Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

As has been the case for three days in a row, the smallish rally in gold in Far East trading met the usual not-for-profit sellers an hour or so before the London open.  The low tick came shortly after 11:00 a.m. EDT in New York.  The gold price rallied quietly from there, before tacking on another quick five bucks in the last hour of trading in the electronic market.

The high and low ticks, such as they were, were recorded as $1,160.90 and $1,150.40 in the April contract.

Gold closed in New York yesterday at $1,158.60 spot, up $5.90 from Thursday.  Net volume was very quiet at only 104,000 contracts.

For the third day in a row, the silver chart pattern was a virtual carbon copy of the gold price chart, although in silver the high of the day came at the close in New York---and not in late afternoon trading in the Far East like it did in gold.

The low and high were recorded by the CME Group as $15.455 and $15.66 in the May contract.

Silver finished the Friday session at $16.64 spot, up 8.5 cents from Thursday.  Net volume was also very quiet at only 18,500 contracts.

The platinum and palladium charts were, once again, mini versions of the gold and silver charts.  Platinum closed up two bucks at $1,115 spot---and palladium was up 4 dollars to $790 spot.  Here are the charts.

The dollar index closed late on Thursday afternoon at 99.27---and rallied unevenly from there, with the 100.39 high tick coming shortly after 2:30 p.m. EDT.  From there it sold off a bit into the close, but still managed to close with a three-digit handle at 100.19 ---up another 92 basis points.

Once again, I have the 1-year USD Index for you courtesy of stockcharts.com.

The gold stocks opened down a hair---and then sank to their lows minutes after 11 a.m. EDT, which was gold's low as well,  The subsequent rally made almost back to unchanged---and undoubtedly would have closed in the green if the last minute rally in the gold stocks had occurred before the markets closed.  The HUI finished down a smallish 0.39 percent.

The silver equities followed an almost identical pattern as the gold equities, except they started the trading session off in positive territory---and ended there as well.  Nick Laird's Intraday Silver Sentiment Index closed up a decent 1.10 percent.

The CME Daily Delivery Report showed that one gold and 113 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.  In silver, the only short/issuer was Jefferies---and the biggest long/stopper was, drum roll please, JPMorgan in its in-house [proprietary] trading account with 77 contracts.  Canada's Scotiabank was a very distant second with 16 contracts received.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest for March declined by 19 contracts---and the new total is down to 111 contracts.  In silver, March o.i. fell by 39 contracts, which was all delivery related---and open interest is now at 805 contracts, minus the 113 contracts mentioned in the previous paragraph.

There was a tiny withdrawal from GLD yesterday, only 8,917 troy ounces worth.  I would guess that this represents a fee payment of some kind.  I must admit that I'm somewhat surprised that GLD hasn't shed more gold than that considering the hammering the price has taken over the last week.  I would bet serious money that all the GLD shares that were falling off the table lately were being picked up by JPMorgan et al.  What else could explain the lack of withdrawals?

As of 7:40 p.m. EDT yesterday evening, there were no reported changes in SLV---and what I said about GLD shares in the previous paragraph also applies to SLV shares as well.

The folks over at Switzerland's Zürcher Kantonalbank updated their website with the activity in both their gold and silver ETFs as of Friday, March 6---and there were declines in both once again.  Their gold ETF dropped by 34,354 troy ounces---and their silver ETF declined by 229,451 troy ounces.

There was another tiny sales report from the U.S. Mint yesterday.  They sold 57,500 silver eagles---and that was all.

Month-to-date the mint has sold 23,000 troy ounces of gold eagles---3,500 one-ounce 24K gold buffaloes---and 1,431,000 silver eagles.  Based on these sales, the silver/gold sales ratio works out to 54 to 1.

There was decent movement in gold at the COMEX-approved depositories on Thursday.  Nothing was reported received, but 68,035 troy ounces were reported shipped out.  The link to that activity is here.

It was monstrous day for silver, as 602,112 troy ounces were reported received---and 1,438,058 troy ounces were shipped out the door.  The link to that action is here.

The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday was about what I was expecting to see.

In silver, the Commercial net short position, decreased by a chunky 6,449 contracts, or 32.2 million troy ounces ---and is now down to 33,263 contracts, or 166.3 million troy ounces.  It's not lowest it's ever been, but certainly getting there.

Ted said that the Big 4 traders reduced their net short position by 2,000 contracts---and the '5 through 8' traders only by 200 or so.  The smaller Commercial traders added another 4,300 contracts to their already huge long position.  Ted also said that JPMorgan's short-side corner is somewhere in the 13-15,000 contract range.

We're both of the opinion that JPMorgan is no longer the biggest short in COMEX silver---and it's been my opinion for years that it's Canada's Scotiabank, with a short position in the 15-20,000 contract range.

Over in the Managed Money category in the Disaggregated COT Report, these technical fund-type traders added 6,575 contracts to their short position.  They've added more since the cut-off.

The other surprise in the Managed Money category, was with what I call the "unblinking" longs.  These are non-technical fund traders.  Price doesn't matter to them---and it showed again in this report, as they added 1,593 longs to their long position that now totals 42,054 contracts, or 210 million troy ounces.  Who are these guys, you ask?  Beats me, I say---but someday we'll find out.

In gold, the Commercial net short position declined by a healthy 34,045 contracts, or 3.40 million troy ounces.  The Commercial net short position now stands at 8.93 million troy ounces.

The Big 4 traders covered 8,000 contracts---and the '5 through 8' traders another 2,000 or so.  But it was the raptors, the smaller traders that were the most active, as Ted says they added 24,000 contracts to their already huge long position.  Ted says its about the same size now as it was back in November at the lows then.

In the Disaggregated COT Report, the technical funds in the Managed Money category sold 8,247 long contracts---and added 16,039 short contracts on top of that.  Ted was expecting more than this, but as I pointed out, the "unblinking" non-technical fund longs in the Managed Money category were probably adding to their long positions in gold as well---and that made the overall numbers in that category not quite as good as he was expecting.

While on the subject of the "unblinking" non-technical fund longs, despite the massive price declines during the reporting week, they increased their long positions in palladium, platinum and silver, as they all showed positive net numbers.  Only gold was negative---and as I said in the previous paragraph, their buying was masked by the huge selling by the technical funds in the same category.

