24 May 2016 — Tuesday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
NOTE: If you’re still not receiving my daily commentary by e-mail, please hit the ‘Contact Me’ button and let me know—and I will have your name put on the list. And if you are getting it—and you’re missing a day here and there—check your ‘junk’ e-mail, plus the ‘junk’ e-mail folder of your ISP, as it’s most likely in one of those two places. – Ed
Gold was up two dollars around 1 p.m. HKT on their Monday afternoon—and at that point the HFT traders and their algorithms began pressuring the price, with the low tick of the day coming right at the open of the equity markets in New York on their Monday morning. The price chopped higher from there until the COMEX close—and then traded sideways until about 3:40 p.m. At that point a thoughtful not-for-profit seller appeared and pealed about three bucks off the price into 4 p.m. EDT close of the stock markets. From there it traded sideways.
The high and low ticks were reported by the CME Group as $1,256.80 and $1,243.50 in the June contract.
Gold finished the Monday session at $1,248.20 spot, down $3.70 from Friday’s close. Net volume was very much on the lighter side at just under 114,000 contracts. Roll-over volume was heavy.
Silver chopped sideways a nickel either side of unchanged until 1 p.m. Hong Kong time. Then, like in gold, the algorithms got spun—and silver was at its low of the day an hour later—and was bounced off that price several times after that, with the final bounce at the 9:30 a.m. EDT open of the equity markets in New York. Silver hit its New York high thirty minutes later at the p.m. gold fix—and then chopped more or less sideways until it ran into the same not-for-profit seller just before 4 p.m. EDT.
The high and low tick in silver was reported by the CME Group as $16.59 and $16.325 in the July contract.
Silver was closed in New York yesterday afternoon at $16.35 spot, down 15 cents on the day. Net volume was reasonably quiet at just under 35,000 contracts.
Platinum’s high tick of Monday also came at 1 p.m. HKT—and ‘da boyz’ took platinum down to $1,004 spot just after 9 a.m. EDT before they relinquished temporary control—and then allowed it to rally a bit once the New York equity markets opened. That rally wasn’t allowed to get far—and the price didn’t do much after that. Platinum finished the Monday trading session at $1,010 spot, down an even ten bucks from Friday.
The palladium price was given the same treatment as platinum by the powers-that-be—and it was closed down 10 dollars the ounce as well at $548 spot.
The dollar index closed late on Friday afternoon in New York at 95.27—and rallied about 10 basis points when trading began at 2 p.m. EDT on Sunday afternoon. The 95.10 low tick came precisely at 8:00 a.m. BST, which was the London open. The 95.48 high tick came a minute or so before the open of the equity markets in New York yesterday. It rolled over from there—and got rescued by the usual ‘gentle hands’ at exactly 2:00 p.m. EDT. The index rallied weakly for a couple of hours, before trading mostly flat into the close. The dollar index finished the Monday session at 95.25—basically unchanged from its Friday close. Here’s the 3-day chart, so you can see all of the Sunday and Monday action.
And here’s the 6-month U.S. dollar index chart. It’s way too soon to presume that a top is in, but this rally only has the strength that the powers-that-be are giving it, as it’s very much a manufactured event.
The gold stocks started off at their lows of the day—and were back in positive territory by the COMEX close, but once ‘da boyz’ showed up at 3:40 p.m. EDT and knocked a few bucks off the gold price, the shares were sold off sharply—and the HUI closed down 1.06 percent.
The silver stocks had a similar trading pattern, but didn’t sell off when silver was sold down just before the equity markets closed—and Nick’s Intraday Silver Sentiment Index closed up 0.84 percent.
The CME Daily Delivery Report showed that 50 gold and 12 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday. The sole short/issuer in gold was HSBC USA once again—and Canada’s Scotiabank was the only stopper of importance with 44 contracts for its own account. It doesn’t have a client account, so all transactions are proprietary. Also in gold, JPMorgan stopped 1 for its clients and 3 for itself. In silver, ABN Amro issued 11 contracts—and JPMorgan picked up 9 for itself—and Canada’s Scotiabank picked up the other three. The link to yesterday’s Issuers and Stoppers Report is here.
