Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

It was a nothing day in gold yesterday, as it traded within a $6 range for the entire Wednesday session---and the low and high ticks are immaterial.  Gold finished the day at $1,304.00 spot, down $3.50 from Tuesday's close.  Net volume was very light at only 65,000 contracts, the same volume as Monday.

It was almost the same chart pattern in silver.  After the obligatory sell-off at the New York open on Tuesday evening, the price did nothing until the noon silver fix in London on Wednesday---and the subsequent rally over $21 spot got capped minutes after the Comex opened.  From there it got sold down for a small loss on the day.  Gold's highs and lows aren't worth looking up, either.

Silver finished the Wednesday trading day at $20.905 spot, down six cents from Tuesday.  Volume, net of July and August, was around 26,000 contracts.

Platinum and palladium didn't do much, either---and both ended down a few dollars on the day.  Here are the charts.

The dollar index closed late on Tuesday afternoon at 80.78---and barely moved on Wednesday.  It closed at 80.81---which was up three ticks from Tuesday's close.

The gold stocks rallied into positive territory right at the open on Wednesday.  They held those gains until noon---and then some kind soul sold enough stock to drop them below the unchanged level---and they slid a bit more into the close from the there.  The HUI finished down 0.46%.

The silver equities followed a very similar price path---and they finished the Wednesday trading session down 0.61%.

The CME Daily Delivery Report shows that zero gold and 17 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  The link to yesterday's Issuers and Stoppers Report is here.

There was another small deposit in GLD yesterday.  This time an authorized participant deposited 19,246 troy ounces---and as of 9:44 p.m. yesterday evening, there were no reported changes in SLV.

Since there was no in/out movement in SLV for the second week in a row, Joshua Gibbons, the "Guru of the SLV Bar List," had little to say in his weekly report on this Web site yesterday evening.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs for the week ending July 18---and this is what they had to report.  There were declines in both gold and silver ETFs.  In gold it was 13,569 troy ounces---and in silver it was 307,811 troy ounces, which was a pretty big chunk.

There was no sales report from the U.S. Mint.

There was a decent amount of gold received at the Comex-approved depositories on Tuesday, as 67,158 troy ounces was taken into inventory, with almost all of it going into Canada's Scotiabank.  Nothing was shipped out.  The link to that activity is here.

It was another busy day in silver, as 300,006 troy ounces were reported received---and 604,652 troy ounces were shipped out the door.  The link to that action is here.

I have another large assortment of stories for you again today---and I'll happily leave the final edit up to you.

 

¤ Critical Reads

Atlantic City’s Credit Rating Cut Two Steps to Junk by Moody’s

The reduction to Ba1 from Baa2 on the city’s $245 million of general-obligation debt reflects a weakened tax base resulting from anticipated casino closings, the New York-based ratings company said today in a statement. The outlook remains negative.

“The downgrade to Ba1 reflects the city’s significantly weakened tax base, revenue-raising ability and broader economic outlook,” analysts Vito Galluccio and Julie Beglin said in the statement. “These result from ongoing casino revenue declines, expected near-term casino closures, and the impact of sizable casino tax appeals, all of which has stemmed from increased competition from casinos in neighboring states.”

Atlantic City lost its regional monopoly as states including Pennsylvania, Maryland and New York legalized casinos or expanded betting to increase tax revenue. Casino revenue in the city has dropped for seven straight years, falling to $2.86 billion last year from a high of $5.07 billion in 2006, according to Bloomberg Industries.

The city’s 11 gambling houses account for almost half its jobs: 5,883 positions in a workforce of 13,500. The Atlantic Club closed in January, putting 1,600 people out of work. The closing of Caesars Entertainment Corp.’s Showboat on Aug. 31 will wipe out 2,133 jobs. Trump Plaza Hotel & Casino said it plans to close Sept. 16, taking away another 1,009. Revel, the $2.4 billion complex that employs 3,106 people, is seeking a buyer in bankruptcy.

