Gold and Silver smash down taking a break today - Bitcoin's turn for a ride.....

http://www.businessinsider.com/bitcoin-57-dollars-2013-4

The Bitcoin Collapse Continues — Now Below $57

Joe Weisenthal | Apr. 16, 2013, 4:47 AM | 1,790 | 3

Now: $57.

Via Clarkmoody.com:

http://www.zerohedge.com/news/2013-04-16/indias-response-gold-sell-buying-frenzy

India's Response To The Gold Sell Off: A Massive Buying Frenzy

Submitted by Tyler Durden on 04/16/2013 22:35 -0400

Panic, depression, rage, suicidal ideations: watching the US mainstream media, one would think that these are the prevailing sentiments among those who unlike the prevailing "developed world" speculative class, are invested most heavily in physical old - Indians, who collectively comprise the largest end-demand consumer segment for gold products. One would be very wrong.

Because while apparently it is incomprehensible to the "sophisticated" financial crowd in the US that someone may have conviction in their beliefs, and not just lunge from extreme to another, merely riding momentum and technicals like so many "professional" investors, Indians are doingprecisely what a buyer should do when the price of the desired product plunges:doubling down, literally.

Bloomberg reports of the immediate aftermath to the past few days' gold plunge: "Gold buyers in India, the world’s biggest consumer, are flocking to stores to buy jewelry and coins, betting a selloff that plunged bullion to a two-year low may be overdone." Wait, so instead of jumping out off high buildings, Indians are being cool, calm and collected and... buying more? Unpossible. Do they not get CNBC in Mumbai? Apparently not: "My daughter is just six months old, but I think it is never too early to buy gold,” said Sharmila Shirodkar, a 28- year-old housewife, while displaying a new pair of earrings she bought from a store in Mumbai’s Zaveri Bazaar. “I had been asking my husband every day if prices will go down more. I couldn’t wait anymore.”

Indeed - the buying frenzy in India has been unleashed:

While the drop in gold prompted investors worldwide to pare holdings in exchange-traded products, surging physical demand in India may help stem the 17 percent slide in prices this year. The plunge after rallying for 12 straight years may make bullion more affordable to Indians, according to Mehul Choksi, chief executive officer of Gitanjali Gems Ltd. (GITG), the nation’s biggest retailer of jewelry and diamonds by sales.

“This is a perfect time to buy as prices will only go up from here,” said Vishal Mehta, a 33-year-old garment dealer, while ordering coins from Choksi V. Naginchand & Co. in Zaveri Bazaar. “I usually buy one gold coin a month, but this time I am buying two.”

Hence the true value of the word "double down". Here is another word US "investors" can learn from the Indians - value.

“It has been very hectic in the last two days,” said Deepak Tulsiani, owner of Dwarkadas Chandumal Jewellers in Mumbai as he surveyed his 11 employees, who were busy with customers. “There has been a rush to buy gold because now people are getting jewelry 15 percent cheaper than before. It’s value for their money.”

Zaveri Bazaar, the largest bullion market in the country, buzzed with customers, who were browsing through collections of bangles, bracelets, necklaces and rings displayed in trays ahead of the wedding and festival seasons. Most buyers were women in groups of two or more, accompanied by a male who paid the bills.

“Whatever be the price, Indians buy gold because it is an age-old tradition,” C.P. Krishnan, a director at Geojit Comtrade Ltd., said by phone from Kochi. “It has become an unavoidable expense during weddings and festivals. With the sudden crash in prices a lot of buying is happening across India as people are thinking of it as a golden opportunity.”

Yes: tradition! That's what the Chairman said too. And the chairman is never wrong. Even when he is selling the synthetic paper representation of that tradition and in the process allowing all those who trade on "value" and not "moment" to average down in terms of infinitely dilutible fiat paper.

Back to India:

“Some customers are still scared to buy now as they feel the price will go down more,” Chetan Ranka, owner of Choksi V. Naginchand, said after answering a call from a prospective customer on one of the four phones at his desk. “I have received more than 250 calls on Monday inquiring about the prices. Normally I get maybe 50 calls a day.”

The lower gold drops, the more people will buy.

“I had been keeping a tab on gold prices daily by reading the newspapers,” Sakshi Jain, a 39-year-old housewife, said as she held an intricately designed necklace against her neck in front of a mirror in Zaveri Bazaar. “I had some wedding purchases to make and as soon as prices dropped I came to buy.”

And the rub: once the correction is over, and prices resume their inexorable rising, the double down will become a buying frenzy, as everyone will realize one simple thing. Just because the BLS says inflation is has not arrived, it merely means the central banks, who are laboring under some $40-50 trillion in excess debt, will have no choice but to also double down. And one of these days not even the BLS' best efforts at fudging reality will fail.

Incidentally, they are already are. As the MIT'sBillion Prices Project shows, there is just a slight disconnect between reality and what is being spoonfed.

Finally, for some actual numbers, we go to Bank of America which has calculated that the disconnect between the paper selloff and physical buying spree can only last so long before gold shoots right back up to $2000 as the surge in buying overwhelms the paper selling.

