Gold & Silver Daily

¤ Yesterday In Gold & Silver

The gold price didn't do much on Monday.  It ticked down at the 6 p.m. open in New York on Sunday night---and the Far East low came at 2 p.m. Hong Kong time on their Monday afternoon, an hour before London opened.  The 'high' of the day came at 1 p.m. BST in London---and it was down hill from there into the 5:15 p.m. electronic close, with gold closing virtually on its low tick.

The high and low for the Monday trading session were recorded by the CME Group as $1,223.90 and $1,215.30 in the December contract.

The gold price closed yesterday at $1,215.00 spot, down $4.40 from Friday's close.  Net volume was pretty light at around 95,000 contracts.

As usual, silver got sold down at the Sunday evening open in New York, hitting its low of the day at 1:00 p.m. Hong Kong time.  The subsequent 'rally' ended at the noon London silver fix---and then traded pretty flat until just before 3:30 p.m. EDT.  At the point, a thoughtful soul came along and sold the price down about a dime in the thinly-traded New York access market.

The low and high were reported as $17.43 and $17.635 in the December contract.

The silver price was closed in New York on Tuesday at $17.46 spot, down 20 cents from Friday.  Net volume was on the lighter side at 26,500 contracts.

Platinum traded more or less flat, but set a new low tick for this move down either side of 2 p.m. Hong Kong time.  The price rallied back above the $1,300 spot price mark, but that wasn't allowed to hold---and platinum was closed at $1,299 spot, down a couple of bucks.

The palladium price popped for eight bucks the moment that trading began at 6 p.m. in New York.  After that it didn't do much of anything until it jumped up another five dollars or so just before 11 a.m. in New York.  Palladium closed up $14 from Friday's close.

The dollar index close on Friday afternoon in New York at 85.64---and the proceeded to do very little during the Monday session, trading 15 points either side of unchanged---and then closing at 85.61---down a small handful of basis points.  It's 'high' tick was 85.79---which came around 1:40 p.m. in Hong Kong.  Nothing to see here.

The gold stocks opened in positive territory, but within 30 minutes were back in the red---and that's where they stayed for the rest of the day, closing on their low tick, as the HUI finished down 1.06%---and breaking the 200 barrier for the first time since last December, closing at 199.55.

The chart pattern for the silver equities was very similar, but they got sold down harder, as Nick Laird's Intraday Silver Sentiment Index closed down 1.88%---and also on its low tick of the day.

The CME Daily Delivery Report for Day 1 of the October delivery month showed that 419 gold and 61 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  In gold, the big short/issuer was Canada's Scotia Bank with 418 contracts---and Barclays was the only long/stopper of note, with 233 contracts in its client account---and another 173 contracts in its in-house [proprietary] trading account.

In silver, the only short/issuer of note was Jefferies with 52 contracts.  HSBC USA stopped 37 of them.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that 2,979 gold and 414 silver contracts are still open in October, but I expect these number to decline rather precipitously within the next 24 hours or so, as the last of the October roll-overs get reported to the CME.  The picture should be much clearer by the time Wednesday's column gets posted---and don't forget to subtract the Day 1 deliveries from these numbers.

There were no reported changes in GLD yesterday---and as of 6:28 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

The U.S. Mint had another sales report.  They sold 4,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---325,000 silver eagles---and a surprising 2,000 platinum eagles.

Over at the Comex-approved depositories on Friday, there was no in/out movement of gold worth mentioning, but it was another very decent day in silver once again---and although only 5,059 troy ounces were reported received, there was 692,827 troy ounces shipped out.  The big withdrawal was at the CNT Depository.  The link to that activity is here.

Here's a chart that Nick Laird passed around late on Sunday evening MDT---and it shows that 50.26 tonnes of gold was removed from the Shanghai Gold Exchange during the week ending September 19.   Of course the headline mentions it---and Koos has lots more to say about this in a story I have posted in the Critical Reads section.

I have a decent number of stories for you today---and I'll leave the final edit up to you once again.


¤ Critical Reads

Ford Gets Crushed

Ford closed down almost 7.5% on Monday. 

The bloodletting was swift: the company basically fell off a cliff at about 3 p.m.

The stock closed at $15, after ending Friday at $16.

Concerns about Ford's losses in Europe and South America drove the sell off.  Bloomberg reported that Ford expects to lose a combined $2.2 billion in both markets this year.

