Gold recovered from its little pounding in early Far East trading on Friday morning… and then rallied right into the Hong Kong close. But once the Far East was done trading for the weekend, the selling pressure resumed into gold’s New York low of $1,169.60 spot, which occurred a few minutes after 9:30 a.m. Eastern time. From that low, gold rallied into the London p.m. fix at 10:00 a.m. New York time, before getting sold off… but then rallied to its high of the day [$1,188.90 spot] about 11:45 a.m. Eastern. Then it got sold off into the Comex close… and flat-lined for the rest of the trading day. All in all, it wasn’t a very exciting trading day… but a new low was set for this move down… and, without doubt, there was more tech fund long liquidation.
Silver traded in a twenty cent range for virtually the entire day on Friday… but the bullion banks did set a new low price for the move. That low came at the same time as gold’s… minutes after 9:30 a.m. in New York. That low price was $17.40 spot… followed by silver’s high at 11:45 a.m. Eastern time at $17.88 spot. From there, silver drifted lower into the close and finished up a whole penny from Thursday. With that new low for this move down, there was certainly more tech fund long liquidation.
The dollar was all over the map during Friday’s trading… but ended up closing down a little over 50 basis from its Far East open at 6:00 p.m. on Thursday evening. Needless to say, the dollar’s movements had no effect on precious metals prices yesterday. Here’s the 3-day dollar graph. In those three days, the dollar has lost about 175 basis points… and the precious metals got creamed. But as you know, dear reader, the precious metals price action was in the hands of the bullion banks… and when that’s going on, it matters not what the dollar is doing.
The HUI chart pretty much followed the gold and silver price action… with the low of the day coming at the lows for these two metals…which was minutes after 9:30 a.m. Eastern time… and moments after the equity markets opened. It’s all there… the London p.m. gold fix, the little sell-off afterwards, the rise to the highs of the day around 11:45 a.m… then the slow decline until 3:15 p.m. Eastern time when the Plunge Protection Team showed up [for the second time] to goose the equity markets and reverse a serious decline in the Dow. It worked like a charm… and also lifted the HUI to a positive close of 0.32% on the day. We owe “Helicopter Ben” et al a big thank you for that.
The CME’s Daily Delivery report showed that 172 gold and 35 silver contracts were posted for delivery on Tuesday. The list of issuers and stoppers may be of interest to some… and the link is here. There were no changes reported by either the GLD or SLV ETFs yesterday… and considering how badly the prices of both gold and silver have been crushed during the past week, this is quite amazing.
The U.S. Mint had another report yesterday. One-ounce gold eagle sales were up another 15,000 to 142,500 for the month so far. Another 3,500 24k-gold eagles were also sold… for a total of 61,000 for the month. And 381,000 silver eagles were sold as well… bringing April’s silver eagle sales up to a whopping 3,040,500 for the month. These are huge numbers, dear reader… and as I’ve been saying all week, it’s a good bet that a lot of these bullion coins are headed for Europe. I hope you’re getting your share as well.
The Comex-approved depositories showed another decline on Thursday. This time they reported silver stocks down 582,801 troy ounces. The 2.4 million ounces that the Comex brought in a week ago Friday, was obviously meant for the deliveries that have been ongoing all this past week… and they’ve gone through most of it in the last four days. You may ask [and rightly so] why the Comex just doesn’t deliver from the stocks they have on hand. Well, there’s a very good reason for that, and it goes like this… every single ounce of that silver sitting in those four Comex warehouses is owned by someone; a financial institution, a user, a private investor… and the list goes on. Of that group, nobody wants to sell at the current price, so if the Comex wants to fulfill their delivery requirements, they have to bring in silver from outside the Comex for that purpose… or they would be in default… and that’s what they’ve been doing. On the other hand, if they couldn’t get it from outside sources, then they’d have to bid up the price high enough that some of the holders of Comex silver would be willing to part with it. And that, dear reader, would drive the silver price up substantially in a very short period of time… and we mustn’t have that, now must we?
