Gold & Silver Daily
"Today is the final day for the big traders to be out of the May futures contract in silver."
 

¤ Yesterday In Gold & Silver

The gold price didn't do much of anything in Far East trading---and was back to Friday's close in New York by the London open on Monday morning.  It popped for a couple of bucks at that point before trading virtually rule flat into the noon London silver fix.  Then it rose another couple of bucks before inching higher into the London p.m. gold fix.  The price blasted higher, but it was obvious that JPMorgan et al were at battle stations, as volume exploded---and the price wasn't allowed to get far.  The rally finally petered out around 12:45 p.m. EDT.  From there it inched lower for the remainder of the New York trading session, both COMEX and electronic.

The low and high ticks were recorded as $1,177.60 and $1,206.70 in the June contract.

Gold finished the Monday session in New York at $1,201.70 spot, up $21.30 from Friday's close.  Net volume was monstrous at 185,000 contracts, as "da boyz" threw everything but the kitchen sink at the rally once the price broke above its 50-day moving average.

Here's the 5-minute tick gold chart courtesy of Brad Robertson.  All the volume that mattered on Monday came between the London pm. gold fix and the COMEX close, which was 10 a.m. until 1:30 p.m. EDT---08:00 till 11:30 on this chart, which is scaled for Denver time.  Add two hours for EDT---and don't forget the 'click to enlarge' feature.

Silver traded quietly either side of $15.80 spot all through Far East and London trading, but starting shortly after 9 a.m. EDT things changed.  The first bump up in price took it up to $16 spot---and then it had two more quick rallies, one at the gold fix---and the other at 10:45 EDT just before London closed.  The high tick of the day came a minute before the London close---and the price didn't do much after that.

The low and high ticks were recorded by the CME Group as $15.68 and $16.445 in the May contract.

Silver finished the Monday session at $16.40 spot, up 64.5 cents cents from Friday's close.  Net volume was well in excess of 100,000 contracts, but it all netted out to only 28,000 contracts, so it didn't appear that there was much interference in the silver rallies---and had all the hallmarks of short covering.

Platinum chopped around unchanged until it hit its spike low shortly before 11 a.m. in Zurich.  Then it rallied a bit into the London p.m. gold fix---and away it went to the upside as well.  The high came at 1 p.m. EDT in New York---and from there it got sold off a bit into the close.  Platinum finished the day at $1,146 spot, up 23 dollars from Friday.

Palladium rallied as well, but on a slightly different time schedule from the other three precious metals.  The low came about the same time as platinum, but the high came shortly after it's rally at the London p.m. gold fix.  From there, like platinum, it got sold down into the the close of electronic trading.  Palladium only finished up 8 bucks on the day.

The dollar index closed late on Friday afternoon in New York at 96.90---and rallied unsteadily in Far East and morning trading in London, hitting its 97.27 high tick shortly before the COMEX open in New York.  From there it got sold down to its 96.48 low tick about 12:45 p.m. EDT.  The index rallied back to 96.80 by 2 p.m.---and then chopped sideways in a tight range into the close.  The index finished the day at 96.86---down only 4 basis points from Friday.

Once again the price activity in the currencies---and in the precious metal market---weren't even close to being related.

The gold stocks gapped up a bit at the open---and barely reacted to the big jump in price at the London p.m. fix.  However they did continue to rally steadily from there, hitting their zenith minutes before 1 p.m. EDT, which was gold's high tick on the day.  From there they slid lower for the remainder of the Monday trading session, giving back over half their gains, as the HUI only closed up 1.90 percent.  I was underwhelmed.

The silver equities turned in a better performance---and their highs came about the same time as gold's, but they didn't sell off as much after that, as Nick Laird's Intraday Silver Sentiment Index closed up 4.18 percent.

The CME Daily Delivery Report showed that 403 gold and 72 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  In gold, the largest short/issuer was JPMorgan out of its client account with 372 contracts.  HSBC USA was in very distant second with 31 contracts.  Not surprisingly, the tallest hog at the trough as a long/stopper was JPMorgan out of its in-house [proprietary] trading account with 211 contracts---and Canada's Scotiabank was on the receiving end of 186 contracts.

In silver, all 72 contracts were issued by JPMorgan out of its client account---and Canada's Scotiabank stopped 70 of them.  The CME Group stopped one contract, so it could deliver five contracts into it's 1,000 troy ounce mini-silver contract.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that the remaining gold open interest for April fell by 26 contracts, down to 415 contracts.  With 403 contracts already posted for delivery tomorrow, it will be interesting to see if the 12 contracts remaining will get delivered on Thursday, or will they simply disappear.  In silver, the April open interest jumped by 50 contracts to 72 contracts and, obviously, they are all out for delivery tomorrow.

I can hardly wait to see who the big short/issuers and long/stoppers are in the May delivery month---and we'll find some of that out on Thursday evening, as it's First Notice Day.

