Gold & Silver Daily
"JPMorgan et al took another tiny slice out of each precious metal "

¤ Yesterday In Gold & Silver

It was another nothing sort of a day in gold.  It rallied a bit once the noon London silver fix was done, but that was capped---and the price was sold down to its low, a hair below $1,200 spot, shortly after 2:30 p.m. EST.  After that it rallied quietly into the close.

The high and low ticks were reported by the CME Group as $1,215.30 and $1,197.70 in the April contract.

Gold closed on Friday at $1,203.90 spot, down another $3.30 on the day.  Net volume was pretty light at 103,000 contracts.

The silver price followed a similar path, except the low came shortly after the COMEX close---and the price didn't do much after that.

The high and low in that metal were recorded as $16.555 and $16.16 in the March contract.

Silver closed in New York yesterday at $16.265 spot, down another 11 cents. There was lots of roll-over volume, but it all netted out to 18,500 contracts, which wasn't a lot.

The platinum price traded lower in a fairly decent price range on Friday.  It closed at $1,161 spot, down eight dollars from Thursday's close.

Palladium traded flat until Zurich opened---and then it got sold down before chopping sideways into the close.  It finished the day at $777 spot, down 7 bucks from Thursday.

The dollar index closed late on Thursday afternoon in New York at 94.40---and then didn't do a thing until shortly after 2 p.m. Hong Kong time on their Friday afternoon.  The it rallied to its 94.77 high shortly after 9 a.m. EST.   Once the London p.m. gold fix was done an hour later, the index rolled over, crashing to its 94.05 low before "gentle hands" appeared once again.  The index finished the day at 94.32---down 8 basis points from Thursday's close.

Here's the 3-day dollar chart, so you can see the number of times that "gentle hands" showed up at, or just below, the 94.00 mark.

The gold stocks opened up---and stayed up---and were up a bit more than 2 percent by 1 p.m. EST.  But at that point, a thoughtful soul appeared in the COMEX futures market and sold gold down to its low tick of the day---and the shares followed.  The HUI closed up only 0.25 percent.

The silver equities spent less than 30 minutes in positive territory at the beginning of the Friday trading session in New York---and headed lower from there.  Nick Laird's Intraday Silver Sentiment Index closed down a chunky 3.62 percent.

In the last two trading days of the week, silver has dropped by the magnificent sum of 23 cents.  During that same period, the silver equities are down almost 8 percent.   What for-profit sellers would ever trade like this?

The CME Daily Delivery Report showed that 96 gold and 3 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  The lone short/issuer was HSBC USA---and JPMorgan was the main long/stopper once again with 89 contracts for its client account.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that February's gold open interest declined by 67 contracts, leaving 481 contract still open---minus the 96 contracts posted for delivery on Tuesday.  Silver open interest increased by 3 contracts, leaving 23 contracts still open in the February.  There are only three days left in the February delivery month, so we'll see some decent activity very early next week---and mostly in gold, of course.

For the second day in a row there was a deposit in GLD.  This time an authorized participant added 57,602 troy ounces.

Just eye-balling the GLD numbers, this ETF now holds 2.05 million more troy ounces of gold than it had at the the beginning of the year---and the most interesting part is that since the top of the latest gold rally on January 22---and a drop of about $110 in the interim---there have only been three smallish withdrawals from GLD in that time period.

And as of 9:53 p.m. EST yesterday evening, there were no reported changes in SLV.

Since the beginning of the year, the amount of silver in SLV has declined by about 5.25 million troy ounces---and there were only three days during that period that silver was actually added to this ETF.  All the rest of the activity has been withdrawals.

As Ted Butler continues to point out, this points to a severe shortage in physical silver.

There was another tiny sales report from the U.S. Mint on Friday.  They sold 69,500 silver eagles---and that was all.

Month-to-date the mint has sold 14,000 troy ounces of gold eagles---9,000 one-ounce 24K gold buffaloes---and 2,244,500 silver eagles.  This puts the silver/gold sales ratio for the month at 68 to 1.

There was only one kilobar of gold activity at the COMEX-approved depositories on Thursday, so I shan't bother to link that "action".  It was busier in silver of course, as 806,597 troy ounces were reported received, but only 29,668 troy ounces were shipped off to parts unknown.  The link to the silver activity is here.

