Category: Silver News

Market seeks clearer guidance on precious metals benchmark rules: sources

02-Feb (Platts) — There have been some hiccups with the LBMA Silver Price so far this year, which have caused many to question the electronic system’s effectiveness.

The LBMA, which does not participate in daily operations, declined to comment on the matter.

Both CME and Thomson Reuters declined to comment on the matter of central clearing or increased participation, pending an investigation into last week’s settlement issues.

“We are investigating the trading activity that took place during the Thursday January 28 auction. It would be inappropriate to provide any further comment at this stage,” Thomson Reuters said.

On January 28 the benchmark settled 6% below spot.

“It’s very simple. The system needs more members. Clients need to be able to trade through the banks that they already have credit lines with,” said one fund manager.

He reiterated the view that more guidance needs to be given by the Financial Conduct Authority.

The FCA did not respond to requests for comment.

[source]

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Posted in Silver News, Silver Views |

Where’s the silver lining? Metals market airs concerns over global benchmark process

29-Jan (Platts) — Regulation. Regulation. Regulation. Once again it is being blamed for the London Bullion Market Association Silver Price — operated and administrated by CME Group and Thomson/Reuters — settling around 6% below the spot price January 28. A matter of some contention across the market.

The jury is well and truly out on whether or not it is the fault of the system, or just another headache embedded by over-regulation.

The LBMA Silver Price settled January 28 at $13.58/oz. When the daily auction process kicked off the spot price was $14.42/oz.

Questions were raised about the process across the metals market January 6, after it took 60 attempts to settle.

One trader said January 28 that he would point the finger of blame at over-regulation of the market.

“I would not say it’s anything technical — the auction was functioning as programmed,” he said. “I’d say it’s definitely to do with regulations and supervision.”

…The official line from the CME was:

“The LBMA Silver Price is established through a transparent electronic auction mechanism designed to adjust the price until there is equilibrium between buy and sell orders. Given the orders placed in the auction today by five participants, the buy and sell orders became balanced after 29 rounds and the LBMA Silver price was established at a price of $13.58.”

[source]

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‘Anti-Arb Compliance’ Sinks London Silver ‘Fix’ 6% to 7-Year Low, Spot Rallies Straight Back

28-Jan (BullionVault) — Silver prices sank almost over 80 cents at Thursday lunchtime’s London benchmarking, hitting the lowest level in 7 years – while gold prices and Comex silver futures contracts held almost unchanged near multi-month highs – thanks to what some traders called the unintended consequences of regulatory compliance by banks and brokerages.

Modelled on the century-old ‘London Fix’ which it replaced in 2014 – and which offered a moment of unlimited liquidity to would-be buyers and sellers – the LBMA Silver Price became a formally regulated benchmark under UK law last April.

With spot bullion for London delivery quoted around $14.41 – only 1.1% below yesterday’s new 7-week highs – the 12 noon benchmarking auction saw what participants called “heavy selling”, with lower suggested prices failing to elicit stronger demand to balance it.

The silver price suggested by exchange group the CME’s electronic algorithm was then cut ever lower before suddenly finding enough demand to balance the selling at the lowest price since 30 July 2009.

Dealers blamed Thursday’s action on rules – decided by the compliance departments of banks and brokerages, and aimed at meeting the new regulatory regime – which block traders participating in the benchmark auction from “arbitrage” in other silver markets at the same time.

[source]

PG View
: Really? There was no demand ahead of $13.85? This doesn’t pass the smell test . . .

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Silver market in disarray after benchmark price fixed far below spot rate

28-Jan (FastMarkets) — The silver market was thrown into disarray on Thursday after the LBMA Silver Price was set 84 cents below the spot and futures price this morning.

The LBMA Silver Price – the crucial daily benchmark used by producers and traders around the world to settle silver products and derivatives contracts – was set at $13.58 per ounce.

At the time of the auction, which begins at 12 noon London time, the spot price was at $14.42 per ounce while the futures price on the CME was at $14.415, leaving a number of market participants extremely confused as to what has happened.

“Unfortunately, it is not [a mistake],” Ole Hansen, head of commodity strategy for Saxo Bank, told FastMarkets. “This could be the end of the fix. It took 14 minutes to find a fix – they obviously found a fix way off of the market.”

The difference between the two was nearly six percent but the benchmark cannot be changed, a person familiar with proceedings told FastMarkets.

