Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

After the usual down tick at the New York open at 6:00 p.m. on their Tuesday evening, the gold price got sold down about five bucks in the first four hours of Wednesday morning trading in the Far East.   It didn't do much until the London open, where the price managed to struggle and break the $1,200 spot price mark on a couple of occasions, with the last one coming at the 10:30 a.m. GMT London gold fix---and by 10:30 a.m. EST, gold was down a couple of bucks.

Then JPMorgan et al, along with their HFT partners in crime, ambushed the market with their algorithms---and the gold price was down twenty bucks in less than 20 minutes.  Then at noon, the price got catapulted higher until it hit its Tuesday closing price in New York.  It hung around unchanged until about 2:20 p.m. in electronic trading, before getting sold down another fourteen bucks by 3:15 p.m. EDT.  From that point it traded sideways into the 5:15 p.m. close.

The high and low ticks were reported by the CME Group as $1,201.70 and $1,173.90 in the December contract.

Gold finished the Wednesday trading session at $1,183.10 spot, down $14.40 from Tuesday's close.  Gross volume was over the moon at 315,000 contracts, but once the roll-overs were subtracted, it netted out at 216,000 contracts, which is still a gargantuan number.

Here's gold's 5-minute tick chart from yesterday courtesy of reader Brad Robertson---and note the volumes on the price moves.   Remember to add two hours for New York Time---and the 'click to enlarge' feature works wonders here.

Silver's price path on Wednesday was the same as gold's, but different in some respects.  The low of the day came around 12:30 p.m. Hong Kong time---and from that point it rallied unsteadily until a few minutes after the COMEX open---and then it flat-lined into the JPMorgan-sponsored shenanigans at 10:30 p.m. in New York.  The noon silver rally blew far past its Tuesday closing price but, once again, 'da boyz' were there to beat silver down to a loss on the day by 2:45 p.m. EST---and it traded flat into the close from there.

The low and high ticks were recorded as $15.87 and $16.535 in the December contract, an intraday move of 4 percent.

Silver was closed on Wednesday at $16.13 spot, down 6 cents from Tuesday's close.  Gross volume was sky-high as well, north of 113,000 contracts, but it all netted out to 57,500 contracts---which is still huge by any stretch of the imagination.

Platinum and palladium weren't spared, either---and both got sold down substantial amounts on the day.  Platinum was closed down 16 bucks---and palladium was closed down 10 bucks.  Note that palladium's high tick came at exactly 10 a.m. EST.

The dollar index closed the Tuesday trading session at 87.61---and it's 87.77 high tick came at 11 a.m. Hong Kong time on their Wednesday morning.  From there the index chopped lower---and on at least three occasions it appeared that 'gentle hands' were required---and provided.  The 87.42 low tick came around 2:15 p.m. EST---and from there it rallied back to above unchanged in very short order.  From there the index chopped sideways, closing the Wednesday session at 87.69---up 8 basis points on the day.

Despite the fact that gold was up a few bucks at the opening of the equity markets in New York yesterday, the gold stocks opened down---and stayed there for the remainder of the day, with the HUI closing almost on its low tick, down 6.03%---giving back almost all its gains from Monday and Tuesday.

It was more or less the same story in the silver equities, as they closed near their lows as well.  Nick Laird's Intraday Silver Sentiment Index closed down 5.76%.

The CME Daily Delivery Report showed that one lonely gold contract was posted for delivery within the COMEX-approved depositories on Friday.

The CME Preliminary Report for the Wednesday trading session showed that gold open interest in the November delivery month is 28 contracts, up 8 from yesterday's report---and for the third day in a row the November o.i. for silver was unchanged at 88 contracts.

There was a withdrawal reported from GLD yesterday.  This time an authorized participant took out 67,271 troy ounces---and as of 9:55 p.m. EST yesterday evening, there were no reported changes in SLV.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes to their gold and silver ETFs as of the close of trading on Friday, November 14.  Their gold ETF declined by 15,966 troy ounces---and their silver ETF dropped by 12,784 troy ounces.

There was a small sales report from the U.S. Mint.  They didn't sell any gold, but sold another 40,000 silver eagles.

It was another decent volume in gold over at the COMEX-approved depositories on Tuesday, but that activity was dwarfed once again by what happened in silver.