The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday was not quite as good as both Ted and I were hoping for, but certainly in the ballpark.

In silver, the Commercial net short position declined by 5,736 contracts, or 28.7 million troy ounces.  That reduces the Commercial net short position down to 238 million troy ounces, which is still an outrageously high number.  Ted pegs JPMorgan's short position between 100-105 million troy ounces, which is almost 50 percent of the total amount.  I would guess that Canada's Scotiabank holds a short position in silver almost the same size as JPM's.

Under the hood in the Disaggregated COT Report, it was virtually all the Managed Money, as they sold 531 longs---and put on 4,960 short contracts, for a total of 5,491 contracts.  The raptors [the Commercial traders other than the Big 8] happily took the other side of the Managed Money trade, as they added about 5,300 long contracts.  The balance of 400 or so contracts showed up as a reduction in the short position of the Big 4 traders, which would include JPMorgan.

In gold, the Commercial net short position declined by 26,956 contracts---and the Commercial net short position in that precious metal is now down to 14.36 million troy ounces.

Under the hood in the Disaggregated report, the technical funds in the Managed Money category dumped 12,240 long contracts, plus they added 11,605 short contracts---for a total of 23,845.  On the other side, it was the Big 8 and the smaller commercial traders [the raptors] either covering shorts or adding longs.

As I've already pointed out, the report wasn't as good as we hoped---and my comments that we still have about fifty or so dollars to the downside left in gold---and maybe a buck or a bit more in silver---still stands.

Remember that it's not the price that determines the bottom, but the number of long contracts that the Commercial traders can force the technical funds in the Managed Money category to puke up.  But if the Commercials really want to get aggressive, then they will attempt to get these same technical funds to not only dump their remaining long positions, but also got them to go massively short as well---and if that's the case, we are nowhere near a price bottom.

So we await developments.

Since yesterday was the 20th of the month, the good folks over at The Central Bank of the Russia Federation updated their website with January's data---and it showed that they didn't add any gold to their reserves during that month---and their reserves remain at 38.8 million troy ounces.  Here's Nick Laird's charts showing the current status.

Considering it's a Saturday column, I don't have a large number of stories for you today, but a couple of them are on the lengthy side, so I hope you have the time to spend on them this weekend if you consider them fit to read.


¤ Critical Reads

It Begins: Goldman Cuts Q1 GDP Due to Snow

... we think that negative snowstorm effects could potentially subtract as much as half a percentage point from Q1 growth compared with a neutral baseline, although there is still plenty of time for activity to bounce back within the quarter. In light of our analysis, we reduced our Q1 GDP tracking estimate by two-tenths to +2.8%. -- Goldman Sachs, February 20, 2015

Back on Monday, we warned that "The Last Time This Happened, U.S. GDP Crashed By 5%", and by this we of course mean the Polar Vortex 2.0 that has gripped the U.S. in a spell of Russian revenge by way of the "Siberian Express" which has blanketed the U.S. in record cold weather.

As a reminder, it was precisely a year ago that economists, clearly unable to realize during the fact that heavy snowfall (in the winter) is disastrous to seasonally-adjusted GDP, decided to blame the harsh weather after the reported GDP fact. After what fact? After seeing Q1 2014 GDP rising as much as 2.5% just shortly before the BEA announced that Q1 GDP was in fact... -2.9%!

This short article appeared on the Zero Hedge website at 10:54 a.m. EST on Friday morning---and today's first story is courtesy of reader M.A.


WSJ: Subprime Consumer Debt Soars to 7-Year High

Subprime consumer borrowing — encompassing auto loans, credit card loans and personal loans — climbed to $189 billion in the first 11 months last year, the highest total since 2007, according to a study compiled for The Wall Street Journal by Equifax.

That borrowing accounted for 41 percent of total consumer lending outside of home mortgages.

The trend stems from lenders and investors seeking high yields in a low-interest rate environment. So it's no wonder that total household debt rose $306 billion, or 2.7 percent, in the fourth quarter from a year earlier to the highest level since 2010.

"We're going from an era where for many years credit was extremely tight to an era where credit is now looser," Gabriel Dalporto, chief marketing officer of LendingTree, told The Journal.

This news item appeared on the Internet site at 8:40 a.m. EST yesterday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.


