Gold & Silver Daily

¤ Yesterday In Gold & Silver

Not much happened with the gold price until about 30 minutes before the London open.  It got sold down a bit---and then didn't do a lot until until the 8:20 a.m. New York open.  Then the usual suspects showed up with their computer algorithms---and gold was down five bucks in seconds.  The same thing happened at the 9:30 a.m. EDT open of the equity markets, except it was in the other direction.  Once that rally was capped, the gold price traded sideways in a tiny range for the remainder of the day.

The low and high ticks, such as they were, were recorded by the CME Group as $1,286.00 and $1,297.20 in the June contract.

The gold price closed in New York on Tuesday at $1,294.30 spot, up $1.70 on the day.  Volume, net of roll-overs, was only 102,000 contracts---only 7,000 more than the volume on Monday.

The silver price was under light selling pressure during most of the Far East and morning trading session in London.  There was no sign of "da boyz" at the New York open, but the price also popped at the 9:30 a.m. open of the New York equity markets.  Once the high was in minutes after the London p.m. gold fix, silver also traded basically ruler flat for the remainder of the day.

The low and highs weren't much to write home about, either---$19.225 and $19.465.

Silver finished the day at $19.385 spot, up a nickel form Monday.  Volume was 31,500 contracts.

The platinum price chart was similar to the gold and silver chart, at least up until the London p.m. gold fix.  But by the close the sellers of last resort had platinum back almost down where it ended the Monday session---and for the second day in a row all the gains of the day had disappeared by the close.  They allowed platinum to close up a whole two bucks.

After the low of the day, which came moments before the London open, palladium was in rally mode---and made it up to its high of the day around 11 a.m. EDT.  After that, the rally gt capped---and the metal traded sideways for the rest of the Tuesday session.

The dollar index, which closed the Monday session at 80.01, didn't do much of anything during the Tuesday session---and it closed at 80.04.

The gold stocks started in negative territory, but rallied into the black in the first five minutes of trading.  That didn't last, of course---and the stocks traded in slightly negative territory for the remainder of the Tuesday session.  The HUI finished down 0.11%---which wasn't bad considering the flat performance of the gold price and the lousy action of the general equity markets.

The silver equities started off in negative territory---and the subsequent rally hadn't cracked the unchanged mark by 9:40 a.m. EDT.  After that, this silver stocks slid lower, but finally caught a bit of a bid shortly after 2:30 p.m. ---and Nick Laird's Intraday Silver Sentiment Index cut its loss to only 1.13%.

The CME Daily Delivery Report showed that 1 gold and 121 silver contracts were posted for delivery within the Comex approved depositories on Thursday.  ABN Amro was the short/issuer on all but one of the contracts---and it should come as no surprise that the two largest long/stoppers were Canada's Scotiabank and JPMorgan Chase.  Scotiabank stopped only 10 contracts---but JPMorgan stopped 94 contracts---72 for its in-house [proprietary] trading account---and 22 for its clients account.  The link to yesterday's Issuers and Stoppers Report is here.

There was another withdrawal from GLD yesterday.  This time it was 57,778 troy ounces.  Since the start of 2014, the GLD ETF has had net withdrawals of a hair under 580,000 troy ounces.  And as of 9:40 p.m. EDT yesterday evening, there were no reported changes in SLV.  However, since the 2014 year began, there has been net additions into the SLV ETF of 11,626,263 troy ounces.

Over at Switzerland's Zürcher Kantonalbank for the period ending Friday, May 16---they reported that their gold ETF had declined by 32,390 troy ounces---and their silver ETF had dropped by 65,909 troy ounces from the prior Friday report.

The U.S. Mint had a sales report yesterday.  They sold 5,500 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---300,000 silver eagles---and 300 platinum eagles.  Ted Butler was expecting way more silver eagle sales than that---and so was I.  Let's see what today brings.

Over at the Comex-approved depositories in gold on Monday, they reported receiving 32,292 troy ounces---and shipped out 24,701 troy ounces.  Virtually all of the activity was at HSBC USA.  The link to that action is here.

