The gold price traded sideways until 10:00 a.m. Hong Kong time on their Tuesday morning and, with the exception of a couple of tiny rallies at the London and N.Y. Comex opens...both of which got hammered flat immediately...it was pretty much all down hill into an early London p.m. gold fix at around 9:50 a.m. EDT in New York.
Once 'the fix was in'...the high-frequency traders went to work...and spun the price down to its Tuesday low, which came just minutes after 11:00 a.m. EDT...and minutes after London closed for the day.
The subsequent [but smallish] rally lasted until the 1:30 p.m. EDT Comex close...and from there it traded sideways until the end of trading at 5:15 p.m. in New York.
The high tick came in early Far East trading...and was a bit over $1,385 spot...and the low tick in New York was $1,360.10 spot.
Gold closed at $1,368.30 spot...down $16.10 on the day. Gross volume wasn't overly heavy at around 132,000 contracts.
The red trace is Tuesday's price action.
It was pretty much the same chart pattern in silver, expect the low tick [$21.45 spot] came at 10:30 a.m. EDT in New York...but after that it followed the same price pattern as gold...rallying into the Comex close, before trading more or less sideways for the remainder of the day.
Kitco recorded the high tick as $22.01 spot, but if the price got that high, it only lasted for a second or two before falling back, as there's no trace of it on the New York Spot Silver [Bid] chart.
Gold closed at $21.68 spot...down 16 cents from Monday. Volume, net of the roll-overs out of the July delivery month, were rather anemic at 23,500 contracts.
The red trace is Tuesday's price action.
Without JPMorgan Chase et al riding shotgun over them 24/7...the platinum and palladium charts looked quite different. However, don't ever lose sight of the fact that JPMorgan is the biggest Comex short holder in both platinum and palladium as well.
The dollar index closed on Monday afternoon in New York at 80.63...and then spent until 9:00 a.m. EDT on Tuesday morning struggling up to its high of the day, which was 80.97. But it was all down hill from there, as the rally fell out of bed...and the index hit its nadir of 80.56 about 12:40 p.m. in New York. The dollar index closed at 80.69...basically unchanged from either Monday's or Friday's close.
Here's the chart from the Sunday night open in New York. Every rally attempt above the 81.00 mark has failed...and the dollar index has closed within 10 basis points for three days in a row. It's worth mentioning that the precious metals price activity has had no correlation whatsoever to the currency moves on Tuesday...not that it ever has.
The gold stocks opened down...and headed lower after the London p.m. gold fix. The bottom was basically in at gold's low, which came a few minutes after 11:00 a.m. in New York...and the equities traded sideways into the close. The HUI finished down 2.84%.
The silver stocks had another bad day as well, even though the silver price was down only 16 cents. Nick Laird's Intraday Silver Sentiment Index closed down another 2.81%.
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The CME's Daily Delivery Report showed that only 26 gold contracts were posted for delivery on Thursday within the Comex-approved depositories. Even though it was only a tiny amount, "all the usual suspects" were involved...and the link to yesterday's Issuers and Stoppers Report is here.
There was a withdrawal from GLD yesterday. This time it was 48,326 troy ounces. And as of 10:34 p.m. EDT last night, there were no reported changes in SLV.
There was no sales report from the U.S. Mint.
Over at the Comex-approved depositories on Monday, they reported receiving 651,006 troy ounces of silver...and shipped 234,059 troy ounces of the stuff out the door. The link to that activity is here. There was no reported warehouse activity in gold.
I have the usual number of stories for a week day...and I hope you can find the time for the ones that are of interest to you.
We no longer have a free market. The world's financial asset prices have become a plaything of central banks and the sovereign wealth funds of a few emerging powers.
Julian Callow from Barclays says they are buying $1.8 trillion worth of AAA or safe-haven bonds each year from an available pool of $2 trillion. Nothing like this has been seen before in modern times, if ever.
The Fed, the ECB, the Bank of England, the Bank of Japan, et al., own $10 trillion in bonds. China, the petro-powers, et al., own another $10 trillion. Between them they have locked up $20 trillion, equal to roughly 25 percent of global GDP. They are the market. That is why Fed taper talk has become so neuralgic and why we all watch Chinese regulators for every clue on policy.
