Gold & Silver Daily

¤ Yesterday In Gold & Silver

The gold price began to rally the moment that trading began at 6 p.m. Monday evening in New York.  The high, such as it was, came minutes after 2 p.m. Hong Kong time---and a couple of hours before the London open.  From that high, the price got sold down, with only a minor rally that began shortly after the London p.m. gold fix.  The low came right at the 1:30 p.m. COMEX close---and the price only rallied a couple of dollars off that low by the time electronic trading was done at 5:15 p.m. EST on Tuesday afternoon.

The high and low ticks were reported by the CME Group as $1,245.90 and $1,230.60 in the April contract.

Gold closed on Tuesday in New York at $1,233.70 spot, down an even five bucks on the day.  Net volume was 89,000 contracts, only a few thousand more than Monday.

Silver rallied back above $17 spot at the start of trading on Monday evening---and then followed a similar price path as gold in Far East trading on their Tuesday, but the real sell-off didn't begin until shortly after London opened---and the low tick came at, or shortly before, the noon silver fix.  The subsequent rally got capped at 10:45 a.m. EST---and silver's New York low, back below $17 spot, appeared to come just minutes after the COMEX close.  The price rallied a few pennies after that before trading sideways into the close of electronic trading.

The high and low prices were recorded as $17.095 and $16.715 in the March contract, an intraday move of almost 4 percent.

The silver price was closed at $16.905 spot, down 6.5 cents from Monday's close.  Net volume was only 26,000 contracts, which was bit lower than Monday's volume---and there was a decent amount of roll-over volume.

Platinum rallied about eight bucks in Far East trading, but ran into the same seller around 3 p.m. Hong Kong time---and the low tick, just like in gold and silver, came at the 1:30 p.m. EST COMEX close.  Platinum finished the day at $1,206 spot, down another 9 bucks.

Not surprisingly, the palladium chart had the same general price pattern as the other three precious metal---and it's low tick was also in around the COMEX close on Tuesday as well.  The price recovered a bit from there, but palladium was closed down 9 dollars as well, at $768 spot.

The dollar index closed late on Monday afternoon in New York at 94.51---and then sold off to its 94.41 low about 11:20 a.m. Hong Kong time.  The subsequent rally topped out at 94.86 around 11:40 a.m. GMT in London.  Twenty minutes after that, at noon GMT, it fell off a 32 basis point cliff in about fifteen minutes before "gentle hands" appeared to rescue it.  Once rescued, it continued to slide a bit as the Tuesday trading session went along---and finished the day at 94.74---which was up 23 basis points from it's Monday close.

The gold stocks gapped down at the open---and were down almost 3 percent by 9:45 a.m. EST.  That turned out to be the low of the day---and they chopped steadily higher from there.  But shortly after 3 p.m. the rally ended---and they got sold down a bit into the close.  The HUI finished the trading session down 1.61 percent.

The chart pattern for the silver equities was very similar as the gold stocks, except the silver shares broke above unchanged just before 3 p.m. EST---and their subsequent sell-off was very muted, as Nick Laird's Intraday Silver Sentiment Index closed down 0.37 percent.

The CME Daily Delivery Report showed that there was no delivery activity in either gold or silver scheduled for Thursday.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in February increased by 27 contracts---and now stands at 702 contracts still open.  Silver's February open interest remained unchanged at 20 contacts.

There were no reported changes in GLD yesterday.  I was certainly expecting a withdrawal of some sort after the engineered price decline on Friday's job numbers, but so far there's been nothing.  It's possible that there was a ready buyer for all these shares that the general public was dumping, but it's a little too soon to say for certain that that was the case.  Let's see what the lay of the land is after they report at the close of today's trading session.

There was no change in SLV either, but that's not surprising, as all the shares in that ETF were most likely purchased by JPMorgan and the other authorized participants to cover their outstanding short positions.

While on the subject of the short positions in both GLD and SLV, the folks over at the Internet site finally got around to updating their website with the new short positions in these ETFs as of Friday, January 30---and here's what they had to say.

The short position in SLV did increase, but not nearly as much as I was expecting---only 6.01 percent.  The short positions went from 19.54 million shares/troy ounces up to 20.72 million shares/troy ounces.  I was expecting multiples of that.

