Silver Phase Transistion

June 11 (King World News) - Gold & Silver Charts Of The Day



Physical demand for gold & silver coins remains strong. For the 3 months thru June, gold coin sales are 120k oz’s (46%) higher than for the 3 months leading up to the $1900 gold peak in 2011 (note: June sales are estimated). Just looking at January-March data, gold coin sales are about 65k oz’s (23%) higher than the 3 months leading to 2011 peak.



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Dollar amount of gold coin sales (3 month sum), is $100 million higher than the 2011 gold peak and, looking back, is at the highest level since June 2010. If just looking at January-March data, sales are $80 million higher than the 3 months leading to the 2011 peak.



http://kingworldnews.com/kingworldne...I%206%3A11.jpg




April data for China retail buying of gold, silver & jewelry show record sales. Even if jewelry accounts for 40% of sales, that leaves $3 billion of gold & silver sales for the month...which is more than US Mint gold & silver coin sales for the past 12 months....



Continue reading the Eric Pomboy interview below...



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“Even factoring-in China’s population is 4x that of the US, this is still a very very strong number. According to the World Gold Council, Chinese demand of gold bars and coins grew to 109.5 tons in Q1 2013, which is 2.5x the 5-year quarterly average of 43.8 tons.



http://kingworldnews.com/kingworldne...I%206%3A11.jpg




This chart speaks for itself. The last time sales were even in single-digit (12 month) year-to-year growth territory was in December 2003.



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What’s worth noting, along with these charts/data, is the disparity in East vs West view of precious metals, especially when seeing China’s retail gold & silver sales at such astonishing levels compared to ours. In the East, they view gold as a store of wealth and have become regular buyers. In the West, even while it is also considered a store of wealth, gold is largely not on the public’s radar.



US Mint sales are strong, yet in order to match data out of China (adjusted for population gap), sales would have to be about 3-fold what they are today. Interestingly, a recent video showed a man trying to sell a one ounce gold coin, which at the time was worth $1,600, for just $20. This took place in one of the wealthiest places in the west coast of the US. There were no takers even at $20. This quite clearly illustrated that the vast majority of all people in the US don’t even know what gold is worth!



If you were to try this in the streets of Shanghai, you’d be met with a 100-person curb-side bidding war inside of a minute or two. This sentiment gap will quickly narrow as gold makes its next impressive move and the public at large realizes that all is, in fact, not well in the world, and that the FED isn’t likely to back off on QE for a long time to come.”
http://kingworldnews.com/kingworldne...al_Demand.html

