Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1197.30 up $5.60 (comex closing time)
Silver: $16.98 up 1 cent (comex closing time)
In the access market 5:15 pm
Gold $1195.00 (options expiry tomorrow so the crooks are already whacking)
Silver: $16.95
Gold/silver trading: see kitco charts on the right side of the commentary.
Following is a brief outline on gold and silver comex figures for today:
The gold comex today had a poor delivery day, registering 0 notices served for nil oz. Silver comex registered 154 notices for 7700,000 oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.34 tonnes for a loss of 58 tonnes over that period. Lately the removals have been rising!
In silver, the open interest fell by 1464 contracts, due to short covering, as Tuesday’s silver price was up by 9 cents. The total silver OI continues to remain extremely high with today’s reading at 172,659 contracts. The front month of March fell by 258 contracts to 346 contracts. We are still close to multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.
We had 154 notices served upon for 770,000 oz.
In gold we again have a total collapse of OI as we enter the next active delivery month of April . The total comex gold OI rests tonight at 433,767 for a whopping loss 14,006 contracts. With June gold almost equal to April gold in price, it just does not sense why so many would liquidate their positions.Tomorrow is options expiry and you know what that entails. Today, surprisingly we again had 0 notices served upon for nil oz.
Today, we had a withdrawal of 1.19 tonnes at the GLD/ Gold Inventory rests at 743.21 tonnes
In silver, /SLV we had no changes in silver inventory at the SLV/Inventory, at 325.323 million oz
We have a few important stories to bring to your attention today…
1, Today we again had some short covering in the silver comex with the silver OI falling by 464 contracts. Gold OI fell by a whopping 14,006 contracts. Both gold and silver rose nicely today. Again we had 1,028.80 oz of gold leave the comex vaults. (report Harvey)
2, DDay for Greece this coming Monday as they continue to drain cash. Today the ECB outlawed the purchase of sovereign bonds by the banks.
(zero hedge)
3. Yemen rebels heading straight for the strategic city of Aden, on the southern tip of the Red Sea. The President of Yemen having vacated the capital Sanaa two weeks ago has now fled the country this morning.
(zero hedge)
4. Saudi Arabian troops are heading to the border of Yemen (and may enter Yemen). The Saudis are very fearful of the Iran backed Yemen rebels.
(Russia’s Sputnik)
5.The Central Bank of Brazil has stopped intervening in the support of the Brazilian real. They were trying to contain inflation but the intervention was too costly. Confidence levels in Brazil at all time lows
(zero hedge)
6. The rating agencies have again lowered the rate on Ukrainian bonds and they are stating an obvious default looming shortly. They cite that Ukraine must find 15 billion dollars in restructuring in order to receive the new 17.5 billion IMF aid.
(UPI)
7. The Atlanta Fed model for growth in the first quarter GDP now down to 0.2%
(zero hedge)
we have these and other stories for you tonight
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest fell by a whopping 14,006 contracts from 447,773 down to 433,767 as gold was up by $3.70 yesterday (at the comex close). As I mentioned above, the complete collapse of OI as we enter an active delivery month makes no sense. We are now in the contract month of March which saw it’s OI surprisingly rise to 346 for a gain of 373 contracts. We had 0 notices filed upon on Tuesday so we gained 346 gold contracts or an additional 34,600 ounces will stand for delivery in this delivery month of March. Somebody must have been in great need of gold. The next big active delivery month is April and here the OI fell by 25,804 contracts down to 155,010. We have 6 days before first day notice for the April gold contract month, on March 31.2015. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 178,525. (Where on earth are the high frequency boys?). The confirmed volume on yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 217153 contracts. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI fell by 1464 contracts from 174,123 down 172,659 despite the fact that silver was up with respect to Tuesday’s trading . We therefore again had some more short covering by our bankers. We are now in the active contract month of March and here the OI fell by 258 contracts rising to 346. We had 106 contracts served upon yesterday. Thus we lost 152 contracts or an additional 760,000 oz will not stand in this March delivery month. The estimated volume today was simply awful at 16,281 contracts (just comex sales during regular business hours. The confirmed volume on Tuesday (regular plus access market) came in at 45,145 contracts which is good in volume. We had 154 notices filed for 770,000 oz today.
March initial standings
March 25.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
1028.80 oz (Manfra and Scotia) 32 kilobars
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
835.90 oz (Delaware)
No of oz served (contracts) today
0 contracts (nil oz)
No of oz to be served (notices)
108 contracts (10,800 oz)
Total monthly oz gold served (contracts) so far this month
8 contracts(800 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
114,790.651 oz
Total accumulative withdrawal of gold from the Customer inventory this month
653,137.7 oz
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil
we had 2 customer withdrawals
i) Out of Manfra: 32.15 oz (1 kilobars)
ii) Out of Scotia: 996.65 oz (31 kilobars)
total customer withdrawal: 1,028.80 (32 kilobars)
we had 1 customer deposits:
i)_ Into Delaware: 835.90 oz (26 kilobars)
total customer deposit: 835.90 oz
We had 0 adjustments
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account
To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (8) x 100 oz or 800 oz , to which we add the difference between the open interest for the front month of March (108) and the number of notices served upon today (0) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the March contract month:
No of notices served so far (8) x 100 oz or ounces + {OI for the front month (481) – the number of notices served upon today (0) x 100 oz} = 48,900 oz or 1.5209 tonnes
we gained a huge 37,300 oz of additional gold standing for delivery.