With prices now below $1,500/oz, we expect a pick-up in jewellery demand in the medium term and see considerable pain for miners should prices dip below $1,200/oz. As such, we believe the downside to gold prices may be limited to an additional $150/oz. In fact, we estimate that jewellery demand may become so pronounced by 2016 that prices could trade above $1,500/oz even if investors remain net sellers. Looking at sensitivities from a different angle, investors would need to buy merely 600t of gold to sustain prices at $2,000/oz by 2016, compared to non-commercial purchases of 1,798t in 2012.

And some more thoughts from BofA:

Cyprus’ announcement to sell nearly 14t of gold reserves was a key trigger behind the recent collapse in gold prices, as it raised concerns that other peripheral nations may follow suit. Given our estimate that every $45/oz represents a net sale of 100t, the move over the last two days would suggest net sales of 480t, or about 20% of yearly mine supply. In short, the market seems to have discounted the combined future gold sales of Portugal and Greece. As we believe additional gold selling in the European periphery is highly unlikely, we find it hard to fully justify the sell-off.

So please go ahead and sell. All we can say is, well, thanks.

http://www.businessinsider.com/jim-rogers-normal-gold-price-correction-2013-4

( Jim Rogers , commodity guru , sees gold falling as low as 1200 , so this may just be a pause in selling today , not surprising to see a technical rebound today - plus Tuesday is the last day counted for the coming Friday COT , so there could be track covering by the big shorts ! )

JIM ROGERS: Like I Said, I Expect Gold To Go As Low As $1,200

Mamta Badkar | Apr. 15, 2013, 2:08 PM | 22,867 | 24

Screenshot via Bloomberg TV

Gold has been taking a battering all day. Gold is off 8.5% to $1,373.80 an ounce.

Commodities guru Jim Rogers isn't buying gold yet.

He told Business Insider there were four key things driving the sell-off.

India - The country hiked its gold import tax rate by 50% to 6% at the start of the year. This has curbed gold demand.
Chartists - Technical analysts that have warned that gold prices will continue to fall.
Cyprus - "Ms. Merkel is seeking re-election so she has told Cyprus and others that they should sell some of their gold to pay their debts. The Germans are tired of bailing people out and she needs to be tough."
Bitcoins - "The collapse of Bitcoin since most of them also own gold."

Rogers said he hasn't hedged his positions at the moment.

"I have repeatedly babbled about $1200-1300, but that is just because that would be a 30-35% correction which is normal in markets," he told Business Insider. "But I am a hopeless market timer/trader."

Rogers said he expects gold prices to fall further for the "foreseeable future" but expects "gold to eventually go higher over the decade."

and....

Bullion Shortages Develop As Retail Demand Skyrockets

kingworldnews.com / April 16, 2013

Amazingly, on Saturday 41-year market veteran Bill Haynes warned King World News that we were already on the verge of seeing major shortages of available retail bullion products. Well, there are already massive shortages of bullion products. Haynes also updates KWN readers globally on the stunning margin which gold and silver buyers are outpacing sellers. Below is what Haynes had to say in this extraordinary interview.

Haynes: “Eric, on Monday there was such chaos in the markets that some of the larger wholesale dealers had to shut down at various times because of the massive demand on the buy side. These wholesalers simply had to quit taking orders not only because of the demand, but also because of the enormous price volatility….

Gold and silver buyers are still outpacing sellers by a stunning 50 to 1. There were premium increases on everything bullion related. The wholesalers are now telling us four to six weeks on silver maple leafs, and wholesalers quit taking orders on one ounce silver rounds. Wholesalers also kicked the premium higher on 100 ounce silver bars as well.

READ MORE

http://maxkeiser.com/2013/04/16/force-majeur-was-the-end-game-all-along-comex-will-default-in-the-next-week/

( If we see another jagged leg down this week into next week - similar to what just transpired , there may be something to this ! )

FORCE MAJEURE WAS THE END GAME ALL ALONG, COMEX WILL DEFAULT IN THE NEXT WEEK!

APRIL 16, 2013 BY THE DOC 91 COMMENTS

The COMEX will default in the next week or several weeks and people will be “settled” with Dollars, no more metal will be delivered! So, knowing that “game over” has arrived, they are dumping a massive volume of paper contracts with impunity to push the metals prices as low as possible before the “default”. This way the “shorts” do not have to and will not be “covered” when “supply” cannot be obtained because of “an act of God”. They will be settled in cash (at a profit no less) because these “unforeseen” disruptions in supply. “Who could have seen it coming?” will be the mantra. I would suspect that banking stress and “bail ins” will also become prevalent globally. The pricing structure” will now push any and all physical sellers away from the markets and the “door” to safety is effectively being shut. Either you own metal or you don’t.
After the closure of the COMEX and LBMA doors there will be no availability and “price” will be meaningless. Your ability to protect yourself is right now for all intents and purposes being eliminated.

Submitted By Bill Holter, Miles Franklin Ltd,:

Last week Barrick Resources announced the postponement of their giant Pascua Lama mine. This was to be one of the worlds largest mines and is now tied up in litigation over true ownership as it appears to show that Barrick does not have clear title. The probale reserves were nearly 18 million ounces of Gold and almost 700 million ounces of Silver. Work on this mine was completely ceased last Wednesday.

