Casey Research Publication
Gold & Silver Daily
"JPMorgan et al are attempting to send the year out on the most negative tone possible"
 

¤ Yesterday In Gold & Silver

It was another Sunday night where gold ticked up at the open in New York, but ran into a willing seller immediately---and by the London a.m. gold fix, the price was down over ten bucks.  There was a tiny rally that began at 1 p.m. GMT in London, 20 minutes before the Comex open, but that ran into the usual seller of last resort at 9 a.m. EST---just like it did on Thursday and Friday of last week.

From that New York high, gold got sold down lower and lower until the HFT-types pulled the plug at 3 p.m. in the thinly-traded New York Access Market.  Up until that point, the gold price had managed to hang onto the $1,200 spot price mark, but by 3:30 p.m. it was down to $1,196 spot---and traded sideways from there into the 5:15 p.m. EST close of electronic trading.

The CME recorded the high and low ticks as $1,215.80 and $1,193.30 in the February contract.

Gold finished the Monday session in New York at $1,196.70 spot, down $17.10 from Friday's close.  Net volume was only 84,000 contracts---4,000 contracts less than Friday's volume.

And as obvious as the sell-off was in gold before the London open yesterday, JPMorgan et al really did a number on silver after its rally attempt at the New York open on Sunday night---resulting in a chart pattern that you've seen many times in the past, dear reader, as the HFT guys engineer prices lower in the most thinly-traded of all markets.

Silver's rally attempt off it's pre-London low got sold down starting around 11:30 a.m. GMT---and from there it got sold down for most of the rest of the day, culminating in the spike down just before 4 p.m. EST close in New York.  The price recovered a bit from them, but only just.

The high and low for silver were reported as $20.18 and $19.46 in the March contract.

Silver closed in New York yesterday at $19.565 spot, down 51 cents from Friday's close---and safely back under the $20 spot price once again.  Net volume was pretty impressive at 32,000 contracts---8,000 contracts more than on Friday.

Platinum's rally attempt on Sunday evening in New York fared no better than the similar rally attempts in gold and silver.  Platinum also had it's low at the same time as gold and silver---in the thinly traded New York Access Market around 4 p.m. EST.  Palladium's decent rally attempt in New York got squashed as well---and it, too, got sold down for a loss.  "Da Boyz" took no prisoners yesterday, despite the fact that the dollar index was in the toilet throughout most of the trading day on Monday.  Here are the charts.

The dollar index closed late on Friday afternoon in New York at 80.33.  From there it rallied to its "high" of 80.42 shortly after 1 p.m. Hong Kong time on their Monday.  From there it was all down hill into the 79.95 low at exactly 11 a.m. EST, as someone was waiting to catch that proverbial falling knife once again, as the index broke decisively  below the 80.00 mark for the second business day in a row.  From that low, the index recovered a bit, closing at 80.01---which was down 32 basis points from its close on Friday.  Here's the 3-day chart.

The gold stocks opened down about a percent---and then traded close to unchanged up until the 3 p.m. arrival of the high-frequency traders.  The gold stocks reacted accordingly---and the HUI finished down 2.60% on the day.  The good folks over at ino.com had trouble with their HUI chart once again, so I only have half a chart for you today.  But it's the most pertinent half.

The silver stocks gapped down a bit over 2% at the open, before climbing back to almost unchanged by noon in New York.  From there they slowly chopped lower until the not-for-profit sellers showed up in the Comex futures market at 3 p.m.---and that was it for the day.  Nick Laird's Intraday Silver Sentiment Index closed down 1.90%.

There were no last minute December deliveries in either gold or silver for later today, so the deliveries I spoke of in Saturday's column were it for the month.  First Day Notice for the month of January showed that 3 gold and an absolutely stunning 1,030 silver contracts were posted for delivery on Thursday within the Comex-approved depositories.

The short/issuers of note were Canada's Bank of Nova Scotia with 368 contracts---but the big kahuna was JPMorgan, with 651 contracts out of its client account!  There's no prize for guessing the biggest long/stopper, as it was JPMorgan Chase once again with 988 contracts in its in-house [proprietary] trading account.  The link to yesterday's Issuers and Stoppers Report is here, and it's worth a look.