Total dealer inventory: 658,537.414 oz or 20.48 tonnes
Total gold inventory (dealer and customer) = 7,887,779.813 million oz. (245.34) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 59.0 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
March silver initial standings
March 25 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
401,239.24 oz (Delaware, HSBC)
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
234,806.700 oz (Scotia)
No of oz served (contracts)
154 contracts (770,000 oz)
No of oz to be served (notices)
498 contracts (2,490,000)
Total monthly oz silver served (contracts)
2303 contracts (11,515,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
7,416,837.6 oz
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 1 customer deposits:
i) Into Scotia: 234.806.700 oz
total customer deposit: 234,806.700 oz
We had 2 customer withdrawals:
i) Out of HSBC: 400,248.09 oz
ii) Out of Delaware; 991.15 oz
total withdrawals; 401,239.24 oz
we had 0 adjustments:
Total dealer inventory: 70.569 million oz
Total of all silver inventory (dealer and customer) 175.180 million oz
.
The total number of notices filed today is represented by 154 contracts for 770,000 oz. To calculate the number of silver ounces that will stand for delivery in March, we take the total number of notices filed for the month so far at (2393) x 5,000 oz = 11,515,000 oz to which we add the difference between the open interest for the front month of March (346) and the number of notices served upon today (154) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the March contract month:
2303 (notices served so far) + { OI for front month of March(346) -number of notices served upon today (154} x 5000 oz = 12,475,000 oz standing for the March contract month.
we lost an additional 760,000 oz of silver standing in this March delivery month.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
March 25.2015 we had a withdrawal of 1.19 tonnes of gold from the GLD/Inventory at 743.21 tonnes
March 24/ no changes in gold inventory at the GLD/Inventory 744.40 tonnes
March 23/we had a huge withdrawal of 5.37 tonnes of gold from the GLD vaults/Inventory 744.40 tonnes
march 20/we had no changes in inventory at the GLD/Inventory at 749.77 tonnes
March 19/we had no changes in inventory at the GLD/Inventory 749.77 tonnes
March 18/ we had a withdrawal of .9 tonnes of gold from the GLD/Inventory at 749.77 tonnes
March 17.2015: no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 16/no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 25/2015 / we had a withdrawal of 1.19 tonnes of gold/Inventory at 743.21 tonnes
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 743.21 tonnes.
end
And now for silver (SLV):
March 25.2015:no change in silver inventory/SLV inventory 325.323 million oz
March 24.2015/ we had another withdrawal of 835,000 oz of silver from the SLV/Inventory rests tonight at 325.323 million oz
March 23./we had a huge withdrawal of 1.174 million oz of silver from the SLV vaults/Inventory 326.158 million oz
March 20/ no changes in silver inventory/327.332 million oz
March 19/ no change in silver inventory/327.332 million oz
March 18/ no change in silver inventory/327.332 million oz
March 17/ no change in silver inventory/327.332 million oz
March 16/no change in silver inventory/327.332 million oz
March 25/2015 we had no changes in inventory/SLV inventory at 325.323 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 7.9% percent to NAV in usa funds and Negative 8.1% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.6%
Percentage of fund in silver:39.0%
cash .4%
( March 25/2015)
Sprott gold fund finally rising in NAV
2. Sprott silver fund (PSLV): Premium to NAV rises to + 1.31%!!!!! NAV (March 25/2015)
3. Sprott gold fund (PHYS): premium to NAV rises -.28% to NAV(March 25 /2015)
Note: Sprott silver trust back into positive territory at +1.31%.
Sprott physical gold trust is back into negative territory at -.28%
Central fund of Canada’s is still in jail.
end
And now for your more important physical gold/silver stories:
Gold and silver trading early this morning
(courtesy Goldcore/Mark O’Byrne)
Global Risks To Irish Economy Being Ignored Again
Global Risks To Irish Economy Being Ignored Again
- Leading think tank forecasts strong economic growth in Ireland, ignores global risks
– Impact of Euro zone debt crisis and global geopolitical risk underestimated
– Global macro-economic, systemic, geo-political and monetary risks largely ignored
- Risk that lulls politicians, investors and people into false sense of security … again
Ireland’s leading economic think tank, the Economic and Social Research Institute(ESRI) has issued its latest quarterly report in which it forecasts that the strong economic performance in Ireland is set to continue.
It has forecast strong economic growth of 4.4% this year and a lower but still strong 3.7% next year. It says it expects unemployment in Ireland to drop below 10% this year for the first time since 2008 and as low as 8.4% next year.
