Monday rout - Gold spot has hit 1385 so far , while silver went as low as 23 ..... first leg seems over at 9am , next leg at London afternoon price fix , third leg globex ?
Fibonacci numbers for gold - 38.2 % ( 185 ) and 50 % ( 1088 ) ........ 1285 possible at this point.....
Silver at 22 is not a reach in this move , next major support at 20......then 18 and 15 would be possible ....
http://silverdoctors.com/cnt-sold-out-of-all-physical-silver/#more-25111
( Is Silver gone - as in physical silver , not paper..... How long before we see the Comex and SLV default ? )
ALL US WHOLESALERS SOLD OUT OF ALL PHYSICAL SILVER!!!
Today we neither gained nor lost any silver at the SLV. Please note that the silver levels have remained quite constant for the week and yet in gold the GLD inventories have plummeted.
I would hazard a guess that all real physical inventories in SLV have been depleted in London and thus nothing that could be sent over to foreign sources. And if that is the case, the only real source of any physical silver left will be at the Comex and this is probably the reason that the OI in silver at the Comex is remaining elevated.
* * *
Gold and Silver items of note....
'Massive physical offtake' in London gold, Maguire tells King World News
Submitted by cpowell on Mon, 2013-04-15 17:25. Section: Daily Dispatches
1:20p ET Monday, April 15, 2013
Dear Friend of GATA and Gold:
London metals trader Andrew Maguire tells King World News today that central banks and commercial traders seem to be buying all the gold paper being sold under margin pressure and that there is "massive physical offtake."
Maguire says: "Western governments have sanctioned leveraged paper selling by their agents, the bullion banks, to drive the price down. What people are seeing right now has nothing to do with the physical market. In fact the physical market is on fire right now."
An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Last Wednesday we had two big stories on mining operations with problems. The first story is the one above where Kennecot Utah Copper had a huge mudslide covering their huge deposit and forcing the mine to shut down. This supplies approximately 16% of USA production or 6.4 million oz.
The second big story is Barrick as they announced that they are mothballing the big Pascua Lama project in Argentina and Chile due to environmental problems and ownership issues. You will recall that we strongly believe that he USA has a claim on Barrick's gold reserves coming from Pascua Lama as the Fed has changed its description of gold to "deep storage" gold. Due to the close relationship that Barrick had with the USA government Barrick probably made a deal that the USA would be shipped all of gold production from Pascua Lama and this gold would cover all the gold lost from leasing the yellow stuff from Fort Knox.
No doubt the USA panicked when they realized that the gold form Pascua Lama will not enter official reserves of the USA. On the following day we see massive relentless selling of gold.
The USA desperately needs to obtain cheap gold to replace what it lost.
Huge landslide shuts Kennecott Utah Copper's Bingham Canyon Mine
- From: News Limited Network
- April 12, 2013
- Vast landslide was "a couple of thousand feet wide' and tall
- The slide covered about two-thirds of the bottom of the pit
- Tibet landslide leaves 21 dead, 62 missing
Read more: http://www.news.com.au/world-news/huge-landslide-shuts-kennecott-utah-coppers-bingham-canyon-mine/story-fndir2ev-1226619124124#ixzz2QZ0Q1tuL
The vast landslide that has shut Kennecott Utah Copper's Bingham Canyon Mine.
The world's largest man-made excavation - a US copper mine - has been shut down by an enormous landslide that smashed roads and buildings and left two-thirds of the pit base buried.
Nobody was hurt in the collapse at the massive open-cast Bingham Canyon Mine, run by Rio Tinto-owned Kennecott Utah Copper - largely because workers had been evacuated amid several weeks of warning signs the ground was going to shift.
"We started noticing movement in that part of the mine in February," said Rio Tinto-Kennecott spokesman Kyle Bennett, according to The Salt Lake City Tribune.
He said that indications were that the mine’s wall was slipping a millimetre or so each day. The mine monitors for movement at all times.
But, by Wednesday morning (local time) mine engineers started seeing movement of up to 5cm per day and moved out the 37 workers at the bottom of the vast open mine. The company also warned residents nearby that a slide was possible any day.
"At 11am yesterday we moved everyone out, including those who were working in the bottom of the mine," Bennett said. "All of our employees are safe and accounted for."
Bingham Canyon Mine is the largest man-made excavation in the world. It has been in production since 1906, and features a pit almost one kilometre deep and 4km wide.
"This is something that we had anticipated," Bennett told Deseret News.
"We knew the slide was imminent. We had relocated machinery, we had rerouted roads, we had rerouted utilities, we had rerouted buildings."
Ted Himebaugh, Kennecott's general manager of operation readiness, said he had seen nothing like it in his 36 years with the company.
"Our primary goal now is to determine how we can safely resume operations and provide not only the jobs for the people but money to the state of Utah and economy," Himebaugh told Deseret News.
Kennecott is the second largest copper producer in the US, supplying about a quarter of the country's copper, the company's website states.
end
Dr Paul Craig Roberts discusses the huge 500 metric tonne sale on Friday which equates to 16 million oz
(courtesy Dr Paul Craig Roberts)
Assault On Gold Update — Paul Craig Roberts
NOTE: Readers point out that gold weights are based on metric tons and Troy ounces. 500 metric tons of gold would be 16,075,000 troy ounces. This changes the arithmetic slightly but not the point
I was the first to point out that the Federal Reserve was rigging all markets, not merely bond prices and interest rates, and that the Fed is rigging the bullion market in order to protect the US dollar’s exchange value, which is threatened by the Fed’s quantitative easing. With the Fed adding to the supply of dollars faster than the demand for dollars is increasing, the price or exchange value of the dollar is set up to fall.
