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Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Message: Ed Steer this morning
Belarus Central Bank Halts Sales of Gold For Roubles
"What we need to see is rising prices on declining open interest...as this will mean that the shorts are covering by buying long positions."
¤ Yesterday in Gold and Silver
On Friday, the gold price spent most of the day trading around the $1,475 price mark. But once the London fix was in at 3:00 p.m. local time [10:00 a.m. in New York] the gold price rose about $13...and then traded sideways for the rest of the New York trading session, which ended at 5:15 p.m. Eastern time. Volume was decent.
Silver's low of the day was a bit under $42...but once it broke above that price level around 11:00 a.m. in London [6:00 a.m. in New York], the price never looked back...and closed above $43 spot for the first time in thirty-one years. Volume was heavy.
The dollar spent all of Friday gaining a bit over ten basis points via a very circuitous route...and was obviously not a factor in the precious metals yesterday.
Considering the fact that gold was up almost $30 on Thursday and Friday...and silver up $2.40 during the same time period...the gold and silver stocks sure stunk up the place. Having said that, the silver shares did just OK on Thursday...but all of them mysteriously got sold well off their Friday highs...and a lot of them finished down on the day.
To tell you the truth, I just don't know what to make of it. The shares of all gold and silver companies should be screaming to new highs...just as the prices of the metals they mine are doing.
John Embry over at Sprott Asset Management has said publicly that he feels that the gold stocks are being manipulated...and we had GATA have said the same thing over the years. It's entirely possible that we saw some of that going on late this week.
Here's the HUI for the week that was...and there's no hint whatsoever of the big rally in gold and silver on Thursday and Friday.
Nick Laird over at sharelynx.com has provided his "Silver Sentiment" graph updated for the week that was. The fact that Coeur d'Alene and Pan American Silver got nailed on Thursday...plus the poor performance of the silver stocks on Friday, certainly took the wind out of the sails of this index.
Friday's CME Daily Delivery Report was nothing to write home about. It show that 7 gold, along with 5 silver contracts, were posted for delivery on Tuesday.
There were some big additions to both GLD and SLV on Friday. The GLD ETF added a very chunky 584,997 troy ounces...and the SLV ETF was up 2,244,423 troy ounces.
The U.S. Mint had a sales report. They sold another 4,000 ounces of gold eagles...2,500 one-ounce 24K gold buffaloes...along with 47,000 silver eagles. Month-to-date the mint has sold 49,000 ounces of gold eagles...10,000 ounces of one-ounce 24K gold buffaloes...and 1,421,000 silver eagles.
Over at the Comex-approved depositories, they finally reported receiving some silver on Thursday...78,683 ounces. This was overshadowed by a 567,252 ounce withdrawal on the same day. The link to that action is here.
Here's the "Gold/Silver Ratio" chart for the last year...and it set a new low for this move on Friday.
I didn't have the chance to talk to Ted Butler about the Commitment of Traders report yesterday...but there was an improvement in the Commercial short positions in both metals for the reporting week ending Tuesday, April 12th.
In silver, the bullion banks reduced their net short position by a rather large 5,135 contracts...or 25.7 million ounces. The Commercial net short position is now down to 256.4 million ounces. The '4 or less' bullion banks are short 209.0 million ounces...and the '8 or less' bullion banks are short 267.6 million ounces. These are the lowest numbers I've seen in quite a while.
In gold, the Commercial net short position was reduced by 4,977 contracts...or 497,700 ounces. The Commercial net short position now stands at 25.4 million ounces. The '4 or less' bullion banks are short 16.1 million ounces of that...and the '8 or less' bullion banks are short 22.65 million ounces.
Without doubt, these numbers have deteriorated significantly since the Tuesday cut-off...as the open interest numbers for Thursday and Friday showed huge increases. As I've been saying, these rallies in both gold and silver are not going unopposed...and the bullion banks, as short sellers of last resort, are going short against all the new longs pouring into the market, in order to prevent the price of both metals from going supernova. And that's exactly what would happen if they didn't.
Here's Ted Butler's "Days of World Production to Cover Short Positions" courtesy of Nick Laird.
I have the usual number of stories today...and I'm also going to empty out my in-box...as I've been saving some of them for the Saturday column, because I didn't have room for them during the week.
¤ Critical Reads
SubscribeUS consumer inflation gains most in 15 months as food and petrol prices increase
The US Labor Department said that consumer prices climbed a higher-than-expected 2.7pc in March from a year before. Almost three quarters of the rise was due to surging food and petrol prices, with petrol costs climbing 5.6pc, the ninth straight month of increases. Food rose 0.8pc in March, the largest gain since July 2008.
The above headline and paragraph was from a story posted at The Telegraph on Friday afternoon. Bloomberg also ran a story about it earlier in the day...and the headline there really down-played the bad news. It read "Inflation Cooled in March Outside of Food, Fuel".
