Gold & Silver Daily

¤ Yesterday In Gold & Silver

The gold price didn't do a thing in Far East or most of the London trading day on their Thursday.  But as I pointed out in The Wrap in yesterday's column, if there was any serious price action coming our way, it would occur during the New York trading session---and that turned out to be the case.  Most of the technical fund selling/Commercial buying came at three different times of the day---including the rally in electronic trading after the Comex close.  If left to its own devices, gold would have probably closed up on the day.

The high and low tick were reported by the CME Group at $1,298.80 and $1,281.30 in the December contract.

Gold closed the trading day on Thursday in New York at $1,280.50 spot, down $14.00 from Wednesday's close.  Volume, net of August, was 152,000 contracts.

For the umpteenth day in a row, the silver price was spiked lower at the 6 p.m. open in New York on Wednesday evening.  From there, silver traded a bit differently than gold during the late Far East and early London trading day.  After doing nothing for most of Thursday in Hong Kong, the silver price began to rally shortly before 2 p.m. local time.  The rally topped out/got capped about an hour after London opened---and it was all down hill from there, helped along with an additional shove at the Comex open.  Silver hit its low tick at the 1:30 p.m. Comex close---and the subsequent rally in electronic trading met the same fate as gold---and at the same time as well.

The high and low for silver yesterday was recorded as $20.78 and $20.37 in the September contract, an intraday move of 2 percent.

Silver closed on Thursday afternoon in New York at $20.38 spot, down 23.5 cents from Wednesday's close.  Volume, net of August, was 44,000 contracts---of which about 2,700 were traded in the December contract.

The trading patters for platinum and palladium were similar, with the major sell-offs beginning at the Comex open in New York.  Platinum finished the day down 19 dollars---and palladium by 6 bucks.  Here are the charts.

The dollar index closed late on Wednesday afternoon in New York at 81.40---and traded flat until 2 p.m. Hong Kong time on their Thursday afternoon. The tiny rally that began at that point topped out at 81.56 at the 8:20 a.m. Comex open in New York.  It slid down to 81.42 just before the London p.m gold fix---and traded flat after that.  The index closed at 81.43---which was basically unchanged from Wednesday.

Not surprisingly, the gold stocks gapped down at the open---and then hit their low of the day at 1 p.m. EDT---and after that they didn't do much.  The HUI closed out the last day of July down 2.17%.

The silver equities followed a similar pattern, with their low tick coming a precisely 1:00 p.m. EDT as well.  But because the metal itself did so poorly, the silver equities closed down more, as Nick Laird's Intraday Silver Sentiment Index finished the day down 2.55%.

The CME Daily Delivery Report for Day Two of the August delivery month showed that 1,743 gold and 9 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The big short/issuer in gold was HSBC USA with 1,739 contracts---and the four biggest long/stoppers were JPMorgan with 548 contracts in its client account, Morgan Stanley with 462 in its in-house proprietary trading account, Barclays with 323 in its in-house trading account---and Canada's Scotiabank with 298 contract.  There were half a dozen or so small long/stoppers as well---and yesterday's Issuers and Stoppers Report, which is linked here, is certainly worth a look.

As I said in this space yesterday, I would be checking Thursday's preliminary report from the CME---and it showed that gold open interest for August only declined by 792 contracts from Wednesday's total, and is now down to 8,128 contracts.  I don't know what percentage of this will end up standing for delivery, but based on this number, there are still lots of gold deliveries left to go for August---and the only thing to watch for going forward, is how long a period of time the delivery process is stretched out over.

As Ted Butler has pointed out to me on many occasions, there's no advantage for the short/issuers to hold back on deliveries---unless they don't have the gold to deliver, of course.  I find that situation unlikely, but I'll be watching the daily deliveries with more than the usual amount of interest as the month progresses---and I'll keep you posted.

As far as silver is concerned, the August open interest dropped from 237 contracts down to 19 contracts.  Most of that decrease was the deliveries from the first day notice report on Wednesday, which was 225 contracts.  If you subtract out the 9 silver contracts posted for delivery on Monday that I spoke of a few paragraphs ago, there's not much left to deliver in silver for August---barring unseen/surprise delivery requests as the month progresses.

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.

Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with the internal goings-on over at the Internet site as of the close of business on Wednesday afternoon---and here's what he had to say: "Analysis of the 30 July 2014 bar list, and comparison to the previous week's list.  1,397,251.6 troy ounces were removed, 629,369.5 oz were added---and 189 bars had a serial number change."

"The bars removed were from: Henan Yuguang (0.9M oz), Krasnoyarsk (0.2M oz), Yunnan Copper (0.2M oz), and 7 others.  The bars added were from: Henan Yuguang (0.3M oz), Valcambi (0.2M oz), and 4 others."

"As of the time that the bar list was produced, it was overallocated 536.0 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

There was a tiny sales report to round out the month of July, as the U.S. Mint reported selling 50,000 silver eagles---and that was all.

For the month of July, the mint sold 30,000 troy ounces of gold eagles---5,500 one-ounce 24K gold buffaloes---and 1,975,000 silver eagles.  July was the slowest month for silver eagle sales for all of 2014 so far---and the same can be said for the 24K gold buffalo as well.

Over at the Comex-approved depositories on Wednesday, there was a decent amount of gold moved around---and it was a lot quieter in silver for a change.  In gold, there was 69,707 troy ounces reported received---and 5,146 troy ounces shipped out.  The link to that activity is here.  In silver, there was nothing reported received---and only 116,017 troy ounces were shipped out the door.  The link to that action is here.

Here's the 5-minute tick chart  for gold from 12:30 a.m. MDT time on Thursday morning, right up until the 3:15 p.m. MDT close.  Don't forget to add two hours for EDT.  Notice the huge volume as the HFT boyz hit the technical funds' sell stops on the first engineered price decline.  There was decent volume on the second decline just before 1 p.m. EDT/11 a.m. MDT---and almost no volume of the third one in the thinly-traded electronic market that followed the Comex close.  I thank reader Brad Robertson for providing this chart.

I have a far more reasonable number of stories for you today---and I hope there are some on this list that you find of interest.


¤ Critical Reads

Chicago PMI Collapses to 13-Month Lows, Biggest Miss on Record

We warned last month that under the covers Chicago PMI looked a lot weaker than the headlines---and this morning's collapse confirms that.

Against expectations of a small rise to 63.0, Chicago PMI plunged from 62.6 to 52.6 (13-month lows) for the biggest miss on record. According to the release itself, "A monthly fall of this magnitude has not been seen since October 2008 ."

This was an 8 standard-deviation miss from analyst expectations (Joe Lavorgna was on the high side at 63.0). New orders, inventory, production, order backlogs, and prices paid all dropped (but employment rose?). This is the biggest 2-month drop since Lehman (and 2nd biggest since 1980). We await the seasonal adjustment "correction" as MNI get the call from Yellen.

This commentary appeared on the Zero Hedge website at 9:55 a.m. EDT---and I thank reader M.A. for today's first story.


Employment Costs Surge Most in 6 Years as Initial Claims Miss

Following last week's "seasonal volatility"-driven plunge in claims to new cycle lows, this week saw a 32k rise to 302k, missing expectations for the first time in 4 weeks.

However, what is more worrisome for bullish equity market investors is the surge in employment costs. The Employment Cost Index jumped 0.7% (beating expectations of a 0.5% rise) - its biggest jump since Sept 2008. This is the biggest variance from expectations in 8 years and suggests Janet Yellen's 'slack' just got a lot tighter.

This is the second Zero Hedge article in a row from reader M.A.---and it was posted on their website at 8:40 a.. EDT on Thursday.


California Health Insurance Rates Rise Up to 88% in 2014

Health-care insurance premiums for individuals in California rose between 22 percent and 88 percent in 2014 from last year, even after the federal health-care overhaul, the state’s insurance commissioner said.

The rate increases, with variation for geography and age, were masked by federal subsidies that the Patient Protection and Affordable Care Act provides to 88 percent of the 1.4 million Californians who purchased health care through the state’s exchange, Insurance Commissioner Dave Jones said.

Jones, a Democrat, is pushing a statewide ballot measure for November known as Proposition 45 that would give him regulatory say on proposed premium increases. The measure is opposed by insurance companies, which have said that it would actually cause rates to rise while harming the quality of care.

