Gold & Silver Daily
"Not to be forgotten is the FOMC meeting that starts today"
 

¤ Yesterday In Gold & Silver

The tiny rally that began in gold shortly after New York opened at 6 p.m. on Sunday evening didn't last long---and the downward pressure on the price was obvious---and really began in earnest late in Hong Kong trading on their Monday.  The low tick came at the noon silver fix in London---and the subsequent rally got sold down starting at 9 a.m. in New York two hours later.  The secondary low came shortly after 10:30 a.m. EST---and the price struggled quietly higher from there into the close of electronic trading.

The high and lows ticks were reported by the CME Group as $1,299.20 and $1,275.60 in the February contract.

Gold closed in New York yesterday at $1,281.30 spot, down $12.80 from Friday.  Volume, net of heavy roll-overs out of February, was reported as 97,000 contracts---which was pretty light.  February goes off the board on Friday, so the roll-over activity will reach its peak in the next forty-eight hours or so.

The silver chart was more or less the same as the gold chart, with the only exception being the sell-off in COMEX trading.  In silver it came shortly after the London p.m. fix---and not at 9 a.m. like gold.  Once silver got sold down, it traded sideways in a very tight range into the 5:15 p.m. close of electronic trading.

The high and low in silver were recorded as $18.49 and $17.865 in the March contract.  Net volume was 32,500 contracts.

The platinum chart had the same general shape as the gold and silver charts.  That metal was closed at $1,247 spot, down 17 dollars from Friday.

Palladium, hoeing its own row, went in the other direction.  The spike low of a double bottom came minutes before the Zurich open---and from there it chopped higher until shortly before 1 p.m. EST.  From there the price didn't do much.  Palladium closed at $777 spot, up four bucks from Friday.

The dollar index closed a hair under the 95.00 mark late on Friday afternoon in New York---and hit its 95.50 high shortly before London opened, which was about the time the really heavy selling pressure began in gold and silver.  The 94.64 low tick came right at noon in New York---and from there it rallied back to the 95.00 mark by 4:20 p.m.---and then faded a hair to finish the Monday session at 94.93---down 7 basis points from its Friday close.

Since gold has been generally rising in tandem with the dollar for about the last three months, I suppose it's can fall when the dollar index falls.  But don't forget that the gold price is set on the COMEX---and has Zip-a-Dee-Doo-Dah to do with the dollar index.

Not surprisingly, the gold stocks gapped down at the open, hitting their lows around 9:45 a.m. EST, but from there chopped higher despite what the gold price itself was doing.  The shares closed virtually on their high ticks, as the HUI finished the Monday session up 1.14%.

The silver equities turned in a similar performance, along with a similar chart pattern, as Nick Laird's Intraday Silver Sentiment Index closed up 1.58%.

If you're looking for a reason why there was such counterintuitive price action in the shares---I don't have one, sorry.

The CME Daily Delivery Report showed that zero gold and zero silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.

The CME Preliminary Report for the Monday trading session showed that January gold open interest fell by 20 contracts---and now shows that 16 are left for delivery.  In silver, one contract was added to January's o.i.---and there are 7 contracts left to deliver in that metal.

Much to my surprise, there was another deposit in GLD yesterday, as an authorized participant added 57,619 troy ounces.  And as of 6:35 p.m. EST yesterday evening, there were no reported changes in SLV.

The U.S. Mint had a sales report yesterday.  Once again they didn't sell any gold, but did sell another 367,000 silver eagles.

There was a bit of movement in gold over at the COMEX-approved depositories on Friday.  They reported receiving 5,814 troy ounces---and shipped out a tiny 96 troy ounces.  The link to that activity is here.

It was another busy day in silver, as 601,411 troy ounces were shipped in---and 349,664 troy ounces were shipped out.  The link to that action is here.

I have a pile of stories for you today---and as I always do when there are this many, I leave the final edit in your hands.

 

¤ Critical Reads

16 firms worth billions despite losing money

Thanks to a new round of funding, the music app is now part of a growing list of technology companies that investors believe are worth at least $1 billion even though they're unprofitable.

While making money may not be the most important factor for young companies, the lofty price tag placed on businesses stuck in the red is raising some eyebrows.

"Markets are not necessarily rationale. This may almost be like a fever," said Roger Kay, a tech analyst at Endpoint Technologies.

It's yet another consequence of extremely easy money from central banks: Investors have little choice but to make riskier and riskier bets.

That's exactly right, dear reader. This article appeared on the cnn.com Internet site on Friday morning EST---and I thank reader U.D. for passing it around on Saturday.

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U.S. Housing-Market Headwinds Are Impeding Recovery: Gary Shilling

U.S. housing activity remains weak despite six years of federal government aid, strong interest from overseas buyers, rock-bottom interest rates and massive purchases of mortgage bonds by the Federal Reserve.

Does this mean housing may never spring back to its pre-recession levels? Many signs point to yes. 

Don't blame the Chinese, who are showing an abundance of interest. Their share of foreign purchases leaped to 16 percent in the year ending March 2014, from 5 percent in 2007.

They paid a median price of $523,148, higher than any other nationality and more than double the $199,575 median price of all houses sold.

This item showed up on the newsmax.com Internet site last Friday as well---and it's courtesy of West Virginia reader Elliot Simon.

