Tuesday, May 20, 2014

Gold and Silver News & Views May 20 , 2014 -- Gold Slammed As 'Panic-Seller' Dumps $520 Million In Futures ......... Conspiracy fact: European central banks again admit, renew secret scheming on gold ........ Koos Jansen: Chinese real estate debt is being settled in silver ........ Ed Steer's Daily Gold and Silver Report ( Data , News and Views )

Another rat jumps the sinking London PM metal fixing boat....

Barclays' Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank

Tyler Durden's picture

Last week, for the first time ever, in "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" Zero Hedge shone a spotlight on the mysterious, and "without any permanent employees" company known as The London Gold Market Fixing Limited which for 117 years has served as the corporate face of the London bankers who "fix" the price of gold twice daily. Since then, more than one of the LinkedIn pages we profiled of the bankers among the 5 gold fixing banks has quietly been taken down. However, the biggest surprise took place moments ago when none other than the head of spot gold trading at Barclays, Marc Booker, did what so many heads of spot FX trading in the past few months have done over fears of being caught in the ongoing manipulation probe: he exited stage left from Barclays HQ at One Churchill Place.
As Reuters further reports, Marc Booker's exit leaves Martyn Whitehead, Barclays' global head of metals and mining sales, as the bank's only representative listed with the London Gold Market Fixing company. Barclays is one of the four banks that contributes to the twice-a-day price setting process for the globally recognised benchmark.
But there has also been speculation about Whitehead's future at the bank.

"I have a job for the year. I have been working for Barclays for 13 years, and I will continue to do my job at Barclays," he told Reuters when asked about the speculation.
Which means the former Rotschild director of metal sales and trading is the only Barclays trader left in the gold fixing "company."
More from Reuters:
A spokeswoman for Barclays declined to comment on the matter. Booker could not immediately be reached.

His exit follows the departure earlier in the year of Jonathan Spall, product manager for metals at the bank, and that of other commodity staff.
And while we can understand why cockroaches feel liky scurrying when the light is shone on them, the bad news for precious metal manipulators everywhere is that no matter where you end up, you will still likely face public scrutiny now that at least the German regulator is taking this matter seriously.
With regulatory scrutiny showing no signs of abating and cost pressures still elevated, the commitment of banks to the precious metals benchmarks is being questioned by the industry.
What is worse for the gold fixers is that it is now quite clear that one after another the scramble to get the hell out of Dodge is all too real:
The other banks involved in the gold-setting process are HSBC, Societe Generale and Bank of Nova Scotia. A former fifth member of the fix, Deutsche Bank , resigned on May 12 without a replacement.
Bottom line: just like the Silver Fixing which last week announced its wind down, the days of the 117-year-old Gold fix are numbered. But to preserve continuity of riggedness and manipulation, perhaps they can just outsource their job duties to the biggest manipulators of all: Bank of England, the Fed and, of course, the BIS.

Another day , another gold manipulation......

Gold Slammed As 'Panic-Seller' Dumps $520 Million In Futures

Tyler Durden's picture

You can't make this up. An initial dump in gold happened when Europe was getting going late last night but as the US wakes up and markets get active, someone (panic-seller) decided it was an entirely optimal time to sell $520 million notional gold futures - sending the price of the precious metal down $7. Intriguingly, though the notional size was large, the actual move is not as large as we have become used to with the ubiquitous Slamdowns (and it's a Tuesday). At the same time, USDJPY was ramped... because we must maintain the appearance that stock markets are operating normally despite civil wars, coups, global growth slowdowns, and de-dollarization growing.