There was a big gold withdrawal from GLD by an authorized participant on Monday.  This time it was 105,527 troy ounces.  And as of 8:50 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I checked the iShares.com Internet site about 3:45 a.m. EDT, I saw that an authorized participant had added 1,434,162 troy ounces.  Based on the price action, it's a reasonable assumption that this was used to cover an existing short position, just like the 1 million ounce add to SLV on Friday.

There was a small amount of gold sold at the U.S. Mint on Monday---4,000 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes.

The in/out activity in gold at the COMEX-approved depositories on Friday are barely worth mentioning, as 700 troy ounces were shipped in---and 132 troy ounces were shipped out.  Nothing to see here.

There was decent in/out activity in silver, as 259,426 troy ounces were shipped in---and 259,426 ounces were shipped out the door.  None of it involved JPMorgan.  The link to that activity is here.

For a change, there wasn't any in/out activity at all in the gold kilobar warehouses in Hong Kong on Friday.

Despite my best efforts, I have a large number of stories today---and I'll happily leave the final edit up to you.

 

¤ Critical Reads

Correction ahead? Investors exit stocks despite new records

While the NASDAQ posted its first record close in 15 years, strategists at Bank of America Merrill Lynch are sounding worried.

They point to a “big decoupling in recent weeks between U.S. equity flows and prices,” meaning that investors continue to cut their exposure to stocks even as equity prices hit new highs.

“Correction risks will grow in [the] absence of fresh inflows in coming weeks,” write the strategists, led by Michael Hartnett, in a note dated Thursday.

The note includes the above chart, which shows cumulative U.S. equity flows decreasing, while the S&P 500 climbs to new peaks. Investors have pulled $79 billion from U.S. stock funds in the year to date, with outflows in nine out of the past 10 weeks, the note adds.

A picture speaks a thousand words, in this case a graph---and even if you don't read the story, the chart is definitely worth the trip---and I thank Casey Research's own John Grandits for passing it around yesterday.

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Strong U.S. dollar erodes $20bn revenue from biggest corporations – FT

A surging U.S. currency has hit the country’s largest companies like PepsiCo and Google, shaving off more than $20 billion from their 2015 first quarter sales.

General Motors, IBM, Procter & Gamble, Amazon and Johnson & Johnson have experienced $1billion plus haircuts on sales as they translated revenues earned abroad into U.S. dollar terms, the Financial Times reported on Sunday. The world’s most valuable company Apple is to report earnings on Monday and warned in January that the currency move could slice more than $2 billion from its quarterly revenues. This is after the company posted the biggest quarterly earnings in corporate history of $18 billion in the quarter to December last year, surpassing Wall Street’s most optimistic expectations.

“Currency has been a powerful headwind for all multinational companies,” Dan Kelley, portfolio manager at Fidelity was cited as saying by the FT. “It is something companies are having to think differently about — what the implications are going forward and whether it makes sense to alter their cost structures.”

No surprises here---and without doubt the big multinational U.S. companies are none to happy about it.  This news item showed up on the Russia Today website at 1:23 p.m. Moscow time on their Monday afternoon, which was 6:23 a.m. EDT in New York.  I thank our man in Greece, Harry Grant, for sending it along.

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David Stockman: 'There Are No Markets, Just a Raging Casino'

Mania in financial markets has raged so far out of control as to place them outside the realm of rationality, says former White House budget director David Stockman.

"There are no markets left in any meaningful sense of the word, just a raging casino infected with the madness of the crowds and the central bank pied pipers who mesmerize them," he writes on his blog.

That madness is illustrated in the months-long rise of Chinese stocks and the rebound of McDonald's shares last week, Stockman says.

"Why everything has gone virtually straight south because the most fantastic credit bubble in recorded history is beginning to burst."

Or as Chris Powell said in Washington back in 2008---"There are no markets anymore, only interventions."  This story appeared on the newsmax.com Internet site at 7:40 a.m. EDT yesterday---and I thank West Virginia reader Elliot Simon for sharing it with us.

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Wal-Mart's sudden closure has crippled a California city

Wal-Mart's sudden closure of a store in Pico Rivera, California, has devastated the city.

The store was the city's second-biggest employer, and its closure resulted in the laying off of more than 500 workers, The Los Angeles Times reports.

The store also generated about 10% of Pico Rivera's sales tax revenue, or about $1.3 million annually, according to the report.

Now hundreds of laid-off employees are trying to find work while city officials scramble to plug the gap in revenue.

This news item appeared on the businessinsider.com website at 12:06 p.m. EDT on Monday afternoon---and it's the first offering of the day from Roy Stephens.

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Crash Boys: Michael Lewis

The first question that arises from the Commodity Futures Trading Commission’s case against Navinder Singh Sarao is: Why did it take them five years to bring it?

A guy living with his parents next to London's Heathrow Airport enters a lot of big, phony orders to sell U.S. stock market futures; the market promptly collapses on May 6, 2010; it takes five years for the army of U.S. financial regulators to work out that there might be some connection between the two events. It makes no sense.