This is really a big deal, as January is not a regular delivery month in silver---and the fact the JPMorgan took delivery of five million ounces on the very first day, should make everyone stand up and take notice.  As Ted Butler has pointed out on many occasions---JPMorgan is mega-short the Comex paper market, but taking physical delivery of every ounce they can lay their hands on.

Not surprisingly, there was another withdrawal from GLD yesterday.  This time it was 96,451 troy ounces.  And as of 6:54 p.m. EST yesterday evening, there were no reported changes in SLV.

There was no report from the U.S. Mint yesterday---and I'll be very surprised if there's one today, either.

There was virtually no in/out activity in gold at the Comex-approved depository on Friday.  Nothing was reported received---and only 95 troy ounces were shipped out.

But it was an entirely different kettle of fish in silver, as 1,643,911 troy ounces were shipped in---and 1,526,663 troy ounces were reported shipped out.  Of the amount shipped in, 1.05 million troy ounces disappeared in the JPMorgan depository.  The link to all that activity is here.

The Commitment of Traders Report that came out yesterday afternoon was certainly a disappointment.  Both Ted and I were expecting some fairly substantial improvements in the Commercial net short positions in both silver and gold for the reporting week ending on Tuesday, December 24.  That expectation was on the back of the engineered price declines in both metals on Wednesday and Thursday of the prior week.  The price declines didn't translate into anything close to what we were expecting.  Here's what the COT Report showed.

In gold, the total commercial net short position declined by a scant 600 contracts to 26,500 contracts. There have been very few weeks where the total commercial net short position has been lower and as such the market structure is still extremely bullish. With such a small total net change, the individual commercial category change couldn’t, by definition, be dramatic. For the record, the big 8 shorts added almost 1,800 new shorts and the raptors added 2,400 new longs.

The technical funds (in the managed money category of the disaggregated COT report) did add over 3,100 contracts of gross new shorts to come close to their previous high-water mark, but I had expected more.

In silver, the total commercial net short position actually increased by 500 contracts to 19,700 contracts. Like in gold, this is still a very low number on any historical basis and must be considered strongly bullish. The changes by commercial category were all in the low hundreds of contracts and not worth detailing. The technical funds did add a few hundred new short contracts, but I was hoping for more there as well. As a result of the minor changes, JPMorgan looks to still be short 13,000 contracts [65 million troy ounces of silver].

I stole the above comments from silver analyst Ted Butler's short essay to his paying subscribers yesterday.  And since I was born in Missouri in another life, the thought also crossed my mind that these COT numbers from the CFTC yesterday were not reported correctly, or some data was withheld because of the holiday.  We'll find out next Monday.

Ted figures that JPMorgan Chase's long-side corner in the Comex futures market in gold is in the order of 67,000 contracts, or 6.7 million ounces.

I have a decent number of stories today, and I'll happily leave the final edit up to you.

 

¤ Critical Reads

Pending Home Sales Plunge at Fastest Pace Since April 2011

For the fifth month in a row, pending home sales missed expectations (though a silver lining is a positive print MoM - breaking a 5-month streak). Year-over-year, home sales collapsed at 4% - its worst drop since April 2011, and that even after prior data was revised lower. Still, despite this ongoing plunge, there is always hope - as engendered by NAR's chief economist who states, "we may have reached a cyclical low."

Lawrence Yun, NAR chief economist, said the market is flattening. “We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” he said. “Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years.”

Today's first story appeared on the Zero Hedge website yesterday morning EST...and the charts are worth the trip.  I thank reader 'David in California' for sending it.  The folks over at marketwatch.com try to put a positive spin on the numbers in a very short story posted here.

Read more...

"What the Bubble..." Chart of the Day: Half of Loans Issued in 2013 Were "Covenant Lite"

If you ask anyone at The Fed if there is a bubble in the credit markets, the answer is definitive "no"...since bubbles are always obvious. Well, hopefully, the following chart will make it "obvious" that the Fed's policy has driven a 'reach for yield' so excessive as to explode the growth of so-called cov-lite loans. This 'riskiest of risky' loan issuance, while already at record high levels, has now massively exceeded the previous bubble in terms of percent issued as the demand for anything with yield 'enables' the worst of the worst companies to refinance their zombie-like existence.

Of the $644.4 billion loans issued, $293.35 billion was Covenant-lite...and is over 45% of all loan issuance in 2013!!!

