Gold & Silver Daily
"JPMorgan et al, as sellers of last resort, were there to kill the rallies stone cold dead"

¤ Yesterday In Gold & Silver

It was pretty quiet in gold in Far East trading on their Friday, as it rose and fell about five bucks between the Tokyo open and up until 30 minutes after the London open.  At that point, the gold price took off to the upside, only to be met with a firestorm of selling by the sellers of last resort.

JPMorgan et al managed to put the fire out by shortly after 11 a.m. GMT in London---and from there the price traded quietly lower until around 10:30 a.m. EST in New York.  After that it didn't do a lot, although a tiny rally that began around 12:30 p.m. EDT got sold down at 3:30 p.m. before it could get anywhere.

The CME Group recorded the high and lows ticks as $1,328.00 and $1,343.00 in the April contract.

The gold price finished the week at $1,334.70 spot, up $6.20 from Thursday's close.  Net volume was very quiet at 87,000 contracts, with at least 50% of that used to kill the morning rally in London.

Here's the New York trading session up close and personal---and you can see the not-for-profit selling show up at 3:30 p.m. in electronic trading.

It was more or less the same price pattern in silver, so I'll spare you the play-by-play.

The high and low price ticks were recorded at $20.585 and $20.265 in the May contract.

Silver closed in New York at $20.275 spot, up a whole half a penny.  Volume, net of March and April, was pretty low at 28,000 contracts but, like gold, it's a good bet that almost half of that volume was JPMorgan et al throwing Comex paper at the price during the rally in early trading in London.

The platinum chart was a mini version of the gold and silver charts---and the metal managed to close up a few dollars.  Here's the chart.

Not surprisingly---and for the second day in a row---there was a decent rally in palladium, as news about the two new palladium ETFs in South Africa hit the Internet.  The rally began just before 10 a.m. GMT in London---and just as obviously got capped less than an hour later.  Then shortly after 9 a.m. in New York, the price went vertical---and a seller of last resort [probably JPMorgan] showed up and prevented the price from taking out the $800 spot level, which it would have certainly done if left to its own devices.

As it turned out, the high tick in palladium was 800.00 right on the button---and the low tick was $768.20---in the June contract, which is the current front month.

You pretty much have to have to have been born stupid, willfully blind, or be a bought and paid for whore of the World Gold Council and/or Silver Institute, not to see that JPMorgan et al prevented an upside explosion in the precious metals yesterday.  If Russia really wanted to screw the U.S. over real good, all they would have to do is put an end to this price management scheme in all four precious metals, as they've known about it for at least a decade now---and China has, as well.

If these two countries wanted to be heroes to all the poor resource-producing countries of Africa, South America and elsewhere, they could change these country's fortunes virtually overnight---if Russia and China thought it in their own respective best interests to do so.

The dollar index closed on Thursday afternoon in New York at 80.19---and then spent all of Friday quietly chopping lower in a very tight range.  The index close yesterday at 80.12, which was down 7 basis points on the day.

The gold stocks gapped up about a percent at the open---and hit their highs of the day about 20 minutes later.  Despite the fact that the gold price traded flat in New York for most of yesterday, the stocks continued to sell off quietly into the red, right up until the tiny gold rally that began around 2:30 p.m. EDT in electronic trading.  From there, the gold stocks rallied quietly right into the close, despite the fact that gold got sold down pretty hard during the last 30 minutes of trading.  The HUI finished down a smallish 0.27%.  The fact that the general stock market sold off starting around 11 a.m. EDT may have had something to do with the sell-off in the gold shares as well.

The silver equities performed in a similar manner up until about 2:30 p.m EDT.  Then, despite the continued weakness in the underlying metal, the equities rallied quietly into positive territory.  Nick Laird's Intraday Silver Sentiment index eked out a gain of 0.46%.  This is the third day this week that the silver equities outperformed not only the metal itself, but gold equities as well. As I've been saying for the last few days, does someone with deep pockets know something we don't?

Just to show you the dichotomy between the gold share price action and the silver share price action---consider the week-over-week changes in the price of both metals vs. how well the HUI and Silver Sentiment Index did.

For the week, gold was down $47.30---or 3.4%---and the HUI lost 8.60%.  Silver was down $1.185 for the week---or 5.52%---and the Intraday Silver Sentiment Index closed lower by only 2.93%.  Does it mean anything?  I don't know for sure, but this particular dichotomy is beyond obvious, as it appears to me that a buyer with deep pockets is using this engineered price decline in silver to pick up a substantial position in the silver equities.

