Ed Steer's Gold and Silver Report - April 18 , 2013 - Data , News and Views

http://harveyorgan.blogspot.com/2013/04/the-usa-mint-posts-huge-63000-oz-of.html
( posted for today's data..... )

The USA mint posts a huge 63,000 oz of gold sales/IMF warns Spain that its debt is unsustainable/The CBC airs its gold manipulation documentary tonight/

Good evening  Ladies and Gentlemen:

 
Gold closed up $9.80 to $1392.00 (comex closing time).  Silver fell by 6 cents  to $23.24 (comex closing time). 

In the access market at 5 pm:

gold: $1392.10
silver: $23.28



At the comex, the open interest in silver fell considerably to 154,640 contracts but still holding at elevated levels . The open interest on the gold contract  fell by a tiny 733 contracts to 412,350. Generally, I would say that 390,000 OI would be rock bottom for gold but in this environment anything goes.  The total amount of gold ounces standing for April fell slightly to 34.35 tonnes but silver  had an increase to 3.725 million oz standing.


Today we learn that the USA mint sold in one day 63,000 oz of gold or 2 tonnes.  This is without a doubt a record day. Dave from Denver comments on this huge sales of gold.

Keith Barron, Ross Pixley and Chris Martenson all talk about the huge retail demand for gold and silver and the unintended consequences of a lower price spiking higher demand.
  
In paper news, the IMF has now warned Spain that its debt is unsustainable.
In the USA the new jobless claims number is up again.  Also the Philly Manufacturing index was down.
  
 We will go over these and other stories but first.........................

Let us now head over to the comex and assess trading over there today:


The total gold comex open interest fell by  733 contracts today  from  413.083  down to 412,350,  with gold falling by $3.00. yesterday.  The front April OI fell by 30 contracts from 668 down to 638. We had 7 notices filed on Wednesday so we lost 23 contracts or 2300  gold oz will not be standing for the April gold contract month. The next non active contract month is May and here the OI rose by 48 contracts to 1429. The next big contract month is June and here the OI fell by   1712 contracts from 256,184 down to 254,472.  The estimated volume today was huge at 247,297 or 24.297 million oz.  The world produces around 70 million oz ex China ex Russia.  Thus today's volume equates to around 35% of global annual production. The confirmed volume on Wednesday was also huge at 272,693 (approx 848 tonnes of gold). 

The total silver comex OI  fell again by a very large 2662 contracts from 157,302 down to 154,640. It still looks like we still have some  stoic longs who seem impervious to pain. The front non active delivery month of April saw its OI fall by 32 contracts from 63 down to 31 . We had 34 delivery notices filed on Wednesday, so in essence we gained 2 contracts or an additional  10,000 oz of silver  will stand for delivery in April.  The next big delivery month for silver is May and here the OI fell by 5922 contracts to stand at 47,841. We are less than 2  weeks away from first day notice for the May silver delivery month.   The estimated volume today was huge, coming in at 74,501 contracts which equates close to 373 million oz of silver. The world produces 700 million oz per year ex China ex Russia so in essence today's volume equates to 53% of annual silver production. We had confirmed volume on Wednesday at 115,920 contracts which is a huge volume day . (.5795 billion oz or 82.8% of annual silver production)

Comex gold/April contract month:

April 18.2013      April gold.

Gold	Ounces
Withdrawals from Dealers Inventory in oz	nil
Withdrawals from Customer Inventory in oz	65,716.191 (JPM,Scotia)
Deposits to the Dealer Inventory in oz	nil
Deposits to the Customer Inventory, in oz	nil
No of oz served (contracts) today	7  (700  oz)
No of oz to be served (notices)	631  (63,100)  oz
Total monthly oz gold served (contracts) so far this month	10,415  (1,041,500 oz)
Total accumulative withdrawal of gold from the Dealers inventory this month	11,227.021
Total accumulative withdrawal of gold from the Customer inventory this month	250,110.13

We had good activity at the gold vaults.

The dealer had 0 deposits and 0 dealer withdrawals.

