Gold & Silver Daily
"We're still at the mercy of JPMorgan et al. This will continue until we aren't"

¤ Yesterday In Gold & Silver

The gold price didn't do much during Far East trading on their Thursday, but was up a couple of bucks by the London open.  The selling began at the point---and the low of day came shortly after 12 o'clock noon BST.  The gold price rallied a bit from there until a few minutes after the London close---and didn't do much after that.  Volume was very light.

The high and lows are barely worth mentioning---$1,294.20 and $1,281.90 in the June contract.

Gold closed in New York on Thursday at $1,286.80 spot, down $3.10 from Wednesday's close.  Volume, net of April and May, was only 95,000 contracts.

It was more or less the same chart pattern in silver, as it's brief foray back above the $20 spot price mark got smacked the moment that London opened as well---and that was that.

The high and low ticks were recorded by the CME as $20.08 and $19.66 in the May contract.

Silver finished the Thursday session at $19.815 spot, down 16 cents from Wednesday.  Net volume was pretty light at 28,500 contracts.

Both platinum and palladium got sold off a bit as well, but rallied a hair starting late in the morning in London---and both closed up a few bucks on the day.  Here are the charts.

The dollar index closed in New York on Wednesday afternoon at 80.22---and traded pretty flat until its spike low of 80.16 which came at exactly 8:30 a.m. in New York.  The subsequent rally was mostly done by 9:15 a.m. EDT---and the index didn't do much after that.  It closed at 80.46---which was up 24 basis points on the day.

The gold stocks gapped down a bit at the open, hit their low of that day a minute or so after 10 a.m. EDT---and didn't do much until 2 p.m.  Then they rallied into the close---and the HUI cut its loses---finishing down only 0.50%.

However, the silver equities got sold down harder, but with a very similar chart pattern---and at their low, were down 2%.  But, like the gold shares, the silver shares rallied a bit into the close as well---and Nick Laird's Intraday Silver Sentiment Index closed down 1.54%.

The CME's Daily Delivery Report for Day 5 of the April delivery month showed that 60 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changed in GLD---but after a small withdrawal from SLV on Wednesday, there was a deposit of 672,909 troy ounces yesterday.  Based on the price action over the last few days, I'd guess that the deposit was made to cover a short position, a fact that won't be known for sure until late this month when the good folks over at issues their report that covers the current reporting period.

Over at Switzerland's Zürcher Kantonalbank for the ten day period ending March 31, they reported declines in both their gold and silver ETFs.  Their gold ETF was down 4,864 troy ounces---and their silver ETF declined by 134,422 troy ounces.

The U.S. Mint had a small sales report yesterday.  They sold 1,000 troy ounces of gold eagles---and 3,000 one-ounce 24K gold buffaloes.

There wasn't much in/out activity in gold over at the Comex-approved depositories on Wednesday, as only 3,200 troy ounces were reported shipped in---and 208 troy ounces were shipped out.  The link to that activity is here.

But, as is usually the case, there was much more in/out activity in silver as 591,718 troy ounces were received---and 700,629 troy ounces shipped out.  Most of the action was at the CNT Depository---and the link to that is here.

It was another day when there weren't that many stories floating around.  I have a few more than I did yesterday, but not by a lot.


¤ Critical Reads

Growing Demand for U.S. Apartments Pushing up Rents

These are good times for U.S. landlords. For many tenants, not so much.

With demand for apartments surging, rents are projected to rise for a fifth straight year. Even a pickup in apartment construction is unlikely to provide much relief anytime soon.

That bodes well for building owners and their investors. Yet the landlord-friendly trends will likely further strain the finances of many renters. That's especially true for the 50 percent of them who already spend more than one-third of their pay on rent.

A 6 percent rise in apartment rents between 2000 and 2012 has been exacerbated by a 13 percent drop in income among renters nationally over the same period, according to a report from search portal Apartment List, which used inflation-adjusted figures.

This news item appeared on the Internet site early yesterday afternoon EDT---and I thank West Virginia reader Elliot Simon for today's first story.


World Food Prices Jump Again in March

Global food prices rose to their highest in almost a year in March, led by unfavorable weather for crops and political tensions over Ukraine, the United Nations food agency said on Thursday.

The Food and Agriculture Organisation's price index, which measures monthly price changes for a basket of cereals, oil seeds, dairy, meat and sugar, averaged 212.8 points in March, up 4.8 points or 2.3 percent from February. The reading was the highest since May 2013.

