The gold price flopped and chopped in a tight five dollar price range through all of Far East and London trading on Wednesday. But thirty minutes after the Comex close---and at precisely 2 p.m. EDT, the price got smacked for five bucks as the HFT boyz spun their algorithms. However, the gold price gained half that back by the 5:15 p.m. EDT electronic close.
The high and low ticks, such as they were, were reported by the CME Group as $1,299.30 and $1,288.70 in the December contract.
Gold closed in New York on Wednesday at $1,291.40 spot, down another $3.80 from Tuesday. Net volume was very light once again at around 76,000 contracts.
Here's the New York Spot Gold [Bid] chart, so you can see the precise timing of the 2 p.m. EDT sell-off by 'da boyz'. This precision extended into the New York Spot Silver [Bid] chart as well.
It was slightly different for silver. After the obligatory down spike at the 6 p.m. open on Tuesday evening, silver also traded flat in a very tight range yesterday, but a discernible rally began at 1 p.m. BST, which was twenty minutes before the Comex open. That rally met its match at, or just before, the London p.m. gold fix---and the price got sold down a dime or so by 10:30 a.m. EDT. After that it traded pretty flat, although the price got hit for about ten cents at precisely 2 p.m. EDT as well.
The high and low price ticks were reported as $19.585 and $19.395 in the September contract.
Silver closed yesterday at $19.45 spot, up 4.5 cents from Tuesday. Volume was pretty heavy because of roll-overs out of the September contract, but it all netted out to only 22,500 contracts.
Platinum traded flat until the Zurich open---and then it got sold off gently to its 3:30 p.m. [or thereabouts] low. After that it gained a few dollars into the close. Platinum got closed down another 12 bucks.
It was the same for palladium, although the sell-off at the Zurich open was a bit more intense. The decline ended just before lunch in New York---and after that it traded flat, but lost another 14 dollars---and is now down twenty-five bucks off its Monday high.
The dollar index closed late on Tuesday afternoon in New York at 81.87. Once it opened for trading again it traded flat until about 9:30 a.m. Hong Kong time. After that it rallied quietly up until 2 p.m. EDT yesterday, then it jumped not quite 20 basis points in just a few minutes---and after that it didn't do much into the close. The index finished the Wednesday session at 82.25---up a chunky 38 basis points.
The action at 2 p.m. appeared to be another 'ramp the dollar index/sell the precious metals' moment---just like what happened at the Comex open on Tuesday.
The gold stocks opened in slightly negative territory---and finally broke into positive territory just before lunch in New York. At that point, the rally picked up a bit more steam, but that all ended the moment 'da boyz' hit the 'buy the dollar/sell gold and silver' button. After trading in the red for an hour or so, the stocks managed to finish the day unchanged, as the HUI close up 0.02%.
The silver equities chart looked the same---and the precision of the 2 p.m. EDT sell-off is to be marveled at. Nick Laird's Intraday Silver Sentiment Index closed basically unchanged as well, down only 0.07%.
The CME Daily Delivery Report showed that 268 gold and 1 lonely silver contract were posted for delivery within the Comex-approved depositories on Friday. The only short/issuer of note was Barclays out of its in-house [proprietary] trading account. The three largest long stoppers were JPMorgan with 151 contracts for its client account, 85 contracts for Canada's Scotiabank---and 29 contracts for Barclays in its client account as well. I continue to be amazed by the number of gold contracts that are being delivered into JPMorgan's client account lately. What do they know that we don't? The link to yesterday's Issuers and Stoppers Report is here.
Much to my surprise, there was more gold added to GLD yesterday, as an authorized participant deposited 28,860 troy ounces of the stuff. And I was even more amazed to discover that another 1,439,175 troy ounces of silver had been deposited into SLV. Obviously JPMorgan is in some hurry to pay down its short position in that ETF.
Since August 4, there has been 8.44 million troy ounces of metal added to SLV---and it certainly wasn't deposited because the price of silver has been rising and silver investors having been buy SLV shares like mad. Au contraire, the silver price has fallen just under 75 cents since that date.
The U.S. Mint had another sales report again yesterday. They sold 1,000 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---and another 100,000 silver eagles.
There was no in/out movement in gold at the Comex-approved depositories on Tuesday, but silver more than made up for it, as 1,239,186 troy ounces were deposited---and a smallish 66,671 troy ounces were shipped out. The link to that activity is here.