A fall in the dollar’s exchange rate would push up import prices and, thereby, domestic inflation, and the Fed would lose control over interest rates. The bond market would collapse and with it the values of debt-related derivatives on the “banks too big too fail” balance sheets. The financial system would be in turmoil, and panic would reign.
Rapidly rising bullion prices were an indication of loss of confidence in the dollar and were signaling a drop in the dollar’s exchange rate. The Fed used naked shorts in the paper gold market to offset the price effect of a rising demand for bullion possession. Short sales that drive down the price trigger stop-loss orders that automatically lead to individual sales of bullion holdings once their loss limits are reached.
According to Andrew Maguire, on Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.
A naked short is when the short seller does not have or borrow the item that he shorts, but sells shorts regardless. In the paper gold market, the participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal.
In other words, with naked shorts, no physical metal is actually sold.
People ask me how I know that the Fed is rigging the bullion price and seem surprised that anyone would think the Fed and its bullion bank agents would do such a thing, despite the public knowledge that the Fed is rigging the bond market and the banks with the Fed’s knowledge rigged the Libor rate. The answer is that the circumstantial evidence is powerful.
Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.
Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?
What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.
Who can afford to lose that kind of money? Only a central bank that can print it.
I believe that the authorities would like to drive the gold price down further and will, if they can, hit the gold market twice more next week and put gold at $1,400 per ounce or lower. The successive declines could perhaps spook individual holders of physical gold and result in actual net sales of physical gold as people reduced their holdings of the metal.
However, bullion dealer Bill Haynes told kingworldnews.com that last Friday bullion purchasers among the public outpaced sellers by 50 to 1, and that the premiums over the spot price on gold and silver coins are the highest in decades. I myself checked with Gainesville Coins and was told that far more buyers than sellers had responded to the price drop.
Unless the authorities have the actual metal with which to back up the short selling, they could be met with demands for deliveries. Unable to cover the shorts with real metal, the scheme would be exposed.
Do the authorities have the metal with which to cover shorts? I do not know. However, knowledgeable dealers are suspicious. Some think that US physical stocks of gold were used up in sales in efforts to disrupt the rise in the gold price from $272 in December 2000 to $1,900 in 2011. They point to Germany’s recent request that the US return the German gold stored in the US, and to the US government’s reply that it would return the gold piecemeal over seven years. If the US has the gold, why not return it to Germany?
The clear implication is that the US cannot deliver the gold.
Andrew Maguire also reports that foreign central banks, especially China, are loading up on physical gold at the low prices made possible by the short selling. If central banks are using their dollar holdings to purchase bullion at bargain prices, the likely results will be pressure on the dollar’s exchange value and a declining market supply of physical bullion. In other words, by trying to protect the dollar from its quantitative easing policy, the Fed might be hastening the dollar’s demise.
Possibly the Fed fears a dollar crisis or derivative blowup is nearing and is trying to reset the gold/dollar price prior to the outbreak of trouble. If ill winds are forecast, the Fed might feel it is better positioned to deal with crisis if the price of bullion is lower and confidence in bullion as a refuge has been shaken.
In addition to short selling that is clearly intended to drive down the gold price, orchestration is also indicated by the advance announcements this month first from brokerage houses and then from Goldman Sachs that hedge funds and institutional investors would be selling their gold positions. The purpose of these announcements was to encourage individual investors to get out of gold before the big boys did. Does anyone believe that hedge funds and Wall Street would announce their sales in advance so the small fry can get out of gold at a higher price than they do?
If these advanced announcements are not orchestration, what are they?
I see the orchestrated effort to suppress the price of gold and silver as a sign that the authorities are frightened that trouble is brewing that they cannot control unless there is strong confidence in the dollar. Otherwise, what is the point of the heavy short selling and orchestrated announcements of gold sales in advance of the sales?
end
Clive Maund comments on Gold's smash with declining inventories at JPMorgan with respect to gold.
(courtesy Clive Maund/GATA)
Clive Maund: Gold smash aims to rebuild JPM's Comex inventory
Submitted by cpowell on Mon, 2013-04-15 16:06. Section: Daily Dispatches
12:01p ET Monday, April 15, 2013
Dear Friend of GATA and Gold:
Market analyst Clive Maund writes that the gold plunge likely was engineered in large part to enable JPMorganChase to replenish its dangerously diminishing gold inventory by running weak hands out of the market.
Maund writes: "There has been a big drawdown in physical gold warehouse stocks at the Comex this year, and a really dramatic drawdown at the JPMorganChase depository. If, as a result of this, stocks are too low to meet deliveries, gold would have to be bought in the open market, driving prices sharply higher, and they for sure don't want that now that their stocks are so low. So the game is to smash the gold price so that they can replenish their stocks on the cheap -- and they are not short of friends in high places who can assist them in this endeavor."
Maund's commentary is posted at his Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Did single entity trigger gold plunge?