The CME's Daily Delivery Report drew a blank yesterday, as no gold or silver contracts were posted for delivery on Tuesday within the Comex-approved depositories.  There was activity, but it was all in palladium.

Much to my surprise, an authorized participant added 134,905 troy ounces of gold to GLD yesterday.  I'm only speculating here, but based on the price action all week, I'd guess that this deposit was being used to cover an existing short position.  And as of 10:10 p.m. EDT yesterday evening, there were no reported changes in SLV.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs for the week ending Friday, March 14.  Their gold ETF continues to slide.  During this reporting week, it declined by another 29,224 troy ounces.  But their silver ETF showed an increase of 123,009 troy ounces.

The U.S. Mint had a sales report yesterday.  They sold 3,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 140,500 silver eagles.  They also sold 300 one-ounce platinum eagles sometime during the reporting week as well.

Month-to-date the mint has sold 16,500 troy ounces of gold eagles---10,000 one-ounce 24K gold buffaloes---9,000 one-ounce platinum eagles---and 3,283,500 silver eagles.  Based on these numbers, the silver/gold sales ratio for the month so far stands at 124 to 1---and it's about 200 to 1 if you just compare silver eagles sales to gold eagles sales.  These are incredible sales ratios.

There was a fairly large gold deposit---160,750 troy ounces---over at the Comex-approved warehouses on Thursday, all of which went into JPMorgan's depository.  Nothing was shipped out.  The link to that activity is here.

In silver, nothing was reported received, but 302,242 troy ounces were shipped out of four of the six depositories---and the link to that action is here.

The Commitment of Traders Report was a mixed bag.  Silver was way better than I expected, but gold was terrible---and I'll leave the discussion about copper up to Ted Butler in his commentary to paying subscribers later today.

In silver, the Commercial net short position actually improved by 1,734 contracts, or 8.67 million ounces.  The Commercial net short position now sits at 179.5 million ounces.  That's the 'good' news.

The bad news is that of the 2,700 short contracts put on/bought by the Big 8 short holders, Ted figures that 2,000 of those contracts were done by JPMorgan.  This brings their short-side corner in the Comex silver market up to around 20,000 contracts, or 100 million troy ounces.  As I mentioned in the previous paragraph, the Commercial net short position in silver was 179.5 million ounces, so this means that JPMorgan holds about 55% of the Commercial net short position all by itself---and about 33% of the short position held by the eight largest traders on the short side combined.  This is a short-side corner by definition.

As an aside in silver, the raptors---the Commercial traders other than the Big 8---bought 4,400 long contracts during the reporting week.

Gold was ugly.  The Commercial net short position blew out by 20,567 contracts, or 2.06 million troy ounces.  The Big 8 increased their short position by about 8,500 contracts---and the raptors [the Commercial traders other than the Big 8]  went short about 8,000 contracts---and Ted Butler said that JPMorgan sold between 7-8,000 of their long-side corner, which is now down to somewhere between 39 and 40,000 contracts, or 3.9 to 4.0 million ounces of the stuff.

All of this was done in gold [and silver] by JPMorgan et al in order to prevent prices from blowing sky high during the reporting week, just like these same precious metals attempted to do again yesterday.  As you already know, "da boyz" are the not-for-profit sellers---and the sellers of last resort.  If they weren't there 24/7, then precious metal prices would be just outside the orbit of Pluto by now.

Here's a chart from Nick Laird that I haven't posted for many a moon.  It's the "Days of World Production to Cover Comex Short Positions".  It still looks much the same as it has for the last couple of years.  Silver, except for a few weeks, has always occupied the far right position on this chart, with palladium and platinum not that far behind.

To give you some idea of JPMorgan's short position in silver compared to the total short positions of the Big 4 or Big 8 shorts---their 100 million ounce short-side corner in Comex silver translates into roughly 50 days of world silver production.  The numbers on this chart are a graphic representation of the short positions of the 4 and 8 largest traders in all physical commodities on the Comex---and the data for this chart came straight out of yesterday's COT Report.

Once again I have a lot of stories and, as always, I'll leave the final edit up to you.


¤ Critical Reads

U.S. judge OKs JPMorgan $218 million Madoff class-action settlement

A federal judge on Friday gave final approval to JPMorgan Chase & Co's $218 million settlement to resolve class-action litigation accusing the largest U.S. bank of playing a central role in the huge Ponzi scheme of former client Bernard Madoff.

