As I mentioned in 'The Wrap' in yesterday's column, the high for the day [around $1,681 spot] was in shortly before 2:00 p.m. Hong Kong time on their Wednesday afternoon...and as you already know, it was all down hill from there. Even the smallest rally attempt got sold off, especially during the Comex trading session.
The low of the day...$1,633.70 spot...came in electronic trading in New York around 3:25 p.m. Eastern. From that low, the gold price rallied back about ten bucks going into the close of trading at 5:15 p.m.
The gold price closed at $1,643.80 spot...down $31.80 on the day. Net volume was immense...around 225,000 contracts.
Silver was also under some selling pressure all through Far East and London trading...but despite the pounding that gold was taking, the silver price held up pretty well. The New York high [$33.22 spot] came at precisely 10:30 a.m. Eastern...and at that point was down less than 20 cents from Tuesday's closing price.
Then a not-for-profit seller showed up...and in three successive boughts of selling, took silver down to its low of the day [$31.52 spot] which occurred just a few minutes after 2:00 p.m. in the New York Access Market.
From that low, the silver price recovered over two percent of its losses by the close of electronic trading at 5:15 p.m. Eastern time. I'd guess that it was a short covering rally. Net volume was extremely high at 65,000 contracts.
Silver closed at $32.15 spot...down $1.26 from Tuesday. The intraday price move was $1.89...a 5.7% swing. As the chart clearly shows, there was nothing free market about this price activity.
In Wednesday trading, gold closed down 1.87%....silver closed down 3.77%...platinum down 0.89%...and palladium down 0.71%. Platinum closed higher than gold for the second day in a row.
The dollar index continued to move higher on Wednesday...and gained about 40 basis points from its 5:15 p.m. close in New York on Tuesday. There certainly wasn't anything in the dollar index [Tuesday or Wednesday] that would lend much support to the pounding that the precious metals took so far this week.
Since the dollar index began to rally at 10:00 p.m. on Monday, it has gained about 90 basis points...or around 1.1%.
In yesterday's column I was mentioning how well the gold and silver stocks had held up on Tuesday...all things considered. That good fortune came to an abrupt end, as the gold stocks gapped down over two percent at the open...and then continued to sell of slowly until gold hit its New York low about 3:25 p.m. Eastern.
Then the gold price and the shares turned on a dime...and the stocks finished about a percent off their lows. The HUI closed down 3.86% on the day.
The silver stocks really got hammered...and Nick Laird's Silver Sentiment Index was down a whopping 4.99%.
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It was another quiet delivery day on Wednesday...and the CME's Daily Delivery Report only showed that 32 gold and zero silver contracts were posted for delivery tomorrow.
There were no reported changes in either GLD or SLV.
The U.S. Mint had a sales report yesterday. They sold another 2,500 ounces of gold eagles...4,000 one-ounce 24K gold buffaloes...and 352,000 silver eagles. Month-to-date the mint has sold 23,500 ounce of gold eagles...16,000 one-ounce 24K gold buffaloes...and 1,417,000 silver eagles. I sure hope that you're buying this dip, dear reader.
Over at the Comex-approved depositories on Tuesday, they reported receiving a rather small 18,070 ounces of silver...and shipped 150,124 troy ounces of the stuff out the door. The link to that action is here.
Silver analyst Ted Butler's mid-week commentary to his paying subscribers just happened to come out on the day when both gold and silver were getting slaughtered...and here's what he had to say about it..
"The current deliberate smash down in prices today is following the usual script. It is very important that you understand what is happening. Silver (and gold) prices are not declining because leveraged long speculators on the COMEX started selling. Prices were deliberately set lower in order to induce that leveraged long liquidation. It’s all in the sequence of events; prices are set lower first, then the selling comes in. Prices are set lower through HFT, usually at times when trading is thin, through collusion among the traders identified as commercials, but who are in reality only speculators out for a quick buck. This collusive price rigging is at the heart of everything illegal under US commodity law."
"It is very simple to prove that the COMEX commercials are acting collusively to rig the price of silver and gold. The proof lies in what occurs as a result of the price rig jobs to the downside. The results of current deliberate price smash are no different from the results of all the previous deliberate price smashes over the years. The results are always that the commercials are big net buyers on these sell-offs. I have never seen an exception to the commercials buying on the big sell-offs. You need look no further than last week’s COT which I discussed in the weekly review. A big down move in price always equals big commercial buying. Always. A reasonable person would have to question how such results could be possible in a free market. Are these commercials such skilled traders that they are always big net buyers of COMEX silver and gold contracts on the big down days? Or are they just the luckiest sons of guns in the world?"
"I would submit that it is neither skill nor luck that enables the commercials to always be big net buyers on the important down days, as that is just not possible. To believe that is to believe a fantasy. Such results can only be achieved through collusion and intent. The commercials are always big net buyers on the big down days because they planned and coordinated the down moves in advance. That planning and execution could not possibly be achieved without coordination and collusion. This is not some way-out conspiracy; this is reality. It is also highly illegal."