As expected, the short position in GLD declined, but only by 7.12 percent.  I was expecting more.  The short position went from 1.599 million troy ounces, down to 1.485 million troy ounces.

I'm sure Ted will have something to say about all this in his mid-week commentary to his paying subscribers early this afternoon---and I'll steal what I think I can get away with and post it in tomorrow's column.

There was another sales report from the U.S. Mint.  They sold 1,500 troy ounces of gold eagles---another 2,000 one-ounce 24K gold buffaloes---and another 242,000 silver eagles.

There was very little activity in gold over at the COMEX-approved depositories on Monday, as nothing was reported received---and only 1,963 troy ounces were shipped out.  The same can be said for silver, as they didn't receive any either---and only shipped out 32,039 troy ounces.

After having a plate full of stories in my Tuesday column, I have considerably fewer today.  A few of them are a bit longer than I like to post on a weekday, but because the events they refer to are changing so quickly, it's possible that they will be quite dated by the time Saturday rolls around, so you're getting them here.


¤ Critical Reads

Apple Closes at Record Market Value of More Than $700 Billion

The world’s largest company by market capitalization got a little bit bigger Tuesday.

Apple Inc., which began flirting with a record valuation of $700 billion during midday trading in November, ended the day at $710.7 billion, marking the first time a U.S. company has reached that milestone. Shares rose 1.9 percent to $122.02 at the close in New York.

The iPhone maker is now more than twice as valuable as longtime rival Microsoft Corp. Exxon Mobil Corp., the world’s next-biggest company, has a market capitalization of $385.4 billion. Optimism about Apple has been growing since Chief Executive Officer Tim Cook revealed larger-screened, more expensive iPhones in September, which helped fuel a record profit during the last three months of 2014. China, where revenue rose 70 percent, is helping to fuel the jump in revenue.

“Given Apple’s powerful iPhone cycle, a big 4G ramp in China and the upcoming launch of Apple Watch in April, we believe there is still plenty to look forward to at Apple during this transformational cycle,” Brian White, an analyst at Cantor Fitzgerald, wrote in a note to investors.

When you start seeing stories about equities that carry headlines like this, you just know that the top is probably in for this company in particular---and maybe the stock market in general.  This tiny Bloomberg story, filed from San Francisco, appeared on their website at 2:09 p.m. Denver time yesterday afternoon---and I thank Dan Lazicki for sending it.


America is Choking: Operation Chokepoint - Mike Maloney

I casually mentioned to our anti money-laundering trainer that our bank had put us through a bizarre risk assessment a couple of months earlier.

“Oh, that’s because of Operation Choke Point” he said, as if it was common knowledge.

“Operation What Point?!” I replied.

He went on to tell me the full story, and it was so frightening that it literally caused the hair on my neck to stand on end.  Though he didn’t use these exact words, the point of what he was telling me was that the U.S. government is waging a new war.  It’s an undeclared war.  It’s an underground war.  It’s a covert war.  But now, slowly but surely, more Americans are becoming aware of this war because they are finding out that they are the targets in this war.  They have become the enemy of the state.  That’s because this war is a war on small business in America.

This absolute must watch 7:16 minute video presentation by Mike, complete with transcript, was posted on the Internet site yesterday morning.  Any person with a small business, American or otherwise, that deals with a U.S. bank, is in the crosshairs.


After Greece Warns It May Get Funds From Russia Or China, Europe Said To Propose 6 Month Extension

Did Europe just fold?

Moments ago Bloomberg blasted a headline which has to be validated by other members of the European Commission as well as Merkel and the other Germans (and may well be refuted, considering this is Europe), which said that:


So did Greece just win the first round of its stand off with Brussels? It remains to be confirmed, but congratulations to Greece if indeed it caused Merkel and the ECB to fold.

But what caused it? Well, it wasn't the laying out of the Greek "ask"?

No, that's not it. What emerged as the biggest point of leverage overnight was the following threat reported hours ago by Reuters, citing the Greek defense minister Kammenos, who essentially threatened to go to Russia and/or China if Europe decline to cooperate. Per Reuters.

This longish---and thrice updated Zero Hedge piece, appeared on their Internet site at 9:57 a.m. EST on Tuesday morning---and I thank reader 'David in California' for passing it around.


