Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

The gold price traded in a pretty tight range through all of Far East trading on their Tuesday---but once London opened, the price developed its usual negative bias---and around 8:45 a.m. EDT, the HFT boyz and their algorithms stepped in---and the low tick came about 9:20 a.m.---which was another new low for this move down.  From there it blasted higher into the London p.m. gold "fix"---and then it got sold down until about 12:40 p.m. in New York trading---and after that it traded almost ruler flat into the close of electronic trading.

The low and high ticks were reported as $1,141.60 and $1,159.30 in the April contract.

Gold closed in New York yesterday afternoon at $1,148.60 spot, down $5.70 from Monday's close.  Net volume was 143,000 contracts.

Here's the 5-minute tick chart for gold courtesy of Brad Robertson.  The only price/volume action that matters is what occurred between the 8:20 a.m. COMEX open and 12:15 p.m. EDT, which is 6:20 a.m. and 10:15 a.m. on this chart, as it's plotted with Mountain Daylight Time.  The rest is just background noise.  The 'click to enlarge' feature is a must for this chart.

The silver price action was virtually identical to gold's, complete with the shenanigans in the last ninety minutes before the London p.m. gold fix.

The low and high ticks were reported as $15.36 and $15.72 in the May contract.

Silver finished the Tuesday session at $15.53 spot, down a dime, but the HFT boyz couldn't set a new low.  Net volume was 31,000 contracts.

JPMorgan et al dealt with platinum and palladium in a similar fashion, slamming them both to new lows for this move down, but both closed well off those lows.  Platinum finished the day at $1,091 spot, down 12 bucks---and palladium finished the Tuesday session at $758 spot, down 17 dollars.  Here are the charts.

The dollar index closed late on Monday afternoon in New York at 99.70---and made it is as high as 99.82 during Far East trading.  It headed lower just after 2 p.m. Hong Kong time---and hit its 99.30 low tick right at the London p.m. gold "fix".  Two hours later it was back up to 99.65---and then didn't do much for the rest of the Tuesday session.  The index closed yesterday at 99.65---down 5 basis points from Monday.

The gold stocks opened down two percent, but quickly blasted into the green until gold's high tick at the 10 a.m. EDT London p.m. gold "fix"---and from there they got sold down into negative territory---and stayed there for the remainder of the day.  The HUI finished down 1.64 percent.

The silver equities followed a similar path---and Nick Laird's Intraday Silver Sentiment Index finished down 1.81 percent.

I mentioned yesterday that the gold and silver equities were trading generally higher as the metals traded lower.  Well, that certainly wasn't the case on Tuesday.

The CME Daily Delivery Report showed that 2 gold and 118 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  Once again it was Jefferies as the big short/issuer on all of them and, once again, it was JPMorgan out of its in-house [proprietary] trading account stopping 81 contracts.  Scotiabank was in distant second place with 16 contracts. These numbers are almost identical to the numbers that were reported in last Friday's Daily Delivery Report.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that there was no changes in March open interest in gold---and it remains at 110 contracts, minus the 2 mentioned above.  Silver's March o.i. was also reported as unchanged, but the 118 contracts in the previous paragraph must be subtracted for a true picture of March open interest remaining.

There was a withdrawal from GLD yesterday.  This time an authorized participant took out 86,377 troy ounces.  And as of 9:38 p.m. EDT yesterday evening, there were no reported changes in SLV.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with the weekly numbers on both their gold and silver ETFs as of the close of trading on Friday, March 13---and it should come as no great surprise that both were down again last week.  Their gold ETF was down only 5,054 troy ounces, but their silver ETF sold off 328,484 troy ounces.

There was another sales report from the U.S. Mint yesterday, as they sold 1,500 troy ounces of gold eagles---2,000 one-ounce 24K gold buffaloes---and another 195,500 silver eagles.

There wasn't much gold activity at the COMEX-approved depositories on Monday, as only 1,700 troy ounces were reported received---and 2,411 troy ounces were shipped out.

It was quiet as well in silver, as only 2,059 troy ounces were received---and only 101,659 troy ounces were shipped out the door.

Once again I have a lot of stories---and I'm more than happy to leave the final edit up to you.

 

¤ Critical Reads

Lagarde Warns World to Brace for Volatility If Fed Surprises

Emerging markets need to prepare for capital flight if investors are surprised by the timing or pace of policy changes in developed economies, the IMF’s Managing Director Christine Lagarde said a day before the U.S. is expected to signal a shift in stance.

“We are perhaps approaching the point where, for the first time since 2006, the United States will raise short term interest rates later this year,” Lagarde said in Mumbai on Tuesday. “Even if this process is well managed, the likely volatility in financial markets could give rise to potential stability risks.”

She was sharing the stage with Reserve Bank of India Governor Raghuram Rajan, who has repeatedly called for more coordination among central banks to shield vulnerable markets from capital swings. The rupee was among currencies that plunged to a record when the Fed first signaled a reduction in stimulus in May-June 2013, pushing India to the brink of a crisis.

