Here are the following closes for gold and silver today:
Gold: $1185.90 down $1.30 (comex closing time)
Silver $16.63 down 10 cents (comex closing time)
In the access market 5:15 pm
Gold $1187.80
Silver: $16.67
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:
At the gold comex today, we had a poor delivery day, registering 1 notices serviced for 100 oz. Silver comex filed with 66 notices for 330,000 oz
Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 243.89 tonnes for a loss of 59 tonnes over that period.
In silver, the open interest rose by 298 contracts as Tuesday’s silver price was down by 30 cents. The total silver OI continues to remain extremely high with today’s reading at 173,629 contracts maintaining itself near multi-year highs 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.
In silver we had 66 notices served upon for 330,000 oz.
In gold, the total comex gold OI rests tonight at 411,961 for a loss of 2,921 contracts as gold was down $17.10 yesterday. We had 1 notice served upon for 100 oz. Whenever we approach first day notice, the entire open interest for the gold or silver complex collapses.
Today, we had no changes in inventory at the GLD, thus the inventory rests tonight at 715.86 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold.
In silver, /we had a huge withdrawal of 1.003 million oz of silver inventory at the SLV/Inventory rests at 316.927 million oz
We have a few important stories to bring to your attention today…
1. Today we had the open interest in silver rise by 298 contracts despite the fact that silver was down in price by 30 cents yesterday. The OI for gold fell by 2921 contracts down to 411,961 contracts as the price of gold was down by $17.10 yesterday. We continually witness open interest contraction once first day notice approaches on an active precious metals contract. In gold we have two days left before first day notice and surprisingly we have over 89,000 contracts remaining as open interest. This is totally unbelievable for two days to go.
(report Harvey)
2,Today we had 2 major commentaries on Greece
(zero hedge/David Stockman )
3. We have another big bankruptcy looming in China, the big bottling company of Coca Cola:
(zero hedge)
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 2921 contracts from 414,882 down to 411,961 as gold was down by $17.10 yesterday (at the comex close). For at least the past 18 months, we have been witnessing a total contraction of open interest in an active precious metals month once we are about to enter first day notice. We are in the active delivery month of May and here the OI fell by 30 contracts falling to 36. We had 0 notices filed upon yesterday. Thus we lost 40 gold contracts or an additional 4,000 oz will not stand for delivery in May. The next big active delivery contract month is June and here the OI fell by 32,688, contracts down to 89,621 which is extremely high for this time in the delivery cycle. June is the second biggest delivery month on the comex gold calendar. First day notice is May 29.2015 so we have 2 trading sessions left. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was good at 344,179. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day) was good at 346,749 contracts. Today we had 1 notice filed for 100 oz.
And now for the wild silver comex results. Silver OI rose by 298 contracts from 173,331 up to 173,629 as the price of silver was down in price by 30 cents, with respect to Tuesday’s trading. We are into the active delivery month of May where the OI fell by 36 contracts and thus falling to 218. We had 0 contracts filed upon with respect to yesterday’s trading. So we lost 36 contracts or an additional 180,000 oz will not stand for delivery in this active May month. The estimated volume today was good at 37,646 contracts (just comex sales during regular business hours. The confirmed volume on yesterday (regular plus access market) came in at 52,046 contracts which is fair in volume. We had 66 notices filed for 330,000 oz today.
May initial standings
May 27.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
101.85 oz (HSBC
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
2500.000 oz ???HSBC,
No of oz served (contracts) today
1 contracts (100 oz)
No of oz to be served (notices)
76 contracts(7600) oz
Total monthly oz gold served (contracts) so far this month
16 contracts(1600 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
164,151.8 oz
Total accumulative withdrawal of gold from the Customer inventory this month
53,156.2 oz
Today, we had 0 dealer transactions
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil oz
we had 0 customer withdrawals
total customer withdrawal: nil oz
We had 1 customer deposits:
i) Into HSBC: 2,500.000 oz ???? (not divisible by 32.15)
Total customer deposit: 2500.00 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 1 contract 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 May contract month, we take the total number of notices filed so far for the month (16) x 100 oz or 1600 oz , to which we add the difference between the open interest for the front month of May (36) and the number of notice served upon today (1) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the May contract month:
No of notices served so far (16) x 100 oz or ounces + {OI for the front month (36) – the number of notices served upon today (1) x 100 oz which equals 5100 oz standing so far in this month of May. (.2830 tonnes of gold)
we lost 4,000 oz of gold standing in this May delivery month.