Another source also suggested that the continued existence of the fix has been put in jeopardy by the huge discrepancy in today’s price, adding that many producers – who still use the price as their daily reference – may have lost significant amounts of money if any contracts have been settled according to the fix.

“A huge number of contracts are still settled on that price,” another said. “This will no doubt cause significant problems.”

[source]

PG View: Spot silver plunged briefly to $14.00 before recovering. But I don’t see how the parties could even possibly agree to a fix so far below the reality reflected in the spot and futures markets . . . There is likely far more to this story.

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“Unprecedented Demand” – US Mint Sells Nearly As Much Gold On First Day Of 2016 As All Of January 2015

11-Jan (ZeroHedge) — While Chinese residents were lining up in front of banks and currency exchange kiosks, desperate to convert as many of their Yuan into dollars as the government will permit, Americans were likewise busy exchanging their own paper currency, so greatly in demand in China, into gold and silver.

As Reuters reports, American Eagle silver coin sales jumped on Monday after the U.S. Mint said it set the first weekly allocation of 2016 at 4 million ounces, roughly four times the amount rationed in the last five months of 2015, after a surge in demand. It will not be enough.

According to the Mint, more than half of the week’s allocation of silver sold on Monday, the first day of 2016 sales, a sign that demand entering 2016 is literally off the charts.

Putting the silver demand in context, the 2.76 million ounces of silver bullion coins sold today is exactly half of the 5.53 million ounces that sold in all of January 2015.

[source]

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Posted in Gold News, Gold Views, Silver News, Silver Views |

Silver Maple Leaf Sales Surge 76 % Y/Y

by Koos Jansen
silver-maple-leaf01-Dec (BullionStar) — In the third quarter 9.5 million ounces (295 tonnes) of silver were sold in Maple Leaf Coins by the Royal Canadian Mint, according data released on Friday. Third quarter silver coin sales at the Canadian Mint were up 76 per cent from the third quarter in 2014 and up 40 % from the second quarter in 2015.

The data available on the website of the Royal Canadian Mint shows Q3 silver Maple Leaf sales were the highest since Q2 2011 (346 tonnes) when the silver price peaked above 45 US dollars an ounce. Currently, spot silver is trading at 14.25 US dollars an ounce. Many retail precious metals investors have taken the opportunity this year to buy silver coins at bargain prices while there still is great economic uncertainty around the world.

[source]

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US Mint American Eagle gold coin sales surge, silver at record

01-Dec (Reuters, via CNBC) — The U.S. Mint’s sales of American Eagle coins surged in November, with gold nearly tripling month-over-month and silver already reaching a new annual record as bullion prices fell to multi-year lows, data released on Monday showed.

The mint sold 97,000 ounces of American Eagle gold coins in November, up 185 percent from October and 62 percent higher from a year ago, after selling out of most of the 2015-dated coins as falling bullion prices attracted buyers.

Strong demand came as spot gold prices fell around 7 percent to the lowest in nearly six years. This was the gold market’s biggest monthly drop in 2-1/2 years as traders and investors widely anticipated that the U.S. Federal Reserve will raise interest rates at its next meeting in mid-December.

…Demand for American Eagle silver coins has also been strong, with year-to-date sales already reaching an annual record at 44.67 million ounces, breaking the full-year record of 44 million ounces in 2014.

[source]

PG View: Physical buyers know a bargain when they see it!

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Silver extends to the upside, setting a new 19-week high at 16.29.

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Gold pushed to another 15-week high after weak U.S. data. Silver probing back above $16.

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Prepare Now For The Coming Global Financial Calamity

05-Oct (TraderPlanet) — In a September 20, 2015 interview, gold expert Bill Holter argued that the economic system is on the verge of a “financial calamity.”

Discussing the recent Fed decision not to raise interest rates, Holter said, “If we had an increase in interest rates. . .the markets would close within two weeks. . ..I don’t think there’s any way the Fed can tighten.” He sees more quantitative easing (QE) in the future, with QE in China because “they’re imploding.” Worse, after 80 months of 0% interest rates and massive printing of money, there is no recovery, let alone any expansion of global markets. He said, “Trade is slowing,” which means that “global GDP is slowing.”

Holter said, “They know they need to do another QE, but they know if they do that, they’ve lost all credibility.” Talk about raising interest rates, he argued, is an attempt to try to regain some credibility. Even as the mainstream media discusses how it will not be that bad if the Fed raises rates, Holter argues, “All that’s left is a reset. . ..The Fed is now helpless to stop the coming global financial calamity.”