Port strike cuts production at Honda Indiana plant

A labor dispute involving dockworkers that has crippled international trade through the West Coast's seaports has prompted Honda to cut production sharply at its Greensburg, Ind., plant because of a parts shortage.

Honda spokeswoman Anita Sipes said the automaker has tried to use alternative means of getting parts. But she said the dockworkers' contract dispute is preventing Honda's Greensburg plant from getting critical items, including electronics and transmissions, because of cargo bottlenecks at 29 West Coast ports.

To deal with production cuts brought on by that parts shortage, Honda identified Monday and Friday of this week and Feb. 23 as days employees can stay home without pay, take paid time off or come in to work for training or other duties.

Production at the Honda plant will be cut in half for the rest of the week, but Sipes said Honda will re-evaluate the decision as the week progresses.

That's all there is to this brief article that appeared on the Internet site at 6:48 p.m. EST on Wednesday evening---and I thank Bill Busser for passing it around yesterday.


Doug Noland: The Curse of Moneyness

Financial innovation occurs more subtly and incrementally. Pay really close attention or you’re bound to miss it all. There are variations of financial instruments, institutions, market norms and government involvement. Success, real or perceived, ensures the envelope is pushed – in the markets and with policy. As we’ve witnessed, cumulative incremental policy experimentation over time can result in fundamentally revamped doctrine. In the markets and in real economies, incremental (“frog in the pot”) changes over the life of protracted booms can amount to profound transformations. And that is exactly what’s been experienced with “money” and monetary management.

The nineties saw the age-old issue of fractional reserve banking completely turned on its head. The “evolution” to market-based Credit fashioned what I refer to as the “infinite multiplier effect” – “money” and Credit created, miraculously, out of thin air like never before. With their implicit government backing, the GSEs enjoyed unlimited capacity to issue new debt liabilities – fed by insatiable demand from both home and abroad. During the mortgage finance Bubble, Wall Street relished in the capacity for seemingly limitless issuance of “money”-like mortgage- and asset-backed securities, most guaranteed by the GSEs that were backed by the federal government.

The phenomenal policy response to the bursting of the mortgage finance Bubble unleashed the “global government finance Bubble”. The world has now seen the evolution of unfettered electronic “money” advance to its final act, with profound yet unappreciated ramifications. For the past twenty-five years, each new Bubble has seen the scope of “money” widen to the point of ensuring Credit expansion sufficient to reflate increasingly impaired financial and economic systems. Yet each reflationary episode only compounded global financial imbalances and economic maladjustment. These days, concerted desperate reflationary measures see perilous expansion at the heart of “money” and at the very foundation of global Credit.

Doug's must read weekly Credit Bubble Bulletin appeared in my in-box yesterday evening courtesy of reader U.D., for which I thank him.


Carl Bernstein: The CIA and the Media

In 1953, Joseph Alsop, then one of America’s leading syndicated columnists, went to the Philippines to cover an election. He did not go because he was asked to do so by his syndicate. He did not go because he was asked to do so by the newspapers that printed his column. He went at the request of the CIA.

Alsop is one of more than 400 American journalists who in the past twenty‑five years have secretly carried out assignments for the Central Intelligence Agency, according to documents on file at CIA headquarters. Some of these journalists’ relationships with the Agency were tacit; some were explicit. There was cooperation, accommodation and overlap. Journalists provided a full range of clandestine services—from simple intelligence gathering to serving as go‑betweens with spies in Communist countries. Reporters shared their notebooks with the CIA. Editors shared their staffs. Some of the journalists were Pulitzer Prize winners, distinguished reporters who considered themselves ambassadors without‑portfolio for their country. Most were less exalted: foreign correspondents who found that their association with the Agency helped their work; stringers and freelancers who were as interested in the derring‑do of the spy business as in filing articles; and, the smallest category, full‑time CIA employees masquerading as journalists abroad. In many instances, CIA documents show, journalists were engaged to perform tasks for the CIA with the consent of the managements of America’s leading news organizations.

