Gold & Silver Daily
"A long-anticipated end game of the present global crisis"
 

¤ Yesterday In Gold & Silver

Gold got quietly sold down once trading started in the Far East on their Friday, with the low of the day coming shortly before lunch in Hong Kong.  Then equally as quietly gold began to rally a few dollars until shortly after 11 a.m. BST in London---and from there it traded flat until the London close at 11 a.m. EDT.  Gold rallied in fits and starts from that point---and even rallied a decent amount in the electronic market after the Comex close.  For that to happen on a Friday is unusual to say the least.  Gold closed virtually on its high tick of the day.

The CME Group recorded the low and high ticks as $1,291.00 and $1,308.90 in the August contract.

Gold finished the Friday trading session at $1,308.30 spot, up $14.40 from Thursday's close.  Net volume was only 84,000 contracts, which was pretty light.

The silver price dipped about 20 cents in the early going in the Far East, but then recovered back to the $20.40 spot price market by 10 a.m. Hong Kong time---and it traded within a nickel of that amount right up until the rally began around 10:30 a.m. in New York.  Silver, like gold, came close to finishing on its high tick of the day as well.

The low and high were recorded at $20.35 and $20.81 in the September contract.

Silver finished the day at $20.745 spot, up 38 cents from Thursday.  Volume, net of July and August, was pretty decent at around 39,000 contracts, of which 3,000 contracts may or may not have been roll-overs out of September into more distant months.

The platinum price didn't do much until noon in Zurich---and then it, too, chopped quietly higher---and finished up 12 bucks on the day.  It was more or less the same trading pattern in palladium---and it closed up 9 bucks. Here are the charts.

The dollar index closed late on Thursday afternoon in New York at 80.87---and rolled over a bit once trading began in the Far East on their Friday morning.  But minutes before the 8 a.m. BST London open, the index began to head higher, with its 81.07 high tick coming just before 12:30 p.m. in New York.  It gave up a few basis points after that, but did manage to close at the 81.04 mark, up 17 basis points on the day.

The gold stocks opened down a bit, but that lasted less than ten minutes---and except for a bit of a sag in the early afternoon, powered higher for the remainder of the Friday trading session.  The HUI finished up 2.68%---and on its absolute high tick.

The performance of the silver equities was very similar---sans the afternoon sag---and Nick Laird's Intraday Silver Sentiment Index closed up a very decent 3.63%---also on its high of the day.

The CME's Daily Delivery Report showed that 5 gold and 2 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The link to yesterday's Issuers and Stoppers Report is here.

There are only a small handful of gold contracts---and a bit over 150 contracts in silver that are still open in the July delivery month.

There were no reported changes in GLD yesterday---and as of 7:47 p.m. yesterday evening, there were no reported changes in SLV, either.

The U.S. Mint had a tiny sales report. They sold 1,000 one-ounce 24K gold buffaloes.

Month-to-date the mint has sold 34,000 ounces of gold and 1,640,000 silver eagles.  That divides out to a silver/gold ratio of 48 to 1.  Bullion sales so far this month have been abysmal, especially silver eagles.

There was a tiny amount of gold moved within the Comex-approved depositories on Thursday, as 3,000 troy ounces were reported received---and 582 troy ounces were shipped out.  I shall dispense with the link on this.

Silver activity was far more substantial, as 1,187,607 troy ounces were reported received---and 616,446 troy ounces were shipped out.  All the activity was at Brink's, Inc. and CNT.  The link to that action is here.

And not that means anything, there was 165,045 troy ounces of silver transferred from Registered to Eligible over at HSBC USA.

There sure wasn't much in yesterday's Commitment of Traders Report for positions held at the close of trading on Tuesday, July 22.

In silver, the Commercial net short position increased by well under 1 million ounces, which is barely a rounding error.  Nothing to see here.  Ted Butler said that JPMorgan increased their short-side corner in the Comex futures market by 1,000 contracts---and is now up to 20,000 contracts, or a 100 million ounces of paper silver.