U.S. District Judge Colleen McMahon in Manhattan said the accord "easily meets the standards" for final approval, and provides "substantial and immediate" benefits to the swindler's former customers.

She also awarded $18 million of fees to law firms that represented the customers: Entwistle & Cappucci, and Hagens Berman Sobol Shapiro.

The settlement was part of a $2.24 billion global resolution of Madoff-related matters by JPMorgan, which was Madoff's main bank for more than 20 years.

This Reuters news item, filed from New York, was posted on their website on Friday afternoon shortly after the markets closed for the weekend.  I thank reader Harry Grant for today's first story.


Revelations of N.S.A. Spying Cost U.S. Tech Companies

Microsoft has lost customers, including the government of Brazil.

IBM is spending more than a billion dollars to build data centers overseas to reassure foreign customers that their information is safe from prying eyes in the United States government.

And tech companies abroad, from Europe to South America, say they are gaining customers that are shunning United States providers, suspicious because of the revelations by Edward J. Snowden that tied these providers to the National Security Agency’s vast surveillance program.

Even as Washington grapples with the diplomatic and political fallout of Mr. Snowden’s leaks, the more urgent issue, companies and analysts say, is economic. Technology executives, including Mark Zuckerberg of Facebook, raised the issue when they went to the White House on Friday for a meeting with President Obama.

This New York Times article, filed from San Francisco, was posted on their website yesterday sometime---and it's courtesy of Nick Giambruno, the senior editor over at the Internet site.


Banks pass stress test but they’re not taking regulations seriously: Simon Johnson

Nearly all of the largest U.S. banks passed the Federal Reserve’s stress test, meaning they are prepared to withstand a severe recession or global downturn. Of the biggest 30 banks, only Zions Bancorp failed to meet the capital minimum required to survive a crisis.

“The largest banking institutions in the United States are collectively better positioned to continue to lend to households and businesses and to meet their financial commitments in an extremely severe economic downturn than they were five years ago,” the Fed said in a statement.

While it’s safe to say that banks are safer, they’re far from reformed says Simon Johnson, former chief economist of the IMF and a professor of entrepreneurship at MIT.

This article, with a 3:35 video clip embedded, was posted on the Internet site very early yesterday morning---and I thank Swiss reader Victor George for bringing it to our attention.  It's a must read/watch.


Doug Noland: April/May/June Dynamic?

Chinese defaults and acute financial fragility weren’t issues a year ago. Confidence in Chinese finance and economic fundamentals was much stronger. Geopolitical risks were much lower. And, importantly, the market was clear on China’s policy of steady currency appreciation versus the dollar. This year’s “April/May/June Dynamic” could easily incorporate a major Chinese component. Chinese reserve holdings declined only slightly last May and June, before “hot money” flows returned with a vengeance by late summer. The prospect of China selling Treasuries was not a market concern.

Everything is just so much bigger than before: The Fed’s balance sheet; PBOC international reserves and the Chinese Credit system; the leveraged speculating community; the big “macro” hedge funds; the powerful “quant” funds; the sovereign wealth funds; the ETF complex; the big mutual fund companies. As history has shown, epic financial Bubbles by their nature spur a concentration of financial power. I often ponder how a marketplace dominated by big players tends to function differently than traditional decentralized marketplaces. Then I contemplate how such a “centralized” marketplace operates with assurances of ongoing central bank support. In my mind – and I see evidence for as much in the marketplace – the markets become more of a game, more speculative and increasingly detached from fundamental prospects.

And all of this really begs the question: to what degree can the Federal Reserve’s balance sheet be counted on as the markets’ future liquidity backstop? Actually, whether the Fed builds its holdings (“prints money”) or not is of seemingly little concern to the markets - that is so long as the markets remain buoyant (as they’ve been). Yet an eruption of de-risking/de-leveraging would have this backstop issue quickly elevated to the top of market worries. Moreover, this liquidity issue would be significantly compounded if the change in China’s currency policy incites a reversal of “hot money” flows and, perhaps, a resulting turnabout in China’s international reserve holdings.

Doug's weekly Credit Bubble Bulletin, posted at the Internet site yesterday evening, is always worth reading---and I thank reader U.D. for sliding it into my inbox late yesterday evening.


Consumer credit and falling savings are indeed driving Britain’s unhealthy boomlet

My colleague Jeremy Warner does not agree with me on the role of consumer credit in fuelling Britain’s pre-election boomlet.