We will find out today whether Ben Bernanke is ready to blink after the market ructions of the last three weeks, sobered by the cascading upsets across the BRICs and mini-BRICs; or whether he will stay the course with Fed tapering sooner rather than later.
"We no longer have a free market." That sounds like Chris Powell's quote..."There are no markets anymore...only interventions." This AE-S blog, which I found in a GATA release, was posted on the telegraph.co.uk Internet site yesterday...and it's worth reading.
On Monday night, President Obama said in an interview, "Well, I think Ben Bernanke's done an outstanding job. Ben Bernanke's a little bit like Bob Mueller, the head of the FBI - where he's already stayed a lot longer than he wanted or he was supposed to."
That raised some eyebrows and really turned up the volume on the conversation today regarding potential successors to replace Bernanke when his term as Chairman of the Federal Reserve expires in January.
In an interview with CNBC on Tuesday afternoon, former Fed Governor Larry Meyer said Obama "basically fired Ben Bernanke on the spot."
This story from very early yesterday evening was posted on the businessinsider.com Internet site...and it's Roy Stephens first offering in today's column.
A gauge of consumer prices excluding food and energy that is watched by the Fed rose 1.1 percent in the year through April, matching the smallest gain since records started in 1960. With inflation below the Fed’s 2 percent long-run goal and the jobless rate at 7.6 percent, the Fed is falling short of its mandate to ensure stable prices and maximum employment.
Policy makers wrapping up a meeting today will probably pledge to plow ahead with record bond buying, setting aside for now concern that growth in the Fed’s $3.41 trillion in assets may stoke long-term inflation expectations or disrupt market functioning, said Drew Matus, a former economist at the Federal Reserve Bank of New York.
“Why would they possibly rush to a taper now?” said Matus, an economist at UBS AG in Stamford, Connecticut. “Unemployment is still nowhere near what they consider to be the natural rate, and the inflation number is too low.”
This Bloomberg story was posted on their website early this morning...and I thank U.A.E. reader Laurent-Patrick Gally for sending it our way just before I hit the 'send' button on today's column.
Kyle Bass covers three critical topics in this excellent in-depth interview before turning to a very wide-ranging and interesting Q&A session. The topics he focuses on are Central bank expansion (with a mind-numbing array of awe-full numbers to explain just where the $10 trillion of freshly created money has gone), Japan's near-term outlook, and most importantly since, as he notes, "we are investing in things that are propped up and somewhat made up," the psychology of negative outcomes. The latter, Bass explains, is one of the most frequently discussed topics at his firm, as he points out that "denial" is extremely popular in the financial markets.
Simply put, Bass explains, we do not want to admit that there is this serious (potentially perilous) outcome that disallows the world to continue on the way it has, and that is why so many people, whether self-preserving or self-dealing, miss all the warning signs and get this wrong - "it's really important to understand that people do not want to come to the [quantitatively correct but potentially catastrophic] conclusion; and that's why things are priced the way they are in the marketplace."
The link to the video is embedded in this Zero Hedge piece from yesterday. Kyle's talk lasts about 30 minutes...and then the Q&A starts immediately after. This is an absolute must watch...and if I had to pick just one story for you to bury yourself in today...this would be the one. I thank West Virginia reader Elliot Simon for bringing it to my attention...and now to yours.
Brazil is currently gripped by its largest protests in 20 years — about 200,000 demonstrators marched through the streets of Brazil's biggest cities on Monday — driven by public frustration over shoddy public services, police brutality, economic instability, and government corruption.
The turmoil, which has been simmering for months, arises as the country hosts the Confederations Cup soccer tournament (i.e. the preliminary for next year's World Cup) and prepares for a visit from the pope next month.
Images being shared on social media show police beating unarmed protesters with batons, in addition to dispersing crowds with rubber bullets and tear gas, and have only caused the protests to expand.
This news item was posted on the businessinsider.com Internet site late yesterday morning EDT...and it's another item courtesy of Roy Stephens.
The American banker couldn't even pronounce the name of his German client when he appeared for the interview on the morning of Sept. 20, 2012: Kommunale Wasserwerke Leipzig, quite a tongue twister for a Wall Street man. But it wouldn't make much difference, he reasoned, because hardly anyone in America was likely to have heard of it before.