Nein! Germany quashes hope of quick Greek debt accord

It seemed like wishful thinking from the start, but German Finance Minister Wolfgang Schaeuble made it official Tuesday: There won’t be any quick resolution of the latest version of the Greek debt crisis.

European equities and U.S. stock index futures got an added lift Tuesday morning as headlines and rumors floated the prospect of a six-month extension of Greece’s bailout program, which would presumably allow the country’s new anti-austerity government to negotiate a new pact with its creditors while avoiding default.

Then Schaeuble stepped in, telling reporters at the Group of 20 meeting in Istanbul that such speculation was the stuff of fantasy. There would be no hasty deal reached Wednesday when the so-called Eurogroup of eurozone finance ministers gather for an emergency meeting in Brussels. 

Talk of any sort of “bridging” was “false,” he said, according to Dow Jones Newswires.

This article appeared on the Internet site at 2:48 p.m. EST on Tuesday afternoon.


Greece's last minute offer to Brussels changes absolutely nothing

Panagiotis Lafazanis, head of Syriza’s powerful Left Platform, reiterated in the Greek parliament that there will be no fundamental concession. “Greece is not a protectorate. If the EU’s ruling elites think they can blackmail us, they are very wrong,” he said.

What has changed is that Mr Varoufakis will go to Brussels on Wednesday with a package that will most likely throw enough sand in everybody's eyes – and exploit mounting alarm in EMU circles that this showdown is becoming dangerous – to force a delay. EMU lives on.

Yet nothing of substance has changed. The eurozone still faces its Morton's Fork: either it finds a way to surrender to the Greek mutineers on austerity and debt (calling it victory), or it persists in holding Syriza to the letter of a discredited and destructive Troika deal agreed by a previous government, and in doing so risks blowing up the European Project.

Either way, we are already in an entirely different Europe.

This must read commentary by Ambrose Evans-Pritchard showed up on the Internet site at 1:17 p.m. GMT yesterday afternoon---and it's courtesy of Roy Stephens.


Greece threatens tilt to Russia and China unless Europe yields

Greece's radical new government has threatened to seek money from Russia and China to avert a financial crisis rather than yield to austerity demands from Europe, risking a dangerous political rift with the leading EU powers and a full-blown NATO crisis.

"We want a deal. But if there is no deal, and if we see that Germany remains rigid and wants to blow Europe apart, then we will have to go to Plan B,” said Panos Kammenos, the defence minister and head of the Independent Greeks party in the ruling coalition.

“We have other ways of finding money. It could be the United States at best, it could be Russia, it could be China or other countries,” he told Greek television. Mr Kammenos said Greece would prefer to leave the euro if membership means submitting to what he calls a “Europe under German domination.”

The implicit threat to team up with Russia comes up at an extremely delicate moment as French and German leaders attempt to negotiate a peace deal with President Vladimir Putin, and Washington mulls military aid for Ukraine.

Six hours after writing his previous commentary posted just above this one, Ambrose Evans-Pritchard had this one stuck up on The Telegraph's website at 7:16 p.m. GMT yesterday evening.  It's worth reading as well.  Roy Stephens slid it into my in-box in the wee hours of this morning Denver time.


"U.S., E.U. unity on Ukraine crisis is cracking and fracturing"

A split between the U.S. and E.U. over the prospect of sending arms to Kiev, if not just public posturing, would mean Europe is finally getting a policy of its own – something Washington never wanted to happen, political expert Nebojsa Malic told Russia Today.

RT: Do you think the meeting between Merkel and Obama was fruitful?

Nebojsa Malic: Just a message that the US is considering to send weapons is going to be encouraging the regime in Kiev not to engage in any sort of diplomacy and continue to pursue military means to resolving this crisis.

But the fact that there is dissent from Europe is meaningful and significant – if it is, in fact, real descent and not just public posturing. I think the Europeans are feeling the impact of the sanctions because this war of words and deeds, in which Washington is targeting Moscow via Kiev, is really destroying the European economy more than anything else.

And so the Europeans are trying desperately to get some way out of this crisis, and would also give their project a much needed legitimacy boost after the events in Greece. Whether Washington will allow them to do that remains to be seen.

This short interview appeared on the Russia Today Internet site at 5:09 a.m. Moscow time on their Tuesday morning, which was 9:09 p.m. on Monday evening in New York.  I thank Roy Stephens for sending it.