Conspiracy fact: European central banks again admit, renew secret scheming on gold

ECB and Other Central Banks Announce the Fourth Central Bank Gold Agreement
Statement by the European Central Bank
Frankfurt am Main, Germany
Monday, May 19, 2014
The European Central Bank, the Nationale Bank van Belgie/Banque Nationale de Belgique, the Deutsche Bundesbank, Eesti Pank, the Central Bank of Ireland, the Bank of Greece, the Banco de Espana, the Banque de France, the Banca d'Italia, the Central Bank of Cyprus, Latvijas Banka, the Banque centrale du Luxembourg, the Central Bank of Malta, De Nederlandsche Bank, the Oesterreichische Nationalbank, the Banco de Portugal, Banka Slovenije, Narodna banka Slovenska, Suomen Pankki–Finlands Bank, Sveriges Riksbank, and the Swiss National Bank today announce the fourth Central Bank Gold Agreement (CBGA).
In the interest of clarifying their intentions with respect to their gold holdings, the signatories of the fourth CBGA issue the following statement:
-- Gold remains an important element of global monetary reserves.
-- The signatories will continue to coordinate their gold transactions so as to avoid market disturbances.
-- The signatories note that, currently, they do not have any plans to sell significant amounts of gold.
-- This agreement, which applies as of 27 September 2014, following the expiry of the current agreement, will be reviewed after five years.

Koos Jansen: Chinese real estate debt is being settled in silver

11a ET Saturday, May 17, 2014
Dear Friend of GATA and Gold:
Silver is not only trading in backwardation in China, gold researcher and GATA consultant Koos Jansen reports, but it is also trading at a great premium to real estate, being used to settle debt on real estate whose price is collapsing. Jansen's commentary is headlined "Chinese Real Estate Debt Settled in Silver, SGE Premium 5.7%" and it's posted at his Internet site, In Gold We Trust, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.




The gold price got sold off a few dollars the moment that trading began on Sunday evening in New York.  But a few hours later it began to chop unsteadily higher.  However, the rally that began at the 8:20 a.m. New York open on Monday morning got dealt with in the usual manner by the usual suspects 10 minutes after the open---and by the end of the day the gold price was back to where it started at Friday's close.
The low and high ticks according to the CME Group were recorded as $1,289.50 and $1,305.70 in the June contract.
Gold closed in New York on Monday at $1,292.60 spot, down one thin dime.  Net volume was pretty light at only 95,000 contracts, so anyone with an agenda had an easy time pushing the gold price in whatever direction they chose---and that's precisely what they did.
The price path for silver was virtually identical to that of gold, with all the highs and lows coming at the same times---along with the ensuing sell-off during the New York trading session, so I shall spare you the details.
The low and high ticks in silver were posted as $19.31 and $19.685 in the July contract.
Silver closed yesterday at $19.335 spot, down a penny from Friday.  Volume, net of May and June, was 38,000 contracts, of which 3,400 contracts was in the September and December delivery months.  And as I said last week, it's hard to tell whether these positions in the far months are new ones, roll-overs, or one leg of a spread trade.
Platinum was up about five bucks by lunchtime in Hong Kong---and then jumped up another ten bucks just before 9 a.m. BST in London.  It tacked on another five spot in early New York trading---and it's attempts to rise further ran into the usual sellers of last resort.  By the 1:30 p.m. Comex close, virtually all of the Monday gains had vanished.  Platinum close up a whole four bucks.
Palladium's rally was a bit more anemic, but even those gains vanished under the feet of JPMorgan et al during New York trading.  Palladium closed down a buck.
It was obvious, at least to me, that the sellers of last resort were toying with all four precious metal prices---and what surprised me the most was that they didn't close palladium down on the day as well.
The dollar index closed late on Friday afternoon in New York at 80.05---but then began to head quietly lower shortly after trading began in the Far East on their Monday morning.  The index sank down to 79.89 shortly before 10:30 a.m. EDT---the London a.m. gold fix---and then it looked like a buyer of last resort showed up close it just above the 80.00 mark at 80.01.  Here's the 3-day dollar chart.


