Gold & Silver Daily

¤ Yesterday In Gold & Silver

After the the two hour sell-off going into the London open, the gold priced inched higher until shortly after the p.m. gold fix was in at 10 a.m. EDT in New York.  After that it chopped quietly sideways into the close.

Once again the high and low ticks aren't worth my effort to look up.

Gold finished the Wednesday trading session at $1,209.80 spot, up $1.80 from Tuesday's close.  Net volume was on the lighter side at 101,000 contracts, with almost a third of that coming before the London open.

It was more or less the same price action in silver, but the obvious sell-off of the quiet rally that occurred at 10:30 a.m. EDT really stands out---and from there it got sold back to unchanged by 3:30 p.m.  It traded flat into the close of electronic trading.

The high and low ticks were reported by the CME Group as $17.28 and $16.935 in the July contract.

Silver closed yesterday at $17.075 spot, up a half a cent.  Net volume was 29,500 contracts.

Here's the New York Spot Silver [Bid] chart from yesterday---and you can see for yourself how precise the timing was of the smack-down in the smallish silver rally at 10:30 a.m. yesterday.  The pop in price at the release of the Fed minutes was taken away as well.

Platinum also got sold down a bit going into the London open, but recovered within an hour or so before chopping sideways for the remainder of the Wednesday session.  Platinum finished the day at $1,154 spot, up 5 bucks from Tuesday.

Ditto for palladium, but the subsequent rally off its pre-London open low tick got dealt with at the COMEX open.  It's low came at noon EDT---and it managed to close up only a dollar from Tuesday at $775 spot.

The dollar index closed late on Tuesday afternoon in New York around 95.30---and although it made it as high at about 95.80 in late afternoon trading in Hong Kong on their Wednesday afternoon, it fell back to around the 95.50 mark after the London open---and chopped sideways for the rest of the Wednesday session, closing at 95.59---up only 9 basis points on the day.

The gold stocks opened up a bit---and chopped sideways until minutes before the Fed minutes were released at 2 p.m. EDT.  They powered higher from there, but willing sellers showed up about 2:30 p.m. as the gold price sagged a few dollars---and by the time the equity markets closed in New York yesterday, most of those gains had vanished, as the HUI closed up only 0.13 percent.

The silver equities traded more or less in the same pattern---and the sell-off at the 10:30 a.m. EDT is obvious on the chart below, as is the up/down pattern after the Fed minutes were released.  Nick Laird's Intraday Silver Sentiment Index closed up 0.63 percent.

The CME Daily Delivery Report showed that no gold or silver contracts were posted for delivery within the COMEX-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in May fell by 15 contracts, leaving 124 still open.  Silver o.i. dropped by 8 contracts, which still leaves 289 left.

There was another withdrawal from GLD yesterday.  This time it was 99,510 troy ounces.  Since May 1 there has been 765,356 troy ounces of gold removed from GLD---and not a single troy ounce deposited.  And as of 9:52 p.m. EDT yesterday evening, there were no reported changes in SLV.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes in both their gold and silver ETFs for the week ending Friday, May 15---and this is what they had to report.  Their gold ETF added 4,234 troy ounces---and their silver ETF increased by 49,672 troy ounces.

For the second day in a row there was no sales report from the U.S. Mint.

There wasn't a lot of activity in gold over at the COMEX-approved depositories on Tuesday.  They only received 4,600 troy ounces---and shipped 99 ounces out the door.  It was much busier in silver as 783,763 troy ounces were reported received, but only 6,250 troy ounces were shipped out.  All the 'in' activity was at the CNT Depository and Canada's Scotiabank.  The link to that action is here.

It was another frantic day at the gold kilobar depositories in Hong Kong on their Tuesday.  They received 9,158 kilobars---and shipped out 10,588 kilobars.  These are huge amounts of gold, dear reader---and the link to that activity in troy ounces is here.

Since yesterday was the 20th of the month, the folks over at The Central Bank of the Russian Federation updated their Internet site with April's data.  It showed that they added 300,000 troy ounces of gold to their reserves, which now stands at 40.1 million troy ounces.  Here's Nick's most excellent chart showing the change.

I have a decent number of stories for you today---and I'll happily leave the final edit up to you once more.