Total dealer inventory: 372,630.992.022 or 11.59 tonnes
Total gold inventory (dealer and customer) = 7,841,215.16 (243.89) tonnes)
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 243.89 tonnes for a loss of 59 tonnes over that period. Lately the removals have been rising!
end
And now for silver
May silver initial standings
May 27 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
130,239.75 oz (CNT,Delaware)
Withdrawals from Customer Inventory
nil
Deposits to the Dealer Inventory
nil
Deposits to the Customer Inventory
94,733.98 oz (HSBC)
No of oz served (contracts)
66 contracts (330,000 oz)
No of oz to be served (notices)
152 contracts (760,000 oz)
Total monthly oz silver served (contracts)
2769 contracts (13,845,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
126,359.680 oz
Total accumulative withdrawal of silver from the Customer inventory this month
3,984,024.8 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 CNT: 94,733.98 oz
total customer deposit: 94,733.98 oz
We had 2 customer withdrawals:
i) Out of CNT: 126,303.95 oz
ii) Out of Delaware; 3935.80 oz
total withdrawals from customer; 130,239.75 oz oz
we had 1 adjustment
i) Out of CNT:
we had one adjustment whereby 4902.200 oz was adjusted out of the customer of CNT into the dealer account of CNT
Total dealer inventory: 60.854 million oz
Total of all silver inventory (dealer and customer) 178.743 million oz
The total number of notices filed today is represented by 66 contracts for 330,000 oz. To calculate the number of silver ounces that will stand for delivery in May, we take the total number of notices filed for the month so far at (2769) x 5,000 oz = 13,845,000 oz to which we add the difference between the open interest for the front month of April (218) and the number of notices served upon today (66) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the May contract month:
2769 (notices served so far) + { OI for front month of April (218) -number of notices served upon today (66} x 5000 oz = 14,605,000 oz of silver standing for the May contract month.
We lost 36 contracts or 180,000 additional ounces will not stand for delivery in this active May contract 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:
may 27: no changes in gold inventory at the GLD/Inventory rests at 715.86 tonnes
may 26.2015/we had a slight addition of .600 tonnes of gold to the GLD inventory/inventory rests at 715.86 tonnes
May 22.2015: no changes in gold inventory at the GLD/Inventory rests at 715.26 tonnes
May 21./no changes in gold inventory at the GLD/Inventory rests at 715.26 tonnes
May 20./we had another withdrawal of 2.98 tonnes of gold leaving the GLD. Inventory rests tonight at 715.26 tonnes
May 19/no changes in gold inventory at the GLD/Inventory at 718.24 tonnes
May 18/we lost another 5.67 tonnes of gold inventory at the GLD/Inventory rests at 718.24 tonnes
May 15./no change in gold inventory at the GLD/Inventory rests at 723.91 tonnes
May 14./ a huge withdrawal of 4.41 tonnes of gold/Inventory rests at 723.91 tonnes
May 13.2015: no change in inventory at the GLD/Inventory rests at 728.32 tonnes
May 12/no change in inventory at the GLD/inventory rests at 728.32 tonnes
May 11/ no changes at the GLD/Inventory rests at 728.32 tonnes
May 8/ they should call in the Serious Fraud squad as the owners of the GLD just saw 13.43 tonnes of gold leave its vaults heading for China:
Inventory : 728.32 tonnes
May 27 GLD : 715.86 tonnes.
end
And now for silver (SLV)
May 27/we had another 1.003 million oz withdrawn from the SLV/Inventory rests tonight at 316.927 million oz
May 26.2015: no change in SLV /Inventory rests at 317.93 million oz
May 22.2015: no changes in SLV/Inventory rests at 317.93 million oz
May 21.no changes at the SLV/Inventory rests at 317.93 million oz
May 20/no changes at the SLV. Inventory rests at 317.93 million oz/
May 19.2015: we lost another 1.195 million oz of inventory at the SLV/Inventory rests at 317.93 million oz/
May 18.2015: we lost another 1.625 million oz of inventory at the SLV/Inventory rests tonight at 719.125 million oz
May 15./no change in silver inventory at the SLV/inventory rests tonight at 320.75 million oz
May 14/ a huge withdrawal of 1.912 million oz from the SLV/Inventory at 320.75 million oz.