Like the first Zero Hedge story posted above, this ZH piece from yesterday afternoon EST contains four excellent charts...and is definitely worth looking at.  I thank Manitoba reader Ulrike Marx for sending it our way.

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Wells Fargo paying $541 million over bad loan claims

Wells Fargo will pay a net $541 million to Fannie Mae to settle claims over defective home loans, completing the government-controlled mortgage company's efforts to have banks buy back troubled loans made before the financial crisis.

Fannie Mae said on Monday it has reached settlements worth roughly $6.5 billion over loan buybacks with eight banks, including Wells Fargo, the nation's largest mortgage lender and fourth-largest bank by assets.

The accord resolves substantially all repurchase claims against Wells Fargo over loans sold to Fannie Mae that were made before 2009.

Wells Fargo agreed in September to pay a net $780 million to the smaller Freddie Mac to resolve similar repurchase claims. It said it had set aside sufficient funds for the Fannie Mae settlement.

This Reuters story was posted on the cnbc.com Internet site yesterday afternoon EST...and I thank West Virginia reader Elliot Simon for sending it our way.

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Police Salaries and Pensions Push California City to Brink

Emerging from Los Angeles’s vast eastern sprawl, the freeway glides over a narrow pass and slips gently into the scrubby, palm-flecked Coachella Valley.

Turn south, and you head into Palm Springs with its mega resorts, golf courses and bustling shops. Turn north, and you make your way up an arid stretch of road to a battered city where empty storefronts outnumber shops, the Fire Department has been closed, City Hall is on a four-day week and the dwindling coffers may be empty by spring.

The city, Desert Hot Springs, population 27,000, is slowly edging toward bankruptcy, largely because of police salaries and skyrocketing pension costs, but also because of years of spending and unrealistic revenue estimates. It is mostly the police, though, who have found themselves in the cross hairs recently.

“I would not venture to say they are overpaid,” said Robert Adams, the acting city manager since August. “What I would say is that we can’t pay them.”

This must read story appeared on The New York Times website last Friday...and it's the first contribution of the day from Roy Stephens.

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Home electricity use in U.S. falling to 2001 levels

The average amount of electricity consumed in U.S. homes has fallen to levels last seen more than a decade ago, back when the smartest device in people's pockets was a Palm pilot and anyone talking about a tablet was probably an archaeologist or a preacher.

Because of more energy-efficient housing, appliances and gadgets, power usage is on track to decline in 2013 for the third year in a row, to 10,819 kilowatt-hours per household, according to the Energy Information Administration.

That's the lowest level since 2001, when households averaged 10,535 kwh. And the drop has occurred even though our lives are more electrified.

This AP story from yesterday was posted on the tbo.com Internet site...and is courtesy of West Virginia reader Elliot Simon.

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U.S. will cling to mass surveillance like nuclear weapons - Assange to Russia Today

Julian Assange said there is “no hope” that mass strategic interception – as it is termed by the U.S. – will go away. The whistleblower then drew a historical analogy with how the U.S. has retained nuclear weapons in the past.

Assange’s comments were made during a panel discussion of the documentary film ‘Mediastan’ on Russia Today. The panel also included director Johannes Wahlstrom and Afghan journalist Enayat Najafizada, who participated in the movie. The film depicts different stages in undercover WikiLeaks journalists’ trips across Central Asia.

“These powers do not give up voluntarily any significant ability to control the world like that,” Assange told RT. He compared any US compulsion to cling onto such abilities as a form of need for global control, pointing out that after the end of the Cold War, the US retained excessive nuclear weapons, despite an enormous anti-nuclear lobby. “Many movies were critical of it – it was a very expensive system to maintain,” he said.

This very interesting read was posted on the Russia Today website Sunday evening Moscow time...and it's courtesy of South African reader B.V.

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Inside TAO: Documents Reveal Top NSA Hacking Unit

The NSA's TAO hacking unit is considered to be the intelligence agency's top secret weapon. It maintains its own covert network, infiltrates computers around the world and even intercepts shipping deliveries to plant back doors in electronics ordered by those it is targeting.

In January 2010, numerous homeowners in San Antonio, Texas, stood baffled in front of their closed garage doors. They wanted to drive to work or head off to do their grocery shopping, but their garage door openers had gone dead, leaving them stranded. No matter how many times they pressed the buttons, the doors didn't budge. The problem primarily affected residents in the western part of the city, around Military Drive and the interstate highway known as Loop 410.