We had 0   customer deposits:


total customer deposit:  nil oz



We had 2  customer withdrawals :


i) Out of JPM:  a huge 64,108.691 oz
ii) Out of Scotia:  1607.500 oz

total customer withdrawal:  65,716.191 oz  

We had 2  adjustment:

Out of the JPMorgan vault: a humongous 367,753.665 was adjusted out of the dealer and into the customer account. (over 11 tonnes of gold)

Out of the HSBC vault:  another huge 41,917.061 oz was adjusted out of the dealer and back into the customer account.

total of adjustments from the dealer to the customer account  409,670.726 oz

Thus the dealer inventory  rests tonight at 2.371 million oz (73.74) tonnes of gold.
The total of all gold at the comex rests at 8.95 million oz or 278.3 tonnes.
The comex is slowly losing its gold both at the dealer end and the customer. 

The CME reported that we had 0 notices filed for nil oz of gold today.   The total number of notices so far this month is thus 10,415 contracts x 100 oz per contract or 1,041,500 oz of gold. In order to establish what will be the total number of gold ounces standing, I take the OI for April (638) and subtract out Thursday's delivery notices (0) which leaves us with 638 contracts or 63,800 oz left to be served upon our longs. 

Thus  we have the following gold ounces standing for metal:

1,041,500 (served)  + 63,800 oz (left to be served upon )  =  1,104,600 oz or
34.35 tonnes of gold.

we lost 2300 oz  of additional gold standing for the April gold contract. This is turning out to be a very big delivery month!1

Silver:

April 18.2013:  April silver: 

Silver	Ounces
Withdrawals from Dealers Inventory	599,490.226 (Scotia)
Withdrawals from Customer Inventory	78,143.22 oz (Brinks,CNT,Delaware,Scotia)
Deposits to the Dealer Inventory	nil
Deposits to the Customer Inventory	599,490.226 (JPM)
No of oz served (contracts)	3 contracts  (15,000 oz)
No of oz to be served (notices)	28  (140,000 oz)
Total monthly oz silver served (contracts)	717  (3,585,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month	1,272,381.0 oz
Total accumulative withdrawal of silver from the Customer inventory this month	4,308,186.4

Today, we  had good activity  inside the silver vaults.

 we had 0 dealer deposits and 1  dealer withdrawals.

Out of Scotia:  599,490.226 oz leaves the dealer and this silver enters the vault of JPM.


We had 1 customer deposit:

i) Into JPM: 599,490.226 oz 

Total deposits:  599,490.226  oz

We had 4 customer withdrawals:

i) Out of Brinks:  3,986.60 oz
ii) Out of CNT:  8,295.52 oz
iii) Out of Delaware:  1002.60 oz
iv) Out of Scotia:  64,838.50 oz




total customer withdrawal: 78,143.22 oz

we had 1  adjustments:

Out of the JPM vault:  661,907.28 oz gets adjusted out of the dealer account and enters the customer account.

Registered silver  at :  40.673 million oz

total of all silver:  165.354 million oz.

The CME reported that we had 3 notices filed for 15,000 oz of silver  for the non active contract month of April. In order to calculate the number of silver ounces that will stand, I take the OI for April silver (31) and subtract out Thursday's notices (3) which leaves us with 28 notices or 140,000 oz left to be served upon our longs.

Thus the total number of silver ounces standing in this non active delivery month of April is as follows:

3,585,000 oz served  +   140,000 oz to be served  =  3,725,000 oz

we gained 10,000 oz of additional silver standing.
This is also turning out to be a very good delivery schedule for what is usually a quiet month as April is a non active month for silver.

Two more tons leave the GLD ETF today - when inventory becomes static , watch out ?  First 4/18....

April 18.2013:

Tonnes1,132.99

Ounces36,426,619.21

Value US$50.752   billion

compare with 4/8..... 73 tons gone by 4/18  since 4/8 ....


april 8.2013:

Tonnes1,205.31

Ounces38,752,008.51

Value US$61,001  billion

Harvey says ....

we  lost another  1.8 tonnes gold  at the GLD today following 22 tonnes on Friday and 4.2 tonnes on Monday  over 8 tonnes on Tuesday, and 11.13 tonnes of gold yesterday.