“Last Wednesday” was also an important day for the Kennecott copper mine in Utah, the ground started to shift more rapidly prior to this weekend’s landslide. They knew this was coming as they closed the visitor center on April 1st and had all equipment and personel out of harms way. This mine produces some 400,000 ounces of Gold and over 3 million ounces of Silver as a by product of copper, this is the largest copper mine on the planet. Have you heard even a peep out of the mainstream media on this on? I didn’t think so.

Is it not strange that these two events came to a head last Wednesday? The same day that out of nowhere Gold reversed from being up and give up $40? And then of course there was Friday with $85 and another $75 this morning. Gold is now down $200 per ounce in just over 3 trading days. Between these two projects, one not coming online and the other going off line, a VERY significant amount of production is not going to happen. Does this make sense? Did you not learn in school that “less” supply meant higher prices? In the real world?

We don’t live in “the real world”, we live in a world where everything financial is manipulated. Here is what I see happening. They knew that this mine was going to collapse and the production would stop. Then the ruling on the Pascua Lama mine was sent down. Last Thursday president Obama met with 15 heads of the biggest banks and brokers in the country, THIS was discussed as sure as the Sun came up this morning: we have hit the bottom of the barrel! Reserves that could be fed into the market are and have dried up at the same time that production has dropped and future production delayed. The paper game is blowing up …RIGHT NOW and the topic of discussion at the White House was about “how it would play out”.

The COMEX will default in the next week or several weeks and people will be “settled” with Dollars, no more metal will be delivered! So, knowing that “game over” has arrived, they are dumping a massive volume of paper contracts with impunity to push the metals prices as low as possible before the “default”. This way the “shorts” do not have to and will not be “covered” when “supply” cannot be obtained because of “an act of God”. They will be settled in cash (at a profit no less) because these “unforeseen” disruptions in supply. “Who could have seen it coming?” will be the mantra. I would suspect that banking stress and “bail ins” will also become prevalent globally. The pricing structure” will now push any and all physical sellers away from the markets and the “door” to safety is effectively being shut. Either you own metal or you don’t.

I tried to “be nice” in my piece from last night talking to those who worry about price. What is now happening is exactly what I spoke of, you must count ounces because “availability” is going away right here and right now! After the closure of the COMEX and LBMA doors there will be no availability and “price” will be meaningless. Your ability to protect yourself is right now for all intents and purposes being eliminated.

We received a few (very few) angry letters from customers who say that Jim Sinclair, Mr. Sprott and Embry, James Turk and others including myself are and were wrong. That we should hang our heads in shame and that we are nothing more than charlatans hawking Gold and Silver. We will soon, very soon see just how right or wrong we really are. What is happening right now is very clear to me, what I don’t understand is how anyone could miss this as it has all been laid out for you and dropped in your e-box to see (for years now), understand and prepare for. Life, all of life as we knew it is about to change forever. Hopefully you understood this and have already prepared for it!

Regards, Bill H.

http://www.zerohedge.com/news/2013-04-16/overnight-sentiment-gold-rout-halted-now

Overnight Sentiment: Gold Rout Halted For Now

Submitted by Tyler Durden on 04/16/2013 06:56 -0400

Yes, there was economic news overnight, such as a Eurozone and UK CPI, both of which came in line with expectations (1.7% and 0.4% respectively), and a German ZEW which confirmed Europe's accelerating deterioration, tumbling from 48.5 to 36.3, far below expectations of a 41.0 print (somehow the huge miss has managed to push the EURUSD up by 60 pips to an overnight high of 1.31 but this is merely the pre-US open manipulation to ramp US equities higher), just as there was news that Angela Merkel's support for a Cyprus bailout is growing (was there an alternative?), and that as part of their ongoing investigation into Italy's repeatedly insolvent Monte Paschi, investigators had seized €1.8 billion worth of assets from Nomura Holdings, and that Spain as usual sold more Bills than expected, driven by oversize Japanese and Pension Fund purchases, but what everyone has been looking for is whether the relentless and record rout in gold is over. For now, it appears that is the case, with gold printing an overnight low of just over $1320 and ramping higher ever since, up 3% so far and rising.

Amusingly, Goldman was stopped out on yet another trade overnight, this time its Commodity Carry Basket which hit the firm's -6% stop loss signal, and yet even with gold crossing Goldman's target, the firm has so far refused to close out its position:

Although gold has now traded below the $1,450/toz target embedded in our short recommendation, we are maintaining our short as we argued last week that prices could decline more than we initially thought as positioning is stretched and the momentum is to the downside. The most recent ETF holdings showed acceleration in the liquidation of length, which points to a broad-based sell-off extending beyond the futures markets with potentially more room to go. As a result, we are now lowering the stop to $1,400/toz (which locks in a potential gain of 12%) while we wait for evidence of a bottom, though we are not changing our price forecasts now.

Looks like Goldman has much more gold to buy from its muppets, who continue being routed on the firm's various other trading recos with realized losses.