The CME's Daily Delivery Report showed that 28 gold and 167 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  In gold, Jefferies was the short/issuer on all 28 contracts---JPMorgan and Canada's Scotiabank stopped all but one of them.  In silver, the largest short issuers were ABN Amro, Jefferies and JPMorgan, with 72, 70 and 19 contracts respectively.  JPMorgan stopped 127 contracts---and Scotiabank stopped 13. The link to yesterday's Issuers and Stoppers Report is here.
There were no changes in GLD yesterday---and as of 6:45 p.m EDT yesterday evening, there were no reported changes in SLV, either.
The U.S. Mint had a tiny sales report yesterday.  They sold 1,500 troy ounces of gold eagles---and that was it.  If they follow last week's procedure, they should have a more decent sales report today.
There wasn't much gold activity over at the Comex-approved depositories on Friday.  Only 4,406 troy ounces was reported received---and a grand total of eight, one kilo gold bars were shipped out---257.200 troy ounces.  The link to that activity is here.
There was much more activity in silver, of course, as 367,190 troy ounces were reported shipped in---and 126,161 troy ounces were shipped out.  The link to that action is here.


Non redundant news and views....

Combating the Crunch: ECB Plans Negative Rate on Bank Deposits

European Central Bank executive board member Peter Praet of Germany is expected to recommend that the bank cut its main refinancing rate from the current 0.25 percent to a record low of 0.15 percent when the bank's Governing Council meets on June 5.

In addition, the bank also wants to introduce a negative rate on bank deposits of -0.1 for the first time in its history. The ECB's deposit rate is currently at zero, and a further cut would mean that banks would effectively have to pay a fee to park their money. Normally they would be paid interest to do so. Under the new punitive rate, if a bank were to deposit €100 million in a central bank account, the ECB would withhold €100,000. The measure is aimed at encouraging banks to lend money rather than park it at the ECB. It is hoped the move will prevent the kind of credit crunch and freeze in lending seen during the height of the euro crisis, when private and corporate loans all but dried up.
Particularly within the crisis-plagued countries of the euro zone, consumers and companies are still having a difficult time obtaining loans. The lower interest rate could also lead to a drop in the euro's high exchange rate.

CME Cuts Silver, Gold Trading Margins

Exchange operator CME Group Inc. reduced the amount of collateral required to trade the benchmark gold and silver futures contracts on Thursday.
CME, which owns the Comex division of the New York Mercantile Exchange, trimmed gold margins by 7.7% effective close of trading Friday, in a notice emailed Thursday evening.
Speculative investors in the benchmark 100-troy ounce gold contract can now deposit $6,600 to open a position and maintain $6,000 of that to keep that position overnight. That's down from the previous initial margin of $7,150 and maintenance margin of $6,500.
I asked Ted Butler what he thought of this news item---and he said this was just normal business activity for the CME Group and not news at all.  Here it is anyway.  It was posted on thenasdaq.com Internet site early Thursday evening last week---and I thank reader Jason Edwards for sending it along.

Norilsk mulls ways around sanctions to sell palladium

Norilsk Nickel, the world's largest palladium producer, would find ways around sanctions to sell the metal if its operations are targetted by Western governments, an executive at the company said on Friday.
Russia's seizure of Crimea has resulted in European Union and U.S. sanctions on some Russian individuals and certain companies, but Norilsk has so far escaped unscathed.
But the United States and its European allies agreed on Thursday that Russia should face broader economic and industrial sanctions if the Kremlin meddled in Ukrainian elections later this month, a U.S. official said. 
"We hope that common sense will prevail," Anton Berlin, Norilsk marketing director, told Reuters in an interview. "In theory, even with the most pessimistic scenario Norilsk will find ways to sell its products... Plus, it's against the interests of our consumers there."
This Reuters story, filed from Moscow, was picked up by themineweb.com Internet site yesterday---and it's the first contribution of the day from Manitoba reader Ulrike Marx.

