Saturday, June 14, 2014

Gold & Silver ( and other PM items of note ) Report -- June 14 - 15 , 2014 ...... Ed Steer's Saturday Report - News , Data for the Week , important contributions to consider from a variety of sources .........


The Friday trading session in gold was very similar to Wednesday, as nothing much happened in price or volume terms.  It traded more or less flat throughout Far East and early London trading---and only developed a positive bias worthy of the name starting at the Comex open.  Even that six dollar 'rally' got sold down a couple of bucks in the last hour of electronic trading in New York.
The low and high ticks aren't worth my effort to look up.
Gold finished the day at $1,275.90 spot, up $2.80 from Thursday's close.  Volume, net of  June and July, was 86,000 contracts.
The silver price pattern was virtually a carbon copy of what happened in gold---and their respective charts are almost interchangeable.
The low and high price ticks were recorded by the CME as $19.47 and $19.72 in the July contract.
Silver closed the day on Friday at $19.67 spot, up 14.5 cents.  Net volume was 29,500 contracts, which is about 25 percent more volume than I wanted to see on a day like yesterday.
Platinum rallied ten bucks by 8:30 a.m. Hong Kong time on their Friday---and was still up that amount by 10 a.m. in Zurich.  But by the open of the equity markets in New York, the price was down 11 bucks from Thursday's close---and didn't do much after that.  It closed the day down another 13 dollars from its 37 buck loss on Thursday.
The palladium chart was similar to the platinum chart in many respects, except that the low came shortly after 2 p.m. in Zurich.  The price recovered from there, but sold off as the trading day in New York progressed.  Palladium close down 12 dollars on the day.
The dollar index closed late on Thursday afternoon at 80.59---and then didn't do much until 2 p.m. in Hong Kong when it began to head lower, hitting its low tick of 80.45 around 9:20 a.m. BST in London.  But by half past lunchtime over there, the index was back up to 80.67---and the slid a handful of basis points as the trading day in New York advanced.  The index closed at 80.62, virtually unchanged from Thursday's close.


The CME's Daily Delivery Report showed that 103 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The largest short/issuer was Jefferies with 100 contracts and, with the exception of Canada's Scotiabank and HSBC USA, it was "all the usual suspects" as long/stoppers.  You can check you yesterday's Issuer and Stoppers Report by clicking here.
There were no reported changes in GLD---and as of 9:43 p.m. EDT on Friday evening, there were no reported changes in SLV, either.  It's been over a week since these current rallies in both gold and silver began---and as the close of business on Friday, not one troy ounce of either metal has been deposited in these ETFs.  As a matter of fact, 1.2 million ounces of silver have actually been withdrawn from SLV during that period.
There were no reported sales from the U.S. Mint yesterday.
It was pretty quiet in gold over at the Comex-approved depositories on Thursday, as nothing was reported received---and only 996 troy ounces were reported shipped out---all out of Canada's Scotiabank.
But it was a lot more active in silver, as 285,726 troy ounces were reported received---and 523,767 troy ounces were reported shipped out.  The link to that action is here.
As expected, yesterday's Commitment of Traders Report, was not happy reading---at least in silver---and there's no way to sugar-coat it.
In silver, the Commercial net short position blew out by an eye-watering 4,682 contracts, or 23.41 million ounces.  To put that amount of paper silver into some sort of perspective, just under 16 million ounces of real silver was dug out of Planet Earth during the same reporting week.  That big blow-out in the Commercial net short position occurred on the back of a measly 40 cent price increase during the reporting week.  The Commercial net short position is now back up to 71.6 million ounces.
Ted said that it appeared that JPMorgan increased their net short position by something less than a thousand contracts---and the 'Big 8' short holders [which includes JPM] increased their total net short position by a bit under 2,000 contracts.  So it wasn't all raptor long selling that controlled a rising price as the technical funds covered short positions---it was also the 'Big 8' increasing their short position as well.
The COT Report for gold was a bit of a surprise.  The Commercial net short position actually declined by 294 contracts, not even a decent sized rounding error.  That was despite the fact that gold rose about 16 bucks during the reporting week.  Nothing to see here.  I think Ted mentioned that JPMorgan sold a few hundred contracts of its long-side corner in the Comex gold market, but that was about it.
Here's Nick Laird's classic "Days of World Production to Cover Short Positions" for every physically traded commodity on the Comex.  Last week, the 'Big 8' were short 141 days of world silver production---and in this week's chart they're now back up to 145 days, about ten million ounces worth---and right in line with Ted Butler's number of around 2,000 Comex contracts.


Best articles of the day - News and views.......

Doug Noland: Sound or Unsound?