Below are some other fresh overnight view on gold:

Credit Suisse:

The price is now not far from the level CS’s technical analysts identify as the next key area of support: $1,310
Next key level is $1,156, then $1,122; Beyond that, $1,000

HSBC:

Factors affecting the metal: April 10th FOMC minutes showed some members favor an early end to QE, a shift out of commodities into equities and bonds, ongoing gold ETF liquidation and reduction in net longs on the Comex
Price break of $1,525/oz followed by $1,500/oz at the end of last week were important technical support and psychological levels
Of the top 20, 17 of the biggest drops occurred during the 1970s and 1980s; this daily drop is the biggest for 20 years with the next biggest occurring in Oct. 2008 at the height of the financial crisis
Expects “slow grind” higher

Liberum:

Gold is the key sentiment setter among commodities; price moves appear to be the result of a concerted short sale by funds trading futures
Seems to have been a series of drivers behind collapse; key has been the potential for an end to QE in U.S.
Will be a while before there can be a strong rally; would require a big policy mistake from a major central bank to reignite anti-dollar sentiment

Coutts:

Although risks still skewed to downside, an attractive entry opportunity is unfolding, especially if gold consolidates around next technical support level near $1,250/oz
Recent selloff is an exaggeration; sales of ETFs have unwound almost all of the eurozone crisis buying seen in 2012

Numis:

Longer term fundamentals remain unchanged
Gold likely to bounce in 2H and move slowly upward as inevitable further monetary easing comes to play

JPMorgan:

Collapse represents “an extreme capitulation”
Investment case remains fundamentally unchanged

Finally, both the bank of Sri Lanka, and the Azeri oil fund thanked whoever was selling the paper gold, saying the drop represents a buying opportunity and both would continue to capitalize on the cheap physical prices.

Looking at the day ahead, in terms of perfectly irrelevant fundamentals which no longer move any risk assets, we have housing starts, permits, industrial production and CPI. Large caps including Cocacola, Goldman Sachs and Johnson & Johnson
will be reporting earnings before the opening bell, followed by Yahoo
and Intel who report after the US market closes.

Key macro observations from SocGen:

Markets retain full confidence in central banks to soothe the path to economic recovery, but this did not halt the correction across risk assets from deepening yesterday on a variety of factors which brought commodties crashing down to earth. Is China’s growth slowdown turning into a bigger scare for global demand?

The Fed is still moving towards an exit strategy, but the timescales remain highly uncertain. The latest US economic indicators have disappointed, holding back any sense of urgency to start tapering bond purchases. Today’s housing market and industrial production data are expected to point in the same direction.

The BoJ is on the offensive and the question is how much further the JPY will fall. SG strategists cut their 1y USD/JPY projection from 103 to 110. Sudden moves in both the USD/JPY and EUR/JPY since the 4 April meeting prompted a pause at the beginning of the week. This was also fuelled by lower-than-expected Q1 2013 Chinese GDP. Nevertheless, the downward trend in the JPY is clearly under way and a positive outcome for US housing construction and production data today should put USD/JPY back on track for a test of 100.00. The ECB is also accommodative and further policy easing has not be ruled out: a weak German ZEW index today will boost expectations of central bank stimulus. Draghi will testify to the EP today. The BoE may well be the G4 central bank with the toughest policy challenge as CPI continues to deviate from the target, growth is lackkustre and credit demand weak. Another increase in CPI is on the cards today.

Overall, G4 central banks remain very prudent, leaving the markets overflowing with liquidity, which will underpin the search for yield in the short term. Any easing in US yields, weakening in the AUD, downturn in the USD/JPY or upturn in the EUR/USD will offer opportunities to position on medium-term directional coverage strategies on long US rates, an upturn in the USD/JPY or a downturn in the EUR/USD.

* * *

The full overnight summary from Deutsche's Jim Reid:

Markets were already having a difficult day prior to the Boston explosions with Gold in crash territory (more below). The S&P 500 was already down 1.4% prior to the explosions but closed -2.3% as the magnitude of the events became clear. The big move of the day was the one that saw the Gold market crash as it fell 9.1% to $1348/oz. This is the 5th largest daily fall since the US suspended the convertibility of the Dollar into Gold in 1971, the point which heralded the move from a Gold based global monetary system to a Fiat based one. It was also the largest single daily fall since the 28th of February 1983.

Over the last two sessions, gold has fallen 13.7% which also makes it also the 5th largest two-day fall since Bloomberg records began in 1920. So what’s been behind the price move in gold? There has been a lot of talk that the technicals had been skewed in the lead-up to last Friday. Newswires suggest that a number of large gold investors have been forced to unwind following the triggering of stops in the $1400-1500/oz range and that several brokers who were caught long have been forced sellers in the last couple of sessions. The WSJ reported that more than $1bn flowed out of physical gold ETF, SPDR Gold Trust, on Friday marking the third-largest outflow on record since the fund’s inception in 2004. The SPDR Gold Trust shed nearly 4% or $2.3bn of its assets last week, ending Friday with roughly $57 billion. Trading volume in the SPDR Gold Trust on Monday was running more than 7x the average and was the heaviest on record, topping the previous high set in December 2009. On the macro side, there has been talk of lower Chinese retail demand amid the recent slowdown in domestic growth and the more benign inflation trends seen recently in China. Last week’s report that Cyprus may sell part of its gold reserves to raise an estimated EUR400m for its bailout has also fuelled suggestions that other indebted countries may follow suit. Our commodity strategists write that fundamentally the economic indicators are disappointing in the US and the Fed is cooling on its QE stance – reducing demand for the gold as a hedge. They also note that with marginal industry costs for the gold mining industry at around the USD1,300/oz - the market could see some support around that level if this situation worsens.