While weather was the most important factor affecting crops, Russia's annexation of Crimea introduced fear into grain markets and the wheat market in particular, and risked damaging trade patterns, a FAO senior economist told Reuters.

In March, FAO's cereal price index rose significantly for the second month in a row, jumping 5.2 percent to its highest value since August 2013 due to unfavorable weather in the south-central United States and Brazil, along with uncertainty over grain shipments from Ukraine.

This Thomson/Reuters piece is the second article in a row from the Internet site.  This one was posted their Internet site very early Thursday morning EDT---and it's also courtesy of Elliot Simon.  It's worth reading.


Venezuela issues I.D. cards to curtail food hoarding

Battling food shortages, the government is rolling out a new ID system that is either a grocery loyalty card with extra muscle or the most dramatic step yet toward rationing in Venezuela, depending on who is describing it.

President Nicolas Maduro's administration says the cards to track families' purchases will foil people who stock up on groceries at subsidized prices and then illegally resell them for several times the amount. Critics say it's another sign the oil-rich Venezuelan economy is headed toward Cuba-style dysfunction.

Registration began Tuesday at more than 100 government-run supermarkets across the country. Working-class shoppers who sometimes endure hours-long lines at government-run stores to buy groceries at steeply reduced prices are welcoming the plan.

"The rich people have things all hoarded away, and they pull the strings," said Juan Rodriguez, who waited two hours to enter the government-run Abastos Bicentenario supermarket near downtown Caracas on Monday, and then waited another three hours to check out.

This AP story, filed from Caracas, was posted on their website mid-afternoon EDT on Tuesday---and I thank Casey Research's own Nick Giambruno for passing it around yesterday.


ECBs deflation paralysis drives Italy, France and Spain into debt traps

The European Central Bank has let it happen. Deflation has been running at an annual rate of -1.5pc in the eurozone over the past five months, when adjusted for austerity taxes.

Prices have been falling at a pace of 6.5pc in Greece, 5.6pc in Italy, 4.7pc in Spain, 4pc in Portugal, 3pc in Slovenia and nearly 2pc in Holland since September, based on my rough calculations (annualised) of Eurostat monthly data.

The rise of the euro against the dollar, yen, yuan and the currencies of Brazil, Turkey and developing Asia, account for some of this imported deflation. Euroland's trade-weighted index has risen 6pc in a year.

It is hard to judge at what point deflation becomes embedded in the system. Factory gate prices have been slipping since mid-2012. The pace quickened to -1.7pc in February, the steepest decline since the Lehman crisis. But this time it is not the one-off effect of a financial crash. It is chronic, and more insidious.

Ambrose Evans-Pritchard acts like he's attempting to get a job as economic advisor to the E.U. the way he's going on in this column.  It was posted on the Internet site late on Wednesday evening BST---and it's the first offering of the day from Roy Stephens.  It's worth reading as well.


ECB considers printing more money

The European Central Bank over the next months will consider various options of 'quantitative easing' - also known as money printing - to counter a very low inflation rate, ECB chief Mario Draghi said Thursday (3 April) in a press conference.

"The ECB Governing Council is unanimous in its commitment to using all unconventional instruments within its mandate, in order to cope effectively with risks of a too prolonged period of low inflation," he said.

Draghi said quantitative easing was part of a "rich and ample discussion" on Thursday among the central bankers from all 18 eurozone countries on what to do to counter the lower-than-expected inflation.

Quantitative easing, popularly known as money printing, is the purchase of financial assets from banks to increase the amount of money in circulation when there is a risk of deflation.

Well, it's nice to see the media call a spade a shovel, as money printing it is.  This article appeared on the Internet site very early yesterday evening Europe time---and it's the second contribution in a row from Roy Stephens.


France sparks E.U. row by asking for more time to make budget cuts

France sparked a row on Thursday by suggesting Paris renegotiate the “pace” at which it cuts its budget deficit - leading to stark warnings that it was “undermining trust” in the continent’s ability to reform.

The European Commission last year granted Paris an extra two years - until 2015 - to reduce its deficit to three per cent of domestic output and said in return the EU expected serious reforms of labour markets, pensions and the welfare state.

But in his first day in office after a reshuffle, Michel Sapin, the new finance minister, said that the timetable should yet again be up for discussion.

“It is the path, the timing itself which will be discussed, with common interests in mind - this is not about France begging on its knees,” he said.

Yes it is, dear reader, as France is already a card-carrying member of the PIIGS.  The only thing missing is a new acronym that includes the letter "F".  This worthwhile read was posted on The Telegraph's website early yesterday evening BST---and I found it all by myself!