This is your big read of the day.  Carl Bernstein, along with cohort Bob Woodward, are legends in the media---and the book, along with the movie "All the President's Men" is based on their Pulitzer Prize winning work at The Washington Post back in the early 1970s.  I remember it like it was yesterday.  This 25,000 word essay appeared in the October 1977 edition of Rolling Stone magazine---and if you have the time and the interest, it's definitely worth reading.  It was something that I was saving for today's column---and I thank reader Norman Willis for bringing it to my attention---and now to yours.


Dutch Government Releases MH17 Documents, Many Redacted

The Dutch government released dozens of documents Tuesday about the aftermath of the downing of Malaysia Airlines Flight 17, but much of the information was redacted.

One of the Dutch broadcasters that requested the information be made public, RTL News, said it would protest against the number of redactions and take the government to court if necessary to compel it to reveal more details.

"We want the relevant facts so that a serious reconstruction can be made of the Cabinet's performance" after the crash, RTL's deputy editor, Pieter Klein, said on the broadcaster's website.

Prime Minister Mark Rutte's government is coming under increasing pressure to reveal all it knew about the risks of allowing passenger planes to fly over conflict-torn eastern Ukraine last year.

This AP story, filed from The Hague, was picked up by the Internet site back on February 10---and I thank South African reader B.V. for sending it along.


Danish Krone Collapses After Hints of Capital Controls

Following numerous rate cuts and backdoor Q.E. (halting government bond issuance), Denmark's Krone is collapsing this morning following the head of Denmark's Economic Council, Hans Jorgen Whitta-Jacobsen said:


This has sparked the biggest drop in DKK against EUR since 2001 and as SEB chief strategist Carl Hammer exclaimed, "currency markets are extremely nervous."

Damage control is beginning:


This brief Zero Hedge piece, complete with two excellent charts, showed up on their Internet site at 8:39 a.m. EST yesterday morning---and it's the second offering of the day from reader M.A.  There was a story about this in The Telegraph yesterday as well.  It's headlined "Denmark Ready to Impose Capital Controls to Protect Currency"---and I found it embedded in a GATA release.  As I said before---and I'll say it again now, it's only a matter of time before Denmark's central banks abandons the Euro peg as well, but their putting on a hell of a show in the interim.


Eurozone Officials Reach Accord With Greece to Extend Bailout

Ending an acrimonious standoff, European leaders hashed out a deal on Friday to extend Greece’s bailout by four months, giving the troubled country a financial lifeline and avoiding a bankruptcy with potentially destabilizing consequences for the region.

The agreement, reached at an emergency meeting of eurozone finance ministers here, paves the way for Greece to unlock further aid from its bailout, worth 240 billion euros, or $273 billion. But the creditors will dole out the funds only if Greece meets certain conditions, setting the stage for tense negotiations that could unsettle the markets and create more political friction with Germany and other European countries.

If Athens moves slowly, it might not get the money for months. Or the deal could fall apart altogether, again raising the prospect of a messy Greek departure from the euro currency.

“As long as the program isn’t successfully completed, there will be no payout,” Wolfgang Schäuble, the German finance minister, said after the negotiations.

This New York Times news item, filed from Brussels, appeared on their website yesterday some time---and it's the first offering of the day from Roy Stephens.  The BBC had a story about this yesterday as well.  It was headlined "Greece bailout: Four-month extension in Eurozone deal"---and it's courtesy of Brad Robertson.


No Evidence of Russian Military Hardware Presence in Ukraine – Hollande

French President Francois Hollande said Friday at a joint news conference with German Chancellor Angela Merkel that he was unable to confirm the presence of Russian military hardware in Ukraine.

“We cannot confirm that Russian tanks had entered Ukraine,” Hollande said.

Earlier on Friday, Ukrainian military spokesman Andriy Lysenko claimed that some 20 Russian tanks, military hardware and ammunition were seen heading from Russia to the Ukrainian territory.

Ukrainian authorities, alongside the United States, have persistently accused Russia of sending its troops and equipment to war-torn eastern Ukraine, without providing any evidence.

This won't make the neocons in Washington too happy.  This story, filed from Paris, put in an appearance on the Internet site at 4:59 p.m. Moscow time on their Friday afternoon---and it's another offering from reader M.A.


Pepe Escobar: E.U. Reeling Between U.S. and Russia

Washington has certainly succeeded in permeating an already embattled EU with a little extra – what else – chaos, by pitting the “West” against Russia.

