The gold price traded in a ten dollar range yesterday...and the Kitco chart for gold looks pretty similar for the last three trading days...with the gold price getting sold off during the London trading day...the low coming at the Comex open...and the price being capped sometime before lunch in New York.
You can tell that gold wanted to rise more than it did again yesterday, but there were willing sellers present in both the London and New York morning trading sessions. Once the high was in, the price wasn't allowed to get far after that.
Gold closed the electronic trading session in New York at $1,650.10 spot...down 70 cents on the day. Net volume was only 112,000 contracts, which was even lighter than Tuesday.
Here's the New York Spot Gold [Bid] chart on its own. The low of the day came at precisely 8:30 a.m. Eastern...and then there was the seller waiting to peal about twelve bucks off the price once gold got too frisky to the upside at 10:15 a.m.
The price pattern in silver was identical...and you can see that silver really wanted to fly by the saw-tooth pattern during the New York trading session. The silver price made more than half a dozen attempts to move sharply higher...and all met the same fate.
Silver closed at $32.17 spot...up a whole penny. Net volume was around 34,000 contracts.
Here's the New York trading day on its own...and all the rally attempts stand out more clearly on this chart.
The same price pattern occurred in gold as well, but it was more subdued.
The dollar index spent virtually the entire trading day within 25 basis points of 79.60...basically closing unchanged from Tuesday. I think it's fair to say that the dollar index and the gold price were in tight sync with each other pretty much most of the Wednesday trading day. Almost too tight.
Talking about tight syncs...the gold stocks followed the gold price like a shadow yesterday...and the HUI finished down a smallish 0.33%.
Virtually all the stocks that make up Nick Laird's Silver Sentiment Index were down on the day...and it closed down as well...0.21%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 114 gold, along with 121 silver contracts were posted for delivery yesterday. The only short/issuer was JPMorgan in its in-house trading account...and the Bank of Nova Scotia was the long/stopper on all of them. In silver, as I predicted, Jefferies was the short/issuer on all 121 silver contracts...and 110 of those contracts were received/stopped by JPMorgan and the Bank of Nova Scotia. The link to the Issuers and Stoppers Report is linked here...and it's worth a look.
There was no reported change in GLD yesterday...but an authorized participant withdrew 825,549 troy ounces of silver from SLV yesterday.
There was no sales report from the U.S Mint.
The Comex-approved depositories reported receiving 300,679 ounces of silver on Tuesday...and shipped 65,386 ounces out the door.
Silver analyst Ted Butler posted his mid-week commentary for his paying subscribers yesterday...and here are a couple of free paragraphs...
"For more than 30 years, I have noticed that on unique U.S. holidays, when Europe is open for business and the US closed, worldwide trading almost stops altogether in gold and silver. That wouldn’t seem to be the case if the COMEX were [smaller than the LBMA]. Further, the most dominant COMEX traders are also the most dominant traders on the LBMA and the OTC markets...and the allegations of manipulation are principally aimed at these traders anyway."
"If there is such massive trading taking place away from the COMEX in gold and silver, then why are those big dominant players, such as JPMorgan, fighting so bitterly to prevent position limits from coming into law? After all, if there are such big liquid gold and silver markets apart from the COMEX out there, then why don’t these commercial crooks just go trade there and avoid the CFTC and position limits completely? I’ll tell you why – there are no big liquid markets elsewhere that the commercials can run to; they know they can’t just pick up and leave the COMEX or the price of silver would explode. That’s because the long side of COMEX silver is not concentrated and, therefore, not potentially restricted by position limits as the short side is."
