Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

After trading virtually flat for all of Far East, most of London trading---and early trading in New York, the gold price got hit at 11:00 a.m. EST on the dot just as London closed for the day.  The low tick came thirty minutes later---and then at precisely 2 p.m. EST, the gold price rocketed 12 bucks higher in just minutes, which was probably a result of the release of the Federal Reserve's January meeting---and crawled higher from there, closing virtually on its high tick of the day.

The low and high were recorded by the CME Group as $1,197.20 and $1,213.40 in the April contract.

Gold closed in New York yesterday afternoon at $1,213.30 spot, up $3.50 from Tuesday's close.  Considering the price volatility, net volume was pretty light at around 111,000 contracts.

Here's the 5-minute tick chart for gold courtesy of Brad Robertson---and you should note the volume spikes on the price moves throughout the trading session.  Considering the price volatility in New York, the associated volume can hardly be called robust.

Silver didn't do much in price and volume terms on Wednesday, either.  The Far East high tick, such as it was, came shortly after 2 p.m. Hong Kong time---and less than an hour before the London open.  from that point the silver price chopped quietly and unsteadily lower, with the low tick coming shortly before the 1:30 p.m. COMEX close.  Like gold, silver also had its little price spike at 2 p.m. in electronic trading on the Fed news, or lack thereof---and recovered all its losses on the day in the process.  From that point onwards, the price didn't do a lot.

The high and low were recorded as $16.575 and $16.23 in the March contract.

Silver finished the Tuesday session at $16.495 spot, up 2.5 cents on the day.  Gross volume was pretty high, but once the roll-overs were taken out, net volume dropped down to only 26,000 contracts.

The platinum charts was a mini version of the gold chart---and the palladium charts was a mini version of the platinum chart, sort of.  Platinum closed at $1,169 spot, down four dollars---and palladium finished the Wednesday session at $775 spot, down an even five bucks.  Here are the charts.

The dollar index closed late on Tuesday afternoon at 94.13---and from there came close to dipping back below the 94.00 mark late in Far East trading on their Wednesday morning.  Then, starting at 2 p.m. Hong Kong time, the index began to chop higher, hitting its 94.50 high tick minutes after 12 o'clock noon in New York.   It hung in there at that level until the Fed news at 2 p.m. EST---and then fell like a stone within minutes to within an eyelash of 94.00 once again.  It "recovered" a handful of basis points from there---and didn't do much for the remainder of the day.  The dollar index closed yesterday at 94.10---which was basically unchanged from Tuesday.

The gold stocks spent half of Wednesday morning fighting to stay in positive territory, but finally gave up the ghost shortly after 11 a.m. EST---and traded down a percent and change until 2 p.m. EST.  Then they blasted into positive territory immediately on the out-of-the-blue price spike in gold---and then crawled higher for the remainder of the New York trading session.  The HUI closed up 2.02 percent.

In most respects, the silver equities followed the path of their golden brethren, complete with the 2 p.m. EST price spike---and Nick Laird's Intraday Silver Sentiment Index closed up 1.77 percent.

The CME Daily Delivery Report showed that zero gold and 36 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The only short/issuer was Jefferies---and they stopped 16 contracts as well.   Canada's Scotiabank stopped the other 20 contracts.

Even though February, like January, isn't a big delivery month in silver, there have been 420 silver contracts posted for delivery already this month.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest dropped by the 49 gold contracts being delivered today---and February o.i. is now down to 552 contracts.  Silver's February open interest is still unchanged at 56 contracts, but 50 contracts of that amount can be subtracted as per the Friday deliveries posted in the previous paragraph.

There was a small 9,600 troy ounces of gold withdrawn from GLD yesterday---and I would suspect that this amount represented a fee payment of some kind.  But the big surprise was in SLV, as authorized participants deposited a whopping 3,971,459 troy ounces yesterday.  It's a safe bet that this was deposited to cover part of an existing short position in this ETF.

