Gold & Silver Daily

¤ Yesterday In Gold & Silver

The gold price rallied a hair in Far East trading on their Monday morning, but that all ended at 9 a.m. Hong Kong time as the HFT boyz and their algorithms took an eight or nine dollar slice off the golden salami.  After that, the price didn't do much until shortly after 11 a.m. EDT---and the rally that began at that time got dealt with in the usual manner at one minute before noon, before it got too far into positive territory---and it wasn't allowed to close there.

The low and high tick were reported as $1,208.80 and $1,221.00 in the December contract.

Gold closed in New York on Monday at $1,214.80 spot, down $1.40 from Friday's close.  Net volume was 131,000 contracts.

Silver opened flat on Monday morning in the Far East but, like gold, the HFT traders and their algorithms showed up at 9 a.m. Hong Kong time as well---and within an hour had silver down over 50 cents.  From there it rallied in fits and starts back to just above unchanged by noon in New York---and at that time met the same fate as the gold price---getting closed down on the day.

The low and highs were reported by the CME Group as $17.865 and $17.325 in the December contract.

Silver finished the trading session on Monday at $17.73 spot, down 6 cents from Friday's close.  Net volume was a stunning 74,000 contracts.

Platinum and palladium had charts very similar to the gold charts, but mini versions---and both metals, like gold and silver, were closed at a new low for this move down. Platinum was closed down 12 bucks---and palladium was closed down 9 bucks, but was briefly below $800 during the day.  Here are the charts.

The dollar index close late on Friday afternoon in New York at 84.78---and then climbed to its 85.85 'high' tick of the day around 11:20 a.m. EDT.  From there it slid lower---and closed at 84.70, which was down 8 basis points from Friday.

The gold stocks gapped down---and then stayed down for the remainder of the day, except for a small rally around noon when gold rallied as well.  Even though gold made it into positive territory for a bit---and only closed down a dollar or so, the HUI closed down another 2.89%.

The silver equities headed for the basement the moment that trading began in New York.  The noon rally didn't last---and the stocks continued lower---and Nick Laird's Intraday Silver Sentiment Index closed down a chunky 3.64%.

The CME Daily Delivery Report showed that zero gold and 220 silver contracts were posted for delivery on Wednesday.  The biggest short/issuer was Jefferies by far with 188 contracts.  There were about 10 long/stoppers, none which really stood out---and the link to yesterday's Issuers and Stoppers Report is here if you wish to check it out.

The CME Preliminary Report for the Monday trading session showed that there are 16 gold and 387 silver contracts still open in September, from which you can subtract the 220 silver contracts in the prior paragraph.

There was 57,698 troy ounces of gold withdrawn from GLD yesterday---but it was totally different over at SLV, as there was another monster deposit.  This time there was 2,397,570 troy ounces were added by an authorized participant.

I forgot all about Joshua Gibbons, the "Guru of the SLV Bar List" while was in San Antonio, so I'll make amends here.  As of the close of trading last Wednesday, this is what he had to say: "Analysis of the 17 September 2014 bar list, and comparison to the previous week's list---4,844,010.2 troy ounces were added (all to Brinks London). No bars were removed or had a serial number change.

The bars added were from: Solar Applied Materials (2.8M oz), Henan Yuguang (1.4M oz), Nordeutsche (0.3M oz), and 4 others.  As of the time that the bar list was produced, it was over-allocated 594.3 oz.  All daily changes are reflected on the bar list, except the 959,072.0 oz deposit last night (17 September 2014).

About 2.5M oz of the deposits were bars that had been in SLV before, with another 2.3M oz of fresh bars."

There was a decent sales report from the U.S. Mint.  They sold 3,700 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---660,000 silver eagles---and 100 platinum eagles. 

There wasn't much activity in gold at the Comex-approved depositories on Friday, as only 3,407 troy ounces were shipped out---and nothing was reported received. 

The silver activity was off the charts once again, as 2,656,293 troy ounces were reported received, with all the action at Brink's, Inc.---CNT---and Canada's Scotiabank.  Only 165,152 troy ounces were shipped out.  The link to that activity is here---and it's worth a look.

Nick Laird sent us this chart on the weekend.  It's the weekly deliveries from the Shanghai Gold Exchange right up until September 12, 2014---and as you can tell, the chart is doing what it's supposed to, moving from lower left to upper right.

I've kept the stories down to as few as possible, but there's still a lot.  The final edit is yours.


¤ Critical Reads

Falling used-car prices roil the auto market

Used-car prices are sliding, a boon to penny-pinchers, but troubling for new-car sales.

