Gold & Silver Daily
"The sellers of last resort were at battle stations once again"
 

¤ Yesterday In Gold & Silver

The price action in gold on Thursday was very similar in most respects to the price action on Tuesday---and you can see that in the Kitco chart below.  There were a couple of short, sharp rallies in Far East trading between the New York open on Wednesday evening, right up until 9 a.m. Hong Kong time on their Thursday morning.  Then the price traded flat until the 8 a.m. BST London open.  The rally continued at that point, as did the efforts of the sellers of last resort.  However it all ended minutes after Comex trading began in New York yesterday morning---and it was all downhill into the close from there.

The low and high ticks were recorded by the CME Group as $1,311.0 and $1,324.90 in the June contract.

Gold finished the Thursday session at $1,318.10 spot, up $5.80 on the day.  Volume, net of May, was 134,000 contracts, with well over a third of that amount occurring before the London a.m. gold fix, as the HFT boyz did what was necessary to prevent the gold price from blowing out to the upside and taking out the 50-day moving average with any kind of authority---which it would have done handily if the not-for-profit sellers hadn't intervened.

It was virtually the same story in silver---and one can only imagine the rather large handle the silver price would have closed at if JPMorgan et al hadn't interfered.

The low and high ticks were recorded as $19.86 and $20.40 in the May contract, an intraday move of almost 3%.

Silver closed the trading day barely above the $20 spot mark at $20.03---up 18.5 cents on the day---but "da boyz" took it back below twenty bucks 45 minutes later, the moment that trading began in the Far East on their Friday.  Gross volume was over 80,000 contracts once again, but it all netted out to around 38,000 contracts, about the same volume as Tuesday.

Platinum and palladium had similar chart patterns, but their prices weren't capped for the final time until noon in New York.  Both closed with very decent gains on the day.  Here are the charts.

The dollar index closed in New York late on Wednesday afternoon at 79.53---and then didn't do much of anything until the equities markets opened in New York yesterday morning.  Then the index dropped down to its 79.35 low around 11:20 a.m. EDT---and from there it rallied a handful of basis points into the close.  The index finished the Thursday session at 79.41---down 12 basis points on the day.

Here's the 6-month dollar index chart---and you can see the damage that has been done during the last five trading sessions.

Although the gold stocks gapped up a bit at the open on the positive gold price action, they probably got caught up in the general sell-off in the U.S. equity markets---and down they went as well.  The HUI finished the day down 1.77%.

It was the same for the silver stocks, as Nick Laird's Intraday Silver Sentiment Index got clocked to the tune of 2.29%.

The CME's Daily Delivery Report showed that 46 gold and 20 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  Credit Suisse was the short/issuer on 45 of the gold contracts---and JPMorgan and Canada's Scotiabank stopped 38 of them.  In silver, Morgan Stanley and JPM were the two issuers---and Canada's Scotiabank stood for delivery on all 20 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There was a tiny withdrawal from GLD yesterday, as an authorized participant took out 8,429 troy ounces.  I would guess that this would represent a fee payment of some kind.  And as of 10:05 p.m. EDT yesterday evening, there were no reported changes in SLV.

Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with the goings-on over at SLV for the reporting week that ended on Wednesday---and here's his report:  "Analysis of the 09 April 2014 bar list, and comparison to the previous week's list---672,916.9 oz were added (all to Brinks London), 145,919.6 oz were removed, no bars had a serial number change."

"The bars added were from: KGHM Poland (0.4M oz), Solar Applied Materials (0.2M oz and 2 others.  The bars removed from were: KCM SA (0.1M oz), and 2 others. As of the time that the bar list was produced, it was overallocated 39.6 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

The U.S. Mint had sales report yesterday, but it was on the skinny side.  They sold 3,000 troy ounces of gold eagles---25,000 silver eagles---and 300 platinum eagles.

Over at the Comex-approved depositories on Wednesday, they reported receiving 14,202 troy ounces---and shipped out zip.  All of the gold went into Brink's, Inc.  The link to that 'activity' is here.

Of course it was a lot busier in silver, as a chunky 1,123,832 troy ounces were reported received---and nothing was shipped out.  The link to that action is here.