And because it was deposited on a Wednesday, it's a good bet that it won't be in tomorrow's SLV bar list report from Joshua Gibbons---and it certainly won't be in next week's short position report from the folks over at shortsqueeze.com.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes in their gold and silver ETFs as of the close of business on Friday, February 13---and this is what they had to report.  Their gold ETF dropped, but only by 2,565 troy ounces.  However, their silver ETF had a very chunky withdrawal of 268,457 troy ounces.

There was a very decent sales report from the U.S. Mint yesterday.  They sold 5,000 troy ounces of gold eagles---3,000 one-ounce 24K gold buffaloes---and 625,000 silver eagles.

There wasn't a lot of gold movement at the COMEX-approved depositories on Tuesday, as only 8,407 troy ounces were reported received---and two kilobars were shipped out.

But it was another very decent day for silver movement, as 498,299 troy ounces were reported received---and 532,516 troy ounces were shipped out.  The link to that activity is here.

I don't have a lot of stories today---and that suits me, and probably you, just fine.

 

¤ Critical Reads

Soros Shifts to Europe, Asia as Investors Cut U.S. Equities

Soros Fund Management, the family office of billionaire hedge fund manager George Soros, cut holdings of U.S. stocks in the fourth quarter and shifted assets globally.

Soros, which manages almost $30 billion, moved about $2 billion into companies in Asia and Europe, according to a person familiar with the strategy. The New York-based firm returned about 8 percent in 2014 and is up 1.5 percent this year, said the person, who asked not to be identified because the firm is private.

Other big hedge fund managers made a similar call on U.S. equities as a slide in oil prices hammered energy holdings. Hedge funds held about $1.6 trillion of U.S. equities at the end of the year compared with $1.8 trillion in the prior quarter, according to data compiled by Bloomberg, based on 886 filings.

This Bloomberg business story appeared on their website at 2:49 p.m. Denver time on Tuesday afternoon---and it's the first offering of two in a row from U.A.E. reader Laurent-Patrick Gally.

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Buffett Ends $3.7 Billion Exxon Investment Amid Oil Plunge

Warren Buffett’s Berkshire Hathaway Inc. exited a $3.7 billion investment in Exxon Mobil Corp. amid a slump in oil prices.

Crude has fallen by about half since June as U.S. production surged and the Organization of Petroleum Exporting Countries resisted output cuts. The decline has ravaged oil company profits and forced major producers and drillers to slash spending and fire thousands of workers.

Berkshire has “not really had the hot hand in energy,” Fadel Gheit, an analyst for Oppenheimer & Co. in New York, said in a phone interview. “The whole energy sector obviously is now traded in completely different circumstances.”

Buffett built Berkshire into the fourth-biggest company in the world through acquisitions and by picking stocks like Coca-Cola Co. and the former Washington Post Co. that multiplied in value in the years after he bought them. Still, he’s had a mixed record when it comes to investing in energy companies.

This Bloomberg business story appeared on their Internet site at 2:37 p.m. MST yesterday afternoon---and is the second in a row from Laurent-Patrick Gally.

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Market Top Is Near: 7-Charts Which Ring the Bell

If it’s all about the economy, stupid, then stock-market bulls may want to think twice about betting on further gains.

With the S&P 500 reaching an all-time intraday high for a second straight trading session on Tuesday, that would suggest the economy’s recent struggles, as depicted by disappointing fourth-quarter growth in gross domestic product, a sharp decline in retail sales and continued weak inflation readings, will eventually give way to improving growth. Read more about recent economic data.

But as the above chart, joined by the following charts, shows, investors often ignore disappointing economic information as a bull market progresses, just as they did before the previous two recessions. And when market prices just start building rapidly on themselves, without a strong economic platform or continued stimulus from the Federal Reserve, the market bubble that is created should eventually pop.

As the saying goes, there’s nothing as bullish as a fresh record, except the last one.

This worthwhile guest commentary appeared on David Stockman's website on Wednesday sometime---and it's the first offering of the day from Roy Stephens.