Here's Nick Laird's "Days of World Production to Cover COMEX Short Positions" for all physically traded commodities on the COMEX.  Silver, platinum and palladium are nailed to the far-right side of this chart, which is a position they've occupied for the last 15 years that I've been following it.  And because of the big declines in the short position in gold during the last month, cocoa has now moved into fourth place by default.  Note that the short positions of the Big 4 traders now dominate this chart in all four precious metals, as the short positions of the '5 through 8' largest traders are becoming immaterial

Without a doubt, there's been even more improvement in the COT numbers since the Tuesday cut-off, as "da boyz" slammed the metals to new lows on Wednesday.  I should also mention that I didn't see any signs of jiggery-pokery in this COT Report, but there's also a chance that not everything was reported in a timely manner, either.  If not much changes between now and next Tuesday's cut-off, we should see Wednesday's trading data clearly in next Friday's report.

Nick sent me a couple of charts in the wee hours of this morning that I thought worth sharing as well.  The first one is the withdrawals from the Shanghai Gold Exchange for the week ending March 6.  The magic number was 44.520 tonnes.

Although the gold import numbers by China through Hong Kong have been out for about three weeks already, they just released the number through official channels yesterday---and this enabled Nick to update the appropriate charts.  And despite the dramatic fall-off in early-to-mid 2014, there's still a pretty big chunk of gold being imported to China via Hong Kong.  In January it was 76.118 tonnes.

I have a lot of stories again today, including a goodly number that had to wait for Saturday's column for length and/or content reasons.  I hope you can find the time to read the ones that interest you.

 

¤ Critical Reads

Debt Ceiling Drama is Back: Two Days Until U.S. Borrowing Capacity is Exhausted

And so, a little over a year after the last debt ceiling melodrama, in which the U.S. kicked the can on its maximum borrowing capacity to this Sunday, March 15, in the meantime racking up total U.S. public debt to $18.149 trillion, the soap opera with the self-imposed borrowing ceiling on America's "credit card" is back, and the U.S. is once again faced with sad reality of its debt ceiling (now at well over 100% of America's upward revised GDP of $17.7 trillion). The reason: two days from today Congress’s temporary suspension of the debt ceiling, which was approved in February 2014, ends.

As Bloomberg reports, Treasury Secretary Jacob J. Lew called on lawmakers to raise the country’s borrowing limit and avoid playing politics when the U.S. government’s credit rating is at stake.

I posted an item about this earlier in the week, but thought worth mentioning one more time now that we're only a day away.  It appeared on the Zero Hedge website at 2:18 p.m. EDT on Friday---and I thank West Virginia reader Elliot Simon for today's first story.

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Oil drops 9 percent on week on stronger dollar, glut warning

Global oil prices tumbled on Friday and fell 9 percent on the week, hit by a renewed rally in the dollar and a warning by the International Energy Agency (IEA) that the oil glut is growing.

Data that showed a sharp drop in the number of U.S. rigs drilling for oil failed to inspire market bulls.

Benchmark Brent oil settled near a one-month low below $55 a barrel and U.S. crude settled near a 2-1/2 month low under $45.

The dollar hit a 12-year high in its march toward parity with the euro, jacking up the cost of oil and other dollar-denominated commodities for holders of other currencies. The 19-commodity Thomson Reuters/Core Commodity CRB Index fell to a six-year low.

This Reuters article, filed from New York, appeared on their Internet site at 4:30 p.m. EDT yesterday---and it's the first offering of the day from Dan Lazicki.

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U.S. Producer Prices Tumble Most Since 2009 (And Don't Blame Oil)

U.S. Producer Price Index (ex food and energy) fell 0.5% MoM in February (against expectations of a 0.1% rise) - the biggest drop on record (since 2009).  The great news for Americans is that the drop in overall producer prices was led by a 1.6% fall in food prices. Year-over-Year PPI Final Demand has fallen (-0.6%) for the first time on record.

So much for QE helping The Fed meet its mandate... perhaps, as we have noted previously, the Fed is creating deflationary pressures by enabling mal-investment driven over-supply on a vast scale.

This Zero Hedge story, along with some great charts, was posted on their website at 8:36 a.m. EDT yesterday---and that makes it two in a row from Dan Lazicki.

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Dead-Cat-Bounce Dies (Again) - Stocks Plunge as EUR/USD Breaks Below Crucial 1.05 Level

Well that escalated quickly...EUR/USD has broken the key 1.05 trendline level; and having rallied yesterday on the worst data since Lehman, today it appears some sense of resignation to the fact that The Fed is boxed in to a rate hike no matter what is setting in... and that the exuberant hockey-stick expectations of earnings growth is spiralling the toilet of near cycle lows oil prices. U.S. equity prices have round-tripped most of yesterday's dead-cat-bounce spike with NASDAQ leading the drop and The Dow and S&P are back in the red year-to-date.

This tiny story, with three excellent charts, appeared on the Zero Hedge website at 11:35 a.m. EDT yesterday morning---and this makes it three in a row from Dan L.

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Stock Super Bubble Setting Up For Crash - Mike Maloney

This excellent 15:35 minute video presentation by Mike appeared on the youtube.com Internet site on Tuesday, but for length reasons, had to wait for today's column.  I hope you have the time for it.

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Marc 'Dr. Doom' Faber: Buy U.S. stocks

Marc Faber is well-known for his persistently bearish take on U.S. stocks—as his nickname, Dr. Doom, implies. But now he argues that large-cap American equities could actually be a great spot to keep one's money.

"I'm an investor, and I invest. Do I want to buy European sovereign bonds at a negative yield where I'm sure to lose some money—not a lot of money, but some money? Or do I want to be in some blue chip stocks? If I take a 10-year view, I think I will make more money in blue chip stocks," Faber said Thursday on CNBC's "Futures Now."

This is not a turnaround for the investor after his years of issuing dire warnings about the market.

"Actually, I have to tell you, I'm even more bearish that I was at the time!" he said with a chuckle.

