The gold price rose gently in Far East trading, reaching a secondary peak around 8:45 a.m. in London. From there it went into an equally gentle decline which came to an end at 12 o'clock noon...also in London...which was 7:00 a.m. in New York.
From that low, gold climbed up to its high of the day [$1,662.40 spot] about fifteen minutes after the end of Comex trading in New York. From that high, the gold price sold off a few dollars into the close of electronic trading at 5:15 p.m. Eastern time.
Gold closed at $1,657.10 spot...up $12.80 on the day. Net volume was on the lighter side at around 119,000 contracts.
Silver price path was only slightly different than gold's, as the rally in New York didn't really develop any legs until 9:45 a.m. Eastern. Silver's high tick [$31.40 spot] also came slightly earlier than gold's...at 1:20 p.m...about ten minutes before the Comex close.
And, like gold, once the high tick was in, silver got sold off a bit going into the close of electronic trading.
The silver price closed at $31.09 spot...up 38 cents. As we come down to the last few days that traders have to roll out of the May silver contract, gross volume was once again, immense. But once all the roll-over and spreads were removed, net volume was down to virtually nothing...10,000 contracts or so.
The dollar index spent most of Thursday just under the 79.00 level, but during the last hour of trading in New York late yesterday afternoon, the index 'soared' almost 25 basis points to finish around the 79.15 mark. Not much to see here.
With the gold price firmly in positive territory, I must admit that I was somewhat taken aback by the performance of the gold shares on Thursday...especially considering how well they did on Wednesday when the gold price turned in a gain of only a fraction of Wednesday's.
And to make matter even more unusual, after gold hit its 1:45 p.m. high and began to fade a bit...the gold stocks actually strengthened. Go figure. The HUI finished down a miniscule 0.05%.
Thankfully most of the silver stocks did better...and Nick Laird's Silver Sentiment Index closed up 1.00% on the day.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 72 gold and zero silver contracts were posted for delivery on Monday. Today is the last day in the April delivery month and, all things being equal, the CME will post the First Day Notice numbers for May silver on their website later tonight...and if that's the case, it will be a talking point in Saturday's column.
For the third day in a row, there were no reported changes in either GLD, SLV...nor a sales report from the U.S. Mint.
One thing that I forgot to mention in my Wednesday column were the changes in short positions in the shares of both SLV and GLD. The latest bi-weekly report showed that the short position in SLV declined by 4.59 percent from 11.78 million shares/ounces, down to 11.24 million shares/ounces. Not a lot, to be sure, but it's better than the alternative. The short position in GLD was up again...this time by 13.60 percent. The number of shares of GLD held short [with no metal backing them] rose from 11.03 million to 12.54 million. That's about 40 tonnes of the stuff, which is not an insignificant amount. In silver, the tonnage is far more substantial...a hair under 350 tonnes, which is more than five days of total world silver production.
It was a pretty quiet day over at the Comex-approved depositories on Wednesday. They reported receiving 300,782 troy ounces of silver...and shipped 93,256 ounce of the stuff out the door. Virtually all the action was over at Brink's, Inc. once again...and the link to that is here.
Reader Scott Plushau has posted a few comments about silver on his website. It's headlined "Bull Hammer in Silver"...and the link is here.
I have a fair number of stories on rather diverse topics today, so I hope you find something of interest in what I have posted below.
Big jumps in foreclosure activity in cities like Pittsburgh, Indianapolis, New York and Raleigh pushed the national numbers higher in the first three months of this year, according to a new report from RealtyTrac, an online foreclosure sales and data company.
A majority of U.S. housing markets posted a quarterly increase in foreclosure activity, although the numbers are still down from a year ago.
“First quarter metro foreclosure trends were a mixed bag,” said Brandon Moore, chief executive officer of RealtyTrac, adding that the increase in the number of cities seeing a quarterly jump is, “an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.”
This cnbc.com story was posted on their website yesterday...and I thank West Virginia reader Elliot Simon for bringing it to our attention. The link is here.