There wasn't much change in gold, either.  The Commercial net short position increased by a smallish 3,285 contracts, or 328,500 contracts.  The new Commercial net short position now stands at 16.02 million troy ounces.  JPMorgan increased their long-side corner in the Comex gold market by 3,000 contracts---and their new long position sits at 25,000 contracts, or 2.5 million troy ounces.

So despite all the price action of the last ten days, the Commercial net short position in silver is still at nosebleed levels---and basically unchanged from last week's COT Report---and the situation in gold is only marginally better.

Based on the current COT structure, it doesn't look good.  But as Ted Butler has said on many occasions, one of these days the numbers in the COT Report won't matter.  However, until that day comes, all I can do is use the past as prologue and assume that history will repeat itself, with one eye ever-watchful for a black swan.

Here's three 5-year Comex silver charts courtesy of Nick Laird.

The first chart shows the Commercial short position the highest it's been in more than five years.

The second chart is the Non-Commercial/Technical fund traders---and they hold their biggest long position since back in late 2010.

The last shows the Commercial net short position.  It's not the highest it's ever been in the last five years, but as I said in the COT commentary a few paragraphs above, it's certainly at "nosebleed levels."

Since this is my Saturday column, I get the chance to empty my in-box of stories that I've been saving all week because of length or content reasons.  I have quite a few, so edit away!

 

¤ Critical Reads

Q2 Closes With A Durable Goods Whimper And 1.6% Y/Y Drop; Core Capex Orders Revised Much Lower; Shipments Tumble

After tumbling in May by 1.0% which was the biggest drop since the dreaded "polar vortex", Durable goods in June posted a modest pick up in June rising 0.7%, driven by yet another surge in aircraft and parts which rose by 8.2% for Non-defense aircraft and 15.3% for defense (thank you Russia). And while this beat expectations of a 0.5% increase, it was the first Y/Y drop in Durable goods since February (and since 2013 if one uses unrevised data).

Excluding volatile transportation, Durable Goods rose by 0.8%, also beating the expected 0.5% print, and higher than last month's 0.1%. Still, the Y/Y change in the category is hardly indicative of sustainable growth in manufacturing production, and certainly smashes any of the ISM and Markit PMI manufacturing surveys indicating an epic renaissance in U.S. production.

This interesting Zero Hedge commentary, with some excellent charts, was posted on their website at 8:57 a.m. EDT Friday morning---and I thank reader M.A. for sending it along.

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Money Manager Sanford: 'Stay Out of Money Market Funds' After SEC Rules

The Securities and Exchange Commission approved rule changes for money-market funds this week — some good and some bad, says James Sanford, a portfolio manager for Sag Harbor Advisors.

On the good side, the SEC now requires a floating net asset value rather than a fixed $1.00 par value for the funds, he writes on CNBC.com.

"However, the other proposed change, which would allow money managers to suspend redemptions by investors or charge them fees to redeem during volatile periods, is a travesty."

This short article was posted on the moneynews.com Internet site at 10:22 a.m. EDT yesterday morning---and I thank West Virginia reader Elliot Simon for sharing it with us.

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Record Student-Loan Debt Prompts Treasury Push to Stem Defaults

The U.S. Treasury, which finances more than 90 percent of new student loans, is exploring ways to make repayment more affordable as defaults by almost 7 million Americans and other strapped borrowers restrain economic growth.

Leading the effort is Deputy Secretary Sarah Bloom Raskin, who became the department’s No. 2 official in March after more than three years as a Federal Reserve governor. As higher-education debt swells to a record $1.2 trillion, Raskin, 53, is alert to parallels to the mortgage crisis.

Raskin has reason to worry: Most of those loans are backed by the federal government. In addition to trying to facilitate stronger growth, she’s focusing on the impact such debt has on government’s financing needs and ways to improve servicing and collection.

This news item was posted on the Bloomberg website at 10:00 p.m. Denver time on Wednesday evening---and it's the second offering in a row from Elliot Simon.

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In a Subprime Bubble for Used Cars, Borrowers Pay Sky-High Rates

Rodney Durham stopped working in 1991, declared bankruptcy and lives on Social Security. Nonetheless, Wells Fargo lent him $15,197 to buy a used Mitsubishi sedan.

“I am not sure how I got the loan,” Mr. Durham, age 60, said.

