Friday, May 23, 2014

Gold and silver Report -- May 23 , 2014 -- Barclays Fined For Manipulating Price Of Gold For A Decade; Sending "Bursts" Of Sell Orders ( And then just fined 26 million ? Cost of business chump change fine ! ) .............. Ed Steer's Daily Gold and Silver Report for May 23 , 2014 ( News , Data and Views on the PMs ) .....

Update.....

From Mish.....


Saturday, May 24, 2014 11:43 PM


Former Bundesbank Vice-President Recommends Gold, Says Current Economic System is "Pure Fiction"


Anyone who is thinking clearly knows the economic system fostered by central banks is totally and completely out of control.

Repetitive rounds of QE, competitive currency debasement, interest rates at zero, and sponsorship of the internet bubble followed by the housing bubble, followed by the current stock market bubble is proof enough.

So, what I am about to report is really nothing but common sense, except for the fact that it comes from an unusual place, where one does not normally hear such discussions.

J├╝rgen Stark, former vice president of the Bundesbank, and also former chief economist of the ECB (unofficial title) says "The System is Out of Control". Via translation from Libre Mercado, here are a few snips.
 Stark, until recently one of the big hawks central bank of Germany for his fierce defense of monetary orthodoxy, resigned in late 2011 for his outright rejection to the purchase of government bonds by the ECB launched the president of the institution Jean Claude Trichet. Since then, Stark has used his rare, but valuable public appearances to warn of the risks associated with the current policy of central banks to the crisis.

In a conference organized by the Ludwig von Mises Institute in Germany, recommended to protect the attendees directly against a probable collapse of the global monetary system. Stark spoke openly.

Stark noted that central banks, including the ECB, "have completely lost all ability to control and perspective on the economic situation."

The monetary system was saved in 2011 through concerted action by major central banks worldwide. But, according to Stark, the whole system is "pure fiction". The monetary authorities have been groping since 2008 to avoid a second Lehman Brothers, but if happen, "the system will not survive," he warned.

The problem is the monetary model itself. That is, the printing of paper currency without real backing and the multiplier by which the commercial banks can expand credit-uncontrolled without prior savings. Stark recommended allocating part of this fictional savings to investment in traditional "safe havens" such as gold or silver.

Also, in another lecture delivered last week in Paris, Stark noted that the fragile recovery in Europe is not due to the absence of monetary and fiscal stimuli (low rates, debt purchase, etc..) and (more government spending) but the slow deleveraging and lack of structural reforms.

Far from helping, the loose monetary policy of the ECB is hampering the recovery, as advanced free market on multiple occasions. The key to growth, create jobs and end the crisis on solid foundations, as Stark, is to increase competitiveness. And to do so, "we must continue gaining flexibility. Progress has been made, but still not enough. The situation has improved, but the crisis is not over."

"the probability of default, as is reflected in the markets are too low," he added. The expert was critical of the downside risks caused by the fall in spreads and insurance against default (CDS), as attributes, especially the artificial ECB action.

"Capital appreciation has grown stronger euro. But the crisis markets are distorted. We should not be too happy with what happened," he mused.
System is Pure Fiction

Stark is preaching to the choir, but it is appreciated. One does not normally hear such statements from central bankers or even ex-central bankers.

That said, his statements would carry more weight if he was still with the Bundesbank. I wish Stark never left.

Supposedly Stark Left for Personal Reasons but it's easy to discern he was fed up with being the only member of the ECB with a clue.

You can only beat your head against the wall so many times before you lose all sense of hope and finally your mind.

Mike "Mish" Shedlock








http://www.maxkeiser.com/2014/05/harvey-organ-banking-boys-are-in-real-trouble-massive-derivatives-crisis-looms-in-gold/

( FWIW.... )

HARVEY ORGAN: BANKING BOYS ARE IN REAL TROUBLE- MASSIVE DERIVATIVES CRISIS LOOMS IN GOLD!

end badlyHarvey Organ joins the show this week for an EXPLOSIVE and MUST LISTEN Metals & Markets discussing: 
  • Massive US gold exports: NY Fed stealing sovereign nations gold- Harvey states ALL CUSTODIAL GOLD AT NY FED has now been shipped to China! 
  • GOFO Negative & silver backwardation with huge physical premiums in Shanghai- shortage looms
  • Death-blow to the dollar- Russia/China $400 B Gas deal a decade in the making is official
  • Eric Dubin explains how after years of rumors, COMEX default could come this summer!
  • Eric makes the case for a 50% upside move in silver coming in 6 months, while Harvey states that the cartel is nearly down to their last ounce of gold, & AN OVERNIGHT REVALUATION OF GOLD TO $4,000 WITH NO-BID SELLERS IS COMING IN 2014- PERHAPS AS EARLY AS JUNE!!
“The fun starts when the run on COMEX begins- $1.4 quadrillion in derivatives will burst in 2014 in a full-blown implosion! -H.O. 




Zero Hedge.....


