Casey Research Publication
Gold & Silver Daily
"I wouldn't read much into yesterday's price action considering the amount of volume there was."
 

¤ Yesterday In Gold & Silver

The gold price rallied about five bucks or so in mid-morning trading in Hong Kong on their Monday...and any further rally attempts were squashed, as volume was very heavy for that time of day.

That small gain lasted until shortly after 11:00 a.m. BST in London...and then got gently sold off for a five dollar loss by noon in New York.  After that, gold struggled back to about unchanged on the day.  The highs are lows aren't worth mentioning.

Gold closed the Monday session in New York at $1,470.30 spot...down forty cents from Friday's close.  Net volume was a tiny 74,000 contracts...and based on that volume, I wouldn't read a thing into yesterday's price action.

It was virtually the same thing in silver, but the spike at 9:00 a.m. Hong Kong time got dealt with far more harshly...and it was obvious that whatever buying activity showed up at the point, got dealt with in the same old way.

But from there, the silver price action mirrored the gold price action...and silver closed at $24.04 spot...down 9 cents from Friday.  Volume was tiny...only 23,000 contracts, with a large chunk of that coming during the Hong Kong spike in prices, as 'da boyz' had to throw a decent number of contracts at the price to put that fire out.

The dollar index closed at 81.105 on Friday afternoon...and traded sideways from there at the open on Monday morning in Far East trading.  From that point, there were a couple of small rallies...one starting around 2:00 p.m. in Hong Kong...and the second around 10:00 a.m. in New York.  The high tick of the days [82.41] came shortly before 11:00 a.m. EDT...and then slid a bit from there.  The index closed at 82.34...up about 25 basis points on the day.  Nothing much to see here.

The gold stocks spent virtually the entire day chopping slightly above unchanged...and the HUI finished the Monday trading session up 0.45%.

The silver stocks did not fare as well...and Nick Laird's Intraday Silver Sentiment Index closed down 0.79%.

(Click on image to enlarge)

The CME's daily delivery report showed that 3 gold and 8 silver contracts were posted for delivery on Wednesday within the Comex-approved depositories.

GLD reported that an authorized participant withdrew 106,371 troy ounces of gold yesterday...and as of 9:22 p.m. Eastern Daylight Time, there were no reported changes in SLV.

Joshua Gibbons, the Guru of the SLV Bar List, updated his website last Thursday with the figures for the end of trading on Wednesday, May 1st.  Twice last week I remembered...and then forgot...to post this data.  This, in part, is what he had to say..."Analysis of the 01 May bar list, and comparison to the previous week's list...1,806,475.8 oz. were added (all to Brinks London), 3,207,486.6 oz. were removed (all from Brinks London), and 595 had a serial number change (all in Brinks London)."  The rest of his brief commentary is posted here.

The U.S. Mint finally had a sales report.  They sold 3,000 ounces of gold eagles...and 719,500 silver eagles.

Over at the Comex-approved depositories on Friday, they reported receiving 126,270 troy ounces of silver...and shipped 510,435 troy ounces of the stuff out the door.  The link to that activity is here.

In gold on Friday, the Comex-approved depositories reported receiving 65,253 troy ounces...and shipped out 119,581 troy ounces.  The link to that activity is here.

Here's a chart that New Zealand reader Bruce McLean sent my way yesterday...and it shows the extreme bearishness of the Hulbert Gold Newsletter Sentiment Index.  You know the bottom is in when you see readings like this, especially when you compare them to what's happened over the last fifteen years...and I've been around for all of them.  The 'click to enlarge' feature is a must with this graph.

Here's your daily dose of cuteness...

Despite the fact that it's a Tuesday column, I don't have all that many stories for you today...and I hope that some of the ones I do have prove to be of interest.

 

¤ Critical Reads

Colleges In U.S. Offer Highest-Ever Discount to Entice Students

Private nonprofit colleges are offering students tuition discounts of 45 percent, on average, in response to a changing financial environment that stems from the weak economic recovery.