In gold, nothing was reported received, but 32,935 troy ounces were reported shipped out---and the link to that activity is here.  In silver, there was 1,084,875 troy ounces reported received---and 760,782 troy ounces shipped out for parts unknown---and the link to that action is here.

Since today is the 20th of the month---and it falls on a weekday---The Central Bank of the Russian Federation will update its website with data for the month of October.

Included in it will be the amount of gold that they have purchased for their reserves during that month---and one of the first stories in my in-box yesterday morning was Mark O'Byrne's commentary over at goldcore.com---and the headline read "Gold Rises After Unusual Russian Central Bank Gold Buying Announcement".  I have the full story in my column, but you can read it now if you wish.

In that story, Russian Central Bank Governor Elvira Nabiullina made the statement that the bank had purchased 150 tonnes of gold so far this year.  Doing some adding and subtracting from Nick Laird's "Russian Reserves" chart shows that they bought pretty close to 1.2 million troy ounces during October to make that 150 tonne number work out right, or around 37 tonnes.

This news will be all over the Internet today, I'm sure---and I'll have the chart, plus the actual number, in tomorrow's column.

Yesterday I got an e-mail, plus a chart, from GATA's good friend Richard Nachbar---and here's what he had to say for himself:

Hi Ed!

Hello from the Weather Channel's winter headquarters! Between lake-effect snow bands, we thought it would be a good time to update our in-house U.S. 90% SILVER COINS graph, depicting the premium/discount history going back to 1998.

You may recall that I sent the previous update to you in May 2013, right after the big silver price smack down, when the premium on these popular coins spiked to above 15% and the chart left one open to the possibility of a third spike to 40%.

Looking back today, hindsight shows us that the premiums eventually drifted back to 5%, then flat a few weeks ago. Then the recent silver price drop to $15.00 per ounce brought out more buyers than sellers and the premium shot up to 10.52% last Friday where we also stand today.  The only way I see the premium going much higher would be if silver prices fell below $15.00, as in late 2008.  I would be happy to see the rising premium alternative of a shortage across the entire spectrum of silver products combined with rising silver prices, but in my opinion that will not happen in 2014.

So, we wait.

Richard

I don't have all that many stories today, although some of them are rather lengthy---and I hope you have the time for the most important ones.

 

¤ Critical Reads

Treasury: Global Investors Pour Record Amount Into U.S.

The U.S. posted a record inflow of long-term portfolio investments in September as the dollar strengthened and foreign buyers accumulated corporate debt, Treasurys and agency securities.

Foreigners bought a net $164.3 billion in long-term financial assets after $52.1 billion in purchases in August, the Treasury Department said in a statement Tuesday in Washington. The previous record was an inflow of $139.7 billion in March 2010.

The figures suggest the U.S. is luring investors with economic growth that’s outpacing other developed nations, as the euro area faces low inflation and slack demand and Japan copes with a recession. The data also showed Americans are selling foreign securities at a record pace.

The U.S. is looking like the cleanest dirty shirt from a global perspective,” said Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York. “You had the U.S. actually lead the way in global growth, and a lot of people were attracted by that — they’re trying to keep their holdings more domestic.”

"Cleanest dirty shirt" pretty much sums it up, as does the phrase "the best looking horse in the glue factory."  Today's first news item was posted on the moneynews.com Internet site at 5:57 p.m. EST Wednesday afternoon---and it's courtesy of West Virginia reader Elliot Simon.

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Yellen Gets That Sinking Feeling Greenspan Once Knew

Alan Greenspan couldn’t control long-term interest rates a decade ago, and bond investors are betting Janet Yellen’s luck will be no better.

When then-Federal Reserve Chairman Greenspan raised the benchmark overnight rate from 2004 to 2006, long-term borrowing costs failed to increase, thwarting his attempts to tighten credit and curb excesses that contributed to the worst financial crisis in 80 years.

“We wanted to control the federal funds rate, but ran into trouble because long-term rates did not, as they always had previously, respond to the rise in short-term rates,” Greenspan said in an interview last week. He called this a “conundrum” during congressional testimony in 2005.

That same year, then-Fed Governor Ben S. Bernanke said a glut of investment dollars from overseas was holding down U.S. interest rates as savers in economies such as China sought safe places to stash their export earnings.

This Bloomberg article, filed from New York, appeared on their Internet site at 2:08 p.m. EST yesterday afternoon---and it's the second offering in a row from Elliot Simon.