Caught Red-Handed: This Is What Zoomed In Gold Manipulation Looks Like

Tyler Durden's picture





Now that gold manipulation is no longer conspiracy theory and has joined every other "tinfoil" narrative into the realm of conspiracy fact, we urge readers to catch up on both what was the story of the day, namely the UK regulator cracking down on exactly one (1) Barclays trader for manipulating the gold price in a way that prevented him from paying out a substantial fee to his counterparty (and also being the absolutely only person in all of Barclays and every other bank to manipulate gold, of course), as well as reading the full explanation of just how said manipulation was conducted.
Failing that, one can simply observe the following pretty charts catching Daniel James Plunkett smashing the price of gold, which apparently in the UK is called a "mini puke", red-handed in the act of what is now confirmed gold manipulation.
Courtesy of Nanex, the charts below show the active Gold Futures contract on June 28, 2012 during the London afternoon gold fixing (3pm London time, 10am Eastern Time), which is when we now know the Barclays trader intentionally manipulated the price lower.
1. August 2012 Gold (GC) Futures trades and quote spread over a 5 second period of time (10:00:21 to 10:00:26 Eastern).
The important London gold fix price was $1558.96 which is near the middle of the price on this chart. Approximately 1,100 contracts were traded during the sudden price drop.
2. August 2012 Gold (GC) Futures trades and quote spread - Zoomed out.
3. August 2012 Gold (GC) Futures trades and quote spread - Zoomed out 2.
4. August 2012 Gold (GC) Futures trades and quote spread - Zoomed out 3.
5. August 2012 Gold (GC) Futures trades and quote spread - Zoomed out 4.












It's 8:00 AM: Do You Know Where Your 'Un-Rigged' Non-Barclays Gold Slam Is?

Tyler Durden's picture





Just like stocks go up on Tuesdays in the US (and Wednesdays in Japan).. and volatility always falls... so shortly after 8am ET this morning 'someone' decided it was the optimal time to unleash $450 million notional of gold futures. Just as we saw earlier in the week, this sizable dump only achieved a $5 depreciation in price as it seems the inexorable efforts of status quo stabilizers to ensure the only real indicator of empire collapse is not flashing red remain in full effect. Given that Barclays is now out ofthe business of rigging gold prices, the question remains: who is?

Gold futures 'odd' volume dump..

Silver also saw high volume dumping...







Barclays Fined For Manipulating Price Of Gold For A Decade; Sending "Bursts" Of Sell Orders

Tyler Durden's picture





It was almost inevitable: a week after we wrote "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" and days after "Barclays' Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank", earlier today the UK Financial Conduct Authority finally formalized what most in the "tin-foil" hat community had known for years, when it announced that it fined Barclays £26 million for manipulating "the setting of the price of gold in order to avoid paying out on a client order." Furthermore, the FCA confirmed that those inexplicable gold raids which come as if out of nowhere, and slam gold with a vicious force so strong sometime they halt the entire market, had a very specific source:Barclays, whose trader "Daniel James Plunkett, sent out a burst of orders aimed at moving the price of the yellow metal."
This took place for a decade. As the FT reports:
The FCA said Barclays had failed to “adequately manage conflicts of interest between itself and its customers as well as systems and controls failings, in relation to the gold fixing” between 2004 and 2013.
Some further details on Plunkett's preferred means of manipulating the gold price.
The FCA said Mr Plunkett had manipulated the market by placing, withdrawing and re-placing a large sell order for between 40,000 oz and 60,000 oz of gold bars.

He did this in an attempt to pull off a “mini puke”, which the FCA took to mean a sharp fall in the price of gold. As a result, the bank was not obliged to make a $3.9m payment to the customer under an option contract.
Which is precisely what we have shown many times here for example in "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds", when a sell order so aggressive comes in it not only takes out the entire bid stack with an intent not for "best execution" but solely to reprice the market lower. Recall from September:
There was a time when, if selling a sizable amount of a security, one tried to get the best execution price and not alert the buyers comprising the bid stack that there is (substantial) volume for sale. Of course, there was and always has been a time when one tried to manipulate prices by slamming the bid until it was fully taken out, usually just before close of trading, an illegal practice known as "banging the close." It appears that when it comes to gold, the former is long gone history, and the latter is perfectly legal. As the two charts below from Nanex demonstrate, overnight just before 3 am Eastern, a block of just 2000 GC gold futures contracts slammed the price of gold, on no news as usual, sending it lower by $10/oz. However, that is not new: such slamdowns happen every day in the gold market, and the CFTC constantly turns a blind eye. What was different about last night's slam however, is that this time whoever was doing the forced, manipulation selling, just happened to also break the market. Indeed: following the hit, the entire gold market was NASDARKed for 20 seconds after a circuit breaker halted trading!