First Gold Exploration Inc. (TSXV : EFG), (Fankfurt : F12) continues to confirm the continuity of mineralized zones at its major rare-earth elements discovery of lithium, tantalum, rubidium and beryllium. In a continuing drill program at the company’s 85%-controlled Pivert/Rose Property near James Bay in NW Quebec, 30 of the 32 new holes drilled to date have intercepted continuing high-grade mineralization. The mineralized surface area has now expanded to 200 meters by 200 meters, returning values of up to 1.59% LI2O, 916 g/t TA2O5, 4,778 g/t rubidium, 254 g/t beryllium and 786 g/t cesium. Core samples from holes LR-10-28 through LR-10-42 are now in the laboratory, and further results should be released shortly. Positive results for these holes will substantially increase the size of the mineralized zones reported this week. True widths reported for holes LR-10-11 through LR-10-27 range up to 12.45 meters, averaging approx. 15 meters on 2 sub horizontal zones very near surface.
Rubidium has significant applications in advanced opto-electronics, while lithium and tantalum also have extensive electronics and battery-power applications.
As well, the Company is earning a 50%-interest in the prior-producing San Javier Gold/Silver/Base Metals Mine in Sierra Madre Del Sur, Mexico. Sampling has confirmed significant bonanza-grade zones of silver in multiple extensive vein structures at the mine.
EFG has 75 million shares outstanding, and approx. 98 million shares fully diluted.
Management: Eric Leboeuf, CEO; Richard Groome, Chairman; and Jean-Sebastien Lavallee, Director, a geologist who was formerly associated with Agnico-Eagle Mines, Noranda Minerals and Uracan Resources. The company is headquartered near Montreal.
Visit Exploration First Gold and register to receive breaking news.
The Commitment of Traders report was a disappointment… at least for me… although Ted Butler had an explanation which, quite frankly, would be over the heads of most people… so I will not get into here. Ted explains some of it in his weekly interview with Eric King over at King World News further down.
Anyway, the COT report [for positions held at the end of trading on Tuesday] showed that the bullion banks increased their net short position in silver by an absolutely monstrous 6,700 contracts… which translates into 33.5 million ounces of paper silver. That’s 18 days of world silver production that the bullion banks went short in one five day period! There are currently 89,453 contracts held short in the Commercial [bullion bank] category. Of that amount, the ‘4 or less’ traders are short 49,500 contracts of that… which is 55.3% of the entire gross short position. The ‘8 or less’ traders are short 73.6% of that 89,453 contracts. This concentration is grotesque and obscene. A lot of people should be in jail for this.
There was a small improvement in the Commercial net short position in gold this past week… but it was a miniscule 2,900 contracts. The net paper short position in gold [as of Tuesday’s cut-off] stood at 28.0 million ounces. The ‘4 or less’ bullion banks hold 21.5 million ounces of that… and the ‘8 or less’ traders hold 27.1 million ounces short.
Lot of people think that this situation is perfectly OK… but we know better. The link to this week’s COT report is here.
Of course, since the Tuesday cut-off, the bullion banks have been covering shorts [or going long] like crazy every since… and next Friday’s COT will show a vast improvement. How vast still remains to be seen.
Here’s Ted Butler’s interview with Eric King over at King World News… and I urge you to stop reading and listen carefully to what he has to say. The link is here.
Well, it’s now official, German lawmakers bit the bullet and bailed out Greece… and the associated EU bankers. I thank Washington state reader S.A. for sending me this Bloomberg story headlined “German Lawmakers Approve Share of $1 Trillion Bailout”… and the link is here.
Along a similar line, comes this story posted at the English language website of france24.com. It’s courtesy of reader Roy Stephens… and the headline reads “EU agrees on coordinated action, financial sanctions”. In my opinion, all this does is delay the inevitable… and the link is here.
Here’s another Bloomberg story courtesy of reader S.A. The headline reads “CFTC Set to Limit Oil Speculation With Senate Backing”. It remains to be seen if CFTC chairman Gary Gensler et al, get around to setting position limits in silver. He know what has to be done… but will he do it? The link to the story is here.