May 13.2015: no changes at the SLV/Inventory rests at 322.662 million oz
May 12/no changes at the SLV/Inventory rests at 322.662 million oz
May 11/no changes at the SLV/Inventory rest at 322.662 million oz
May 8/ today we lost a huge 2.87 million oz of silver from the SLV/Inventory 322.662
May 7/no change in silver inventory/325.53 million oz
May 6/we had a huge withdrawal of 2.143 million oz of silver from the SLV/325.53 million oz
May 5/no change in silver inventory at the SLV/327.673 million oz
May 27/2015 no change in inventory/SLV inventory 316.927 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 8.0% percent to NAV in usa funds and Negative 8.2% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 60.8%
Percentage of fund in silver:38.8%
cash .4%
( May 27/2015)
2. Sprott silver fund (PSLV): Premium to NAV falls to-0.49%!!!!! NAV (May 27/2015)
3. Sprott gold fund (PHYS): premium to NAV rises to -39% to NAV(May 27/2015
Note: Sprott silver trust back into negative territory at -0.49%.
Sprott physical gold trust is back into negative territory at -.39%
Central fund of Canada’s is still in jail.
This morning Sprott formally launches its offer for Central Trust gold and Silver Bullion trust:
SII.CN Sprott formally launches previously announced offers to Central GoldTrust (GTU.UT.CN) and Silver Bullion Trust (SBT.UT.CN) unitholders (C$2.64)
Sprott Asset Management has formally commenced its offers to acquire all of the outstanding units of Central GoldTrust and Silver Bullion Trust, respectively, on a NAV to NAV exchange basis.
Note company announced its intent to make the offer on 23-Apr-15 Based on the NAV per unit of Sprott Physical Gold Trust $9.98 and Central GoldTrust $44.36 on 22-May, a unitholder would receive 4.45 Sprott Physical Gold Trust units for each Central GoldTrust unit tendered in the Offer.
Based on the NAV per unit of Sprott Physical Silver Trust $6.66 and Silver Bullion Trust $10.00 on 22-May, a unitholder would receive 1.50 Sprott Physical Silver Trust units for each Silver Bullion Trust unit tendered in the Offer.
* * * * *
end
Early morning trading from Asia and Europe last night:
Gold and silver trading from Europe overnight/and important physical
stories
(courtesy Mark O’Byrne/Goldcore)
Gold Bullion Is “100% Guarantee from Legal and Political Risks” – Russia
By Mark O’ByrneMay 27, 20150 Comments
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– Gold is a “100% guarantee from legal and political risks”
– Russia’s central bank buys another 300,000 ounces in April
– Russia views its overseas assets as vulnerable
– ‘De-dollarisation’ continues across Asia
– Gold offers protection from growing risks today
Russia’s central bank once again increased its gold holdings substantially in April. They added another 300,000 ounces to their existing stockpile bringing the total up to 40.1 million ounces (see chart below).
It marks the continuation of a policy which was only slightly affected by last year’s rouble crisis following the collapse in the price of oil and Western imposed sanctions.
In an address to Russia’s lower house, a senior policy maker at Russia’s central bank indicated that while gold prices fluctuate they offer invaluable insurance against external factors. Dmitry Tulin, manager of monetary policy said,
“The price of it swings, but on the other hand it is a 100 percent guarantee from legal and political risks.”
Reuters reports that western sanctions “have not targeted government assets abroad” to date and suggest that Russia’s reduction of its exposure to U.S. Treasury bills is a symptom of its fear that state assets will be targeted next.
Of course, Russia’s reducing of its Treasury bill holdings may also be part of the policy of de-dollarisation which Russia and China are energetically pursuing. As may the insatiable appetite of their central banks for gold.
Countries across central Asia continue to buy gold eagerly. The government of Kazakhstan banned the export of mined gold and is stockpiling its reserves – although its current holding of 200 tonnes is dwarfed by those of its Russian and Chinese neighbours.
Gold is absolutely central to monetary policy in Eurasia and Asia. China openly refer to their yuan as “the reserve currency of the world”. While this ambitious slogan may be slightly premature it is likely that by backing the yuan with gold it would become a major reserve currency that would challenge the debt-bloated dollar.
Investors would be wise to take heed of Russia’s attitude to gold as a “100% guarantee”. In the crisis that approaches physical gold held outside the banking system in safe vaults in safe jurisdictions will prove to be such a guarantee to individuals, companies, pension funds, family offices, as well as nations.
Must Read Guide: 7 Key Bullion Storage Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,187.85, EUR 1,088.07and GBP 770.64 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,194.00, EUR 1,095.56 and GBP 774.77 per ounce.