The headline is totally misleading.  The embedded video clip runs for 2:46 minutes---and there is a transcript as well.  It was posted on the CNBC website at 1:52 p.m. EDT on Thursday---and it's courtesy of Ken Hurt.

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Record Low Baltic Dry Casualties Emerge: Third Dry-Bulk Shipper Files For Bankruptcy in Past 3 Weeks

The unintended consequences of a money-printed, credit-fueled, mal-investment-boom in commodities (prices - as opposed to physical demand per se) and the downstream signals that sent to any and all industries are starting to bite. The Baltic Dry Index has plunged once again to new record lows and the collapse of the non-financialized 'clean' indicator of the imbalances between global trade demand and freight transport supply has the real-world effects are starting to be felt, as Reuters reports the third dry-bulk shipper this month has filed for bankruptcy... in what shippers call "the worst market conditions since the '80s."

This very interesting news story showed up on the Zero Hedge website way back on February 23---and I thank Brad Robertson for digging it up for us yesterday.

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Doug Noland: Emerging Market Contagion---and a New Z.1

With the (king) U.S. dollar index trading Friday above 100 for the first time since 2003, the unfolding Emerging Market (EM) - ongoing “global reflation trade” - unwinds broadened and turned more disorderly. Brazil is now lurching toward crisis. Friday trading saw the Brazilian real slammed for 2.6% to the low since April 2003, boosting y-t-d losses to 18.2% (down 27.2% y-o-y). Brazil sovereign CDS surged 13 bps Friday to 302, the high since early-2009. Notably, Brazil’s dollar yields surged 23 bps Friday to a multi-year high 5.08%. For the week, Brazilian (real) yields jumped 43 bps to 13.40% (traded as high as 13.79% intraday Friday).

EM currency weakness was broad-based. In Latin America this week, the the Brazilian real fell 5.7%, Colombian peso 3.2% and the Chilean peso 1.8%. Eastern European currencies were under heavy pressure. The Polish zloty was hit for 3.6%, the Bulgarian lev 3.2%, the Hungarian forint 3.2%, the Romanian leu 3.2%, the Czech koruna 3.1% and the Iceland krona declined 2.4%. The Russian ruble reversed course and declined 2.9% this week.

EM bonds were also under pressure. The lira’s 1.9% Friday decline wiped out the Turkey currency’s earlier rally, as Turkish lira yields jumped 14 bps this week to a three-month high 8.36%. Turkey CDS traded to an almost one-year high earlier in the week. In Asia, Indonesia CDS rose 12 bps to a two-month high 160 bps. Interestingly, China CDS gained 5 bps to 89 bps.

EM stocks were not spared. Russian stocks were hit for 5.8% and Turkish equities were slammed for 4.6%. India’s Sensex index fell 3.2%. Eastern European equities were under pressure almost across the board. Things were not much better in Latin America and Asia.

Doug's weekly Credit Bubble Bulletin is always on my weekly must read list---and this week's offering is no exception.  I thank reader U.D. for sending it before I had time to find it myself.

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Dollar Imperialism, 2015 Edition

“The dollar is our currency, but it’s your problem.” This is what U.S. Treasury Secretary John Connally said to his counterparts in the Rome G-10 meeting in November, 1971, shortly after the Nixon administration ended the dollar’s convertibility into gold and shifted the international monetary system into a global floating exchange rate regime. The world has been suffering from this “problem” ever since the U.S. obtained the “exorbitant privilege” of issuing the world’s reserve and trade currency under the Bretton Woods system after WWII.

The Fed effectively acts as the world’s central bank, but sets monetary policy only in its own interest. Under the pressure and the orders of financial oligopolies, it fixes interest rates and prints money to suit itself, sending economies across the globe into tailspins. When the Fed wanted to halt the decade-long decline in the profit rate and to pull the U.S. out of stagflation in the late 1970s, it raised its rates sharply – the Volcker shock of 1979-1981, when the federal funds effective rate jumped to more than 20% at the beginning of the 1980s – throwing many developing countries into free fall, default and debt servitude. As their debts were denominated in dollars and rates jumped, suddenly they were paying drastically heavier debt service burdens, which they could only cover by taking out more debt under the draconian conditions of the IMF. In 1997, the U.S. interest rate hike of only a quarter of a point was one of the main reasons for the “Asian crisis,” as hot money fled South-East Asia. Today in 2015, the end of QE, a strengthening dollar and an anticipated rise in U.S. interest rates could wreak havoc in developing economies. Since 2009, trillions of dollars hot off the printing press or borrowed at near zero rates have been flooding into the global South and East. But today’s monetary tightening is already leading to an exodus of hot money that is destabilizing these countries, with the effect of keeping the United States’ rivals in the “emerging” world down.

This essay is one that I've been saving for today's column.  It showed up on the counterpunch.org Internet site last weekend---and I thank Roy Stephens for sending it to me on Sunday.  In my opinion, it's certainly worth reading.

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6 Decades On, a Patriotic Plea Still Resonates: The New New York Times

At the lectern, Dwight D. Eisenhower was every bit as dull as Tony Smith, 17, had expected. On a June afternoon in 1953, Mr. Smith was at Dartmouth College to see his grandfather, Joseph Proskauer, receive an honorary degree.

President Eisenhower, who had taken office six months earlier, was also being honored. “I had been passionately for Adlai Stevenson, and was very disappointed that Eisenhower was elected,” he said.

At first, Mr. Eisenhower did not let him down, urging the graduates to have fun every day. “Very prosaic and boring,” Mr. Smith said.

Yet in the next few minutes, the words Mr. Eisenhower would utter — off the cuff, with unrehearsed passion — touched on issues that would be entirely familiar today: the tension, real or perceived, between the free exchange of ideas and security; the power of fringe forces to shape or control a political party; the duty of patriots to be critical of their country.

This very interesting commentary showed up on the NYT website on Tuesday---and for content reasons, had to wait for today.  I thank Phil Barlett for sending it our way.

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Household Debt Soars in Canada, “Stability” at Risk

Debt by Canadian households is a special phenomenon. Statistics Canada reported today that in the fourth quarter, household debt set another breath-taking record.

