Thursday, April 10, 2014

Ed Steer's Gold and Silver Report -- April 10 , 2014 -- News of the day , data and views touching on the precious metals ! Additional items on the day after Ed's Morning Wrap .....


The gold price rallied about five bucks or so during early trading in the Far East on their Wednesday, but then began to sell off a bit starting around 2 p.m. Hong Kong time---an hour before the London open.  Then, at the noon London silver fix, the gold price got sold down another five bucks or so---and then didn't do much until the Fed minutes were released at 2 p.m. EDT.  The subsequent price spike ran into a not-for-profit seller within 30 minutes---and that was pretty much it for the remainder of the day.
The CME recorded the high and low ticks at $1,301.10 and $1,315.50 in the June contract.
The gold price closed in New York on Wednesday at $1,312.30 spot, up $4.30 on the day.  Volume, net of April and May, was fairly decent at 137,000 contracts.
The silver price got sold down back down below the $20 level the moment trading began at 6 p.m. EDT in New York on Tuesday evening---and traded within a dime of that price until noon Hong Kong time.  Then, like gold, the HFT boyz went to work, with the absolute low of the day coming minutes before 9 a.m. in New York.  The subsequent rally didn't get far---and the price spike at 2 p.m. ran into the usual sellers of last resort shortly after that.  From there, the price traded sideways into the close.
The high and low price ticks were reported as $20.095 and $19.60 in the May contract.
Silver closed yesterday in New York at $19.845 spot, down 21.5 cents from Tuesday's close.  Not surprisingly, gross volume was through the roof at almost 90,000 contracts, but netted out to 36,000 contracts---which was more than double the net volumes of both Monday and Tuesday.
The platinum price also rallied a bit in Far East trading yesterday---and also began to sell off about an hour before the London open.  The low tick, like silver, came at 9 a.m. in New York.  The metal rallied a bit after that---and manged to close up a couple of bucks on the day.
Palladium traded ruler flat once again, but popped five bucks or so on the Fed news---and finished up on the day as well.
The dollar index closed at 79.78 on Tuesday afternoon in New York---and then didn't do much until an hour before London opened.  At 10 a.m. BST, the index hit its 79.86 'high' of the day---and then began to fade until about 11:20 a.m. in New York. From there it rallied into the release of the Fed minutes, before getting hit for around 25 basis points when the news actually hit the tape.  After that, the index barely twitched.  The index closed at 79.53 down 25 basis points.


The CME Daily Delivery Report showed that 16 gold and 14 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  Once again, the Issuers and Stoppers Report isn't worth the effort of hyperlinking.
There were no reported changes in GLD yesterday---and as of 10:07 p.m. EDT yesterday evening, there were no reported changes in SLV, either.
Yesterday evening, the good folks over at the Internet site updated the short positions of both GLD and SLV as of the end of March.  The short position in SLV declined by 4.77%---and is now down to 12,657,900 ounces/shares, or just under 394 tonnes.  The decline in the short position in GLD was far more substantial, as it dropped by 21.11%.  The short position in that ETF is now down to 1.09 million troy ounces of gold, or just under 34 tonnes.
Over at Switzerland's Z├╝rcher Kantonalbank they reported that both their gold and silver ETFs had withdrawals for the week ending April 4.  Their gold ETF declined by 15,997 troy ounces---and their silver ETF dropped by 100,030 troy ounces.
There was a tiny sales report from the U.S. Mint yesterday, as they only sold 1,500 troy ounces of gold eagles.
Over at the Comex-approved depositories on Tuesday, there was pretty big activity in gold.  Precisely 1 metric tonne [32,150.000 troy ounces] was reported received over at Brink's, Inc.---and 148,344 troy ounces were shipped out for parts unknown.  The biggest chunk of it came out of JPMorgan's warehouse.  The link to that activity is here.
In silver, only one good delivery bar was reported received, but a very chunky 1,062,229 troy ounces were reported shipped out.  With the exception of one bar, all of it came out of HSBC USA and Canada's Scotiabank.  The link to that action is here.