It is a thorny subject – a good honest debate – and depends on which part of the credit nexus you look at.

We can all agree that households have slashed debt-to-income ratios since the Brown blow-off. It is what has happened over the last eighteen months that is starting to bother me and many others.

Note these charts from the Bank of England’s Trends in Lending. They are already in the rear view mirror from January and October. The picture is undoubtedly “worse” by now.

This very interesting Ambrose Evans-Pritchard blog from yesterday is definitely worth reading, as it gives you a real look inside Britain's economy in just a few charts.  It's the first offering of the day from Roy Stephens.


'Bank secrecy to die' after Austria and Luxembourg back E.U. law

Austria and Luxembourg at a summit on Thursday (20 March) in Brussels agreed to back EU plans to increase transparency in tax reporting.

We confirmed today that this is the course we want to follow," Luxembourg Prime Minister Xavier Bettel said, as the two countries had delayed endorsing E.U. reforms on the tax savings directive over the past six years of negotiations.

E.U. Council chief Herman Van Rompuy in a statement said the agreement “is indispensable for enabling the member states to better clamp down on tax fraud and tax evasion.”

He noted Europe is now committed to the new single global standard for automatic exchange of tax information.

This news item, filed from Brussels yesterday morning Europe time, was posted on the Internet site---and it's the second offering in a row from Roy Stephens.


‘People are just being murdered’: Fresh E.U. funds for Greece do little to stop misery

Greek streets thronged with disillusioned crowds, as some three thousand union members hit the streets, fed up with austerity measures just as the country secured a fresh rescue loan of 8.5 billion euro coupled with further spending cuts and unemployment.

Public sector workers in Athens have blocked roads, fearing new cuts could see many civil servants, including doctors and teachers out of a job. But the newest E.U. cash scheme is the only way the country can grapple with its huge $400 billion debt.

The International Monetary Fund (IMF), the European Commission (EC) and the European Central Bank (ECB) have just returned from a review mission to Greece and produced a report, which sees prospects for stabilization in the near future, with prior projections and targets being met, prices returning to normal and inflation considerably below the European average.

Such quarterly reports are there to determine whether Greece gets its rescue cash tranches.

All the 'rescue' money that Greece receives, goes to European banks to pay interest on the loans that Greece has.  They'll be in debt to the banks for generations to come.  This news item showed up on the Russia Today website early Thursday afternoon Moscow time---and it's the second contribution of the day from reader Harry Grant.


Pepe Escobar: Russian sanctions as war and farce

Let's start with the serious stuff. As Russia's Federation Council ratifies a treaty with Crimea, concluding the formal annexation, Ukraine signs the political chapters of an association agreement with the European Union (E.U.). The signing of the full E.U. agreement will only happen later in 2014.

These are the facts on the ground. Now let's turn to comedy hour - also known as the sanctions war.

The oh-so democratic E.U. has punished the democratic Crimea referendum by sanctioning 33 Russians and Crimeans with asset freezes and travel bans, according to that Magritte-style walking fiction, European Council President Van Rompuy. The EU also canceled the EU-Russia summit in Sochi on June 3. And the vast, Kafkaesque bureaucracy of the European Commission (EC) has taken time out from subsidizing European cows to prepare for "possible economic sanctions", according to German Chancellor Angela Merkel. 

The E.U. is irretrievably split on what to do. Whatever it does, Moscow's capacity to make the EU badly hurt is stronger. There may be another meek set of sanctions next week, as Merkel advertised. But that's it.

This must read essay by Pepe was posted on the Asia Times website yesterday sometime---and it's another offering from Roy Stephens, for which I thank him.


In Iran, Hopes Fade for Surge in the Economy

Suffering in an economy dragged down by years of mismanagement and the effects of international sanctions, Iran’s increasingly impoverished middle class voted in huge numbers last summer for President Hassan Rouhani, who promised to reignite growth by restoring ties with the rest of the world.

But more than six months after Mr. Rouhani took office, hopes of a quick economic recovery are fading among ordinary Iranians, business owners and investors, while economists say the government is running out of cash.

Although Mr. Rouhani has managed to stabilize the national currency, halt inflation and forge a temporary nuclear deal that provides some relief from sanctions, delivering on his promises of economic growth has proved far more difficult. On taking office, he discovered that the government’s finances were in far worse condition than his predecessor, Mahmoud Ahmadinejad, had ever let on. Now, with a lack of petrodollars and declining tax revenues, Mr. Rouhani has little option but to take steps that in the short-run will only increase the pain for the voters who put him into office.