To summarize: a humble block of 2000 gold futs (GC) taking out the bid stack, and slamming the price of gold, managed to halt the gold market: one of the largest "asset" markets in the world in terms of total notional, for 20 seconds.
And Mr. Plunkett in action:
To be sure Barclays was truly sorry, and pinky swears that having been caught manipulating the gold market for ten years it will never do it again:
The news is also a fresh blow to Barclays’ chief executive Antony Jenkins as he tries to overhaul the culture of the London-based lender. Mr Jenkins took over 18 months ago after his predecessor, Bob Diamond, stepped down amid the Libor scandal.

Analysts said the fine reflected badly on the industry – as well as the hard-charging, revenue-focused business model that Barclays had previously been operating.

Mr Jenkins said in a statement on Friday: “We very much regret the situation that led to this settlement . . . These situations strengthen our resolve to improve.” The bank discovered the misconduct after the client complained. It then reported the incident to the regulator, for which it received a 30 per cent discount on its fine for co-operation.

Ian Gordon, analyst at Investec, said that in pure financial terms, the fine was “utterly inconsequential, both in a group context, and in relation to the quantum of other conduct costs”. He was referring specifically to the bank’s provisions for the mis-selling of payment protection insurance and interest rate hedging products
So a wrist slap, we get that. One wouldn't expect more - after all the banks run the show.  And yet, one wonders: is this just a case of "Fab Tourre-ing" the scandal, and redirecting all attention to just one (preferably junior) person? To be sure, this one trader made handsome profits from gold manipulation...
Mr Plunkett boosted his trading book by $1.8m at the expense of a customer, who was later compensated. He has now been banned from “performing any function in relation to any regulated activity” and fined £95,600. At the time, Barclays was one of five banks that set the price of the precious metal twice a day. Tracey McDermott, the FCA’s director of enforcement and financial crime, said: “A firm’s lack of controls and a trader’s disregard for a customer’s interests have allowed the financial services industry’s reputation to be sullied again.”
... but is this just an attempt by the FCA to pass this off as the proverbial "only cockroach", especially when as we reported earlier this week, none other than Barclays head of trading Marc Booker quietly left dodge?
The speculation is further heightened when one considers that Plunkett had left Barclays nearly two years ago in October 2012! According to his FCA record:
Prior to Barclays Plunkett worked as a lowly junior trader at Dresdner and RBC - and this is the a manipulation mastermind? Further, considering the FCA found failures at Barclays starting in 2004 and Plunkett only joined in 2006,can the FCA please disclose who else was the frontman for gold manipulation at Barclays in the 2004-2006 period? 
This is what the FCA had to say on the matter of young master Plunkett:
Plunkett was a Director on the Precious Metals Desk at Barclays and was responsible for pricing products linked to the price of precious metals and managing Barclays' risk exposure to those products.

Plunkett was responsible for pricing and managing Barclays' risk on a digital exotic options contract (the Digital) that referenced the price of gold during the 3:00 p.m. Gold Fixing on 28 June 2012. If the price fixed above US$1,558.96 (the Barrier) during the 3:00 p.m. Gold Fixing on 28 June 2012, then Barclays would be required to make a payment to its customer. But if the price fixed below the Barrier, Barclays would not have to make that payment.

During the 3:00 p.m. Gold Fixing on 28 June 2012, Plunkett placed certain orders with the intent of increasing the likelihood that the price of gold would fix below the Barrier, which it eventually did. As a result, Barclays was not obligated to make the US$3.9m payment to its customer, and Plunkett’s book profited by US$1.75m (excluding hedging), which was in addition to an initial profit that his book had received upon the sale of the Digital.

Very shortly after the conclusion of the 3:00 p.m. Gold Fixing on 28 June 2012, the customer became aware that the price had fixed just below the Barrier and sought an explanation from Barclays as to what happened in the Gold Fixing. When Barclays relayed the customer’s concerns to Plunkett on 28 and 29 June 2012, he failed to disclose that he had placed orders and traded during the Gold Fixing. Further, Plunkett misled both Barclays and the FCA by providing an account of events that was untruthful.

Plunkett’s misconduct is particularly serious because he preferred his interests over those of a customer and his actions had the potential to have an adverse effect on the Gold Fixing and the UK and international financial markets.
It would appear that Plunkett is indeed nothing more than another instance of "Kerviel" or "Tourre" - an irrelevant mid-level trader thrown at the wolves of public consumption just so the attention can be redirected from the real manipulation elsewhere, and much higher up.
This is hardly surprising, as we noted three days ago when we wrote about the Barclays head gold trader termination:
"Bottom line: just like the Silver Fixing which last week announced its winddown, 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."
So yes: it is now a fact that gold is manipulated by various commercial banks, and that those gold "raids" one sees every morning usually around the time of the London fix aren't accidental at all but are entirely designed to reprice the market, but how deeper does the rabbit hole go?
[FCA Director Tracy] McDermott added: “Firms should be in no doubt that the spotlight will remain on wholesale conduct and we will hold them to account if they fail to meet our standards.”
Alas, this is a lie - by handing Plunkett to the public on a silver platter, it simply means that the far bigger and more important players in the gold manipulation market - stretching all the way to central bank and, of course, bank of central bank level, will simply be allowed to continue business "as usual."
So for those who want the real people behind the real manipulation before they all scatter into the dust, we urge you to reread "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold." Because the gold manipulation rabbit hole goes far, far deeper than just one single, solitary trader...