Germany Emerges: George Friedman

German Chancellor Angela Merkel, accompanied by French President Francois Hollande, met with Russian President Vladimir Putin on Feb. 6. Then she met with U.S. President Barack Obama on Feb. 9. The primary subject was Ukraine, but the first issue discussed at the news conference following the meeting with Obama was Greece. Greece and Ukraine are not linked in the American mind. They are linked in the German mind, because both are indicators of Germany's new role in the world and of Germany's discomfort with it.

It is interesting to consider how far Germany has come in a rather short time. When Merkel took office in 2005, she became chancellor of a Germany that was at peace, in a European Union that was united. Germany had put its demands behind it, embedding itself in a Europe where it could be both prosperous and free of the geopolitical burdens that had led it into such dark places. If not the memory, then the fear of Germany had subsided in Europe. The Soviet Union was gone, and Russia was in the process of trying to recover from the worst consequences of that collapse. The primary issue in the European Union was what hurdles nations, clamoring to enter the union, would have to overcome in order to become members. Germany was in a rare position, given its history. It was in a place of comfort, safety and international collegiality.

The world that Merkel faces today is startlingly different. The European Union is in a deep crisis. Many blame Germany for that crisis, arguing that its aggressive export policies and demands for austerity were self-serving and planted the seeds of the crisis. It is charged with having used the euro to serve its interests and with shaping EU policy to protect its own corporations. The vision of a benign Germany has evaporated in much of Europe, fairly or unfairly. In many places, old images of Germany have re-emerged, if not in the center of many countries then certainly on the growing margins. In a real if limited way, Germany has become the country that other Europeans fear. Few countries are clamoring for membership in the European Union, and current members have little appetite for expanding the bloc's boundaries.

This longish, but absolute must read commentary, appeared on the Internet site at 9:00 a.m. GMT on Tuesday morning---and I thank Dan Lazicki for sharing it with us.


Is Peace or War at Hand? — Paul Craig Roberts

The meeting with Putin was initiated by Merkel and Hollande, because they are disturbed by the aggressive position that Washington has taken toward Russia and are fearful that Washington is pushing Europe into a conflict that Europe does not want.  However, Merkel and Hollande cannot resolve the NATO/EU/Ukraine situation unless Merkel and Hollande are willing to break with Washington’s foreign policy and assert the right as sovereign states to conduct their own foreign policy.

Unless Washington’s war-lust has finally driven Europeans to take control over their own fate, the most likely outcome of the Putin-Merkel-Hollande meeting will be more meetings that go nowhere. If Merkel and Hollande are not negotiating from a position of independence, one likely outcome after more meetings will be that Merkel and Hollande will say, in order to appease Washington, that they tried to reason with Putin but that Putin was unreasonable.  

Based on Lavrov’s meeting in Munich with the Europeans, the hope for any sign of intelligence and independence in Europe seems misplaced.  Russian diplomacy relied on European independence, but as Putin has acknowledged Europe has shown no independence from Washington.  Putin has said that negotiating with vassals is pointless. Yet, Putin continues to negotiate with vassals.

Perhaps Putin’s patience is finally paying off. There are reports that Germany and France oppose Washington’s plan to send weapons to Ukraine. French president Hollande now supports autonomy for the break-away republics in Ukraine. His predecessor, Sarkozy, said that Crimea chose Russia and we cannot blame them, and that the interests of Americans and Europeans diverge when it comes to Russia. Germany’s foreign minister says that Washington’s plan to arm Ukraine is risky and reckless. And on top of it all, Cyprus has offered Russia an air base.

This commentary by Paul is your second must read in a row---and it's another offering from Roy Stephens.


"Germany reserves the right to impose sanctions on Ukraine"--Steinmeier

Frank-Walter Steinmeier’s announcement that sanctions against Kiev are possible cause a furious reaction by the Ukrainian Ministry of Foreign Affairs.

The Foreign Minister Steinmeier made this statement in an interview with the ARD TV channel.

Steinmeier said that if no political decision is reached in Ukraine, the German government reserves the right to “act decisively against the Ukrainian leadership, up to and including sanctions”.

Germany’s ambassador to Ukraine Christoph Weil was forced to have a discussion with the Deputy Foreign Minister of Ukraine Andrey Olefirov due to Steinmeier’s statement.