I'd say that this is an advanced warning that it might be a good time to fasten your seat belt.  This  Bloomberg article, co-filed from Mumbai and New Delhi, appeared on their Internet site at 4:44 a.m. Denver time yesterday morning---and today's first story is courtesy of Roy Stephens.

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Something Strange is Going on With Non-farm Payrolls

Let's start with the basics: why is there a majority consensus that the Fed will hike rates after it removes its "patient" language tomorrow? One simple reason: non-farm payrolls. As reported earlier in the month, following the report of March's expectations smashing 295,000 jobs added, there have now been a 13 consecutive months of 200K+ payroll months, something which together with the 5.5% unemployment rate, is for the Fed is a clear indication that the slack in the labor is about to disappear and wages are set to surge.

Sadly, as we showed before, wages are not only not rising, but for 80% of the population they are once again sliding.

Falling wages aside (a critical topic as it singlehandedly refutes the Fed's bedrock thesis of no slack in a labor force in which there are 93 million Americans who no longer participate in the job market) going back to the original topic of which economic factors are prompting the Fed to assume there is an economic recovery, without exaggeration, all alone.

Is there nothing else that can validate the Fed's rate hike hypothesis? Well...no.

This interesting, but longish Zero Hedge article appeared on their website at 5:30 p.m. EDT yesterday---and the first reader through the door with it was Dan Lazicki late yesterday morning, so the story has obviously been "updated" since it was first posted.

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WTI Plunges To $42 Handle On Massive API Inventory Build

For what appears to be the 10th week in a row, API reports a massive 10.5 million barrels (far bigger than the 3.1 million barrel expectation) and a 3 million barrel build at Cushing. If this holds for DOE data tomorrow (and worryingly API has tended to underestimate the build in recent weeks) it will be the biggest weekly build since 2001. WTI has plunged on this news hitting $42.60 on the April contract.

If API data is accurate (and it has tended to underestimate the inventory build in recent weeks) then this will be the biggest build since 2001...

The above two paragraphs are all there is to this brief Zero Hedge article from 4:53 p.m. EDT yesterday afternoon---but the two embedded charts are worth a look.  It's the second offering in a row from Dan Lazicki.

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U.S. may revoke settlement agreements in currency-rigging probes

U.S. prosecutors investigating currency manipulation are considering revoking years-old settlements and prosecuting banks for rigging interest rates, according to people familiar with the matter.

The Justice Department is weighing whether evidence of wrongdoing in currency trading means banks violated old deals resolving probes into the rigging of benchmark interest rates, said two people, who asked not to be identified because final decisions haven't been made.

Barclays Plc, Royal Bank of Scotland Group Plc, and UBS Group AG, which are operating under such agreements, are among banks being investigated in the currency case, as is HSBC Holdings Plc. The Justice Department is also scrutinizing whether HSBC's currency-trading practices violated a 2012 agreement settling a money-laundering probe, another person familiar with the matter said.

This Bloomberg news story, filed from New York, appeared on their website at 9:10 a.m. MDT yesterday morning---and I found it embedded in a GATA release.

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Citibank in Argentina to Stop Making Bond Payments

Citibank said Tuesday it was getting out of the business of making bond payments for Argentina, the latest fallout from a bitter court fight between the South American country and a group of bondholders in the U.S.

In a statement, the bank said it was making plans to transfer Argentina's debt payments to another entity because of an "unprecedented international conflict of laws." The statement said the bank had notified the New York court overseeing the legal fight, but did not elaborate on its transition plans.

Last week, the bank found itself in a difficult position with few options. First, U.S. District Judge Thomas Griesa ordered Citibank to stop processing payments to bondholders. A day later, Argentina threatened to revoke the bank's operating license if it refused to process those payments.

"Instead of staying in the frying pan or hopping into the fire, Citibank decided to simply get out of the kitchen," said Brett House, a debt expert and senior fellow at the Jeanne Sauve Foundation, a think tank in Montreal, Canada.

This AP story, filed from Buenos Aires at 4:17 p.m. EDT on Tuesday, was picked up by the abcnews.go.com website---and I my thanks go out to West Virginia reader Elliot Simon for sharing it with us.

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U.S. credibility at risk if IMF reforms not approved: Lew

The credibility of the United States is at risk if Congress fails to approve International Monetary Fund quota and governance reforms, Treasury Secretary Jacob Lew warned Tuesday.

"Critically, we are seeking Congressional approval of the IMF quota and governance reforms," Lew told a hearing of the House of Representatives financial services committee, according to the prepared text.

"Our international credibility and influence are being threatened."

For more than two years the US Congress has prevented the 2010 IMF reforms from taking effect.

This short AFP story, filed from Washington, was posted on the france24.com Internet site at 4:45 p.m. Europe time on their Tuesday afternoon---and I thank South African reader B.V. for sending it along.  It's certainly worth reading.

