Gold & Silver Daily
"Well, another day---and another slice out of all four precious metals"
 

¤ Yesterday In Gold & Silver

Gold's weak rally attempt at the open of trading in New York on Sunday evening wasn't allowed to get far---and by the London open the price was down six bucks.  The price crawled higher into the noon London silver fix---and then rallied until a few minutes before the COMEX open.  JPMorgan et al, along with the HFT buddies, did the dirty the moment that London closed at 11 a.m. EDT, with the low tick of the day coming twenty minutes later.  The gold price rallied steadily from there, but ran out of gas just before the 1:30 p.m. COMEX close---and the price didn't do a thing after that.

The high and low ticks, which both occurred during COMEX trading, were recorded by the CME Group as $1,190.90 and $1,178.00 in the June contract.

Gold finished the Monday trading session at $1,183.50 spot, down an even four bucks from Friday's close.  Net volume was very light at only 91,000 contracts, so it wasn't difficult for any trading group with an agenda to what they wishes to the price---and that's exactly what they did.

Here's the 5-minute price tick chart for gold courtesy of Brad Robertson---and you can see the big volume spike on the engineered price decline by the HFT boyz and their algorithms. Midnight MDT is the dark gray vertical line.  Add two hour for EDT---and don't forget the 'click to enlarge' feature.

The silver chart looked the same as the gold chart, except the absolute low tick came twenty-five minutes after gold's low.

The high and low were reported as $16.55 and $16.20 in the July contract.

Silver closed in New York yesterday afternoon at $16.275 spot, down 12.5 cents on the day.  Net volume was 31,000 contracts---about the same net volume silver has traded at for the last five days in a row.

With some minor variations, platinum and palladium had similar price patterns as gold and silver, with the low ticks coming at the same time as gold.  Certainly nothing free market about any of this.  Platinum closed at $1,126 spot, down 13 bucks from Friday---and palladium finished the Monday session at $779 spot, down 19 dollars from Friday's close.  All of palladium's gains on Friday were taken away on Monday.  Here are the charts.

The dollar index closed late on Friday afternoon in New York at 94.77---and rallied a decent amount in Far East trading, hitting its 95.26 high tick just before lunch in Hong Kong on their Friday morning.  From there it chopped lower, finishing the Monday session at 95.04---up 27 basis points.  The folks over at ino.com show it closing down 16 basis points---and I have no idea how they arrived at that considering Friday's action.  I've included the 3-day USD index chart so you can see for yourself and arrive at your own conclusion.

The gold stocks opened basically unchanged---and flopped and chopped around either side of unchanged for the entire New York trading session.  The HUI managed to close up a tiny 0.17 percent, which is certainly better than the alternative.

The silver equities opened up---and stayed up, as Nick Laird's Intraday Day Silver Sentiment Index closed higher by a decent 1.69 percent.

The CME Daily Delivery Report showed that 1 gold and 166 silver contracts were posted for delivery within the COMEX approved depositories on Wednesday.  The three largest short/issuers were ABN Amro, Canada's Scotiabank and Mizuho---a Japanese bank.  The two largest stoppers were HSBC USA with 57 contracts in its in-house [proprietary] trading account---and JPMorgan with 46 contracts for clients---and 63 contracts for itself.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in May dropped by 7 contracts---and is now down to 149 contracts, minus the 1 posted above.  In silver, May o.i. contracted by 141 contracts---and is now down to 574 contracts remaining, minus the 166 contracts mentioned in the previous paragraph.

There were no reported changes in GLD yesterday---and as of 6:25 p.m. EDT, there were no reported changes in SLV, either.

I note that the folks over at shortsqueeze.com updated their website with the short positions of both GLD and SLV yesterday evening as of the close of trading on April 30---and this is what they had to report.

The short position in SLV increased by 10.95 percent from 18.53 million shares/troy ounces up to 20.56 million shares/troy ounces.  That's a hair over 639 tonnes of the stuff---and represents nine days of world silver production.

The short position in GLD declined by 9.14 percent from 1.53 million troy ounces, down to 1.40 million troy ounces.  That's a hair over five days of world gold production.

There was no sales report from the U.S. Mint on Monday.

Over at the COMEX-approved depositories on Friday, there was 33,128 troy ounces of gold reported received---but only 602 troy ounces were shipped out.  Virtually all of the 'in' action was at Canada's Scotiabank.  The link to that activity is here.

There was a lot of silver received, as 1,631,216 troy ounces were received---and 231,458 ounces were shipped out.  All of the in/out action was at CNT and Canada's Scotiabank.  The link to that action is here.

Over at the gold kilobar depositories in Hong Kong on their Friday, they received 5,271 kilobars---and 2,677 kilobars were shipped out.  All of the activity was at the Brink's, Inc. depository---and the link to this activity in troy ounces is here.

Here are a couple of charts that Nick Laird sent around yesterday evening.  They are the monthly intraday price movements for both gold and silver for the month of April.  Adding up and averaging the days in the month, there certainly wasn't much shape to April's price action in gold.  But the low of the day, on average, was the London p.m. gold fix---and the high, not surprisingly, was ten minutes after the COMEX open---and the negative bias between the London a.m. and p.m. fixes is still alive and well on this chart.

