Gold & Silver Daily
"I also said in the next sentence that the next country that asked for its gold back could be a game-changer."
 

¤ Yesterday In Gold & Silver

Once the roll-overs out of the February delivery month were subtracted from yesterday's trading volume, the net volume was pretty light...and that was certainly reflected in the price action on Monday.

There was a bit of rally after the silver fix in London trading, but that got stopped in its tracks shortly after the Comex opened...and then down it went into the 3:00 p.m. GMT London gold fix.  From there, the gold price got sold off every time it broke above the $1,670 spot price mark.  The high tick...$1,676.10 spot...came less than fifteen minutes after the Comex open.

The gold price closed at $1,667.80 spot...up $5.10 on the day.  Net volume was very light...around 92,000 contracts.

The silver price was obviously much more 'volatile'.  After jumping up about two bits around 9:00 a.m. Hong Kong time, the silver price traded sideways until around 3:00 p.m in the Far East, before jumping up another twenty cents just before the London open.

From that point, silver traded sideways and...just like gold, began to rally about a half-hour after the noon London silver fix.  The silver price rallied further right from the Comex open...and within fifteen minutes, was up 35 more cents before getting capped.  Then at 9:30 a.m...the entire New York gain disappeared going into the 10:00 a.m. Eastern London gold fix.

After that, silver didn't do much until precisely 12:30 p.m. Eastern...and away it went to the upside once again, with the high tick of the day [$31.27 spot] coming precisely at the 1:30 p.m. Comex close.  From there it got sold off into the 5:15 electronic close.

Silver finished the Monday trading session at $31.08 spot...up 64 cents from Friday's close.  Volume was pretty decent at around 46,000 contracts.

Here's the New York Spot Silver [Bid] chart on its own, so you can see the Comex price action in greater detail.

The dollar index opened on Sunday night in New York at 79.55...and from there it traded as low at 79.36 very early in Far East trading...and it's high tick [79.64] came around 1:00 p.m.. in London...which was 8:00 a.m. Eastern time.  From there it drifted lower in the close...and finished the Monday session at 79.50...down a whole 5 basis points from where it started the day.

Nothing to see here...and certainly no co-relation to the precious metal prices, either.

The gold stocks opened in positive territory...and dipped a bit going into the London p.m. silver fix...and then chopped around the unchanged mark for the rest of the day before getting sold back into the red going into the 4:00 p.m. close of the equity markets.  The HUI finished down 0.40%.

Despite the rousing performance of the metal itself, the silver stocks finished mixed...and Nick Laird's Intraday Silver Sentiment Index only finished up 0.12%.

(Click on image to enlarge)

The CME's Daily Delivery Report for Monday showed that only 9 silver contracts were posted for delivery tomorrow within the Comex-approved depositories.

There were no reported changes in either GLD or SLV yesterday.

But it was a different story once again at the U.S. Mint on Monday.  They sold another 13,000 ounces of gold eagles...3,000 one-ounce 24K gold buffaloes...and 300,000 silver eagles.  Silver eagle sales are now through the five million coin/ounce mark at 5,082,000...along with 150,000 ounces of gold eagles and buffaloes combined to date.  These are serious numbers...and we're only halfway through January.

It was another busy day over at the Comex-approved depositories on Friday, as they reported receiving 1,812,809 troy ounces of silver...and shipped 448,010 ounce of the stuff out the door.  Most of the activity was at Scotia Mocatta, both in and out...and the link to all the activity is here.

Twice a month I report on the short positions of both SLV and GLD from data provided by the good folks over at shortsqueeze.com.  My latest comments on this were posted in my Thursday column last week...and here are the two pertinent paragraphs...

The short position in SLV increased by another 2,892,600 shares/ounces...which works out to an increase of 13.15%.  The short position now sits at 24,897,800 shares/ounces...and that translates into a short position 7.64% of all outstanding shares of SLV.

The short position in GLD increased by 'only' 802,100 shares, or 80,210 troy ounces...which works out to an increase of 5.43% from the previous report.  The short position in GLD now sits at 15,575,200 shares, or about 1.56 million ounces of gold...3.62% of the outstanding shares of GLD.