The report said the economy is now growing so strongly that Ireland’s budget deficit could be virtually eliminated by next year – two years ahead ofschedule.
The economy was supported by the first growth in consumer spending since the start of the recession. Consumer spending grew by 1.1 per cent last year, and the think tank forecasts this to rise to 2 per cent this year.
However, the think tank does acknowledge that it will be constrained by the still very high levels of household and mortgage debt, by people prioritising debt repayment over consumption, and by the still falling level of consumer credit from Irish banks.
It says that while exports drove growth up until the middle of last year, domestic consumer spending started to play a stronger role in economic growth in the second half.
This is concerning given that the euro began plummeting against both the dollar and the pound during the middle of last year. This should have given exports a strong boost in the final quarter of 2014 and into 2015.
It highlights the export dependent nature of the Irish recovery and the risks posed by currency wars. The recent sharp fall in the euro should help exports. At the same time, the U.S. may be forced to maintain ultra loose monetary policies and competitive currency devaluations. The strong dollar is undermining U.S. exports. If this happens, it may have a negative impact on Irish exports and the growth that the ESRI expects.
We believe the report, which views Ireland’s economic performance as though it were independent of international considerations, is misguided. It assumes that there is a real, sustainable global economic recovery underway and if Irish politicians manage the economy correctly, Ireland will continue to recover from its economic collapse.
This is quite an assumption given the uncertain world of today and the fact that the Irish economy is a tiny, tiny fraction of the global economy.
It ignores many of the still significant global macroeconomic, systemic, geopolitical and monetary risks (MSGM) of today.
a) Macroeconomic risk is seen in the risk of recessions in major industrial nations with negative data emanating from the debt laden Eurozone, UK, Japan, China and U.S. recently.
The collapse in oil prices is a reflection of lack of demand for energy globally. Industry is buying less oil as economic activity is declining globally.
Issues with banks, a la Lehman Brothers, a major terrorist event or a another war in the Middle East or with Russia would badly impact fragile consumer, investor sentiment and western economies.
b) Systemic risk remains high as some of the major problems in the banking and financial system have not been addressed. There is a real risk of another ‘Lehman Brothers’ moment or a new ‘Grexit’ moment and the seizing up of the global financial system. The significant risk from the unregulated “shadow banking system” continues to be significantly underappreciated.
Global debt has ballooned more than 25% since the 2008 crisis which was itself a product of excessive debt. This dwarfs the growth in the global economy over the same period. The world is now in a deeper, though as yet
unacknowledged, debt-crisis than it was in 2008.
c) Geopolitical risks are elevated – particularly in the Middle East. This is seen in the serious developments in Syria and in the tensions between Iran and Israel. There is the real risk of conflict and consequent impact on oil prices and the global economy. There are also simmering tensions between the U.S. and its western allies and China and particularly Russia.
d) Monetary risk is high as the policy response of major central banks to the first three risks continues to be ultra loose monetary policies, ZIRP, NIRP, the printing and electronic creation of a tsunami of currency and the debasement of currencies.
Should the macroeconomic, systemic, or geopolitical risks increase even further in the coming months than the central banks response will again be by monetary and further currency debasement which risks currency wars deepening. This risks the devaluation of all fiat currencies and serious inflation in the coming months and years.
That the ECB has begun a trillion euro QE program is clear evidence that the policies of the past seven years have not been effective and the Euro zone, bloated with unpayable debt like the rest of the developed world, risks economic stagnation and in a worst case scenario – economic and political contagion in the Euro zone.
Mario Draghi’s QE experiment and printing of EUR 1.1 billion is an act of desperation.
What catalyst triggers the next crisis is anyone’s guess? There are many options to choose from.
It remains prudent to remain aware of the risks and adopt a cautious approach with regard to personal finances and indeed the nation’s finances.
Ignoring the considerable risks in the mid 2000s led to the global financial crisis. It also led to significant pain being inflicted on those who had been lulled into a false sense of security by think tanks, politicians and assorted financial experts.
‘Forecasts’ and forecasting the future is an extremely difficult task. It is essential for planning but must be qualified and anchored in empirical data with an international context. It is important that major caveats and health warnings are included.
Latest ESRI forecast predicts strong GNP growth in 2015 and 2016
OUTLOOK 2015 – Uncertainty, Volatility, Currency Devaluations – DIVERSIFY
MARKET UPDATE
Today’s AM fix was USD 1,192.55, EUR 1,088.89 and GBP 801.18 per ounce.
Yesterday’s AM fix was USD 1,193.25, EUR 1,085.56 and GBP 798.96 per ounce.
Gold rose 0.26 percent or $3.10 and closed at $1,193.70 an ounce yesterday, while silver slipped 0.35 percent or $0.06 at $17.00 an ounce.
Gold inched downward after its five day rally, but hovered near its two and a half week high.