This short Bloomberg news item, filed from Trenton, N.J., was posted on their Internet site at 3:20 p.m. Denver time yesterday---and today's first story is courtesy of Howard Wiener.

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Illinois Workforce Shrinks By Largest Margin in State History

In June, Illinois suffered the largest monthly workforce loss in recorded state history.

June’s workforce loss was worse than the worst month of the Great Recession. Overall, 21,700 Illinoisans gave up and left the workforce in June; in September 2008, 17,500 Illinoisans quit the workforce.

This hefty workforce loss has driven state’s unemployment rate down to 7.1% from 7.5%, creating a superficial appearance of improvement. And Gov. Pat Quinn says Illinois needs to “keep the momentum.”

Keeping up this sort of “momentum” would be disastrous.

This news item appeared on the illinoispolicy.org Internet site on Sunday---and it's something I found in yesterday's edition of the King Report.

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Jobs Hold Sway Over Yellen and Carney as Central Banks Splinter

Before the Federal Reserve and fellow central banks go to work raising interest rates, they first need others to go to work.

That’s the signal from policy makers worldwide, as even those whose mandates focus on inflation put the health of labor markets at the heart of their decision making. The approach leaves investors bracing for global monetary policies to diverge after the post-crisis embrace of easy money.

Accelerating job creation -- and the hope this will spur wages -- leaves the U.S. central bank and the Bank of England preparing for higher rates by the end of 2015. At the other end of the spectrum, double-digit unemployment in the euro area and stagnant pay in Japan mean stimulus remains the only option.

Nothing has changed, dear reader, as it's still "print or die"---and forget about higher interest rates anytime this year or next.  Even a hint of an imminent interest rate hike would crush the bond market.  This longish Bloomberg article, co-filed from Washington and London, was posted on their Web site at 3:25 a.m. MDT on Wednesday morning---and it's courtesy of West Virginia reader Elliot Simon.

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The "Gates" Are Closing: SEC Votes Through Money Market Reform

It was nearly five years ago when Zero Hedge first wrote: "This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied" in which we predicted as part of the ongoing herding of investors away from every other asset class and into stocks, regulation will be implemented to enforce that "money market fund managers will have the option to 'suspend redemptions to allow for the orderly liquidation of fund assets" or in other words implement redemption "gates." The logic: spook participants in the $2.6 trillion money market industry with the prospect of being gated (i.e., having no access to ones funds) and force them to reallocate funds elsewhere.

Moments ago the gates arrived, when following a close 3-2 vote (with republican commissioner Piwowar and democrat Stein dissenting), the SEC adopted new rules designed to curb the risk of investor runs on money market funds, capping the end of a years-long heated debate between regulators and the industry dating to the financial crisis according to Reuters.

Among the changes, funds will have to switch to a floating share price instead of the current $1/share (hence the term breaking the buck). But the key part: "The SEC's rule will require prime money market funds to move from a stable $1 per share net asset value, to a floating NAV. It also will let fund boards lower redemption "gates" and fees in times of market stress."

This longish piece appeared on the Zero Hedge Web site at 1:18 p.m. EDT yesterday afternoon---and I thank Dr. Dave Janda for sending it around.

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Tale of the Tapes: IRS Head Confirms Investigators Have Found Backup Tapes in Lerner Probe

The head of the IRS confirmed Wednesday that investigators looking into missing emails from ex-agency official Lois Lerner have found and are reviewing "backup tapes" -- despite earlier IRS claims that the tapes had been recycled. 

IRS Commissioner John Koskinen, testifying before a House oversight subcommittee, stressed that he does not know "how they found them" or "whether there's anything on them or not." But he said the inspector general's office advised him the investigators are reviewing tapes to see if they contain any "recoverable" material. 

The revelation is significant because the IRS claimed, when the agency first told Congress about the missing emails, that backup tapes "no longer exist because they have been recycled." 