Non redundant news and views.....

Ukraine and Russia ....

U.S. and E.U. prepare to strike Russian banks, energy firms

The U.S. and E.U. are preparing to strike at Russian banks, energy and minerals firms if Russia invades mainland Ukraine.
Speaking to U.S. senators in Washington on Tuesday (8 April) secretary of state John Kerry used blunt terms to describe events in Ukraine's Donetsk, Kharkiv and Luhansk regions in recent days.
“Everything that we’ve seen in the last 48 hours from Russian provocateurs and agents operating in eastern Ukraine tells us that they’ve been sent there determined to create chaos … These efforts are as ham-handed as they are transparent,” he said.
“No one should be fooled, and believe me, no one is fooled by what could potentially be a contrived pretext for military intervention just as we saw in Crimea.”
Trying to make mountains out of molehills.  There's no way on God's green earth that Russia will every move militarily against the Ukraine.  This news item, filed from Brussels, was posted on the Internet site yesterday morning Europe time---and I thank Roy Stephens for sending it.

Russia can’t support Ukrainian economy forever- Putin

Russia can’t continue to prop up Ukraine’s faltering economy, and this responsibility should fall on the US and EU, which have recognized the authorities in Kiev but not yet given one dollar to support the economy, President Putin has said.
“The situation is - to put it kindly, strange. It’s known our partners in Europe have recognized the legitimacy of the government in Kiev, yet have done nothing to support Ukraine – not even one dollar or one euro,” Putin said at a meeting with government officials at his residence outside of Moscow.
“The Russian Federation doesn’t recognize the legitimacy of the authorities in Kiev, but it keeps providing economic support and subsidizing the economy of Ukraine with hundreds of millions and billions of dollars. This situation can’t last indefinitely,” Putin said.
You couldn't make this stuff up, dear reader.  This must readstory was posted on the Russia Today website early yesterday afternoon Moscow time---and once again I thank Roy S. for sharing it with us.

Ukraine’s Rust Belt Fears Ruin as Putin Threatens Imports

For Pavel Cesnek, the future of his sprawling locomotive maker in eastern Ukraine lies in the balance and its fate will be sealed across the Russian border.
The head of Luganskteplovoz in the city of Luhansk rules over a communist-era factory and workforce of 6,500 that builds trains primarily for state-run OAO Russian Railways. Like many local businessmen, he fears the pro-European government in Kiev will antagonize the Kremlin into unleashing trade restrictions that could wipe out industry across Ukraine’s rust belt.
“Trade ties with Russia are an existential question -- to be or not to be,” said the 40-year-old Czech. “Without Russia, there’d be a total collapse for me, my workers and my owner.”
This very interesting news item was posted on the Bloombergwebsite yesterday afternoon Denver time---and once again my thanks go out to Roy Stephens.

De-invest from the West: Russia urges companies to return assets to the motherland

As the US and Europe escalate talks of sanctions, Russia is recommending companies unregister abroad and bring their shares to the Moscow Exchange to protect from possible future sanctions and provide economic security.
“Companies that have listed shares on the New York Stock Exchange, London need to seriously reconsider,” Russia’s Deputy Prime Minister Igor Shuvalov told reporters in Moscow on Tuesday.
Sanctions by the West have ramped up over the geopolitical action in Ukraine, and Russian business and politicians have been the target of asset freezes and visa bans.
The government will not force companies to delist and return to Russia, but Shuvalov said the Russian state and the Moscow Exchange will work together to create “attractive conditions” for companies to make the switch.
This is another Russia Today news item.  This one showed up on their Internet site during the Moscow lunch hour yesterday---and its the second last offering of the day from Roy.