Since yesterday was the 20th of the month, the good folks over at The Central Bank of the Russian Federation updated their website with their July data. It showed that they added 300,000 troy ounces of gold to their 'official' reserves. Their reserves now stand at 35.5 million troy ounces---and Nick Laird's most excellent chart below reflects that change.
Try as I may, I just can't get the number of stories down to a manageable size, so I always have to wimp out and get you to edit it for me. Today's list is no exception.
Former mob boss Michael Franzese thinks investors should avoid the U.S. stock market, but should you take his investment advice?
"There's a bubble there that's going to burst at some point and when it does it's not going to be good," Franzese, a former mob boss for the Colombo crime family in New York who has become an author and motivational speaker, told CNBC.
It's not just the valuations. He's got another reason for advising investors to keep their money off Wall Street.
"I did a lot of things at times with people on Wall Street," said Franzese, who believes there is still a contract out on his life. "A lot of guys are shady and they did shady things with me and I don't trust them. And I don't like other people that I don't know really well taking care of my money. I think that I can do it better."
What's the difference between Wall Street and this guy? At least he's a reformed crook, something that won't happen to Wall Street. I'll take his word on things any day compared to the usual shills that they have on that network. This very interesting 7:15 minute video clip [plus transcript] appeared on the CNBC website just after midnight on Wednesday morning---and I thank West Virginia reader Elliot Simon for today's first 'story'.
Listening to James Rickards ain’t healthy for your stomach.
The American lawyer, economist, and investment banker predicts that the global economy is heading for a disaster which will be even worse than the financial crisis of 2008. At the center of this horrifying scenario is the end of the Dollar as the leading world reserve currency, says the author of "The Death of Money".
He’s putting the blame on the massive money printing of the Federal Reserve and on over-reliance on flawed models to manage risk. Rickards is no stranger to financial crises himself: In the fall of 1998, he was the principal negotiator of the rescue of the hedge fund Long-Term Capital Management (LTCM).
An interview is only as good as the questions asked---and the person asking them. This is a great one, as are Jim's answers. It was posted on the Swiss website fuw.ch on Tuesday afternoon---and I thank reader Harold Jacobsen for digging it up for us.
Bank of America has reached a record settlement of nearly $17 billion to resolve an investigation into its role in the sale of mortgage-backed securities before the 2008 financial crisis, officials directly familiar with the matter said Wednesday.
One of the officials, who spoke with The Associated Press on condition of anonymity because the announcement isn't scheduled until Thursday at the earliest, said the bank will pay $9.65 billion in cash and provide consumer relief valued at $7 billion.
The deal is the largest settlement arising from the economic meltdown in which millions of Americans lost their homes to foreclosure. It follows agreements in the last year with Citigroup for $7 billion and with JPMorgan Chase & Co. for $13 billion.
This AP story was picked up by the finance.yahoo.com Internet site early Wednesday evening EDT---and it's another contribution from Elliot Simon. There's another AP story on this subject. It's headlined "Why Bank of America deal might not cost it $17B"---and it's courtesy of Elliot Simon as well.
The same kinds of complex, confusing derivatives that almost brought down the global financial system in 2008 are back in spades, according to the Financial Times. As one trader put it: "We've reformed nothing."
The U.K. newspaper suggested investors may be fooled by a false sense of security, and are therefore “chasing levered returns via certain types of US credit derivatives that Wall Street is willingly providing in the current climate of low interest rates and moribund volatility.”
The developments suggest that the financial industry learned little from the 2008 meltdown and that reforms put in place since then are ineffective.
“While standardized derivatives such as interest rate swaps are now transacted in exchange-type venues and centrally cleared, the flourishing area of opaque products are not, and moreover there are few records of activity that regulators can monitor,” the Times said.
This Financial Times article appeared on the moneynews.com Internet site at 7:51 p.m. EDT on Tuesday evening---and it's worth reading. I thank Brad Robertson for sharing it with us. There was also a very interesting 6:29 minute video about this derivatives story [featuring Janet Tavakoli] posted on the cbc.ca Internet site on Tuesday as well---and if you read the above story, this video is worth watching as well. I thank Vancouver, B.C. reader 'Ashley D' for bringing it to our attention. The link is here.
