Ukraine to pay 80% more for Russian gas

As of next week, Ukraine will pay nearly 80% more for Russian gas.

This means Moscow might charge Ukraine "close to $500 for 1,000 cubic meters of gas," according to the New York Times.

Ukraine uses gas for about 40% of its energy needs, and more than half of that supply comes from Russia.

Earlier this month Russia said it would no longer provide Ukraine with discounted gas. Under the agreement signed in 2010, Russian gas flowed cheaply into Ukraine and, in exchange, Russia was allowed to extend its lease on a military base in Sevastopol, Crimea. Now that Russia controls Crimea, it doesn't need the gas deal.

"Russia, because it committed armed robbery of Ukraine, and in this way in fact destroyed our bilateral agreement, wants to raise the price of gas for Ukraine,” Ukrainian Prime Minister Arseny Yatseniuk told reporters, as reported by the New York Times.

Ukraine has since secured $27 billion financing deal with the International Monetary Fund (IMF) to help stabilize the economy.

A golden opportunity coming in silver

Silver has been in a bear market for almost three years and the recent lack of strength suggests the metal could be headed for new lows. New lows are always bearish until the last one. Our technical work suggests that we should watch for a final low and end to the bear market in the coming months.

This chart plots every major bear market in Silver dating back 45 years (excluding the 1980-1982 bubble bust). It plots them on the same time scale as the current bear market. Excluding the 1980-1982 bear market, we find that the current bear market is inline for being the worst bear market. It is already the fourth longest in time and close to the second worst in price. The current bear is very close to the 1983-1986 bear. This chart and the 1983-1986 bear suggest that if the current bear breaks to a new low then its final bottom could occur about one month later.

Silver has very strong trendline support on the daily chart around $17. If Silver breaks to a new low then it will run into this trendline support which dates back 11 years.

In the lower column we plot a 12-month rate of change for Silver. Note how it often reaches or comes close to 100%. After lows in 2003, 2005, 2008 and 2010 Silver gained 100% in a 12 month period. Moreover, following the 1983-1986 bear market which closely resembles the current bear, Silver rebounded 89% in 10 months. Following the 2008 low, Silver rebounded 84% in 11 months. Let’s say Silver bottoms at $17.50 and rebounds 70% in 12 months. That would take it to $30. That would create huge upside in most silver stocks.

Below is a chart of our proprietary silver producers index which contains 14 stocks and is partially weighted by market cap. It contains all of the large, important silver companies as well as junior producers. We didn’t just pick the 14 best. This index recently peaked at neckline resistance and just below the 80-week moving average. Note how the 80-week moving average marked resistance in early 2012 and late 2012. A new bull market will only be confirmed when this index is able to surpass that confluence of resistance.

From a bird’s eye view, the bear market in Silver is just about over while the bear market in silver stocks probably is over as we don’t expect them to make a new low. However, the silver stocks won’t break resistance and confirm a new bull market until Silver has bottomed. Our analysis shows that Silver’s bear has a bit more to go in terms of price and time. We’ve laid out what we are looking for in Silver which is a new low and a bounce from 11-year trendline support. If that occurs at a time of extreme bearish sentiment then it is a buy signal. This prognosis, if correct means we have some time to research and patiently accumulate the best silver stocks which are positioned to benefit from a resumption of the secular bull market.

Source : Jordan Roy-Byrne - The Daily Gold

Hedge Funds Vulnerable After Raising Gold Bets

After boosting bets on higher gold prices,hedge funds may hesitate from buying more of the metal on expectations for higher U.S. interest rates and unless the standoff between Russia and the West intensifies, UBS AG said.

The CHART OF THE DAY shows that speculators and other money managers increased their net-long positions, or wagers on a rally, to the highest level since November 2012 in the week ended March 18. The buying of gold futures and options helped prices reach a six-month high on March 17. It fell as much as 6.3 percent since then.

Gold rebounded from the biggest annual drop in three decades as Russia’s move to annex Crimea spurred demand for a haven. Federal Reserve Chair Janet Yellen said on March 19 that that the central bank’s benchmark rate may rise about six months after monetary stimulus ends later this year. Prices rose 70 percent from December 2008 to June 2011 as the Fed pumped more than $2 trillion into the financial system and cut interest rates to boost the economy.

“In the wake of the more hawkish Fed last week, the continuous expansion in spec positioning and with geopolitical headlines dampened, longs are likely feeling quite vulnerable here,” Edel Tully, a UBS analyst in London, wrote in a report yesterday. “The pace of increase itself has been quite dramatic. Simply put, this nature of positioning is unsustainable. We don’t think gold has yet found its price floor.”

