The Silver Set-Up: Bullish in the Extreme

23 May 2017 — Tuesday

YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM


The gold price opened about unchanged in New York at 6:00 p.m. EDT on Sunday evening.  About thirty minutes after that, it rallied a few dollars, but then was sold lower starting at 8 a.m. CST on their Monday morning.  The sell-off lasted until the morning gold fix in Shanghai — and from there it crawled slowly but steadily higher until fifteen minutes after the COMEX close in New York on their Monday afternoon.  It was sold off a bit from there into the close.

The low and high ticks are barely worth looking up, but here they are anyway:  gold’s low was recorded by the CME Group as $1,251.60 — and it’s high at $1,262.60 in the June contract.

Gold finished the Monday session in New York at $1,260.40 spot, up $4.80 from its close on Friday.  Net volume was only moderate at around 152,000 contracts — and roll-over/switch volume out of June was pretty chunky.

I didn’t receive the 5-minute gold and silver tick charts from Brad yesterday — and that’s why they’re not in today’s column.

The silver price inched higher during the first thirty minutes of trading on Sunday evening in New York — and at that point the price went vertical in what appeared to be a ‘no ask’ market.  But the short buyers and long sellers of last resort appeared in an instant — and by 11 a.m. in Shanghai on their Monday morning, they had the price back to unchanged.  Around 1 p.m. over there it began to head higher slowly but steadily and, like gold, the buying stopped at 1:45 p.m. EDT in New York.  The tiny sell-off ended shortly before 3 p.m. in the thinly-trade after-hours market — and it traded flat from there into the close.

The low and high ticks in this precious metal were reported as $16.84 and $17.21 in the July contract.

Silver was closed in New York yesterday at $17.145 spot, up 31.5 cents on the day.  Net volume by midnight in New York on Sunday evening was a bit over the 10,500 contract mark — and by the close of trading at 5:00 p.m. EDT yesterday afternoon, net volume checked in at pretty heavy 71,500 contracts.

Platinum was up a few bucks in the early going in New York on Sunday evening, but that didn’t last — and it was sold down into the morning gold fix in Shanghai along with silver and gold.  It traded sideways from there until the Zurich open — and then chopped quietly but unevenly higher until 1 p.m. in New York.  The price went vertical at that juncture, but got brutally capped within seconds — and wasn’t allowed to traded above $948 spot after that — and that’s where  it closed…up an even 10 dollars on the day.

Palladium chopped mostly sideways throughout all of the Far East and morning trading session in Zurich on their respective Monday’s.  ‘Da boyz’ dropped the hammer at the COMEX open — and the $748 low tick was set around 9 a.m. EDT.  Then, starting about forty-five minutes later, it began to rally rather impressively until it reached the $770 spot mark just before 3:30 p.m. in the thinly-traded after-hours market.  The price was capped at that point — and it was closed at $773 spot, up 12 bucks on the day.

The dollar index closed very late on Friday afternoon in New York at 97.11 — and rallied to its 97.44 high tick in two separate steps between the open in New York on Sunday evening — and 9:45 a.m. in New York.  It began to head sharply lower from there, with 96.80 low tick coming a few minutes after 10 a.m. in New York…which was at, or just after, the London p.m. gold fix.  It rallied back to the 97.00 mark by about 11:25 a.m. EDT — and then chopped quietly sideways for the rest of the Monday session.  The dollar index finished the day at 96.99 — down 12 basis points from Friday.

Here’s the 3-day dollar index chart so you can see the whole move during the Sunday/Monday trading session, along with Friday’s action as well.

And here’s the 6-month U.S. dollar index chart — and it’s looking oversold…whatever that means these days.

The gold shares gapped up about a percent at the open — and then chopped quietly higher until their collective high ticks were set around 2:15 p.m. in New York trading.  They gave up a decent portion of their Monday gains after that — as the HUI only closed up 1.54 percent.

It was mostly similar for the silver equities, except their respective highs came at silver’s high tick– and that was shortly after the COMEX close.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by 1.54 percent as well.  Once again, I was underwhelmed by the action in the silver stocks.  Click to enlarge if necessary.