The biggest overhaul to the $19 trillion credit derivatives market in more than a decade will seek to solve flaws that have stopped some contracts paying out as buyers anticipated.
The changes come too late for investors in the junior debt of Banco Espirito Santo SA, whose credit-default swaps were devalued this month when the Portuguese lender was rescued and restructured by the government. Since the contracts are tied to the majority of a company’s debt, if the borrower is reorganized the swaps don’t necessarily stay tied to the securities they’re meant to protect.
Investors will start signing up to convert outstanding trades into new contracts as early as this week after the International Swaps & Derivatives Association rewrote the documentation to address the weaknesses. The biggest impact of the shakeup may be in the cost of swaps tied to subordinated bank bonds like those of Banco Espirito Santo, which will be about 50 percent more than existing contracts, according to Citigroup Inc.
This article, filed from London, showed up on the businessweek.com Internet site on Tuesday sometime---and it's another offering from Elliot Simon.
The U.S. Federal Reserve hinted on Wednesday that a surprisingly strong jobs market recovery could lead it to raise interest rates earlier than it had been anticipating.
At the same time, most Fed officials wanted further evidence before changing their view on when rates should rise, according to the minutes from the central bank's July 29-30 meeting.
"Labor market conditions had moved noticeably closer to those viewed as normal in the longer run," the minutes said, adding that policymakers "generally agreed" the job market was healing faster than they had expected.
Since there's nothing the Fed can do, as its hands are tied, it has resorted to talking the markets into doing what it wants. We'll see how well that works out going forward, as a rate increase at this point would devastate the bond market. This Reuters article, filed from Washington, appeared on their website at 4:26 p.m. EDT on Wednesday---and I thank Orlando, Florida reader Dennis Mong for sending it our way.
Argentina's new plan to skirt U.S. courts and resume payment on defaulted bonds aims to protect creditors who participated in two debt restructurings, the economy minister said on Wednesday as the local peso currency weakened to a new historic low.
Defying a U.S. federal court order, Axel Kicillof also said it would be "madness" to pay holdout creditors the 100 cents on the dollar that they were awarded in 2012.
The government has sent a bill to Congress that would replace its New York intermediary bank with state-run Banco Nacion, the latest move in a years-old legal chess game between Argentina and its "holdout" creditors who refused to participate in the restructuring.
Argentina's black market peso reeled on the news, falling 2.0 percent to an all-time low 13.5 to the U.S. dollar. The country's benchmark dollar-denominated bonds due in 2033 slumped more than 2.0 percent in price.
This Reuters story, filed from Buenos Aires, appeared on their website at 2:56 p.m. EDT yesterday---and I thank Dennis Mong for his second contribution in a row. I had several other readers send me stories about this yesterday, but this is the first one where the deal was explained in such a way that I could grasp it. Helping things out is this 3:22 minute CNBC video clip from Tuesday. Jim Rickards explains it all---and the link to that is here. This CNBC video is also courtesy of reader Harold Jacobsen.
The conflict in Ukraine should come to an end, and 16 Russian, Ukrainian and international business leaders are willing to help, said a statement published Wednesday on Virgin Group founder Richard Branson’s website.
“As concerned business leaders from Russia, Ukraine and the West we encourage our governments to compromise and find a peaceful solution to the current conflict. If we can help in the process we’re happy to do so,” the statement said.
“As the world has become more and more interconnected, we have an opportunity to advance peaceful solutions that will bring about a better future for all. As responsible leaders, we must ensure that differences are resolved peacefully, through dialogue and diplomacy, and with respect for both national sovereignty and the right of all human beings to live in peace,” the statement read.
The businessmen urged the governments to cooperate to avoid slipping back into the Cold War era past. The statement also appealed to other business leaders around the world to help create ways to resolve the issues peacefully.
Voices of reason at last. This RIA Novosti article appeared on their Internet site at 7 p.m. Moscow time on their Wednesday evening, which was 11 a.m. EDT yesterday morning---and it's the first offering of the day from Roy Stephens.
Having served Washington's propaganda purposes, the downed Malaysian airliner and the alleged Russian armored column that entered Ukraine and was allegedly destroyed have dropped out of the news even though both stories remain completely and totally unresolved.
Washington's stooge government in Ukraine has not released the communications records between Ukrainian air traffic control and Malaysian flight 17, and Washington has not released the photos it claims were taken by one of its satellites, which was directly overhead at the time of the airliner's demise.