Over the past few weeks, gold has also failed to rally despite the events in Cyprus in late March and the BoJ’s announcement of a new monetary easing regime in early April. One would normally expect that the threat of a country leaving the Eurozone, deposit haircuts, capital controls and unprecedented levels of easing by a major central bank, all occurring within a short span of time, would be enough to send gold higher. The fact that it hasn’t was probably disappointing to those who had held gold to hedge against those risks, and suggests that the marginal buyer of gold was already fully exposed. In other news, Citigroup's better than expected earnings ($1.29 vs $1.17 expected) yesterday failed to offset the negative sentiment during the US session. The bank reported sluggish net interest margins and loan demand, echoing similar statements from JPMorgan and Wells Fargo last week in what may be the beginning of a recurring theme for US banks this reporting season. Despite the negatives, Citigroup (+0.2%) was only one of seven S&P500 stocks to finish higher yesterday.

Turning to overnight markets, commodities are having a mixed session with Brent (-1%) continuing to trade weaker but gold (+1.1%) and copper (+0.3%) paring some of the recent losses. The USDJPY and AUDUSD have stabilised at 97.55 and 1.036 respectively following sharp corrections yesterday. In terms of equities, most Asian bourses are around half a percent lower with oil, gas and mining sectors stocks leading the declines. The KOSPI (+0.1%) is outperforming despite a warning from the North Korean military to South Korea that a strike “will start without any notice”. The South Korean government unveiled a 17.3trillion supplementary budget to support exporters who have been pressured by a weaker yen and this is boosting sentiment. Staying in the region, overnight Moody’s affirmed China’s rating of Aa3 but changed its outlook from positive to stable. The rating agency wrote that progress in increasing the transparency of local government debt and reducing credit growth were less than anticipated. The move comes one day after China reported its fourth consecutive quarter of sub-8% GDP growth – the first time this has occurred in two decades, according to Bloomberg data.

We have a busy day ahead with the immediate focus likely to be on the fallout from the tragic events in Boston. On the data front, we have the Italian trade report, Eurozone and UK CPI and the German ZEW survey in Europe. Mario Draghi will be presenting the ECB’s annual report to the European Parliament at 2pm London time. In the US, the data highlights include housing starts, permits, industrial production and CPI. A number of large caps including Cocacola, Goldman Sachs and Johnson & Johnson will be reporting earnings before the opening bell, followed by Yahoo and Intel who report after the US market closes. The IMF publishes its World Economic Outlook and Fiscal Monitor report today, and the Fed’s Janet Yellen will chair a monetary policy panel at the IMF’s Macro Policy conference. The BoE’s Mervyn King will also be participating in the discussion.

http://www.caseyresearch.com/gsd/edition/the-gold-takedown-another-glimpse-into-the-central-banking-matrix/

The Gold Takedown: Another Glimpse Into the Central Banking Matrix

Apr
16

"The only card that the world's central banks have left to play is the gold card."

¤ YESTERDAY IN GOLD & SILVER

The high-frequency traders didn't waste much time setting the tone for Monday's price action, as they went to work in all four precious metals in early Far East trading on their Monday morning.

The rest, as they say, is history, as the paper market in gold, silver, platinum and palladium...plus copper and crude oil...were hit with a blizzard of panic selling as the margin calls went out on Friday, over the weekend...and Monday as well.

You don't need me to tell you what happened, as you already know...and the highs and lows in each metal don't really matter.

Gold closed at $1,352.60 spot...down $125 from Friday...the biggest one day decline that I can remember. Gross volume was also a record, as 750,000 contracts were traded yesterday.

Silver closed at $22.69 spot...down a whopping $3.16 from Friday's close. Volume, net of roll-overs out of the May delivery month, was an astonishing 164,000 contracts...give or take.

Here are the Kitco charts for platinum and palladium as well...and they weren't spared, either.

As Ted Butler said on the phone yesterday morning...you could bet a princely sum that every contract that was being sold by a panicked and margined long holder in the Comex futures market yesterday and Friday, was gobbled up immediately by the JPMorgan et al...as that's always the way these engineered price declines have worked in the past...with no exceptions.

And as John Hathaway said in the first sentence of the opening paragraph of a short commentaryposted on the tocqueville.com Internet site yesterday..."Gold bullion prices have been subjected to a cleverly orchestrated bear raid in our opinion." That comment applies to copper and crude oil...as well as silver, platinum and palladium.