Earlier this month, even Equifax Canada, which is in the business of facilitating and increasing this indebtedness, had warned about it. The total indebtedness of Canadian households, according to its own measure, had jumped 7.7% from prior year, which had already been at record levels. The biggest culprits were installment and auto loans. Households are powering consumer spending, and thus the overall economy, with ever larger amounts of ultimately unsustainable debt.

A “a cautionary tale,” the report called it.

The rapid decline in oil prices caught many by surprise. And, that’s the point – consumers and business owners need to be more vigilant. When economic change happens, it can happen very quickly and can challenge previously observed stability of key economic and credit indicators.

In other words, as the price of oil collapsed, as housing stumbled, and as layoffs began – the “economic change” that “can happen very quickly” – the “stability” of different aspects of the economy, including household debt, is suddenly at risk. It’s a warning that consumers might buckle under that mountain of debt.

This article appeared on the wolfstreet.com website on Thursday---and was picked up by Zero Hedge.  It's the second contribution of the day from Elliot Simon.

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U.S. anger at Britain joining Chinese-led investment bank AIIB

The White House has issued a pointed statement declaring it hopes and expects the U.K. will use its influence to ensure that high standards of governance are upheld in a new Chinese-led investment bank that Britain is to join.

In a rare public breach in the special relationship, the White House signalled its unease at Britain’s decision to become a founder member of the Asian Infrastructure Investment Bank (AIIB) by raising concerns about whether the new body would meet the standards of the World Bank.

The $50bn (£33.5bn) bank, which is designed to provide infrastructure funds to the Asia-Pacific region, is viewed with great suspicion by Washington officials, who see it as a rival to the World Bank. They believe Beijing will use the bank to extend its soft power in the region.

The White House statement reads: “This is the U.K.’s sovereign decision. We hope and expect that the U.K. will use its voice to push for adoption of high standards.”

This story showed up on theguardian.com Internet site at just after midnight GMT on London's Friday morning.  I had a news item about this in Friday's column, but it has now become big international news.  I thank Mark Hancock for this one.  There was another story on the Russia Today website at 12:25 p.m. Moscow time yesterday afternoon---and it's headlined "Britain’s membership in China-led World Bank rival of ‘U.K. national interest’ - spokesman".  I thank Roy Stephens for sending it.

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Bizzaro World Becomes Normality: Germany Issues 5-Year Negative Bond

The luxury of paying your government to hold your money, once thought as absurd, hilarious and downright preposterous is now a reality.

For the first time ever, Germany sold five year debt at a negative interest rate. You heard that correct, German citizens and investing institutions that wish to buy government debt in Germany, will be paying the government to hold THEIR money!

Not only does this exist, but it was a success! Last week, Germany successfully sold €3bn worth of five year bonds at a negative interest rate of 0.8 percent.

The reason for the success, is the greater than expected QE announcement by the ECB, who announced last month that they would be entering into a €60bn per month repurchasing program. Essentially telling investors that no matter the price, we’ll buy your bonds.

This article, originally from the sprottmoney.com website, appeared on the Zero Hedge Internet site at 5:41 a.m. yesterday---and it's another offering from Dan L.

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Grexit would be 'beginning of the end' for Europe, warns E.U. chief

A disorderly Greek exit from the eurozone would mark "beginning of the end" for the currency union and spark a dangerous domino effect of market contagion across the continent, according to the EU's top finance commissioner.

Seeking to soothe talk of an "accidental" Grexit, Pierre Moscovici said any move to eject Greece from the bloc "would be a catastrophe - for the Greek economy, but also for the eurozone as a whole."

"If one country leaves this (monetary) union, the markets will immediately ask which country is next, and that could be the beginning of the end," the former French finance minister told Der Spiegel magazine.

Mr Moscovici's comments come after days of fractious exchanges between Greece and its international creditors.

This commentary appeared on the telegraph.co.uk Internet site at 4:00 p.m. GMT on Friday---and I thank South African reader B.V. for finding it for us.

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Endgame: Power Struggle in Brussels and Berlin over Fate of Greece

In Brussels, the endgame over Greece's continued euro-zone membership has begun. Greek Prime Minister Alexis Tsipras is trapped between his campaign promise to put an end to EU-imposed austerity and his rapidly emptying state coffers. Meanwhile, his government's tone has become increasingly shrill. Most recently, Justice Minister Nikos Paraskevopoulos threatened to auction off the Goethe Institute in Athens in accordance with his government's demands for World War II reparations from Germany. And this Thursday, the Greek government lodged an official complaint with Berlin, accusing Finance Minister Wolfgang Schäuble of insulting his Greek counterpart.

They are acts of desperation. In recent weeks, the European Central Bank once again tightened the thumbscrews on Athens and is only approving small amounts of money at a time. At ECB headquarters in Frankfurt, officials have begun speaking more or less openly about the looming Grexit.

Now, Juncker has become Tsipras' last hope. Last week, the Commission president made clear that Greece's departure from the euro zone is out of the question. "The European Commission's position is that there will be no Grexit," he said in an interview with the German weekly Welt am Sonntag.

This very interesting and very thoughtful, but rather longish news item put in an appearance on the German website spiegel.de at 7:56 p.m. Europe time on their Friday evening---and I thank Roy Stephens for sending it.  It's worth reading.

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E.U. unlikely to agree next week to prolong Russia sanctions

European Union leaders are unlikely to reach agreement at their summit next week to prolong economic sanctions on Russia that expire in July, a senior E.U. official said on Friday.

New sanctions on Russia are also off the table for now because E.U. governments want to give a chance to a fragile ceasefire in eastern Ukraine.

But some of the E.U.'s 28 member states had pushed for an early decision on extending sanctions on Russia's financial, energy and defense sectors adopted in July last year over Russia's annexation of Crimea and support for separatists in eastern Ukraine.

This Reuters article, filed from Brussels, appeared on their Internet site at 8:48 a.m. EDT yesterday---and I thank Elliot Simon for sending it along.

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Russia to provide $13.75mn as part of first IMF loan for Ukraine – finance minister

Russia will participate in financing the first tranche of IMF aid to Ukraine in the amount of $13.75 million; the Bank of Russia will deliver the payment on March 13, said Russian Finance Minister Anton Siluanov.