Here — and back by popular demand, is the 6-month Silver Sentiment/Silver 7 Index chart…click to enlarge.

The CME Daily Delivery Report showed that 2 gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Wednesday.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in May rose by 2 contracts, leaving 25 left, minus the 2 contracts mentioned just above.  Friday’s Daily Delivery Report showed that zero gold contracts were posted for delivery today within the COMEX-approved depositories, so that means the obvious.  Silver o.i. in May dropped by 24 contracts, leaving 79 still around, minus the 2 contracts mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 26 silver contracts were posted for delivery today, which means that 26-24=2 more silver contracts were added to the May delivery month.

There was a deposit in GLD yesterday, as an a.p. added 57,087 troy ounces — and as of 7:26 p.m. EDT yesterday evening, there were no reported changes in SLV.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of trading on Friday — and this is what they had to report.  Their gold ETF added a pretty healthy 44,703 troy ounces — and it’s been a very long time since I’ve seen that size of a deposit.  Almost the same can be said of their silver ETF, as they reported adding 547,110 troy ounces.

Since the beginning of May there has been 1.6 million troy ounces silver added to that ETF — and I would doubt very much if John Q. Public was doing the buying.

There was no sales report from the U.S. Mint.

There was very little movement in gold over at the COMEX-approved depositories on the U.S. east coast on Friday.  Nothing was reported received — and only 1,286.000 troy ounces/40 kilobars were shipped out.  That activity, such as it was, occurred at Canada’s Scotiabank — and I shan’t bother linking it.

It was somewhat busier in silver, as 100,258 troy ounces were received — and 748,481 troy ounces were shipped out the door.  All of the ‘in’ activity looks like it came from a transfer out of HSBC USA — and along with them, there were four other depositories involved in the ‘out’ activity — and I’m not going to itemize it.  If you’re curious, the link to all that is here.

It was fairly quiet over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday.  They received only 700 of them — and shipped out 640.  All of this activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

There was a slight error in the COT Report for silver in my Saturday column.  I have corrected the offending paragraph on my website — and here’s the updated version…

Ted said that the Big 4 traders decreased their short position by about 3,300 contracts — and he attributes all of that to JP Morgan, which bring their short position down to about the 15,000 contract mark.  The ‘5 through 8’ traders actually added 3,400 contracts to their short position during the reporting week — and Ted’s comment that “now at least two managed money shorts are in that category” is the reason why. [This last sentence was changed at 1:00 p.m. EDT on Sunday, as Ted sent me the wrong numbers initially, as he was on the road — and in a hurry. – Ed] Ted’s raptors, the remaining 30-odd traders in the commercial category other than the Big 8, increased their long position by around 12,000 contracts.  They are now net long 31,500 COMEX contracts…a huge number.”

And it certainly explains why the short position of the Big 8 traders remained at 182 days of world silver production…unchanged from the previous week’s COT Report…as the decrease in short position by the Big 4/JPM, was perfectly counterbalanced by the increase in the short position of the ‘5 through 8’ large traders because of the two Managed Money traders now in that category.

I have a lot of stories today, so I hope you have enough time to spend the time on the ones that interest you the most.


CRITICAL READS

We Now Know “Who Hit the Brakes” as Loan Creation Crashes to Six Year Low

The wheels are falling off the U.S. bank loan market.

After we first showed in early March the steep drop in bank loan creation for both Commercial and Industrial, auto and total loans – all traditionally leading indicators to economic contraction and recession as business and consumers halt spending, even with borrowed money – numerous other analysts and pundits have attempted to explain, and justify why one should not be particularly concerned about this tumbling indicator. Most notable among them Goldman, who in late March “explained” that there was nothing ominous about the crash in loan creation, and instead it was just a function of a base effect, and a shift from loan to corporate bond issuance.

Two months later we can confirm that not only was Goldman wrong, but so are all the Pollyannas who assert there is nothing troubling about the ongoing collapse in loan creation.