The housing market is bumping along the bottom and due to improve but the American Dream of home ownership as most know it is “just gone” and becoming a thing of the past, says Karl Case, co-founder of the S&P/Case-Shiller Home Price Index.
The S&P/Case-Shiller Index covers home prices in 20 major U.S. cities. February home prices fell 0.8 percent compared to January levels and home prices are down 3.5 percent from February 2011.
"The owner occupancy rate is very, very low," Case says. "We've added seven million households in the last seven years and six million of those are rentals," Case says, adding that the "American dream is just gone."
The index's other co-founder, Yale economist Robert Shiller, agrees that housing may take years — even lifetimes — to recover.
I would say that this assessment is just about 100% accurate...and that will soon apply to anywhere in the Western world...not just the U.S. This is worth reading...and I thank Elliot Simon for his second contribution in a row to this column. It was posted over at the moneynews.com website yesterday...and the link is here.
When David Wegner went looking for a checking account in January, he was peppered with offers for low-end financial products, including a prepaid debit card with numerous fees, a short-term emergency loan with steep charges, money wire services and check-cashing options.
“I may as well have gone to a payday lender,” said Mr. Wegner, a 36-year-old nursing assistant in Minneapolis, who ended up choosing a local branch of U.S. Bank and avoided the payday lenders, pawnshops and check cashers lining his neighborhood.
An increasing number of the nation’s large banks — U.S. Bank, Regions Financial and Wells Fargo among them — are aggressively courting low-income customers like Mr. Wegner with alternative products that can carry high fees. They are rapidly expanding these offerings partly because the products were largely untouched by recent financial regulations, and also to recoup the billions in lost income from recent limits on debit and credit card fees.
This story showed up in The New York Times on Wednesday...and it's Roy Stephens first offering of the day. The link is here.
Today's surprise macroeconomic indicators, be it Britain slipping back into recession or America's large decline in durable goods orders, speak to the unusual challenges facing advanced economies. Yet, way too many of today's policy approaches to the problems at hand are tactically oriented. Rather than confronting the challenges comprehensively and setting a long-term destination, they are short-term responses designed simply to right a leaning ship. Aimed at achieving equilibrium just long enough for everyone to catch their breath, they deliver a tranquility that has repeatedly proved temporary, reversible, and therefore fundamentally elusive.
There are good reasons for this policymaking approach, and to be fair, it has worked in the past. Yet circumstances are fundamentally different today. So what appears tactically smart to some may well end up strategically shortsighted for all.
The recurrent inclination to opt for the tactical rather than the strategic solution to the current mess is evident in Europe and the United States -- and it is visible in both the public and the private sectors. Facing their biggest debt crisis in modern history, European government officials have muddled along for more than two years. Through a series of small steps -- be it the financial bailout of three peripheral economies or the massive liquidity injections by the European Central Bank -- they have done enough to avoid a catastrophe, but not nearly enough to leave the crisis firmly and decisively behind.
Mohamed A. El-Erian is CEO and co-chief investment officer of global investment management firm Pimco. This 2-page article showed up over at the foreignpolicy.com website on Wednesday...and I thank reader Donald Sinclair for bringing it to my attention. The link is here.
This 22-minute interview with the good doctor is posted over a the informationliberation.com website on Monday...and I thank Nick Laird for sending it along. Nick says it's "A brilliant interview"...so if that turns out not be the case, you can blame him. The link is here.
Here's the 72-graph presentation that Jeff Gundlach just delivered to investors at the New York Yacht Club. I'd say his listeners had more than a few pennies to rub together.
This story was posted on the businessinsider.com website yesterday...and I thank Roy Stephens for sending it. The link is here.
Starting at around 1:50, Capital Account's Lauren Lyster begins by introducing Jim Grant's reflexive perspective of the world in a rather eloquent brief on just how our centrally-planned economy has veered from any notion of true capitalism. The interview with Jim Grant begins at the 4:30 mark.
This Russia Today interview is well worth your time if you have it. It's imbedded in a zerohedge.com piece that reader U.D. slid into my in-box in the wee hours of this morning. The link is here.