This very interesting New York Times article, filed from Tehran, was posted on their Internet site on Thursday---and is definitely worth reading if you have the time.  Once again I thank Roy Stephens for bringing it to our attention.


The Return of Terror: Violence Rocks Iraq as Elections Approach

With just six weeks to go before parliamentary elections in Iraq, sectarian violence has once again gripped the country. Car bombs have become a regular occurrence and Prime Minister Nouri al-Maliki is under fire.

Prime Minister Maliki has been in power for eight years now and will run for a third term in April. Today, no small number of Sunnis and Kurds characterize Maliki as "corrupt," "despotic" and "tyrannical," the same terms Shiites and Kurds once used to describe Saddam Hussein. But Maliki is also trying to govern a caricature of a country, one that US President Barack Obama said in 2011 was "not a perfect place" but at least "sovereign, stable and self-reliant." It's the sort of thing a US president says when seeking to justify the withdrawal of his troops.

In cities like Fallujah, one Western diplomat says, "sociopaths led by psychopaths" are at work. And although Maliki has sharply increased security in the capital, the government is not even capable of keeping the peace in Baghdad, particularly as violence has swelled ahead of parliamentary elections set for the end of April.

In an off-the-record conversation, a Western diplomat said that Iraq is "actually ungovernable." To this day, the artificial entity that the British created in 1920 by combining three provinces of the Ottoman Empire -- Mosul in the north, Baghdad in the center and Basra in the south -- has not grown together into a single nation. The image of an Iraqi identity was never real, but merely forcibly imposed by Saddam's iron fist.

Here's another short, but fascinating essay.  This one showed up on the German website early yesterday afternoon Europe time---and it's the final contribution of the day from Roy Stephens.  This book is an absolute must read if you want to know all about the history of Iraq---and all of the modern Middle East.


Eyes on Crimea, China makes its move

While much of the world was busy watching Russia swallow Crimea, few realized that an also dangerous territorial tit-for-tat had begun to unfold earlier this month more than 5,000 miles away in the South China Sea.

At Second Thomas Shoal, a handful of Philippine marines have long been stationed and re-provisioned on the rusting deck of the BRP Sierra Madre, a Philippine naval ship half-sunk into the reef in 1999. Ever since, the vessel and the marines have served to embody Manila's claim of sovereignty over the shoal. More recently, China has tried to raise the salience of its own claim by intensively patrolling the area.

On March 9, 2014, China made a move to end the status quo at the shoal. For the first time in 15 years, Beijing stopped Manila from delivering supplies to the Sierra Madre. The Chinese Coast Guard forced two Philippine ships to turn away. Manila answered the blockade by successfully dropping food and water to the marines by air. It was then up to Manila whether to send in another supply ship or plane, and up to Beijing whether to leave it alone, chase it away, sink it, or shoot it down.

China claims that the Philippine ships were "loaded with construction materials" to build up Manila's position. Manila says the ships were merely trying to re-provision the marines "to improve the conditions there," not "to expand or build permanent structures on the shoal."

This commentary is worth reading as well---and it showed up on the Asia Times website on Monday---and had to wait for a spot in today's column.  My thanks go out to reader M.A. for finding it for us.


As credit tightens at home, Chinese sell Hong Kong luxury real estate

Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland.

Wealthy Chinese were blamed for pushing up property prices in the former British territory, where they accounted for 43 percent of new luxury home sales in the third quarter of 2012, before a tax hike on foreign buyers was announced.

The rush to sell coincides with a forecast 10 percent drop in property prices this year as the tax increase and rising borrowing costs cool demand. At the same time, credit conditions in China have tightened. Earlier this week, the looming bankruptcy of a Chinese property developer owing 3.5 billion yuan ($565.25 million) heightened concerns that financial risk was spreading.

This Reuters piece, filed from Hong Kong, was posted on their Internet site late Wednesday afternoon EDT---and I found it in yesterday's edition of the King Report.


Four King World News Blogs

1. Art Cashin [#1]: "This Key Event Has Only Occurred 24 Times Since 1940"  2. Andrew Maguire: "An LBMA Default Was Delayed, But It's Coming"  3. Egon von Greyerz: "People Would Be Terrified if They Knew What Was Happening"  4. Art Cashin [#2]: "Historic Short Squeeze Will Create Massive Panic and Contagion"

[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]


GOLDMAN: Here's Why Gold Is Going To Plunge Again This Year

One of the star performers of 2014 has been gold.

