http://www.zerohedge.com/news/2013-05-15/producer-prices-plunge-empire-fed-slides-first-negative-print-january
( Deflation signs anyone ? PM selloff could worsen off this report.... )
Submitted by Tyler Durden on 05/15/2013 08:48 -0400
and....
New York Spot Market
( Deflation signs anyone ? PM selloff could worsen off this report.... )
Producer Prices Plunge, Empire Fed Slides To First Negative Print Since January
One of these days we might just get a positive economic print, of the kind that the meandering Tepper was saying is visible everywhere now. Just not yet. Moments ago we got the releases of the May PPI and the Empire Fed, the first of which dropped -0.7%, on expectations of a -0.6% drop, the lowest MoM PPI since July 2009. driven by food and energy producer prices as economic slack continues to persist, while PPI ex food and energy dropped from a +0.2% increase in April to just 0.1%, in line with expectations. Technically, this is bullish for the E-Trade baby as it gives the Fed carte blanche to continue QEternity as long as needed.
But it was the Empire Fed index that was even more disappointing, as it crushed hopes for an increase from 3.05 to 4.00 in May, instead posting the first contractionary print since January, printing at -1.43. It gets worse when one digs through the data: New Orders dropped from 2.20 to -1.17, Shipments also slid into negative from 0.75 to -0.02, Unfilled Orders deteriorated even more from -3.41 to -6.82, Inventories contracted from -4.55 to -7.95, Prices Paid and Received both contracted, but worst of all, the Average Employee Workweek dropped from 5.68 to -1.14, meaning the collapse in the average workweek persists, and even if the BLS reports a positive print for May, the report will once again mask the declining aggregate end demand for labor.
What is worst, however, is that even the Hopium has now run out, with the future general business conditions index declining for a second consecutive month, dropping six points to 25.5. Add to this the just 1.2% expectation in increasing prices received - the lowest on record - and one can see why the US manufacturing sector is collapsing.
The May 2013 Empire State Manufacturing Survey indicates that conditions for New York manufacturers declined marginally. The general business conditions index fell four points to -1.4, its first negative reading since January. The new orders index also edged into negative territory, and the shipments index fell to zero. The prices paid index declined eight points to 20.5, indicating a slowdown in selling price increases, while the prices received index was little changed at 4.6. Employment indexes were mixed, showing both a modest increase in the number of employees and a slight decline in the length of the average workweek. Indexes for the six-month outlook were generally lower, suggesting that optimism about future conditions had weakened.In a series of supplementary survey questions, firms were asked about past and expected changes in both the prices they paid for inputs and the prices they charged their customers. The same questions had previously been asked in surveys conducted in May 2012 and in May of earlier years. Respondents to the current survey, on average, expected the prices they paid to climb by 2.8 percent—the smallest anticipated rise since May 2009.Moreover, the average respondent anticipated an increase of just 1.2 percent in prices received—the smallest expected increase recorded since these questions were first asked in May 2007.General Business Conditions Index Falls Below ZeroAfter three months of modestly positive readings, the general business conditions index fell four points to -1.4 in May, pointing to a slight deterioration in business conditions for New York manufacturers for the first time since January. Twenty-five percent of respondents reported that conditions had improved over the month, while 26 percent reported that conditions had worsened. The new orders index also fell below zero, declining three points to -1.2. The shipments index was little changed, holding at zero in a sign that shipments were flat. The unfilled orders index declined three points to -6.8. The delivery time index was unchanged at -3.4, and the inventories index fell three points to -8.0, suggesting a modest decline in inventory levels.
And visually:
and....
New York Spot Market
MARKET IS OPEN
(Will close in 8 hrs. 35 mins.)
Metals
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05/15/2013
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22.97
23.07
-0.44
-1.88%
22.77
23.15
05/15/2013
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1492.00
1502.00
-6.00
-0.40%
1488.00
1504.00
05/15/2013
08:39
723.00
728.00
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-0.69%
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Morning flush for the PMs......
William Kaye: How a Criminal Syndicate of Banks is Raping the Gold Market
May
15
15
¤ YESTERDAY IN GOLD & SILVER
Gold's rally in early Far East trading lasted until 10:00 a.m. Tokyo time on their Tuesday...at the exact moment that the dollar index began its big rally.