Ed Steer's Report 


http://www.caseyresearch.com/gsd/edition/gold-market-rigging-is-ever-more-documented-and-ever-more-suppressed-by-the


 

¤ YESTERDAY IN GOLD & SILVER

The gold price traded pretty flat in Far East trading on their Thursday---and began to develop a positive bias around 1 p.m. Hong Kong time.  From there it rallied slowly but steadily until the 8:20 a.m. EDT New York open---and you don't need me, or anyone else for that matter, telling you what happened next---as you've seen that movie before plenty of times.  By the time that JPMorgan et alwere done at 11:30 a.m.---all the London and New York gains had vanished into thin air---and from that point on, the gold price traded flat into the 5:15 p.m. electronic close.
The CME Group recorded the low and high ticks as $1,290.10 and $1,304.10 in the June contract.
The gold price finished the Thursday session in New York at $1,293.70 spot, up $1.80 from Wednesday's close.  Net volume was 102,000 contracts.
It was precisely the same chart pattern in silver---and that's all I need to say about that.
The low and high ticks were reported as $19.36 and $19.825 in the July contract.
Silver finished the Thursday session at $19.485 spot, up a whole 10 cents from Wednesday.  Volume, net of May and June, was a very hefty 43,500 contracts, of which 7,500 was in the September and December delivery months once again.  As I keep saying, it seems way too early for July contract holders to be rolling out of their positions, but you just never know---and as I've also said, all those contracts could be one leg of spread trade.  Regardless of what they are, volume yesterday was pretty big.
The rallies in platinum and palladium didn't really get started until around 11 a.m. BST in London trading, but they to ran into the same sellers of last resort shortly after the Comex open.  Although their respective prices were capped, at least they held onto a decent portion of those gains---and weren't sold down hard like their gold and silver brethren.  Here are the charts.
As you've already figured out for yourself, the closing prices of all four precious metals would be have been past the orbit of Jupiter if "da boyz" hadn't been stepped in---as the panic short-covering rally that would have commenced at some point, would have finished the job.  The only thing left to be done once the smoke cleared after that, would be to make note of which short sellers were forced into bankruptcy attempting to make margin calls, or cover short positions in a "no ask" market---like what happened to Bear Stearns.
The dollar index closed late on Wednesday afternoon in New York at 80.07---and then spent all of Thursday chopping very quietly higher.  It finished the day at 80.22---up 15 basis points on the day.

***


The CME Daily Delivery Report didn't show much, as there were zero gold and 6 silver contracts posted for delivery within the Comex-approved depositories on Monday.  And yes, JPMorgan was the long/stopper on all six contracts.  The link to yesterday's Issuers and Stoppers Report is here.
There were no reported changes in GLD---and as of 9:52 p.m. yesterday evening, there were no reported changes in SLV, either.
Joshua Gibbons, the "Guru of the SLV Bar List", updated his website with the goings-on within SLV during the reporting week---and here is what he had to say: "Analysis of the 21 May 2014 bar list, and comparison to the previous week's list.  No bars were added, removed, or had a serial number change.  As of the time that the bar list was produced, it was overallocated 234.2 oz.  A withdrawal of 1,152,782.4 oz on Wednesday is not reflected on the bar list." The link to Joshua's website is here.
There was no sales report from the U.S. Mint once again.
Over at the Comex-approved depositories on Wednesday, there was no in/out movement in gold.  But it was much busier in silver, of course, as 606,473 troy ounces were reported received---and 673,568 troy ounces were shipped out.  The link to that activity is here.

***

Non redundant PMs focused news.....



BofA Scrapping Market-Making Unit Amid Trading Scrutiny

Bank of America Corp. is dismantling an electronic market-making unit created last year to serve the lender’s Merrill Lynch wealth-management division, said two people with knowledge of the decision.
Increased regulatory scrutiny of U.S. equity markets and managers’ concerns for the potential perception of a conflict of interest killed the project, said the people. The desk advanced to a testing phase before being abandoned in recent weeks and two executives hired to run it, Jonathan Wang and Steven Sadoff, were told to seek new jobs within the firm, the people said, requesting anonymity because the matter is private.
Businesses such as the shuttered Bank of America unit usually execute equity orders internally, rather than sending them to the public stock market. Critics including Kor Group LLC’s Dave Lauer say the practice may cause harm by keeping some supply and demand private, distorting prices. Bank of America’s decision coincides with a renewed examination by regulators of whether trading in the $22 trillion U.S. stock market is fair.