Turning to gold and silver, Holter said, “I think this is the bottom. Can they push the price down again? It’s possible, but. . . . The physical market has hit a hard bottom.”

…Holter said, “If some type of an event happens today, you could wake up tomorrow and all of that gold could be cleaned out.” Owners of gold and silver won’t sell their gold or silver until you can give them a currency they can trust. Holter warned, “We will have a standard of living completely unthought-of of as possible.”

When credit shuts down, he warned, distribution shuts down. “This is not going to just be a financial problem, but a problem getting things you need to live.” Holter said, “These big stores get stocked up every single night. . . . The average store only has food for about two or three days. So, this is not going to just be an issue about you paying your bills. It’s going to break down so badly it is going to be an issue about whether or not you can get food.”

[source]

PG View: Obviously this is something we hope does not happen. However, the prudent investor is prepared!

Don’t think it could happen? Post-financial crisis books by the likes of Ben Bernanke and Tim Geithner reveal just how close we came to the abyss. We may not be so luck the next time.

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Posted in Economy, Gold News, Gold Views, Silver News, Silver Views |

Spot silver trading with a 16-handle for the first time since June.

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Posted in Silver News |

Scarce silver to get even tougher to find in 4th quarter

04-Oct (MINING.com) — The void left by government mints in North America is shaking up the silver market, creating a major opening for competitors to supply the growing ranks of “silver stackers” and capture market share.

Shortages of fabricated silver bullion products continue across the board. Mints and refiners have fallen progressively further behind in recent weeks – caught flat-footed by a spike in demand starting at the end of June.

…The sovereign mints – particularly in the U.S. and Canada – aren’t likely to pull their weight in the 4th quarter. Almost all of the remaining production of 2015 dated silver American Eagles and Maple Leafs has now been sold. That means many buyers may soon find themselves in a queue for delivery of 2016 dated coins sometime after the new year, or paying even bigger premiums for coins from stock.

The problem is the pipeline of new coins, which is already insufficient. It will completely shut off towards year end. The U.S. Mint, whose bureaucratic incompetence historically makes it the most incapable of keeping up during demand spikes, will stop all production sometime in early to December to change over to the 2016 dies. The production halt generally lasts a month, and deliveries of new coins resume in early to mid January. (Switching out coin dies at private mints only takes a few minutes, but for some reason the process takes several weeks at the U.S. Mint.)

[source]

PG View: Several words of caution:

1. Beware of brokers selling Eagles at below market premiums with the promise of delivery in December (or even January). They (and you) are betting on the U.S. Mint fulfilling their production expectations and that is hardly a sure thing with the Mint on allocation since July and the above report that “almost all of the remaining production of 2015 dated silver American Eagles and Maple Leafs has now been sold.” The U.S. Mint sold out of silver Eagles in early-November last year, and I wouldn’t be surprised if that happens even earlier this year. At that point they may just shut down for the remainder of the year to retool for 2016 strikes.

2. Private mint rounds become popular only when sovereign mint coins can’t be had. When the U.S. Mint and RCM get caught up and Eagles and Maples are readily available again, rounds become very illiquid and difficult to sell.

3. Consider gold as a viable alternative to silver at this juncture. Most investors see silver as undervalued relative to gold with the ratio above 70. While that may be true, when premiums are factored in, the ratio is actually in the mid-50s. The value proposition is not nearly as great in “real” terms.

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Rickards: It’s important to allocated part of your portfolio to physical assets

by James G. Rickards
07-Sep (DarienTimes) — Only one person has ever been director of both the National Security Agency and the Central Intelligence Agency. That person is retired Four-Star General Michael Hayden. Recently I had the chance to talk to Mike Hayden on Capitol Hill. We were both there as part of a conclave to discuss the status of Iran-U.S. negotiations on uranium enrichment. We had a chance to talk one-on-one about my specialty, which is financial warfare, and the potential impact on investors.

…For investors, the implications of this new age of financial warfare are profound. Stock and bond markets have always been affected by wars. But the wars were fought elsewhere – stocks and bonds merely adjusted in price to the new state of the world. Today, markets are not bystanders; they are ground zero. It’s fascinating to meet brilliant military and intelligence officials like General Hayden who are rapidly absorbing the fact that wars are now fought in financial markets rather than on physical air, sea and land.