"Specifically, the big COMEX silver short, JPMorgan, can’t just move its concentrated and manipulative short position elsewhere...and because of this, it's forced to fight against silver position limits to the bitter end. To abandon the COMEX would create a void on the short side that must be met by short selling by others. If the short side were currently attractive to others (to the extent of JPMorgan’s current position), the other sellers would have already sold short, which has not occurred. The only possible inducement for others to replace JPMorgan on the short side is higher prices. In fact, this is the clearest proof of all that JPMorgan has manipulated the price of silver. In any alleged manipulation, the key question is always what the price would be if the manipulator didn’t hold its concentrated position. If the answer is that the price structure would most likely be radically different without such a concentrated position, then the conclusion must be that the concentrated position is manipulative to the price. In silver, it’s simple; without JPMorgan’s concentrated short position on the COMEX, the price of silver would be sharply higher. Surely, no one would argue that if JPMorgan eliminated its COMEX short position that would cause the price of silver to fall."
I have the usual number of stories for you today...and I hope you have time for the ones that interest you.
Last month, Glenn Neasham, an independent insurance agent, was ordered to spend 90 days in jail on a felony-theft conviction for selling a complex annuity to an 83-year-old woman who prosecutors alleged had shown signs of dementia.
The agent's conviction, by a state-court jury in Lake County, Calif., is sending shivers down the spines of Mr. Neasham's peers across the country. They can't recall another case where an agent was sent behind bars for selling an annuity.
Agents "who steal from vulnerable seniors will not get away with their shameful tricks," Steve Poizner, the state's then-insurance commissioner, said in a statement in 2010 when Mr. Neasham was arrested.
Mr. Neasham, 52 years old, maintains the woman appeared fine and wasn't confused at the time of the 2008 transaction and that he acted appropriately. His lawyer has filed notice of appeal, and a bail hearing is scheduled for this week.
This Wall Street Journal story showed up on their website on Sunday...and I thank Casey Research's own Alex Daley for sending it along. The link is here.
"If this were the last debt ceiling increase you could ask for, the final one, and you had to make it large enough for all current and future obligations, what would the request need to be?" Congressman Trey Gowdy (R-SC) asked Treasury Secretary Tim Geithner at a Capitol Hill hearing on Wednesday.
"I don’t know how to answer that question," Geithner said to Gowdy.
After being prodded by the Congressman, Geithner eventually told him, "it would be a lot."
“It would make you uncomfortable," he added. Also listen for "I'll have to get you that in writing" then not 30 seconds later say "he can NOT provide that in writing."
I bet it would be a lot...and no surprise that he won't provide it in writing! This 3:09 minute youtube.com video clip was posted over at the realclearpolitics.com website yesterday...and I thank reader Brian Doyal for bringing it to our attention. The link is here.
Now that inflation is beginning to pick up, it is vital to distinguish between what is real and what is just an illusion caused by inflation. If one does not, one might very well come away with the impression that the economy is shifting into higher gear when, in fact, it is not.
Take retail sales, for example. On the surface they are encouraging, since February’s sales gain was the most in five months. And since retail sales are one-half of consumers’ spending, which in turn makes up two-thirds of overall economic activity, one might be tempted to conclude that the worst is over.
One would be wrong. First of all, these are dollar figures, adjusted for the time of year but not for inflation. Second, most of the rise reflected a 6% surge in gasoline prices.
This marketwatch.com story was posted on their Internet site on Tuesday...and I lifted it from yesterday's King Report. The link is here.
Goldman Sachs Group Inc lost its bid to dismiss a lawsuit accusing it of defrauding investors by selling risky debt linked to subprime mortgages that it planned to bet against.
The decision by U.S. District Judge Victor Marrero in New York keeps alive a hedge fund's claims over a $2 billion offering of collateralized debt obligations, amid intense scrutiny over Goldman's activities before and after the 2008 financial crisis.
Marrero said the hedge fund Dodona I LLC may pursue nearly all its claims against Goldman, including that the Wall Street bank recklessly or intentionally sold the Hudson Mezzanine Funding CDOs to offload subprime risk on unsuspecting investors.
Roy Stephens sent me this Reuters piece that was posted on their website last evening...and the link is here.
A council of U.S. financial regulators should speed up Dodd-Frank Act rules needed to limit speculation on oil, natural gas, and other commodities, Bart Chilton, a member of the Commodity Futures Trading Commission said.