It is unclear whether the tapes in I.G. custody contain any Lerner emails, but Koskinen said investigators are now checking.

Tapes in this day and age?  Would they be cassette, 8-track, or reel-to-reel?  Just asking.  This Fox News item showed up on their Web site yesterday sometime---and I thank reader M.A. for sending it our way.

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Super bear Marc Faber: Here Are the Markets I Like

Investment guru Marc Faber, famed for his gloomy views on financial markets, took some time out from being the voice of doom on Wednesday to highlight areas of the market that he actually liked.

On CNBC Asia's Squawk Box, the author of the Gloom, Boom and Doom Report singled out the agriculture sector, Chinese and Hong Kong stocks and precious metals as places he thought investors should put their money into.

"In general I like plantation companies – I like everything to do with agriculture," said Faber, who is also widely known as Dr. Doom.

This 3:54-minute video clip was posted on the CNBC Web site late yesterday morning Hong Kong time---and I thank reader Ken Hurt for sharing it with us.

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UK Hastens Negotiations for Currency-Rigging Settlement

Talks to reach the first settlement in the currency-rigging probe are accelerating, with Britain's markets regulator preparing to reach a deal with a group of banks this year, people with knowledge of the talks said.

The Financial Conduct Authority is in talks with banks including Barclays Plc, Citigroup Inc., JPMorgan Chase & Co., and UBS AG, said the people, who asked not to be identified because the discussions are private. Royal Bank of Scotland Group Plc and HSBC Holdings Plc may also be part of the group settlement, one of the people said.

The FCA is trying to fast-track the process and may levy any fines in the coming months, three of the people said. The watchdog is seeking to keep the scope of the deal narrow to speed up the settlement, two of the people said.

The talks are still continuing and an agreement may stretch into next year, the people added.

This article showed up on the Bloomberg Web site at 5 p.m. MDT yesterday afternoon, but it was posted there earlier than that because I received it in a GATA release at 12:37 p.m. MDT.

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Defying UK, France to Proceed with Warships Sale to Russia

French Foreign Minister Laurent Fabius responded with a strong dose of sarcasm to British criticism of France’s planned sale of two warships to Russia, saying the UK should put its own house in order before criticising others.

British Prime Minister David Cameron said Monday that Paris’s plan to press ahead with the €1.2 billion ($1.7 billion) order of two French warships following the downing of Malaysia Airlines flight MH17 in Ukraine would be “unthinkable” in Britain.

“The English, in particular, were very pleasant so to speak, saying, 'We would never do that'. But I told my dear British friends, let’s talk about the financial sector,” Foreign Minister Laurent Fabius told TF1 television after returning from a European foreign ministers meeting in Brussels.

“I am led to believe that there are quite a few Russian oligarchs in London,” he said.

When asked if that meant Britain should take care of its own business first, Fabius said: “Exactly.”

This is a big "UP YOURS!" with a French twist.  It was posted on the france24.com Internet site yesterday sometime---and it's the first offering of the day from Roy Stephens.

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Europe Braced for Any Gas Crisis as Russia Sanctions Escalate

Europe has enough spare capacity in liquefied natural gas (LNG) to meet a large part of the region’s needs if Russia retaliates against the latest EU sanctions by restricting gas supplies.

The showdown with Russian president Vladimir Putin comes at moment of surging global supplies of LNG, which can be diverted to European markets and reduce the Kremlin’s political leverage. The price of LNG in Asia has crashed from $20 to $11 per million British thermal unit (BTU) since February.

The pan-EU group Gas Infrastructure Europe said the network of LNG terminals in Britain and the Continent is currently operating at just 20% of its full capacity. It could in theory boost flows by 160bn cubic metres (BCM), if there is available gas.

This is more than Russia’s entire shipments, which reached 155 BCM last year. The European network of pipelines does not cover every region and would leave pockets in eastern Europe without supply.

