Gold & Silver Daily

¤ Yesterday In Gold & Silver

The gold price didn't do much during most of the Wednesday trading session.  But that all changed at precisely 2 p.m. EDT when Janet spoke---and that was that.  The initial down spike at that time didn't amount to much, but about forty minutes later the HFT boyz put in an appearance and quickly had gold down to a new low.  The sell-off ended at precisely 4 p.m. EDT---and from there it traded sideways into the 5:15 p.m. close of electronic trading.

The high and low ticks were recorded by the CME Group as $1,240.50 and $1,222.00 in the December contract.

Gold finished the Wednesday session at $1,223.20 spot, down $11.70 from Tuesday's close.  Net volume was 125,000 contracts with a big chunk of that occurring between 2 and 4 p.m. in New York.

Here's the New York Spot Gold [Bid] chart on its own, so you can see the Comex trading in more detail.

Brad Robertson sent along the 5-minute tick gold chart---and you can see the big volume on the engineered price decline.  Don't forget to add two hours for EDT.

The silver chart was very similar except for a brief [and capped] rally at the Comex open.  Then it traded sideways until 2 p.m.---and you already know the rest.

The high and low in silver yesterday were recorded as $18.80 and $18.49---however, it wasn't a new low for silver, as that would be tough to do, as the metal is basically sold out to the downside.

Silver closed on Wednesday at $18.52 spot, down 16.5 cents from Tuesday.  Net volume was 32,500 contracts.

And here's the New York Spot Silver [Bid] chart---and for the most part, it looks similar to gold's.

Platinum hit its high of the day about half an hour before Zurich opened---and it was all down hill to its 4:30 p.m. EDT low.  It recovered a few bucks into the close---and it, too, hit a new low for this move, down 13 bucks on the day.

Palladium hit its high just before lunch in Zurich---and it, like platinum, got sold down as well, closing almost on its low, down an even ten bucks---but nowhere near a new low.

The dollar index closed late on Tuesday afternoon in New York at 84.07---and traded basically flat until a few minutes before Yellen opened her mouth at 2 p.m.  The dollar rallied---and then retreated but, once again, it looked like the HFT boyz spun their algorithms---and away went the dollar to the upside.  I'm sure there was a certain amount of short covering involved, but it didn't start by itself.  The dollar index closed at 84.73---up 66 basis points on the day---and massively in overbought territory.

And here's the 3-year dollar index to put what's currently happening in some sort of historical perspective.

The gold stocks traded a tad lower for most of the New York session yesterday, but after the initial sell-off at 2 p.m. EDT, they had the audacity to rally into positive territory before the HFT boyz and their algorithms showed up---and it was all over, except for the crying, as the HUI closed down 2.45%.

The silver stocks followed an identical pattern, but Nick Laird's Intraday Silver Sentiment Index closed down 'only' 1.88%.

The CME Daily Delivery Report showed that only 1 gold and 9 silver contracts were posted for delivery within the Comex-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that there are 28 gold contracts still open in September, down 4 contracts from yesterday's report.  In silver, there are 389 contracts still open, after 233 contracts were subtracted for the deliveries posted for today.

There were no reported changes in GLD yesterday but, once again, there was another big deposit into SLV.  This time an authorized participant added 959,072 troy ounces of the stuff.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the latest activity in their gold and silver ETFs---and they're still going down.  As of the week ending last Friday, their gold ETF shed another 7,507 troy ounces---and their silver ETF dropped by 99,636 troy ounces. 

There was a tiny report from the U.S. Mint yesterday. They sold 3,000 troy ounces of gold eagles---and that was all.

There was no in/out movement in gold over at the Comex-approved depositories on Tuesday.  However, silver more than made up for it as 591,510 troy ounces were received---and an eye-watering 2,447,550 troy ounces were shipped out.  The deposit was at CNT---and 90 percent of the withdrawal was from Brink's, Inc.  The link to that action is here

The in/out movement in Comex silver, along with the continued deposits into SLV are simply stunning---and it's for good reason that Ted Butler can't figure out why more people aren't talking about it, as this is big news.

While on that subject, here's a timely chart that Nick Laird slid into my in-box yesterday.  It shows the total weekly silver holdings of all transparent silver ETFs---and the big increase in the last couple of months [to a new all-time high] is all because of the silver pouring into SLV.

I have less stories today, but I hope you find the odd one of interest.


¤ Critical Reads

Yellen: Fed balance sheet to take years to shrink

Federal Reserve Chair Janet Yellen says "it could take until the end of the decade" to shrink the Fed's record investment portfolio to more normal levels.