Price reductions, designed to boost attendance, were at an all-time high in 2012 and outpaced the rate during the recession, according to a study of 383 private-nonprofit four- year schools, released today by the National Association of College and University Business Officers.

Some colleges are struggling with enrollment declines even after offering a reduction and enduring price sensitivity is driving the drop, according to chief business officers at institutions that have been affected.

“The expectation that a private institution can maintain or grow enrollment and increase net revenue simply by offering large tuition discounts is no longer valid,” Walda said in a statement. “Price sensitivity, changing student demographics, and a dynamic, competitive landscape all point to the need for increased attention to a strong brand, good marketing, diverse revenue streams, and cost containment.”

This Bloomberg story was posted on their website late yesterday morning MDT...and I thank U.A.E. reader Laurent-Patrick Gally for today's first story.

Read more...

U.S. regulators eye Bitcoin supervision

Senior officials at a top US financial regulator are discussing whether Bitcoin, the controversial cyber-currency, might fall under their regulatory remit.

Bitcoin "is for sure something we need to explore," Bart Chilton, one of the five commissioners at the Commodity Futures Trading Commission (CFTC), told the Financial Times. A person familiar with the CFTC's thinking said that the regulator is "seriously" examining the issue.

Said Mr Chilton: "It's not monopoly money we're talking about here -- real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be 'out there' transactions."

Bart and the rest of the CFTC should get to the bottom of the gold and silver price management scheme...which is doing real damage in the real economies of so many countries on Planet Earth, before wasting their time and resources on computer generated fantasy money.  This Financial Times story from yesterday is one I found posted in the clear in this GATA release.

Read more...

Brazil furious with Cristina Fernandez non-kept promises freezes relation

Brazil has virtually frozen political and economic relations with Argentina following serious discrepancies that were confirmed during the recent summit of presidents Cristina Fernandez with Dilma Rousseff who cut short the originally scheduled two-day visit to Buenos Aires.

The bilateral conflict exposes billions of dollars of investments from Brazil, which also happens to be Argentina’s main trade partner, since the government of Cristina Fernandez has not complied with any of the understandings reached in previous meetings referred mainly to limitations, restrictions and other obstacles implemented by the Argentines.

But this time also, according to Argentine and Brazilian diplomatic sources quoted in the Buenos Aires media, there were serious questionings towards Cristina Fernandez latest political decisions ‘on the path of the late Venezuelan leader Hugo Chavez’, the main of which, judicial reform and the advance on the media.

This article appeared on the mercopress.com Internet site on Saturday...and I thank Casey Research's own Louis James for passing it around.

Read more...

Uruguay admits trade and economic relations with Argentina ‘couldn’t be worse’

Vice-president Danilo Astori admitted on Friday that economic-trade relations with Argentina continue to deteriorate and seriously question Mercosur and Uruguay must therefore speed the search for other alternatives.

“Argentina protectionist policies are flagrantly contradicting the Treaty of Asuncion, (the founding stone of Mercosur), and even when the Argentine government has all the right to decide its policies, those decisions have no support in the Mercosur treaty”, pointed out Astori during a business forum.

He added that the current foreign exchange policy of Argentina which has seen the US dollar reach almost ten Argentine Pesos in the ‘blue’ or informal market with a 90% spread over the official exchange rate, already is seriously harming bilateral trade but “it’s not clear” how it can really affect the Uruguayan real estate market.

“To say this will not have an impact on us is to ignore reality; the issue is how do we behave to mitigate this possible impact, but at the same time even more important find other sources to diversify and improve our trade and economic situation”, argued Astori.

This is another story from the mercopress.com Internet site on Saturday...and the second offering in a row from Louis James.

Read more...

