Gold & Silver Daily
"JPMorgan et al are not about to allow precious metals to rise just yet"
 

¤ Yesterday In Gold & Silver

[NOTE: Sorry about no column on Wednesday, as I was rather ill on Tuesday.  Ed]

In the overall, the gold price activity on Wednesday was pretty much the same as it was on Monday and Tuesday.  The price rallies that began twenty minutes before the COMEX open got hammered withing minutes, as "da boyz" spun their algorithms.  And, like Monday and Tuesday, the price got sold down into the COMEX close regardless of the fact that oil was continuing to rally---and the dollar index continued to head south with a vengeance.  They even managed to close the gold price lower than it was on Tuesday.

The high and low ticks are barely worth the effort of looking up.  The CME Group reported them as $1,187.40  and $1,196.90 in the July contract.

Gold finished the Wednesday session at $1,191.20 spot, down $1.80 on the day.  Net volume was pretty light at only 91,000 contracts, so JPMorgan et al had an easy time of it.

The same can be said about silver for the week-to-date, as it was wasn't allowed to rally in the London open yesterday---and then got sold down until 1 p.m. BST, which was twenty minutes before the COMEX open.  The rally that began at that time got capped at the open---and spent thirty minutes being held at the $16.61 spot price mark, before getting sold down into negative territory by the London close.  It rallied a hair from there, but still was closed down on the day.

The low and highs in that  metal were reported as $16.385 and $16.65 in the July contract.

Silver finished the Wednesday session at $16.485 spot, down 2.5 cents from Tuesday.

Here's the New York Spot Silver [Bid] chart from yesterday showing the price action in detail from 8:00 a.m. EDT [1:00 p.m. BST] until the 5:15 p.m. EDT close of electronic trading---and you can see just how tight the control on the price was in the thirty minutes between open of the New York equity markets and the London p.m. gold fix.

The chart for platinum was similar: sell-off at Zurich open, rally twenty minutes before the COMEX open, price capped at the COMEX open, sold down until 12:45 p.m. in New York.  But it did manage to rally after that---and actually closed up a two bucks at $1,144 spot.

Palladium price action was tiny facsimile of what happened in palladium---and it closed unchanged at $789 spot.

The dollar index got trashed again yesterday, falling from just under the 96.00 mark on Tuesday---shortly after the London open---all the way down to 93.90 and its 10:30 a.m. EDT low yesterday afternoon.  It recovered a bit from there---and closed at 94.16.

From its low tick on Wednesday, that a bit over 200 basis points move to the downside in just over twenty four hours.  Both gold and silver closed barely above unchanged during that move.

Because I was too ill to write a column yesterday, I've included the 3-day USD chart so you can put yesterday's action in some context.

Here's the 6-month dollar index chart for comparison purposes.  The RSI indicator is now bouncing off its oversold mark for the second time in a week---and it wouldn't surprise me in the slightest if we had dollar rally in our future, manufactured or otherwise.

The gold stocks opened up, but within thirty minutes were in the red---and kept sinking for the remainder of the day, as the HUI barely finished off its low tick, down 2.96 percent.

It was just the same for silver stocks at the start of the day, but there was mid-day rally that ended minutes after 1 p.m.---and from there they headed lower.  But at 3:00 p.m. on the dot, they turned on that proverbial dime---and rallied into the close.  Nick Laird's Intraday Silver Sentiment Index closed down only 1.18 percent.

The CME Daily Delivery Report for Tuesday, my sick day, showed that zero gold and 308 silver contracts were posted for delivery within the COMEX approved depositories today.  The only short/issuer worth mentioning was Scotiabank with 307 contracts.  The two biggest short/issuers were JPMorgan with 103 contracts out of its in-house [proprietary] account and 98 contracts for its client account.  The other stopper was HSBC USA with 86 for its in-house account as well.

The CME Daily Delivery Report for Wednesday showed that zero gold and 15 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  Scotiabank issued 11 contracts---and JPMorgan stopped 11 contracts, 5 for clients and 6 contracts for itself.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for Tuesday showed that gold open interest in May dropped by 5 contracts to 204 contracts left open---and in silver the o.i. fell by 6 contracts, down to 1,095 contracts.

The CME Preliminary Report for Wednesday showed that gold o.i. dropped another 8 contracts leaving 196 open---and in silver it fell by 319 contracts, as the big 308 contract delivery posted on Tuesday, gets delivered today.  This leaves 776 open, minus the 15 mentioned above that will be delivered tomorrow.

There were no reported changes in GLD either on Tuesday or yesterday, but on one of those days, probably yesterday, an authorized participant withdrew a very chunky 2,142,804 troy ounces.  Based on the price action over the last week, one wonders what that was all about.  But since April 27 authorized participants [read JPMorgan most likely] have withdrawn 5.1 million troy ounces out of SLV.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with their gold and silver ETF data as of the close of business on Thursday, April 30.  Their gold ETF added another 5,054 troy ounces, but their silver ETF dropped by 88,645 troy ounces.

