http://www.caseyresearch.com/gsd/edition/the-dire-state-of-the-platinum-palladium-miners
¤ YESTERDAY IN GOLD & SILVER
NOTE: I will be at the Vancouver Investment Conference for the next five days. Because of that, my Friday, Saturday...and Tuesday columns are going to be as short as I can possibly make them. I have other fish to fry while I'm there...and sacrifices have to be made...and this is one of them.
The gold price rallied in fits and starts all through Far East and most of London trading on Wednesday, but got sold down a bit beginning shortly after 9:00 a.m. in New York.
But once the London p.m. gold fix was in, the gold price blasted higher...reaching its high tick of the day of $1,416.00 spot at 10:15 a.m...fifteen minutes later. It took JPMorgan et al almost to the close of London trading at 11:00 a.m. EDT to kill that rally and drive the gold price back below its Tuesday close...safely back under $1,400 spot...and an intraday trading range of seventy bucks.
The low price tick at 2:45 p.m. in electronic trading...and Kitco recorded that as $1,346.00 spot.
Gold close on Wednesday at $1,369.70 spot...down $6.30 from Tuesday's close. Volume was immense, as the short sellers of last resort used a lot of paper gold to put the London p.m. gold fix fire out. Net volume was 259,000 contracts.
It was pretty much the same price pattern in silver. Silver's high tick at 10:15 a.m. in New York was reported as $23.46 spot...and the 2:45 p.m. EDT low was recorded as $22.12 spot. That was an intraday move of $1.34.
Silver closed at $22.27 spot...down 16 cents from Tuesday. Volume in silver was very chunky as well...79,500 contracts.
The price patterns for platinum and palladium were similar as well...and here are their respective charts...
The dollar index closed at 83.76 in late afternoon trading in New York on Tuesday...and then didn't do much until 10:00 a.m. in New York. After a two-minute 27 basis point dip, the dollar index blasted higher...reaching it's zenith at 12:30 p.m. EDT. From there it slid a hair into the close...finishing the Wednesday session at 84.28...up 48 basis points from Tuesday's close.
If you'd like to believe that the Fed minutes...or Bernanke's commentary...had much to do with precious metal prices yesterday, you're certainly entitled to hold that opinion. The dollar index and all four precious metals were blasting higher together, until the not-for-profit sellers showed up at 10:15 a.m. EDT and put an end to it. That's why volumes in both gold and silver were over the moon...because, as I said, it took enormous fire power to kill the precious metal rallies stone-cold dead.
The CME's Daily Delivery Report showed that zero gold and 40 silver contracts were posted for delivery on Friday...and the link to yesterday's Issuers and Stoppers Report is here.
There were more withdrawals from both GLD and SLV yesterday. In GLD, it was 96,682 troy ounces...and in SLV, it was an eye-watering 5,648,281 troy ounces. This huge amount of silver was obviously not plain-vanilla investor liquidation...and as Ted Butler mentioned in yesterday's column, he feels that it's JPMorgan and a few other bullion banks helping themselves by redeeming shares they already own...probably ones they bought in the April 12/15 engineered price decline...or in Monday's bear raid...or both.
There was a smallish sale by the U.S. Mint yesterday. They reported selling another 37,500 silver eagles.
Over at the Comex-approved depositories on Tuesday, they didn't report receiving any silver...but shipped 669,991 troy ounces out the door. The link to that activity is here.
In gold on Tuesday, these same depositories reported receiving 57,855 troy ounces of the stuff...and didn't ship any out. The link to that activity is here.
* * *
selected news and views.......
Four King World News Blogs
The first interview is with Michael Pento...and it's headlined "Fed Lies and Propaganda Won't Stop Gold and Silver Rise". Next is this commentary by Citi analyst Tom Fitzpatrick "Gold to Advance a Stunning $2,000+ From Current Levels". Here's a blog with Robert Fitzwilson. It's entitled "The Fed Destruction and a Cascading Panic Among Investors". And lastly is this interview with Dan Norcini...and it bears the headline "Incredibly Important Developments in Many Key Markets".