In the United States, a country of cars and commuters, the mysterious garage door problem quickly became an issue for local politicians. Ultimately, the municipal government solved the riddle. Fault for the error lay with the United States' foreign intelligence service, the National Security Agency, which has offices in San Antonio. Officials at the agency were forced to admit that one of the NSA's radio antennas was broadcasting at the same frequency as the garage door openers. Embarrassed officials at the intelligence agency promised to resolve the issue as quickly as possible, and soon the doors began opening again.

It was thanks to the garage door opener episode that Texans learned just how far the NSA's work had encroached upon their daily lives.

You couldn't make this stuff up.  This incredibly interesting 3-page essay put in an appearance on the German website spiegel.de on Sunday morning...and it's the first of two in a row from Roy Stephens on the NSA.

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Shopping for Spy Gear: Catalog Advertises NSA Toolbox

When it comes to modern firewalls for corporate computer networks, the world's second largest network equipment manufacturer doesn't skimp on praising its own work. According to Juniper Networks' online PR copy, the company's products are "ideal" for protecting large companies and computing centers from unwanted access from outside. They claim the performance of the company's special computers is "unmatched" and their firewalls are the "best-in-class." Despite these assurances, though, there is one attacker none of these products can fend off -- the United States' National Security Agency.

Specialists at the intelligence organization succeeded years ago in penetrating the company's digital firewalls. A document viewed by SPIEGEL resembling a product catalog reveals that an NSA division called ANT has burrowed its way into nearly all the security architecture made by the major players in the industry -- including American global market leader Cisco and its Chinese competitor Huawei, but also producers of mass-market goods, such as US computer-maker Dell.

These NSA agents, who specialize in secret back doors, are able to keep an eye on all levels of our digital lives -- from computing centers to individual computers, and from laptops to mobile phones. For nearly every lock, ANT seems to have a key in its toolbox. And no matter what walls companies erect, the NSA's specialists seem already to have gotten past them.

This, at least, is the impression gained from flipping through the 50-page document. The list reads like a mail-order catalog, one from which other NSA employees can order technologies from the ANT division for tapping their targets' data. The catalog even lists the prices for these electronic break-in tools, with costs ranging from free to $250,000.

This very interesting commentary is a companion piece to the previous spiegel.de story posted above.  It's also courtesy of Roy Stephens.

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Spend, spend, spend. Because your savings aren't worth a damn

Organising my 2012-13 UK tax return this month, I compiled the year's interest earnings. Joint current account: net interest received £1.68, tax £0.39. Personal current account: interest received £0.19, tax £0.06. Then the big kahuna, my savings account, where I really sock away what I might need for a rainy day: interest received £14.10, tax £3.55. Wow – at least enough to pick up a handsome selection of Quality Street.

I can't be the only UK taxpayer who records these miserable bank payments in a state of rage. I could have earned more than I made in interest last year in the time it took me to type the account numbers. Such a pittance does interest income now produce that savers would at least appreciate the issuance of a blanket policy statement: "Not wishing to add insult to injury, HMRC no longer requires taxpayers to humiliate themselves by reporting contemptuously small interest payments, in which the nation's fiscal authorities are complicit. FYI, we'll no longer dun your pathetic interest for taxes, either, as it costs us more than 6p to extract those pennies from your current account."

The recent economic recovery in the UK is apparently driven not only by a renewed property boom, but by savers spending their reserves – quite sensibly, too.

This very interesting article was posted on theguardian.com website on Saturday sometime over in the U.K...and it's courtesy of Swiss reader G.B.

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Britain's Serious Fraud Office plots charges over Libor scandal

British authorities are preparing charges against several more bankers and traders in connection with the Libor-rigging scandal, the country’s top fraud investigator has revealed.

David Green, director-general of the Serious Fraud Office, said the agency was in the process of an “enormous” investigation into interest rate manipulation, with about a fifth of its staff now working on the inquiry.

“I am sure there will be more charges against others,” said Mr Green in an interview with The Sunday Telegraph in which he also acknowledged a rift with the US over the handling of the investigation.