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German politicians admit Greece has case for wartime reparations

Several senior Social Democrats (SPD) and Greens in Germany have for the first time said their nation should consider paying reparations to Greece for Nazi crimes committed during the second world war, breaking ranks with Angela Merkel’s government.

Relations between Germany and Greece have deteriorated as Athens tries to renegotiate its bailout terms and Berlin fears it will ditch previously agreed financial promises.

The Greek prime minister, Alexis Tsipras, who is due to meet Merkel in Berlin on Monday, has accused Germany of using tricks to avoid paying reparations. One of his ministers raised the prospect of seizing German property to compensate victims of a Nazi massacre.

This news item appeared on theguardian.com Internet site at 2:14 p.m. GMT on their Tuesday afternoon---and it's the second offering in a row from reader B.V.

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Greece Scrambles to Find Cash Ahead of $2 Billion Payment Deadline

Greece will begin debating measures to boost liquidity as the cash-starved country braces for more than 2 billion euros ($2.12 billion) in debt payments Friday.

Unable to access bailout funding and locked out of capital markets, the government will outline emergency plans to parliament later Tuesday that includes incentives for tax delinquents to pay up before March 27, when Greece needs money for monthly salaries and pensions.

Prime Minister Alexis Tsipras’s government is burning through cash while trying to get creditors -- euro area member states, the European Central Bank and the International Monetary Fund -- to release more money from a 240 billion-euro bailout program. Euro-area finance ministry officials will hold a call Tuesday to discuss Greece’s deteriorating finances, according to two European officials who asked not to be identified because the talk hasn’t been publicized.

This Bloomberg article, filed from Athens, showed up on their Internet site at 5:01 p.m. Denver time on Monday afternoon---and it's something I found in this morning's edition of the the King Report.

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Bank of England director: 'Greece will not in any realistic scenario repay its debts'

A senior Bank of England official has said that Greece will never be able to get rid of its enormous debt mountain, since the "political pain" that its leaders would suffer would make it impossible.

Alex Brazier said that Greece could, in theory, run a surplus large enough to shrink its debt mountain, which currently runs to 176pc of GDP, after bail-outs worth €245bn.

However, he said no elected government would be able to do so, suggesting that Greece will be left with an enormous debt overhang for some time.

This story was posted on the telegraph.co.uk Internet site at 12:14 p.m. GMT yesterday---and it's the second article in a row that I filched from this morning's King Report.

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Against U.S. Strategy: Spain Calls for End to Confronting Russia

Spanish Foreign Minister Jose Manuel Garcia-Margallo spoke out against anti-Russian sanctions during his state visit to Moscow. These sanctions, he said, are harmful for both sides. Prior to this, Hungary, Italy, Greece and Cyprus had spoken out against the sanctions as well.

Spanish Foreign Minister Jose Manuel Garcia-Margallo said after a meeting with his Russian counterpart Sergei Lavrov in Moscow on Tuesday that the continuation of anti-Russian sanctions or their extension basically depend on ‘whether the agreements on Ukraine are complied with or not’. The sanctions are not advantageous for either side, E.U. Observer quoted García-Margallo.

In addition, there is no need for the extension of sanctions. Since the rebels in Ukraine withdrew their heavy weapons on the basis of the Minsk peace agreement which they thus obey. This is a positive development. The E.U. also needs to take into account Russia interests while developing its relations with Ukraine. García-Margallo added that the food sanctions of the Kremlin had affected the Spanish economy.

This re-posted article was posted on the russia-insider.com website late yesterday afternoon Moscow time---and it's another offering from Roy Stephens.

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Hungary, Cyprus and Greece first to return to Russian market after sanctions lifted – watchdog

Food products from Hungary, Greece and Cyprus may be the first to return to Russian supermarket shelves once the food embargo ends, said Sergei Dankvert, head of Rosselkhoznadzor, the Russian agricultural watchdog.

Russia is discussing the possibility of sending inspectors to Hungary, Greece and Cyprus in order to audit suppliers and ensure immediate exports after the sanctions are lifted, said RSN citing Dankvert.

After the issue is resolved, the service will allow deliveries only from suppliers audited by experts from the European Union, as there was long-term lack of supply, he said.

This article was posted on the Russia Today Internet site at 3:30 p.m. Moscow time yesterday, which was 8:30 a.m. EDT in Washington.  My thanks go out to Roy Stephens once again.

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Ukrainian lawmakers pass bill on temporary special status of self-governance in Donbas

The Parliament of Ukraine passed on Tuesday a draft law stipulating areas in the country’s south-eastern region of Donbas, which will be enjoying a temporary special status of self-governance.

With the necessary 226 votes to pass the bill a total of 296 lawmakers from Ukraine’s Verkhovna Rada voted in favor of the document.

However Verkhovna Rada postponed the entry of this law into force until elections are held in Donbas.