For a change, there wasn't big activity in silver.  They didn't report receiving any, but they did ship out 229,287 troy ounces and, like gold, almost all the activity was confined to the HSBC USA warehouse.  The link to that action is here.

Since yesterday was the 20th of the month---and it fell on a weekday---The Central Bank of the Russian Federation updated their website with their April numbers.  What they showed was that they had purchased 900,000 troy ounces of gold during the reporting month.  That, along with their purchase in January 2010, represents the second-largest monthly Russian Central Bank purchase ever---and only the 1.1 million troy ounces added in May 2010 was larger.  Nick Laird's most excellent chart below tells all.

Once again I have a lot of stories for you today---and the final edit is up to you.


¤ Critical Reads

Housing Debt Still Traps 10 Million Americans

Nearly 10 million Americans remain financially trapped by homes worth less than their mortgage debts, an enduring drag on the U.S. economy almost seven years after the housing bust triggered the Great Recession.

During the first three months of this year, 18.8 percent of homeowners with a mortgage, 9.7 million, owed more on their loans than their properties would sell for, according to online real estate database Zillow. Though that was an improvement from the 25.4 percent figure of a year ago, the share of such "underwater" homeowners is about four times the historic average.

An additional 18.1 percent of mortgage holders were "effectively" underwater: They had equity, but the proceeds from selling their home would be too low to recoup the sales costs and also put a down payment on a new property.

The consequence is that few Americans are putting their homes on the market, thereby limiting the economic growth made possible by sales. Because of the shortage of homes being listed, bidding wars have inflated prices in parts of the country to levels that squeeze out many first-time and middle class buyers.

Today's first new item, which is a must read, was posted on the Internet site early yesterday afternoon EDT---and my thanks go out to West Virginia reader Elliot Simon for sending it our way.


Charles Plosser thinks there’s a ticking time bomb at the Fed

The way Charles Plosser sees it, the Federal Reserve is sitting on a ticking time bomb that could severely damage the economy unless the central bank reacts quickly to defuse the looming threat.

The Philadelphia Fed president, viewed as one of the bank’s leading hawks, is worried about some $2.5 trillion in “excess” reserves. That is, loanable funds available to individual or corporate borrowers through the nation’s banks.

The Fed has created these reserves through unprecedented purchases of U.S. Treasurys and mortgage-backed securities, a strategy known as quantitative easing.

This news item, also courtesy of Elliot Simon---and also worth reading---was posted on the Internet site later in the afternoon EDT.


WikiLeaks threatens to name NSA-targeted country despite warnings it may lead to deaths

Despite warnings that doing so “could lead to increased violence” and potentially deaths, anti-secrecy group WikiLeaks says it plans to publish the name of a country targeted by a massive United States surveillance operation.

On Monday this week, journalists at The Intercept published a report based off of leaked U.S. National Security Agency documents supplied by former contractor Edward Snowden which suggested that the NSA has been collecting in bulk the contents of all phone conversations made or received in two countries abroad.

Only one of those nations, however — the Bahamas — was named by The Intercept. The other, journalists Ryan Devereaux, Glenn Greenwald and Laura Poitras wrote this week, was withheld as a result of “credible concerns that doing so could lead to increased violence.”

This very interesting Russia Today story appeared on their Internet site very early Tuesday evening Moscow time---and it's the first offering of the day from Roy Stephens.


U.S. Cites End to C.I.A. Ruses Using Vaccines

Three years after the Central Intelligence Agency set up a phony hepatitis vaccination program in Pakistan as part of the hunt for Osama bin Laden, the Obama administration told a group of American health educators last week that the agency no longer uses immunization programs as a cover for spying operations.

 In a letter to leaders at a dozen schools of public health, President Obama’s senior counter-terrorism adviser said the C.I.A. had banned the practice of making “operational use” of vaccination programs, adding that the agency would not seek to “obtain or exploit DNA or other genetic material acquired through such programs.”  

 The letter from the adviser, Lisa O. Monaco, comes more than a year after public health officials wrote to Mr. Obama expressing anger that the United States had used immunization programs as a front for espionage. The educators were protesting the C.I.A.’s employment of a Pakistani doctor, Shakil Afridi, to set up a hepatitis B vaccination program in Abbottabad to gain access to a compound where Bin Laden was believed to be hiding.