I thought nothing of this until I heard from reader Walter Stepko...and this is what he had to say about my data...

Ed,

There is something amiss with the reported GLD & SLV short positions reported by Short Squeeze for Dec 30 that you quote in today's GSD.

They show a  Dec 30 short position for GLD of 15,575,200 with a prior (Dec 15) position of 14,773,100 .

For SLV they show a short of 24,897,800 for Dec 30 and a prior position of 22,005,200.

However, my records show a Dec 15 short positions of 22,823,400 for GLD and 18,118,000 for SLV. This is also what you reported in your Dec 28 GSD issue.

Walter

Since I don't track this stuff as religiously as Ted Butler, I fired Walter's e-mail off to Ted as soon as I got it.  Ted had already noted the changes as well...and since Walter sent that e-mail, the numbers had been changed for a second time.

Ted figures that it was nothing that shortsqueeze.com was doing...but rather the fault of the Depository Trust Clearing House [DTCC] where all these numbers originate.  There's not too many shades of grey in Ted's thoughts about this rather shadowy outfit...and here it is in three sentences:  I have been steadfast in naming JPMorgan as the big silver crook, but my feelings about the DTCC makes JPM look like Mother Theresa in comparison.  After all, the DTCC appears to be little more than a secret private organization comprised of bankers controlling most of the world's financial assets.  I'll continue to report on short sale activity in SLV, but remain distrustful of the source.

Here are a couple of charts that Nick sent my way on the weekend.  They show the percentage gains in the 1970 bull market in both gold and silver versus the percentage gains we've had in the current [starting in year 2000] bull market to date.  The deserve a look...and the 'click to enlarge' feature will come in handy for that.

(Click on image to enlarge)

(Click on image to enlarge)

Being a Tuesday column, I have a fair number of stories for your reading 'pleasure' today.

 

¤ Critical Reads

Top Democrats urging Obama to raise debt ceiling all voted against increase in ’06

On Friday the Democratic leadership of the Senate — Majority Leader Harry Reid, Assistant Majority Leader Richard Durbin, Conference Chair Charles Schumer, and Conference Secretary Patty Murray — wrote to President Obama urging him to unilaterally raise the debt ceiling in the event that Republicans either block such an increase or attempt to pass one “as part of unbalanced or unreasonable legislation.”

“We believe that you must make clear that you will never allow our nation’s economy and reputation to be held hostage,” the Democrats wrote.  “We believe you must be willing to take any lawful steps to ensure that America does not break its promises and trigger a global economic crisis — without congressional approval, if necessary.”

Put aside the picture of leading lawmakers, usually so jealous of their constitutional prerogatives, asking the president to ignore Congress.  What is striking about the letter is that every one of its signers — Reid, Durbin, Schumer, and Murray — voted against raising the nation’s debt ceiling just seven years ago.

Well, dear reader, can you spell hypocrisy?  This story showed up around lunchtime on Saturday in The Washington Examiner...and it's a story I borrowed from yesterday's edition of the King Report.  The link is here.

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JPMorgan Ordered to Bolster Risk Management After London Whale

JPMorgan Chase has been ordered to take steps to correct poor risk management that led to a surprise trading loss last year of more than $6 billion.

Federal regulators are also citing the nation's largest bank for lapses in control that allowed the bank to be used for money laundering.

JPMorgan will not pay a fine under the agreements with the Federal Reserve and the U.S. Comptroller of the Currency, a Treasury Department agency. JPMorgan promised to strengthen its policies and procedures to control risk and to screen customers to prevent money laundering.

JPMorgan in May disclosed that its London office lost billions in trades designed to hedge against risk. The bank later said that some traders had tried to hide the size of the losses.

These four paragraphs are all there is to this CNBC story that was posted on their Internet site shortly after the markets closed in New York yesterday.  Since JPMorgan owns part of the Federal Reserve, it got to write part of its own punishment.  Isn't that grand!  I thank West Virginia reader Elliot Simon for sending it along in the wee hours of this morning...and the link to the hard copy is here.