¤ Critical Reads

Big banks plead guilty to currency market-rigging conspiracy, will pay $5.8 billion

Six of the world's biggest banks will pay $5.8 billion and five of them agreed to plead guilty to charges tied to a currency-rigging probe as they seek to wind down almost half a decade of enforcement actions.

Citicorp, JPMorgan Chase & Co., Barclays Plc, and Royal Bank of Scotland Plc agreed to plead guilty to conspiring to manipulate the price of U.S. dollars and euros in settlements with the Justice Department announced in Washington today. The main banking unit of UBS Group AG agreed to plead guilty to charges related to interest-rate manipulation. The Swiss bank, the first to cooperate with antitrust investigators, was granted immunity in the currency probe.

The four banks that agreed to plead guilty to currency charges are among the world's biggest foreign-exchange traders. They were accused of colluding to influence benchmark rates by aligning positions and pushing transactions through at the same time. Traders who described themselves as members of "The Cartel" used online chat rooms to discuss their positions in the minutes before the rates were set, the Justice Department said.

That leaves only the precious metal markets that JPMorgan et al haven't been been found guilty of rigging, but you know that they're doing it, even if they're never found guilty of it.  This Bloomberg story appeared on their Internet site at 8:00 a.m. Denver time yesterday morning---and I found it embedded in a GATA release.  The New York Times spin on this, courtesy of Roy Stephens, is headlined " Rigging of Foreign Exchange Market Makes Felons of Top Banks".  BUT NOBODY'S GOING TO JAIL!!!  And until that happens, this will never end.


Trannies Tumble, S&P/Dow Give Up Week's Gains

Bond yields are leaking higher, The U.S. Dollar is flat (but noisy), but with no macro data to spark a momo run, U.S. equities have tumbled out of the gate... especially Dow Transports. Dow and S&P are back to unchanged on the week...

BTFD? Well we are sure the FOMC Minutes will be spun dovishly.

Trannies are in trouble again - Down 6% YTD... worst start to a year since 2009

This story appeared on the Zero Hedge website less than twenty minutes after the equity markets opened yesterday---and it's courtesy of Dan Lazicki.  The two embedded charts are worth a glance.


Stocks Pump-And-Dump After Ministry of Truth 'Manipulation' Trumps Spoofing Algos

Thanks to the spoofing, stocks soared to record highs after the FOMC Minutes to prove that everything is awesome---but then CNBC broke the news that BEA will double-seasonally-adjust GDP data - implicitly enabling Q1 to look better and thus giving Janet more room to hike in June  - and stocks sunk...

The bottom line: stocks were so obviously manipulated higher today after FOMC to prove the Fed is right it was disgusting... not just the actual indications of spoofing but the fact that stocks entirely decoupled from the "DEADNESS" of every other asset class after the minutes hit.

Then when BEA hit with their agreement over double-seasonal-adjustments, the farce was complete, stocks tanked on the bad news.

This chart-filled commentary from Zero Hedge showed up four minutes after the closing bell yesterday---and it's worth a minute of your time.  It's also the second offering in a row from Dan Lazicki.


Stocks Slump After Liesman Reports GDP to Be "Double Seasonally-Adjusted" Upward

The San Francisco Fed decided that the weak Q1 GDP data simply needed to be seasonally adjusted (again) in order to make it ...well, less weak.

The official estimate of real GDP growth for the first three months of 2015 was shockingly weak. However, such estimates in the past appear to have understated first-quarter growth fairly consistently, even though they are adjusted to try to account for seasonal patterns. Applying a second round of seasonal adjustment corrects this residual seasonality. After this correction, aggregate output grew much faster in the first quarter than reported.

Got that? There was still some "residual seasonality" (i.e. the data still looked weak) in the Q1 print after the first round of seasonal adjustments, so in order to "correct" things, a second round of seasonal adjustments needs to be applied, after which the new figures should show that the economy did not in fact flat-line in the first three months of the year. Of course if the numbers still don't come out looking the way you want them, you can always rinse and repeat. As we put it two days ago:

And if the double seasonally adjusted data doesn't work? Why triple adjust it, then quadruple adjust it, until you get precisely the goalseeked number you want, as US economic "data" promptly devolve to a level of ridiculousness that will make even the Chinese Department of Truth turn green with envy.