This article appeared on the Internet site at 4:10 p.m. EDT on Monday afternoon---and today's first story is courtesy of Roy Stephens.


The Illogical Trade — Buy the U.S. Dollar as the Economy Flounders

The U.S. dollar has seen an impressive strengthening in the past three months. That is a fact that has many analysts, including me, scratching their heads.

We have seen the U.S. dollar strengthen across the board against nearly all currencies of the world. The worst of the currencies in the last month has been the Japanese yen. Just a few weeks ago I wrote to you about the insanity that Prime Minister Shinzo Abe has unleashed upon Japan.

The United States is following in Japan's footsteps and yet we see the U.S. dollar soar.

Manipulation in gold prices along with weak demand for commodities has crushed the Canadian dollar. The temporary weakness in China's growth has pushed the Australian dollar down.

This news item was posted on the Internet site at 8:04 a.m. EDT last Wednesday---and I thank Brad Robertson for sharing it with us.


Rates on short-term Treasuries go negative

Investors are scrambling for safe assets ahead of the end of the financial quarter, with the scrum for securities exacerbated by the Federal Reserve's testing of a key financing tool for an eventual tightening of policy.

Yields on short-term Treasury bills, viewed as ultra-safe securities, have dipped below zero as the assets attracted heavy buying in the run-up to the end of the third quarter.

Negative yields on the securities mean that money market funds and other big investors are effectively willing to pay the US government for holding their cash over the end of the financial period.

These above three paragraphs are all there is that's posted in the clear in this story that appeared in The Financial Times of London yesterday---and it showed up in a GATA release yesterday.  The FT headline reads "Fed 'Repo' Tests Drive Scramble for Safety".


U.S. senators demand probe into leaked Goldman Sachs tapes

U.S. Senate Banking Committee members are calling for hearings and full investigation into alleged ties between Federal Reserve supervisors and officials at Goldman Sachs, a bank the Fed was supposed to be policing.

Congress must hold “oversight hearings on the disturbing issues” raised by the secretly recorded conversations between the Fed and Goldman officials, Senator Elizabeth Warren (Mass, D) said on Friday. Portions of recordings from 2011 and 2012 were recently made public, apparently showing unwillingness by some Fed supervisors to both demand information from Goldman Sachs and criticize its conflict-of-interest policy.

“When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy,” Warren said in an emailed statement to Reuters, adding that the issues raised by the whistleblower should be addressed when Congress returns in November.

This story showed up on the Russia Today website at 7:37 p.m. Moscow time on their Saturday evening, which was 11:37 a.m. EDT---and I thank Harry Grant for sharing it with us.


New York Fed Denies Allegations of Bank-Supervision Lapses

The Federal Reserve Bank of New York said it “categorically rejects” allegations made by a former examiner at the Fed bank that her colleagues there were too deferential to the institutions they regulated.

“The New York Fed works diligently to execute its supervisory authority in a manner that is most effective in promoting the safety and soundness of the financial institutions it is charged with supervising,” the regional Fed bank said in a statement posted on its website Friday.

The radio program “This American Life” today released the transcript of a broadcast that includes excerpts of conversations it said were secretly recorded by Carmen Segarra, the former bank examiner, with some of her colleagues and her supervisor.

The transcript includes excerpts of discussions between Segarra and another official, Michael Silva, who was then a senior Fed supervisor with oversight responsibilities for Goldman Sachs Group Inc.

This story appeared on the Internet site at 1:26 p.m. EDT on Friday---and it's courtesy of West Virginia reader Elliot Simon.


New York Sun: Audit the New York Fed

With Massachusetts' freshman liberal Democratic senator, Elizabeth Warren, calling for hearings on the Federal Reserve's subservience to big investment banks, The New York Sun muses that Kentucky's libertarian-leading freshman Republican senator, Rand Paul, could join her in a coalition to pass legislation to audit the central bank, and particularly its New York office.

The Sun's editorial is headlined "Audit the New York Fed"---and it was posted on their Internet site on Saturday.  I found this item on the website---and I thank Chris Powell for wordsmithing the above paragraph of introduction.


The Plunge Protection Team is Opening an HFT-Focused Chicago Office

For several days we had heard a persistent rumor, that one of the most famous members of the New York Fed's Markets Group, also known as the Plunge Protection Team, Kevin Henry was moving to the HFT capital of the world, Chicago. We refused to believe it because, let's face it, when the trading desk on the 9th floor of Liberty 33 needs to get its hands dirty in stocks, it simply delegates said task using just a little more than arms length negotiation, with the world's most levered HFT hedge fund: Ken Griffin's Citadel. Why change the status quo.