Finra Fines Cost JPMorgan 3 Minutes of Profit

The world’s biggest bond dealers, including JPMorgan Chase & Co. and Morgan Stanley, failed to properly report trades to the industry’s price-tracking system more than 11,000 times. JPMorgan’s penalty: About three minutes of its annual profit.
Fines levied in settlements disclosed last month by the Financial Industry Regulatory Authority amounted to a fraction of what the two New York-based firms generated from trading debt during the two-year reviews. JPMorgan’s $95,000 penalty was the biggest imposed by Finra as it cited at least three other dealers in the past five months for similar types of violations.
Regulators are seeking to uphold the integrity of the bond-price reporting system known as Trace, the biggest window into a market that’s grown about 78 percent since 2008 as investors poured money into debt securities. Holding back information on trades can give Wall Street dealers an advantage over customers seeking a fair price, undermining Finra’s stated goal of equal access for all participants to real-time data.
Once a crook---always a crook.  Not even coffee money for these guys.  This Bloomberg story was posted on their Internet site at 9:28 a.m. Denver time yesterday---and I thank Washington state reader S.A. for sharing it with us.



CFTC Wins Fraud Trial against Hunter Wise Related Precious Metals Firms and Their Owners

The U.S. Commodity Futures Trading Commission (CFTC) today announced that on May 16, 2014, a federal court in Florida entered an Order finding in the CFTC’s favor following a trial against four Hunter Wise related companies and their owners on charges that they had fraudulently misrepresented the nature of precious metals transactions that resulted in millions of dollars in customer losses.
Hunter Wise Commodities, LLC, Hunter Wise Services, LLC, Hunter Wise Credit, LLC, and Hunter Wise Trading, LLC and the individuals running the companies, Fred Jager and Harold Edward Martin, Jr., have been ordered to pay, jointly and severally, $52.6 million in restitution to the defrauded customers, and to pay a civil monetary penalty, jointly and severally, of $55.4 million, the maximum provided by law.
“This result makes clear that the CFTC will aggressively act to protect customers from fraud. Customers are entitled to know the truth of how their hard-earned money is being used. Here, customers thought Defendants were purchasing precious metals on their behalf and they were not,” said Gretchen L. Lowe, Acting Director of the CFTC’s Division of Enforcement. “This is also another excellent example of how the CFTC is using its new enforcement authority under Dodd-Frank to go after fraudsters.”
As Elliot Simon said in his covering e-mail---"If only central banks and Wall Street banks were held to the same standard."  Amen to that.  This news item showed up on the CFTC's website yesterday.



Barrick Gold slapped with $6bn class-action lawsuit

Plaintiffs’ attorneys from Canadian law firms Koskie Minsky; Sutts, Strosberg; and Groia & Company have filed a $6 billion class action lawsuit against Barrick Gold and former Barrick CEO Aaron Regent, former CFO and current CEO Jamie Sokalsky, current CFO Ammar Al-Joundi and former COO Peter Kinver.
The action was filed Wednesday with the Ontario Superior Court of Justice on behalf of Barrick Gold investors who acquired Barrick stock during the period from May 7, 2009, to November 1, 2013.
“The action raises serious questions about how Barrick Gold conducted its business and affairs and the manner in which it raised capital from public markets,” said Kirk Baert of Koskie Minsky.
I would be delighted to see this company file for bankruptcy.  It's hard to believe that just this one gold mining company could cause so much damage to the entire industry over the last 20 year.  This gold-related news item showed up on themineweb.com Internet site yesterday---and I thank Ulrike Marx for sending it our way.



Implats CEO says platinum strike could last much longer

The crippling four-month miners strike in South Africa could last much longer, the chief executive of Impala Platinum said, adding that feedback from initial court-mediated talks with the world's biggest producers and main mining union was lukewarm.
South African platinum miners Anglo American Platinum (Amplats), Impala Platinum (Implats) and Lonmin have been battered by a strike over wages that began on Jan. 23 and has cost the trio collectively almost $2 billion in lost revenue.
The stoppage has also turned increasingly violent, with the National Union of Mineworkers reporting one of its members was stabbed to death on his way to work at Amplats, the fifth such killing in the past two weeks. 
The talks, aimed at ending South Africa's longest-ever mining dispute, started on Wednesday and should last for up to three days.
This longish Reuters story, filed from London, showed up on the mineweb.com Internet site yesterday---and it's worth skimming.



India's gold premiums crash on import relaxation

Gold prices in the spot market here fell on Thursday after the Reserve Bank of India (RBI) last night relaxed rules for importing the metal.
Spot gold premium crashed from $80 an ounce on Wednesday to about $20 on Thursday, after falling to $10 during the day. In evening trade, however, the premium rose to $35-40, as banks didn’t indicate big gold purchases through the next few days. Actual gold imports could take some time.
The price of gold here fell by Rs 525, about two per cent, to Rs 28,200/10g, a 10-month low,  from Rs 28,725 on Wednesday. At $1,295-1,300 an ounce, the international price was steady. MCX June gold futures lost Rs 1,000 from Wednesday’s high and were trading around Rs 27,260 on Thursday.
“Before the relaxation, the August contract was at a discount of Rs 800 to the June contract. This has now shrunk to Rs 125. Delivery concerns are easing and their hangover is not visible in futures prices anymore,” said Ajay Kedia, director of Kedia Commodities.
This gold-related news item appeared on the business-standard.com Internet in the wee hours of Friday morning IST---and it's courtesy of reader Danny Carroll.