Submitted by cpowell on Mon, 2013-04-15 14:58. Section: Daily Dispatches
11a ET Monday, April 15, 2013
Dear Friend of GATA and Gold:
Ross Norman at bullion broker Sharps Pixley and Mark O'Byrne at gold dealer GoldCore seem to think that the gold plunge may be largely the work of shorting by a single entity.
Norman's commentary is posted at Sharps Pixley's Internet site here:
O'Byrne's is at GoldCore's here:
In any case, gold investors can count on the silence of the World Gold Council and most gold and silver mining companies, which surely will accept their devastation with their usual indifference to their shareholders.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Shanghai Gold exchange may hike gold and silver margins tomorrow:
(courtesy zero hedge)
Shanghai Gold Exchange To Hike Gold, Silver Margins
Submitted by Tyler Durden on 04/15/2013 07:44 -0400
Adding insult to injury, the Shanghai Gold Exchange overnight announced that following the tumbling precious metal prices and limit down drop in early trading, it may raise trading margins for its gold and silver forward contracts. The SGE announced thatshould prices not recover by the end of the trading day (which they didn't), trading margins for the gold forward contract will be raised to 12 percent, while margins for the silver forward contract will be hiked to 15 percent, the exchange said in a statement on its website. Curiously, gold prices in China were up in early trading only to take a dramatic U-turn on Monday, reversing early gains to drop to a two-year trough once the Japanese pre-margining onslaught was unleashed on the market.
From the SGE (translated)
'Massive physical offtake' in London gold, Maguire tells King World News
Submitted by cpowell on Mon, 2013-04-15 17:25. Section: Daily Dispatches
Read more: http://www.news.com.au/world-news/huge-landslide-shuts-kennecott-utah-coppers-bingham-canyon-mine/story-fndir2ev-1226619124124#ixzz2QZ0Q1tuL
Submitted by Tyler Durden on 04/15/2013 07:44 -0400
1:20p ET Monday, April 15, 2013
Dear Friend of GATA and Gold:
London metals trader Andrew Maguire tells King World News today that central banks and commercial traders seem to be buying all the gold paper being sold under margin pressure and that there is "massive physical offtake."
Maguire says: "Western governments have sanctioned leveraged paper selling by their agents, the bullion banks, to drive the price down. What people are seeing right now has nothing to do with the physical market. In fact the physical market is on fire right now."
An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
Last Wednesday we had two big stories on mining operations with problems. The first story is the one above where Kennecot Utah Copper had a huge mudslide covering their huge deposit and forcing the mine to shut down. This supplies approximately 16% of USA production or 6.4 million oz.
The second big story is Barrick as they announced that they are mothballing the big Pascua Lama project in Argentina and Chile due to environmental problems and ownership issues. You will recall that we strongly believe that he USA has a claim on Barrick's gold reserves coming from Pascua Lama as the Fed has changed its description of gold to "deep storage" gold. Due to the close relationship that Barrick had with the USA government Barrick probably made a deal that the USA would be shipped all of gold production from Pascua Lama and this gold would cover all the gold lost from leasing the yellow stuff from Fort Knox.
No doubt the USA panicked when they realized that the gold form Pascua Lama will not enter official reserves of the USA. On the following day we see massive relentless selling of gold.
The USA desperately needs to obtain cheap gold to replace what it lost.
Huge landslide shuts Kennecott Utah Copper's Bingham Canyon Mine
- From: News Limited Network
- April 12, 2013
- Vast landslide was "a couple of thousand feet wide' and tall
- The slide covered about two-thirds of the bottom of the pit
- Tibet landslide leaves 21 dead, 62 missing
Read more: http://www.news.com.au/world-news/huge-landslide-shuts-kennecott-utah-coppers-bingham-canyon-mine/story-fndir2ev-1226619124124#ixzz2QZ0Q1tuL
The vast landslide that has shut Kennecott Utah Copper's Bingham Canyon Mine.
The world's largest man-made excavation - a US copper mine - has been shut down by an enormous landslide that smashed roads and buildings and left two-thirds of the pit base buried.
Nobody was hurt in the collapse at the massive open-cast Bingham Canyon Mine, run by Rio Tinto-owned Kennecott Utah Copper - largely because workers had been evacuated amid several weeks of warning signs the ground was going to shift.
"We started noticing movement in that part of the mine in February," said Rio Tinto-Kennecott spokesman Kyle Bennett, according to The Salt Lake City Tribune.
He said that indications were that the mine’s wall was slipping a millimetre or so each day. The mine monitors for movement at all times.
But, by Wednesday morning (local time) mine engineers started seeing movement of up to 5cm per day and moved out the 37 workers at the bottom of the vast open mine. The company also warned residents nearby that a slide was possible any day.
"At 11am yesterday we moved everyone out, including those who were working in the bottom of the mine," Bennett said. "All of our employees are safe and accounted for."
Bingham Canyon Mine is the largest man-made excavation in the world. It has been in production since 1906, and features a pit almost one kilometre deep and 4km wide.
"This is something that we had anticipated," Bennett told Deseret News.
"We knew the slide was imminent. We had relocated machinery, we had rerouted roads, we had rerouted utilities, we had rerouted buildings."
Ted Himebaugh, Kennecott's general manager of operation readiness, said he had seen nothing like it in his 36 years with the company.