This short Bloomberg piece, filed from Sacramento, showed up on their website at 5:09 p.m. Denver time on Tuesday---and I thank Victor George for sharing it with us.


Jim Rickards: 6 Major Flaws in the Fed’s Economic Model

The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.

The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in the world.

The Fed may have some legitimate role as an emergency lender of last resort and as a force to use liquidity to maintain price stability. But, the lender of last resort function has morphed into an all-purpose bailout facility, and the liquidity function has morphed into massive manipulation of interest rates.

The original sin with regard to Fed powers was the Humphrey-Hawkins Full Employment Act of 1978 signed by President Carter. This created the “dual mandate” which allowed the Fed to consider employment as well as price stability in setting policy. The dual mandate allows the Fed to manage the U.S. jobs market and, by extension, the economy as a whole, instead of confining itself to straightforward liquidity operations.

Janet Yellen, the Fed chairwoman, is a strong advocate of the dual mandate and has emphasized employment targets in the setting of Fed policy. Through the dual mandate and her embrace of it, and using the dollar’s unique role as leverage, she is a de facto central planner for the world.

This commentary by Jim showed up on the Internet site on Wednesday sometime---and I thank Harold Jacobsen for sending it our way.


Brennan Apologizes For CIA Monitoring of Senate Computers

CIA Director John Brennan apologized to Senate intelligence committee leaders after his inspector general found that CIA employees acted improperly when the CIA searched Senate computers earlier this year.

Agency spokesman Dean Boyd said in an email to The Associated Press on Thursday that Brennan has convened an accountability board that will investigate the conduct of the CIA officers and discipline them, if need be.

The Justice Department has so far declined to pursue criminal charges against the employees, who searched the computers for information gathered in the course of a Senate investigation into the CIA's interrogation techniques.

One look at the photo of Brennan tells you that he's not someone you would want to meet in a dark alley.  This article showed up on their Internet site at 12:18 p.m. EDT on Thursday---and I thank Brad Robertson for finding it for us.


Data stored overseas should be accessible to U.S. government, judge rules

A federal judge in New York City sided with the United States government on Thursday and said that Microsoft must comply with a search warrant compelling the corporation to surrender customer data it stores overseas.

The multi-national computer company has for months now refused to turn over emails and other digital content requested by authorities in the US because the information in question, Microsoft insists, is kept on data servers physically located in Ireland. Previously, Microsoft said in a statement that “a US prosecutor cannot obtain a US warrant to search someone's home located in another country, just as another country's prosecutor cannot obtain a court order in her home country to conduct a search in the United States.”

But District Judge Loretta Preska ruled from a Manhattan courtroom on Thursday that, contrary to the company’s objections, Microsoft must produce the information sought pursuant to a US-based investigation.

"It is a question of control, not a question of the location of that information," Preska said at the conclusion of a two-hour court hearing, Reuters reported from New York.

This very interesting news item appeared on the Russia Today Internet site at 6:49 p.m. Moscow time early Thursday evening, which was 10:49 a.m. EDT.


U.S. judge Thomas Griesa schedules new hearing for Friday in Argentina Bond Crisis

After negotiations between the Argentine government and vulture funds, led by US Special Master Daniel Pollack, failed New York District Judge Thomas Griesa called for a new hearing between the parties for tomorrow at 12 pm (Argentina time).

The US judge overseeing Argentina's dispute with a group of creditors said a hearing he has set for Friday morning in the case will be "regarding the recent default by the Republic of Argentina," according to a court filing posted today.

On Wednesday, Argentina and a group of hedge funds holding some of its bonds failed to come to terms on a deal to avoid the country falling into default on its debt for the second time in more than 12 years.

A court's official informed today holdout representatives and Argentine officials will be part of the meeting.

The above four paragraphs are all there is to this news item that was posted on the Buenos Aires Herald website yesterday---and it's the second contribution of the day from reader M.A.


Jim Rickards: Tracking the impact of Argentina's debt default

Jim Rickards, Senior Managing Director at Tangent Capital, discusses whether Argentina's second default on its sovereign debt will have a contagion effect on global financial markets.

The video/audio interview was posted on the CNBC website just before midnight on Wednesday evening---and it's worth your time.  I thank Harold Jacobsen for tracking this story down for us.


Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis

Germany and Russia have been working on a secret plan to broker a peaceful solution to end international tensions over the Ukraine.

The Independent can reveal that the peace plan, being worked on by both Angela Merkel and Vladimir Putin, hinges on two main ambitions: stabilising the borders of Ukraine and providing the financially troubled country with a strong economic boost, particularly a new energy agreement ensuring security of gas supplies.

More controversially, if Ms Merkel’s deal were to be acceptable to the Russians, the international community would need to recognise Crimea’s independence and its annexation by Russia, a move that some members of the United Nations might find difficult to stomach.

Sources close to the secret negotiations claim that the first part of the stabilisation plan requires Russia to withdraw its financial and military support for the various pro-separatist groups operating in eastern Ukraine. As part of any such agreement, the region would be allowed some devolved powers.

This article appeared on the Internet site on Thursday sometime---and I thank South African reader B.V. for bringing it to our attention.


‘Dark pool’ probes suck in big two Swiss banks

Swiss banking giants UBS and Credit Suisse have confirmed that they are among a number of banks that have come under the scrutiny of a United States-led investigation into so-called ‘dark pool’ trading. 

Dark pool platforms enable investors to buy and sell positions anonymously, thus shielding their trades from rivals. The secretive activity is often combined with a high-frequency trading service that employs complex computer algorithms to complete multiple transactions within fractions of a second. 

The investigatory floodgates were opened last month when New York prosecutors accused British bank Barclays of unfairly boosting profits by misleading investors in its dark pool. The bank denies the charges.

This short news item appeared on the Internet site at 2:26 p.m. Europe time yesterday afternoon---and it's the second offering in a row from reader B.V.


E.U. sanctions some of Russia's biggest banks, including #1 Sberbank

The European Union has imposed sectorial sanctions on five Russian banks, including the country’s biggest, Sberbank, as part of economic steps that Europe, along with the US, have taken against Moscow over the crisis in Ukraine.

The list, published Thursday, includes Sberbank, VTB Bank, Gazprombank, Vnesheconombank (VEB) and Russian Agriculture Bank (Rosselkhozbank).

These financial entities will be banned from raising capital on the EU’s capital markets.

The sanctions – targeting banks with state ownership of over 50 percent – enter into force on August 1 and will be valid for one year. The decision can be reviewed after three months.

This article appeared on the Russia Today Internet site at 3:48 p.m. Moscow time on their Thursday afternoon.


Russia sanctions: Who will be hurt the most?

They are the toughest sanctions imposed on Russia since the Cold War, but who will they hurt the most?

The E.U.'s latest sanctions package comes amid anger over the Kremlin's support for Ukrainian rebels, who stand accused of shooting down a Malaysia Airlines passenger jet and killing 298 people.

The measures include an arms embargo, restrictions on offshore energy exploration and curbs on Russian banks trading in European markets.

The sanctions are intended to strangle the Russian economy and convince President Vladimir Putin to abandon his support for the separatists in Ukraine.

This commentary put in an appearance on the Internet site at 9:24 a.m. BST on their Wednesday morning---and I thank reader B.V. for bringing it to my attention, and now to yours.  It's worth reading.


Mr. President, Your Own CIA Says What Russians Say. What Are We Gonna Do? - Paul Craig Roberts

Why did President Obama look so lost Monday [July 21 - Ed] while trying to make a case against Russia in the downing of the Malaysian Boeing in Ukraine? And how come the U.S. journalists seem to know more than experts and intelligence agencies investigating the case? The Burning Point is discussing it with Paul Craig Roberts, former assistant secretary of the U.S. Treasury, currently the chairman of The Institute for Political Economy.

Mr. Roberts, the shooting down of the Boeing passenger airplane in Ukraine is really making headlines. But sometimes it seems that many media outlets already know everything about what appears to be still a mystery to experts.

PCR — This is Washington’s propaganda show. They have seized on the opportunity to demonize Russia, especially President Putin.  Washington is disturbed by a number of things – one is the rise of Russia and China as powers.  This is inconsistent with the Wolfowitz Doctrine, which is the basis of American foreign policy.  The Wolfowitz Doctrine requires that the U.S. prevent the rise of other powers. So, that is the big backdrop, the big background of it.  And what Washington is doing, they have seized on this airliner catastrophe, whoever is responsible, whatever is the cause, in order to blame Russia.  And so instantly as soon as the world learned that the Malaysian airliner had gone down, Washington was controlling the explanation.  It was out with the story that Russia did it, or the Russian government helped the ‘separatists’ in Eastern Ukraine do it.  And that it seemed to be orchestrated.  And such an orchestration requires advanced effort, advanced timing and that almost implies that the US was involved in the catastrophe.

