Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

The gold price started out the Tuesday session the same as it did on Monday, with the high tick coming just before the London open---and then drifted lower.  There was no surprise in New York trading yesterday---and the low tick came at 3:15 p.m. EST.  from there it rallied about $5 into the close.

The high and low ticks are barely worth the effort to look, but the CME recorded them as $1,184.90 and $1,172.40 in the February contract.

Gold closed in New York yesterday at $1,176.90 spot, up a whole 20 cents from Monday.  Volume, net of December and January was 111,000 contracts.

Except for a dime's worth of up/down action in the early going in Far East trading on their Tuesday morning, the silver price didn't do a lot until 1 p.m. in London.  At that point there was a vicious 2% down/up move that got hammered flat almost immediately---and just minutes before the Comex open.  After that, the price didn't do a lot, but did rally into positive territory in the last 30 minutes of trading before the 5:15 p.m. EST close of electronic trading.

The low and high ticks were reported as $15.895 and $15.56 in the March contract.

Silver finished the Tuesday session at $15.79 spot, up 11 cents from Monday's close.

Platinum was in rally mode almost from the moment that trading began at the 6 p.m. New York open on Monday evening, hitting its interim high minutes after Zurich opened.  From there it got sold down until about 20 minutes before the Comex open---and then away it went to the upside once again, hitting its high tick about 10:45 a.m. EST.  After that it chopped sideways into the close.  Platinum finished the Tuesday session at $1,187 spot, up $12 from Monday's close.

Palladium didn't do much, chopping higher in a five dollar range---and closed at $812---up $3 on the day.

The dollar index finished the Monday trading session at 89.79---and when it opened on Monday evening, it began to slide a bit, with the 89.65 low coming a minute or two after 9 a.m. GMT on their Tuesday morning.  The rally that commenced at the point, ended at its 90.14 high a minute or so before the London p.m. gold fix.  After that it chopped sideways in a very tight range---and finished the Tuesday session at 90.07---up another 28 basis points.

Here's the six-month U.S. dollar index to put this week's movements into some sort of perspective.

The gold stocks opened unchanged---and then rallied strongly, hitting their highs around 12:20 p.m. EST---and up over 3%.  From that point they began to slide, but starting shortly after 2:15 p.m. relentless and continuous selling pressure appeared---and by 3:00 p.m. all the gold stocks were down on the day---and from there they chopped sideways into the close.  The HUI finished the Tuesday session down 1.18%.

The silver equities put in a carbon-copy performance, except for the fact that at their high tick, they were up over 4%.  The downside from there was the same, complete with the mystery not-for-profit seller between 2:20 and 3:00 p.m. EST.  Nick Laird's Intraday Silver Sentiment Index closed down 0.99%.

We've seen many instances in the last several months where big intraday gains have all but disappeared by the close or, like yesterday, down on the day.  It doesn't look like free-market trading to me---but you're entitled to your own opinion on that.

The CME Daily Delivery Report showed that 246 gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Friday.  The big short/issuer was HSBC USA with 234 contracts---and the only long/stopper of note was JPMorgan out of its in-house (proprietary) trading account with 242 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that December gold open interest declined by 41 contracts---and is now down to 545 contracts minus, of course, the 246 contracts due to be delivery on Friday.  Silver open interest for December dropped by 4 contracts---and is now down to 31 contracts, minus the two in the previous paragraph.

After a 96,000 troy ounce deposit in GLD last Friday, an authorized participant removed a very chunky 374,652 troy ounces yesterday---almost 12 metric tonnes.  That's a lot.  To go along with that big withdrawal in GLD, there was even more gargantuan withdrawal from SLV.  This time an authorized participant removed 5,842,153 troy ounces.  There has been no price activity during the last five trading days that would warrant withdrawals of this size in either GLD or SLV.  Withdrawals maybe, but nothing that would justify these amounts.  I would guess that that the metal withdrawn was more desperately needed elsewhere.

The good folks over at Switzerland's Zürcher Kantonalbank updated their Web site with the changes in their gold and silver ETFs as of the close of trading on Friday, December 19---and here is what they had to report:  Their gold ETF sold 39,647 troy ounces, which is a pretty decent amount for this ETF.  In silver, that ETF declined by 65,418 troy ounces.

There was a small sales report from the U.S. Mint yesterday.  They sold 1,000 troy ounces of gold eagles---1,000 one-ounce 24k Gold Buffaloes---and another 55,000 Silver Eagles.