Gold in Dollars – 1 Year
In Singapore, gold for immediate delivery pulled back 0.2 percent to $1,190.90 an ounce near the end of trading but was not far from a high of $1,195.30 hit in the prior session.
Yesterday, Fed policymaker James Bullard said that a first rate hike “sometime in the summer” would still leave monetary policy extremely accommodative, and that market expectations should be better aligned with those of the Fed considering the current “boom time” for the U.S. economy.
Positive economic data from the Eurozone strengthened the euro versus the dollar, and expectations for a U.S. interest rate rise is focused on later in the year. As ever, watch what the Fed’s actions rather than their daily ‘jawboning.’
Gold is at $1,192.58 per ounce or up 0.08 percent. Silver is $16.96 per ounce or plus 0.25 percent and platinum is at $1,143.25 per ounce or up 0.37 percent.
Gold in Euros – 1 Year
Spot gold at $1,200 per ounce remains a key psychological level for gold and a close above this level should see gold eke out further gains.
The European Central Bank banned Greek banks from increasing holdings of short-term government debt, as concerns grow that they are nearly out of cash. Eurozone finance ministers will hold a call on Wednesday to discuss progress on Greece, amid concerns that the country will run out of money by early April.
A clash in the Ukraine amongst politicians was seen as Ukrainian President Petro Poroshenko accepted the resignation of Igor Kolomoisky, the billionaire governor of the strategic Dnipropetrovsk region who has clashed with authorities over the control of energy companies.Yesterday, in a vote that largely slid under the radar, the U.S. House of Representatives passed a resolution urging Obama to send lethal aid to Ukraine, providing offensive, not just “defensive” weapons to the Ukraine army – the same insolvent, hyperinflating Ukraine which, with a Caa3/CC credit rating, last week started preparations to issue sovereign debt with a U.S. guarantee.
The resolution passed with broad bipartisan support by a count of 348 to 48. The measure urges Obama to provide Ukraine with “lethal defensive weapon systems” that would better enable Ukraine to defend its territory from “the unprovoked and continuing aggression of the Russian Federation.”
Geopolitical risk remains very high and is not priced into “irrationally exuberant” markets.
end
A good study of all of the gold mints around the world.
(courtesy Koos Jansen)
Posted on 25 Mar 2015 by Koos Jansen
The Largest Gold Mints Of The World
The most recent data available suggests the US Mint is currently the largest mint on the planet in terms of production output, having produced 4.54 tonnes of gold in Eagles and Buffalos year to date (January and February 2015).
The largest gold mints of the world are the Turkish State Mint, Chinese Mint, South African Mint, US Mint, Perth Mint (Australia), Royal Canadian Mint and Austrian Mint. Sales and production numbers of all these mints of 2014 has not been released, however, below is a chart displaying available data up until 2013.
What is little known in the gold space is that the Turkish Mint is one of the biggest mints around. Because Turkish Ziynet coins are not widely sold outside of Turkey, the blogosphere is hardly taking note. From 2002 until 2008 the Turkish Mint was by far the largest producer on earth, on average minting 49 tonnes of gold a year over this period. The US Mint ranked second, having produced 17 tonnes on average over the same period.
Since Lehman Brothers feel in 2008 mostly Western mints saw their market share grow, led by the US Mint, who overtook the Turkish Mint in 2009 by minting 56 tonnes of gold.
From 2011 the Turkish took back the lead at 59 tonnes, versus 35 tonnes at the US Mint. Extending first position in 2012 at 40 tonnes and in 2013 at a staggering 91 tonnes.
Though data from other mints is lagging, both the Turkish and US Mint publish production numbers every week. From these figures we know Turkish production has also been transcending that of the US in 2014 (by 19 tonnes) at 41 tonnes in total. However, year to date the US Mint has outpaced its Asian colleague by 0.95 tonnes at 4.54 tonnes.
If we look at monthly data we see that after the price of gold made its famous nosedive in April 2103, the Turkish Mint stepped up its production output, before it shut down in August and September 2013, presumably as a result of supply issues.
Note, all coins produced by the Turkish Mint are 22 karat. For comparing them to other coins I calculated the fine content.
Koos Jansen
E-mail Koos Jansen on: koos.jansen@bullionstar.com
end
(courtesy Bill Holter/Miles Franklin)
COMEX Gold COT’s.
Gold and silver probed their November 2014 lows early last week and finished strong. From a chart standpoint, they both put in outside reversal weeks to the upside. I’d like to visit the current “setup” in gold and silver from several angles and then take a step back and look at them from a very broad view.
The latest commitment of traders report, out this past Friday (and with data throughTuesday) shows a picture which has changed dramatically over the last few weeks.
——————————————————————————————-
GOLD
-The large specs reduced long positions by 9,553 contracts and increased shorts by 19,246 contracts.
-The commercials increased longs by 25,886 contracts and reduced shorts by 6,966 contracts.
-The small specs reduced longs by 816 contracts and increased shorts by 3,237.