Ladies and Gentlemen, this is no gold liquidation..this is gold that China is demanding over in London. If any of our readers happen to be GLD shareholders, I urge you to depart from this vehicle and buy Sprott or Central Fund of Canada.

As a reminder the total comex gold had inventories of around 11 million oz in 2011. Today it broke below 9 million oz.Despite China's slowdown, it still have an insatiable appetite for gold.

Compare the SLV ETF - first 4/18.....

April 18.2013:

Ounces of Silver in Trust	336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.	10,451.01

compare with 4/8 .....

april 8.2013:

Ounces of Silver in Trust	337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.	10,497.59

  *    *     *


https://www.ukbullion.co.uk/selling-to-us   Note the message from UK Bullion !

UNPRECEDENTED DEMAND – DISRUPTION TO NORMAL SERVICES

Due to the unprecedented demand triggered by the recent fall in the Gold Price we are currently not able to guarantee Next Day Delivery of orders.

We anticipate that all orders will be delivered within 7 days of receipt by us.

Whilst we appreciate that these delays are frustrating for our customers we would like to stress that all accepted orders are guaranteed at the order price and will be dispatched as soon as possible.

It is necessary for all of our staff to be utilised in fulfilling orders and we ask for your cooperation by not calling us to query delivery times. If you do need to contact us, please do so by e-mail and we will endeavour to respond within 48hrs.

PLEASE REFRAIN FROM CALLING US AS WE ARE CURRENTLY UNABLE TO DEAL WITH TELEPHONE ENQUIRIES. IF YOUR ENQUIRY IS URGENT THEN PLEASE CONTACT US BY EMAIL.

Thank you for your kind patience and understanding.

CBC DOCUMENTARY TO BREAK JPM WHISTLE-BLOWER TESTIMONY ON GOLD & SILVER MANIPULATION!

APRIL 18, 2013 BY THE DOC 42 COMMENTS

The CFTC is sitting on information that implicates JPMorgan as manipulating the futures market in Silver and Gold.  The reason this is so damning is that the CFTC has evidence that incriminates JPM as having malicious short positions designed to influence the price action of Silver and Gold towards JPM’s favor; akin to the LIBOR scandal in which rates were manipulated down towards the banks favor.  -JPM Whistle-blower

The PM community has been waiting over a decade to see the gold and silver manipulation story go mainstream, as the LIBOR scandal did last summer. 
As of 9pm EST tonight, the wait is over…

At 9pm EST tonight, Thursday 4/18, the CBC is set to broadcast The Secret World of Gold, a detailed documentary exploring the co-ordinated manipulation of precious metals:

The Secret World of Gold is a documentary exploring the power and politics of gold, a precious metal with more allure and fascination than any other.  Valued for its permanence, beauty and scarcity, people will lie, cheat, steal and kill in the name of gold.

To finance the Third Reich, the Nazis went after the gold of Europe. Allied countries stored their gold offshore to keep it safe. In the first months of the Second World War, the gold of England and France was secretly shipped to vaults in Montreal, Ottawa and New York.

Those ships made it safely to port, but throughout history, many were not so lucky. It is estimated that worldwide, 3 million shipwrecks loaded with treasure lie at the bottom of the ocean. Odyssey Marine, an American company listed on the NASDAQ stock exchange, spends huge amounts of money to search for that gold. But there’s always the risk they will have to hand it over to countries claiming ownership.

In recent years, economic uncertainty is giving gold a new lustre in the world of high finance. Whether it’s a few gold coins or gold bars stored in one of the many vaults around the world, many investors are taking a shine to gold. But there’s not a lot of it. It is said that, even melted down, there would not be enough to fill an Olympic swimming pool.

Some claim that much of the gold held by the Bank of Canada, the Bank of England, the Federal Reserve and Fort Knox is gone — that for every 100 ounces of gold traded, there exists only one ounce of real, physical gold. So, where is the gold — and who really owns it?