You couldn't make this stuff up.  Here's another interesting news item.  This one was posted on The New York Times website yesterday sometime---and it's the second offering in a row from Roy Stephens.


JPMorgan, HSBC and Credit Agricole accused of euro rate-fixes

The European Commission has accused JPMorgan, HSBC and Credit Agricole of colluding to fix a key euro benchmark borrowing rate - Euribor.

JP Morgan and HSBC will fight the charges. Credit Agricole will study the European Commission's findings.

Euribor is a cousin to Libor, which is used to set trillions of dollars of financial contracts from complex financial transactions to car loans.

In December, the Commission imposed fines totalling 1.04bn on Barclays, Deutsche Bank, RBS and Société Générale as part of the same investigation.

This news item showed up on the Internet site late yesterday morning EDT---and I thank South African reader B.V. for bringing it to our attention.


Deutsche Bank: "Perhaps the Fed and Other Central Banks Are Controlling the Market Too Much These Days"

On Monday we showed what happens when the Fed takes central-planning a bit too far and leads to a market in which even Fed members say is too manipulated. Tuesday, it's Deutsche Bank's turn to voice a lament on the topic of uber-manipulated, rigged markets.

From Jim Reid: "Perhaps the Fed and other central banks are controlling the market too much these days with their guidance. In the old days central banks used to like to create an element of surprise to ensure that markets didn't become complacent. With the crisis fresh in people's minds, with the stock of debt still huge and with the recovery still so uncertain they feel they cannot risk creating too much uncertainty at the moment. The risk to this strategy is clearly that bubbles can build with so much central bank visibility and also that if they do have to change course suddenly it could create more problems due to the surprise factor in markets positioned for stability. Anyway for now low volatility rules."

This short, but must read Zero Hedge piece from yesterday morning was sent to us by Manitoba reader Ulrike Marx---and it's her first contribution to today's column.


Financial Times: Currency Wars Heat Up Again

A year after G-20 finance ministers agreed to end their currency wars, competitive devaluations are back in style.

European Central Bank President Mario Draghi called the euro's strength a "serious concern" last week, and officials in Australia, Canada and New Zealand have been making noise about weakening their currencies for weeks, the Financial Times reports.

China moved strongly to push down the yuan during the first quarter, spending an estimated $100 billion-plus in direct market intervention. Other emerging market governments are apparently fighting off currency strength too, including India, Brazil and South Korea, according to the Times.

The dollar's weakness amid the Federal Reserve's determination to keep short-term interest rates near record lows has put upward pressure on other currencies.

This FT story found a home over at the Internet site early yesterday morning EDT---and it's another offering from Elliot Simon.


European Commission Presidency Contenders Campaign Amid Indifference

Martin Schulz, 58, and Jean-Claude Juncker, 59, are going head-to-head in the 28 countries of the E.U., drumming up support and cooperation everywhere from Estonia to Portugal, from Ireland to Greece. But will this experiment be successful? Can an election campaign underway in so many different countries actually work?

After all, the elections are taking place at a time when the Brussels is looking to the general public more than ever like a bubble. The last five years have seen the economies of many Southern European nations collapse, debts spiral and in some regions, unemployment among the younger generation has reached 50 percent. The euro crisis catapulted the bloc into an identity crisis.

Voter indifference was a problem even in the last European elections, five years ago. Putting faces to the parties is intended to jolt the electorate out of their E.U. fatigue -- but are the candidates for the EPP and the PES different enough to make the vote interesting?

This commentary was posted on the German website very early yesterday evening Europe time.  It now sports a more 'upbeat' headline..."A Distinct Lack of Excitement: Battle for Brussels Less Than Tense". It's courtesy of Roy Stephens.


Netherlands' Geert Wilders cuts up E.U. flag

Scissors in hand, anti-E.U. nationalist Geert Wilders of the Netherlands on Tuesday vandalised the European Union flag in front of the European Parliament in Brussels.

In a publicity stunt amid the dozen or so cafes at Place Luxembourg, overlooked by the parliament’s tall glass structures, Wilders cut out a yellow star before unfolding the Dutch flag in its place.