Monday was a real yawner over at the Comex-approved depositories.  In gold, only 21,379 troy ounces were reported received---all at Canada's Scotiabank---and nothing was shipped out.  In silver, nothing was reported received---and only 25,001 troy ounces were shipped out---all out of Brink's, Inc.

I have the usual number of stories for a midweek column---and I hope you have time over the next few days to read the ones that interest you.

 

¤ Critical Reads

Fed Tightening on Deck After Q3 GDP Soars to 5% on Revisions, Highest Since 2003

And just like that, Q3 GDP, the one for the quarter ended September 30, was revised from 3.9% (which in turn was revised higher from 3.5%) to a mind blowing 5% -- the highest print since Q3 2003 when GDP rose by 6.9%. This was above the highest Wall Street forecast of 4.7%, higher even than Joe Lavorgna's.

The drivers: unprecedented revisions to Personal Consumption which supposedly rose by 3.2% in Q3 as opposed to the 2.2% prior reported, and 2.5% expected. Consumption accounted for 2.21% of the final 5.0% GDP print: this was the highest since Q4 2010 when it rose 2.8%. In fact, everything was revised higher: fixed investment rose 1.21% compared to the 0.97% reported previously; private inventories were virtually unchanged after allegedly subtracting 0.6% from growth in the original Q3 GDP estimate; net trade was unchanged adding 0.77% to GDP and finally the government boosted GDP a little as well, contributing 0.8%.

In other words, it is all downhill from here, as the subprime fueled boom in consumer spending in the late summer will certainly not be repeated any time soon, Q4 capex is crashing (as the durables report just confirmed), and inventory restocking took place far earlier than expected, meaning expectations of a low 2% spring for Q4 GDP will now have to be revised lower as consumption was pulled aggressively into the present.

Does this stink to high heaven or what???  I can smell the b.s. all the way up here in Edmonton.  This short commentary, with two excellent charts, appeared on the zerohedge.com Internet site at 8:51 a.m. EST Tuesday morning---and I thank reader "David in California" for today's first story.

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Here Is the Reason for the "Surge" in Q3 GDP

Back in June, when we were looking at the final Q1 GDP print, we discovered something very surprising: after the BEA had first reported that absent for Obamacare, Q1 GDP would have been negative in its first Q1 GDP report, subsequent GDP prints imploded as a result of what is now believed to be the polar vortex. But the real surprise was that the Obamacare boost was, in the final print, revised massively lower to actually reduce GDP!

Of course, even back then we knew what this means: payback is coming, and all the BEA is looking for is the right quarter in which to insert the "GDP boost".

Two-thirds of the "boost" to final Q3 personal consumption came from, drum roll, the same Obamacare which initially was supposed to boost Q1 GDP until the "polar vortex" crashed the number so badly, the BEA decided to pull it completely and leave this "growth dry powder" for another quarter. That quarter was Q3.

This is another story from the Zero Hedge Web site.  This one appeared there at 2:45 p.m. EST yesterday afternoon---and it's certainly worth reading.  This one is courtesy of Manitoba reader U.M.

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The Housing Recovery Remains Cancelled Due to Six Months of Downward Revisions

Following last month's surge to record high home prices, it is perhaps no surprise that for the sixth month in a row, home prices have been revised lower.

New Home Sales printed 438k, down from prior revised lower 445k and missing expectations of a surge to 460k...missing for 8 of the last 10 months

However, the key focus should be on the epic revisions of the (by now useless) home sales. For the period May - November, the initial new home sales prints amount to 2.779MM houses. Post revision, the number plunges by 22% to 2.168K. There goes the housing pillar of recovery (let's hope economists are wrong and rates don't rise next year, eh?)

This is the third Zero Hedge article in a row---and this one is courtesy of reader M.A.  It showed up there at 10:15 a.m. EST yesterday.  It's worth reading as well---as the charts tell all.

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James Rickards: US Stock Market "Feels Like a Bubble"

The S&P 500 index has more than tripled from its March 2009 low, standing just below its record high close of 2,075.37.

But that puts it in dangerous territory, says James Rickards, senior global strategist at West Shore Funds and author of "The Death of Money: The Coming Collapse of the International Monetary System."

The U.S. stock market "just feels like a bubble to me," he tells Kitco News. "I'm not saying it couldn't go up, they may go up more. But when they come down, they'll come down hard and fast, and I don't want to be around when that happens."

This short commentary was posted on the moneynews.com Internet site at 6:20 a.m. EST yesterday morning---and I thank Brad Robertson for sending it our way.

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EDITORIAL: The New York Sun --- Kaboom?