Italy cracks down on alleged violent secessionists in Venice

Italian special operations forces arrested 24 suspected secessionists Wednesday who were allegedly planning a violent independence campaign for the wealthy northeastern Veneto region.

Police said the group had built an armored vehicle that they intended to deploy in St. Mark's Square in Venice — reminiscent of a 7 ½-hour takeover of the piazza's famed bell tower by secessionists in 1997. TV footage showed the vehicle was a bulldozer with firearms that had yet to be mounted.

Italian media reported the secessionists intended to deploy the vehicle on the eve of European Parliamentary elections in May.

The crackdown comes days after politicians in Veneto started formal proceedings toward independence, despite constitutional prohibitions.

This AP story, filed from Milan, was picked up by the Internet site on Wednesday afternoon EDT---and it's the second item of the day from Casey Research's Nick Giambruno.


Ukraine ‘spillover’ could wreck world economy - Lagarde

International Monetary Fund (IMF) managing director Christine Lagarde warns the Ukraine situation could have “broader spillover implications” if it is mismanaged. She was talking to Johns Hopkins University students ahead of the IMF’s spring meeting.

Ukraine’s ailing economy, combined with fresh geopolitical tension in Crimea and now US-led sanctions against Russia, have Lagarde worried the consequences won’t be contained regionally, but could have an effect on the global economy.

“The situation in Ukraine is one which, if not well managed, could have broader spillover implications,” Lagarde said. 

Ukraine’s economy is forecast to contract 3 percent in 2014 as it recovers from a tumultuous year which has nearly wiped out its Eurobond market, currency, and national reserves. Inflation is expected to continue to rise, with the IMF predicting 12 percent in 2014.

This article appeared on the Russia Today website yesterday morning Moscow Time---and it's definitely worth reading.  I thank South African reader B.V. for bringing it to our attention.


Russia wants answers on NATO troop movement in Eastern Europe

Russia expects detailed explanations from NATO regarding expanding its military presence in Eastern Europe, said Russian Foreign Minister Sergey Lavrov. The statement comes after NATO bloc announced boosting its military presence in the area.

"We have addressed questions to the North Atlantic military alliance. We are not only expecting answers, but answers that will be based fully on respect for the rules we agreed on," Lavrov told reports at a joint briefing with Kazakhstan’s FM Yerlan Idrisov.

However, NATO chief Anders Fogh Rasmussen said he had not received any questions from Moscow.
In response he called Russian accusations about NATO's actions "propaganda and disinformation."

He denied that NATO was violating the 1997 treaty on NATO-Russian cooperation by boosting its forces in Eastern Europe.

This Russia Today news item showed up on their Internet site yesterday afternoon Moscow time---and it's the second offering in row from reader B.V.


Putin 1 - Dimon 0: JPMorgan Un-halts Russian Money Transfer

Yesterday when we reported that a "Furious Russia Will Retaliate Over "Illegal And Absurd" Payment Block By "Hostile" JPMorgan", in which we explained that unlike previous responses to Russian sanctions by the West, which were largely taken as a joke by the Russian establishment, this time Russia is furious, we said that "we certainly can not be the only ones looking forward to the epic battle prospect that is Vlad "Shootin" Putin vs. JP "Fail Whale" Morgan."

Alas the title fight lasted for just about a day, and was won, with a technical knock out in the first round, by none other than the former KGB spy who can now add the whale which manipulates all markets to its trophy case which includes about 100 statues of a crushed and beaten John Kerry. 

Because after shocking the world with its unilateral decision to halt Russian money transfers without a direct order from the administration, Reuters reports that JPM has folded and will process said payment from Russia's embassy in Kazakhstan to insurance agency Sogaz, easing tension after Moscow accused the U.S. bank of illegally blocking the transaction under the pretext of sanctions.

In other words, Putin 1 - Jamie Dimon 0.

This must read news item showed up on the Zero Hedge website late yesterday morning EDT---and I thank reader M.A. for sending it along.


13 years---and $100 billion after U.S. entry, Afghanistan faces total devastation

The Taliban pre-electoral campaign of bloodshed continues in Afghanistan, as six die in an attack on the interior ministry in Kabul. As the first democratic transfer of power approaches, the country is in terrible shape ahead of the 2014 US pullout.

A suicide bomber attacked the interior ministry compound in the capital on Wednesday, just three days before polls open, amid months of increasing violence from the country’s extremist Taliban insurgency.

The bomber wore military uniform to avoid detection and security checks, local authorities reported. This, after earlier on the same day, the terrorist group killed nine people they had abducted several days prior to the incident. One of them was a candidate running for provincial office.