MIT developing platinum replacement

Fears of a looming crunch in platinum supply, driven mainly by a four-month-long ongoing strike at the world’s top producers of the metal in South Africa, may be about to fade.
MIT graduate student Sean Hunt, postdoc Tarit Nimmandwudipong, and Yuriy Rom├ín, an assistant professor of chemical engineering, are working on a new process to replace platinum-group metals with more widely available elements in renewable energy technologies.
In a paper published last week in the journal Angewandte Chemie, the team explains their proposed new method for synthesizing alternative catalysts.

Gold bar and coin demand slumps to 4-year low

Investors dramatically scaled back purchases of gold bars and coins in the first quarter as uncertainty in the bullion price outlook put a damper on demand, an industry report showed on Tuesday.
Demand for bars and coins slumped 39 percent on year to 283 tonnes in the January-March quarter, the lowest level in four years, according to the World Gold Council's (WGC) latest Gold Demand Trends report.
"Caution permeated the market for small bars and coins during the first quarter, particularly in the more price-sensitive markets, as investors awaited a clear signal as to the future direction of the gold price following the huge levels of investment in 2013," the industry body representing gold mining companies, wrote.
And retail bullion sales are even slower in the second quarter.  This gold-related news item was posted on the CNBC Asiainternet site early Tuesday afternoon local time---and I thank reader Mark Molinari for bringing it to our attention.

Smart recovery of Indian gold jewellery exports in April

India’s export of Gold jewellery recorded a smart recovery at the start of fiscal year 2014-15 growing 27.3 per cent to reach Rs.3,648.29 crore in April 2014, against the year-ago period. Figures from Gem & Jewellery Export Promotion Council (GJEPC) show that in dollar terms, gold jewellery exports rose 14.69 per cent to $604.42 million.
Cut and polished diamond exports too rose almost 20 per cent at Rs.9,864.34 crore while in dollar terms they rose 8 per cent to $1,634.25 million in April 2014.
However, total exports including exports of gold medallions & coins, coloured gemstones, silver jewellery, pearls, synthetic stones and rough diamonds, declined 6.8 per cent to Rs.14,989.4 crore and 16.03 per cent in dollar terms to $2,483.33 million.
“The improvement is heartening and I believe the worst for the industry is now behind us. It also reflects the improvement in the supply of gold,’’ Vipul Shah, Chairman, GJEPC, told this correspondent.
This very interesting gold-related news item was posted onthehindu.com Internet site one minute before midnight late Monday evening India Standard Time---and it's another contribution from Ulrike Marx.

Gold Appetite Shrinks in Thailand Amid Political Deadlock

Gold shipments to Southeast Asia’s biggest consumer are forecast to contract by as much as half this year, a sign the unprecedented Asian demand that helped stem last year’s rout in prices is weakening.
Thailand’s purchases may be 150 to 200 metric tons because of falling prices and the country’s political crisis, according to YLG Bullion International Co., the largest local importer. They fell 78 percent in the first quarter from a year earlier and totaled 314 tons in 2013, valued at about $13 billion.
Consumption across Asia reached a record in 2013 even as some investors in the U.S. and Europe lost their faith in bullion as a store of value. Prices snapped a 12-year bull market, the longest in at least nine decades. Holdings in exchange-traded products backed by gold are contracting and Goldman Sachs Group Inc. says prices will keep retreating.
This Bloomberg news item, filed from Bangkok, showed up on their Internet site very early Monday morning Denver time---and it's courtesy of reader "Tom in Thailand".

World Gold Council: First-Quarter Demand Holds Steady With Year-Ago Levels at 1,074.5 Tonnes

Gold demand in the first quarter was 1,074.5 metric tonnes, on par with bullion demand the first quarter of last year, the World Gold Council said Tuesday.
Compared demand in the first quarter of 2013 of 1,077.2 tonnes, gold demand in the first quarter of this year was down 0.25%. The WGC said jewelry demand rose 3% because of lower prices versus the first quarter of last year, along with season factors such as Chinese New Year. China saw record first-quarter jewelry demand, the group said.
Investment demand in the first quarter was 282.3 tonnes in the first quarter, down 2% from the 288.1 tons bought in the first quarter of 2013. The investment demand breakdown shows that exchange-traded fund flows were essentially zero, while bar and coin demand fell 39% from year ago levels, down to 282.5 tons.
Total supply rose 1% to 1,048.5 tons, which includes both mine supply and recycling.
This must read commentary showed up on the Kitco Internet site one minute after midnight EDT this morning---and my thanks go out to Ulrike Marx one more time.