What b.s.!!!  This is wall-to-wall disinformation, but Ambrose Evans-Pritchard is always one to stoop to the occasion when it does arise---and when his master calls.  This commentary was posted on the telegraph.co.uk Internet site at 10:20 p.m. BST on Tuesday evening.

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Black Boxes of Crashed Malaysian Plane to Be Deciphered in 2 Days

It will take about two days to retrieve and decipher data from flight recorders of the Malaysian airliner that crashed in eastern Ukraine last week killing nearly 300 people, a spokesman for the UK Department for Transport told reporters Wednesday.

Air Accidents Investigation Branch experts in Farnborough, Hampshire, will study the flight data recorders, known commonly as black boxes. The spokesman said that the process might take about two days, depending on their condition.

“Experts received flight recorders at the lab in Farnborough, Hampshire. Experts will attempt to extract data from the recorders at the request of Dutch authorities, which are conducting the investigation. Based on the damage [to black boxes] the process can take about two days,” the spokesman said.

He stressed that he was only referring to the extraction of data from the flight recorders and its transfer to the Netherlands, not about the conclusions about the cause of the crash. One of the flight recorders stored technical parameters of the plane, while the other recorded the sounds on board.

This RIA Novosti news item, filed from London, was posted on their Internet site at 3:53 p.m. yesterday afternoon Moscow time, or 7:53 a.m. New York time.

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Crashed MH17 Flight "Was 300 Miles Off Typical Course"

Robert Mark, a commercial pilot who edits Aviation International News Safety magazine, said that most Malaysia Airlines flights from Amsterdam to Kuala Lumpur normally travelled along a route significantly further south than the plane which crashed.

Malaysia Airlines has insisted its plane travelled on an "approved route" used by many other carriers.

But Mr Mark said: "I can only tell you as a commercial pilot myself that if we had been routed that way, with what's been going on in the Ukraine and the Russian border over the last few weeks and months, I would never have accepted that route.

"I went into the FlightAware system, which we all use these days to see where airplanes started and where they tracked, and I looked back at the last two weeks' worth of MH17 flights, which was this one---And the flight today tracked very, very much further north into the Ukraine than the other previous flights did...there were MH17 versions that were 300 miles south of where this one was."

This story appeared in The Telegraph a week ago, but it's still worth your time.  I thank Harry Grant for sending it along at midnight MDT last night.

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The Saker: The Most Pathetic Case of Backpedaling I Have Seen in My Life

Senior U.S. intelligence officials said Tuesday that Russia was responsible for "creating the conditions" that led to the shooting down of Malaysia Airlines Flight 17, but they offered no evidence of direct Russian government involvement.

The intelligence officials were cautious in their assessment, noting that while the Russians have been arming separatists in eastern Ukraine, the U.S. had no direct evidence that the missile used to shoot down the passenger jet came from Russia.

The officials briefed reporters Tuesday under ground rules that their names not be used in discussing intelligence related to last week's air disaster, which killed 298 people.

The plane was likely shot down by an SA-11 surface-to-air missile fired by Russian-backed separatists in eastern Ukraine, the intelligence officials said, citing intercepts, satellite photos and social media postings by separatists, some of which have been authenticated by U.S. experts.

But the officials said they did not know who fired the missile or whether any Russian operatives were present at the missile launch. They were not certain that the missile crew was trained in Russia, although they described a stepped-up campaign in recent weeks by Russia to arm and train the rebels, which they say has continued even after the downing of the commercial jetliner.

Have you counted the "caveat words"?  I counted 15 (depending on what you want to include).  Notice that they consider the Ukie missile as "implausible" but that they never explain why this would be implausible.  And they admit relying in part on social media and Ukie government info?  How absolutely utterly pathetic.  I mean - I feel sorry for them.  For any self-respecting intelligence official to admit such things is to commit a seppuku of your professional pride.  It's admitting that you are an amateur and a drooling moron.  And here is the deal - I very much doubt that these men are amateurs or morons.  So, yet again, they were back-stabbed by imbecile politicians like Obama and Power who just are not used to consulting with their own specialist before flapping their lips and never mind if they make an entire intelligence community look like cretins.