We can safely and conclusively infer from this purposeful withholding of evidence that the evidence does not support the story Washington and Kiev want us to believe.
We can also safely and conclusively infer that the Western media's sudden disinterest in the unresolved story and failure to demand the evidence kept secret by Washington and Kiev is in keeping with the Western media's role as a Ministry of Propaganda.
This absolute must read commentary from Paul was picked up by the RIA Novosti website late Wednesday morning Moscow time---and it's courtesy of reader M.A.
Slovakia and Ukraine have laid the preliminary groundwork for a long future in the natural gas sector, the Slovakian minister of economy said from Kiev.
The Ukrainian government this week said testing began to send 70 million cubic feet per day from Slovakia to Ukraine through the joint work of transit companies Uktransgaz and Eustream.
Ukrainian Energy Minister Yuri Prodan hosted Slovakian Minister of Economy Pavol Pavlis in Kiev to discuss the prospects of a new relationship in the natural gas sector.
"Small reverse flow will become a basis for further collaboration between Slovakia and Ukraine," Pavlis said in a statement.
The question that begs to be asked is "Where is the Ukraine going to get the money to pay for this gas when it does finally arrive?" This UPI story, filed from Kiev, was posted on their website at 8:49 a.m. EDT yesterday morning---and it's the second offering in a row from Roy Stephens.
The first 16 trucks with Russian humanitarian aid to the population of violence-torn eastern Ukraine have started movement toward customs office at the Donetsk border crossing point, a RIA Novosti correspondent reported Wednesday.
"The trucks will pass through a special customs scanner at the crossing, which is 100 meters away from their current location," the correspondent reported from the site.
The rest of the 280-truck convoy remains near the Russian town of Kamensk-Shakhtinsky some 20 miles away.
This RIA Novosti article, filed from Donetsk, showed up on their website at at 8:48 p.m. Moscow time on their Wednesday evening---and it's another contribution to today's column from Roy Stephens.
The Russian government published an amended list of embargoed goods Wednesday, which now includes live fish.
The decree also removes lactose-free dairy products from the list of goods banned for import from countries that sanctioned Russia.
Norway is Russia's largest provider of fish, according to the Federal Customs Service. Russia imports up to 60 percent of the fish consumed in the country, especially in large cities.
This is another story from the RIA Novosti website. It was posted there at 5:14 p.m. Moscow time on their Wednesday---and I thank Roy Stephens for sending it our way.
Chinese and Indian meat is to replace banned pork and beef exports from the West, which will not succeed in reclaiming its position on the Russian market if the embargo is lifted, Russia’s relevant authority said Wednesday.
“For example, Russia’s Far East used to be heavily reliant on meat supplies from the United States and Canada. Now that [we are] actively cooperating with China’s veterinary authorities on … pork supplies from certain highly-integrated Chinese enterprises, the U.S. and Canadian suppliers will not be able to come back,” Sergei Dankvert, the head of Russia’s Federal Service for Veterinary and Phytosanitary Surveillance, said in a statement released on the agency’s website.
According to data from Russia’s Federal Customs Service, Moscow imported 619,200 tons of pork for $2.13 billion in 2013. Brazil, Denmark, Germany and Canada were the principal suppliers of the meat. Canada exported 79,300 tons of pork to Russia in 2013 for $246.3 million, while U.S. pork exports had reached $19 million per year.
This is another article from the RIA Novosti website. It appeared at 7:43 p.m. Moscow time on Wednesday---and my thanks go out to Roy Stephens once again.
Poland has made a formal request that the EU take Russia before the World Trade Organisation (WTO) to overturn its ban on EU food and vegetables.
Reuters reported on Tuesday (19 August) that Poland’s economy ministry had sent a written request for a legal challenge to EU trade commissioner Karel De Gucht.
The move is expected to be confirmed by agriculture minister Marek Sawicki and economy minister Janusz Piechociński at a press conference on Wednesday (20 August).
This article appeared on the euobserver.com Internet site at 7:45 a.m. Europe time on Wednesday morning---and it's courtesy of Roy Stephens as well.
Russia’s consumer watchdog has shut down four McDonald's restaurants in central Moscow – including the first-ever outlet in the country – over “administrative violations.” More of the company 430 Russian franchises are under investigation.