If you haven't noticed from the CME warehouse report yet---and just as a point of interest---JPMorgan Chase is the top dog in physical silver as well, as their depository now hold 45.49 million troy ounces of the stuff---a couple of million more than does HSBC USA.  One has to wonder how much more silver they may have stashed away, either in other Comex depositories [or elsewhere] in good delivery form that we just don't know about.  Then there's the question of who the mystery buyer is of all those silver eagles that have been sold for the last year or so.  Ted Butler suspects JPMorgan---and I'm not about to argue the point.

I have the usual number of stories for a week-day column---and I hope you find some in here that interest you.

 

¤ Critical Reads

Marc Faber's dire warning for the market

Marc says that the 2014 crash will be worse than 1987.  This 11:52 minute video clip was posted over at the CNBC website very early yesterday afternoon EDT---and today's first news item is courtesy of reader Ken Hurt.

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US Budget Deficit Falls In March To $37 Billion

The U.S. government's budget deficit shrank to just $37 billion in March from $107 billion in the same month last year, the latest sign of improvement in the nation's finances. The deficit was the lowest for the month of March in 14 years.

The deficit fell partly because revenue jumped 16 percent to $216 billion, the Treasury Department said in its monthly budget report Thursday. Individual income and Social Security tax receipts have increased as employers have steadily hired more workers in the past year.

And if you believe that's actually true, then I really do have this bridge I'd like to unload---and you look like the perfect buyer.  This AP story showed up on the kitco.com Internet site at 2 p.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for bringing it to our attention.

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Internet giants to government: We can spy on customers’ data, you shouldn’t

Silicon Valley has been largely speaking out as of late against the United States government’s controversial surveillance programs, but some say the nation’s top cyber firms are scared that their own abilities to collect info could soon be eroded.

Months into the ongoing and always heated debate about the U.S. National Security Agency’s spy operations, President Barack Obama said last December that he had appointed a small panel of experts to assess the NSA programs in question that had been exposed after former contractor Edward Snowden started to disclose classified documents earlier that year. That review group has since presented a few dozen recommendations to the White House, and last month President Obama asked Congress to codify into law changes concerning the way that the US government gets access to certain sensitive records — namely the telephony metadata created by telecommunication companies and currently gathered in bulk by the NSA, as exposed by Mr. Snowden.

In January, however, the president also said a separate group would reach out to privacy experts, technologists and business leaders to inspect the way that “big data” is created, collected and used by both the public and private sector, and “whether we can forge international norms on how to manage this data and how we can continue to promote the free flow of information in ways that are consistent with both privacy and security.”

This article showed up on the Russia Today website late yesterday afternoon Moscow time---and it's the first offering of the day from Roy Stephens.

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More than 40,000 signed for 'Alaska Back to Russia' petition

The petition on Alaska going back to Russia, posted on the White House website on March 21st 2014, has since been signed by over 40,000 people. It should be signed by at least 100,000 by April 20th so the US authorities come up with an official response.

The petition points out that those residing in Siberia crossed into Alaska via Bering Strait ages ago.

Russians became the first Europeans to appear in Alaska on August 21st 1732. The actual discoverers are the St. Gabriel ship crew under land surveyor Gvozdev and junior sailing master Fyodorov, who were part of the 1729-1735 Shestakov and Pavlutsky-led expedition.

This rather amusing news item appeared on the Voice of Russia website early yesterday evening Moscow time---and if you're looking for a short history of Alaska before the U.S bought it from the Russians for a song in 1867---this is a must read.  It's the second offering in a row from Roy Stephens, for which I thank him.

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Draghi Seen Easing Policy by June as ECB Readies Rate Cut

Mario Draghi will probably take action within two months against the threat of deflation, economists said.

Almost two-thirds of respondents in the Bloomberg Monthly Survey predicted the European Central Bank president will ease policy by June. Of those economists, just under half said he may implement multiple measures ranging from interest-rate cuts to asset purchases and long-term loans.

With euro-area inflation at the weakest in more than four years, Draghi says he has “unanimous” backing from policy makers for unconventional measures if needed. Even so, recent comments show officials haven’t yet agreed on which tools to use, setting them up for discussions on whether to take an unprecedented leap into quantitative easing or rely on smaller and more-targeted initiatives.

This Bloomberg article, filed from Frankfurt, was posted on their website in the wee hours of Thursday morning Denver time---and I thank reader Ward Pace for sending it our way.