Mr. Durham’s application said that he made $35,000 as a technician at Lourdes Hospital in Binghamton, N.Y., according to a copy of the loan document. But he says he told the dealer he hadn’t worked at the hospital for more than three decades. Now, after months of Wells Fargo pressing him over missed payments, the bank has repossessed his car.

Where have we seen this picture before, dear reader?  This article appeared on The New York Times website a week ago, but for length reasons---and it is a looong read---it had to wait for my Saturday column.  It's the first offering of many from Roy Stephens.

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Don’t Tell Anybody About This Story on HFT Power Jump Trading

Far from Wall Street in a Chicago neighborhood once synonymous with urban blight, two futures industry veterans are using secrecy and speed to mint fortunes.

Their firm, Jump Trading LLC, was all but invisible until it was among six companies subpoenaed in April by New York prosecutors. Jump has ascended the ranks of high-frequency traders during the past 15 years to become one of the top firms on the Chicago Mercantile Exchange, where $925 trillion of derivatives changed hands last year. Its annual revenue has exceeded half a billion dollars.

The company was founded by traders Bill DiSomma and Paul Gurinas, whose level heads caused them to stand out in the cacophony of a Chicago trading floor. Today, the pair parcel money among 20 or so teams, each guarding its computer models from the others to trade stocks, bonds and commodities with strategies that go almost as fast as light.

This longish Bloomberg article showed up on their Internet site at 5:01 p.m. MDT on Wednesday---and also for length reasons, had to wait for today's column.  It's the third contribution of the day from Elliot Simon.

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Sprott Money Weekly Wrap Up

Eric's weekly commentary also contains a lot of gold-related information as well.  This audio interview runs for 6:05 minutes---and was posted on the sprottmoney.com Internet site on Friday afternoon.

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Doug Noland: Bubbles and Schemes

Perhaps it’s coincidence that the ECB is commencing a major new liquidity operation just as the Fed’s QE winds down. Clearly, the “Draghi plan” to bolster fragile European peripheral debt markets should be viewed as a sophisticated financial scheme. Thus far, the Bank of Japan (BoJ) shows no indication that its “money” printing scheme is ending anytime soon. And despite all the talk that the Chinese were serious about financial and economic reform, they apparently took one alarming look at rapidly unfolding systemic fragilities and opted to let their historic Bubble run. The Chinese Bubble is a government-dictated financial scheme of epic proportions.

So it’s become an equally fascinating and alarming global dynamic: a multifaceted global scheme to support inflated securities markets and a grossly maladjusted global economic structure. Worse yet, it’s a global scheme held together by various governments that are increasingly engaged in heated geopolitical strife. In the end, “Ponzi Finance” financial schemes boil down to games of confidence.

Doug's weekly Credit Bubble Bulletin is always a must read for me---and his Friday evening missive over at the prudentbear.com Internet site is no exception.

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Fourteen YEAR drought leaves Lake Mead at all-time low

Drought in the southwestern U.S. will deplete the vast Lake Mead this week to levels not seen since Hoover Dam was completed and the reservoir on the Colorado River was filled in the 1930s, federal water managers said Tuesday.

The projected lake level of about 1,080 feet above sea level will be below the level of about 1,082 feet recorded in November 2010 and the 1,083-foot mark measured in April 1956 during another sustained drought.

But U.S. Bureau of Reclamation regional chief Terry Fulp said water obligations will be met at least through next year without a key shortage declaration. The result will be full deliveries to cities, states, farms and Indian tribes in an area that's home to some 40 million people and the cities of Las Vegas, Phoenix and Los Angeles.

I posted a story about this more than a week ago, but this photo essay that showed up on the dailymail.co.uk Internet site on July 15 is first rate---and is worth your time.  I thank William Gebhardt for sending it our way last Sunday.

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IMF fears ultra-low rates are fuelling asset bubbles

Ultra-low interest rates around the world are fuelling financial bubbles and pushing investors into overvalued assets, the International Monetary Fund has warned in a marked shift of policy.

“Financial markets have been very optimistic in recent months. Frankly, we’re seeing some prices that are very high compared with what is happening the real economy,” said Gian Maria Milesi-Ferretti, the fund’s deputy director.