Gold market rigging is ever more documented -- and ever more suppressed by the news media

This speech/commentary by GATA's secretary/treasurer Chris Powell was given at the Committee for Monetary Research and Education Spring Dinner Meeting at the Union League Club in New York last night---and is literally "hot off the press".  It's a must read for sure.


***

¤ THE WRAP

The 320 million oz concentrated silver short position is 36% of all the visible silver bullion in the world’s total ETFs and exchange inventories (875 million oz) and 40% of total annual mine production (800 million oz). Can you imagine the outrage that would erupt in any market, say the stock market, if prices were down 40% and there existed eight traders (7 unidentified) holding a short position equal to 36% of total stocks in existence? And if JPMorgan was the identified king stock short, would it be swept under the rug?
While it’s clear that the regulators won’t intercede and break up the illegitimate concentrated short position in COMEX silver, neither can they make it easily go away. And it appears that the 8 big shorts can’t make it go away either, or at least they haven’t until now. Not only can’t the massive short position be explained in terms of hedging legitimacy, it also can’t be explained in legitimate economic terms. - Silver analyst Ted Butler: 21 May 2014
I don't think that I need to add anything further to my prior discussion on Thursday's price activity, as the charts pretty much speak for themselves---and I said all that was necessary about it at the top of this column.
Here are the 6-month charts for both gold and silver once again with Thursday's data added.  JPMorgan et al are still keeping the gold price below its 50-day moving average---and silver, which broke above its 50-day moving average on its spike high at the New York open, closed a hair above its 20-day moving average.
The London open is less than five minutes away as I type this paragraph---and the gold price did absolutely nothing in Far East trading on their Friday.  The same goes for silver.  Volumes are vanishingly small in both metals.  Gold's net volume is a hair under 8,000 contracts---and silver's volume is 3,500 contracts.
Both platinum and palladium got sold down a bit during Far East trading---and platinum is still down at the London open, but palladium is back to unchanged.  The dollar index is basically unchanged from its New York close on Thursday afternoon EDT.
Today we get the new Commitment of Traders Report for positions held at the close of Comex trading on Tuesday, May 20.  As I said earlier this week, the price action suggests we should see further improvement in the Commercial net short positions in both gold and silver---but I also said [out of the other side of my mouth] that I reserved the right to be wrong.  I'll find out at 3:30 p.m. EDT this afternoon---and I'll have all of it for you tomorrow.
I was looking at the CME's Preliminary Report on the Thursday trading action---and I note that there are about 127,000 gold contracts still open in June.  All of those have to be sold or rolled by the end of Comex trading next Thursday---and those that aren't, will be standing for delivery in the June delivery month.  Based on that, we'll see some really decent roll-over/trading volume during the next five business days.
And as I hit the send button on today's column at 5:05 a.m. EDT, I note that selling pressure has shown up in all four precious metals---and all are below their Thursday closing prices in New York.  Gold volume is now up over 50% from the open, but still very light for this time of day---and about the same can be said for silver's volume.  So based on volume alone, I'm not prepared to read much into the current price move, regardless of direction.
The dollar index, which had been ruler flat up until the London open, is now up 19 basis points, so I'd guess that the precious metal prices moves at the moment are a result of that, at least that's what will be given as the reason by the main stream media if these trends continue.
Since today is Friday, I haven't any idea as to how the trading action will unfold in New York.  Will "da boyz" take off for The Hamptons early, or will there be some fireworks of some kind?  Beats me, but we won't have long to wait to find out.
Before heading out the door, I'd like to remind you once again that Casey Research has a limited-time offer [it ends at midnight EDT on Monday] on their Casey Extraordinary Technology subscription service.  Alex Daley is all pumped up about the successes they've had over the last year, with anaverage 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 is now providing a 6-month guarantee of customer satisfaction with this offer.
I hope you enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.







Add on items.....









The World Is Running Out Of Gold To Mine


Untitled
How much gold would you have if you stole every bit that’s ever been mined? Not much—you’d be able to make a cube of solid gold with 60-foot sides. There just isn’t that much gold in the world, and it’s getting harder and harder to find it. In fact, our love of gadgets may be part of the problem.
In a report from theWall Street Journal this morning, we learn that we’re only two decades away from exhausting the world’s gold supply if mining continues apace. How could we be running out of gold? It’s simple. As gold boomed in the 90s and 00s, the easy-to-access deposits were sapped of their supplies. Now, the gold being discovered is way deeper into the Earth, which means that discovering it takes a lot more work before it can be extracted.
You can read the rest of the article here:  The World Is Running Out Of Gold
GATA...