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Christine Lagarde: Huge Government and banks debts risk new financial crash

George Osborne is to tell an audience of free-market campaigners in Washington that the UK's economic turnaround will defy those who say austerity and low wage growth will lead to long-term stagnation. In his first major speech in the US, the chancellor will attempt to demolish claims that a further five years of austerity will restrict growth and hurt workers' living standards.

Osborne will argue at the American Enterprise Institute that low interest rates, the Bank of England's creation of new money through massive bond purchases under its quantitative easing programme and a strengthened banking sector can secure a bright future for the UK.

Osborne's speech comes after head of the International Monetary Fund, Christine Lagarde, issued a warning to world leaders that they need to do more to deal with huge government and bank debts that she said continue to drag down growth and undermine the stability of the financial system. Speaking at the IMF's spring conference, Lagarde said leaders needed to co-operate in their efforts to repair public sector and bank finances to protect against a repeat of the 2008 crash.

This article from The Guardian has had a major headline change, as you'll find out if you click on the link. It now reads a much softer sounding "George Osborne to use first major U.S. speech to rebuke critics of austerity."  It was posted on their website early yesterday afternoon BST---and I thank South African reader B.V. for digging it up on our behalf.

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Top economists warn Germany that EMU crisis as dangerous as ever

The eurozone debt crisis is deepening and threatens to re-erupt on a larger scale when the liquidity cycle turns, a leading panel of economists warned in a clash of views with German officials in Berlin.

"Debts above 130pc of GDP for Italy and 170pc for Greece are a recipe for disaster once we go into the next downturn," said Professor Charles Wyplosz, from Geneva University.

"Today's politicians believe the crisis is over and don't want to hear any more about it, but they have not tackled the core issues of fiscal union and public debt," he said, speaking at Euromoney's annual Germany conference.

This Ambrose Evans-Pritchard offering showed up on the telegraph.co.uk Internet site very early on Wednesday evening BST---and I thank Roy Stephens for another contribution to today's column.

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Angela Merkel denied access to her NSA file

The U.S. government is refusing to grant Angela Merkel access to her NSA file or answer formal questions from Germany about its surveillance activities, raising the stakes before a crucial visit by the German chancellor to Washington.

Merkel will meet Barack Obama in three weeks, on her first visit to the US capital since documents leaked by whistleblower Edward Snowden revealed that the NSA had been monitoring her phone.

The face-to-face meeting between the two world leaders had been intended as an effort to publicly heal wounds after the controversy, but Germany remains frustrated by the White House's refusal to come clean about its surveillance activities in the country.

This story is from theguardian.com Internet site---and it was posted there very early yesterday evening British Summer Time.  It's certainly worth reading.

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Is the U.S. or the World Coming to an End? — Paul Craig Roberts

2014 is shaping up as a year of reckoning for the United States.

Two pressures are building on the US dollar. One pressure comes from the Federal Reserve’s declining ability to rig the price of gold as Western gold supplies shrivel and market knowledge of the Fed’s illegal price rigging spreads. The evidence of massive amounts of naked shorts being dumped into the paper gold futures market at times of day when trading is thin is unequivocal. It has become obvious that the price of gold is being rigged in the futures market in order to protect the dollar’s value from QE.

The other pressure arises from the Obama regime’s foolish threats of sanctions on Russia. Other countries are no longer willing to tolerate Washington’s abuse of the world dollar standard. Washington uses the dollar-based international payments system to inflict damage on the economies of countries that resist Washington’s political hegemony.

Russia and China have had enough. As I have reported---and as Peter Koenig reports, Russia and China are disconnecting their international trade from the dollar. Henceforth, Russia will conduct its trade, including the sale of oil and natural gas to Europe, in rubles and in the currencies of its BRICS partners.

This commentary by Paul falls into the must read category as far as I'm concerned, especially for any serious student of the New Great Game.  I thank Luxembourg reader Rudi Staudinger for bringing it to our attention.

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Chinese exports and imports fall sharply in March

The country's exports fell by 6.6% in March when compared with the previous year.

Imports dropped by 11.3% in the same month, when compared with the same time last year.

This is the second straight month of falling exports for China. In February, exports dropped by 18.1%.

It is the first time since 2009 that exports have fallen for two months in a row.

This news item showed up on the bbc.com Internet site a few minutes after midnight EDT on Thursday morning---and it's worth reading.  I thank reader B.V. for sending it our way.

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Bank of China Sydney branch issues 2 billion yuan bonds

Bank of China's Sydney branch issued 2 billion yuan (325 million U.S. dollars) of yuan bonds on Wednesday, the first yuan bond in Australia, the bank announced on Thursday.