“We don’t think there is a generalised bubble but this is something we have to watch closely. In a world of very low interest rates there is an incentive to take on risk and hunt for yield, and that can lead to excesses,” he said.

Olivier Blanchard, the IMF’s chief economist, said the fund is now watching financial markets “like a hawk” but said the world economy is still too fragile to withstand the introduction of tighter monetary policy. “The first line of defence should be macro-prudential tools; slowing down the housing market for example. The recovery is not very strong and really needs to be nurtured,” he said.

The IMF, ECB, BoJ---and the Fed are powerless to do anything.  After having painted Planet Earth into an economic, financial and monetary corner for the last couple of generations they, like us, can only stand by and wait for the whole thing to implode---which it will.  This Ambrose Evans-Pritchard commentary appeared on The Telegraph's website at 6:07 a.m. BST on Thursday morning---and it's the second story of the day from Roy Stephens.

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Number of French Jobless Rises to New Record

The number of people without a job in France rose in June to yet another record in the latest blow to President Francois Hollande's efforts to get unemployment falling.

The Labour Ministry said the jobless total in mainland France rose by 9,400 last month to 3,398,300, up 0.3 percent over one month and 4.0 percent over one year.

Hollande has seen his popularity collapse to record lows for a French president as he failed to live up to promises to get unemployment declining.

The Socialist leader is counting on plans to phase out 30 billion euros ($40.29 billion) in payroll tax on companies to get them investing and hiring.

This Zero Hedge piece, based on a Reuters story, showed up on their Internet site at 12:25 p.m. EDT on Friday afternoon---and I thank reader M.A. for his second offering in today's column.

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Europe Unveils Preliminary Sanctions Against Russia

While the preliminary terms of Europe's Russian sanctions were leaked on Thursday, moments ago it was reported that E.U. ambassadors have reached an agreement on what the "hard-hitting" economic sanctions against Russia would look like even as details remain to still be ironed out ahead of a formal announcement of the final terms next week. According to Reuters, key measures suggested by the Commission include: 1] closing EU capital markets to state-owned Russian banks,2] an embargo on arms sales to Moscow, 3] restrictions on the supply of energy and dual-use technologies, and 4] a list of 15 individuals and 18 entities, including companies, subject to asset freezes for their role in supporting Russia's annexation of Crimea and detribalization of eastern Ukraine.

Of course, since France would blow a gasket if its Mistral ship was impacted by the sanctions, and since this really is just another populist measure not intended to really punish Russia (as that would mean a prompt shut off of European gas and an even prompter slide into a triple dip recession if not outright depression), Europe promptly "detoothed" the sanctions by announcing that they would not affect current supplies of oil, gas and other commodities from Russia, diplomats said.

This news item, also based on a Reuters story, appeared on the Zero Hedge website at 8:27 a.m. EDT on Friday---and I thank reader M.A. for sharing it with us as well.  There's also an Ambrose Evans-Pritchard take on the sanctions story---and it's courtesy of Roy Stephens.  The headline reads "Proposed E.U. sanctions threaten to shut Russia out of the world financial system".  The euobserver.com website had a story on this as well.  It bears the title "E.U. to hit Russia with economic sanctions next week".  This is also courtesy of Roy Stephens.

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Canada sanctions Russian energy sector

Canadian Prime Minister Stephen Harper announced new sanctions targeting the Russian energy sector in response to the Kremlin's pressure on Ukraine.

Harper announced sanctions against 10 separate Russian entities, including Russian independent gas company Novatek and Gazprombank, the financial arm of Russian gas giant Gazprom.

The prime minister said the sanctions were meant as a response to Russia's occupation of the Crimean region in Ukraine and its military action in eastern Ukraine.

Nothing proves that Canada [via Stephen Harper] has sold out to the U.S. lock, stock and barrel, more than this piece of rubbish/propaganda that showed up on the upi.com Internet site yesterday.  I'm embarrassed to call myself Canadian.  It's another article from Roy Stephens.