The military and intelligence communities are absorbing the new reality, but most investors are still behind the curve. Traditional stocks and bonds are digital assets that can be hacked, wiped-out or frozen with a few keystrokes. It’s important to allocated part of your portfolio to physical assets that cannot be wiped out in financial warfare. These assets include silver, gold, fine art, land, rare stamps, cash (in banknote form, not bank deposits) and other physical stores of value. For the portion of your portfolio that is in stocks, it is helpful to consider venture capital and start-up companies where your ownership is in the form of a written contract, not a digital account.

My conversation with General Hayden reinforced my already strong view that financial warfare is here and digital assets such as brokerage accounts and 401(k)s are in the line of fire.

[source]

PG View: We here at USAGOLD have always viewed it as an imperative to hold a portion of one’s wealth outside the traditional banking and financial services realm. Rickards’ op-ed drives home the point.

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Gold underpinned by haven bid, silver slides with commodities; Au/Ag ratio surges to nearly 7-year high of 79.14.

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U.S. Mint has 3 mln oz of American Eagle silver coins as sales resume


27-Jul (Reuters) — The U.S. Mint said on Monday it has 3 million ounces of its popular 2015 American Eagle silver bullion coins to sell on an allocated basis this week as it resumed sales after running out of stock almost three weeks ago.

The mint halted sales on July 7 after selling out of inventory due to strong demand.

So far this month, the mint has sold 2.7 million ounces of the silver coins.

[source]

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Metals hit multi-year lows on global growth concerns, dollar rises

24-Jul (Reuters) — Metal prices hit multi-year lows on Friday after weaker-than-expected data from China and the euro zone raised concerns about global growth, but the U.S. dollar rose as a Federal Reserve rate hike was still on the table.

London copper fell to its lowest level since 2009 after a survey showed China’s factory sector contracted by the most in 15 months in July due to shrinking orders, fuelling worries over demand in the top metals consumer as stockpiles steadily mount.

The flash Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) dropped to 48.2, below economists’ estimate for a reading of 49.7. It was the fifth straight month below 50, the level which separates contraction from expansion.

Euro zone business activity also started the second half on a less secure footing than expected, hit by Greece’s near-bankruptcy woes. Markit’s flash PMI fell to 53.7 this month from June’s four-year high of 54.2. A Reuters poll had predicted a more modest dip to 54.0.

While economies looked weaker in Europe and Asia, better-than-expected U.S. jobless claims kept the Federal Reserve on track for a rate hike in coming months.

The U.S. dollar was 0.3 percent higher against a basket of currencies.

[source]

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U.S. Mint sold out of silver coins due to strong demand

07-Jul (Reuters) – The U.S. Mint said on Tuesday it temporarily sold out of its popular 2015 American Eagle silver bullion coins due to a “significant” increase in demand, the latest sign plunging prices have spurred a resurgence of retail buying.

In a statement sent to its biggest U.S. wholesalers, the Mint said its facility in West Point, New York, continues to produce coins and expects to resume sales in about two weeks.

This is the second time the mint has sold out of silver coins in the past nine months – it ran out of 2014-dated American Eagles in November last year.

In 2013, the historic drop in precious metals prices unleashed a surge in global demand for coins, forcing the mint to ration silver coin sales for 18 months.

[source]

PG View: Further confirmation of the post below. We still have good availability on silver Eagles!

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‘It’s time to hold physical cash,’ says one of Britain’s most senior fund managers

20-Jun (Telegraph) — Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, including the flagship Moneybuilder Income fund, is concerned that a “systemic event” could rock markets, possibly similar in magnitude to the financial crisis of 2008, which began in Britain with a run on Northern Rock.

“Systemic risk is in the system and as an investor you have to be aware of that,” he told Telegraph Money.

The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some “physical cash”, an unusual suggestion from a mainstream fund manager.

His concern is that global debt – particularly mortgage debt – has been pumped up to record levels, made possible by exceptionally low interest rates that could soon end, and he is unsure how well banks could cope with the shocks that may await.

He pointed out that a saver was covered only up to £85,000 per bank under the Financial Services Compensation Scheme – which is effectively unfunded – and that the Government has said it will not rescue banks in future, hence his suggestion that some money should be held in physical cash.

He declined to predict the exact trigger but said it was more likely to happen in the next five years rather than 10. The current woes of Greece, which may crash out of the euro, already has many market watchers concerned.