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Marc Faber: U.S. shares to correct 50%; China is growing only at a maximum of 4%

Dr. Marc Faber opines on the expensive U.S. market, IPO foibles and the increase in bonds carrying a negative yield. His biggest warning is a 50% correction in shares.

This is part #2 of a BoomBust interview that showed up on the Russia Today website on Saturday---and the interview with Marc begins at the 3:20 minute mark---and it runs until about 11:45 minutes.  Reader Ken Hurt sent it our way.

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European court confirms Polish complicity in CIA rendition

A European Court of Human Rights ruling that Poland allowed a secret CIA jail on its soil became final on Tuesday (17 February) after the court rejected an appeal request.

The Strasbourg court last July found the Polish government had colluded with the CIA to establish the secret detention facility at the Stare Kiejkuty military base.

The court said Poland had failed to launch a proper investigation into human rights violations on two individuals who had been tortured at the CIA prison camp in 2002 and 2003.

Poland challenged the July ruling and appealed the case at the court’s Grand Chamber of five judges in October.

This news item put in an appearance on the euobserver.com Internet site at 9:38 a.m. on their Wednesday morning, which was 3:38 a.m. EST.  It's another offering from Roy Stephens.

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Moscow Promises Canada's 'Clumsy' Sanctions Won't Go Unanswered

New sanctions by Canada against Russia are an attempt to undermine the Minsk agreements and hamper normal bilateral relations between Moscow and Ottawa, Russian Foreign Ministry spokesman Alexander Lukashevich said Wednesday.

"The decision by the Canadian authorities on the further expansion of sanctions against official Russian figures and companies under the guise of the events in Ukraine look like a clumsy attempt to hamper the fulfillment of the agreements on settling the conflict reached in Minsk on February 12 with the active and constructive role of Russia," Lukashevich said in a statement published on the ministry's website.

The diplomat added that Canada's sanctions would not be left without a response from Moscow.

This story showed up on the sputniknews.com Internet site at 3:33 p.m. Moscow time on their Wednesday afternoon, which was 7:33 a.m. in New York.

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ECB risks crippling political damage if Greece forced to default

The political detonating pin for Greek contagion in Europe is an obscure mechanism used by the eurozone's nexus of central banks to settle accounts.

If Greece is forced out of the euro in acrimonious circumstances - a 50/50 risk given the continued refusal of the creditor core to acknowledge their own guilt and strategic errors - the country will not only default on its EMU rescue packages, but also on its "Target2" liabilities to the European Central Bank.

In normal times, Target2 adjustments are routine and self-correcting. They occur automatically as money is shifted around the currency bloc. The US Federal Reserve has a similar internal system to square books across regions. They turn nuclear if monetary union breaks up.  The Target2 "debts" owed by Greece's central bank to the ECB jumped to €49bn in December as capital flight accelerated on fears of a Syriza victory. They may have reached €65bn or €70bn by now.

A Greek default - unavoidable in a Grexit scenario - would crystallize these losses. The German people would discover instantly that a large sum of money committed without their knowledge and without a vote in the Bundestag had vanished.

This longish commentary by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site at 8:54 p.m. GMT yesterday evening---and I found it all by myself.  It's definitely worth reading.

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Swiss prosecutor raids HSBC office, opens criminal inquiry

Geneva's public prosecutor searched HSBC's lakeside Swiss office on Wednesday after opening a criminal inquiry into allegations of aggravated money laundering, the second probe to hit the bank this week.

Europe's largest lender is in regulators' sights after details about how its Swiss private bank allegedly helped wealthy clients dodge taxes were leaked to the media and published last week.

In an unusual move, the Geneva prosecutor's office notified the media of the raid as it was going on. It searched two HSBC offices and said its investigation could target individuals, who would be liable to a fine and up to five years in prison if found guilty of serious money laundering offences.

"As of now, we aim at securing all the information concerning the accounts and clients who have been mentioned as detaining funds resulting from criminal offences," Attorney General Olivier Jornot told reporters.

This Reuters article, filed from Geneva, put in an appearance on their website at 2:50 p.m. EST on Wednesday afternoon---and I thank reader 'h c' for finding it for us.