According to the latest Fed data, the all-important C&I loan growth contraction has not only continued, but over the past two months, another 50{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} has been chopped off, and what in early March was a 4.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} annual growth is now barely positive, down to just 2.0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, and set to turn negative in just a few weeks. This was the lowest growth rate since May 2011, right around the time the Fed was about to launch QE2.

At the same time, total loan growth has likewise continued to decline, and as of the second week of May was down to 3.8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the weakest overall loan creation in three years.

This longish chart-filled Zero Hedge piece was posted on their Internet site at 5:00 p.m. on Sunday afternoon EDT — and I thank Richard Saler for pointing it out.  Another link to it is here.


Illinois’ unpaid bills jump to $14.3 billion

Illinois’ unpaid bill backlog has increased to $14.3 billion from a previous balance of $13.3 billion. The Illinois comptroller’s office announced the staggering $1 billion jump in unpaid bills in a May 17 press release.

In August 2016, analysts from Moody’s Investors Service, a prominent credit rating agency, predicted Illinois’ stack of unpaid bills would reach $14 billion by summer 2017.

In March, Moody’s warned that Illinois’ ongoing budget gridlock and failure to pay its bills could lead to further credit downgrades, which could result in Illinois becoming the first “junk”-rated state in the nation.

Illinois’ mounting pile of unpaid bills reveals that the state continues to spend money faster than it takes it in.

Many Springfield politicians think a tax hike would solve this problem. But more tax revenue would just paper over the state’s spending problem.

This article showed up on the illinoispolicy.org Internet site last Wednesday — and I found it in the Monday edition of the King Report.  Another link to it is here.


Key Events in the Coming Week: FOMC Minutes, GDP, BOC, OPEC and More

The key highlights in the coming week are the Fed minutes, the Eurogroup meeting on Greece, the OPEC meeting and Bank of Canada rate decision. We also get GDP releases in the U.S., Eurozone, and U.K., while a murder (or gaggle) of Fed speakers will highlight virtually every single day, starting with four today. Also there will be monetary policy meetings in Colombia, South Africa, Korea, Hungary, Thailand and Ukraine. Ratings in Kuwait&Qatar

In the U.S., key economic releases this week are the durable goods report — and Q1 GDP revision on Friday. The minutes of the May FOMC statement will be released on Wednesday at 2 P.M. In addition, there are several scheduled speaking engagements by Fed officials this week

Detailed event breakdown:

  •  Looking for dovish signs in the Fed minutes? The minutes on the May statement will be closely watched as the market tries to assess the potential of a communication tweak. The last statement dismissed the impact of weak 1Q GDP and March consumer inflation. With recent data being on the weak side, a dovish sign in the minutes may put emphasis on downside risks.
  •  Also watch for Eurogroup meeting on Greece and OPEC: A Eurogroup meeting is scheduled for 22 May. All eyes will be on the outcome because of Greece. Markets are optimistic that a compromise can be reached on Greece – we remain sceptical. Red lines around debt relief and IMF participation are the same and there is potential for complications in the run-up to the summer redemptions.

There’s a very long list of “stuff” in this Zero Hedge piece, but the Fed minutes this Wednesday should be considered the most important as far as the precious metals are concerned.  The whole thing isn’t worth reading — and you’ve already read the salient bits in my opinion.  This item was posted on their Internet site at 9:06 a.m. on Monday morning EDT — and my thanks go out to Brad Robertson for sharing it with us.  Another link to it is here.


Ron Paul With Special Guest Nassim Taleb: Black Swans and Interventionistas

Dr. Taleb, author of “The Black Swan,” takes apart our foreign and monetary policies.

Why do neocons and mainstream media keep pushing war and conflict? They face zero risk. This is something new in history. Those who decide on interventionism overseas are never harmed by the interventions.

Plus…are we headed for a market crash that makes 2008 look like a picnic? And if so, what will the aftermath look like?

This 31:16 minute video interview put in an appearance on the marketsanity.com Internet site yesterday, but the interview itself is from last Friday.  I thank Ken Hurt for bringing it to our attention — and another link to it is here.


E.U. Shocked to Discover U.K. May Walk Away With No Deal

The U.K. will quit Brexit talks unless the European Union drops its demands of a divorce payment of 100 billion euros ($112 billion), Brexit Secretary David Davis said.