Gold fell $19.30 or 1.6 percent yesterday to $1,187.70 an ounce. Silver slipped $0.36 or 2.11 percent to $16.74 an ounce.
Gold in Singapore for immediate delivery was up 0.3 percent at $1,189.65 an ounce while gold in Zurich fell to $1,185.96.
Gold held near a two week high after dipping in the prior session when positive economic data hinted that the U.S. economy may be picking up. The U.S. business investment spending plans increased for its second consecutive month in April and consumer confidence moved upward along with new U.S. home sales that increased last month.
The positive U.S. economic data fuelled the U.S. dollar’s rally which ramped up to an eight year high against the beleaguered Japanese yen.
Greek finance ministers and creditors continue bailout negotiations today. Its payment of 1.6 billion euros is due to the IMF next week and government sources indicate that the nation may not be able to make the payments without a deal.
The ECB kept the cap on emergency liquidity assistance Greek banks can draw from the country’s central bank unchanged at 80.2 billion euros, a banking source told Reuters on Wednesday.
The lack of any solid progress in recent talks has pushed European equities lower yesterday, with the FTSE 100 falling 80 points. Emerging market equities slumped to six-week lows, with sentiment poor due to concerns about the Chinese and indeed the global economy.
In late European trading gold was at $1,186.10 an ounce down 0.19 percent. Silver was at $16.71 an ounce off 0.21 percent, and platinum was at $1,123.90 an ounce down 0.04%,
end
Quite a commentary…
(courtesy Seth Mason/GATA)
Busted metals traders distract from larger manipulation problem
Submitted by cpowell on Wed, 2015-05-27 02:14. Section: Daily Dispatches
10:14p ET Tuesday, May 26, 2015
Dear Friend of GATA and Gold:
Seth Mason, founder of the Solidus Center, a nonprofit organization that aims to highlight the faults of the Federal Reserve, calls attention to the longstanding price-suppressive effect of the U.S. futures markets on gold and silver prices. Mason concludes that the U.S. Commodity Futures Trading Commission has allowed market rigging on a massive scale for many years. Mason’s commentary is headlined “Busted Metals Traders Distract from Larger Manipulation Problem” and it’s posted at GoldSeek here:
http://news.goldseek.com/GoldSeek/1432669015.php
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
(courtesy London’s Financial Times/GATA)
China’s currency ‘no longer undervalued,’ IMF says, clearing entry to SDRs
Submitted by cpowell on Wed, 2015-05-27 01:02. Section: Daily Dispatches
By Tom Mitchell and Shawn Donnan
Financial Times, London
Tuesday, May 26, 2015
The International Monetary Fund has declared that China’s currency is “no longer undervalued,” marking a significant shift after more than a decade of criticism of Beijing’s tight management of the renminbi.
The move amounts to a major vote of confidence in Beijing and the renminbi at a critical time. It also puts the IMF at odds with its biggest shareholder, the United States, which insists that China continues to draw an unfair trade advantage from a renminbi that it considers “significantly undervalued.” …
The renminbi has gained 25 per cent against the US dollar since it was allowed to adjust upward within a narrow band a decade ago, and has held its value even as the dollar has strengthened against other major currencies over the past year.
Speaking in Beijing at the end of a regular review of China’s economy, David Lipton, the IMF’s first deputy managing director, said: “While undervaluation of the renminbi was a major factor causing large imbalances in the past, our assessment is that the substantial real effective appreciation over the past year has brought the exchange rate to a level that is no longer undervalued.” …
Eswar Prasad, the former head of the IMF’s China unit, said the shift by the fund was important as it marked the first time since the Asian financial crisis of the late 1990s that the fund had not deemed the renminbi to be undervalued. It also presaged the likely adoption later this year of the renminbi as one of the small number of major currencies in a basket used to determine the value of the IMF’s de-facto currency, the Special Drawing Rights. …
… For the remainder of the report:
http://www.ft.com/intl/cms/s/0/11e96e1e-03a7-11e5-b55e-00144feabdc0.html
end
(courtesy Times of India/GATA)
Gold smuggling in India rises 900% to record
Submitted by cpowell on Wed, 2015-05-27 00:51. Section: Daily Dispatches
Gold Smuggling at All-Time High, Seizures Total Rs 1,000 Crore
By Deeptiman Tiwary
The Times of India, Mumbai
Wednesday, May 27, 2015
NEW DELHI — For the first time in the history of gold smuggling in India, the seizure in illicit trade has crossed the rupees 1,000 crore mark in one financial year with customs, police, and revenue agencies seizing more than 3,500 kilograms of gold in 2014-15.