This brief news item, filed from Kiev, showed up on the tass.ru Internet site at 7:23 p.m. Moscow time on their Tuesday evening---and I thank Roy S. once again for bringing it to our attention.  It's worth reading.

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Moscow urges France, Germany to intensify work on implementing Minsk accords

Resolving a problem relating to Kiev’s bill on a special status of Donbas is a priority issue now. This document is an attempt to reinterpret this status and distorts the Minsk agreements, Russian Foreign Minister Sergey Lavrov said on Tuesday.

"We assume, above all, that it’s necessary to urgently intensify the process within the framework of the Contact Group, because the Minsk agreements as well as the Package of Measures to implement them adopted on February 12 are a series of measures to be implemented within the Contact Group," Russia’s top diplomat said. "The Normandy Four has adopted a declaration to support this set of measures, agreeing to control this process," he added.

"By means of our daily contacts with colleagues in France and Germany, we’re talking about the necessity to send a strong signal to Kiev, which is hindering the work of the Contact Group on the implementation of the political, humanitarian and socio-economic aspects of the Minsk agreements," the Russian Foreign Minister said. He added that of primary importance now was "resolving the complex problematic situation that had emerged after President Poroshenko submitted to the Verkhona Rada a bill [on a special status of Donbas]."

This is another brief story from the tass.ru Internet site on Tuesday evening Moscow time.  It's also courtesy of Roy Stephens---and it's worth your while as well.

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Political Logorrhea: Psaki's Statements Reach New Levels of Confusion

Jen Psaki, the spokesperson for the U.S. Department of State, said Russian troops that were stationed in Crimea at Russian military bases, legally with the permission of the Ukrainian government, occupied the peninsula prior to the referendum.

Prior to the Crimean referendum, Russia, absolutely legally with the permission of the Kiev government, had stationed its troops at Russian military bases in Crimea. That meant, regardless of the referendum, Russian troops at Russian military bases could not possibly occupy the Ukrainian territory, as they were stationed at their own bases.

Matthew Lee, a reporter from AP, asked Psaki to clarify how could Russian troops “occupy” Crimea by simply sitting at their bases without forcibly seizing or taking over anything.

Psaki attempted to parry the question with her statement that the Russians were training and sending military equipment to Crimean residents, only to realize that Crimea was not in eastern Ukraine.

“Oh, you’re talking about in eastern Ukraine now, not Crimea,” Lee tried to correct Psaki. After that the spokesperson for the U.S. Department of State got totally lost and replied with incoherent series of words.

As this U.S. State Department official found out, it's hard to keep your facts straight when you've been caught lying your ass off!  This very interesting article appeared on the sputniknews.com Internet site at 6:55 p.m. Moscow time yesterday evening, which was 11:55 a.m. in Washington.

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Russia rules out handing back Crimea, expands war games

Russia ruled out handing Crimea back to Ukraine on Tuesday and a Defense Ministry official said nuclear-capable long-range bombers were being sent to the Black Sea peninsula as part of war games.

The huge military exercises, in which the Northern Fleet was put on full alert on Monday and will range from the Arctic to the Black Sea, appear to be a show of force and defiance on the anniversary of the annexation of Crimea.

Russia's parliament approved the annexation on March 21 last year after Russian forces took control of the peninsula, which is home to Russia's Black Sea Fleet, and residents backed joining the Russian Federation in a referendum.

Dismissing a U.S. pledge to keep economic sanctions in place on Russia over the annexation, Kremlin spokesman Dmitry Peskov said: "Crimea is a region of the Russian Federation and of course the subject of our regions is not up for discussion."

Of course the big lie here is that the citizens of Crimea voted by over 90 percent to rejoin Russia when given the opportunity in a free vote.  This Reuters article, filed from Moscow, appeared on their Internet site at 1:29 p.m. EDT yesterday afternoon---and once again I thank Roy Stephens for sending it along.

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Supersonic strategic bombers heading to Crimea for drills – military source

Russia’s Air Force is deploying an unspecified number of strategic nuclear-capable supersonic bombers to Crimea, according to a source. The major drills also include deployment of tactical Iskander ballistic missiles to the Kaliningrad exclave in Europe.

Several Tu-22M3 (NATO designation ‘Backfire’) variable-sweep wing, long-range strategic and maritime strike rocket aircraft are due to arrive to Crimea as part of global training exercises for the Russian military in the European part of the country.

“In the course of snap combat readiness drills of the armed forces strategic rocket Tu-22M3 aircraft are going to be deployed to Crimea,” a source in Defense Ministry told TASS.

Armed with a variety of air-to-sea cruise and ballistic missiles, high-precision bombs, the bomber’s specialization is the elimination of valuable seaborne targets, such as aircraft carriers and their escorts, convoys and operational squadrons.

This article from Russia Today was posted on their Internet site at 2:06 p.m. Moscow time on their Tuesday afternoon---and it's also courtesy of Roy Stephens.  There was also a story about this on the sputniknews.com Internet site as well.  It was headlined "Russian Strategic Strike Bombers Deployed to Crimea for Military Drills"---and it's courtesy of reader M.A.