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Editorial: In Mr. Obama’s own words, acting alone is ‘not how our democracy functions’

Democrats urging President Obama to “go big” in his executive order on immigration might pause to consider the following scenario:

It is 2017. Newly elected President Ted Cruz (R) insists he has won a mandate to repeal Obamacare. The Senate, narrowly back in Democratic hands, disagrees. Mr. Cruz instructs the Internal Revenue Service not to collect a fine from anyone who opts out of the individual mandate to buy health insurance, thereby neutering a key element of the program. It is a matter of prosecutorial discretion, Mr. Cruz explains; tax cheats are defrauding the government of billions, and he wants the IRS to concentrate on them. Of course, he is willing to modify his order as soon as Congress agrees to fix what he considers a “broken” health system.

That is not a perfect analogy to Mr. Obama’s proposed action on immigration. But it captures the unilateral spirit that Mr. Obama seems to have embraced since Republicans swept to victory in the midterm elections. He is vowing to go it alone on immigration. On Iran, he is reportedly designing an agreement that he need not bring to Congress. He already has gone that route on climate change with China.

The legal or constitutional case for each is different, but the rationales overlap: Congress is broken, so Mr. Obama must act. Two-thirds of Americans did not vote in the midterms, and the president must represent them, too. He has tried compromise, and the Republicans spurned him.

This 'up yours Mr. President' from The Washington Post's Editorial Board appeared on their website on Monday---and that makes it three in a row from Elliot Simon.

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Ice to close upper Mississippi from November 20, earliest on record

The shipping season on the upper Mississippi River will end on Thursday as ice surrounding locks and dams near Minnesota's Twin Cities forced the earliest winter closure on records that date back to 1969, the U.S. Army Corps of Engineers said.

"There's so much ice through the whole system," said Bryan Peterson, navigation manager for the Army Corps' St. Paul district. "They're getting the barges they can out and not risking getting stuck there all winter."

There were two tow boats waiting to pass lock and dam No. 2 near Hastings, Minnesota. Once they moved down river, no more vessels were expected, Peterson said.

The closure came as a blast of arctic air brought early snow and freezing temperatures across the United States.

This Reuters story, filed from Chicago, appeared on the news.yahoo.com Internet site about 8:45 CST last evening---and I found it all by myself!

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Jail threat is biggest deterrent for bad bankers, says Bank of England official

The threat of jail is a far more effective tool for reining in bad behaviour at banks than the prospect of losing bonuses, according to the Bank of England policymaker leading a review into financial market regulation.

Minouche Shafik told MPs that criminal sanctions “are top of the list in making them think twice, making them pay is further down the list”.

It came as a court in Iceland sentenced the former chief executive of Landsbanki, to 12 months in prison for market manipulation.

Sigurjon Arnason was convicted of manipulating the bank's share price and deceiving investors in the run up to the financial crisis that saw Iceland's banking system collapse.

At least someone agrees with me, but talk is cheap.  Will they walk the walk?  I found this story on the telegraph.co.uk Internet site at 6:41 p.m. GMT on Wednesday evening.

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Hungary to start South Stream construction in 2015 despite western pressure

Hungary plans to break ground next year on its stretch of the South Stream pipeline to send natural gas from Russia to Europe. It is in defiance of E.U. and U.S. calls to halt the project over frosty relations with Moscow.

One major reason Hungary has thrown its support into South Stream is the lack of a better option since the EU-backed Nabucco pipeline, which was supposed to deliver gas from Azerbaijan to Europe, failed.

"Nabucco will not be built and after nearly 10 years of hesitation, and especially in light of the Ukraine situation, we need to act. This is a necessity," Hungarian Energy Minister Andras Aradszki told Reuters.

This Russia Today story showed up on their Internet site at 4:45 p.m. Moscow time on their Wednesday afternoon, which was 8:45 a.m. EST.  My thanks go out to Roy Stephens for sending it.

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Ukraine's coal reserves 'unprecedented' low, not enough for another month - Deputy Energy Minister

Two out of ten coal-fired power plants in Ukraine only have enough stock for a few days, as the key coal mines supplying the plants are located in Donbass where Kiev and self-defense forces are fighting, says Ukraine's Deputy Energy Minister Yury Zyukov.

