http://www.caseyresearch.com/gsd/edition/china-produces-90-tonnes-consumes-320-tonnes-in-q1-of-2013
¤ YESTERDAY IN GOLD & SILVER
The gold price opened quietly in early Far East trading on their Tuesday...and then began to chop lower shortly before 10:00 a.m. in Tokyo. It gained a bit of that back once London began to trade, but had the rug pulled out from under it the moment that Comex trading began at 8:20 a.m. EDT.
The low price tick...$1,440.40 spot...came at 10:15 a.m. in New York. The subsequent rally lasted until noon...and that was it for the day.
Gold closed at $1,452.60 spot...down $17.70 from Monday's closed. Net volume was very decent...147,000 contracts, double what it was on Monday...and most of it of the high-frequency trading variety.
It was more or less the same price pattern for silver, except its low tick came about twenty minutes after the Comex open...and Kitco recorded that as $23.35 spot. The subsequent rally lasted until noon EDT as well...and then traded sideways into the 5:15 p.m. electronic close.
Silver closed at $23.96 spot...down 8 cents from Monday. Net volume was 46,000 contracts, also exactly double what it was on Monday.
Platinum and palladium weren't spared either.
The dollar index opened at 82.34 in Far East trading on Tuesday...and then chopped sideways until just minutes before 11:00 a.m. in London...and the did a 23 basis point face plant, with its nadir coming at precisely noon BST. The index struggled upward from there, before jumping higher starting at exactly 10:00 a.m. in New York. Its high in New York thirty minutes later was 32.32...and the index chopped sideways into the close...finishing the day at 82.28...down only 6 basis points when all was said and done.
The CME Daily Delivery Report showed that 25 gold and zero silver contracts were posted for delivery tomorrow within the Comex-approved depositories.
Down, down, down goes GLD...and yesterday was no exception, as an authorized participant withdrew another 145,048 troy ounces. And as of 9:10 p.m. EDT, there were no reported changes inSLV.
Over at Switzerland's Zürcher Kantonalbank as of the close of business on May 6th...they reported a decline of 47,064 troy ounces in their gold ETF...but their silver ETF showed an increase of 81,920 troy ounces, the third weekly increase in a row since the big engineered price decline of mid-April.
The U.S. Mint only had a smallish sales report yesterday. They sold another 180,500 silver eagles.
Over at the Comex-approved depositories on Monday, they reported receiving 67,873 troy ounces of silver...and shipped 439,785 troy ounces of the stuff out the door. The link to that activity is here.
On the same day, they reported receiving 82,944 troy ounces of gold...and didn't ship any out. The link to that activity is here.
Here's a chart that I also look forward to seeing...the Hong Kong/China gold import chart for March. And as impressive as these numbers are, the import figures for April, when they come out in a months time, will be something to see.
(Click on image to enlarge)
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selected news and views.........
IMF Chief Lagarde Criticizes U.S. Government Spending Cuts
International Monetary Fund head Christine Lagarde criticized the U.S. government's budget policies as too tight on Tuesday, in an appearance in Amsterdam that was interrupted by student protestors.
Lagarde said the U.S. government's debt reduction plans are too abrupt, including the $85 billion in federal budget cuts known as the sequester. She said that the current policies would lower the U.S. economy's growth rate.
The IMF's most recent forecast in April said the U.S. economy would expand by 2 percent this year, 1.75 percentage points slower than it would have grown without the tax hikes and spending cuts.
The U.S. "should consolidate less in the short term, but give...economic actors the certainty that there will be fiscal consolidation going forward," she said.
What is this woman smoking? Whatever it is, she needs to reduce the potency of her next joint. That's the way I felt about the above comments from Ms. Lagarde in this moneynews.com story from yesterday...as did Elliot Simon in his covering e-mail.
Lagarde said the U.S. government's debt reduction plans are too abrupt, including the $85 billion in federal budget cuts known as the sequester. She said that the current policies would lower the U.S. economy's growth rate.
The IMF's most recent forecast in April said the U.S. economy would expand by 2 percent this year, 1.75 percentage points slower than it would have grown without the tax hikes and spending cuts.
The U.S. "should consolidate less in the short term, but give...economic actors the certainty that there will be fiscal consolidation going forward," she said.
