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Gold fell $28 or 1.73% yesterday in New York and closed at $1,591.60/oz.  Gold traded sideways prior to another 1% fall in Asia but has recovered somewhat in early European trading and has made gains in euros and Swiss francs particularly. 

Cross Currency Table – (Bloomberg)

Spain has not even asked Germany Europe for a formal bailout (well they did, but promptly recanted), not has Germany even granted one, and already the fiesty Iberians are protesting against Germany... if only on twitter. As can be seen below the #stopmerkel hashtags has taken Spain by storm. While we wholeheartedly support this expression of independence, we are a little confused just what Spain is protesting: a German bailout of insolvent Spanish banks? We expect once the initial "twitter revolt" subsides, and Spanish citizens realize they would rather have EURs than 95% devalued pesetas, or even Spiderman towels, in their insolvent banks, they will promptly revert to #merkelgive.

Central bank gold demand remains robust as central banks continue to diversify out of the euro and the dollar. Further central bank demand is confirmed in the news this morning that Kazakhstan plans to raise the share of gold in its international reserves from 12% to 15%. So announced central bank Deputy Chairman Bisengaly Tadzhiyakov to reporters today in the capital, Astana. “We’ve already signed contracts for 22 tons,” Tadzhiyakov said. Bloomberg report that immediate-delivery gold was little changed at $1.620.41 an ounce at 10:50 a.m. in Moscow, valuing 22 metric tons of gold at about $1.2 billion. “The bank is ready to buy when suppliers are ready to sell,” Tadzhiyakov said. Kazakhstan said yesterday it will cut its holdings in the euro by a sixth. It was reported in the Reuters Global Gold Forum that the central bank buys all the gold produced in Kazakhstan and owned 98.19T at the end of April, according to the IMF's most recent international finance statistics report. Meanwhile, supply issues remain and South African gold production continues to plummet. South African gold production fell 12.8% in April from a year earlier, Juan -Pierre Terblanche, a spokesman for Statistics South Africa, told Bloomberg.

The end game of this global monetary crisis is the imposition of a 100% digital monetary system that would permanently end what little economic freedoms we still retain today. Educate. Resist. Fight Back. Win.

Everyone's worried about EU soveriegn debt. Once all of that rapidly depreciated real estate collapses mortgages that have been leveraged 30x, you'll really see the meaning of AUSTERITY! I'm trying to make it very clear to you people, you ain't seen nothing yet!!!

Global gold demand continues to surprise to the upside – especially sizeable demand from the Middle East and China. Confirmation of continuing huge demand in China came yesterday with data showing that Hong Kong shipped 101,768 kilograms of gold to mainland China in April, up 62% on the month - marking the second-highest monthly exports ever.  While demand from India continues it has fallen from the record levels recently but demand from other Asian countries is robust with reports of demand in Thailand, Vietnam, Malaysia and Indonesia. A new and potentially significant source of demand is that of demand from Iran. Iran imported a massive $1.2 billion worth of precious metals from Turkey in April alone. Turkish exports of gold, precious metals, pearls and coins to Iran rose to $1.2 billion in April from a tiny $7,500 a year earlier, according to figures released by the state statistics institute in Ankara yesterday. This is a massive increase in demand and suggests that there may be official involvement in the imports from the Central Bank of Iran.

Instead of a "botched" event, the Facebook IPO is actually a total success by Wall Street standard, since concerted effort appeared to have been made  to ensure an "acceptable" return for the insiders.

With so many countries vying for the dubious honor of “Sick man of Europe,” ConvergEx's Nic Colas looks at some of the academic literature related to how doctors make sound diagnostic decisions.  The medical profession suffers from many of the challenges we all face in making sound judgments, fighting off inherent biases and shortcuts to make consistent decisions based on the facts.  The one difference is that medical professionals must often make their decisions “On the fly,” with life or death often in the balance.  In contrast, European policymakers have, thus far, had the luxury of time in addressing the region’s challenges.  But if the pace of crisis picks up in the coming months, the ECB/IMF as well as other monetary and fiscal policy bodies will have to move more like an army field surgeon than careful diagnostician. The ongoing challenges in Greece, Spain, Italy and other European countries could be considered either economic malpractice or misdiagnosis. Will they see “Austerity” as the cure for every ailment, or will they remain flexible?  Will they remain overconfident and (potentially) overplay their hand? It is tempting to say that policymakers should follow the Hippocratic Oath and “First, do no harm.”  Sadly, the situation in Europe is beyond that simple recommendation. 

