Wednesday, April 2, 2014

Gold and Silver ( as well as precious metals items ) April 2 , 2014 Ed Steer's morning report and his wrap up.... .....News and data touching on the precious metals ..... of particular interest - Virtu ( did you know they were an " authorized participant " with both GLD and SLV ETFs ) IPO delayed ( HFT blowback ) ..... 12 largest banks sued by Public Retirement Funds for FX rigging....... JP Morgan unilateral sanctions imposed on Russia , by way of blocking a diplomatic transfer...... Hugo Salinas Price as well as Dr Paul Craig Roberts and Dave Kranzler missives...... Vietnam places restrictions on entry and exit of gold .... Ed 's wrap and additional items to consider ( GATA ) , Jesse's Crossroads Cafe ......


It was a very quiet day in gold pretty much everywhere on Planet Earth yesterday.  Volume wasn't overly heavy, so not much can be read into Tuesday's price action.  However, one thing I did note, was the price action on Tuesday was almost a carbon copy of the price action on Monday
The high and low, if you wish to dignify them with that description, were recorded by the CME Group as $1,288.40 and $1,277.40 in the June contract.
Gold finished the Tuesday session in New York at $1,279.80 spot, down an even five bucks from Monday's close.  Volume, net of April and May, was around 120,000 contracts.
The silver price action had a little more shape to it, but not a lot.  The low tick came shortly before 11 a.m. in Hong Kong---and the high occurred minutes after 9 a.m. BST in London, safely below the $20 spot mark.  The silver price got sold down a bit from there---and then traded in a 15 cent range for the remainder of the Tuesday session.
The high and low here were $19.91 and $19.635 in the May contract.
Silver finished the trading day at $19.76 spot, up a whole half a cent.  Net volume was pretty light at 22,500 contracts.
The platinum price didn't do anything in Far East trading on their Tuesday, but began to rally with some strength beginning at the 8 a.m. London open.  That lasted for two hours--and then began to rally anew about 12:30 p.m. BST.  But the moment that Comex trading began 50 minutes later, there was a not-for-profit seller laying in wait---and that was it for the day.  Platinum closed up a whole five bucks.
Palladium got sold down to its low of the day at 10 a.m. Hong Kong time.  From there it struggled higher before beginning to rally a bit more strongly starting shortly after 12 o'clock noon in London.  The high was in around 1 p.m. EDT---and the metal traded sideways from there.
The dollar index closed in New York late on Monday afternoon at 80.11---and didn't do much until shortly after 8 a.m. in New York.  Then twice within the space of three hours the index dropped below the magic 80.00 mark, only to be rescued by a not-for-profit buyer.  The index closed at 80.08 on Tuesday---basically unchanged from Monday's close.


The CME's Daily Delivery Report for 'Day 3' of the April delivery month showed that 79 gold and 210 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  In gold, the biggest short issuer was F.C. Stone with 60 contracts---and the two biggest long/stoppers were Canada's Bank of Nova Scotia---and JPMorgan Chase in its in-house [proprietary] trading account with 41 and 18 contracts respectively.  In silver, JPMorgan issued all 210 contracts out of its in-house [proprietary] trading account---and Canada's Scotiabank stopped 205 of them.  The link to yesterday's Issuers and Stoppers Report is here.
Another day---and another withdrawal from GLD.  This time it was only 67,443 troy ounces.  And as of 10:03 p.m. EDT yesterday evening, there were no reported changed in SLV.
The U.S. Mint had a sales report yesterday.  They started off the new month with sales of 5,500 troy ounces of gold eagles---3,500 one-ounce 24K gold buffaloes---293,000 silver eagles---and 200 platinum eagles.
Over at the Comex-approved depositories on Monday there were 32,103 troy ounces of gold deposited into Scotiabank's vault---and 32,103 troy ounces withdrawn from HSBC USA.  The link to that activity is here. In silver, nothing was reported received, but 694,053 troy ounces were shipped out, with virtually all of it coming out of Scotiabank's warehouse.  The link to that activity is here.


Non redundant news and views.....