And then, it turned out to be true because as the Chicago Fed announced just a few short days ago:

The Markets Group at the Federal Reserve Bank of New York manages the size and composition of the Federal Reserve System’s balance sheet consistent with the directives and the authorization of the Federal Open Market Committee (FOMC), supports debt issuance and debt management on behalf of the U.S. Treasury, provides foreign exchange services to the U.S. Treasury and provides account services to foreign central banks, international agencies and U.S. government agencies.

Markets Group is establishing a presence at the Federal Reserve Bank of Chicago and has openings for both experienced professionals and recent graduates.

So instead of interacting with the HFT momentum ignition algos using the microwave line of sight towers from NY all the way to Chicago, the NY Fed has decided it needs to be present on location in the windy city to buy up every ES contract and reverse the selling momentum when the day of reckoning finally hits.

This long article appeared on the Zero Hedge website at 11:48 a.m. EDT on Sunday morning---and I thank reader M.A. for sending it along.  You don't have to read it all to get the point being made.


Washington’s Secret Agendas — Paul Craig Roberts

One might think that by now even Americans would have caught on to the constant stream of false alarms that Washington sounds in order to deceive the people into supporting its hidden agendas.

The public fell for the lie that the Taliban in Afghanistan are terrorists allied with al Qaeda. Americans fought a war for 13 years that enriched Dick Cheney’s firm, Halliburton, and other private interests only to end in another Washington failure.

The public fell for the lie that Saddam Hussein in Iraq had “weapons of mass destruction” that were a threat to America and that if the US did not invade Iraq Americans risked a “mushroom cloud going up over an American city.” With the rise of ISIS, this long war apparently is far from over. Billions of dollars more in profits will pour into the coffers of the US military security complex as Washington fights those who are redrawing the false Middle East boundaries created by the British and French after WW I when the British and French seized territories of the former Ottoman Empire.

The American public fell for the lies told about Gaddafi in Libya. The formerly stable and prosperous country is now in chaos.

Always controversial, but never far off the mark, this essay by Paul showed up on his Internet site on Sunday sometime---and it's the first offering of the day from Roy Stephens.  It's worth reading.


Lloyds fires eight over rate manipulation claims

Lloyds Banking Group said it had dismissed eight people and recouped L3 million in bonuses after finding they had attempted to manipulate benchmark interest rates, as the long-running probe into rate-rigging continues to claim scalps.

The bank was criticised for "highly reprehensible" behaviour by the Bank of England in July after it became the first lender to be fined for rigging rates to cut the cost of a UK financial crisis rescue scheme, in effect costing the taxpayer millions of pounds.

It said on Monday that eight employees had been dismissed, pending their right to appeal, after an internal disciplinary process. Four other members of staff who had been suspended were cleared of wrongdoing and have returned to work.

The rest of this Financial Times story from Monday is subscriber protected---and I found it embedded in a GATA release yesterday.  It's worth skimming.


'I’m joining UKIP!' Tory MP defects to join Farage’s anti-EU crusade

A UK Conservative MP has defected to the UK Independence Party, formally resigning from the main ruling coalition party and prompting a by-election in his home constituency.

“I’m joining UKIP!” MP Mark Reckless announced to a standing ovation at the UKIP party conference, which took place in Doncaster on Saturday.

The 43-year-old Rochester and Strood MP, a former investment banker elected to the Commons in 2010, had previously denied rumours that he was going to “jump ship” and the announcement was sprung on the audience as an apparent surprise.

“These decisions are never easy. Mine certainly has not been. Many have been the sleepless nights when I have talked it over with my wife and have thought about the future of our children,” Reckless said.

This Russia Today story put in an appearance on their Internet site at 5:12 p.m. on Saturday afternoon Moscow time---and it's the second contribution of the day from Roy Stephens.


One is not amused: Queen faces £1million bill every year if proposed Labour 'mansion tax' comes into force

The Duke and Duchess of Cambridge, Princess Anne and the Duchess of Cornwall could also be hit by hefty bills by the tax, which would target everyone with a home worth more than £2million.

The likes of Buckingham Palace would not be taxed - as it is technically owned by the state - but Balmoral castle and Sandringham House would still leave the Queen with huge amounts to pay.