The Obama administration – infested with neo-con cells, those ghosts inside the machine – have always believed that a package of Western sanctions plus a Saudi-unleashed oil price war would be enough to bring down the Russian economy, thus “changing its behavior” on Ukraine, and in the best scenario provoking regime change in Moscow.

Well, it’s not working. Minsk 2.0 – as fragile an agreement as it is – de facto shows Germany (assisted by France), the leading European powers, trying to break away from the American Chaos project.

This must read commentary by Pepe appeared on the Internet site at 3:13 p.m. Moscow time on their Friday afternoon, which was 7:13 a.m. EST in Washington.  My thank go out to reader B.V. for his second contribution to today's column.


A Ukraine Update: Stephan F. Cohen and John Batchelor

Batchelor and Stephen Cohen are mostly coming to the same conclusions as everyone else about Minsk2.  But the logic and information train is much more interesting. If Minsk2 fails, then Cohen expects a resumption of fighting in the spring when 1) more Ukrainian army troops can be trained and 2) weapons from Poland and the U.S. can be stockpiled for the offensive. Supposedly Poland is a source of old Soviet armor and SP guns etc. that the military is already familiar.

Also discussed is the American training group moving (en route?) to Ukraine, and it is either 400 (as Cohen mentions) or 600 - the latter virtually a battalion of U.S. troops. These are supposedly parachutists. 

The deplorable state of the Ukrainian military and its ability to fight is discussed as well. Something like half of Kiev's forces are gone and what is left is poorly trained and poorly motivated. It is doubtful that it is capable of winning against the rebels. Cohen also speculates, correctly, I think, that Kiev is not at all in control of the extreme militias like the Azov Battalion that has publicly stated it would not honour any Minsk Agreement. That should mean that these paramilitary groups are just as hostile or indifferent to Kiev as the Donbass rebels are.... He then speculates correctly that Poroshenko has no real power in Kiev, and his enthusiasm for leadership is declining, and that perhaps he is preparing to leave, . Summing up: the Ukrainian military is in disarray, the government is very shaky, the economy is only maintained by money (IMF) from the West (and is probably illegally sent) and Russian energy, and it is likely that the war will be pursued only with boots on the ground from the West. That doesn't leave much solidity to the concept of "proxy" war...

Putin's situation was also well explained. He only wants this ended to avoid war with the West and to rebuild his country. He has more cards to play yet. And it appears like a partitioning of Ukraine will be the remaining solution. Cohen sees no possibility for any cooperation like a federated relationship; Kiev has obviously targeted civilians and infrastructure in its efforts and the rightful rage of the rebels toward the west will guarantee a permanent separation.

This 39:50 minute audio interview with Stephen Cohen appeared on the Internet site on Tuesday---and I thank Larry Galearis for sending it our way yesterday.


Global Politics – a war of meanings: Nikolai Starikov

Today, the world is in a situation that can be characterized as a dead end that the liberal financial-oriented world economy drove itself into after remaining the dominant economic system following the collapse of the USSR. Not going into much more detail on that theme, since doing so would require a whole other in-depth discussion, I will simply point out that, as historical experience and logical consideration confirm, this economic system cannot work without theft. On its own, without infusions from outside, it is not able to sustain itself, therefore a long period in which no one goes to war and no one is robbed, for countries sitting at the top of the liberal “food chain”, will always mean a crisis of the economic system itself. The need for war or theft is a matter of life and death for many (if not for all) countries of the West. The danger for the West today is that “potential victims” are nowhere to be found. In the world of today, the approximate parity of strength is like it was before two world wars, which itself increases many times over the risk of a new world conflict. A classical conflict, as during the previous two world wars, or as a hybrid, hidden beneath a large number of local conflicts (the main goal of which will be not to allow the nuclear weapons deterrent to be used!) together with informational and economic aggression.

What goals are the wars’ organizers aiming for?