Britain’s negotiations on leaving the E.U. would otherwise be plunged into “chaos,” and even a £1 billion settlement would be “a lot of money,” Davis said in an interview published in the Sunday Times.

The size of Britain’s exit bill, and which types of negotiations can begin before it has been agreed, has been a source of debate for weeks.

European Commission President Jean-Claude Juncker has said the U.K. will have to pay about £50 billion, while Luxembourg’s Prime Minister Xavier Bettel has signaled a figure between €40 billion and €60 billion. The Financial Times estimated the cost could balloon to €100 billion, while a study by the Institute of Chartered Accountants in England and Wales put the cost at as little as £5 billion ($6.5 billion).

We don’t need to just look like we can walk away, we need to be able to walk away,” Davis said. “Under the circumstances, if that was necessary, we would be in a position to do it.”

This is the Mish Shedlock spin on a Bloomberg story that’s had a headline change since it was posted on their website back on Saturday afternoon Denver time.  And, by the look of it, it has had a Page 1 re-write as well.  I would suggest that Mish’s comments, along with the quotes from the original Bloomberg article, are worth reading.  Then, when that’s done, take a look at the embedded and linked Bloomberg story to see how much new spin has been put on it by their ‘thought police’  when they ‘edited’ it at 5:37 a.m. on Sunday morning Mountain Daylight Time.  This news item comes courtesy of Roy Stephens — and another link to it is here.


John Pilger speaks out on Julian Assange and Sweden

The anti-war journalist and investigative reporter John Pilger has been a long time friend and supporter of fellow Australian Julian Assange. Assange, once the darling of the western liberal media when he exposed the war crimes of George W. Bush’s America, fell from their favour when he applied an equally vigorous amount of scrutiny to the war crimes, lies and lack of ethics of the Obama administration.The anti-war journalist and investigative reporter John Pilger has been a long time friend and supporter of fellow Australian Julian Assange. Assange, once the darling of the western liberal media when he exposed the war crimes of George W. Bush’s America,fell from their favour when he applied an equally vigorous amount of scrutiny to the war crimes, lies and lack of ethics of the Obama administration.

But Pilger, like Assange is a man of principle and has consistently helped expose Assange’s plight to the wider world.

Pilger has released remarks on recent events concerning Sweden dropping its case against the Wikileaks founder.

Julian Assange has been vindicated because the Swedish case against him was corrupt. The prosecutor, Marianne Ny, obstructed justice and should be prosecuted. Her obsession with Assange not only embarrassed her colleagues and the judiciary but exposed the Swedish state’s collusion with the United States in its crimes of war and “rendition”.

Had Assange not sought refuge in the Ecuadorean embassy in London, he would have been on his way to the kind of American torture pit Chelsea Manning had to endure.

This prospect was obscured by the grim farce played out in Sweden. “It’s a laughing stock,” said James Catlin, one of Assange’s Australian lawyers. “It is as if they make it up as they go along”.

This long, but very worthwhile essay appeared on theduran.com Internet site on Saturday — and it’s the second offering in a row from Roy Stephens.  Normally I would save a piece of this content and size for the weekend, but this is very much in the news at the moment, so I’ve posted it now.  Another link to it is here.


Catalonia Threatens Immediate Declaration of Independence if Spain Doesn’t Approve Referendum

The constitutional crisis in Spain may be coming to a head quickly according to a leaked document on a “Secret Law for Catalonia Independence” as reported by El Pais.

Spain’s Attorney General José Manuel Maza is set to examine the legality of a plan outlined by the regional government of Catalonia to activate immediate secession from Spain if the central government in Madrid stops it from holding a vote on independence – something it is planning on doing in September or October of this year.

The independence mechanism is detailed in a secret draft version of legislation being prepared by the Generalitat, the Catalan regional government, and to which EL PAÍS has had access.

The document aims to work as a provisional Catalan Constitution that, according to the text, would be in place during the two-month period that the parliament would have to begin a process that would culminate in the “parliamentary republic” of Catalonia.