———————————————————————————————-
You will notice the giant movement in sales and even larger shorts put on by the large and small speculators. The specs dumped over 1 million ounces and went short another 2.25 million ounces. Totaling these, speculators altered their position by over 3.25 million ounces in just one week. On the commercials side we saw the opposite. They bought almost a net 2.6 million ounces and covered almost 700,000 short ounces for a net decrease of short exposure by about 3.3 million ounces.
I point this out to you for several reasons with a couple of caveats. The caveats being, COMEX is a playground where the charts are painted with paper brushes, very little metal actually changes hands and the total amount of gold claimed in inventory is less than China and India import in a month …EVERY month. Another aspect is we don’t really know if these reported numbers are real. How do we know this? Because CME group told us so, over a year ago they basically said they cannot verify the numbers and rely on the individual reporting firms for data. “Imperfect” to say the least.
These are HUGE moves and their “size” tells me something is happening or going to if the numbers are real. The sentiment shift has been huge with the specs confirming the negativity in the air. I know of no other previous time where sentiment for gold and silver have ever been worse, including the major bottoms in 2001 and 2008. Another reason to point this out is because even though we are not at all time record levels, the specs have not been less “long” nor the commercials less “short” since November of 2013, prior to this I believe was late 2008.
While on the subject of COMEX, we have also noticed something else very strange. February which is traditionally a very active delivery month, saw very little delivered even though open contracts just before first notice day were huge and outsized. March on the other hand is a very small delivery month, yet HUGE amounts of gold have left their vaults in just the first three weeks. I don’t know how to explain this other than to say, “someone wants or needs the gold”.
We have also mentioned several times in the past that movements within the COMEX have been showing as “kilo” movements. Much of what is being reported are “000” weights and divisible by 32.150. COMEX threw us another curveball on Thursday when they began reporting a new “kilo gold” contract. I had no idea this was even being contemplated and had not seen any news prior. What’s quite interesting is in just two days they reported the inflow of close to 700,000 ounces of gold. ALL of the gold came in as “eligible” and none as “registered”. The other oddity is the fact the reporting DID show “.xxx” (numbers) as opposed to (“.000″) triple zeroes. It appears kilo bars are moving within the 100 ounce category on COMEX while ounces are being moved in the kilo category. COMEX now creating a kilo contract cannot easily be explained, this for me is a head scratcher and would love to hear theories on “why”?
Switching gears, the biggest topics currently are Greece, Ukraine and the new AIIB bank in Asia. I plan to write further about the AIIBtomorrow because the U.S. has been outflanked and has folded as even the IMF will now join. Greece and Ukraine are two hotspots for very different reasons.
Greece’s continued participation in the Eurozone is now being called a 50-50 proposition by none other than George Soros. I look at it a little differently and put the odds far higher that Greece will exit unless someone can show me where exactly the money will come from? Will Germany fold and give in to Greece’s WWII reparations demands? I don’t know the answer to this but I do know it is THE only source of cash for Greece which comes with no “strings attached”. By “strings” I mean money that will need to be paid back in the future. I just do not see any viable way for Greece to remain solvent and stay in the Eurozone. It is my opinion Greece will fall into Russian (and the East’s) arms.
Speaking of Russian “arms”, though you may not be hearing much via mainstream media, the West/East saber rattling is frenzied like never before. The Iranian nuclear talks have broken down and Russia has vowed to protect both Iran and Syria. This at a time NATO has been sending troops and machinery within spitting distance to Russia’s borders. There was also some muscle flexing with a test fire of an ICBM over the weekend and the “big ship” are now moving toward the Persian Gulfhttp://www.zerohedge.com/news/2015-03-24/us-moves-big-stick-negotiations-tactic-sends-big-ships-gulf .
Whether you see it or not, the U.S. has not “isolated” Russia as was the plan. The U.S. has now succeeded in isolating ourselves, I will talk about this tomorrow. China has attracted a long list of “charter members” for their international infrastructure banks which includes Britain, Germany, France, Italy and the IMF with Japan and Australia waiting in the wings. Could our self imposed isolation be any more obvious!? Regards, Bill Holter
end
Bill Holter interviewed by Palisade Radio
(courtesy Palisade Radio/Bill Holter)
Fw: Palisade Radio interview: Bill Holter: China Will Flip the Switch on the Gold Price – 03/22/15
Bill Holter:
China Will Flip the Switch on the Gold Price
03/22/15
Watch interview with Bill Holter – Click Here
Once again we bring on a very popular guest, Mr. Bill Holter. Bill is very vocal on how corrupt governments and central banks are mismanaging (or outright destroying) the western economy, before our very eyes. Bill is also highly regarded for his investment knowledge, and thousands of investors follow his writing every week on MilesFranklin.com. It was great to get Bill on once again, and to get his comments on the new political developments from Asia.