From that point, the gold price traded sideways until around 2:30 p.m. in Hong Kong...about thirty minutes before the London open...and then the serious sell-off began. The low tick of the day [$1,420.30 spot] came at 9:00 a.m. in New York, right on the button. The subsequent rally lasted until the London p.m. gold fix, or just moments after...and that, as they say, was that.
Gold closed at $1,425.80 spot...down an even five bucks on the day. Net volume was decent at around 141,000 contracts.
It was mostly the same story in silver, although it appeared that the silver price got a bit of a shove starting just before 11:00 a.m. BST in London, as it didn't appear to want to go down on its own. Then it got smacked for another 40 cents the moment that Comex trading began in New York...and the low price tick [$23.05 spot] came a few minutes after 8:30 a.m. EDT. The subsequent rally appeared to run into the same set of not-for-profit sellers as gold did at, or shortly after, the London p.m. gold fix around 10:00 a.m. in New York. From there it got sold down until about 12:30 p.m. EDT...and traded sideways into the 5:15 p.m. electronic close.
Silver finished the Tuesday trading day at $23.41 spot...down 24 cents from Monday's close. Gross volume, not surprisingly, was fairly decent...around 44,500 contracts.
It was a slightly different story in both platinum and palladium...and here are the charts.
For the Tuesday trading session, gold finished down 0.35%...silver closed down 1.01%...platinum closed up 1.42%...and palladium was up 1.68%.
The dollar index, which closed on Monday at 83.22...began to head south the moment that trading began in the Far East on their Tuesday morning...but someone was there to catch a falling knife as the index fell below 83.00 at 10:00 a.m. in Tokyo...and until 10:30 a.m. in London it traded pretty close to the 83.00 mark.
Then away it went to the upside...and was at 83.36 about an hour later. From there it chopped sideways until 11:00 a.m. in New York. The rally began anew at that point...and topped out at 83.67 around 3:45 p.m. Eastern time, before selling off a hair into the close. The dollar index closed at 83.605...up about 38 basis points...with the vast majority of that gain coming between 11:00 a.m. and the 3:45 p.m. EDT high tick.
It would take a very vivid imagination to fit the price action of any of the four precious metals into the price action of the dollar index after the low tick was in, in early Far East trading yesterday. As a matter of fact, it doesn't fit at all...and in my opinion was just another bear raid on the precious metals hidden behind the skirts of a manufactured rally in the dollar index.
Here's the 3-day chart so you can see the entire Tuesday trading day starting at 6:00 p.m. EDT in New York on their Monday night.
The CME's Daily Delivery Report showed that 7 gold and 21 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.
There were no reported changes in either GLD or SLV for the second day in a row.
Over at Switzerland's Zürcher Kantonalbank for the week ending on Monday, May 13th...they reported that 112,879 troy ounces of gold were withdrawn from their gold ETF. And, for the fourth week in a row, they reported an increase in their silver ETF holdings. This time it was 209,816 troy ounces.
The U.S. Mint finally came out with a sales report...and I can tell from the numbers, that they have not been reporting their sales in anything close to a 'timely manner'...as there are some big changes. They sold 16,000 ounces of gold eagles...5,000 one-ounce 24K gold buffaloes...and 833,500 silver eagles.
Over at the Comex-approved depositories on Monday, they reported receiving 214,163 troy ounces of silver...and shipped 101,801 troy ounces out the door. The link to that activity is here.
In gold, they didn't report receiving any on Monday...and shipped out 54,808 troy ounces...all of it from the JPMorgan Chase depository. The link to that activity is here.
selected news and views.....
Sales Tax Bill Threatens Economy
The impact of the Marketplace Fairness Act (the so-called Internet Sales Tax Bill) which passed the Senate on May 6 received limited coverage in a May 10 Numismaster column. However, it deserves a much more detailed discussion. The negative effect it will have on numismatic and precious metals transactions will be dwarfed by the potentially disastrous economic fallout throughout the U.S. economy.
As former Congressman Jimmy Hayes explained at the American Numismatic Association’s National Money Show in New Orleans last week, the label of “Internet Sales Tax” is completely inaccurate. The bill applies to all forms of remote selling, including by mail, telephone, television, radio and Internet. Nowhere in the bill does the word “Internet” appear.