A bunch of news reports have suggested that the CFTC didn’t have the information available to it to make the case. After the flash crash, the commission focused exclusively on trades that had occurred that day, rather than orders designed not to trade -- at least until some mysterious whistle-blower came forward to explain how the futures market actually worked. But this can’t be true.

Immediately after the flash crash, Eric Hunsader, founder of the Chicago-based market data company Nanex, which has access to all stock and futures market orders, detected lots of socially dubious trading activity that May day: high-frequency trading firms sending 5,000 quotes per second in a single stock without ever intending to trade that stock, for instance. On June 18, 2010, Nanex published a report of its findings.

The following Wednesday, June 23, the website Zero Hedge posted the Nanex report. Two days later the CFTC’s chief economist, Andrei Kirilenko, e-mailed Hunsader. “He invited me out to D.C. and I talked with everyone there (and I mean everyone -- including a commissioner),” Hunsader says. “The CFTC then flew out a programmer to our offices where we showed him how to work with our data. Took all of a day. We sent him back with our flash crash data, and that was pretty much the last we heard about that project.”

This must read commentary by "Flash Boys" author Michael Lewis showed up on the bloombergview.com Internet site on Friday sometime---but has obviously been revised since.  I found it embedded in Ted Butler's weekly review to his paying subscribers on Saturday.

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Redefining “Country” -- International Man

"Will the Emerging Europe become an active participant in the construction of a new international order, or will it consume itself on its own internal issues?”

The quote above is from the book, World Order, by Henry Kissinger.

Of course, Mister Kissinger has been known for decades for his desire to create a New World Order, based loosely on the Westphalian system. On the surface, the quote seems reasonable enough, as he muses over the two choices that are given to mankind in going forward.

As a career diplomat, he offers us a choice between “A” and “B”—order and chaos. But then, every diplomat understands that it’s easier to convince others if “A” and “B” are the only possibilities offered. What he carefully does not suggest is that there are further possibilities.

The world is not at all limited to either an elite control over the entire world or chaos. In fact, in my view, the more choices of different types of countries, the better.

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

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NSA veteran chief fears crippling cyber-attack on Western energy infrastructure

The West is losing the worldwide fight against jihadist terrorism and faces mounting risks of a systemic cyber-assault by extremely capable enemies, the former chief of the National Security Agency has warned.

"The greatest risk is a catastrophic attack on the energy infrastructure. We are not prepared for that," said General Keith Alexander, who has led the U.S. battle against cyber-threats for much of the last decade.

Gen Alexander said the "doomsday" scenario for the West is a hi-tech blitz on refineries, power stations, and the electric grid, perhaps accompanied by a paralysing blow to the payments nexus of the major banks.

"We need something like an integrated air-defence system for the whole energy sector," he said, speaking at a private dinner held by IHS CERAWeek in Texas.

But if one occurs, dear reader, how will we know if it's the real deal, of just another false flag operation?  A question with no answer.  This Ambrose Evans-Pritchard offering put in an appearance on The Telegraph's website at 8:29 p.m. BST on Sunday evening---and it's the second contribution of the day from Roy Stephens.

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ECB Said to Start Buying Covered Bonds With Negative Yields

The European Central Bank started buying covered bonds with negative yields as its asset-purchase program reduces the supply of the highly rated debt, according to two people familiar with the matter.

The central bank bought the debt in the past two weeks, said the people, who asked not to be identified because the information is private. The notes were from Germany, one of the people said.

The ECB has bought €69.7 billion (US$75.5 billion) of covered bonds since October as part of its latest measures designed to stimulus growth in the euro area. The accumulation of assets is driving down yields and the central bank now holds about 15 percent of the market, according to ABN Amro Bank NV.

“The ECB has caused this situation by being a big buyer and has exacerbated the already negative net supply of covered bonds,” said Joost Beaumont, a fixed-income strategist at ABN Amro in Amsterdam. “If the ECB buys more, yields will go still lower and that’s going to affect the ECB itself.”

You couldn't make this stuff up!  This Bloomberg news story appeared on their website at 5:36 a.m. MDT on Friday morning---and it's an article I found in yesterday's edition of the King Report.

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Mistral: Paris Surrenders Again---This Time to the Americans

Unreal.  But true.  It appears that France will really not deliver the Mistrals to Russia and will pay €1.1 billion in refunds and fines. I was pretty sure that this was all bluff and that the French would hand them over within "weeks" of declaring that they would not. Not even I could imagine the Hollande government so terminally stupid. But then, they are hardly alone.

In this case, the entire Empire is doing something fantastically stupid.

Let’s set aside the economics which are pretty clear for everybody. Let’s look at this decision from a military point of view.