Virtu Said to Delay IPO Amid Furor Spurred by Michael Lewis Book

Virtu Financial Inc., the high-frequency trader that announced plans last month to sell shares, will start marketing the offering weeks later than bankers anticipated, two people with knowledge of the matter said.
Virtu won’t start marketing the initial public offering until after April 20, a process its bankers had expected to begin this week, according to the people, who asked not to be named because the decision is private.
The delay comes amid unprecedented scrutiny of high-frequency traders. “Flash Boys,” the Michael Lewis book released March 31, says high-speed traders, Wall Street brokerages and exchanges have rigged the $23 trillion U.S. stock market. New York Attorney General Eric Schneiderman is examining privileges such as enhanced data feeds marketed to high-speed firms, while the Federal Bureau of Investigation is looking into whether those traders are breaking U.S. laws by acting on nonpublic information.

12 Largest Banks Sued By Public Retirement Funds For "Conspiring To Rig Global FX Markets"

Yesterday, we read with some amusement that Goldman has moved Guy Saidenberg, reportedly one of the greater profit centers at the firm - and how could he not be when he always traded against Tom Stolper's recommendations which led to tens of thousands of pips in losses to those who listened to him over the past five years - from head of global foreign-exchange trading to a new role, as co-head of commodities.  Why did Goldman decide to scrap its once uber-profitable FX vertical and redo it from scratch? Simple - the ability to rig and manipulate FX markets, which are now under every global regulator's microscope after the "Cartel" members so foolishly let themselves be exposed to the entire world, is no longer there, as confirmed last night by news that a dozen large investors have filed a joint lawsuit against 12 banks for "allegedly conspiring to rig global foreign-exchange prices." Allegedly? Hasn't everyone read the Cartel chatroom transcripts yet?
But the punchline is not that FX is rigged, and as a result virtually all carbon-based traders are now gone, leaving the FX market at the mercy of Virtu and GETCO algos (those USD/JPY momentum ignitions at specific, recurring times of the day are just that), but that as Goldman has shown by relocating Saidenberg, the commodity market is the only one where manipulation, rigging and fraud are not only possible but smiled upon by regulators. Because one of the key commodities in said market is gold. And as everyone knows, alongside getting the Russell 200,000 to all time highs, the other core mandate of central bankers everywhere is to push gold to 0.
The worst news: we are rapidly running out of "conspiracy theories" that haven't become conspiracy facts yet.

Russia reacts to JPMorgan Chase blocking diplomatic transfer on ‘sanctions’ pretense

The Russian Foreign Ministry has sharply reacted to the “illegal and absurd” blocking of a Russian diplomatic transaction by U.S. bank JPMorgan Chase due to “sanctions.” Moscow warned that such moves might backfire for the U.S. diplomatic mission in Russia.
JPMorgan Chase blocked a money transfer on behalf of the Russian Embassy in Kazakhstan to insurance company SOGAZ, Russian Foreign Ministry spokesman Aleksandr Lukashevich said in a Tuesday statement. The bank cited sanctions imposed by the U.S. government against some Russian politicians and companies in connection with the situation in Ukraine, he said.
Lukashevich condemned the move as an “absolutely unacceptable, illegal and absurd decision,” saying that the sanctions were merely a “pretense.”

Three King World News Blogs

The first commentary today is courtesy of Dr. Stephen Leeb---and it's headlined "We Are Nearing the Dawn of a New Economic World Order".  The second interview is with Art Cashin.  It's entitled "This Disaster Signal Has Only Been Triggered 3 Times in History".  And lastly is this interview with Rick Rule---and it bears the headline "Anti-Gold Investors Will Be Destroyed Before This is Over"

American Silver Eagle Bullion Sales Jump in March, Platinum Eagles Debut

Sales of the United States Mint's American Silver Eagle bullion coins experienced strong sales during the month of March, exceeding the levels of both the prior month and year ago period. American Gold Eagle sales were decidedly lower for the month, and American Platinum Eagles saw their return after more than a five year gap in availability.
Silver Eagle bullion sales reached 4,476,000 ounces for March 2014. This represented a gain of 19.36% compared to the prior month when sales were 3,750,000 ounces. The latest monthly figure is also up by a more significant 33.35% compared to the year ago period of March 2013, when sales had reached 3,356,500 ounces.
For the first quarter of the year, Silver Eagle sales have reached 13,001,000 ounces. This compares to first quarter sales of 14,223,000 ounces in the prior year.