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Indicted businessman: Utah Attorney General tied to alleged scheme

Embattled St. George businessman Jeremy Johnson says new Utah Attorney General John Swallow helped broker a deal in 2010 in which Johnson believed he was to pay Senate Majority Leader Harry Reid $600,000 to make a federal investigation into Johnson’s company go away.

But when the federal government filed a lawsuit Johnson thought he had paid to quash, he demanded Swallow return some of the $250,000 initial payment. Then, just days before the Nov. 6 election, Johnson engaged in a frenetic but unsuccessful effort to get Swallow to drop out of the race, saying information about what Johnson called a "bribe" would come out and force the Republican’s resignation if he became attorney general.

Johnson’s allegations come less than a week after Swallow took the oath of office. Federal agents have interviewed several Utahans about Johnson’s relationship with Swallow, among other issues, according to those interviewed. The FBI would not comment.

This article showed up in The Salt Lake City Tribune one minute before midnight on Friday night...and I thank Marshall Angeles for bringing it to my attention...and now to yours.  The link is here.

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Doug Noland: A Credit Theory and "Ro, Ro" Update

It’s safe to add the Fed’s “pre-commitment” of $85bn monthly QE – and tying such extreme accommodation to the unemployment rate – as one more major policy error for the history books.  The Fed’s quandary is today compounded by its obfuscation and convoluted communications strategy.

A mini “exit strategy” is definitely in order – and it’s been awhile since the markets had to fret about a reversal of Fed accommodation.  And, importantly, the longer “risk on” spurs global market excesses – the more pressing it will be for the Fed to act.  Yet, ongoing “fiscal cliff” risks abound.  Fed timidity raises the probabilities that an unleashed “risk on” finds an opening.  And a scenario of runaway “risk on” - and a Fed some months down the road forced to reverse course - would play right into the “2013 fat tails, bi-polar outcome possibilities” thesis.   Less hypothetical is today’s predicament that highly speculative global risk market behavior is dictated by expectations for ongoing extreme policy accommodation – although I suspect policymakers have little clarity on the future course of policy because they haven’t a clue as to what the future holds for a rather robust and unwieldy “risk on, risk off” speculative market Bubble Dynamic.

Doug Noland's weekly Credit Bubble Bulletin was a casualty of editing in my Saturday column...but here it is today.  The link is here.

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As Hugo Chavez fights for his life, Cuba fears for its future

Away from the constitutional wrangles and impassioned crowds of Caracas, the future of Venezuela after Hugo Chavez is being plotted this weekend in an elegant pre-revolutionary mansion in Havana's old playboy quarter.

The firebrand Venezuelan president is fighting for his life in a nearby hospital, stricken by severe respiratory problems and a lung infection after his latest round of surgery for cancer.

His illness left him unable to be sworn in for his fourth term as president last Thursday, having won a close-fought election in October.

But for his Cuban hosts, much more is at risk than simply the loss of a fellow left-wing Latin American radical who has long venerated Fidel Castro. His death would also put at risk the remarkable oil-fuelled largesse that has allowed Cuba to cling to its experiment in tropical communism.

Thanks to the close personal relationship between Mr Chavez and Mr Castro, energy-rich Venezuela supplies more than 100,000 barrels of dirt-cheap oil a day to Cuba - an estimated 50 per cent of the island's petroleum needs.

This very interesting read showed up on the telegraph.co.uk Internet site on Saturday afternoon GMT...and I thank reader U.D. for sharing it with us.  The link is here.

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Anti-European Sentiment Grows: German Warnings to Britain Fall on Deaf Ears

Growing ranks of euroskeptics in the UK have Prime Minister Cameron scrambling to adjust his country's relationship with the EU. And diplomatic warnings from Germany and the US against such measures have only further encouraged anti-EU voices there.

Gunther Krichbaum is a quiet man who rarely makes front-page news in Germany. But the member of Chancellor Angela Merkel's center-right Christian Democratic Union (CDU) did just that in the United Kingdom last week.

"One of Angela Merkel's closest allies has warned David Cameron not to try to blackmail the rest of Europe," wrote The Guardian. The tabloid Daily Mail called Krichbaum's remarks "effrontery." And Douglas Carswell, a parliamentarian with Prime Minister Cameron's Conservative Party, said that Britons "don't want to live a life directed by Germany."