Sure enough, just moments ago, CNBC's Steve Liesman (who else) reports that the double seasonal adjustments are indeed in the works.

Well, dear reader, things are just getting more outrageous all the time.  This is another Zero Hedge article from Wednesday afternoon that's courtesy of Dan Lazicki.


Even Harvard Economists Admit Fed Policy Has "Created Dangerous Risks"

No lesser establishment economist than Martin Feldstein - Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research - has some warning words of wisdom for The Fed today: "...the Fed’s unconventional monetary policies have also created dangerous risks to the financial sector and the economy as a whole." When even The Ivory Tower is losing faith, you know The Fed is in trouble...

This commentary by Feldstein was embedded in another Zero Hedge piece from yesterday---and it's also courtesy of Dan L.


The Treasury Bond Bull Market Will Persist -- Jim Rickards

How many times have you heard the phrase “bond bubble” in the past three years?

It seems that every time you turn on financial television or go to a financial website, there’s an analyst warning you about a bond bubble about to burst. The commentary usually consists of the observation that “interest rates are near an all-time low” and “have nowhere to go but up.”

There’s not much more to the analysis than that. In fact, interest rates are near all-time highs and could drop significantly, setting off one of the greatest bond market rallies in history.

Allow me to explain…

This commentary by Jim appeared on the Internet site yesterday sometime---and it's another contribution from Dan Lazicki. [Note: Jim says that "Russia invaded Crimea in 2014".  They did not.  Crimea voted over 90 percent to return to Russia from whence they came, after being "gifted" to the Ukraine by Khrushchev in 1954 - Ed] 


For Caterpillar, This is What the "Second Great Depression" Looks Like

According to the latest CAT retail sales data, Caterpillar has now reported an unprecedented 29 months of declining global retail sales, with the month of April seeing a 16% Y/Y collapse in China (after a 25% plunge in 2014 and a 20% plunge the year before), while Latin America just suffered an epic 44% Y/Y crash, the biggest going back to 2009, after a 28% drop the year before.

Or as far as the industrial and heavy equipment bellwether is concerned, the emerging markets (or BRICS) are in an unprecedented economic collapse.

To put Caterpillar's ongoing second great depression in context, during the Great Financial Crisis, CAT suffered "only" 19 months of consecutive retail sales declines. As of April 2015, this number is now 29, and there is no hope in sight of seeing an annual rebound any time soon.

This short Zero Hedge article appeared on their Internet site at 10:55 a.m. EDT on Wednesday morning---and it's definitely worth your time.  This is the real economy talking.  Once again I thank Dan Lazicki for finding it for us.


Paul wages Patriot Act filibuster with call for an 'open rebellion'

Presidential hopeful Sen. Rand Paul is speaking from the Senate floor Wednesday in what he is calling a filibuster of extending the Patriot Act.

"I will not let the Patriot Act, the most unpatriotic of acts, go unchallenged," Paul said. "The bulk collection of all Americans' phone records all of the time is a direct violation of the Fourth Amendment."

Paul's hours-long speech also marks a potentially savvy political move, allowing the Kentucky Republican, and his presidential campaign, to dominate the media spotlight for hours Wednesday afternoon.

Paul brushed aside criticisms from his colleagues that letting the Patriot Act expire would threaten national security.

"Couldn't we just for a couple of hours live under The Constitution?" he asked.

This commentary was posted on website at 2:03 p.m. EDT yesterday afternoon---and the stories from Dan just keep on coming.


Euro slides on Greece default fears

The euro fell to a two-week low on Wednesday following a Greek government warning that it will miss the June 5 IMF payment deadline without a deal with the Troika by then.

The single currency traded at $1.1115, down 0.4 percent at 11:36 a.m. MSK on Wednesday. It declined 0.71630 against the British pound and 134.34 against the Japanese yen.

“Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5. If there is no deal by then that will address the current funding problem, they won’t get any money.”

The country owes more than €320 billion to its external creditors, and is counting on a €7.2 billion International Monetary Fund loan installment. Last week the country raided its International Monetary Fund reserves for a €750 million debt payment to the IMF.

This news item appeared on the Russia Today website at 11:45 a.m. Moscow time on their Wednesday morning, which was 4:45 a.m. EDT in Washington.  I thank Roy Stephens for sending it along.