By the afternoon of the next day, after undergoing 12 hours of questioning by the American financial regulatory agency, the Securities and Exchange Commission (SEC), John Simon knew he was mistaken. SEC enforcement division lawyer Andrew H. Feller was in fact very well informed, after having read through emails and call logs, and he knew whom Simon had met in New York, London and South Africa. The SEC attorney could even pronounce the name of the city of Leipzig's water utility relatively well.
Feller had spent two years investigating the methods Simon had used to develop risky deals involving water treatment plants in the eastern German state of Saxony for UBS, a major Swiss bank. In the end, Leipzig faced potential losses of €300 million ($400 million), joining the ranks of many German municipalities that had lost vast sums of money in complex Wall Street deals.
Just another case of Wall Street ripping the face off their clients. This story appeared on the German website spiegel.de early yesterday evening Europe time...and it's another contribution to today's column from Roy Stephens.
Swiss lawmakers dealt a serious blow Tuesday to a plan that could enable the country's banks to avoid the threat of prosecution in the U.S. by collectively coming clean about their dealings with suspected American tax evaders.
The lower house of Parliament voted 126-67 against even considering the plan, which would allow banks to skirt Switzerland's banking secrecy law and hand information to U.S. authorities about the undeclared holdings of their American clients, as well as the bank employees who assisted those clients.
The vote sends the measure back to the upper house, which had approved it last week, for further debate and another show of hands as early as Wednesday. A reversal there would mean the legislation's demise—and could lead to severe legal complications for Swiss banks in U.S. courts. Approval would send it back to the lower house.
This article, filed from Zurich, was posted on the barrons.com Internet site yesterday...and I thank Casey Research's own Dennis Miller for sharing it with us.
George Osborne is facing pressure to radically overhaul Britain's banks by introducing a new law to jail bankers for "reckless misconduct" and force bankers to wait up to 10 years to receive their bonuses.
The proposals, among the key measures recommended in a major report by the parliamentary commission on banking standards, also include a call on him to consider breaking up the Royal Bank of Scotland. They come ahead of the chancellor's crucial set-piece Mansion House speech to the City on Wednesday night.
The chancellor is urged to restore confidence in the financial system by making top bankers more accountable for their actions in the wake of the 2008 bank bailouts, the Libor rigging scandal, and the shoddy treatment of customers mis-sold payment protection insurance.
The senior Conservative MP Andrew Tyrie, who led the commission, said the 80 or so recommendations were intended to "change banking for good". They also include giving regulators new powers to halt bonus payouts and pensions for bosses of any banks that have to be bailed out by the taxpayer in the future.
These bankers should be in jail for what they've already done. This story from The Guardian showed up on their website very shortly after midnight last night...and it's also courtesy of Roy Stephens.
In the past month bankers and lawyers from Citigroup, Goldman Sachs, and JPMorgan Chase have streamed into a dark brick Washington office building where the future of finance is being shaped.
The high-powered visitors to the home of the Commodity Futures Trading Commission testify to its rise from an obscure US government agency to a global watchdog of financial derivatives, the scandal-hit Libor lending benchmark, and physical commodities from oil to silver.
The agency's tack is now more in question than at any time since Gary Gensler became chairman four years ago. He and one or two others on the five-member commission may be replaced as soon as July, lobbyists and commission officials say. This could slow or reverse Mr Gensler's clampdown on Wall Street banks.
I have to agree with Ted Butler on this one...Gensler and Chilton had their opportunities to make things right, but in the end the knuckled under to JPMorgan Chase and the CME Group. This Financial Times story from yesterday...and it's posted in the clear in this GATA release.
Prime Minister Erdogan used police violence to fight the youth protests, then he softened his tone before cracking down once more. But does he truly comprehend what is currently happening in his country? His own future hangs in the balance.
It didn't take much more than that to unleash Turkey's May revolts, and almost everyone had a reason to take to the streets, as the composition of the protest movement shows. It is a melting pot of conservationists and leftist Muslims, football fans and young creative types, and although it is still amorphous and disorganized as movements go, its existence alone poses a challenge to the prime minister.