The two-year bonds, with a coupon rate of 3.25 percent, were well-received in the market, oversubscribed 1.45 times.

Some 27.5 percent of the bonds were subscribed by local investors, said the bank.

This short article appeared on the xinhuanet.com Internet site early yesterday evening Beijing time---and I thank reader 'David in California' for sharing it with us.

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Five King World News Blogs/Audio Interviews

1. William Kaye [#1]: "Gold Delivery Strains Reappear---and What Might Destroy COMEX"  2. Art Cashin: "Critical Metric is Now Over 1,000 Times Higher Than Normal!"  3. Jean-Marie Eveillard: "U.S. Gold Gone---and What 52 Years in This Business Taught Me"  4. William Kaye [#2]: "The Secret That Has U.S. and Western Leaders Truly Terrified"  5. The audio interview is with Gerald Celente

[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]

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Blythe Masters Under Investigation By Federal Prosecutors

There is much new info in the just released Bloomberg profile on the infamous ex-JPMorganite Blythe Masters, among which the disclosure that she had made it clear that she had wanted to go along with the disposable JPM physical commodities unit (which as was reported recently, was sold to Swiss commodities giant Mercuria) and "and continue as the group's chief", a plan which did not work out as she had planned since she has no plans to "join the unit’s purchaser" (although joining Glencore is another matter entirely, and one which looks increasingly plausible) but what we find most striking is the following revelation: "Masters is under investigation by federal prosecutors in Manhattan, according to two people with knowledge of the matter. That probe was opened following a settlement with regulators that alleged JPMorgan manipulated power markets in the Midwest and California."

This is somewhat ironic because it was none other than Zero Hedge which asked nearly a year ago if "JPMorgan's "Enron" Will Be The End Of Blythe Masters?" Suddenly, the answer appears to be yes.

This very interesting commentary over at Zero Hedge was posted on their website very late yesterday evening EDT---and it's definitely worth reading.  My thanks go out to Elliot Simon for bringing it to my attention---and now to yours.

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Pat Heller: U.S. has rigged precious metals markets for 80 years

Writing for Coin Week, Patrick Heller of Liberty Coin Service in Lansing, Michigan, provides a brief history of the U.S. government's mechanisms of surreptitious market intervention and headlines his commentary, "The U.S. Government Has Rigged Precious Metals Markets For 80 Years".

I found this article in a GATA release last evening.

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Chris Martenson and Alasdair Macleod discuss China's corner on gold

Market analyst Chris Martenson and GoldMoney's Alasdair Macleod discuss China's increasing control of the gold market, anti-gold propaganda in the Western financial news media, the likelihood that Western governments will commandeer the gold of private investors, and other provocative topics in an interview posted this week in audio and text versions at Martenson's Internet site, peakprosperity.com

The audio interview runs for 54:32 minutes, so top up your coffee or blow the froth off a cold one.

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U.S. mined silver output continues to fall--USGS

U.S. mines produced 80,900 kilograms (2,600,995 troy ounces) of silver in November 2013, a 14% decrease from the 94,300 kg (3,031,815 oz) produced in November 2012, the U.S. Geological Survey reported.

Monthly silver production continued on a downward trend that began in June 2013, the USGS observed.

Average daily U.S. silver production in November 2013 was 2,700 kg (86,807 oz), compared with 3,140 kg (100,953 oz) in November 2012.

The Silver State of Nevada led silver production in November 2013 with 19,700 kg (633,369 oz) of output, while the combined total production of Alaska, Arizona, California, Colorado, Idaho, Missouri, Montana, New Mexico, South Dakota and Utah was 60,900 kg (1,957,980 oz).

Total U.S. silver output from January to November 2013 totaled 956,000 kg (30,736,114 oz), said the Geological Survey.

Wow!  U.S. silver production is even worse than I imagined it to be---only a bit over 33 million ounces per year based on current production rates.  That means that the U.S. Mint has to import about 10 million ounces of silver per year just to meet demand.  One has to wonder how much more has to be imported on a yearly basis to meet the rest of U.S. silver demand.  I would bet that it's a lot.  The above five paragraphs are all there is to this news item that was posted on the mineweb.com Internet site just after midnight Reno time this morning, but it's worth reading a second time if you've already read it.