Tatler reported that Balmoral had been estimated to be worth up to £50million earlier this year, and if Sandringham were to fetch a similar fee, the Queen could be made to pay nearly £1million for the two homes - if they were both taxed at a rate of one per cent of their value over £2million, the Daily Express reports. 

Labour has not yet released full details of the tax on the wealthy, which they say could raise an extra £1.3billion for the NHS.

This very interesting story showed up on the Internet site at 1:00 a.m. BST on Sunday morning---and I thank reader 'h c' for finding it for us.


French public debt over €2.0 trillion for first time

France's public debt topped the symbolic level of €2.0 trillion for the first time, in the second quarter of the year, the national statistics agency INSEE said Tuesday.

The total national debt amounted to €2.023 trillion ($2.57 trillion), INSEE said, which represents 95.1 percent of gross domestic product (GDP). European Union rules limit debt to 60 percent of GDP.

Yep, the money printing will never stop.  It either gets devalued to nothing, or is defaulted on.  There is no other way.  The above two paragraphs are all there is to this very brief AFP story that appeared on the Internet site at 9:05 a.m. Europe time this morning---and I thank South African reader B.V. for sending it my way in the wee hours of this morning.  It's only three sentences long, so you should read it.


ECB to unveil details of new liquidity programmes

The European Central Bank will this week unveil details of its plans to inject cash into the moribund eurozone economy, even as analysts express doubt about the effectiveness of the measures.

Following its surprise rate cut last month, the ECB is not expected to announce any new policy moves at its regular monthly meeting on Thursday, held this time in the Italian city of Naples instead of its usual home venue in Frankfurt.

But financial markets are hoping that ECB president Mario Draghi will provide more details about the bank's contested liquidity programmes, notably its plans to buy asset-backed securities as a way of kick-starting lending in the 18 countries that share the euro.

And some ECB watchers will be listening out for any hints that the bank may embark on a much wider programme of so-called quantitative easing (QE) or the purchase of unlimited amounts of bonds, a policy already practiced by other central banks such as the US Federal Reserve and the Bank of England.

This AFP story showed up on the Internet site at 8:25 a.m. Europe time on Sunday morning---and I seem to remember posting a similar story from another source in my Saturday column.  I thank South African reader B.V. for sharing it with us.


Draghi Devaluing Euro Cheers ECB as Inflation Seen Fading

While the European Central Bank president says the exchange rate isn't a policy target, officials aren't secretive about their approval of the currency's almost 10 percent slide. The depreciation increases the cost of imports and boosts exporters' competitiveness, aiding the effort to revive inflation that data tomorrow will probably show is the weakest since 2009. A gauge of economic confidence published today slipped to the lowest since November.

The euro dropped from a 2 1/2-year high in May as officials unveiled a medley of stimulus measures, and consolidated below $1.30 when Draghi cut rates this month and signaled a desire to grow the ECB's balance sheet by as much 1 trillion euros ($1.3 trillion). Details of a plan to buy assets will probably come this week after the Governing Council meets in Naples, Italy.

"When Draghi mentioned expanding the size of the balance sheet, I think he was secretly thinking of the exchange rate," said Martin Van Vliet, senior euro-area economist at ING Groep NV in Amsterdam. "I'm sure he's happy to see that the euro has been going down. He's well aware that one important channel of policy transmission is the exchange rate."

This Bloomberg story, filed from Frankfurt, put in an appearance on their Internet site at 6:13 a.m. Denver time yesterday morning---and once again I found this article posted on the Internet site.


Geneva group's report predicts low interest rates forever

A "poisonous combination" of record debt and slowing growth suggest the global economy could be heading for another crisis, a hard-hitting report will warn on Monday.

The 16th annual Geneva Report, commissioned by the International Centre for Monetary and Banking Studies and written by a panel of senior economists including three former senior central bankers, predicts interest rates across the world will have to stay low for a "very, very long" time to enable households, companies, and governments to service their debts and avoid another crash.

The warning, before the International Monetary Fund's annual meeting in Washington next week, comes amid growing concern that a weakening global recovery is coinciding with the possibility that the US Federal Reserve will begin to raise interest rates within a year.

One of the Geneva Report's main contributions is to document the continued rise of debt at a time when most talk is about how the global economy is deleveraging, reducing the burden of debts.

This Financial Times story showed up on their website on Sunday---and it's posted in the clear in its entirety---and this is another item from the Internet site.  The actual FT headline reads "Geneva Report Warns Record Debt and Slow Growth Point to Crisis".  It, too, is worth reading.