France Declares Austerity Over as Germany Offers Wiggle Room

French Finance Minister Pierre Moscovici declared the era of austerity over after his German counterpart offered flexibility on deficit cutting amid renewed bickering between Europe’s two biggest economies.

“We’re witnessing the end of the dogma of austerity” as the only tool to fight the euro debt crisis, Moscovici said yesterday on Europe 1 radio. “We’ve been pleading for a growth policy for a year. Austerity on its own impedes growth.”

The gap between the French Socialist finance chief’s view and the election-year positioning of Germany’s Wolfgang Schaeuble underscores the divergence between their economies and the wrangling that has marked the crisis fight since Francois Hollande replaced Nicolas Sarkozy as French leader a year ago.

This story was filed from Paris about lunchtime in Europe...and posted on the Bloomberg Internet site very early yesterday morning.  I thank Manitoba reader Ulrike Marx for sending it along.

Read more...

German euro founder calls for 'catastrophic' currency to be broken up

Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is "leading to disaster". 

"The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt," he said.

"The Germans have not yet realised that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later," he said, blaming much of the crisis on Germany's wage squeeze to gain export share.

Someone at Casey Research said that this was posturing for votes in the upcoming fall election in Germany.  That may be true, but you should form your own opinion once you've read this Ambrose Evans-Pritchard piece from The Telegraph on Sunday evening BST...and I thank reader 'h c' for sharing it with us.

Read more...

Small-Town Mayor’s Millions as 'Exhibit A' on Graft in Spain

In the good times, the former mayor of this small, wind-swept village of 5,000 in northern Spain was busy building: the olive oil museum, the wind museum, the museum of life. If that were not enough, there was the new bullring, the sports center with 25,000 seats and the zoo with the exotic-bird park.

The former mayor, María Victoria Pinilla, seemed to be prospering personally, as well. Three stately houses took shape on her family plot. There was an apartment in Madrid, a beach house and a vacation home in the Dominican Republic next to Julio Iglesias’.

Now, however, the fence outside the former mayor’s family compound is in disrepair and half-built housing developments lie abandoned on the outskirts of the village. And last month, Ms. Pinilla, 57, became just one more in a growing throng of political officials in Spain to face corruption charges.

The 2-page essay appeared in the Saturday edition of The New York Times...and is definitely worth reading.  I thank Roy Stephens for bringing it to our attention.

Read more...

Draghi Says ECB Ready to Cut Interest Rates Again If Needed

European Central Bank President Mario Draghi said policy makers are ready to cut interest rates again if needed after reducing them to a record low last week.

“We will be looking at all the data that arrives from the euro-area economy in the coming weeks and if necessary, we are ready to act again,” Draghi said in a speech in Rome today. “Monetary policy will remain accommodative.”

The euro fell half a cent on the comment to $1.3057 and European stocks pared losses. The Frankfurt-based ECB on May 2 cut its benchmark rate by a quarter point to 0.5 percent, and Draghi said then that officials have an “open mind” about taking the deposit rate, currently at zero, into negative territory.

Money is worthless...cash is trash.  Take your pick.  A lot of customers showing up at our bullion store are saying precisely the same thing.  How has it come to this?  This story was filed from Frankfurt yesterday afternoon Europe time...and posted on the Bloomberg website mid-morning MDT.  My thanks go out to Ulrike Marx for her second offering in today's column.                                                                     

Read more...

Afghanistan's Karzai Says He Was Assured C.I.A. Would Continue Delivering Bags of Cash

The C.I.A.’s station chief here met with President Hamid Karzai on Saturday, and the Afghan leader said he had been assured that the agency would continue dropping off stacks of cash at his office despite a storm of criticism that has erupted since the payments were disclosed.

The C.I.A. money, Mr. Karzai told reporters, was “an easy source of petty cash,” and some of it was used to pay off members of the political elite, a group dominated by warlords.