The CME Preliminary Report for the Monday trading session showed that gold open interest in May dropped by 17 contracts leaving 120 still open—minus the 50 contract mentioned above. Since 44 gold contracts were posted for delivery today in Friday’s Daily Delivery Report, that means that 44-17=27 additional gold contracts were added to the May delivery month. In silver, May o.i. fell by only 1 contract, leaving an even 600 left, minus the 11 mentioned in the prior paragraph. No silver contracts were posted for delivery today, so 1 lonely short/issuer got let off the hook by a long/stopper in the May delivery month.
Despite the continuing decline in the gold price, there was another very decent addition to the GLD yesterday as an authorized participant added 105,076 troy ounces.
Ted Butler didn’t think that these counterintuitive deposits had anything to do with do with either retail buying or the closing out of short positions, but suspected that “…the most logical conclusion is accumulation by a single buying force.” I agree completely.
There was a small withdrawal from SLV yesterday, as an a.p. took out 285,290 troy ounces, which looked a little on the chunky side to be a fee payment, but I could be wrong about that.
The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of business on Friday, May 20—and this is what they had to report. Both ETFs showed declines—their gold ETF by a smallish 2,682 troy ounces—and their silver ETF by 125,452 troy ounces.
There was a sales report from the U.S. Mint yesterday. They sold 10,000 troy ounces of gold eagles—2,000 one-ounce 24K gold buffaloes—and 829,000 silver eagles.
While I was doing other things last week, Australian reader Peter King sent this information along courtesy of The Perth Mint. I forgot to include it in my holiday-shortened column on Saturday, so here it is now.
Two of Australia’s iconic silver bullion coins are now officially sold out at The Perth Mint.
1oz Australian Kookaburra: Released in November 2015, the full mintage of 500,000 2016 Australian Kookaburra 1oz silver bullion coins has been sold worldwide. This popular issue has achieved sell-out every year since 2008, reflecting its reputation as one of most eagerly sought-after limited mintage silver bullion coins in the world.
1oz Australian Koala: This year’s 1oz Australian Koala silver bullion coin is also sold out. Issued just last January, the coin was restricted to a maximum mintage of 300,000 for the first time.
There was very little movement in gold over at the COMEX-approved depositories on Friday. There were 25 kilobars received—and 1 shipped out. All of that ‘action’ was at the Manfra, Tordella & Brookes, Inc. depository—and I shan’t bother linking that.
There was decent activity in silver once again, as 405,487 troy ounces were reported received—and 673,922 troy ounces were shipped out the door for parts unknown. All of the ‘in’ activity was at JPMorgan—and it’s a near certainty that it had to do with the continued receipts of the physical silver they were the long/stoppers on in the March contract. The lion’s share of the withdrawal action was at HSBC USA. The link to all of this, is here.
It was another busy day over at the Brink’s, Inc. depository in Hong Kong on Friday, as that COMEX-approved gold kilobar depository added 4,752 kilobars—and shipped out 4,168 of them. The link to that action, in troy ounces, is here.
I have a very decent number of stories for you today—and I hope you can find time to read/watch/listen to the ones that interest you.
CRITICAL READS
These Are the Ten Companies That Have Cut the Most Jobs in 2016
After the U.S. Manufacturing PMI plunged to 7 year lows today, we thought it relevant to remind everyone just how robust the economy is by showing the 10 companies that have cut jobs so far in 2016.
The Fiscal Times has compiled a list of 20 companies – here are the top ten “fiction peddlers” ignoring President Obama’s rhetoric…
Not surprisingly the list is dominated by the tech and energy sectors, but those will bounce back in the second half of the year as growth pics up… right?
This brief pictorial news item showed up on the Zero Hedge website at 1:49 p.m. EDT on Monday afternoon—and I thank ‘aurora’ for passing it around. Another link to this short photo essay is here.
Deere shares fall after company cuts full-year outlook
Shares of Deere fell more than 5 percent Friday despite posting better-than-expected earnings.
The company reported earnings per share of $1.56 for its second quarter, while analysts expected a profit of $1.47 a share.
That said, Deere reduced its fiscal-year net income forecast to $1.2 billion from $1.3 billion. Last year, the company had forecast net income to come in at $1.4 billion for the fiscal year.
Deere also forecast a fiscal-year sales decline of 9 percent, less steep than the 10 percent it had previously expected.
This CNBC story showed up on their website late Friday afternoon—and it’s the first of two stories that I plucked from yesterday’s edition of the King Report. Another link to this news item is here.