Morgan Stanley warns on Asian debt shock as dollar soars

Debt ratios in developing Asia have surpassed extremes seen just before the East Asian financial crisis blew up in the late 1990s and companies have borrowed unprecedented sums in dollars, leaving the region highly vulnerable to US monetary tightening.

Morgan Stanley said foreign debt in emerging Asia has soared from $300bn to $2.5 trillion over the last decade, creating the risk of a currency shock as the dollar surges to a four-year high and threatens to smash through key technical resistance.

"High dollar liabilities do not bode well for emerging markets. In Asia (excluding Japan), the credit-to-GDP gap has reached levels higher than 1997," it said.

The US bank warned clients that local lenders in Asia have relied increasingly on the wholesale capital markets - a little like Northern Rock before 2007 - allowing them to expand credit faster than deposit growth. This leaves them exposed if liquidity dries up.

This Ambrose Evans-Pritchard commentary appeared on the Internet site on Monday morning at 5:10 a.m. BST---and my thanks to Roy Stephens for sending it.


Yuan to Start Direct Trading With Euro as China Pushes Usage

China will start direct trading between the yuan and the euro tomorrow as the world’s second-largest economy seeks to spur global use of its currency.

The move will lower transaction costs and so make yuan and euros more attractive to conduct bilateral trade and investment, the People’s Bank of China said today in a statement on its website. HSBC Holdings Plc said separately it has received regulatory approval to be one of the first market makers when trading begins in China’s domestic market.

The euro will become the sixth major currency to be exchangeable directly for yuan in Shanghai, joining the U.S., Australian and New Zealand dollars, the British pound and the Japanese yen. The yuan ranked seventh for global payments in August and more than one-third of the world’s financial institutions have used it for transfers to China and Hong Kong, the Society for Worldwide International Financial Telecommunications said last week.

“It’s a fresh step forward in China’s yuan internationalization,” said Liu Dongliang, an analyst with China Merchants Bank Co. in Shenzhen. “However, the real impact on foreign exchange rates and companies may be limited as onshore trading volumes between yuan and non-dollars are still too small to gain real pricing power.”

This short Bloomberg article, co-filed from Hong Kong and Beijing, showed up on their website at 5:06 a.m. MDT yesterday morning---and I thank reader 'h c' for his second offering in today's column.


Hong Kong protesters remain defiant as riot police withdraw

Pro-democracy protesters in Hong Kong defied volleys of tear gas fired by police, blocking streets and forcing some banks to close on Monday as they stood firm in the centre of the global financial hub on Monday.

Hong Kong’s government later said it had withdrawn riot police from the city’s streets as demonstrators apparently began to calm down.

The unrest, the worst in Hong Kong since China resumed its rule over the former British colony in 1997, sent white clouds of gas wafting among the world’s most valuable office towers and shopping malls as the city prepared to open for business.

Televised scenes of the chaos also made a deep impression on viewers outside Hong Kong, especially in Taiwan, which has full democracy but is considered by China as a renegade province which must one day be reunited with the Communist-run mainland.

This news story appeared on their website on Monday sometime---and it's also courtesy of Roy Stephens.  Then there's this amazing piece on this issue headlined "Stunning Drone Footage Shows Just How Enormous The Hong Kong Protests Really Are".  This 3-minute video clip is even more impressive than than the article.  It's definitely worth watching. It's also the final contribution of the day from Roy Stephens, for which I thank him.


Jim Rickards: Abenomics Will Fail --- An interview with Erkan Öz

Rickards attended the Forex World Istanbul---and delivered a presentation on currency wars at the event last Friday. I found the opportunity to ask him a couple of questions following his book signing event. I am sharing this short interview and Rickards’ exclusive comments here.

- My first question is, what do you think about ‘Abenomics’ this historical money printing experiment taking place in Japan?

JR - Japan has been in depression since 1990 so it's a 25 year depression. Depressions cannot be solved with liquidity or monetary solutions. Depressions can be solved with structural solutions. You have structural problems so you need structural solutions. Through all this time Japan tried monetary solutions. They tried money printing, they tried lower interest rates, they tried stimulus but they could not make fundamental structural reforms for their economy. So that’s why they were not able to get out of the depression.

Abenomics will fail. It will fail unless they make structural solutions. But since they haven't, I expect their depression to continue and spread throughout the world.