[source]

PG View: Spreadbury adds his voice to a number of high profile investors that have recently been advocating for precious metals ownership.

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Gold sets 12-week highs above 1224.23. Silver at 14-week highs after taking out resistance at 17.40/44.

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Gold surged back above $1200 intraday, retracing all of Friday’s losses and then some. Currently 1204.11 (+24.21). Silver 16.41 (+0.68).

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Posted in Gold News, Markets, Silver News |

The Daily Market Report: Gold Extends to the Upside, Poised for 3rd Consecutive Higher Close


20-Mar (USAGOLD) — Gold heads into the weekend on a solid note, buoyed by renewed weakness in the dollar. The yellow metal appears poised for a third consecutive day of gains, nothing new 2-week highs.

The weekly chart looks particularly good from a technical perspective, showing a failed test of the November low at 1131.15 and a likely key reversal (lower low, higher high, close above the previous week’s high). That’s a pretty bullish setup, but further upside follow-through is needed to lend confidence.

Silver is actually leading the charge on this week’s rally, up more than 2.5% today, to gold’s 1.1% gain thus far. The gold/silver ratio had been hovering around 74 recently, but started to retreat on Wednesday. Today support at 70.23 gave way, putting the ratio at 5-month lows.

The major currencies, with the exception of the yen, are all up significantly against the dollar: EUR +175. CHF +160, GBP +210, AUD +120, NZD +140, CAD +80. Clearly the surprisingly dovish tenor of this week’s Fed policy statement has ignited considerable volatility in the FX market.

While the FOMC removed the word “patient” from the statement, the significant downward revisions to central tendencies suggests the central bank is now far less optimistic about growth and inflation prospects. Significant shifts in the “dots” show that when (if?) the Fed starts raising rates, FOMC members think they will climb at a far slower pace than previous expectations.

HSBC’s David Bloom warns us that “The U.S. economy is surprising to the downside aggressively. Don’t ignore it.” The Fed’s own outlook is suddenly reflecting that reality, and the recent dollar strength has likely been a contributing factor.

While the stock market is up significantly today, equity bulls should take heed of that reality as well. Former Dalls Fed President Richard Fisher chimed in with his own warning today on CNBC:

“Are we vulnerable in my personal opinion to a significant equity market correction? I do believe we are, and the reason for that is people have gotten lazy. They’ve depended totally on the Fed.” — Richard Fisher

“Depended totally on the Fed” to the exclusion of the fundamentals and the reality of the slowing economy. Now may the time to lock in some of your profits in shares and move those funds into the safety of gold and/or silver.

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Posted in Daily Market Report, Gold News, Gold Views, Silver News, Silver Views |

Silver leads the charge: Gold/Silver ratio has dropped from around 74.00 to 70.69 since Wednesday.

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Posted in Silver News |

2014 Silver Eagle Sales Break Annual Record at Over 43 Million!

12-Dec (MarketOracle) — Silver Eagle sales in 2014 have already broken the 2013 annual record with a few weeks of sales still left to be counted. As of December 11, the U.S. Mint reported that 43.1 million silver eagles have been sold so far in 2014. This compares to the 42.7 million during all of 2013, which was the previous all-time record.

Investor demand for silver clearly remains strong and people are taking advantage of discount prices. Why not? It isn’t too often that you can purchase an end product for less than the cost to produce it. Many miners are unprofitable at current silver prices as their all-in cost of production is closer to $20. I believe this is an excellent time to take advantage of the paper games that have pushed prices to such absurd lows. Silver at under $20 per ounce is not likely to last long.

[source]

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US Mint Sells Out Of Silver Eagles Following “Tremendous” Demand

05-Nov (ZeroHedge) — When it comes to buyers of physical assets as opposed to traders of paper representations of such assets, there is one key difference: the latter, more than anything, enjoy looking at “heatmaps”, chasing trends and jumping on momentum, the result being the most recent massive selloff in such “paper” representations of precious metals as the GLD and SLV ETFs, and various gold futures.

On the other hand, those who prefer to hold the metal in their hands, as well as others such as China whose ravenous apetite for gold over the past 4 years has been extensively covered here in the past, take every advantage of selloffs, and – inconceivably – demonstrate how Econ 101, namely supply and demand, really works, leading to ever greater demand the lower the price. Demand so high, in fact, that the underlying commodity that is being sold through paper conduits, sells out.

This is precisely what happened at the U.S. Mint, which just sold out of all silver American Eagle silver bullion coins, following “tremendous” demand in the past several weeks, according to Reuters reports.

This should hardly come as a surprise: over the weekend we reported that “Silver Coin Sales At US Mint Soar To Highest In Two Years.”

[source]

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October Silver Eagle Sales Best Ever…. And With 10 Days Remaining

22-Oct (SRSrocco) — While the Fed and Western Central Banks continue to prop up the entire market, investors took advantage of the manipulated low silver price by purchasing a record amount of Silver Eagles in October. Silver Eagle sales were also extremely strong last month as total sales reached 4.1 million in September.

In the beginning of October as the price of silver was clobbered below $17, investors purchased more silver eagles in one week than in any other week throughout the year. This trend continues as sales in October are the strongest ever compared to previous years.

If we look at the chart below, we can see that investors only bought 550,000 Silver Eagles in October 2007. Then in the next few years, purchases of Silver Eagles increased dramatically to 1,425,000 in Oct 2008 and 2,939,000 in Oct 2009. However, since 2010…. October sales were relatively flat–between 3.0 to 3.1 million.

[source]

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CME, Thomson Reuters win battle to replace century-old silver benchmark

11-Jul (Reuters, via ChicagoTribune) – CME Group and Thomson Reuters will operate an electronic silver benchmark when the 117-year-old “fix” is disbanded in August, in a move widely seen preceding sweeping reforms of precious metals price-setting.

The London Bullion Market Association (LBMA) said in a statement on Friday that CME Group will provide a price platform and methodology for the daily process, while Thomson Reuters is responsible for administration and governance.

CME/Thomson Reuters will start testing the new process in early August after the closely contested competition to produce a solution.

…The new price mechanism is electronic, auction-based and auditable, the LBMA said. It is also tradeable with an increased number of direct participants.

[source]

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Gold & Silver Hit Multi-Month Highs As ETF Inflows Surge Most In 21 Months

02-Jul (ZeroHedge) — The last 2 days have seen something ‘odd’ happen in gold markets. As the China commodity finance deals are unwound and massive futures positions squeezed, Gold ETFs have seen the biggest inflows since September 2012 (and are their highest in 2 months). Whether this is the start of trend is unclear (as perhaps the conspiracy ‘fact’ proof of manipulation and rigging in the gold markets stalled the hollowing out of the gold complex). Ironic that this considerable rise should occur shortly after rumors of Germany’s end to repatriation calls. Gold (and silver) has broken out once again this morning after the early dump on ADP ‘good’ news is well bid to 3-month highs.

[source]

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Gold and silver head for major weekly gains

20-Jun (Financial Times) — Gold and silver were headed for their biggest weekly gains in more than three months after surging through $1,300 and $20 a troy ounce respectively, writes the FT’s Xan Rice.

The yellow metal posted its largest price rise in nine months on Thursday, as geopolitical tensions and a weaker dollar spooked investors holding bearish speculative positions. Gold rose as much as 3.4 per cent, and silver 5.3 per cent.

[source]

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Gold Hits $1300, Silver Surges To 3-Month Highs As China Ponzi Unwinds

19-Jun (ZeroHedge) — But, but, but… Janet Yellen didn’t say precious metal valuations were within historical norms? Gold and Silver are surging today (and have done since the FOMC press conference all-clear) with the latter having its best day in months and back at 3-month highs… Intriguingly, just as we warned, gold and silver have been on a significant tear since the Qingdao CCFD probe began (as synthetic hedges are unwound – which dominate pricing in PMs) while copper and iron ore and so on have all fallen (as the reality of no real demand leaks into these commodities).

[source]

PG View: A Chinese trading company is being investigated for securing loans from foreign banks with collateral they did not own and/or pledging the same collateral multiple times. The concern is heightened by the fact that if one trading company was doing it, perhaps many were. Where there’s smoke there’s fire.

What ZeroHedge is suggesting, is that part of unwinding these dubious Chinese Commodity Finance Deals (CCFDs) would likely include buying in short hedges in the paper gold market.

if we are right that somehow China managed to push gold lower via gold CFDs, then the unwind pushes gold higher. — ZeroHedge 09-Jun-14

ZeroHedge notes today, that gold and silver prices have been on the rise since the Qingdao CCFD probe began. Perhaps the great unwind has now begun in earnest…

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Gold really running now, 1311.25 last (+32.70). Silver 20.74 (+0.827), a level last seen in mid-March.

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