Marc Faber: Why the Fed is worrying too much about the markets
‘Gloom, Boom & Doom Report‘ Editor Marc Faber on why he thinks the Federal Reserve is worrying too much about the markets.
This 6:10 minute audio/video interview between Marc and talking head Neil Cavuto, put in an appearance on the foxbusiness.com Internet site on Monday morning EDT sometime—and it’s courtesy of Ken Hurt. I don’t think that Mr. Faber thinks much of Mr. Cavuto—and he’s been getting real short with a lot of the other main stream media types in the last few months as well.
David Stockman predicts another economic recession
David Stockman, former director of the Office of Management and Budget under President Ronald Reagan, explains why he believes the economy has taken a down turn and how interest rates affect the market.
This 6:24 minute video interview with David was hosted by the super smart and super sexy Deirdre Bolton—and was posted on the foxbusiness.com website last Friday—and I thank Jim Gullo for sending it our way way.
Why The Flyover Zone Is Hurting: Bubble Finance Is Strictly For The Bi-coastal Elite — David Stockman
We are now in month 83 of this so-called recovery. Yet there are still 45 million people on food stamps——one out of every seven Americans. The median real household income is still 5% below its level in the fall of 2007. There are still only 71 million full-time, full-pay “breadwinner” jobs in the nation—–nearly 2 million fewer than when Bill Clinton was packing his bags to vacate the White House.
At the same time, we have had monetary stimulus like never before. There has been 90 straight months of virtually zero interest rates. The balance sheet of the Fed has been expanded by $3.5 trillion. For point of reference, that is 4X more than all the bond-buying during the entire first 94 years of the Fed’s history.
So something doesn’t parse, and that’s to put it charitably. The truth is, the Fed’s entire radical regime of ZIRP and QE constitutes a monumental monetary fraud.
It has not “stimulated” a wit the struggling main street economy of flyover America. Instead, it has showered Wall Street speculators with trillions of windfall gains and gifted the bi-coastal elites with a false prosperity derived from financial inflation and government expansion.
This longish commentary by David was posted on his website on Saturday—and I thank reader U.D. for finding it for us. Another link to David’s commentary is here.
Companies ‘drowning in debt’ despite almost $2 trillion in cash
That American companies have been wadding up huge amounts of cash is no secret. What may be less well-known is that they’re also accumulating debt at a much faster pace.
Total debt among more than 2,000 non-financial companies swelled to $6.6 trillion in 2015, dwarfing the $1.84 trillion in cash on their balance sheets, according to a study released Monday by S&P Global Ratings. The ratio of cash to debt is the lowest it’s been in about 10 years, or just before the global financial crisis.
As financial markets came to grips with the prospect of higher rates ahead, corporate America went on a debt bonanza. Debt grew 50 times that of cash, with companies rolling up $850 billion of new IOUs compared to just $17 billion, or 1 percent, cash growth.
“This jump in debt reflects the scant resistance borrowers faced from yield-starved investors as companies pursued acquisitions and returned cash to shareholders,” S&P credit analysts Andrew Chang and David C. Tesher wrote in the report.
This CNBC story appeared on their website late on Sunday evening sometime—and it’s the first offering of the day from Richard Saler. Another link to this article is here.
Banks Must Defend Libor Lawsuits After Judges Warn of Impact
Sixteen of the world’s largest banks including JPMorgan Chase & Co. and Citigroup Inc. must face antitrust lawsuits accusing them of hurting investors who bought securities tied to Libor by rigging an interest-rate benchmark, a ruling that an appeals court warned could devastate them.
The appellate judges reversed a lower-court ruling on one issue — whether the investors had adequately claimed in their complaints to have been harmed — while sending the cases back for the judge to consider another issue: whether the plaintiffs are the proper parties to sue, in part because their claims, if successful, provide for triple damages that could overwhelm the banks.
“Requiring the banks to pay treble damages to every plaintiff who ended up on the wrong side of an independent Libor‐denominated derivative swap would, if appellants’ allegations were proved at trial, not only bankrupt 16 of the world’s most important financial institutions, but also vastly extend the potential scope of antitrust liability in myriad markets where derivative instruments have proliferated,” the U.S. Court of Appeals in New York said in the ruling.
This Bloomberg news story was posted on their Internet site at 9:18 a.m. Denver time on Monday morning—and was updated about five hours later. I found it in a GATA release. Another link to this news item is here.