The CFTC and Securities and Exchange Commission, having delayed adopting regulations stemming from the 2010 financial-regulation overhaul, should consider asking the Financial Stability Oversight Council to complete the regulation defining which derivatives are swaps, Chilton said in a speech prepared for his appearance today before the Exchequer Club of Washington. The speculation limits rely on the definition.
The speculation limits are among the most controversial requirements in Dodd-Frank and spurred more than 13,000 comments to the CFTC from supporters such as Delta Air Lines Inc. and opponents such as Barclays Plc's Barclays Capital. CFTC commissioners voted 3-2 at an Oct. 18 meeting to approve the final regulation, with Jill E. Sommers and Scott O'Malia, both Republicans, voting in opposition.
A huge chunk of those 13,000 comments were about position limits in the Comex futures market in silver. This Bloomberg story was one I found posted in a GATA release yesterday. It's well worth reading...and the link is here.
Here's something you don't see every day...an interview with The Telegraph's Ambrose Evans-Pritchard. The interview runs 31:13...and the link pops up on the screen during the 1:47 introduction.
It's posted over at the mcalvanyweeklycommentary.com Internet site...and I thank reader Dennis Meredith for sharing this interview with us. I haven't heard it yet, but once I've finished this column, I'll be listening...and I would suggest you do the same. The link is here.
This documentary film obviously covers the big key issues that the mainstream bulls, bankers and politicians always conveniently fail to address... which they can continue doing for a time, until these issues destroy them, and the system.
It features some big guns with proven track records; Peter Schiff, Eric Sprott, James Turk, Bill Murphy, Alasdair Macleod, Jim Puplava, G. Edward Griffin, Mike Maloney, James G. Rickards, Adam Fergusson MEP, Dimitri Speck.
The Treasury said on Wednesday there were no plans to add to gold reserves, after Chancellor George Osborne said in a presentation of the budget that he would take the opportunity to rebuild the country's reserves.
"What the Chancellor is talking about here is rebuilding the official reserves, so it's not gold-specific. It's just over financing the deficit this year by 6 billion pounds ($9.51 billion) in 2012-13 to build up the official reserves," a Treasury spokesman said.
Osborne said in presenting the country's budget for fiscal 2012-2013: "We are also taking the opportunity to rebuild Britain's reserves, which had fallen to historically low levels. I can confirm our gold holdings have risen in value to 11 billion pounds."
I dug this short Reuters piece out of a GATA release yesterday. It's posted over at the uk.news.yahoo.com website. It's worth your time...and the link is here.
Deutsche Bank plans to open a new precious metals vault in London next year, seeking to cash in on booming investor demand for physical gold and silver, the Financial Times reported on Tuesday.
In London, centre of the global bullion market, vault space is running low even as the growth in exchange-traded funds backed by physical precious metals has led to a steep rise in demand for vaults.
A growing number of banks and logistics companies are rushing to break into the market. Clients are looking to diversify where they place their physical holdings of precious metals, the paper quoted Raymond Key, Deutsche's global head of metals trading, as saying.
The new vault will be built and managed by G4S, the logistics company, the paper reported, citing Deutsche Bank.
This Reuters story, filed from Singapore on Tuesday morning, was sent to me by reader Norbert Wangnick...and the link is here.
Replying to Federal Reserve Chairman Ben Bernanke's lecture on Tuesday at George Washington University defending central banking against a gold standard, the New York Sun asks concisely: "The question is why, if the Federal Reserve and the system of fiat money are so superior to sound money, has our country been in such a pickle these past few years?"
The Sun notes that the Fed's enabling legislation back in 1913 declared explicitly that its purpose was not to supplant gold-backed money, and adds: "Why Mr. Bernanke leaves this history out of his lecture one can but surmise. He also leaves out the fact that under the Federal Reserve System the dollar has lost something like 85 percent of its value. Nor does he mention the sheer drama of the collapse of the dollar on his watch."
It's a brilliant editorial, headlined "Bernanke 101"...and I thank Chris Powell for writing the introduction. It's posted at the New York Sun's Internet site...and the link is here.
