Tuesday, June 10, 2014

Gold , Silver and PM Report June 10 , 2014 -- Ed Steer's report for June 10 , 2014 -- News , Data and views touching on the precious metals ....... additional items after Ed's Daily " Wrap " !



The gold price didn't do much of anything in Far East trading on their Monday morning.  A bit of a rally started around 1 p.m. Hong Kong time---and that lasted until the 8:20 a.m. EDT New York open.  But by the time "da boyz" were done at the 5:15 p.m. electronic close, they had closed it down on the day.  Volumes were exceedingly light.
The high and low are barely worth looking up, but here they are anyway.  The high was $1,57.30---and the low was $1,251.60 in the August contract.
The gold price closed on Monday at $1,252.00 spot, down 30 cents from Friday's close.  Volume, net of June and July, was around 57,000 contracts, which is basically no volume at all, so it wasn't difficult for anyone with an agenda to manage the price, which is what happened.
Silver's rally in the Far East on Monday began about an hour later than gold's, around 2 p.m. local time in Hong Kong.  The rally, such as it was, picked up a bit more steam after the London silver 'fix' was in but, like gold, the rally got capped at the New York open.  Silver was allowed to close up a few pennies on the day.
The low and high ticks were recorded by the CME Group as $18.985 and $19.19 in the July contract.
Silver closed on Monday at $19.055 spot, up 4.5 cents from Friday.  Net volume was a hair under 20,000 contracts, as the roll-overs out of the July contract are now on in earnest.
Platinum had a trading pattern similar to gold and silver---and also got sold down at the New York open.  The bottom was in an hour and a bit before the Zurich close---and it rallied back to a bit above unchanged by 12:30 p.m. in New York, finishing almost flat on the day, down a buck.
Palladium didn't do much, but the tiny gain at the New York open also disappeared---and palladium was closed down 3 bucks.
As I keep saying, you'd sure never know that there was a 20-week old strike going on in one of the world's largest platinum/palladium producing countries the way the prices of these two metals are acting, or allowed to act.
The dollar index finished the Friday session at 80.425---and barely moved until it rolled over a bit shortly before 2 p.m. Hong Kong time.  The low of 80.31 came minutes before London opened---and the subsequent rally topped out at 80.67 at, or very close to, the London p.m. gold fix.  After that it faded a few basis points---and closed that at 80.624---up 20 basis points from Friday's close.
The gold stocks opened slightly in the black---and struggled to stay there for the rest of the trading session.  However, they gave up the ghost just before 3:30 p.m. EDT---and closed down 0.41%.

The CME Daily Delivery Report showed that zero gold and 12 silver contracts were posted for delivery on Wednesday within the Comex-approved depositories.  The link to yesterday's Issuers and Stoppers Report is here.  There are still over 1,100 gold contracts open in the June delivery month---and it will be interesting to see when the short/issuer steps up to the plate---and even more interesting will which bullion bank it is, as I'm sure it's only one.
There were no reported changes in GLD yesterday---and as of 6:25 p.m. yesterday evening, there were no reported changes in SLV, either.
The U.S Mint had a decent sales report on Monday.  They sold 4,000 troy ounces of gold eagles---and 375,000 silver eagles.
Over at the Comex-approved depositories on Friday, there was a decent withdrawal in gold, as HSBC USA shipped out 74,957 troy ounces of the stuff.  The link to that activity is here.
It was a very busy day in silver once again, as they reported receiving 614,506 troy ounces---and shipped out 439,914 troy ounces.  The link to that action ishere.
Now that I've read Ted Butler's weekend review---and had a chance to talk to him after the fact---I have a few more things to report regarding the Commitment of Traders Report on Friday.
In gold, as I suspected, JPMorgan added to its long-side corner in the Comex gold market.  Ted said they purchased an additional 4,000 contracts---and they're now sitting at 38,000 contracts, or 3.8 million ounces.  Ted mentioned that the big sellers in gold were the technical funds, which added nearly 19,500 new short contracts on top of the 22,000 they added in the previous COT report.
In silver, I said that we'd reach a new low in the Commercial net short position.  That was wrong.  But it's the lowest level since last July.  The technical funds hit a new record short position when they added more than 4,300 short contracts on top of the 5,200 short contracts they added the prior week.
But the big surprise that Ted talked about was that JPMorgan reduced their net short position in silver by about 4,000 contracts---and their new short-side corner in Comex silver is now down to 14,000 contracts, the lowest level since February---and one of the lowest levels since they assumed the short position from Bear Stearns back in 2008.
Ted is a world authority on the COT Report---and I thank him for all of the above.
I did sort of catch the drop in the Commercial short position in another way.  I mentioned in Friday's column when talking about Nick's "Days to Cover Comex Short Positions" chart, that the short positions of the 8 largest short holders had fallen by eight days of world silver production from the prior reporting week. That's about 18 million ounces, which is 3,600 Comex contracts, which is pretty close to the 4,000 contracts that Ted mentioned that JPMorgan covered during the current reporting week.
I received a very interesting e-mail from reader Rick Cordes on the weekend---and being in the retail bullion business myself,  I though it worth sharing.
Hi Ted and Ed,   I hope this finds you well.  I wanted to share with you a new website that my friend Chris Mendola and I have developed calledwww.AllEngelhard.com.  Joshua Gibbons was kind enough to turn over his Engelhard "Definitive Pages" to Chris last year (as referenced on Joshua's about.agsite), and this has opened the door for a new platform which has now become a standard for Engelhard enthusiasts as well as Ebay auction reference.  Over the past 10 years, Chris and I have been fascinated by, and have focused almost exclusively on, collecting older poured Engelhard silver bars.  Through arduous digging, we have found no known lists indicating production numbers or serial number ranges of any varieties of Engelhard bars, so we set a mission to create our own serial number registry to define production ranges and mintages.  The fact that nearly all Engelhard bars were serial numbered by the time production ceased in 1986 has created a market not unlike that of numismatics. We hope you enjoy navigating through this site!
Rick Cordes, Managing Partner
1343 Locust Street, Suite 202
Walnut Creek, CA 94596