Americans: A Conquered People: The New Serfs — Paul Craig Roberts
As readers know, I have seen some optimism in voters support for Trump and Sanders as neither are members of the corrupt Republican and Democratic political establishments. Members of both political establishments enrich themselves by betraying the American people and serving only the interest of the One Percent. The American people are being driven into the ground purely for the sake of more mega-billions for a handful of super-rich people.
Neither political party is capable of doing anything whatsoever about it, and neither will.
The optimism that I see is that the public’s support of outsiders is an indication that the insouciant public is waking up. But Americans will have to do more than wake up, as they cannot rescue themselves via the voting booth. In my opinion, the American people will remain serfs until they wake up to Revolution.
Today Americans exist as a conquered people. They have lost the Bill of Rights, the amendments to the Constitution that protect their liberty. Anyone, other than the One Percent and their political and legal servants, can be picked up without charges and detained indefinitely as during the Dark Ages, when government was unaccountable and no one had any rights. Only those with power were safe. In America today anyone not politically protected can be declared “associated with terrorism” and taken out by a Hellfire missile from a drone on the basis of a list of human targets drawn up by the president’s advisers. Due process, guaranteed by the US Constitution, no longer exists in the United States of America. Neither does the constitutional prohibition against the government spying on citizens without just cause and a court warrant. The First Amendment itself, whose importance was emphasized by our Founding Fathers by making it the First Amendment, is no longer protected by the corrupt Supreme Court. The Nine who comprise the Supreme Court, like the rest of the bought-and-paid-for-government, serve only the One Percent. Truth-tellers have become “an enemy of the state.” Whistleblowers are imprisoned despite their legal protection in U.S. law.
This right-on-the-money commentary by Paul showed up on his website on Monday—and it’s definitely worth reading. I thank ‘aurora’ for his second offering in today’s column. Another link to this article is here.
The Day the Trump Bloodbath Began: Robert Ringer
Since watching Donald Trump’s speech to the NRA, I have concluded that he might beat Hillary the Horrible much worse than I originally predicted. I have long believed that Trump would win about 55-45, but I now think the margin of victory will be much greater than that (assuming she is his opponent).
Not only is Trump creating more excitement than any presidential candidate in my lifetime (far more than John F. Kennedy or Ronald Reagan), Hillary is on the wrong side of virtually every issue. I would say she’s a masochist, but the reality is that Obama probably has her by her transgender gonads.
Friday, her anti-gun record was highlighted by the response of the overflow crowd to Trump’s pro-Second Amendment remarks. But it’s not just gun control. It’s illegal immigration, sanctuary cities, throwing open the prison doors and setting violent criminals free, transgender bathrooms, the refusal to identify the psychopaths who are murdering innocent men, women, and children worldwide, ever tougher EPA regulations that are making it impossible for industries such as coal mining to survive … the list goes on and on.
I am increasingly convinced that the only voters Hillary can hope to attract are those in the hard-core radical-left camp and those whose information base hovers near zero. Women? Don’t worry about it. When all is said and done, Trump will get at least 50 percent of the female vote, possibly more. And he’ll increase his standing with Hispanics and blacks more than enough to coast to victory. We’re talking about a world-class winner facing off against a world-class feminist putz who is already gasping for air.
This commentary by Roberts put in an appearance on his website on Sunday sometime—and I thank Kathmandu reader Nitin Agrawal for passing it around. Another link to Robert’s commentary is here.
Lake Mead declines to lowest level in history
The nation’s largest reservoir has broken a record, declining to the lowest level since it was filled in the 1930s.
Lake Mead reached the new all-time low on Wednesday night, slipping below a previous record set in June 2015.
The downward march of the reservoir near Las Vegas reflects enormous strains on the over-allocated Colorado River. Its flows have decreased during 16 years of drought, and climate change is adding to the stresses on the river.
As the levels of Lake Mead continue to fall, the odds are increasing for the federal government to declare a shortage in 2018, a step that would trigger cutbacks in the amounts flowing from the reservoir to Arizona and Nevada. With that threshold looming, political pressures are building for California, Arizona and Nevada to reach an agreement to share in the cutbacks in order to avert an even more severe shortage.
This must read news item, along with a 3:04 minute embedded video clip, appeared on the desertsun.com Internet site on Friday morning—and I thank Brad Robertson for sharing it with us. Another link to this must read story is here.