This is the first of many stories from Roy Stephens in today's column...and this one was posted on the spiegel.de Internet site early yesterday afternoon in Europe.  The link is here.

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Mario Draghi has saved the rich, now he must save the poor

The European Central Bank has washed its hands of any further responsibility for the 27m people across the eurozone listed as unemployed or classified as discouraged workers. 

The Governing Council has concluded that nothing more can usefully be done to lift the region out of double-dip recession, a relapse that it failed to foresee and to a great extent caused by allowing all key measures of the money supply to contract in early-to-mid 2012.

It will not take fresh action to offset fiscal tightening this year of 2.3pc of GDP in Spain, 2pc in France, or 1.2pc in Italy -- not to mention draconian retrenchment in the three indentured states of Greece, Portugal, and Ireland -- or take action to cushion the shock of deep reforms.

This very long Ambrose Evans-Pritchard rant showed up on The Telegraph website early yesterday evening GMT...and I thank Roy Stephens for sending it.  The link is here.

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Greece seeks revenue and approves new mines

In the forest near here, bulldozers have already begun flattening hundreds of acres for an open pit gold mine and a processing plant, which Canada’s Eldorado Gold Corporation hopes to open within two years. Eldorado has reopened other mining operations around here, too, digging for gold, copper, zinc and lead from nearby hills.

For some residents, all this activity, which promises perhaps 1,500 jobs by 2015, is a blessing that could pump some life into the dismal economy of the surrounding villages in this rural northeast region of Greece.

But for hundreds of others, who have mounted repeated protests, the new mining operation is nothing more than a symbol of Greece’s willingness these days to accept any development, no matter the environmental cost. Only 10 years ago, they like to point out, Greece’s highest court ruled that the amount of environmental damage that mining would do here was not worth the economic gain.

This story appeared in the Sunday edition of The New York Times.  True, it's about gold mining...but the story itself has more to do with the economy in general, rather than gold in particular.  It's another Roy Stephens offering...and the link is here.

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Journalists in Greece Are Becoming Bombing Targets

The Greek police on Saturday were looking for the people responsible for detonating makeshift bombs at the homes of five journalists in Athens, the latest in a series of actions taken against reporters in Greece that have raised questions about a deteriorating climate for media freedom.

An anarchist group calling itself Lovers of Lawlessness claimed responsibility for Friday’s attacks, citing coverage of the financial crisis that the group denounced as sympathetic to the austerity programs being imposed by the Greek government and its foreign lenders.

Reporters Without Borders condemned the bombings, in which explosives tied to gas canisters caused minor damage at the homes of the editor of the Athens News Agency, Antonis Skylakos, and two broadcasters, Giorgos Oikonomeas and Antonis Liaros, from private television stations. Petros Karsiotis, a crime reporter, and Christos Konstas, a former journalist who is now a spokesman for the government agency in charge of privatizing Greek assets, were also targeted. No injuries were reported.

“These attacks are the most visible expression of an increasingly dangerous climate for all journalists, who are being turned into the scapegoats of a crisis they are just analyzing,” Reporters Without Borders said.

This is the second story in a row from The New York Times.  This one was posted on their Internet site on Saturday...and I thank Phil Barlett for finding it for us.  The link is here.

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Haven for Oligarchs: Europe's Mounting Reluctance to Bail Out Cyprus

There is growing resistance in Europe to the planned aid program for Cyprus, because it would also benefit illegal Russian money parked in bank accounts in Cyprus. The government in Nicosia is willing to make concessions, but Brussels is demanding more reforms.

Cyprus has a smaller population than the little German state of Saarland, but that hasn't stopped it becoming one of the biggest trouble spots in global politics at the moment. The question of whether the government in Nicosia should be allowed to bolster its ailing banks with more than €17 billion ($22.7 billion) from Europe's bailout funds is dividing the euro zone, causing uncertainty in international markets and adding to the woes of the coalition government of Chancellor Angela Merkel, made up of her center-right Christian Democratic Union (CDU), its Bavarian sister party, the Christian Social Union (CSU), and the business-friendly Free Democratic Party (FDP). Now that the center-left Social Democratic Party (SPD) and the Green Party have announced their opposition to the plan, Merkel's coalition could for the first time fail to muster a parliamentary majority on an important decision relating to the euro crisis.