By the way, here's a link to the Top 10 silver producers in 2013.

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Lawrence Williams: Silver being left behind in latest gold price surge – but don’t despair!

Silver investors will have been a little disappointed by the metal’s performance vis-à-vis the gold price following the latter’s gains after the release of the latest U.S. FOMC meeting minutes. The minutes suggested that the low interest rate regime may well continue longer than expected and resulted in a major boost to the stock market and a significant uptick in the gold price. But it had rather less impact on silver which initially remained stuck below the $20 mark, although this morning’s trade has at last see it move up above this mark. Perhaps European investors are less pessimistic about silver’s investment credentials.

Now silver usually moves with gold, but in a more exaggerated manner so the silver investors could have been forgiven for expecting that the near 2% rise in the gold price since Tuesday would be accompanied by an even greater rise in silver in percentage terms. This may yet happen should the gold price continue its latest mini-surge, but silver has been more volatile and indeed the price actually fell back sharply on some adverse comment in the U.S. before recovering quite well in this morning’s trade… But over the same 3 day period that gold rose the 2% mentioned above the silver price was, in effect, following a very sharp temporary dip yesterday.

So why is silver behaving in this manner. Perhaps the short answer is China.

That's not the short answer---and Lawrie knows it.  But why he won't say it in the public domain is beyond me.  Silver analyst Ted Butler says that JPMorgan Chase has a 20,000 contract short-side corner in the Comex futures market in silver---which represents 16% of the total net open interest as of last Friday's Commitment of Traders Report.  They, along with the smaller Commercial traders, run the show in silver---and the other three precious metals as well.  End of story.  If you read this commentary, I would do it for entertainment purposes only.

Read more...

 

¤ The Funnies







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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

My advice, as it has been, is to move to the sidelines while holding large positions in physical silver and gold. Regardless of what the markets do, silver and gold represent eternal wealth, and the bid to sleep undisturbed at night. No amount of money is worth the loss of peace of mind. The power of gold opened the American West and populated Alaska. Men have spent their lives searching for gold. You can own gold by the simple action of swapping Federal Reserve notes for the yellow metal. I advise you to do it. - Richard Russell

It's getting repetitive, so I'm not going to dwell too much on what happened in Far East and early London trading on Thursday except to say that the sellers of last resort were at battle stations once again preventing all four precious metals from doing what they wanted to---and that's move sharply higher.  This was particularly true in gold, as "da boyz" wanted to prevent a major break-out above its 50-day moving average---and they succeeded.

Here, once again, are the 6-month gold and silver charts with yesterday's price action included.

Note that gold closed above its 50-day moving average, but would have closed considerably higher than that if the HFT traders hadn't been involved.

And no matter how well silver performs intraday, it's always sold back down to, or just below, the $20 spot price mark.  Yesterday they had to peel about 40 cents off the price to do it---and looking at the chart, it's a pattern that's obvious over the last 13 consecutive trading days.

In Far East trading on their Friday, the gold price didn't do much, but got sold back down below unchanged an hour before London opened.  And as I mentioned earlier, silver got sold back below the $20 mark the moment that trading began in New York yesterday evening---and every tiny rally attempt above that price mark has been sold off.  Platinum and palladium aren't doing much.  And as I write this paragraph, London has been open 75 minutes---and volumes aren't overly heavy, less than half of what they were yesterday at this time.  Roll-overs out of the May silver contract continue unabated.  The dollar index is comatose.

Today, at 3:30 p.m. EDT, we get the latest Commitment of Traders Report, I'll guess that we might see further deterioration in the Commercial net short position in gold, but that's just a guess based on a quick glance at the gold price action during the reporting week.  I'm neutral on silver, but nothing will surprise me.  The thing that makes me uncertain as to direction is that fact that all the volume from the prior week's COT Report may not have been reported in a 'timely manner'---so we could see some spill-over into today's report.  But whatever the numbers, I'll have them for you tomorrow.

And as I hit the 'send' button on today's column, I note that all four precious metals are below their closing prices in New York yesterday afternoon. Volumes are still nothing special---and the dollar index is now up a small handful of basis points.

Since today is Friday, nothing would surprise me regarding precious metal price action, especially during the New York session.  Gold is now a few dollars above its 50-day moving average---and I'll be interested in seeing if the rally [such as it is] will be allowed to continue, or whether it 'fails' at this point.

That's all I have for today.  Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.