The use of the C.I.A. cash for payoffs has prompted criticism from many Afghans and some American and European officials, who complain that the agency, in its quest to maintain access and influence at the presidential palace, financed what is essentially a presidential slush fund. The practice, the officials say, effectively undercut a pillar of the American war strategy: the building of a clean and credible Afghan government to wean popular support from the Taliban.

Instead, corruption at the highest levels seems to have only worsened. The International Monetary Fund recently warned diplomats in Kabul that the Afghan government faced a potentially severe budget shortfall partly because of the increasing theft of customs duties and officially abetted tax evasion.

This short, but very interesting essay, is a must read for all serious students of the 'New Great Game'.  It was posted on The New York Times website on Saturday...and I thank Roy Stephens for finding it for us.

Read more...

Policy battle rages in China as slowdown feeds 'sense of crisis'

Anti-reform hardliners in China's Communist Party have become seriously alarmed by the sharp slow-down in economic growth, creating a "task-force" to crank up production.

China's Caixin Magazine reports that there is a growing "sense of crisis" not felt since the depths of the global banking crash in 2008-2009.

The State-owned Assets Supervision and Administration Commission [SASAC] has assembled a team to "protect economic growth" and pressure state companies to boost jobs at all costs.

SASAC is the bastion of vested interests and controller of 115 state behemoths with assets above $6 trillion and lock on much of the economy.

The move comes amid further signs that growth is faltering across all fronts. HSBC's gauge of Chinese services fell three points to 51.1 in April, the lowest in almost two years.

This must read story by Ambrose Evans-Pritchard showed up on the telegraph.co.uk Internet site yesterday afternoon BST...and I thank Roy Stephens for his final offering in today's column.

Read more...

"The Captain" Says Goodbye: The Full Final Edition Of The Privateer

For 727 editions, and nearly 30 years, Bill Buckler, the "captain" of the free market-praising Privateer newsletter provided a welcome escape from a world overrun with "free-lunch" economists, "for-hire" politicians, "crony-capitalist" oligarchs, "heroin-addict" bankers, "the-solution-to-record-debt-is-more-record-debt" Keynesians, and all those other subclasses of that species which Einstein, or whoever, described so aptly in saying that they all expect a different, and happy, outcome when applying the same flawed methods over and over. And for 30 years, Buckler's steadfast determination and adherence to his arguments, beliefs, reasoning and ironclad logic brought him countless followers, all of whom are now able to see past the bread and circus facade of a world every day on the edge of political and social collapse.

Sadly, all good things come to an end, and so does The Privateer. We are delighted to celebrate its illustrious memory by presenting to our readers the final, must read, issue of the newsletter which encapsulates the philosophy and ideology of its author - a man much respected and admired in the free market circles - and thirty years of objective, unbiased market and economic commentary, best of all.

Whether you read it now or later, as it's on the longish side...a 12-page missive in its original pdf format...this is an absolute must read.  I've been reading Bill Buckler for about ten years...and there was none better.  I thank Marshall Angeles for digging this up on our behalf.

Read more...

Woman scams metal buyers out of thousands with fake silver bars

Police are looking for a woman who they say sold several hundred fake silver bars to local metal buyers under the guise that it was real silver.

According to police, a 40-year-old white woman came to the Traverse City, Colorado area in late April and sold these metal bars to at least three different precious metal buyers in the area.

On April 27th, the woman walked into Bay West Antiques and sold 100 silver bars to store owners, Holly Dalley and her husband Pete. Real silvers bars are currently worth just over $24.00 each.

"She came in, she sat down, she had a couple of boxes," said Dalley. "She said there were 50 1-ounce bars in each box. I looked at the first one, I didn't take it out of it's plastic. I just saw that and said everything looked good. There wasn't anything that would have indicated that it was fake at all."

This is another example of caveat emptorUnless you know what you're doing, you should always buy from a reputable dealer...and have your guard up if you're buying privately.  You'll note that this person unloaded them at pawn shops or other such places where the persons working there know next to nothing about precious metals.  I thank James Anderson for sharing this story.