The Fed's response to the 2008 financial crisis has swollen its balance sheet to more than $4.4 trillion from less than $1 trillion roughly six years ago. Fed officials responded to the downturn in the economy with three rounds of bond purchases to try to hold down long-term borrowing rates to spur spending.

The Fed plans to end its latest round of buying Treasurys and mortgage bonds after its next meeting in October. It would then look to reduce its balance sheet once it begins raising a key short-term rate from its record low near zero.

The above three paragraphs are all there is to this brief AP story from yesterday---and it's courtesy of West Virginia reader Elliot Simon.


U.S. House passes Fed audit bill but measure is seen doomed in Senate

The U.S. House of Representatives today overwhelmingly passed a bill that would open up Federal Reserve monetary policy decisions to a congressional audit, reviving a measure passed in 2012.

But the legislation approved by the Republican-dominated House is expected to meet a fate similar to its predecessor's: death in the Democratic-controlled Senate.

The "Federal Reserve Transparency Act" passed 333-92 in a bipartisan vote. It is largely similar to the 2012 "Audit the Fed" bill championed by former libertarian Representative Ron Paul.

I thank reader Brad Robertson for sending me this Reuters story yesterday, but I borrowed the headline from a GATA release. 


Food-stamp enrollment in Illinois outpaces job creation by nearly 2-to-1

Illinois’ sluggish jobs recovery is coming at a tremendous cost. For every post-recession job created in Illinois, nearly two people have enrolled in the Supplemental Nutrition Assistance Program, commonly known as food stamps.

In the recession era, the number of Illinoisans dependent on food stamps has risen by 745,000. Without adequate job creation in the state, Illinois families have had no choice but to depend upon food stamps to put bread on the table.

The Prairie State has had the worst recovery from the Great Recession of any state in the U.S. There are nearly 300,000 fewer Illinoisans working today than in January 2008, and 170,000 fewer payroll jobs.

This interesting article was posted on the Internet site on Tuesday---and I found it in yesterday's edition of the King Report.


Scottish independence vote spurs Texan secessionists

Thursday’s vote to decide whether Scotland should be independent of the United Kingdom has bolstered Texans campaigning to split the state from the United States.

Texas Nationalist Movement president Daniel Miller, who wants the state’s legislature to put the secession question on a state-wide ballot, said Scotland’s referendum is a positive sign for his movement.

“If Scotland can do it, so can Texas,” Miller told Reuters. The top US cattle- and oil-producing state would be the 12th largest economy in the world, larger than Mexico or Spain, said Miller, whose organisation has campaigned for secession since the late 1990s.

Miller said Scotland’s referendum has increased interest in the Texas movement and the fact that a free Texas would lose big federal institutions like NASA and multiple military bases was of no concern to him.

“Win or lose, the Scottish referendum is both serving as a source of inspiration and information about what’s happening here in Texas,” Miller said.

This news item appeared on the Internet site on Wednesday sometime---and it's the first offering of the day from Roy Stephens.


$30 million bounty set to identify who shot down MH17 in Ukraine

$30 million will be given to those who help identify the perpetrators of the downing of the Malaysian Airlines flight MH17 in eastern Ukraine that killed all 298 on board, said an independent German fraud investigation company.

Two months have passed since the Malaysia Airlines plane on its way from Amsterdam to Kuala Lumpur was shot-down in eastern Ukraine on July 17 with 298 crew and passengers on board who all died in the crash. A preliminary report into the disaster carried out by Dutch investigators and issued on September 9 said that the MH17 crash was a result of structural damage caused by a large number of high-energy objects that struck the Boeing from the outside.

The investigation company Wifka, based in Schleswig-Holstein, north Germany said that it has been charged with investigating the case of the downing.

Wifka said that the client who preferred to stay anonymous will pay $30 million dollars to whoever provides evidence that identifies those behind the shoot down.

This story appeared on the Russia Today website at 4:11 p.m. Moscow time on their Wednesday afternoon, which was 8:11 a.m. EDT in New York.  It's the second offering in a row from Roy Stephens.  South African reader B.V. sent us a similar story headlined "‘£18million for whoever tells us who shot down MH17’: German detective agency offers huge bounty after anonymous backers provide massive war chest".  It was posted on the Internet site yesterday as well.


Ukrainian Prime Minister Orders to Keep Troops on Full Combat Alert

Ukrainian Prime Minister Arseniy Yatsenyuk said Wednesday he had ordered the defense minister to keep the country's armed forces in the highest state of combat readiness.

"I ask the defense minister and the interior minister [to ensure] full combat readiness and supply everything that the army or the National Guard needs," he said.

Earlier on Wednesday, a Russian Foreign Ministry's human rights representative stressed the countries, truly interested in putting an end to the crisis in Ukraine, must suppress the attempts to derail the ceasefire by what he called the "war party" in Kiev.