Directed by Brian McKenna for Galafilm with CBC-TV.

As the Montreal Gazette reports, the program was originally developed as a historical documentary, until the director discovered a whistle-blower :

Brian McKenna didn’t predict the recent nosedive in gold prices, but he knows someone who did.

“Andy sent me an email early Friday morning,” recounted the Montreal director. “He said, ‘There’s a big event happening. Someone’s dumping 500 tons of gold into the market.’ That ended up driving the price down by $78 an ounce. And 500 tons is 16 million ounces — we’re talking about a serious intervention here. Who’s got that kind of money?”

“Andy” is Andrew Maguire, a key source in McKenna’s fascinating new film The Secret World of Gold, which premières Thursday at 9 p.m. on CBC-TV. The hour-long documentary plunges into the dramatically rich narrative of gold, unveiling some shocking facts along the way.

“I was just going to do a history piece, until I stumbled over a whistle-blower,” McKenna said.

Those who would like a preview of the documentary can listen to this interview provided by the CBC of Director Brian McKenna.  Portion on gold & silver manipulation begins at the 10:00 mark.

The explosive CBC documentary has been in the works for over a year, since a JPM whistle-blower on March 15th, 2012 alleged that JPMorgan was manipulating the price of gold and silver in a note posted on the CFTC’s website, and taken viral after it was posted by SD.

The whistle-blower was placed in contact with Andrew Maguire shortly after, who upon reviewing the information and documents the JPM employee had obtained documenting the alleged manipulation of gold and silver, assisted in making an official filing to the CFTC.  At the time, Maguire believed the evidence of malicious price manipulation in the gold & silver market was so compelling that the CFTC would be forced to act on the information.

To no surprise however, the CFTC reportedly sat on the information, making no public announcements or actions over the past 9 months, while the whistle-blower left JPM & fled to China for safety.

As a result, the whistle-blower has been left no other recourse than to pursue public exposure, resulting in the CBC’s The Secret World of Gold documentary.

The story was partially leaked through the PM blogosphere last August, with both GATA’s Bill Murphy and TFMetalsReport’s Turd Ferguson predicting an explosive and historic move in silver last August out of expectations that the information would be released and acted upon by the CFTC, as in the words of Andrew Maguire, the documentation provided by the JPM whistle-blower was damning evidence, & everything we could want to prove gold & silver are in fact manipulated.

August, September, & October came & went however without any action by the CFTC.
In response, the (now former employee) JPMorgan whistle-blower who submitted the information to the CFTC alleged in October of 2012:

The CFTC is sitting on information that implicates JPMorgan as manipulating the futures market in Silver and Gold.  The reason this is so damning is that the CFTC has evidence that incriminates JPM as having malicious short positions designed to influence the price action of Silver and Gold towards JPM’s favor; akin to the LIBOR scandal in which rates were manipulated down towards the banks favor.

Now that the CBC documentary is scheduled to air tonight, and GATA has publicized it as well, the time has come to force exposure and bring the metals manipulation story into the mainstream- particularly in the wake of this week’s blatant & historic take-down of the gold and silver markets. 

The documentary includes testimony from GATA’s Bill Murphy, Eric Sprott, CFTC whistle-blower Andrew Maguire, as well as the JPMorgan employee whistle-blower testimony among others.

Bullion bank silver shorts have most likely been covering in mass all week into the silver massacre, and we’ll soon have the data to make the case.  Many have speculated that the bullion banks are going to switch to a net long position.

Given the fact that the bullion bankers were no doubt aware of the impending release of tonight’s documentary as well as that at $22/oz, pretty much all existing shorts taken out before this week will be in the money, we believe it is highly likely that Jim Sinclair’s recent call that the bullion bankers were flipping net long was 100% accurate and the bullion banks have exited the majority of their recent 200 million ounce net short position over the past week by covering into the epic gold and silver raid.

Along with the London Whale JPMorgan ICD9 debacle, the LIBOR scandal was one of the largest financial stories to break in all of 2012.    Metals manipulation is the London Whale & LIEBORGATE rolled into one single scandal. 