This short and very interesting article appeared on the Internet site on Monday---and it's another contribution from Roy Stephens.


Ukrainians Rage Against Military Draft: "We're Sick of This War" --- Justin Raimondo

When Ukrainian army officers came to the Ukrainian village of Velikaya Znamenka to tell the men to prepare to be drafted, they weren’t prepared for what happened next. As the commanding officer was speaking, a woman seized the microphone and proceeded to tell him off: "We’re sick of this war! Our husbands and sons aren’t going anywhere!" She then launched into a passionate speech, denouncing the war, and the coup leaders in Kiev, to the cheers of the crowd.

What she did is now a crime in Ukraine: the only reason she wasn’t arrested on the spot is that the villagers wouldn’t have permitted it. But in Ukrainian Transcarpathia, well-known journalist for Ukrainian Channel 112 Ruslan Kotsaba has been arrested and charged with "treason" and "espionage" for making a video in which he declared: "I would rather sit in jail for three to five years than go to the east to kill my Ukrainian brothers. This fear-mongering must be stopped." Kotsaba may sit in jail for twenty-three years, the prescribed term for the charges filed against him.

Kotsaba’s arrest is part of a desperate effort by the Ukrainian government to intimidate the growing antiwar and anti-draft movement, which threatens to upend Kiev’s dreams of conquering the rebellious eastern provinces. Kotsaba’s particular crime, according to prosecutors, was in describing the conflict as a civil war rather than a Russian "invasion." This is a point the authorities cannot tolerate: the same meme being relentlessly broadcast by the Western media – that an indigenous rebellion with substantial support is really a Russian plot to "subvert" Ukraine and reestablish the Warsaw Pact – now has the force of law in Ukraine. Anyone who contradicts it is subject to arrest.

This short essay by Justin Raimondo of fame was picked up by the folks over at the Zero Hedge website at 12:22 p.m. EST on Tuesday---and I thank Scott Carpenter for passing it around yesterday.  It also falls into the absolute must read category as well.  Justin's headline reads "Kiev's Bloody War is Backfiring"---and if you want, you can read it directly from his website here.


U.S. House Proposes $1 billion in Lethal Aid, Military Assistance to Ukraine

The U.S. House of Representatives introduced new legislation authorizing military and lethal aid to Ukraine through 2017, according to a U.S. Congress announcement.

The Secretary of Defense is authorized, in coordination with the Secretary of State, to provide assistance, including training equipment, lethal weapons of a defensive nature, logistics support, supplies and services, and sustainment to the military and national security forces of Ukraine, through September 30, 2017," Tuesday’s legislation read. “To carry out the provisions of this act there are authorized to be appropriated $1,000,000,000. Amounts authorized to be appropriated under this subsection are authorized to remain available until September 30, 2017."

The bill, introduced by Representatives Adam Smith and Mac Thornberry, both members of the House Armed Services Committee, aims to secure Ukraine’s “sovereign territory against foreign aggressors,” and defend Ukrainians from attacks by “Russian-backed separatists,” according to the legislation. Additionally, the bill calls for having a negotiated settlement to “end the conflict” in Ukraine.

This news item put in an appearance on the Internet site at 2:53 a.m. Moscow time on their Wednesday morning, which was 6:53 p.m. New York time.  It's the second-last offering of the day from Roy Stephens.


U.K. reserves right to arm Ukraine military

The U.K. has followed the U.S. in saying that if diplomacy doesn’t stop Russian aggression in Ukraine then it might start arming the Ukrainian military.

Foreign minister Philip Hammond made the statement in the British parliament on Tuesday (10 February).

“It is a national decision for each country in the NATO alliance to decide whether to supply lethal aid to Ukraine. The U.K. is not planning to do so, but we reserve the right to keep this position under review,” he said.

“We share a clear understanding that while there is no military solution to this conflict, we could not allow the Ukrainian armed forces to collapse”.

This story was posted on the Internet site at 7:12 p.m. Europe time yesterday evening---and Roy Stephens slid it into my in-box just before midnight MST.


China's January inflation hits five-year low, pressure builds for more policy support

China's annual consumer inflation hit a five-year low in January while factory deflation worsened, underscoring deepening weakness in the economy and heaping pressures on policymakers to inject more stimulus to underpin growth.