The nationalist, who runs the Dutch Freedom Party, is convinced he will be able to form a new group of eurosceptic MEPs following the upcoming European Parliament elections. He wants the Netherlands to leave the Union, regain its sovereignty, and shut down its borders to asylum seekers.

His other goal - to pull apart the EU from within by forming the anti-EU faction in parliament - will require at least 25 MEPs from seven EU member states.

This interesting news item showed up on the Internet site very early yesterday evening---and it's another contribution from Roy Stephens.


Who will benefit from the IMF's $17bn bailout of Ukraine? Not its people

In return for the latest $17bn bailout of Ukraine the IMF insists on dramatic measures in five main areas of the economy: a sharp currency devaluation, which will increase the cost of all imported goods, a government-funded bailout for domestic banks, government spending cuts, measures to regulate money laundering and a sharp increase in energy prices.

The latter are particularly ironic, since the widespread story in the west is that it is the Russian oil giant Gazprom that is threatening price hikes. The IMF calls for energy prices to be increased by between 240% and 425% over the next four years. No wonder Ukrainian prime minister Arseniy Yatsenyuk says he will be "the most unpopular prime minister in the history of my country".

Many of the usual arguments are advanced for the terms, such as the emergency need to "stabilise government finances". But on the fund's own admission the implementation of its policies will lead to an increase in Ukraine's public sector deficit in the short term, and the deficit "will decline only gradually thereafter". Preserving the private-sector banks seems to take precedence over the stated objective of improving government finances. The state will be expected to recapitalise the failed private banks using public resources.

This very short, but absolute must read commentary was posted on Internet site very late yesterday afternoon BST---and it's the second offering of the day from reader B.V.


Medvedev: Approaching Second Cold War Nobody Needs

Russian Prime Minister Dmitry Medvedev discusses sanctions and relations with the U.S. with Bloomberg's Ryan Chilcote.

This short 2:18 minute video clip showed up on the Bloomberg website yesterday sometime---and I thank Roy Stephens for finding it for us.


Just imagine... If Russia had toppled the Canadian government

Just imagine if the democratically-elected government of Canada had been toppled in a Russian-financed coup, in which far-right extremists and neo-Nazis played a prominent role.

That the new unelected 'government' in Ottawa cancelled the law giving the French language official status, appointed a billionaire oligarch to run Quebec and signed an association agreement with a Russian-led trade bloc.

Just imagine…

If Russia had spent $5 billion on regime change in Canada and then a leading Canadian energy firm had appointed to its board of directors the son of a top Russian government politician.

This eye-opening 'op-edge' commentary was posted on the Russia Today website late Tuesday morning Moscow time---and I thank reader B.V. for another offering in today's column.


Ukrainian MPs call for immediate troop withdrawal from country’s east

Ukrainian troops deployed in the country’s east should immediately return to their bases, the country’s parliament said in a memorandum. The freshly-adopted document also urges constitutional reforms based on the decentralization of Kiev’s power.

With 226 votes required to pass the law, the Ukrainian parliament finally adopted the so-called ‘Memorandum of Peace and Consent’, 252 MPs voting in favor. In particular, the document calls "to restore law, order and public safety in the state by stopping bloodshed and bringing to justice those responsible for the killings of civilians during mass protests; to stop the anti-terrorist operation in Ukraine’s southeast and return the soldiers involved in anti-terrorist operations to their places of permanent deployment.”

Kiev launched a military crackdown in the country’s south-east regions in April in response to mass protests against the coup-appointed government calling for the federalization of the region.

This news item appeared on the Russia Today website yesterday afternoon Moscow time---and my thanks go out to reader B.V. once again.


China Signs Non-Dollar Settlement Deal With Russia's Largest Bank

Slowly - but surely - the USD's hegemony is being chipped away whether by foreign policy faux pas, crossed red-lines, or economic fragility. However, on Day 1 of Vladimir Putin's trip to China it is clear that the two nations are as close as ever. VTB - among Russia's largest banks - has signed a deal with Bank of China to pay each other in domestic currencies, bypassing the need for US Dollars for "investment banking, inter-bank lending, trade finance and capital-markets transactions." Kirill Dmitriyev the head of Russia’s Direct Investment Fund notes, "together it’ll be possible to discuss investment in various projects much more efficiently and clearly," as Russia's pivot to Asia continues to gather steam.