This short article appeared on the RIA Novosti website at 4:22 p.m. Moscow time yesterday afternoon---and I thank Roy Stephens for sending it.


Russia Calls Law on Special Status of Donbas 'Step in Right Direction'

Russia views the recent Ukrainian law on special status of parts of the Donetsk and Luhansk region as a step in the right direction, the Foreign Ministry said on Wednesday.

"This document is regarded by Russia as a step in the right direction and in line with the agreements outlined in the Geneva joint statement by Russia, Ukraine, the United States and the EU on April 17, as well as in the Berlin declaration of July 2," the ministry said in a statement.

"It creates a foundation for the launch of a comprehensive constitutional process in Ukraine, including the start of a dialogue aimed at facilitating the national reconciliation in that country," the statement said.

The ministry also expressed hope that all the provisions of the law would be strictly implemented by Kiev authorities in order to avoid a return to confrontation and violence in eastern Ukraine.

This story is also from the RIA Novosti website.  This one showed up there at 6:05 p.m. Moscow time yesterday evening---and once again my thanks go out to Roy Stephens.


Pay up, Gazprom tells Ukraine

The future relationship between Ukraine and natural gas company Gazprom depends on resolving lingering debt issues, the Russian company said.

Gazprom says it's owed $5.3 billion from Ukrainian energy company Naftogaz. Similar debt issues in 2006 and 2009 resulted in suspension of gas deliveries, and Gazprom said it's time to pay up.

"The future relationships between the companies are fully dependent on settling the debt payout issue," the company's board said in a statement Tuesday.

This UPI story appeared on their Internet site at 8:41 a.m. EDT yesterday---and it's another contribution from Roy Stephens.


Cold Turkey: Ankara not keen on supporting US led anti-ISIS coalition

Turkey remains a key ally of the US despite Ankara’s refusal to back Washington’s bombing campaign against the Islamic State in Syria, the State Department said. Ankara is fighting claims that militants are entering Syria and Iraq through its territory.

"When it comes to Turkey, we share a partnership with them that's essential," deputy spokeswoman Marie Harf said on Wednesday.

"They play a key role obviously in the region. And ISIS is a threat to Turkey's security. And they felt the ripple effect from this, quite frankly, more than most countries in the region."

Turkey was present at a meeting last week, where the US tried to get a coalition together to deal with the problem presented by the Islamic State (IS, formerly ISIS/ISIL). Although 10 Muslim nations in the Middle East did sign up, such as Saudi Arabia and Qatar, Turkey abstained.

This news item appeared on the Russia Today website at 4:12 p.m. Moscow time on their Wednesday afternoon---and it's the final offering of the day from Roy Stephens, for which I thank him on your behalf.


People's Bank of China pumping 500bn yuan through SLF to top 5 banks reports that the PBOC will use their Standard Lending Facility to add 500bn in liquidity.

Not sure what to make of this news on the face of it as they have been drawing liquidity out of the system, but nothing around this size.

Update: is citing a banking analysist Qui Guanhua whi says they will be providing 100bn yuan to each bank today and tomorrow with a 3 month duration.

It looks like a short term pump rather than anything more worrying but we’ll keep an eye on it.

That's all there is to this story that was posted on the Internet site on Tuesday---and it's another article I found embedded in yesterday's edition of the King Report.


Jim Rickards: Hedge Against the Next Crisis

Cash, gold and “real” assets, such as infrastructure and agricultural resources, are the place to be for investors, argues best-selling author and economist James Rickards.

Rickards, who wrote The Currency Wars and The Death of Money, is adamant that he is not a pessimistic sort of guy. But he has few soothing words to say about the economy.

The global economy, in his view, has been in depression since 2007 and investors may yet face either deflation or much higher inflation – and potentially both.

“Ultimately inflation has to come,” he says.

Jim made these comments when he was speaking in Australia last week---and an executive summary of what he had to say was posted on the Internet site.  I thank Harold Jacobsen for digging this up for us.


Three King World News Blogs

1. Rick Rule: "Massive Fund Flows Pouring Into Gold and Silver"  2. Gerald Celente: "Propaganda Aside, It's Bad Out There and Getting Worse"  3. Victor Sperandeo: "Legend Warns of Destructive New Policies for U.S. and Europe"  

[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] 


Gold loses luster on Fed; Barclays cuts forecast

Gold prices dipped Wednesday on concerns about a stronger dollar ahead of the Federal Reserve policy statement and in response to Barclays lowering its gold forecast.