Three men have already been charged by the SFO over allegations they were involved in attempts to rig the benchmark index, including former Citigroup and UBS trader, Tom Hayes. The SFO currently has a team of 60 working on the investigation, out of a total staff of more than 300.

This story, which is well worth reading, was posted on the telegraph.co.uk Internet site on Saturday evening GMT...and it's another offering from Roy Stephens.

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Bombings Jolt Russia, Raising Olympic Fears

A deadly suicide bombing at a crowded railroad station in southern Russia on Sunday, followed by a blast in a trolley bus on Monday in the same city, raised the specter of a new wave of terrorism just six weeks before the Winter Olympics in Sochi.

President Vladimir V. Putin’s government has worked to protect the Olympics with some of the most extensive security measures ever imposed for the Games. But the bombings, in Volgograd, underscored the threat the country faces from a radical Islamic insurgency in the North Caucasus that has periodically spilled into the Russian heartland, with deadly results, including several recent attacks.

Security has become a paramount concern at all major international sporting events, especially in the wake of the bombing at the Boston Marathon in April, but never before has an Olympic host country experienced terrorist violence on this scale soon before the Games. And would-be attackers may have more targets in mind than the Russian state.

This 2-page essay was posted on The New York Times website yesterday...and it's courtesy of Roy Stephens once again.  The Russia Today website had a very graphic story/video on the second bombing...and it's pretty ugly, so be warned in advance.  The link to that is here...and it's courtesy of reader M.A.

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Japan Consumer Prices Seen Rising Five Times as Fast as Wages

Japanese employers will fail in the next fiscal year to heed Prime Minister Shinzo Abe’s goal of wage increases that outpace inflation, highlighting risks that the nation’s recovery will stall, surveys of economists show.

Labor cash earnings, the benchmark for wages, will increase 0.6 percent in the year starting April 1, according to the median forecast in a poll of 16 economists by Bloomberg News. Consumer prices will climb five times faster, increasing 3 percent, as Japan raises a sales tax for the first time since 1997, a separate Bloomberg survey shows.

The squeeze on consumers from higher prices risks undermining public support for Abenomics and dragging on retail spending, unless Abe can convince companies to boost wages to cushion the blow. At stake is sustaining a recovery in the world’s third-biggest economy, set to expand this year at the fastest pace since 2010 as Abe tries to drive an exit from 15 years of deflation.

This Bloomberg news item was posted on their website at noon in Denver MST on Sunday..and is something I found in yesterday's edition of the King Report.

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'Shadow warehouses' are hoarding the world's metal

The world's metal is slipping into the shadows.

Banks, hedge funds, commodity merchants and others are stashing tens of millions of tons of aluminum, copper, nickel and zinc in a hidden system of warehouses that span the globe.

These facilities are known to some in the industry as "shadow warehouses" because they are unregulated and don't disclose their holdings.

They operate outside the London Metal Exchange system of warehouses, the traditional home for these metals...and as of October, a record 7 million to 10 million tons of aluminum were being housed in these facilities, in countries as far apart as Malaysia and the Netherlands, according to estimates from several analysts.

This interesting article originally showed up on The Wall Street Journal...and is reprinted here on the money.msn.com Internet site last Friday afternoon EST.

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Gold price collapse is the worst for 30 years

Gold will finish the year as one of the worst-performing asset classes, bringing to an end a decade-long rally in the precious metal.

Gold has suffered its sharpest fall in 30 years, down almost 28pc over the past 12 months to close 2013 at about $1,200 (£725) an ounce.

That compares badly against other assets, with the S&P 500 up 28pc, the FTSE 100 gaining around 13pc and Brent crude oil futures up about 2.5pc in the same period.

“Equities have won the battle over gold for investors’ money this year,” Ole Hansen, head of commodity strategy at Saxo Bank, said. Last year, Mr Hansen correctly predicted that gold would finish the year at $1,200 and for 2014 he is forecasting that prices may have already bottomed out.

This commentary was posted on The Telegraph's website on Saturday evening GMT...and I thank Roy Stephens for his final contribution to today's column.

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Bank of Canada's gold coins to be liquidated to help balance government's budget

Canada's first gold coins had barely been minted before Ottawa yanked them out of circulation a hundred years ago in an effort to stop gold from leaving the country during the First World War.