It started the year around $1,200/oz and recently nearly got to $1,400/oz before slipping back a bit. 

In a new note, Goldman argues that the rise in gold has been driven by three unsustainable factors: Weather-induced economic slowdown in the U.S., a spike in Chinese demand due to credit concerns, and increased geopolitical tension.

The firm argues that all of these tailwinds will fade and that gold will hit $1,050 this year.

This is such drivel, but if someone at Goldman Sachs say it, then it must be true.  It will be a frosty day in July [in the northern hemisphere] before gold ever gets anywhere near that price.  This "news" item was posted on the Internet site in the wee hours of Friday morning EDT---and I thank reader Scott Pluschau for sending it along.


Lawrence Williams: Goldman's blinkered view on gold could be so wrong

Goldman Sachs’ head of commodities research Jeffrey Currie is at it again. The man who not so long ago described gold as a 'slam dunk sell' is reiterating his prediction that gold will fall back to $1,050 this year despite the metal’s stellar performance so far. While Currie’s academic qualifications for making these kinds of predictions are probably far better than those of this writer, we think his very vocal pronouncements are misguided and potentially have a degree of self-fulfillment given the regard with which Goldman Sachs is held in the financial sector; damaging to the gold market in itself.

While Currie is obviously entitled to his viewpoint we are not sure that stating these views in such aggressive terms is wise. If he proves wrong – and those who’ve followed his advice so far this year may already feel badly served – he is left with a vast amount of egg on his face, and his subsequent commodity price predictions will be largely discounted. Personally I feel he might be wise to be a little more circumspect in his comments, but perhaps they are necessary to balance the views of the ultra gold bulls who are even more vocal in predicting enormous gold price increases ahead.

This commentary by Lawrie was posted on the Internet site sometime yesterday---and I found it there just before I hit the send button on today's column.


Gold Fund Investors Dig for Deals in the Mining Sector

Gold has been a highly coveted asset for millennia, but its appeal lately has been intermittent at best. The price of gold has climbed about 11 percent in 2014 through March 19, but is still 29 percent below the all-time high of $1,895, set in 2011, after a dismal run last year.

Investors could have done worse — by investing in mining stocks, which lost about two-thirds of their value during the decline in the price of gold.

Running a fund that concentrates on mining stocks is difficult amid such a backdrop, but John Hathaway, lead manager of Tocqueville Gold, and Joseph Foster, manager of Van Eck International Investors Gold, have done it better than most. Hathaway's fund was recognized at the 2014 U.S. Lipper Fund Awards in New York on March 20 as the best precious-metals fund for the second straight year and for its five-year performance. The Van Eck fund was honored for its 10-year results.

The managers highlight several reasons for the decline in gold, including reduced inflation expectations and a heightened appetite for risk that made hedging against disaster an afterthought.

This Thomson/Reuters piece showed up on the Internet site early yesterday morning---and it's courtesy of West Virginia reader Elliot Simon.


The Biggest Misconception: What’s the Tax Rate on Silver and Gold Bullion?

Well, it’s that time of year again.  While many of you may have filed your taxes weeks ago, others are sifting through piles of forms, trade confirmations and receipts to makes sure you have everything accounted for on that 1040.  The last thing you need is uncertainty about your obligations under IRS codes for the reporting of gains or losses on any physical gold and silver bullion you own.  This article will help you weave through the complexities of the rules and regulations, and help you figure out the solution best for you.

**Disclaimer:  We are not tax professionals.  The information here is for the purpose of learning more about how the rules work and give some general examples of how different actions you may have taken throughout the year affect your individual tax situation.  Remember, tax issues are often very specific to your individual situation…so as necessary, reach out to a professional for help.

This very interesting commentary is obviously directed at U.S. citizens wherever in the world they happen to be---and it's a worthwhile read if this topic concerns you.  It was posted on the Internet site on Tuesday---and had to wait for a spot in today's column.


Zimbabwe mulls Implats platinum refinery proposal

Zimbabwe is considering a proposal for the construction of a platinum refinery from the world No. 2 producer of the precious metal Impala Platinum , the mines minister said on Thursday.

President Robert Mugabe's government has given platinum companies operating in Zimbabwe a deadline of two years to set up a refinery to add value to its mineral exports - or face a ban on unrefined exports.

Some industry insiders however argue the amount of platinum produced in Zimbabwe is too small to make construction of a $2-3 billion refinery economically viable.

