Morning cut.....
¤ YESTERDAY IN GOLD & SILVER
The gold price didn't much of anything in Far East trading for most of their Wednesday. However, about 2:30 p.m. Hong Kong time, which is thirty minutes before the 8:00 a.m. BST London open, gold got sold down about fifteen bucks by 9:00 a.m. BST...and that certainly could have been currency related.
After that, the gold price didn't do much of anything until at, or shortly after, the London p.m. gold fix. Then, in the space of less that ninety minutes, gold got sold down about twenty-five dollars, with the low tick [$1,387.00 spot] coming shortly before 11:30 a.m. EDT in New York.
The subsequent rally, such as it was, didn't amount to much...and after that, gold continued to sell off quietly into the close of electronic trading at 5:15 p.m.
Gold closed at $1,392.50 spot...down $33.30 on the day. Net volume was very large...around 204,000 contracts.
It was pretty much the same sort of price action in silver...and the silver chart looks a lot like the gold chart. The low tick...$22.41 spot...most likely came at the same moment as gold's low, but even the New York Spot Silver [Bid] chart didn't come close to catching it. Not surprisingly, silver got hit worse than gold, as that's "da boyz" problem child...at least it is for JPMorgan Chase and Canada's Bank of Nova Scotia.
Silver closed at $22.59 spot...down 82 cents from Tuesday's close. Gross volume was a very chunky 65,000 contracts.
Here's the New York Spot Silver [Bid] chart on its own, so you can see the Comex action in more detail.
Platinum got sold off as well during the New York session, but recovered smartly once the selling pressure disappeared. There was no such sell-off in palladium, as the chart below so plainly shows.
All four metals closed down on the day. Gold was down 2.34%...silver was down 3.50%...platinum down 0.67%...and palladium 0.41%.
The dollar index closed at 83.605 in New York late Tuesday afternoon...and traded just about ruler flat until shortly before 2:00 p.m. Hong Kong Time. The rally from there peaked out at precisely 8:00 a.m. in London. The high tick was 84.05. From there, the index sagged slightly for the rest of the Wednesday session, closing in New York at 83.785...up 18 basis points from Tuesday's close.
JPMorgan et al made no attempt to hide their actions behind the smoke screen of a currency move in New York yesterday, as it was all blatant in-your-face price management that started right at, or just after, the London p.m. gold fix.
The CME's Daily Delivery Report showed that 88 gold and 27 silver contracts were posted for delivery within the Comex-approved depositories. The link to yesterday's Issuers and Stoppers Report is here.
Both GLD and SLV had withdrawals by authorized participants yesterday. In GLD it was 145,034 troy ounces...and in SLV it was 1,544,992 troy ounces.
The U.S. Mint reported selling 5,500 ounces of gold eagles yesterday...and that was it.
It was a busy day in silver over at the Comex-approved depositories on Tuesday. They reported receiving 1,274,887 troy ounces of the stuff...and shipped 513,511 troy ounces out the door. The link to that activity is here.
On the same day in gold, the Comex-approved depositories reported receiving 75,751 troy ounces...and shipped 44,054 troy ounces of the stuff out the door. The link to that activity is here.
Selected news and views......
Treasury to suspend state, local securities sales
The Treasury Department on Friday will suspend sales of state and local government Treasury securities until further notice, the first action to avoid hitting the U.S. debt ceiling. The debt ceiling is expected to be reached on May 18, but the Treasury had been expected to take steps like this one in order to keep paying bills. Treasury Secretary Jacob Lew said last week that the U.S. will be able to avoid the debt limit until Labor Day. The Congressional Budget Office said Tuesday that the deadline could be as late as November.
This 1-paragraph story showed up on the marketwatch.com Internet site late yesterday afternoon EDT...and I thank reader "David in California" for bringing it to our attention.
German growth too weak to lift eurozone from recession
The eurozone economy continues to shrink as Germany's economy grew by a meager 0.1 percent in the past three months, while France slid back into recession, according to data from the EU statistics office Eurostat published on Wednesday (15 May).
Shrinking by 0.2 percent in the first three months of 2013, the eurozone economy has now been in recession for the past one and a half years, the longest period since 1995, when Eurostat started collecting the data.
The worst off are Greece - whose economy shrunk by 5.3 percent - and Portugal (-3.9%) compared to the same period last year.
France is also officially back in recession, after its economy shrank by 0.2 percent over the past six months, amid unemployment rates of over 10 percent and low business and consumer confidence.
This news item showed up on the euobserver.com Internet site very late in the afternoon Europe time...and is courtesy of Roy Stephens.
Battling the Crisis: Disunity Plagues E.U. Banking Union Talks
European leaders had hoped to quickly finalize plans for an EU banking union to regulate bank bailouts and provide a roadmap for unwinding insolvent financial institutions. But with the German election looming, Berlin is wary of moving forward. The result could be a lengthy delay.
The pledge was made almost a year ago. European leaders announced in the summer of 2012 that they were working on a plan to break the vicious cycle between the need to prevent banks from collapse and the surge in sovereign debt such efforts caused. In the future, they said, insolvent banks would not be saved by last-second, taxpayer-funded bailouts. Rather, troubled financial institutions would be propped up by a European banking union or they would be unwound in an orderly fashion.