The dollar index has never been a factor in the precious metals market...and certainly wasn't yesterday. It closed on Friday at 82.10...and closed on Monday at 82.32...up 12 basis points.

The gold stocks were slaughtered, as the HUI finished down 9.44%.

The silver stocks were annihilated as well. Nick Laird's Intraday Silver Sentiment Index closed down an eye-watering 11.85%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 9 gold and 78 silver contracts were posted for delivery on Wednesday. The largest short/issuer in silver was Jefferies with 71 contracts...and Canada's Bank of Nova Scotia was the stopper on 73 of them. The link to yesterday's Issuers and Stoppers Report is here.

GLD reported another decline yesterday. This time it was 135,410 troy ounces. And after ten days of no activity, SLV had 1,497,412 troy ounces withdrawn by an authorized participant.

Much to my amazement, there was no sales report from the U.S. Mint yesterday. Bullion sales are currently on fire in both the U.S. and Canada for a few weeks now...and I find it more than strange that they have been conspicuous by their silence over the last several days.

It was another monster day over at the Comex-approved depositories on Friday. They reported receiving 2,519,507 troy ounces of silver...and shipped 2,525,959 troy ounces of the stuff out the door. The link to that activity is here.

Well, I don't care to have a repeat of yesterday's sales action at the bullion store. Never has it been like that before...wall-to-wall buyers virtually all day long..and lined up at the store before it even opened. I was dead on my feet when it was all done. We had one of our biggest silver sales days ever...with gold sales not far behind...and it would have been even bigger if we'd allowed unlimited sales out of our inventories. Because of the prices and volatility, each purchaser was limited to 1 oz. of gold and 25 ounces of silver on a cash-and-carry basis, or we would have been cleaned out. However, if you were ordering for future delivery, you could purchase whatever quantity you wanted.

To make matters even more difficult, most of our suppliers weren't taking orders...and if they were, delivery was six weeks or longer...and the premiums over spot were out of this world. With the entire retail and wholesale precious metals world in a state of panic/confusion/uncertainty, nobody wanted to commit to anything until the smoke clears. Maybe things will have settled down a bit by the time I get to the store today. I'll keep you posted.

By the way, I noticed that the CME Group increased margin requirements in both gold and silver by 18.5% effective at the close of trading today. The link to that news is here.

Here's a quote from Ted Butler's weekend commentary to his paying subscribers on Saturday. I'm inserting it at this point, because I have another quote from his note to clients that he sent out yesterday posted in its usual spot just below the cartoons...

I have read reports suggesting big volume in London, although as is usually the case, no verification is offered or even possible. The same goes for Asian buying in that it sounds reasonable but can’t be verified. That’s the beauty of COMEX data; it may be a crooked exchange, but at least you can verify the data. I don’t doubt that the crooked commercials which operate in London are one and the same commercials as on the COMEX and in the ETFs. What I object to is the use of unverified data to make a case in any market. Besides, there’s no need to resorting to story-telling. Friday’s COMEX net volume (subtracting spreads) in gold came to more than 30 million troy ounces (1,000 tonnes) and more than 400 million troy ounce in silver, or more than six months of world mine production, dwarfing the amounts in the stories based upon unverifiable data. Why make stuff up when the facts are available...and are even better than the stories? - Silver analyst Ted Butler...13 April 2013

* * *

Selected non redundant items of news and views....

Greece to sack 4,000 state workers to unlock bail-out cash

Greece will fire 4,000 civil servants this year as part of programme of austerity measures agreed with the EU-IMF “troika” as the condition for the next €8.8bn of payments in its €270bn bail-out.

The redundancies will begin a savage round of job cuts in the Greek public sector, with another 11,000 officials due to be sacked by the end of next year.

Greece is in deep recession, GDP has contracted by 22pc since 2008 and unemployment has spiralled to 27pc as the Greek government has implemented deeply unpopular EU-IMF austerity measures or “fiscal adjustment” in return for loans.

“Our society has reached its limits. But finally we are meeting our targets and the programme is being improved,” said Antonis Samaras, the Prime Minister, in a nationally televised address.

This article was posted on the telegraph.co.uk Internet site early yesterday afternoon British Summer Time...and I thank Roy Stephens for his first offering in today's column.

U.S. Treasury to BOJ: Do As We Say, Not As We Do

With a new president and central bank governor in place, Japan has finally decided to get serious. Earlier this year, Prime Minister Shinzo Abe announced a "monetary regime change" including a 2 percent inflation target. On April 4, following its regular meeting, the Bank of Japan made its "quantitative and qualitative monetary easing" official.

The BOJ will double the monetary base by purchasing about 7.5 trillion yen of Japanese government bonds per month. It plans to extend the average maturity of its portfolio from three to seven years. And it will continue such actions until it achieves its inflation target.

In other words, the BOJ is doing exactly what the Federal Reserve is doing. And for this it gets a warning from the U.S. Treasury "to refrain from competitive devaluation and targeting its exchange rate for competitive purposes"?

Ah, yes...the pot calling the kettle black, methinks. This Bloomberg was posted on their website early yesterday morning Mountain Daylight Time...and I thank Washington state reader S.A. for sharing it with us.