For the second day in a row, there were no reported sales from the U.S. Mint.

Well, the people at the Royal Canadian Mint that I was having an e-mail exchange with last week, told me at the time that their 2014 annual report wouldn't be posted on their Internet site until the end of June.  I checked their website at 7 p.m. EDT yesterday evening---and there it was!  I've stolen a few paragraphs from page 29 and 31 of that report, which is linked here.

The Mint’s refinery supports the production of the Mint’s bullion and numismatic coins with refined precious metals. In 2014, the volume of precious metals refined declined 14.0% from 5.5 million ounces in 2013. The volume of scrap gold and rough gold deposits from the mining industry declined 6% while silver deposits declined 44% in the face of aggressive competition in the refining industry; the supply of bullion scrap is much diminished due to the drop in bullion prices. Weaker global demand for bullion bar products has also depressed sales of gold kilo bars and 100-ounce silver bars. [Emphasis is mine - Ed]

Sales of Gold Maple Leafs (GML) declined 37.8% to 709,200 troy ounces from 1,140,400 ounces in 2013 while the average price declined 10.2% to US$1,266.40 per ounce in 2014 from US$1,411.23 per ounce in 2013.

In sharp contrast, sales of Silver Maple Leaf (SML) coins increased to 29.2 million ounces from 28.2 million ounces in 2013, establishing a record volume of sales for the second consecutive year. While the volume of coins sold increased 3.5%, the average silver price declined 19.7% from $US23.8 per ounce in 2013 to $US19.1 per ounce in 2014. Although activity in the silver and gold bullion markets tend to correlate, demand for silver in North America and Europe did not diminish throughout 2014 buoyed in part by expectations that industrial demand for the metal could strengthen on an economic recovery. [Don't believe that last sentence for one minute. - Ed]

The Mint also sold 13.1 thousand ounces of Platinum Maple Leaf coins in 2014 compared to 19.3 thousand ounces in 2013.

Over at the COMEX-approved depositories on Monday they reported shipping out 578 troy ounces of gold---and received nothing.  In silver, they took in 615,550 troy ounces---and shipped out only 9,491 troy ounces.  In the HONG KONG depositories there 9,491 kilobars shipped in---and 5,280 shipped out.

Over at the COMEX-approved depositories on Tuesday they reported receiving 68,995 troy ounces of gold---and shipped out 1,695 troy ounces.  Virtually ever ounce of in/out activity was at HSBC USA.  The link to that activity is here.

In silver, nothing was received---and 539,710 troy ounces were shipped out.  The link to that action is here.

There wasn't much activity at the COMEX-approved depositories in Hong Kong on Tuesday and, as usual, the activity there was at Brink's, Inc., as 448 kilobars were shipped in---and 530 were shipped out.  The link to that activity, in troy ounces, is here.

Here's a chart that Nick Laird sent our way last night---and I thought it worth sharing.  It's the Dow/Gold ratio going back 200 years.  Along with the chart, Nick made this comment "Here I speculate that the Dow/Gold ratio is going to repeat a similar trend as seen in 1977-1980 where after a bounce, the Dow/Gold ratio then fell from 10:1 down almost to a Dow/Gold ratio of 1:1". [We're all praying that's the way it's going to turn out after this counter-trend rally has run its course. - Ed]

With no column yesterday, I've really had to hack and slash to get the Critical Reads down to a manageable size today.

 

¤ Critical Reads

Wynn Calls "Big" Recovery "Complete Dream" As Gaming Revenues Collapse

Last month, courtesy of Andrew Zatlin’s Vice Index, we flagged the disturbing Q1 rise in traveling hookers. We call the trend disturbing not because we have a prima facie inclination to look with disdain upon all things escort-related but because, as Zatlin notes, when escorts are forced to take their show on the road it means the phones have stopped ringing locally, and if you’re inclined to believe that trends in all-cash businesses are a good leading indicator for trends in consumer spending in general, depressed spending on gambling, alcohol, and other “fun” things does not bode well for economic growth going forward. As you can see from the graph below, The Vice Index hit its lowest level in more than a year in March

Given this — and given the fact that whatever discretionary income Americans do have is apparently being chanelled into TD Ameritrade accounts — it should perhaps come as no surprise that gaming revenue on the Las Vegas strip fell nearly 10% in March after sliding 4.4% in February.

Meanwhile, the situation in Macau continues to deteriorate at a rather remarkable pace, as gaming revenue fell 39% last month, the eleventh consecutive monthly decline which looks good only in comparison to March’s 39.4% decline and February’s 49% drop. Of course in the deluded minds of China’s millions of newly-minted day traders, a 39% decline represents “stabilization” and so, as Bloomberg reports, casino shares rose in Hong Kong on the news.