Spanish parliament rejects Catalan independence bid

Spain’s parliament on Tuesday (8 April) overwhelmingly rejected Catalonia’s bid to call for a referendum on independence.
There were 299 votes against a proposal by Catalan leader Artur Mas to have an independence poll. Only 47 MPs from the Catalan and Basque nationalist parties voted in favour of the petition. One MP abstained.
Centre-right Prime Minister Mariano Rajoy told the deputies before the vote that he could not “conceive of Spain without Catalonia nor of Catalonia outside of Spain and Europe.”
This story, filed from Brussels, was posted on the euobserver.comInternet site yesterday morning Europe time---and it's the final offering of the day from Roy Stephens.

PMs news and views....

Perth Mint: Monthly Sales for March 2014

According to Bron Suchecki over at The Perth Mint: "The chart below shows our sales of minted bars and coins, with gold down and silver up on last month. However, minted products are only about 10% by volume, with our cast bar sales usually over 600,000 oz/ a month, mostly in the form kilobars into China – premiums have come off and back to normal. Perth Mint Depository is stable with a lot of buying and selling by clients."
This tiny blog, with an excellent chart, is worth a few seconds of your time---and I thank Bron for sending it our way.

Jay Taylor: Prepare for bull market to shock even most ardent goldbugs

This interview with Jay by The Gold Report showed up on Internet site earlier this morning British Summer Time---and it's a must read.  I've known Jay for about ten years---and with the possible exception of Leonard Melman---a nicer man you could never hope to meet.



Every man’s heart one day beats its final beat. His lungs breathe their final breath. And if what that man did in his life makes the blood pulse through the body of others and makes them believe deeper in something that’s larger than life, then his essence, his spirit, will be immortalized by the storytellers — by the loyalty, by the memory of those who honor him, and make the running the man did, live forever. - James Brian Hellwig: The Ultimate Warrior
The attempt to sell gold back below the $1,300 spot price mark didn't pan out---and I was happy to see gold jump back into positive territory on the Fed minutes news.  Silver, of course, was another matter entirely, as JPMorgan et al kept pounding away at the price---causing more technical fund selling of long positions, along with new short positions being added.  JPMorgan et al happily took the other side of all these technical fund trades---ringing the cash register in the process.  This was the reason that silver's volume was through the roof yesterday---and none of this price/volume activity will show up in tomorrow's Commitment of Traders Report, as it happened the day after the cut-off.
Here are the 6-month gold and silver charts once again.
The gold price closed right at its 50-day moving average again---and would have handily closed above it after the Fed news at 2 p.m. EDT yesterday, but a seller of last resort was on hand to ensure that didn't happen.
The silver price came within a few pennies of taking out its March 27 low yesterday---and is about a buck away from taking out its late-December 2013 low as well.  Could JPMorgan et al pull that off?  You betcha---and in a New York minute if desired.  All they have to do is turn their HFT boyz loose like they did yesterday---and the combination of long contract selling and new shorting by the technical funds would take care of that.  "Da boyz" have painted the silver chart to perfection for just such an event.  The only question remaining is---will they, or not?
I was happy to see the gold stocks do as well as they did yesterday, even before the Fed news, as they were already hanging on to tiny gains before the announcement.  But the real surprise was in the silver equities.  Despite the fact that the metal itself got pounded, there were buyers in the market picking up every silver stock that was being sold in a panic, plus a lot more.  Silver closed down more than a percent, but Nick's chart was up nicely on the day.
As I write this paragraph at 3:47 a.m. EDT, the market in London has been open about 45 minutes---and since the open last night in New York, gold has spent almost the entire Thursday trading session in the black---and rallied a bit more during the early going in London as well.
The silver price did nothing until around 8 a.m. Hong Kong time---and it's attempt to rally above the $20 spot price mark met with the usual selling pressure.  However, it really took off at the London open, but ran into very heavy selling pressure once again as it broke above $20.20 spot---and is now back at $20.12 as I type this sentence.
Platinum also spent most of the Far East trading session in positive territory as well---and it, along with palladium are back in rally mode as of the London open.
Gold and silver volumes, which had been more or less 'normal' going into the London open, have both blown out considerably, so it's obvious that JPMorgan et al are at battle stations in all four precious metals once again.  If/when they put these rally fires out, it will be of interest to see how much Comex paper they had to throw at them to get them to behave.  Right now, gold volume is north of 33,000 contracts---and 99.9% of that is in the current front month.  In silver, the gross volume is already north of 13,000 contracts---and a bit over 10 percent of that is roll-overs---and all of the remaining volume is the current front month as well.  Based on that, it's easy to see that the lion's share [and then some] of the current volume is all HFT price management.
And to give you some idea of how tiny the platinum market is, as of this writing at 4 a.m. EDT, there have been 1,701 platinum contracts traded on the Comex so far today---and all but one of those contracts is in the current front month, which is July.  It's even more ridiculous in palladium.  Only 525 contracts have been traded so far on Thursday---and all except one is the current front month, which is June.
As of last Friday's Bank Participation Report---'4 or less' U.S. bullion banks in platinum---and '3 or less' bullion banks in palladium, were net short 19.2% and 23.5% of the platinum and palladium markets respectively.  And to put it in realperspective, the '4 or less' U.S. bullion banks were net short a stunning 12,828 Comex platinum contracts---and '3 or less' U.S. bullion banks were net short 9,653 Comex contracts in palladium.
It should be obvious to all except the willfully blind, that there's a very good reason why platinum and palladium prices are going nowhere.
If you want to review the Bank Participation Report data in my Saturday column, the link is here---and you have to scroll down a bit to find it.
And as I fire this off to Stowe, Vermont at 5:25 a.m. EDT, I note that all four precious metals continue to struggle higher---and are obviously still being met with heavy selling pressure, as the not-for-profit sellers pull out all the stops. Gold volume is approaching 45,000 contracts---and silver's gross volume is a hair under 20,000 contracts.  I forgot to mention what the dollar index was doing---and it has remained almost unchanged from it's open in early Far East trading on their Thursday.
Using the past as prologue, I'll stick my neck out here and surmise that we may have already seen the highs for both silver and gold today.  However, I'd be delighted to be proven wrong, as I'd dearly love to see JPMorgan et al get over run at this point.  And they just might if Russia and maybe China decide to move the battlefield onto the Comex futures market.
That's more than enough for one day.  I hope your Thursday goes well---and if you live west of the International Date Line, I hope you have a good weekend.
See you here tomorrow.