Ex-Soros Advisor Sells "Almost All" Japan Holdings, Shorts Bonds; Sees Market Crash, Default And Hyperinflation

It was none other than Takeshi Fujimaki, Soros' former advisor on all matters Japanese, who tripled down on the warnings, and told Bloomberg that the Bank of Japan’s “huge bet” by boosting quantitative easing won’t turn the economy around and is instead sending the nation toward default.

“By expanding the monetary base to 270 trillion yen, the BOJ is making a huge bet which I think it will ultimately lose,” Fujimaki said in an interview in Tokyo on April 11. “Kuroda’s QE announcement is declaring double suicide with the government. The BOJ will have to share the country’s fate and default together.”

Why? Same reason we have been pointing out every day for the past week, the same reason the Japanese bond market is now essentially broken with daily trading halts becoming an expected feature.

This story is another that was posted on the Zero Hedge website...this one on Sunday evening...and my thanks go out to West Virginia reader Elliot Simon.

Eight King World News Blogs/Audio Interviews

1. Dan Norcini: "I Guarantee You Margin Clerks Are Out in Full Force Today" 2. Andrew Maguire [#1]: "155 Tonnes of Paper Gold Sold in Just One Hour!". 3. Andrew Maguire [#2]: "LBMA Default Triggered Gold and Silver Takedown". 4. Bill Haynes: "Bullion Shortages Develop as Retail Demand Skyrockets". 5. Egon von Greyerz: "Tragedy, Panic and the Greatest Short Squeeze in History". 6. James Turk: "Gold and Silver Smash, Monetary Train Wreck and Apple". 7. The first audio interview is withAndrew Maguire...and the second audio interview is with Dr. Paul Craig Roberts.

Paulson Gold Bet Loses Almost $1 Billion: Chart of Day

Hedge-fund manager John Paulson’s wager on gold wiped out almost $1 billion of his personal wealth in the past two trading days as the precious metal plummeted 13 percent.

The Chart of the Day shows gold’s tumble since the start of the year has cut his riches by $1.52 billion on paper, including about $973 million in the rout that began on April 12 and continued with yesterday’s 9.3 percent drop. Paulson started the year with about $9.5 billion invested across his hedge funds, of which 85 percent was in gold share classes.

“Federal governments have been printing money at an unprecedented rate creating demand for gold as an alternative currency for individual and institutional savers and central banks alike,” John Reade, a partner and gold strategist at Paulson & Co., said yesterday in an e-mailed statement. “While gold can be volatile in the short term and is going through one of its periodic adjustments, we believe the long-term trend of increasing demand for gold in lieu of paper is intact.”

This piece of nonsense showed up on the Bloomberg website early yesterday evening...and I thank Rob Bentley for bringing it to our attention.

John Hathaway: Tocqueville Gold Strategy Update

Gold bullion prices have been subjected to a cleverly orchestrated bear raid in our opinion. Selling of paper Comex contracts on Friday, April 12th, and Monday, April 15th, totaled 1 million contracts, exceeding global annual gold production by 12%. The attack succeeded when the technical support in the low $1500’s/oz. easily gave way and led to waves of forced selling. The volume is without precedent and has all the characteristics of a panic liquidation driven by naked short selling. There is no way to know where or when the liquidation will end, but it will inevitably do so, probably sooner rather than later.

According to our source at the World Gold Council, physical buying from India and China, which represents half of global gold consumption, remains robust. Central bank buying activity shows no signs of abating. The notion that weak peripheral European states will be forced to sell their gold holdings is fanciful. A more likely scenario is that these holdings would be used as collateral to support additional credit to the sovereign.

All in all, it appears to us that this gold sell off was made in America, based on an assessment of technical weakness by a large number of opportunistic players, and supported by dubious macroeconomic speculations. At the very least, a sharp rebound based on short covering and physical buying should be expected once the panic has run its course.

This short 2-page commentary was posted on the tocqueville.com Internet site yesterday...and is a must read from start to finish.

Sprott's Thoughts: Gold Panic?

The recent price action in gold can only be described as 'panic selling'. Money managers and veteran traders know that when panic sets in and markets start moving rapidly, "investing" logic drops by the wayside and money begins to flow one direction only. We have seen this over the last two trading days in long gold positions in the futures and ETF markets. This selling in turn drives prices lower, forcing those holders on margin to liquidate their positions. This process leads to even more selling as the pain of holding levered "under water" positions becomes too great, causing traders to liquidate their positions. The light at the end of the tunnel for precious metals investors is that these events have been value-buying opportunities that occur only a few times a decade.

For all the short term pain it has caused, we view this selloff as an opportunity. All the pre-conditions that brought gold to this point are still intact. The macroeconomic case for gold is as strong as it has ever been and now investor sentiment has reached a negative extreme. Patience will be rewarded; we've seen this all before. [Indeed we have! - Ed]

This 4-paragraph article from David Franklin over at sprott.com is also amust read.

