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Physical demand remains robust globally and especially in China where Reuters report “stock loading in the market and physical buying in Shanghai.”
There is also the interesting trend of many western banks, some who are making loud bearish noises in public, quietly moving to offer their high net worth client’s storage in Zurich, Singapore and Hong Kong.
Smart money is still accumulating physical gold and the banks know this and realize that in order to retain clients and income they must offer bullion services and storage outside the still fragile banking system.
Bloomberg reports tonight that UBS has launched a gold vaulting service in Singapore and will make its bullion vaulting services available for clients in Singapore and Hong Kong. UBS joins Deutsche Bank and JP Morgan in offering bullion storage facilities in Asia.
Perhaps this is where the approximately 300 tons of gold drained from the GLD over the past 6 months was headed?
Edward Snowden has released his latest statement today via Moscow, and the NSA whistle-blower has lashed out directly at Obama and his administration:
The Obama administration is not afraid of whistleblowers like me, Bradley Manning or Thomas Drake. We are stateless, imprisoned, or powerless. No, the Obama administration is afraid of you. It is afraid of an informed, angry public demanding the constitutional government it was promised — and it should be.
Snowden’s full statement is below:
At the current $18 paper price of silver, nearly all the primary miners would be stating net income losses. Some of the miners may cut costs and spending to at least tread water, but other much higher cost miners would be severely impacted.
To be able to understand how $18 silver affects the miners, we have to figure out what break-even is for the individual company and the industry as a whole. My first attempt at calculating break-even was presented in my article The Complete Cost of Mining Silver.
What the Fed is doing to manipulate the precious metals lower while inflating the value of PAPER ENERGY IOU’s such as Treasuries, Bonds, MBS, Stocks, IRA’s, Pension Plans etc and etc, is actually creating an ever-increasing unstable financial system.
The best thing to do to take advantage of much lower silver prices, investors should be purchasing silver bullion and coins by the droves. Even though it seems as if the paper prices of silver can keep falling, it seems highly unlikely that the FED and Central Banks would be stupid enough to allow the bankruptcy the ENTIRE PRIMARY SILVER MINING INDUSTRY.
Our friend Megan Duffield from the Silver Circle movie has asked us to pass along the news to SD readers that the Silver Circle has been released today on video on demand platforms and iTunes, with the DVD/BlueRay release planned for later this summer.
Jim Sinclair sent subscribers an email alert over the weekend regarding Russia’s announcement that it will develop and launch a cash bullion market, stating that the development is the singular most important development in the gold market in my 53 years being involved in gold.
Sinclair goes on to state that the manipulators will be flattened in late 2014 after one more try to manipulate the price of gold.
Sinclair’s full alert is below:
If the economy is improving, then why aren’t things getting better for most average Americans? They tell us that the unemployment rate is going down, but the percentage of Americans that are actually working is exactly the same it was three years ago. They tell us that American families are in better financial shape now, but real disposable income is falling rapidly. They tell us that inflation is low, but every time we go shopping at the grocery store the prices just seem to keep going up. They tell us that the economic crisis is over, and yet poverty and government dependence continue to explode to unprecedented heights. There seems to be a disconnect between what the government and the media are telling us and what is actually true. With each passing day the debt of the federal government grows larger, the financial world become even more unstable and more American families fall out of the middle class. The same long-term economic trends that have been eating away at our economy like cancer for decades continue to ruthlessly attack the foundations of our economic system. We are rapidly speeding toward an economic cataclysm, and yet the government and most of the media make it sound like happy days are here again. The American people deserve better than this. The American people deserve the truth. The following are 36 hard questions about the U.S. economy that the mainstream media should be asking…
Gold & Silver COT Report 6/28/13
Commercials continued their pace during the reporting period and moved 9.25 million ounces towards becoming net long.
Large speculators cut their net long position by over 75% moving 15.33 million ounces towards becoming net short.
Small speculators moved over 6 million ounces net long.
The latest in a wave of scandals for the Obama administration has broken as investigative reporters for McClatchy have uncovered The Insider Threat Program, a secret anti-whistleblower initiative created by the Obama administration.
The program specifically targets whistle-blowers wishing to expose corruption and illegal practices by government agencies, equates media leaks with espionage, and like a page out of George Orwell’s 1984, mandates that government employees spy and snitch on each other or risk being criminally charged!
The Problems With Paper
Paper derivatives do not price in fundamentals. Nevertheless, price movements in paper products are shaping sentiment, and are moving the precious metals far off the radar screen as an attractive investment — except perhaps for the very few that see their intrinsic value.
All paper derivatives markets have ballooned so far from reality, that along with the rapidly expanding money supply, they seem to be gigantic bubbles in and among themselves.
Furthermore, the latest silver market rout indirectly serves to support the metal’s price in the long term by forcing numerous suppliers out of the market, as their production becomes increasingly uneconomic.
“The Critical Trend toward higher interest rates has begun,” Deepcaster has been saying for several weeks now. And yields on the most important rate in the world – the U.S. 10-year Treasury – have popped up to 2.6%ish from well below 2% just a few weeks ago.
And all this simply because The Fed announced a conditional (confirmed by Fed Governor Dudley) plan to begin tapering stimulus, later this year. But the initial Negative reaction to this conditional tapering plan was so severe – witness the consequent Bond and Equities Markets sell-offs – that The Fed will likely not be able to remove stimulus according to plan by 2014!
In any event, the consequences of this Climacteric Trend of increasing Interest Rates for Investors, Markets, and Economies are considerable regardless of whether The Fed tapers according to plan. Consider just Brazil, Australia, Japan, Spain, and Italy, as examples.
