Saturday, May 3, 2014

Gold and silver news and views May 3 , 2014 -- GoldCore Reports Half of Italy's Gold is Held in New York Fed Vault; Is Repatriation Possible ? Embry warns against paper gold , currency event ..... Harvey Organ highlights ! Silver Doctors looks at CME manipulations , BRICS moving toward a parallel IMF , Russian rejection of the USD and other BRICS following suit ....

Gold Core.....

GoldCore Reports Half of Italy's Gold is Held in New York Fed Vault; Is Repatriation Possible?

Published in Market Update  Precious Metals  on 2 May 2014

Today’s AM fix was USD 1,285.00, EUR 927.26 and GBP 761.03 per ounce.
Yesterday’s AM fix was USD 1,283.00, EUR 924.15 and GBP 759.04 per ounce.
Gold fell $5.50 or 0.43% yesterday to $1,284.90/oz. Silver slipped $0.13 or 0.68% yesterday to $19.06/oz.
Please note GoldCore is closed for a Bank Holiday, this Monday, May 5th, reopening May 6th.
Gold remained in range bound trading yesterday and into this morning, fluctuating between $1,280 and $1,285/oz. Likewise, silver traded in a narrow band between $18.90 and $19.10/oz. The precious metals appear to be treading water while awaiting the open of New York morning trading, and the release of the latest U.S. non-farm payroll figures today.
Consensus payroll data estimates from surveyed economists indicate improving expectations for April and a possible drop in the unemployment rate. Any surprises in the U.S. payroll data today could be the catalyst to move the gold price out of its very narrow trading pattern, although given that it’s the end of the trading week, the short term direction for gold may not become apparent until next week.

Gold in USD Simple Moving Averages, 9 Years - (Thomson Reuters)
Italy May Have Over 1,000 Tonnes Of Gold At The New York Fed
Written by Ronan Manly for GoldCore