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Leaders of 26 States to Visit Moscow for Victory Day Celebrations

The leaders of 26 countries have confirmed that they will take part in Moscow’s Victory Day celebrations on May 9, Russia’s Foreign Minister Sergei Lavrov said Tuesday.

“As of yesterday, the leaders of 26 states, as well as UNESCO and the Council of Europe had confirmed their participation,” Lavrov said.Lavrov noted that some of the European leaders accepted Russia’s invitation despite U.S. pressure.

Lavrov noted that some of the European leaders accepted Russia’s invitation despite US pressure.

Moscow is set to host grandiose celebrations to mark the 70th anniversary of Nazi Germany's defeat in the Second World War.

This news item, filed from Moscow, appeared on the sputniknews.com Internet site on Sunday afternoon---and it's another contribution from Roy S.

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Putin blasts WWII history rewriting as lies aimed at weakening Russia

The Russian president has again denounced attempts to rewrite WWII history, noting that the authors seek to sow strife between peoples and nations for their own geopolitical purposes.

Putin said the cynical lies about the Great Patriotic War and the attempts to blacken the reputation of the Soviet people and the Red Army have nothing to do with the truth. The president’s comments came at the Tuesday session of the committee preparing the May 9 celebrations of the 70th anniversary of the Soviet Union’s victory over Nazi Germany in the Second World War. The Great Patriotic war is the traditional Russian title for the 1941-45 campaign against Germany and its allies.

I reject these shameless conclusions and so called observations that have nothing to do with the truth. Their objective is clear – they want to undermine the power and moral authority of modern Russia and deprive it of the winner nation status with all consequences that would follow in international law,” Putin told the committee members. “They want to divide peoples and instigate conflicts among them, to use historical lies in geopolitical games.”

This Russia Today item put in an appearance on their Internet site at 3:03 p.m. Moscow time on their Tuesday afternoon---and it's definitely worth reading.  Once again I thank Roy Stephen for sharing it with us.

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Pepe Escobar: Power Play behind Regime Change in Russia

With “friends” like European Council President Donald Tusk and top NATO commander Gen. Philip Breedlove, the E.U. certainly doesn’t need enemies.

Gen. Breedhate has been spewing out his best Dr. Strangelove impersonation, warning that evil Russia is invading Ukraine on an everyday basis. The German political establishment is not amused.

Tusk, while meeting with U.S. President Barack Obama, got Divide and Rule backwards; he insisted, “foreign adversaries” were trying to divide the U.S. and the E.U. – when it’s actually the U.S. that is trying to divide the E.U. from Russia. And right on cue, he blamed Russia — side by side with the fake Caliphate of ISIS/ISIL/Daesh.

Tusk’s way out? The E.U. should sign the U.S. corporate-devised racket known as Transatlantic Trade and Investment Partnership (TTIP), or NATO on trade. And then the “West” will rule forever.

NATO may indeed incarnate the ultimate geopolitical/existential paradox; an alliance that exists to manage the chaos it breeds.

This absolute must read commentary by Pepe was posted on the russia-insider.com Internet site early yesterday evening Moscow time---and once again I thank Roy Stephens for finding it for us.

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Stratfor Chairman Straight-Talking: U.S. Policy Is Driven by Imperative to Stop Coalition between Germany and Russia

George Friedman, Founder and Chairman of Stratfor, or what is called by many "private/shadow CIA" for its well known connections and close cooperation with the CIA, gave a very interesting speech to the Chicago Council of Foreign Affairs on subject Europe: Destined for Conflict? in February of this year.

This speech came after another interesting interview where he admits that the overthrow of Yanukovych was "the most blatant coup in history" and among other things the American "payback" for Russian involvement in Syria. 

In my humble opinion, this is one of the most important speeches I've heard in years---blatantly presenting Neocon perspective that dictates Washington's foreign policy.

This excellent story, along with an 11 minute video clip of  Stratfor's George Friedman's speech, put in an appearance on the russia-insider.com Internet site on Tuesday sometime---and it's definitely worth your while if you have the time.

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Tehran's success, Riyadh's failure

Each for its own reasons, the world's major powers have decided to accept Iran as a regional hegemon, I wrote March 4 in Asia Times, leaving Israel and the Sunni Arabs in isolated opposition. The global consensus on behalf of Iranian hegemony is now coming clearly into focus. Although the motivations of different players are highly diverse, there is a unifying factor driving the consensus: the Obama administration's determination to achieve a strategic rapprochement with Tehran at any cost. America's competitors are constrained to upgrade their relations with Iran in order to compete with Washington.