“Multiple violations of sanitary norms were detected in the sourcing of food and waste disposal in McDonald’s restaurants during inspections carried out between the 18th and 20th of August,” said an official statement from the watchdog, Rospotrebnadzor.
The company has said that it will study the allegations against its franchises, and “will do everything to ensure that the restaurants open as soon as possible.”
“McDonald’s main priority is offering its customers quality and safe produce,” said a statement on the McDonald’s website.
One wouldn't think that there's much wrong with these restaurants, but like everything in Russia involving the West these days, they're caught in the crossfire. This Russia Today story was posted on their Internet site at 3:26 p.m. Moscow time yesterday afternoon---and it's the second-last offering of the day from Roy Stephens.
Construction on a natural gas pipeline meant to feed the Chinese market is set for the beginning of September, a Russia official said Tuesday.
A pipeline contract between Gazprom and China National Petroleum Corp. is for 30 years and calls for 1.3 trillion cubic feet of natural gas per year. Russian energy company Gazprom said it started working on the infrastructure necessary for the pipeline almost immediately after signing a contract for gas to China in May.
A Russian source told state news agency RIA Novosti construction on the pipeline should begin next month.
"Sept. 1 is a tentative date, and it will all depend on the schedules of the country's leaders," the source said Tuesday.
This UPI story, filed from Moscow was posted on their Internet site at 9:31 a.m. EDT on Tuesday---and it's the final offering of the day from Roy Stephens.
Skirmishes broke out Tuesday between Iraqi security forces and militants on the outskirts of Tikrit a day after the Iraqi and Kurdish troops - backed by U.S. airstrikes - dislodged Islamic militants from a strategic dam in the country’s north.
The United Nations refugee agency, meanwhile, said it is launching one of its largest aid pushes aimed at helping close to a half million people who have been forced to flee their homes by the violence in Iraq.
The clashes in Tikrit, some 130 kilometers (80 miles) north of Baghdad, began on the militant-held city’s southwestern outskirts when a military convoy was travelling along the main highway that links Baghdad with the northern provinces, they said. The Iraqi military shelled militant positions inside and outside the city.
There were no immediate reports of casualties. The local official and resident both spoke on condition of anonymity, fearing for their safety.
This news item was posted on the france24.com Internet site yesterday sometime---and I found it all by myself.
Chinese troops have advanced in recent days into disputed territory claimed by India, echoing a similar incursion last year that raised tensions between the two rival giants, official sources said on Tuesday (Aug 19).
Chinese troops twice crossed over the border into a remote area of the western Himalayas, with some unfurling a banner that read "this is Chinese territory, go back", an official said on condition of anonymity.
Indian border police noticed the troops on Sunday in an unpopulated area of Ladakh during a patrol of the informal border that separates India and China. "It was a temporary peaceful face-off with PLA well inside Indian territory," the official told AFP referring to China's People's Liberation Army.
This news item showed up on the channelnewsasia.com Internet site at 5:37 p.m. local time in Singapore---and I thank Brad Robertson for his second contribution of the day.
China found a dozen Japanese auto-parts makers guilty of price fixing and doled out the biggest antitrust fines in the country since relevant rules came into effect six years ago.
Total fines amounted to 1.24 billion yuan ($200 million), the National Development and Reform Commission, China’s main economic planner, said on its website. Sumitomo Electric Industries Ltd. drew the heaviest fine at 290.4 million yuan -- the biggest-ever antitrust penalty for a single company -- followed by Yazaki Corp.
While China follows the U.S., Europe and Japan in punishing parts makers, the fines come as foreign businesses increasingly voice concerns that an era of heightened regulatory scrutiny is dawning on the world’s second-largest economy. Global Car manufacturers, technology companies and food companies have faced antitrust probes in the country since last year.
“This sends a warning to companies engaging in global price-fixing that they should beware of China,” said Chen Danzhou, a lecturer specializing in anti-monopoly law at the University of International Business and Economics in Beijing. “The government is getting more aggressive as it tries to make a structural adjustment to the market.”
This Bloomberg story, co-filed from Shanghai, Tokyo---and Osaka, was posted on their Internet site at 10:39 p.m. Denver time on Tuesday evening---and it's the final offering of the day from Elliot Simon.