In 2012-13 the same figure stood at merely Rs 100 crore with just about 350 kilograms of gold seized. In two years, since the government increased duty on gold to 10 percent to rein in a yawning current account deficit, gold smuggling has grown by 900 percent.
Since as an accepted principle seizures could be less than 10 percent of actual smuggling, the figures look even more ominous.
Sources say gold has also begun to be smuggled in unique ways and from rather unexpected corners. …
… For the remainder of the report:
http://timesofindia.indiatimes.com/india/Gold-smuggling-at-all-time-high…
end
(courtesy Reuters/GATA)
Russia acquires gold as defense against ‘political risks,’ central banker explains
Submitted by cpowell on Wed, 2015-05-27 00:35. Section: Daily Dispatches
By Elena Fabrichnaya and Alexander Winning
Reuters
Tuesday, May 26, 2015
Russia is increasing its gold holdings because gold is a reserve asset free from legal and political risks, a senior central banker said on Tuesday.
The comments by Dmitry Tulin, who manages monetary policy at the central bank, reflect Russian fears that the country’s overseas assets could be frozen as part of a possible toughening of Western sanctions over the Ukraine crisis.
“As you know we are increasing our gold holdings, although this comes with market risks,” Tulin told lawmakers in the lower house of parliament. “The price of it swings, but it is a 100-percent guarantee from legal and political risks.” …
… For the remainder of the report:
http://www.reuters.com/article/2015/05/26/russia-cenbank-gold-idUSL5N0YH…
end
(courtesy Mike Ward/Houston Chronicle/GATA)
Texas could create its own Fort Knox to store gold
Submitted by cpowell on Wed, 2015-05-27 12:41. Section: Daily Dispatches
By Mike Ward
Houston Chronicle
Tuesday, May 26, 2015
http://www.houstonchronicle.com/news/politics/texas/article/Texas-could-…
AUSTIN, Texas — Texas could get its own version of Fort Knox, the impenetrable repository for the nation’s gold bullion, if the Legislature gets its way.
Under House Bill 483, approved unanimously on Tuesday by the state Senate, Comptroller Glenn Hegar would be authorized to establish and administer the state’s first bullion depository at a site not yet determined.
No other state has its own state bullion depository, officials said.
Sen. Lois Kolkhorst, R-Brenham, said the state and its agencies have more than $1 billion worth of gold that now is kept in secure facilities in other states. She said there is concern that fortune should be in Texas.
An official analysis of the bill explains: “The establishment of a Texas Bullion Depository would allow the state, state agencies, and private individuals to store precious metals utilizing a secure Texas-based depository to reduce reliance on out-of-state facilities and to insulate their assets from unstable market forces.”
The new depository would be operated as an office within the comptroller’s agency.
“Would this be like Fort Knox?” asked Sen. Juan Hinojosa, D-McAllen. “If I have gold in my possession, can I deposit it?”
Yes, Kolkhorst said, the new depository would be available for his deposits and those of other Texans, and would save the state money.
“The state has gold, and several years ago (the University of Texas Investment Management Corp.) purchased just under a billion dollars worth of gold,” she said. “Most of the bullion depositories are in New York — there may be a small one in Delaware — and they charge the state a fee to store each bar of gold.”
The United States Bullion Depository, located at Fort Knox in Kentucky, adjacent to a U.S. Army base by the same name, was built in the late 1930s to hold the nation’s gold reserves. Its name has become synonymous with impenetrable security. In addition to holding the country’s gold reserves, Fort Knox has been used as secure storage for vital documents over the years, including the Declaration of Independence and the U.S. Constitution.
Kolkhorst said UTIMCOin March had 5,610 gold bars in its portfolio, an investment worth $645 million, and was being charged a storage fee of $108 per bar by a bullion depository in New York City, a total of more than $605,000 a year.
HB 483 was filed by Rep. Giovanni Capriglione, R-Southlake, the president of a private equity company, and is co-authored by 31 other colleagues. It passed the House 140-1 this month.