If the Spanish state effectively impedes the holding of a referendum, this law will enter into effect in a complete and immediate manner when the [regional] parliament has verified such an impediment,” the draft legislation reads.

This news item is another one from the mishtalk.com Internet site.  It was posted there at 2 p.m. EDT on Monday afternoon — and another link to it is here.  It’s the third contribution in a row from Roy Stephens.


Ukrainian regime on verge of creating famine in Transnistria

Not content with blockading Donbass, a blockade was has largely  been a failure do to Donbass’s self sufficiency and border with Russia where aid and food frequently flow in, the Ukrainian regime has now imposed a total foodstuffs blockade against Transnistria.

Transnistria is a small effectively self-governing landlocked entity between the former Soviet Republics of Ukraine and Moldova.

Ever since 1990, Transnistria has considered itself independent of Moldova.

The position of Transnistria has always been precarious. Prior to the collapse of the USSR and prior to Moldova becoming an independent state, Transnistria proclaimed itself a sovereign Soviet Republic in 1990 as the Pridnestrovian Moldavian Soviet Socialist Republic.

When Moldova became an independent state in 1991, it claimed sovereignty over Transnistria.

A war ensued which ended in a fragile ceasefire in 1992. The issue remains largely unresolved.

This isn’t the first story I’ve posted about this tiny ‘country’ — and it doesn’t sound like it will be the last.  This article put in an appearance on theduran.com Internet site on Sunday — and it’s yet another offering from Roy Stephens.  Another link to it is here.


Slovakia: NATO Exit Idea Gains Momentum

Montenegro is to be officially admitted into the North Atlantic Treaty Organization on June 5. The Montenegrin parliament has approved becoming NATO 29th member country amid a certain degree of popular rejection shared by most of the political opposition, who demanded a public referendum in order to ratify its membership of the military alliance.

The organization has grown from twelve founding members in 1949 to 28 today. The most recent new members, Albania and Croatia, joined in 2009.

There are three officially recognized aspiring members: Bosnia and Herzegovina, Georgia, and Macedonia. Extending membership is currently a topic of debate, including Sweden, Finland. Ukraine and is less likely to join but the membership is not excluded, it’s on the agenda.

The alliance appears to be constantly expanding with new aspiring nations knocking at the door. This fact is often adduced to demonstrate success. With Montenegro to join soon, the bloc’s expansion grabs media headlines. At the same time, little is said about the emerging trend in the opposite direction.

Over 150,000 people have already signed the petition to kick off a referendum on Slovakia’s withdrawal from NATO. The initiative has been launched by the opposition anti-NATO, anti-EU Kotleba – People’s Party Our Slovakia. The petition needs 350 thousand signatures to start the process.

This commentary showed up on the strategic-culture.org Internet site on Sunday — and it’s worth reading, especially if you’re a serious student of the New Great Game.  I thank Larry Galearis for bringing it to our attention — and another link to it is here.


Philippines President Duterte slams America on eve of Putin meeting

The former American colony is embracing multi-polarity.

This week Philippines President Rodrigo Duterte is set to meet with President Vladimir Putin in Moscow. The meeting should be understood as part of Duterte’s efforts to take his country out of America’s geo-political and economic orbit and engage in countries that constitute the other end of the multi-polar world.

Duterte has all ready engaged in an historic rapprochement with China, something which looks set to calm tensions over territorial disputes in the South China Sea.

Last year, Duterte welcomed a Russian Navy group to Philippines to engage in a friendly military demonstration. At the event Duterte spoke of his desire to foster closer and better relations with the Russian Federation.

Now, on the eve of talks with President Putin, Duterte told Russian reporters that he seeks to break from a traditional over-dependence on America.

Duterte stated,

It’s the way how they handle it. You (the United States) treat me as if I am your colony still? You must be kidding. Why would I allow it, why would I allow you to treat me as if I am your colonial governor? We are independent country. We will survive, we will endure. We can go hungry, but this time, I want my country treated with dignity”.

This news item appeared on the duran.com Internet site on Saturday sometime — and it’s the final offering of the day from Roy Stephens — and I thank him on your behalf.  Another link to it is here.