What is this woman smoking? Whatever it is, she needs to reduce the potency of her next joint. That's the way I felt about the above comments from Ms. Lagarde in this moneynews.com story from yesterday...as did Elliot Simon in his covering e-mail.
Bank deposits of over €100,000 may be at risk
Deposits of over €100,000 are likely to be hit in the event of future European bank collapses, according to a proposal put forward by the Irish presidency of the European Council ahead of a key meeting of finance ministers next week.
Discussions on the controversial bank resolution regime, which is likely to see savers with deposits over €100,000 “bailed in” as part of future bank wind-downs, are due to intensify this week in Brussels, ahead of Tuesday’s meeting, which will be chaired by Minister for Finance, Michael Noonan.
“We will try to get some guidance from Ministers about the possible design of the bailout tool,” one EU official said yesterday.
Under a compromise text proposed by the Irish presidency, uninsured deposits of over €100,000 would be bailed in, in the event that a bank is resolved, but depositors would rank higher than other creditors in the event of a wind-down.
This article was posted on the Irish Times website during the lunch hour in the U.K. yesterday...and I thank reader David in California for bringing it to our attention. There's also a similar Fox News story about the Finnish Prime Minster saying the same thing...and that story is linked here. My thanks to Ulrike Marx for that one.
German Euro-Skeptic Party Gaining Ground
The anti-euro party "Alternative for Germany" (AfD) was officially founded just a few weeks ago, but it has clearly struck a nerve: It already numbers 10,476 members, SPIEGEL has learned -- some 2,800 of which have switched allegiance from Germany's established parties.
As elections loom later this year, Alternative for Germany is making waves with an agenda that includes dissolving the euro currency zone and returning powers from Brussels to EU member-states. Although a survey released on Tuesday showed the party's support is currently barely nudging 4 percent, its rapidly swelling ranks could end up significantly altering the country's political landscape.
The numbers are so far not particularly threatening to the country's largest parties. Just over 1,000 of AfD's freshly minted members previously belonged to Chancellor Angela Merkel's Christian Democrats, while Germany's largest opposition party, the Social Democrats, have seen 558 members defect.
But the threat to smaller parties, particularly the CDU's junior coalition partner, the pro-business Free Democratic Party, is more acute. The FDP has lost 587 members lured by the AfD's slogan: "Straight talk instead of S€datives".
This article showed up on the German website spiegel.de yesterday...and it's another offering from Roy Stephens.
U.S. Accuses China’s Military Directly for Cyberattacks
The Obama administration on Monday explicitly accused China’s military of mounting attacks on American government computer systems and defense contractors, saying one motive could be to map “military capabilities that could be exploited during a crisis.”
While some recent estimates have more than 90 percent of cyberespionage in the United States originating in China, the accusations relayed in the Pentagon’s annual report to Congress on Chinese military capabilities were remarkable in their directness. Until now the administration avoided directly accusing both the Chinese government and the People’s Liberation Army of using cyberweapons against the United States in a deliberate, government-developed strategy to steal intellectual property and gain strategic advantage.
This news item appeared on The New York Times website on Monday...and it's Roy Stephens' final offering in today's column.
Four King World News Blogs/Audio Interviews
1. James Turk: "Extraordinary Delays for Physical Gold and Silver". 2. Tom Fitzpatrick: "Gold and Silver Setting Up For Spectacular and Massive Surges". 3. Dan Norcini: "God Help Us All Because This Sure as Hell Will Not End Well". 4. The audio interview is with John Embry.
Gold Imports by India Seen Topping 100 Tonnes for a Second Month
Gold imports by India, the world’s largest consumer, are set to exceed 100 metric tons for a second month in May as jewelers rush to beat central bank curbs on overseas bullion purchases by banks, a refiner said.
The biggest slump in gold prices in more than three decades on April 15 spurred banks, traders and jewelers to import more than 100 tons last month, said Rajesh Khosla, managing director of MMTC-PAMP India Pvt. Purchases this month will match April’s imports, he said. MMTC-PAMP’s refinery in northern Indian state of Haryana can process 100 tons of gold, 600 tons of silver and make 2.5 million pieces of coins a year, he said.
The Reserve Bank of India, or RBI, will issue guidelines by the end of this month to restrict banks from importing gold on a consignment basis as it seeks to reduce domestic demand and curb a record current-account deficit, the central bank said on May 3. Banks will be allowed to buy on a consignment basis to meet only genuine needs of exporters of jewelry. The bulk of the imports by banks now is on a consignment basis that doesn’t require them to fund the purchase, RBI said.