There was much more to the April goings-on in silver.  Like gold, silver's average April high was also shortly after the COMEX open.  The secondary low came at the London p.m. gold fix---and the absolute low coming at the close of electronic trading in New York.  Nothing free market about any of this, dear reader.

I have a lot of stories today---and I hope you can find the times to read the one you like.

 

¤ Critical Reads

JPM, Barclays, other banks likely to plead guilty over forex - sources

The parent companies or main banking units of as many as five major banks, rather than their smaller subsidiaries, are expected to plead guilty to U.S. criminal charges over manipulation of foreign exchange rates, people familiar with the matter said.

   A handful of banks will likely resolve forex-rigging investigations by the U.S. Justice Department as soon as this week: JPMorgan Chase & Co, Citigroup, British banks Royal Bank of Scotland (RBS.L) and Barclays and Swiss bank UBS.

It would be unprecedented for parent companies or main banking units, rather than smaller subsidiaries, of so many major banks, to plead guilty to criminal charges in a coordinated action, the people said.

Peter Carr, a spokesman for the U.S. Justice Department, declined comment. Spokespeople for Citi, JPMorgan, RBS, UBS, and Barclays all declined to comment.

According to an FT article, the amount of the fines totals about $6 billion.  This Reuters article showed up on the ca.finance.yahoo.com Internet site on Monday sometime---and today's first story is courtesy of Roy Stephens.  This article now sports a new headline, which you'll discover when you click on the link.

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The $900 Billion Influx That’s Wreaking Havoc in U.S. Bills

For all the anxiety over the global sell-off in bonds, the big worry in money markets is the havoc being created by a dearth of U.S. Treasury bills.

The magnitude of the problem was on display last week, when not even the Treasury Department’s surprise announcement to boost sales could do much to lift bill rates. Over the past two weeks, some of those rates have turned negative, reaching levels last seen during the financial crisis.

With supply at multi-decade lows, investors are signaling alarm as regulations intended to shore up banks and prevent a run on money-market funds exacerbate the bill shortfall. JPMorgan Chase & Co. expects an extra $900 billion of demand for government securities during the next 18 months, putting pressure on a sizable chunk of the $1.4 trillion bill market.

“You have all this money that wants to be in liquid, safe assets that is overwhelming the supply,” said Alex Roever, the Chicago-based head of U.S. interest-rate strategy at JPMorgan.

This Bloomberg article appeared on their website at 9 p.m. Denver time on Sunday evening---and it's courtesy of West Virginia reader Elliot Simon.

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Bills to Rein in Fed Take Shape as Lawmaker Criticism Mounts

After complaining for months about what they see as the Federal Reserve’s recalcitrance and opacity, lawmakers are now rolling out concrete legislative proposals to make the world’s most powerful central bank more accountable.

Senate Banking Committee Chairman Richard Shelby is putting the finishing touches on a bill that could give Congress more power over the New York Fed and create a commission with authority to propose sweeping reforms of the entire Fed system.

Other senators want to curb the Fed’s ability to bail out banks during a financial meltdown and increase transparency of its regulation.

“Shelby wants to do something with the Fed,” said Ed Mills, a financial-policy analyst at FBR & Co. in Arlington, Virginia, and a former adviser to Democrats in the House and Senate. “It seems as if they’re going to have something in here that is additional oversight of the Fed or rebalancing some of the power internally at the Fed, whether staff resources or more transparency.”

This Bloomberg story found a home on the msn.com Internet site on Saturday---and I thank reader Bill Moomau for sharing it with us.

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Fed said to have emergency plan to intervene if U.S. defaulted on debt

The Federal Reserve drew up extensive plans for handling a U.S. debt default that included scheduling deferred payments and lending cash to investors, according to a lawmaker who cited Fed documents.

America courted disaster in 2011 and 2013 when political fights over the national debt nearly left the federal government unable to pay its bills.

Analysts and officials warned that missing payments could lead to economic calamity, and details have only slowly emerged over how financial officials braced for the unthinkable.

In a June 2014 letter to Treasury Secretary Jack Lew seen by Reuters on Monday, Republican Representative Jeb Hensarling of Texas said his staff had reviewed the Fed's unclassified plans for how to handle a default.

This Reuters article, filed from Washington, was posted on their Internet site at 7 p.m. EDT yesterday evening---and I thank Orlando, Florida reader Dennis Mong for bringing it to our attention.

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Canada's right-wing agenda is coming undone

It's a good thing for Canada's Prime Minister Stephen Harper that he's been out of the country. 

Last weekend, in an apparent attempt to distance himself from whatever was about to emerge at the trial of disgraced Senator Mike Duffy, the Conservative leader took off for Iraq and Kuwait.

He ostensibly made the surprise trip to bolster the troops there who are training Kurdish fighters. However, to more cynical political observers, the visit was a blatant attempt to win back military support after last year's brutal budget cuts to veterans services and benefits. But really? It was all about the photo ops, the stage-managed appearances before the red maple leaf blazing behind fighter jets carefully arranged nose-to-nose just so.