Please spread the news throughout the blogosphere to make sure as many as possibly are tuned into CBC at 9pm EST tonight!

http://www.caseyresearch.com/gsd/edition/the-cbc-the-secret-world-of-gold/

The CBC: The Secret World of Gold

Apr
18

• Yesterday in Gold and Silver
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• The Funnies
• The Wrap

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"At the moment, I'm just sitting here and waiting for the next shoe to drop."

¤ YESTERDAY IN GOLD & SILVER

The gold price didn't do much in Far East trading on their Wednesday...and the tiny rally in London didn't get far...and got sold down to basically unchanged by the time that Comex trading began in New York.

The gold price rallied a bit more, but that lasted until the London p.m. gold fix...and then it got sold down to its 3:45 p.m. Eastern time low, before rallying a hair into the close.

Nothing much to see here.  The high and low price ticks in New York were $1,396.30 spot...and $1,367.60 spot.  For the second day running, the gold price wasn't allowed above the $1,400 spot price mark.

Gold closed the day at $1,377.50 spot...up $8.20 from Tuesday's close.  Volume was very heavy once again, around 269,000 contracts.

It was pretty much the same price pattern in silver, with the New York high tick [$23.81 spot] being printed at the London p.m. gold fix...and the low [$22.86 spot] at the Comex open.  Once the afternoon gold 'fix' was in, the silver price followed the gold price around like a shadow.

Silver finished the Wednesday session at $32.31 spot...down 3 cents from Tuesday.  Volume was very chunky once again...around 51,000 contracts net.

The trading patterns in both platinum and palladium were similar as well...and both finished down on the day.

The dollar index closed on Tuesday afternoon in New York at 81.83...and once trading began in the Far East on their Wednesday, the index continued to rally...hitting its zenith [82.70] around 3:00 p.m. in New York.  It backed off a hair from there, closing at 82.63...up 80 basis points on the day.

Despite the decent price performance in gold, the shares struggled to remain above the unchanged mark.  Their highs were at gold's high at the afternoon London gold fix...and it was basically all down hill from there, closing almost on their lows.  The HUI finished down another 5.11%.

The silver shares were crushed again as well...and Nick Laird's Intraday Silver Sentiment Indexclosed down another 6.25%.

(Click on image to enlarge)

As I said in this space yesterday, it's my opinion that the mutual funds have been hit with massive redemptions...and they've been forced to sell into an illiquid market whether they wanted to or not.

The CME Daily Delivery Report showed that zero gold and 3 silver contracts were posted for delivery on Friday.  Nothing to see here.

Another day...and another withdrawal from GLD yesterday, as an authorized participant[s] withdrew 357,860 troy ounces.  And as of 9:48 p.m. Eastern time yesterday evening, there were no reported changes in SLV.

Over at Switzerland's Zürcher Kantonalbank, they reported declines in both their gold and silver ETFs as of the close of business on April 15th.  Their gold ETF dropped by a smallish 19,008 troy ounces...and their silver ETF fell by 212,767 troy ounces.

It was a pretty decent sales day over at the U.S. Mint yesterday.  They sold a very chunky 63,500 ounces of gold eagles...almost two metric tonnes!  And they almost doubled their April one-ounce 24K gold buffalo sales from 9,500 to 18,000 in one day.  But they only sold 172,000 silver eagles, so it's obvious that the are selling them as fast as they are making them.

Over at the Comex-approved depositories on Tuesday, they reported receiving 630,567 troy ounces of silver...and shipped 484,203 troy ounces of the stuff out the door.  The link to that activity is here.

Well, the silver bullion supply crunch has finally arrived in Edmonton.  Virtually all silver bullion sold in Canada starts off life in the United States...even the Canadian silver maple leaf...as the Royal Canadian Mint sources virtually all of its blanks from the U.S.  So much for "Made in Canada"...eh!