Takeaways from this week’s interview with Bill Holter:● How the federal reserve has few options when dealing with the US economy moving forward● Real reasons behind quantitative easing explained● How China will trigger a huge shift in the gold market!● Implications of the new Chinese led Asian Infrastructure Investment Bank (AIIB) – a competitor to The World Bank….● The way Bill has structured his own gold portfolio
WATCH INTERVIEW – CLICK HERE
end
And now for the important paper stories for today:
Early Wednesday morning trading from Europe/Asia
1. Stocks generally mixed on major Chinese bourses ( India’s Sensex and Shanghai lower)/yen rises to 119.53
1b Chinese yuan vs USA dollar/yuan weakens to 6.2122
2 Nikkei up by 32.75 or .17%
3. Europe stocks all in the red/USA dollar index down to 96.74/Euro rises to 1.0986
3b Japan 10 year bond yield .32% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.53/
3c Nikkei still above 19,000
3d USA/Yen rate now below the 120 barrier this morning
3e WTI 47.25 Brent 55.32
3f Gold up/Yen up
3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil down for WTI and up for Brent this morning.
3i European bond buying continues to push yields lower on all fronts in the EMU
Except Greece which sees its 2 year rate slightly falls to 19.74%/Greek stocks up by a huge 3.66%today/ still expect continual bank runs on Greek banks.
3j Greek 10 year bond yield: 10.80% (down by 60 basis point in yield)
3k Gold at 1195.00 dollars/silver $17.00
3l USA vs Russian rouble; (Russian rouble up 7/8 rouble/dollar in value) 56.90 rising with the higher brent price
3m oil into the 47 dollar handle for WTI and 55 handle for Brent
3n Higher foreign deposits out of China sees hugh risk of outflows and a currency depreciation. This scan spell financial disaster for the rest of the world/China may be forced to do QE!!
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF
3p Britain’s serious fraud squad investigating the Bank of England/ the British pound is suffering
3r the 7 year German bund still is in negative territory/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.
3s
3t Bloomberg calculates Greece’s shortfall in March at 3.5 billion euros.
4. USA 10 year treasury bond at 1.86% early this morning. Thirty year rate well below 3% at 2.45%/yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
Without Buyback Back Up, Futures Fail To Find Fizzle
After three days of unexpected market weakness without an apparent cause, especially since after 7 years of conditioning, the algos have been habituated to buy on both good and bad news, overnight futures are getting weary, and futures are barely up, at least before this morning’s transitory FX-driven stop hunt higher. Whether this is due to the previously noted “blackout period” for stock buybacks which started a few days ago and continues until the first week of May is unclear, but should the recent “dramatic” stock weakness persist, expect Bullard to once again flip flop and suggesting it is clearly time to hike rates, as long as the S&P does not drop more than 5%. In that case, QE4 is clearly warranted.
Asian stocks traded mixed overnight following a negative Wall Street close although newsflow remained light and markets quiet. The Nikkei 225 (+0.2%) overturned its early losses ahead of the close, while the Shanghai Comp (-0.8%) is poised to halt its longest streak of gains in 23yrs, weighed on by poor earnings from several large financial names. Elsewhere, the Hang Seng (+0.5%) was the session’s best performer lifted by China Mobile after the company announced a plan to cut its Capex this year by 6.5%.
Most major currencies steadied overnight against the USD after the index pared back some of yesterday’s post US CPI-inspired gains. NZD was the session’s laggard after NZ February trade balance data showed the widest deficit in more than 5yrs (12-Month YTD -2.18bln vs. Exp. -1.85bln) and weakness was also seen in AUD following the RBA Financial Stability Review which prompted markets to tweak expectations of a rate cut to 61% probability of a rate cut at the Apr. 7th meeting vs. 49% before the release. In other news, Brazil’s central bank announced it will not extend its FX intervention program past March 31st.
Newsflow and firm direction has been lacking in this morning’s European trade with equity markets trading mixed although the USD continues its downward trend. In overnight news reports suggested that the ECB are looking to make it illegal for lenders in Greece to add to their government debt pile by loading up on short-term debt, a move which could force the hand of Greece into a compromise with the Eurogroup in order to get continue to raise much needed cash. Headlines on Greece are also expected today as the ECB are believed to be planning a call today to assess emergency funding for Greek banks, however it is worth bearing in mind that Greece markets are closed today for a market holiday. EUR has failed to be negatively dented by overnight developments and the slide in the USD has supported the pair in earlier trade, which has also led to upside in other EUR crosses.
Fixed income markets have been pretty quiet this morning so far although German paper supported by some slight weakness in Equities. Gilts continue to outperform and have shrugged off overnight comments from BoE Deputy Governor Shafik (Soft Dove) who said the next move in rates is likely to be higher, however the BoE are still open to possible cuts in the future. Peripheral spreads are marginally wider this morning however there are no major standouts across the bloc.
Barclays Prelim Pan Euro Agg month-end extensions +0.07yrs (Prev. +0.07yrs, Avg. Of last 12 months +0.08yrs) Barclays Prelim month-end extensions for US Treasury +0.09yrs (Prev. +0.13yrs, Average of last 12 months +0.10yrs)
Crude futures have pared overnight weakness alongside an uptick in gold and silver prices, shrugging off the build shown by the API inventories yesterday which saw a build in oil stockpiles of 4.8mln vs. Prev. 10.5mln and ahead of the DoE inventories which are expected to show a build of 4.75mln for the headline.