All of which gave credence to Liberal leader Justin Trudeau's flip remark during last fall's parliamentary debate on the mission: that Harper was just "trying to whip out our CF-18s and show [ISIL] how big they are".

But Harper ended up being shot down. That's because his personal video entourage, who produce promotional reports called "24 Seven" at the taxpayers' expense, took images that revealed the troops' faces. That despite the prime minister's office (PMO) receiving at least two separate briefings on security measures prohibiting exactly that.

This very interesting article, filed from London, appeared on the aljazeera.com Internet site at 12:30 p.m. BST o Monday---and is a must read for all my Canadian subscribers.  It's the second offering of the day from Roy Stephens.

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Home rule for Britain? Tory backbenchers pressure Cameron on Brexit referendum

Prime Minister David Cameron is under pressure from Conservative backbenchers to timetable a referendum on Britain’s membership of the European Union.

Cameron, whose party secured a narrow majority in last Thursday’s general election, is expected to introduce legislation for an in/out referendum on the EU within the first 100 days of this parliament.

It is widely suggested the prime minister will use a plebiscite on E.U. membership as a bargaining chip to wrestle power back from Brussels.

Cameron has pledged to reform Britain’s role in the E.U. to curb benefits migration and limit freedom of movement within the bloc.

This story put in an appearance on the Russia Today website at 1:34 p.m. Moscow time on their Monday afternoon, which was 4:34 a.m. in Washington.  I than Roy Stephens for finding it for us.

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Nigel Farage withdraws resignation as Ukip leader

Nigel Farage has withdrawn his resignation as leader of Ukip four days after standing down when he failed to win his target seat of South Thanet in the general election.

The party said it had refused to accept Farage’s decision to go and his recommendation that Suzanne Evans, his deputy, be appointed as a caretaker leader.

Farage had said for weeks that he would step down if he did not become an MP, arguing that it was not credible to lead the party without being in the Commons. After losing by about 2,000 votes to the Conservatives’ Craig Mackinlay, the Ukip leader said he would stick to his pledge as a man of his word.

This interesting news item showed up on theguardian.com Internet site at 4:33 p.m. BST yesterday afternoon in London, which was 11:33 a.m. in New York.  It's also courtesy of Roy Stephens.  The sputniknews.com website carried a story on this headlined "UKIP Keeps Farage but Hits Back Over Unfair Voting System"---and my thanks go out to reader M.A. for finding that one for us.

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Greece's 'war cabinet' prepares to battle E.U. creditors as anger mounts

Greece's "war cabinet" has resolved to defy the European creditor powers after a nine-hour meeting on Sunday, ensuring a crescendo of brinkmanship as the increasingly bitter fight comes to a head this month.

Premier Alexis Tsipras and the leading figures of his Syriza movement agreed to defend their "red lines" on pensions and collective bargaining and prepare for battle whatever the consequences, deeming the olive-branch policy of recent weeks to have reached a dead end.

"We have agreed on a tougher strategy to stop making compromises. We were unified and we have a spring our step once again," said one participant.

The Syriza government knows that this an extremely high-risk strategy. The Greek treasury is already empty and emergency funds seized from local authorities and state entities will soon run out.

This commentary by Ambrose Evans-Pritchard showed up on the telegraph.co.uk Internet site very late on Saturday evening in London---and it's another Roy Stephens contribution.

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Greece says deal will be 'difficult' at Eurogroup meeting

Finance Minister Yanis Varoufakis acknowledged that a deal to ease Greece's cash crunch was not likely at a meeting of euro zone finance ministers later on Monday despite progress in talks with lenders on some issues.

Greece is under growing pressure to reach agreement with lenders to avoid financial chaos though many Greeks also want the government to stick to its "red lines" of avoiding further pension cuts and labor reforms making it easier to fire workers.

A 750 million euro debt repayment to the IMF falls due on Tuesday but Varoufakis said a deal that would provide some liquidity relief for Greece was more likely in the coming days.

This Reuters article, filed from Athens, appeared on their website at 9:35 a.m. EDT on Monday morning---and it's the second contribution to today's column from Dennis Mong.

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Greece confirms repayment of €750m loan instalment to IMF

Greece moved to banish fears it was on the brink of insolvency and default on Monday, ordering the repayment of €750m (£535m) in IMF loans hours before they were due.

The payment – timed in a calculated gesture to coincide with the latest exercise in brinkmanship with eurozone creditors in Brussels – came as a relief, though not as a surprise, to senior eurozone officials.

Eurogroup finance ministers met their Greek counterpart, Yanis Varoufakis, in Brussels for the latest round in more than three months of talks, but there was no breakthrough and the session was relatively brief.

“More time is needed to bridge the remaining gaps,” said Jeroen Dijsselbloem, the Dutch finance minister and president of the Eurogroup.

This item was posted on theguardian.com Internet site very late yesterday afternoon BST in London---and once again I thank Roy Stephens for sharing it with us.