There’s a very good reason why gold and silver prices (along with other CME metals) don’t respond to developments as most would imagine. The reason is because the price-setting mechanism, which is the COMEX, doesn’t have anything to do with supply or demand or world events. Instead, the COMEX sets gold and silver prices on its own terms, namely, by who is zooming who among an incredibly small circle of traders isolated from the rest of the world or any influence from actual metal supply and demand.

I'm not telling you anything new here, but it is amazing how gold and silver pricing has become so effectively captured by a private club of paper traders that anyone who follows the market could fail to see it. The rally early [last] week was exclusively the result of technical fund buying/commercial selling and the sell-off on Thursday and Friday was the reverse. There was no other explanation or real world influence on price this week or any other week. And for certain, future price action will be due to positioning by the traders in the COMEX’s private club.
 - Silver analyst Ted Butler: 17 May 2014
It was another trading day where the gains of the Far East and London sessions were crushed under the heels of the trading algorithms of "da boyz" as the critical $1,300 price point---and the 50-day moving average in gold were both penetrated to the upside again yesterday.  For the moment, it doesn't seem that they are going to allow any excitement in the precious metals, as the 50 and 200-day moving averages in gold are being strongly defended.  Here's the 6-month gold chart.
[In silver, it's the 20 and 50-day moving averages that are in play.
And as we've already discovered this year---and every other year since 2011---is that even if these moving averages are broken, JPMorgan et al are there to snuff out any rally before they can get far.  Will this time be different?  Who knows.
As Ted Butler has pointed out on many occasions, that although there's little room to the downside in silver, the potential exists for further downside price movement in gold, as the COT Reports of late have show that the technical funds are not loaded up on the short side as they were last year when an important price low was reached.  It remains to be seen whether the powers that be still have that in store for us.
Of course, if that is in the cards, they will certainly use the opportunity to pound the other three precious metals as well because, as we already know, supply/demand fundamentals mean nothing when "four or less" U.S. bullion banks have short-side corners in silver, platinum and palladium.  JPMorgan controls the gold market with its long-side corner---and as Ted also pointed out in his Saturday commentary, they sold 5,000 contracts of that long positions, leaving him "with the distinct impression that JPM capped gold prices single-handedly during the reporting week."
With about five minutes to go before the London open, I see that all four precious metals got sold down a bit during the lead-up to the open---and it will be interesting to see what happens as the Tuesday trading session unfolds in both London and New York.  Gold volumes are already pretty decent, but silver volume is very light---and the dollar index is barely above the 80.00 mark.
And as I send this out the door to Stowe, Vermont at 5:05 a.m. EDT, I see that both silver and gold are chopping lower.  Platinum and palladium are attempting to rally, but each attempt, no matter how tiny, is being sold off.  Net gold volume has just topped the 30,000 contract mark, which is pretty heavy for this time of morning---and silver's volume is nothing special.  The dollar index is up 8 basis points.
I note that Casey Research has a limited-time offer [it ends at midnight EDT on Friday, so you don't have a lot of time] on their Casey Extraordinary Technology subscription service.  Alex Daley is all pumped up about the successes they've had over the last year, with an average return of 47%.  The commentary is rather provocatively headlined "Gold is Dead: Long Live Tech".  It costs nothing to check it out, which I urge you to do when you have a spare minute.  The link is here---and Casey Research's usual 3-month guarantee applies.
That's all I have for today---and I'll see you here tomorrow.