The auto industry sales recovery in recent years means millions of used cars, many coming off lease, are starting to flood the market. The result is a decline in used-car prices that zoomed sky-high after the recession. And the decline is leading to talk that new-car auto sales growth may be peaking.

"We're going to see a tremendous increase in used-car supply over the next couple of years," says Larry Dominique, an executive vice president of auto-pricing site TrueCar.

That used-car cascade could dampen new-car sales in three ways.

This is very interesting story showed up on the Internet site on Sunday---and the first story of the day is courtesy of reader Ward Pace.


'I had no choice,' says Sarkozy of political comeback

Former French president Nicolas Sarkozy said Sunday that he "had had no choice" but to return to politics, stating that he had never seen such "despair" in France.

In a 45-minute prime time television interview on France 2, Sarkozy outlined his bid to lead the opposition UMP party and launched a scathing attack on Socialist President François Hollande.“I don’t want my country to be condemned to the humiliating state of affairs that we have today or the perspective of total isolation'' that he predicts will happen if France's far-right National Front party continues its rise.

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


‘Europe getting fed up with the U.S. business influence’

Europeans’ anger with their governments over US-led sanctions against Russia can go “quite far” as they are fed up with US business influence helping arms exporters and NATO, but not average Europeans, former British diplomat William Mallinson told RT.

RT: On Friday, French farmers in the city of Brest in Brittany set local tax office on fire, in protest against tit-for-tat sanctions with Russia. Is the Russian food ban hitting European businesses that bad, making people that desperate?

William Mallinson: Yes. What we have to remember is that the EU is originally founded on the livelihood for farmers and for supplying food to Europeans. Despite the fact that there is a very large number of huge farms, in France, in particular, [there are] still a lot of small farmers. The French agriculturalists are one of the most powerful political forces in France. I remember the Poujadists in 1960-70s [a movement named after Pierre Poujade that articulated the economic interests and grievances of shopkeepers and other proprietor-managers of small businesses facing economic and social change - RT]; they are quite capable of causing major problems for the government.

This article showed up on the Russia Today website at 1:32 p.m. Moscow time on their Monday afternoon---and it's the second contribution of the day from Roy Stephens.


Russian sanctions ‘de facto against European business’ – Alstom chief

Russia has become a strategic market for thousands of European companies, and sanctions put E.U. business at risk, Philippe Pegorier, President of Alstom Russia , told RT at a Sochi Investment Forum.

“Sanctions against Russia are de facto sanctions against European business,” Philippe Pegorier, President of Alstom Russia, and Chairman of the Association of European Business in Russia (AEB), the largest foreign business association in the country, told RT over the weekend at an international business forum in Sochi .

“We don’t need the government or the E.U. to decide where our priorities are, for us, for many European companies, Russia is a strategy partner and we will remain a strategy partner,” he said.

Pegorier has warned that sanctions against Russia could cause 300,000 layoffs in Germany and at least 100,000 in France.

This is another article from the Russia Today website.  This one was posted there at 3:39 p.m. Moscow time yesterday afternoon---and it's also courtesy of Roy Stephens.


Moscow warns ‘circles in Washington’ over hindering peace process in Ukraine

Moscow is bewildered by Washington’s warmongering rhetoric, which accompanied President Petro Poroshenko’s visit to the U.S. Russia has also noted all the Russia-unfriendly opinions voiced recently by hawkish American politicians.

“We’ll keep in mind all signals, including those unfriendly towards Russia, that were heard during the visit of the Ukrainian president to Washington,” commented Russia’s Deputy Foreign Minister Sergey Ryabkov. “We do regret that there are quite influential circles [within the American establishment] that are unambiguously working against the emerging stabilization [in Ukraine],” Ryabkov said.

In short, U.S. senators urged to supply Ukraine with arms to fight against Russia and President Putin.

Senator Robert Mendez, a Democrat who runs the Foreign Relations Committee told CNN, "We should provide the Ukrainians with the type of defensive weapons that will impose a cost upon Putin for further aggression."

This story was also posted on the Russia Today website yesterday, just before lunch Moscow time---and my thanks go out to Roy Stephens once more.


Turkish security troops clash with Kurds, as thousands flee ISIS

Turkey's security forces closed the border with Syria through which thousands of Kurds are trying to flee IS, after clashes between Kurds and soldiers on the Turkish side of the divide.

The separatist Turkey-based Kurdistan Workers Party (PKK), which is classed as a terrorist organization by Istanbul, called for a solidarity demonstration on Sunday, after 70,000 Kurds crossed from Syria in just 24 hours.