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Marc Faber Says He Likes Gold, `Some Emerging Economies'

This 2:40 minute Bloomberg video clip appeared on their website yesterday I guess, as there's no dateline on the web page.  I thank reader Ken Hurt for sending it along.

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Mark Carney warns of liquidity storm as global currency system turns upside down

The Governor of the Bank of England has warned markets to brace for possible trouble in 2015 as the US Federal Reserve tightens monetary policy and liquidity evaporates, fearing that the new financial order has yet to face its first real test.

Mark Carney said diverging monetary policies in the US, Britain, Europe, and Japan may set off further currency turbulence and "test capital flows across the global economy, including to emerging markets."

It is the latest sign that officials at Threadneedle Street are worried about the global fall-out from the rising dollar, which poses a mounting threat to companies in the developing world that have borrowed up to $9 trillion in US dollars.

Mr Carney said regulators have cleaned up the banks and tried to prepare for the tectonic shift taking place in the international currency structure but major risks remain.

This story put in an appearance on the telegraph.co.uk Internet site late on Saturday afternoon GMT---and it's the first contribution of the day from South African reader B.V.

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Germans united in the conviction ECB has gone rogue

While Saudi Arabia lamented the passing of King Abdullah yesterday, Germany was busy burying its last illusions about the European Central Bank.

After a long and valiant struggle, German hopes were finally extinguished that the ECB would change its monetary mind and come back to the Bundesbank way of thinking.

The majority decision by the ECB governing council to buy €1.14 trillion in sovereign bonds has been a a slap in the face for the German establishment.

Lead by the Bundesbank, Germany’s political, media and business leaders had insisted they saw no looming deflationary threat to justify bond-buying. When the ECB proceeded anyway, they dismissed it as “Draghi doping” of weak euro economies.

This right-on-the-money story showed up on the irishtimes.com Internet site in the wee hours of Saturday morning GMT---and it's the second article in a row from reader B.V.

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Europe’s Saddest Day in 50 Years: Another Trillion For the Banks, More Trauma For the People

I was going to start out saying yesterday was the saddest day in Europe in 50 years, or something like that, because of the insane and completely nonsensical largesse the ECB permits itself to launch, aimed at once again saving a banking system, but which will not only not help the European people, it will make things even much worse than they already are. Which is also, lest we overlook that ‘detail’, entirely thanks to the ECB/EU/IMF Troika,

I’ve said many times that the EU in its present form should be dismantled tomorrow morning (even though it’s not the same tomorrow morning anymore), and if Draghi’s $1.1 million x million ‘stimulus’ should make anything clear, it’s that the dismantling gets more urgent by the day.

But calling it the saddest day in Europe in 50 years would show far too little respect for the people who died in former Yugoslavia, and in eastern Ukraine. It’s still a very sad day, though. And I was already thinking about that even before I read Theopi Skarlatos’ article for the BBC; that really made me want to cry.

This interesting guest commentary appeared on David Stockman's website on Sunday---and it's the first offering of the day from Roy Stephens.

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Doug Noland: Draghi's Do Whatever it Takes Beats Estimates

As always, the CBB is expression of my own views. It is in no way intended as investment advice. My objective is to chronicle history's greatest Credit Bubble and hopefully add some insight along the way.

Let’s return to where we left off in late-December: “Bubble On, Bubble Off.” The thesis remains that the “global government finance Bubble” was pierced in 2014. However, in a world of unprecedented liquidity excess, deflating Bubbles at the “Periphery” further inflate Bubbles at the “Core.” Last year saw faltering Bubbles in the Emerging Markets (EM) and commodities usher in a new King Dollar reign. While the Fed wound down QE, extraordinary measures by the likes of Draghi and Kuroda safeguard the historic boom in global leveraged speculation. Hot money flooded into U.S. securities markets. These trends run unabated in early-2015.

I’m also not backing away from the view that a prolonged experiment in global monetary inflation is “failing spectacularly”. The stakes are just incredibly high – financial, economic, social, geopolitical… Global policymakers refuse to admit their failings. They will not accept the obvious: printing “money” – creating perceived wealth through electronic debit and Credit entries – will not rectify the world’s ills. Indeed, runaway financial Bubbles lie at the heart of an extraordinary array of worsening global maladies. Disastrously, key central banks have coalesced into the stand that monetary measures have not been aggressive enough.

After being M.I.A. for a month, Doug is back in the saddle, but now on his own website creditbubblebulletin.blogspot.ca.  As always, his commentaries are must reads---and this one is no exception.  I thank Dan Lazicki for tracking Doug down for us.

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E.U. Fears TTIF Free Trade Agreement Could Spur Litigation

When Bernd Lange talks about the advantages of a free trade agreement with the U.S., he often cites the example of the VW bus. The hippy favorite has been the target of a 25 percent tariff since 1964, a punitive move after the European Economic Community raised levies on imported chicken, shutting the Americans out of the market. Sales have been hampered for decades as a result. But if the levy were significantly reduced, its price tag would plunge.

Lange is a classic car enthusiast -- and the chair of the European Parliament Committee on International Trade, which focuses on the Transatlantic Trade and Investment Partnership (TTIP) treaty. But despite the possible benefits for Volkswagen, the Social Democrat has had little choice but to emphasize the negative aspects of TTIP during his public appearances. In Europe's leading exporting nation, broad swathes of the population are opposed to the free trade agreement. You can even find anti-TTIP flyers in many churches.