It's hard to believe that both stories are referring to the same subject...but they are. The U.S. headline is called 'spin'...and it's Ben Bernanke's management of "inflation expectations" in spades.
I thank reader Roy Stephens for the story from The Telegraph...and Washington state reader S.A. for the Bloomberg piece. The link to the story from The Telegraph is here...and the Bloomberg story is here.
Broke U.S. States’ $48 Billion Debt Drives Unemployment Assistance Cuts
Missouri state Senator Jim Lembke had enough of what he calls Washington’s runaway spending. So he and three fellow Republicans in the state with an unemployment rate of 9.4 percent, blocked $105 million in federal aid for those out of work.
“It’s not free money -- it’s borrowed money from China,” he said in interview. “We’ve got to send a message to Washington: Stop the spending, stop the madness.”
This Bloomberg story is worth a few minutes of your time...and I thank Washington state reader S.A. for sending it along...and the link is here.
Venezuela Raises Some Food Costs 48% Amid Inflation Surge
Venezuela raised government-set price caps on some food products by as much as 48 percent even as President Hugo Chavez's government struggles to contain one of the highest inflation rates in the world.
Food is the principal driver of inflation in Venezuela, according to the central bank, and consumer prices may climb more than 4 percent in April with today’s decision, said Boris Segura, a Latin America economist at Nomura Securities International.
Once again I thank Washington state reader S.A. for this Bloomberg piece...and the link is here.
China's Economy Expands More-Than-Forecast 9.7% as Inflation Accelerates
China's economy grew a more-than-estimated 9.7 percent in the first quarter and inflation accelerated in March to the fastest pace since 2008. Consumer prices rose 5.4 percent from a year earlier...adding pressure for more monetary tightening.
I thank reader Scott Pluschau for this Bloomberg story...and the link is here.
Ireland downgraded and Greece disappoints: analysts react to latest twists in eurozone saga
A day after Greek borrowing costs soared on fears about a restructuring of its debt - an effective default - the crisis in Europe continues as credit rating agency Moody's cuts its rating of Irish government debt to just one level above 'junk'.
The mess in the European Union, if you wish to dignify it with that name, just gets worse and worse.
I thank reader Roy Stephens for sharing this short piece story from The Telegraph with us...and the link is here.
Audio Interviews with James Grant and Rick Rule
Belarus central bank halts sales of gold for roubles
My only real gold-related story today is this Reuters piece, which has since been pulled. Reader Ken Metcalfe, who sent me the original story, found another link to it over at westindia.wordpress.com.
Belarus’ central bank has stopped selling gold to local retail customers for Belarussian roubles, it said on Friday, after demand for precious metals soared due to expectations of a currency devaluation. The bank did not explain its decision.
No explanation is required, either. Anyone with a room temperature IQ in degrees Fahrenheit can figure this one out. That's why we're all buying precious metals hand over fist...to save us from this very thing.
It's a very short must read...and the link is here.
Answering the Sceptics: Ted Butler
Ted e-mailed me this story yesterday. It's not a new piece, as it's dated March 12, 2010...but it's a commentary of his that's worthwhile reading one more time. He starts the essay with this paragraph...
"Recently, I was contacted by a reporter for the Financial Times of London. He was looking to write a story about the CFTC’s upcoming hearing on precious metals. I could tell in my conversations with him that he was skeptical about my claims of a downward manipulation in the price of silver. As a result, the story he wrote reflected his skepticism, which was rooted in how could such a manipulation exist for as long as I alleged and how could silver be manipulated if it doubled in price over the past five years?"
Ted goes through the silver price manipulation scheme line by line. If you've read it before, it is, as I said, worth a second reading...and if it's your first time, then it's a must read...and the link is here.
The Heaviest Video of the Tsunami You'll Ever See
Now here's a brand new video of the tsunami that I hadn't seen before...and it's well worth your time.
At first these people are interested, almost jovial, but as the scope of the disaster comes upon them, they begin to grasp it...and start to cry in horror. It is quickly apparent to these folks that this is not a jovial - nor pleasant - experience as their homes and lives are destroyed right in front of their eyes.
The video...courtesy of reader 'Chris'...is posted over at the modernmarketingjapan.com website and runs 5:49...and the link is here. Don't forget to turn up your speakers and bring the video up to full-screen size. You don't need to understand Japanese to feel their pain.
Japan's Devastated Coastline: The Pompeii of the Pacific
It is a vast wasteland covered with the debris of houses pushed inland like toy building blocks. The tsunami of March 11, 2011 wiped out entire cities and has shaken the nation's postwar faith in technology and continuous prosperity. SPIEGEL has taken a chilling trip along the devastated northeastern coast.
Reader Roy Stephens sent me this piece from the German website spiegel.de earlier this week...and I thought it very apropos to insert it after the horrific video you just saw. It's not overly long...and very much worth your time. The link is here.
Has BP really cleaned up the Gulf oil spill?