Gold has climbed 8.8 percent to $1,311.63 an ounce in London since the end of December, after dropping 28 percent last year, and reached $1,392.22 on March 17. Speculators are holding a net-long position of 138,429 contracts, U.S. Commodity Futures Trading Commission data show. Prices were above $1,700 when the wager was last that high.

Top industrial powers threatened stiffer sanctions to deter Russian President Vladimir Putin from seizing more of Ukraine. U.S. and European Union have focused mainly on imposing asset freezes and visa bans on individuals. Putin said he doesn’t plan to further split up Ukraine after Crimea voted to join Russia.

Weekly Economic Data for the week 22-Mar-14 to 28-Mar-14

Expected impact on price:	This indicator shows the effect of the anticipation of data on the prices of related country’s major indices. We have categorized it as below: Very Good Good Neutral Bad Very Bad
Actual:	Refers to the actual/latest figures after its release.

Data for the week 22-Mar-14 to 28-Mar-14

Date	Time (IST)	Country	Data	Exp.	Prior	Exp. chg today	Avg. chg of last 1 year	Exp. Impact on Price
24-28 Mar-2014	-	United Kingdom	Nationwide Housing Prices PX (MoM)	0.8%	0.6%	0.20%	0.00	Neutral
24-Mar-2014	07-15 AM	China	HSBC Manufacturing PMI	48.7	48.5	0.20	0.97	Neutral
25-Mar-2014	02-30 PM	Germany	IFO - Business Climate	110.9	111.3	-0.40	0.00	Neutral
25-Mar-2014	03-00 PM	United Kingdom	Consumer Price Index (MoM)	0.50%	-0.60%	1.10%	0.00	Very Good
25-Mar-2014	07-30 PM	United States	Consumer Confidence	78.5	78.1	0.40	4.00	Neutral
25-Mar-2014	07-30 PM	United States	New Home Sales	0.445M	0.468M	-0.02	0.01	Very Bad
26-27 Mar-2014	00-00 AM	United States	U.S. President Obama Meets NATO Secretary General					Neutral
26-Mar-2014	05-00 PM	European Monetary Union	EU Summit Held in Brussels
26-Mar-2014	06-00 PM	United States	Durable Goods Orders	0.70%	-1.00%	1.70%	6.72	Neutral
26-Mar-2014	08-00 PM	United States	EIA Crude Oil Stocks change	--	5.850	-5.85	3.45	Neutral
27-Feb-2014	02-30 PM	European Monetary Union	M3 Money Supply (3m)	1.2%	1.2%	0.00%	0.18	Neutral
27-Mar-2014	06-00 PM	United States	GDP Annualized QoQ	2.7%	2.4%	0.30%	0.45	Neutral
27-Mar-2014	07-00 PM	United Kingdom	BoE Publishes Financial Policy Committee Statement					Neutral
27-Mar-2014	08-00 PM	United States	EIA Natural Gas Storage change	--	-48	48.00	33.60	Neutral
28-Mar-2014	03-00 PM	United Kingdom	Gross Domestic Product (QoQ)	0.7%	0.7%	0.00%	0.34	Neutral
28-Mar-2014	03-30 PM	European Monetary Union	Consumer Confidence	--	-9.3	9.30	1.04	Neutral
28-Mar-2014	07-25 PM	United States	Reuters/Michigan Consumer Sentiment Index	80.5	79.9	0.60	2.48	Neutral

Miners protest at Anglo’s Los Bronces mine in Chile

Contract workers staged Monday a massive a protest at Anglo American’s Los Bronces copper mine in central Chile, as the company refused last week to negotiate their demands.

The London-listed miner said in a statement that operations remain unaffected. However, it noted there have been “fires, looting, vehicle thefts and disturbances.”

The contractors’ leader, Cesar Inostroza, told local newspaper La Tercera (in Spanish) they are demonstrating against alleged anti-union practices, including layoff threats and harassment.

Anglo, the operator of Los Bronces, owns 50.1% of the mine. Mitsubishi has a 20.4% stake, and  Chile's state-owned Codelco and its joint venture partner Mitsui hold the remaining 29.5%.

UPDATE

Anglo American halting Chile Los Bronces mine ops due to protest

WWW.REUTERS.COM

SANTIAGO (Reuters) - Global miner Anglo American Plc <​AAL.L> said on Monday it was halting operations at its Los Bronces copper mine in central Chile because of a violent protest by contract workers.