Additional items......

Central banks in the West are emptying their vaults in an attempt to maintain the illusion that the national currencies they manage are immune to monetary debasement.  The central banks are trying to perpetuate a system in which governments believe they can borrow and print money endlessly to fulfill the impossible promises of politicians.  - James Turk on King World News (link)
After the metals staged their usual overnight rally while the physical gold hoarding Asian markets were open, this morning featured two HFT-algorithm flash crashes.   One at 7:00 am. EST and one right at the Comex open (the latter occurs at least 85% of the time).
This graph illustrates the action – note the long “wicks” at the bottom of the red candlesticks, which is our indication that the flash-crash operation triggered computer-driven “stop-loss limit” selling from the hedge funds:
(click on graph to enlarge)
Neither attack on the metals was accompanied by any possible news triggers.  The dollar didn’t move, which is something we would have expected if there had been some kind of fundamentals-based trigger.  The SPX futures ramped up at the same time the metals were hit in the first flash crash.   It is clearly unmistakable Fed intervention designed to keep a lid on the recent rally in the metals.   But why?
The intervention in the gold/silver market reflects desperation from the western Governments/banks, especially the U.S., in order to prop up the U.S. dollar.   Russia and China are getting ready to sign a series of gas/oil deals which will be transacted using rubles/yuan.  Russia’s main bank just signed up for China’s equivalent of Visa/Mastercard after the U.S. sanctions restricted the use of Visa/MC in Russia.   The dollar has dropped back below the critical 80 level (US dollar index) just as quickly as it popped back over 80 after Janet Yellen delivered her highly “engineered” post-FOMC meeting press remarks.
It is becoming increasingly clear – at least to me – that the U.S. economy is now a walking corpse.   The housing market is about to go into free-fall like it did starting 2006.  How do I know this?  Because of the exhaustive analysis I’ve been doing on the housing market data and because the homebuilder stocks are now diverging significantly to the downside from the rest of the stock market.   The homebuilder stocks behaved this way starting in mid-2005, about 6 months before housing market reflected the deteriorating fundamentals of the housing market back then.   The homebuilder stocks similarly peaked in May 2013.
There is a big “accident” in motion for which impact could occur at any time.   The stock market action from Friday thru Tuesday is an obvious signal.  The quick reversal from its recent dead-cat bounce is another.  The dollar is in big trouble and the Fed is trying desperately to fight that by suppressing the metals. When that fails, I bet we’ll see an escalation in military operations.