But I look around the world today and am more worried about the future than ever before – Iraq, the Middle East, China and Asia, the emerging markets, Europe, Ukraine and Russia. The “social mood” is sour at home and abroad. Animosity. Anti-Americanism. Anti-Capitalism. Fragmentation. Conflict.
Compounding the problem, I see wildly distorted global central bank-induced Truman Show securities markets. I see a mirage of prosperity fueled by surging values of all kinds of financial (and real) assets. And I see endless electronic debit and Credit entries – contemporary finance – that is supposed to equate with unprecedented global wealth. Yet there’s a massive gulf between perceived and real wealth. I see incredible bullishness and denial in the face of deep structural issues for both U.S. finance and our economy. I see the mirage of U.S. prosperity dependent more than ever before on highly accommodating central bankers and unending bull markets. I just don’t buy the view of the U.S. as an oasis of prosperity impervious to global degradation.
On an almost globalized basis, there is this very troubling divergence between highly speculative and inflated securities markets - and a really uncertain future. I’ve argued that central bankers can’t make things better – that their monetary inflation only makes things worse. It seems obvious that a most protracted period of unsound “money” has created one hell of a mess. As for geopolitical risk, Ukraine and Russia remain issues. Asia is an accident waiting to happen. And, now, instability in the Middle East risks a blowup that could wreak havoc on global energy markets – not to mention a horrific human tragedy.

No more gas talks planned, Russia says

With a payment deadline looming, a Kremlin spokesman said Russia would sit on the sidelines Friday of talks on gas debt issues with Ukraine.
Russian, Ukrainian and European Union representatives are working to find a way to settle ongoing gas disputes. Russian energy company Gazprom says Ukraine owes billions of dollars for recent gas deliveries. Debt disputes in 2006 and 2009 resulted in a Gazprom decision to cut gas through Ukraine, which left downstream consumers in Europe short of energy supplies.
A spokeswoman for the Russian Energy Ministry told Russian news agency ITAR-TASS no talks were planned before Monday.
The report said European Energy Commissioner Gunther Oettinger had expected to continue trilateral talks by phone.

Ukrainian PM orders govt: ‘Prepare to stop Russian gas imports’

Ukrainian Prime Minster Arseny Yatsenyuk has ordered Energy and Coal ministries, regional governments, and Naftogaz to get ready for Russian gas supplies to be cut starting Monday, the cabinet’s website said.
The measure is dubbed “the energy sector’s functioning plan which involves the cessation of gas deliveries from the Russian Federation” and comes into effect on June 16, the document states.
With that, Kiev will launch its case against the Russian energy giant Gazprom at the Stockholm Court of Arbitration, the statement said. Yatsenyuk called for “preparations to be completed” for the process.
Moscow set Monday as a deadline for Ukraine to pay off part of its gas debt of $1.95 billion.

Tightening the U.S. Grip on Western Europe: Washington’s Iron Curtain in Ukraine

NATO leaders are currently acting out a deliberate charade in Europe, designed to reconstruct an Iron Curtain between Russia and the West.
With astonishing unanimity, NATO leaders feign surprise at events they planned months in advance. Events that they deliberately triggered are being misrepresented as sudden, astonishing, unjustified “Russian aggression”. The United States and the European Union undertook an aggressive provocation in Ukraine that they knew would force Russia to react defensively, one way or another.
They could not be sure exactly how Russian president Vladimir Putin would react when he saw that the United States was manipulating political conflict in Ukraine to install a pro-Western government intent on joining NATO.  This was not a mere matter of a “sphere of influence” in Russia’s “near abroad”, but a matter of life and death to the Russian Navy, as well as a grave national security threat on Russia’s border.
A trap was thereby set for Putin. He was damned if he did, and damned if he didn’t.  He could under-react, and betray Russia’s basic national interests, allowing NATO to advance its hostile forces to an ideal attack position.
Or he could over-react, by sending Russian forces to invade Ukraine.  The West was ready for this, prepared to scream that Putin was “the new Hitler”, poised to overrun poor, helpless Europe, which could only be saved (again) by the generous Americans.

Greece Wars With Courts Over Ways to Slash Budget

The Greek government has made a range of painful cuts to salaries, pensions and jobs for public workers over the last four years, saying they were needed to satisfy the demands of the international creditors that bailed the country out. But the Greeks hurt by those steps, and the nation’s courts, have a different idea.
Steadily, citizens groups — including police officers, university professors, cleaning workers and judges themselves — have challenged the cuts as illegal or unconstitutional. And in case after case, Greek courts have agreed, presenting a nearly existential question for the government: Can it actually shrink the state?
The mounting pile of judgments has now become a serious obstacle to the austerity drive of Prime Minister Antonis Samaras, with the International Monetary Fund warning this week that the “adverse court rulings” threaten to undo the country’s reforms, which its creditors are scheduled to begin reviewing in July.