"Our primary goal now is to determine how we can safely resume operations and provide not only the jobs for the people but money to the state of Utah and economy," Himebaugh told Deseret News.
Kennecott is the second largest copper producer in the US, supplying about a quarter of the country's copper, the company's website states.
end
Dr Paul Craig Roberts discusses the huge 500 metric tonne sale on Friday which equates to 16 million oz
(courtesy Dr Paul Craig Roberts)
Assault On Gold Update — Paul Craig Roberts
NOTE: Readers point out that gold weights are based on metric tons and Troy ounces. 500 metric tons of gold would be 16,075,000 troy ounces. This changes the arithmetic slightly but not the point
I was the first to point out that the Federal Reserve was rigging all markets, not merely bond prices and interest rates, and that the Fed is rigging the bullion market in order to protect the US dollar’s exchange value, which is threatened by the Fed’s quantitative easing. With the Fed adding to the supply of dollars faster than the demand for dollars is increasing, the price or exchange value of the dollar is set up to fall.
I was the first to point out that the Federal Reserve was rigging all markets, not merely bond prices and interest rates, and that the Fed is rigging the bullion market in order to protect the US dollar’s exchange value, which is threatened by the Fed’s quantitative easing. With the Fed adding to the supply of dollars faster than the demand for dollars is increasing, the price or exchange value of the dollar is set up to fall.
A fall in the dollar’s exchange rate would push up import prices and, thereby, domestic inflation, and the Fed would lose control over interest rates. The bond market would collapse and with it the values of debt-related derivatives on the “banks too big too fail” balance sheets. The financial system would be in turmoil, and panic would reign.
Rapidly rising bullion prices were an indication of loss of confidence in the dollar and were signaling a drop in the dollar’s exchange rate. The Fed used naked shorts in the paper gold market to offset the price effect of a rising demand for bullion possession. Short sales that drive down the price trigger stop-loss orders that automatically lead to individual sales of bullion holdings once their loss limits are reached.
According to Andrew Maguire, on Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.
A naked short is when the short seller does not have or borrow the item that he shorts, but sells shorts regardless. In the paper gold market, the participants are betting on gold prices and are content with the monetary payment. Therefore, generally, as participants are not interested in taking delivery of the gold, naked shorts do not need to be covered with the physical metal.
In other words, with naked shorts, no physical metal is actually sold.
People ask me how I know that the Fed is rigging the bullion price and seem surprised that anyone would think the Fed and its bullion bank agents would do such a thing, despite the public knowledge that the Fed is rigging the bond market and the banks with the Fed’s knowledge rigged the Libor rate. The answer is that the circumstantial evidence is powerful.
Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.
Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?
What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds. The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.
Who can afford to lose that kind of money? Only a central bank that can print it.
I believe that the authorities would like to drive the gold price down further and will, if they can, hit the gold market twice more next week and put gold at $1,400 per ounce or lower. The successive declines could perhaps spook individual holders of physical gold and result in actual net sales of physical gold as people reduced their holdings of the metal.
However, bullion dealer Bill Haynes told kingworldnews.com that last Friday bullion purchasers among the public outpaced sellers by 50 to 1, and that the premiums over the spot price on gold and silver coins are the highest in decades. I myself checked with Gainesville Coins and was told that far more buyers than sellers had responded to the price drop.
Unless the authorities have the actual metal with which to back up the short selling, they could be met with demands for deliveries. Unable to cover the shorts with real metal, the scheme would be exposed.
Do the authorities have the metal with which to cover shorts? I do not know. However, knowledgeable dealers are suspicious. Some think that US physical stocks of gold were used up in sales in efforts to disrupt the rise in the gold price from $272 in December 2000 to $1,900 in 2011. They point to Germany’s recent request that the US return the German gold stored in the US, and to the US government’s reply that it would return the gold piecemeal over seven years. If the US has the gold, why not return it to Germany?
The clear implication is that the US cannot deliver the gold.
Andrew Maguire also reports that foreign central banks, especially China, are loading up on physical gold at the low prices made possible by the short selling. If central banks are using their dollar holdings to purchase bullion at bargain prices, the likely results will be pressure on the dollar’s exchange value and a declining market supply of physical bullion. In other words, by trying to protect the dollar from its quantitative easing policy, the Fed might be hastening the dollar’s demise.
Possibly the Fed fears a dollar crisis or derivative blowup is nearing and is trying to reset the gold/dollar price prior to the outbreak of trouble. If ill winds are forecast, the Fed might feel it is better positioned to deal with crisis if the price of bullion is lower and confidence in bullion as a refuge has been shaken.
In addition to short selling that is clearly intended to drive down the gold price, orchestration is also indicated by the advance announcements this month first from brokerage houses and then from Goldman Sachs that hedge funds and institutional investors would be selling their gold positions. The purpose of these announcements was to encourage individual investors to get out of gold before the big boys did. Does anyone believe that hedge funds and Wall Street would announce their sales in advance so the small fry can get out of gold at a higher price than they do?
If these advanced announcements are not orchestration, what are they?
I see the orchestrated effort to suppress the price of gold and silver as a sign that the authorities are frightened that trouble is brewing that they cannot control unless there is strong confidence in the dollar. Otherwise, what is the point of the heavy short selling and orchestrated announcements of gold sales in advance of the sales?
end
Clive Maund comments on Gold's smash with declining inventories at JPMorgan with respect to gold.