"The program will be financed via the IMF quota resources, and the funding from shareholder countries in the framework of their participation in the so-called New Borrowing arrangements,” Siluanov said.

“As such, the Russian Federation will participate in the funding in accordance with its obligations as a participant, and deliver the first tranche of the IMF program for Ukraine in the amount of $13.75 million dollars. The Bank of Russia will carry out the payment on 13 March 2015,” he added.

The first tranche is 3.546 billion in special drawing rights (around $5 billion) and will be made available to the account of the National Bank of Ukraine, he said.

This news item, showed up on the Russia Today website at 2:14 p.m. Moscow time on their Friday afternoon, which was 7:14 a.m. EDT in Washington.  Once again I thank Roy Stephens for sharing it with us.

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Russia’s Remarkable Renaissance -- F. William Engdahl

Something remarkable is taking place in Russia, and it’s quite different from what we might expect. Rather than feel humiliated and depressed Russia is undergoing what I would call a kind of renaissance, a rebirth as a nation. This despite or in fact because the West, led by the so-called neo-conservatives in Washington, is trying everything including war on her doorstep in Ukraine, to collapse the Russian economy, humiliate Putin and paint Russians generally as bad. In the process, Russia is discovering positive attributes about her culture, her people, her land that had long been forgotten or suppressed.

My first of many visits to Russia was more than twenty years ago, in May, 1994. I was invited by a Moscow economics think-tank to deliver critical remarks about the IMF. My impressions then were of a once-great people who were being humiliated to the last ounce of their life energy. Mafia gangsters sped along the wide boulevards of Moscow in sparkling new Mercedes 600 limousines with dark windows and without license plates. Lawlessness was the order of the day, from the US-backed Yeltsin Kremlin to the streets. “Harvard boys” like Jeffrey Sachs or Sweden’s Anders Aaslund or George Soros were swarming over the city figuring new ways to rape and pillage Russia under the logo “shock therapy” and “market-oriented reform” another word for “give us your crown jewels.”

The human toll of that trauma of the total collapse of life in Russia after November 1989 was staggering. I could see it in the eyes of everyday Russians on the streets of Moscow, taxi-drivers, mothers shopping, normal Russians.

Today, some two decades later, Russia is again confronted by a western enemy, NATO, that seeks to not just humiliate her, but to actually destroy her as a functioning state because Russia is uniquely able to throw a giant monkey wrench into plans of those western elites behind the wars in Ukraine, in Syria, Libya, Iraq and well beyond to Afghanistan, Africa and South America.

This essay falls into the absolute must read category for an serious student of the New Great Game.  This was posted on the journal-neo.org website on Monday, but for obvious reasons had to wait for today's column.  I thank Rob Bentley for bringing it to our attention.

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Top Russia Public Intellectual: Western Financial System Is Driving It to War

In the course of life today, we’ve grown accustomed to using terms whose meaning we might not fully understand. We throw them around casually, not realizing that they lose their meaning and sometimes even come around to stand for their exact opposite. This is precisely why the sense has arisen today in society that there is a need to determine in a clear and understandable manner exactly what is happening on the global chessboard in front of all of our eyes – the Big Story, written online. 

Even those people the very furthest from politics are feeling the need for understanding and explaining to themselves the reasons for the things they encounter even just moving through their own lives. Why have prices in stores started to go up? What’s the reason for the fact that, quietly and nearly unnoticed, belief in a brighter tomorrow is slipping? When and why did talk about a possible war stop being speculative and distant? These and dozens of other questions have driven millions of yesterday-apolitical citizens to seek answers. They feel the need to find those answers and to construct a new worldview in which what-comes-tomorrow is not simply a lottery ticket, but a predictable and logical continuation of today. Predictable and, hopefully, not frightening. 

This atmosphere, unfortunately, is a breeding grounds for attempts to brainwash our citizens and to stuff their heads with ideas which will be devastating to them personally. But this devastation will come hidden within banal attempts stubbornly do good. So let’s try to dissect the methods and means of manipulating the people’s conscience which we have already started to encounter. And, which will grow in direct proportion to the problems being encountered by our geopolitical opponents.

This longish essay was written by Nikolai Starikov, a Russian writer, political activist and influential public intellectual.  It appeared on the russia-insider.com website on Thursday.  It's certainly worth reading if you have the time and/or the interest---and it's another contribution from reader B.V.

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Once upon a TIME [Magazine]

Once upon a time – last October, to be precise – I gave an interview to a TIME magazine correspondent for the publication’s in-depth profile on Russia Today. Late last week that piece finally appeared on America’s newsstands.

The opus is a case study of RT-centered writing, which over the last year or so has blossomed into its own cottage industry: full of half-truths, half-quotes and full-on commitment to fitting your subject into an existing narrative box, rather than an attempt to understand or discover anything new.

In an effort to give the article a sense of timeliness, the author uses the backdrop of Boris Nemtsov’s murder to frame the RT story. How did RT treat this tragic, headline-grabbing event that reverberated around the world, and the tens of thousands-strong Moscow march that followed it? According to TIME: “On March 1, when a massive march began in Moscow to protest Nemtsov’s murderwith many carrying signs that read propaganda killsRT was showing a documentary about American racism and xenophobia.”

Would you like to know what TIME was writing about on March 1? It was comparing the merits of two new models of the Samsung smartphone. A poignant story indeed!

As they say, hell hath no fury like a woman scorned---especially one that has a way with words, buys her ink by the barrel, figuratively speaking that is---and is the Editor-in-Chief of the wildly popular Russia Today Internet site.  It was posted on their website back on Monday, but obviously had to wait for today's column.  It's certainly worth reading---and I thank Roy Stephens for bringing it to our attention.

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U.S. Dispatches Regime Change Specialist to Pro-Russian Central Asian 'Stan'

One of the most prominent Color Revolution experts in America’s coup d’état toolkit has been hurriedly recalled from retirement for immediate deployment to Kyrgyzstan.

Richard Miles, the engineer of the first Color Revolution in Serbia and the Rose Revolution in Georgia, has been appointed as charge d’affaires in Kyrgyzstan until a new ambassador is confirmed by the Senate, because the former one, Pamela Spratlen, has been reassigned as the U.S. Ambassador to Uzbekistan.