World Leaders Gather in Beijing While the U.S. Sinks into Irrelevancy

While vaudevillian comedy-like shouting matches broke out in the West Wing of the White House between President Donald Trump and his senior advisers and between the White House press secretary and various presidential aides, world leaders gathered in Beijing to discuss the creation of modern-day land and maritime «silk roads» to improve the economic conditions of nations around the world. Nothing more could have illustrated the massive divide between the concerns of many of the nations of the world and those of the United States, which is rapidly descending into second-rate power status, along with its NATO allies Britain, France, and Germany.

While Mr. Trump was threatening to fire his senior White House staff, reprising his one-time role in his reality television show «The Apprentice», China’s President Xi Jinping, Russian President Vladimir Putin, and presidents and prime ministers from around the world sat down to discuss the creation of new international and intercontinental highways, railways, and maritime routes under China’s proposed Silk Road Economic Belt and the 21st Century Maritime Silk Road.

Even countries that are cool on the Chinese initiative, including India and Japan, sent representatives to the summit that carried a bit more clout than the pathetic representation of the United States, Matt Pottinger, a little-known special assistant to Trump and the senior director for East Asia of National Security Council. In fact, the only reason Trump sent anyone to represent the United States at the Beijing gathering was because of a special request made by President Xi during his recent meeting with Trump at the president’s private Mar-a-Lago Club resort in Palm Beach, Florida.

South Korea, which saw relations with China sour over America’s placement of Terminal High Altitude Area Defense (THAAD) missile system in South Korea, sent a delegation to Beijing after a phone call between South Korea’s new liberal president, Moon Jae-in, and President Xi. Moon responded to the phone call by sending a delegation led by his Democratic Party’s veteran legislator to Beijing.

Even North Korea, which rankled South Korea, Japan, and the United States by firing a ballistic missile into waters near Russia, sent a delegation to the Beijing meeting headed by Kim Yong Jae, the North’s Minister of External Economic Relations. The Trump administration, which sent a virtual unknown to Beijing, complained loudly about North Korea’s representation at the Silk Road summit. But Washington’s complaint was conveyed by someone as unknown as Mr. Pottinger, Anna Richey-Allen, a low-level spokesperson for the U.S. State Department’s East Asia Bureau. The reason why the United States is being spoken for by middle-grade bureaucrats is that the nation that still believes it is the world’s only remaining «superpower» is now governed by an administration rife with top-level vacancies, inter-agency squabbling, and amateur league players.

This opinion piece showed up on the strategic-culture.org Internet site on Saturday — and it’s the second contribution of the day from Larry Galearis.  It’s certainly worth reading, even if you’re not a serious student of the New Great Game — and another link to it is here.


Someone bought 2 pizzas with 10,000 bitcoins in 2010 — today they’re worth $20 million

On May 22, 2010, a developer bought two pizzas for 10,000 units of a then-little-known digital currency called Bitcoin.

Today, those 10,000 bitcoins are worth more than $20 million (£15.4 million).

Bitcoin is going absolutely nuclear now. Its price is tearing upwards, with each bitcoin currently worth $2,128 (£1,638) – a little shy of all-time-high of $2,185 (£1,682), earlier this morning.

Just a year ago, it was trading at just $443 (£341), after deflating from what was then seen as the giddy highs of around $1,100 (£847) in late 2013. It has since embarked on an epic bull run.

The Japanese have caught the Bitcoin bug and inefficiencies across markets are being exposed,” CryptoCompare founder Charles Hayter said in an e-mailed comment. “Irrational exuberance is taking hold as the Japanese stumble over each other to enter the Bitcoin market and drag up international prices.

The digital currency has come a long way since 2010, when the purchase of the two Papa Johns pizzas by Laszlo Hanyecz from another bitcoin enthusiast marked what is believed to be the first “real-world” bitcoin transaction.

You know that the world has gone truly mad when you see stuff like this.  This amazing article was posted on the nordic.businessinsider.com Internet site in the wee hour of Monday morning EDT — and it comes courtesy of Swedish reader Patrik Ekdahl.  Another link to it is here.