Trade wars: memo shows E.U. is costing U.K. billions
A secret government memo today reveals how a trade war between European Union countries is damaging the British economy.
The damning Whitehall assessment – seen by The Telegraph – has found that France and other E.U. countries are hampering new “free-trade” deals because they want to protect their farmers from the extra competition.
David Cameron claims that the power of Brussels to negotiate these free-trade agreements with parts of the world such as the United States is a critical reason why Britain must not leave the E.U.
But the memorandum suggests that Britain is losing out on £2.5 billion a year in potential trade as a result of the ongoing delays to a proposed deal between the E.U. and Latin America.
Under E.U. treaties, the U.K. cannot negotiate its own trade arrangements and has to wait until Brussels reaches agreements that are acceptable to all 28 member states, a process that often takes years to complete.
This news item showed up on the telegraph.co.uk Internet site at 9:31 p.m. BST on Saturday evening—and my thanks go out to Roy Stephens for sending it along. Another link to this story is here.
Austria elects Green candidate as president in narrow defeat for far right
A left wing, independent candidate has narrowly prevented Austria from becoming the first E.U. country to elect a far-right head of state after a knife-edge contest ended with his opponent conceding defeat.
Alexander Van der Bellen, a retired economics professor backed by the Green party, defeated Norbert Hofer, of the anti-immigrant, Eurosceptic Freedom party, a day after polling closed and only when more than 700,000 postal ballots – about 10% of available votes – were taken into account.
The Austrian presidency is a largely ceremonial role but the outcome became hugely symbolic.
Mirroring the rise of populist parties across Europe, the Freedom party exploited anti-E.U. and anti-immigrant sentiment in the wake of the continent’s refugee crisis and, despite Hofer’s narrow defeat, the election has left a deep split over the direction Austria should now take.
This very interesting news item was posted on theguardian.com Internet site at 6:57 p.m. London time on Monday evening. I thank Patricia Caulfield for sending it our way. Another link to this story is here. An editorial on this from The Guardian is headlined “The Guardian view on the Austrian presidential elections: disaster narrowly averted“—and that’s courtesy of Patricia C. as well.
Can Russia Survive Washington’s Attack? — Paul Craig Roberts
It is not only American generals who are irresponsible and declare on the basis of no evidence whatsoever that “Russia is an existential threat to the United States” and also to the Baltic states, Poland, Georgia, Ukraine, and all of Europe. British generals also participate in the warmongering. U.K. retired general and former NATO commander Sir Richard Shirreff, Deputy Supreme Allied Commander in Europe until 2014, has just declared that nuclear war with Russia is “entirely possible” within the year.
My loyal readers know that I, myself, have been warning for some time about the likelihood of nuclear war. However, there is a vast difference between me and the Western generals. I see the war as the consequence of the neoconservative drive for US world hegemony. The neoconservative drive for world hegemony is acknowledged by the neoconservatives themselves in their public position papers, and it has a 15 year record of being implemented in America’s many and ongoing wars in the Middle East and Africa. Although the Presstitute media does its best to keep our focus away from the known facts, the facts remain known.
The position of the Western generals is that “Russian aggression” is driving an innocent America/NATO to nuclear war.
This commentary certainly falls into the must read category, regardless of whether you are a serious student of the New Great Game or not. I thank Roy Stephens for sending it my way on Saturday. Another link to this very worthwhile article is here.
NATO Nuclear War Hype Goes Ballistic
Sometimes I wonder whether the world is being run by smart people who are putting us on, or by imbeciles who really mean it… Mark Twain, American humorist
While I am credited as the creator of the byline “You just can’t make this stuff up”, I must now add an addendum to that, the NATO exception, because they make it up all the time.
And, just when we figure they have flogged the Russian Bear threat to death, almost as badly as the retired Iran nuclear weapon threat, here we have British General Shirreff, former Deputy Supreme Comr. for NATO, pitching his fictional book about a nuclear war with Russia, in 2017 mind you, and over the Baltics no less.
This is the kind of ploy that an Intelligence agency would use to seed a repetitive fear message into the public’s consciousness via a series of high ranking officials to give support to a geopolitical psyops game they are running. We now have General Shirreff as a book end to American General Breedlove, who told us all about the amassed Russian army on Ukraine’s eastern border that was ready to sweep across Ukraine in three days.