This Zero Hedge story is their spin on a Bloomberg story---and surprisingly enough, it's definitely worth reading.  'David in California' was the first person through the door with this news item on Tuesday.

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JPMorgan in advanced talks to settle forex investigatio

JPMorgan Chase & Co said on Tuesday it is in "advanced stages" of settlement talks with the U.S. Department of Justice and Federal Reserve over previously disclosed investigations into its foreign exchange trading.

The company gave the description of the talks in a quarterly filing with the U.S. Securities and Exchange Commission on Tuesday. A Justice spokesman acknowledged that the department has an "active, ongoing investigation," but declined to comment further.

JPMorgan also estimated its "reasonably possible" legal expenses, in excess of its litigation reserves, at $5.5 billion as of the end of March, down from $5.8 billion at the end of December.

The above three paragraphs are all there is to this brief Reuters article that appeared on their Internet site at 6:27 p.m. EDT on Tuesday---and my thanks go out to West Virginia reader Elliot Simon.

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Mind the $76 Trillion Global Bond Bubble——Even the ‘Experts’ Are Getting Scared

Warren Buffett believes “that bonds are very overvalued“, and a recent survey of fund managers found that 80 percent of them are convinced that bonds have become “badly overvalued“.  The most famous bond expert on the planet, Bill Gross, recently confessed that he has a sense that the 35 year bull market in bonds is “ending” and he admitted that he is feeling “great unrest”.  Nobel Prize–winning economist Robert Shiller has added a new chapter to his bestselling book in which he argues that bond prices are “irrationally high”.  The global bond bubble has ballooned to more than 76 trillion dollars, and interest rates have never been lower in modern history.  In fact, 25 percent of all government bonds in Europe actually have a negative rate of return at this point.  There is literally nowhere for the bond market to go except for the other direction, and when this bull market turns into a bear it will create chaos and financial devastation all over the planet.

In a recent piece entitled “A Sense Of Ending“, bond guru Bill Gross admitted that the 35 year bull market in bonds that has made him and those that have invested with him so wealthy is now coming to an end…

And it gets worse from there, dear reader.  This Michael Snider commentary showed up on David Stockman's website on Tuesday---and it's the first offering of the day from Roy Stephens.

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Hedge fund managers’ pay slashed to $211,538 an hour

Talk about stagnant wages. In the hedge fund industry, it’s worse. How about wage cuts?

Institutional Investor’s Alpha annual rich list was published Tuesday. And for the hedge fund billionaires and multimillionaires who mostly comprise it, the report is sobering. Massive pay reductions were recorded across the board. David Tepper, founder of Appaloosa Management, for instance, made only $400 million last year — he’s averaged $1.36 billion in the 11 years he’s made the IIA list.

As the publication put it, managers made only “$11.62 billion combined, barely half of the $21.15 billion the top 25 gained the previous year and roughly equal to what they took home during nightmarish 2008.”

To put that in perspective, the top 25 hedge fund managers made just a little more than half the annual economic output of Cyprus, a nation of 1.2 million people.

This story showed up on the marketwatch.com Internet site just before noon EDT on Tuesday---and that makes it two in a row from Roy.

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Why Elizabeth Warren Makes Bankers So Uneasy, and So Quiet

Let’s assume that when he woke up on the morning of Dec. 12, Michael Corbat, CEO of Citigroup, was feeling pretty good. The day before, the House of Representatives had passed a bill that would save his bank and others lots of money and headaches.

The trouble was, Elizabeth Warren, the senior senator from Massachusetts, was getting ready to speak on the Senate floor. She had his bank on her mind.

What Warren wanted to talk about was an item tucked into page 615 of a 1,603-page spending package: the repeal of section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Known as the swaps push-out rule, section 716 required banks to set up separate subsidiaries, not backed by the government, to trade certain derivatives. If the rule stood, it would generate huge administrative costs for the big banks.

Citi had fought hard on this. The bank’s lobbyists had worked on lawmakers and helped draft language for the repeal. Getting it into a big spending package Congress was sure to pass was a coup. In the ongoing wars between Wall Street and the forces of government regulation, this repeal was a big win for the banks.

This very worthwhile read, another Roy Stephens offering, put in an appearance on the Bloomberg website at 3 a.m. Denver time on Tuesday.

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‘Father of internet’ speaks out against govt demand for back doors in encryption

Internet pioneer Vint Cerf said Monday that creating defects in encryption systems for law enforcement, often known as “back doors,” was “super, super risky” and not the “right answer.”

Cerf, recognized as a “father of the internet,” currently working at Google, told an audience at the National Press Club that he understood law enforcement’s desire to avoid being locked away from evidence that could be used to prevent crimes. He went on to say, however, that providing such access raises constitutional and legal questions.