This short, but worthwhile read showed up on the Zero Hedge website yesterday morning EDT---and I thank reader MA. for sending it our way.


Russia, China oppose Western sanctions, more strategic cooperation possible - expert

Russian President Vladimir Putin has begun his two-day official visit to China. Aside from holding talks with his Chinese counterpart Xi Jinping, he will also attend a summit of the Conference on interaction and confidence-building measures in Asia opening on Wednesday. The Voice of Russia talked to Yuriy Tavrovskiy, professor of Peoples' Friendship University.

During his visit, Mr.Putin will also hold separate bilateral meetings with some summit participants, including Presidents of Afghanistan and Iran, Hamid Karzai and Hassan Rouhani.

A separate meeting with UN Secretary-General Ban Ki-moon is planned as well. The two sides are expected to discuss a number of pressing international issues, including the Ukraine crisis.

Roy Stephens sent me this Voice of Russia piece yesterday afternoon MDT.


Vladimir Putin faces giving ground in China to seal gas deal

Russian president Vladimir Putin may have to accept unpalatable terms from China to clinch a massive gas pipeline deal in Shanghai this week, abandoning red lines defended tooth and claw by the Kremlin for the past decade.

The Russian state gas giant Gazprom said it is just “digits” away from an accord to supply North East China with 38bn cubic metres (BCM) for 30 years as soon as 2018. It is a long-coveted prize that would allow Russia to switch sales from Europe to the Far East and totally transform the Eurasian gas market.

Gazprom’s share price has soared 14pc this month as negotiations reach a climax. Investors are betting that the deal could be the start of an even greater build-up in gas shipments to Asia that would ultimately eclipse sales to Europe, currently 130 BCM, or 60pc of Gazprom’s revenues.

Mr Putin said the deal had “nearly been finalised” and was a perfect fit for both sides: allowing Russia to diversify its sales and letting China plug its “energy deficit” and switch to a cleaner fuel.

This Ambrose Evans-Pritchard offering appeared on The Telegraph's website late on Monday evening BST---and it's the final offering of the day from Roy Stephens.  It's worth reading.


China confronts U.S. envoy over cyber-spying accusations

China summoned the U.S. ambassador after the United States accused five Chinese military officers of hacking into American companies to steal trade secrets, warning Washington it could take further action, the foreign ministry said on Tuesday.

The U.S. Ambassador to China, Max Baucus, met with Zheng Zeguang, assistant foreign minister, on Monday shortly after the United States charged the five Chinese, accusing them of hacking into American nuclear, metal and solar companies to steal trade secrets.

Zheng "protested" the actions by the United States, saying the indictment had seriously harmed relations between both countries, the foreign ministry said in a statement on its website.

Zheng told Baucus that depending on the development of the situation, China "will take further action on the so-called charges by the United States".

This Reuters story, filed from Beijing, was posted on their Internet site early Tuesday afternoon EDT---and it's also courtesy of Roy Stephens.


China Arrests Former CEO of JPMorgan Asia

Just one day after the FBI issues arrest warrants for 5 Chinese military officials, Caixin reports that Fang Fang - the former CEO of JPMorgan Asia - has been arrested in Hong Kong by the Independent Commission Against Corruption (or anti-graft agency). Coincidental timing we are sure; and while details are sparse, the arrest appears linked to the hiring of the children of Chinese officials. Bloomberg reports that Fang declined to comment after being released on bail (under restrictions not to leave Hong Kong).

This short Zero Hedge piece showed up on their Internet site just before midnight EDT last night---and I thank reader 'David in California' for sending it our way.