While it is not known how long Miles will remain in Kyrgyzstan, which will be the Eurasian Union’s weakest economy when it joins in May of this year, ordinary citizens there already suspect that foul play is being planned against their country and have protested his arrival. Given that Miles’ track record of regime change makes him worthy of the ‘Male Nuland’ moniker, it’s appropriate to investigate what tricks the U.S. may be up to in Central Asia, and how it may be trying to force the Ukrainian scenario onto Russia’s southern doorstep.

Another psychopath unchained.  This is another absolute must read story for any serious student of the New Great Game.  It appeared on the russia-insider.com website on Tuesday---and for obvious reasons had to wait for my Saturday column.  It's another contribution from reader B.V.

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History Suggests OPEC's Days Could Be Numbered

As OPEC 's refusal to curb oil production contributes to a nine-month plunge in prices, a new paper suggests the group's days may be numbered.

OPEC, the Organization of the Petroleum Exporting Countries, has vowed to defend its market share against higher-cost producers such as U.S. shale drillers and companies developing Canada's oil sands.  Its strategy hinges on the odds that an extended period of low prices will lead other producers to scale back output, enabling the group to reassert its influence. OPEC supplies about 40 percent of the world's crude.

Yet a brief history detailed by the World Bank Group shows how difficult it can be to maintain a commodities cartel in the face of market forces and technological advances.

This commentary was posted on the Bloomberg website on Tuesday---and had to wait for a spot in today's column as well.  It's another offering from Roy Stephens.

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The Endgame of Communist Rule in China Has Begun

On Thursday, the National People’s Congress convened in Beijing in what has become a familiar annual ritual. Some 3,000 “elected” delegates from all over the country—ranging from colorfully clad ethnic minorities to urbane billionaires—will meet for a week to discuss the state of the nation and to engage in the pretense of political participation.

Some see this impressive gathering as a sign of the strength of the Chinese political system—but it masks serious weaknesses. Chinese politics has always had a theatrical veneer, with staged events like the congress intended to project the power and stability of the Chinese Communist Party, or CCP. Officials and citizens alike know that they are supposed to conform to these rituals, participating cheerfully and parroting back official slogans. This behavior is known in Chinese as biaotai, “declaring where one stands,” but it is little more than an act of symbolic compliance.

Despite appearances, China’s political system is badly broken, and nobody knows it better than the Communist Party itself. China’s strongman leader, Xi Jinping , is hoping that a crackdown on dissent and corruption will shore up the party’s rule. He is determined to avoid becoming the Mikhail Gorbachev of China, presiding over the party’s collapse. But instead of being the antithesis of Mr. Gorbachev, Mr. Xi may well wind up having the same effect. His despotism is severely stressing China’s system and society—and bringing it closer to a breaking point.

There's a lot of truth to this, but since this commentary showed up on The Wall Street Journal, one has to be aware that some of it is propaganda as well, so just keep that in mind if you decide to read this.  It showed up on David Stockman's website on Sunday, but for obvious reasons it had to wait for today's column.  It's certainly worth reading---and is another offering from Roy Stephens.

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China-IMF talks underway to endorse yuan as global reserve currency

China is pushing for the International Monetary Fund to endorse the Chinese yuan as a global reserve currency alongside the dollar and euro.

A senior Chinese central bank official said Thursday that the country is “actively communicating” with the IMF on the possibility of including the yuan, or RMB, in the basket of the Special Drawing Rights (SDRs).

Including the yuan in the SDR system would allow the IMF to recognize the ascent of the world’s second-biggest economy while aiding China’s attempts to diminish the dollar’s dominance in global trade and finance.

“We hope the IMF can fully take into account the progress of RMB internationalization, to include RMB into the basket underlining the SDR in foreseeable, near future,” said Yi Gang, vice governor of the People’s Bank of China.

This news item appeared on thebricspost.com Internet site on Thursday---and I thank Norman Willis for sending it along.

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China Furious at U.S. 'Childish, Hysterical Paranoia' on Beijing World Bank

The United States has launched into paranoid hysteria by criticizing the United Kingdom for joining the Beijing-headquartered Asian Infrastructure Investment Bank (AIIB), China's state-run Xinhua news agency announced on Friday.

"The U.S. has again launched into paranoid hysteria by manifesting its skepticism toward China's creation of the Asian Infrastructure Investment Bank."

The editorial continues, saying that the U.S. has been closing its eyes to China's constructive efforts such as the Silk Road Economic Belt, which aims to build an economic corridor between China and Europe. The editorial also notes that certain US politicians "sometimes simply cannot restrain themselves from making picky and irresponsible remarks" about China.

This rather short story put in an appearance on the sputniknews.com Internet site at 5:51 p.m. Moscow time on their Friday afternoon---and it's worth reading as well.  It's the final contribution of the day from Roy Stephens---and I thank him on your behalf.

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London Backtracking: Diego Garcia Island Still Off Limits to Natives

When questioned in the House of Commons about the government's progress on a decision for resettlement of the islands, Secretary of State William Hague refused to speculate on a time frame, despite saying that the possible resettlement was being considered "at the highest level."

"I don't think I can guarantee to you there will be a statement about that before the dissolution of Parliament given that we've nearly already arrived at dissolution," he said.

The forced removal of the native Chagossian population from the Chagos Islands — a group of small, isolated islands in the middle of the Indian Ocean — is considered to be a huge, unsolved blight on the U.K.'s human rights record.

At the height of the Cold War, between 1967 and 1973, the estimated 1,500 to 1,800 Chagossians were forcibly removed from the islands, later renamed British Indian Ocean Territory (BIOT), to make way for the construction of a U.S. military base on the archipelago's largest island Diego Garcia.

This amazing and very ugly story, which I've known about for years, was posted on the sputniknews.com Internet site at 5:54 p.m. Moscow time on their Friday afternoon, which was 10:54 a.m. in Washington.  It's definitely worth reading if you have the interest.  It's the final contribution of the day from reader B.V.---and I thank him on your behalf.

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New Zealand---and the "Five Eyes"

New Zealand's electronic surveillance agency, the GCSB, has dramatically expanded its spying operations during the years of John Key's National Government and is automatically funnelling vast amounts of intelligence to the U.S. National Security Agency, top-secret documents reveal.