The Congress is forced now to struggle with that, and they’re going to have to listen to these various arguments about protection and safety on the one hand and preservation and privacy and confidentiality on the other,” Cerf said, as reported by The Hill.

The Obama administration has been trying to force companies like Google and Apple to create defects in encryption so the FBI and other government agencies can gain access to people’s information; this despite mounting criticism over the plan – a criticism that’s shared by Cerf.

This very interesting news item appeared on the Russia Today website in the wee hours of Tuesday morning Moscow time---and once again I thank Roy Stephens for sending it our way.

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Canada poised to pass anti-terror legislation despite widespread outrage

Widespread protest and souring public opinion has failed to prevent Canada’s ruling Conservative Party from pushing forward with sweeping anti-terror legislation which a battery of legal scholars, civil liberties groups, opposition politicians and pundits of every persuasion say will replace the country’s healthy democracy with a creeping police state.

Prime Minister Stephen Harper is looking forward to an easy victory on Tuesday when the House of Commons votes in its final debate on the bill, known as C-51. But lingering public anger over the legislation suggests that his success in dividing his parliamentary opposition may well work against him when Canadians go to the polls for a national election this fall.

No legislation in memory has united such a diverse array of prominent opponents as the proposed legislation, which the Globe and Mail newspaper denounced as a a plan to create a “secret police force”.

The campaign to stop Bill C-51 grew to include virtually every civil-rights group, law professor, retired judge, author, editorialist and public intellectual in Canada.

Stephen Harper isn't the man I used to know---and he's certainly changed for the worst.  He will probably lose the next Federal election coming up in less than six months.  I apologize for his actions on behalf of all Canadian citizens.  This story was posted on theguardian.com Internet site late Tuesday morning BST---and I thank International Man senior editor Nick Giambruno for sending it to me very early on Wednesday morning.

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French lawmakers back spy bill dubbed ‘French Patriot Act’

French lawmakers voted in favour Tuesday of a new law granting the state sweeping surveillance powers, despite criticism from civil society groups that have dubbed the bill the “French Patriot Act”.

The bill passed the National Assembly with 438 votes in favour and just 86 against after it gained the backing of the two main parties – the ruling Socialists and the centre-right UMP. The bill will now go up before the French parliament’s upper house, the Senate, in June.

The latest intelligence bill is one of several government reforms in the wake of the January 7-9 Paris attacks that left 17 dead. France remains on high alert and has received repeated threats from jihadist groups, including the Islamic State (IS) group in the Syria-Iraq region.

Rights groups, however, have slammed the new proposals, calling the raft of measures a “French Big Brother”.

This news story was posted on the france24.com Internet site on Tuesday sometime---and the stories courtesy of Roy Stephens just keep on coming.  Phil Barlett also sent me a New York Times article on this headlined " Lawmakers in France Move to Vastly Expand Surveillance".

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America's Willing Helper: Intelligence Scandal Puts Merkel in Tight Place

Germany's latest spying scandal has created the biggest crisis yet for the country's foreign intelligence agency. The German government appears to have been aware of widespread US spying, possibly including economic espionage, against European targets and yet it did nothing to stop it.

July 14, 2013 was an overcast day. The German chancellor was reclining in a red armchair across from two television hosts with the country's primary public broadcaster. With Berlin's Spree River flowing behind her, Angela Merkel gave her traditional summer television interview. The discussion focused in part on the unbridled drive of America's NSA intelligence service to collect as much information as possible. Edward Snowden's initial revelations had been published just one month earlier, but by the time of the interview, the chancellor had already dispatched her interior minister to Washington. Having taken action to confront the issue, Merkel was in high spirits.

Merkel's interviewers wanted to know exactly what data had been targeted in Germany. Reports had been making the rounds, they reminded her, of "economic espionage." Merkel sat quietly. "So, on that," she said, "the German interior minister was clearly told that there is no industrial espionage against German companies."

Only a few hundred meters away from the red armchair, though, more was known. In Merkel's Chancellery, staff had long been aware that the information provided by the United States wasn't true.

This very important must read story appeared on the German website spiegel.de on Monday afternoon Europe time---and it's another offering from Roy Stephens.

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Germany's record trade surplus is a bigger threat to euro than Greece

Germany’s current account surplus is out of control. The European Commission’s Spring forecasts show that it will smash all previous records this year, reaching a modern-era high of 7.9pc of GDP. It will still be 7.7pc in 2016.

Vague assurances that the surplus would fall over time have once again come to nothing. The country is now the biggest single violator of the eurozone stability rules. It would face punitive sanctions if E.U. treaty law was enforced.

Brussels told Germany to do its “homework” a year ago, but recoiled from taking any action. We will see if Jean-Claude Juncker's commission does any better this time.