Three King World News Blogs

1. John Embry: "Shocking Events Are Taking Place Around the World"  2. John Mauldin: "Remarkable Information Kyle Bass, Dylan Grice and Others Shared"  3. David P: "This is About to Trigger Massive Inflation"

[Note: Due to a small problem yesterday, the King World News blogs/interviews in my Tuesday column didn't show up there until lunch time on the East Coast yesterday.  If you missed them, they're now in the Critical Reads section of yesterday's column---and the link to that is here.]

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]


Gold Slammed As 'Panic-Seller' Dumps $520 Million In Futures

You can't make this up. An initial dump in gold happened when Europe was getting going late last night but as the US wakes up and markets get active, someone (panic-seller) decided it was an entirely optimal time to sell $520 million notional gold futures - sending the price of the precious metal down $7. Intriguingly, though the notional size was large, the actual move is not as large as we have become used to with the ubiquitous slamdowns (and it's a Tuesday). At the same time, USD/JPY was ramped... because we must maintain the appearance that stock markets are operating normally despite civil wars, coups, global growth slowdowns, and de-dollarization growing.

No surprises here.  It's the same old, same old---and only the willfully blind won't admit it.  That's all there is to this brief Zero Hedge article from yesterday---but the embedded graph is worth a look.  I thank U.A.E. reader Laurent-Patrick Gally for bringing this story to my attention---and now to yours.


Barclays head of spot gold trading leaves bank - sources

Barclays' head of spot gold trading is leaving as part of the bank's restructuring and its exit from the commodity business, sources familiar with the situation told Reuters on Tuesday.

Marc Booker's exit leaves Martyn Whitehead, Barclays' global head of metals and mining sales, as the bank's only representative listed with the London Gold Market Fixing company. Barclays is one of the four banks that contributes to the twice-a-day price setting process for the globally recognised benchmark.

But there has also been speculation about Whitehead's future at the bank.

This Reuters story, filed from London, was posted on their website just after 12 o'clock noon EDT yesterday---and I thank reader Brad Robertson for sharing it with us.


Eric Sprott: Chinese Gold Demand Falls, Indian Gold Demand May Increase, and More

Eric's 4:12 weekly broadcast was posted on the Internet site yesterday.  I haven't had the time to listen to it myself, but would suggest it's worth listening to.


Gold demand in India to rise, Modi seen easing import curbs

India's gold demand is likely to pick up in the second half of the year as curbs on bullion imports are expected to be eased by the country's new government, the World Gold Council (WGC) and other industry officials said on Tuesday.

Gold imports by India, the world's No. 2 bullion consumer after China, could double from current levels if the restrictions are eased, according to an industry estimate. This would help global prices that slumped 28 percent last year - the first drop in 13 years - partly due to India's curbs.

Struggling with a ballooning trade deficit, India in 2013 imposed a record high duty of 10 percent on overseas purchases of gold, the second-biggest expense in its import bill, and introduced a rule tying import quantities to export levels.

This Reuters story, co-filed from Mumbai and Singapore, was posted on their Internet site mid-afternoon yesterday India Standard Time---and I thank Ulrike Marx for sending it.


Jewellers, bullion traders jubilant with election results

Bullion traders and jewellers are ecstatic about Narendra Modi gearing up to take over as the Prime Minister of India.

As election results starting trickling in on Friday last, the afternoon heat seemed to matter little to those milling around south Mumbai’s busy Zaveri Bazaar, an area dominated by diamond traders and jewellers who distributed sweets and burst firecrackers to celebrate the BJP victory.

It helps hugely that the trade is dominated by Gujaratis who have never hidden their unequivocal support for Narendra Modi. “He understands the problems we have been facing over the last twelve months,” Haresh Soni, Chairman, All India Gem & Jewellery Traders’ Federation, told this correspondent. “We are sure he will solve our issues.”

This gold-related news item put in an appearance on Internet site early yesterday evening IST---and I thank reader Joe Nordgaard for sending it our way.


AngloGold’s new game-changing technology churns out 1,600 oz

South Africa’s largest gold miner AngloGold Ashanti has now produced 1 600 oz of gold using its exciting new technology, which mines “all of the gold, only the gold, all the time, safely”.

AngloGold’s Tau Tona gold mine, near Carletonville, has become the first pukka production site of the “game-changing” technology, which leaps over mechanisation into automation (Also watch attached video).