Hugo Salinas Price: The Dollar Cannot Be Devalued---and Suicidal Bankers

The last opportunity for devaluing the dollar took place in August 1971, when the dollar was still pegged at 1/35th of an ounce of gold. Nixon took the advice of Milton Friedman and made the worst mistake in history; Nixon did not devalue the dollar as he should have done, but simply took the US off the gold standard, such as it was, and thence forth the US refused to redeem dollars held by Central Banks around the world at any price.
Since August 15, 1971, the dollar can no longer be devalued.
Since the dollar is the reserve currency of all Central Banks in the world, all other currencies – the euro included – are only derivatives of the dollar. The proof of this statement is that the value of each and every currency in the world is calculated in dollars,
The world’s currencies are devalued or revalued against the dollar in the world’s currency markets every day of the year.

Dr. Paul Craig Roberts and Dave Kranzler: The Federal Reserve Has No Integrity

As we documented in previous articles, the gold price is driven down in the paper futures market by naked short selling by the Fed’s dependent bullion banks. Some people have a hard time accepting this fact even though it is known that the big banks have manipulated the LIBOR (London Interbank Overnight Rate – London’s equivalent of the Fed Funds rate) interest rate and the twice-daily London gold price fix.
Almost every week it is possible to illustrate the appearance of a large number of contracts shorting gold at times of day when trading is thin. The short-selling triggers stop-loss orders and margin calls and hammers down the gold price.
The Fed has resorted to this practice in order to protect the value of the US dollar from Quantitative Easing.
In order for the Fed to effectively support the reserve status of the U.S. dollar by pushing it higher when it starts to drop, the Fed has also to prevent the price of gold from rising. Intervention in the gold market has been occurring for a long time. However, in the last several years the intervention has become blatant and desperate, as rising concerns about the dollar are causing countries such as China and Russia to accumulate fewer dollars and more gold.

Vietnam to ban gold bullion at country’s borders

Local and foreign individuals will be prohibited from carrying gold bullion and gold material when they enter or leave Vietnam, except for immigration purposes, starting May 15, according to a new circular recently issued by the country’s central bank.
The tightened rule is applicable to people who use passports or other approved travel documents that permit them to cross borders legally on their entry and exit, the State Bank of Vietnam said in its new fiat, in replacement of Decision No. 1165/2001, which is currently in effect.
The current regulation dictates that individuals are allowed to bring at most 1kg of gold bullion upon entry, but must declare it with the customs agencies. On the other hand, they must obtain a license from the local branches of the SBV should they wish to leave the country with gold bullion.



The other standout in silver this year is in the large amount of Silver Eagles being sold, both on an absolute and relative basis from the U.S. Mint. There may be one more update on Monday [There wasn't - Ed] but the data through Friday continues to confirm a very large number of Silver Eagles being sold this year. From what I hear, it is not John Q. Public doing the buying. I don’t know who it is, but someone sure is buying Silver Eagles aggressively. Since I don’t know who is buying, I also can’t know if the buying will continue.
What is most peculiar is that the demand for Gold Eagles has trailed off in the face of Silver Eagle demand. Year to date, 13 million oz of Silver Eagles have been sold versus only 142,000 oz of Gold Eagles, a record ratio of 91 Silver Eagles to every one oz of Gold Eagles. Just to put this into perspective, the year 2013 witnessed the highest number of Silver Eagles to Gold Eagles in history at 50 to 1. This year, in the face of rotten relative price performance for silver compared to gold, the Mint is reporting relative demand has increased 80% for Silver Eagles compared to Gold Eagles. I keep saying this pace can’t continue and hope that I will continue to be wrong. - Silver analyst Ted Butler: 29 March 2014
It was another day where not much happened, or was allowed to happen, in any of the four precious metals.  What intervention there was, was particularly obvious in the platinum market at the Comex open.
But the one thing that I have noticed is that JPMorgan et al have not been that aggressive to the downside in the last few days, especially in silver.  As I've been stating---and as Ted Butler first pointed out---the potential exists for "da boyz" to still kick the living snot out of the precious metal prices because of the current configuration of the COT Report, with the technical funds still being massively long compared to their positions back at the lows of late December 2013.  So the jury is still out as to whether this pounding is currently in the cards or not.  For the moment, they seem content to take a small slice off the gold salami every day---and why they're not doing that in silver at the moment is impossible to know.
But whatever price action we see going forward will have nothing to do with the free market, either to the upside, or the downside.
Here are the usual 6-month charts for both gold and silver.
As has been the case for most of the precious metals so far this week, there hasn't been much price activity of note during the Far East trading sessions---and this trend continued on Wednesday as well.  All four precious metals, with the exception of palladium, are up a bit now that London has been open about 35 minutes.  Volumes in both gold and silver are on the lighter side---and I note that someone stepped in to save the dollar index from plunging below the 80.00 mark once again [the fourth time in less than 48 hours] just minutes before the London open.
I have nothing else to add to today's column.  Everything that has to be said, has been said over the last few days---and I'm sure you're just as sick of reading it, as I am or writing it.  All we can do is sit here and await developments.  That's all I'm doing at the moment.
And as I fire today's column out the door at 5:12 a.m. EDT, I note that nothing has changed since I wrote my comments about London trading almost two hours ago.  Gold, silver and platinum are hanging on to small gains---and the palladium price is still unchanged.  Volumes are up, but about average for this time of day, whatever that means---and the dollar index is still hanging onto the 80.00 level for dear life.
I'm off to bed---and I'll see you here tomorrow.