First and foremost is a breaking of established economic ties, a deepening everywhere of the economic slide, except for in agreed-upon “economic growth spots”. In the First and Second World Wars this zone was the USA and once again they are trying to repeat this scenario. In addition, a goal of starting wars is the nullification or depreciation of “pre-war” debts and a restart of the world economy. An analysis of the upcoming conflict’s probable zones of destruction and (or) thievery which will permit the world economy to be restarted while preserving the existing economic model and the currently-constituted “economic food chain” for the existing financial elites shows that the level of accumulated contradictions can only be resolved at the expense of Russia and her demolition. The situation in the disparate and ailing enclaves of Europe and Asia, surrounded by the raging chaos that will come from the destruction of our country, will allow the United States to retain for itself the role of regulator of the world’s economy, island of stability, and the source point for new growth. Growth for itself, for Europe, and for Asia under the USAs security guarantees, paid for by the robbery of our country and our people.

This very thoughtful and profound essay, which is on the longish side, appeared on the Internet site on Wednesday---and falls squarely into the absolute must read category for any serious student of the New Great Game.  For length and content reasons, it had to wait for Saturday's column---and I thank Roy Stephens for pointing it out.


CIA-planted ‘evidence’ may force IAEA review of Iran’s alleged nuke arms program – report

Doctored blueprints for nuclear weapon components supplied to Iran by the CIA 15 years ago could force the IAEA to review its conclusions on Iran’s atomic program, which was potentially based on misleading intelligence, Bloomberg reports.

The details of the Central Intelligence Agency operation back in 2000 were made public as part of a judicial hearing into a case involving Jeffrey Sterling, an agent convicted of leaking classified information on CIA spying against Iran.

“The goal is to plant this substantial piece of deception information on the Iranian nuclear-weapons program, sending them down blind alleys, wasting their time and money,” a May 1997 CIA cable submitted to the court reads.

The intelligence in question pertains to fake designs of atomic components that were transferred to Iran in February 2000.

Why should we be surprised, dear reader.  This Russia Today story, based on a Bloomberg article, appeared on the Russia Today Internet site at 16 minutes after midnight on Saturday morning Moscow time, which was 4:16 p.m. in New York.  I thank Roy Stephens for sending it---and it's certainly worth reading.


Pepe Escobar: China pivots everywhere

As for the Middle Kingdom as a whole, it has ventured much further than the initial proposition of producing cheap goods and selling them to the rest of the planet, virtually dictating the global supply chain.

Now Made in China is going global. No less than 87 Chinese enterprises are among the Fortune Global 500 – their global business booming as they take stakes in an array of overseas assets.

Transatlantic trade? That’s the past. The wave of the future is Trans-Pacific trade as Asia boasts 15 of the world’s top twenty container ports (with China in pride of place with Shanghai, Hong Kong, Shenzhen, Guangzhou).

Sorry, Britannia, but it’s Asia – and particularly China – who now rule the waves. What a graphic contrast with the past 500 years since the first European trading ships arrived in eastern shores in the early 16th century.

This is Pepe's second must read commentary in today's column.  This one appeared on the Russia Today website at 11:01 a.m. Moscow time on their Friday morning---and it's the final offering of the day from Roy Stephens, for which I thank him on your behalf.


There's a place in Japan where hundreds of wild foxes are waiting for you to play with them

This very interesting photo essay appeared on the Internet site back on February 6, 2015---and it's definitely worth a minute of your time.  I thank reader M.A. for digging it up for us.


Sprott Money Weekly Wrap Up

Listen to Eric Sprott share his views on the continual lack of growth in the economy despite “official” data being released, Gold holding steady through tense Greek talks in the Eurozone, and Indian gold imports show that hope is still on the horizon for precious metals.

This 8:59 minute audio interviews with Eric was conducted by Geoffrey Rutherford---and it's worth your while if you have the time.


Platinum reaches biggest discount to gold in nearly two years

Platinum's discount to gold hit its highest level on Friday since the gold price crash of April 2013, as concerns over the euro zone outlook lifted demand for the yellow metal as a haven, while dampening sentiment towards platinum.

Prices of the white metal fell to 5-1/2 year lows on Friday, weighed by concerns that turmoil in the currency bloc could hurt demand from the European car sector, which accounts for nearly a fifth of annual platinum consumption.

Gold meanwhile recovered from Wednesday's six-week low as investors weighed up whether euro zone finance ministers will reach a deal that would prevent a possible Greek exit from the euro zone.

One can only fantasize about what the real spread might be if both these metals were allowed to trade freely.  This short Reuters article, filed from London, appeared on their website at 2:30 p.m. GMT on their Friday afternoon---and I thank Elliot Simon for sharing it with us.