Standard & Poor's lowered Spain's long-term credit rating by two notches on Thursday, saying the country's budget problems are likely to get worse because of the weak economy.
S&P reduced Spain's long-term sovereign credit rating to "BBB+" from "A." The agency also lowered Spain's short-term rating and assigned a negative outlook, which suggests the possibility of another downgrade in the near future.
Spain's credit rating is still in investment grade, three notches above junk status. Nonetheless, the lower rating could increase the nation's borrowing costs because investors will likely demand higher interest rates to compensate for the greater risk implied by the downgrade.
This AP story was posted over at The New York Times website yesterday evening...and I thank Phil Barlett for sharing it with us. The link is here.
On the heels of the S&P downgrade of Spanish debt yesterday, King World News interviewed acclaimed money manager Stephen Leeb, Chairman & Chief Investment Officer of Leeb Capital Management. Leeb told KWN that not only is Spain in trouble, but Europe is literally ready to blow apart. Leeb also discussed gold and silver, but first, here is what Leeb had to say about the S&P downgrade of Spanish debt: “It’s really one more sign that Europe is on a terrible track. When you have 25% unemployment in Spain and a huge amount of economic distress in most of Europe, and you are telling people the solution is to spend less money and become more austere, it’s just simple logic that’s not going to work.”
This KWN blog was posted on their website late last night...and the link is here.
In its latest escalation of rhetoric over the disputed islands, Argentina said it had written to Falkland Oil & Gas (FOGL), Borders & Southern, Rockhopper, Desire Petroleum and Argos Resources on April 17, to "notify them of their illicit actions and their consequences".
"In case of failure to offer a response and once the deadline expires, administrative sanctions will be imposed to each company within the framework of an Energy Secretariat resolution which deems these activities illegal," it said. "The Argentine government will also press criminal and civil charges."
It gave no details of the form in which it intended to pursue such action, however. None of the explorers has any assets in Argentina and the British Foreign Office has said it is "deeply sceptical" that Argentina could pursue penalties against such companies in foreign courts.
This story was posted on The Telegraph's website just before midnight last night...and I thank Roy Stephens for bringing it to our attention. The link is here.
I have just been listening to a talk on the Chinese housing market by Xianfang Ren, Beijing analyst for IHS Global Insight.
Land sales make up 30pc of total tax revenue for the central government and 70pc for local government. (For those of us who watched the Irish state balloon on the back of property taxes – when they had a fat budget surplus – this has a familiar ring.)
Construction makes up 10pc of total jobs, and a further 20pc indirectly in cement, steel, metallurgy etc. The government is building 36m homes for the poor, but that will start to run down in two years or so.
Residential investment typically peaks at 8pc to 9pc of GDP for emerging nations during their catch-up growth spurts. It is already 12pc in China.
Japan’s ratio peaked in 1973, long before the property price bubble burst. China has almost certainly peaked too on this crucial measure.
This short blog by Ambrose was posted on The Telegraph's website yesterday...and I thank Roy Stephens once again for sending it along. The link is here.
On Saturday April 14th, the People's Bank of China expanded the range that it would allow the renminbi to rise or fall each day. Previously the currency was only allowed to rise or fall by 0.5% from a determined midpoint, but now that limit is being increased to 1%. Many have long felt that the currency was undervalued and that this could be a first step in a upward revaluation of the renminbi. It is also interesting to consider this move in the larger context of the recent actions of the Chinese in their investments.
It is little secret that China is a large creditor to the United States. China has played the role of the manufacturer while the United States has been the consumer of many of those goods. A growing trade imbalance and extremely high debt levels in the US create significant questions about the ability to ever pay for these goods. During last summer's highly publicised debt ceiling debate, many nations in the world took notice of the spending patterns of the United States and voiced surprisingly blunt comments. China has at times been vocal with its frustration with the United States and saber rattling accusations of currency manipulation have increased tension in the relationship.
This short essay, written by trader and Austrian School economist, Chris Marcus...was posted over at the goldmoney.com website on Monday. The link is here.