This interview by Erkan Öz was posted on the Turkish website on Saturday---and it's definitely worth reading.  Jim also has something to say about the BIS and the ongoing price management situation in gold as well.  English is obviously not Erkan's first language, but you should be able to figure it out nonetheless.  I thank Harold Jacobsen for bringing this to my attention---and now to yours.


Three King World News Blogs

1. John Embry: "Silver is the Cheapest Asset in the World Today"  2. James Turk: "Total Corruption in Global Markets---and Silver in Backwardation"  3. Richard Russell: "Financial Meltdown and Once in 600-Year Event"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]


Steve Lonegan: There are no free markets when markets don't set money's value

Well-meaning conservative and libertarian groups beat the drum for something called "free markets." Liberal groups blame these "free markets" for many of the world's evils.

Here's the harsh reality neither side will tell you. There ain't no such thing as a "free market."

The free market ceased to exist more than 40 years ago. Nixon drove a stake through its heart by shutting down the Bretton Woods world monetary system, without which free markets cannot exist.

It cannot exist in its true form because the very money that is the foundation of our economy now is just pieces of paper: "legal tender for all debts public and private." Money's value is controlled not by the markets but by a federal agency, the Federal Reserve.

This right-on-the-money opinion piece put in an appearance on the Internet site back on September 10---and it's another item that showed up in a GATA release late last night.


For one New Jersey candidate, the issue is gold

Republican Jeff Bell spent three decades in Washington working on policy and wrote a book promoting all aspects of social conservatism. But so far his campaign for the U.S. Senate has centered on just one issue: returning the United States to the gold standard.

It's an idea that his opponent, Democratic incumbent Cory Booker, dismisses as "defunct and debunked," which is pretty much how most economists seem to see it.

But a group of conservative thinkers pushing for the change is undaunted.

Bell and other supporters of the gold standard say it would be a way to keep prices stable. He says the current means of controlling prices -- near-zero interest rates from the Federal Reserve -- is making it hard for small businesses to get loans and expand. Bell says that's a major reason that the economy is growing slowly years after the Great Recession.

This ABC News story, filed from New Brunswick, N.J., was posted on their website at 7:23 p.m. EDT on Sunday evening---and it's another offering I found on the Internet site.


The Mexican Libertad: The Currency Solution?

The Libertad is a Mexican coin that was first issued in 1981 in .999 fine gold and then in silver in 1982. Beginning in 1991, the Libertads became the only coins in the world that were issued in the convenient sizes of 1/20, 1/10, 1/4, 1/2, and 1 ounce—again, in both gold and silver. This made them very practical if they were to be used as currency.

But of course, gold and silver coinage has traditionally had a bit of a problem when either inflation or deflation is the norm in the world: a denominated face value. A century ago, a one-ounce U.S. Liberty gold coin had a face value of twenty dollars. Today, its scrap value alone is nearly 65 times that amount. So, as the value of precious metals changes from day to day, the face value of the coin becomes meaningless.

However, the Libertad, unlike most gold and silver coinage in the world, does not show a face value; it shows only a weight. It can therefore change in value daily, assuming that the Mexican government were to also create a standard by which the Libertad prices could be calculated each day as the prices of gold and silver fluctuate.

This very interesting commentary showed up on the Internet site yesterday---and parallels the decades worth of work that Mexican billionaire Hugo Salinas Price has been doing in this area.  It's certainly worth reading.


Conspiracy fact: The European Central Bank Gold Agreement is renewed

Bullion Vault research director Adrian Ash notes that the fourth European Central Bank Gold Agreement takes effect today, extends for five years, and removes any limits on gold sales by the 21 signatories while acknowledging that "they do not have any plans to sell significant amounts of gold," because the limits contained in predecessor agreements had come to look silly, such sales having ended long ago.

Ash's commentary, along with a link to another story, is headlined "End of the Central Bank Gold Agreement"---and both of these article were embedded in a GATA release from yesterday---and both are very much worth reading.


Russia’s Gokhran Buying Gold Bullion in 2014 and Will Buy Palladium in 2015

Gokhran’s palladium reserves are a state secret and analysts try to guess the level each year but they are widely believed to have been depleted according to Reuters.

Gokhran was influential on global platinum group metals (PGMs) markets in the 1990s and 2000s, when its palladium stocks, accumulated during the 1970s and 1980s, came to the market, depressing prices.