(courtesy Clive Maund/GATA)
Clive Maund comments on Gold's smash with declining inventories at JPMorgan with respect to gold.
(courtesy Clive Maund/GATA)
Clive Maund: Gold smash aims to rebuild JPM's Comex inventory
Submitted by cpowell on Mon, 2013-04-15 16:06. Section: Daily Dispatches
12:01p ET Monday, April 15, 2013
Dear Friend of GATA and Gold:
Market analyst Clive Maund writes that the gold plunge likely was engineered in large part to enable JPMorganChase to replenish its dangerously diminishing gold inventory by running weak hands out of the market.
Maund writes: "There has been a big drawdown in physical gold warehouse stocks at the Comex this year, and a really dramatic drawdown at the JPMorganChase depository. If, as a result of this, stocks are too low to meet deliveries, gold would have to be bought in the open market, driving prices sharply higher, and they for sure don't want that now that their stocks are so low. So the game is to smash the gold price so that they can replenish their stocks on the cheap -- and they are not short of friends in high places who can assist them in this endeavor."
Maund's commentary is posted at his Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
Did single entity trigger gold plunge?
Submitted by cpowell on Mon, 2013-04-15 14:58. Section: Daily Dispatches
11a ET Monday, April 15, 2013
Dear Friend of GATA and Gold:
Ross Norman at bullion broker Sharps Pixley and Mark O'Byrne at gold dealer GoldCore seem to think that the gold plunge may be largely the work of shorting by a single entity.
Norman's commentary is posted at Sharps Pixley's Internet site here:
O'Byrne's is at GoldCore's here:
In any case, gold investors can count on the silence of the World Gold Council and most gold and silver mining companies, which surely will accept their devastation with their usual indifference to their shareholders.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
Shanghai Gold exchange may hike gold and silver margins tomorrow:
(courtesy zero hedge)
(courtesy zero hedge)
Shanghai Gold Exchange To Hike Gold, Silver Margins
Adding insult to injury, the Shanghai Gold Exchange overnight announced that following the tumbling precious metal prices and limit down drop in early trading, it may raise trading margins for its gold and silver forward contracts. The SGE announced thatshould prices not recover by the end of the trading day (which they didn't), trading margins for the gold forward contract will be raised to 12 percent, while margins for the silver forward contract will be hiked to 15 percent, the exchange said in a statement on its website. Curiously, gold prices in China were up in early trading only to take a dramatic U-turn on Monday, reversing early gains to drop to a two-year trough once the Japanese pre-margining onslaught was unleashed on the market.
From the SGE (translated)
http://www.zerohedge.com/news/2013-04-15/cme-hikes-gold-silver-margins-185
( Warned this was coming folks..... )
CME Hikes Gold, Silver Margins By 18.5%
Anyone surprised, please raise your hands. And yes, it was fun when margin were hiked only on surges in the various futures contracts. Now, dumps works just as well. The logic, of course, is that gold shorts are also margined. However, judging by the immediate $15 drop in gold upon the announcement, those who are short the metals certainly have a much, much bigger balance sheet and cash hoard to satisfy any collateral requirements than those long. Next: expect the Shanghai Gold Exchange to hike margins in a few short hours once China wakes up and looks at overnight PM prices in horror.
Source: CME
http://www.zerohedge.com/news/2013-04-15/gold-plummets-most-30-years-stocks-have-biggest-drop-2013
( Post - mortem of today's routs.... )
Gold Plummets By Most In 30 Years, Stocks Have Biggest Drop Of 2013
A bad day all around. Liquidation continued from Asia and commodities were Baumgartner'd - especially gold and silver, suffering their biggest single-day drop in 30 years. Weak NAHB data stalled any BTFD in stocks and despite a couple of tries at EUR ramps, stocks had their biggest drop in 5 months. The horrible acts in Boston seemed a catalyst for late-day weakness in stocks but there was no bid and heavy volume as homebuilders were hit their hardest in 10 months and US equity indices plunged into the close. Dow Transports had its worst day in 17 months. Away from stocks, FX markets were just as volatile withJPY's 2-day rally the biggest in 35 months(and AUD the biggest down day in 5 months). Swiss 2Y rates dropped to their lowest of the year and US Treasuries were relatively calm (though bid) until Boston hit and then dropped 3-4bps on the day. VIX also surged higher by 5.2 vols to 17.25% (its highest since the Italian elections).
S&P futures ended at the lows...
and VIX surged...
which took everything but the magic Dow below Cyprus levels...
As FX Carry was dumped in a hurry... AUDJPY especially...
And commodities were slammed...
But some other markets had seriously bad days...
and Gold broke all kinds of records...
after-hours gold dropped more and S&P futures also followed...