The main sticking point is special rights given to investors, who would be able to challenge countries in special international dispute settlement panels that bypass national courts. It's a pill that even those who believe in the deal are having difficulty swallowing. Some 145,000 European citizens voiced their disapproval in a "public consultation" undertaken by the European Commission, with many expressing fear that U.S. companies might seek to overturn E.U. laws on genetic engineering, environmental protection and food quality.

This news story was posted on the German website spiegel.de at 4:22 p.m. Europe time on their Monday afternoon---and it's definitely worth reading.  I thank Roy Stephens for sending it.  By the way, the thought police over at the spiegel.de website changed the headline to read "Free Trade Faults: Europeans Fear Wave of Litigation from U.S. Firms".

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The Elections in Greece---and the Fall Out: Nine stories

1. Greek radical left wins election, threatening market turmoil: yahoo.com  2. Alexis Tsipras - Troika Belongs in the Past: greekreporter.com  3. Greece's New FinMin Warns "We Are Going To Destroy The Greek Oligarchy System" : Zero Hedge  4. Yanis Varoufakis: Greece's future finance minister is no extremist: The Telegraph  5. Greece elections: Merkel has lost, hope has won: Russia Today  6. Far-Left Syriza Victory in Greece - Bruises European Markets: Reuters  7. IMF's Lagarde rules out special treatment for Greece: Reuters/Yahoo  8. Greek vote could be only the beginning for debtor states seeking a euro-exit: The Telegraph  9. Syriza’s victory: this is what the politics of hope looks like: The Guardian

Note: There's been a headline change and rewrite of story #6.  It now reads "Euro bounces back, global stocks up after Greek vote".

[The above stories are courtesy of Brian Farmer, our man in Greece---Harry Grant, South African reader B.V., Roy Stephens---and Dennis Mong]

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Red Alert: Rocket Fire Could Signal New Offensive on Mariupol

Reports of heavy rocket artillery firing on the eastern parts of the city of Mariupol, Ukraine, as well as a statement made by a separatist leader, indicate the potential preparation of an offensive on the city. While this would be a significant escalation and an indicator of Russian intent to push further into Ukraine, potentially forming a much-rumored land connection to the northern border of Crimea, there are also several indicators required for such an offensive that are currently still missing.

The heavy rocket artillery firing has been widely reported, and the death toll has risen to 27. Mariupol has been shelled in the past, notably in early September, but as the cease-fire took effect, separatist forces generally conducted attacks only outside of the city. It is not clear whether this is simply an intensification of relatively static fighting along the front between Russian and pro-Russian forces on the one side, and Ukrainians, or the beginning of a Russian-led offensive to widen the pocket, or the opening move in a broader strategic offensive to link up with Crimea, 200 miles to the west of the pocket.

The widespread use of Grad Multiple Launch Rocket Systems indicates that this is a planned action with significant logistical support that involves extensive use of Russian troops, though Grad fire has been widely used throughout the conflict. There have been indications that Russian forces, including Russian Marines, have moved into the eastern Ukraine pocket controlled by pro-Russian forces, giving the Russians offensive options. Heavy artillery preparations frequently precede Russian attacks, particularly by concentrated MLRS attack. Given the amount of munitions needed to supply concentrated fire, the Russians tend not to use them casually. The presence of Grad missiles indicates the possibility of artillery preparation for a broader offensive.

I'm sure the attacks are real, but I'm always suspicious of anything that comes off the strafor.com Internet site---and you should be as well.  This news item appeared there on Saturday.  It's courtesy of Roy Stephens.

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Kiev introduces state of emergency in Donbass, high alert across Ukraine

The Ukrainian government has introduced the state of emergency in the war-torn south-eastern Donetsk and Lugansk Regions, and put all other territories on high alert, Prime Minister Arseny Yatsenyuk announced.

"In accordance with the Ukrainian Code of Civil Protection, the Cabinet of Ministers has adopted a decision to recognize an emergency situation at a state level. The Ukrainian government has decided to impose the state of emergency in the Donetsk and Lugansk Regions," Yatsenyuk is cited as saying by Interfax-Ukraine.

According to the PM, the move is aimed at providing the most efficient coordination of all government agencies in order to ensure civil protection and the safety of the population.

The statement was made after the field meeting of the Cabinet of Ministers, which took place at the headquarters of the State Emergency Service of Ukraine in Kiev on Monday.

This story showed up on the Russia Today Internet site at 1:03 p.m. Moscow time on their Monday afternoon, which was 5:03 a.m. EST.  It's also courtesy of Roy Stephens.

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Ukraine crisis: Angela Merkel 'offers Russia free trade deal for peace'

Angela Merkel has reportedly offered Russia negotiations on a free trade agreement with the E.U. in exchange for a peace deal in Ukraine.

The German chancellor made the offer at the World Economic Forum in Davos, where she spoke of a free trade area “from Lisbon to Vladivostok”, according to a report in Süddeutsche Zeitung newspaper.

Mrs Merkel said Germany was “ready” to discuss “possibilities of cooperation in a common trade areas”. But she made it clear talks could not start until Russia abides by the Minsk Agreement, the ceasefire agreed in September, which it has so far failed to honour.