In 2012 and 2013 Ukraine extracted about 85 million tons of coal, of which 40 billion tons were used for domestically, Zyukov told Glavkom magazine, adding that previously Ukraine even exported coal.

“Situations as this one have never happened in the history of an independent Ukraine, we have never had such precedents.”

“Do you know that Zmiev TPP has 30 thousand tons of coal reserves and the Tripol TPP has 50 thousand? That is literally enough for just for a few days,” Zyukov said. “That is why we needed coal from South Africa - we have no reserves.”

This is another article from the Russia Today Internet site.  This one showed up on there at 4:09 p.m. Moscow time yesterday afternoon---and it's the second contribution in a row from Roy Stephens.

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Why the Western Hype of Fake Russian Invasions?

On Friday, the Ukrainian military’s P.R. machine spun-up its latest episode of the illusive “Russian Invasion”, this time accusing Moscow of dispatching a column of 32 tanks and “truckloads of Russian troops” into the country’s eastern region.

The West are being very choosy with their language – in case they have to deny they ever said it later. Presently, the West and Kiev are stopping short of labeling the non-event as an invasion, instead calling it “Russian aggression”, and a “cross-border incursion” to aid separatists, with the all-important caveat of “unconfirmed report”, a PR system standardized by CIA media handlers currently in residence inside the U.S.-backed Kiev regime.

Another ‘Russian Invasion’?

The timing, and the sheer desperation of this latest P.R. move is designed for one thing: deflecting public attention away from the fact that Ukrainian military have already broken the fragile ceasefire with rebels, as Kiev resumes its shelling of civilian areas around Donetsk and Lugansk.

This article, a repost from the 21stcenturywire.com Internet site back on November 8---appeared on the russia-insider.com Internet site just after midnight Moscow time on their Wednesday morning---and it's courtesy of South African reader B.V.  It's worth reading.

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The 'Caliphate's' Colonies: Islamic State's Gradual Expansion into North Africa

The caliphate has a beach. It is located on the Mediterranean Sea around 300 kilometers (186 miles) south of Crete in Darna. The eastern Libya city has a population of around 80,000, a beautiful old town and an 18th century mosque, from which the black flag of the Islamic State flies. The port city is equipped with Sharia courts and an "Islamic Police" force which patrols the streets in all-terrain vehicles. A wall has been built in the university to separate female students from their male counterparts and the disciplines of law, natural sciences and languages have all been abolished. Those who would question the city's new societal order risk death.

Darna has become a colony of terror, and it is the first Islamic State enclave in North Africa. The conditions in Libya are perfect for the radical Islamists: a disintegrating state, a location that is strategically well situated and home to the largest oil reserves on the continent. Should Islamic State (IS) manage to establish control over a significant portion of Libya, it could trigger the destabilization of the entire Arab world.

The IS puts down roots wherever chaos reigns, where governments are weakest and where disillusionment over the Arab Spring is deepest. In recent weeks, terror groups that had thus far operated locally have quickly begun siding with the extremists from IS.

In September, it was the Algerian group Soldiers of the Caliphate that threw in its lot with Islamic State. As though following a script, the group immediately beheaded a French mountaineer and uploaded the video to the Internet. In October, the "caliphate" was proclaimed in Darna. And last week, the strongest Egyptian terrorist group likewise announced its affiliation with IS.

This longish essay was posted on the German website spiegel.de at 7:20 p.m. EDT on their Tuesday evening---and it's courtesy of Roy Stephens. Normally I'd save this for the weekend, but it's a slow news day, so here it is now.

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Inside Islamic State’s oil empire: how captured oilfields fuel Isis insurgency

Islamic State has consolidated its grip on oil supplies in Iraq and now presides over a sophisticated smuggling empire with illegal exports going to Turkey, Jordan and Iran, according to smugglers and Iraqi officials.

Six months after it grabbed vast swaths of territory, the radical militant group is earning millions of dollars a week from its Iraqi oil operations, the U.S. says. Coalition air strikes against tankers and refineries controlled by Isis have merely dented – rather than halted – these exports, it adds.

The militants control around half a dozen oil-producing oilfields. They were quickly able to make them operational and then tapped into established trading networks across northern Iraq, where smuggling has been a fact of life for years. From early July until late October, most of this oil went to Iraqi Kurdistan. The self-proclaimed Islamic caliphate sold oil to Kurdish traders at a major discount. From Kurdistan, the oil was resold to Turkish and Iranian traders. These profits helped Isis pay its burgeoning wages bill: $500 (£320) a month for a fighter, and about $1,200 for a military commander.