Hundreds of Kurds duly showed up near the barbed wire border fence - some volunteering to join the struggle against IS, others asking to bring over aid to the refugees on the other side of the border.

This Russia Today story, filed from Moscow at 12:43 p.m. Moscow time on the their Sunday afternoon is also courtesy of Roy Stephens.


Lavrov tells U.S. to respect Syria’s sovereignty while tackling ISIS

Washington should respect the sovereignty of Syria in its attempts to deal with the Islamic state, Russia’s Foreign Minister Sergey Lavrov said in a phone call with his US counterpart, John Kerry.

Lavrov and Kerry talked on Sunday at the initiative of the US Secretary of State, Russia’s Foreign Ministry said in a statement.

During the conversation, the Russian FM stressed “the importance of coordinated action... by the international community aimed at countering the threat” coming from the Islamic State (IS, formerly ISIS).

However, he warned against “double standards” and “distortion of facts” during the battle against the terrorist group, which has declared a caliphate in the occupied territories of Syria and Iraq.

This is the final story from the Russia Today website---and the final offering of the day from Roy Stephens as well.


South Africa in '$50m deal' for Russian nuclear reactors

Russia's atomic energy agency said Monday it will provide up to eight nuclear reactors to South Africa by 2023 in a $50m strategic partnership between the two countries.

The delivery of the reactors will enable the foundation of the first nuclear power plant based on Russian technology on the African continent, the Rosatom agency said in a statement.

Director general Sergey Kirienko estimated the value of the deal at between $40 to $50 billion, given that one reactor costs around $5 billion, according to the Itar-Tass news agency. 

This news item was posted on the Internet site at 7:25 p.m. Europe time on Monday evening---and I thank South African reader B.V. for sharing it with us.


Eight King World New Blogs/Audio Interviews

1. John Embry:  "The Wild Action in Gold, Silver and Other Markets"  2. Michael Pento: "It's Terrifying to Look at What's Really Happen in the U.S."  3. David P: "Despite Pressure, is Silver Ready to Turn Mega-Bullish?"  4. Robert Fitzwilson: "Western Vampire Machine Waging War Against Russia and China"  5. James Turk: "Two Shocking Charts Expose the Stunning Collapse in the U.S."  6. Richard Russell: "The Grim and Devastating Tragedy of America"  7. The first audio interview is with Bill Fleckenstein----and the second audio interview is with Nigel Farage.

[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]


Koos Jansen: Chinese gold demand rises 5 percent as international exchange opens

China's gold demand, the off take from the Shanghai Gold Exchange for the most recent week reported, rose nearly 5 percent as China bought the dip, gold researcher and GATA consultant Koos Jansen writes. Jansen also reports the comments made at the opening ceremony of the exchange's international subsidiary, where the governor of the People's Bank of China said that China wants to become a major force in gold pricing.

This article appeared on the Internet site early on Saturday morning Singapore time---and I found it embedded in a GATA release.


Is World Gold Council's CEO angling for a tin-foil hat?

MineWeb's Lawrence Williams reports an interesting comment by the World Gold Council's chief executive, Aram Shishmanian, about the opening of the international subsidiary of the Shanghai Gold Exchange.

"The growth of the Shanghai Gold Exchange to become the world's largest physical gold exchange provides compelling evidence that the future for gold is physical," Shishmanian said. "As the market shifts from west to east, the expansion of strong gold trading hubs in Asia will improve price discovery, liquidity, transparency, and efficiency, all of which will transform the landscape of the global gold market."

So, then, does the World Gold Council believe after all that the present gold market is not really physical and transparent at all but rather shadowy and highly manipulated by derivatives and that, as a result, price discovery needs to be improved?

That kind of talk could sound like an application for a tin-foil hat. Williams should ask Shishmanian whether he wants one. We here at GATA's tin-foil hat factory would be delighted to oblige.

The rest of this commentary by Chris Powell, along with the story from Lawrie, falls into the must read category---and it was posted on the Internet site on Saturday.


Russia central bank buys more gold and builds bilateral trade with China

While we will probably have to wait another few days until the IMF publishes its latest statistics for the global picture, the Russian central bank has announced that it has added another 9.3 tonnes of gold to its official gold reserves. This is as tensions now seem to be diminishing in Ukraine which could, if the latest agreement holds, lead to Western sanctions against Russia being gradually withdrawn.