Risk of vicious circle for gold as hedging returns
London-listed gold producer Petropavlovsk has said it will pre-sell 55pc of its future output planned for the second quarter of 2014, at an average price of $1,408 an ounce. This is the first time that a big producer has hedged more than half its future sales.
“We have a huge investment programme and thought a little price protection in the short-term will let us sleep better at night,” said chairman Peter Hambro.
“It was hedging that killed gold prices the 1990s,” said Ross Norman from Sharps Pixley. “Every time there was rally, the producers seized on the chance to sell forward. It was most unhelpful.”
Mr. Norman said it was the unwinding of hedge books a decade ago that unleashed the bull market. This process could now go into reverse if hedging spreads. "We don't think it will. The forces that led to the bull market will prevail," he said.
The forward sale is for only three months...and Ross Norman has it exactly right. Except for project financing, no miner is going to put their head back in that particular lion's mouth ever again. This Ambrose-Evans Pritchard offering was posted on The Telegraph's website early yesterday evening BST...and it's Roy Stephens second and final offering in today's column.
Sprott's Thoughts: The Dire State of the Platinum-Palladium Miners
During the third week of May each year, representatives of the platinum industry gather in London, for an event that has become known as ‘Platinum Week’. Platinum Week centers on an industry dinner sponsored by the London Platinum and Palladium Market (LPPM) which marks the anniversary of the inauguration of the London Platinum Quotation (the forerunner of the present London Fixings) in 1973.
This event is attended by platinum group metals (PGM) producers, refiners, fabricators and traders. The first major event of the week is the publication of Johnson Matthey’s annual review of supply and demand for the PGM markets.
According to Johnson Matthey, the platinum market was in deficit by 375,000 ounces in 2012, close to their forecast made last November. The palladium market was also undersupplied but by a much larger margin of more than 1 million ounces.
This commentary by David Franklin over at Sprott Asset Management is a must read.
China demand drives Asian gold bar premiums to record highs
Premiums for gold bars hit a record high in Asia on Wednesday as lower spot prices lured more buyers, mainly in China, the world's second biggest consumer of the precious metal, amid tight physical supplies.
Premiums for gold bars in Hong Kong touched a new all-time high of $6 an ounce over spot London prices, up from $5 last week. Singapore premiums rose to $5.
Banks in China were quoting up to $7 in premiums, two traders in Singapore said.
This Reuters story, filed from Singapore, was posted on the mineweb.comInternet site...and I thank Manitoba reader Ulrike Marx for sharing it with us. It's definitely worth reading.
¤ THE WRAP
Among the many misdeeds of British rule in India, history will look upon the Act depriving a whole nation of arms as the blackest. -- Mohandas Gandhi, An Autobiography
Well, not too many shades of grey in yesterday's price action, as JPMorgan et al hauled the precious metals prices down with naked brute force...selling whatever Comex paper contracts necessary to keep prices where they're currently sitting.
Based on the structure of last Friday's Commitment of Traders Report, which will most likely show an even more wildly bullish set-up in tomorrow's report, you have to wonder what "da boyz" are waiting for. As I've mentioned a few times already, we'll probably have a triggering event of some kind, but it was obvious from yesterday's price action that the powers that be didn't want the Fed news to be the event that set it off...although it was as equally obvious that all four precious metal wanted to blow sky high.
Looking at the current economic, financial and monetary situation...you just have to wonder how much time we have left before the whole thing collapses in a heap. Maybe the Fed and JPMorgan et al are awaiting that day when everything melts down before they finally allow the precious metals market to melt up. We'll find out, as they say, in the fullness of time.
In Thursday trading in the Far East, the gold price got sold down to its low shortly after 10:00 a.m. in Tokyo...and has been rallying a bit ever since. Gold and silver volumes are very high as London opens at 8:00 a.m. BST...and the dollar index is flat.
And as I hit the 'send' button at 4:50 a.m. Eastern time, the gold price is up a respectable eighteen bucks...and silver is up about 20 cents. The dollar index has taken a real header in the last hour or so...and is down about 41 basis points. Gold's net volume is already 50,000 contracts...and silver's gross volume is at the 12,000 contract mark, so these rallies are not going unopposed.
The rest of the Thursday trading day could be educational...and I await the Comex open in New York with great interest.
See you tomorrow.
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