Reader Scott Pluschau had a blog on silver yesterday that's headlined "Silver approaching neckline of a Head and Shoulders pattern". In his covering e-mail, he had this to say..."Intermediate term, we don't want to see the neckline fail with any follow through... see chart". The link to his blog is here.
Here's an interesting graph that Washington state reader S.A. sent my way yesterday. It's the 10-year chart of the platinum/gold ratio. As you can see, the ratio is way out of whack...and as I pointed out further up in this column, platinum closed higher than gold for the second day running.
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I have considerably fewer stories today than I did in this space yesterday, so I hope you have the time for them all.
Stop us when this confession from Greg Smith, a now former executive director and head of the Goldman's United States equity derivatives business in Europe, the Middle East and Africa, sounds exactly like everything we have said about the firm over the past 3+ years.
That's how this zerohedge.com offering started, when talking about The New York Times story about Goldman Sachs now ex-employee, Greg Smith.
Greg rips the "Great Vampire Squid" a new one...and the link to the NYTimes story is imbedded in this Zero Hedge posting. I had a lot of readers send me this piece yesterday, but the first one through the door was Australian reader Wesley Legrand...and the link is here.
A former intern who worked under Smith gave Business Insider a look into who Smith was at Goldman. Aveneesh Singh Saluja, a fellow Stanford alum, was willing to speak out for the guy most Goldmanites are probably fuming at.
This short 3-paragraph piece was posted over at the businessinsider.com website early yesterday morning...and I thank Roy Stephens for sending it along. The link is here.
Wall Street is buzzing this morning about a resignation – a historic one. Greg Smith, the executive director and head of Goldman Sachs’s United States equity derivatives business in Europe, the Middle East and Africa, not only decided to quit Goldman, he decided to do it in the New York Times, eloquently deconstructing the firm’s moral slide in a lengthy op-ed piece.
The essence of Smith’s piece is devastating. He points to one simple, specific problem in the company: the fact that Goldman routinely screws its own clients.
Matt Taibbi, the Rolling Stone reporter that coined the "Great Vampire Squid" name for Goldman Sachs, had a field day with yesterday's goings-on...and you can "read all about it" in his blog. I thank Roy Stephens for his second offering in a row...and it's definitely worth the read. But, once again, I must warn you in advance of Matt's rather 'pithy prose'...and the link is here.
Fitch Ratings said Britain risks losing its top investment grade because of its limited ability to deal with shocks, days before Chancellor of the Exchequer George Osborne will present his annual budget.
Fitch changed the outlook on Britain to “negative” from “stable,” indicating a “slightly greater” than 50 percent chance that the AAA rating will be reduced within two years, the company said in a statement in London late yesterday, citing the weak economic recovery, high debt levels and threats from Europe’s debt crisis. Osborne will meet coalition partners later this week to agree on a budget he will present on March 21st.
Britain's debt/finances are right up there with the PIIGS...and the only reason they haven't been more severely manhandled by the U.S. credit agencies is because they are half of the Anglo/American empire.
I thank West Virginia reader Elliot Simon for sending me this Bloomberg story which was posted early yesterday evening. It's worth the read...and the link is here.
A mini job miracle has taken Schwäbisch Hall in the southern German state of Baden-Württemberg by surprise. After a Portuguese journalist wrote a rosy report on the town and its efforts to seek skilled workers from crisis-plagued European countries, job applications have flooded in. More than 10,000 people have written in so far, but results have been mixed.
When Guido Rebstock came into his office on Feb. 8, booted up his computer and checked his email, he could hardly believe his eyes. About 2,500 applications had accumulated in his mailbox -- all overnight and all from Portugal. It quickly dawned on the head of the government employment agency in Schwäbisch Hall, a small city in southern Germany, why he was being flooded with applications. A short time earlier, the city had gone on a media offensive. City officials invited seven journalists from countries affected by the euro crisis, including Greece, Italy, Spain and even Portugal, for two days to inform them about job opportunities in the area.
Little happened after Greek and Spanish journalists published stories. In contrast, journalist Madalena Queirós unleashed a wave in her home country. More than 10,000 Portuguese people have already applied to firms and the city's employment agency. "Because it was the only article that was available online, the news spread like wildfire on Facebook," Rebstock explains.
It's only going to get worse as time goes on...and as bad as it is in Portugal...it's even worse in Spain. This story appeared on the German website spiegel.de yesterday...and I thank Roy Stephens once again. The link is here.
The complaint charges Welsh with directly attempting to manipulate the palladium and platinum futures prices and with aiding and abetting the attempted manipulations of Christopher L. Pia, a former portfolio manager of Moore Capital Management, LLC, a CFTC registrant.
According to the complaint, while working as a broker at MF Global Inc., Welsh employed a manipulative scheme commonly known as “banging the close.”
Platinum? Palladium? What about JPMorgan's 26% short position in the silver futures market? I feel like Bill Murray in 'Groundhog Day'...or maybe this is an early April Fool's joke.