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Chris Martenson: The U.S.’s Suicidal Strategy on Ukraine

As I’ve written previously, the West, especially the U.S., was instrumental in toppling the democratically elected president of Ukraine back in February 2014. US officials were caught on tape plotting the coup, and then immediately supported the hastily installed and extremist officials that now occupy the Kiev leadership positions.

In short, the crisis in Ukraine was not the result of Russia’s actions, but the West’s. Had the prior president, Yanukovych, not been overthrown, it’s highly unlikely that Ukraine would be embroiled in a nasty civil war. Relations between Russia and the West would be in far better repair.

Russia, quite predictably and understandably, became alarmed at the rise of fascism and Nazi-sympathetic powers on its border. Remember the repeated statements by Kiev officials recommending extermination of the Russian speakers who make up the majority living in eastern Ukraine? Were a parallel situation happening in Canada, for example, I would fully expect the U.S. to be similarly and seriously interested and involved in the outcome.

The only people seemingly surprised by this predictable Russian reaction toward protecting its people and border interests are the neocons at the U.S. State Department who instigated the conflict in the first place. In my experience, these are dangerous people principally because they seem to lack perspective and humility.

Let's call them what they really are---sociopaths at best, psychopaths at worst.  This must read commentary by Chris showed up in yesterday's edition of the Casey Daily Dispatch.

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Hundreds of Ukraine Troops Surrender as Besieged Town of Debaltseve Falls to Rebels

According to Reuters government forces started pulling out of the east Ukraine town on Wednesday after a fierce assault by the rebel separatists which Europe said violated a crumbling ceasefire. President Petro Poroshenko said before flying to the town of Debaltseve that more than 80 percent of his troops in the rail hub had already left following a heavy bombardment and street-by-street fighting despite the truce that took effect on Sunday.

As previously reported, according to the pro-separatists rebels the ceasefire does not apply to Debaltseve, which links the two rebel-controlled regions of eastern Ukraine, Donetsk and Luhansk.

Bloomberg adds, that "some Ukrainian troops are leaving the town as “full scale” street fighting continues following a small tank battle, Ilya Kyva, a deputy police chief of the Donetsk region, said by phone on Wednesday. Kyva wouldn’t say how many Ukrainian soldiers had left or how many still remained surrounded by the rebels. Ukrainian Eurobonds fell to a record as fighting was also reported near the coastal city of Mariupol."

It appears that all the stories about the fighting in the Ukraine I posted in yesterday's column were right on the money.  This speaks volumes about the credibility of the Russian news services.  This news items appeared on the Zero Hedge website at 8:10 a.m. EST yesterday morning---and I thank reader M.A. for sharing it with us.  There was also commentary about this on The Telegraph's website as well---and it's headlined "Defeated Ukrainians take the 'road of life' on their retreat from Debaltseve".

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The strategic implications of the battle for Debaltseve: [Updated]

The Novorussians are in control of most of Debaltsevo (officially 90% officially 100% as of midnight GMT).  More relevantly, there is no more organized resistance.  Russian sources say that about 1,000 junta soldiers have refused to surrender and are hiding in the outskirts or have fled to the south end of the cauldron.  The Novorussians are not even bothering to hunt them down or return their sporadic (and inaccurate) fire: they are waiting for hunger and cold to force them to give up.  A spokesman for the Novorussians has reported that all communications between the junta forces in the cauldron and their commanders have been suppressed.  Russian TV stations are showing footage of Novorussian soldiers raising their flag over the center of the city.

That the forces in the Debaltsevo cauldron were doomed was pretty clear for a while already, but what is still amazing is the speed at which the collapse has taken place.  Clearly, we are dealing with a catastrophic collapse of combat capability of the junta forces.

The Russian media is also showing many video clips of surrendering junta soldiers in and around Debaltsevo.  Those who surrender are treated for their wounds, washed, clothed, fed and they will be sent home as soon as possible.