As of noon today, our store stopped selling most products over the counter...and order-in as well, which is the lion's share of our business.  None of our U.S. suppliers were taking orders for any bullion products of any description.  We could still sell a very limited number of silver, gold, platinum and palladium maples leafs and bars over the counter, but that was it.  This problem is now wide-spread everywhere in North America.  Most small 'Ma and Pa' precious metals dealers are cleaned out...and have no chance of getting any more product for months.

Here are a couple of charts that Nick sent me on Tuesday evening that I just didn't have room for in yesterday's column.  They show gold and silver prices going back to 1970...and the percent deviation from their respective 200-day moving averages over the years.  As you can tell, we are at extremes rarely seen in both metals...especially in gold.

(Click on image to enlarge)

(Click on image to enlarge)

Selected non redundant news items.......

Francois Hollande faces austerity revolt from own ministers

Three cabinet members have launched a joint push for a drastic policy change, warning that cuts have become self-defeating and are driving the country into a recessionary spiral.

“Its high time we opened a debate on these policies, which are leading the EU towards a debacle. If budget measures are killing growth, it is dangerous and absurd,” said industry minister Arnaud Montebourg.

“What is the point of fiscal consolidation if the economy goes to the dogs. Budget discipline is one thing, cutting to death is another,” he said.

Mr Hollande will on Wednesday unveil another round of belt-tightening worth €12bn, even though Paris is already carrying out the harshest fiscal squeeze since the Second World War and France may already be in a triple-dip recession.

This Ambrose Evans-Pritchard offering was posted on The Telegraph's website early on Tuesday evening...and I thank Roy Stephens for his third story in a row.

Egan-Jones Downgrades Germany From A+ To A, Outlook Negative

Although Germany's credit metrics are respectable, the country has exposure to its banks and the weaker EU members. Deutche Bank has adjusted shareholders' equity to asset near 2% and might need €100B of support. Via the ECB's Target 2, Germany is owed €700B of which perhaps 50% is collectible and then there is the banks' southern EMU exposures. Germany's debt to GDP was 80.6% as of 2011. However, increasing Germany's debt by €500B raises the adjusted debt to GDP to 100%. The deficit to GDP of .8% is reasonably strong. Unemployment is 6.9% but will probably rise as global economies continue to show weakness. The positive (€16.8B) balance of trade (per GFSO) and the positive €5.59B current account (per the OECD) help. Inflation has been moderate at 1.4% (per GFSO).

Chancellor Merkel continues to resist calls for EU bonds (shared liabilities) and money printing and is pushing for fiscal controls and the seniority of bailout funding. Germany is likely to be outvoted by other ECB members and therefore will have greater prospective exposure. Watch for the EFSF and the ESM morphing into banks (thereby depressing eventual recoveries) and a rise in the number of euros. Watch progress on the EU banking union. We used the IMF's data for Germany's debt which is greater than Eurostat's data. Downgrading.

This news item showed up on the Zero Hedge website yesterday afternoon...and I thank West Virginia reader Elliot Simon for bringing it to our attention.

Nigel Farage: E.U. Common Criminals

Nigel is at the top of his game in this 3:03 minute speech posted over on theyoutube.com Internet site yesterday.  It's a must listen in my opinion...and I thank Marshall Angeles for sending it along.

Turkey Said to Sign Oil Deal With Kurds, Defying Baghdad

Iraq’s Kurdish region has signed a landmark agreement with Turkey to supply it directly with oil and gas, two people familiar with the matter said.

The accord was signed last month when Turkey’s Prime Minister Recep Tayyip Erdogan met Iraqi Kurdish Prime Minister Nechirvan Barzani in Ankara, said the people, who asked not to be identified because the plans are private. Turkish Energy Minister Taner Yildiz, contacted via his press office, declined to comment, as did an Iraqi Kurdish official. The Oil Ministry in Baghdad didn’t immediately respond to a request for comment.

This very interesting Bloomberg article was posted on their website early yesterday morning Mountain Daylight Time...and I thank U.A.E. reader Laurent-Patrick Gally for digging it up for us.