Let’s begin by remember that the decision to get the Mistrals was a political one, opposed by many, possibly most, Russian Navy commanders. Mind you – there is nothing wrong with the Mistrals, they are superb and very capable ships  The point is that they are not well adapted to Russian conditions except for in the Black Sea. The plan was to send one of them to the Pacific Fleet to provide a “Green Water” power projection capability and serve as a command ship. There were rumors that the 2nd one would be going to the Black Sea Fleet. In the first case, this would have required a lot of very expensive modifications. In the 2nd case, this would have been easier, but remember that these ships were ordered when Crimea was still in Ukrainian hands. Now with Crimea back under Russian sovereignty, Russia basically “owns” the Black Sea so the addition of a Mistral would have been an “okay” to have, but nothing more. I would also note here that Russian ports (docks) are not adapted to this kind of ship and adapting them would also have required major investments.

This very interesting story appeared on thesaker.is Internet site on Sunday---and was picked up by the russia-insider.com Internet website site early on Monday.  I thank both South African reader B.V.---and reader M.A.---for contributing to this article.

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West Not Planning to Force Russia to Return Crimea – European Politician

Western countries are not planning to force Moscow to return Crimea because that would only be possible with the use of military force, and no one is interested in a military confrontation, European politician Günter Verheugen told Deutsche Welle.

Europe may lift sanctions against Russia once a peaceful settlement of the conflict in Ukraine is achieved, former European Commissioner Günter Verheugen said, adding that Western politicians are unlikely to link the withdrawal of sanctions and the Crimea issue.

In response to the question of whether the E.U. will abolish sanctions if Crimea continues to remain a part of Russia, Verheugen said he did not have the impression that European governments connect the normalization of relations with Russia with Crimea.

This commentary showed up on the sputniknews.com Internet site at 6:31 p.m. Moscow time on their Saturday evening---and I thank reader M.A. for sending it along.

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If Greece falls, no one wants their prints on the murder weapon

"We're going bust." "No, you're not." "You're strangling us." "No we're not." "You owe us for World War Two." "We gave already."

The game of chicken between Greece and its international creditors is turning into a vicious blame game as Athens lurches closer to bankruptcy with no cash-for-reform agreement in sight.

Europe's political leaders and central bankers and Greek politicians agree on only one thing: if Greece goes down, they don't want their fingerprints on the murder weapon.

If Athens runs out of cash and defaults in the coming weeks, as seems increasingly possible, no one wants to be accused of having pushed it over the edge or failed to try to save it.

This Reuters article, filed from Brussels, appeared on their Internet site on Sunday morning EDT---and I thank Orlando, Florida reader Dennis Mong for sending it our way.

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Debt Crisis: Greek President Promises Repayment of all Debt

Time is running out for Greece and its international creditors. If an agreement isn't found by June, the country will face insolvency. The new Greek president, Prokopis Pavlopoulos, has now told SPIEGEL ONLINE his views on the conflict: He rules out the possibility of a Grexit and promises that all the loans made to Greece will be paid back, but he is also critical of past austerity programs.

"Some of the measures imposed on us go beyond E.U. law," Pavlopoulos said to SPIEGEL ONLINE at his official residence in Athens. "We want to be equal members of Europe."

Among other things, the law professor feels that international lenders' criticisms of the minimum wage and other labor rights in his country are problematic. Pavlopoulos pointed out that in Germany, too, there is a minimum standard of living. "We are not asking for anything more than for the Greek people to enjoy what Germany's Constitutional Court considers as an established social right for the German people," Pavlopoulos said. He also claimed that parts of the austerity programs "were not at all growth friendly, but rather would lead the Greek economy to a recessionary course."

This article was posted on the German website spiegel.de late Monday morning Europe time---and I thank Roy Stephens for finding it for us.

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Greek-Russia ties bloom as default looms

Greek Prime Minister Alexis Tsipras and Gazprom CEO Alexei Miller agreed last week on a “road map” for a multi-billion dollar pipeline project to transport gas from Russia to Greece.  The long-term plan is a further sign of warming geopolitical ties between Athens and Moscow, at a moment when the Greek economic crisis appears to be worsening.

In effect, Greece is now engaged in a very high stakes game of poker. It has issued a legislative decree to tap pockets of cash reserves across the public sector and has reportedly made plans to potentially nationalize the banking sector and introduce a parallel currency to pay bills in the event its cash reserves are exhausted.

Tsipras insists he wants Greece to keep the euro, but doesn’t appear to have a clear strategy for negotiating with international creditors. What he has warned repeatedly of are “major clashes” that are needed with these creditors to ease the country’s debt burden which is over a staggering 175 percent of its GDP.

Earlier this month, he also agreed to meet Russian President Vladimir Putin.  The session, billed as routine, had originally been planned for May but was brought forward, serving as a prelude to the meeting between Tsipras and Gazprom over the pipeline road map.

This Reuters article appeared on their website yesterday sometime---and it's another contribution from Roy Stephens.