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Ukraine votes to keep Western companies out of gas industry

Ukraine’s parliament has rejected allowing E.U. and U.S. companies to buy up to 49 percent of oil and gas company Naftogaz, and also said they were against liquidating the national energy monopoly.

Kiev rejected splitting the company in two, a measure encouraged by the West in order for Naftogaz to comply with Europe’s third energy package, which doesn’t allow one single company to both produce and transport oil and gas.

The bill proposed creating two new joint stock companies in order to conform to the package, “Ukraine's Main Gas Transmission” and “Ukraine's Underground Storages.”

This Russia Today article appeared on their Internet site at 12:11 p.m. Moscow time on Friday---and credit goes to Roy Stephens once again.

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Catastrophic Desertions and Losses in the Ukrainian Army - Official Ukrainian Reports, July 19, 2014

It is rare that we report on the workings of the aggressor across the battle lines. This item is different. Before you is a translation, kindly prepared by Valentina Lisitsa, of a report from the head of the Ukrainian Security Service, V.O. Nalyvaichenko, to the President of Ukraine, P.A. Poroshenko. It is an important document, which, we hope, you will distribute widely.

No further commentary is necessary, other than the following brief quotation. According to V.O. Nalyvaichenko, "2/3 of the active combat military units currently participating in the ATO will simply cease to exist in as little as 4 to 5 days" due to mass desertions and casualties. To provide context for this letter, provided below is another document recently publicized as an internal memorandum from the Ukrainian Ministry of Defence, which details recent casualties of the Ukrainian army, equally as catastrophic as its desertion rates.

This very interesting news item [if true] appeared on the vineyardsaker.blogspot.ca Internet site yesterday---and I thank reader Nick Ferris for bringing it to our attention.

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Russia transfer of rocket system to Ukraine rebels imminent - Pentagon

The Pentagon said on Friday the transfer of heavy-caliber multiple-launch rocket systems from Russia to Ukrainian separatists appeared to be imminent with the arms close enough to the border they could be handed over "potentially today."

"We have indications that the Russians intend to supply heavier and more sophisticated multiple-launch rocket systems in the very near future," said Army Colonel Steve Warren, a Pentagon spokesman, adding that the weapons were in the over-200mm range.

Warren indicated the weapons had been seen getting closer to the border and the Pentagon believed a transfer was imminent and could happen "potentially today."

"We believe that they are able to transfer this equipment at any time, at any moment," he said.

The western main stream media is sinking to a new low just about every day.  This breathless propaganda/warmongering piece, filed from Washington, showed up on the reuters.com Internet site at 2:01 p.m. EDT yesterday---and the stories from Roy just keep on coming.

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Over 40 mortar shells ‘fired to kill’ into Russia from Ukraine

At least 45 mortar shells fired at targets located inside the Rostov-on-Don region have been unleashed by Ukraine’s army, Russia’s border officials said. The barrage destroyed multiple houses and forced an evacuation of civilians.

Investigators say they were examining the site of a previous shelling near the Primiusskiy hamlet right on the southwestern edge of Russia on Wednesday, when a cannonade went off from the other side of the border.

“There is no doubt that those shooting from the Ukrainian side picked their target, and tried to kill Russian security officials,” said Investigative Committee representative Vladimir Markin.

This news item put in an appearance on the Russia Today website at 5:31 p.m. Moscow time on Friday---and it's another story from Roy S.

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Shell Leaves Business Strategy for Russia Unchanged Despite Sanctions

British oil giant is determined to continue its work in Russia and will not change its business strategy in the country, despite the sanctions imposed against Moscow by the United States and European Union, representative of Shell’s press service told RIA Novosti on Friday.

“Shell continues to run business in Russia both in the upstream and downstream without any changes. We monitor the situation regarding the sanctions. But so far there have been no changes in either the business itself or in the business strategy,” the source said.

This interesting article was posted on the RIA Novosti Internet site at 7:45 p.m. Moscow time on Friday evening---and it's another contribution from Roy Stephens.

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Russia takes aim at McDonald's burgers as U.S. ties worsen

McDonald's burgers and shakes may become the latest victims of worsening ties between Moscow and Washington after a Russian consumer watchdog agency accused the U.S. chain of sanitary violations.