What You Need to Know About Russia, Putin, and Gold

With Russia rising to the forefront of world affairs as well as natural-resource-related events, we thought it timely to find out more about Russians’ attitudes toward gold. We’ve been in touch with Russian bullion expert Dmitriy Balkovskiy for over a year and decided to get his take.

Here’s the view from Russia…

Jeff Clark: You mentioned to me previously that Russia is not quite as bullish on gold as the West portrays.

Dmitriy: It seems to me that Western gold investors are too optimistic about Putin’s love affair with gold. The reality is not as straightforward as it’s sometimes portrayed by Western media.

First, a little background. The old Soviet Union viewed gold and silver as strategic metals and a matter of national security. Private ownership of precious metals in any form except jewelry and numismatic coins was strictly forbidden. People went to jail for merely owning a gold bar.

This very interesting interview by BIG GOLD's Jeff Clark appeared on the Internet site yesterday---and it's definitely worth reading.


Ronan Manly: Spotlight on Greece's gold reserves and Grexit

Greece holds or claims to hold a fairly substantial gold reserve, GATA consultant Ronan Manly writes today, but where it's held, whether it has been irrevocably pledged to the European Central Bank, whether Greece can recover it if it withdraws from the euro bloc, and whether it can be put in play or already has been put in play are open questions.

I thank Ronan for sending me this article yesterday---and I thank Chris Powell for wordsmithing the above paragraph of introduction.  It's a must read.


Lawrence Williams: China gold demand up 17% Y.T.D.

With another 59 tonnes of gold withdrawn from the Shanghai Gold Exchange (SGE) in week 6, Chinese demand, as represented by the SGE, is already up 32% on last year at 374 tonnes (as against 320 tonnes a year ago) – and last year’s first six weeks were a previous record, although perhaps not directly comparable as the New Year holiday fell a little earlier in 2014. With this year’s holiday period now in full swing, and with the SGE closed for the week long duration, we are going to see something of a fall-off, which is probably one of the factors adversely affecting the global gold price over the past week. If you take this much gold demand off the market then prices are almost certain to weaken, although it is gold in the pipeline from the West to China and other points East which should be setting the pattern and this will still be substantial.

Gold analysts believe, not without reason, that Chinese demand will now fall off in intensity perhaps through to the beginning of Q3 as it did last year, once the New Year gift giving is out of the way. Thus SGE withdrawals once market activity re-commences effectively in ten days’ time, will be followed particularly closely by those looking to try and assess the likely level of overall Chinese demand in 2015. While the country’s economy is seen as slowing down considerably, it is not considered to be in recession so there has still been a continuing build-up of wealth and in those seen as entering the middle classes who have particularly embraced a gold-buying culture.

This must read commentary by Lawrie appeared on the Internet site yesterday---and I found it all by myself.



¤ The Funnies

The day we arrived at the Grand Canyon was the same day as I took the photos in Winslow and at meteor crater that I posted earlier this week.  By the time we got there, the land altitude had increased enough where we were right at cloud base, something most of us only experience when we're in an airplane.

The lookout points [like in photo #1 below] are the only areas that are fenced.  Once you're away from them, the trails follow the edge of the canyon---and if you're at all squeamish about heights, this place takes a bit of getting used to.  In some spots you'll bounce once or twice on the way to the bottom, but in most places it's a mile straight down to the canyon floor.  Don't forget the "click to enlarge" feature.

I'll have more and better canyon photos next week, as this was only day one.

The first of the two bird photos below is of a white-breasted nuthatch---and the second is a mountain chickadee, which is a bit different that the black-capped variety that most of us are used to seeing.  Both were sitting in the same Utah juniper which, if you haven't see one before, is quite amazing---and I'll have a photo of one next week.  Once again I had the wrong lens and no flash, so these were the best photos I could get under the circumstances.   They're are cropped quite a bit as well---and the moment I get better ones, these are going in the trash, although I doubt if I'll ever see another mountain chickadee in my life.

Integra's Lamaque South Gold Project and Sigma-Lamaque Milling Complex and Mines are located directly east from the city of Val-d’Or along the prolific Abitibi Greenstone belt in the Province of Québec, Canada, approximately 550 km northwest of Montréal. Québec is rated one of the best mining jurisdictions in the world. Infrastructure, human resources and mining expertise are readily available.