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E.U. is Critical of Ukraine’s Unwillingness to Implement Minsk Agreement

Critical voices are increasingly heard among the EU countries regarding the unwillingness of the Ukrainian government to implement provisions of the Minsk Agreement, “Deutsche Wirtschafts Nachrichten” reported.

It particularly concerns Ukraine’s attempts to delay its implementation and reluctance to realize the decentralization agreed in Minsk.

German Foreign Ministry Walter Steinmeier called on the E.U. to involve Russia in the negotiation of the EU-Ukraine free trade agreement in order to show "the necessary flexibility" and to improve the political climate.

However, this move is rejected by Kiev as the Ukrainian government claims that Russia has no right to participate in the discussion of an agreement between the sovereign Ukraine and the EU, the German media source reported.

This tiny story put in an appearance on the sputniknews.com website at 4:41 p.m. Moscow time on their Monday afternoon, which was 9:41 a.m. EDT in Washington.  It's courtesy of Roy Stephens as well.

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Countries on Russia's southern flank ready for war

Increased hostilities between Armenia and Azerbaijan, two former Soviet republics in western Asia, are imminent, analysts say.

An increase in violence since the start of the year centers on Nagorno-Karabakh, a de facto independent republic with an Armenian majority but recognized internationally as part of Azerbaijan. An upcoming election there could trigger an increase in violence, a Royal Bank of Scotland report indicated. There have been 31 confirmed deaths along trench-style warfare lines in the area, the Azerbaijani Caspian defense Studies Institute reported.

The election May 3 "could further escalate the tensions, increasing the risks of a wider confrontation over the disputed territory," Anna Tokar, a Royal Bank of Scotland analyst wrote on April 16, "putting the oil and gas pipelines in the South Caucasus in danger."

The disputed region, near Turkey and Georgia, is torn by religious and national alliances, and an outbreak of conflict could disturb the route of pipelines that provide the only westward passage of crude oil delivery lines which bypass Russia.

This UPI news item, filed from Baku, Azerbaijan, appeared on their Internet site at 10:16 am. EDT yesterday morning---and it's certainly worth reading.  I thank Roy Stephens for sending it along.

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Insanity Grips The Western World — Paul Craig Roberts

Just as Karl Marx claimed that History had chosen the proletariat, neoconservatives claim that History has chosen America. Just as the Nazis proclaimed “Deutschland uber alles,” neoconservatives proclaim “America uber alles.” In September 2013 President Obama actually stood before the United Nations and declared, “I believe America is exceptional.”

Germany’s political leaders and those in Great Britain, France, and throughout Europe, Canada, Australia, and Japan also believe that America is exceptional, which means better than they are. That’s why these countries are Washington’s vassals. They accept their inferiority to the Exceptional Country — the USA — and follow its leadership.

It is unlikely that the Chinese think that a handful of White People are exceptional in anything except their diminutive numbers. The populations of Asia, Africa, and South America dwarf those that comprise Washington’s Empire.

Neither do the Russians believe that the U.S. is exceptional. Putin’s response to Obama’s claim of American superiority was: “God created us equal.” Putin added: “It is extremely dangerous to encourage people to see themselves as exceptional, whatever the motivation.”

This is your only absolute must read of the day.  It showed up on Paul's website yesterday sometime---and I thank South African reader B.V. for bringing it to my attention, and now to yours.

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Wiped off the map: Startling images from Nepal earthquake epicenter reveal entire hillside villages have been decimated

Dramatic aerial photographs taken just miles from the epicenter of Saturday's Nepal earthquake in Gorkha reveal entire villages reduced to rubble and flattened by mudslides.

Already the number of dead reported in the western region has reached 47, but officials estimate the death toll will rise considerably, possibly hitting 10,000 as the nation picks up the pieces from the powerful quake.

Indeed, across the rubble-strewn country, survivors and rescue teams are battling to find the missing amid now-ruined and collapsed historic buildings, while the international community sends aid as fast as it can to the mountainous country.

This rather large [and updated] photo essay appeared on the dailymail.co.uk Internet site at 12:48 p.m. BST on Sunday afternoon in London---and I thank reader M.A. for passing it around yesterday.

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Shanghai equities roar as China floats QE-lite

China is drafting plans for bond purchases to boost liquidity and shore up the country's $2.6 trillion edifice of local government debt, becoming last of the world's big economic powers to resort to quantitative easing.

The news propelled the Chinese stock market to a seven-year high on Monday, helped by fevered talk of a merger between Sinopec and PetroChina, the country's two oil giants..

Corporate profits fell 2.6pc in the first quarter and swathes of industry are mired in recession. "The operational situation of industrial enterprises remains grave," said the National Bureau of Statistics.

The People's Bank of China (PBOC) is looking at menu of unconventional measures to expand its balance sheet, according to officials cited by Market News. These include the option of buying $160bn of local government bonds from the banks.