This next item is a very short read… and has an interesting set of numbers to go with it. The title is on the longish side… but explains all… “32 States Have Borrowed from the Federal Government to Make Unemployment Payments; California Has Borrowed $7 Billion” It’s a very short read… and the list of states [and amounts] is shocking. I thank reader Scott Pluschau for bringing it to my attention. It’s posted over at economicpolicyjournal.com… and the link is here. It’s worth your time.
Here’s another story provided by reader Roy Stephens. This one is about silver. The article was written by Mark O’Byrne, director of GoldCore… and it’s posted over at moneyweek.com and bears the headline “Why silver could soon take off”. There are a lot of good graphs… and it’s certainly worth the read… and the link is here.
The next story is definitely gold related… and is headlined “10 Gold Charts Commercial Investment Firms Never Want Clients to See”. There are very good reasons why they don’t want to, either. The charts show that, priced in gold, most Western stock indexes have declined over the last decade. This is an excellent piece… and is a must read. It’s posted over at theundergroundinvestor.com… and the link is here.
The next gold-related story is also very much worth your time. It’s a piece from today’s edition of The Wall Street Journal. Since you would normally need a subscription to view the whole thing… GATA was kind enough to post it in the clear. The headline reads “A Billionaire Goes All-In On Gold”… and the link to this must read story is here.
Here’s a story courtesy of reader Scott Pluschau that arrived in my in-box at 5:32 a.m. Eastern time this morning… just before I hit the ‘send’ button on this column… so I inserted it here. It’s from today’s edition of The Borneo Post of all places. The ‘Golden Dinar’ has been out of the news for many years… but it’s back again. The headline reads “Support gold dinar as alternate trade instrument, World Islamic Economic Forum members told”. The story is definitely worth your time… and the link is here.
Lastly today is another interview from the King World News web site. This one is with the always-popular Jim Rickards. As you are aware, dear reader, he’s only one of a small handful of people that I have all the time in the world for. Gold is one of the topics de jour in this interview… as is financial warfare… which F. William Engdahl spoke of yesterday. This is a must listen interview from one end to the other… and the link is here.
My ‘blast from the past’ today is a video I posted at least two years ago… and since I have many orders of magnitude more readers now… I will take the liberty of posting it again. It’s one of my favourite songs from the 1970s… and this one hails from 1976. Everyone knows it… and you can sing along if you wish. So turn up your speakers and click
Without a doubt, if the President’s Working Group on Financial Markets [the PPT] hadn’t shown up at the beginning of trading… and also again in the late afternoon on Friday… the markets would have melted down again… as that was where they were going in a hurry. Gold was headed north… and the stock markets were headed south. If that had been allowed to happened on a Friday in North America, the bloodbath in the Far East and Europe on Monday would have been catastrophic. That wasn’t allowed to happen… but it was oh so obvious… both in the stock market and the gold price.
As I keep saying… the world’s current economic, financial and monetary system is on the verge of total collapse. The only thing that concerns me is how soon it will come… and how bad it will be. That’s why I’m “all in”… like that billionaire in that story earlier in this column. I have a feeling that when gold and silver are allowed to melt up… there will be little or no entry points for anyone sitting on the sidelines. After 10 years of this… I’m not going to risk being out of position when the precious metals markets blow up, or the equity markets melt down… either accidently or deliberately.
It’s impossible to tell how far along in the liquidation cycle we are. Only JPMorgan et al know that… as do the powers that be at the Fed and the U.S. Treasury Department. I think that we’ll have to wait until June before we see any major improvement in precious metals prices. At the moment, both gold and silver are badly beaten up, but they don’t hold a candle to what happened to platinum and palladium. We should be thankful the these kinds of loses have not been visited on either gold or silver… at least not yet.
Here’s the 3-year palladium chart.
And the 3-year platinum chart.
Enjoy the rest of your weekend… and I’ll see you right here on Tuesday morning.