Obama Says Iraq’s Leaders Must Hold Country Together

President Barack Obama said he’ll decide over the next several days whether to commit the U.S. military to helping Iraq slow an offensive by militants, while warning that the conflict won’t end unless Iraq’s leaders bridge political differences.
Obama ruled out sending ground forces and emphasized that action isn’t imminent. He said the U.S. won’t be able to prop up a government that can’t unify the country or bolster an army unwilling to confront the Sunni extremists who are waging a battle against the Shiite leadership in Baghdad.
“This is not solely, or even primarily, a military challenge,” Obama said at the White House today. “We’re not going to allow ourselves to be dragged back” into trying to keep a lid on unrest and have Iraqi leaders undermine chances for an accommodation with foes.
“This should be a wake up call; Iraq’s leaders have to demonstrate a willingness to make hard decisions and compromises on behalf of the Iraqi people in order to bring the country together,” he said. “We can’t do it for them.”

Banks urge Indian government not to write off gold loans

In what is being termed the single biggest populist measure initiated by any state government in India, Andhra Pradesh's new Chief Minister (CM) Chandrababu Naidu is all set to waive off a staggering $9 billion (Rs 540 billion) in loans taken by farmers from various banks.
At the first Cabinet meeting on Thursday at Vishakpatnam, discussion on farm loans waiver took centre stage. Ministers expressed their opinions on conditions for the farm loan waiver, which has been set at a limit of $1,681 (Rs 100,000) per loan. While some of them sought to exclude gold loans, others wanted it to be included. Instead of repaying the banks, the state is set to issue bonds to them.
Koti Reddy, a farmer from Chavuluru village of Guntur district, Andhra Pradesh, is awaiting clearance on the waiver of his gold loan. 
Along with his friend Ramesh Seshagiri, another farmer, Reddy had obtained a loan of $5,039 (Rs 300,000) mortgaging his ancestral gold ornaments. Seshagiri, on the other hand, refused to mortgage his gold, and had taken a $3,000 loan from the bank with his crop as surety.

Koos Jansen: Shanghai Gold Exchange chairman explains its objectives

Gold researcher and GATA consultant Koos Jansen provides an English translation of a news report about a speech by Shanghai Gold Exchange Chairman Xu Luodo, explaining the exchange's plan to become a major international exchange increasing China's influence on the gold price and facilitating the internationalization of the nation's currency.
Xu's speech also confirms that Shanghai Gold Exchange off take is equivalent to China's total gold demand.

Eric Sprott: Gold shortage coming

I am very excited about developments in the gold and silver markets today. I have been speculating since late 2012 that Western central banks could be running out of gold. I put the sell-off in gold and silver in 2013 to the fact that the Western banks needed a way to generate physical gold supplies. As the metals prices went down, there was a lot of liquidation of gold which increased the supply by an estimated 900 tonnes last year.
Let’s look at the figures. The annual supply of gold is around 4,300 tonnes. 3,000 tonnes come from mining and the other 1,300 tonnes or so from recycled material. In 2013, an additional 900 tonnes came onto the market from ETFs that were being liquidated – a supply increase of around 21%.
Quite frankly, I believe this was all orchestrated in order to create this supply. During the time when the price was knocked down, a tsunami of buying started. India bought 336 tonnes from April to June of 2013. I’m sure that the central bankers went to the Reserve Bank of India and said: “You’ve got to stop people from buying gold.”
Of course, the Reserve Bank of India went on to create rule after rule to try to stop people from buying gold. They managed to get monthly imports of gold down to around 20 tonnes from its normal imports of around 80 tonnes per month. Obviously, those official numbers leave out smuggling, which probably makes up a very large amount of gold imported into India.