The financial woes of Cyprus are a thorny issue for the German government, the mood in global financial marks and, most of all, for Europe's bailout policy. Ever since last fall, when SPIEGEL published a report by Germany's Federal Intelligence Service (BND) on money laundering in Cyprus, it has been clear that an aid program for the country would also benefit Russian oligarchs who have deposited billions in assets from dubious sources on the Mediterranean island. According to the BND analysis, if Brussels released the requested aid money, German taxpayer funds could very well be used to protect the illegal assets of Russian business magnates.

Sooner or later Europe will have to bail out Cyprus, just like they did Greece, whether they want to or not.  This spiegel.de story was posted on their Internet site around lunchtime in Berlin yesterday...and I thank Roy Stephens once again.  The link is here.

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Interview with Cypriot Finance Minister: 'Cyprus Is No Tax Haven'

In a SPIEGEL interview, Cypriot Finance Minister Vassos Shiarly, 64, defends his country's request for billions of euros in European bailout funds. He denies accusations that Cyprus encourages worldwide money laundering and is attracting investment by means of tax dumping.

SPIEGEL: Minister Shiarly, considerable opposition is taking shape against Cyprus's request for billions in aid from the European bailout fund. Do you think that your European counterparts will approve the funds?

Shiarly: I have a very good relationship with God. I spoke with him for a long time, but he didn't give me an answer. But seriously, we have done everything in our power to bring about this decision.

Wow!  Like today's first story...can you spell hypocrisy?  Of course, Vassos Shiarly is lying through his teeth whether he talks to God or not.  This is Roy Stephens final offering in today's column...and the link to this second spiegel.de story in a row is here.

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China Export Surge Spurs Data Skepticism at Goldman, UBS

China’s unexpected surge in exports last month renewed concern from analysts at Goldman Sachs Group Inc., UBS AG and Australia & New Zealand Banking Group Ltd. (ANZ) that statistics from the nation can be unreliable.

The 14.1 percent jump from a year earlier was the biggest positive surprise since March 2011, according to data compiled by Bloomberg. The increase didn’t match goods movements through ports and imports by trading partners according to UBS, while Goldman Sachs and Mizuho Securities Asia Ltd. cited a divergence from overseas orders in a manufacturing index.

Smaller trade gains could signal a less robust recovery from a seven-quarter slowdown just as Australian Treasurer Wayne Swan says the economic rebound is a sign of improving global demand. Accurate statistics from the world’s second-biggest economy are increasingly important for domestic and foreign investors and for China’s government, ANZ’s Liu Li-Gang says.

This Bloomberg story was posted on their website during the Denver lunch hour yesterday...and I borrowed it from yesterday's King Report.  The link is here.

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Eight King World News Blogs/Audio Interviews

The first blog is with John Embry...and it's headlined "Silver Will Soar Hundreds of Dollars Higher".  Next comes John Hathaway...and his interview is titled "The Case for Gold to Trade Substantially Higher".  Next comes this Richard Russell blog.  It's entitled "Gold & Silver are on the Verge of Accelerating". Here's a "KWN Sunday Gold Chart Special"...with all charts courtesy of Nick Laird.  And next is this blog with Michael Pento...and it's headlined "This is the Frightening Reality We All Face Going Forward". In sixth place comes this "KWN Monday Silver Chart Special"...and the charts are also courtesy of Nick Laird.  The two audio interviews are with Ben Davies...and Egon von Greyerz.  The links are here...and here.

Chris Powell posted John Hathaway's KWN blog in a GATA release on Sunday...and this is what he had to say about it in his preamble to the link..."Tocqueville Gold Fund manager John Hathaway has provided King World News with 11 charts making a powerful bullish case for gold. But, like most bullish arguments for gold, the charts don't account for central bank intervention in the gold market as well as central bank and bullion bank creation of imaginary paper gold to meet metal demand from the unwary. So as valuable as Hathaway's charts are for demonstrating what should happen with gold, what actually will happen remains a question and something central banks will be striving to answer with every manner of deception and market rigging."