The atrocity took place hours after the group warned Afghans to stay away from the election offices this Saturday, where people will be picking from a list of eight candidates to replace incumbent President Hamid Karzai.

This longish, but very interesting essay---with 2 photos and 2 video clips embedded---was posted on the Russia Today website yesterday afternoon Moscow time---and it's the final offering of the day from Roy Stephens.  It's a must read for all serious students of the New Great Game.


Four King World News Blogs

1. John Hathaway: "Despite Pullback This is a Game-Changer For Gold"  2. Art Cashin: "Fed Frustrated, ECB---and the Great Struggle in Japan"  3. Gerald Celente: "West Just Pushed The World One Step Closer to War"  4. Keith Barron: "China to Cause Massive Collapse of Second London Gold Pool"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests, to them, and not to me. Thank you. - Ed]


Mark Hulbert: Gold Hasn't Hit Bottom Yet

Gold has dropped 7 percent since hitting a six-month high March 14, leading some market participants to speculate it may be nearing a bottom. 

But Mark Hulbert, founder of Hulbert Financial Digest, doesn't see it that way. 

"Some readers have contacted me to ask if enough gold timers have finally thrown in the towel to persuade contrarian analysts that a low is at hand," he wrote on MarketWatch. "No."

While the average newsletter editor who market-times gold is more bearish today than last weekend, "he still is not as pessimistic about gold’s prospects as he was on the occasion of past tradable bottoms," Hulbert wrote.

This commentary by Mark was embedded in a story posted over at the Internet site on Wednesday evening EDT---and it's the third and final offering of the day from Elliot Simon.


Marc Faber: "How Could you NOT Own Gold?"

Faber said that gold has been in a correction since then, which isn’t unusual in a money printing environment. On gold at today’s prices, Faber said that “the fact is that gold down is a present from God and I wish it would go lower so I could buy more,” he said.

The big proviso Faber added was that he had to physically own coins and bars. He also warned that people would be ‘mad’ to own any asset, including gold, in the U.S. Previously, Faber has said that he favors owning gold in fully allocated gold accounts in Singapore and Switzerland.

Jim Rickards said that gold should remain an essential part of diversified portfolios and Mark Faber pointed out that the question should be “how could you NOT own gold?”

This commentary includes comments from Jim Rickards as well---and it's worth reading.  It was posted on the Internet site on Wednesday---and I thank reader Ken Hurt for sending it our way.



AMCU marches: Won't bend on platinum mining wage demand, leader warns

The Association of Mineworkers & Construction (AMCU) vowed to bring the platinum industry to a standstill if the big three producers in Rustenburg do not adhere to their demands.

Addressing thousands of workers outside Melrose Arch in the northern suburbs of Johannesburg, AMCU president Joseph Mathunjwa said the union and its members were prepared to go through leaps and bounds to ensure that their demands of a R12500 minimum wage are met (~30% increase).

“They paid their mandate in blood back in 2012 when they were shot by the police. So we are saying that we will only negotiate from R12500 over a four-year period," Mathunjwa said, referring to AMCU members killed during what has become known as the Marikana massacre.

The union was in Johannesbrug to hand over a memorandum to Lonmin CEO Ben Magara.

I must admit that I totally agree with their demands---and I wish them well.  But their real anger should be directed to the Anglo/American precious metal price management scheme---JPMorgan in particular---because if platinum and palladium were trading at their free market prices, the miners would already be making far more than the 30% wage increase they're demanding.

This news item, filed from Johannesburg earlier today, is definitely worth reading---and I found the story posted on the Internet site in the wee hours of this morning.


The dirt on India's latest gold-smuggling seizures

Editor's note: Gold smuggling continues to plague India despite official efforts to curb it with reduced tariffs and new enforcement initiatives. Looking back over the past week our correspondent in India reports a series bold smuggling attempts. These seizures surely represent but a small part of the amount of illegal gold that actually crosses the border...

April 2:  Security personnel at Mumbai's international airport caught a sweeper trying to exit the airport with 5 kilograms of gold. The man was exiting with five gold bars weighing one kilogram each, wrapped inside a plastic bag with a tape over it.

Further investigations unearthed a passport and some cash. Since the man was an airport employee, he did not need a passport to gain access to the  airport, leading investigators to determine that the man was involved in a gold smuggling cartel, which were using him as a carrier.

This very interesting story, filed from Mumbai, was posted on the Internet site yesterday---and it's worth reading as well.