McDonald's Corp, which opened its first Russian restaurant in Moscow in 1990, became an iconic symbol of flourishing American capitalism during the fall of the Soviet Union.

But its Golden Arches may be in the Kremlin's crosshairs as ties between Moscow and Washington have fallen to their lowest point since the end of the Cold War with consecutive rounds of U.S. sanctions over Russia's role in the Ukraine crisis.

"We have identified violations which put the product quality and safety of the entire McDonald's chain in doubt," Anna Popova, the watchdog's head and Russia's chief sanitary inspector, was quoted by Interfax news agency as saying.

This Reuters news item, filed from Moscow, showed up on their Internet site at 11:19 a.m. EDT on Friday---and once again I thank Roy Stephens for sending it.

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Washington is Escalating the Orchestrated Ukrainian “Crisis” to War — Paul Craig Roberts

Despite the conclusion by U.S. intelligence that there is no evidence of Russian involvement in the destruction of the Malaysian airliner and all lives on board, Washington is escalating the crisis and shepherding it toward war.

Twenty-two U.S. senators have introduced into the 113th Congress, Second Session, a bill, S.2277, “To prevent further Russian aggression toward Ukraine and other sovereign states in Europe and Eurasia, and for other purposes.” The bill is before the Committee on Foreign Relations.

Note that prior to any evidence of any Russian aggression, there are already 22 senators lined up in behalf of preventing further Russian aggression.

Accompanying this preparatory propaganda move to create a framework for war, hot or cold with Russia, NATO commander General Philip Breedlove announced his plan for a deployment of massive military means in Eastern Europe that would permit lightening responses against Russia in order to protect Europe from Russian aggression.---and there we have it again: Russian Aggression. Repeat it enough and it becomes real.

This must read commentary put in an appearance on Paul's website on Thursday---and my thank go out to reader M.A. for bringing it to my attention, and now to yours.

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An Unprecedented Look Inside Iran From a Getty Photographer

Ever since Getty photographer John Moore visited Iran 10 years ago to cover parliamentary elections in Tehran, he's had an itch to experience the country behind the headlines. He finally got his chance this past June when he was approved to tour the country on a one-week trip from Shiraz to Tehran.

Mostly free from the constraints of traditional news — he did happen to document the 25th anniversary of the death of Ayatollah Khomeini along the way — Moore visited Iran’s most prominent cities, monuments, and squares for a look at the everyday life of average Iranians.

Though he had been pleasantly surprised by Iranian hospitality on his trip 10 years ago, he was again struck by how friendly, open, and hospitable most Iranians were to him, an American photographer documenting their country.

Well, dear reader, I know a number of people that come from Iran---and I know this might shock you, but they're people like you and I.  Iran and Turkey are two places I'd love to spend some time.  This photo essay, which has had over 260,000 hits, was posted on the businessinsider.com Internet site on June 23---and it's the final offering of the day from Roy Stephens, for which I thank him.  Enjoy, because it's also worth your time.  The photo sequence on Afghanistan that follows is also worth looking at.  That photo sequence has had over 331,000 hits.

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Three King World News Interviews

1. Andrew Maguire: "Criminal" CME Colluded to Save Banks Short Gold"  2. Ronald-Peter Stoferle: "4 Astonishing Charts Show Gold May Finally Be Set to Soar"  3. Art Cashin: "Art Cashin Warns of Terrifying Black Swan and the Banking Crisis"

[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]

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Gold price suppression elicits more notice

Evidence of gold price suppression ahead of futures contract options expiration abounds and is remarked upon in Friday's commentary by GoldCore's Mark O'Byrne.

I found this precious metal-related story in a GATA release yesterday.  It's definitely worth reading.

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London gold fix company appoints committee to oversee benchmark

The company operating the gold price 'fix' has appointed a supervisory committee to oversee the century-old system of benchmarking gold prices ahead of the implementation of stricter regulations, its website showed on Friday.

The London Gold Market Fixing Ltd's new board is made up of compliance officers at the four banks that currently set the twice-daily auction process over the telephone.

The appointment of the committee comes after the company said this month it was seeking a third party to take over administration of the process.