Here are some of the potential financial pitfalls that lurk if the bill is enacted: The bill enables every jurisdiction that charges sales tax to audit sellers. That includes 45 states, the District of Columbia, 740 American Indian tribes, and thousands of local governments across the country. Maybe a business can absorb the costs of an audit by one or two governments, but what if 20 entities came to audit? Although these audits would be conducted by the state government where the seller lives, the overhead costs of audits could put some smaller sellers out of business.
As former Congressman Jimmy Hayes explained at the American Numismatic Association’s National Money Show in New Orleans last week, the label of “Internet Sales Tax” is completely inaccurate. The bill applies to all forms of remote selling, including by mail, telephone, television, radio and Internet. Nowhere in the bill does the word “Internet” appear.
Here are some of the potential financial pitfalls that lurk if the bill is enacted: The bill enables every jurisdiction that charges sales tax to audit sellers. That includes 45 states, the District of Columbia, 740 American Indian tribes, and thousands of local governments across the country. Maybe a business can absorb the costs of an audit by one or two governments, but what if 20 entities came to audit? Although these audits would be conducted by the state government where the seller lives, the overhead costs of audits could put some smaller sellers out of business.
This essay was posted on the numismaster.com Internet site. West Virginia reader Elliot Simon, who sent me this article and has some expertise in this matter, says it's a must read for all Americans...so, being Canadian, who am I to argue.
Pew Study: Europeans Rapidly Losing Faith in Europe
Europe's ongoing economic crisis and lasting currency woes are beginning to rapidly erode faith among Europeans in the EU project. That is the result of a new survey undertaken by the renowned Pew Research Center in Washington D.C. and released on Monday evening.
The institute polled 8,000 people in eight European Union member states in March and arrived at some disturbing results. In just one year, the share of Europeans who view the European Union project favorably plummeted from 60 percent in 2012 to just 45 percent this year. Furthermore, only in Germany does a majority continue to support granting more power to Brussels in an effort to combat the ongoing crisis.
"The European Union is the new sick man of Europe," read the survey's opening lines. "The effort over the past half century to create a more united Europe is now the principal casualty of the euro crisis. The European project now stands in disrepute across much of Europe."
This spiegel.de story, filed from Washington yesterday, is worth reading as well...and my thanks go out to Roy Stephens for his third contribution to today's column.
Letter From Berlin: Anti-Euro Party a Growing Challenge for Merkel
German Chancellor Angela Merkel wanted to ignore the Alternative for Germany. But with the anti-euro party gaining ground, many among her conservatives say it is time to change strategy. They are concerned that the currency heretics could cost Merkel her re-election.
Germany's center-right has long been in a luxurious position. Whereas conservatives across Europe have been struggling in recent years with the rise of right-wing populist parties eating into their base, Chancellor Angela Merkel's Christian Democrats have had little to worry about. Though the German left is splintered among three, or even four, parties, the right is a monolith. There is the CDU, its Bavarian wing known as the Christian Social Union, and its favorite coalition partner, the Free Democrats (FDP).
But this election year is different. With the birth of the anti-euro party Alternative for Germany (AfD), Merkel is facing competition from within her own clientele. Furthermore, though her preferred strategy has been that of maintaining complete silence about the AfD so as not to lend it credibility, there are many in Merkel's party who disagree with that approach. And they are increasingly giving voice to their displeasure.
This is another story from the German website spiegel.de. This one was posted on their website mid-afternoon Europe time...and it's another offering from Roy Stephens.
Luxembourg says NO to new E.U. tax law
Luxembourg, one of the EU's smallest but richest countries, has said No to a new law against tax evasion.
Its finance minister, Luc Frieden, told press in Brussels on Monday (13 May): "We won't agree tomorrow to the savings tax directive with an extended use because there's still some need for clarification."
He added: "At the moment we lack precision about a number of questions that need answers … We don't know how this will be written into European law and we're not sure that all the loopholes have been closed, in particular a number of trusts don't seem to be covered."
It also contains a big hole on Austria and Luxembourg.