"Kaboom! Dow 18K” is the headline atop the Drudge Report. It links to a story on the Bloomberg wire reporting that the Dow Jones Industrial Average “rallied past 18,000 for the first time, after data showed the world’s largest economy grew at the fastest pace since 2003 last quarter.” By 4 p.m. the Dow had gained 64.73 points and hit 18,024, while Standard and Poor’s 500 Index hit a record 2,082.17 and the American economy was expanding at an annualized 5% in the third quarter as, the Bloomberg noted, “consumers and businesses spent more than was previously estimated.”

What the story failed to note is that the value of the Dow — that is, its worth in ounces of gold — is nowhere near a record. This can be glimpsed in the charts that are kept by pricedingold.com. The chart illuminates that even with the kurrent kaboom, the current value of the Dow, at just under 450 ounces of gold, is below where it was at the start of the Obama administration, when it was near 350 ounces, and way down from its record of 1,400 ounces part way through 1999. The value of the Dow has certainly been trending upward in recent months, the chart of pricedingold.com suggests. It ducked under 200 ounces of gold at one point during the Great Recession.

It is, however, nowhere near a record.

This short five-paragraph editorial appeared on The Sun's Web site yesterday---and it's definitely worth reading.  I found it in a GATA release yesterday.

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EDITORIAL: The New York Times --- Prosecute Torturers and Their Bosses

Since the day President Obama took office, he has failed to bring to justice anyone responsible for the torture of terrorism suspects — an official government program conceived and carried out in the years after the attacks of Sept. 11, 2001.

He did allow his Justice Department to investigate the C.I.A.'s destruction of videotapes of torture sessions and those who may have gone beyond the torture techniques authorized by President George W. Bush. But the investigation did not lead to any charges being filed, or even any accounting of why they were not filed.

Mr. Obama has said multiple times that “we need to look forward as opposed to looking backwards,” as though the two were incompatible. They are not. The nation cannot move forward in any meaningful way without coming to terms, legally and morally, with the abhorrent acts that were authorized, given a false patina of legality, and committed by American men and women from the highest levels of government on down.

Today’s blinkered apologists are desperate to call these acts anything but torture, which they clearly were. As the report reveals, these claims fail for a simple reason: C.I.A. officials admitted at the time that what they intended to do was illegal.

This absolute must-read commentary by the editorial board of The New York Times stops just short of saying that Dick Cheney et al. belong in jail.  Cheney is one sick psychopathic puppy dog.  This must-read commentary was posted on the nytimes.com Web site on Sunday sometime---and it's courtesy of Roy Stephens.

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British Pound Drops as Figures Reveal "Unsustainable" Current Account Deficit

Britain's recovery is more fragile than previously thought, official data showed on Tuesday, as statisticians revised down growth for most of last year and revealed that the U.K.'s current account deficit is now at its joint-widest on record.

Sterling dropped against the dollar on Tuesday after new figures showed growth was less robust between the second quarter of 2013 and second quarter of 2014 than previously thought.

Weaker manufacturing growth, a smaller than expected surplus in services exports and weaker government consumption over the period were behind the downgrades, the ONS said.

While the Office for National Statistics [ONS] left its final estimate of third quarter GDP growth unchanged at 0.7pc, the year-on-year figure fell from 3pc to 2.6pc due to downward revisions to growth in each of the five previous quarters.

Why is all this a surprise?  The U.K. is bankrupt, just like Spain, Portugal, and Italy---or France.  What the Brits need to do is what the BLS did in the U.S. yesterday---add in Obamacare or some other b.s. number so the figures come out 'cooked' to perfection.  This article appeared on the telegraph.co.uk Internet site at 12:00 p.m. GMT on their Tuesday---and I thank South African reader B.V. for finding it for us.

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Royal Bank of Scotland Freezes Bonuses of 18 Traders Amid Forex-Rigging Review

Royal Bank of Scotland has frozen the bonuses of 18 traders as part of a continuing review of the alleged rigging of foreign exchange rates.

The bank, which remains 81% owned by taxpayers, said it had made the decision to hold the payments as it continues to investigate the conduct of more than 50 former and current employees.

Six employees are in what RBS described as a disciplinary process. Three of them have been suspended as the investigation continues.

Bonuses?  These guys should be kicking bulls hit down the street.  The article appeared on theguardian.com Internet site at 3:54 p.m. GMT on Monday---and it's the second contribution in a row from reader B.V.