This Bloomberg story, filed from New Delhi earlier today IST, was posted on their website late last night Mountain Daylight Time. I found this must read news item on the sharpspixley.com Internet site in the wee hours of this morning.
Gold-hungry China braces for surge in imports
Chinese gold imports are likely to swell further after rising strongly for a second straight month in March, as investors seek safety from economic uncertainty and after prices plunged to a two-year low last month.
"Physical demand picked up significantly over the last couple of weeks. Consumers and industrial users tend to see price drops as buying opportunities," Zhang Bingnan, secretary-general of the China Gold Association, told Reuters.
"Investment demand should continue to stay strong through the rest of the year because of limited investment alternatives," said Zhang, adding that gold sales and processing volumes both spiked in April.
This Reuters story, filed jointly from Singapore and Beijing yesterday, was picked up by the mineweb.com Internet site...and it's definitely worth reading. I thank Ulrike Marx for digging this news item up on our behalf.
China produces 90 tonnes, consumes 320 tonnes in Q1-2013
World's largest gold producer and second largest consumer China's total gold usage reached 320.54 metric tonnes in the first quarter, China Gold Association said.
According to CGA, purchases of gold bars surged 49% to 120.39 tonnes, while jewelry gained 16% to 178.59 tonnes.
Gold consumption in China soared 26% in the first three months of 2013 from a year ago amid strong bullion sales and rising jewelry demand.
The Association added that country's gold production gained 11% in the same period to 89.91 tonnes.
Here's another must read story...this one was posted on the bullionstreet.comInternet site yesterday afternoon IST...and even if you don't read the article, which is very short, the photo alone is worth the trip! I thank Ulrike Marx for our last news item of the day.
¤ THE WRAP
A little knowledge that acts, is worth infinitely more than much knowledge that is idle. -- Kahlil Gibran
Another day...and another engineered take-down in the precious metals. Although volume was high, it was mostly of the HFT variety...and with almost non-existent liquidity on the Comex, it's not hard to manage prices. JPMorgan Chase et al were certainly out and about yesterday.
I'm not sure how many short contracts they managed to cover, but it wouldn't have been many, as they would have to set new low prices for this move down...and I'd be prepared to bet a good chunk of money that the spike low of April 16th will not be revisited.
As silver analyst Ted Butler said in his Saturday missive..."I don't doubt for a minute that JPMorgan Chase would like their current short position in silver [around 18,000 contracts] to be even lower. But I'm hard pressed to imagine who the selling victims might be, given the extent of speculative selling that has already occurred on the price carnage to date."
I echo those sentiments.
Yesterday was the cut-off for this Friday's Commitment of Traders Report...and this month's Bank Participation Report. Based on the price action over the reporting week, I'll stick my neck out and speculate that we'll see some more improvement in the Commercial net short position in both gold and silver, but it won't be a lot.
I'm still pondering the continuing out-flow from GLD. Except for one, or maybe two days at the most, this ETF has been in continuous decline since December 7th...Pearl Harbor Day...with no respite, even with the rally off the April 16th low. This is not at all normal...and certainly hasn't been the case in SLV.
My records show that the gold ETF over at Switzerland's Zürcher Kantonalbank began to decline during the first week of 2013...and it, also, has shown no signs of ending. But their silver ETF is unchanged over the same period.
Questions with no answers. But as I've said before, maybe I'm looking for black bears in a dark room that aren't there...but I don't think so in this particular case.
As I've said on several occasions lately, something appears to be afoot, but I just can't put my finger on it. But whatever it is, it will change things quickly, as this bifurcated market cannot continue forever...or for much longer. So we wait.
Not much happened in Far East trading on their Wednesday...and the same thing can be said about the first thirty minutes of trading in London, which is where we're at as I type this paragraph. Volumes in both gold and silver are considerably reduced from their levels of Tuesday morning...and the dollar index is down about 11 basis points, not that it matters.
And as I hit the 'send' button on today's column, not much has changed during the last couple of hours. Gold is currently up a couple of bucks...and silver is down about 20 cents. Volumes have changed very little...and the dollar index is still down the same 11 basis points.
I hope your day goes well...and I'll see you here tomorrow.
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