Having seen this gold market before, Rule tells KWN he won't be shaken out

4:08p ICT Wednesday, April 2, 2014
Dear Friend of GATA and Gold:
Sprott Asset Management's Rick Rule tells King World News today that he has seen this gold market in the 1970s and won't be shaken out. "I remember investors panicking out of the market," Rule says. "Others investors were margined out as well. That washout was incredibly brutal and the gold market correction took no prisoners by crushing the weak hands. But the investors who either panicked out or were forced out of the gold market had to sit by and watch gold advance a staggering 850 percent from $104 to $850 in a matter of a few short years."
Rule's interview is posted at the KWN blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Zero Hedge: Pushing gold to zero is the core mandate of central bankers everywhere

3p ICT Wednesday, April 2, 2014
Dear Friend of GATA and Gold:
Zero Hedge nails it again today in commentary headlined "12 Largest Banks Sued by Public Retirement Funds for 'Conspiring to Rig Global FX Markets'":
"Of course, the rigging of FX markets, disclosed hot on the heels that Libor too was massively manipulated (to the delight of 'conspiracy theorists' everywhere) is by now well known. But the punch line is not that FX is rigged and as a result virtually all carbon-based traders are now gone, leaving the FX market at the mercy of Virtu and GETCO algos (those USD/JPY momentum ignitions at specific, recurring times of the day are just that), but that as Goldman has shown by relocating [Guy] Saidenberg, the commodity market is the only one where manipulation, rigging, and fraud are not only possible but smiled upon by regulators -- because one of the key commodities in said market is gold.
"And as everyone knows, alongside getting the Russell 2,000 to all-time highs, the other core mandate of central bankers everywhere is to push gold to zero.
"The worst news: We are rapidly running out of 'conspiracy theories' that haven't become conspiracy facts yet."
Zero Hedge's commentary is here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Bix Weir: HFT suspicions get close to the mother ship of gold and silver manipulation

7:16a ICT Wednesday, April 2, 2014
Dear Friend of GATA and Gold:
Newsletter writer Bix Weir notes that Virtu Financial, an instigator of the "high-frequency trading" now facing various investigations, was the only private company allowed to become an "authorized participant" in the gold and silver exchange-traded funds GLD and SLV. It's something that should give pause to investors in those doubtful vehicles. Weir's commentary is headlined "Michael Lewis Is SOOO Close to the Mother Ship of Gold and Silver Manipulation" and it's posted at his Internet site, Road to Roota, here:
Meanwhile Bloomberg News reports that Virtu Financial, itself under investigation, has postponed its initial public offering:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

02 APRIL 2014

Gold Daily and Silver Weekly Charts - 340,200 Ounces of Gold Claimed So Far In April

There was intraday commentary on the moral blindness of the US and UK financial establishment and ruling elites here.  

So far in April 3,402 gold contracts have been 'stopped,' that is, someone has taken the option of 'standing for delivery' on a 100 ounce futures contract.

There are more than enough ounces at the Comex in the deliverable category now at 876,637 ounces. 

This is just part of the paper shell game, but it is interesting to watch its progress.  After all, 340,200 ounces of gold is only about 10.6 metric tonnes.  Cumulative physical gold delivery in Shanghai alone last year was well over 2,000 tonnes.

Have you ever wondered how a relatively small force, the British East India company and later the British Raj, was able to control the Indian sub-continent?   Perhaps that is how New York and London are able to govern the world market for gold, and thereby the foundations of money.

Non-Farm Payrolls on Friday.  The stock market seems a bit 'puffy' here, and complacent.

Have a pleasant evening.