This is absolutely true, of course...and John knows it.

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Jay Taylor discusses gold market manipulation in Future Money Trends interview

Gold market manipulation is the first topic in an interview with financial letter writer Jay Taylor by Dan Ameduri of Future Money Trends. GATA is cited. The interview is 19 minutes long and its audio is posted at Future Money Trends Internet site.

I stole all of the above from a GATA release on Sunday...and the link is here.

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With platinum coin rejected, how about up-valuing the gold reserve instead?

So much for the trillion-dollar platinum coin idea.

The U.S. Treasury Department said on Saturday it will not produce platinum coins as a way of generating $1 trillion in revenue and avoiding a battle in Congress over raising the U.S. debt ceiling.

The idea of creating $1 trillion by minting platinum coins has gained some currency among Democrats in recent days as a way of sidestepping congressional Republicans who are threatening to reject a necessary increase in the debt ceiling unless deep spending cuts are made.

The Treasury Department and the Federal Reserve, both independent of one another, each concluded this was not a viable option.

"Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit," said Treasury spokesman Anthony Coley in a statement.

Well, I'm sure that the powers that be were disappointed that only their political hacks would buy what they were selling.  Lincoln's famous statement that you can't fool all of the people all of the time, remains inviolate, at least in this matter...and this patently ridiculous trial balloon found the pin that it so richly deserved.  I found this Reuters story in a GATA release on Saturday, but the first reader through the door with this article was Brian Farmer...for which I thank him...and the link is here.

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Zuma signals radical changes

Radical legislative changes are on the cards and the ANC has given notice that it plans a drastic push on emotive and controversial policies such as land, mining and health.

Just 18 months before the elections and a few weeks after the ANC’s policy conference, President Jacob Zuma used the party’s 101st anniversary celebrations yesterday to reveal a raft of targets for action – some as early as this year. “We have … resolved that the state must capture an equitable share of mineral resource rents through the tax system and deploy them in the interests of long-term economic growth, development and transformation. Government must implement this resolution,” he said.

Taxation on super profits is in the offing along the lines of recommendations in the ANC’s research report, State Intervention in Minerals Sector.

This is a tax grab pure and simple.  This article showed up on the iol.co.za Internet site during the Johannesburg lunch hour on Sunday...and I thank Manitoba reader Ulrike Marx for sending it.  The link is here.

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Sovereign Exchange holds fundraiser for GATA in Vancouver on January 19th

The Sovereign Exchange, a British Columbia-based company putting silver back to work as money is planning a fundraising party for GATA this coming Saturday, January 19, on the eve of the Vancouver Resource Investment Conference, in which both GATA and the Sovereign Exchange are participating, a fundraiser separate from GATA's own, scheduled Monday, January 21.

If you'll be at the conference on that date...you can find out all about this fundraiser in this GATA release linked here.

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GATA's work depends on Jan. 21st fundraiser in Vancouver, so please bring metal

GATA's immediate future will depend largely on the fundraising reception we're planning on the evening of Monday, January 21, at the conclusion of Cambridge House's Vancouver Resource Investment Conference.

The fundraiser will be held from 5 to 7:30 p.m. in the Cypress Room of the Pan Pacific Hotel, adjacent to the conference site, the Vancouver Convention Centre West, and the keynote speaker will be the renowned Bob Bishop, retired editor of the Gold Mining Stock Report newsletter. Sprott Asset Management's chief investment strategist, John Embry, will be master of ceremonies. Admission to the reception will be free; there will be snacks and a cash bar.

With enough financial support GATA could undertake comprehensive freedom-of-information litigation in the federal courts to gain access to the U.S. government's likely treasure trove of records involving gold-market rigging.

This must read GATA release contains much more than the fundraising information...and the link to it is here.

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Yellow Metal's Blue Chips Are Greener Than You Think

Many readers have expressed concerns about press reports on how rising costs are eating miners' lunches. Sentiment is so bearish, some companies have delivered great news to the market in recent months only to see share prices fall anyway.

This is great news for contrarians, who - made of stronger stuff - are happy to buy when the faint of heart flee the field. But what is the reality of gold mining today? Is the business really as bad as so many investors seem to think?