Fed, BIS defending $1,300 barrier against gold, Kaye tells KWN

 Section: 
4:10p ET Friday, May 23, 2014
Dear Friend of GATA and Gold:
The gold cartel led by the Federal Reserve and Bank for International Settlements is holding the gold price below $1,300 per ounce, Hong Kong fund manager William Kaye tells King World News today. But, he adds, the steady diminishment of the dollar's use in the oil market, the decline of the "petrodollar," will lift gold over the barrier eventually. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



Notes on the Barclays gold manipulation case: Enough money can rig ANY market

 Section: 
10:07a ET Friday, May 23, 2014
Dear Friend of GATA and Gold:
Here are a few observations on the British Financial Conduct Authority's finding today that a trader for Barclays Bank manipulated the London gold fixing down one day two years ago to cheat a customer, a finding detailed by the FCA here:
1) The London gold fix, a peculiar and suspect mechanism already the target of class-action lawsuits for market manipulation, has been definitively impugned. But almost any market could have been the venue for what Barclay's did, because:
2) While the London gold fixing is not an open and transparent market and thus is more vulnerable to manipulation, the sort of manipulation in the Barclays case is not peculiar to the fixing. For with enough money, anyone can manipulate any market. That's what anti-trust law in the United States and competition law in the U.K. and European Union recognize in principle. Many investment banks have access to far more money than most traders and even access to far more money than is available to the markets in which the investment banks are trading. Some investment bank money comes effectively from government, especially when government policy is to suppress interest rates to negligible levels.
3) Having the power of money creation, central banks have infinite money and thus their market-rigging potential is virtually infinite -- at least until, in a price-suppression operation, the commodity price being suppressed is forced below the cost of production and supply is exhausted. Of course when market participants are willing to hold paper claims to the commodity rather than the commodity itself, as has been the case especially with gold but to a lesser extent with many other commodities as well, the supply of paper claims is infinite and so price suppression may be infinite as well.
4) It would be far more interesting if the market regulatory agencies in the United States, the U.K., and E.U. put to their own governments the sort of trading questions that have just been put to Barclays. But this won't happen because, at least in the United States, the government is fully authorized by law to trade surreptitiously in any market --
-- and because the central bank has the authority to monetize infinite government and private debt, to purchase infinite assets, and to rig the gold price:
As market rigging by the government is fully contemplated by law, the only thing to be done about it is to expose it. The British Financial Conduct Authority's action against Barclays for manipulating the gold market is welcome mainly for establishing that gold market manipulation is not mere "conspiracy theory" and for potentially making it a little harder for governments to rig the gold market surreptitiously with the cover of intermediaries.
Of course if governments ever have to rig the gold market in the open, as they used to do --
-- investors and gold-producing countries at last may understand that there are no markets anymore, just interventions, and may decline to be cheated as much.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


Gold market rigging is ever more documented -- and ever more suppressed by the news media

 Section: 
Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.
Committee for Monetary Research and Education Spring Dinner Meeting
Union League Club, New York
Thursday, May 22, 2014
For those of you who haven't heard of the Gold Anti-Trust Action Committee, a few words of introduction:
Since 1999 we have been collecting and publicizing evidence and documentation of the longstanding Western central bank scheme of surreptitiously suppressing the price of gold as part of a broader scheme of controlling the currency, bond, and equity markets.
The documentation is overwhelming and includes admissions by central bankers and records in government archives. Some of this material is quite current. We have posted it all at our Internet site, GATA.org:
Because of time constraints this evening I'll review only a few important items discovered in the last year.
Last June the annual report of the Bank for International Settlements confirmed that the BIS trades secretly in the gold market for its members, central banks. The BIS report said:
"The bank transacts foreign exchange and gold on behalf of its customers, thereby providing access to a large liquidity base in the context of, for example, regular rebalancing of reserve portfolios or major changes in reserve currency allocations. The foreign exchange services of the bank encompass spot transactions in major currencies and Special Drawing Rights (SDR) as well as swaps, outright forwards, options, and dual currency deposits (DCDs). In addition, the bank provides gold services such as buying and selling, sight accounts, fixed-term deposits, earmarked accounts, upgrading and refining, and location exchanges."
The BIS report continued:
"The bank operates a banking business in currency and gold on behalf of its customers. In this business the bank takes limited gold price, interest rate, and foreign currency risk."
See:
In a Power Point presentation to prospective central bank members in June 2008, the BIS actually advertised that its services include secret interventions in the gold market:
Last September at the London Bullion Market Association's conference in Rome the director of market operations for the Banque de France, the French central bank, Alexandre Gautier, reported that the bank trades gold for its own account "nearly on a daily basis" and is "active in the gold market for central banks and official institutions":
Last July GoldMoney's research director, Alasdair Macleod, discovered a 1,200-tonne reduction in the records of the Bank of England's custodial gold inventory between February and July 2013, the period encompassing the gold price smashdown of April 2013. The Bank of England refused GATA's request for an explanation of whose gold came out of the bank's vaults and why and whether this reduction had something to do with the plunge in the gold price:
Last week in correspondence with me the Swiss National Bank said it stopped leasing gold in 2011, but the bank refused to answer or even acknowledge my question as to whether the bank remains active in the gold market in any way, including the trading of gold derivatives:
I have to assume that the bank refused to answer or even acknowledge the question because it does indeed remain active in the gold market directly or through intermediaries like the BIS or Banque de France.
This week in its latest communique on gold the European Central Bank confirmed that its members consult and act secretly all the time to control the gold price. The communique said:
"The signatories will continue to coordinate their gold transactions so as to avoid market disturbances."
See:
Last November GATA discovered a particularly incriminating and instructive record in the archive of the U.S. State Department. It is the transcript of a meeting in April 1974 called by Secretary of State Henry Kissinger to consider the danger that the price of gold might get beyond the U.S. government's control.
The minutes of that meeting confirm the U.S. government's long understanding of the "golden rule" -- that is, that whoever has the gold makes the rules. The minutes explain explicitly the need for the United States to control the gold price:
Assistant Undersecretary of State for Economic and Business Affairs Thomas O. Enders: It's against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we still have some substantial gold holdings -- about $11 billion -- a larger part of the official gold in the world is concentrated in Western Europe. This gives THEM the dominant position in world reserves and the dominant means of creating reserves. We've been trying to get away from that into a system in which we can control. ...