The U.S. has pressured Iraqi Kurdistan’s leaders to clamp down on smuggling, with limited success. But oil is still finding its way to Turkey via Syria, with Islamic State deftly switching from one market to another, smugglers say, with cheap crude channelled to Jordan instead. On Monday, a U.N. panel urged countries neighbouring Iraq and Syria to seize oil trucks that continue to flow out from jihadist-occupied territory.

This essay appeared on The Guardian website at 1:06 p.m. GMT yesterday afternoon---and I thank reader B.V. for digging it up for us.

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Crashing Steel Prices Lead to Largest Chinese Bankruptcy, "Will Be Followed By Others"

With growth rates for steel products at or near record lows and prices for end-product having plunged to record lows, it is little surprise that the Steel industry would provide the largest Chinese bankruptcy yet in this cycle.

As Bloomberg reports, unlisted Haixin Iron & Steel - which halted production and defaulted on CNY3 bn in March - has started bankruptcy proceedings. Having spent 8 months hoping for the government bailout that every Western onlooker believes is every firm's god-given right, a reorganization application for the Wenxi, Shanxi province-based company (with $1.7 billion of total debt) was accepted by the Yuncheng City Intermediate People’s Court.

This is just the start as "Haixin Group’s bankruptcy will be followed by others," according to researcher Mysteel.com's Chief Analyst Xu Xiangchun.

This interesting article put in an appearance on the Zero Hedge website at 8:16 a.m. EST on Wednesday morning---and I thank reader 'David in California' for passing it around.

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Senate report criticizes Goldman and JPMorgan over their roles in commodities market

A two-year Senate-led investigation is throwing back the curtain on the outsize and sometimes hidden sway that Wall Street banks have gained over the markets for essential commodities like oil, aluminum, and coal.

The Senate's Permanent Subcommittee on Investigations found that Goldman Sachs and JPMorgan Chase assumed a role of such significance in the commodities markets that it became possible for the banks to influence the prices that consumers pay while also securing inside information about the markets that could be used by the banks' own traders.

Bankers from both firms, along with other industry executives and regulators, will testify about the allegations at hearings on Thursday and Friday.

The report provides an unprecedented level of detail about the enormous global operations the banks have built up in recent years since politicians and regulators lifted long-time curbs on banks owning physical commodities and infrastructure.

Of course this includes the precious metals, plus oil and copper.  This must read article put in an appearance on The New York Times website at 5:01 p.m. EST on Wednesday afternoon---and the first person through the door with it was U.K. reader Nigel Bunting.  There was also an AP story about it as well.  It appeared on the abcnews.go.com Internet site at 7:27 p.m. EST last evening.  It's headlined "Report: Role of 3 Big Banks in Commodities Risky"---and it's courtesy of Elliot Simon.

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CFTC Launches National Campaign to Protect Consumers from Financial Fraud

The U.S. Commodity Futures Trading Commission (CFTC) today launched CFTC SmartCheck, a new national campaign to help investors identify and protect themselves against financial fraud. The comprehensive campaign includes a new website, a national advertising campaign and interactive videos that will help investors spot investment offers that are potentially fraudulent. The new website, SmartCheck.CFTC.gov, unveiled today, is an educational tool that helps investors conduct background checks of financial professionals.

“The CFTC is committed to protecting investors from fraud, and we demonstrate that commitment today with the launch of CFTC SmartCheck,” said CFTC Chairman Tim Massad. “This campaign provides investors with new interactive tools that include the website as well as a targeted advertising campaign and collaborative outreach with allied organizations.”

Over the coming months, the CFTC SmartCheck campaign will include online, television, and print advertising slated to run nationwide and additional outreach efforts with organizations aligned with the CFTC’s mission to reduce financial and investment fraud. The campaign will also feature special events to reach investors and encourage them to use the online tools available at SmartCheck.CFTC.gov. In addition to the background-check tools, the SmartCheck.CFTC.gov website includes a range of information for investors, including interactive videos that help illustrate how to avoid fraud.