This news release was posted over at the cftc.gov website yesterday...and I thank Florida reader Donna Badach for sending it along. The link is here.
The first link is the audio interview with Nigel Farage. I posted the blog yesterday...and the link to the full audio interview is here. The second is this James Turk blog headlined "Gold & Silver Turmoil, What to Expect Going Forward".
Market analyst and mining company promoter Peter Grandich remarked yesterday that even the beating gold has taken over the last week doesn't undo its bull market. Grandich reads gold's chart to say that the uptrend's support line is at $1,600.
I pulled the headline and story from a GATA release yesterday...and the link is here.
SocGen's Dylan Grice is out with a fresh dose of catnip for gold bugs, tinfoil hat wearers, and anti-Feders. His latest note is titled: When To Sell Gold...
Eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability. Until it does, the temptation to inflate will remain, as will economists with spurious mathematical rationalisations as to why such inflation will make everything OK (witness the IMF’s recent recommendation that inflation targets be raised to 4%: IMF Tells Bankers to Rethink Inflation – WSJ). Until it does, the outlook will remain favorable for gold. But eventually, majority opinion will accept the painful contractionary medicine because it will have to. That will be the time to sell gold.
This short must read piece was posted over at the businessinsider.com website yesterday...and I thank Nick Laird for contributing it to today's column. The link is here.
MineWeb's David Levenstein notes growing concern about the security of official gold reserves held outside the countries that own them. His commentary is headlined "Some Central Banks Showing Concerns about Their Gold Holdings".
This is another story plucked from a GATA release yesterday. It's a must read for sure...and it was posted over at the mineweb.com website...and the link is here.
Sprott Asset Management's John Embry, interviewed by King World News yesterday, cites the ratio between gold and platinum prices as evidence of central bank manipulation of the gold market. He also comments on silver and oil.
I thank Chris Powell for the introductory paragraph...and the link to this must read KWN blog is here.
It's now 6 months since gold hit its current all-time high. How long 'till the next...?
Thanks to hindsight, the bull market in gold which followed Richard Nixon un-pegging the US Dollar, and therefore the rest of the world, from its last pretence of a Gold Standard sounds as inevitable today as Jimmy Page's solo in Stairway to Heaven, also a 1971 classic.
But the gold price's rise from $35 per ounce to $850 in less than a decade hardly ran that smooth at the time.
The Bullion Vault's Adrian Ash posted this essay over at the safehaven.com website yesterday. It's not an overly long read...but it's well worth your time...and I thank Roy Stephens for his final offering in today's column. The link is here.
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Great Panther Silver Limited (TSX: GPR) is one of the fastest growing primary silver producers in Mexico. The Company’s organic growth strategy will see output from mining operations increase by 30% in 2011 to 3.0 million ounces silver equivalent and again by 27% in 2012 to 3.8 million ounces silver equivalent, providing strong leverage to rising silver prices.
The Company has also been growing its resource and reserve base at both 100% owned operations. A new resource/reserve estimate was released for the Guanajuato Mines in late December 2010 and a new resource/reserve estimate for the Topia Mines is expected during the first quarter is 2011. The Company is also advancing drilling activities at its new discovery at the San Ignacio property in Guanajuato. Great Panther continues to replace mined ounces, grow resources and reserves at both operations, and is targeting a 10 year mine live at each.
Great Panther is committed to becoming a leading primary silver producer by acquiring, developing and profitably mining precious and base metals in Latin America.
I can't add anything to what Ted Butler had to say about yesterday's price action in his 3-paragraph commentary that I borrowed from his mid-week blog to paying subscribers...and if you've forgotten already, you can scroll up and read it again.
Here's how the 6-month gold and silver charts look like with yesterday's price action added in.
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Now the only question remaining is...as Ted Butler said on the phone yesterday...are JPMorgan et al done to the downside, or are lower prices still in our future? How long this price smash goes on depends on how much blood they think they can get out of these gold and silver stones.
If you look at the either the silver or gold charts above, you'll see the previous two attempts before this...one in the last week of September...and the second that started in very late October and ended during the last week of December. So how this particular price take-down plays itself out over time, is still unknown.
We are well below the 200-day moving averages in both gold and silver...so there's been a huge clean-out of speculative long positions in both the Non-Commercial and Nonreportable categories of the Commitment of Traders Report.
Of course none of yesterday's price/volume action will be in tomorrow's COT report...as it's one day past the cut-off. And it's still up in the air whether or not the smack-down in the electronic trading session on Tuesday afternoon in New York will be in there, either.
Not much happened in overnight trading in the Far East...and nothing much happened during the first two hours of London trading, either. But volume in both metals is way up there already...just like on Tuesday...so it's a good bet that most of it involves the high-frequency traders. The dollar index is quiet.
As I hit the 'send' button at 5:13 a.m. Eastern time, gold is up about four bucks...and silver is up 20 cents. And like I said in this space yesterday, I have no idea what the rest of this trading day will bring...but nothing will surprise me when I turn my computer on later this morning.
I hope your Thursday goes well...and I'll see you here on Friday.