Russian gold reserves now stand at 1,113.5 tonnes, the world’s fifth largest national holding, thus climbing even further above China’s 'official' 1,054 tonnes. However few out there seem to believe that China doesn’t have more gold than it announces to the IMF, but is holding considerable amounts in some other government controlled accounts. Overall Russia has just about doubled its gold reserves since the 2007/2008 financial crisis and its central bank has been a net buyer almost every month since. The figures suggest that that the monthly increases have primarily come from the central bank taking in a significant proportion of the country’s domestic gold output which averaged around 20 tonnes a month in 2013; last year Russia was the world’s third largest producer of gold and this year could surpass Australia and move into the No. 2 position behind China.

Russia, like China, perhaps somewhat belatedly, has come to see its gold holdings as a significant positive in any new world financial order that may develop over the next decade.  American financial policy has dominated world trade for almost a century but there are powerful economic forces out there – notably involving various countries, including China and Russia, building trade ties in their own domestic currencies and thus starting to bypass the dollar. Energy trade is particularly significant in this respect as the U.S. dominance in setting the terms of world trade has been very much down to the virtually total dominance of the dollar in global oil and gas transactions.

Historically the country with the most gold has been able to dominate global trade – barbarous relic or no – and while the West may see this coming to an end there is an enormous, and ever wealthier, part of the world’s population which still believes in gold as the key global monetary asset. China and Russia are both strong believers in gold and the potential negotiating position it enables. At some stage soon the validity of their belief is going to be put to the test.

Here's another commentary from Lawrie.  This one was posted on the Internet site on Monday sometime---and I thank West Virginia reader Elliot Simon for pointing it out.  It's certainly worth reading as well.


Hugo Salinas Price: The tribute the world pays to the empire

In his latest commentary Hugo Salinas Price, president of the Mexican Civic Association for Silver, explains how foreign exchange surpluses kept in the bonds of countries that issue reserve currencies are actually the tax or tribute lesser countries pay to the empires that dominate them. Countries that hold such bonds in exchange for their exports have not really been paid and never will be paid, Salinas Price writes. In the old days, he adds, exporting nations could be paid by exchanging fiat currencies for gold.

His commentary is headlined "The Tribute the World Pays to the Empire" and it's posted at the civic association's Internet site, I found all of the above in a GATA release on Sunday.  I can't get this website to load on either my home computer, or my laptop. So if it doesn't work for you, there's nothing I can do to help.


Established rivals may keep Shanghai trade zone's gold exchange in check

China's launch of an international gold exchange in the Shanghai Free-Trade Zone 11 days ahead of schedule last week, may not be much help as it seeks to compete with established gold markets such as New York, London or Singapore.

While China is the largest physical gold consumer in the world, the financial infrastructure may lag that of Singapore and Hong Kong in handling a gold market.

Gold traders believe the gold market in the FTZ would attract domestic and foreign investors to trade, but catching up with the major international players will not come quickly.

This gold-related news item showed up on the South China Morning Post website in the wee hours of Monday morning local time---and it's another item I found on the Internet site.


New Gold Fix Planned By LBMA In Desperate Attempt to Maintain Status Quo

The London Bullion Market Association (LBMA) is quietly planning its new gold fix in a desperate attempt to maintain the status quo.

Reuters reported Friday that according to the LBMA, there are at least 15 companies interested in running the upcoming replacement to the London ‘Gold Fixing’ auction. Like the recently introduced replacement to the ‘Silver Fixing’ which is now being run by the CME Group and Thomson Reuters, the LBMA has appointed itself as the coordinator for a new London Gold Price auction and is currently soliciting Requests for Proposals (RfPs) from interested parties.

When the new silver fixing auction was being debated in the summer, the World Gold Council (WGC) took the initiative and organised a conference of gold market participants including miners and refiners to work out the key features of a new gold price auction. This WGC initiative appears to have been shot down by the LBMA who felt threatened that a gold mining representative organisation was muscling in on the London gold ‘price discovery’ mechanism.

In advance of the LBMA choosing the winning bid, which may well be CME Group/Thomson Reuters again, the LBMA will be holding another seminar for ‘market participants’ that will feature presentations from the short-listed candidates. 

This article appeared on the Zero Hedge website at 4:15 p.m. Sunday afternoon---and I thank reader Harry Grant for sending it our way.


U.K.'s Royal Mint's Tip for Investors: Go for Gold

It has provided gold coins for kings, queens, and governments for hundreds of years, but the Royal Mint is opening its services to the public with a new trading website.

It is encouraging members of the public to become gold investors, claiming that the precious metal is now "relatively affordable."

It is hoped that the website will convince everyday investors to buy bullion coins struck in gold or silver directly from the Royal Mint, after previously being put off by the complexity of investing.