This Ambrose Evans-Pritchard commentary, filed from Washington, appeared on The Telegraph's website at 8:32 p.m. in London yesterday evening, which was 3:32 p.m. EDT.  I thank reader U.D. for passing it around very late last night. It's worth reading.

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Fitch downgrades Japan, joins Moody's in warning on fiscal policy

Fitch Ratings downgraded Japan's credit rating by one notch after the government failed to take steps in this fiscal year's budget to offset a delay in a sales tax increase, the agency said on Monday.

Fitch cut its rating on Japan by one notch to A, which is five notches below the top AAA rating. The outlook is stable.

"One reason why Japan is at single A, which is a low rating, is the fragility around the baseline case for the public debt," said Andrew Colquhoun, head of Asia-Pacific sovereigns at Fitch.

"The tolerance to fluctuations in growth and interest rates is low."

This Reuters article, filed from Tokyo, was posted on their website at 7:36 a.m. EDT yesterday morning---and once again I thank Roy Stephens for sending it.

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Effort by Japan to Stifle News Media Is Working

It was an unexpected act of protest that shook Japan’s carefully managed media world: Shigeaki Koga, a regular television commentator and fierce critic of the political establishment, abruptly departed from the scripted conversation during a live TV news program to announce that this would be his last day on the show because, as he put it, network executives had succumbed to political pressure for his removal.

“I have suffered intense bashing by the prime minister’s office,” Mr. Koga told his visibly flabbergasted host late last month, saying he had been removed as commentator because of critical statements he had made about Prime Minister Shinzo Abe. Later in the program, Mr. Koga held up a sign that read “I am not Abe,” a play on the slogan of solidarity for journalists slain in January at a French satirical newspaper.

The outburst created a public firestorm, and not only because of the spectacle of Mr. Koga, a dour-faced former top government official, seemingly throwing away his career as a television commentator in front of millions of viewers. His angry show of defiance also focused national attention on the right-leaning government’s increased strong-arming of the news media to reduce critical coverage.

This very interesting news item, filed from Tokyo, appeared on The New York Times website on Sunday---and is definitely worth reading.  It's another contribution from Roy Stephens.

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Australia: Housing affordability crisis

And I thought Vancouver and Toronto house prices were ridiculous.  This 7:22 minute video clip appeared on the Australia Broadcasting Corporation's website last Thursday---and my thanks go out to Grahame Goodman for sharing it with us.

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BHP blinks as iron ore prices fall, delays output boost

BHP Billiton is slowing down its expansion plans in iron ore, the first big miner to pull back as a global supply glut sends ore prices tumbling.

The world no. 3 producer said it would delay an Australian port project that would have boosted output by 20 million tonnes and buoyed annual output to 290 million tonnes by mid-2017.

While BHP’s pullback is small compared with overall seaborne iron ore trade of around 1.3 billion tonnes, it is viewed as significant given BHP’s position as an efficient producer.

“It is probably more a symbolic posturing position by BHP, but it also likely signals the bottom of the iron ore market, given this action is being taken by one of the lowest cost producers,” said Mark Pervan, head of commodities for ANZ Bank.

This Reuters article, filed from Sydney, showed up on the Globe and Mail website last Wednesday---and I thank reader U.D. for passing it around yesterday.

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El Salvador sells 80 percent of its gold reserves for U.S. dollars

El Salvador's central bank sold about 80 percent of its gold reserves last month to diversify risk and take advantage of the metal's appreciation, a central bank official said on Friday.

The country, which has been dollarized since 2001, sold 5.412 tons of gold for $206 million, which will go into the Bank's reserve portfolios to protect it against market volatility.

The poor Central American nation was the only country to sell gold in March, while Turkey, Belarus, Kazakhstan and Russia increased their holdings, according to data released by the International Monetary Fund on Friday.

El Salvador's central bank expects the economy to grow 2.8 percent this year, above the 2.2 percent reached in 2014, thanks to a U.S. recovery and lower oil prices.

The above four paragraphs are all there is to this brief Reuters article that showed up on their website last Friday---and I found it embedded in a GATA release on Saturday.

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Ronan Manly: El Salvador's gold reserves, the BIS, and the bullion banks

Gold market researcher and GATA consultant Ronan Manly has studied El Salvador's recent liquidation of most of its gold reserves and concludes that it is likely a small example of what the governments of bigger countries are doing surreptitiously in the gold market.

Manly writes: "The case of the El Salvador gold sales demonstrates that central banks can and do use the gold depositing facilities of the Bank for International Settlements and the gold-lending services of London Bullion Market Association commercial bullion banks such as Barclays, the Bank of Scotia, and Standard Chartered among many others. The case of El Salvador also shows that central banks actively use derivatives such as put options within the management of the gold component of their reserve portfolios.

"It would be naive to think that the bullion banks and the BIS are just providing these services to small emerging-market central banks in Central America. It would be more realistic to suggest that the bullion banks and the BIS are providing these gold reserve portfolio services (with scale) to many central banks."