A Couple of Things

Sunday, June 16, 2013 at 2:58 pm
Before we start the week, just a few items for you to consider.
First of all, the Commitment of Traders report from Friday was interesting yet again. Below is a c&p of my thoughts from Friday afternoon.
"GOLD
The Large Specs added 3000 longs but also added a fresh 5200 shorts. The Small Specs dumped 137 and added 998 new shorts and now are once again net short by almost 700 contracts.
The Gold Cartel dumped 1000 longs but also covered 4300 shorts, thereby reducing their net short position by 3,330 contracts. This leaves them net short just 58,300 contracts with a net short ratio of 1.40:1.
SILVER
The Large Specs dropped their net longs by another 1650 contracts and they are now net long just a total of 3,700 with a preposterously low net long ratio of just 1.12:1. The Small Specs dumped 350 longs and added 1367 new shorts. This leaves them net long only 1300 contracts.
The everybody-but-JPM silver commercials added another 1,581 longs this week. This brings their gross long position back to the 2nd highest on record at 68,438. WOW! JPM and their pals were able to further reduce their gross short position, too. They used the weakness brought upon by the Spec selling to cover 1798 contracts. This leaves them with a gross short position of just 73,458. All totaled...The entire commercial category on silver is now net short just 5,020 contracts and the are sitting on a new record low net short ratio of just 1.07:1.
Once again, from a historical perspective this is truly astonishing...almost breathtaking. From time immemorial, even getting the Commercial net short ratio down under 1.5:1 was considered extremely bullish. Now it's 1.07:1!. If you want to see some historical comparisons, I once again refer you here: http://www.tfmetalsreport.com/blog/4...ge-days-indeed.
I would strongly encourage you to go back to that post and review those numbers. Not just the historical ones but even the data from the CoT of 2/5/13. The changes in the four months since are amazing."
Just for fun, let's go back and look at the data from the "Strange Days" post of 2/9/13. All of the historical CoT data is telling but let's look specifically at the CoT from 2/5/13. Why that date? You likely recall what happened on the days that followed. First, we had the price smash of mid-February and then we had the stop-running, range breakdown price smash of mid-April.
Again, all you hear in conventional media and analysis is the "the bull market in the metals is over" and why is this? Because the speculators are selling and, in doing so, they've driven price sharply lower. But always remember and never forget that whenever someone is selling, there is someone buying and taking the other side of the trade. So, now take a look at this:
DATE L.S.LONG L.S.SHORT RATIO CARTEL LONG CARTEL SHORT RATIO
2/5/13 42,449 6,588 6.45:1 46,293 98,239 1.99:1
6/11/13 35,309 31,806 1.11:1 68,438 73,458 1.07:1
In just over four months, the net short position of the Silver Commercials has dropped from nearly 52,000 contracts to just 5,000...a reduction of over 90%!! So, the specs have sold and the commercials have bought. Whether you are bullish or bearish going forward is simply determined by whether you think the specs lead this "market" or the banks. I think you know where I stand.
Let's look at gold in the same format.
DATE L.S.LONG L.S.SHORT RATIO CARTEL LONG CARTEL SHORT RATIO
2/5/13 192,806 55,341 3.48:1 145,291 319,898 2.20:1
6/11/13 174,015 115,010 1.51:1 146,470 204,792 1.40:1
For gold, there are a couple of things that should absolutely jump off the page at you.

• The Large Spec gross short position has more than doubled in the past four months.
• The Gold Cartel gross long position is unchanged. Contrast that to the commercial gross long position is silver, which has climbed by nearly 50% over the same time period.
• The Gold Cartel has covered 115,000 short contracts. This has reduced their net short gold liability from nearly 175,000 contracts (17,500,000 ounces) to just 58,000 contracts (5,800,000 ounces). That's a reduction of 67%.

Also consider that, according to the latest Bank Participation Report, chief evildoer JPM has now flipped what was a 50,000 net short position in gold into a 50,000 net long position.
Again, I ask you: Going forward, with whom would you like to side? Do you think that The Specs will be proven correct with a money-making short position or do you think the The Forces of Darkness will rule the day?
While we're on the subject of JPM, let's move on to point #2 of this post. Why is JPM now net long in gold and, at a minimum, likely net neutral in silver? Hmmmm. Why would that be??
As you know, sources have told me that late last summer, the criminal CFTC was given damning information, proving JPM's role in manipulating the metals "markets". As I've often stated, the inaction by the CFTC in the 10 months since makes them a co-conspirator to a crime in progress. But now ponder this: We know that the commissioners of the CFTC are just a bunch of politically-appointed hacks, firmly in the back pocket of the Big Banks. This worthless organization has been "investigating" silver manipulation for nearly five years. The information provided them last summer should have brought about an immediate conclusion and judgment. Clearly, it didn't. Why?
As we look at the CoT data in the 10 months since, the answer is obvious. When presented with the irrefutable proof of manipulation, rather than act immediately, the CFTC kicked-the can and sat on it. Eventually, they must have notified JPM that they "had the goods" and ordered JPM behind-the-scenes to end their manipulation scheme. JPM said "OK, just give us a few months and we'll take care of it". Et, voila! From a net silver short position of over 30,000 contracts back in November, today the JPM silver short position, if it exists at all, is likely less than 10,000 and, in gold, they've flipped from a net short position of 50,000 to a net long position of 50,000. Mission accomplished! JPM can no longer be said to be the big, evil, rascally short manipulator and the CFTC is absolved from their dereliction of duty. Ain't that great?
Finally, to thought #3, and this is a biggie. Did you see this yesterday? http://www.zerohedge.com/news/2013-0...-president-hoe
So now we have a former Fed Goon openly questioning whether or not Deutsche Bank is solvent. This isn't the first time I have heard this. The Golden Jackass himself has been telling me this for months. In fact, when I saw this story, I emailed it to him and he responded with this, which he gave me the OK to post for all to read:
"My best German source told me that D-Bank is going into failure very very soon.
A week ago, he said 3 banks were in great danger of failure, likely not to survive, to happen soon
after a certain amount of begging, along with my lame guesses, he gave in
Barclays, Citigroup, Deutsche Bank -- all gonna die in a huge round that will eclipse Lehman & Fannie & AIG
it will be global
watch a Japanese bank join them
post this if you wish."
OK, let's worry about Barclays and Citi another day. For now, let's focus on DB. They've been in trouble for some time and now it's becoming clear for all to see. Additionally, I was told by an English friend that "a major bullion bank has been and continues to be on the verge of bankruptcy/insolvency". Hmmm. I wonder who that could be? There are, of course, six major banks that do all of the clearing for the LBMA. They are:
Barclays, Scotia, HSBC, JPM, UBS and...drumroll please...Deutsche Bank.
Things get curiouser and curiouser, don't they? It's going to be another interesting week. I hope you're ready.
TF