Since 2009, the Government Communications Security Bureau intelligence base at Waihopai has moved to "full-take collection", indiscriminately intercepting Asia-Pacific communications and providing them en masse to the NSA through the controversial NSA intelligence system XKeyscore, which is used to monitor emails and internet browsing habits.

The documents, provided by U.S. whistleblower whistleblower Edward Snowden, reveal that most of the targets are not security threats to New Zealand, as has been suggested by the Government.

Instead, the GCSB directs its spying against a surprising array of New Zealand's friends, trading partners and close Pacific neighbours. These countries' communications are supplied directly to the NSA and other Five Eyes agencies with little New Zealand oversight or decision-making, as a contribution to US worldwide surveillance.

This very long essay appeared in The New Zealand Herald a week ago Friday---and has caused an uproar in the country.  I posted it in one of my columns earlier the week, but it was used as an accompaniment to another story I posted.  I'm putting in today's column to make sure you don't miss it.  I thank Norman Willis for his second contribution to today's column.

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First photographs emerge of new Pacific island off Tonga

The first photographs have emerged of a newly formed volcanic island in the Pacific Ocean after three men climbed to the peak of the land mass off the coast of Tonga.

The three locals from Tonga visited the island on Saturday, landing on a black beach and climbing to the rim of the crater.  They said the surface was still hot and the green lake in the crater smelt strongly of sulphur.

The one-mile long cone-shaped island began forming last month, about forty miles from the nation's capital, and is now safe to walk on.

Experts believe a volcano exploded underwater and then expanded until an island formed. The island is expected to erode back into the ocean in a matter of months. It will not be named yet until officials know how long it will be around for.

This excellent photo essay showed up on The Telegraph's website late Wednesday morning GMT---and the pictures are worth the trip.  I thank reader M.A. for sending it our way.

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Chinese Banks as direct participants in the new LBMA Gold and Silver Price auctions? Not so fast!

There is a growing assumption in the financial media that a number of Chinese banks will be joining the new LBMA Gold Price auction as direct participants when the auction launches in London on Friday, 20 March. This assumption is based on various sources, but primarily on a number of general comments made by the London Bullion Market Association (LBMA) in February, and also some comments made by the LBMA last October.ICE Benchmark Administration (IBA), the administrator for the LBMA Gold Price, issued a press release on 2nd February in which the Chief Executive of the LBMA, Ruth Crowell said:

“I’m delighted to see a high level of interested participants for the March launch. The intention and the interest has been very positive and creates a more diverse pool of participants which includes Chinese banks. We look forward to having enhanced numbers of participants for day one for the LBMA Gold Price.”

There are, however, a number of dangers in assuming that some of the Chinese banks will be direct participants in the new gold auction at launch date, not least of which is that the identities of the direct participants will only be revealed on 20 March, but also the fact that the LBMA’s comments above didn’t specifically say that Chinese banks will be direct participants on launch date. The LBMA’s comments merely said that Chinese banks were interested in participating in the auction.

This very long commentary by Ronan Manly appeared on the bullionstar.com Internet site yesterday---and it's certainly worth reading.

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Why You Should Listen to This Man About Gold

Would you like your advice from someone who has been successful or from someone who’s failed? I’d prefer to hear from a winner.

Now that the gold market has been mauled by a bear, we can sort out the pretenders from the contenders in the mining industry. After all, there’s nothing like a major down cycle to reveal which companies are run by people who know how to prepare for bad weather.

The price of gold has fallen more than a third since August 2011, crushing the prices of gold stocks... but not all of them.

Check out the performance of Franco Nevada (FNV).

Given the state of the gold market right now, Franco Nevada chairman Pierre Lassonde is making a major call, one of the most consequential in his 40-year career. It’s a clear and very timely message for gold investors that you’ll be glad you received. He knows what he’s talking about. Join him along with Frank Holmes, Rick Rule, Bob Quartermain, Ron Netolitzky, Doug Casey, Louis James, and myself in our free webcast, “GOING VERTICAL”. It’s a one-hour event that is well worth your time.

This is the 1-hour podcast that was done on Tuesday---and here it is in the Casey Research archives---and it's certainly worth listening to sometime over the weekend if you haven't watched it already.

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Greece's New Gold Drachma

I suggest a new Drachma linked to gold. The previous one was created in 1832, soon after the establishment of the modern state of Greece, as independent from the crumbling Ottoman Empire. It replaced the Ottoman kurus as the currency of Greece. The 20 Drachma coin contained 5.8 grams of gold. Paper banknotes, linked to gold, were issued by the National Bank of Greece beginning in 1841.

The government would now have a "multi-currency" policy, where people could use any currency they wish in commerce and as a basis for contracts, including Euros, Dollars, or Russian Rubles. Among those options, would be the option of a gold-based currency. Nobody needs to use it. They could use Euros or Dollars instead. But, they could use it if they wanted to. It might become popular, just as gold-based ETFs have become popular worldwide as an investment vehicle.

Zimbabwe's government recently floated the idea of introducing a new Zimbabwean gold-based currency to the existing "multi-currency" arrangement. This new currency could be provided by a monopoly issuer, like a central bank, or it could be issued by multiple commercial banks, as is the case today in Scotland for example.

This opinion piece showed up on the bullionvault.com Internet site last Saturday---and I thank reader M.A. for his last offering in today's column.

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Gold Up 11% Euro This Year As Currency Wars Intensify

Gold rose 12% against the euro in 2014 and so far in 2015, gold has risen a further 11% versus the euro. The euro has fallen 23% against gold since January 2014. Gold has risen from EUR 880 per ounce in January 2014 to EUR 1,090 per ounce today.

The dollar-centric nature of most financial media and the tendency to focus on gold solely in dollars would give one the impression that gold has been devastated this year.

In dollar terms gold has not fared terribly well, it’s true, but that is more a function of the surge in the dollar than of weakness in gold. Gold’s performance has been quite good considering the significant strength in the dollar and the gains seen in stock markets.

This commentary by Mark O'Byrne showed up on the goldcore.com Internet site yesterday---and it's worth skimming.  I thank Dan Lazicki for his final offering in today's column.