Rick Rule: Trump, Gold, Investing in Junior Mining Companies

Rick Rule, founder and chairman of Sprott Global Resource Investments Ltd., began his career in the securities business in 1974. He is a leading American retail broker specializing in mining, energy, water utilities, forest products and agriculture. His company has built a national reputation on taking advantage of global opportunities in the oil and gas, mining, alternative energy, agriculture, forestry and water industries.

This 30-minute audio interview starts at the 9:25 minute mark…which it should do automatically when you hit the ‘play’ button.  I thank Ken Hurt for sending it along.


James Rickards: Gold’s “Decisive Turn Around” – “Next Stop is $1,300 or Higher

This mostly economic commentary by Jim showed up on the goldcore.com Internet site on Monday — and Mark O’Byrne just snatched the gold stuff right at the end of it…making a headline from it.  All of the “gold stuff” is quoted in this article, as is the link to Jim’s entire commentary from The Daily Reckoning headlined headlined “The Perils of Complacency“.  A link to all of this stuff is here.


Silver Superman coins prove to be Kryptonite to Royal Canadian Mint’s bottom line

In 2011, the mint began selling a series of silver collectible coins, with a face value of $20, at a time when the price of silver was soaring. The cost to buy one was also just $20, tax free.

Superman, Bugs Bunny, the starship Enterprise and other catchy images on the coins attracted hundreds of thousands of coin collectors and investors, and fattened revenues at the Crown corporation. More than 4.2 million such coins have been struck to date.

But the price of silver has fallen dramatically in the five years since, and Canadians are returning the coins by the truckload, protected from the fall in silver prices by that fixed $20 face value which the mint must pay back on request.

Stung by the massive returns, the mint abruptly ended its so-called Face Value collectible coin business earlier this year, and has taken a big hit on its balance sheet.

The 2016 annual report, delayed for months because of revised accounting for the Face Value reversal, says there’s no plan to place an expiry date on redemptions of the coins.

Well, this certainly explains the delays in the last two sets of financial statements from the RCM.  This must read news item put in an appearance on the cbc.ca Internet site at 5:00 a.m. on Sunday morning EDT — and I thank Doug Clark for bringing it to my attention — and now to yours.  Another link to it is here — and the embedded 1:59 minute video clip is definitely worth watching.


‘Car boot-sale’ diamond set to fetch £350,000 at auction

A diamond ring bought for £10 at a car-boot sale 30 years ago is expected to fetch £350,000 at auction.

The owner believed the “exceptionally sized” stone was a piece of costume jewellery when she bought it at West Middlesex Hospital in Isleworth, west London, in the 1980s.

Unaware it was a 26 carat, cushion-shaped white diamond from the 19th Century, she wore it daily for decades.

After about 30 years of wearing the ring, the owners took it to Sotheby’s when a jeweller told them it may be valuable

The stone goes under the hammer at Sotheby’s in June.

This incredible story, along with an incredible photo, appeared on the bbc.com Internet site on Monday sometime — and it comes courtesy of Patrik Ekdahl.  It’s definitely worth reading if you have the interest — and another link to it is here.


The PHOTOS and the FUNNIES

I was out with the camera on Sunday.  I was looking for black-crowned night herons, but they’re not back at their usual spring breeding grounds yet.  Maybe next weekend.  But I did come across this male red-winged blackbird that was courting a female, all the while trying to scare off other males — and it was a sight to behold.  The problem with all-black birds is that unless  you get the light shining on them at the right angle, there’s absolutely no detail.  These were the only two shots that I got with any eye glint in them.  That’s a must for a bird with a black head, because without it, it’s just a black blob with a bill.  Although I must admit that the resolution would have been better if I could have gotten a few meters closer that I was. But the épaulettes, hidden for the most part during the rest of the year, are quite a sight when used for the purpose for which they were designed.  The click to enlarge feature doesn’t help with these photos.


