Gold & Silver Daily
"Ted Butler had a good reason for calling the CME Group, JPMorgan and the CFTC, crooks"

¤ Yesterday In Gold & Silver

With the markets closed in the U.S. for the Labor/Labour Day holiday on Monday, the price action in any of the four precious metals is barely worth mentioning, except for palladium, which still continues to inch higher.

Gold and silver did manage to rally a bit during early morning trading in London on Monday, but both ran into selling at 10 a.m. BST---and both closed with tiny losses, sort of like what happened on Friday in New York trading.

And, once again, silver got sold down at the open of New York trading on Sunday evening EDT.

The volume in both metals were fumes and vapours.

Here are the charts.

The dollar index closed late on Friday afternoon in New York at 82.73---and made it as high as 82.80 in late morning trading in Hong Kong on their Monday morning.  From there it began to slide, hitting its 82.68 low minutes after 10 a.m. BST in London yesterday---the exact high ticks for both gold and silver. A rather anemic looking rally began at that point, but it did make it back to 82.77 by the 'close.'

I doubt there was much volume with this---and despite the small movements in the dollar index, it's a certainty that the top in gold and silver prices---and the bottom in the dollar index, such as it was, were directly related.

With New York closed tight yesterday, there were no reports from anywhere.

Here are a couple of new charts that Nick passed around yesterday evening.  The first one shows the 5-year monthly transparent gold holdings for all published depositories, mutual funds, ETFs, etc beginning on Sept 1/2009.

The second is the same chart, except it's the 5-year monthly chart for silver.

The differences between the two charts is awesome to behold.

The main reason for today's column is to deal with the stories that have piled up over the weekend---and I have quite a few.

But before I get to those, I fired an e-mail off to Jim Rickards on the weekend, asking him for his take on the Henry Kissinger piece that was posted on The Wall Street Journal Internet site on Friday---and here's what he had to say about it:

"Kissinger, like other advocates of a world order, understands that the changes they advocate may not happen in years, decades or even a single lifetime. They understand that they are carriers of a flame that has to be passed from generation to generation. George Soros is another example of this approach. They are both guided by Karl Popper's definition of social engineering which championed the "piecemeal engineer" who does what he can to thwart particular evils rather than trying to complete utopian solutions all at once. For the piecemeal engineer like Kissinger or Soros, the key is not to change the world quickly, but rather to move incrementally and, above all, not to move backwards. What prompted Kissinger's editorial, apart from promoting his new book, is a fear that the U.S. is actually going backwards in in its ideals and goals. The most telling sentence is, "The affirmation of America's exceptional nature must be sustained. History offers no respite to countries that set aside their sense of identity in favor of a seemingly less arduous course." This is a clear slap at Obama and a warning that America must not move backwards from its exceptionalist identity and its progressive path. Kissinger understands that the tempo of American progress may vary. What he fears is not that Obama has slowed the tempo, but that Obama is moving America in the wrong direction." - Jim


¤ Critical Reads

Two experts warn correction could total 60%

Markets could soon face a fall of up to 60 percent, two experts told CNBC on Wednesday.

A jolt to international confidence in central banks will lead to a 30 to 60 percent market decline, David Tice, president of Tice Capital and founder of the Prudent Bear Fund, told CNBC's "Power Lunch." When this happens, he said, markets will face a "period of extreme turmoil."

This crash will be precipitated, he said, by a disillusionment with the Federal Reserve's "confidence game," which will then see inflation rise, and the Fed scramble to raise rates. At that point, Tice added, "the Fed starts to lose control."

This news item appeared on the CNBC website last Wednesday---and I thank Orlando, Florida reader Dennis Mong for today's first story.


A Rare Glimpse Inside the N.Y. Fed's Favorite 'Quote-Stuffing' Hedge Fund: Citadel

As regular readers are well aware, when it comes to "more than arms length" equity market intervention in New Normal markets, the New York Fed's preferred "intermediary" of choice to, how should one say, boost investor sentiment aka "protect from a plunge", is none other than Chicago HFT powerhouse, Citadel. Recently we discovered that the true culprit behind the May 2010 Flash Crash was not Waddell & Reed, but quote stuffing.

The most recent revelation for Citadel is that quote stuffing is not just some byproduct of some "innocuous" HFT strategy, as none other than the NASDAQ has now stated on the record, that the most leveraged hedge fund (at 9x regulatory to net assets), and the third largest after Bridgewater and Millennium, used quote stuffing as a "trading strategy." The following 2 clips give a sense of what goes on from day to day inside the firm that trades more volume than the NYSE every day...

This short Zero Hedge piece from Saturday contains two embedded video clips totalling 8 minutes---and they're both definitely worth your time.  I thank reader U.D. for passing it around.


And The Best Performing Asset In August Was...

August is the month in which the third try for a global economic recovery officially snapped, with first China, then Europe and finally Latin America succumbing to pre-recession forces and/or outright contraction. Which, in the New Normal, is great news as it means more hopes for even greater imminent central bank easing and "stimulus" if only for the wealthiest (and also please ignore the fact that 6 years of more of the same has not worked, this time will be different). Which explains why August, otherwise the sleepiest month of the year, proved to be fairly strong with both equities and bonds moving higher in tandem.