During his recent press conference in Hungary, Vladimir Putin has confirmed that the Ukrainian forces in Debaltsevo has been defeated.  He also confirmed that the U.S. has been sending weapons to the junta and he added that he was absolutely sure that while this could kill more people, it would make no difference at all because the Ukrainian soldiers have no desire to fight whereas the morale of the Novorussians was extremely strong.

This hot-off-the-press, up-to-the-minute commentary on the situation in Debaltsevo was posted on the vineyardsaker.blogspot.ca Internet site just after midnight EST this morning.  It's on the longish side, but definitely worth your time, if you have the interest---which you should.  And, not surprisingly, it's courtesy of Roy Stephens.

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Merkel in Moscow and Minsk: Der Spiegel Says Putin Has Won

As we have also previously said, Der Spiegel shows this was a Western not a Russian initiative. The Russians did not initiate it. Merkel did. According to Der Spiegel she first floated the idea at the end of January when she was dining at a restaurant in Strasbourg with Hollande and European Parliament President Martin Schultz. 

This is the key to understanding what happened in Minsk. Because it is difficult for some in the West to acknowledge that the initiative was launched by Merkel because of the critical condition the Ukrainians are in and that this forced Merkel to make major concessions to Putin in Minsk, parts of the Western media are trying to deny the fact.

An article by Niall Ferguson in the Financial Times says it was Putin who invited Merkel and Hollande to Moscow in order to divide the West and prevent the US sending arms to Kiev. An editorial in the London Times says the same thing. Der Spiegel shows this is untrue.

Thirdly, as we have also said, the initiative was Merkel’s not Hollande’s. Hollande was brought along purely to give Merkel diplomatic cover. Der Spiegel does not openly say so, but a German Chancellor cannot afford to be seen cutting unilateral deals at the expense of other European states with the Russians in Moscow, as Ribbentrop and Molotov once did.

This long, but VERY interesting article, is certainly worth reading if you have the time and the interest.  I highly recommend it.  It was posted on the russia-insider.com internet site very early yesterday morning in North America---and my thanks go out to Roy Stephens for bringing it to our attention.

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Russia Dumps Most U.S. Paper Ever as China Reduces Treasurys Holdings to January 2013 Levels

Back in December, Socgen spread a rumor that Russia has begun selling its gold. Subsequent IMF data showed that not only was this not correct, Russia in fact added to its gold holdings. But there was one thing it was selling: some $22 billion in U.S. Treasurys, a record 20% of its total holdings, bringing its U.S. paper inventory to just $86 billion in December - the lowest since June 2008.

It wasn't just Russia: the country that has ever more frequently been said to be in the same camp as Russia - and against the U.S. - namely China, also sold another $6 billion in Treasurys in the last month of 2014, which would have made its U.S. treasury holdings equal with those of Japan, if only Tokyo hadn't also sold over $10 billion in the same month.

And while we know that Russia used at least some of the proceeds to buy gold, the bigger question is: just what is China buying with all these stealthy US$-denominated liquidations, and how much gold does the PBOC really have as of this moment.

This brief, but most excellent article, appeared on the Zero Hedge website at 9:02 p.m. EST yesterday evening---and the two embedded charts are worth the trip.  I thank reader M.A. for sending it our way.

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Paulson Keeps Gold Stake as Investors Lose Love for Metal

Billionaire hedge fund manager John Paulson stuck with his holding in the world’s biggest gold exchange-traded product at a time when other investors were dumping the metal.

Paulson & Co., the largest holder of the SPDR Gold Trust, kept its stake at 10.23 million shares in the three months ended Dec. 31, a government filing showed. The position was unchanged for a sixth straight quarter.

Assets in the SPDR fund slumped 11 percent in 2014, and reached 704.83 metric tons in January, the lowest since September 2008. Gold prices dropped 1.5 percent last year, capping a consecutive annual decline for the first time since 1998. Gains for equities and the prospect of rising U.S. interest rates prompted some investors to lose faith in the metal as a store of value.

This short news item was posted on the newsmax.com Internet site at 5:56 a.m. EST on Wednesday morning---and it's courtesy of West Virginia reader Elliot Simon.