But of course the big news here is this: the U.S. fairy tale about Putin the terrorist is falling down in flames.  Yet again the Neocons by their sheer arrogance, hubris and boundless stupidity manged to lie their way into a corner from which there is no exit.  Not that the U.S. had much street-cred anyway, not after Colin Powell's dishwasher powder in a vial at the UNSC.  But, of course, there is bad, very bad, even worse and outright terrible.  But now the U.S. has reached the "terminal" stage.  The AngloZionists sure had this one coming.

And I couldn't agree more!  This must-read commentary showed up on the vineyardsaker.blogspot.ca Web site yesterday---and I thank Roy Stephens for sending it our way.

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Pepe Escobar: A Chessboard Drenched in Blood

"The intelligence and facts were being fixed around the policy." Everyone remembers the Downing Street Memo, which unveiled the Bush/Blair "policy" in the run-up to the 2003 bombing/invasion/occupation of Iraq. The "policy" was to get rid of Saddam Hussein via a lightning war. The justification was "terrorism" and (non-existent) weapons of mass destruction (WMD), which had "disappeared", mounted in trucks, deep into Syria. Forget about intelligence and facts.

The tragedy of MH17 - turned, incidentally, into a WMD - might be seen as a warped rerun of imperial policy in Iraq. No need for a memo this time. The "policy" of the Empire of Chaos is clear, and multi-pronged; diversify the "pivot to Asia" by establishing a beachhead in Ukraine to sabotage trade between Europe and Russia; expand the North Atlantic Treaty Organization to Ukraine; break the Russia-China strategic partnership; prevent by all means the trade/economic integration of Eurasia, from the Russia-Germany partnership to the New Silk Roads converging from China to the Ruhr; keep Europe under US hegemony.

The key reason why Russian President Vladimir Putin did not "invade" Eastern Ukraine - as much as he's been enticed to by Washington/NATO - to stop a U.S. military adviser-facilitated running slaughter of civilians is that he does not want to antagonize the European Union, Russia's top trading partner.

Crucially, Washington's intervention in Kosovo invoking R2P - Responsibility to Protect - was justified at the time for exactly the same reasons a Russian intervention in Donetsk and Luhansk could be totally justified now. Except that Moscow won't do it - because the Kremlin is playing a very long game.

Here's another must read for you today.  It was posted on the Asia Times Internet site yesterday---and it's another contribution from Roy Stephens.

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David McWilliams: Deadly Game of Human Chess

When seen from the Russian perspective, Ukraine is just another example of the gradual but definitive encroachment of the West into all things Russian. Russia and Ukraine are not different cultures. They are part of the same broader Russian/Slavic family. Our narrative is that the Russians are happy to keep Ukraine unstable and that what happened to the Malaysian airliner was the risk Russia was running by arming the separatists with sophisticated weapons.

Seen from the Russian side, it isn’t the Russians who are doing the destabilising but the Americans.

For them, the Americans arming and financially supporting an opposition in Ukraine would be like the Scottish Nationalists being financed by Russia. How do you think London and Washington would react to that? How do you think they’d react to the idea of a Russian puppet running an independent Scottish state from Edinburgh?

This is how close Ukraine is to Russia.

Now when you think about it in those terms, do you think Putin will back down and do what the West wants him to do?

This commentary by David McWilliams also falls into the must-read category---and it was posted on his Web site on Monday.  I thank reader M.A. for bringing this article to our attention.