No redundant news and views ...

Russian companies prepare to pay for trade in renminbi

Russian companies are preparing to switch contracts to renminbi and other Asian currencies amid fears that western sanctions may freeze them out of the U.S. dollar market, according to two top bankers.
"Over the last few weeks there has been a significant interest in the market from large Russian corporations to start using various products in renminbi and other Asian currencies and to set up accounts in Asian locations," Pavel Teplukhin, head of Deutsche Bank in Russia, told the Financial Times.
"Given the extent of our bilateral trade with China, developing the use of settlements in roubles and yuan [renminbi] is a priority on the agenda, and so we are working on it now," he told Russian President Vladimir Putin during a briefing. "Since May we have been carrying out this work."
This Financial Times story from Sunday was posted in the clear in a GATA release.

Deutsche Bank sets up bullion vault in London

Deutsche Bank said on Monday it begun operating a precious metals vault in London, joining a series of other institutions that offer to store gold in the global centre of the over-the-counter bullion market.
The vault has a capacity of 1,500 tonnes, making it significantly bigger than a 200-tonne storage facility that the bank owns at the Singapore Freeport. Other vaults are in Hong Kong, Zurich and New York.
The bank announced it would open a London vault in March 2012, when gold prices stood around $1,590 an ounce and investment demand was growing.

Jim Rickards interviewed by Physical Gold Fund

May 29, 2014 Interview with Jim Rickards on ratio of paper money to physical gold, a monetary reference back to gold to restore confidence, a $7000-$9000 gold price, the debate over gold manipulation, hedge fund stops create cascades in the gold price, the $400 billion Russo-China energy deal and what it means for shifting geo-politics, the IMF “Central bank to the world” and how it operates, the next liquidity crisis, the final backstop for money after the IMF, the function of the BIS, and gold/GDP ratios.

India's gold buyers make the most of lower prices

Jewellery shops in the city are witnessing a surge in the number of customers as they don't want to miss out on the plunging gold prices. Gold was quoted at Rs 2,539 per gram on Saturday, a considerable decline from Rs 2,830 a month ago.
The Chinnakadai Veethi, which houses many jewellery shops, is bustling with gold buyers, mostly women. Leading jewellers here said there is a spurt in the number of customers, particularly during weekends. Many families are purchasing favourite designs they have been longing to wear for long. Some even arrive with neighbours and friends to make the right selection from an array of jewels coming in myriad designs and weights.
"The lower prices have prompted jewellers to come up with new, attractive designs," said Kalyani S, a housewife who has been planning to buy at least two sovereigns for the past few months. She had been regularly checking the gold prices and finally decided to make the purchase on Saturday. "I saved nearly Rs 7,000," she added.

Indian, Chinese Central Banks on Track to Absorb 90% of Gold Mine Output

Indian and Chinese central banks on track to absorb the equivalent of 90% of all mined gold production this year, said ETF Securities in its Precious Metal Weekly.
China, India and central banks absorbed just over 80% of global mine supply in 2013 according to recent data. Recent data indicates that these three entities alone are likely to absorb the equivalent of nearly 90% of mine production in 2014m said ETF Securities.
Demand from India is likely to increase with the curtailing of the 2013 import restrictions . Central banks purchased 122 tons of gold in Q1 which is essentially unchanged year-on-year and China’s imports of gold from Hong Kong are up 18% year-on-year as of April . On a similar note, sales of U.S. mint silver coins are on pace in 2014 to surpass the record 35 million ounces sold in 2013.
The US mint must purchase its silver from U.S. sources and the amount of silver mined in the U.S. in 2013 was only 35 million ounces. Most of the demand for silver is for industrial purposes and inventories are the lowest in decades - the majority in ETFs.
The above four paragraphs is all there is to this scrapregister.comnews item, filed from Mumbai at 6:35 a.m. BST this morning.  It was picked up by the metal.com Internet site---and I found it on the Sharps Pixley website minutes after I filed today's column.