1. John Embry: "Coming Crash to Create a Human Tragedy of Epic Proportions" 2. Grant Williams: "Why the Next Mania in Gold Will Be Parabolic" 3. Doug Kass: "The Final Page in an Age of Innocence"
[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]
A Chinese state-run newspaper on Wednesday called on Beijing to "teach Canberra a lesson" after Australian tycoon and politician Clive Palmer labelled the Communist government "mongrels" who "shoot their own people" in a televised tirade.
The flamboyant mining baron, who is locked in a long-running dispute over royalties and port operations with a state-controlled Chinese company, also called the Chinese "bastards" who "want to take over this country".
In an editorial, the Global Times, a newspaper owned by the Communist Party's mouthpiece the People's Daily, urged Beijing to take "solid actions to punish him".
It labelled the billionaire's comments as "rampant rascality" showing "Australian society has an unfriendly attitude toward China".
Open mouth---insert foot. Lots of bucks doesn't necessarily translate into lots of brains, regardless of the nationality.
This AFP article appeared on the france24.com Internet site at 9:05 a.m. Europe time on Wednesday morning---and I thank South African reader B.V. for bringing it to our attention.
Arguably London’s most accurate gold forecaster for the past 15 years, Sharps Pixley CEO Ross Norman is warning of single digit gains only for the yellow metal this year, though he has not lost his sights on ‘very much higher prices’ in 2015-16.
His gold forecast last year suggested that 2014 would be a ‘Goldilocks’ year – not too hot and not too cold – with rally fade to both the upside and downside as the market reverted to the mean – so far that view appears to have held true.
Speaking from his office in Berkeley Street he told ArabianMoney that gold and silver prices will only really shine again when there is again a perceived serious inflation threat and he just can’t see one on the immediate horizon.
It's hard to know if he's being serious or not---as there's not a word about the fact that a small group of Commercial traders have captured the price-setting mechanism for all four precious metals, plus copper, on the Comex. It's also hard to know which of John Embry's three categories Mr. Norman falls. Is he ignorant, naïve---or complicit? Considering his background---and current occupation, I would have to cast my vote in favour of 'complicit'. And if that's the case, he's not exactly telling us the truth in this opinion piece---which I found on the Sharps Pixley website yesterday.
Gokulasthami, one of the major festivals celebrated across Maharashtra and some parts of South India, has now got a touch of gold, underscoring what some expect will be stronger second half for gold demand in India as the festival season ramps up.
If anything attracts Indians, it is gold, and gift prizes of gold pots, and gold coins, and even gold plated decorations rouse the masses.
The tradition of Dahi Handi festival on Gokulashtami, celebrated across India on August 18 and 19 this year, relates to a human pyramid breaking an earthen pot filled with buttermilk suspended high above the ground, sometimes well over 50 feet above the ground.
This very interesting gold-related story, filed from Mumbai, was posted on the mineweb.com Internet site yesterday sometime---and the real 'juice' is in the last half-dozen paragraphs.
The next two photos are of scaups...probably Lesser Scaups. The first photo is of the parents I took back on June 7. The second photo is of Mom and the offspring, now fully fledged, which was taken less than three metres away from the first photo, but on August 17. The log in photo one, is just out of frame on the left hand side in photo two. Both pictures were cropped for maximum visual impact. By the way, the third photo is of a baby Tasmanian Devil.
First Majestic is a mining company focused on silver production in México and is aggressively pursuing the development of its existing mineral property assets. The Company presently owns and operates five producing silver mines; the La Parrilla Silver Mine, the San Martin Silver Mine, the La Encantada Silver Mine, the La Guitarra Silver Mine, and the Del Toro Silver Mine. Production from these five mines is anticipated to be between 12.70 to 13.35 million ounces of pure silver or 14.85 to 15.60 million ounces of silver equivalents in 2014. Please visit our website for more information.
I’m scratching my head at Monday’s 3 million oz deposit into the big silver ETF, SLV, following a 4 million oz deposit in the previous week. Trading volume in SLV has been light and price action rotten, not the ingredients for the 7 million oz deposits being due to plain vanilla investment buying. The only plausible alternative explanation is that then deposits are intended to reduce the short position in SLV, last reported at 17.37 million as of July 30, although only the first 4 million oz deposit occurred before the next report on August 26. At least the combined 7 million oz deposit is within the confines of reducing a 17 million oz total short position. If the deposits are not intended to reduce the short position, then I am at a loss to explain why they occurred. - Silver analyst Ted Butler: 20 August 2014
JPMorgan et al took another small slice off the golden salami yesterday---and although silver set a new low for this move down, it was only by a penny or so, so there wasn't much in the way of technical fund long liquidation in the 'Manged Money' category. Once again, volumes were low in both metals.