The only problem with that tall tale was that despite Moscow’s holding long planned exercises in the area, none of the experienced observers who attended ever reported seeing this invasion army. Since that day, we have had a never ending echo chamber of claims of Russian aggression toward Europe, but where no one felt it was necessary to provide any proof. General Breedlove never showed us any satellite photos of all the huge stockpiles in forward bases that could have easily be viewable for an invasion, and he never apologized for the lie.
This longish commentary also falls into the must read category as the previous one on Russia did. This one showed up on the journal.neo.org Internet site on Sunday. Roy Stephens was the first person through the door with it on Monday morning. Another link to this must read news item is here.
Beware what you wish for: Russia is ready for war — Pepe Escobar
So foreign ministers from the 28 NATO member-nations met in Brussels for a two-day summit, while mighty military power Montenegro was inducted as a new member.
Global Robocop NATO predictably discussed Afghanistan (a war NATO ignominiously lost); Iraq (a war the Pentagon ignominiously lost); Libya (a nation NATO turned into a failed state devastated by militia hell); Syria (a nation NATO, via Turkey, would love to invade, and is already a militia hell).
Afghans must now rest assured that NATO’s Resolute Support mission – plus “financial support for Afghan forces” – will finally assure the success of Operation Enduring Freedom forever.
Libyans must be reassured, in the words of NATO figurehead secretary Jens Stoltenberg, that we “should stand ready to support the new Government of National Accord in Libya.”
And then there’s the icing on the NATO cake, described as “measures against Russia”.
Pepe lays it all out here—and if you read the other two articles on Russia and NATO posted above, this piece fits like a hand in a glove [but not like O.J.’s glove!]. This opinion piece by Pepe was posted on the Russia Today website at 1:05 p.m. Moscow time on their Sunday afternoon, which was 5:05 a.m. EDT in Washington—EDT plus 8 hours. I thank U.K. reader Tariq Khan for sharing it with us—and another link to this very worthwhile article is here.
Erdogan vs. the world
President Recep Tayyip Erdogan’s ouster of Prime Minister Ahmet Davutoglu to clear his own path to absolute power has left many wondering what effect the move will have on Turkey’s foreign policy orientation and its relations with the West in particular.
Given the way Erdogan has been ratcheting up his angry anti-Western rhetoric, some fear that Ankara’s ties with the United States and Europe will remain strained for the foreseeable future over a number of seemingly irreconcilable issues.
Erdogan’s finger-wagging approach to the West is what endears him to Turkey’s conservative Islamic masses. Faced with a need for political support as he pushes for a new constitution at home that will give him the power he currently lacks as Turkey’s sole leader, Erdogan is not likely to alter his populist line anytime soon.
This news item appeared on the al-monitor.com Internet site last Friday—and it’s another contribution from Roy Stephens. Another link to this story is here.
Saudi financial crisis “could leave oil at $25” as contractors face being paid in IOUs — Ambrose Evans-Pritchard
Saudi Arabia faces a vicious liquidity squeeze as capital continues to leak out the country, with a sharp contraction of the money supply and mounting stress in the banking system.
Three-month inter-bank offered rates in Riyadh have suddenly begun to spiral upwards, reaching the highest since the Lehman crisis in 2008.
Reports that the Saudi government is to pay contractors with tradable IOUs show how acute the situation is becoming. The debt-crippled bin Laden group is laying off 50,000 construction workers as austerity bites in earnest.
Societe Generale’s currency team has advised clients to short the Saudi riyal, betting that the country will be forced to ditch its long-standing dollar peg, a move that could set off a cut-throat battle for global share in the oil markets.
Francisco Blanch, from Bank of America, said a rupture of the peg is this year’s number one “black swan event” and would cause oil prices to collapse to $25 a barrel. Saudi Arabia’s foreign reserves are still falling by $10bn (£6.9bn) a month, despite a switch to bond sales and syndicated loans to help plug the huge budget deficit.
This AE-P story showed up on The Telegraph‘s website at 8:40 p.m. BST on their Sunday evening—and it’s certainly worth reading. I thank Richard Saler for bringing it to our attention. Another link to this worthwhile article is here.
U.S. lifts arms ban on old foe Vietnam as China tensions simmer
The United States announced a complete end to its arms embargo on Vietnam on Monday, a historic step that draws a line under the two countries’ earlier enmity and underscores their shared concerns about China’s growing military clout.