This commentary by Ronan was posted on the bullionstar.com Internet site yesterday---and I found it over at the gata.org website.  It's long, but worth reading if you have the interest.

Read more...

London gold trade probably won't move to an exchange, LBMA says

The London Bullion Market Association on Monday said it has commissioned Ernst & Young LLP to conduct a study and prepare recommendations on how to develop the market, including looking at moving over-the-counter trading to an exchange. While such a change is unlikely, there may be more regular transaction reporting and a return of publishing gold forward offered rates and the forward curve, said Ruth Crowell, the LBMA’s chief executive.

The World Gold Council began gathering views from banks and traders, including potentially moving OTC trading to an exchange, three people with knowledge of the matter said in February. Contracts change hands through a bourse in New York, Singapore and Shanghai, while London, where gold dealing goes back more than three centuries, relies on banks and other companies to manage counterparty risks.

“It is unlikely that the Ernst & Young review will recommend moving the existing business from OTC to an exchange, given a move would increase costs for OTC clients and diminish liquidity,” Crowell said by phone on Monday. “We have also had a lot of changes happening in the market. Recently, the market has needed a lot more from the LBMA.”

This Bloomberg story appeared on their Internet site at 3:30 a.m. Denver time on Monday morning---and it's another gold-related story I found in a GATA release.

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Is Greece About To "Lose" Its Gold Again?

When it comes to the topic of Greece, most pundits focus on two items: i) when will Greece finally run out of confiscated cash, and ii) will Greece fold to the Troika (and agree to another bailout(s) with even more austerity) or to Russia (and agree to the passage of the Russian Turkish Stream pipeline, potentially exiting NATO and becoming the most important European satellite of the USSR 2.0) once that moment arrives.

And yet what everyone appears to be forgetting is a nuanced clause buried deep in the term sheet of the second Greek bailout: a bailout whose terms will be ultimately reneged upon if and when Greece defaults on its debt to the Troika (either in or out of the Eurozone). Recall that as per our report from February 2012, in addition to losing its sovereignty years ago, Greece also lost something far more important. It's gold:

To wit:  Ms. Katseli, an economist who was labor minister in the government of George Papandreou until she left in a cabinet reshuffle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal.

This commentary about Greece and it's gold appeared on the Zero Hedge website at 9:45 p.m. EDT on Saturday evening---and I thank reader 'David in California' for passing it around.

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Russia resumes gold stockpiling as rouble crisis eases

Russia has resumed stockpiling gold after suspending purchases in the first two months of the year, as the central bank prepares to cut borrowing rates.

The move comes as the country’s central bank prepares to reduce its main interest rate by 200 basis points to 12pc when it convenes on Thursday. The bank had been forced to raise rates to 17pc last December at the height of the rouble crisis following the collapse in oil prices and the imposition of tough economic sanctions by the US and Europe.

According to the International Monetary Fund, the Kremlin in March bought gold in the largest quantities seen since last September, when president Vladimir Putin’s dispute with the West over Ukraine was beginning to heat up, leading to the near collapse of the rouble against the US dollar.

The currency has appreciated by around 27pc against the dollar since January, which may have prompted the decision to resume gold purchases.

This brief news item, which is more than a day late and a dollar short, showed up on the telegraph.co.uk Internet site at 6:12 p.m. BST yesterday evening---and contains nothing that you probably don't already know.  So unless you're desperate for something to read, I'd give it a miss, although the photo is pretty neat---if you like gold, that is.

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What happens to gold when the yuan floats free of the dollar? -- Lawrence Williams

There has been much speculation in recent weeks regarding the likelihood of China announcing a much bigger gold reserve as a prerequisite for possible inclusion of the RMB (renminbi – or yuan the words are effectively interchangeable in terms of the Chinese currency) into a reset Special Drawing Right as a preliminary move towards recognition of the yuan as a global reserve currency.  China has gone on record as suggesting that this should happen.  Discussions within the IMF on a possible revision to the SDR will commence next month.  But it is also apparent that there is little point in the yuan being brought into the SDR while it remains pegged to the US dollar.  The idea of the composition of the SDR basket of currencies is that it should represent broad currency stability and having two significant components pegged directly to each other would rather defeat the point behind it.

So, if we assume that a prerequisite for the inclusion of the yuan in a revised SDR basket will be an unpegging of the yuan from the dollar this opens up all kinds of interesting prospects and theories and I am indebted to Dr Fraser Murrell in Australia for pointing me to a fascinating, and apparently little read so far, article on the subject by J.C. Collins entitled:  When Will China End The Dollar Peg which sets out all these factors in detail.  I would commend anyone following this subject to click on the link and read it.

Dr Murrell goes further himself with a suggestion that the recent strength in the US dollar may not be quite what it seems, but given the peg to the yuan it actually represents strength in the yuan dragging the Dollar up with it ahead of the unpegging of the currencies and a resultant sharp rise in the global valuation of the yuan.  Who knows?