I thought this process was incestuous enough as it was, but this really takes it to a new level.  This Reuters story, filed from London, was posted on their Internet site at 6:40 a.m. EDT Friday morning---and it's the final offering of the day from reader M.A.

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The strange case of Germany's gold: An interview with Peter Boehringer

Interviewed by Andrew Schiff for the summer edition of Euro-Pacific Capital's Global Investor Newsletter, Peter Boehringer of the campaign to repatriate Germany's gold reserves explains how the recent Bloomberg News report on the issue was so misleading and elaborates on the fraud of the fractional-reserve gold banking system.

"One reason that the gold was unavailable for quick delivery," Boehringer says, "could be multiple ownerships of our bars at the Fed. Given today's global fractional gold banking scheme, an (allegedly physically existing) bar in a central bank vault could have more than 10 owners and could thereby show up in more than 10 central bank balance sheets as either 'physical gold' or 'gold claim.' These two completely different balance sheet items have not been properly differentiated for many decades now. We are potentially talking about non-existent physical bars at a magnitude of tens of thousands of tonnes."

The Euro-Pacific newsletter headlines the interview "The Strange Case of German Gold -- An Interview with Peter Boehringer" and it's posted about halfway down the newsletter.  It's definitely worth reading.  I found this gold-related news item on the gata.org Internet site yesterday---and I thank Chris Powell for wordsmithing "all of the above."

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Physical Gold Fund interviews Jim Rickards

July 2014 Interview with Jim Rickards on the June FOMC meeting, Yellen's July congressional testimony, Yellen is now stock picking, Efficient Markets theory is junk science, the bubble economy is headed for another crash, legal ramifications of USD transactions in non-US jurisdictions, in the next crisis you will be told you can not have your money when you ask for it, the term “Macro Prudential” means asset freeze or bail-in, new money market regulations allow for suspension of redemptions, the Fed is coming around to the view that a collapse is coming, regulators are exhibiting signs they expect another collapse, the Federal Reserve regional bank structure, FOMC driving policy, and the freezing or confiscation of 401k’s.

This 51-minute audio interview was posted on the physicalgoldfund.com Internet site very recently---and I thank Harold Jacobsen for finding it for us.  It's certainly worth listening to if you have the time.

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R1.2bn in gold ‘missing’ at Rand Refinery

Rand Refinery, processor of about a third of the world’s gold since 1920, found $113 million (R1.2 billion) less physical metal than the company had booked in its accounts after adopting a new computer system.

The refinery in Germiston, a town 20 kilometres east of Johannesburg, has 87,000 ounces of physical gold less than the amount present in its accounting records after “implementation difficulties” with the new system, the company said in a statement today.

That’s worth about $113 million at today’s price of $1,296 an ounce.

This article was all over the Internet yesterday.  This version appeared on the io.co.za Internet site at 4:30 p.m. South Africa time---and it's the final contribution of the day from Elliot Simon.

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India's gold import restrictions turn into political patronage for trading houses

A war is brewing in the gold market with traders led by the All-India Bullion and Jewellers Association complaining to the Reserve Bank of India that its May 21 decision to allow premier and star trading houses to import gold for local sales has given half a dozen export houses a dominant position in the market and raised imports of the metal.

The RBI claimed that one of the complainants from the trade is likely to initiate action shortly, considering that the sharp rise in imports has happened during the traditionally slack month of June.

The trading houses strongly contested the claims of traders. They say the RBI's action had improved supplies and reduced the premium on gold, and that the traders' claims of the surge in gold imports are exaggerated.

This article, filed from Mumbai, appeared on the Economic Times of India website at 5:11 a.m. IST yesterday---and I found this in a GATA release yesterday.

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Indian gold imports fell 25% year over year---not counting smuggling, of course

Gold imports in 2013-14 stood at 638 tonnes, a decline of 25 per cent over the previous fiscal, Parliament was informed today.

The quantity of gold imported in 2012-13 was 845 tonnes and in 2011-12 it was 919 tonnes, Minister of State for Finance, Nirmala Sitharaman said in a written reply in the Lok Sabha.

In the April-June period of current fiscal, the quantum of gold import stood at 221 tonnes while in value terms it was Rs 54,792 crore, she said.