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Greece’s Presidential Election: Second Round Results Do Not Elect Stavros Dimas as Greek President

The second round of voting concluded with a negative result on the election of a new Greek President by the Greek Parliament a few minutes earlier. The only candidate nominated by the coalition government partners, New Democracy and PASOK, and Greek Prime Minister Antonis Samaras’ favorite, is the former Foreign Minister of the Papademos administration, and former EU commissioner, Stavros Dimas.

‘Yes’ to Dimas’ election voted a total of 168 MPs, while 131 blank votes opposed the election. One MP was not present during the vote.

During this second round, at least 200 votes were needed in order to elect a new President. The final round of voting takes place on Dec. 29, where 180 votes are required — as the Greek Constitution declares.

With 168 votes in the second round, the Greek coalition government is seeking at least 12 additional MPs willing to vote for Dimas in order for the country not to be driven to snap general elections. The Greek Constitution states that if a President is not elected, the country must hold general elections within a month.

This article appeared on the greekreporter.com  Internet site yesterday sometime---and my thanks go out to Harry Grant for sharing this with us.

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Ukrainian Combat Jet Returned Without Missiles After MH17 Crash: Reports

A Ukrainian air force Su-25 combat jet took off from an airbase in eastern Dnipropetrovsk carrying air-to-air missiles and returned without them on the day a Malaysia Airlines plane crashed in eastern Ukraine in July, Komsomolskaya Pravda newspaper reported, citing an airbase employee.

The employee, who claims to be an eyewitness, said on July 17 that three Ukrainian combat jets took off, and that one of them, an Su-25, was carrying air-to-air missiles.

“After a while only one jet [of the three] returned, which had had those missiles… It returned without the missiles. The pilot was very frightened,” the man said. The employee stressed that only the returned Su-25 had been equipped with air-to-air missiles, and said he was sure it was not air-to-ground missiles.

The airbase worker said he remembered the pilot saying “the wrong plane” and "the plane was in the wrong place at the wrong time" after he returned from the flight.

I've seen this news item pop up on two different websites in the last couple of days.  I'm not sure what to make of it, but the one thing that I do know is that Ukraine and 'the West' are in no hurry to resolve the circumstances around Flight MH17.  Still no air traffic control recordings---nor anything from the black boxes---has been released to the public.  You have to ask yourself why that is the case.

This news story put in an appearance on the sputniknews.com Internet site at 9:37 a.m. Moscow time on their Tuesday morning, which was 1:37 a.m. EST.  It's another offering from reader M.A.

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Russia to Probe Media Reports that Ukraine Military Shot Down MH17

Russia’s Investigative Committee is investigating a Russian newspaper report alleging that a Ukrainian military jet shot down Malaysian Airlines passenger plane MH17 over the rebel-held eastern part of the country last summer.

“Investigators have talked to the editor-in-chief and journalists of the ‘Komsomolskaya Pravda’ newspaper and have taken the contact details of the Ukrainian citizen [cited in the report],” spokesman for the committee Vladimir Markin said.

He added that the witness would be interviewed as part of the Russian investigation into the use of banned weapons and methods of warfare in Ukraine. The information he shares will be cross-checked, he added.

This Russia Today news item was posted on their Web site at 9:44 a.m. Moscow time on their Tuesday morning---and it's courtesy of Roy Stephens.

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Ukraine Votes to Abandon Non-Aligned Status and Join NATO

Prospects for a political solution to the Ukraine crisis took a turn for the worse Tuesday, when parliament voted to relinquish the "nonaligned" status the country has maintained since its independence and instead seek to join NATO. Russia, whose entire Ukraine strategy has been based on preventing the Western alliance from establishing a base on its doorstep, immediately condemned the move — but there's little reason to believe NATO will be in any hurry to accept the defense obligations attached to awarding membership to a country locked into a potentially hot war with its more powerful neighbor.

Russian Foreign Minister Sergei Lavrov called Ukraine's renunciation of its neutral military and political status a "counterproductive" step that would only boost tensions around the crisis in Ukraine’s east.

"It will only escalate the confrontation and creates the illusion that it is possible to resolve Ukraine's deep internal crisis by passing such laws," TASS news agency quoted Lavrov as saying.

Addressing deputies in Kiev before the vote, Ukrainian Foreign Minister Pavlo Klimkin said the decision underscored the country's determination to pivot toward Europe and the West.

This story showed up on the aljazeera.com Internet site at 10:06 a.m. EST on Tuesday---and I thank International Man Senior Editor Nick Giambruno for passing it around yesterday.