Charts: Bloomberg
Bonus Chart: Despite the day's chaos - risk-assets led stocks lower all day and the algos would not beat the real selling pressure for once...
http://www.kitco.com/market/
( End of the day numbers.... gold hit low at 1334.9 , silver at 22.52 )
Liquidations Monday .....
http://www.kitco.com/market/
( early morning routs.... )
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
http://www.zerohedge.com/news/2013-04-15/shanghai-gold-exchange-hike-gold-silver-margins
Shanghai Gold Exchange To Hike Gold, Silver Margins
Adding insult to injury, the Shanghai Gold Exchange overnight announced that following the tumbling precious metal prices and limit down drop in early trading, it may raise trading margins for its gold and silver forward contracts. The SGE announced that should prices not recover by the end of the trading day (which they didn't), trading margins for the gold forward contract will be raised to 12 percent, while margins for the silver forward contract will be hiked to 15 percent, the exchange said in a statement on its website. Curiously, gold prices in China were up in early trading only to take a dramatic U-turn on Monday, reversing early gains to drop to a two-year trough once the Japanese pre-margining onslaught was unleashed on the market.
From the SGE (translated)
Next up , Comex margin hikes for gold and silver ?
http://www.zerohedge.com/news/2013-04-15/which-countrys-gold-will-be-sold-next
Which Country's Gold Will Be Sold Next?
The first time the Status Quo/Troika tried to force a (not so) stealthy gold confiscation on an insolvent European country was back in early 2012, when as part of the most recent Greek bailout MOU, it was disclosed 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." However, the public outcry was so loud that the Troika had no choice but to shelve its plans and proceed with a full scale bondholder restructuring instead. Fast forward to last week, when Europe's appetite forphysical gold came back with a bang, this time as part of the Cyprus "Debt Sustainability Analysis", and subsequent comments from Mario Draghi, demanding that tiny Cyprus, whose opposition, already weakened by the confiscation of uninsured deposits would be far less vocal than Greece's, sell off €400MM, or virtually all of its sovereign gold, over 10 of its 13.9 total tons, to cover the excess costs of its ever ballooning sovereign bailout.
So who's next? It remains to be seen, although we are certain there will be a very clear correlation between the next country to see its gold "purchased" by the status quo, likely some time in the next 1-3 months, and the amount of total non-performing loans on said country's bank balance sheets. The usual suspects are presented below.
And, in the parlance of Goldman Sachs, these countries better scramble to sell, sell, sell now before gold hits 0, or maybe even goes negative.
Source: World Gold Council
http://silverdoctors.com/here-we-go-again-gold-silver-gap-down-on-globex/
HERE WE GO AGAIN…SILVER PLUNGING TO $23 HANDLE, GOLD TO $1420: FREE-FALL IN PROGRESS!
*Update: Full-fledged margin-call blood-bath in progress, silver nearing $23 handle, gold to $1420!!
http://www.zerohedge.com/news/2013-04-15/all-eyes-gold-rout-most-oversold-14-years
All Eyes On The Gold Rout, Most Oversold In 14 Years
- American Express
- Bank of America
- Bank of America
- Bank of England
- Barclays
- BOE
- British Pound
- Central Banks
- China
- Citigroup
- Consumer Sentiment
- Copper
- CPI
- Deutsche Bank
- Equity Markets
- fixed
- General Electric
- Global Economy
- Goldman Sachs
- goldman sachs
- Gross Domestic Product
- Housing Starts
- India
- International Monetary Fund
- Investor Sentiment
- Japan
- Jim Reid
- McDonalds
- Morgan Stanley
- NAHB
- Philly Fed
- Precious Metals
- Price Action
- Real estate
- recovery
- Renminbi
- SocGen
- Volatility
- Wells Fargo
- World Bank
- World Economic Outlook
While China's trifecta miss of GDP, Retail Sales and Industrial Production all coming lower than expected was likely a factor in the overnight rout of gold, the initial burst of selling started well before the Chinese data hit the tape, or as soon as Japan opened for trading with forced financial institution selling to prefund cash for any and all future JGB VaR-driven margin calls. It was all downhill from there, literally, with overnight selling of gold punctured by brief burst of targeted stop hunting, sending the metal down $116 per ounce, as spot touches $1385 after trading nearly at $1500 yesterday and down $200 in 4 days. End result, whether due to a re-collapsing global economy, margin calls, fears forced Cyprus gold selling will be imposed on all other insolvent European countries, coordinated central bank slams, hedge fund positioning, long unwinds, liquidations, fears about future demand, or whatever the usual selling suspects are, is that gold tumbles an unprecedented 7.8% on 230,000 contracts in one day, and well over 10% in two days, pushing the yellow metal 14 day RSI band to 18, meaning it is now most oversold since 1999. In brief, it is an all out panic, with Goldman still telling clients to sell, i.e., buying every shiny ounce all the way down (not to mention India, where accordingto UBS Friday demand was double the average).