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Why Putin Isn't Afraid of Europe

Why can't Europe's leaders bring themselves to impose tough sanctions on Russia after the Malaysia Airlines passenger jet disaster? One explanation is that economic ties to Russia, a major supplier of energy, trump the moral imperative to punish President Vladimir Putin for his support of separatists in Ukraine.

A look at trade data for selected European countries offers an indication of the incentives in play. The Netherlands, which had 193 citizens aboard Flight MH17, is among the most connected: Russia accounted for about 6.4% of its imports in the 12 months through February, according to data compiled by Bloomberg. Germany, the most politically powerful country in Europe, is roughly three times more tied to Russia than the U.S. or the U.K., which have been much more aggressive in pushing sanctions.

Europe's economic ties to Russia are much stronger than they were when Putin came to power. Back in February 1999, soon after he took over from former President Boris Yeltsin, Russia's share of German exports and imports was less than half what it is today. Apparently, building new pipelines to Europe has served Russia's geopolitical interests well.

This opinion piece by Mark Whitehouse showed up on the Bloomberg Internet site at 1:50 p.m. EDT on Wednesday afternoon---and once again I thank Roy Stephens for sending it.

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Putin Recalls State Duma From Vacation, "Planning Something" on Ukraine Situation

In a somewhat disconcerting move, Russian President Vladimir Putin has recalled The State Duma from a planned vacation to participate in an unscheduled meeting because of the situation in eastern Ukraine. As Ukrinform reports, sources confirm "Something is being planned, because many deputies come, probably for a quorum." Rumors are spreading that Putin is set to issue Kiev an ultimatum over recognizing separatists or face military intervention.

Given that Poroshenko has demanded the separatists be labeled "terrorists" under international law, we suspect this is one demand they cannot fulfill... and of course, Ukraine is claiming that the 2 fighter jets shot down this morning were shot down by and from Russia... sure, with the whole world watching, Putin would do that?

This very interesting news item appeared on the Zero Hedge website at 11:46 a.m. EDT yesterday morning---and I thank Bill Busser for finding this for us.

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Opening Remarks of Vladimir Putin at the Russian Security Council Meeting

Note: normally the meetings of the Russian Security Council are held behind closed doors.  This time, however, the press was allowed in just to record the beginning of the opening remarks of Vladimir Putin.  Then the press was asked to leave.  Clearly, this is intended as a message to the Russian people.  I have bolded out the part which appear the most important to me. - The Sakar

Good afternoon, colleagues.

Today we will consider the fundamental issues of maintaining the sovereignty and territorial integrity of this country. We all understand how many political, ethnic, legal, social, economic and other aspects this topic encompasses.

Sovereignty and territorial integrity are fundamental values, as I have already said. We are referring to the maintenance of the independence and unity of our state, to the reliable protection of our territory, our constitutional system and to the timely neutralization of internal and external threats, of which there are quite a few in the world today. I should make it clear from the start that, obviously, there is no direct military threat to the sovereignty and territorial integrity of this country. Primarily, the strategic balance of forces in the world guarantees this.

We, on our part, strictly comply with the norms of international law and with our commitments to our partners, and we expect other countries, unions of states and military-political alliances to do the same, while Russia is fortunately not a member of any alliance. This is also a guarantee of our sovereignty.

These longish remarks by Vladimir Putin were posted on the vineyardsaker.blogspot.ca website yesterday sometime---and worth reading if you have the time.  It's also courtesy of Roy Stephens.

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China’s Terrifying Debt Ratios Poised to Breeze Past US Levels

The China-US sorpasso is looming. I do not mean the much-exaggerated moment when China’s GDP will overtake America's GDP – which may not happen in the lifetime of anybody reading this blog post – as China slows to more pedestrian growth rates (an objective of premier Li Keqiang.)

The sorpasso may instead be the ominous moment when China’s debt ratios overtake the arch-debtor itself.

I had presumed that this inflection point was still a very long way off, but a new report from Stephen Green at Standard Chartered argues that China’s aggregate debt level has reached 251% of GDP, as of June.