I had the chance to reconnect today with Peter Grandich, publisher of The Grandich Letter, for a powerful conversation on the gold market. Peter has issued spot-on market calls for decades now, beginning with the 87′ market crash, gold in 2003, and the stock market bottom in 2009.
Wednesday morning Peter issued a major new call entitled, “Gold ($1225) Bottom In Sight“, calling for a bottom in gold—likely within the next 48 hours. The thrust of that call is being led by cycles, sentiment, and market manipulation.
In discussing his new call, Peter indicated that, “Some [market] technical work came up this morning in a way that I haven’t seen in years…I’m an old fan of ‘Gann Angles’, [and] the combination of that, cycles work, and some sentiment indicators—suggested to me that within a couple of trading days…we would [see] a major bottom in the price [of gold].”
This week, I spoke to an elderly fellow who has accumulated silver for decades. He has been buying it since the 1960s, and he’s not concerned about the current price action at all.
Commercial traders are bullish, and the public is more negative than at any time in recent history, including the 2008-2009 lows.
The public may be correct, but only in the short term. Their long term track record is disastrous, so this is probably a very good time to accumulate physical metals.
On this week’s SD Weekly Metals & Markets we cover:
*This week’s historic smash in the metals which saw gold complete it’s worse quarter in decades and fall to $1186, and silver drop another $3 to $18.20 in what can only be described as panic driven capitulation
*Doc’s Physical Market Re-cap: Silver supply issues re-emerge as spot price smashed under $20
*Smart Money: Asian demand greater than 2-to-1 Western “paper” dishoarding
*1970s Cyclical Bear vs. Current Metals Correction: Is history repeating or is the bull market over?
Picking a bottom is virtually impossible with the cartel gang lurking around. We never can be certain when their “managed retreat” strategy is flipping over into “retreat” mode. But there are hints that we might be setting up for a bottom. Previous strong support levels of $26 and $22 silver obviously didn’t hold, but falling below $18 would have erased nearly 3 years worth of bull market action, leaving silver well below the cost of production. As with gold, declining prices has boosted physical demand. Silver’s strong fundamentals remain, and Friday’s leap higher prior to the London PM Fix isn’t just short covering. It tells the story of the need to source physical silver out of the LBMA, which was only possible going into the fix at a much higher price.
SD Weekly Metals & Markets with The Doc & Eric Dubin is below:
Did you know that you are involved in the most massive Ponzi scheme that has ever existed? To illustrate my point, allow me to tell you a little story. Once upon a time, there was a man named Sam. When he was younger, he had been a very principled young man that had worked incredibly hard and that had built a large number of tremendously successful businesses. He became fabulously wealthy and he accumulated far more gold than anyone else on the planet. But when he started to get a little older he forgot the values of his youth. He started making really bad decisions and some of his relatives started to take advantage of him. One particularly devious relative was a nephew named Fred. One day Fred approached his uncle Sam with a scheme that his friends the bankers had come up with. What happened next would change the course of Sam’s life forever.
There’s not much arguing against gold stocks being the most hated sector in the markets these days. And with such a loathing, you can only imagine the visceral disdain towards the more risky juniors.
Provocatively it wasn’t too long ago that the junior subsector was a speculators’ paradise that offered legendary gains. These small companies are of course a vital component of the gold ecosystem. And the quality ones that made solid discoveries while skillfully advancing their projects towards development would righteously see their stocks soar.
Unfortunately with gold selling off hard and the larger mining stocks getting crushed, the juniors don’t stand a chance. And indeed junior gold stocks have been annihilated amidst a sentiment superstorm that has left no prisoners. The carnage in this subsector has made it the vilest of pariahs.
At the last FOMC meeting, by prematurely announcing the timeline and the specifics of an exit from QE, Bernanke might have lost control of rates and volatility. The current US economic growth is still feeble and hinges on housing, which would be slowed down by raising rates. Banks, while better capitalized than pre-crisis, are still not lending to most borrowers and would be dearly affected by too fast increases in rates. Moreover, European woes still threaten the stability of the international financial system and the recent rush to the exit might further exacerbate funding pressures for weak European banks. Finally, the US government (amongst others) debt load, while already unsustainable, would keep on climbing if rates were to increase only by 100bps.
The chaotic reaction by market participants and the corresponding increase in yields now risks destabilizing this very fragile equilibrium. It is yet unclear whether or not the damage control from the other Fed Presidents will put a lid on yields and market volatility, or if the damage to the Fed’s (poorly executed) exit strategy is permanent.
Did you actually believe that they were not going to use the precedent that they set in Cyprus? On Thursday, EU finance ministers agreed to a shocking new plan that will make every bank account in Europe vulnerable to Cyprus-style bail-ins. In other words, the wealth confiscation that we just witnessed in Cyprus will now be used as a template for future bank failures all over Europe. That means that if you have a bank account in Europe, you could wake up some morning and every penny in that account over 100,000 euros could be gone. That is exactly what happened in Cyprus, and now EU officials plan to do the same thing all over Europe. For quite a while EU officials insisted that Cyprus was a “special case”, but now we see that was a lie. International outrage over what happened in Cyprus has died down, and now they are pushing forward with what they probably had planned all along. But why have they chosen this specific moment to implement such a plan? Are they anticipating that we will see a wave of bank failures soon? Do the banksters know something that they aren’t telling us?
As today’s Chart of the Day (courtesy Bloomberg) demonstrates, on a year-over-year percentage change basis, gold bullion is currently exhibiting the strongest buy signal of the entire bull market, far surpassing the previous buy signals placed in 2005, 2007, and late 2008-early 2009.
Must See year-over-year percent change of gold bullion chart for the duration of the bull market is below: