Silver prices | The Beginning Of The End Of Precious Metals Manipulation: The ...

Silver prices | The Beginning Of The End Of Precious Metals Manipulation: The <b>...</b>

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• The Beginning Of The End Of Precious Metals Manipulation: The <b>...</b>
• Supply and Demand Report: 11 May | Zero Hedge
• Endeavour <b>Silver</b> posts strong production, costs despite tough <b>price</b> <b>...</b>
• <b>Silver</b> Was Not In a Bubble in 2011! :: The Market Oracle :: Financial <b>...</b>

The Beginning Of The End Of Precious Metals Manipulation: The <b>...</b> Posted: 14 May 2014 06:56 AM PDT Following a crackdown on precious metal manipulation by various European regulators (mostly Germany's BaFin, recall "Precious Metals Manipulation Worse Than Libor Scandal, German Regulator Says"), which led to the shocking outcome that Deutsche Bank would pull out of the London gold and silver fixing committees, the London Silver Market Fixing company ended up with a most curious outcome: it would have just two members: HSBC and Bank of Nova Scotia. And, as an even more shocking result, overnight the London Silver Fix announced that after August 14, 2014 it will no longer exist - the first of many victories for all those who have fought for fair and unmanipulated precious metal markets. From the press release: The London Silver Market Fixing Limited (the 'Company') announces that it will cease to administer the London Silver Fixing with effect from close of business on 14 August 2014. Until then, Deutsche Bank AG, HSBC Bank USA N.A. and The Bank of Nova Scotia will remain members of the Company and the Company will administer the London Silver Fixing and continue to liaise with the FCA and other stakeholders. The period to 14 August 2014 will provide an opportunity for market-led adjustment with consultation between clients and market participants. The London Bullion Market Association has expressed its willingness to assist with discussions among market participants with a view to exploring whether the market wishes to develop an alternative to the London Silver Fixing. Q&A 1. What will happen after 14 August 2014? Will the Silver Fixing cease to exist? With effect from the close of business on 14 August 2014, the Company will cease to administer a Silver Fixing, and a daily Silver Fixing Price will no longer be published by the Company. 2. What will happen in the period up to that date?? The Company intends to continue to administer the daily Silver Fixing and publish Silver Fixing Prices throughout that period. 3. Why a three month notice period? Although members of the Company may resign on seven clear days' notice, the members have confirmed that they stand ready to continue the Company's operations until (and including) 14 August 2014. 4. What happens after 14 August 2014 for market participants with contracts referencing the Silver Fix? The Company is not in a position to comment on such matters, but market participants can speak to their contractual counterparties. 5. What does this mean for the gold, and platinum and palladium fixing companies? This decision relates only to the London Silver Fixing administered by the Company. The Company is not in a position to comment on other fixings * * * This huge loss for precious metal manipulators fixers was amusingly "explained" by the FT's John Dizard as follows: "The field may be more level, but there are not enough players left for a game." Mocking those who prefer unmanipulated markets, he said: ... once that satisfying self-righteous feeling passes, the dwellers on BaFin Island might want to consider whether they have helped create a level playing field without enough players for the game. So far, it would appear the significant beneficiaries of BaFin's persuasion have been the less-than-systemically important dealers in international silver markets. While there will still be four participants in the London gold fix, the similarly structured 12pm London silver fix will now have only two participants, which common sense tells us means no real market at all. Actually, it will mean no manipulated market by a handful of participants. It will also mean that going forward a much more transparent pricing mechanism will have to be adopted: once which relies on, gasp, the entire market, not just legacy firms that operated for decades out of Rothschild's wood-panelled London basement. Of course, for Gizard, there is no manipulation: Deutsche Bank will have withdrawn from participating in the ritual of setting a standard price for physical gold. While no wrongdoing by any of the gold-fixing participants has been proven legally, or even, I believe, convincingly demonstrated in econometric modelling, Deutsche apparently came under intense social pressure from its home regulator to withdraw. Correct, because banks withdraw from lucrative operations due to "social pressure", not because they know full well some legal arm is about to crush an existing arrangement with elements of criminality. While we are delighted that Mr. Gizard will disagree, we are confident that after August 14 the price discovery model, while certainly not free from manipulation, most certainly originating from the BIS' Basel Offices, will be a far better one. One can only hope that in the future all vestiges of gold and silver manipulation will eventually disappear resulting in what may be the first real price discovery of precious metals, absent central and commercial bank manipulation.  It is the same FT that we go to for some additional color on today's stunning outcome: It was born in the late 19th century when a handful of London bullion dealers agreed to meet daily under a cloud of cigar smoke to set the price for the "devil's metal". But now, after 117 years of operation, the London silver fix – the global benchmark for the metal – is on its deathbed. The three banks that run the auction announced on Wednesday that silver prices would be "fixed" for the final time at noon on August 14. The move follows increased scrutiny by European and US regulators into precious metals price-setting following the Libor scandal and probe into possible forex market abuse. Deutsche Bank last month resigned its seats on the silver and gold fixes, after failing to find buyers. That left just two members on the silver fix, HSBC and Bank of Nova Scotia. Market participants said the benchmark process, which occurs via teleconference and allows miners, financial institutions and jewellers to trade silver and value their stocks and contracts, could not function properly with fewer than three members. The UK's Financial Conduct Authority asked Deutsche Bank to stay on for an extra three months to allow for the benchmark to be wound down smoothly. "Deutsche Bank has postponed its resignation from the London Silver Market Fixing from 29 April 2014 to 14 August 2014, at which point the benchmark will terminate," the bank said in a statement on Wednesday. In other words, the FCA - undoubtedly in conjunction with the Bank of England - pushed hard to keep the existing manipulation structure in place for three months, effectively against the will of the German regulator, and of Deutsche Bank itself which wanted to get out as soon as possible. As for what happens after August 14, when the London Silver fix is officially gone, we can't wait to find out. In the meantime, we are confident the existing members of the mirror fix, that of gold, will be scurrying under rocks to avoid all public exposure. We plan to spoil their plans later today when we profile just who they all are. Finally, a reminder of what the once proud tradition of gold price fixing looked like back in the day. Average: Your rating: None Average: 4.9 (9 votes)

Supply and Demand Report: 11 May | Zero Hedge Posted: 11 May 2014 09:34 PM PDT by Keith Weiner This was another short week, with Monday a bank holiday in the UK. Through Tuesday, the prices of the metals seemed to want to hold onto the increase that was sparked by an unemployment report. It wasn't until Wednesday that the prices began to sag, almost but not quite to the pre-unemployment report levels again by Friday. We are not going to lament the folly of man nor trader. We are not even going to comment on the accuracy, or lack thereof, of the unemployment data. We are simply interested in the evolving dynamic between the fundamental setters of the prices of the monetary metals and the speculators who are trying to front run them. Read on… First, here is the graph of the metals' prices.             The Prices of Gold and Silver We are interested in the changing equilibrium created when some market participants are accumulating hoards and others are dishoarding. Of course, what makes it exciting is that speculators can (temporarily) exaggerate or fight against the trend. The speculators are often acting on rumors, technical analysis, or partial data about flows into or out of one corner of the market. That kind of information can't tell them whether the globe, on net, hoarding or dishoarding. One could point out that gold does not, on net, go into or out of anything. Yes, that is true. But it can come out of hoards and into carry trades. That is what we study. The gold basis tells us about this dynamic. Conventional techniques for analyzing supply and demand are inapplicable to gold and silver, because the monetary metals have such high inventories. In normal commodities, inventories divided by annual production can be measured in months. The world just does not keep much inventory in wheat or oil. With gold and silver, stocks to flows is measured in decades. Every ounce of those massive stockpiles is potential supply. Everyone on the planet is potential demand. At the right price. Looking at incremental changes in mine output or electronic manufacturing is not helpful to predict the future prices of the metals. For an introduction and guide to our concepts and theory, click here. Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. The ratio moved up this week, ending about 67.4. The Ratio of the Gold Price to the Silver Price For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide terse commentary. The dollar will be represented in green, the basis in blue and cobasis in red. Here is the gold graph.             The Gold Basis and Cobasis and the Dollar Price The dollar is up slightly, to over 24mg. The cobasis is up slightly. We have previously discussed the extraordinarily high level of the gold cobasis across all contracts. It is not in backwardation, but it's new and different in the post-2008 world to see such a high cobasis (around -0.1%) so far out from the present date. This is evidence of a tight gold market, and suggestive that the price could go higher. What is interesting to note is that we are in the midst of the contract roll. Those who are long gold are selling their June contracts and if they want to remain long gold they can buy August or a farther month. There is a famous scene in a Sherlock Holmes story, where the dog does not bark in the night (which proves the criminal was known to the dog). This is the contract roll, which seems not to be able to shove the June cobasis over the zero line. The market is tight but perhaps not that tight. Now let's look at silver. The Silver Basis and Cobasis and the Dollar Price The cobasis fell as the dollar fell (i.e. silver price rose), showing the move was speculative. It ended the week slightly higher than it ended last week. Not only is the silver cobasis four times lower than gold's, but the next month is almost twice lower than that. Gold may be tight, but silver not so much. We saw one headline on Friday that silver is in backwardation. Not from where we sit, though the July basis is negative. Our definition of backwardation is strict: when one can sell metal in the spot market (bid) for more than one can buy it in the futures market (ask). This is because we are looking for an actionable trade—to decarry. There is no profit in decarrying silver today. We promise to bellow from the rooftops when, once again, there is. Keith wrote an article for Forbes that those interested in gold and silver may enjoy, Why Did Both Silver and Gold Become Money? © 2014 Monetary Metals Average: Your rating: None Average: 4.7 (3 votes)

Endeavour <b>Silver</b> posts strong production, costs despite tough <b>price</b> <b>...</b> Posted: 13 May 2014 06:17 AM PDT Tue 9:17 am by Deborah Bacal The company reported this morning strong production and cost performance in the first quarter, even though profits and revenues dropped in spite of higher grades and recoveries at all three mines. Endeavour's Guanacevi mine, in particular, had a strong quarter thanks to sharply higher ore grades at the Porvenir Cuatro mine. Corp. (NYSE:EXK)(TSE:EDR), which operates three underground silver-gold mines in Mexico, says it is well ahead of its production plan for the year, despite a first quarter that was hurt by weak precious metals prices. The company reported this morning strong production and cost performance in the first quarter, even though profits and revenues dropped in spite of higher grades and recoveries at all three mines. Endeavour's Guanacevi mine, in particular, had a strong quarter thanks to sharply higher ore grades at the Porvenir Cuatro mine. For the three months to March 31, net earnings fell to $4.0 million or 4 cents per share, compared to $14.4 million, or 14 cents per share, in the year-ago period. On an adjusted basis, earnings came to $5.5 million, or 5 cents per share, versus $12.9 million, or 13 cents per share, in the first quarter of 2013. The company said that earnings were impacted as realized silver prices fell 30% to $20.50 an ounce sold, consistent with the average spot price, while realized gold prices dropped 19% to $1,306 an ounce. Revenues were also affected, decreasing 24% to $53.0 million in the latest quarter.  Still, the company managed to post improved production and cost figures at its mines, which include the Ganacevi mine in Durango state, as well as the Bolanitos and El Cubo mines in Guanajuato state. Silver production increased 27% during the period to approximately 1.9 million ounces, while gold output climbed 23% to 18,519 ounces. Silver equivalent production advanced 26% to 3.0 million ounces.  "We delivered another strong quarter of silver and gold production in Q1, 2014, which puts us well ahead of our production plan for the year," said CEO Bradford Cooke in the release accompanying the quarterly figures.  "Both cash costs and all-in sustaining costs were well below guidance thanks to our cost cutting strategies initiated last year." Indeed, all-in sustaining costs improved by 51% to $12.15 per silver payable ounce, net of gold credits.             "We continue to work toward optimizing operating costs and improving profit margins given the current low silver and gold prices," he added.  The precious metals producer has said it is planning to hone its mining operations this year, focusing on brownfields exploration and positioning the company for a turnaround in metal prices later in 2014. At its El Cubo mine in Guanajuato, Endeavour's biggest opportunity to expand production this year, the miner said that capital investments and operational changes made since acquisition have appeared to gained traction, but a few months of accelerated mine development is still necessary to make progress over the longer term. It said the mine is now back on plan to fill the plant capacity by year-end to 1,550 tonnes per day and start building an ore stockpile.  Cash flow from operations before working capital changes, a key metric in the industry, was $18.3 million in the first quarter, down 28% from the year-ago period. The company, which is intent on improving safety measures after two fatal accidents at its mines last month, ended the period with $44.3 million in cash and equivalents, up from $35 million at year-end 2013.

<b>Silver</b> Was Not In a Bubble in 2011! :: The Market Oracle :: Financial <b>...</b> Posted: 14 May 2014 08:25 AM PDT Commodities / Gold and Silver 2014 May 14, 2014 - 05:25 PM GMT By: DeviantInvestor Conclusions The April 2011 silver price spike was NOT a bubble. The January 1980 silver price blow-off was a bubble, and it was materially different from the April 2011 price spike. I fully expect a bubble in silver – someday – but that day is months or years into the future. Prices for food, energy, silver, and gold are going up – broadly speaking – along with the national debt, money supply, and similar measures of debt and credit. Since we KNOW national debt will increase for the foreseeable future, plan on the prices for food, energy, silver, and gold increasing similarly. The Data I examined the weekly data for silver since 1974. I used 144 week, 100 week, and 40 week moving averages for smoothing. I calculated the difference, both absolute and as a percentage, of the weekly closing price of silver above and below the various moving averages. Excel calculated the standard deviation of the percentage price differences in the various data sets – over 2000 data points for each of the three moving average groups. I examined the exceptions – the extremes in the data sets. Data Results Using the 144 week moving average data, the peak (weekly closing data) in early 1980 was 10.4 standard deviations above the norm. The April 2011 peak was 4.12 standard deviations above the norm. The current price for May 2014 is about 0.75 standard deviations BELOW the norm. Current 144 week moving average of the weekly silver closes is about $27.50. One standard deviation is approximately 39% of the 144 week moving average. You may object to such a long moving average and think it exaggerated the number of standard deviations above the norm that occurred in 1980. Nope! The results were similar, regardless of the length of the moving average. The 1980 peak was 10.39 standard deviations above the norm using 100 week moving average, and 9.66 standard deviations above the norm using the 40 week moving average. Using the 40 week moving average the April 2011 peak was less than 4 standard deviations above the norm. April 2011 was NOT a bubble peak and was merely a spike high that will be repeated sometime in the next few years. Yes, I know that 10 standard deviations occurs with an infinitesimally small probability, assuming a normal distribution of statistical data. But most of us know that market data cannot be represented as a normal distribution at the extremes of the data – there are "fat tails" where the extremes occur far more often than a normal distribution would indicate. Real world examples – such as rogue waves off the southern coast of South America – are observed, relatively speaking, much more often than a normal distribution would predict. I have read that the interest rate spreads that sunk Long Term Capital Management in 1998 "should" have occurred less than once in the known age of the universe – assuming a normal statistical distribution. The important point, in my opinion, is that the bubble peak in 1980 was thousands of times more extreme and LESS probable than the price spike in April 2011, which was not, in my analysis, a blow-off bubble. Hence I expect that silver prices, along with national debt, congressional spending, health care expenses, and bankster graft and corruption, will increase substantially from here. Expect the blow-off bubble peak in silver and gold in a few years. Expect the current bubbles in sovereign debt, "printing money," and fiat currencies to pop at some time in the relatively near future. The following graph of smoothed silver prices correlates with national debt at about 0.75. Correlation is not causation, but massive deficits create a continually increasing national debt and that causes the money supply to increase. That "printed money" works its way into the economy causing higher prices. Every family knows food prices have increased, gasoline is nearly triple what it was 15 years ago, and, not surprisingly, the prices for silver and gold are also much higher. They are all connected. The bubble in silver and gold is coming – it did not occur in 2011. Expect stormy weather and higher silver and gold prices ahead. When? Ask the High-Frequency-Traders, JP Morgan, the Treasury department, or just wait for demand to overwhelm physical supply in the relatively near future. You might also find value in: Silver, Gold, and What Could Go Wrong Silver Up & S&P Down DI's Interview on the Financial Survival Network GE Christenson aka Deviant Investor If you would like to be updated on new blog posts, please subscribe to my RSS Feed or e-mail © 2014 Copyright Deviant Investor - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors. © 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication. Only logged in users are allowed to post comments. Register/ Log in

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