The technology is referred to as the South African Technology Project because of the company’s big-hearted decision to allow it to be migrated to all of South Africa’s hard-rock narrow-reef non-group mines, including the hard-pressed platinum mines.

Despite widespread cost cutting in the latest quarter to March 31, which saw AngloGold reduce its all-in sustaining costs (AISC) by 22% to $993/oz, the project budget was one of the few that remained untouched because of the “bang” the company expects to get from every “buck” it spends on it.

This very interesting news item appeared on the Internet site yesterday sometime---and it's the final offering of the day from reader B.V.


South African Labour Court calls 3-day strike mediation

After more than a month of cold war, South Africa's platinum miners and the Association of Mineworkers & Construction Union (AMCU) will reconvene wage talks under the facilitation of the Labour Court.

Instead of delivering judgement on AMCU's application to have Lonmin, Impala Platinum (Implats) and Anglo American Platinum (Amplats) prevented from communicating directly with the union's members, the Labour Court called for three days of mediation which is scheduled to start on Wednesday (May 21).

Lonmin, Implats and Amplats said they believed the majority of striking employees are desirous of returning to work having sacrificed nearly four months of wages - intelligence they learned following a programme of polling via text message.

This news item was posted on the Internet site late yesterday evening South Africa time---and it's another contribution from Ulrike Marx.



Lawrence Williams: Latest ECB gold sales agreement raises questions

But, coming back to the language of the ECB statement. The analysts noted above may well be correct in their views IF there is no significant upwards move in the gold price over the five year period of the agreement. But five years is an awful long time in global economic terms and should some external event, or series of events, such as a severe equity market crash, or a significant escalation of some major conflict situation turn into a shooting war, then gold safe haven demand could see a big change in investor sentiment and lead to another major upwards kick in the price. (The World Gold Council currently sees gold fundamentals in terms of supply and demand pretty much in balance and it would not take much to tip this one way or the other). If this should happen and the ECB banks – and the U.S. Fed – perhaps see the gold price moving out of the range they would like to see it remain within, then all bets would be off and ‘current plans not to sell significant amounts of gold’ could have a totally different interpretation by the banks.

Overall, though, we do agree with the analysts’ viewpoints, at least for the time being. Under current conditions the European central banks would have little reason to sell gold – indeed some would suggest they might even be in the market to purchase it should prices remain stagnant, or indeed fall, while non ECB central banks will probably continue their purchases.  But, over a five year term the situation could change dramatically and then any ‘plans not sell significant amounts of gold’ could rapidly fall by the wayside.

This commentary be Lawrie was posted on the Internet site yesterday---and it's worth reading.  It's also the final offering of the day from Ulrike Marx, for which I thank her.


German TV network broadcasts long program on gold market manipulation

Gold researcher and GATA consultant Koos Jansen calls attention to a long broadcast about gold market manipulation made this month on the German-language television network 3sat, which serves Germany, Austria, and Switzerland. The broadcast came on the 3sat program "Makro" and focused on recent complaints about the daily London gold fixings.

It quoted market analyst and GATA consultant Dimitri Speck and Hong Kong fund manager William Kaye, who is frequently interviewed by King World News about gold market manipulation. The program does not seem to have gotten much into central bank involvement in the market manipulation, but questions are raised about Germany's gold reserves vaulted abroad, so this may have been a good start.

Jansen has posted both full video of the program and an English transcript at his Internet site  It's worth watching if you speak German---and worth the read if you don't.  I found this gold-related stories on the Internet site yesterday morning.



¤ The Funnies

The next photo from my one-week trip was taken in central North Dakota.  It was just a general landscape shot---and I thought the church on the hill in the middle of nowhere [literally] on State Highway 200 was worth the trouble of stopping.  The second photo, also in North Dakota---and a little further west from the first one, is a pair of Killdeers that I took in the small town of McClusky.