The Adults Are Back——Kerry Throws In the Towel on Ukraine

The U.S. seems to admit it overplayed its hand over Ukraine. Caving to reality is actually the best possible policy.

It is just as well Secretary of State John Kerry’s momentous meetings with Russian leaders last week took place in Sochi, the Black Sea resort where President Putin keeps a holiday home. When you have to acknowledge that two years’ worth of pointless hostility in the bilateral relationship has proven none other than pointless, it is best to do so in a far-away place.

Arriving in the morning and leaving in the afternoon, Kerry spent three hours with Sergei Lavrov, Russia’s very competent foreign minister, and then four with Putin. After struggling with the math, these look to me like the most significant seven hours the former senator will spend as this nation’s face abroad.

Who cannot be surprised that the Obama administration, having turned the Ukraine question into the most dangerous showdown since the Cold War’s worst, now declares cordiality, cooperation and common goals the heart of the matter?

The question is not quite as simple as one may think.

This commentary falls into the absolute must read category for any serious student of the New Great Game---and is the only absolute must read in today's column.  I was going to save it for Saturday for length reasons, but after having read it myself, I though it best to insert it into today's missive.  It was posted on the Internet site on Tuesday at 5 p.m. Denver time---and I borrowed the above headline from David Stockman's reposting of it.  The actual headline reads "John Kerry admits defeat: The Ukraine story the media won’t tell, and why U.S. retreat is a good thing"---and I thank Roy Stephens for bringing it to my attention---and now to yours.


Washington Throws in the Towel on Ukraine, Shifts to 'Plan B'

Obama has thrown in the sponge for Ukraine, Eric Zuesse underscored, adding that Washington is now "on-board with the ‘Plan B’ for Ukraine," which means implementing the provisions of the Minsk II accord.

International media have failed to highlight the ultimate failure of Washington's policy in Ukraine, investigative historian Eric Zuesse emphasized, referring to remarks by U.S. Secretary of State John Kerry in response to Petro Poroshenko's oath to retake Crimea and the Donetsk Airport.

"I have not had a chance – I have not read the speech. I haven't seen any context. I have simply heard about it in the course of today [which would be shocking if true]. But if indeed President Poroshenko is advocating an engagement in a forceful effort at this time, we would strongly urge him to think twice not to engage in that kind of activity, that that would put Minsk in serious jeopardy. And we would be very, very concerned about what the consequences of that kind of action at this time may be," John Kerry said during a press conference in Sochi, as cited by the historian.

Eric Zuesse stressed that the remark has clearly demonstrated that the Obama administration has thrown in the towel on Washington's original plan for Ukraine, which was purportedly aimed at an all-out military invasion of the eastern regions.

This news story, filed from Moscow, showed up on the Internet site at 7:26 p.m. Moscow time on their Wednesday evening---and it's certainly worth reading.  I thank Roy Stephens for his second article in a row.


Russia to take legal moves if Ukraine defaults on $3bn debt - finance minister

Russia will appeal to the International Court of Justice if Ukrainian President Petro Poroshenko signs a moratorium on the payment of Ukraine’s external debt into law and fails to pay its debt to Russia, said Russian Finance Minister Anton Siluanov.

Siluanov said Ukraine was virtually defaulting on its debt, adding that Russia doesn’t yet have grounds to lodge any claims. If Kiev fails to pay $75 million in June, Moscow will use its right to appeal to the court, the Minister said.

The Ukrainian parliament has adopted a law allowing the country not to pay foreign debt to private lenders, saying it needs to protect the ailing economy and people from “unscrupulous” creditors.

The bill says the $3 billion in Ukrainian Eurobonds purchased by Russia at the end of 2013 are on the list of liabilities subject to a possible payment moratorium.

This article put in an appearance on the Russia Today website at 11:01 a.m. Moscow time yesterday morning---and I thank Roy Stephens for sharing it with us.


China Factory Index Shrinks for 3rd Month

A report says manufacturing in China shrank for the third month in a row in May as demand remained soft, raising the chances of further stimulus from Beijing.

The preliminary version of HSBC's purchasing managers' index came in at 49.1. That's slightly better than the 48.9 recorded in April but still in contractionary territory on the 100-point index. Numbers above 50 indicate expansion.

The report said that factory production decreased from last month's no-change level, falling to its lowest in 13 months.