Here are the 6-month charts for gold and silver once again.
The liquidation process in gold continues unabated, as it has much further to go than silver. Silver took a bit of a breather yesterday, but I don't expect that happy situation to exist for long, as JPMorgan and the HFT boyz could slice another dollar off silver in a New York minute if that's what they decided to do.
And as I write this paragraph, the London open is twenty-five minutes away. I see that the HFT boyz working for JPMorgan et al are busy slicing the salami in gold and silver to the downside once again, as they took a couple of five dollar slices out of the gold price during Far East trading, the last one starting at 2 p.m. Hong Kong time. The price chart for silver looks similar---and silver was down over a percent at one point. Platinum and palladium are basically unchanged.
I was quite taken aback by the gold volume figure, as it has exploded to 34,000 contracts net, as sell stops were hit as the 200-day moving average got penetrated to the downside about 15 minutes ago. Net silver volume is much, much quieter at only 5,400 contracts, as any moving average of significance for silver was broken a long time ago. The dollar index, which had been up as much as 10 basis points earlier, is now about unchanged.
Once again I feel I must comment on how well the precious metal equities are holding up in the face of these engineered price declines. As a 'for instance', silver is down about $2.15 since it topped out back on July 10---which is a ten percent decline. According to Nick Laird, the silver equities are only down 2.2% over the same period. I would guess that deep pockets are buying all the equities that John Q. Public is selling at the moment.
I was doing some reading over at the goldcore.com website just now---and Mark O'Byrne, the proprietor over there, had a few interesting things to say about 'peak gold'.
The decline in gold production in Australia has been blamed on royalties and gold’s falling price in recent years. Yet, there is a real possibility that Australia, like many other gold producing countries, may have reached “peak gold.”
Recently, the decline in South African gold production was attributed to national electrical issues, power outages and industrial unrest. However, the scale of the decline at a time when gold prices has risen since 2001 and there has not been a corresponding decline in base metals mined in South Africa suggests that geological constraints may be leading to lower gold production.
Peak oil is a phenomenon familiar in the popular consciousness – peak gold is a phenomenon yet to be understood.
Peak gold is the date at which the maximum rate of global gold extraction is reached, after which the rate of production enters terminal decline. The term derives from the Hubbert peak of a resource.
Peak gold has yet to be considered and analysed by the international financial community but there is a risk that it has happened or will happen soon. It should lead to much higher gold prices in time and gold’s inflation adjusted high of $2,500 per ounce remains a realistic long term price target.
The fact that peak gold may take place at a time when the world is engaged in a peak fiat paper and electronic money creation experiment, bodes very well for gold’s long term outlook.
You can read the rest of what Mark had to say over at the goldcore.com Internet site---and the link to his Wednesday commentary is here.
And as I hit the send button on today's missive at 5:05 a.m. EDT, I note that gold's current low of the day was set at the London open---and silver a few minutes after that---but both have recovered slightly. Platinum and palladium have hit new lows as well---and palladium is actually up a few bucks from its New York close yesterday.
Net gold volume is now up to 47,000 contracts---and silver's net volume a bit under 8,000 contracts. Obviously JPMorgan et al are continuing to harvest the technical funds for fun, profit---and price management purposes. The dollar index is now down a hair.
It's a difficult situation to read at the moment, as there's still lots of room left to the downside in both gold and silver, but I'm also intrigued by the amount of metal being deposited in both GLD and SLV even as prices of the underlying metals continue to deteriorate. I'm also watching the amount of gold contracts that are being delivered into JPMorgan's client account as well, as the amounts are not insignificant. Then there's the matter of how well the precious metal shares are holding up---along with the current melt-up in the dollar index.
Is something afoot? Beats me. I've felt this way before---and it's always come to nothing. But some day we'll wake up and things will be different---and as I am wont to say, only the timing is unknown.
For that reason I'll be watching the rest of August's price action with more than the usual amount of interest---starting with the New York open this morning.
That's all I have for today and, as usual, it's more than enough.
See you tomorrow.