So, what we have heard is accusations and insinuations from the US government, the American media and as far as I can tell much of the European media.  There is no evidence, but the accusation and insinuations are repeated over and over, and this is a propaganda trick to establish the truth by repetition. There has been no evidence presented by Washington and no response from Washington to the Russian government’s pleas to look at evidence, to have a non-politicized expert international investigation. It’s only the Russian government that has released any evidence; they have released the satellite photos of the Ukrainian missile batteries in place; they have released the flight path of Ukrainian jet, which approached the Malaysian airliner prior to its demise. And they repeatedly asked for evidence and Washington provides not.

This 15:38 minute audio interview was posted on the RIA Novosti website nine days ago on July 23---and it's a must listenBut if you want to "read all about it"---there's a transcript as well.  I thank reader B.V. for another contribution to today's column.


The West’s Reckless Rush Towards War With Russia: Chris Martenson

Paul Craig Roberts had this to say as an introduction to this very long Martenson essay---"On a number of occasions recently I have made the point that the psychopaths in control of Washington are driving the West to war with Russia. The lies that the Obama regime and Western presstitute media are hurling at President Putin are even more blatantly false that the lies Washington used against Saddam Hussein, Gaddafi, Assad, the Taliban, and Iran, and the lies are far more reckless. Russia has a nuclear arsenal as large as Washington’s, and Russia is very much aware that for 13 years Washington’s lies and demonizations of countries are the preludes to launching military attacks on the countries."

"It is completely obvious that no one in Washington has enough sense to be in government. In Washington power is in demonic and idiotic hands. Washington consists of the largest collection of criminal fools in human history."

"You have read what I have had to say. Now you can read it from Chris Martenson."

"The threat to life on earth has never been as great as it is at this time. The crazed fools in Washington and the reckless scum that comprise the Western media are brewing Armageddon."

The first half of this commentary by Chris was posted on the Zero Hedge website at 6:15 p.m. EDT yesterday evening.  You have to sign up [for free] to read the second half.  But the first half is an absolute must read, especially for all serious students of the New Great Game---and is, without question, the most important article in today's column.  I thank reader B.V. for his final contribution of the day.


Libya’s Islamic militants ‘seize’ Benghazi, declare it ‘emirate’

The Islamist militant group Ansar al-Sharia has declared Benghazi an ‘Islamic Emirate’ after claiming to have taken total control of Libya's second largest city, seizing military barracks with rockets and ammunition.

The official spokesperson of the extremist group told local Radio Tawhid that "Benghazi has now become an Islamic emirate."

The announcement has been denounced by pro-government militia forces.

"The national Libyan army is in control of Benghazi and only withdrew from certain positions for tactical reasons. The claim that Benghazi is under the control of militias is a lie," Khalifa Haftar, a former army general, who launched a self-declared offensive against militants in May, told Al Arabiya channel.

I'm sure that if the U.S. State Department sent in Hillary Clinton, she would have this all fixed up in no time.  This Russia Today news item was posted on their website at 8:05 p.m. on Thursday evening Moscow time, which was shortly after 12 o'clock noon in New York.


How to protect yourself from Ebola

West Africa is grappling with the largest outbreak of Ebola virus in history, and concerns are mounting that the hemorrhagic fever could spill across international borders.

Here is some advice from the World Health Organization (WHO) and the U.S. Centers for Disease Control and Prevention (CDC) on how people can protect themselves against Ebola.

Symptoms of Ebola include fever, headache, joint and muscle aches, weakness, diarrhea, vomiting, stomach pain, lack of appetite and in some cases bleeding.

"Transmission is through direct contact with bodily fluids of an infected person, or exposure to objects such as needles that have been contaminated with infected secretions," said Stephan Monroe, deputy director of the CDC's National Center for Emerging and Zoonotic Infectious Diseases.