Mrs Merkel's vice-chancellor, Sigmar Gabriel, who was also in Davos, spelt out the offer more clearly. “The next step is to discuss a free trade zone,” he said. “We should offer Russia a way out.”

This story appeared on The Telegraph's website on Friday afternoon GMT---and Bill Busser sent it our way on Sunday morning.

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S&P downgrades Russia's sovereign credit rating to below investment grade

Ratings agency S&P said on Monday it had cut Russia's sovereign credit rating to BB+ or below investment grade.

S&P warned in late December that it could deprive Russia of its investment-grade credit rating as soon as mid-January, following a rapid deterioration of the country's monetary flexibility and a weakening economy.

This Reuters piece, filed from Moscow, showed up on their website [via yahoo.com] late on Monday morning EST---and I thank Elliot Simon for sharing it with us.

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Outdoing Dr. Goebbels: The propaganda war against Russia Today

Propaganda. At its best – a wonderful German pop group of the 1980s who had their biggest hit with a track named ‘Duel’. At its worst – the comments of the new BBG chief Andrew Lack, which put RT in the same category of ‘challenges’ as ISIS.

“We are extremely outraged that the new head of the BBG [U.S. Broadcasting Board of Governors] mentions RT in the same breath as world’s number one terrorist army. We see this as an international scandal and demand an explanation,” says Margarita Simonyan, RT’s editor-in-chief. Anyone who supports genuine pluralism in the international media should be demanding an explanation too.

It would be easy to say that Dr. Joseph Goebbels, the infamous Nazi Minister of Propaganda would be proud of Lack’s comments. But in fact the propaganda war against RT – of which Lack’s comments are only the latest example, actually – ‘out-Goebbels’ Dr Goebbels’.

The reason for these attacks is fear. What is clear is that the success of RT has caused real panic in the ranks of the west’s neo-con/‘liberal interventionist’ elite.

This must read op-edge piece appeared on the Russia Today website early Sunday afternoon Moscow time---and it's another offering from Roy Stephens.

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Iran moves away from U.S. dollar in foreign trade

Iran is stopping mutual settlements in dollars with foreign countries and agreements on bilateral swap in new currencies will be signed in the near future, the Central Bank of Iran (CBI) has said.

“In trade exchanges with foreign countries, Iran uses other currencies, including Chinese yuan, euro, Turkish lira, Russian ruble and South Korean won,” Gholamali Kamyab, CBI deputy head, told the Tasnim state news agency.

He added that Iran is considering the possibility of signing bilateral monetary agreements with several countries on the use of other currencies.

This Russia Today article put in an appearance on their Internet site on Saturday afternoon Moscow time---and I thank International Man's senior editor Nick Giambruno for passing it around.

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Germany halts arms exports to Saudi Arabia

Germany has decided to stop arms exports to Saudi Arabia because of "instability in the region," German daily Bild reported on Sunday.

Weapons orders from Saudi Arabia have either been "rejected, pure and simple," or deferred for further consideration, the newspaper said, adding that the information has not been officially confirmed.

The decision was taken on Wednesday by the national security council, a government body that includes Chancellor Angela Merkel, Vice Chancellor Sigmar Gabriel and seven other ministers, it said.

"According to government sources, the situation in the region is too unstable to ship arms there," added the daily.

This AFP story, filed from Berlin, showed up on the france24.com Internet site on Saturday Europe time---and I thank South African reader B.V. for his final contribution to today's column.

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A Saudi Palace Coup

King Abdullah's writ lasted all of 12 hours. Within that period the Sudairis, a rich and politically powerful clan within the House of Saud, which had been weakened by the late king, burst back into prominence. They produced a palace coup in all but name.

Salman moved swiftly to undo the work of his half-brother. He decided not to change his crown prince Megren, who was picked by King Abdullah for him, but he may choose to deal with him later. However, he swiftly appointed another leading figure from the Sudairi clan. Mohammed Bin Nayef, the interior minister is to be his deputy crown prince. It is no secret that Abdullah wanted his son Meteb for that position, but now he is out.

More significantly, Salman, himself a Sudairi, attempted to secure the second generation by giving his 35- year old son Mohammed the powerful fiefdom of the defense ministry. The second post Mohammed got was arguably more important. He is now general secretary of the Royal Court. All these changes were announced before Abdullah was even buried.

The general secretaryship was the position held by the Cardinal Richelieu of Abdullah's royal court, Khalid al-Tuwaijri. It was a lucrative business handed down from father to son and started by Abdul Aziz al Tuwaijri. The Tuwaijris became the king's gatekeepers and no royal audience could be held without their permission, involvement, or knowledge. Tuwaijri was the key player in foreign intrigues -- to subvert the Egyptian revolution, to send in the troops to crush the uprising in Bahrain, to finance ISIL in Syria in the early stages of the civil war along his previous ally Prince Bandar bin Sultan.

This short essay, which is worth reading, appeared on the huffingtonpost.com Internet site on Friday morning EST---and I thank reader Vince Koloski for finding it for us.

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King Abdullah: Medieval Reactionary, Brutal Despot, Incessant Warmonger

After nearly 20 years as de facto ruler of the Kingdom of Saudi Arabia, King Abdullah ibn-Abdulaziz al-Saud died last night at the age of 90. Abdullah, who took power after his predecessor King Fahd suffered a stroke in 1995, ruled as absolute monarch of a country which protected American interests but also sowed strife and extremism throughout the Middle East and the world.