Mining companies say there is not enough energy there to run a power-hungry refinery smoothly.

Mugabe was already making a name for himself in Rhodesia when I was there in the early 1970s when Ian Smith ran the place---and he can't kick the bucket soon enough for me, or a whole lot of other people, either.  This Reuters story, filed from Harare, found a home on the Internet site yesterday---and its definitely worth reading.  It's another contribution to today's column from reader M.A.


India's Gold jewellery exports up first time this fiscal year

India’s export of gold jewellery rose 1.04 per cent in February, rising for the first time in fiscal 2013-14.

According to figures from the Gem & Jewellery Export Promotion Council (GJEPC), cumulative gold jewellery exports from April 2013 to February 2014 fell 45.6 per cent to $6.352 billion.

Exports of gold jewellery have taken a beating in 2013-14 with the government imposing restrictions on the import of gold in a bid to control the current account deficit (CAD) resulting in very limited gold supplies. The measures included higher import duty of 10 per cent on gold and an 80:20 scheme which made it mandatory for gold importers to export a fifth of the gold imported.

Speaking to The Hindu, Pankaj Parekh, Vice-Chairman, GJEPC, said “The blame for poor availability in the market would have to be on the Customs Department. There have been inordinate delays in releasing consignments of imported gold”.

This short article was posted on Internet site very late Friday evening IST---and I thank reader M.A. for his final offering in today's column.


China gold demand up 29% so far this year, Koos Jansen reports

China's gold demand as measured by withdrawals from the Shanghai Gold Exchange is up 29 percent so far this year as compared to last year, China gold market researcher and GATA consultant Koos Jansen reports yesterday.  I found this commentary on the Internet site.


Official gold market to open in South Korea

On March 19, two gold bars were brought to Ilsan in Gyeonggi Province and deposited in the safe of the Korea Securities Depository (KSD), an organization that stores gold for the gold market.  In order for the gold market to open, there needs to be actual gold to be bought and sold, and this was the first gold bullion to arrive at the safe.

The gold bars, which have a purity of 99.99%, weighed 1kg each, and a security label was attached to the bottom bearing the mark of the Korean Mint.

The KSD announced that, once the gold commodities market takes off, it is expecting to handle an average of 4-7 tons, or 4000-7000 gold bars, each day.

This is the first gold-related story involving South Korea that I can ever remember posting---and for that reason alone, it's worth your time.  I found this story embedded in a GATA release that Chris Powell filed from Hong Kong yesterday.


Two Jim Rickards video interviews about gold

The first video interview is with Kitco's Daniela Cambone.  It was posted on their Internet site on Thursday sometime---and runs for a bit over 12 minutes.  The second interview with Jim takes place with Mike Maloney over at the website site yesterday---and it runs for a hair over 11 minutes.  The link to that one is here.  I thank Harold Jacobsen for the first one---and reader Joe Nordgaard for the second one.


Alasdair Macleod: Implications of the Ukrainian situation for gold

The West is not just confronting Russia, but potentially China and the other SCO members as well. Russia's relationship with the SCO brings with it the possibility of using gold as a weapon against the West, because most governments involved with the SCO have been actively buying gold while western central banks have been providing it. So far the SCO members have been content to accumulate the west's gold on falling prices, being careful not to disrupt the market.

We cannot say the Ukrainian crisis is over. It is more than likely Putin will not be fully satisfied until there is a Russian-friendly government in Kiev. And if a senior Russian politician cares to have another conversation with China over maximising turmoil on Wall Street, driving up the gold price is the obvious financial weapon of choice.

I discovered this story on the Internet site just minutes before I hit the send button on today's column.  I haven't read the whole thing, but judging by the contents of the above two paragraphs, it's definitely worth reading.


'Gold Cartel' author Dimitri Speck interviewed by Kitco News

Gold market researcher, fund manager, author, and GATA consultant Dimitri Speck was interviewed Friday by Daniella Cambone of Kitco News about manipulation of the gold market, describing the research done for his book "The Gold Cartel" -- and expressing his belief that gold eventually will defeat the price suppression engineered by Western central banks. The interview is seven minutes long and can be viewed at Kitco News.  This is another item I found in a GATA release just moments before I fired today's column off to Stowe, Vermont this morning.