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U.S. Tells Greece to Reject Putin Pipeline Marking Return to Cold War Politics

Over the course of Greece’s painful and protracted negotiations with European creditors, Athens has sought, at various times when a deal seems to be slipping away, to play the Russian pivot card. What began as a series of diplomatic overtures between the Tsipras government and Moscow quickly turned more serious once rumors began to swirl around Greece’s potential participation in Russia’s Turkish Stream pipeline which, as a reminder, will allow Russia to bypass Bulgaria by piping gas through Turkey, then through Greece, Serbia, and Hungary straight to the Austrian central hub.

In short order, it leaked that Moscow was set to advance Greece $5 billion against the future potential profits from the pipeline, a payment which we characterized as a get-out-of-Troika-jail free card and although conflicting reports emerged thereafter regarding just how soon money would actually be flowing from Moscow to Athens, discussions around the pipeline continued to move forward when Gazprom chief  Alexei Miller visited Greece late last month to discuss “current energy issues of interest.” 

That visit proved more than Europe could bear, and so the European Commission promptly filed antitrust charges against the Russian gas giant in an absurdly transparent attempt to punish the Kremlin for interfering in negotiations between the EU and its Aegean debt serf. 

Now with negotiations between Athens and creditors still fraught with uncertainty, and with the IMF now reportedly at odds with the rest of the Troika over appropriate bailout terms, another interested party is stepping into the melee because, as NY Times reports, fresh off a humiliating political defeat at the hands of China’s Asian Infrastructure Investment Bank, Washington is in no mood to see the birthplace of Western civilization co-opted by a Russian natural gas firm.

This longish, but very interesting, Zero Hedge piece showed up on their website on Saturday morning EDT---and I thank reader 'David in California' for passing it around.  There was another story on this issue posted on the dw.de Internet site headlined " U.S. wants Greece to stick to the 'right' pipeline"---and I thank Brad Robertson for sending it.

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Why Europe will never give up Greece: Dr. Marc Faber

Preventing Russian influence in the Mediterranean is the real reason why Europe will never allow Greece to leave the euro zone, according to global investor Marc Faber.

"This is a political issue overlooked by many people," the infamously pessimistic economist told CNBC on Monday. "If Greece leaves, the North Atlantic Treaty Organization [NATO] countries led by America are very afraid that Russia will establish closer relationships [in the Mediterranean]."

Many economists agree that if Athens does default on its multi-billion dollar debt repayments, $840 million of which is due Tuesday to the International Monetary Fund (IMF), the chances of a Grexit, i.e. Greece leaving the euro currency bloc, are high.

But, should that occur, "the Russian fleet can move into the Mediterranean from the Black Sea," Faber said.

Along with the transcript, there's a 3:14 minute video clip.   All of this was posted on the CNBC Asia website very early yesterday morning EDT---and I thank Ken Hurt for sending it our way.  The video clip is worth watching for any serious student of the New Great Game.

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Russia Asks Greece To Join BRICS Bank

As if the discussions in Brussels and Athens were not mired in enough uncertainty, Bloomberg reports that --  Russian Deputy Finance Minister Sergei Storchak spoke with Greek PM Alexis Tsipras today, proposed that Greece become 6th member of New Development Bank set up by Brazil, Russia, India, China, South Africa, a Greek govt official says in e-mail to reporters.

Tsipras said keen to discuss matter in St. Petersburg Economic Forum June 18-20, with leaders of BRICS countries.

This brief story, with no link to the Bloomberg article referred to, put in an appearance on the Zero Hedge website around noon EDT on Monday.  It's another article that reader 'David in California' passed around.

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In Talks With Merkel, Putin Calls for Improving Relations With Europe

President Vladimir V. Putin used a visit on Sunday by the German chancellor, Angela Merkel, to call for a return to normal relations with Europe, brushing aside the widespread boycott by Western leaders of the huge Victory Day parade on Red Square a day earlier.

“We do face some problems today, but the sooner we can end their negative impact on our relations, the better it will be,” Mr. Putin told Ms. Merkel at the start of their talks, after both leaders laid large bouquets of red flowers on the Tomb of the Unknown Soldier along the Kremlin wall.

Ms. Merkel and other Western leaders avoided the colossal official outpouring marking the 70th anniversary of the end of World War II in Europe. The parade included 16,000 soldiers marching through Red Square, along with the first new Russian tank in decades, the T-14 Armata, and three updated Yars intercontinental ballistic missiles. (An Armata stalled in the square during a practice run on Thursday, but all went smoothly during the real event.)

The guests of honor were Presidents Xi Jinping of China and Pranab Mukherjee of India. Their nations were among 10 countries with military contingents in the parade. Most of the others were former Soviet states. The presidents of Egypt, South Africa, Cuba and Venezuela were also among those attending.

Anything Russia-related that shows up in The New York Times should be treated with some suspicion, such as this semi-hatchet job that was filed from Moscow on Sunday.  The stories from Roy just keep on coming.

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'Immortal Regiment’ marches on: World celebrates Victory Day

About 12 million people around Russia and abroad have joined Victory Day parades to mark 70 years since victory over Nazi Germany in WWII. Many of them gathered to march with the so-called “Immortal Regiment” to honor the veterans of the war.

The numbers were announced by one of the movement’s organizers, Nikolay Zemtsov.

Crowds of people carrying photographs of veterans who went through World War II have come to rally across Russia in a symbolic action known as the Immortal Regiment (Bessmertny Polk) march.