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Why gold could rebound to $1,400 an ounce: Jeffrey Gundlach

Jeffrey Gundlach, the well-known investing guru who runs the money management firm DoubleLine Capital, is reported to have said in a presentation earlier this week that he thinks gold could rebound to $1,400 an ounce.

His reasoning? Negative bond yields in Europe will make gold look more attractive.

Gold is an asset that often outperforms in times of both inflation and deflation. In other words, when the market is scared of something, people flock to gold.

And those negative bond rates are a tell-tale sign of deflation worries. Investors are so spooked by the prospect of falling prices that they are willing to tolerate a small loss on government bonds rather than risk bigger losses in other parts of the market.

That price would be barely get me exited, unless it happened within the space of a couple of days.  This gold-related story appeared on the money.cnn.com Internet site at 1:39 p.m. EDT on Thursday afternoon---and I thank Elliot Simon for sending it.

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¤ The Funnies

Once you head up this hill and turn the corner, you leave Jerome behind---and are headed for Prescott via the mountain pass, which is still quite a climb.  The second photo is less than a two minute drive from the first one---and Jerome has already vanished behind the rocks.

At the pass about fifteen minutes later, it looked like this.  The trees are ponderosa pine.

Fifteen minutes after that,we were back in the valley---and it looked like this.

The agreement with Sumitomo on the Fourth of July project is a great compliment to our recent agreement with Newmont Mining on the Wood Hills South project. We also have the Arabia, Golden Shears and some generative efforts being funded through our joint venture business model. We have enough capital in the bank to last two more years and no debt. The share structure remains at 33.5 million fully diluted. We are very well positioned to have a major win with an incredible share structure.

Renaissance Gold has proven through the joint venture business model what exploration success with a tight share structure can do. Renaissance is the spinout of AuEx Ventures that sold in 2010 and made just shy of 100x their first private placement. It takes technical strength and fiscal conservatism to generate meaningful share holder returns in the high risk exploration business. Please visit our website for more information.

 

¤ The Wrap

I base my analysis on easily verifiable public data, principally the CFTC’s COT data. That data both suggests price trends, while at the same time provides the proof of the manipulation. Many manipulation deniers and critics love to erroneously point out that no one ever complains about manipulation when prices are climbing, only when prices fall. Regular readers know that is nonsense---and that’s because I am usually most vocal about manipulation at price tops, precisely because that is the point of maximum concentrated short selling by JPMorgan and other commercials. Either a market is manipulated or it isn’t; it is impossible for a market to be manipulated for as long as silver has been if the manipulation weren’t a continuing process.

There’s no voodoo or deep secret to my COT analysis – when the commercials get as least net short as they can, the market looks good to go to the upside. When the commercials are overloaded on the short side, the market is not usually good to go to the upside. I may be wrong (and please let me hear from you if you feel I am), but if I refrained from suggesting that the COT structure was bearish when, in fact, it was bearish, that it would make any difference to prices falling. Any legitimate analyst strives to be objective and avoid sugar-coating or distorting the facts. For me to avoid pointing out when the commercials are packed like the criminal rats that they are on the short side would seem to validate the manipulation deniers’ criticism and expose me as non-objective. I don’t think I could do that in good conscience, particularly knowing it wouldn’t likely do any good. Again, if you disagree, please let me hear from you. - Silver analyst Ted Butler: 11 March 2015

Today's pop 'blast from the past' dates from 1961.  I was barely a teenager then, but I remember the song well.  It's by American singer/song writer Gene Pitney---and the link is here.

Today's classical 'blast from the past' was composed in 1904.  It was not a smash hit when it was first performed---and was almost relegated to the dustbin of classical music history until the latter part of the 20th century when it was revived and restored to the exalted position it holds today.  It took years for me to appreciate it for what it was.  It's one of the most extraordinarily technically demanding violin concertos ever written---and when performed the way it should be, it's awesome.  It's the Jean Sibelius violin concerto in D minor, Op. 47.  Here's the luscious and incredibly gifted Sarah Chang doing the honours accompanied by the Dutch Radio Filharmonisch Orkest.  Jaap van Zweden conducts. The link is here.  I've posted this before, but its been a while.

For the third day in a row the precious metal stocks traded in the same pattern.  I feel like Bill Murray in Groundhog Day.  The only difference about Friday's price action was that there was a slight pop in prices after the equities markets closed---and before the electronic markets closed at 5:15 p.m. EDT.  I doubt very much if the free markets were anywhere to be found in the precious metal trading arena this week.

Here are the 6-month charts for all four precious metals once again.

One thing I'm happy about is the fact that we're at, or very close to the bottom, as there's not much room left to the downside.  Since the technical funds in the Managed Money category of the Disaggregated COT Report have long since sold every long in the precious metals that they have---and are now piling in on the short side, the down-side price action will now be solely determined by how many more shorts positions they're prepared to put on under the continuing pressure from the HFT boyz.  Nothing else matters.

I'm also happy to see that the gold price has been holding up relatively well vis-à-vis the dollar index---and if it wasn't for this last big engineered price decline that began in mid January, the gold price would certainly be much higher than it is now, regardless of what the U.S. dollar is doing, as it just happens to be the best looking horse in the glue factory right now, which is comment I've made several times in the past.

Next week we get the FOMC meeting---and nothing will surprise me as far as price action is concerned when the smoke goes up the chimney early Wednesday afternoon in Washington.   That's one of many items on the dance card for early next week.

But in the interim I'll be quite surprised if much happens from a price perspective between now and then---and it's entirely possible that the precious metal charts on Monday and Tuesday will end up looking the same as the ones we had from mid-week onward this past week.

Looking ahead of the FOMC meeting---and with the bottom in the precious metal markets pretty much in, what happens during the next rally is something that we should put our minds to.  Will it end up the same old way, like the rally from mid December until mid January, as JPMorgan et al capped the rally all the way up until they turned the market over.  Or will it be "different" this time?

It beats me, but when the rally starts, we won't be left doubting for long as to how it's going to turn out.

That's all I have for today, which is more than enough once again.

I'm off to bed.

See you on Tuesday.

Ed Steer