The Bank of Japan on Friday said it will increase the size of its asset purchase program by 5 trillion yen ($61.88 billion) to a total of ¥70 trillion, while leaving its policy interest rate in the current target range of 0% to 0.1%. The increase in the size of the asset purchases, a quantitative easing measure aimed at improving demand, compared with the ¥5 trillion to ¥10 trillion addition that was already priced in by markets, according to a Reuters report.
The BOJ said it would increase purchases of Japanese government bonds by about ¥10 trillion, while adjusting lower its purchases of another type of asset by ¥5 trillion. The BOJ also said the year-on-year change in inflation is gradually expected to rise above 0.5% but remain less than 1%, and that it likely won't be long before price increases reach its goal of 1% in the "medium to long term." The Nikkei Stock Average shot higher after the central bank decision, trading up 0.9% a few minutes after the decision.
This short 2-paragraph story was filed from Hong Kong early on Friday morning in the Far East...and is posted over at the marketwatch.com website. Reader 'David in California' sent it to me late last night. The entire story is posted above...but the link to the hard copy is here.
Global food prices are rising again, pushed higher by costlier oil, strong demand from Asia and bad weather in parts of Europe, South America and the United States, the World Bank said on Wednesday.
The latest World Bank food price index showed the cost of food rose 8 percent between December and March. In the previous four months, prices had declined. Even after the latest rise, food prices remain 1 percent below a year ago and 6 percent below the February 2011 historical peak, the World Bank said.
"After four months of consecutive price declines, food prices are on the rise again, threatening the food security of millions of people," Otaviano Canuto, World Bank vice president for poverty reduction and economic management, said in a statement.
This Reuters piece was posted on their website on Wednesday...and I thank West Virginia reader Elliot Simon for his last offering of the day. The link is here.
The blog is with Egon von Greyerz...and it bears the headlined "Bankrupt Nations Desperate to Save the Financial System". The two audio interviews are from blogs that were posted in this column yesterday. The first is with Richard Yamarone...and the second is with John Embry.
Butler's new book "The Golden Revolution" has been getting a lot of attention these days. This GATA release contains links to two video interviews about it...and both of them are must views in my opinion. I'll let Chris Powell do the rest of the introductions...and the link to both are posted over at the gata.org website here.
Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization
Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.
Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.”
Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained.
Please visit our website for more information about the project.
The study of money, above all other fields in economics, is one in which complexity is used to disguise or to evade truth, not to reveal it. - John Kenneth Galbraith
It was sort of a nothing day yesterday. Of course I was happy to see prices in the plus column in both metals for a change, so I'm not about to complain. Right now I'm just waiting for the smoke to clear in the silver market, as the roll-overs out of the May contract all have to be done by the end of today. As I mentioned yesterday, I believe that the CME will post First Delivery Notice for the May delivery month on their website later this evening Eastern time.
And like I said further up in this column, I was rather surprised at the poor performance of the gold stocks...and I can't think of any good reason why that was the case. However, I'm not about to read anything into just one day's price activity.
Friday is also the day that we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday. All of Monday's engineered price decline in silver will be in it...and it's too bad that Wednesday's big price smack-down won't be in it. If it is was, it would tell us a lot.
Not too much happened in Far East trading on their Friday. Both metals were down a bit going into the London open, but with super low volumes once again, I wouldn't read a thing into that price activity. The dollar index didn't do much of anything, either. And as I hit the 'send' button a couple of hours after London began trading, gold is down about two bucks...and silver is back to unchanged from Thursday's close in New York. The dollar index hit its high tick at precisely 8:00 a.m. at the beginning of London trading...and is now down about 25 basis points from that high as of 5:15 a.m. Eastern time. Volumes in both metals are still incredible light...and have hardly increased at all since the London open.
I'd like to think that the lows are in for this move down in both metals...but you can't trust 'da boyz' for even one second. Having said that, if I were looking around for an entry point into the precious metal market...now would be as good a time as any, although I'm not an investment advisor.
With that in mind, there's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) recommendations...as well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
Enjoy your weekend...or what's left of it if you're west of the International Date Line...and I'll see you here tomorrow.