Read more...

Mike Kosares: Silver eagle sales show metal's recognition as safe haven

Mike Kosares, proprietor of Centennial Precious Metals and its Internet site, USAGold.com, has, fortunately for followers of the monetary metals, begun writing regularly, and yesterday he showed that silver in hand is becoming, like gold, recognized as a safe haven for wealth. Kosares' commentary is headlined "Bell Weather American Gold and Silver Eagle Sales Show Safe-Haven Public Mindset".

You can read all about it in this GATA release from yesterday.

Read more...

Sprott's Thoughts: Rely on Valuations, Not Momentum...Jason Stevens

Investment Executive Jason Stevens joined Sprott Global Resource Investments Ltd. in 2002. A devout student of Benjamin Graham’s value investing thesis, Jason shared with me how he is managing his portfolio right now:

The junior mining sector is highly volatile, in part because trading volumes are minute relative to other sectors’. Companies that get attention in the market -- because of a new discovery, or rumors of a takeover -- may experience share price increases to well in excess of what we would consider fair value for their projects. Conversely, the slightest setback, or failure to meet expectations can result in companies trading at a fraction of an objective estimate of the business’ value.

The key to investing in natural resource equities is to understand the factors that affect a project’s possible outcomes and create a realistic assessment of its value to an investor. The further the price distances itself from the valuation we establish, the more potentially lucrative we perceive the buy or sell opportunity to be.

This short commentary by Jason was posted on the sprottgroup.com Internet site yesterday.

Read more...

Casey Research: Buy Gold Stocks – When???

Last week, our senior precious metals analyst, Jeff Clark, advised: Buy Gold NOW. So far that has worked out well, but it begs the question: What about gold stocks? When do we back up the truck for them?

My own answer in the current edition of the International Speculator is that no one really knows, but that those who buy value when its price is low should do very well indeed.

Jeff returns this week with a by-the-numbers look at the last two biggest gold stock corrections, comparing them to our market today. This is excellent context we would all do well to remember when asking such questions.

These above three paragraphs of introduction in yesterday's edition of the Casey Daily Dispatch were written by Louis James...and Jeff's commentary that follows is a must read.

Read more...

Jan.-Feb. data reveals U.S. gold production declining—USGS

U.S. gold mining output was already slowing when on April 10, Kennecott Copper’s Bingham Canyon Mine experienced a massive slope failure temporarily idling the country’s 4th largest gold producer.

Gold production by U.S. mines was down 8% in February from 18,300 kilograms (588,358 troy ounces) in February 2012 to 16,900 kilograms (543,347 ozs) this year, the U.S. Geological Survey reported in its Mineral Industry Survey.

This comes on the heels of a 10% drop in January of this year from 19,800 kilograms (636,584 ozs) in January 2012 to 17,900 kilograms (575,498 ozs).

The rest of this very short story was posted on the mineweb.com Internet site yesterday...and it's worth the read.

Read more...

GoldMoney's Alasdair Macleod interviewed on 'The Keiser Report'

GoldMoney's research director, economist Alasdair Macleod, was interviewed for 15 minutes last week by Max Keiser on "The Keiser Report" program on the Russia Today network.  He remarked that the world's gold is moving from West to East, that liquidations in the major gold exchange-traded fund, GLD, could signify a shift by investors away from paper gold and into real metal, and that the recent attack on the gold price could have been undertaken by a central bank or a hedge fund. The program has been posted on the youtube.com Internet site...and Alasdair's segment begins at the 11:50 minute mark.

I found this video in a GATA release from yesterday.

Read more...

Gold to play major role in Italy economic recovery

Majority of Italian's, holder of world's fourth largest gold reserves holder, are against selling some gold from country’s huge reserves to sped up economic recovery.

According to a WGC survey, Only 4% of citizens and business leaders would support the sale of Italy's gold reserves, while 52% of citizens and 61% of business leaders would endorse using, but not selling, national gold reserves.