If there is one single factor responsible for the long term silver manipulation it is the concentrated short position, of which JPMorgan has been the kingpin of since acquiring Bear Stearns in 2008. Given all the history, circumstances and stakes to certain large financial and regulatory institutions, I’m convinced that the price of silver would have already blown off were it not for the concentrated short position.  The concentrated silver short position was always too large; as became clear in time by the damage it did to Bear Stearns. It also seems clear that because the concentrated short position was transferred to JPMorgan, the regulators have looked aside as JPMorgan and the CME Group resorted to a series of dirty tricks to assure silver prices would decline so that the concentrated short position could be protected and reduced. - Silver analyst Ted Butler: 07 June 2014
Today's pop 'blast from the past' will only be familiar to Canadians of a certain vintage, as it was a fairly big hit in this country in its day, although it did make it to #56 on Billboard's Top 100 in the U.S. back in 1979 when it was released.  It was the one and only hit of a German-Canadian group called Deliverance.  I posted this years ago when I first found it on Youtube---and in my humble opinion it's worth revisiting.  The link is here.
Today's classical 'blast from the past' is the Adagio from the Concierto de Aranjuezby Spanish composer Joaquín Rodrigo, which he wrote in 1939.  Very little music was every written for the guitar and orchestra---as an acoustic guitar tends to get buried even during the quiet passages---and every time I've heard the guitar with orchestra, it's always been miked---which is OK.  If I had to pick the most beautiful piece of music ever written for guitar and orchestra---this is it, as it's one of the most recognizable works in 20th century classical music.  The link ishere.  Enjoy!
It was another quiet trading day on Friday.  Gold volume was pretty quiet, but as I stated further up, silver's volume was quite a bit higher than I wanted to see---and it's entirely possible that there was quiet short covering going on by the technical funds in silver now that all [except the 200-day] the moving averages have been broken to the upside.  Once again, the preliminary volume numbers for Friday from the CME Group didn't help clear up the situation much.
Here are the 6-month gold and silver charts updated with Friday's price data.  The moving averages plotted are the 25 and 50-day.
As I mentioned further up in this column, we've been in rally mode in both gold and silver for about two weeks now---and there are still no deposits being made into either GLD or SLV.  This is a situation that I'll be watching with great interest---and some concern.  I'm expecting/hoping that all the required gold will show up in GLD, but my major concern is with SLV, because if the authorized participants [read JPMorgan] can't rustle up the metal, they'll short the shares in lieu of---and possibly engineer a price decline in the future that will allow them to buy back those short positions without ever having to deposit the metal itself.
That's why I consider both these ETFs, but SLV in particular, to be totally fraudulent. The current short position in SLV is north of 14 million ounces/shares---and it will be interesting to see what the new short position in this ETF [as of the close of trading yesterday] will be when the numbers show up on the Internet site towards the end of this month.
And as Eric Sprott pointed out in his comments in the last story of the day posted above, there appears to be a gold shortage looming on the horizon---and if that's truly the case for gold, then the coming silver shortage will dwarf that.  It would be here now if the short holders in SLV were required to deposit the equivalent amount of metal, which is why they authorized participants will short the shares, because buying and delivering the physical metal itself would explode the price.
I don't know about you, dear reader, but in my almost 66 years on this planet, I don't remember a time [except for maybe the Cuban missile crisis back in the 1960s] where the whole world seems about to float off the rails.
How long can this charade last, you ask?  It beats the hell out of me, but the closer to the end we get, the more I've convinced that it will end with a bang, rather than a whimper.  So we wait.
That's it for the day---and the week.
See you on Tuesday.


Additions ....


Ned Naylor-Leyland interview with Lars Schall covers gold market manipulation

2:51p ET Thursday, June 12, 2014
Dear Friend of GATA and Gold:
Because of gold's supreme importance in the world financial system, the gold market should be the most transparent market but it is actually the least so, Quilter Cheviot Investment Management's Ned Naylor-Leyland tells financial journalist Lars Schall today. The interview, conducted for Matterhorn Asset Management's Gold Switzerland Internet site, covers gold market manipulation, the failure of the financial news media to treat the issue honestly, and the need for investors in the monetary metals to be patient in anticipation of a reset of the world financial system. The interview is 23 minutes long and can be heard at the Gold Switzerland Internet site here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Koos Jansen: March Indian gold imports highest in 10 months

8p ET Thursday, June 12, 2014
Dear Friend of GATA and Gold:
Because of rampant smuggling, official gold import data in India grossly underestimates the nation's gold demand. But gold researcher and GATA consultant Koos Jansen today reported something meaningful in the latest import data: a huge increase.Jansen writes that the figures for March showed Indian gold imports up 88 percent from February -- and of course India's new government is expected to relax import restrictions soon. Jansen's report is headlined "March Indian Gold Imports Highest in 10 Months" and it's posted at his Internet site, In Gold We Trust, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

China needs gold to protect its currency, Stoferle writes for KWN

3:18p ET Thursday, June 12, 2014
Dear Friend of GATA and Gold:
Writing for King World News, Ronald-Peter Stoferle of Incrementum AG in Liechtenstein argues that as China's foreign exchange surplus falls and the value of the yuan starts to be questioned, China is buying gold to protect its currency as well as to diversify its currency reserves. Stoferle's commentary is posted at the KWN blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Koos Jansen: March Indian gold imports highest in 10 months

8p ET Thursday, June 12, 2014
Dear Friend of GATA and Gold:
Because of rampant smuggling, official gold import data in India grossly underestimates the nation's gold demand. But gold researcher and GATA consultant Koos Jansen today reported something meaningful in the latest import data: a huge increase.Jansen writes that the figures for March showed Indian gold imports up 88 percent from February -- and of course India's new government is expected to relax import restrictions soon. Jansen's report is headlined "March Indian Gold Imports Highest in 10 Months" and it's posted at his Internet site, In Gold We Trust, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.