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"Counterproductive": Ukraine Seeking NATO Membership "a False Solution," Says Russia

Kiev’s latest move to become a NATO ally is counterproductive and gives rise to false hope for resolving its political crisis, Moscow said. The Ukrainian parliament voted to repeal a law that upheld the country’s non-participation in military blocks.

The move on Tuesday is a step towards becoming a member of the North-Atlantic Treaty Organization, a goal the post-coup authorities in Kiev have made a key point of their foreign policies. Kiev says that Russia is the cause of the civil war that led to eastern parts of the country rebelling against the central government and hopes that NATO’s military might will help resolve the situation.

This is counterproductive. It only escalates the confrontation and creates the illusion that the internal national crisis in Ukraine can be solved through adoption of laws like that,” Russian Foreign Minister Sergey Lavrov commented on the new legislation.

This news item was posted on the Russia Today Internet site at 1:21 p.m. Moscow time on their Tuesday afternoon---and it's the third contribution of the day from Roy Stephens.

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Russian Warning: No gas for Ukraine if It Fails to Pay $1.65 Billion Debt by Next Week

Energy Minister Aleksandr Novak has threatened Russia may turn off the taps if Kiev doesn’t repay the remaining $1.65 billion of its gas debt by the end of December.  The warning comes less than a month after Russia resumed supplying Ukraine with gas.

Kiev had to pay $378 million in advance for December deliveries.

The prepayment regime introduced for Ukraine was just one part of the so–called ‘winter plan’ between Russia and Ukraine. The other critical term is that Kiev needs to repay the remainder of its multi-billion dollar gas debt by the year end.

In early November Kiev paid $1.45 billion of its gas debt, leaving $1.65 billion due.

This very interesting article appeared on the Russia Today Web site at 1:47 p.m. yesterday afternoon Moscow time, which was 5:47 a.m. in New York---and it's another offering from Roy Stephens, for which I thank him.

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Informal Capital Controls Arrest Russian Ruble's Slide

The Russian rouble hit its highest levels in two weeks on Tuesday, shored up by informal capital control measures designed to head off a repeat of the galloping inflation and mass protests that marked Russia's 1998 financial crisis.

The government put pressure on state-owned exporters on Tuesday to sell dollars while officials and banking sources said the central bank had installed supervisors at the currency trading desks of top state banks. ...

Analysts said the measures were effectively a softer version of capital controls, adding that they did not believe President Vladimir Putin, who has drawn much of his popularity from financial stability and rising prosperity, would break his pledge not to resort to full-fledged controls.

This longish, but worthwhile Reuters article, filed from Moscow, appeared on their Internet site at 1:33 p.m. EST Tuesday afternoon---and it's a story I found posted over on the gata.org Internet site.

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Ruble at Two-Week High as Central Bank Pulls Out Big Financial Tools

The Russian ruble hit a two-week high Tuesday of 53 against the USD, showing strong signs of recovery after hitting rock bottom one week ago on 'Black Tuesday'. The Central Bank and government have taken swift action to shore up the ailing ruble.

The Russian ruble improved to 53 in early day trading, a more than 33 percent increase since just 1 week ago when it hit 80 against the US dollar. The Russian ruble suffered a ‘perfect storm’ last week, and is improving for the third consecutive trading session on the Moscow Exchange Tuesday. By 4:00pm in Moscow, it had weakened to 54.72 against the greenback.

The Russian government and the Central Bank of Russia (CBR) have made a significant effort in the last couple of days to stop the ruble’ s free fall. Russia’s five huge oil exporters including Gazprom and Rosneft have been ordered to sell part of their foreign exchange revenues in the next couple of months, Kommersant reports Tuesday. This is expected to add an estimated $1 billion daily to the market, which should serve as strong support for the ruble.

This news item, filed from Moscow, appeared on the Russia Today Web site at 10:06 a.m. local time on their Tuesday morning---and it's also courtesy of Roy Stephens.

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Singapore Rejects Calls to Join Anti-Russian Sanctions: Russian Diplomat

Despite strong pressure from the United States, Singapore has unequivocally said it will not join Western sanctions over Ukraine, Russian Ambassador to Singapore Leonid Moiseyev told Tass on Wednesday.

Singapore’s stance “is quite consistent and principled - the imposition of sanctions is prerogative of the United Nations, the Security Council, and without this sanctions are unlawful,” the ambassador said.

As a very attractive investment centre, Singapore “proceeds from the premise that sanctions violate the freedom of trade, normal international cooperation,” Leonid Moiseyev added.