The two financial centres are exempt from automatic exchange until such time as five non-EU tax havens - Andorra, Liechtenstein, Monaco, San Marino and Switzerland - agree to it as well.
Luxembourg, home to just half a million people, has a GDP per capita which is almost three times the size of the EU average. Its wealth comes mainly from financial services. Its banking sector is worth 22 times the size of its economy.
And you though Cyprus was bad. Luxembourg is far worse. No wonder they're opposed to this new tax. This must read story, filed from Brussels, was posted on the euobserver.com Internet site early yesterday morning Europe time...and my thanks go out to Roy Stephens once again.
Cyprus gets €2bn despite money laundering concerns
The E.U. on Monday (13 May) said many Cypriot banks do not know who their customers really are, but wired Nicosia €2 billion anyway.
Commenting on a recent study on money laundering in the Mediterranean island, eurozone finance ministers said in a joint communiqué that it must do better on "customer due diligence by banks" and must fix "the functioning of [its] company registry."
Dutch finance chief Jeroen Dijsselbloem, who chairs the ministers' meetings, added: "This report shows that while the legal [anti-money-laundering] framework is OK, the implementation is really lacking."
This is another story from the euobserver.com Internet site. This one was filed minutes after midnight Europe time yesterday. It's definitely worth the read...and my thanks to Roy Stephens for his final offering in today's column.
Seven King World News Blogs/Audio Interviews
1. Ron Rosen: "This Key Chart Tells You All You Need to Know About Gold". 2. Egon von Greyerz: "The Move to Global Hyperinflation is Now Accelerating". 3. Richard Russell: "We Are Witnessing Unprecedented Events". 4. William Kaye: "How a Criminal Syndicate of Banks is Raping the Gold Market". 5. William Kaye audio interview Part One...and Part Two. 6.James Turk audio interview. 7. Andrew Maguire audio interview.
Gold buying becomes frantic in India, strongest since 2008
Accelerating gold imports contribute to the current account deficit, which analysts say is one of the biggest concerns for the Indian economy. The government has tried to curb India's appetite for gold with import duties while the central bank has imposed restrictions on the import of the metal, but buyers don't care. They are actually rushing to buy before the authorities clamp down on gold.
On Monday's Akshaya Trithiya festival, the demand was so high that some jewellers opened their shops at 7 am. People stood in queues for hours to buy coins, bars, and ornaments, hoisting sales to the brisk pace last seen in 2008 when gold prices were half of the current level.
The sudden surge in demand has prompted the World Gold Council to say India's imports this year will exceed earlier estimates of 865-965 tonnes, said the council's managing director, Somasundaram PR.
"Consumers are buying both coins and jewellery. Since coins can be bought on the spot, they are flying off the shelves quickly. Orders for jewellery are being placed which may be delivered at a later date," he said.
This is another story from The Economic Times of India. This one was posted on their website on Tuesday...and I found it in a GATA release.
$1 billion of gold has been shipped from New York to South Africa this year
Examining U.S. trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March. Why?
It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)
The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.
This story was sent to me on Monday by reader Federico Schiavio...and I really didn't know what to make of it. But it spread like wildfire on the Internet yesterday...and this is what James Turk had to say about it...
"The Rand Refinery is one of the largest in the world. South Africa used to mine 1,000 tones per year, all of which was refined at Rand Refinery. South Africa now mines less than 1/3rd of that weight. So there is a lot of unused fabricating capacity at the Rand Refinery. Given that the Swiss refiners are working 24/7 and backlogged, it is not surprising to me that someone would send gold to the Rand Refinery for fabricating, whether Krugerrands, kilobars, tael bars or whatever."
"That exports from JFK are rising is not surprising either. The US economy continues to do poorly, so a lot of old jewellery and stuff is being sold for cash, to help make ends meet. So these growing shipments from JFK is just part of the now well-established trend that gold is being shipped from west to east."
This very interesting essay, with some excellent charts, was posted on theqz.com Internet site yesterday...and I thank reader Federico Schiavio for bringing it to our attention.
Record High Gold Bullion Sales at the Perth Mint
The Perth Mint of Australia achieved record breaking sales for gold bullion products in April, as lower precious metals prices spurred a huge leap in demand. Silver bullion sales also jumped to the highest level in six months.