This news item, filed from Washington, appeared on the Internet site at 10:53 p.m. Singapore time on their Thursday evening---and I thank reader M.A. for sharing it with us.


Russia and India Begin Negotiations to Use National Currencies in Settlements, Bypassing Dollar

Over the past 6 months, there has been much talk about the strategic proximity between Russia and China, made even more proximal following the "holy grail" gas deal announced in May which would not have happened on such an accelerated time frame had it not been for U.S. escalation in Ukraine.

And yet little has been said about that other just as crucial for the "new BRIC-centric world order" relationship, that between Russia and India. That is about to change when yesterday the Russian central bank announced that having been increasingly shunned by the west, Russia discussed cooperation with Reserve Bank of India Executive Director Shrikant Padmanabhan. The punchline: India agreed to create a task group to work out a mechanism for using national currencies in settlements.

This Zero Hedge article put in an appearance on their website at 11:44 a.m. EDT on Thursday---and it's the final offering of the day from reader M.A., for which I thank him.


Three King World News Blogs

1. Egon von Greyerz: "Horrifying Worldwide Financial Destruction to Shock Investors"  2. Gerald Celente: "Terrifying Crash---and the Death of the Global Ponzi Scheme"  3. Jeffrey Saut: "Stock Market Plunge, Gold, Crisis and Contagion"

[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]


Platinum to Palladium Fixings Join Precious Metals Revamp

The company that runs platinum and palladium fixings in London is seeking a new administrator for the price-setting process after similar changes were proposed for rituals in gold and silver.

The London Platinum & Palladium Fixing Company Ltd. will “shortly” start a request-for-proposals exercise for firms interested in assuming responsibility for the procedure that takes place each business day at 9:45 a.m. and 2 p.m. by phone, it said today in a statement. BASF Metals Ltd., Goldman Sachs Group Inc., HSBC Holdings Plc and Standard Bank Plc conduct the fixings, the London Platinum & Palladium Market website shows.

“With both the silver and gold fixings undergoing important structural change, it certainly makes sense for the London platinum and palladium fixing company to reconsider its own fixing process as well,” Nic Brown, head of commodities research at Natixis SA in London, said today by e-mail. “Reform of the fixings should help to reinforce confidence in the structure of London’s precious metal markets.”

This Bloomberg article, filed from London, was posted on their Internet site at 4:37 a.m. Denver time yesterday morning---and I found it on the Sharps Pixley website.


Chinese gold jewellery demand sees first quarterly drop in 8 years

Chinese gold jewellery demand fell for the first time in eight years in the second quarter and could drop as much as 20 percent in the full year, a leading precious metals consultancy said.

Many Chinese jewellery makers saw a 40-60 percent drop in gold fabrication in the second quarter, Sara Zhao, a GFMS analyst at Thomson Reuters, told the Reuters Global Gold Forum on Thursday.

Other industry sources also said higher gold prices and a weaker yuan are weighing on demand, and fresh buying has also been tempered by last year's record purchases.

Jewellery demand - the biggest segment of Chinese gold consumption - fell significantly in the April-June period, the first year-on-year drop since the second quarter of 2006, Zhao said.

This Reuters story, co-filed from Singapore and London, was posted on their website at 1:26 p.m. BST on their Thursday afternoon---and it's another article I found posted on the Internet site.


Background and History of the West Point Mint

The West Point Mint is one of four current production facilities operated by the United States Mint. It is located near the U.S. Military Academy in West Point, New York, situated on four acres of land that used to belong to the Academy under the Department of Defense.

The facility was erected in 1937 as the West Point Bullion Depository and originally served as a storage facility for silver bullion, earning the nickname “The Fort Knox of Silver.” In 2005, the facility was remodeled and a second story was added to the building.

In 1980, the Depository would begin striking the American Arts Gold Medallions and also begin storing gold in its vaults. The medallions had been authorized by Congress and conceived as a method of gold bullion investment similar to the South African Krugerrand. The one ounce and one-half ounce gold pieces depicted notable American artists and were minted from 1980 to 1984 without mint marks.

The first legal tender gold coins were struck at West Point in 1983. These $10 gold commemorative coins were issued for the 1984 Los Angeles Olympic Games and bore the “W” mint mark. Additional commemorative gold coins bearing the “W” mint mark would be produced in subsequent years. In 1986, the facility began production of the American Gold Eagle bullion coins, which sold more than 1.7 million ounces in the first year of release.

