U.D. was the first person through the door with this story...but I'm posting the GATA release about it, as Chris Powell's preamble to this is a must read on its own. If I had to pick only one precious metal-related story for you to read out of today's column...this would be it. The link is here.
Corvus Gold Inc. (TSX: KOR, OTCQX: CORVF) is engaged in the exploration and development of gold-related mineral properties located in Nevada, Alaska and Canada through a mix of internal and partner funded work. Corvus Gold’s emerging producer potential is highlighted by its 100% North Bullfrog project in Nevada with a current resource of 1.6M oz. gold. A preliminary economic assessment of the project shows the potential for an annual output of 57,700 ounces of gold over 12.8 years with an initial total capex of $68.8M. The project is shown to have a high leverage to gold prices with an NPV (5%) of $338M, an IRR of 69.7% and a 1.2 year payback at $1,700/oz. gold. Recent step out drilling success shows the potential of significant resource expansion and will be further addressed in the 2012 exploration program. Please visit our site to learn more about the projects or request information through email@example.com.
There are no markets anymore, only interventions. Chris Powell, GATA
I wouldn't read a thing into yesterday's trading action, although with the slightly elevated volume in both metals, I suspect that it was the last of the speculative longs dumping their positions that made up most of the extra volume.
It took JPMorgan et al just under twenty-three and a half hours...starting on Tuesday at 2:00 p.m. Eastern time, and ending at 1:25 p.m. Eastern on Wednesday...to engineer a $60 price decline in gold and a $2.45 cent drop in silver. Ted pointed out that startling fact to me on the phone yesterday.
I would guess that we saw the low for this move down at 1:25 p.m. on Wednesday...but I wouldn't bet the farm on it. As we've seen on many occasions, they can do pretty much what they want, when they want.
As of yesterday's close, the gold price was about $60 under its 200-day moving average...and the silver price was about $3.00 under its. How much more speculative long liquidation is still possible is unknown, but this far below all the moving averages, I would guess there would be next to none no matter how low the price may be driven down from here. I doubt that 'da boyz' will waste their time on what little might be left. But, as I said above, you can never say never.
And as I mentioned in this space on both Tuesday and Wednesday, none of data from those two big down days earlier this week will be in the next Commitment of Traders Report which, Ted informed me, will be coming out today...not Monday. That was a surprise, considering it's Good Friday. But, if that's the case, I would suspect that the Bank Participation Report will be posted as well. That will give me something to talk about in Saturday's column.
Well, if there was any trading in the Far East earlier today, the volume numbers weren't being recorded on the CME's website, as it still shows Thursday's closing volumes...and without JPMorgan et al stomping about, the prices of any of the precious metals won't mean much.
That's all for today. I'll have a report tomorrow, but it will be pretty skinny.