If not, cynics might justifiably conclude that big countries play by their own rules in Europe, and that Germany can defy all rules.

This Ambrose Evans-Pritchard commentary showed up on the telegraph.co.uk Internet site early Tuesday evening London time---and I thank South African reader B.V. for bringing it to our attention.

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Greece Says Compromise Not Possible Under Current Conditions

Greece blamed its creditors for the failure to end the impasse over its fiscal crisis as government bonds slumped and the European Central Bank weighs how much more liquidity to offer its financial system.

No deal will be possible until the European Commission and the International Monetary Fund reduce the number of red lines they’re demanding, a government official said on Tuesday.

The comments clouded the outlook for bailout talks, which some officials had said were making progress, and accelerated a sell off in the country’s stocks and bonds. Yields on two-year notes rose 149 basis points to 20.98 percent, sparking a sell off across European debt markets. The benchmark stock index fell 3.9 percent, the most in six weeks.

Attention now turns to the ECB’s Governing Council, which meets in Frankfurt on Wednesday and will discuss emergency funding for Greek lenders. While the ECB has increased the amount of liquidity on offer to Greek banks, concerns are rising about the risks attached to the strategy.

This Bloomberg story put in an appearance on their website early Monday morning MDT---and it's also courtesy of Roy Stephens.  I also note that Bloomberg's 'thought police' have changed the headline to read "Greece Attacks Creditors as ECB Considers Next Step".

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'Anglo-Saxons' would rip Europe apart after a Grexit, says Juncker

The president of the European Commission has risked angering Britain after comments warning that the "Anglo-Saxon world" would seek to dismantle the European project if Greece was ever allowed to leave the single currency.

Speaking to an audience at the Catholic University of Leuven in Belgium, Jean-Claude Juncker said a "Grexit" would leave the euro prey to forces who "would do everything to try to decompose" what remained of the monetary union.

“Grexit is not an option," said Mr Juncker.

"If we were to accept, if Greece were to accept, if others were to accept that Greece could leave the area of solidarity and prosperity that is the eurozone, we would put ourselves at risk because some, notably in the Anglo Saxon world, would try everything to deconstruct the euro area piece by piece, little by little."

This article was posted on The Telegraph's website early Tuesday evening BST---and it's worth reading.  It's the second contribution of the day from reader B.V.  Russia Today put their spin on this story as well---and it's headlined "London bankers plotting to bring down the Eurozone, says Juncker".  It's courtesy of reader B.V. as well.

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The Choice Before Europe — Paul Craig Roberts

Washington continues to drive Europe toward one or the other of the two most likely outcomes of the orchestrated conflict with Russia. Either Europe or some European Union member government will break from Washington over the issue of Russian sanctions, thereby forcing the EU off of the path of conflict with Russia, or Europe will be pushed into military conflict with Russia.

In June the Russian sanctions expire unless each member government of the EU votes to continue the sanctions. Several governments have spoken against a continuation. For example, the governments of the Czech Republic and Greece have expressed dissatisfaction with the sanctions.

US Secretary of State John Kerry acknowledged growing opposition to the sanctions among some European governments. Employing the three tools of US foreign policy–threats, bribery, and coercion–he warned Europe to renew the sanctions or there would be retribution. We will see in June if Washington’s threat has quelled the rebellion.

Europe has to consider the strength of Washington’s threat of retribution against the cost of a continuing and worsening conflict with Russia. This conflict is not in Europe’s economic or political interest, and the conflict has the risk of breaking out into war that would destroy Europe.

This absolute must read was posted on Paul's website on Tuesday---and I thank South African reader B.V. for this final offering in today's column.

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Putin blasts ‘cynical attempts to rewrite history’ at Russia-China WWII conference

The Russian president has denounced any attempts to rehabilitate Nazism as immoral and dangerous in his message to the Russian-Chinese conference dedicated to the 70th anniversary of the end of World War II.

We consider the cynical attempts to rewrite history so that it matches someone’s urgent political interests, to rehabilitate Nazis and their collaborators, as absolutely inadmissible,” Vladimir Putin said in his address to members of the Russian-Chinese conference on the role of USSR and China in the victory over Nazi Germany and militarist Japan in the Second World War.

Such actions are not only immoral, they are extremely dangerous as they push the world towards new conflicts, cruelty and violence,” the Russian leader added.

Vladimir Putin also praised the role of the Chinese people in securing victory and emphasized that Russia would always honor the heroism of Chinese soldiers and their input in defeating the enemy.

This commentary appeared on the Russia Today Internet late Monday morning Moscow time---and my thanks go out to Roy Stephens once again.

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U.S. oil delegation to visit Iran this week: Iranian official

A U.S. oil delegation is scheduled to travel to Tehran this week to hold talks with a number of Iranian petroleum ministry officials as well as oil industry contractors.