Nick Barisheff...The Gold Takedown: Another Glimpse into the Central Banking Matrix

Three weeks ago, the investing public was awarded a brief glimpse into the mysterious world of central banking through events in Cyprus. Despite the official assurances by IMF head Christine Lagarde that this was an anomaly, a one-time expropriation of investor savings, it is now clear that the situation is far more serious than originally acknowledged and that the Cyprus style "bail-in" will likely be used as a template for other distressed banks. News soon circulated that Cyprus’s gold reserves will be seized as part of the plan. Rumors rapidly spread that other troubled countries would also be forced to sell their gold .

Central banking has always been a highly secretive, subterranean affair that has led to many conspiracy theories. Until the advent of the Internet and the light it has shed on this dark room, most of the world believed the Federal Reserve was a government agency rather than a privately owned bank, for example. Former Congressman Dr. Ron Paul was largely responsible for clearing up this mystery. As discussed in my previous commentary on the subject, Cyprus gave us an important glimpse of the three great secrets central bankers would prefer to keep in the dark: The loss of purchasing power brought about through inflation, debasement and financial repression; the loss of investor confidence in the fiat model and in government and banking policies that support it; and the importance of uncompromised bullion ownership. The attack on gold and silver further supports this premise rather than weakens it, but arriving at this conclusion takes more than superficial, reactionary analysis.

This 6-page analysis by Bullion Management Group's president and CEO Nick Barisheff also falls into the absolute must read category...and I certainly hope you can find the time for it.

¤ THE WRAP

With the record-setting trading volume on Monday...and [also] on Friday, I would not be surprised if JPMorgan had eliminated its concentrated silver short position. I think it obscene that the CFTC and the CME have stood by and allowed JPMorgan and the other crooked commercials to disrupt the orderly functioning of the markets, but this is nothing new. The reality is that JPMorgan and their collusive partners are better positioned for a price rally in silver and other markets like never before. - Silver analyst Ted Butler...15 April 2013

I stayed up until the London open on Monday morning, which is 1:00 a.m. in my time zone...and already knew it was going to be a bad day by that time, both by the price action and the associated volume. Before switching off my computer for the night, I sent the following e-mail to Ted Butler..."Well, when you said years ago that the final clean-out to the downside...when it came...would scare the hell out of everyone, I'm sure you didn't know how right you'd be."

Here are the 1-year charts for the four precious metals, copper...and West Texas Intermediate. Ted Butler said that these were the six commodities that 'da boyz' were really after...and they got them good...especially silver, their big problem child.

(Click on image to enlarge)

As John Hathaway and Nick Barisheff stated in one form or another in the last few stories in today's column...this was a bullion bank affair that was "Made in America" by JPMorgan et al...although they didn't mention them by name. I'm glad to see that this fact is now being hinted at in public at the highest levels of the gold world...besides just coming from Eric Sprott and John Embry over at Sprott Asset Management. Let's hope it continues...and maybe filters down into the heads of the people that run the precious metal companies we own shares in. I would guess that it will be a frosty day in July [in the northern hemisphere] before that happens.

Not that I'm cheering for it, but I'm hoping that today's price action in gold and silver will remain subdued, as today [at the close of Comex trading in New York] is the cut-off for this Friday's Commitment of Traders Report. I've already bought a frame to hang it in, as it will be one for the history/record books...and it will show changes that none of us will ever live to see again. The same can be said of Nick Laird's "Days to Cover" chart that's derived from that data. It's my opinion that this engineered price decline was the bullion banks' last swing for the fences...and it's a whole new ballgame from hereon in.

Whether JPMorgan and the other handful of bullion banks that are short this market in the precious metals have covered their entire short positions in all of them, won't be known until Friday afternoon. However, it's a good bet that they've reduced them to such an extent that they either have the physical metal available to cover the balance...or can buy enough futures contracts without going bankrupt in the process.

And I'm still of the opinion the only card that the world's central banks have left to play is the gold card...and that a 'new and improved' gold price [along with a commensurate rise in price of the other five commodies mentioned above] is in the cards in the not-to-distant future. The reason I keep harping on this is that the current world-wide fiat currency system, in its current configuration, is toast...and the only thing that can save it [or maybe just prolong it] is very large gold price that will balance the central bank's books...and maybe some of the big bullion banks as well. JPMorgan Chase and Goldman Sachs, plus a small handful of others, come to mind.

Whatever changes are coming down the track, they won't be long in making an appearance, at least not in my opinion. I hate to hold up a sign the says "The End is Nigh"...but it is...and I must admit that I'm more than apprehensive of what comes next with, or without, the higher precious metal prices that will most certainly accompany it.

I don't know what to make of overnight action in both the Far East and the first couple of hours of London trading. All the metals are up, of course...but compared to the price declines of Friday and Monday, they're not doing much. Volumes in both gold and silver are already massive...over 130,000 contracts in gold...and 30,000 [net] contracts in silver. And as you've already figured out by now, movements in the dollar index [which is currently up 12 basis points] are irrelevant, at least for the moment.

It should be another interesting day in New York...and I look forward to the Comex open with great interest.

That's more than enough for today...and I'll see you here tomorrow.

Catharsis Ours

Tuesday, April 16, 2013