And Erdogan? He sees the ghosts of his old rivals, the Kemalists, at work wherever he encounters resistance. He repeatedly derided the protesters as "radical fringe groups" and "scraps," but then he blamed the unrest on the "old elite." This reveals how little Erdogan has comprehended the social changes taking place in his country. Officials with the Kemalist party, the CHP, tried to give speeches at the demonstrations but were drowned out by whistling protesters.
This is another story from the spiegel.de Internet site yesterday...and another offering courtesy of Roy Stephens.
“We do not have any facts of the use of such weapons by the Syrian government. I assure you, that by no means all the G8 members believe that they were used,” Putin said.
The Russian President stressed he “never felt isolated” at the summit despite the difference in views, and said the G8 leaders have been seeking a common solution to the Syrian conflict.
Supplying arms to the rebels based on unconfirmed reports that chemical weapons were used by the Assad government would further destabilize Syria, Putin warned.
Putin urged Western nations not to be hasty in arming the Syrian opposition, saying that such weapons could fall into the wrong hands, or be uncontrollable.
This article was posted on the Russia Today website mid-afternoon yesterday Moscow time...and is a must read for all students of the New Great Game. Once again I thank Roy Stephens for digging this up for us.
The top-secret world the U.S. government created in response to the terrorist attacks of September 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.
[We] discovered what amounts to an alternative geography of the United States, a Top Secret America hidden from public view and lacking in thorough oversight. After nine years of unprecedented spending and growth, the result is that the system put in place to keep the United States safe is so massive that its effectiveness is impossible to determine.
Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.
An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.
This amazing...and rather short essay...was posted on the mises.org Internet site yesterday...and I thank Australian reader Wesley Legrand for sending it along.
The first commentary is by Rob Arnott...and it's headlined "Man Who Oversees $150 Billion Warns of Hyperinflation". The second interview is with James Turk. It's entitled "Global Markets and Banking System Face Major Collapse". And lastly is this blog with John Embry. It bears the headline "Banks Poised for Gold and Silver Turn as Central Planners Panic".
Here's commentary by Australian writer Dr. Alex Cowie...the Editor of Diggers & Drillers. It was posted on his website on Monday in North America...Tuesday 'down under'.
He feels that the results of the FOMC meeting later today [Thursday in Australia] will have a big impact on silver prices...and gold, as well, I might add.
He's probably right about that...the only thing that's not known is which way the price will move...and my bet is down, as JPMorgan pulls out all the stops to rid themselves of their remaining short position in that metal.
Time will tell...and not too much time, either. Alex's commentary was posted on the moneymorning.com.au Internet site.
In these two interviews...which run for just under 7 minutes in total...they talk about KYC [Know Your Customer]...and Hawala. Hawala...an Arabic word the means transfer...also known as hundi, is an informal value transfer system based on the performance and honour of a huge network of money brokers, which are primarily located in the Middle East, North Africa, the Horn of Africa, and the Indian subcontinent. It is basically a parallel or alternative remittance system that exists or operates outside of, and parallel to, traditional banking or financial channels.
So keep that in mind when listening to these two Bloomberg video clips which were posted on the youtube.com Internet site yesterday. I thank Mumbai reader Avinash Raheja for bringing these to our attention. The link to the first clip is here...and the second clip, here.
Palladium has posted gains year-to-day as the other precious metals have slipped, ETF Securities' Will Rhind tells The Street's Joe Deaux.
This 2:57 minute video clip was posted on theaureport.com Internet site on Monday...and I thank Roy Stephens for his final contribution to today's column.
In a news release issued Wednesday, the Silver Institute observed that the medical use of silver has helped reduce the growing threat of antibiotic-resistant germs spreading through a hospital.
“Today, advances in coatings technology has enabled medical equipment producers to introduce silver-coated instruments and hospital equipment for use in treating patients—eliminating, on contract, almost every bacterial or fungal exposure,” said Michael DiRienzo, executive director of the Silver Institute.
Because silver breaks down cell walls and interferes with respiration and reproduction, bacteria have great difficulty in developing immunity to the metal, The Silver Institute noted.