The Obama administration's assessment of Iran's intentions is so positive that Iranian official sources quote it in their own propaganda. As Jeryl Bier observed at the Weekly Standard, the just-released Threat Assessment report of the director of National Intelligence makes no mention of Iran's support for terrorism, in stark contrast to the explicit citation of Iranian terrorism in the three prior annual reports. The omission of Iran's terrorist activities is noteworthy. What the report actually says is even more disturbing. It praises Iran with faint damn:

Despite Iran's intentions to dampen sectarianism, build responsive partners, and deescalate tensions with Saudi Arabia, Iranian leaders - particularly within the security services - are pursuing policies with negative secondary consequences for regional stability and potentially for Iran. Iran's actions to protect and empower Shia communities are fueling growing fears and sectarian responses.

Iran supposedly is doing its best to "dampen sectarianism, build responsive partners, and deescalate tensions with Saudi Arabia" - complete and utter falsehood. Iran is infiltrating Saudi Arabia's Shi'te-majority Eastern Province (also its most oil rich) to agitate against Saudi control, and sponsored a coup against a Saudi-allied regime in Yemen. The report attributes nothing but good intentions to the Tehran regime, and worries only that its policies will have "negative secondary consequences" due to its (understandable, of course) efforts to "protect and power Shia communities." Iran's primary motivation, in the administration's view, is to be a good neighbor and a fountain of good will. Neville Chamberlain never said such nice things about Hitler.

This short essay certainly falls into the must read category for any serious student of the New Great Game---and I thank reader M.A. for sending it our way.  It was posted on the Asia Times website yesterday sometime.

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Failure to clinch nuclear deal will not be ‘end of world’: Larijani

Iranian Parliament Speaker Ali Larijani says the country’s legislature is not pessimistic about the prospect of the nuclear talks, and thinks that if the other party does not raise “excessive demands”, reaching a nuclear deal would be possible.

However, a failure by Tehran and the world powers to reaching a final nuclear deal “would never mean the end of world”, Larijani told a press conference on Monday. 

“We are now living without such a comprehensive deal and if an agreement is not reached, we will go after other solutions.”

Larijani, a former chief nuclear negotiator, also said the parliament “will supervise the negotiations’ dynamism with a supportive approach.”

This news item appeared on the Tehran Times early on Thursday evening local time---and I thank Roy Stephens for finding it for us.

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China cuts back on U.S. debt for 5th month in a row

China, the largest holder of U.S. debt, has continued to cut back on U.S. Treasuries for the fifth consecutive month, shaving $5.2 billion from its holdings between December and January. Japan is edging closer in overtaking the number one spot.

The U.S. Treasury reported Monday that China reduced its holding from $1.244 trillion in December to $1.239 trillion in January.

Economic growth in China, which is at a 25-year low, is the most obvious explanation for the scale back. With more capital leaving mainland China, the less the government needs U.S. dollars to keep the yuan in check.

In total, foreign central banks sold off $12.3 billion in U.S. Treasuries in January, the fourth consecutive month of outflow.

This article is another one from the Russia Today website.  This one showed up there at 10:44 a.m. Moscow time on Tuesday morning, which was 3:44 a.m. in New York.  It's the final offering of the day from Roy Stephens---and I thank him on your behalf.

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Gold Spikes On Sudden $1.2 Billion Bid

For no good reason aside from the algos had their fun to the downside and crude ran its stops, precious metals' futures have suddenly exploded higher on heavy volume... The surge in gold saw approximately $1.2 billion notional traded...

The folks over at Zero Hedge pretty much summed it up in one sentence, although they don't get into the details---and the four excellent charts that are embedded in this brief article are definitely worth the trip.  I thank Brad Robertson for bringing it to my attention---and now to yours.

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Gold eyes Fed; platinum hits 5-1/2 yr low

Platinum tumbled to a 5-1/2-year low on Tuesday as a stronger dollar, weaker gold prices and improving supply took a toll on prices.

Platinum, the worst performing precious metal of the year, fell to $1,096.50 an ounce during Asian hours, its lowest since July 2009. It is down more than 8 percent this year.

"The sentiment around platinum is quite negative. It's a combination of supply coming back online after the strikes last year and it's certainly getting no support from the gold market," said ANZ analyst Victor Thianpiriya.

What bulls hit this is, dear reader.  And the really scary part is that a lot of mining executives actually believe it!  Of course supply and demand, interest rates or the gold price have zero to do with the current prices of any of the precious metals.  It's all paper games on the COMEX by JPMorgan et al.  This Reuters story, filed from Singapore yesterday, was picked up by the finance.yahoo.com Internet site---and I thank Elliot Simon for sending it our way.

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RBI decides to further restrict gold imports, retracts a day later

The Reserve Bank of India (RBI) had a quick change of mind between Monday evening and Tuesday afternoon regarding gold import for jewellers.

On Monday, it informed banks that they could not import gold as a consignment for outright sale to jewellers. On Tuesday, it sent another e-mail that the “e-mail sent yesterday stands withdrawn”.

Which meant a restoration of the position brought about by its February 18 circular, allowing banks to so import gold on a consignment basis and also provide gold loans to jewellers.