After a century of sitting in cloth bags inside the Bank of Canada vault, they are among a wide range of assets the Conservative government is liquidating -- in this case literally -- to save taxpayers a few dollars and help balance the books. The plan is to melt down more than 200,000 gold coins from the years 1912 to 1914, when Ottawa suspended the gold standard.

The coins have been the subject of whispers among collectors curious what happened to the $5 and $10 gold coins that Ottawa had pulled out of circulation. The mystery was lifted late last year when the Bank of Canada announced it would be offering 30,000 of the bank's 246,000 coins for sale to collectors.

This story, filed from Ottawa, was posted on theglobeandmail.com website late yesterday evening EST...and I found embedded in a GATA release.  And on a personal note, I'm sure not happy about seeing these coins get melted.

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Mike Kosares: The gold owner's guide to 2014

Michael Kosares of Centennial Precious Metals in Denver provides "The Gold Owner's Guide to 2014," a comprehensive analysis of the factors bearing on a market that seems increasingly under stress. Kosares quotes many GATA favorites. His own prediction for the year ahead: "Global demand for gold and silver will remain strong no matter what the price does. At the same time, I believe we are going to get back on the upside track this year."

Kosares' commentary is posted at Centennial's Internet site, USAGold.com...and I thank Chris Powell for wordsmithing the above paragraph of introduction.

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Lawrence Williams: Whither Gold in 2014?

As we draw to the close of another very disappointing year for the gold investor, one might ask how much further the yellow metal has to fall before making something of a sustained recovery.  And while our track record on gold price prediction may have been pretty good prior to 2012, since the start of that year it has been decidedly out of sync with reality.  Perhaps one can do better in the current year?

On a basic reading of the current situation vis-à-vis gold, one might suggest that, in 2014, gold will end the year at a higher price level than it will likely begin it, but that does not necessarily mean there won’t be a few difficult months ahead before things start to get better.

Although, as the gold price falls, the potential for further downside risk diminishes.  Politicians have been adept, for the most part, in talking up the global economy and thereby building confidence among the general populace, however misleading the quoted, massaged statistics may be in reality.  Increased confidence means a return to the spending economy and this has transferred to the stock markets with nearly all major western stock indices rising, and, so far, continuing to do so.

This commentary by Lawrie was posted on the mineweb.com Internet site yesterday...and I thank Ulrike Marx for bringing it to our attention.

Read more...

J.P. Morgan Sees Golden Opportunities for Huge Gains in 2014 With Gold and Silver

With serious inflation still only a gleam in the eyes of the ardent gold bugs, 2014 looks like a tough year for gold miners. The metals analysts at J.P. Morgan think it is easy to look at the cost of new mines and conclude that current prices are unsustainable. But new mine projects may not be needed for several years if more of investors’ above-ground gold horde is unwound. Here is where the story gets more interesting.

For many on Wall Street the question of future inflation is a when, and not if, proposition. Central backs around the world are printing money at a furious pace, debasing the value of their local currency. So whether it is a question of gold and silver as a hedge, an industrial commodity or simply a straight contrarian stock trade, the J.P. Morgan team thinks now is the time to look hard at the top names. They also think the downturn in prices has created a golden opportunity.

This commentary from a week ago yesterday quotes a note from JPMorgan Chase, but there was no link or direct quote in this article...and therefore I would treat this story as hearsay until such time as a hard copy of the "note" appears.  I thank Casey Research's own Jeff Clark for sending this our way.

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India gold tax hits bridal budgets and smuggling is up

With India's wedding season in full swing, the glass sales counters in Mumbai's famed Zhaveri gold bazaars are crowded with customers eyeing elaborate headpieces, nose rings, and necklaces. No one does jewelry quite like an Indian bride, who by tradition wears all the gold she can stand up in and her family can afford.

These days, though, even the most ambitious bridal budgets don't bring the bling like they used to, thanks to hikes in import duties and a rise in local gold prices that have shoppers like Rajanikant Mehta grumbling.

Mehta, who owns a factory outside the capital, had planned to spend about $1,800 on a necklace for the woman marrying his son late this month, but he's unhappy about what he's getting for his money. Gold prices in India, which imports nearly all its gold, have risen 50 percent over the past three years to about $1,400 an ounce.

This AP story, filed from Mumbai, showed up on The Seattle Times website last Friday...and I have a feeling that I've read this before, so it may be a repeat.  I went back a full week in my previous columns, but couldn't find it, so I could be wrong.  I found this article in a GATA release on Saturday, so maybe that's where I read it!