The study revealed that Italian business leaders (92%) and citizens (85%) overwhelmingly agree that the nation's gold reserves have an important and positive role to play in the country's economic recovery.

This short gold-related news item was filed from London...and posted on the bullionstreet.com Internet site yesterday afternoon India Standard Time...and I thank Ulrike Marx for her final offering in today's column.

Read more...

 

¤ The Funnies

Sponsor Advertisement

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

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

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

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

Please visit our website for more information about the project.



 

 

¤ The Wrap

I now hold the opinion that the commissioners and other high officials of the CFTC are traitors. That’s a real ugly word, but Merriam-Webster defines traitor as one who betrays another’s trust or is false to an obligation or duty. It may be ugly, but the CFTC has betrayed the public trust and has been false to a sworn obligation and duty to uphold commodity law. How else to describe a phony 4.5 year investigation and never a comment on the series of unprecedented price declines in silver while the supposed investigation was in place? I don’t know how these people live with themselves by betraying the public on a daily basis. - Silver analyst Ted Butler...04 May 2013

As I mentioned further up, I wouldn't read much into yesterday's price action considering the amount of volume there was.  However, it should be noted that the mid-morning rallies in both gold and silver in the thinly-traded Far East markets were squashed in the usual manner...and volumes at the time, were heavy.

Nothing has changed in the precious metals market since the big sell-off of three weeks ago.  The Commitment of Traders Report is still sitting in a wildly bullish configuration...and all that awaits is a trigger of some sort.  That, coupled with the reaction of JPMorgan et al when the rallies begin, will determine how high the rally goes...and how fast we get there.  Supply and demand means squat in a managed market.  So we wait.

Today, at the close of Comex trading, is the cut-off for this Friday's Commitment of Traders Report...and after last week's surprise, I'm not about to hazard a guess as to what the new report will show when it's posted on the CFTC's website at 3:30 p.m. EDT on Friday.

Both gold and silver came under some selling pressure during the Far East trading session on their Tuesday...and volumes at the London open [3:00 a.m. EDT] are already pretty chunky in both metals.  Virtually all of it is of the HFT variety.  The dollar index isn't doing much.

And as I hit the 'send' button at 5:10 a.m. Eastern time, London has been trading for a bit more than two hours.  Gold is down about ten bucks...and silver is lower by 35 cents, but was down 55 cents just before the Lodnon open.  Volumes are way up there...35,000 net in gold...and around 11,000 contracts in silver.  The dollar index is not doing a thing. 

Before heading off to bed, I'd like to mention that Casey Research is sponsoring another on-line video event.  This one is entitled The Myth of American Energy Independence Webinar.

Marin Katusa, CR's chief energy investment strategist, interviews the world’s top energy experts including former U.S. Energy Secretary - Spencer Abraham, Canada’s former Minister of Natural Resources – Herb Dhaliwal, and the Chairmen Emeritus of the U.K. Atomic Energy Authority – Lady Barbara Thomas Judge, and co-founder and CEO of Uranium Energy Corp – Amir Adnani about how important nuclear power will be for our global energy future.

Marin and Chairman of Sprott US Holdings, Rick Rule believe that due to increasing costs to bring uranium to market, increased demand, and the end of the Megatons to Megawatts agreement with Russia at the end of the year, uranium prices have nowhere to go but up.  And early investors can position themselves now for very large gains in the near future.

This free video will air on Tuesday, May 21 at 2:00 p.m. Eastern Daylight Time.  It will be available for viewing after the initial stream for those who have schedule conflicts.

Following the webinar, all attendees will get a free copy of the new Global Resource Intelligence report on Uranium.  It’s a $29 value, roughly 39 pages, and will be e-mailed on May 21st.

If energy is your bailiwick, you can learn more about it here...and register at the same time.

See you here tomorrow.