In a statement last night Senator John McCain eulogized Abdullah as “a vocal advocate for peace, speaking out against violence in the Middle East”. John Kerry described the late monarch as “a brave partner in fighting violent extremism” and “a proponent of peace”. Not to be outdone, Vice President Joe Biden released a statement mourning Abdullah and announced that he would be personally leading a presidential delegation to offer condolences on his passing.

It’s not often that the unelected leader of a country which publicly flogs dissidents and beheads people for sorcery wins such glowing praise from American officials. Even more perplexing, perhaps, have been the fawning obituaries in the mainstream press which have faithfully echoed this characterization of Abdullah as a benign and well-intentioned man of peace.

I would bet that this story is pretty close to the mark.  It was a guest contribution on David Stockman's website on Saturday---and I thank Roy Stephens for sending it.  It's also worth reading if the topic interests you.

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ECB's QE move adds pressure on China's policy easing

The European Central Bank's announcement on Thursday to switch on the money tap shed light on the deflation risk stalking the euro zone and reminded the elites, who are gathering here for the World Economic Forum's (WEF) annual meeting, of the divergence among policies from different central banks.

The European Central Bank (ECB) on Thursday decided to purchase over 1 trillion euros in public and private sector bonds by the fall of 2016 to counter the deflationary risk and possible stagnation.

ECB President Mario Draghi said the purchasing would start in March 2015 with a monthly amount of 60 billion euros (about 69.48 billion U.S. dollars), and was intended to last until the end of September 2016, but would in any case be conducted until the ECB saw a sustained adjustment in the path of inflation which is consistent with its medium-term inflation maintenance target of below, but close to, 2 percent.

Draghi said the decision to kick off the rescue program was made against a backdrop that inflation dynamics continued to be weaker than expected.

This article, which appeared on the news.xinhauanet.com Internet site on Friday, has had headline change since it was posted.  It now reads "Policy divergence talked regarding ECB's QE at WEF".  It's the second contribution of the day from Bill Busser.

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Koos Jansen: Amazingly heavy withdrawals from Shanghai Gold Exchange

China's gold demand as measured by withdrawals from the Shanghai Gold Exchange for the week ending January 16 were "amazing" at 70 metric tonnes, Bullion Star market analyst and GATA consultant Koos Jansen writes. He adds that it was unusual for China to do so much buying as the gold price was rising.

Jansen's analysis is headlined "Booming SGE withdrawals In Week 2, 2015: 70 Tonnes" and it's posted at the Singapore website bullionstar.com Internet site on Saturday.  I found this gold-related story on the gata.org Internet site.

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Mike Kosares: Gold spike in major currencies is a remarkable start to 2015

The new year has ushered in a remarkable and unexpected turn of events for gold. It is up significantly in four of the seven top currencies (the euro, British pound, and Australian and Canadian dollars), up respectably in two others (U.S. dollar and Japanese yen), and down slightly in the last (Swiss franc).

These charts and the significant gains in gold's value in a very short time demonstrate amply the value of gold as a hedge, not just against inflation but against sudden currency devaluation and systemic financial and economic risks as well. ...

... Though it appears that gold and quantitative easing might be directly correlated, what is really going on is that both simply are reacting to the same problem -- a bad economy with the potential systemic breakdown, not the prospect of inflation. Central banks respond by printing money. Investors respond by buying gold.

This commentary by Mike appeared on the usagold.com website on Saturday---and I thank Chris Powell for wordsmithing all of the above.

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Al Korelin interviews your humble scribe

This is another interview I did at the Vancouver Resource Investment Conference last weekend---and if my memory serves me correctly, it runs for a bit over five minutes.  I thank Al for taking the time to interview me.  It was posted on the kereport.com Internet site on Saturday.

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CME Starts Gold Futures in Hong Kong in Price-Benchmark Race

CME Group Inc. started physically delivered kilobar gold futures in Hong Kong as it joins other exchanges vying to establish new price benchmarks in the top user region.

The contract listed on the Comex is tied directly to the price of bullion of 99.99 percent purity in Hong Kong and will be physically delivered to vaults in the special administrative region. CME, owner of the largest futures exchange, said in September that trading may begin in the fourth quarter of 2014.

The Shanghai Gold Exchange started bullion trading in the city’s free-trade zone on Sept. 18 while Singapore Exchange Ltd. began a wholesale kilobar contract on Oct. 13 as more of the world’s gold is processed and used in the region and the 95-year-old fixing benchmark in London gets overhauled. Almost two-thirds of gold jewelry, bars and coins were consumed in Asia in 2013, according to data from the World Gold Council.

“The success of the contract depends if it can get the liquidity,” said Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd. in Singapore. “Hong Kong is as close to China as you can get without being onshore, so it might appeal to those that don’t have a license to trade onshore. People like to trade the China-London price differential.”

This Bloomberg story, filed from Singapore, appeared on their Internet site just before midnight on Sunday evening---and I thank Manitoba reader U.M. for sending it our way.

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Thailand bourse gearing up for gold exchange

The Stock Exchange of Thailand is gearing up for the establishment of the country's first physical gold exchange after major gold dealers agreed to become members of the new spot gold exchange.