This short AP story ended up on the Internet site at 10:35 p.m. EDT Wednesday evening---and I thank West Virginia reader Elliot Simon for digging it up for us.  It's worth a quick read.


Against Beijing? U.S. Holds Asian Military Summit, Excludes China

As the United States struggles to maintain influence in the South China Sea, it has pushed Pacific nations to assert themselves against Beijing. In that effort, Washington organized a gathering of military leaders from over 20 countries, specifically excluding China.

A first-of-its-kind event, the United States hosted the PACOM Amphibious Leaders Symposium in Hawaii for Pacific nation commanders to discuss amphibious military capabilities. In attendance are representatives from Japan, Australia, the Philippines, Malaysia, Vietnam, and many others.

During the event, military leaders were flown aboard the USS Essex and given a demonstration of the U.S. Marines amphibious assault capabilities.

This news item appeared on the Internet site at 2:16 a.m. Moscow time on their Thursday morning, which was 7:16 p.m. Wednesday evening in Washington.  Once again I thank Roy Stephens for sending it our way.


Ray Dalio Slams Buffett For Being "Wrong on Gold", Says "Social Disruption" is Inevitable

Given the recent resurgence of precious metals and the looming 'endgame' of Federal Reserve faith, we thought dusting off the following 160 seconds of uncomfortable truth from Bridgewater's Ray Dalio was worthwhile...

"We're beyond the point of being able to successfully manage this... and I worry about another leg down in the economy causing social disruption... Hitler came to power in 1933 because of the social tension between the factions."

"Gold should be a part of everybody's portfolio to some degree because... it is the alternative money.  Warren Buffett is making a big mistake."

This 2:40 minute video clip is of unknown age, as the opening paragraph states "dusting off"---but it certainly is worth watching if you haven't seen it before, which I hadn't.  I thank Dan Lazicki for his final contribution to today's column.


It’s Time to Hold More Cash and Buy Gold -- Citigroup

Gold is a regarded as a hedge against market turbulence by Bank of America who, in a note to clients, advised holding gold and paper currency at this time.

Bloomberg report that Bank of America Merrill Lynch describe the markets as being in a “Twilight Zone” – the zone between the end of QE and the Fed beginning to raise rates to try to bring normality back into the markets.

To deal with this they advocate adding gold to one’s portfolio along with higher levels of cash. Citing factors such as liquidity, profits, technological disruption, regulation, and income inequality they say there exists a potential for a “cleansing drop in asset prices.

This commentary appeared in Mark O'Byrne's column over at the Internet site yesterday---and it's certainly worth skimming.


UBS Shielded From Charges in U.S. Precious-Metals Probe

UBS Group AG won immunity from criminal fraud charges in a Justice Department investigation into misconduct in the trading of precious metals.

The Swiss bank’s main UBS AG unit won’t be charged by the department’s criminal division for information the firm disclosed to prosecutors about precious-metals transactions, according to the company’s plea agreement released on Wednesday to resolve a probe into interest-rate manipulation.

Prosecutors have been investigating whether at least 10 banks, including Barclays Plc, JPMorgan Chase & Co. and Deutsche Bank AG, manipulated prices of precious metals such as silver and gold, Bloomberg reported in February. The scrutiny follows international probes into the rigging of financial benchmarks for rates and currencies, which have yielded billions of dollars in fines.

This Bloomberg news item was posted on their website at 1:01 p.m. yesterday afternoon Denver time---and I found it on the Sharps Pixley website in the wee hours of this morning.


Indian banks doubt that gold paperization scheme will do much

A proposal in India to attract thousands of tonnes of gold owned by households into a bank deposit scheme will likely fail in its current form as it does not address some key concerns for banks and consumers.

Support from banks would be crucial for the success of the monetisation plan. Deposit schemes, similar to the one proposed on Tuesday by the Narendra Modi-led government, have previously failed as the incentives offered were not profitable for banks.

The idea is to attract gold lying idle among Indian homes into the banking system. This amounts to an estimated 20,000 tonnes of gold -- or almost seven times global annual output.

This gold-related Reuters article, co-filed from Singapore and Mumbai, was posted on their website at 9:24 a.m. EDT on Wednesday morning.  It's actual headline is "India's gold monetisation plan lacks lustre - industry"---and I found it in another GATA release.  It's not overly long---and it's worth reading, as it goes hand-in-hand with the other stories on this issue that appeared in my Wednesday column.