http://www.tfmetalsreport.com/blog/4783/couple-things

in physics, a phase transition is solid to liquid, liquid to gas, solid to gas (dry ice) ... etc.

so actually, i think the term "phase transition" is accurate.

it's going from a paper market to a physical market.

but i think the transition for silver will be more violent than a day-to-day phase transition like boiling water.


what allows the market to behave so atypically, the manipulation, is aided & abetted by the big delusion.

the 100:1 paper to physical ratio, for example. Morgan Stanley customers thinking they owned the Silver they bought from Morgan Stanley. what they owned was a credit derivative tied to the price of silver.

after all, it's from Morgan Stanley, it's got to be good, RIGHT ? <== DELUSION.

Morgan Stanley settled that case in 2007 for $4.4 million. Morgan Stanley returned the money they charged customers for storing precious metals they told the customers they purchased. then they charged storage fees. they never bought the metal but still they charged the storage fees.

when the customers complained, via a lawyer, Morgan Stanley returned the storage fees. customers got zero metal. Morgan Stanley somehow maintained a not-totally-terrible reputation.


Morgan Stanley has a reputation as being the investment bank for Shabbas Goyim, whereas Goldman is where you go if you're Jewish. (that's the informal rep.) but Morgan Stanley sure has the basic idea of financial fraud down pat. i'd say they scored 100% on that test.


Morgan Stanley is the tip of the tip of the iceberg.

the phase transition involves Americans realizing that the corporations they used to revere, to trust their money to (because they got nice marble and granite buildings ?), are puss. the germy kind of puss.