This news item showed up on the CFTC's website yesterday---and I found it embedded in silver analyst Ted Butler's mid-week commentary yesterday---and this was his scathing right-on-the-money comment on it.  "Here’s the latest announcement from the CFTC warning the public on financial fraud in commodities. Funny, there was no mention of the ongoing scam in COMEX silver which many thousands of market participants have written the agency about. I hate to be cynical but why does this seem like a perfect bureaucratic solution – instead of resolving a manipulation most everyone is aware of, come out instead with a public campaign to warn people of financial fraud in commodities. Marvelous."  I know what we should all do, dear reader, is click on the website and ask them to check out the precious metal price rigging scam on the COMEX.

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Gold Rush in Ohio? Small Town Plays Big Role

Building contractor Alan Stockmeister is known around town for his stewardship of local businesses: radio stations, a movie theater and a bank, for example. But nothing has been quite like his refinery just off Main Street, which has become an outpost in the multibillion-dollar global gold trade.

Ohio Precious Metals LLC owns one of five refineries in the U.S.—there are 73 world-wide—certified to melt scrap gold and pour it into ingots that can be traded on global markets. OPM’s more than 170 workers process several billion dollars a year in gold and silver headed for banks and jewelers in New York, London and Shanghai.

“Historically, gold refineries have been near production sites, mines or the big financial centers where gold is traded,” says David Jollie, a London-based analyst at gold trader Mitsui Precious Metals. Ohio “is not really one of those places.”

OPM has been able to stay in south-central Ohio in part because gold prices, while 30% below their 2011 peak, are about triple what they were in 2004. Sales of gold to make rings, watches and electronics have increased 70% over the last 10 years, according to Thomson Reuters GFMS. Recent price declines mean that gold production at mines hasn’t kept pace, in turn fueling demand for cheaper-to-produce gold scrap.

OPM is a well-known brand name in our store---and reader Ken Hurt sent this Wall Street Journal story our way yesterday

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Silver demand to fall 7% in 2014 – Thomson Reuters GFMS

Demand for silver will post a 7% decline in 2014 because of a slower pace of buying by jewellers and industrial fabricators in the first three quarters of the year, metals consultant Thomson Reuters GFMS said on Tuesday.    

Harmonized European sales tax rates that started in January have driven up retail silver investment product prices, reducing demand on the continent, the Thomson Reuters unit said in an interim market review.     

Thomson Reuters GFMS said it expected total physical demand, which includes jewellery, coins and bars, silverware and industrial fabrication, to fall 6.7% to 31,243.44 tonnes in 2014 from a record high of 33,498.44 tonnes last year.    

Silver industrial demand is forecast to drop 1.8% as the electronics sector keeps shifting to cheaper metals. Jewellery consumption should fall 4.4% because retailers are pushing more gold products to take advantage of lower bullion prices, GFMS said.     For the full year, Thomson Reuters GFMS now forecasts silver prices to average $19/oz an ounce, a 20% decline from $23.79/oz in 2013.

Since it was Gold Field Mineral Services that said this, I'd take this Reuters story with a big grain of salt.  It was picked up by the miningweekly.com Internet site yesterday---and I thank Malcolm Roberts for sharing it with us.

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Koos Jansen: Why did European central banks sell gold?

Focusing on the Netherlands Central Bank's reduction of its gold reserves, Bullion Star market analyst and GATA consultant Koos Jansen asks why the European central banks sold (or purported to sell) so much gold from the announcement of the Washington Agreement on Gold in 1999 through 2010, when such sales stopped almost completely. Jansen cites a comment by the Dutch treasury secretary in 2011 in support of his speculation that the gold sales may have been intended to help redistribute and equalize official gold reserves around the world.

This is exactly what the U.S. economists and fund managers Paul Brodsky and Lee Quaintance speculated in 2012 -- that central banks were moving their gold around so that nations would be better prepared for a complete resetting of the world financial system, in which gold would play an important part for building confidence.

Of course on a planet with actual financial journalism, mainstream news organizations would question central banks about this -- and about everything else central banks do. Since we're living on Earth, Jansen's citing the Dutch parliamentary archive and posing the question it suggests will have to suffice today.

This commentary by Koos is embedded in this GATA release from yesterday---and I thank Chris Powell for writing the above paragraphs of introduction.  It's worth reading.