“Today, the need to combat antibiotic-resistant superbugs and to suppress hospital-acquired infections has increased the importance and number of uses of silver-infused products,” the Institute observed.
This very interesting article was posted on the mineweb.com Internet site yesterday...and is worth reading if you have the time.
Avrupa Minerals Ltd. is a growth-oriented prospect generator focused on aggressive exploration for valuable mineral deposits in politically stable and prospective regions of Europe with a growing pipeline of prospects in Portugal, Kosovo and Germany.
Share structure and cash on hand (12/31/2011):
Please visit our website for more information.
It's only because JPMorgan is so smart, powerful...and adept at manipulating markets...that they have been able to amass such a large gold long and small short silver position. The truth is maybe they can add more to the gold long and reduce the silver short position with still lower manipulated prices, but we have to be in the terminal phase of this operation in terms of gauging how many more sellers can be lured in at this point. There is a limit to such engineered speculative selling. Therefore, since JPM is running out of road as to how much more gold and silver they can buy before we reach the resolution, it is no exaggeration to say that we are running out of time in which to buy cheap silver...and gold. - Silver analyst Ted Butler...15 June 2013
It was another day of low volume, but another day when the high-frequency traders were active almost the entire time...as there was no precious metal-specific news to account for the big sell-offs in both gold and silver during the Comex trading session in New York. Ted Butler's quote from his Saturday commentary posted above, explains it better than I can.
And as I mentioned further up...and in yesterday's column...I expect to see some price 'action' when the word comes down from the FOMC meeting at 2:00 p.m. EDT this afternoon...and I fully expect that it will allow "da boyz" to hit the precious metals hard once again. I'd love to be proven wrong.
One interesting thing I did see in that piece by Dr. Alex Cowie posted in the 'Critical Reads' section, was the weekly silver chart. I always post the daily charts...and it's rare event when I remember to post anything else.
Not only are we at the bottom of the barrel in price terms...and in the Comex futures market as well...but it is more than obvious when one looks at the 3-year weekly charts for both metals. As Ted said on the phone yesterday...a major low is being set.
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Both these charts are courtesy of JPMorgan et al...as there is nothing free market about either of them. The MACD and RSI traces are at lows probably never seen before...and both metals are well below their respective 200-day moving averages...and are probably the most oversold in the history of either metal, certainly going back over a decade. If anyone has weekly charts for both metals going back that far, or further, I'd love to see them...and would be happy to post them in this space.
I still firmly of the belief that when the bottom does finally arrive...and the market turns up...it will do so violently, as JPMorgan et al won't be there to go short...as they are already mega-long gold in all markets...and attempting to cut their silver loses to a bare minimum in the process. I also believe that it will happen in such a way that no trader will be able to react to it...and you'll either be all the way in, or all the way out.
That's certainly the way I'm playing this. But there's been a terrible price [both financially and emotionally] to pay for being "all in" for the last ten years. I, and others, are still paying that price...but I've bet the ranch on this particular outcome.
Of course, it may not turn out exactly like that, but it will be pretty close...and I'm just hoping that I've prepared for any eventuality.
In Far East trading on their Wednesday, there was no price action worthy of the name...and the same can be said of the first couple of hours of the London trading day as well. Volumes are very light in both gold and silver...and the dollar index continues to chop sideways just under the 81.00 mark.
Since I mentioned the dollar index, I remember that Ted pointed out last week that the four largest traders still hold a bit over 80 percent of the entire short position in the U.S. dollar index...traded on the I.C.E. Ted figures that its "da boyz". So whatever happens in gold and silver on their next rally, it's obvious that the dollar is going to get hit hard at the same time...and JPMorgan et al are all set up to profit on that as well when the brown stuff hits the fan. And as I've pointed out on numerous occasions, it's only the timing of these events that remains unknown...at least to the general public, as nothing happens by accident anymore.
As I hit the 'send' button on today's column at 5:10 a.m. EDT...gold is unchanged from Tuesday's close...silver is down about a dime...volumes are still very light...and the dollar index isn't doing much.
It could prove to be an interesting day for all four precious metals during the New York session...and we should be emotionally ready for anything as the trading day unfolds.
See you on Thursday.