Chinese Gold Standard Would Need a Rate 50 Times Bullion's Price

A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion's price now, according to Bloomberg Intelligence.

A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there's no evidence that the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published today. Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said.

Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote. Theoretically, to create an exchange rate of one ounce of gold for every $64,000, the country would need about 10,000 metric tons of the metal, they estimated. That's nine times the nations official holdings and about 6 percent of all the bullion ever mined globally.

Well, dear reader, I don't know about you, but I'd be happy with a gold price five times what it is now.  This Bloomberg article showed up on their Internet site at 5:16 a.m. MDT yesterday morning---and I found it on the Internet site.


Will China go for a gold standard? The jury is out! -- Lawrence Williams

I listened today (20th May) to an exceedingly interesting presentation by Ken Hoffmann, Bloomberg’s Global Head of Metals & Mining Research at the very well attended Global Mining Finance Precious and Base metals event in London. The talk was entitled ‘China: Brace for a hard landing and a new ‘Gold Standard’ and related to research conducted by Bloomberg analysts which was only released about half an hour earlier than the talk.

While Hoffmann may not have answered the question posed by the talk title directly, and a ‘gold standard’ in the old sense may not be realistic given that to back the yuan physically with gold would require either more gold than the world has ever produced (at the current price levels) or perhaps if China can accumulate 10,000 tonnes of gold, a gold price of $64,250 an ounce would be required. (China currently has official holdings of 1,054 tonnes as reported to the IMF, but is widely believed to have accumulated far more held in separate accounts not yet reported to the IMF.  Bloomberg analysts suggested it might have an additional 2,500 tonnes in such accounts – others put the figure rather higher, but until and unless China comes clean with a ‘true’ figure we just don’t know – and even then we may still not know for sure given the somewhat opaque nature of Chinese government statistics).

Lawrie has a go at the Bloomberg story posted above---and this very interesting commentary of his is worth your while.  It was posted on the Internet site at 4:22 p.m. BST in London yesterday---and the first reader through the door with it was Roy Stephens.


Americans Fear Beijing, Moscow May Introduce New Gold Standard

China is planning to introduce the gold fixing reference price in yuan. Americans fear that China could introduce a new gold standard to displace the dollar, DWN reported.

The competition for London gold-market has grown after the Chinese Shanghai Gold Exchange (SGE) established an International Chamber of Commerce in the free trade zone of the city, providing for free capital flows, Deutsche Wirtschafts Nachrichten reported.

China is the world's largest gold producer and is, logically, interested in the possibility to influence the determination of the gold price.

According to a market participant, China will have its fixing price before the end of the year, with the country experiencing a rapid development of its gold market, Financial Times reported.

This is another interesting article on the same issue---and it seems to have come out entirely independently of the above two stories.  This one appeared on the Internet site at 4:37 p.m. Moscow time on their Wednesday afternoon, which was 9:37 a.m. EDT in New York.  It's the final offering of the day from Roy Stephens, for which I thank him.



¤ The Funnies

These water birds are horned grebes---and are very common around this part of Canada in the summer time.  Both sexes are magnificent in their respective breeding plumages---and to tell you the truth, I don't know which is which, but I guess it's only important that they know the differences.  Its "horns" are yellowish patches of feathers behind its eyes that it can raise and lower at will.

Avrupa and Antofagasta intersect copper-rich VMS in Pyrite Belt, Portugal

•             First Greenfields discovery of massive sulfide mineralization in 20 years in the Iberian Pyrite Belt

•             10.85 meters of massive and semi-massive/stockwork sulfide mineralization grading 1.81% Cu, 2.57% Pb, 4.38% Zn, 0.13% Sn, and 75.27 ppm Ag

•             Including 7.95 meters @ 2.21% Cu, 3.05% Pb, 4.82% Zn, 0.15% Sn, 89.8 ppm Ag

•             Followed by 2.90 meters @ 0.71% Cu, 1.27% Pb, 3.17% Zn, 0.092% Sn, 35.4 ppm Ag

•             Avrupa and Antofagasta sign an amended Joint Venture Agreement

Please visit our website to learn more about the company and current exploration program.