This gold-related story, filed from New Delhi, appeared on The Financial Express Internet site at 2:54 p.m. India Standard Time on their Friday afternoon---and it's another item I found over at the gata.org website site.

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Deutsche Bank, HSBC Accused of Silver Fix Manipulation

Deutsche Bank AG, HSBC Holdings Plc and Bank of Nova Scotia were accused in a lawsuit of rigging the price of billions of dollars in silver, an allegation similar to earlier suits involving the London gold fix.

The banks unlawfully manipulated the price of the metal and its derivatives, an investor claims in a complaint filed yesterday in federal court in Manhattan. The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit.

“The extreme level of secrecy creates an environment that is ripe for manipulation,” according to the complaint. “Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits.”

It beats the hell out of me why JPMorgan isn't named in this lawsuit, as they're the ringleaders in all this.  However, Canada's Scotiabank is probably #2 on the list.  I won't be the only person interested in how this all turns out.  This story was posted on the businessweek.com Internet site in the wee hours of Saturday morning---and I thank U.K. reader Nigel Bunting for sliding it into my in-box at 10:41 a.m. BST, which works out to 5:41 a.m. EDT this morning.

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¤ The Funnies

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¤ The Wrap

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. - Ernest Hemingway

Today's pop 'blast from the past' doesn't need any introduction, nor do the two ladies who sing it.  But you have to be of a certain vintage to know it was one of their big hits back in 1976.  Alas, I'm of that vintage myself.  The link is here.  Enjoy!  While I'm at it, here's their first Top 10 hit on America's Billboard Top 100 during the same year.

Today's classical 'blast from the past' is one I posted many years back, but thought worth posting again as things start to unravel in eastern Europe once again.  It was written for the 1941 film "Dangerous Moonlight".  The history behind this composition is absolutely fascinating---and you can read about it here.  Ultimately this piece of music was such a hit, that it made the unusual journey from the movie screen to the concert hall.  This performance is by Swedish virtuoso pianist Patrik Jablonski---and he's accompanied by the Polish National Radio Symphony Orchestra, which is as it should be.  The link is here.

Well, both gold and silver had nice bounces off their respective 200-day moving averages---and as I mentioned in The Wrap on Friday, that was one of the price scenarios that might occur.  I was also happy that there wasn't much volume associated with yesterdays price action---and I was surprised to see that a lot of it occurred after the 1:30 p.m. EDT Comex close.  On a Friday, the price normally flat-lines as the traders head out the door for the weekend---but not this time.

Here are the 6-month gold charts for both metals showing Friday's volume and price activity.   The RSI readings on both are virtually identical.

But we're far from being out of the woods yet---and I'm extra cautious about reading too much into yesterday's price action.  All options---up, down and sideways are still out there---but with the Commercial net short positions in gold and silver still sky high, I have to use past as prologue and assume that there's more down-side pain yet to come.  However, I'd love to be proven wrong.

On the political side of things, I must admit that I'm growing more apprehensive by the day.  The way that the West, led by the U.S., is pushing Russia into a financial and economic corner I find frightening.  Even though the U.S. intelligence community has come out and said that there's no evidence that flight MH17 was the result of anything the Russia's did, either directly or indirectly, that's not stopping the West from assuming guilt regardless.   International law is being thrown out the window, as the U.S. drives for a casus belli.

If it comes to that, or even close to that, one would assume that current financial, economic and monetary situation as it exists today would be one of the first casualties.

In a Russia Today story I posted yesterday, Russia's ambassador to the U.K. said that "sanctions would not serve the interests of the countries concerned, including the U.S., and would "trigger a long-anticipated endgame of the present global crisis."

If that isn't a warning of some sort, then I don't know what is.

To me, it's a clarion call to get my own financial affairs in order---and be prepared for the worst.  And the worst could come at any time with little or no warning.  I urge you to keep a close eye on the situation from this day forward.  A current passport and money outside your country of domicile should be the first things on your list.

On that cheery note, I'm done for the day---and the week.

Enjoy what's left of your weekend---and I'll see you here on Tuesday---and on Wednesday elsewhere.