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Lawrence Williams: Global silver production up 3.8% in 2014

According to precious metals specialist research consultancy Metals Focus, a company which was primarily formed by former GFMS analysts and marketers following the latter’s acquisition by Thomson Reuters a couple of years ago, global silver output may have peaked in 2014. The consultancy is one of the primary analytical firms involved in researching precious metals supply and demand, and in its latest Precious Metals Weekly newsletter gives us some insight into what it sees happening this year in terms of global silver production.

Indeed, as with gold, the weakness in the silver price is at last beginning to have an impact on global mine production and Metals Focus sees mine output flattening out after several years of fairly strong production growth. As the consultancy points out the mining cycle is such that new mine decisions are largely taken when prices are high, but that it may take several years to bring a big new mine into production and by the time it comes on stream the price situation may have changed dramatically. The silver price has been falling for the past three years and is now around 65% below its 2011 peak which leaves many silver producers now sitting on all-in sustaining costs (AISC) levels close to, or even higher than the value of sales. With no real price respite in sight this will undoubtedly lead to new projects being curtailed and possible mine cutbacks and closures – indeed this is already beginning to happen.

This commentary by Lawrie is deficient in the fact that nothing is mentioned about the extreme short position held by the Big 8 traders in the COMEX futures market which, as Ted Butler pointed out, are mostly domestic and foreign banks.  This, and this alone, is why  the silver price is as low as it is.  And until that situation changes, nothing changes.  This commentary by Lawrie appeared on the mineweb.com Internet site at 2:41 p.m. GMT yesterday afternoon---and it's worth reading.

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RBI lifts ban on import of gold coins, medallions by banks

The Reserve Bank of India today lifted the ban on imports of gold coins and medallions by banks and trading houses.

In a notification the RBI also said banks are permitted to import gold on consignment basis. Domestic sales will be, however, permitted against up-front payment only.

"While the import of gold coins and medallions will no longer be prohibited, pending further review, the restrictions on banks in selling gold coins and medallions are not being removed," it said.

The RBI and the government have been receiving requests for clarification on some of operational aspects of guidelines on import of gold after withdrawal of restrictions on import of the metal on November 28 last year, the notification said.

This brief gold-related news item, filed from Mumbai, appeared on the Economic Times of India website at 9:22 p.m. IST on their Wednesday evening---and I found it on the gata.org Internet site.

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Middlekoop and Macleod see a gold-based reset

Gold-based transformations of the world financial system are envisioned in two commentaries today, one by Willem Middlekoop, author of "The Big Reset," who writes today in Koos Jansen's space at Bullion Star a commentary headlined "A New Gold Standard in the Making".

And GoldMoney research director Alasdair Macleod, writing at Gold-Eagle, wonders if the Russian government has figured out that Western central banks don't have the gold they claim to have---and if Russia is ready to undertake a reset of its own. Macleod's commentary is headlined "Gold and Russia".

The links to these commentaries are posted in this GATA release from yesterday---and both fall into the absolute must read category.

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¤ The Funnies

I'm going to take a break from Arizona for a day and feature three photos that gold market analyst Lawrie Williams sent my way from his trip to Cape Town, South Africa to attend the recently-concluded Cape Town Mining Indaba.  I thought they were worth sharing---and I hope you do as well.

These photos were taken when he was on a boat excursion---and show the city from a perspective that few ever get to see.  The first photo shows Signal Hill and Lion's Head in the foreground---and Table Mountain in the background, with clouds called the "tablecloth" spilling over the edge.



The second photo is a little further around the coast and show the "tablecloth" clouds on Table Mountain more clearly.



And lastly, further around the coast still, comes a mountain formation the locals call the "Twelve Apostles".







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Amir Adnani, President and CEO, stated, “We are very pleased to have received this final authorization for initiating production at Goliad. Our geological and engineering teams have worked diligently toward achieving this major milestone and are to be truly commended. We are grateful to the EPA for its thorough reviews and for issuing this final concurrence. The Company’s near-term plan is to complete construction at the first production area at Goliad and to greatly increase the throughput of uranium at our centralized Hobson processing plant.” Please contact Investor Relations with questions or to request additional information, info@uraniumenergy.com.