Gokhran is the State Precious Metals and Gems Repository which is a state institution under the Russian Ministry of Finance. It is responsible for the State Fund of Precious Metals and Precious Stones of the Russian Federation. It is responsible for the purchase, storage, sale and use of precious metals, precious stones, jewellery, rocks, and minerals by the State Fund.

These are the only four paragraphs on this subject that appeared on the Internet site yesterday.  However, some of Mark O'Byrne's other commentary is worth reading as well.


Singapore bourse to start kilobar gold trading to lure investors

Singapore Exchange Ltd., Southeast Asia's biggest bourse operator, will start trading a kilobar gold contract next month as it joins other nations in the biggest consuming region in a push for new price benchmarks.

The wholesale contract for 25 kilograms of 99.99 percent purity will start trading at 8:15 a.m. on Oct. 13, according to a joint statement from the exchange, IE Singapore, the World Gold Council, and the Singapore Bullion Market Association. The group said in June that trading may begin as soon as September.

The Shanghai Gold Exchange started bullion trading in the city's free-trade zone on Sept. 18, while CME Group Inc. is planning a physically-delivered futures contract in Hong Kong in the fourth quarter as global demand shifts from the West to the East. Asia accounted for 63 percent of total consumption of gold jewelry, bars, and coins last year, with China overtaking India as the biggest buyer, according to the council.

This brief gold-related Bloomberg news item, filed from Singapore, appeared on their website at 3:00 a.m. MDT on Monday morning---and it's the second-last story of the day from that Internet site.  Chris was a busy boy yesterday.


Koos Jansen: Chinese gold demand 'extremely strong,' even 'astonishing'

While Western financial news organizations and the World Gold Council keep reporting a decline in Chinese gold demand, gold researcher, but GATA consultant Koos Jansen writes that demand remains "extremely strong" and, as measured by withdrawals from the Shanghai Gold Exchange for the week ending September 19, even "astonishing."

This gold commentary appeared on the Singapore Internet site at 4:50 p.m. local time on Saturday afternoon---and it's the last story of the day from the Internet site.  I thank Chris Powell for wordsmithing the above paragraph of introduction. It's definitely worth reading---at least up until the point where your eyes start to glaze over.


Lawrence Williams: China gold demand surging again

We cannot emphasise more strongly that gold followers should ignore the mainstream media reports, based on Hong Kong gold export figures to mainland China, that Chinese gold demand has plummeted by anything between 30% and 50% this year.  As we pointed out in an article last week, Hong Kong is now no longer the principal port of entry for gold into the Chinese mainland.  When it was still so, gold exports into China were extremely high at the beginning of the year, but since then the Hong Kong figures have tailed off as China effectively opened up gold import routes through other entry points---notably Shanghai and Beijing---resulting in the Hong Kong net gold exports falling back month by month from a peak of 111 tonnes in February to a mere 21 tonnes in August.  This is thus no longer an indicator of overall Chinese gold demand.

That this does not represent the overall Chinese picture is apparent from the withdrawals of physical gold from the Shanghai Gold Exchange (SGE).  True these withdrawals are also down this year suggesting a more gradual slowdown in Chinese demand, NOT a precipitous fall as suggested by the mainstream media.  However, recently SGE gold withdrawal figures have been particularly strong again – a fact apparently ignored by most gold commentators.  Indeed the past four weeks’ withdrawals from the SGE have totalled over 170 tonnes – this suggests an annual rate of over 2,200 tonnes although weaker figures from March up until August will mean this level will not be reached for the 2014 calendar year, but it may well get much closer to last year’s 2,197 tonnes withdrawn from the SGE than previously estimated.  We would suggest that this year’s figure may well get close to 2,000 tonnes given the lower gold price has been stimulating demand at a time of year when it is traditionally strong anyway.  We can thus anticipate continuing demand at high levels and China maintaining its place as the world’s largest gold importer – even disregarding the assumed-probable additional gold imports to swell the country’s gold reserves.

This commentary by Lawrie is a follow-on to the Koos Jansen piece posted above it.  This article was posted on the Internet site yesterday.  It's also worth your while.



¤ The Funnies

The first four photos are ones I took on the very extensive grounds of the resort hotel where the Casey Summit in San Antonio was held ten days ago---and the golf course is a 1-minute walk straight down the path in the third photo.  The southern live oak looks good in any shot---and the branches of one framed the golfers nicely.  The photo of the golf course is the only one I cropped, as the other three came straight out of the camera basically untouched.  A 24mm wide-angle lens certainly helped these shots, although photo #1 is with a 14mm.