Below are some banks' takes on the overnight action via BBG:
Deutsche Bank:
- Unclear at this stage if there’s a clear link between the decline in gold prices and the currency markets; China’s weak 1Q GDP data probably had a more direct impact on currencies this morning than gold, Bilal Hafeez, strategist at Deutsche Bank, says in interview
- Commodity prices underwent some position adjustments on Friday, unclear on cause
- Overall commodity cycle will be important going forward for currencies such as AUD and NZD
Citigroup:
- Impact of decline in gold price was seen in commodity-related currencies like AUD and NZD; some unwinding in the JPY was also noted; EUR and GBP have been largely steady on the gold move, Rohan Ramchandani, head of European spot trading at Citigroup, says in interview
- Gold decline may have been related to some break in technical levels and the general improvement in global risk appetite
- Gold drop may have some more room to run in short-term but in the longer-term, gold should be supported, and likewise the commodity currencies; market has been comfortably long on the gold trade since the financial crisis
Morgan Stanley
- Impact of gold decline on AUD should be buffeted by the easy global liquidity conditions, Ian Stannard, strategist at Morgan Stanley, says in interview
- Expect AUD to hold up in recent trading range even with the decline in gold prices as long as equity markets continue to provide a positive signal and there’s prospect of Japanese asset reallocation overseas
ING:
- While gold should decline in the longer term on USD strength, short-term risk is financial dislocation, Chris Turner, strategist at ING, writes in note
- Pickup in gold volatility may see increase in the 15% haircuts on gold’s use as collateral at major financial exchanges; gold has become a strong source of collateral since the global financial crisis
- Gold collapse has sparked some unwind in USD/JPY
Barclays:
- Plunge in prices of precious metals has caught market attention, suggesting note of caution for risk sentiment in general, Jordan Kotick, global head of technical strategy at Barclays, writes in note
- Break in gold and silver’s multi-year range lows are forcing liquidation across board, not just in USD terms but also when priced in almost any currency
- Markets may unsettle, risk of near-term correction in many recent trends such as JPY crosses, AUD/USD and USD/CAD
SEB:
- Gold collapse on break of 1,522/25 key support has forced copper, oil to take a beating; CAD is weaker while JPY correct seems to be getting legs
In other words, nobody has any idea what is going on, but is piling on to spread the confusion. Which, of course, for those who only care about the ongoing dilution of global fiat, which shows no signs of halting especially with the global economic deterioration accelerating, courtesy of central bank printing, a very welcome opportunity to paper dollar cost-average much lower.
Speaking of deteriorating economics, here is a brief recap of the Chinese data via SocGen:
The week opened with a truckload of unpleasant surprises from Chinese activity data. GDP growth decelerated unexpectedly to 7.7%yoy in Q1 from 7.9%yoy previously. March industrial production and fixed asset investment also came in decisively below street expectations, despite accommodative liquidity conditions. The data disappointment shocked down prices of all kinds of risky assets, from the AUD, commodity prices, to stock markets across the region. We do not think Q1 marked the end of recovery, as the lagged impact of rapid credit growth in the past few months should kick in later. However, at the same time, the latest data firmly support our call for a weak and short-lived cyclical recovery of the Chinese economy in 2013.
China’s economic growth unexpectedly decelerated to 7.7%yoy in the first quarter The Chinese economy grew 7.7% yoy in Q1, below market expectations (Cons. & SG 8%) and down from 7.9% yoy in Q4 2012. The biggest surprise to us was the sharp slide in the investment contribution (2.3ppt from 3.9ppt in 2012), despite the clear acceleration in credit growth since Q4 2012. Consumption – private and public combined – contributed 4.3ppt, only marginally higher than the 4.1ppt in 2012 but substantially short of the 6.4ppt in Q1 2012. As we expected, net exports were a big plus, adding 1.1ppt to Q1 growth (vs. -0.2ppt in 2012).
Retail sales registered a 12.6%yoy growth in March, in line with expectations (Cons. 12.6%, SG 12.5%, Jan-Feb 12.3%). But such a pace still suggested a fairly soft momentum of consumption, by China’s standard. The impact of anti-corruption measures was easily spotted, with the catering sector mired in contraction (-1.1%yoy in March). Other major drags were car and petroleum sales. Comparing to December, these three categories subtracted 1.2ppt, 1ppt
and 2.1ppt from the headline growth, respectively.
and 2.1ppt from the headline growth, respectively.
Industrial production growth slid substantially from 9.9%yoy during the first two months to 8.9%yoy in March (Cons. 10.1%; SG 9.7%) – the slowest pace since May 2009. Utility production was particularly weak, with power generation growth falling to 2.1%yoy in March from 3.4%yoy in January and February. In addition, textile and IT equipment manufacturing also slowed down notably. Throughout the first quarter, IP persistently undershot expectations, while export growth stayed firmly on the other side of the consensus. This latest IP reading only casted more doubt on the reliability of the strong export data in the past few months.
Consistent with GDP breakdowns, fixed asset investment (FAI) grew slower at 20.9%yoy in Q1 (Cons. 21.3%, SG 21.5%), implying a deceleration to 20.7%yoy in March from 21.2%yoy in January and February. Real estate investment growth fell back to 17.6%yoy from the surprisingly solid level of 22.8%yoy previously, indicating that developers may have started to adjust their investment plan shortly after the announcement of renewed tightening. Other property sector data were also not as upbeat as we initially thought. Property starts contracted again by 20.2% yoy in March, after only two months of positive growth; property sales growth almost halved to 26.6%yoy in March from the feverish pace in the previous two months. Given this, the well-reported surge in second-hand home transaction seemed to be largely regional.
Manufacturing FAI posted some improvement, rising 19.9%yoy in March (vs. 17%yoy in the first two months). However, those sectors that are suffering from excess capacity continued to show little sign of revival. Infrastructure investment grew apace at 26.5%yoy in March, up from 24.2%yoy in January and February. State-driven FAI remained the major support to China’s growth.
* * *
So yeah, central banks will stop printing any minute now, and gold will go to zero, so Cyprus - please sell your gold to the Troika, Russia, Goldman or China now before it plunges to triple, double, single, or zero digit range.