This article put in an appearance on the Internet site at 11:33 p.m. BST on their Sunday evening---and this is another gold-related item I found in a GATA release.


Gold price suppression covered fully by GATA secretary treasurer Chris Powell on 'The Larry Parks Show'

Thanks to the interviewer's knowledge of the issue and willingness to spend time on it, your secretary/treasurer got to cover many aspects of the Western gold price suppression scheme last week on "The Larry Parks Show," broadcast on the Manhattan Neighborhood Network in New York. Parks was so adept because he is executive director of the Foundation for the Advancement of Monetary Education.

Among the aspects discussed were the U.S. government's having authorized itself to rig all markets secretly, the U.S. government documents recently disclosed showing that central banks are trading secretly in all major U.S. futures markets, the other documents GATA has compiled proving the gold price suppression scheme, why the gold mining industry refuses to do anything about it, why the scheme will keep succeeding until gold investors shun "paper gold," and the treason of the central bankers in developing countries.

The interview being so comprehensive, it would be an especially good one for gold investors and anti-imperialists to recommend to government officials, financial journalists, and gold and silver company executives.

The interview is 30 minutes long---and can be viewed at the Vimeo Internet site.  This GATA release and embedded video easily falls into the absolute must watch category---and should be given the widest possible distribution.



¤ The Funnies

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¤ The Wrap

Certainly, the signals in silver from everywhere I look are much different than the prices being set on the COMEX. Despite the pronounced price weakness, investment holdings in the big silver ETF, SLV, have grown and not shrunk, both on an absolute basis and relative to the big gold ETF, GLD.  Even though the price of silver has gone down---and has gone down relative to gold’s price, there are no indications of investment selling of physical silver, only indications of buying.  

There is no compatibility between price action and the holdings in the two largest public investment vehicles in silver and gold. One would appear to be wrong, either the collective behavior of silver and gold investors when it comes to physical metal holdings or the price-setting mechanism on the COMEX. This is a disconnect that demands an eventual re-connection. The easiest re-connection must involve a radical change in the price of silver and not a change in collective investment behavior. The price of silver is wrong, not public reaction to a price thought too cheap. - Silver analyst Ted Butler: 20 September 2014

Another slice out of the salami in all four precious metal yesterday, particularly in silver, as all hit new lows for this move down.  And as you already know, da boyz are after silver in a big way, as it's the problem child for both JPMorgan and Canada's Scotia bank.  I would guess that between them, they hold a bit over half of the entire short position of the 'Big 8' traders in the Commercial category of the Commitment of Traders Report.

Here are the 6-month charts for all four precious metals.  Platinum is most likely at its most oversold position in many years---and that goes for the other three precious metals as well.

And as I write this paragraph, the London open is 15 minutes away.  With the exception of silver, the other three precious metals are all up a tiny amount on the day.  Gold volume is a bit over 15,000 contracts, which isn't overly heavy---but silver's volume is very brisk at 7,700 contracts.  The dollar index is flat.

Today is the cut-off for this Friday's Commitment of Traders Report---and I would guess that we'll see new records pretty much across the board in gold and silver---and close to records in platinum and palladium as well.  Of course that depends on today's price action, so we'll see how things turn out as the trading day progresses, particularly in New York.

And as I fire this out the door to Stowe, Vermont at 5:00 a.m. EDT, I see that the prices of all four precious metals went vertical shortly after 9 a.m. BST in what had all the hallmarks of a 'no ask' market---and it remains to be seen how long JPMorgan et al allow these rallies to last.  Judging by the volumes in both gold and silver at the moment, they are hard at work as sellers of last resort.  Right now [4:50 a.m. EDT] net gold volume has exploded to a bit over 35,000 contracts---and silver's net volume is 14,000 contracts.  So unless a black swan of some type shows up, it's a pretty good bet that these rallies will meet the same fate as every other rally.

Here are the gold and silver charts as of 4:45 a.m. EDT---9:45 a.m. BST in London.

I'm back home in Edmonton now that the Casey conference is done.  I was amazed at the quality of not only the speakers, but also the calibre of the attendees.  After talking with many---and I'm happy to report that the "can do" spirit is still very much alive in America.  I was delighted to meet so many readers while I was there---and I was humbled by their kind words.  So a profound "thank you" hardly seems adequate.

After flying for a good chunk of Monday, I must admit that I'm a pretty tired puppy.

I'm off to bed---and after watching the early morning action in London, nothing will surprise me when I power up my computer later this morning.

See you tomorrow.