Russia Is Slowly Turning The NatGas Tap Off To Europe

While Naftogaz (Ukraine's gas pipeline operator) states that all gas transportation from Russia to Europe is running normally, Bloomberg reports that Russian natgas exports to Europe are declining. Shipments are down over 4% from the prior week and also lower to Ukraine. This 'adjustment' follows increased sanctions by the West as Medvedev's notable statement this morning that Ukraine owes Russia $16bn.

NatGas output is tumbling

The good news:

Gazprom today said natgas transit to Europe via Ukraine, supplies for Ukrainian consumption  

But Pay Up...

Ukraine owes Russia $11b after collapse of 2010 deal, Russian Prime Minsiter Dmitry Medvedev says to President Vladimir Putin at Security Council meeting, according to transcript on Kremlin website.

Medvedev adds $3b Ukraine bonds bought in Dec., ~$2b debt to Gazprom for natgas supplies

NOTE: In 2010, Russia agreed to sell natgas at discount in exchange for extending lease to Black Sea naval port of Sevastopol in Crimea to 2042 from 2017

Or Else...

Russian natgas exports to Europe and Turkey, excl. former Soviet Union, declined to 405.3mcm as of March 22,  according to Bloomberg calculations based on preliminary data from Energy Ministry’s CDU-TEK unit.

Avg daily exports to region were ~457mcm in March, lower than yr earlier: calculations based on CDU-TEK data

Shipments March 16-22 were 3.04bcm, 4% decrease vs level in week ended March 15

Russia is now asking close to $500 for 1,000 cubic meters of gas, the standard unit for gas trade in Europe, which is a price about a third higher than what Russia’s gas company, Gazprom, charges clients elsewhere.

Russia says the increase is justified because it seized control of the Crimean Peninsula, where its Black Sea naval fleet is stationed, ending the need to pay rent for the Sevastopol base. The base rent had been paid in the form of a $100 per 1,000 cubic meter discount on natural gas for Ukraine’s national energy company, Naftogaz.

And if that's not clear enough...

Which Precious Metal Is Controlled By The Russians - Palladium

Palladium is like the Rodney Dangerfield of precious metals. It never gets any respect.

If you ask someone about precious metals, in fact, just about everyone has heard of gold and silver. And occasionally platinum.

But palladium is one of those obscure precious metals that few people think about, or even know about.

Aside from actually having its own currency code (XPD), palladium is widely used in a variety of industrial applications, from spark plugs to catalytic converters to hydrocarbon ‘cracking’ to electronic components.

And here’s something most people don’t know: most of the world’s palladium is mined in Russia.

Since October 2013, Palladium prices have had a moderate boost—about a 5.3% increase in five months.

But given what’s happening in Russia, prices could soar. In fact, with trade sanctions looming, palladium could be taken off the world market indefinitely.

As the following chart shows, palladium has just broken out to a new 52-week high and is showing strong upward momentum.

Moreover, if you look at the 5-year chart, it could be about to break out to even longer-term highs.

I would consider buying palladium today, with a stop-loss order to protect your capital, at $759. That means if the market should prove this thesis wrong, the loss would be limited to just 4%.

I think the near-term upside target is the 5-year high of $855. That’s about an 8% gain from where we are today.

An upside of 8% versus a downside of 4% makes palladium a good risk/reward trade, given that the odds of the higher-price outcome are much better than the odds of the lower-price outcome.

But if tensions between the West and Russia escalate and trade sanctions stay in place for a prolonged period, $855 could be a very conservative upside target for palladium.

The last time Russia withheld palladium supplies from world markets back in 2000, the price rose 151% from a low of $433 in January 2000 to over $1,090 an ounce by January 2001.

In a scenario like that, palladium would be an incredibly profitable trade.

One easy way to take a position in palladium is via the ETFS Physical Palladium Shares (PALL on the New York Stock Exchange).

A new physical palladium ETF sponsored by Standard Bank has also just launched in South Africa.

And Absa Bank, which already sponsors the world’s largest platinum-backed ETF, has also announced it will launch a palladium ETF called NewPalladium. It will list on the Johannesburg Stock Exchange on March 27th.

These new palladium ETF launches, coming at a time of tightening supply due to Russian sanctions, could easily add more upward momentum to palladium prices, as they will withdraw supply from the market to physically back their shares.

However, if you want to avoid the possibility of any counterparty risk, there’s no substitute for owning the physical metal yourself.

The Royal Canadian Mint has in the past minted palladium versions of its very popular and instantly recognizable Maple Leaf bullion coins.

You can also buy 1 troy ounce palladium bars from most major dealers.