Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Yesterday in Gold and Silver
After Thursday’s late afternoon price adjustment by one of the usual not-for-profit sellers, the gold price remained in a quiet and very tight trading range up until 12:15 p.m. in New York. Then out of the blue…and for no reason I could see…someone decided to pull their bids and mark gold down about $13 in the space of half an hour.
A bid appeared at 12:45 p.m…and gold recovered to close sixty cents below its Thursday close.
Silver spent most of Friday up between thirty and fifty cents…but at 12:15 p.m. Eastern…the silver price got hit for more than sixty cents before recovering a lot of that going into the close of electronic trading at 5:15 p.m. in New York.
You could be forgiven if you thought the timing of this price drop yesterday was more than coincidental, as it bore a remarkable resemblance to what happened to the price at the exact same time on Thursday in both metals. I can tell you that it pinned the needle on my b.s. meter.
The dollar’s low came minutes before 8:00 a.m. in London…and was up about forty basis points by the time gold and silver were pushed off their respective 12:15 p.m. cliffs…so most of the dollar’s serious rally in price was already in for the day before the rug got pulled out from under the precious metals. Here’s the chart…and you can be judge and jury on this one.
The gold stocks followed the gold price pretty much tick-for-tick…although the shares got sold off a bit at the end of the day…with the HUI down 0.88%. The silver stocks closed mixed. Here’s the 5-day HUI for the week that was.
The CME’s Friday Delivery report showed that only one gold, along with 34 silver contracts, were posted for delivery on Tuesday. JPMorgan and Barclays were the issuers and stoppers of note.
There were no changes reported in either GLD or SLV…and the U.S. Mint reported selling another 1,000 ounces of gold eagles…and nothing else.
The Comex-approved depositories showed a smallish increase of 47,993 ounces of silver on Thursday…and equally smallish 63,548 ounces were shipped out.
The Commitment of Traders report [for positions held at the close of trading on Tuesday, March 22nd] wasn’t quite what I was hoping to see…but Ted Butler said that it was still pretty impressive considering the big price gains we saw in both gold and silver during the reporting week.
There was a 1,761 contract increase in the open interest in the Commercial net short position in silver but, as Ted Butler pointed out, the total open interest in silver for the $3.50 up move during the reporting week only showed an increase of 1,074 contracts…and that isn’t a lot.
Gold was up about forty dollars during the week, but the Commercial net short position only increased 4,645 contracts…and the total open interest in gold only rose a tiny 1,371 contracts. Ted was very happy about this.
On sober second thought…he’s right, of course…and he also pointed out that the COT structure is far more favourable at this juncture than when we were at the previous highs in both gold and silver earlier this month.
Nothing much has changed [from the previous week] with Ted’s “Days to Cover Short Positions” since last week, but here’s the chart anyway.
As a matter of interest…Monday, March 28th is the last day that you can submit a comment to the CFTC regarding position limits in silver. Here’s what Ted had to say about this in his comments to his paying subscribers earlier this week…
“The core issue is that there exists an unusual concentration on the short side of COMEX silver futures held by JPMorgan. Manipulation can only exist if a concentrated position exists. Everything else is a peripheral matter. It does not matter if the concentrated silver short position held by JPMorgan is naked or is hedged with physical or OTC offsets. It does not matter if JPMorgan inherited the concentrated short position from Bear Stearns at the request of the US Government. It does not matter if JPMorgan operates an exchange — licensed or not. What does matter is the concentrated nature of its COMEX silver short position [in the futures market].”
“What also matters is that the only known antidote to concentration is the enactment of legitimate speculative position limits, something now lacking in COMEX silver futures. That’s why the current position limit process underway by the CFTC, including the solicitation of publiccomments on the matter, is so important. Fortunately, there has been an outpouring of public response on this issue with well over 3,000 comments being made by fellow citizens and investors asking that the Commission institute a 1,500 contract position limit in silver. I am hopeful that the large number of comments on silver will finally result, at a bare minimum, in an open discussion by the CFTC onthe merits of a 1,500 contract level in silver. For more than 20 years, any thought of an open debate has been buried.”
“Of the more than 3,900 public comments on position limits, more than 99% urge the Commission to institute hard position limits on all physical commodities. It will be hard for the Commission to misinterpret the public’s collective opinion that they want hard position limits. With a deadline of March 28 for public comments, if you have not yet submitted your comments, please do so.”
And if you’re not sure exactly what to say, or how to say it, you can check out what others have written…cut-and-paste that…then embellish it with your own comments…and please be polite. The link to the public comments page is here. This will take about ten minutes out of your life…and it’s a small price to pay to be heard on this issue…and you’ve got the rest of the weekend to do it.
Before running the long list of stories, videos and interviews…here’s a chart that was sent to my by Nick Laird over at sharelynx.com. It’s the “Total PMs Pool” graph that shows the total physical ounces of precious metals in all know repositories…and their value in U.S. fiat.
| The Wrap |
| Nothing much has changed in the silver backwardation situation, as it remains pretty much the same as it was on Thursday.
Here’s the 1-year silver chart for your viewing pleasure. Could we power higher from here? Absolutely. Could JPMorgan et al engineer a sell-off and take out the 50-day moving average and scare the hell out of us? You betcha! But can they…or will they? I don’t know, but I would suspect that we will find out in the next ten trading days. I also noticed on this chart that the 200-day moving average has now snuck above $25 the ounce…and the 50-day m.a. will probably break through the $32 mark on Monday. This is a powerful bull market we’re in…and it’s a good bet that JPMorgan and HSBC are not happy campers about the negative press they’re getting these days…and that Forbes piece was just another brick in the wall. I’m still ‘all in’.
One other thing to note about this graph is that the price scale is now logarithmic. 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. The Casey Research web site, Casey’s Investment Alert, Casey’s International Speculator, BIG GOLD, Casey’s Energy Confidential, Casey’s Energy Report, Casey’s Energy Opportunities, The Casey Report, Casey’s Extraordinary Technology, Conversations With Casey, Casey’s Daily Dispatch and Ed Steer’s Gold & Silver Daily are published by Casey Research, LLC. Information contained in such publications is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The information contained in such publications is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. The information in such publications may become outdated and there is no obligation to update any such information. |