The risk of deflation is rising for the world's second-largest economy as a property market downturn and widespread factory overcapacity have been compounded by an uncertain global outlook and falling commodity prices.

A collapse in global oil prices have already unleashed a wave of easings around the world as central bankers from Europe to Canada to Australia sought to defuse the deflationary pressures and bolster their economies.

This Reuters article, filed from Beijing, appeared on their Internet site at 12:30 p.m. EST on Tuesday---and I thank Dan Lazicki for his final offering in today's column.  It's worth reading.


Africa's Mining Industry is Basically Bust: Mark Bristow

The mining sector is in a sorry state even at current prices and cannot be seen as a viable industry unless it undergoes a major reinvention, says Randgold Resources CEO Mark Bristow.

“The harsh reality is that the mining sector has inflicted debt and write-downs on itself without making provision for its long-term future,” he told delegates at the Mining Indaba, in Cape Town, on Tuesday.

In a sobering address, Bristow said the industry’s ability to contribute to Africa’s transformation had been handicapped by its short-term culture, which had been an unfortunate legacy of the boom years.

While the industry was grappling, African countries were revising their mining codes to increase their share of revenue.

“They are demanding more money from an industry that is basically bust.”

This article, filed from Cape Town, appeared on the Internet site yesterday---and it is, of course, courtesy of South African reader B.V.


Low gold price causes Kinross to shelve expansion of African mine

Kinross Gold Corp. will not go ahead with a $1.6 billion expansion of its Tasiast mine in Africa's northwest because of the weak gold price, the Toronto-based miner said today as it reported an unexpected fourth-quarter loss.

Although Kinross was in a strong cash position and project financing talks had gone well, the company was concerned about cash flow during the 35 months of construction if the gold price fell further, Kinross Chief Executive Paul Rollinson said.

This gold-related news item, filed from Vancouver, put in an appearance on their website at 6:50 p.m. EST last evening---and I found it over at the Internet site.


Remember the China herdsman who found a giant gold nugget? The government does

Remember the lucky Chinese herdsman who recently stumbled onto a 17-pound gold nugget? Well, it seems China’s government hasn’t forgotten, as the nugget’s finder may now be forced to surrender his find to the state as a public “mineral resource.”

After the ethnic Kazak herdsman accidentally tripped over a gold nugget “on bare ground” in China’s far western Xinjiang region about two weeks ago, the local government conducted an appraisal of the rock — and an investigation with various officials to discuss ownership of the treasure, the government-run Beijing Morning Post reported Wednesday.

News that the gold might be seized has triggered controversy across China, with legal experts and laypersons alike debating who should get to keep the giant nugget.

However, the report quoted a lawyer based in Shanxi province as saying that if the nugget is eventually determined to be any type of “mineral resource,” it would still be the property of the government under Chinese law.

This story appeared on the Internet site just after midnight EST last night---and I found it on the Sharps Pixley website.



¤ The Funnies

The first two photos were taken in the Salt River canyon, which is on State Highway 77 between Globe and Show Low in Arizona.  Except for some squiggles on the map, there was no way of telling what kind of geology and geography we would be driving through when we got there.  It turned out to be a mini version of the Grand Canyon.  The first photo was taken with my back to a very bright sky---and the second one involved shooting directly into it.  That's why the colours are so much different.

This next photo was taken on the north rim of the canyon just before Show Low---and I really liked the way the mountains/hills faded away into the distance with every-increasing amount of haze making each successive mountain/hill darker.  I cropped it for maximum visual impact.  The 'click to enlarge' feature helps, but it still doesn't do it justice.

Freegold Ventures Limited is a North American gold exploration company with three gold projects in Alaska. Current projects include Golden Summit, Vinasale and Rob. Both Vinasale and Golden Summit host NI 43-101 Compliant Resource Calculations.

An updated NI 43-101 resource was calculated on Golden Summit in October 2012 and using 0.3 g/t cutoff  the current resource is 73,580,000 tonnes grading 0.67 g/t Au for total of 1,576,000 contained ounces in the indicated category, and 223,300,000 tonnes grading 0.62 g/t Au for a total of 4,437,000 contained ounces in the inferred category. In addition to the Golden Summit Project the Vinasale also hosts a NI 43-101 resource calculation which was updated in March 2013. Indicated resources are 3.41 million tonnes averaging 1.48 g/t Au for 162,000 ounces, and Inferred resources are 53.25 million tonnes averaging 1.05 g/t Au for 1,799,000 ounces of gold utilizing a cutoff value of 0.5 grams/tonne (g/t) as a possible open pit cutoff. Please send us an email for more information,


¤ The Wrap

Keep this one fact firmly in mind – the unusually frantic COMEX silver warehouse turnover began when silver prices were close to $50 and continued for nearly 4 years; the same four years where the price of silver put in its worst performance of all time, falling 70% from the highs. While I always believed the turnover would prove ultimately bullish for the price of silver, I don’t believe I made that representation on a short term basis, suggesting the turnover was the driving force behind short term prices (as are the COTs). My point is that no one should fear the end of the physical warehouse turnover as it has coincided with absolutely rotten concurrent price action. On the surface, we should be rooting for the movement to end.

Over the past year or so (I can’t remember exactly when) I have speculated that JPMorgan has accumulated the largest stockpile of physical silver ever amassed in history. And where I thought the physical silver movement in the COMEX warehouses was originally driven by strong industrial demand, more recently I have come to believe the movement was related to JPMorgan’s silver accumulation. The two thoughts, moreover, are not that far apart. While I suppose I would have preferred the movement to have been caused by straight industrial demand and not by buying by JPMorgan if I had the choice; in reality, I had no such choice. When the good Lord gives you lemons, you make lemonade or lemon pie; you don’t moan that you don’t have oranges. While I further suppose that if I am correct about JPMorgan accumulating silver that some might argue that the world’s most crooked bank might then sell that silver to continue to depress prices; I’m of the belief JPM is more likely to make the financial score of all time by arranging to sell at unimaginable high prices.

I guess the bottom line here is that if the COMEX silver warehouse turnover has or is coming to an end , it might signal that JPMorgan has finished its silver accumulation phase and would begin to consider the distribution phase of its hoard (at much higher prices). That doesn’t mean we go straight up from here---and considering the current COT setup, that would appear unlikely. But the COT setup will likely change in fairly short order and when it does, there will be no reason for JPMorgan to continue to depress silver prices as they have over the past seven years. - Silver analyst Ted Butler: 07 February 2015

Despite the very low volumes, it was obvious that all four precious metals were under selling pressure yesterday.  The dollar index rally came and went during morning trading in London---and can hardly be a factor considering that the rally was all done long before New York even opened---and all four precious metals had their respective lows at the 1:30 p.m. close of COMEX trading---six and a half hours after the dollar index topped out.  If there's a correlation there, I'd like to have someone show me where it is.

Here are the 6-month charts for gold and silver---and nothing much has changed since Monday.

And as I type this paragraph, the London open is twenty-five minutes away.   Three of the four precious metals are up a bit on the day and, like Monday in early Far East trading, weren't allowed to get far.  Palladium is flat.  Net gold volume is barely 11,000 contracts---and silver's net volume is just a bit over 2,900 contracts.  The dollar index, which hadn't done much in early Far East trading, is now up 7 basis points.  Nothing to see here at the moment, please move along.

Yesterday was the cut-off for Friday's Commitment of Traders Report---and Tuesday's price action in both gold and silver isn't really going to affect Friday's report all that much.

Where we go from here is a complete unknown for anyone.  There are myriad black swans of various types floating around out there that could go bump in the night, either individually, or as a group.  There's also the matter of the obscene and grotesque short positions in the COMEX futures market in both gold and silver that are currently held by the Big 8 traders.  Are they going to try to cover as much as they can, or are they going to get over run?

Right now I'm just sitting here with my face up against the windshield wondering which way this is going to break---and how hard.

And as I sent today's commentary out the door to Stowe, Vermont at 5:10 a.m. EST, I note that gold and silver are still up a bit on the day---and trading basically where they were about thirty minutes before the London open.  Platinum and palladium are about unchanged from Tuesday's close.

Net gold volume is around 16,500 contracts---and silver's net volume is around 4,200 contracts---both very much on the lighter side, and almost microscopic for this time of day.

The dollar index is back to unchanged.

It's as quiet as the proverbial church mouse at the moment.

That's all I have for today---and I'll see you here tomorrow.

Ed Steer