Further details about shareholding between the gold dealers and the stock exchange are being discussed, said SET chairman Sathit Limpongpan. The creation of the spot gold market recently hit a snag due to disputes over management and shareholding between the SET and gold dealers, while some traders at the time said that they would refuse to join the new exchange.

Mr Sathit said the Securities and Exchange Commission had also thrown support behind the idea of setting up the spot gold exchange, but its implementation is pending the approval of the Finance Ministry could enact an organic law to allow the market to be priced and settled in major currencies, the US dollar in particular.

This gold-related news item showed up in the business section of the Bangkok Post on Monday morning local time---and it's another item I found on the gata.org Internet site.

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Koos Jansen: India's silver imports rose to record in 2014

India's silver imports in 2014 rose 15 percent from 2013, the most since at least 2009, Bullion Star market analyst and GATA consultant Koos Jansen reports, as investment and jewelry demand shifted from from gold. Jansen adds that Asia is draining Western supplies of silver as well as gold.

His analysis was posted on the bullionstar.com website yesterday---and it's certainly worth reading.  I found this silver-related story in a GATA release.

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Moscow Update: Gold During the Crisis

Dmitriy Balkovskiy is a Russian coin dealer in Moscow we’ve interviewed before. Since the ruble’s crash, he’s witnessed some interesting developments in his country, so we asked him for an update.

I would like to expand on Jeff Clark’s piece “Gold Was Up 73% Last Year” with some real-life stories from inside Russia.

First, a small correction… Jeff describes an investor sitting in a Moscow café and reading about gold’s phenomenal rise in rubles in a Russian newspaper. In reality, gold-related info in a Russian newspaper would be buried on page 17 and very difficult to locate. “Serious” gentlemen deal in stocks or real estate; gold coins and bars are for the naïve. In this respect, Russia is no different from the USA, and even worse.

Now to my episodes…

  • Our small office is located about 200 meters from the Kremlin’s entrance, right across the street from it. So sometimes we get visitors from within those walls. In the early afternoon of December 16, a Ukrainian construction worker came in wishing to buy a one-ounce Austrian Philharmonic. He had just finished several months of work at the Kremlin reconstruction site and wanted to get rid of his rubles and take home a hard asset. (Note: December 16, 2014 has already been named the Russian Black Tuesday. On that day, the ruble fell from 58 to 72 per USD in several hours.)

    Now this guy must have been burnt a few times in his life, because he wanted to check the coin for authenticity in every possible way. When he first entered the door, the coin sold for about 86,000 rubles. It took us about 30 minutes to complete the checking procedure to his satisfaction—but when we looked at the price again it had soared above 100,000 rubles. Unfortunately all he had in his pocket was 90,000 rubles. The coin had literally slipped from his grasp.

Yesterday's edition of the Casey Daily Dispatch is one of the best ones that has ever crossed my desk---and easily falls into the absolute must read category.

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Precious metals coveted once more as Draghi acts

Investors' desire for precious metals is deepening after Mario Draghi's $1.3 trillion pledge drove gold to a five-month high and silver to the brink of a bull market.

Their buying helped boost the value of exchange-traded products backed by gold and silver by $8.94 billion this month, the most since September 2012, data compiled by Bloomberg show. Hedge funds and other speculators in futures are the most bullish on gold in two years and have bet more on silver in all but two weeks since the start of November.

At a time when the price of almost every other commodity is sinking, silver and gold are having their best start to a year in more than three decades. The European Central Bank president's stimulus sent the euro to an 11-year low against the dollar, pushed government bond yields lower and raised the appeal of alternatives to currencies that are being revalued.

"Silver is tied to gold, and they move with trust," David Rosenberg, the Toronto-based chief economist at Gluskin Sheff & Associates, which oversees C$8 billion ($6.4 billion), said Jan. 22. "There's an increasing number of global investors who are starting to lose trust in the world's central banks."

This very interesting Bloomberg story, filed from New York, appeared on their website at 12:28 p.m. Denver time on their Monday afternoon---and the precious metal-related stories from GATA just keep on coming.

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Netherlands Increases Gold Holdings for First Time Since ’98

The Netherlands added to its gold reserves for the first time since 1998 as the ninth-biggest holder boosted assets to the highest in seven years, while Russia bought for a ninth month, International Monetary Fund data show.

Bullion reserves in the Netherlands climbed to 20 million ounces or 622 metric tons in December, the highest since 2007, after being unchanged at 19.7 million ounces from December 2008 through November, the IMF’s website showed. Russia, with the fifth-biggest hoard, held 38.8 million ounces last month, the most in at least two decades, the data show.

Central banks globally are adding gold to reserves after reducing holdings for about two decades from the late 1980s as they seek to diversify assets, according to Oversea-Chinese Banking Corp. Worldwide purchases would probably be 400 tons to 500 tons in 2014, the World Gold Council said in November. Gold rose for the first time in four months in December as signs of slowing economic growth spurred haven demand.

This short item, co-filed from Singapore and Melbourne, appeared on the businessweek.com Internet site on Tuesday in the Far East---and Manitoba reader U.M. slid it into my in-box just before 3 a.m. EST this morning.  It's definitely worth reading.

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Scottish village of Tyndrum prepares for '£200m gold rush'

The picturesque village of Tyndrum in Scotland's Grampian Highlands is bracing itself for what could be a surge of prospectors after it was revealed around £200m of gold is located in local hills.