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Support for Swiss gold referendum proposal weakens as campaign heats up

Support among Swiss voters for a referendum proposal that would force a huge increase in the central bank's gold reserves has slipped to 38 percent, an opinion poll showed on Wednesday, falling short of the majority backing it needs to become law.

Under the "Save our Swiss gold" proposal, the Swiss National Bank would be banned from selling any of its gold reserves and would have to hold at least 20 percent of its assets in the metal, compared with 7.8 percent last month. ...

Wednesday's poll, conducted by Berne-based research institute gfs.bern in partnership with Swiss broadcaster SRG, showed 47 percent opposed the initiative, which has been led by the right-wing Swiss People's Party, while 15 percent were undecided or gave no answer.

This Reuters article, co-filed from Zurich and London, put in an appearance on their website at 11:29 a.m. EST on Wednesday---and I found this story over at the gata.org Internet site.

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Gold Rises After Unusual Russian Central Bank Gold Buying Announcement

Russia’s central bank bought about 150 metric tons of the metal this year, announced Governor Elvira Nabiullina yesterday. The pronouncement immediately created buying in the market, prompting gold to rise to a two week high at $1,200 an ounce.

Russia's central bank Governor Elvira Nabiullina told the lower house of parliament about the significant Russian gold purchases. She is an economist, head of the Central Bank of Russia and was Vladimir Putin's economic adviser between May 2012 to June 2013. 

This announcement is unusual and to our knowledge has not happened before. The announcement by the Russian central bank governor was likely coordinated with Putin and the Kremlin and designed to signal how Russia views their gold reserves as a potential geopolitical and indeed financial and currency war weapon.  

Gold currently constitutes for around 10% of the bank's gold and forex reserves, she added.

"Unusual" is an understatement.  A better word would be "astonishing"---and in case it might have been lost on you, dear reader, I'd bet that this announcement was a veiled threat that, as I've said many time in the past, all Putin has to do is say the word---and the precious metal price management scheme would blow up in a New York minute---and take a large chunk of the Western banking/financial system with it---including Canada's beloved Scotiabank.  This must read commentary by Mark O'Byrne appeared on the goldcore.com Internet site yesterday---and the first person through the door with it was South African reader B.V.

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As The “Sanctions War” Heats Up, Will Putin Play His ‘Gold Card’?

One intriguing possibility is one which Russia has, in fact, contemplated before: Backing the currency with Russia’s gold reserves.[6] In the late 1980s, as the Soviet Union was breaking up, the rouble was in free-fall and inflation was soaring. Russia had essentially zero access to global capital markets and relied on oil exports for hard currency with which to trade with other nations. In 1989, Premier Gorbachev invited two prominent US economists to Russia, where they met with senior economic policy officials and recommended precisely this as the best way to stabilise the rouble. One of the two was former Fed governor Wayne Angell; the other, Jude Wanniski of ‘supply-side’ economic fame. In 1998, Mr Wanniski wrote that he “became alarmed about the financial collapse in Russia,” and decided to “write a piece on how to fix Russia right away, before it was in complete chaos.” In the Wall Street Journal editorial that followed, Mr Wanniski explained the longer history of the gold-backed rouble idea:

In September 1989, the Soviet government of Mikhail Gorbachev invited me to Moscow for nine days to discuss my unorthodox views on how the U.S.S.R. could make the conversion to a market economy. I’d been arguing that the process had to begin by fixing the ruble price of gold at a credible rate of exchange, which I believed then would be a relatively easy thing to do. I still believe that.

This long essay by John Butler appeared on David Stockman's website yesterday---and certainly falls into the absolute must read category.  The first person through the door with this commentary was Dan Lazicki.

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¤ The Funnies









Freegold Ventures Limited is a North American gold exploration company with three gold projects in Alaska. Current projects include Golden Summit, Vinasale and Rob. Both Vinasale and Golden Summit host NI 43-101 Compliant Resource Calculations.