Your metals mining team has had a look at the numbers and reports its findings below. Quick version: we're still buyers.

That's what Senior Metals Investment Strategist Louis James had to say in his introduction to yesterday's must read edition of the Casey Daily Dispatch...and you can read all about it here.

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Goldcore raises clamor about Bank of England's custody of Ireland's gold

Bankrupt Ireland owns 6 tonnes of gold, the bulk of which is held at the Bank of England, it has been revealed.

The Central Bank of Ireland said the value of its gold holdings was E235 million last time it checked. This represents just over 1 per cent of its total investments.

A spokeswoman said the central bank was a party to the Washington Agreement on Gold, which recognised gold as an important element of global monetary reserves.

She said the central bank had not entered into any lease arrangements regarding any of its gold but would not provide specific details of its storage arrangements with the Bank of England.

This short must read story was post on the independent.ie Internet site on Sunday...and I found it embedded in a GATA release...and the link is here.

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Bundesbank reported ready to retrieve Germany's gold from New York and Paris

The German business newspaper Handelsblatt, based in Dusseldorf, reported exclusively  last night that the Bundesbank will announce a plan to retrieve Germany's national gold from the Federal Reserve Bank of New York and the Banque de France in Paris.

As our German friends have gone to bed at this hour, we're left with only the meatball-quality work of Google translator, on which Zero Hedge's dispatch relies...and exactly how much gold is to be repatriated from each foreign vault will not be clear until tomorrow. But some speculation may be allowed as follows...

This absolute must read GATA release was posted on the gata.org Internet site shortly before midnight last night.  But the first reader through the door with this story yesterday evening was Matthew Nel, for which I thank him...and the link to the GATA release is here.

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¤ The Funnies

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¤ The Wrap

The great masses will more easily fall victim to a big lie than to a small one. – Adolph Hitler

Despite the low volume, it was pretty the same price pattern as always in early New York trading yesterday, as whatever potential the rallies that developed in all four precious metals had, they quickly disappeared under a barrage of short selling by JPMorgan et al...especially in gold and silver. It was the same old, same old.

The big news story from Germany yesterday didn't really have any initial effect on the precious metals prices...but that changed in afternoon trading in Hong Kong...and again at the London open.  But you can tell by the charts that these rallies are not going unopposed...however, as I type this paragraph at 3:39 a.m. Eastern time, the day is still very young.

I had mentioned back when Hugo Chavez repatriated his country's gold back to Venezuela, that this wouldn't set off any repercussions in the gold market and, unfortunately, it didn't.  But I also said in the next sentence that the next country that asked for its gold back could be a game-changer.  But not in my wildest imaginations did I think it would be Germany...and if the story posted above is true, it could turn into a whole new ballgame very quickly.

As Ted Butler has said for decades, the only way that the price management scheme in all four precious metals would end, is if JPMorgan et al released their death grip on the short side of these markets...either by: 1] putting their hands in their pockets and doing nothing during the next rally...and subsequently getting over run, 2] buying back their short positions...driving prices to the moon and the stars...and going bankrupt in the process, or 3] closing the Comex.  All three of these options, or combinations of them, are the only ways out.  It just remains to be seen how the end game manifests itself...and over what period of time.

A big tip of the hat goes out to German financial journalist Lars Schall for his relentless efforts in bringing this whole German repatriation situation to the state it's in at the moment.  And as Chris Powell said in his absolute must read GATA release on this issue, we won't have to wait much longer to find out just how much gold will be coming home to the Fatherland.

And as I hit the 'send' button at 5:20 a.m. Eastern time, volumes in both gold and silver are very heavy...40,000 contracts in gold and 11,000 in silver...and since very little of it in gold is roll-overs, it's safe to assume that a lot of this is high-frequency trading that's attempting to control the price rally that's now under way in all four precious metals.  It appears, at least for the moment, that the precious metals prices got capped within the first hour of London trading...and we'll have to see how things unfold going into the noon silver fix, followed by the Comex open in New York.  The dollar index isn't doing much of anything.

It could prove to be an interesting day in the precious metal markets as Tuesday progresses.

See you tomorrow.

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