In fact, the situation in Europe is so dire, that European government bonds yields reached/retested their record multi-century all time lows. As Deutsche Bank summarizes, the 10yr government bond yields for Germany, France, Italy, Spain, and Switzerland declined by 27bp, 28bp, 26bp, 28bp and 11bp in August to 0.89%, 1.25%, 2.44%, 2.23% and 0.44% respectively.

Doug Noland mentioned 'all of the above' in his Credit Bubble Bulletin on Saturday, but here's the Zero Hedge spin on it courtesy of reader M.A.


Eurozone manufacturing slows further in August

Manufacturing in the eurozone slumped in August to a 13-month low, a closely watched survey showed on Monday, in a further sign that recovery is faltering and that tensions with Russia are taking their toll.

Markit's purchasing managers' index (PMI) measure of output in the eurozone's manufacturing sectors fell to a figure of 50.7 in August, according to the final estimate.

That was still above the 50-point boom-or-bust mark and it compared with the previous flash reading of 50.8.

This AFP article appeared on the Internet site at 3:25 p.m. Europe time on Monday---and it's the first contribution of the day from South African reader B.V.  There was also a similar story on the Internet site on Monday morning EDT.  It was headlined "The Bad News Out of Europe is Intensifying"---and that was courtesy of Roy Stephens.


France Asks for More ECB Action to Weaken Overvalued Euro

French Prime Minister Manuel Valls called for more action from the European Central Bank to lower the value of the euro, amid concerns the 18-nation region might be headed toward deflation.

“The monetary policy has started to change,” Valls said today in a speech made at the Socialist Party’s summer school in La Rochelle, France. While he called the ECB’s package of measures taken in June a “strong signal,” he also said that “one will have to go even further.”

Valls’s comments come after ECB President Mario Draghi, who’ll meet French President Francois Hollande tomorrow in Paris, signaled this month that declining inflation (ECCPEST) expectations are pushing the central bank toward introducing quantitative easing. Policy makers will gather in Frankfurt on Sept. 4 for their monetary-policy meeting.

This Bloomberg story, co-filed from Paris, Frankfurt---and Berlin, appeared on their website at 11:03 a.m. Denver time on Saturday morning---and I found it over at the Internet site.


Moldova Asks EU to Provide Its Farmers With Financial Assistance

Moldovan Prime Minister Iurie Leanca asked the European Union to provide Moldovan farmers with financial aid during a meeting with Stefan Fule, European Commissioner for Enlargement and European Neighbourhood Policy, a spokesman for the Moldovan government told RIA Novosti Monday.

“European financial assistance was one of the main topics discussed by Leanca and Fule. The Commissioner stated that he would consider the possibility of Europe providing [Moldovan] farmers with financial help,” the spokesman said.

On July 18, Russia's agricultural watchdog Rosselkhoznadzor introduced temporary restrictions on fruit imports from Moldova.

On September 1, a law cancelling nullified duties for imports of certain Moldovan products to Russia, including wine, meat, vegetables, grain and fruit, came into effect. The law was drafted in order to protect the Russian market from an uncontrolled flow of European duty-free goods following Moldova’s signing of a free-trade agreement with the EU on June 27.

The above four paragraphs is all there is to this short article that was posted on the RIA Novosti website at 6:18 p.m. Moscow time on Monday---which was 10:18 a.m. EDT in New York.


Mr. Tusk goes to Brussels - but can he save the EU?

The first Eastern European EU president, Donald Tusk faces difficult times ahead – and few credentials to suggest he is up to the job...

Polish Prime Minister Donald Tusk will chair EU meetings as President of the European Council, with many hoping he will prove to be a pragmatic counterweight to the divisive Jean-Claude Juncker, who by his own admission held the Eurozone together with a tissue of lies when the crisis last flared up. For Tusk it is a remarkable story, the son of a carpenter from Gdansk, closely involved in his youth with the Solidarity movement which did so much to end Communist fiat and deliver freedom to the nations east of the River Oder.

A career politician, Tusk has tasted unique electoral success in modern Poland as the only prime minister to win reelection. Widely seen as a calm, likeable, rational figure, he has that air of the Tony Blair about him which appeals – for a while. Unfortunately, he shares the abject economic illiteracy of Mr Blair. Ironically, one of Tusk’s first utterances as EU Council President was to suggest Poland is on an accelerated route to the Euro... Had it not been for the zloty, his own economy would have endured a grinding recession after 2008. Hopefully, circumstances will prevent the Poles being shackled by this corrosive currency straitjacket.

This 'Op-Edge' piece appeared on the Russia Today Internet site at 8:40 a.m. Moscow time on their Monday morning---and it's the first contribution of the day from Roy Stephens.


Sanctions Against Russia ‘Unproductive’ - France's National Assembly

EU sanctions against Russia are unfair and unproductive, according to Thierry Mariani, member of the National Assembly of France.