An updated NI 43-101 resource was calculated on Golden Summit in October 2012 and using 0.3 g/t cutoff  the current resource is 73,580,000 tonnes grading 0.67 g/t Au for total of 1,576,000 contained ounces in the indicated category, and 223,300,000 tonnes grading 0.62 g/t Au for a total of 4,437,000 contained ounces in the inferred category. In addition to the Golden Summit Project the Vinasale also hosts a NI 43-101 resource calculation which was updated in March 2013. Indicated resources are 3.41 million tonnes averaging 1.48 g/t Au for 162,000 ounces, and Inferred resources are 53.25 million tonnes averaging 1.05 g/t Au for 1,799,000 ounces of gold utilizing a cutoff value of 0.5 grams/tonne (g/t) as a possible open pit cutoff. Please send us an email for more information, ir@freegoldventures.com

 

¤ The Wrap

When I started [Wednesday's column], silver and gold were steady, only to sell off suddenly around 10:30 AM (EST). This sell-off was followed by a sharp rally, particularly in silver, only once again to sell-off as I complete this piece. Although I am adamant about reading too much into price movement to gauge what’s going on under the surface, there’s something about this volatility that is encouraging. I’m still of the mind that the COT structures in gold and silver are exceedingly bullish and it appears to me that this unusual price volatility may be due to JPMorgan and the other big commercial silver shorts shaking the tree to flush out as much outside selling as possible so that these big silver shorts can buy. I can (and have) look dumb in the very short term, but it feels to me like we can move up sharply at any moment.

The more I contemplate the four month price decline since mid-July in silver (and other commodities) increasingly it looks like the setup of all setups. There was an almost unmistakable deliberate intent to the decline and this has been proven out in the futures’ positioning changes. While unexpected by me, the recent double-crossing by the big silver shorts of the smaller raptors fits in perfectly with the mother of all setups thesis. And while the big traders on the COMEX can bomb the price at will in the short term, it’s hard for me to see what category of traders’ remains that can sell significant quantities of futures contracts. Instead, all I see are the many categories of potential big buyers. - Silver analyst Ted Butler: 19 November 2014

Regarding Wednesday's price action in both gold and silver, I certainly can't add anything to what Ted had to say in his quote above from his mid-week commentary to his paying subscribers yesterday---and as I said in the first part of today's column, the gross and net volumes in both metals were over the moon.

It's just too bad that none of this data will be in tomorrow's Commitment of Traders Report.

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

As I type this paragraph, the London open is less than ten minutes away.  Gold got sold down five bucks or so in early trading in the Far East on their Thursday morning, but began to rally off off its low starting at 1:30 p.m. Hong Kong time. The same price pattern is evident in silver and platinum.  Palladium was mostly unaffected.  Not surprisingly, silver is the only precious metal that's currently down from its Wednesday's close in New York.

Net gold volume is already a very chunky 40,000 contracts, with very few roll-overs so, like the last few days, most of this volume is of the HFT variety.  Silver's net volume is 6,000 contracts---and the roll-over activity is slightly higher, but only just.

The dollar index, which hadn't been doing much for most of the early Far East trading session, went into rally mode starting at precisely 2:30 p.m. in Hong Kong---and is currently up 12 basis points.

There are six business days left [including today] for all traders, except those standing for delivery, to be out out of the December contract.  Those that aren't standing for delivery have to be out by the end of the Comex trading session next Thursday.  All the large traders have to have rolled or sold their December contracts by the end of Comex trading on Wednesday---and everyone else has to be out the following day.  First Day Notice for the December delivery month will be posted on the CME's website late Friday evening EST.

And as I hit the send button on today's column at 5:21 a.m. EST, I note that the rally in gold is continuing---and it will interesting to see if the price suffers the same fate it did the last two times it attempted to break above the $1,200 spot price mark---if it's allowed to get close to that price, that is.  The other three precious metals are in rally mode as well---and nicely above their Wednesday closing prices in New York.

Here's the Kitco gold chart as of 5:17 a.m. EST

Net gold volume is around 55,000 contracts, which is a lot---and roll-over activity has increased by quite a bit.  Silver's net volume is now up to 9,500 contracts, also with decent roll-over action.  Even though the rallies are being allowed to progress, the volume associated with them is higher than I'd like to see.

The dollar index has been all over the map---and is continuing its rather frantic choppy trading action that it went through during the Wednesday session.  At the moment its up 17 basis points.

December is the biggest delivery month of the year for both gold and silver---and with JPMorgan et al appearing to be heading for exits in both these metals, all the ingredients are in place for a potential wild and woolly trading week dead ahead.  If the last two Friday trading sessions, plus yesterday's shenanigans are any indication, I won't have a shortage of things to talk about for the remainder of the month.

That's all I have for today, which is more than enough---and I'll see you here tomorrow.

Ed Steer