“It is predicted that following the visit by the American delegation to Tehran and possible removal of sanctions against the oil industry, we will witness the presence of major international U.S. oil and gas companies in Iran in future,” Abbas Sheri Moqadam, Iran’s deputy petroleum minister was quoted as saying by Mehr News Agency.

Meanwhile, the Iranian official said European and American companies have already voiced their preparedness to invest in several new petrochemical projects in Iran.

“Negotiations have already started with companies from Germany, the Netherlands, and Italy,” said Sheri-Moqaddam.

This very interesting article appeared on the tehrantimes.com Internet site on Tuesday---and I thank Roy Stephens for his final contribution to today's column.

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Never Mind Oil, Iran’s About to Shake the World Pistachio Market

Iran is ready to return to the global commodities market, flooding it with fresh supplies and risking a slump in prices.

Oil? Possibly, but there’s a second industry that could be even more disrupted by a nuclear pact between Iran and the west: pistachio nuts.

Iran has far more clout in the market for cocktail nibbles than it does in crude trading. While it ranks only as the world’s seventh-largest oil producer, the Middle Eastern country vies with the U.S. to be the biggest pistachio grower.

“The new supply will have an impact,” said Hakan Bahceci, chief executive officer of Hakan Agro DMCC, a grain, nuts and pulses trading house based in Dubai.

The biggest losers may be Californian farmers who have doubled pistachio acreage over the past ten years despite drought conditions. Pistachio production in California started in earnest in 1979 and output hit 513 million pounds last year, more than triple the harvest in 2004, according to the U.S. Administrative Committee for Pistachios.

This rather interesting, and somewhat humorous news item appeared on the Bloomberg website late Tuesday afternoon MDT---and I thank Elliot Simon for his second offering in today's column.

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Even Brown Brothers Harriman admits rigging of gold market by central banks

Dating from 1818, Brown Brothers Harriman describes itself as the oldest private bank in the United States. It is also the newest recipient of a GATA tin-foil hat, on account of its acknowledgment that central banks are surreptitiously manipulating the gold market.

The acknowledgment is reported today by Ross J. Burland, editor of the FX Street Internet site, who excerpts comments made by BBH "analysts" about Venezuela's recent pawning of its gold reserve.

Among the "key quotes" from BBH as noted by Burland:

"One of the advantages for Venezuela of the gold swap is that by some accounting it may still count the gold as part of its reserves. This underscores that central bank reserves may not always be what they seem. Central banks have used a number of ploys to hide the extent of their intervention, like operating in the forward market or conducting off-balance-sheet operations, like Brazil's currency swaps. Similarly, Russia had included its sovereign wealth funds in its reserve calculations, but they are not liquid or available."

This GATA release, with a couple of relevant links, appeared on their website on Tuesday.  It's definitely worth reading.

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Buy Silver or You Will Die! -- Jeff Clark, Casey Research

There are numerous medical examples like this every day, where silver served a cornerstone purpose to treat a hospital patient. In fact, if you’ve ever been treated by a doctor or admitted to a hospital, you’ve been a direct recipient of one or more of the medical benefits of silver. From simple bandages to life-saving equipment in operating rooms, silver is quite literally a lifesaving precious metal.

Silver is used in nearly every major industry today, from biocides and electronics to solar panels and batteries. In fact, silver is so embedded in modern life that you do not go one day without using a product made with or by silver. It’s everywhere, even if you don’t see it.

Due to the exponential increase in the number of uses for this precious metal, demand has exploded. Check out silver’s growth…

I'm sure there was silver in just about everything that was used on me during my eight hour stay in the emergency room of our local hospital on Tuesday, so this commentary by Jeff is worth checking out.

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Silver Mine Supply Is Running Out of Steam

After 12 straight years of gains, global silver production is expected to fall in 2015 as lower prices take a toll.

Silver mine production rose 5% in 2014 to reach 877.5 million ounces, the 12th successive gain and a new record, according to the World Silver Survey, published by industry lobby group The Silver Institute and metals consultancy Thomson Reuters GFMS.

But this year will see silver output decline amid a dearth of new mines and as aging operations see their production fall, the report said.

“We’re just not seeing the investment in new mine capacity that would be needed to sustain continued record peak production,” said Andrew Leyland, an analyst with GFMS who worked on the report.

This very interesting article showed up on the blogs.wsj.com Internet site at 8:33 a.m. EDT Wednesday morning---and I thank Phil Barlett for digging it up for us.  It's a must read.

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CPM Group Calling for Silver Price Consolidation in 2015

CPM Group released its Silver Yearbook 2015 on Wednesday, and while the document is aimed at educating investors about silver market trends and fundamentals, it likely contains few surprises for those who’ve kept an ear to the ground.