This is up 20 percentage points of GDP since late 2013. The total is much higher than normal estimates, though it tallies with what I have heard privately from officials at the IMF and the BIS.

This Ambrose-Evans Pritchard blog appeared on The Telegraph's Web site on Tuesday sometime---and it's the final offering of the day from Roy Stephens.

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Four King World News Blogs

1. Michael Pento: "This is the Timeline For the Terrifying Endgame of Destruction"  2. Frank K: "Switzerland Has Exported a Shocking Amount of Gold to Asia"  3. Investors Intelligence: "Here is the Chart That Has the Central Planners Worried"  4. William Kaye: "Is This the Real Reason Why Malaysian MH17 Was Shot Down?"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

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A Revolving Door Farce: CFTC Commissioner Bails to Head Regulator's Biggest Opponent

There is no better way to describe what the recently departed CFTC commissioner Scott O'Malia just did when he bailed from the commodity watchdog to become the new head of the International Swaps and Derivatives Association, aka ISDA, the biggest banking group that has constantly opposed every intervention and attempt to regulate the swaps market by the CFTC since the Lehman crisis, than an epic farce.

For those who are unaware ISDA is a global OTC derivative lobby group, counting the world's largest investment banks among its members, and has frequently fought regulatory efforts to reform the market after the financial crisis. ISDA itself was exposed as a complete joke during the European crisis when due to the overhang of avoiding Europe's insolvent reality, it made CDS protection obsolete as protection from sovereign restructurings and credit events, in the process crushing one of the key ways to hedge for credit event risk.

Even an otherwise impartial Reuters appears outraged by this blatant and painfully clear example of government capture of "public servants" by those who have dangle carrots of money in exchange for lobby (and future employment promise) favors, and thus set the rules, courtesy of people like O'Malia.

If there was any more proof needed that the CFTC is a compromised and crooked organization, here it is.  O'Malia handed in his notice on Tuesday---and look where he is 24 hours later.  This Zero Hedge piece was posted on their Web site at 11:29 a.m. EDT on Wednesday morning---and I thank Phil Barlett for sending it our way.

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US Gold ETF Delivers First Physical Bullion Coins; Holdings Grow

Merk Gold Trust, a bullion-backed exchange-traded fund that allows its shares to be redeemed for physical gold, said on Wednesday it has made its first delivery in dozens of U.S. gold coins to an investor.

The ETF, launched by Palo Alto, California-based Merk Funds in May to offer a liquid trading product with the benefits of physical gold bullion, has accumulated 40,000 ounces in two months even in a bearish gold market.

The fund, trading on the NYSE Arca platform with the ticker OUNZ, owns less than 1 percent of gold held by SPDR Gold Shares , the world's biggest gold ETF. However, many participants are warming to the idea that the product could bridge the gap between the physical and paper gold markets.

This very interesting Reuters piece, filed from New York, showed up on their Internet site at 3:46 p.m. EDT on Wednesday afternoon.  I found it embedded in a GATA release late last night MDT.

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Smoking Out Indian Gold, Central Bank Relaxes Loan Rules

In a major relief, the Reserve Bank of India has relaxed the limit of loan that banks can sanction against the pledging of gold ornaments and jewellery, and where the end use of the loan is not for agricultural purposes.

The move is expected to protect the interest of the customers who can continue to opt for gold loans based on merits of the case, rather than rely on the loan to value ratio. The RBI has however retained the loan to value ratio at 75% of the value of gold.

The apex bank has left it to individual banks to decide on a lending cap. On December 30, the apex bank had restricted loans with a cap of $1,661 (Rs 100,000) against the pledge of gold ornaments and jewellery.

With many individuals pledging household gold ornaments to avail of personal loans, the aim is also to smoke out gold lying within homes and bank lockers across the country, said analysts.