Since then, leaders have been discussing what, exactly, such a banking union should look like. On Tuesday, European Union finance ministers met in Brussels for fresh talks in an attempt to reach agreement on the degree to which bank shareholders, creditors and savers should be involved in bailouts.
This article appeared on the German website spiegel.de yesterday...and it's courtesy of Roy Stephens, of course.
Three King World News Blogs
The first one is with Hong Kong hedge fund manager William Kaye...and it's headlined "Gold to Soar as West Enters a Frightening Economic Ice Age". Next is John Embry. It's entitled "This Catastrophic Situation is Entering the Terminal Phase". The third interview is with Dan Norcini...and it's titled "Incredibly Important Developments in Many Key Markets".
CFTC's Gensler, Chilton's Positions May Not Be Renewed
Positions held by Commodity Futures Trading Commission Chairman Gary Gensler and CFTC Commissioner Bart Chilton are up for renewal, but so far neither official has had their position renewed, which suggests new blood may come into the agency, said an futures industry official on Wednesday.
In addition to Gensler’s and Chilton’s positions being up for renewal, CFTC Commissioner Jill Sommers is leaving soon, said Walter Lukken, chairman of the Futures Industry Association on Wednesday in Chicago. Sommers has said in interviews she would not leave until the last set of Dodd-Frank financial regulatory rules are in place.
“We may be faced with a set of new commissioners who will oversee a complex set of rules,” Lukken said, regarding the implementation of the Dodd-Frank rules. Lukken spoke to members of the futures industry at a luncheon to discuss the view from Washington.
No loss as far as I'm concerned. If they did have good intentions at the beginning, they just didn't have the gonads to do what was right...or someone told them to toe the line, or else. They, like the organization they work for, are controlled by the CME Group and JPMorgan. This article appeared on thekitco.com Internet site yesterday...and I thank reader "Rocky R" for sending it along.
¤ THE WRAP
I believe that the big buyer of the 10 million oz of gold liquidated in the GLD was JPMorgan, either alone or with other collusive commercial banks. It dawned on me that the same methodology I’ve previously attributed to a potential Mr. Big in SLV (also probably JPMorgan) is at work in GLD. If one (or 2 or 3) big buyers in GLD had merely purchased the 100 million shares that were sold in GLD by liquidating shareholders, that would have quickly pushed the big buyer(s) over the 5% SEC reporting threshold, thereby revealing the identity of the buyers. Remember, we’re talking about 23% of shares outstanding and there is no way to buy that many shares and not quickly be into reporting status. But by having the gold redeemed out of the trust and the metal being purchased (instead of shares), stock reporting requirements are evaded. A single holder, perhaps working with a few collusive partners, came to own what is, effectively, almost a quarter of the world’s largest gold stockpile and no one is the wiser. - Silver analyst Ted Butler...15 May 2013
Another day...and another engineered price decline in silver and gold. One would have to fairly delusional to buy into the 'stronger dollar' story considering it's rather anemic performance. The price action in both those precious metals had zero to do with currencies, as the dollar index was doing squat at the London p.m. gold fix where most of the price damage occurred.
It's amazing...and discouraging...to look at the precious metal share prices. They're now back to where they were when silver was selling for under ten bucks an ounce...and gold around $500. You'd think that the mining companies would be up in arms, but there hasn't been a peep out of any of them...or from the organizations that purport to represent them...the World Gold Council and The Silver Institute.
Of course these organizations are strong with the dark side of The Force...and any mining executive that has ever worked in an executive position in either of them had already been totally compromised, or they would never have been offered those positions in the first place.
It's too bad that yesterday's price action occurred on a Wednesday, as it was the day after the cut-off for tomorrow's Commitment of Traders Report. And as I've pointed out countless times over the years, this is a little trick "da boyz" pull when they want to hide their tracks for as long as possible, as what happened yesterday won't be public knowledge until the COT Report on May 27th.
Not much happened, or was allowed to happen, in Far East trading on their Thursday...and as the London open approaches [in less than ten minutes] as I write this paragraph, all four precious metals are basically unchanged from Thursday's close in New York. Volumes are already very high in both silver and gold but, as per usual, it's virtually all high-frequency trading. The dollar index is up a handful of basis points.
It's been more than two hours since I wrote the above paragraph...and there have obviously been some 'developments'. Around the time of the London open, the high-frequency traders showed up on the scene...and all four precious metals came under selling pressure once again. And as I hit the 'send' button at 5:15 a.m. EDT...gold is down seventeen bucks, silver is down 40 cents...and platinum and palladium are down over a percent each. Volumes skyrocketed...now over 65,000 contracts in gold and 14,000 contracts in silver...and the dollar index is up a magnificent 15 basis points.
Silver came within a few pennies of its Far East April 16th low price tick at 10:00 a.m. BST in London, but gold is still fifty bucks away from its low of the same day. If I use Wednesday's trading action as a template for what might happen in Comex trading in New York today, I'd guess we'll see JPMorgan et al try to punch a new low price in silver. But as Ted Butler has carefully pointed out, there are few technical fund long holders left to sell...and even fewer of them are prepared to go short at these prices. "Da Boyz" may get the price lower, but it will probably won't allow them to improve their short positions by much...or go long themselves.
As you can imagine, I await the New York open with some apprehension.
See you on Friday...or on Saturday west of the International Date Line.
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