Russian President Vladimir Putin has joined the march in Moscow. He was carrying a portrait of his father, who fought the Nazis during WWII.

This excellent photo essay appeared on the Russia Today website at noon on Wednesday Moscow time---and it's certainly worth a minute of your time.

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Putin Knows the Reality of 'Free Market' Extremism

If the Washington Post’s clueless editorial page editor Fred Hiatt had been around during the genocidal wars against Native Americans in the 1870s, he probably would have accused Sitting Bull and other Indian leaders of “paranoia” and historical “revisionism” for not recognizing the beneficent intentions of the Europeans when they landed in the New World.

The Europeans, after all, were bringing the “savages” Christianity’s promise of eternal life and introducing them to the wonders of the Old World, like guns and cannons, not to mention the value that “civilized” people place on owning land and possessing gold. Why did these Indian leaders insist on seeing the Europeans as their enemies?

But Hiatt wasn’t around in the 1870s so at least the Native Americans were spared his condescension about the kindness and exceptionalism of the United States as it sent armies to herd the “redskins” onto reservations and slaughter those who wouldn’t go along with this solution to the “Indian problem.”

However, those of us living in the Twenty-first Century can’t say we’re as lucky. In 2002-03, we got to read Hiatt’s self-assured Washington Post editorials informing us about Iraq’s dangerous stockpiles of WMD that were threatening our very existence and giving us no choice but to liberate the Iraqi people and bring peace and stability to the Middle East.

This is the first of two absolute must reads of the day---and it was posted on the russia-insider.com Internet site last Friday---and it's the first contribution of the day from South African reader B.V.

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Saudi Arabia Says King Won’t Attend Meetings in U.S.

Saudi Arabia announced on Sunday that its new monarch, King Salman, would not be attending meetings at the White House with President Obama or a summit gathering at Camp David this week, in an apparent signal of its continued displeasure with the administration over United States relations with Iran, its rising regional adversary.

As recently as Friday, the White House said that King Salman would be coming to “resume consultations on a wide range of regional and bilateral issues,” according to Eric Schultz, a White House spokesman.

But on Sunday, the state-run Saudi Press Agency said that the king would instead send Crown Prince Mohammed bin Nayef, the Saudi interior minister, and Deputy Crown Prince Mohammed bin Salman, the defense minister. The agency said the summit meeting would overlap with a five-day cease-fire in Yemen that is scheduled to start on Tuesday to allow for the delivery of humanitarian aid.

Arab officials said they viewed the king’s failure to attend the meeting as a sign of disappointment with what the White House was willing to offer at the summit meeting as reassurance that the United States would back its Arab allies against a rising Iran.

This New York Times story, filed from Washington, appeared on their website on Sunday---and it's the third and final offering of the day from Brad Robertson.

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‘West still treats Africa as former vassals’ – South Africa’s Zuma

Western “colonial” states are not interested in South Africa’s development, but rather want to take its natural resources and never give anything back, Jacob Zuma, S. African president, told RT. It’s China’s investment that Zuma sees as a way to prosperity.

“The Western world or the European countries, in particular, came to Africa [in the 19th century] to colonize and they had been taking the resources of Africa,” Zuma said.

But even after the continent decolonized itself in the mid-20th century, its relationship with the U.S., U.K., France and other Western countries “remained the same,” he stressed.

“They still regard us as the Third World, as a kind of people, who must be related to as the former subject [state], etc. That talks also to the economics… Their intention has never been to make the former colonial countries develop,” the president explained.

Mr. Zuma understands the situation perfectly.  Of course he's got no one other than himself to blame, as all he has to do is put his foot down regarding the gold price management scheme---and things would change overnight for not only South Africa, but every other commodity-producing country on Planet Earth.  This Russia Today story is the second offering from reader B.V---and it appeared on their Internet site at 11:17 p.m on Sunday evening Moscow time, which was 4:27 p.m. Sunday afternoon in Washington.

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Ruble-yuan settlements booming, set to reshape global finance

Settlements in local currencies between Russia and China now account for 7 percent of the bilateral trade, but the potential for growth is tremendous, experts tell RT. Yuan-ruble trade in Russia has grown 700 percent in a year.

Growing cooperation between Russia and China has become one of the hottest topics in the global economy. It is signaling the emergence of a strong alliance of one the world’s richest and strongest economies, which is expected to reshape the existing western-dominated economic model.

While energy deals between the resource – rich Russia and resource – hungry China look natural, bringing the countries’ finances closer looks like a real challenge to the US dollar system, experts agree, although the transition won’t be quick.

This article showed up on the Russia Today Internet site at 10:05 a.m. Moscow time on their Monday morning---and it's the third contribution of the day from reader B.V., for which I thank him.

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Another Chinese Firm Defaults on Its Dollar Bond

China’s credit markets sent their latest sign of stress Friday as coal importer Winsway Enterprises Holdings Ltd. became the nation’s second company to default on a dollar-denominated bond this year.