This article, filed from Singapore, showed up on the itar-tass.com Internet site at 6:52 a.m. Moscow time on their Wednesday morning, which was 10:52 p.m. on Tuesday evening EST.  A similar story, also courtesy of Roy, appeared on the same Web site---and it's headlined Russian parliament speaker thanks Serbia for its refusal to join anti-Russian sanctions.

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Pepe Escobar: Russia, China Mock Divide and Rule

The Roman Empire did it. The British Empire copied it in style. The Empire of Chaos has always done it. They all do it. Divide et impera. Divide and rule - or divide and conquer. It's nasty, brutish and effective. Not forever though, like diamonds, because empires do crumble.

A room with a view to the Pantheon may be a celebration of Venus - but also a glimpse on the works of Mars. I had been in Rome essentially for a symposium - Global WARning - organized by a very committed, talented group led by a former member of European Parliament, Giulietto Chiesa. Three days later, as the run on the rouble was unleashed, Chiesa was arrested and expelled from Estonia as persona non grata, yet another graphic illustration of the anti-Russia hysteria gripping the Baltic nations and the Orwellian grip NATO has on Europe's weak links.  Dissent is simply not allowed.

At the symposium, held in a divinely frescoed former 15th century Dominican refectory now part of the Italian parliament's library, Sergey Glazyev, on the phone from Moscow, gave a stark reading of Cold War 2.0. There's no real "government" in Kiev; the U.S. ambassador is in charge. An anti-Russia doctrine has been hatched in Washington to foment war in Europe - and European politicians are its collaborators. Washington wants a war in Europe because it is losing the competition with China.

Glazyev addressed the sanctions dementia: Russia is trying simultaneously to reorganize the politics of the International Monetary Fund, fight capital flight and minimize the effect of banks closing credit lines for many businessmen. Yet the end result of sanctions, he says, is that Europe will be the ultimate losers economically; bureaucracy in Europe has lost economic focus as American geopoliticians have taken over.

This absolute must-read commentary by Pepe was posted on the Asia Times Web site yesterday sometime---and the first person through the door with it was reader M.A.

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Goldman Sells Metro Metals Warehouse Unit to Reuben Brothers

Goldman Sachs Group has sold its controversial metals warehousing business to Swiss private equity group Reuben Brothers, the Wall Street bank said on Monday.

The deal for Metro International Trade Services comes months after Goldman formally put the business on the block. Goldman bought Metro for an estimated $550 million in 2010, capitalising on a surge in demand for storing base metals such as aluminium as demand slumped.

But the bank came under fierce political and regulatory pressure to divest the Detroit-based operation amid allegations it had encouraged hoarding supply, inflating metals prices. Goldman has denied it did anything wrong.

Last month, Goldman executives testified before a Senate subcommittee on the matter, and reaffirmed the company's intention to sell the metals warehousing unit.

This Reuters story from Tuesday was picked up by the miningweekly.com Internet site---and it's the final offering of the day from South African reader B.V.

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Eagles Not Best Way to Own Silver

The U.S. Mint charges $2 above the spot price when it sells regular silver American Eagle one-ounce coins to its handful of Authorized Purchasers. These APs are then responsible for the costs and logistics of picking up the coins at the West Point or San Francisco Mints. By the time most coin dealers get in a smaller supply of these coins from the larger wholesalers, retail customers could easily be paying $3-$4 per coin above the silver spot price to purchase a 500-coin box of silver Eagles.

At those premiums, retail buyers would now be paying 15-20% or more above the intrinsic metal value of silver Eagles.

These coins have been hugely popular, with combined mintages since the series debuted in 1986 of more than 200 million coins. In absolute terms, even the lowest-mintage 1996-dated coins cannot be called rare.

It is possible to buy the old U.S. 90% silver dimes and quarters (and often half dollars) struck up to 1964 at a lower cost per ounce of silver content.  Privately manufactured silver rounds and ingots in sizes of 1, 10, and 100 ounces can also be acquired for a lower premium than silver Eagles.

At our store here in Edmonton we recommend generic silver---Sunshine, A-Mark, OPM, etc---as it's way cheaper per ounce than the Canadian silver maple leaf.  We avoid the Northwest Territorial Mint as if it had the plague.  Not because their products aren't first rate, because they are.  It's the attitude and delivery times that suck.  Here in Canada we don't recommend the U.S. silver eagle at all, because they have to go through at least one more wholesaler before we see it at the retail level.  This commentary by Patrick Heller appeared on the numismaticnews.net Web site last Thursday---and I thank reader Tolling Jennings for bringing it to our attention.

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Bitcoin Meets Gold in Canadian Startup Seeking 2015 IPO

A Canadian start up says it will enable customers to swap their holdings between gold bullion and bitcoins, and it plans an initial public offering next year.