The Long Silver Ranger

Dr. Jeffrey Lewis
| June 16, 2013 - 7:51pm

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Could China be the big silver long? Who else has deep enough pockets to endure the recent price weakness and the increased margin requirements that typically follow?
Nevertheless, the Chinese willingness to accept fungible dollars instead of precious metal seems to be waning. They are quietly accumulating metals..
Perhaps this explains why the silver open interest has remained stubbornly high throughout the most egregious washouts the silver market has seen in years.
Normally this has the effect of clearing out weak longs, often setting the scene for a price turnaround based on the COT structure.
This could be just a subset of a peaceful currency maneuvering plan.
China is Now a Net Importer of Silver
China used to export silver, but it has recently turned into a net importer. It would therefore make sense for the Chinese to seek delivery, especially given the difficulty of obtaining a reliable stock of silver these days.
Outside of the big ETF (SLV) and COMEX, no significant (government) stockpiles of silver currently exist. Furthermore, scrap flow is typically reduced in a soft market, since people are less willing to part with their recyclable silver metal.
Miner acquisition is also relatively difficult, and its feasibility can often be affected by politics and the lack of opportunity.
The silver miners — including the few primary silver producers — have long suffered from suppressed market pricing. Furthermore, what capital and financing they receive usually comes from the same bullion banks who keep the price of silver artificially low.
China and other sovereigns would naturally seek to reduce the level of their forex reserves denominated in U.S. Dollars, especially since the Fed seems locked into its role as lender of last resort to the world - and especially to the Eurozone.
A case in point is that 600 billion of QE2-generated electronic cash actually went to foreign banks as a way of building capital reserves in lieu of ECB balance sheet expansion.
The Irony of it All
The silver market has often noted a phenomenon of overnight dumping that is typically seen at the Asian open, but it is timed to occur before most Asians are actually awake.
It is now thought to be U.S. operators initiating the selloffs at Asian openings. Could this be yet another front in the trade/currency war?
New buyers for silver currently seem to be waiting in the wings to accumulate silver on the dips. Of course, the silver market has been a “buy the dip” market since the 1980's, which is the classic investment strategy employed in a long term bull market.
Short Term Versus Long Term Perception
The Chinese tend to take a long term view and are notorious for being far sighted in their investment habits.
Not only is it necessary to go back decades in order to understand and gain perspective on the silver market’s currently situation, but it is also interesting to project forward several decades.
The key to doing this is using the measuring stick (the U.S. Dollar) as the proxy. Furthermore, observing the persistent rise in unfunded liabilities should help any potential silver investor maintain a bullish long term view on silver.
However, for those hoping for a silver rally in a shorter time frame, it might be helpful to be reminded of the (high open interest with a reduced, though still concentrated short) structural set up in the silver futures market that allows price suppression to exist.

http://www.silver-coin-investor.com

http://www.silverseek.com/commentary...r-ranger-12188

Silver Price to Rise as Top Miner's High Grade Production Evaporates

Steve St. Angelo, SRSroccoReport
| Tuesday, June 18th
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One of the most insidious problems taking place in the gold and silver mining industry is the decline in falling yields. Not many realize, when yields decline, production evaporates and disappears. To offset the decline in metal yields, the mining companies have to add new mines and or increase the amount of processed ore.
If we take a look at the top 6 silver producers, we can see that the average yield declined 38% since 2005, from 13.0 oz/t (ounce/tonne) to 8.1 oz/t in 2012:
http://67.19.64.18/news/2013/6-18sa/image001.png
The companies and individual primary silver mine included in the graph above were, Fresnillo, BHP Billiton Cannington, Pan American Silver, Polymetal, Hochshild & Hecla. Furthermore, I only included primary silver mine production from these companies.
For example, both Fresnillo and Polymetal had higher annual silver production figures than is shown in the graph above. This by-product silver came from their primary gold mines and was excluded from the calculations as it would have significantly lowered the average yield.
This next chart shows the inverse relationship between falling yields and increased processed ore:
http://67.19.64.18/news/2013/6-18sa/image003.png
In 2005, these companies processed 9.4 million tonnes of ore to produce 123 million ounces of silver. However, by 2012 a total of 15.8 million tonnes of ore was processed, an increase of 67%, to supply 127 million oz of silver.
Pan American's Dolores silver & gold open-pit mine was not included in the 2012 calculations due to its extremely low average ore grade of 42 g/t (grams/tonne). Even though the Dolores mine added 2.6 million oz to Pan American's total, it would have severely impacted the group's 2012 annual yield by knocking it down from 8.1 oz/t to 6.4 oz/t.
Declining Silver Yields = Evaporated Production
If we take the top 6 silver production in 2005 at 123 million oz and figure a seven-year 38% decline in yield, we would have the following:
123 million oz (X) -38% yield = 47 million oz loss of production
So, if no new production was added by these 6 mining companies overall supply would have declined to 76 million in 2012. To be able to increase production on top of declining yields, the silver miners have to either add new mines or ramp up their milling and processing of ore.
A perfect example of this took place at Fresnillo. Here we can see that overall production at Fresnillo remained the same in 2012 as it was in 2005:
http://67.19.64.18/news/2013/6-18sa/image006.gif
How was Fresnillo able to keep its production at 33.4 million oz as its average yield declined from 15.2 oz/t in 2005 down to 9.2 oz/t in 2012? This 40% decline in yield caused a huge reduction of 13.3 million oz in this seven-year time period.
To offset this large decline in yield, the company ramped up its milling capacity 26% at its Fresnillo mine and added production from its new Saucito mine. In 2012, the Fresnillo mine accounted for 26.4 million oz of production while Saucito made up the difference by adding 7 million oz to the total.
Again, the figures in the chart above only came from Fresnillo's two primary silver mines... Fresnillo and Saucito. Fresnillo accounted for all the production until 2011 when Saucito ramped up production.
This is the big problem companies face as silver yields decline. In the case above, Fresnillo PLC had to ramp up production at Fresnillo and had to bring on a new mine (Saucito) just to keep production the same as it was seven years ago.
Now we can see how costs rise as yields decline. For instance, think of all the capital it took to bring Saucito from the exploration stage to commercial mine production. Furthermore, the company had 875 contractors working at its Saucito mine in 2012 including all the additional mining equipment, materials and energy costs.
The Cost to Produce Silver will Rise as Yields Continue to Decline
The impact of falling yields shown in the Fresnillo example above is taking place in the whole mining industry. Pan American Silver was producing silver at 7.4 oz/t in 2005, but by 2012 this had fallen to 5.1 oz/t (this is excluding the Dolores open-pit mine which would drop the average yield down to 2.9 oz/t). Furthermore, Hochschild's average silver yield declined from 12.4 oz/t in 2005 to only 6.7 oz/t in 2012. I could go on and on.
What we are witnessing here is the evaporation of high-grade silver production only to be replaced by a much more expensive low yielding supply. This will only become more difficult each passing year. As costs to mine silver continue to rise in the future, so will the price of silver.
Lastly, energy is the overwhelming factor contributing to the increased costs of mining silver as yields decline. Thus, silver will become one of the best stores of value in the future because it functions as an excellent store of trade-able energy value.