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¤ The Wrap

So why is so much silver flowing into the SLV, particularly in light of the lack of gold flowing into GLD and the crummy price action? I can’t uncover or imagine a sinister plot by the bad guys---aka the collusive commercials on the COMEX---and by process of elimination must assume it represents value buying motivated by the incredibly cheap price of silver. Plus, the buying in SLV looks widespread, since no large buyer has revealed a 5% holding (18 million shares) yet---and we have not seen a conversion of shares to metal which would suggest a large buyer was seeking to shield [its] identity. If the large recent deposits of metal into SLV are bearish in any way, I can’t see it. - Silver analyst Ted Butler: 27 September 2014

It was a nothing sort of day in gold and silver yesterday, but neither one was allowed to close in positive territory.  Da boyz took another slice off the platinum salami---and palladium was the only winner on the day.  Even copper was closed at a new low for this move down.

As usual, here are the charts for all four precious metals---and this time I've included the 6-month chart for copper.  It's the same story in this metal, as JPMorgan et al continue to engineer prices lower, buying every long position that they force the technical funds/Managed Money to sell, along with buying the long side of every trade these same traders go short.

As I write this paragraph, it's 2:30 p.m. in Hong Kong on their Tuesday---and 2:30 a.m. in New York.  The London open is thirty minutes away.  With the exception of silver, the precious metals are up a hair---and platinum is back above $1,300 spot for the moment.  Volumes in gold and silver are vanishingly small---gold around 9,800 contracts, and silver at 3,100 contracts.  The dollar index is down a handful of basis points.

Today, at the 1:30 p.m. EDT close of Comex trading, is the cut-off for this week's Commitment of Traders Report.  Just eyeballing the above charts---and provided nothing untoward [to the upside] happens in the precious metal market for the remainder of the Tuesday trading session---we should continue to show further improvement in the Commercial net short positions in all four precious metals, including copper.

I suppose we could get more oversold than we already are, but we're at extremes rarely seen in the last decade---and there has to be a limit to the amount of long positions that the technical funds have left---or are prepared to sell---or how short they're prepared to go when prices are this far below their respective 50 and 200-day moving averages---which are now grotesque amounts in all four precious metals, which you can see at a glance in the above charts.

And as I check the precious metal charts at 4:30 a.m. EDT, I see that nothing much has changed in the last couple of hours as far a prices are concerned.  Gold volume is up to 15,000 contracts, with silver volume a hair over 5,000 contracts---which are still very much on the light side.  The dollar index is back to unchanged.

If the powers-that-be really want a little inflation to show up on Planet Earth, all they have to do is let the precious metal prices run up from here---and that would take the rest of the commodity complex with them.  However, the problem is that once started, it would be difficult to stop.  But the way I see it at this point, the gold card is the only one they've got left to play---and it remains to be seen if they're desperate enough to do it, either in incremental amounts, or in a revaluation.

The COT structure is certainly set up for a bullish run to the upside---and as both Ted Butler and I have stated for many years, all JPMorgan et al have to do is stand back, do nothing---and let nature take its course.  However the negative side of that is that all the world's precious metal ETFs---including GLD and particularly SLV---will probably require more metal than exists, or is available.  So if it does play out that way, it will be interesting to watch if JPMorgan and HSBC USA resort to shorting the shares in these ETFs in lieu of depositing metal, which is what they've done in the past.

With in/out activity in silver at the Comex-approved depositories screaming of a hand-to-mouth existence---and the counterintuitive deposits into SLV continuing unabated, there's obviously something going on under the hood which we are not yet privy to.

We'll just have to wait to see how this all plays out.

Today is the last day of the month---and the quarter---and nothing will surprise me as far as price action is concerned when I roll out of bed later this morning.

And, having said that, here's the Kitco gold chart as of 5:35 a.m. EDT.  The other three precious metals are under price pressure as well, but da boyz and their algos are really putting the boots to gold at the moment.  It's not a new low for this move down yet, but the trading day is still young.

But before heading in that direction, I'd like to mention The Grand Cayman Liberty Forum that's being held at Marriott - Grand Cayman from November 16 to November 20, 2014Casey Research presenters will be Doug Casey, Terry Coxon, Jeff Clark, Nick Giambruno and Paul Rosenberg.

For more information you can telephone 1-800-926-6575---or check out the website linked here.

See you tomorrow.