The quick reversal has worried some official quarters, since it means imports will stay high — the estimate is 90 tonnes for this month. The purport of Monday's mail was understood to be for tightening of such inflow, a worry for the trade deficit.

This must read article appeared on the Indian website business-standard.com on Tuesday IST sometime---and I thank Mumbai-based reader Danny Carroll for sharing it with us.

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India could still cut gold import duty this year – WGC

The Indian government may yet cut the 10-percent import duty on gold this year despite choosing not to do so in this year’s budget as many market observers had expected, Somasundaram PR, the World Gold Council’s managing director in India, said.

“They have not cut it because they said ‘let us evolve, let us pass a few bills’ but 10 percent is still a lot of money,” he told FastMarkets. “When push comes to shove, it will be reduced but they will wait for certain other things but, as I see it, things are moving in the right direction.”

The Indian government confounded widespread speculation for drop of 2-4 percentage points in the duty, which has stood at 10 percent since August 2013 – it was raised three times that year from the initial four percent.

But Somasundaram doubted whether the schemes, particularly the gold-centric bonds, will find much traction with the Indian public.

“I have said it personally before that none of the schemes will work because 10 percent [in import duties] is still a huge incentive for smuggling. As long as smuggling prevails, none of these schemes will work,” he added.

This gold-related article appeared on the mineweb.com Internet site at 3:47 p.m. GMT yesterday in London---and I found it all by myself.

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Koos Jansen: SGE Withdrawals in Perspective

In 2014 SGE withdrawals, which can be used as a proxy for Chinese wholesale gold demand, have lost their accuracy since the Shanghai International Gold Exchange (SGEI) was launched in September, providing foreign enterprises to trade gold in renminbi, take delivery and export the gold from the Shanghai Free Trade Zone (FTZ). SGE and SGEI withdrawals are not published separately and thus SGEI activity can distort SGE withdrawals (being a proxy for Chinese wholesale demand). This post is about what we know at this stage about SGEI activity in relation to SGE withdrawals. It’s not exact science, but it’s the best we have right now.

The SGEI facilitates gold trading in the Shanghai Free Trade Zone (FTZ). The physical gold flows through the FTZ are completely separated form the Chinese domestic gold market, which is a closed market. Would we get our clear view back if SGE and SGEI withdrawals would be disclosed separately? Unfortunately not. This is because Chinese domestic banks are also trading on the SGEI, when they withdrawal from the vaults in the FTZ they can import this gold into the Chinese domestic gold market (without it being required to be sold through the SGE).

Technically, as I’ve reasoned previously,  Chinese wholesale gold demand is at most equal to SGE withdrawals, at least equal to SGE withdrawals minus SGEI trading volume. Because, it can be every contract traded on the SGEI is bought by a foreign trader that takes delivery, withdraws and exports the gold out of the FTZ.

This short commentary by Koos, which certainly falls into the must read category, appeared on the Singapore website bullionstar.com Wednesday afternoon local time---and shortly before I was about to send this column off to Stowe.

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¤ The Funnies

This was the last day of our trip to Arizona and we're back in Fountain Hills, which is a northeastern suburb of Phoenix---and a beautiful spot.  The temperature was in the 20C/68F range---not like up in the "high country" from where we came.  This is a combination of desert and residential area, with this lake and fountain being the central feature.

This fellow is a male bufflehead that was swimming on the lake.  He's wintering here before heading back into Canada or Alaska somewhere to breed in the spring---and since it's already March, I'd guess he's en route now.  He was further away than I would have liked---and I had to crop the photo pretty hard---and in doing that, it left it at the fringes of what I consider acceptable.  We have them in Alberta, but they're not common.

This butterfly goes by the name Sylphina Angel---and according to Wikipedia it can be found in Ecuador, Peru, and Bolivia.  I thank my daughter Kathleen for sending it our way.

Alexandria Minerals Corporation (TSX VENTURE:AZX) and Murgor Resources Inc. (TSX VENTURE:MGR) are pleased to announce that they have entered into an arrangement whereby Alexandria will acquire all of the outstanding common shares of Murgor.

Here are some of the benefits for Alexandria's shareholders:

  • Substantial increase in Alexandria's mineral resources
  • Alexandria’s cost of discovering gold is already low, at approximately $15.00/oz. The cost of acquiring Murgor’s gold assets is even lower, at approximately $3.00/oz.;
  • Alexandria will have larger strategic land packages in the well-known and prolific mining camps of Val d’Or and Chibougamau in Québec; Red Lake and Matachewan in Ontario; and Flin Flon-Snow Lake in Manitoba;
  • Alexandria management knows how to capitalize on its strategic assets, as evidenced by Alexandria’s successful track record in discovering its West Zone Au-Cu deposit and then monetizing this exploration project in the sale to Agnico-Eagle  (Alexandria Press Release January 14, 2014);

On January 30 Alexandria closed a non-brokered private placement of $500,000 at a price of 10 cents.  There are neither Finder’s Fees nor Commissions associated with this financing.  Proceeds from the sale of the shares will be used for exploration on its Cadillac Break property group in Val d'Or, Québec and general corporate purposes. Call or email Mary Vorvis, 416-305-4999/MVorvis@azx.ca, for more information on Alexandria Minerals.  