“New York will hate this,” Kolkhorst said of the bill that now goes to Gov. Greg Abbott to be signed into law. “To me, that and the fact that it will save Texas money makes it a golden idea.”
end
(courtesy Wall Street Journal/GATA)
LIBOR riggers included Bank of England’s ‘Hammer’ in their e-mail plotting
Submitted by cpowell on Wed, 2015-05-27 15:36. Section: Daily Dispatches
Bank of England Official Received Emails Relating to Libor Manipulation, Prosecutor Says
By David Enrich
The Wall Street Journal
Wednesday, May 27, 2015
LONDON — A senior Bank of England official received emails that were part of an alleged campaign to rig benchmark interest rates, according to evidence presented in a London trial today.
Martin Mallett, who at the time was the chief currencies dealer at the Bank of England, was among a couple dozen recipients of emails sent in 2007 by brokers allegedly working at the behest of former bank trader Tom Hayes. The recipients were blind carbon-copied on the messages.
In the emails, the brokers sent out daily suggestions for where a variety of banks should set the London interbank offered rate, or Libor. Mukul Chawla, the prosecutor trying Mr. Hayes, said those emails were used in an attempt to skew interest rates for the benefit of Mr. Hayes, at the time a trader in Tokyo at UBS AG.
Mr. Mallett, nicknamed “The Hammer,” was sent the emails at his hammer@bankofengland.co.uk address. …
… For the remainder of the report:
http://www.wsj.com/articles/boe-official-received-emails-relating-to-lib…
end
Zero hedge discusses why Russia is purchasing gold:
(courtesy zero hedge)
Why Russia Is On A Gold Buying Spree
Several years ago, Kyle Bass gave the simplest bull casefor gold:
“Buying gold is just buying a put against the idiocy of the political cycle. It’s That Simple”
And since it is this same political cycle that is doing everything in its power to preserve what little credibility it has, and to avoid its naked idiocy from being revealed for all to see, it has done everything in its power to push the price of gold lower.
However, several entities refuse to be fooled by such “cheap” tricks. One is China, whose ravenous apetite for gold has been extensively discussed previously. The other is the Bank of Russia.
According to central bank data, Russia’s gold reserves rose to 40.1 million troy ounces as of May 1 compared with 39.8 million ounces a month earlier. Russia increased its gold holdings for many months in a row last year, as shown by central bank figures and represented in the chart below.
So why is Russia engaging in this gold-buying spree when it likely has more immediately gratifying ways to spend its reserves?
The answer was given by Dmitry Tulin, who manages monetary policy at the central bank, was as concise, as sensible, and as lucid as that given by Bass. From Reuters:
“As you know we are increasing our gold holdings, although this comes with market risks,” Tulin told lawmakers in the lower house of parliament.
“The price of it (gold) swings, but on the other hand it is a 100 percent guarantee from legal and political risks.”
And with global political risks only set to rise, since under central planning politicans are made obsolete and are thus even more prone to “idiocy”, expect Russian gold buying to continue indefinitely.
end
Steve St Angelo is a pretty good analyst. He has a good grasp on the precious metals. Today he tackles the silver market:
(courtesy Steve St Angelo/SRSRocco report)
Something BIG Is About To Happen To Silver
Filed in Precious Metals by SRSrocco on May 27, 2015
Yes, that’s correct. Something BIG is about to happen to silver. Now, how this plays out is hard to tell. Recently released new data points to a situation that will force a BIG move in the silver market. In addition, there have been some very interesting movements in the flow of silver bullion.
As I mentioned in the article Why Is The U.S. Importing So Much Silver Bullion??, U.S. silver bullion imports surged 44% in the first months of 2015 compared to the same period last year. We can see this in the chart below:
During Jan-Feb 2015, the U.S. imported 838 metric tons (mt) of silver bullion versus 583 mt last year. Moreover, I mentioned that overall demand for silver in the first quarter of 2015 is either flat or down compared to last year. So, why would the U.S. silver market need additional silver bullion if demand is lower? Who is acquiring this silver… and why?
This brings me to the newest data put out by the CFTC. According to the most recent COT Report, the Commercials (big bullion banks) added a massive 18,595 new silver short contracts in just the last week. This is off the charts. If we look at the chart below, we can see just how big this single week increase compares to the changes over the past year:
The RED LINE in the chart below the silver price chart is the change in Commercial net short positions. You will notice that most of the changes in the past were more subtle. The Red Line changes in a stair step pattern, either up or down. The majority of the times, the step changes are very gradual. However, this past week was a huge step down of a net short position of 24,362 contracts.