Another smashing of gold unlikely because it would unleash demand, Kaye says

5:42p ET Thursday, April 10, 2014
Dear Friend of GATA and Gold:
Hong Kong-based fund manager William Kaye today tells King World News that more smashing of the gold price seems unlikely because it would unleash unquenchable demand for real metal that isn't available:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Golden Ruble Symbol Appears In Front Of Russian Bank

Silverdoctors published an article on April 9, 2014 titled: PUTIN SENDS THE WEST A GOLDEN MESSAGE: CENTRAL BANK OF RUSSIA CHANGES LOGO TO GOLDEN RUBLE. The article presents a “Google Translate” from the Russian website and states the Russian central bank has changed it’s logo into a Golden Ruble. FromSilverdoctors:

According to reports from Russian media, Putin appears to have sent the west a golden message in the aftermath of JPMorgan unilaterally deciding to block an official Russian wire transfer, as the Central Bank of Russia has introduced a new logo, which just happens to be a gold ruble.

Officials stated on the new logo: Golden Badge of the Russian national currency, officially adopted by the Central Bank of Russia, will symbolize a sign of stability and security of the ruble gold reserves of the country.

The article suggests this to be the new logo:

Russia gold bar

The first thing I noticed was that in the original Russian article I couldn’t find the new golden Ruble logo displayed by Silverdoctors. In order to get closer to the bottom of this I decided to ask a Russian friend of mine, who has no expertise in politics or economics, to translate the original Russian article:

Golden Ruble symbol appears in front of the central bank of Russia

Moscow, march 30- RIA News. A symbol of the Russian ruble appears on sunday in front of the office of a Russian joint-stock bank, organizers said.

The action took place at 15.00 in front of the bank Perevedenovskom lain in the center of Moscow (near metro “Baumanskaya”).

A golden badge of the Russian national currency officially adopted by the CBR will symbolize a sign of stability and security of the ruble gold reserves of the country – said the organizers.

Thus participants installation intends to express support to the Russian bank, who decided to work exclusively for the domestic market and only with one currency, the national currency of the Russian Federation, the Russian ruble.

US authorities in response to accession of the Crimea to the Russian Federation imposed sanctions on 20 Russians and Russian banks, including the thirty largest in the country. Consequence of the sanctions was the refusal of the international payment system Visa and Master Card to conduct non-cash transactions through Russian cards, worsening outlook on the banks and suspension of rating actions. On friday, the Bank announced that it will only work in Russia, and only with rubles.

The symbol of the Russian ruble, the letter R with a horizontal line, was approved by the Central Bank sovdirom in december 2013.


I'm fully aware that “my” translation is far from perfect, though we must conclude the message the original article contains is different from that of Silverdoctors. What actually happened was that activists supporting their banks in the fight against US sanctions, build a golden colored Ruble symbol out of wood and revealed it in front of a commercial bank, as we can see in the picture below. And no, I don’t think Putin funded this action. Here is more information.

Golden Russian Ruble