In Friday's silver COT Report, the technical funds added more than 4,300 new Comex short contracts, on top of the near 5,200 shorts they added last week. At more than 42,800 contracts short, the technical funds have added an astounding 33,000 short contracts since the end of February, the equivalent of 165 million oz of silver. To put the price impact of the equivalent 165 million oz in proper perspective, please consider that both the Hunt Brothers and Warren Buffet bought less than this amount in causing silver prices to explode. How could 165 million oz sold in a few months not have the same effect to the downside? - Silver analyst Ted Butler: 07 June 2014
Like Friday, there was little volume associated with the price action on Monday.  However, also like Friday, it was obvious that the prices of all four precious metals were kept on a short leach starting when New York opened yesterday.
Here are the 6-month charts in both gold and silver with Monday's data in place.  Once again they are shown with their 20 and 50-day moving averages.
Gold came nowhere near its 20-day moving average.  However, silver touched its 20 day moving average for the second day in a row.
Whether it be the engineered "summer doldrums" or some other form of price management, it should be obvious that until silver and gold are allowed to penetrate these critical moving averages to the upside, we won't see a lot of short covering by the technical funds.  But when that does happen, either by a rising price, or a falling moving average---or a combination of both---how high we go and how fast we get there, will be entirely depended on how willing the raptors are to sell their long positions for a profit.  Will they let the tech funds off easy, or let the price melt up?  What will JPMorgan do in this circumstance---cover, put their hands in their pockets, or sell short once again?  As Ted Butler has been saying for years---it's these actions alone that determine how high prices go on any given rally.  That's all there is---there ain't no more---no matter what anyone else says.
And as I type this paragraph, it's still about one hour and forty minutes to the London open.  None of the precious metals are doing anything, although gold is up a couple of bucks, and everything else is flat.  Volume is ultra quiet, with gold at 8,000 contracts---and silver a hair under 2,000 contracts.  Not a creature is stirring at the moment---and the dollar index is trading as flat as pancake as well.
Since today is Tuesday once again, the cut-off for this Friday's Commitment of Traders Report comes at the 1:30 p.m. EDT close of Comex trading.  Using the past as prologue, I'll be amazed if much happens, or is allowed to happen as the remainder of the Tuesday trading session unfolds.  However, you just never know.
I was quite surprised to note that JPMorgan had covered a chunk of their short-side corner in the Comex silver market---and I'm wondering if there's more to come or not.  It would take another engineered price decline of biblical proportions to accomplish that feat---and I'll be prepared to bet that they won't be able to cover this short position fully.  However, they're probably covered in other markets.
And as I send this off to Stowe, Vermont at 4:50 a.m. EDT---I see that gold is back down to almost unchanged, silver is down about a dime from its close in New York on Monday---and the rallies at the London open in both platinum and palladium ran into not-for-profit sellers almost immediately, but are still attempting to rally regardless of that.  The dollar index, which had been down a handful of basis points going into the London open, is now up the same amount.
It could be an interesting trading day and, as usual, nothing will surprise me when I roll out of bed and check the charts later this morning.
I hope your day goes well---and I'll see you here tomorrow.

Additional items.....


09 JUNE 2014

Gold Daily and Silver Weeky Charts - Better Call Saul

It is hard to miss the price capping and manipulation on the metals market at the Comex, unless one does willfully so. And there are certainly those who do, and I suspect you know who they are.

There was little action on the metals front last Friday as the clearing and warehouse reports below demonstrate. The action has shifted to the East.

I expect the markets to unravel their story about the future somewhat slowly over the summer. This goes for stocks, bonds and commodities. We are seeing a great reckoning between reality and the will to power.

If anyone is near to a fiduciary responsibility for the obligations for gold and silver bullion delivery, or even large positions of naked shorts in stocks, and they do not personally have title and possession of the metal or the equities, I would probably suggest that they get out or start lawyering up now, with a well thought out Plan B involving offshore accounts and domiciles.  You can always try for a Presidential pardon later on.   I suspect it will become the fashionable thing to do.

If this convoluted system of asset rehypothecation starts breaking bad it is going to make MF Global look like a church picnic.  'Everyone was doing it' is not an unassailable defense, and 'I had no idea what was going on'' only works for those with very lofty connections and office.

Have a pleasant evening.

Alasdair Macleod: Market positions for gold and silver

11:35a ET Monday, June 9, 2014
Dear Friend of GATA and Gold:
Futures market positions in gold and silver indicate the likelihood of a short squeeze since the biggest trading banks are not as short as usual, GoldMoney research director Alasdair Macleod writes today. His commentary is headlined "Market Positions for Gold and Silver" and it's posted at GoldMoney here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.