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¤ The Wrap

For the 20 weeks of 2014 through Saturday, approximately 90 million oz of silver were physically removed from, or brought into, the six various COMEX warehouses. That’s an average weekly turnover of 4.5 million oz (and not the 3 million oz average I had assumed), or 234 million oz on an annualized basis. Interestingly, total COMEX silver inventories are nearly the same today as they were on January 4---and total inventories have fluctuated only a small amount over the past 20 weeks. Certainly, at least for the first 20 weeks of this year (and for the past three years), total inventories are not newsworthy compared to the movement of metal, a theme I admit to repeating.

The equivalent of 30% of world mine production has physically entered and exited the COMEX silver warehouses over the past 20 weeks; that is a massive amount and something that has never occurred in any other commodity to my knowledge. Since I believe that investment holdings make up the vast bulk of total COMEX silver inventories and no more than 35 million ounces are available, the 4.5 million oz weekly average movement represents a stunningly higher effective turnover. On any basis that could be imagined either compared to silver’s actual supply and demand or compared to other commodities, the COMEX silver warehouse movements must be considered highly unusual. - Silver analyst Ted Butler: 17 May 2014

It was another day of marking time where not much was allowed to happen in any of the precious metals---and anything of importance that did, met the usual fate during the New York trading session.

How long this will last is anyone's guess, as it's very quiet out there---and JPMorgan et al are determined to keep it that way for the moment.

Here are the 6-month gold and silver charts once again, with the 50 and 200 day moving averages in gold---and the 20 and 50-day moving averages in silver.

Even though not much is happening price wise, I do have a couple of things I'd like to comment on here that has to show up in prices sooner or later.  The first of which was the approximately 28 metric tonnes of gold that Russia's Central Bank purchased in April.  It was during the time that the Ukraine/Crimea situation was at its peak---and sanctions against Russia were imminent.  Wisely, Russia decided to take the opportunity to dump a portion of its U.S. bonds and treasuries and buy gold with it.  I had been waiting for their May 20th website update with some anticipation---expecting/hoping that this would turn out to be the case---and it was.  I'll be equally interested in what The Central Bank of the Russia Federation does this month when their website is updated on Friday, June 20.

The other thing is the turn-over of silver stocks at the Comex-approved depositories.  Ted has been talking about this for years---and I've been fortunate enough to be able to post his thoughts on this as time has gone by.  I also post the actual numbers every day on this site, so we've been able to watch the goings-on in real time.  But even I was taken aback by what Ted had to say about it in the quote above that I borrowed from his weekly review on Saturday.

Just think about it---"The equivalent of 30% of world mine production has physically entered and exited the Comex warehouses in the last twenty weeks."  And not another person on the Internet has seen fit to comment on this extraordinary [and preposterous, I might add] situation.  Even at 3 million ounces per week, Ted's original estimate, it was still big news.

While I'm at it, I also mentioned at the top of this column that year-to-date GLD has seen about 580,000 troy ounces head out the door---but over 11.6 million ounces has been added to SLV---and the silver price action has stunk up the place compared to gold.  Would someone please let me know why this---and the turnover---aren't big news?  Aren't there any curious minds left out there?

Nothing much of anything happened in Far East trading on their Wednesday---and as I write this paragraph, London has been open about an hour.  Gold and silver are down a hair---and platinum and palladium are up the same amount.  Net volume in gold is microscopic, just under 12,000 contracts---and silver's volume is around 4,400 contracts.  The dollar index slipped back below the 80.00 mark about 30 minutes before the London open.

Yesterday, at the close of Comex trading, was the cut-off for this Friday's Commitment of Traders Report.  Just glancing at the price action during the reporting week, I'd guess that we'll see further improvement in the Commercial net short positions in both gold and silver.  However, I reserve the right to be wrong about that, as the price action has occurred in a very narrow range during that period.

And as I hit the send button on today's efforts at 5:05 a.m. EDT, I note that all four precious metals rallied a bit starting shortly after the London open.  Gold and silver are back at almost unchanged, platinum is up ten bucks---and palladium's rally attempt didn't get above the $827 price level it was held at in New York yesterday.  Surprisingly enough, the volumes in both gold and silver although up from an hour ago, aren't up by much.  The dollar index is down about 12 basis points.

That's all I have for today---and nothing will surprise me when I check the charts later this morning.

I hope your day goes well---and I'll see you tomorrow.