This very interesting article appeared on the Internet site on July 30---and is certainly worth reading if you have the interest.  I thank West Virginia reader Elliot Simon for digging it up for us.



¤ The Funnies

Sponsor Advertisement

Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization

Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.

Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.” 

Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained. 

Please visit our website for more information about the project.


¤ The Wrap

The prime disruptor to the continuing silver manipulation remains an eventual physical silver shortage. While its timing remains unknown, the preconditions necessary for such a shortage appear to be in place as seen in the extraordinary physical turnover in the COMEX-approved silver warehouses. Tight supply conditions, as is suggested by the silver warehouse turnover, can readily morph into outright shortage. After all, a shortage is nothing more than a tight physical market getting tighter to the point of noticeable delays in deliveries to buyers. A shortage doesn’t mean no material at any price; it’s more a case of an inability to deliver in a timely manner at then-prevailing prices to buyers. - Silver analyst Ted Butler: 30 July 2014

If Thursday's price action in New York was another engineered price decline, there certainly wasn't much volume associated with it considering that gold took out both its 50 and 200-day moving averages with some authority---and closed below them as well.  Silver hasn't broken either one to the downside just yet, but it's a chip shot for the HFT boyz if/when they decide to make their move.

Here are the charts showing yesterday's price action.

The question of how low the price might go from here is not the question one should ask.  As Ted reminded me on the phone yesterday, it's the number of contracts that counts.  If/when JPMorgan et al decided to pull the pin for real and flush the tech funds' long positions down the drain, it then depends on how many longs they can get the tech funds to puke up---and if "da boyz" press hard enough, how many short-side contracts they can get these same technical funds to load up on.

If they want to take back all of what the tech funds put on since the first week of June, then we have a long way to go to the downside, both from a contract and price perspective.  And when the Commercial traders can't wring out another long contract, or force the technical funds to go further short, then the bottom will be in, regardless of what the price is.

The price is incidental, but that's what everyone looks at---and as Bill Murphy over a is wont to say---"Price action makes market commentary."  He would be right about that.

This presupposes that everything will go JPMorgan's way, of course---and with the way events are unfolding in the world at the moment, I wouldn't bet the ranch on that outcome.   But with JPMorgan et al having captured the pricing mechanism in the Comex futures market for all four precious metals, plus copper---I wouldn't bet against them, either.

One thing that is absolutely a given, is that the Commercial traders---JPMorgan et al---will be buying every long that the technical funds sell in these metals---and will gobble up the long side of every short position that the technical funds place.

So we wait.

As I write this paragraph, the London open is twenty minutes away.  Gold and platinum are up a few bucks, palladium and silver are unchanged.  Gold volume, net of August, is a bit over 13,000 contracts---and silver's volume is a bit over 4,000 contracts.  That's pretty light volume.  And not that it matters, but the dollar index is a up a small handful of basis points.

Today, at 8:30 a.m. EDT, we should get the latest job numbers---and I'll be more than interested in how gold and silver react, or are allowed to react, when the news hits the street.

The other thing we get today is the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday, July 29.  Just eye-balling the 6-month charts above, I'd guess we'll see some improvement in the Commercial net short positions of both metals, but it won't be a material amount if there is---and it certainly won't put a serious dent in the sky-high Commercial net short positions that currently exist in both metals.

As I mentioned earlier this week, there's an FOMC meeting on Tuesday and Wednesday of next week---and nothing will surprise me as far as gold and silver price action is concerned.  I'm mentally preparing myself for the worst---and I'm sure that JPMorgan et al won't disappoint if given the opportunity.

And as I hit the send button on today's offering at 4:45 a.m. EDT, I note that very little has changed now that London has been open for a bit over 90 minutes.  Gold is up a few dollars---and the other three precious metals are hovering around unchanged.  Volumes in both gold and silver have increased, of course, but still fall in the very light category---and the dollar index is still up the same small handful of basis points.

Once again I expect that all the significant price action will begin either at the Comex open, or ten minutes after that when the jobs number shows up---and I shan't hazard a guess as to how the remainder of the Friday trading day will end up.

Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.