The Hong Kong-listed company isn’t able to pay $13.2 million of semi-annual interest due Friday on $309.3 million of notes that mature next year, according to a Hong Kong stock exchange filing on Friday. A 30-day grace period expired May 8 after it skipped the payment April 8 and hired advisers to restructure its debt.

The failure sends a signal that prices of coking coal used in steel making are far from rebounding as the government steps up efforts to curb pollution and China’s economic slowdown deepens. Homebuilder Kaisa Group Holdings Ltd. defaulted last month, becoming the first Chinese developer to miss interest obligations on its U.S. currency debt, while underground mall developer Renhe Commercial Holdings Co. bought back its dollar notes at a discount in a so-called distressed exchange.

This Bloomberg article put in an appearance on the their website Friday morning Denver time---and it's courtesy of reader U.D.

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China cuts interest rates for third time in six months as economy sputters

China cut interest rates for the third time in six months on Sunday in a bid to lower companies' borrowing costs and stoke a sputtering economy that is headed for its worst year in a quarter of a century.

Analysts welcomed the widely-expected move, but predicted policymakers would relax reserve requirements and cut rates again in the coming months to counter the headwinds facing the world's second-largest economy.

The People's Bank of China (PBOC) said on its website it was lowering its benchmark, one-year lending rate by 25 basis points to 5.1 percent from May 11. It cut the benchmark deposit rate by the same amount to 2.25 percent.

"China's economy is still facing relatively big downward pressure," the PBOC said.

This Reuters article was filed from Beijing on Sunday morning EDT---and I thank Dennis Mong for another contribution to today's column.

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Why China’s Bid to Join the Elite of Global Finance Will Almost Certainly Be Successful This Year

There are many steps China has taken to get into the U.S.-led International Monetary Fund. One of the key pieces of the puzzle will likely come to fruition later this year: China’s inclusion in the fund’s own reserve currency, the Special Drawing Rights (SDR). Right now, these drawing rights are made up of the U.S. dollar (47 percent), euro (34 percent), pound sterling (12 percent), and Japanese yen (7 percent).

As usual with the IMF, this is more a matter of status rather than practical value—there are only $285 billion worth of SDR in circulation worldwide. In addition, the SDR isn’t real money but merely the claims on an amount of dollars, euros, pounds, and yen—if they should ever be exercised.

for China, it would mean international recognition for its currency and by extension for its economy. The country this year has officially asked to be included in the SDR, which is formally reviewed at the end of the year. The IMF has signaled that China’s bid will probably be accepted and even U.S. officials have admitted in private that the United States is not against it.

“It should increase the demand of yuan worldwide as a reserve currency. Every time you establish a new use for a currency you increase the demand for the currency. In a sense it’s an IMF endorsement to maintain some of your reserves in yuan,” says James Nolt, a senior fellow at the World Policy Institute.

This article appeared on theepochtime.com Internet site on Sunday---and I thank GATA's secretary/treasurer Chris Powell for sending it our way.  It's worth your while if you have the interest.

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Prominent Chinese banks are at the center of the $1.8 trillion counterfeit money market

Kim Sbarcea knew exactly what she wanted. She typed "Tiffany Elsa Peretti mesh earrings" into Google and chanced upon a pair of the $450 earrings for — deal of deals! — $32.

The website, called tiffany-outletsale.com, looked legit. She hit the buy button.

In that instant, Sbarcea's money was sucked from her house in Christchurch, New Zealand, into the global counterfeiting market, where Chinese banks have emerged as key conduits in an illegal industry estimated to be worth $1.8 trillion this year.

At least three prominent Chinese banks serve as safe havens for counterfeiters, who use them to process credit card payments or move their money around the globe, The Associated Press has found. A review of hundreds of pages of court documents — along with interviews with lawyers, investigators, government officials and industry groups — shows that a lack of legal cooperation between the West and China is allowing counterfeiters to use Chinese banks as financial shelters.

This AP article appeared on the businessinsider.com Internet site early Friday morning EDT---and I thank Brad Robertson for finding it for us.

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Who’s Got the Gold?

In 1971, the U.S. abruptly went off the gold standard, and in making the public announcement, U.S. President Richard Nixon looked into the television camera and said, “We’re all Keynesians now.”

I was a young man at the time and had previously bought gold, albeit on a very small scale, but I recall looking into the face of this delusional man and thinking, “This is not good.”

However, the world at large apparently agreed with Mister Nixon, and within a few years, the other countries also went off the gold standard, which meant that, from that point on, no currency was backed by anything other than a promise.

This commentary by Jeff Thomas was posted on the internationalman.com Internet site yesterday---and I thank senior editor Nick Giambruno for bringing it to my attention.  It's worth reading.

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Slipping gold reserves

The trend is clear. Gold reserves are sliding for top miners. On average proven and probable gold reserves slipped 12% from 2013 to 2014 among the top five gold miners – Barrick, AngloGold, Newmont, Goldcorp and Kinross, respectively.None registered reserve gains. The reserve declines ranged between 9% to 20% and absolutely speaking between 5 million and 11 million ounces gold.This year you couldn’t blame the price of gold. Within house, all the top five gold miners used the same price assumptions in 2014 as 2013 in calculating their own reserves. So changes to gold reserves reflected asset sales and depletion more than they have in recent years when the changing price of gold bloated or shrunk the amount of mineralised rock considered ore.

