Anti-Trust Division of the Department of Justice Will Look Into Silver Manipulation
Gold made slow, steady gains all through Far East, London and early New York trading. But, at precisely 12:00 noon Eastern time, someone got tired of this slow and steady rise… and put an end to it. The high price tick at noon was $1,183.00 spot… and from there it got sold off about four bucks and then traded sideways into the close of electronic trading at 5:15 p.m.
Silver's price action wasn't exciting either… and the metal didn't show any signs of life until shortly after London opened its doors on Friday morning. The high price came shortly before London closed at 4:00 p.m. local time… which was shortly before 11:00 a.m. in New York. The high tick was $18.79 spot… and from there got sold off 15 cents going into the close of trading.
Once again the dollar was not a factor in precious metals prices… and if it was, it's not worth mentioning.
The precious metals stocks were pretty strong at the beginning of the day… but starting at 12:00 noon on the button in New York, gold got hit a bit… and the Dow began to roll over at exactly that time. The precious metals stocks followed in tandem… with the HUI only finishing up 0.67% when all was said and done. However, most of the juniors and the silver producers had a very good day indeed… and that, hopefully, is a sign of things to come. And it can't come soon enough for me.
Thursday was a nothing day for gold… and gold's open interest slid 2,522 contracts. But total open interest, although not at a record, is still way up there at 536,846 contracts. Total volume was reported as 115,853 contracts… of which about 5% were roll-overs. Silver had that big surprise rally out of the blue on Thursday… and its open interest was only up a smallish 839 contracts… which is very encouraging. Volume was high at 61,047 contracts… but the vast majority of it was roll-overs and spreads, as Thursday was last day of trading in the April contract, so this kind of wild activity is to be expected. Friday's preliminary numbers show that silver open interest for May has collapsed down to just 1,928 contract. Silver's volume on Friday was way down as well… only 35,674 contracts were traded. Gold volume on Friday was reported as 136,323 contracts.
The CME's Delivery Report for Friday showed that 27 gold and 725 silver contracts were posted for delivery on Tuesday, May 4th. JPMorgan and Bank of Nova Scotia were the big issuers and stoppers once again… and you can view all the action here.
Neither GLD or SLV showed any changes on Friday… and the U.S. Mint reported another 8,000 of the 24K gold buffaloes were sold. The Comex-approved warehouses had a report for both Wednesday and Thursday yesterday… as they missed Thursday's update. On Wednesday the added 429,217 ounces of silver to their collective inventories… and on Thursday they added another 749,586 ounces of silver on top of that.
Well, I was less than impressed with yesterday's Commitment of Traders report… for positions held at the end of trading on Tuesday, April 27th. Silver open interest actually rose 2,104 contracts. Both Ted and I were expecting a decline. How wrong we were! The commercial net short position in silver is 282.1 million ounces… the '4 or less' bullion banks hold 259.5 million ounces of that short position… and the '8 or less' bullion banks are short 332.1 million ounces of silver.
In gold, the bullion banks went short another 8,126 contracts during the week that was. This isn't a lot… but it's just another brick in the wall. The commercial net short position in gold [as of Tuesday] was 26.6 million ounces. The '4 or less' bullion banks hold 19.0 million ounces of that amount… and the '8 or less' bullion banks hold 24.5 million of the total commercial net short position. The link to yesterday's COT report is here.
Eric King's weekly interview with Ted Butler over at King World News is always a must listen… and the link is here. Ted Butler has a major breaking news story this week, so stop reading here and give this interview your undivided attention.
Today's first offering is a video interview. On its Trading Day program on Friday, Canada's Business News Network interviewed Jay Taylor for six minutes about the loss of faith in government currencies and the worldwide monetary system, a perfect environment for gold. While the Western public is largely oblivious to gold, Taylor says, Asians have never forgotten that it is money. The link to the interview is here… and it's a must watch.
The next gold-related story is one that I borrowed from the usual New York gold commentator yesterday. It's a Reuters piece filed on April 30th from Mumbai, India. The headline reads "India May gold festival demand seen robust this year". It's not an overly long piece… and I think it's worth your time. The link is here.