Gold was excavated from the local Cononish mine by Australian firm Scotgold Resources in the 1990s but the firm suffered financial difficulties when the price of gold plummeted and the mine never opened for business.

Now the price of gold has risen to £850 an ounce, potentially turning the gold mine into a literal lucrative goldmine for the company who estimate there could be 248,000 ounces of gold – twice as much as previously thought.

The purity of the gold has also taken the company by surprise – it is 9% purer than previously thought. That means there could be £200m of gold around the town.

This news item was posted n the ibtimes.co.uk Internet site on Sunday afternoon GMT---and I thank BIG GOLD editor Jeff Clark for digging it up for us.

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New York Fed's gold vaults' depositors and metal have been declining steadily

In the first of a series of articles about the gold vaults of the Federal Reserve Bank of New York, GATA consultant Ronan Manly reports that the bank's documents indicate a huge decline over recent decades in the number of central banks vaulting gold there as well as the amount of gold vaulted.

Further, Manly finds, the bank has gotten much more secretive about its gold vaulting over the years. Manly's study is titled "The Keys to the Gold Vaults at the New York Fed, Part 1" and it was posted on the bullionstar.com Internet site on Friday.

It's another article I found on the gata.org Internet site---and it's on the longish side, but it's definitely worth your while.

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Buyers Take a Shine to Gold, Silver Again

Gold and silver are getting another turn in the spotlight, luring investors worried about slowing global growth and surprises by central banks.

On Thursday, the European Central Bank offered the latest reason to pile into precious metals by unleashing a bigger-than-expected bond-buying program amid continued worries about Europe’s economy. Gold futures ended above $1,300 a troy ounce for the first time since August, while silver neared bull-market territory, defined as a 20% increase from a recent low.

Gold and silver are drawing buyers of all stripes, a sign fears about a worsening economic outlook run deep in financial markets. The metals are popular havens for nervous investors but had fallen out of favor after setting price records in 2011 as the U.S. recovery gained speed. Now these metals are luring back some money managers, as collapsing oil prices, fears of a recession in Europe and volatility in currency markets shake their faith in stocks and other investments.

Both metals remain far below their peaks, and many investors are skeptical that economic conditions are dire enough to sustain recent gains. But others make the case that gold and silver look more promising than stocks, which are at or near record highs in many markets, or government bonds, where yields are near zero across the developed world. Some investors also are embracing metals as a store of value in case policies like those announced by the ECB spur inflation.

This gold-related story, posted in the clear, appeared on The Wall Street Journal's website last Thursday evening EST---and I thank Ken Hurt for bringing it to our attention.

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Goldman: It's the Central Banks' Fault We Can't Be More Bearish on Gold

We've heard it all: snow, cold weather, hot weather, non one-time recurring, "one-time, non-recurring" charges, and even Bush. But when it comes to "excuses" for why one is wrong, this morning Goldman's note "Central banks stall a more bearish gold outlook" absolutely takes the cake.

That's right: Goldman just blamed central banks for being unable to be "more bearish" on gold.

While readers let that sink in for a bit, here is the gist of Damien Courvalin's note.

Even more monetary stimulus has helped support gold prices…

While gold prices have trended lower since mid-2013, the decline has been short of our expectations. Recently, the combined support of: (1) weaker-than-expected US economic data; (2) the run-up to the announcement of QE in Europe; and (3) the surprise SNB decision to remove the CHF/EUR cap, have seen prices rise to near $1,300/oz. While we believe that these catalysts are now mostly priced in, and that gold prices will decline in 2015-16, we are nonetheless raising our near-term forecast to current prices.

Wait, so infinitely diluting fiat money and paper claims on wealth, a process which inevitably ends up with the para-dropping of bales of cash, is favorable for hard, "traditional" stores of value? Do go on...

This incredible story showed up on the Zero Hedge website at 8:01 a.m. on Monday morning---and I thank Manitoba reader U.M. for her second offering in today's column.

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Pinch Yourself: Financial Times begins to wonder if central banking is even crazier than gold

Lenin, the implacable Russian revolutionary, despised gold. He thought it should be used to build public lavatories. I was of much the same persuasion early in my career. The yellow metal's economic utility seemed to me minimal in the light of its declining industrial uses. As an investment it was and remains entirely speculative because it yields no income. And since the introduction of index-linked government bonds, any merits it might have as an inflation hedge have become less relevant.

Certainly gold has been a very erratic store of value in recent decades. Anyone who bought gold at the peak of the gold bull market in the early 1980s saw their investment lose 80 per cent of its value in real terms over the next 20 years. And as a protection against political and economic instability it has latterly become a less reliable bolt-hole, failing to rise in price consistently in response to each new geopolitical crisis.

Yet some years ago I changed my mind about the metal.

The first reason was that gold, over millennia, has never defaulted. Humanity thus harbours a psychological commitment to the yellow metal that would probably take not just decades but centuries of terrible investment returns to unravel. That means it is unlikely to lose all its value in our lifetimes even if its industrial uses finally disappear in their entirely and people lose all interest in gold as jewellery.

Heresy has been committed at the Financial Times!  Off with his head, I say!  When you see articles like this allowed to surface in the FT, you know it's time to circle the financial and monetary wagons on an international scale.  How things have changed in the fifteen years since I got involved with GATA.  This Financial Times story from Sunday is posted in the clear in another GATA release.  Needless to say, it's very much worth reading.