A push by the ECB for the euro zone to stand behind banks suffering from bank runs is slowly gaining traction but the bloc has yet to build backstops to prevent, or cope with, a sudden collapse of confidence in banks and mass deposit withdrawals. Last week, European leaders discussed pan European means of supporting banks, measures the ECB hopes will include a bank resolution fund to deal with the fallout from the wind up or restructuring of a failing bank. But a wave of withdrawals by depositors - either for fear that their government is too weak to stand behind its banks or that their country will exit the euro and forcibly convert their savings into a vastly devalued national currency - would represent a crisis of completely new proportions. Greece’s exit and reversion to their national currency, the drachma, could precipitate electronic bank runs in other periphery nations. The risk is that even savers who may trust their bank as being safe, come to the conclusion that there is a risk that their euro deposits may, in the event of a sovereign crisis, be forcibly converted to drachmas, pesetas, liras, punts and escudos.

While the Spanish government feverishly attempts to wrap up the country’s euphemistic financial system reform, the ever-expanding black holes, multiple balance-sheets restructuring with infinite amounts of public funds and reiterated calls for the need to further consolidate financial institutions seem to be setting up the stage for a self-fulfilling prophecy of Mayan proportions.  Hopefully, this time around, we can learn from the not-so-ancient Mesoamericans’ hard-learnt lessons of the dangers implied in the state breaking the rules of free market capitalism when bailing out institutions and interest groups at the taxpayers’ expense. If we don’t, at least the endgame should not take anyone by surprise.

A reminder of the sharp increase in demand for gold and silver, particularly store of wealth demand, in recent years was seen in the figures released by the China Nonferrous Metals Industry Association in Shanghai today. China’s gold consumption rose 33% to 761 tons in 2011 and China’s silver consumption rose 6.8% to 6,088 tons last year. China’s gold consumption rose 190 metric tons last year to 761 tons, Wang Shengbin, China Gold Association Vice Chairman, said in a speech in Shanghai as reported by Bloomberg. China’s jewelry consumption jumped 28 % to 456.7 tons last year, gold bar consumption surged 51% to 213.9 tons and gold coin consumption gained 25% to 20.8 tons, Wang said. China’s silver consumption, including industrial use, jewelry and coins, rose 6.8% to 6,088 metric tons last year, the vice chairman said. The amount shows a surplus given China’s output of 12,348 tons last year, which gained 6.3%, Wang said.

Today, the deputy chairman of Russia's central bank, Sergey Shvetsov, said that the Bank of Russia plans to keep buying gold on the domestic market in order to diversify their foreign exchange reserves.   "Last year we bought about 100 tonnes. This year it will be less but still a considerable figure," Shvetsov told Reuters on the sidelines of a financial conference in Milan. Russia's gold and foreign exchange reserves fell to $514.3 billion in the week ending May 18, from $518.8 billion a week earlier. However, they have risen from the $498.6 billion seen at the end of 2011. Yesterday, Shvetsov said that Greece has plans for a parallel currency and that it is a “necessity” for Greece to leave the euro.

Gold’s London AM fix this morning was USD 1,558.50, EUR 1,239.27, and GBP 993.62 per ounce. Yesterday's AM fix this morning was USD 1,555.00, EUR 1,229.44, and GBP 989.56 per ounce.
Gold fell $5.60 or 0.36% in New York yesterday and closed at $1,561.20/oz. Gold has been trading sideways in Asia and was slightly lower in Europe prior to buying which saw gold rise to about the close in New York yesterday. 

Now that talk of NEW QE is once again all the rage, and with the FOMC's June meeting in less than a month, and since there is nothing that anyone can do, short of a revolution to prevent this (with half the country obese, and the other half hypnotized by the Kardashians or on disability, that ain't happening), it only makes sense to join them since we can't beat them. Which is why we are officially launching the "POMO For The Rest Of Us" initiative. Beginning today, we will collate readers' ideas based on twitter posts with the #POMOList hashtag, which we naturally suggest be addressed to the @FederalReserve twitter account as we wouldn't want the good central planners at the Fed to be unaware of what the general population demands be monetized in the next imminent iteration of an utterly idiotic activity which does absolutely the same as every year before, while hoping for a different result.

It just never gets old...