Here's a marketwatch.com story filed from Madrid on Friday. It hasn't exactly been a great week for Spain… and this headline doesn't help… "Spanish unemployment tops 20% in first quarter". If the truth were know, the U.S. unemployment rate is about that right now as well… at least if you use the figures quoted by John Williams over at shadowstats.com. I thank reader Scott Pluschau for sending it along… and the link is here.
This next story is one I 'borrowed' from Friday's King Report. It's posted at businessweek.com and Bloomberg's Mark Gilbert nicely captures the absurdity of ECB nations essentially bailing themselves out. That's all well and good for Greece… but what about Portugal, then Spain, and then heaven only knows which country will be next. How about England? Gilbert is at the top of his game with this commentary… and I consider it well worth the read. The headline states "Junking Greece May Be Beginning of End for Euro"… and the link is here
It's already 10:00 a.m. on Saturday morning in most of Europe as I write these words… and here's a story from the france24.com website with the latest update on Greece's bail-out package. The headline reads "Finance ministers to announce amounts of emergency loans to Greece". I thank reader Scott Stephens for sending me the story… and the link is here.
In his latest commentary over at the Free Gold Money Report, GoldMoney founder and GATA consultant James Turk reviews a recent study by the Bank for International Settlements about the danger that national debts will be inflated away through monetary devaluation. Sovereign debt instruments, Turk writes, are anything but "risk-free"… while only gold carries no counterparty risk. Turk's commentary is headlined "Gold: Needed Now More Than Ever" and the link to this must read story is here.
And lastly today is another interview with Jim Rickards. In it, he and Eric King of King World News discuss the implications of the anti-trust division of the Department of Justice looking into the silver price manipulation scheme. It's a powerful interview… and dovetails nicely with what Ted Butler had to say in his interview earlier. This is a must listen… and the link is here.
The gold standard may be dead… but gold remains the standard. – James Turk, goldmoney.com
Today's 'blast from the past' comes from the era of polyester leisure suits… which I remember all too well. This song needs no introduction whatsoever… so turn up your speakers and click here.
There's not much to add to everyone else's commentary in this column… as we're all saying the same thing. This will end badly… one way or another… sooner or later. There is only one protection from all of this and that's physical gold and silver in hand… or it's equivalent in a bullion fund that actually has the goods… or in the stocks of solid mining companies in safe jurisdictions.
Also, this turn of events with the Department of Justice now investigating the goings-on in the silver market is just another step along the road towards a free market in precious metals. I could be wrong, of course… but I sense that this day is close at hand. The only thing that is not known, is the manner in which it will come… slowly over time… or a sudden and massive revaluation once the major bullion banks with a short-side corner on the silver and gold markets realize that the jig is up.
That's why I'm all in… and will stay all in. I've been at this for ten years now… and I'm not going to miss this investment opportunity by being out of position. Nor am I going to 'sell in May and go away'. The world's financial and monetary systems are both well down the road to total collapse… and there's nothing that can save it now. It's just a matter of 'when' not 'if'… the run for gold [and silver] begins in earnest.
If you still have some capital to invest, I strongly urge you, dear reader, to put it to work in the precious metals market as soon as possible. There are no better vehicles for this than Casey's Gold & Resource Report… and Casey Research's flagship publication… the International Speculator. It costs nothing to check them out… and our 90-day satisfaction guarantee applies to both.
With options expiry and first day notice for May now out of the way, it will be interesting to see what next week brings. Here's the 3-year gold chart.
I see nothing here that says that this bull market is going to end any time soon… and there's still lot of room for the price to run to the upside. Of course when the price management schemes in both precious metals comes to an end… this chart won't mean a thing. But it will certainly be 'Exhibit A' for the biggest bull market in gold the world has ever seen. As George Soros was careful to point out a few months back… "gold is the ultimate bubble". We'll soon find out how right he was.
Enjoy the rest of your weekend… and I'll see you here on Tuesday.