This news item, filed from Mumbai, put in an appearance on the mineweb.com Internet site on Wednesday sometime---and it's worth skimming.

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Kalgoorlie's Golden Hotel Prices

Car dealers, doctors and now a hotel in Western Australia's Kalgoorlie are accepting payments of gold.

Weary travelers will be able to pay to rest their head at a hotel in the wild west Goldfields town of Kalgoorlie with gold.

Rydges Kalgoorlie Resort and Spa general manager Nicholas Parkinson-Bates said while the idea to allow people to pay for a room with the precious metal was inspired by the annual Diggers and Dealers mining conference in August, he was keen to extend the payment method for life.

This short gold-related news item was posted on The West Australian Web site yesterday at 6:16 p.m. local time 'down under'---and it found a home over at the au.news.yahoo.com Internet site.  I thank reader Michael Donovan for sliding it into my inbox yesterday morning.

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¤ The Funnies

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¤ The Wrap

On an historical basis and given the extreme technical fund long position in silver, I will not be shocked if the COMEX commercial crooks rig it the downside. But it’s also possible for an upside resolution, as occurred under similar, if not identical, circumstances in late 2010. I know some are pointing to the COT structure and pounding the table for prices to rise and others are pointing to the exact same circumstances as a reason prices will surely fall. What I do know most of all is that no one knows for sure, even if they don’t want to admit that. At some point though, price volatility will return in force. - Silver analyst Ted Butler: 23 July 2014

I don't have a thing to say about the gold market yesterday, but it was obvious that silver's attempt to break above the $21 spot price mark was turned back by a not-for-profit seller.

Here are the six-month charts for both metals.

I got an email from reader Bill Higgins yesterday, who was questioning the accuracy of something I'd said, not only in my Tuesday column, but in my Wednesday column as well---and this is what he had to say: "If the tech funds are massively short as you said yesterday and again today, how can an engineered sell-off be accomplished by the commercials? I read your column every day first thing. Is that a misprint?"

Upon reading the offending paragraph to which he was referring, I discovered to my horror and embarrassment that he was absolutely correct.  But it wasn't a misprint---I just made a mistake, pure and simple.

Here's the offending paragraph once again, with the correct word underlined and in bold lettering.

"So, where do we go in price from here?  Could we go higher from here, as the RSI traces shows that we're not 'overbought' in any of the four precious metals at the moment.  Sure, but as I mentioned a few paragraphs ago, we're almost at a five-year high long position in silver for the technical funds---and unless the commercial traders get over run by some black swan event, the usual engineered price decline outcome is a foregone conclusion.  And if that turns out to be the case, only the timing remains unknown.  Of course gold will also meet the same fate at the same time."

I had 'short' instead of long, which is patently false.  It's JPMorgan et al. that are massively short---and it's they who will determine the time that the cash register is rung for fun, profit---and price management purposes.

That's what happens when I'm trying to think straight at 2 a.m. when I'm writing The Wrap section.  My apologies to you---and my thanks to Bill.

As I write this paragraph, the London open is about 20 minutes away.  Gold got sold down about $10 starting shortly after 9 a.m. Hong Kong time on their Thursday---and silver got sold down about 20 cents, but has since recovered a bit.  Not surprisingly, the volumes in both these metals have blown out since the down-side price activity began.  Net gold volume is around 27,000 contracts---and silver's volume is a bit over 8,000 contracts.   Platinum got hit as well, but palladium was mostly spared.  The dollar index, which had been flat for most of the Far East session, suddenly headed north shortly before 2 p.m. Hong Kong time---and is up about eight basis points at the moment.

And as I send this off to Stowe at 4:50 a.m. EDT, there hasn't been much in the way of price action since the London open about two hours ago---and all four precious metals are still down on the day.  Volumes in both gold in silver have slowed since the open---and the dollar index is now down a couple of points from yesterday's close.

That's all I have for today---and I'll see you here tomorrow.