BitGold Inc.’s website will go live in the first quarter, co-founder Roy Sebag said in an interview today. The Toronto-based company will allow account holders to purchase bitcoins and exchange them for gold redeemable in various vaults around the world, as well as convert the metal back into the digital currency. Customers will also get a debit card, said Sebag, 29.

The company is trying to muscle in on traditional bullion dealers and gold-backed exchange-traded funds, two of the most popular ways for retail investors to get hold of physical gold.

“We’re looking for this to be a scalable Internet platform,” Sebag said. “It’s a platform that looks and feels like a traditional online bank except its totally powered by gold.”

This Bloomberg article, filed from Toronto, was posted on their Internet site at 4:02 p.m. Denver time yesterday afternoon---and it's the second offering of the day from reader U.M.

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German Investors Buy Significantly More Gold – Degussa Experiences Record Sales This November

Compared to the previous months, German investors have bought significantly more precious metals in November. Both the demand for gold and for silver have risen.  Degussa estimates the total sale of gold in November to be around 15 tonnes, with a value of about €450 million, approximately 40% above the monthly average this year. Despite the record month of November, Degussa expects a slight decline in total for the year 2014 in Germany, from 121 tonnes in 2013, down to 116 tonnes.

The high demand for gold in the past months has also elevated the Degussa business itself. In November, Degussa was able to record the strongest revenues since 2011. The high demand for investment metals was evident in the Degussa branch offices, as well as in its online store. Gold items, especially medium-sized bars, weighing an ounce, 100 grams or up to 250 grams, are still extremely popular. Silver is also very popular, shown by the fact that one ounce investment coins from Canada and Australia were bought very frequently.

“The most important reason for institutional and private investors to buy precious metals is the prevailing insecurity concerning the further development of the economy and financial industry“, explains Wolfgang Wrzesniok-Roßbach, CEO and speaker for the Degussa management.

This very interesting precious metal-related story [pdf] was filed from Frankfurt on December 4---and I plucked it from the Sharps Pixley website yesterday.

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Could Russia Back Its Currency with Gold?

Russia's government could still be pushed into using its gold reserves to bolster the falling ruble, currency experts have forecast.

Rumors last week that Russia was on the verge of selling its gold reserves were quashed with the news on Friday that it has continued to add to its holdings. However, John Butler, chief investment officer at Atom Capital, and Alasdair MacLeod, the head of research at online bullion exchange GoldMoney Foundation, believe that Russian President Vladimir Putin could bring the country onto some sort of "gold standard" to try to shore up its economy.

"It was (and still is) in Russia's power to adopt a gold standard," MacLeod told CNBC via email.

"There is no doubt that Russia and China, plus the other Eurasian states in their sphere of influence are all accumulating gold and the indications are they see it as central to replacing the U.S. dollar for cross border trade."

This CNBC gold-related news item appeared on their Web site around midnight on Monday evening---and I found it in a GATA release early yesterday morning.  It's definitely worth reading.

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China Gold Miners Drop Shovels as Slump Bites: Chart of the Day

Even as gold has been mired in a bear market, Chinese miners ramped up production. Now, they are poised to change course as the price slump begins to bite.

The CHART OF THE DAY shows the spot price of gold last month touched a four-year low of $1,132.16 an ounce. For the year through Dec. 22, it’s down 2.1 percent on top of a 28 percent plunge in 2013, the biggest drop in three decades. Meanwhile, China’s mine output rose 15 percent in the first 10 months of this year, outpacing a 3.4 percent gain in the global total, according to World Bureau of Metal Statistics data.

“We will see output growth moderating going forward into 2015 as miners perceive a downtrend in gold prices to persist,” said Lin Haoxiang, an analyst at UBS Group AG in Shanghai. “Falling prices are cutting into some high-cost private mines in China, while some big miners chose to reduce costs by reducing jobs and capital investments.”

Every time you see a precious metal-related story in the mainstream press, you should automatically reach for the salt shaker---and put your b.s. meter on it's most sensitive setting.  This Bloomberg article, filed from Beijing, appeared on their Web site at 3:00 p.m. MST yesterday---and it's the final contribution of the day from Manitoba reader U.M., for which I thank her.

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Goode Comment on China Gold Price Control

Just a brief follow up to my article on China being the ultimate controller of the gold price – Path of the gold price is in China’s hands – in that we received a very interesting and thought provoking comment from Keith Goode from Australia who attended the China Gold Conference held in Beijing in September.