Absolutely, in terms of ounces gold, the worst among the top five major gold miners was Barrick (down 11 million ounces). Thereafter came AngloGold (down 10 million ounces), Kinross (down 8 million ounces), Newmont (down 6 million) and then Goldcorp (down 5 million ounces).

Percentage wise Kinross’ decline was the worst at 20%, followed by, AngloGold (down 15%), Barrick (down 11%), Goldcorp (down 9%) and then Newmont (down 7%).

Of course this whole premise goes down the drain once gold prices rise---and it would have created a much more balanced commentary if the author had at least mentioned that inevitable event.  But since he didn't, I will---and it should be read with that in mind.  It was posted on the mineweb.com website just after midnight on Monday.  I thank Roy Stephens for sharing it with us.

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South Africa gold wage talks create sunset industry – Venkat

If South African miners insist on having yearly wage negotiations, it will not bode well for the local mining industry. Speaking at AngloGold Ashanti’s head offices, in Johannesburg, on Monday, CEO Srinivasan Venkatakrishnan (Venkat) warned that yearly discussions around wages would have dire economic consequences for the local gold sector.

“That effectively creates a sunset industry for gold mining in South Africa. The dialogue has to change,” he stated.

In the coming months, AngloGold Ashanti would join the largest employers and producers in South Africa's gold sector in negotiating a new wage agreement with labour unions representing most of the industry's collective workforce.

This interesting article, filed from Johannesburg, showed up on the miningweekly.com Internet site on Monday sometime---and it's the final offering of the day from South African reader B.V.---and I thank him on your behalf.

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India's April gold import estimated $3.5 billion

Gold imports continued to remain buoyant in April, despite fears that unseasonal rain and hailstorms would impact agricultural production, adversely affecting farmers’ income, leading to decline in demand for the yellow metal from rural India.

Trade sources said India’s total gold import in April is estimated at about 90 tonnes ($3.5 billion). In March, it was much higher at 121.8 ($4.98 billion) tonnes. But, that was because many traders and investors had delayed their purchases in previous months, expecting a cut in the import duty in the Budget. This did not happen. The gold import in April, 2014, was 58 tonnes.

Thanks to the suppressed demand in the past and demand surge on account of Akshaya Tritiya (21 April) resulted in higher demand in March and part of that demand spilled over to April also, said a CEO of listed jewellery company.

This short gold-related story appeared on the business-standard.com Internet site at 10:35 p.m. IST on their Monday evening---and it's an article I found on the Sharps Pixley website in the wee hours of this morning.  It will take less than a minute of your time to read---and it's worth it.

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Silver no longer the poor man’s gold as solar demand surges

Silver has been mined for thousands of years. But for most of the 20th century it was the poor man’s precious metal, its value eclipsed by the enduring lure of gold.

The first big revolution in silver came in 1492 with the discovery of the New World, which opened up mining of the metal on a scale not previously seen. In the centuries that followed Hernán Cortés and the conquistadors’ destruction of the Aztecs, Peru, Bolivia and Mexico accounted for three-quarters of all world production and trade in the metal.

Today, more than 877 million ounces of silver are mined annually and the metal is increasingly being employed in new industrial processes. A major catalyst for demand over the next decade will be in the production of solar energy.

Silver is a key component in crystalline silicon photovoltaic (PV) cells. According to IHS, demand for solar power is set to increase by 30pc to 57 gigawatts of electricity in 2015. China alone is expected to install something in the region of 17 gigawatts of solar capacity by the end of the year, creating huge potential demand for silver.

It's embarrassing to read stories like this about silver from a writer that calls himself a "Commodities editor".  To talk about silver pricing without acknowledging the two 1,000 pound gorillas in the price living room---JPMorgan and Canada's Scotiabank---is paramount to admitting that you shouldn't really be writing about this subject at all, at least the pricing aspect of it.  With that in mind, it's worth reading anyway.  It appeared on the telegraph.co.uk Internet site at 6:00 a.m. BST yesterday morning, which was 1 a.m. in New York.  I thank California reader Rick Cordes for bringing this article to our attention.

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Ted Butler: The Biggest Silver Haul in History

At the end of 2007, when the price of silver was less than $15, but close to the highest price it had been in 25 years, Bear Stearns assumed the role of the biggest silver and gold short when these positions were transferred from AIG. From the end of 2007 to March 2008, the price of silver rose to $21 and gold rose from $800 to $1,000. Based upon the size of the short positions that Bear Stearns held the investment bank had to come up with more than $2 billion in margin money. Bear was unable to do so and the U.S. Government arranged for JPMorgan to take over Bear Stearns and its massive COMEX short positions in silver and gold.

With the cooperation from the federal government, JPMorgan was able to turn silver (and gold) prices sharply lower into year end 2008 and made well over one billion dollars as a result of falling metals prices. Thus, they were able to greatly reduce the short positions inherited from Bear Stearns. JPMorgan then repeated the process of selling short great additional quantities of COMEX short contracts on metals price rallies buying back those short positions when prices fell. JPMorgan’s profits from the short side of COMEX silver and gold, amounted to hundreds of millions and even billions.