 

¤ The Wrap

It would appear the influence of COMEX futures positioning is at play in silver and gold prices. Certainly, if the price action for this week, month, year---and years past---is not fully explained by changes in the COT market structure, then I am at a loss to explain it in different terms. I actually feel badly for anyone who thinks silver and gold prices are dependent on any other financial news or events other than COMEX trading. That’s not to sound cocky or say it will always be this way, because that’s not the case in the long run. But it happens to be the case right now---and has been for a very long time.

In simple terms, we went lower on Tuesday and Wednesday---and in the case of every previous significant sell-off in gold and silver---because the commercials (led by JPMorgan) set prices lower through means of HFT and other dirty tricks on the COMEX in order to induce technical fund selling so that the commercials could buy. If this is not the story 100% of the time, then it's the story 99% of the time. In any case, this is the manipulation that increasing numbers of observers are coming to grasp. The clincher is that it is confirmed in evolving COT data. Never has there been a significant decline in the price of silver or gold without significant commercial buying.

That brings us to the current “count.” I would be surprised if the COT report to be released on Friday and covering trading through the close of business on Tuesday, didn’t feature hefty declines in the headline number of the total commercial net short position. For COMEX gold, considering there were two significant down days in the reporting week, Tuesday when new price lows were set---and last Thursday, Feb 11 when the 50-day moving average was first penetrated to the downside, I would guess another 30,000 net contracts or so were taken off the total commercial net short position. In silver, the 50-day moving average wasn’t violated until Tuesday, but there could have been a reduction in the headline number of as many as 5,000 to 10,000 contracts. - Silver analyst Ted Butler: 18 February 2014

It was another very quiet day in the precious metal markets, at least up until the U.S. equity markets opened.  Then shortly after that, the price began to head lower---and by the time the HFT boyz were done after the 11 a.m. EST London close, the gold price was down twelve bucks.

That was all gained back on the release of the January minutes from the Federal Reserve at 2 p.m. EST---and you'll excuse me for thinking that the morning sell-off in the precious metals was done to counteract the expected jump in their respective prices when the minutes were released.  If that was the case, it worked like a charm.

Here are the 6-month charts for all four precious metals---and nothing should be read into yesterday's price shenanigans in New York on a longer-term basis, despite the positive dojis on their respective charts.

And as I type this paragraph, the London open is fifteen minutes away.  Not much is going on in Far East trading with the Chinese New Year now in full swing---and it's one of the reasons why trading volume has been so light during these hours for the last day or so.  The smallish gains in all four precious metals that accrued during early morning trading in the Far East on their Thursday are all staring to slip away, but are still up a hair from their closes in New York yesterday afternoon---and volume is a little heavier than it was this time yesterday, probably because of those early rallies---such as they were.  The dollar index is down 8 basis points---and trading on both side of the 94.00 mark at the moment.

We seem to be in some sort of holding pattern at the moment. Although I'm expecting the engineered price declines to continue in both gold and silver in the days ahead, the fact is that these markets could move strongly to the upside as well.

But unless it's the big "reset," any rallies or sell-offs will be paper trading on the COMEX at the hands of JPMorgan et al---and nothing to do with supply and demand, a fact that was more than adequately covered in Ted's quote above.

And as I hit the 'send' button on today's column at 5:15 a.m. EST, I note that there's a bit of positive price activity in three of the four precious metals [palladium is down a buck], but nothing much should be read into this, either.  Net gold volume is closing in on 24,000 contracts---and silver's net volume is a hair over 6,500 contracts.  The dollar index is back above the 94.00 mark, but only by 4 basis points---and it's currently down 6 basis points from its close in New York yesterday.  It will be interesting to see if this is the start of another "gentle hands" rescue as the Thursday trading day unfolds.

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

Ed Steer