Secretary Kissinger: But that's a balance-of-payments problem.
Assistant Undersecretary Enders: Yes, but it's a question of who has the most leverage internationally. If THEY have the reserve-creating instrument, by having the largest amount of gold and the ability to change its price periodically, they have a position relative to ours of considerable power. For a long time WE had a position relative to theirs of considerable power because WE could change gold almost at will. This is no longer possible -- no longer acceptable. Therefore, we have gone to Special Drawing Rights, which is also equitable and could take account of some of the less-developed-country interests and which spreads the power away from Europe. And it's more rational in. ...
Secretary Kissinger: "More rational" being defined as being more in our interests or what?

Mr. Enders: More rational in the sense of more responsive to worldwide needs -- but also more in our interest. ...
The transcript of this meeting is posted at GATA's Internet site:
So from the perspective of those who want free and transparent markets and limited and transparent government, the good news is that central bank intervention in the gold market to suppress the monetary metal's price is being exposed more often than ever. Sometimes it's very easy to do if you pose the right specific questions.
But there's plenty of bad news as well.
First is that the major targets of this price suppression -- gold mining companies and gold-mining countries -- have chosen to curl up and die quietly rather than fight it. Many of them have been told all about gold price suppression but will do nothing to defend themselves.
Second is that major financial news organizations all around the world have been told about the gold price suppression scheme as well but seem to have a policy of suppressing the information.
GATA has delivered to major news organizations on all continents the most important documentation and summaries of gold price suppression and what it means. While there has been some journalistic interest lately in Russia and China, and some journalistic interest in the West in regard to complaints about the daily London gold fixings, the connection to central banks has not been reported by the mainstream financial news media in the West.
I have been told by reporters at several major news organizations that the topic is simply forbidden.
For example, in March I went to Asia in large part to accept the enthusiastic invitation of a television journalist to appear on his program for what would have been the third time. On the eve of my departure, when I sought to learn the exact date and time of my appearance, the journalist's secretary told me without explanation that I would not be on the program after all. When I sought explanation from the journalist who had so enthusiastically invited me, a journalist who always had responded to me promptly and cordially, I got no response at all. I'm sure he was mortified about something that suddenly had been put beyond his control by his company's highest management. He probably had jeopardized his job.
The Western central bank gold price suppression scheme is a scheme to control surreptitiously the valuation of all capital, labor, goods, and services in the world. It is essentially a totalitarian scheme, the same scheme of currency market rigging used by Nazi Germany to loot occupied Europe during World War II. The Nazi scheme was described in detail by the November 1943 edition of the U.S. War Department's intelligence letter, Tactical and Technical Trends --
-- and by Gotz Aly's history of Nazi Germany, "Hitler's Beneficiaries" --
Today's currency market rigging scheme can be defeated only by publicity -- and publicity can defeat it, because it works only through deception.
If you believe in free markets and limited and accountable government, please look into GATA's work and urge journalists to do so as well.
Jim Grant is also a speaker here tonight and GATA sure would like to get into his financial letter, Grant's Interest Rate Observer, especially since former Federal Reserve Chairman Ben Bernanke has just told us that there won't be anything to observe with interest rates for a long time.
Once again our Internet site is GATA.org. If you need help finding something, please e-mail me at CPowell@gata.org.
Thanks for your kind attention.


Julian Phillips surmises that nearly all Western central bank gold is leased and gone

 Section: 
7:50p ET Wednesday, March 21, 2014
Dear Friend of GATA and Gold:
Gold Forecaster editor Julian Phillips earns his tin-foil hat with his new commentary, "Will Central Banks Need to Buy Gold Back from the Market?," in which he surmises that nearly all Western central bank gold has been leased and is not readily recoverable. Phillips' commentary is posted at GoldSeek here --
-- and at 24hGold here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.