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¤ The Funnies







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, ir@freegoldventures.com

 

¤ The Wrap

Whereas the turnover of silver into and out from the COMEX warehouses is true movement in every sense of the word, the deposits/withdrawals in SLV and other ETFs, may or may not be actual physical  movement. This is not a particularly important issue in terms of the analysis involved, but I did want to state it correctly. In any event, the “movement” in the SLV the past few days was quite extraordinary.

On Wednesday, I commented that the deposits and withdrawal pattern in SLV has been counterintuitive in that recent withdrawals seemed to come when deposits should have been made (on rising prices and heavy trading volume as has been the case in GLD). I also indicated that as a result of the strong price rise and heavy trading volume of Friday Jan 16, some 6 million oz or more were due to be deposited and the delay in that deposit could be considered a shortage. Well, not only did we not get a big deposit of metal, after the close that day, close to 7 million oz were withdrawn from SLV (followed by a one million oz deposit Thursday). Aside from having to come up with a more intensive and descriptive word to describe counterintuitive, what the heck is going on?

Best as I can imagine and contrary to my original take, there must have been a big buyer on that Friday---and rather than risk having to disclose ownership, that buyer converted shares into metal to avoid going over the 5% reporting ownership level mandated by the SEC. There’s no way of knowing, as there never is, whether the metal was physically moved out or remained where it was in the warehouse with just the form of ownership changing (from shares to private allocated metal). At a minimum, the changes in holdings in SLV, particularly compared to the “normal” pattern exhibited in GLD, must be considered unusual---and it remains perplexing why so few are commenting on this. Most importantly, such unusual changes in physical silver holdings are completely compatible with physical tightness. - Silver analyst Ted Butler: 24 January 2015

It was a rather strange trading day on Monday, with the price of gold and silver going in one direction---and their respective equities going in the other.  Of course this is a phenomenon that we've seen before---and in both directions.  Why this is the case beats the hell out me, with yesterday's price action just another case in point.

But part of the price action yesterday was certainly related to the the roll-over and switches out of February, as there are now only three days left before First Notice Day for the the upcoming delivery month in gold.

Here are the 6-month charts for the "Big 6" commodities that are traded on the COMEX.  As you can see, gold, silver and platinum have been rolled over from their respective highs from last week---and it remains to be seen whether this trend will continue or not.  It appears that both copper and crude oil are in some sort of bottoming process, but I suppose the possibility exists for further down-side price action in those two commodities.

Not to be forgotten is the FOMC meeting that starts today---and ends tomorrow.  With a butt-ass ugly Commitment of Traders Report in one hand and this meeting in the other, along with options and futures expiry in the February contract now upon us in the next 48 hours as well---nothing will surprise me to the downside.

I'm sure you've noticed that it's a frosty day in July [in the Northern Hemisphere] when gold and silver rise going into, or after, an FOMC meeting.  I doubt this one will prove to be the exception, although I'd love to be spectacularly wrong.

Of course with the supply/demand fundamentals being what they are---and the world's financial and monetary system in shambles---I still look on in amazement at how the powers-that-be can keep their respective thumbs on precious metal prices in the face of all that.  But that's precisely what they're doing.

And as I write this paragraph, the London open is less than fifteen minutes away.  Both gold and silver got sold down a bit during the early going in Far East trading, but both have rallied back to unchanged---as has palladium, which also got sold down a couple of buck as well.  Platinum is now up a couple of dollars from Monday's close in New York.  Net gold volume is a bit under 20,000 contracts, with a bit more than 11,000 contracts on top of that volume being roll-overs and switches out of the February contract, so gross volume is around 31,000 contracts in total.  Silver's net volume is far more modest at just over 7,000 contracts.  The dollar index has been chopping sideways all day in the Far East---and is currently down 7 basis points.

Today, at the 1:30 p.m. EST close of COMEX trading, is the cut-off for Friday's Commitment of Traders Report---and I certainly hope that whatever price/volume action there is today will be reported in a timely manner.

And as I hit the send button on today's column at 5:15 a.m. EST, I see that both gold, silver are still hovering around unchanged after two and half more hours have passed.  Platinum is up five bucks---and palladium, which had been trading flat earlier, jumped up four or five dollars as well.  Net volumes in both silver and gold are up, of course, but not by huge amounts---and there's a lot of roll-over activity in gold, which is to be expected.  But the dollar index took a bit of a header at the London open---and is now down 46 basis points, which isn't reflected in the current price activity.  Except for the dollar index, there sure isn't much going on, but that will certainly change as the trading day progresses.

Before heading off to bed, I thought I'd point out a promo that's being run by the guys over in the BIG TECH department at Casey Research.  It's called "Lighting Your Way to Profits".  It’s about the ban on incandescent light bulbs, the inefficiency of fluorescents, and the company developing a new, more efficient bulb. It comes with a special report, How to Grab Your Share of the New $85 Billion Lighting Market.  You can find all you need to know by clicking here.---and it costs nothing to check it out, so I recommend that you do so.  The standard 90-day money-back guarantee applies.

The rest of this week could prove educational---and I await the COMEX trading day with some interest.

See you tomorrow.

Ed Steer