For one thing, the firm cautions readers not to expect anything too dramatic this year in terms of silver price action. Instead, it’s calling for silver price consolidation as the US economy and dollar continue to strengthen. Specifically, CPM sees the silver price averaging $16.93 per ounce in 2015, with the metal trading in a range of $15.66 to $18.51.

That’s a bit of a downer, especially given that a $16.93 average for the silver price would be 15 percent lower than silver’s average 2014 price of $19.09. It’s also disheartening given that it will put the white metal on track for its longest fall in four years — the firm notes that the silver price hasn’t fallen for such an extended period since 1991.

In terms of what’s weighing on the silver price, CPM states that an imbalance between supply and demand is part of the problem. “Silver supplies have been on the rise, driven primarily by mine supply,” the firm states in its report, adding that investors will need to absorb that additional supply if the metal’s price is to move higher.

Well, dear reader, if JPMorgan and Scotiabank weren't holding a COMEX short position in silver well north of 35,000 contracts between them, I can absolutely guarantee that the price of silver would be many orders of magnitude higher than it is now.  But CPM Group conveniently omits that minor detail.  This silver-related news item appeared on the metal.com Internet site at 3:49 a.m. BST on their Wednesday morning, but the story they posted is a reprint from Silver Investing News back on 30 April---last Thursday.  I found this item on the Sharps Pixley website Wednesday evening. [PLEASE NOTE: When I checked the link while editing today's column just before hitting the send button---and it's no longer active, even though the story is still listed on the Sharps Pixley website, but I've leaving it today's column away. - Ed]

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Gold repatriation from New York Fed continued in March

Gold repatriation from the Federal Reserve Bank of New York continued in March, Zero Hedge reports on Tuesday, bringing foreign custodial gold in the New York Fed's vaults below 6,000 tonnes for the first time in many years.

I posted the chart on this in my Tuesday column that Nick Laird sent our way, but here's the spin on it courtesy of Zero Hedge.  It's worth reading as well.  I found the story on the gata.org Internet site.

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Two Traders Sued for ‘Spoofing’ on Gold and Silver Futures

Two traders from the United Arab Emirates were sued by U.S. regulators over claims they were “spoofing” gold and futures markets by placing bids and offers they intended to cancel before execution.

Heet Khara and Nasim Salim, suspended for 60 days by CME Group Inc. last week, should be permanently barred from trading and fined from their illegal profits, the U.S. Commodity Futures Trading Commission said Tuesday in a complaint in Manhattan federal court. The practices they are accused of are similar to those in the case against Navinder Singh Sarao, the British trader facing U.S. charges for allegedly manipulating futures markets for five years and contributing to the 2010 flash crash.

Khara and Salim appeared to act “in a coordinated fashion,” as recently as April 28, entering orders for gold and silver futures they never intended to execute, the CFTC alleged. Feigning interest in completing a trade is discouraged because it can drive prices in directions they wouldn’t otherwise move.

Silver analyst Ted Butler summed it up these charges with this comment in his weekly review on Saturday---"It seems that COMEX gold and silver are among the few markets where this outrageous and illegal price setting is still encouraged by the CME. Even the sacrificial offering by the crooked CME of two low-level gold spoofers in order to protect the big traders’ price setting scam should not deter you from the obvious – the COMEX is still illegally setting the price of gold and silver in defiance of commodity law."  Enough said.  This Bloomberg story was buried in a GATA release yesterday.  It's worth your while if the subject interest you.

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China tests yuan gold fix process amid pricing ambitions

China conducted trial runs for the planned launch of a yuan-denominated gold fix last month, three sources familiar with the matter said, in a sign the world's second-biggest bullion consumer was moving closer to creating a benchmark price.

The state-run Shanghai Gold Exchange (SGE), on whose international platform the fix will be launched, conducted the trial with major Chinese banks and a few foreign banks, the sources said this week.

The SGE could not be immediately reached for comment.

China, also the top gold producer, feels its market weight should entitle it to be a price-setter for bullion and it is asserting itself at a time when the established benchmark, the century-old London fix, is under scrutiny because of alleged price-manipulation.

This very interesting gold-related news item was filed from Singapore at 11:29 a.m. EDT on Tuesday---and it's another offering courtesy of the gata.org Internet site.  It's not very long---and it's definitely a must read.  Mark O'Byrne over at goldcore.com picked up this story and ran with it his column yesterday.  It's headlined "China One Step Closer to Becoming World’s Gold Hub".

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The Royal Mint's £80 Princess Charlotte coin 'worth £9.72'

As with all items sold to celebrate a royal or other occasion, commemorative coins have both a collectible value and an inherent value based on what they're made of.

The collectible value depends on how many coins were struck and how much demand there is at the time of sale, and so is hard to determine.

But the value of the coin's precious metal content is easier to gauge - and it's often a lot less than the Royal Mint's sale price.