* * *
The rest of the overnight action recap comes from Deutsche's Jim Reid:
Ahead of us this week is a busy seven days of politics, earnings and economic data. On the earnings side, about a quarter of the S&P500 by market cap will be reporting quarterly results. Setting the tone on the macro side will be the Q1 results from many of the big banks including Citigroup who report today before the US market open. This will be followed by Goldman Sachs tomorrow, Bank of America and American Express on Wednesday and Morgan Stanley on Thursday. Outside of the financials, we also have a number of tech giants including Google, Microsoft and IBM reporting earnings on Thursday. Corporate bellwethers Coca Cola (Tuesday), General Electric and McDonalds (Friday) are also scheduled to report this week.
In Europe, the Italian parliament will be holding its presidential election on Thursday April 18th to elect a successor to Giogio Napolitano. Numerous names have been floated as his successor including former Prime Ministers Romano Prodi and Giuliano Amato, and former EU Commissioner Emma Bonino, but no clear favourite has emerged. A two-thirds vote is required on any of the first three rounds of balloting, after which a majority suffices. The process is expected to last several days.
Elsewhere we can expect more rhetoric about currency wars this week as political and business leaders gather in Washington for the World Bank/IMF spring meetings beginning this Friday. Over the weekend, the US treasury fired the first shot, urging Japan to “refrain from competitive devaluation” in its semiannual foreign currency report to congress. The Treasury report also urged Japan to adhere to international commitments “to remain oriented towards
meeting respective domestic objectives using domestic instruments”. The Treasury found that no country met the legal standard to be designated a “currency manipulator” but said that China’s renminbi “remains significantly undervalued”.
meeting respective domestic objectives using domestic instruments”. The Treasury found that no country met the legal standard to be designated a “currency manipulator” but said that China’s renminbi “remains significantly undervalued”.
We’ll preview more of the week ahead a little later, but first returning to Friday where earnings beats from JPMorgan and Wells Fargo failed to spark the S&P500 (-0.28%) to its fifth straight positive session. Perhaps weighing on investor sentiment was the commentary from both banks around sluggish loan demand and net interest margins. Away from earnings, there was no mistaking that Friday was a weak day for US data. Both retail sales (-0.4% vs 0% expected) and consumer sentiment (72.3 vs 78.6) disappointed to the downside, renewing fears of another mid-year seasonal slowdown in US data.
In terms of retail sales, downward revisions to both January and February numbers perhaps hinted at the effect of higher tax rates on consumer spending. Meanwhile, the UofM consumer sentiment index fell to a nine-month low. The index of six-month expectations decreased to 64.2 this month from 70.8 in the prior period. We’ll get further indication on the direction of US data with the Empire manufacturing survey today.
In terms of price action, commodities continued to underperform other risk assets on Friday. Indeed, if we look at a longer time horizon, the S&P GSCI index has underperformed the S&P500 by about 15% in the year to date as the commodities complex continues to decouple from equities. The most notable move was gold which closed 5% lower in its largest one day drop since 2008. The precious metal has lost about 20% since the October 2012 peak. Brent (- 1.1%) and copper (-2.4%) also had soft trading sessions on Friday, a move which has been exacerbated by lower than expected Q1 growth numbers from China overnight.
China’s GDP growth was 7.7% year-on-year for the first quarter which was lower than the median Bloomberg estimate of 8.0% and lower than the 7.9% growth seen in Q4 2012. The monthly activity indicators also disappointed with industrial production (9.5% vs 10%), fixed asset investment (20.9% vs 21.3%) and retail sales (12.4% vs 12.5%) all coming below expectations.
The market reaction to the Chinese data has been negative with most major Asian bourses trading about 1-2% weaker overnight. Across the region, commodity stocks are leading declines on Monday including 4%+ falls in mining giants BHP and Rio Tinto – partly in reaction to the Chinese data but also taking the lead from last Friday’s price action in commodities. The ASX200 (-1.2%) is underperforming other indices on the back of weakness in miners, and is under further pressure with the weak Chinese data. The AUD is 0.7% weaker against the greenback. Declines in oil (-2.1%), copper (-1.9%) and gold (-2.5%) are continuing this morning.
In the EM space, acting President Nicolas Maduro was elected as Venezuela's president with 50.7% of vote, the national electoral office said after more than 99% of the ballots were counted. The opposition's Henrique Capriles Radonski had 49.1% of the vote. The head of the country's electoral council said that the "results are irreversible" (Bloomberg).
Turning to the day ahead, as discussed earlier the US dataflow continues today with the Empire manufacturing survey and NAHB homebuilders index. Citigroup reports earnings before the opening bell. Over the rest of the week, the IMF will publish its World Economic outlook on Tuesday and its semiannual Global Financial Stability Report on Wednesday.
Beyond today, the US data calendar highlights are tomorrow's CPI, building permits, housing starts and industrial production reports; followed by Thursday’s jobless claims. Also due on Thursday is the Philly Fed survey. The Fed’s latest Biege Book will be published on Wednesday. The European data calendar is relatively light with the German ZEW survey tomorrow the major data release of note. The BoE publishes minutes from its last meeting on Wednesday. Spain will auction bonds on Thursday. The Chinese government provides an update on property prices on Thursday. In Japan, the key prints include industrial production, machine tool orders (Monday) and trade (Thursday).
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