Officially, marine life is returning to normal in the Gulf of Mexico after the Deepwater Horizon Gulf of Mexico oil spill, but dead animals are still washing up on beaches – and one scientist believes the damage runs much deeper.
This essay, posted in The Guardian, is a long...but very worthwhile read...and I thank Swiss reader G.B. for sending it along earlier this week. The link is here.
Wall Street Stands at the Pinnacle of 5,000 Years of Human Exploitation
As powerful as Wall Street appears to be, its abuse of power has so eroded the economic, social, and environmental foundations of its own existence that its fate is sealed.
The author, David Korten, originally wrote this 2-page article for YES! Magazine...but here it is posted over at alternet.org. This is a must read essay...and I thank Roy Stephens for sharing it with us...and the link is here.
Libya all about oil, or central banking?
This is my last posting of this column...and it's also a must read...and was sent to me by reader Tolling Jennings. Author Ellen Brown starts out the essay as follows...
Several writers have noted the odd fact that the Libyan rebels took time out from their rebellion in March to create their own central bank - this before they even had a government. Robert Wenzel wrote in the Economic Policy Journal: "I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences."
As I stated above, it's a must read...and a real eye-opener. The essay is posted over at the Asia Times...and the link is here.
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¤ The Wrap
Today's 'blast from the past' is still shrouded in controversy since its 'composition' over 200 years ago. The piece in question is Mozart's Requiem Mass in D minor [K. 626]. Most people know this work from either Peter Schaffer's 1979 play Amadeus...or the subsequent movie of the same name directed by Miloš Forman. Needless to say, I'm a huge fan of the Requiem...and the movie that was made from it.
Here's the Introitus and Kyrie performed by the English Baroque Soloists and the Monteverdi Choir. This performance was filmed at the Palau de la Musica Catalana, Barcelona in Dec. 1991...and you'd be hard pressed to find a better rendition anywhere. John Eliot Gardiner conducts...and the link is here. The rest of the movements are in the right sidebar. My personal favourite is the Tuba Mirum linked here.
Gold's net trading volume yesterday was a bit over 150,000 contracts...and the preliminary open interest number was a rather chunky 15,556 contracts, which is not what I wanted to see.
I knew Thursday's final open interest number for gold was going to be ugly...and it was...as o.i. blew out by 16,309 contracts. The preliminary number was 22,034 contracts...so it was an improvement, but only just.
April's open interest in gold had Wednesday's delivery of 256 removed from the total...and the number of contracts left to deliver in April is now down to 1,125...which still a reasonably large number, but nothing alarming.
Silver's net trading volume after all roll-overs was around 90,000 contracts on Friday...which is a real decent amount. The preliminary open interest number was a surprisingly low 1,925 contracts, which was way better than I expected. Based on this, there might have been some short covering in the futures market yesterday. I'll have a better idea of that when the final o.i. numbers are posted on the CME's website on Monday morning.
Silver's final open interest number from Thursday's big up-day was reported as +3,587 contracts. The preliminary number was a monstrous 7,729 contracts...so the final number was a big improvement.
What we need to see is rising prices on declining open interest...as this will mean that the shorts are covering by buying long positions. This may turn out to be what happened in silver yesterday. The very act of doing that decreases open interest...and drives the price up at the same time. This is something that none of the shorts have started to do...and this is what occupies Ted's thoughts a lot of the time at this point. Mine too.
The silver backwardation issue is virtually unchanged from Thursday.
Here's the 1-year silver chart. As I keep pointing out, the RSI is well into overbought territory...and the top-callers are out in force. Maybe that's why the shares of both silver and gold didn't do so well these last couple of days. Or maybe the smart in-the-know money is taking profits before the JPMorgan hammer falls. In the past, lousy share price action in the face of big gains in the metals themselves, has always been the tell-tale sign that the bullion banks were about to pull the pin. We'll find out soon enough...maybe on Monday.
Here's the 1-year gold chart. The RSI is just about to poke its nose into overbought territory once again. Could the price get smacked from here? Sure...but only the bullion banks know the date and the time.
If they're going to do the dirty, they normally run the price up in Far East trading to a new high...and then really start to go to work on prices once London is open. Don't forget that the New York bullion banks have virtually 24-hour access to the bullion market...and can enter it at any time...and that's exactly what they do when it suits them.
But, having said all that...although the Commitment of Traders is slightly bearish in gold, it's still pretty neutral in silver, so it remains to be seen just how low they can get the prices of either metal if they do decide to go after the technical fund longs.
There's still a lot of room to the upside in both metals if the bullion banks decide to let the price run higher for a little longer...and if the do, it will be interesting to see if some of the weaker shorts panic...and run to cover their positions, as that will drive the prices even higher.
There's still time left to either readjust your portfolio...or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations...as well as the archives. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
That's all for today...and for the week. I'll see you on Tuesday.
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