Pakistan rejects IMF's call to sell its gold reserves for FX cash

Pakistan has refused to sell gold worth $2.7 billion, citing national security reasons, as the International Monetary Fund pushes Islamabad to convert the precious metal into cash to build foreign currency reserves, the global lender's report revealed Friday.

The report, prepared by IMF staff led by its Washington-based mission chief to Islamabad, Jeffrey Franks, also spills the beans on the "$1.5 billion gift" to Pakistan by "Saudi Arabia" -- the name Prime Minister Nawaz Sharif's government has so far refused to officially share with parliament.

According to the report, the State Bank of Pakistan holds more than 2 million troy ounces of monetary gold, having $2.7 billion of value at the market rate. It is not counted in gross international reserves as it is not deemed to be liquid by the State Bank of Pakistan, the IMF says.

This must read story, filed from Islamabad last Saturday, was posted on the Internet site---and I found it embedded in a GATA release that Chris Powell dispatched from Vietnam on their Friday morning.



¤ The Funnies

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¤ The Wrap

There have been no serious flash crashes in the stock market in four years; there have been too many HFT price smashes in COMEX gold and silver in that time. The most egregious price smashes were the two separate 30%+ price plunges in silver that occurred within a few days, in May and September of 2011. Twice silver fell by $15 in short order, or more than three times the percentage amount of the great May 6, 2010 stock market crash. Yet, unlike the immediate attention from the regulators that the 9% temporary decline in the stock market attracted, neither the CFTC nor the CME had any comment whatsoever on the two silver smashes in 2011, even though these were the largest price declines in commodity history and silver was supposedly under a CFTC formal investigation at those times. - Silver analyst Ted Butler: 02 April 2014

With all four precious metals enjoying smallish rallies going into the London open, it should have been obvious to anyone that the sell-offs in all four were premeditated, as they all got sold down at the very same instant the moment that trading began at 8 a.m. BST.  No free market ever operates like this.

Nothing has changed since yesterday, as we're still at the mercy of JPMorgan et al.  This will continue until we aren't---and all the commentaries by other so-called analysts in precious metals as to where prices are headed [including mine] don't amount to a bucket of warm spit.

As I write this paragraph, the London open is about 30 minutes away.  Gold and silver are trading unchanged from Thursday's close in New York---and both platinum and palladium are down a couple of bucks each.  I've never seen volume this light, not even during the Christmas/New Year's holiday season just past.  Gold volume is 7,500 contracts---and silver is just 1,800 contracts.  Based on that, I wouldn't read a thing into the current price of any of the four precious metals.

Today we the jobs report at 8:30 a.m. EDT and, as always, it will be interesting to see how gold and silver react, or are allowed to react---either at, or minutes before, the numbers become public.

The other two reports today are the weekly Commitment of Traders Report---and the April Bank Participation Report.  These reports are generated from data up to the 1:30 p.m. EDT cut-off at the Comex close on Tuesday afternoon.  And as I say every time at this juncture, the data in the Bank Participation Report is extracted from the COT Report---and for that one day a month we get to see what JPMorgan and the other U.S. banks are up to, along with what's happening in the non-U.S. banking system as far as their collective short positions in all four precious metals are concerned.

As the previous reports have shown---and this one will as well---except for the long-side corner in gold held by JPMorgan, every other bank on Planet Earth that holds Comex contracts in the precious metals, is net short all four of them.  It only remains to be seen how bad the report is.

As Ted Butler mentioned in his mid-week commentary to his paying subscribers on Wednesday, there will certainly be improvements in both reports, but it's only a matter of degree.  And whatever the numbers show, I'll have it all for you in tomorrow's column.

And as I send this off to Stowe, Vermont at 5:15 a.m. EDT, I see that both gold and silver have rallied a hair during the first couple of hours of trading in London.  Gold is up about five bucks---and silver is up a dime.  Platinum and palladium are each down a dollar or so.  Needless to say, volumes are way up from what they were 30 minutes before the London open.  Gold volume now sits at 17,500 contracts---and silver's net volume is now 4,000 contracts, so it's obvious that even this smallish positive price momentum is being met with fairly chunky selling resistance.  The dollar index is still flat.

I'd love to be proven wrong of course, but I already have a pretty clear idea as to what the gold and silver price charts are going to look like by the time I roll out of bed later this morning.

But before heading off to bed, I want to remind you that today is the LAST DAY that you can sign up for the Casey OnePass.  It's one heck of a bargain, and you can read all about it here.  Naturally, Casey Research's 90-day risk-free policy applies in full.

Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.