But the precious metal may get a reprieve in the short term as the Fed’s statement, released after gold settled, reiterated that the central bank will keep interest rates low for a “considerable time” after it curtails its bond buying program.

As for the vote on Scotland’s independence, Edward Meir of INTL FCStone expects the “no” vote to prevail, but said markets could get dicey if it doesn’t.

“We do expect to see a massive short-covering rally in gold if Scotland votes ‘yes’, an event that should be momentous in terms of the economic fallout on both the U.K. and Europe,” Meir said.

Well, dear reader, the only reason that gold 'dipped' yesterday, is because JPMorgan et al were standing by to make sure it happened.  This story showed up on their website at 3:22 p.m. EDT yesterday---and I found this article over at the Sharps Pixley website.


Mike Kosares: Scottish secession, not the Fed, just knocked gold down

Gold has been knocked down last night, not by anything said or done by the Federal Reserve yesterday, but by rising fear of Scotland's secession from the United Kingdom and the separatism it is likely to encourage throughout Europe, Mike Kosares of Centennial Precious Metals in Denver writes.

This fear---and the usual algorithmic trading programs, Kosares contends, have goosed the dollar.

This has "Zip-a-Dee-Doo-Dah" about Scotland.  Da boyz always like to hit gold and silver at the 6 p.m. EDT open---and after what they did earlier in the day, the down ticks at the open were 'all the usual suspects' in action, kicking the precious metals while they were down.  This commentary appeared on the Internet site yesterday---and I found it over at the Internet site.


Facing Death in the Search for Silver

This brief 3:47 minute video clip, was 'borrowed' from The Telegraph---and posted on The New York Times website at 3:47 p.m. EDT on Tuesday.  And I was wrong, this is Roy Stephens' last offering of the day.


Sprott's Thoughts: Get Your Money ‘Out of Banks and into Something Tangible’

In a recent call with Eric Sprott, founder of Sprott Inc., he said he was still buying physical gold -and planned to keep buying it for as long as he could. The gold shortage that he talked about in our May interview is still there, and economically, things aren’t getting better. “When people finally decide they want to buy gold, there probably won’t be any gold,” he explained.

This interview by Henry Bonner was posted on the Internet site on Wednesday---and it's definitely worth reading.



¤ The Funnies

These two photos of juvenile lesser scaups are two more from Sunday.  I was lucky on the first one, as the bird was dry.  The scaup is a diving duck---and they also have a 'wet' look, which you can see in the group shot that follows---and I apologize for the red reflection in these shots as well, but better that, than no shots at all.  I also have to be careful what I say about ducks from this point onward, as I had an ornithologist correct me on one of my duck photos from a week or so ago.  It was juvenile goldeneye, not a scaup.  I also have at least one English teacher reading this column---and I have to watch my "its and it's" far more carefully, as well.

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¤ The Wrap

Almost eerily, the exact same cause (insufficient physical supply) resulted in the silver price run to $50 in 2011. Unlike what occurred in 1980, there was no coordinated manipulative buying in the price run in 2011; only broad-based investor buying, particularly in the publicly traded silver Exchange Traded Funds (ETFs), like SLV. If the crooks at the CFTC and CME had been able to pin the 2011 silver run to futures speculators manipulating the price upward, they would have taken that action by now. The reality is that there was no Hunt-like culprit to blame for the 2011 price run, so the actions taken by the regulators to cause prices to crash were strictly to bail out silver short sellers, particularly JPMorgan; just like occurred in 1980. - Silver analyst Ted Butler: 17 September 2014

I'd forgotten all about the FOMC meeting, so I was shocked when I first say the swan dive in gold and silver once I'd checked into the hotel in San Antonio.  But once I discovered the reason, all became clear.  It was just JPMorgan et al using this opportunity to kick the crap out of these two metals once again, especially if they could set new lows in the process, which they proceeded to do in both gold and platinum.

Here are the 6-month charts for all four precious metals as of yesterday's close.

It's not even lunchtime in Hong Kong as I check on trading in the Far East---and it should have come as no shock to anyone that the HFT boyz and their algorithms were standing at the ready when trading began at 6 p.m. EDT in New York yesterday evening.  All four precious metals got smacked---and both gold and platinum set new lows for this move down.

Not surprisingly, volumes in gold and silver are very decent as well---15,000 in gold and 4,000 in silver, which is very high for this time of day.  Of course I'm sure that the technical funds/managed money were pitching longs and going short in all four precious metals, with JPMorgan et al gobbling up the opposite side of those trades.  The dollar index is down 9 basis points as of 11:15 a.m. Hong Kong time.

I'm off to bed, as it's been a very long day---and after yesterday's surprise, nothing will faze me when I check the charts this morning.

See you tomorrow.