Italy’s central bank, the Banca d’Italia, has recently published an important document detailing the storage locations and composition of the country’s gold reserves. The document confirms that Italy’s gold is held across four vault locations, three of which are outside Italy.
This is a significant announcement given that the Banca d’Italia is the world’s third largest official holder of gold after the U.S. and Germany. Italy officially holds 2,451.8 tonnes of gold, worth more than €72 billion (US$ 100 billion) at current market prices [1].
In the detailed three page report focusing exclusively on its gold reserves (and only published in Italian), the Banca d’Italia reveals that 1,199.4 tonnes, or nearly half the total, is held in the Bank’s own vaults under its Palazzo Koch headquarters on Via Nazionale in Rome, while most of the other half is stored in the Federal Reserve Bank gold vault in New York. The report also states that smaller amounts are stored at the Bank of England in London, and at the vaults of the Swiss National Bank in Bern, Switzerland.
The Gold in RomeOf the 1,199.4 tonnes held in Rome, 1,195.3 tonnes are in the form of gold bars, with 4.1 tonnes held as gold coins (871,713 coins). There are 95,493 bars in the Rome vault, most of which are the standard trapezoidal shaped bars, however the holdings also include brick shaped U.S. Assay Office bars produced by the U.S. Assay Office, and another bar type which the Bank d’Italia refers to as ‘panetto’ (or loaf) shaped 'English' bars.
Like other major European central banks, the Banca d’Italia’s gold reserves were mainly accumulated during the late 1950s and early 1960s. Although Italy was already an important official gold holder during the first half of the 20th century, it still only held 402 tonnes of gold as of 1957. However, from 1958 until the late 1960s, the country’s gold reserves increased nearly 600% to exceed 2,560 tonnes by 1970[2].
Since 1970, Italy’s gold holdings have remained fairly constant, although at times some of the gold has been used in various financial transactions such as gold collateral against a German loan during the 1970s, and as contributions to the European Monetary Cooperation Fund (EMCF) and more recently to the European Central Bank (ECB).
The RAI Broadcast, the BIS and BernWhile the report from the Banca d’Italia appears to be the first official written confirmation that documents the exact storage sites of its gold reserves, the four storage locations were previously confirmed to Italian TV station RAI in 2010 when an RAI presenter and crew were allowed to film a report from inside the Bank’s gold vaults in Rome.
In the RAI broadcast for an episode of ‘Passaggio a Nord Ovest’, the presenter Alberto Angela states that in addition to Rome, the Italian gold is stored at the Federal Reserve Bank in New York, the Bank of England in London, and at the Bank for International Settlements (BIS) in Switzerland. The reporter uses the exact words “Banca dei Regolamenti Internazionali”.
The BIS connection was also confirmed in August 2009, when Italian newspaper “La Repubblica” published an article about Italy’s gold, stating that it was held in Rome, at the Federal Reserve in New York, in the vaults of the the Bank of England, and in the ‘vaults’ of the BIS in Basel.
This apparent contradiction between, on the one hand, the RAI and La Repubblica, who both state that some of the Italian gold is stored with the BIS in Switzerland, and on the other hand, the Banca d’Italia’s own document which states that its gold in Switzerland is stored at the Swiss National Bank (SNB) in Bern, is not really a contradiction since the BIS does not have its own gold storage facilities in Switzerland. The BIS simply uses the SNB’s gold vaults in Bern.
The BIS confirms this fact on its web site, under foreign exchange and gold services, where it states that it offers its clients “safekeeping and settlements facilities available loco London, Bern or New York”.[3] The term loco refers to settlement location for precious metals transactions.
By confirming that it stores gold at the Swiss National Bank in Bern, the Banca d’Italia has also inadvertently confirmed that the Swiss National Bank’s gold vaults are located in Bern. While this was generally known, the SNB currently will not confirm this fact publically and does not go beyond saying that it stores its own gold “domestically and internationally” in “decentralised” locations.[4]
However, Bern based Swiss newspaper “Der Bund” published an article in 2008 stating that the SNB’s gold vaults are in Bern, specifically underneath the Bundesplatz square which is adjacent to the SNB’s headquarters at No. 1 Bundsplatz. The SNB has two headquarters, one in Bern, the other in Zurich.
So it appears that the Italian gold in Switzerland is on deposit with the BIS (either earmarked or as a sight deposit) and is, at the same time, stored in Bern at the SNB vaults. Therefore the RAI and La Repubblica reports and the Banca d’Italia report are most likely both all in agreement, since they are merely saying the same thing, just in different ways. Another possibility is that the BIS sight deposit was converted back to earmarked gold in the SNB vault sometime since the 2010 RAI broadcast.
The reason for the confusion is because the Banca d’Italia will not confirm any of these details about how their gold in Bern is held, and they stated last week that they cannot comment beyond what is published in their April document.
Some of the details in the Bank’s gold reserve document were also confirmed a week prior to its publication when three Italian senators from Beppe Grillo’s political party Movimento 5 Stelle (Five Star Movement), namely, the party treasurer Giuseppe Vacciano, Andrea Cioffi and Francesco Molinari, visited the Rome vault on 31st March 2014.