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China's gold imports drop 42 percent in November

The mainland's net gold imports from Hong Kong fell 42 per cent to below 100 tonnes last month, reflecting a drop in demand from jewellers and retail investors after strong purchases in recent months.

Net flows into the mainland, excluding imports by Hong Kong from the mainland, slipped to 76.39 tonnes from 131.19 tonnes in October, data from Hong Kong's Census and Statistics Department showed.

The People's Bank of China plans to increase the number of firms allowed to import and export gold and ease restrictions on individual buyers of the precious metal, according to a draft policy document issued in September.

This Reuters story, filed from Singapore, was picked up by the South China Morning Post in the wee hours of this morning local time over there...and my thanks go out to Ulrike Marx for her final offering in today's column.

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China said to regard gold as the center of a new and fair monetary system

China sees gold as the basis of a new world monetary system that is fair to all nations and not favoring any nation issuing a dominant currency, according to a speech given [earlier] this year by Zu He Liang, director of the Chinese Gold Market Research Center...and reported yesterday by gold researcher and GATA consultant Koos Jansen at his Internet site, ingoldwetrust.com.

This is another item I found over at the gata.org Internet site yesterday...and I consider it a must read.

Read more...

 

¤ The Funnies







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¤ The Wrap

The commercials may not know in advance precisely how many technical fund shorts they can lure into the market. The commercials keep rigging prices lower until the tech funds can’t short anymore. At that point, the bottom in price is established. It seems to me we are close to that point---and that may be why there was not more technical fund selling in the current COT report.

Of course, the collusive commercials, particularly the low lifes at JPMorgan, are likely to press prices until it’s crystal clear to them that the tech funds are sold out to the max. I think that’s the explanation for today’s price action and any further rigged sell-offs. But considering how extreme the price action and resultant market structure has become, it has to be played as a crooked game at the very end of its existence. - Silver analyst Ted Butler: 30 December 2013

It should be obvious to anyone with a couple of synapse to rub together that the HFT boys were out in the thinly-traded Far East market on their Monday.  As Ted Butler said in his short COT commentary yesterday---"there was a clear intent by the commercials to press prices lower to induce more technical fund selling, as there was no legitimate supply/demand justification for the lower prices", and as I scan the Far East price action for today, I see the same intent again, with new low ticks for this move down.

Today is the last trading day of the year---and also the cut-off for next Monday's Commitment of Traders Report, which is delayed one day because of the New Year's Day holiday.  It certainly appears that JPMorgan et al are attempting to send the year out on the most negative tone possible---and nothing will surprise me during the trading action in New York later this morning.

But the real surprise yesterday was the amount of silver that JPMorgan Chase stood for delivery on, on the first day of the January delivery month.  Events like this put "paid" to the Butler quote above that states that it is a "crooked game at the very end of its existence."

With the London open about five minutes away as I type this paragraph, the gold price traded pretty flat throughout the Far East session on their Tuesday, with a spike down around 1:30 p.m. Hong Kong time.  It rallied back over the $1,200 spot price mark, but that got sold down right away.  Silver made a rally attempt in early Far East trading, but that ran into selling pressure at 9 a.m. Hong Kong time---and then spiked to its low at the same moment as silver.  Gold is up three bucks---and silver is down about 15 cents.  Platinum had the same spike low at the same time---and is unchanged in price.  Palladium is up four dollars.  Gold volume is very light, a hair under 14,000 contracts----and silver's volume is under 6,000 contracts.

And as I hit the send button on today's column at 5:15 a.m. EST, there hasn't been much change in any of the four precious metals during the last two hours of trading, although they have all rallied a bit since the London open---and gold is up about seven bucks and silver is back to unchanged on the day.  Volumes in both gold and silver are still very light---and I'm must admit that I'm expecting things to remain that way.  The dollar index is up a handful of basis points.

I await the 8:20 a.m. EST Comex open with a great deal of interest, but I expect the markets will close early.

I may or may not have a column tomorrow---and whether I do or not, obviously depends on what happens as the trading day unfolds in New York.

If there's nothing in your in-box tomorrow, then I'll certainly have something on Thursday morning.

Happy New Year---and all the best in 2014 to you and yours.