This process was repeated by JPMorgan in COMEX silver until the fall of 2010, when silver began to rise in earnest due to a developing physical shortage that drove prices to nearly $50 by the end of April 2011. On the run up, it must have become clear to JPMorgan that a physical silver shortage was developing and for the bank to try to fight it with additional paper short sales would be futile. Therefore, two decisions were made; one, it would be necessary to create such a large break in silver prices so as to crush the momentum of the price rise and two, the developing physical shortage proved that silver was destined to blow sky high in time and JPMorgan should position itself accordingly. The big break in prices started on May 1, 2011 and broke the back of the silver price. Less visible is the evidence that JPMorgan began to acquire the biggest physical silver stockpile in history.

This absolute must read commentary by Ted showed up on the silverseek.com Internet site yesterday afternoon.  It first appeared in his weekly review on Saturday---and I knew when I read it then, that it was destined to show up in the public domain, which it has.

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¤ The Funnies

Here are three photos I took on the weekend, none of which I'm going to keep, but I thought I'd stick them in today's column anyway.  The first is a single baby Canada goose.  I'm tired of taking pictures of these things, but this one was too cute for words standing all by itself.  The second photo is of rather-distant pair of Cinnamon teals---and I had to crop the photo quite a bit to get them this big, and there's a definite loss of image quality.  They're fairly common, but not around here, as this the very northern limit of their summer range.  The duck in the background is a male Blue-winged teal.  The third photo is another jackrabbit---and I'm sure it's the same one I took a photo of two weeks ago, because it was almost in exactly the same spot.  Note that it still has its white winter coat on parts of its ears.

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¤ The Wrap

Does that mean we can’t move lower temporarily so that the commercials can fill the fuel tanks even more with additional technical fund shorts in both gold and silver?  Hey, this is a crooked market and only a fool would pretend to know the full extent of commercial treachery. But it would be a mistake to deny that the only setup that matters in gold and silver pricing, namely, the COMEX COT market structure is anything but exceptionally bullish. - Silver analyst Ted Butler: 09 May 2015

Well, another day---and another slice out of all four precious metals by JPMorgan et al and their HFT buddies.  Volume was very light once again---and with volume like that it is, as I said last week and further up, very easy for anyone with an agenda to push prices around, either up or down.

Here are the 6-month charts for all four---and you should note that silver is sitting right on its 50-day moving average.  Also worth noting is the price action in palladium during the last three business days.  As I pointed out at the top of today's column, there certainly isn't anything free-market about that price activity.

But despite the waterfall declines in both gold and silver, their respective equities both finished in the black on Monday---and I find that very encouraging.

And as I type this paragraph, the London open is about ten minutes away.  Except for a slight dip in early afternoon trading in Hong Kong on their Tuesday afternoon, not much happened in gold in the overnight hours.  Silver made a new low tick for this move down---and platinum and palladium aren't doing a thing.

Gold volume is a hair over 10,000 contracts---and silver's net volume is about 3,300 contracts.  about 99.9 percent of the volume in both metals is in their current front months, so it's all of the HFT variety.  Volumes were much lower earlier---and the tiny sell-offs in both metals popped their respective volumes by about 100 percent just in the last few hours.

The dollar index, which made it up to 95.15 in early Tuesday morning trading in Hong Kong, is currently down about 30 basis points off that high---and down 14 basis points from Monday's New York close.

Today, at the 1:30 p.m. EDT close of COMEX trading is the cut-off for this Friday's Commitment of Traders Report.  One hopes that all of today's price/volume data will be in it.

And as I hit the send button on today's column at 5:15 a.m. EDT, I see that the tiny rallies in gold and silver that began an hour or so before the London open, weren't allowed to get far---and both are trading virtually unchanged from Monday's close in New York.

Gold's net volume is now about 17,900 contracts, with a lot more roll-over activity now that London has been trading for a couple of hours.  Silver's net volume is just over 5,400 contracts.  These volumes are still very much on the lighter side.

Both platinum and palladium are up up a few bucks---and the dollar index has really taken a header, as it's down 61 basis points at the moment, and even more than that from its Far East high tick.

This swoon in the dollar index is certainly not being allowed to manifest itself in the prices of the precious metals.  That will only happen when JPMorgan et al allow it.  Just looking at the price action of the last hour or so, they still have these metals in a headlock in the COMEX futures market---and until that changes, nothing changes---regardless of what's going on in the currency market.

There's certainly a bit more price room to the downside if "da boyz" want to push it.  But as I said on Saturday, we're very close to the bottom as it is---and there can't be too many contracts left for JPMorgan et al to get from the technical funds in the Managed Money category.

If one cares to look into the future a bit, how high in price the next rallies in all four precious metals go, still boils down to the fact that it will be determined soley by whether or not the powers-that-be step in front of them or not.  Nothing else matters.

Based on what I see in the charts at the moment, it's far too early in the day to guess as to how trading action will unfold as the Tuesday session progresses.  But, as usual, it's a given that all the price/volume action that matters will occur after the 8:20 a.m. EDT COMEX open.

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

Ed Steer