In summary: European shares fall with the personal & household and food & beverage sectors underperforming and autos, basic resources outperforming. Euro strengthens as German business confidence rose for 5th month in March. European shares trading off session low. The French and Spanish markets are the worst-performing larger bourses, the Swedish the best. The euro is stronger against the dollar. German 10yr bond yields fall; Japanese yields increase. Commodities little changed, with natural gas, nickel underperforming and Brent crude outperforming. U.S. mortgage applications, durable goods orders, capital goods orders due later.
Market Wrap
S&P 500 futures up 0.1% to 2087.8
Stoxx 600 down 0.3% to 401.4
US 10Yr yield little changed at 1.87%
German 10Yr yield down 2bps to 0.22%
MSCI Asia Pacific up 0.2% to 149
Gold spot down 0.1% to $1192.1/oz
45.8% of Stoxx 600 members gain, 50.3% decline
Eurostoxx 50 -0.4%, FTSE 100 +0.1%, CAC 40 -0.5%, DAX -0.2%, IBEX -0.3%, FTSEMIB -0.2%, SMI -0.2%
MSCI Asia Pacific up 0.2% to 149; Nikkei 225 up 0.2%, Hang Seng up 0.5%, Kospi up 0.1%, Shanghai Composite down 0.8%, ASX up 0.1%, Sensex down 0.2%
Heinz to Merge W/Kraft as Berkshire, 3G Invest $10 Billion
Hutchison to Buy U.K. Mobile Network O2 for $15.3 Billion
Airbus to Sell Additional Stake in Dassault Aviation
Euro up 0.27% to $1.0953
Dollar Index down 0.23% to 96.97
Italian 10Yr yield up 2bps to 1.34%
Spanish 10Yr yield up 2bps to 1.31%
French 10Yr yield down 1bps to 0.5%
S&P GSCI Index up 0.1% to 400.5
Brent Futures up 0.8% to $55.5/bbl, WTI Futures up 0.1% to $47.6/bbl
LME 3m Copper down 0.6% to $6109.5/MT
LME 3m Nickel down 1.1% to $13790/MT
Wheat futures little changed at 523.8 USd/bu
Bulletin Headline Summary From RanSquawk and Bloomberg
Reports suggest that the ECB are looking to make it illegal for lenders in Greece to add to their government debt pile by loading up on short-term debt, a move which could force the hand of Greece into a compromise with the Eurogroup in order to raise much needed cash
Otherwise markets have been quiet in early European trade although central bank speakers are due on the docket including Fed’s Evans and ECB’s Weidmann
Treasuries steady as week’s auctions continue with 2Y floaters and 5Y notes; latter yield 1.375% in WI trading vs. 1.48% award in February.
Yesterday’s$26b 2Y auction was awarded at 0.598% vs 0.602% WI bid at 1pm, according to Stone & McCarthy, with biggest direct award since June 2014 (18.3%)
The international economic architecture crafted by the U.S. after WWII faces its biggest shakeup yet as U.S. allies defy America to back China’s initiative to establish the Asian Infrastructure Development Bank
Germany’s Ifo institute business climate index advanced to 107.9, more than expected, from 106.8 in March
Brazil’s central bank scaled back its support for the real, ending sales of new foreign-exchange swaps that had swelled the government’s dollar liabilities
Lifting oil sanctions on Iran could hit global markets long before the nation starts pumping more crude as the OPEC member has been stockpiling oil onshore and in supertankers in the Persian Gulf, according to data compiled by Bloomberg
Forces loyal to Yemeni President Abdurabuh Mansur Hadi collapsed in the face of rebels, who advanced deeper in the south toward his stronghold in the port city of Aden
French helicopters searched for bodies and wreckage of the Airbus A320 that crashed in rugged terrain in the French Alps while en route to Germany from Spain.
Sovereign 10Y yields mixed. Asian stocks mixed, European stocks decline, U.S. equity-index futures rise. Crude, gold and copper lower
DB’s Jim Reid completes the overnight event summary
I noticed yesterday that a new series of cult 1990s TV program the “X-Files” is coming back to our screens. FBI agents Mulder and Scully used to investigate unexplained paranormal phenomena in a covert wing of the organization. Apparently their first case in the new series is on negative bond yields as in the original series back in the 1990s this was seen as too far fetched to use as a plot line!! On a serious note this was one of my favorite programs back in the day so I’m looking forward to a return of UFOs and Aliens.