http://www.silverseek.com/article/si...aporates-12194

Wouldn't the falling ore yield be because of the rising silver price since 2005? It has become more economical to mine lower yield ores because the price is higher than it was 2005-2009.

http://www.silverdoctors.com/wp-cont...06/silver5.gif


Notice the tight trading band maintained for most of June 17th (red line)? That’s the sort of trading typically seen when High Frequency Trading algorithms comprise the majority of the volume on futures exchanges. Given the downward bias, this week’s example shows what most likely are HFT algos run in service of the cartel’s interest. But check out both the regular and after hours trading in New York for both June 17th and June 18th. There are visible buy-side upswings at the open of New York trading that deviate from the tight algo-dominated pattern encapsulating New York trading. Real accumulation started at the New York open today and yesterday, only to be met with a capping effort as the London PM Fix approached — with today’s downdraft representing a classic smash down against stop loss orders, resulting in quick downward price spikes.

Keeping tame price trends for the London PM Fix is one of the prime objectives of the cartel. More physical bullion deliveries are tied to the London PM Fix than any other paper-based price. But it’s noteworthy that this week shows new long-side interest coming out of New York, and we need to keep an eye on this to see if the trend continues.

It’s also worth pointing out the contrast Kitco’s 72-hour gold chart provides. It lacks the tight algo-driven pattern the silver chart demonstrates. This suggests silver algo-trading management by the cartel outside of New York hours executed to cap silver and, in turn, guide gold downward.
http://www.silverdoctors.com/cartel-...ld/#more-28129

Quote:

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Originally Posted by Neuro

Wouldn't the falling ore yield be because of the rising silver price since 2005? It has become more economical to mine lower yield ores because the price is higher than it was 2005-2009.

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I know they do that with gold ,not sure with silver

ALERT: JP Morgan Increases SLV Holdings by 500%!

http://www.silverdoctors.com/alert-j...00/#more-28052

I think the prices for the progressive lenses in my glasses doubled since this thread was created.