 

¤ The Wrap

So it comes down to not how many COMEX silver contracts the commercials want to buy, but how many they can buy. And what the commercials can buy is what others, mainly the technical funds will sell to them. According to my analysis, if the technical funds don’t ramp up short positions to the peaks of last October, we’re getting down to the dregs of what can still be sold to the commercials. Again, once the last technical fund contract is sold, the bottom is in.

However, I could be wrong in my calculations, so let’s look at what happens in the event I am wrong and the technical funds add the 20,000 short contracts I suggest won’t be added. Or the non-technical fund longs in the managed money category liquidate longs well below the 40,000 contract level that has held to date. In that case, I look like a jerk and we go lower in price than I believe. Then what? If that were to occur, namely, massive new quantities of technical fund and non-technical fund silver contracts were sold and prices fell accordingly, we would then be in such a bullish set up in silver that it would then be impossible for prices not to explode because the commercials would then force prices to the heavens. In other words, a bullish set up far beyond anything I’ve ever contemplated.

Since I believe we are close to the maximum point of technical fund selling and, therefore, maximum commercial buying, more attention should be placed on what the next rally will look like, rather than how much more we have to go to the downside. I know that market sentiment is so depressed, as a result of the non-stop deterioration of price these past four years, that it is natural for most to expect that the next silver price rally will be in the mold of all previous rallies, namely, anemic and capped by aggressive commercial selling. That may turn out to be the case, but that outcome is not written in stone. The possibility of a price explosion, instead of a manipulated price capping, looms as large as ever; perhaps more than it ever has before. - Silver analyst Ted Butler: 14 March 2015

It should have been obvious to all but the willfully blind that JPMorgan et al, along with their HFT buddies, spun their algorithms as the Zero Hedge story mentioned above---and Bob's your uncle!  They set new lows for this move down in gold, platinum and palladium.  They certainly tried in silver as well, but the technical funds in the Managed Money weren't taking the bait, so I'd guess they're full up on the short side already.

The vertical rallies into the London p.m. gold fix that came hard on the heels of the engineered price declines, were certainly short covering rallies by the same traders that took the prices down only a few minutes earlier.

And they've been pounding the crap out of platinum and palladium lately---and you can tell from the charts below that "da boyz" didn't start on these metals until March 1---whereas in gold and silver, the engineered price declines began around the third week of January.  I've thrown in the 6-month WTIC chart as well.

So---here we sit waiting for the Fed news.

We're at lows for the precious metals and in crude oil that, quite frankly, I thought I wouldn't live to see again.  The technical funds are all loaded up on the short side---and the powers-that-be at JPMorgan et al are loaded up on the long side; or hold as small a short position that they've been able engineer.

Will we blast off from here, or will "da boyz" use the news to kick the precious metals and crude oil in the gonads one more time?  Beats me, but there's a limit to how low prices can go---and as Ted Butler said above, it's how many short positions the technical traders are prepared to put on, on the short side, as it's a given that none of them have any long positions left to sell.

The act of them placing a short contract under price pressure from the HFT boyz is what causes prices to decline.  If these technical funds are not prepared to short any further, the bottom is in, no matter how hard JPMorgan et al huff and puff from that point forward.

And as I type this paragraph, the London gold market open is about fifteen minutes away.  Gold, silver and platinum rallied tiny amounts for a couple of hours during morning trading in the Far East on their Wednesday morning, but at 10 a.m. Hong Kong time, the prices headed lower---and all four precious metal now sport a negative bias---and all are a hair below their New York closes on Tuesday afternoon. 

Net gold volume is extremely light at only 12,500 contracts---and silver's net volume is only 2,300 contracts, which is mostly fumes and vapours---so nothing much should be read into the current price action.  The dollar index hasn't been doing much either---and is currently up 4 basis points.

As I mentioned in Tuesday's column, that day---at the close of COMEX trading---was the cut-off for this Friday's Commitment of Traders Report---and I hope that all of yesterday's price/volume action will be reported in a timely manner.

And as I put the finishing touches on today column at 5:30 a.m. EDT, I see that all four precious metals got sold down a bit more at the London open, but none of them got sold down below Tuesday's low tick---and only palladium is up on the day at the moment.

Gold's net volume is around 20,500 contracts---and silver's net volume is just 4,000 contracts.  The dollar index is chopping lower---and is currently down 10 basis points.

We're "locked and loaded" for any "surprise" that IMF Managing Director Christine Legarde said might be associated with the Fed announcement---and all we can is sit here, stare at the computer screen and wait.

That's certainly what I'm doing to be doing--and I'll have a full report on what transpires in tomorrow's column.

Ed Steer