Five King World News Blogs

The first interview is with John Embry.  It's entitled "Physical Buying Intensifying on Lower Gold Prices".  Next is this commentary by Dan Norcini...and it's headlined "If This Continues the Currencies Will Literally Collapse".  Next is this blog with Keith Barron [#1].  It bears the title "Massive Run on Physical Gold and Silver at UBS and Scotiabank".  Here's a blog with Rick Rule...and it's headlined "Rick Rule Weighs in on the Gold and Silver Takedown".  And lastly is interview #2 with Keith Barron.  It's entitled "Switzerland to Buy a Stunning 1,000 Tonnes of Physical Gold?"

Rio Tinto copper declares force majeure at Utah copper mine

Rio Tinto's Kennecott Utah Copper said on Tuesday it is invoking force majeurewith respect to contracts with copper cathode and sulphuric acid customers after last week's huge landslide at its Bingham Canyon copper mine.

Kennecott is in the early stages of assessing plans to restart ore production, spokesman Kyle Bennett said in an email.

Force majeure is a clause included in contracts that removes liability for natural and unavoidable events that prevent companies from fulfilling their obligations.

This short Reuters story was posted on their website early on Tuesday evening BST...and it's courtesy of reader Bill Busser.

Bart Chilton: CFTC is Looking at Gold, Silver Moves

Bart Chilton, a commissioner at the U.S. Commodity Futures Trading Commission, talks about commodities trades and market regulations. He speaks with Erik Schatzker and Sara Eisen on Bloomberg Television's "Market Makers."

That's all Bart and the rest of the crooks at the CFTC are going to do...and that's look at the situation.  They won't do a thing.  This 11:14 minute video clip was posted over at the Bloomberg website yesterday...and I thank Roy Stephens for his final offering in today's column.

¤ THE WRAP

The growth of the Internet will slow drastically, as the flaw in "Metcalfe's law" – which states that the number of potential connections in a network is proportional to the square of the number of participants – becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine.  – Paul Krugman, 1998

I wouldn't read much into yesterday's price action in either gold or silver, except to note that gold wasn't allowed to penetrate the $1,400 mark for the second day in a row.  Volumes in both metals were very heavy...and with the much quieter price action, one would have thought that the volume level would have dropped off even more than it did.

At the moment, I'm just sitting here and waiting for the next shoe to drop.  Are we going higher or lower...and how soon and how fast?  Beats me, but like I said yesterday, I doubt very much if we'll have long too wait to find out.  My bet is up...and up big.

But, having said that, I note that in Far East price action around 9:00 a.m. in Hong Kong on their Thursday morning, all four precious metals were massaged to the downside by the high-frequency trading crowd, as no for-profit seller would dump a boat load of contracts all in the same moment in the most thinly-traded portion of the market, if they were trying to get the best price.

The biggest price declines were in both gold and silver...and that doesn't come as a surprise to me.  However, both metals are struggling back...and have regained most of their losses going into the London open.  As of 3:25 a.m. Eastern time...gold volume is already north of 63,000 contracts...and silver's net volume is a bit over 12,000 contracts.

Here are the 3-year charts for both gold and silver with both the 50-day and 20-day moving averages shown.  Note that they both printed a record low RSI reading earlier this week...and probably the lowest in history.  The RSI in silver didn't even get that low on the May 1st drive-by shooting back in 2011.  The nearest moving average of importance in gold is the 20-day...and it's about $170 aboveyesterday's closing price on the chart below.  In silver, the 20-day moving average is currently about four bucks above silver's closing price on Wednesday.  Until we get to those moving averages, there's no reason for the technical funds to begin covering their record high short positions...and the 50-day moving average in both metals are even higher.

(Click on image to enlarge)

(Click on image to enlarge)

And as I hit the 'send' button at 5:19 a.m. Eastern time, gold is up about nine bucks...and silver is up a nickel.  Volumes are continuing to rise.  Gold's volume is approaching 80,000 contracts...and the net volume in silver is around the 15,000 contract mark.  The dollar index is down a hair...not that it matters.

That's all I have for you today...and I'll see you here on Friday...or Saturday if you live just west of the International Date Line.

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