The Company’s primary focus is on production planning for its high-grade Lamaque South project. The Lamaque South property is divided into three clusters, the North, South and West cluster. The primary targets are the high-grade Parallel Zone in the North Cluster and the Triangle Zone in the South Cluster. The acquired Sigma Mill, located 1 kilometer from the Parallel Zone and 3 kilometers from the Triangle Zone, is a fully-permitted, 2,200 ton per day mill and tailings facility. The Sigma-Lamaque Mill and Mining Complex include the historic Sigma and Lamaque Mines which operated for 75 and 52 years respectively and produced more than 9 million ounces of gold in total. Please visit our website for more information.


¤ The Wrap

Fifteen years ago, talk of a silver shortage and wildly escalating prices were mocked (except by those who looked beneath the surface). By 2011, prices had risen tenfold and silver was closer to a worldwide physical shortage than ever in history. Currently we’re back to the mocking stage, but that is as unlikely to remain permanent as it was before that. The 2011 peak in price and unprecedented physical tightness came as a result of a 65 year consumption deficit and the ongoing COMEX manipulation. Yes, it is true that same manipulation caused prices to then crash and the resultant cooling of investment demand relaxed the physical tightness; but the question is---what now? Can the 10 billion ounce depletion of world silver bullion inventories (1940 thru 2006) be restored any time soon or ever, particularly at the current depressed prices? (No knock on gold, but the yellow metal has never experienced even one year of lower world inventories, to say nothing of silver’s 65 consecutive years of inventory depletion). Can the increasingly blatant COMEX silver manipulation become permanent or self-perpetuating in light of these circumstances?

I know these things are hard to consider objectively in the face of continued deliberate price declines, but, nonetheless, remain at the core of the decision to invest in silver, namely, there is so little of the stuff remaining. As far as the question of why large investors haven’t rushed into silver, I am convinced some will. Certainly, large investors have done so in the past, in the form of the Hunt Brothers and Warren Buffett. The case of Mr. Buffett is particularly instructive and, I believe, should serve as the model for the future. - Silver analyst Ted Butler: 18 February 2015

Today's pop blast from the past is off the Beatles "Double White" album, if you remember what an album is.  I've posted this George Harrison tune before, as it's a classic---and really done up right in this particular cover.  It's an all-star cast of performers, including George's son, Dhani Harrison---and does he ever look like his dad!  I remember George when he was that age!  Of course Prince steals the show---and proves beyond all doubt that he's one of the greatest guitarists of all time.  I never liked the guy, but that's beside the point as you'll soon find out.  Turn up your speakers and enjoy.  The link is here.

Today's classical "blast from the past" is one that most people might recognize as a popular tune, but its real origins were in the classical era.  The song is from the 1953 Broadway musical Kismet---and I remember this song when I was a little boy, as it was a big hit on the radio back then.  There was no TV in those days.  The popular tune was called "Stranger in Paradise"---but the music itself was one of the Polovtsian Dances from Alexander Borodin's opera Prince Igor.

Here's the video clip of Borodin's Polovtsian Dances from that opera done up right at the Bolshoi Theatre in Moscow---complete with French subtitles---and I thank reader M.A. for sharing this with us.  The link is here.  The video is world class, so put it on full screen and turn it up.

I was hoping that we were going to make it through the Friday trading session relatively unscathed---and maybe even with tiny gains.  But those hope were dashed later in New York trading---and JPMorgan et al took another tiny slice out of each precious metal once again.

Here are the 6-month charts in all four.  As you can tell, we should be pretty much done to the downside soon, but we have to have some sort of big ugly washout that will scare the bejesus out of everyone before "da boyz" are through.  Unless things end differently this time, that scenario still lies in our future---fifty or so bucks in gold and a dollar or so in silver, plus maybe twenty or so bucks each in platinum and palladium.

I'd like to look past the absolute bottom, but I'll pass on that until we reach it---and with these tiny slices of the salami, it may take a while.  But as I just said above, the final washout could be brief and ugly---and using the past as prologue, they usually are.

So we wait.

That's all I have for today---and the week. 

I'm off to bed early tonight, as I'm a tired puppy---and I'll see you here on Tuesday.

Ed Steer