The move came during President Barack Obama’s first visit to Hanoi, which his hosts described as the arrival of a warm spring and a new chapter in relations between two countries that were at war four decades ago.
Obama, the third U.S. president to visit Vietnam since diplomatic relations were restored in 1995, has made a strategic “rebalance” toward Asia a centerpiece of his foreign policy.
Vietnam, which borders China, is a key part of that strategy amid worries about Beijing’s assertiveness and sovereignty claims to 80 percent of the South China Sea.
I’m sure that China is none too happy about this turn of events in their own back yard. The U.S. is sticking its nose in everyone’s business as it continues on its journey [along with two other key allies] in its bid to take over the world. This Reuters article, filed from Hanoi, was posted on their Internet site at 5:22 p.m. EDT yesterday afternoon—and it’s the third and final offering of the day from Patricia Caulfield. Another link to this news item is here.
U.S. warns Japan on yen intervention as G-7 reaffirms deal “no competitive devalutations” deal
The U.S. issued a fresh warning to Japan against competitive currency devaluation on Saturday, exposing a rift on exchange-rate policy that overshadowed a Group of 7 (G-7) finance leaders gathering hosted by the Asian nation.
Japan and the U.S. have been at logger-heads over currency policy, with Washington saying Tokyo had no justification to intervene in the market to stem yen gains, given the currency’s moves remained “orderly”.
In bilateral talks ahead of the second day of G-7 talks in Sendai, Japan, on Saturday, U.S. Treasury Secretary Jack Lew told Japanese Finance Minister Taro Aso that it was important to refrain from competitive currency devaluations.
“Secretary Lew underscored that the commitments made by the G-20 in Shanghai to use all policy tools to promote growth – fiscal policy, monetary policy and structural reforms – and to refrain from competitive devaluation and communicate closely have helped to contribute to confidence in the global economy in recent months,” according to a statement by the Treasury Department.
This Reuters article from early Saturday morning EDT was picked up by CNBC—and I found it in yesterday’s edition of the King Report. Another link to this news item is here.
The Gold Chronicles: May 18th, 2016 Interview with Jim Rickards
The West is waking up to Gold
Gold inflows have exceeded $13 Billion so far in 2016
Paul Singer, Stanley Druckenmiller, Jeffrey Gundlach, George Soros all recommending gold
Gold is the best performing asset for both 2016, as well as the last 16 years since 2000
There has been a change in the conversation and narrative about gold in the West
This 58:31 minute audio interview with Jim would be a must listen in my opinion. It was posted on the physicalgoldfund.com Internet site on Friday—and I thank Harold Jacobsen for sharing it with us.
Kinross’ Paul Rollinson and after the gold rush
When Paul Rollinson took over as chief executive of Kinross Gold four years ago the end was in sight for the biggest gold boom in history — and for some of the people who were part of it.
After rising 500 per cent in a decade, the market price of the precious metal had peaked. In the rush to exploit the boom, mining investments and costs had spun out of control.
Investors in gold miners such as Kinross, which had lavished $11 billion on acquisitions in six years and was already writing off part of that spending, were in revolt. Tye Burt, Mr Rollinson’s predecessor, was among a score of mining chief executives to lose their jobs.
It was “the end of a champagne era“, recalls Mr Rollinson. “Everything was going up, up, up, forever and ever — and then I got the back half of the mountain, where it has been down, down, down.”
Of course, never was a word uttered about why it was “down, down, down“. No questions were asked even though it was perfectly clear as to what happened—and who was responsible. As John Embry said almost fifteen years ago—“The miners are either ignorant, naïve—or complicit.” You get to chose, dear reader. This Financial Times story from yesterday was posted in the clear over at the gata.org Internet site—and anther link to this gold-related news item is here.
Jim Rickards makes the case for gold at $10,000 U.S. an ounce
Gold is often seen as a safe investment in times of economic uncertainty, and prominent investors, such as George Soros, are placing big bets on the precious metal.
Gold prices of have been surging lately and gold stocks are among the top performers in 2016.
In his new book The New Case for Gold, Wall Street veteran Jim Rickards explains why he expects the current world monetary regime to fail and why he sees bullion heading to $10,000 U.S. an ounce.
The current increase in the dollar price of gold reflects the decline of the U.S. dollar, Rickards said during a recent interview with Peter Armstrong, host of The Exchange on CBC News Network.