I've worked part time for a bullion store in Edmonton for four years now.  Let me tell you what happens when people bring in their collections of silver and gold commemorative coins from the Royal Canadian Mint that they've been accumulating for 5, 10 or even 20 years.  If they're 24K, they get the current spot price of gold or silver.  If they're not pure, they only get paid for gold or silver content, minus a considerable smelting fee, as virtually 99 percent of every coin like that we buy---100% pure or otherwise---we send out to a refiner, and they melt them all back into good delivery form.  There is virtually no after-market demand at all for things of that nature---and dealers get rid of them as quick as they can because its dead inventory the moment they buy it.  It's a money-making racket---and most major mints of the world do it.

This story appeared on the telegraph.co.uk Internet site at 1:27 p.m. BST yesterday afternoon, which was 8:27 a.m. EDT in New York.  It's another item I found on the Sharps Pixley website.

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¤ The Funnies

Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization

Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.

Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.”

Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained.

Please visit our website for more information about the project.

 

¤ The Wrap

One thing I would like to point out is that I sense that no true liquidity exists in silver (or gold). Because the technical funds and commercials both act in unison, it has gotten to the point where there are only two traders in the market – technical funds on one side and commercials on the other side.

There may be 30 different technical funds and a like amount of commercials on either side of the COMEX silver market, but if they are each operating in conformity with the other traders in their group, that means we have, in effect, one buyer and one seller. It can’t get more illiquid than that. Great moves usually occur in illiquid markets and with silver prices in the gutter, it would seem certain that the biggest move must be to the upside. - Silver analyst Ted Butler : 02 May 2015

It should be reasonably obvious that despite the rapidity of the decline in the U.S. dollar index in mid-March, which has been accompanied by an impressive 40+ percent rise in the price of oil, that JPMorgan et al are not about to allow precious metals to rise just yet.

Here are the 6-month charts for all four precious metals, plus WTIC and the U.S. dollar index.

As I mentioned earlier when talking about the U.S. dollar at the top of this column, we might be close to the beginning of a counter-trend rally.  If it does occur, it's a near certainty that 'da boyz' will use the opportunity to put the technical funds in the Managed Money category back on the maximum short position that they held last Friday.  The only redeeming feature about that, is that the engineered price decline needed to do the dirty, won't result in a lot of price damage, as we're barely off the bottom as it is.  However, the precious metal equities are acting like this event is imminent---and nothing will surprise me, especially when the job numbers come out tomorrow at 8:30 a.m. EDT.  So we wait some more.

As I write this paragraph, the London open is about ten minutes away, and I note that after rallying a few bucks in early Far East trading on their Thursday morning, it appears that the "da boyz" along with the algorithms are at it once again.  Ditto for silver.  Platinum and palladium are mini versions of what's going on in gold and silver at the moment.  Gold is down five bucks---and silver is down 15 cents

Gold net volume is approaching 16,000 contracts---and silver's net volume is 3,500 contracts, so the HFT traders/spoofers are having an easy time of it.  98 percent of this volume is of the HFT variety.  So they, not legitimate producers and consumers, are setting the price.  The dollar index, which has been trading basically unchanged in early Thursday trading---and just above the 94.00 mark---is currently down 6 basis points.

I would guess that we'll see some improvement in the Commercial net short position in gold in tomorrow's Commitment of Traders Report, but what it will show in silver is much harder to define.  It looks like a wash based on the 5-day Wednesday-to-Tuesday reporting week on the 6-month silver chart above, but I wouldn't bet the farm on that call.

And as I send this off to Stowe, Vermont at 5:25 a.m. EDT, I see that gold made a new low for this current 2-day move to the downside shortly after 10 a.m. BST---and at the low, was down a bit more than ten bucks from its New York close.  It's rallied a hair since then, but I'm not looking forward to what JPMorgan et al do with the price once COMEX trading begins this morning.  Silver's current low came minutes before 9 a.m. in London---and has rallied vigorously off it since then.  It only a matter of time before that rally gets capped as well.  Platinum is having it's usual mini move in the same direction---but palladium is trading back at almost unchanged.

Net gold volume has exploded to just about 31,000 contracts---and silver's net volume is now sitting at 9,000 contracts.  These are big numbers.  The technical funds traders are selling longs and adding to their short positions in both metals, while "da boyz" in the Commercial category do the opposite.  Please re-read Ted Butler's quote about this, that's posted above.  The dollar index is still heading lower---and is currently down 22 basis points---and back below the 94.00 mark.

Everything appears to be unfolding as I suggested it might just a few paragraphs ago---and the real proof will come with the lay of the land at the COMEX close today.  Of course we get the 1-week delayed job numbers tomorrow at 8:30 a.m. EDT and, for the most part, "da boyz" have not made it a happy moment for the precious metals.

That's all I have for today, which is more than enough---and I'll see you here tomorrow.

Ed Steer