The WRAP

It is simply stunning how this stone-cold market crook and manipulator could get big net long on COMEX inventories alone, right in front of our eyes. You can forget completely my contention that JP Morgan has accumulated another 500 million oz of physical silver apart from its COMEX holdings (a total of 600 million oz) for the purpose of seeing that the bank has nothing to fear on exploding silver prices. But if you do leave out the more than half a billion oz JPM has acquired over the past six years, you would be missing the key feature in silver today.

Over the past 4 reporting weeks, JPM has reduced its silver short position by 19,000 contracts, an amount equal to 95 million oz. I would submit that if there was one single explanation for the silver price drop over the past 4 weeks, it was due to the desire and ability of JPM to reduce its paper short position by as much as it did.

From the largest (most bearish) commercial silver short position in history, barely 4 weeks ago, silver’s market structure is now the most bullish in almost a year and a half. Simply stunning – never has there been such a turnaround in history and only the most naïve would think this was coincidental or free market derived in any way.Silver analyst Ted Butler: 21 May 2017


I must admit that I don’t know what to make of yesterday’s price action in both silver and gold.  Gold is back above its 50 and 200-day moving averages — and even with yesterday’s impressive rally, silver is still below its 50-day moving average by a bit.  It will be more than interesting to see what happens once it breaks above that number, plus the 200-day moving average, currently 30 cents above it.

I’ll also be interested in what this Friday’s COT Report has to say for itself, particularly if the price shenanigans after last Tuesday’s cut-off involve JPMorgan and the only longs left that they can potentially harvest…Ted’s raptors…the commercial traders other than the Big 8.  I would suspect that the technical traders in the Managed Money category don’t have a long left to sell — and most likely are maxed out on the short side for all intents and purposes, too — and the traders in the Nonreportable/small trader category would be pretty slim pickings for JP Morgan.

This was a scenario that Ted brought up some years ago — and that we have discussed on and off since.

Here are the 6-month charts for all four precious metals, plus copper, once again.  And, once again, the high ticks of the day in both gold and silver were set after the COMEX close, so they don’t appear on Monday’s dojis.  As I’ve commented on before, the amount of trading going on after the COMEX close has really picked up in the last month.  The ‘click to enlarge‘ feature helps a bit with the first four charts.

And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price has been chopping around a few dollars above unchanged in Far East trading on their Tuesday — and is only $1.10 at the moment.  It was mostly the same price action in silver, except it has been sold lower as well — and is down 2 cents.  It’s been pretty uneventful in both platinum and palladium — and both are down a buck as Zurich opens.

Net HFT gold volume is just over 35,000 contracts, with fairly decent roll-over/switch volume out of June — and that number in silver is 8,500 contracts — and there’s respectable roll-over/switch volume out of July.

The dollar index sagged a bit in morning trading in the Far East — and starting shortly before 2 p.m. China Standard Time, it began to head higher — and from down 9 or 10 basis points, it’s now back to unchanged, after being up a handful of basis points a few minutes ago.  I would suspect that this was the reason that gold and silver prices got leaned on during the last hour of trading in Shanghai.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and for reasons I stated just above, I’d certainly be happy to see the 50-day moving average in silver remain intact until after that event.

And as I post today’s efforts on the website at 4:02 a.m. EDT, I note that the gold price has been chopping quietly lower during the first hour of London trading — and is currently down 60 cents the ounce.  It’s been the same price pattern for silver — and it’s lower by 8 cents.  Platinum and palladium are now down 2 dollars and 3 dollars respectively.

Net HFT gold volume is coming up on 42,000 contracts — and the roll-over/switch volume out of June is increasing as well.  That number in silver is almost 11,000 contracts now, with twenty-five percent of gross volume composed of switches out of July.

The dollar index turned lower a minute or two before the London open — and is now down 14 basis points.

We’re coming up hard on the June delivery month for gold, so I expect both volume and roll-over activity to pick up as the week moves along.  All the large traders have to roll out of June by the close of COMEX trading on Monday, with the rest having to exit those positions by the close of COMEX trading on Tuesday…except for those standing for delivery.

I have no idea what to expect between now and the close of trading next Wednesday when May goes off the board, so I won’t bother prognosticating on what may or may not happen during the remainder of the Tuesday session.

That’s all I have for today — and I’ll see you here tomorrow.

Ed