The senators’ report states that as well as the 1,199.4 tonnes of gold held in Rome, “the remainder is mostly deposited at the Federal Reserve”, but also at the Bank of England and at “la Banca Centrale Svizzera” (which is the Swiss National Bank). The senators also reported that “For confidentiality reasons we were not notified of the exact extent of the deposits in different countries”.
Italian Gold in New YorkAs per the senators’ experience, the Banca d’Italia document does not specify how much of the Italian gold is held in New York, London and Bern, beyond stating that most of the gold that is not stored in Rome is stored in New York. However, the document does state that “the bulk” of foreign stored gold is in New York with “contingents of smaller size” located in London and Bern, so essentially it implies that the London and Bern holdings are not very large.
Of the 1,252.4 tonnes not in Rome, technically, a majority of this figure is anything greater than 626.2 tonnes. So with a simple calculation, there is at least 626.2 tonnes of Italian gold in New York.  But given that the “bulk” of 1,252.4 tonnes is in New York as the Bank’s document implies, and that “most of the remainder” not in Rome is in New York as the senator’s comments imply, then there could be anywhere up to between 1,000 tonnes and 1,200 tonnes of Italian gold in the FRB in New York.
In fact, 522 tonnes of this Italian gold that was earmarked at the Federal Reserve in New York in September 1974 was used as gold collateral for the Bundesbank loan to Italy during the first gold loan to Italy between 1974 and 1976. This collateral rose to 543 tonnes between 1976 and 1978.
London – The Bank of EnglandIt is possible using historical data and records of Italian gold movements to estimate how much, or how little, Italian gold may be in London.  
It would appear that the Banca d’Italia does not hold very large amounts of gold in London. During the late 1960s, mainly between 1966 and 1968, the Banca d’Italia moved most of their gold that was stored at the Bank of England back to Italy. Regular shipments were exported and delivered to the Bank’s vaults in both Rome and Milan. By the end of 1969, the Banca d’Italia held less than 1,000 gold bars in London, or just under 400,000 ounces (approx. 12 tons).
Therefore, since Italian gold reserves have not in total changed very much since 1969, it would be realistic to assume that the Banca d’Italia’s London gold holdings have not changed very much since 1969, unless gold was moved back to London (or swapped back to London) after 1969. This would only make sense if it had been moved back to London for a specific reason such as to allow Italian gold lending through the London market. Gold lending only really began in London in the mid-1980s, and there is no public record that the Italians have engaged in gold lending through London.
Bern, SwitzerlandHistorical records from the BIS show that there wasn’t any Italian gold left in Bern after WWII, so whatever Italian balance is in Bern has been built up since 1946. It’s interesting to note that Sweden and Finland both recently published the international locations of their gold reserves, and revealed that only very small percentages of their gold is kept in the SNB vaults in Switzerland. Of Sweden’s 125.7 tonnes of gold reserves, only 2.8 tonnes or 2.2% is stored with the SNB vaults[5]. For Finland, only 7%, or 3.4 tonnes of its 49 tonnes of gold reserves are stored with the SNB in Switzerland[6].
If this Swedish-Finnish 2-7% range of allocations at the SNB was applied to the Italian gold that is reported to be outside Italy, it would work out at between 25 tonnes and 87.6 tonnes of Italian gold held at the SNB vaults in Bern. Assuming that there is very little Italian gold in London (400,000ozs or about 12 tonnes), and only a small allocation in Bern, then there could be nearly 1,200 tonnes of Italian gold at the Federal Reserve in New York.
Gold Audits and RepatriationThe Banca d’Italia state in their gold document that external auditors verify the gold held in Rome each year in conjunction with the Bank’s own internal auditors. The external auditors also verify the gold held abroad using annual certificates issued by the central banks that act as the depositories i.e.
This sound very similar to the way the German gold reserves stored abroad was audited. i.e. the gold stored abroad is not physically audited at all (although the Bundesbank did describe recently in quite a vague way that their gold in New York was recently audited by some of their own appointed representatives).
Given the widespread recent media coverage of the German Bundesbank’s plans to repatriate 300 tonnes of its gold reserves from the Federal Reserve in New York to the Bundesbank’s headquarters in Frankfurt, it will be interesting to see whether, in time, a critical mass is reached in Italian public opinion or even in Italian political opinion that would lead to the Banca d’Italia raising a similar request to the Federal Reserve.
The fact that the initial gold repatriated from New York by the Bundesbank needed to be melted down and recast (suggesting that it was low grade coin bars), does not inspire confidence that the Banca d’Italia might not face a similar problem if it attempts any gold repatriation from New York.
Movimento 5 Stelle video of visit to Bank:
[1] Excluding the IMF, Italy is the world’s third largest official gold holder; including the IMF, Italy is the world’s fourth largest gold holder.
[2] Central Bank Gold Reserves, An Historical perspective since 1845, Timothy Green, Research Study No. 23, November 1999, WGC