For all the new folks out there, let me explain this chart a little better. The Red Line represents the net short position of the Commercial bullion banks. As the Red Line heads lower the Commercials are adding more shorts, and as it moves higher, they are reducing shorts. You will notice a particular trend. As the price of silver moves higher, the Commercials add more short positions, which act as more leverage against a higher price.
On the other hand, as the price of silver falls, the Commercial net short position declines as well. Basically, they are liquidating or covering their short positions. If we look at the chart above, we can clearly see that when the Commercial net short position reached a high, so did the price of silver. Here are the corresponding dates:
July 15, 2014 – Commercial Net Shorts = 58,696 – Silver high price = $21.53
Jan. 22, 2015 – Commercial Net Shorts = 61,593 – Silver high price = $18.49
May 19, 2015 – Commercial Net Shorts = 62,485 – Silver high price = $17.74
Each time the Commercials held the highest amount of net short positions, the price of silver peaked. And, as the price fell to a low, the Commercial net short positions bottomed. Not only is the Commercial net short position the highest all year, it’s the highest it’s been in over 4 years:
The blue dotted line represents the current high amount of Commercial net short positions. Now, when the net short positions increase, the line goes lower. The reason for this is the net short is shown as a negative position (in red), and the net long-held by the Large Specs (in green) is shown as a positive position.
So, if we go back all the way to 2011 when silver traded at its record high of $49, the Commercial net shorts weren’t as large as they are today. For some reason, the Commercials were motivated to add the most short positions in one week for more than four years running.
The only other time the Commercial net short position increased similar to this past week was back in June 24, 2014 when it surged 20,059. However, the reason it jumped that much that week was due to the Commercials liquidating 7,733 long contracts while adding 12,326 shorts for a total net short position increase of 20,059. The last weeks silver COT report update showed the Commercials liquidating 5,787 longs and adding 18,575 shorts for a total net short position increase of 24,362… over 4,000 more than the highest in the year.
We also must remember that when the Commercials reduce their long contracts; it acts as an increase to their net short position. That being said, over the past four years the Commercials never added as many short contracts in one week as they did last week.
What does this all mean? Well, if we go by the trend for the past several years, the Commercials are betting that the price of silver is heading lower. How much lower?? Who knows, but the Commercials now have the most net short leverage since their last record net short position on Jan 22nd, when the price went from a high of $18.49 to a low of $15.26, just two months later.
Could Silver Skyrocket Higher On A Massive Short Squeeze?
This is the forecast put forth by Bo Polny of Gold2020Forecast.com. I have spoken with Bo on the phone several times and he has his own method in determining the movement in the precious metals. He sent me this chart showing how the four-year descending triangle for silver was finally broke on May 18th.
Bo believes the price of gold and silver will breakout before the summer, June 21, 2015. So, there you have it. The Commercials have placed their bets looking for the price of silver to move lower, while Bo believes we are going to see a massive short covering rally due to silver breaking out of the four year descending triangle.
With the possibility of Greece exiting the EURO, the situation in the global financial system could become very interesting. There is a good chance the Greek exit could happen quickly. Thus, a BIG move higher in the precious metals prices could possibly be the result. Let’s see how the next month plays out.
As you all know, I am more of a long-term fundamental investor in the precious metals. I believe the peak and decline of global oil production will wreak havoc on the valuations of most paper assets. Owning precious metals during this time will be one of the best investments or stores of wealth. There is no limit to how high the value of gold and silver could reach as the Greatest Paper Ponzi Scheme in history collapses.
Nonetheless, we are going to see a great deal of volatility along the way. Something strange is going on in the silver market that I can’t put my finger on. There is no reason the U.S. should be importing a record amount of silver bullion as Silver Eagle sales are flat year-over-year, industrial silver consumption is likely lower, and the COMEX silver inventories didn’t really increase that much during the first quarter of 2015.
This makes the huge increase in the Commercial Net Short quite interesting. Something BIG is about to happen to silver. The real question is… WHICH WAY WILL IT GO?
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The following is a link to my latest interview with Greg Hunter. Please watch and feel free to forward or post. Thanks much, Bill
(courtesy Bill Holter/Greg Hunter)
http://usawatchdog.com/60000-gold-may-be-laughably-low-bill-holter/
and now Bill Holter’s commentary tonight:
(courtesy Bill Holter/Holter-Sinclair Collaboration)
Bill H:
G.O.T.S.
Jim has asked me to review “G.O.T.S.” (Get Out of The System) with you and comment on it. From a timing standpoint, I can tell you he is as adamant as I’ve ever seen, now, RIGHT NOW you must exit the system! You will not be afforded the opportunity if you are even one second too late!