The first is a Richard Russell blog entitled "Silver now outpacing Gold and Fed Frightened". The second is the must listen audio interview with John Hathaway. I posted the KWN blog of this in this column yesterday. The third one is a Peter Schiff blog that's headlined "Gold, Oil & the Fed's Greatest Fear"...and lastly is the audio interview with John Embry from his blog in this column yesterday. It's a must listen as well.
Talking back last night to Federal Reserve Chairman Ben Bernanke's lecture at George Washington University, and with particular expertise, is GoldMoney founder, Free Gold Money Report editor, and GATA consultant James Turk, who throws Austrian economics at Bernanke pretty hard, perhaps harder still because he is a graduate of that university.
I borrowed the headlined and preamble from a GATA release last night. Turk's longish commentary is headlined "Bernanke Goes to College"...and it's posted at the fgmr.com Internet site. The link is here.
There was a time when catching the silver "whack-a-mole" algo, or process, or intervention, or manipulation, or whatever one wants to call it, in action...was a myth: an urban legend, perpetuated by silver conspiracy theorists.
Until today, that is.
Courtesy of Nanex we now have direct evidence of just what the reflexive market (in which derivative products such as ETFs influence underlying assets) goes to town by taking silver to the woodshed at a whopping 75,000 times per second!
Frankly, we don't know about you, but when someone is willing to bend the laws of relativity, just to get a cheaper price in silver, to perpetuate a failing monetary system or for any other reason, we quietly step aside.
These are the high-frequency traders in the silver market that Ted Butler has been going on about for ages now...and now their actions in the silver market are stripped bare for all to see.
I received this incredible zerohedge.com story from reader U.D. last night...and it ended up as a GATA release shortly thereafter. Chris Powell really tears the cover off the ball in his scathing editorial/introduction. Powell's comments and the Zero Hedge piece...posted at the gata.org website...are linked here. His headline reads "The CFTC has already done all it can about silver -- and everything else". I must admit that I only understand the contents of the graphs in their broadest form...but the message is crystal clear..."There are no markets anymore, only interventions."
MAX Resource Corp. (TSX:MXR) is focused on a newly-defined copper/silver/gold porphyry system at Majuba Hill in Nevada that is highly prospective for a bulk-tonnage, open pit deposit. MAX recently completed a Phase II core drilling program and additional soil sampling in a step-out drilling program at the DeSoto discovery near the past producing Desoto silver mine at Majuba.
Drilling earlier in the year encountered long intervals of high-grade silver and copper near surface in five of eight holes, as well as significant gold intercepts, such as 44.2 m of 71.0 g/t Silver, 0.15 g/t Gold and 1.14% Copper. Further assay results and soil geochemistry are expected in February/March 2012. Permitting is underway for an extensive Phase III delineation drill program at Desoto to begin in the spring of 2012.
Gold's two major attempts to break out yesterday...once in early London trading...and the other shortly after the London p.m. fix at 3:00 p.m. GMT...10:00 a.m. in New York...were all dealt with in the same old way by the high-frequency traders. Silver's price path followed the same pattern.
That zerohedge.com piece should wake you up to the ugly truth about these markets...and how they are managed. It also wouldn't surprise me if the precious metal stock prices are managed in a similar fashion, but there's just no way of knowing. But we all know that the big U.S. stock indexes are run by the HFT crowd, because of the 'flash crash' we had a year or so ago.
Other than that, there's not much else to report on, as it was just another day off the calendar. Tomorrow we get the Commitment of Traders Report...and we should find out pretty quick just how much of that HFT data shows up in it.
Not much happened in overnight trading. But less than half an hour after London opened, the dollar...which had been down all night...suddenly caught a bid...and is up a whole 12 basis points as I write this paragraph. That gave the HFT crowd the opportunity to hit both gold and silver...which they did with relish.
As I hit the 'send' button, gold is down about eighteen bucks...and silver is down about 40 cents.
Here are the gold and silver charts as of 5:35 a.m. Eastern time...
That's all I have for this Thursday. Based on what's happening at the moment, it could be another interesting day when the Comex begins to trade.
I'll see here on Friday.