But the ramifications of the above are that an announcement that China now holds gold reserves considerably in excess of the 1,054 tonnes it has reported since 2009, the possible inclusion of the yuan in a revised SDR, and the unpegging of the yuan from the Dollar are all inextricably linked  and the countdown to this is already under way.

This commentary by Lawrie appeared on the mineweb.com Internet site at 12:57 p.m. in London yesterday afternoon---and it's definitely worth reading.

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¤ The Funnies

I was out with my camera again on Sunday.  It's spring, but this far north in continental North America, it arrives slowly.  A lot of the waterfowl and a few other species of birds have returned from the south, but the rest are weeks away from showing up.

The first photo is of a jackrabbit---and it's not quite in focus as the auto focus couldn't keep up with him.  They're very common around here---and this one looks a little shaggy, as it's in the final throes of losing its inner and outer winter coat.  This is not your cute little bunny, this is a big animal---and there are only a few dogs it can't outrun.

Here's your typical drake mallard in its breeding plumage.  I was using a 1.4x teleconverter with my 400mm telephoto lens when I took this shot, so the image quality is not quite what it could be.  The photo below it is of a drake mallard as well, as it flew overhead.  It's a view very few get to see for any length of time---but at 1/3,200 of a second, the wing action gets stopped cold---and you can view the wing pattern at your leisure.













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¤ The Wrap

Not one ounce of the 59 million equivalent ounces sold by the speculators in the managed money category this [past reporting] week was remotely connected to legitimate hedging; yet the sale was the indisputable sole price influence. That silver prices only declined by around 30 cents in the reporting week proves that the commercial buyers were more interested in buying the 59 million ounces from the managed money traders than they were in driving prices even lower. What this proves is that silver prices are being set on the COMEX with no regard to the actual world of silver production or consumption.

The managed money long side is down to less than 42,500 contracts and is undoubtedly less than that since the cut-off and near the 40,000 contract non-technical fund core long position I have long postulated. Unless I’m off by a country mile (always possible), significant additional managed money long liquidation is not likely.

The short position of the technical funds, at 32,283 contracts in the current report is already larger than the peak in January and higher, admittedly, than I thought it would be at this point. And it must be higher still since the cutoff. Simply put, the rocket fuel tanks appear to have been topped off in silver. - Silver analyst Ted Butler: 25 April 2015

There was no precious metal news to speak of on Monday---and the fact that prices blew up at the London p.m. gold fix [just like they melted down on Friday at that time] should be proof positive that this was all paper trading on the COMEX/GLOBEX between the brain-dead technical funds in the Managed Money category on one side---and the Commercial traders on the other.

I was surprised that silver's net volume was as low as it was, but I'm sure that  a certain portion of it was used to put out the fire in silver---and that was very noticeable in gold, with a huge blow-out in volume when gold broke above its 50-day moving average.  Silver just broke above its by only a few pennies.

Here are the 6-month charts for all four precious metals courtesy of stockcharts.com.

And as I write this paragraph, the London open is fifteen minutes away.  All four precious metals got sold down a bit during the first couple of hours of Far East trading on their Tuesday morning---and have all traded pretty much ruler flat since then.  Gold is hanging onto the $1,200 spot mark by its proverbial fingernails at the moment.

Gold volume is a bit over 16,500 contracts, with virtually all of it in the current front month, which is June, so it's all of the HFT variety.  Silver volume is very decent, but once you remove the roll-overs, net volume is barely moving the needle at 1,500 contracts.  It's like yesterday's price action never happened.

The dollar index has been chopping sideways as well---and is currently down 8 basis points.

Today is the final day for the big traders to be out of the May futures contract in silver, so I expect Tuesday's volume to be pretty chunky as well, with a tiny net volume.  Of course that may all go out the window if we have another price surprise in COMEX trading this morning, but I don't ever remember big price moments on this particular day of the trading month---but after yesterday, I guess one shouldn't rule it out entirely.  But if I had to bet money, it would be on the former scenario.

Today, at the close of COMEX trading, is also the cut-off for this Friday's Commitment of Traders Report---and it will be interesting to see if all of the reporting week's price/volume action makes it into that report, particularly Monday's action.  We'll see.

And as I send today's column off to Stowe, Vermont at 5:15 a.m. EDT, I see that all four precious metals are still down a hair from Monday's close---and with the exception of palladium, all are trading absolutely flat.  Gold's net volume is way up there at 27,000 contracts, with 99 percent of that in current front month. As expected, there's still heavy roll-over volume in silver, but net volume is still extremely light at barely over 2,100 contracts---and the dollar index is virtually unchanged from two and half hours ago, down 5 basis points.

I haven't the foggiest notion as to how the precious metals will trade for the remainder of the Tuesday session, but I will be surprised if we do see a lot of price action either today or tomorrow, as the May silver contract goes off the board.

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

Ed Steer