Embry warns against 'paper gold,' expects a 'currency event'

3:45p ET Friday, May 2, 2014
Dear Friend of GATA and Gold:
Sprott Asset Management's John Embry, interviewed for a company newsletter, warns investors against "paper gold" and says he expects some sort of "currency event" that will change things dramatically:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Harvey Organ......

Friday, May 2, 2014

May 2/GLD loses another 2.7 tonnes of gold/Surprisingly SLV adds 4.198 million of silver/Gold and silver skyrocket northbound as we enter physical time zones/turmoil in Odessa Ukraine/ Another phony jobs report/

Gold closed up  $19.50  at $1302.60 (comex to comex closing time ). Silver was up 50 cents at $19.49  

In the access market tonight at 5:15 pm
gold: $1300.00
silver:  $19.50

Before I begin, I would like to remind everyone the words of Morgan Stanley last week:

" we will never again see $1300 gold."

I guess that event did not take long to prove wrong!!

Today was the first day back for the physical price zones for gold and silver
and the buyers were waiting in the wings.  As soon as the bankers pushed gold down to $1280 and silver to $18.87,on the jobs announcement, there was a massive demand for these metals as the London fix approached.  Our banker friends were buried today. Physical metals are scarce as we witness gold GOFO rates go deeper into negative territory and thus official backwardation. Silver is also in backwardation  (SIFO).

Gold and silver today certainly got a lift from the chaos inside the Ukraine.  For the past few days, the major city of Slaviansk was the scene of major fighting. Today it was the major port of Odessa (and it is a very important city for the Ukraine).  It is a warm water port similar to Sevastopol and the Ukraine cannot afford to give it to the Russians.  Immediately the globe picked up on the urgency of this matter as gold then broke above the 1300 dollar level and stayed there for the rest of the day.

The GLD  inventories lowers by 2.7 tonnes of gold despite the fact that gold remains in backwardation from one month to 6 months out.  It is within a whisker of backwardation going out for one year.

The silver inventory at the SLV tonight rose by an astonishing 4.198 million oz.
It too is in backwardation  (SIFO)

I may be wrong, but it looks to me like we have the beginnings of a run on the silver inventories at the comex.  I will let you be the judge on this when you peruse the data at the comex tonight.


Silver Doctors.....


Bernanke-Dimon-Fed-TunnelYou have to give the Western bullion banking cartel credit.  They are leaving no stone un-turned in their efforts to suppress precious metals prices and sentiment.
With gold and silver completing a 3 year correction, and both metals trading near multi-year lows, Reuters reports that the CME is looking to introduce daily price fluctuation caps(reportedly 1%) in gold and silver futures in a bid to “reign in wild volatility”.
It looks like GATA’s 2% rule in gold is about to be cut in half.  [Read more...]


he logo of the International Monetary Fund (IMF) at the organization’s headquarters in Washington, DC (AFP Photo/Saul Loeb)
The post war consensus on financing bodies appears to be breaking down as the West clings desperately to the reins of the IMF and World Bank. In exasperation, the BRICS nations are pushing forward with alternative institutions.
The BRICS (Brazil, Russia, India, China and South Africa), fed up with ongoing American stalling at reforming the voting system in the IMF, have been working their way towards a genuine new world order.
Pivoting away from the influence of the US-centric Western financial system, it makes sense to create a counterweight to the IMF; a supranational bank for the emerging east.  [Read more...]


The Russian banking system has responded to the West’s petty and of no-effect sanctions by raising a one-finger salute to the West.  Russian banks have stopped using the dollar and have adapted total reliance upon its own ruble, intent on having the ruble become a part of any new global currency.  US banks continue to entrap citizens with debt-forever fiat.  Russia has the second largest gold reserve in the world.  US is the highest debtor nation in the entire world.  The US has always had a fondness for being number 1 in everything.
The fact that Russia has rejected the dollar in every way, coupled with another fact that it will only transact its gas and oil trade in the ruble will have an impact on the US and the West more than any sanctions Obama can ever hope to [under]achieve.  As a  consequence of pushing Russia away from the [totally failed] Western banking system, the US stands to lose trillions of fiat $ in return.  It is not just Russia.  All of the other BRICS nations are following suit.
The US and the central banking system is committing seppuku, [hari kari], financial [self-imposed] disembowelment.