Talking of spooky occurrences, yesterday saw the 25th day without the S&P 500 (-0.61%) experiencing consecutive gains. This is the longest such stretch since 2001. US equities are struggling for momentum in a post Fed QE, uncertain Fed rate outlook, strong dollar world. Having said that the dollar continues to be relatively weak post FOMC last week. Indeed, despite a +0.16% gain for the broader DXY yesterday, the index is down around 2.3% from the levels just prior to the FOMC statement release. Price action in the US yesterday was largely driven by the CPI numbers – which we’ll touch on shortly. Equity markets closed at their lows for the day while US Treasuries bounced as the curve flattened. 10y (-3.8bps) and 30y (-5.0bps) yields were lower at 1.873% and 2.464% respectively. The former is in fact now 37bps off the highs in yield of earlier this month. In the commodity complex, Gold (+0.31%) was higher for the fifth consecutive day, however oil markets were somewhat mixed with WTI (+0.13%) higher but Brent (-1.45%) declining.
With much of the global focus on the data yesterday and with UK YoY% headline inflation hitting zero for the first time since 1960, and likely to enter deflation soon for the first time in 55 years, we thought we’d show one of our favorite graphs that we often use in our long-term studies. This is UK inflation back 800 years. To make it easier to read (and more relevant) we’ve also repeated it from 1900. Indeed prior to 1900 deflation and inflation were broadly equal partners. In an era where money was linked to precious metals deflation was arguably the natural state as human ingenuity and productivity growth and a fixed supply of money encouraged prices to fall over time. The periods where overall prices picked up likely reflected discovery/introduction of new precious metals in circulation or a debasement (punching holes in coins was a tactic used by some governments). However post the twentieth century ties to precious metals periodically weakened and eventually broke completely in 1971 with the Bretton Woods system imploding. So the last century has been the century of inflation and fiat currencies. As we’re still in a world of fiat currencies it’s fairly remarkable that we’re still flirting with deflation in many countries and returning to levels more consistent with a fixed supply of money. On the contrary we have seen a huge amount of money printed in the last 6-7 years across the globe but not much inflation to show for it. Most of the QE has ended up pushing asset prices higher and has not really made it into the real economy. The transmission mechanism continues to be broken and for as long as it is then inflation will respond with a very low multiplier to QE. If the money printing seen so far had been used by Governments to directly finance real economy projects (e.g. infrastructure/ tax cuts) then we likely would have seen much higher inflation.
Staying with inflation, across the Atlantic yesterday, the modest beat in US CPI attracted most of the attention. The headline +0.2% mom print was enough to nudge the annual rate up to 0.0% yoy, which was ahead of both expectations (-0.1%) and up from the -0.1% yoy we saw in January. The core also saw a modest beat, with the +0.2% mom reading for February (+0.157% to be exact), a touch above expectations (+0.1%). It was enough to push the annualized reading up one-tenth to 1.7% yoy and in line with consensus.
Data elsewhere in the US was a mixed bag. New home sales (+7.8% mom vs. – 3.5% mom expected) were a considerable beat for February although the FHFA house price index showed a 0.4% drop to +0.3% mom, and below expectations of +0.5%. Manufacturing indicators were somewhat contrasting yesterday. The preliminary March manufacturing PMI (55.3 vs. 54.6 expected) came in ahead of market, however the Richmond Fed manufacturing index for March wasn’t quite so positive, with the -8 reading 8pts down from the February reading and well below expectations of a reading of 3. The print was in fact the lowest since January 2013. The St Louis Fed President, Bullard (a non-voter) meanwhile noted that unless market expectations for interest rates line up with the outlook of policy makers, then the market reaction could be ‘violent’ in the event of a surprise move by the Fed. Bullard did however say that, ‘given the extent of discussion about it, I’d be surprised if we get all the way to that juncture’ (Bloomberg).
Moving on, this morning we’ve published a note entitled “Credit left behind post-QE. Lessons from 2000?” where we look at how credit performance has been impacted by a ‘buy the rumour – sell the fact’ theme post QE starting. While the announcement (and the lead up) of government bond purchases by the ECB in January was generally greeted with strength in EUR credit, the start of the purchases on the 9th March has seen a more sober environment for the asset class. While Germany and French yields are around 12bps lower since QE started, the Peripherals are broadly flat, Euro IG credit yields are generally a handful of bps higher with HY up to 30bps weaker. So credit spreads have moved meaningfully.
Although we continue to think credit spreads will tighten this year given the need for yield and decent fundamentals we make comparisons in the note to the build up to the year 2000 where credit got hit by the all-time wides for swap spreads. This occurred when the market was pricing in a long period ahead of Government buy backs of debt. Indeed the US CBO was predicting that the entire US debt could be eliminated by 2013!! It’s amusing to think back to this prediction. The experience is a reminder that credit spreads are simply the relative supply/demand balance between the benchmark (say bunds) and credit. At the moment the former is seeing extreme demand relative to supply (like in 2000) and the later has seen high demand but is perhaps currently digesting record corporate supply.
While we think the extra yield story and decent fundamentals will be too compelling for investors to ignore given where Government bonds trade, it is a reminder of what spreads actually are. They are a relative not absolute measure. It’s not impossible to consider a scenario where credit remains well bid but that b