“It’s sort of a vote of no confidence in central bank policies,” Rickards said.
This 5:31 minute video interview put in an appearance on the cbc.ca Internet site at 5:00 a.m. on Monday morning. Even though the message is similar what you’ve most likely heard before, it’s presented somewhat differently here—and it’s worth your while if you have the time, or the interest. Another link to this video clip is here.
The PHOTOS and the FUNNIES
I’d love to claim ownership of these photos, but can’t. Nick Laird’s friend Jack in Innisfail, North Queensland feeds these things in his backyard. This is a male double-wattled cassowary—and I’ve posted photos of these creatures before. All birds are directly related to the dinosaurs, of course, but this one is obviously more closely related than most. I didn’t crop these photos—and I’m posting them as received.
The WRAP
There were new low closing prices for both gold and silver yesterday. There was a new intraday low in platinum—and palladium was closed at a new low for this move down as well. It’s the only one of the four precious metals that’s substantially below its current 50-day moving average. Gold is slightly below its—and both silver and platinum are hovering just above their respective 50-day moving averages, almost like JPMorgan et al are toying with them.
Ted and I were wondering out loud on the phone yesterday just how big the slices will be once ‘da boyz’ really get serious to the downside. Like everyone else, we’re both sitting here waiting to see how this turns out. Will it be the same old, same old—or is it different this time?
Of course my money is the former—but as I’ve always said, I’d love to be proven spectacularly wrong about that.
Here are the 6-month charts for the four precious metals—and you can see where things stand vis-à-vis their respective 50-day moving averages. The other thing that I’ve noticed in gold, silver and platinum, is how low the RSI’s have dropped. They’re already well below 50—and if the powers-that-be are going to get serious about these engineered price declines, it certainly won’t take many decent down-days to drive these indicators into a hugely oversold configuration.
The same can be said for the RSI for the HUI index. The HUI is down about ten percent from its May 1 high, but the RSI is already at 51. Here’s the 6-month chart for that.
As both Ted and I mentioned in our respective Saturday missives, the gold flowing into GLD as prices decline is as counterintuitive as it comes—and as Ted said further up—“…the most logical conclusion is accumulation by a single buying force.” But who that might be is unknown, but their pockets are pretty deep whoever they are.
Here’s Nick Laird’s 6-month GLD chart, with the gold price overlaid for comparison purposes. Click to enlarge.
And as I type this paragraph, the London open is less than five minutes away—and I note that the selling pressure in gold began shortly after 8 a.m. HKT on their Tuesday morning—and it’s currently down 5 dollars an ounce. ‘Da boyz’ set a new low in silver for this move down around 2 p.m HKT—and it’s currently off that low by a few pennies. Platinum revisited its Monday low—and it’s currently off that mark by a few bucks. Palladium is now at another new low for this move down—and is lower by another 5 dollars the ounce at the moment.
Gross gold volume is very heavy, as is the roll-over activity out of June—but once that activity is netted out, gold volume is a hair under 27,000 contracts, which isn’t much out of the ordinary. Net volume in silver is just under 6,000 contracts with no roll-over volume to speak of. The dollar index hasn’t been doing much—and is currently up 6 basis points as London opens.
We’re in the last week of roll-overs out of the June contract in gold—and gross volume will increase sharply as the week progresses. The large traders have to be out of the June contract by the close of COMEX trading on Friday—and the rest by the close of COMEX trading on Monday. First Day Notice for delivery into the June delivery month for gold is on Tuesday.
And as I post today’s column on the website at 4:10 a.m. EDT, I see that gold is down another buck since I reported on things an hour ago—and the powers-that-be have silver at another new low for this move down as well—and it’s currently lower by 15 cents the ounce. Both platinum and palladium are down 4 dollars apiece, but off their earlier lows.
Net HFT gold volume is now up to 32,000 contracts—and roll-overs are still heavy. Net HFT volume in silver is just under 7,500 contracts, which is only 1,500 contracts or so higher than an hour ago. The dollar index is off its earlier low in late Hong Kong trading—and is now up 19 basis points, so I expect this ramp job in the dollar to roll on while JPMorgan et al continue to engineer precious metal prices lower.
Today, at the close of COMEX trading, is the cut-off for Friday’s Commitment of Traders Report and, hopefully, all of today’s volume activity will make into that report.
That’s all I have today, which is more than enough—and I’ll see you here tomorrow.
Ed
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