Ted Butler: Suing JPMorgan and the COMEX

I’ve had some recent conversations with attorneys who were considering class-action lawsuits regarding a gold price manipulation stemming from reports about the London Gold Fix. I told them that while there is no doubt that gold and, particularly, silver are manipulated in price, I didn’t see how the manipulation stemmed from the London Fix. I wished them well and hoped that they may prevail (the enemy of my enemy is my friend), because you never know – if the lawyers dig deep enough they might find the real source of the gold and silver manipulation, namely, the COMEX (owned by the CME Group) and JPMorgan.

So I thought it might be constructive to lay out what I thought a successful lawsuit might look like, although I’m speaking as a precious metals analyst and not as a lawyer. I’ll try to put the whole thing into proper perspective, including the premise and scope of the manipulation as well as the parties involved.

The first thing I should mention is how unprecedented it is that I’m writing this in the first place. Here I am, directly and consistently accusing two of the world’s most important financial institutions of market manipulation (making sure I send each all my accusations) and I have received no complaint from either. I don’t think that has ever occurred previously. Now I am taking it one step further; presenting a guide for how and why JPMorgan and the CME should be sued for their manipulation of gold and silver (and copper, too).

Ted's been at this for almost 30 years, so he knows a thing or two about what might be the best way to end the price management scheme in the precious metals.  You have to ask yourself why private individuals are the ones that have to storm the ramparts when the World Gold Council and The Silver Institute should be doing it on our [and the miners] behalf.  But as I've said countless times in this column, the sole reason that these two organizations exist, is to ensure that this very thing never happens---and that the mining companies are kept in line.

Needless to say, this is an absolute must read from one end to the other.  It was posted on Peter Spina's Internet site yesterday morning EDT.



¤ The Funnies

Sponsor Advertisement

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

You pretty much have to have to have been born stupid, willfully blind, or be a bought and paid for whore of the World Gold Council and/or Silver Institute, not to see that JPMorgan et al prevented an upside explosion in the precious metals yesterday.  If Russia really wanted to screw the U.S. over real good, all they would have to do is put an end to this price management scheme in all four precious metals, as they've known about it for at least a decade now---and China has, as well.

If these two countries wanted to be heroes to all the poor resource-producing countries of Africa, South America and elsewhere, they could change these country's fortunes virtually overnight---if Russia and China thought it in their own respective best interests to do so. - Ed Steer: Gold and Silver Daily---21 March 2014

Today's pop "blast from the past" is only 15 years old---and one of the few modern pop songs that I think is worth listening to.  Carlos Santana and Rob Thomas do the honours---and the link is here.

Today's classical "blast from the past" is another Jean Sibelius number, but it's totally different from the one that I posted in this space last week.  The Swan of Tuonela is an 1895 tone poem---and is the second part of Op. 22 Lemminkäinen (Four legends), tales from the Kalevala epic of Finnish mythology.  It's a melancholy piece---and the solo by the cor anglais is perhaps the best known for this instrument in all of orchestral literature.  The link is here.

Well, I'll be the first one to admit that yesterday's price rally shortly after the London open came as a big surprise to me.  What wasn't a surprise---and a disappointment---was the immediate explosion in open interest as JPMorgan et al, as sellers of last resort, were there to kill the rallies stone cold dead.  Of course they had to give a little ground in palladium because of the announcement of the two new South African palladium funds, but even then, their footprints at the $800 mark were obvious for anyone who cared to examine the price chart carefully.

As I said in The Wrap in yesterday's column, it didn't appear that "da boyz" were about to give up control of the precious metal market any time soon---and this turned out to be prophetic within hours of me writing it.

Where we go from here is anyone's guess.  The roll-overs out of the April delivery month in gold have to be all done by next Friday---and I'm sure that JPMorgan would still dearly love to take out both the 50 and 200-day moving averages in that precious metal before then, but yesterday's price action sort of threw a spanner into the works.

And as I mentioned in the first part of today's column, the dichotomy between the gold and silver equities is still something I'm keeping an eye on---and Friday's numbers only reconfirmed my suspicion that someone with very deep pockets is taking a very large position in silver equities using the engineered price decline as cover.

Taking a look at the preliminary volume report from the CME yesterday, I note that there are only about 35 gold contracts and just under 200 silver contracts still open in the March delivery month---and those have to delivered into, or rolled over, by next Friday as well.

I'm only speculating here, but it appears that it may be anything but "business as usual" next week---and for that reason I'll be watching the 6 p.m. EDT open in New York on Sunday evening with more interest than normal.

Enjoy what's left of your weekend---and I'll see you here on Tuesday.