Dear CIGAs,
For your convenience, here is the GOTS check list.
1. Your equities are held in certificate form or direct registration
2. You have no Federal sponsored retirement funds such as 401K etc.
3. You have no CDs and investments in bonds.
4. You have modest money deposited among selected BRICs countries or BRIC protectorates like Singapore
5. You store your own precious metals.
6. You have no mortgage obligations.
7. You keep cash on hand for 6 months expenses. That is cash, not plastic with credit open
8. You have no consumer debt at all. Pay it down or off.
9. You have a small hobby farm for protein and veggies outside of where you are living with no mortgage debt, set up green.
10. You have a gas, diesel or electric car with high fuel mileage for the farm.
11. You have a generator with large fuel capacity for the farm.
12. 33 1/3% of your liquid net worth is in gold and silver or according to your preference.
The above is by no means a complete checklist. Please keep in mind, not everyone even has the ability to attain the position of this checklist because they simply cannot afford to. In a perfect world, the above checklist would be a “start” only and situated on a private island, preferably with other like minded people.
Let’s break this list down into groups. Numbers 1-4 pertain to your “paper assets”. When the system comes down and is reset, do not count or rely on your paper wealth as an “asset”. There are two problems, first whether your institution will even survive and then of course whether the paper itself retains value. The basic premise is to rely as little as possible on paper and the institutions holding that paper. #4 is notable because having some capital outside of the West and within the BRICS ahead of time will leapfrog any capital controls put in place.
#5 is very important because of the counter party risk issue. Is it really and truly gold and silver that you own? Or is it a piece of paper or a receipt “promising” you gold or silver? Promises are made to broken …and “promises” are the only thing holding the financial system up from total collapse. Better said, it is the “belief” in these promises preventing an outright collapse. I have maintained all along, all that has been done has been to hide the relationship of values between paper currency and gold. Quite simply, more paper exists than is believed and less gold is held than claimed. We will find out the true relationship as the promises are broken!
Numbers 6-8 are all about debt, have as little as possible! For some, this is impossible. Some believe gold will explode in current dollar terms (it will) and their debt will be washed away via inflation (it will not). Jim wrote to me:
“Anyone who knows the real history of Weimar collapse know that the banks were not hurt as mortgages & debts owed were readjusted to value to gold before the collapse to the value of gold after the collapse so you owed the bank the exactly the buying power in terms of the Rentenmark (new currency) after the currency collapsed. Those that owned gold, closed debt obligation ahead of time and GOTS to the greatest degree they could were the winners to the degree they GOTS. they and the banks were the only winners.” I agree with this, there will be no “debt jubilee”. I would also add this, with gold (and especially silver) priced as they are right now, selling metal to pay down debt is not smart because the relationship is skewed. I believe you will have a better gold/dollar relationship at a later date and prior to the issue of a new currency. That said, having zero debt means zero chance of becoming a slave.
Numbers 9-11 are the hardest of all because they require a lot of capital. Being totally self sufficient may only be a dream to you, ignoring this and living in a city will be a nightmare! If the best you can do is to live 30 miles away from a city and in a rural setting, this certainly will be a better choice than living in a metropolis. Remember, food stocks will run out within 3 days and even if you have paper dollar bills, they cannot spend on what does not exist.
A few months back I penned a fictional article referring to how it might begin to go down and can be found here http://blog.milesfranklin.com/fact-or-fiction . By no means was this all inclusive, the exercise was undertaken to make people think. It was meant only as a start for some or a reminder for others of what you may have forgotten. When Jim requested a review, he finished with the following “GOTS = Get out of the system. It is as or more important than owing gold and be in the system.” Please understand what he is saying, “gold will help but it is not a magic bullet”. Gold is meant to get your wealth “from here to there”. In other words, gold will transport wealth from today into tomorrow. It is up to you to live long enough to get there. Sufficient quantities of water, rice, beans and lead will be more helpful than gold or silver in this department! Do the best you can with what you have, do not beat yourself up because you forgot something …you will. Plan with like minded people or neighbors and don’t mistake what is most important, your family and your spirituality. Do what you can even while being laughed at by your friends and family, in the end, they will “get why you GOTS”! And no matter what your faith or who your God is, make your relationship right because when push comes to shove, there are no atheists in a foxhole! For those who have a belief, this is the Absolute GOTS of them all!
Regards, Bill Holter
Holter-Sinclair Collaboration
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