Keith noted as follows: “I agree on China controlling the gold price or Shanghai preventing Comex from selling it down. China commented at their Gold Conference in September 2014 that the $200/oz fall in the gold price in April 2013 was a one-in-2 million year event, and that it partly happened because Shanghai (SFE) could not then trade 24hours per day – now it can.  Also that at the price in September 2014 at ~$1200/oz about one-third of China’s mines were insolvent. So no I don’t see $1000.”

Keith was a highly rated and experienced mining and gold analyst with a career spanning 18 years with South African and Australian banks and brokerages before starting up his own research company, Sydney area based Eagle Research Advisory (ERA), in 2001.  ERA specialises in undertaking commissioned research on mainly Australian mining companies.  He has a particular interest in precious metals and also in China and makes a point of visiting that country every year so has great experience in understanding how the country operates and its policies with respect to precious metals and mining.

This short commentary by Lawrence Williams appeared on his lawrieongold.com Web site yesterday---and it's certainly worth reading.

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¤ The Funnies

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Renaissance Gold has proven through the joint venture business model what exploration success with a tight share structure can do. Renaissance is the spinout of AuEx Ventures that sold in 2010 and made just shy of 100x their first private placement. It takes technical strength and fiscal conservatism to generate meaningful share holder returns in the high-risk exploration business. Please visit our website for more information.

 

¤ The Wrap

There is the matter of extraordinary sales of Silver Eagles from the U.S. Mint. Since April 2011, the U.S. Mint has produced and sold 140 million Silver Eagles, more than in any similar period of time, in a price environment that can only be termed putrid and in which sales of Gold Eagles were notably lower. I would estimate that JPMorgan purchased close to half of the 140 million Silver Eagles sold since April 2011. According to very reliable sources on the retail front, investment demand has been lower over this time, as retail buyers do not buy strongly into a declining price environment in any investment asset. Yet we know for a fact that there has been extraordinary buying of Silver Eagles, even while Gold Eagle sales cooled off notably, so someone had to be buying [them].

If there is one thing that JPMorgan is expert at, given that it commands an army of lobbyists and has more government officials in its back pocket than any other entity on the face of the earth, it is the exploitation of U.S. law and regulations. JPMorgan knew that [the] law dictated that the Mint must produce enough Silver (and Gold) Eagles to meet demand. That law was never intended to allow a single big buyer to demand the extraordinary amount of Silver Eagles that JPMorgan desired to buy, but that’s the purpose behind the exploitation of the law.

The Mint sells Silver Eagles at the prevailing price of silver on the day of the sale. In essence, the Comex price of silver is the price of silver. By controlling the price of COMEX silver, JPMorgan sets the price at which it will buy Silver Eagles. It’s the perfect crime - JPMorgan sets the price of Comex silver and then demands as many coins as the Mint and its suppliers can produce, even if that means producing the coins on a 24/7 basis. Hey, that’s the law. And remember when JPMorgan increased its Comex short position in the summer, assuring that prices were about to drop and what occurred as a result? Sales of Silver Eagles nosedived temporarily and only resumed after prices were brought lower by this crooked bank. - Silver analyst Ted Butler:  20 December 2014

Not much happened yesterday in the precious metal markets---even though I was ready for any possible scenario.  And as I mentioned at the top of this column, all the excellent gains [and then some] in the silver and gold equities vanished before the trading day was done, which is a scenario we've seen on more occasions that I care to remember during the last few months.

The only six-month chart I have is the one for natural gas, as it set a new intraday low for this move down.

As I type this paragraph, the London open is five minutes away.  Precious metal prices are doing precisely nothing.  Gold volume isn't quite 10,000 contracts as of yet---and silver's volume is barely at 2,000 contracts.  The dollar index is down 10 basis points.  Absolutely nothing to see here.

And as I send this out the door at 5:11 a.m. EST, I see that not much has changed since I reported a couple of hours ago.  Volumes are a bit higher, but inconsequential---and the dollar index is now down 18 basis points and back below the 90.00 mark.

I'm not expecting much to happen between now and the weekend, as most traders will be on holidays---and I expect New York to close early today.

Before stepping out the door myself, I thought I'd leave you with this very traditional 16th century English Christmas carol.  Here's the Lithuanian male vocal group "Quorum" singing the " Coventry Carol" a cappella style, which is the way it was originally performed.  The link is here---and you'll never hear a better recording of it than this. Enjoy!

Season's Greetings---and have a wonderful Christmas.

I'll see you on Saturday---and Friday maybe.

Ed Steer