The Perth Mint began publicly reporting its monthly gold and silver bullion sales in March 2012, providing a window of insight into demand for physical precious metals. Sales spikes have occurred in September 2012 to coincide with the release of the new designs and last month to coincide with the decline in metals prices.
For the month of April 2013, sales of gold as coins and minted products reached 111,505.06 troy ounces. This amount was more than double the previous month and up by an astounding 534.43% from the year ago period when 17,575.64 troy ounces were sold.
This article is well worth your time and was posted on the coinupdate.comInternet site yesterday...and I thank Elliot Simon for bringing it to our attention.
Bank of Portugal says no Cyprus-style gold sales
Portugal will not replicate a deal that allowed Cyprus to sell its gold reserves under its bailout, Bank of Portugal Governor Carlos Costa said on Tuesday, adding that its reserves were unchanged at 382.5 tonnes.
"It is not applicable in Portugal," he told reporters. "What happened in Cyprus (on gold reserves), just like a lot of other things there, cannot be replicated in Portugal."
"If we can say today that the Bank of Portugal is among a small group of central banks with adequate risk provisioning ... is mostly because we have significant gold reserves," Costa said. The value of Portugal's reserves rose 3.6 percent last year to 15.51 billion euros due to gold price fluctuations, but Costa said the actual quantity remained the same.
This Reuters news item was posted on their website early yesterday morning EDT...and I thank Ulrike Marx for digging it up on our behalf.
¤ THE WRAP
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed. - 2nd Amendment...Constitution of the United States of America...December 17, 1791
As I said further up in this column, I would classify the gold and silver price action yesterday as a bear raid by JPMorgan et al...hidden, in part, by the rally in the dollar index...such as it was.
The only good thing about yesterday's price action was the fact that it should appear in Friday's Commitment of Traders Report. Of course, when it suits them, "da boyz" have been tardy about reporting Comex trading volume in the past, so it remains to be seen if they pull that stunt again...and I'd put nothing past these guys.
Just eye-balling the price action over the five reporting days that will show up in Friday's COT report, I would guess that we'll see improvements in the Commercial net short positions in both gold and silver...but nothing in platinum, as it has been trading flat...and palladium is on a tear...up about fifty bucks during the reporting period.
Just looking at the last five trading days on the 6-month charts, it should be obvious that the price pressure has only appeared in silver and gold...and not platinum and palladium. Here are all four charts...complete with 20 and 50-day moving averages.
(Click on image to enlarge)
(Click on image to enlarge)
(Click on image to enlarge)
(Click on image to enlarge)
All four precious metals came under some price pressure during the Far East trading session on their Wednesday...and the high-frequency traders went back to work in gold and silver about the same times as they did on Tuesday...shortly before the London open. As I write this paragraph, the London market has been open about thirty minutes...and gold is down about eleven dollars...and silver, JPM's real problem child, is down a bit over 40 cents. Trading volumes are quite high...but as I said, it's all HFT. This is not true supply and demand setting prices at this point...and to top it off, there's virtually no liquidity, as little real-world trading is being done. It's the machines with their algos.
And as I hit the 'send' button on today's column at 5:15 p.m. EDT, both gold and silver are still under considerable selling pressure. Platinum and palladium are lower as well, but just barely. Gold is down about fifteen bucks...and silver is down 45 cents...about 2 percent. Gold volume is north of 48,000 contracts...and silver's volume is over 14,000 contracts. The dollar index, which spiked up about 25 basis points in afternoon trading in Hong Kong, is now up only 16 basis points as of 10:15 a.m. BST in London.
This 'bear market' we're going through is JPMorgan et al's last attempts to cover as many short positions as they can before prices head higher...much higher. But as Ted Butler mentioned in yesterday's column, JPMorgan Chase was short 18,000 Comex silver contracts before the mid-April price smash...and was still short about that amount as of last Friday's COT Report, so one has to wonder what they're up to at the moment. If they couldn't cover any or all of it back then, it's doubtful they can pull it off now. We'll see.
Needless to say, nothing will surprise me as far as price action is concerned once we get past the noon silver fix in London, which is 7:00 a.m. EDT...and after that, the 8:20 a.m. Comex open awaits.
See you tomorrow.
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