¤ The Wrap

Where do I get off accusing the COMEX and CME of running a crooked shop whether you call it market making or a bookie operation? For nearly 30 years I’ve argued that COMEX silver has facilitated the silver manipulation in violation of the terms of commodity and interstate commerce law; but let me do so today in terms of what constitutes a crooked bookie. If there’s one thing in which no one would disagree, a bookie would be considered unquestionably crooked if he took measures to ensure the outcome of a sporting event, such as paying players in a college basketball game to deliberately shave points in a game or otherwise perform badly enough to affect the outcome. In essence, that’s exactly what the COMEX has encouraged in silver. How so?

First, if a bookie never lost when he took a big line on any sports event that should raise suspicions of rigged games. After all, there is no way a freely contested event could always fall within the odds to the bookie’s favor. Let me stop here and agree that it’s not the COMEX or the CME taking the bets that never lose, but certain favored members, like JPMorgan and other large institutions. The CME provides the infrastructure that enables the real bookies to take the bets of speculators (technical funds) in silver, gold, copper and other commodities. The CME gets kickbacks from everyone who places bets on the COMEX, but sees to it that the most favored member bookies always win.

Data from the federal commodities regulator, in the form of the weekly Commitments of Traders Report (COT) confirm that the biggest bookies, like JPMorgan, have never, to my knowledge, incurred any losses in taking the other side to what the technical funds have ever bet. Some smaller bookies or commercial traders have suffered a rare setback or two over the years, but the biggest silver bookies, like JPMorgan? Never have they lost. That’s the sure sign that the COMEX silver game is fixed –  when the biggest bookies never lose. - Silver analyst Ted Butler: 20 May 2015

Except for the dip in all four precious metals in the two hours leading up to the London open, all was quiet yesterday in the precious metal market.  Even the tiniest hint that prices might rally was met by a willing seller, probably of the HFT variety.  And the FOMC minutes release at 2 p.m. EDT had no impact on p.m. prices.  For a change, all was quiet on the currency front as well.

Here are the 6-month charts for all four precious metals as of the close of trading on Wednesday.  There's not much to see---and I'm just sitting here waiting for the other shoe to drop, as I don't believe that this engineered price decline that started on Tuesday is close to being over---although I'd love to be spectacularly wrong about that.

And as I type this paragraph, the London open is about ten minutes away.  The gold price certainly didn't do much in Far East trading on their Thursday---and just about the same can be said of the other three precious metals as well.  Silver is up 8 cents---and palladium is up 2 bucks.

Net gold volume is a hair over 14,000 contracts at the moment, which is fairly decent for this time of day---and about ten percent of the gross volume is roll-overs out of the June contract.  Silver's net volume is a handful of contracts under the 3,000 mark.  The dollar index, which has been chopping sideways in a pretty tight range over the last twenty-four hours, is flat at the moment.  Nothing to see here, either.

Tomorrow we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and as I expected, Ted didn't want to be nailed down as to what the report might say, either.  Here's a paragraph on this issue from his mid-week column yesterday---"I’m not even sure what the COT report will show on Friday. Before Tuesday’s price smash, I would have assumed an extreme increase in the total commercial net short position, along the lines of what I mentioned on Saturday (40,000+ in gold and 10,000 to 20,000 contracts in silver), although surprises were possible. [But] after Tuesday, I would have assumed some moderation in those expected increases, but that’s the problem with sharp up and down moves within the reporting week, namely, it scrambles objective analysis."

And as I send today's column off to Stowe, Vermont at 5:15 a.m. EDT, I see that the dollar index made it as high as 95.65 around 2:30 p.m. Hong Kong time, thirty minutes before the London open---and has been heading lower ever since.  At the moment it's down 50 basis points from Wednesday's close in New York.

However, this is not being reflected in the gold price, as it's trading basically unchanged at the moment.  Net volume is just under 22,000 contracts, which isn't overly heavy.  Silver is up a dime---and volume is just over 4,400 contracts, which is also on the lighter side. Platinum and palladium are up a couple of bucks each.

I must admit that I have no clue as to what may be in store for the precious metals for the remainder of the Thursday trading session, but as is usually the case, any price action of significance will occur once the COMEX opens at 8:20 a.m. EDT in New York.

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

Ed Steer