“I, and many of the other participants of today’s meeting, think that the sanctions imposed against Russia are unfair, unconstructive and unproductive,” Mariani said during a meeting between Sergei Naryshkin, Russia’s State Duma (lower house of parliament) Speaker, with French political and social activists in Paris Monday.

Over the past few months, the United States and the European Union introduced several rounds of targeted sanctions against the Russian economy, unjustifiably blaming Moscow for meddling in Ukraine’s internal affairs.

This short RIA Novosti story was posted on their Internet site just before midnight last night Moscow time, which was 3:52 p.m. EDT Monday afternoon.  It's courtesy of reader M.A.


OSCE and Swiss politicians react to the Ukraine crisis

Continued emphasis on negotiation is needed in response to the tense situation between Ukraine and Russia, said Didier Burkhalter, President of the Organization for Security and Co-operation in Europe, on Friday. At present the organisation has no proof that Russian troops have invaded Ukraine, he said.

The OSCE’s Special Monitoring Mission to Ukraine has established a base in Mariupol and will expand its monitoring activities in the region in order to provide objective information about  the situation, said Burkhalter, who is also the President and Foreign Minister of Switzerland.

“The OSCE and also Switzerland must always act in such a way that the possibility of easing tensions and de-escalation  exists. That is our role. We’ll continue to pursue it,” Burkhalter said Friday in an interview with Swiss public television, SRF.

“A diplomatic solution has to be found,” he said. “A military solution would be a catastrophe.”

This article appeared on the Internet site late on Friday evening Europe time---and it's another contribution from reader B.V.


Russia demands publication of recordings from downed flight MH17

Russia is demanding to know why international investigators have yet to publish the black box data from a Malaysian airliner that was shot down over eastern Ukraine in July, a deputy defence minister said in an interview published on Saturday.

Moscow blames Ukraine for the disaster, in which all 298 passengers and crew were killed. In a version of events widely believed in the West, Ukraine says the Boeing 777 was shot down by pro-Russian separatists with a surface-to-air missile.

"The Boeing catastrophe throws up more and more questions. But lately not many people are talking about this," Anatoly Antonov, deputy defence minister, told RIA news agency.

"Why have the data still not been published about the conversations between the air traffic controllers and the pilots of the Boeing? Why haven't the data been presented from the international investigation of the black boxes? Who doesn't want this to happen?"

The way Antonov is talking, you'd think that he had been talking to me on the weekend.  All good questions with no answers---and he knows it.  This hard news story showed up on the Internet site at 11:51 a.m. BST on Friday---and I thank reader 'h c' for bringing it to my attention, and now to yours.


Gorbachev: Internal Ukrainian conflict can't be turned into inter-state one

Former Soviet President Mikhail Gorbachev believes Russia has not intervened in the events in southeastern Ukraine and is right in doing so.

"If our country intervenes, there could be a fire that the whole world would be unable to put out. And it's right that the politicians are holding to their position," Gorbachev said on Rossiyskaya Sluzhba Novostei (Russian News Service) on Saturday.

"Our proposal was to open passages and let people get out of all those entrapments. But no, someone is sitting in warm offices and intellectualizing. And at the same time - look what is happening to the people, to children and women. Maternity homes and schools are being shelled, hospitals are being destroyed. Two thousand people have been killed even according to official reports, and how many have been injured?" Gorbachev said.

He insisted that everything possible should be done to de-escalate the conflict.

This Interfax article appeared on the Internet site at 11:30 p.m. Moscow time on their Saturday night---and I thank Roy Stephens for sending it our way.  It's definitely worth reading.


Moscow ‘Shocked’ by Ukrainian Defense Minister’s Remarks of Looming Bloody War

The Russian Foreign Ministry said Monday it was “shocked” by the Ukrainian defense minister’s recent remarks, in which he warned of an imminent war between Russia and Ukraine that would lead to thousands of deaths.

“Moscow, of course, noted the remarks by the Ukrainian defense chief Valeriy Heletei, who claimed that ‘the operation to free east Ukraine from terrorists is over’ and announced the beginning of ‘the Great patriotic war’ that would leave ‘dozens of thousands’ dead. The degree of adequacy of the Ukrainian defense minister, who published this post on his Facebook page, requires a careful study, albeit not by military experts,” the Ministry said in a statement.

“Moreover, Heletei’s call to prepare for ‘dozens of thousands’ of victims in what he claims is the ‘Great patriotic war,’ but what de-facto is a new punitive operation in his country, leaves [us] deeply shocked. By [making] such [announcements], he drags the Ukrainian people into continuing civil conflict,” the statement reads.

Hetelei made the statement earlier today on his Facebook page.

This article, filed from Moscow, appeared on the RIA Novosti website at 11:15 p.m. on Monday evening local time---and it's courtesy of Roy Stephens.  There was a related Russia Today story headlined "Russia outraged after Kiev accuses Moscow of nuclear attack threats"---and Roy sent that one to me late yesterday evening.


When the U.S. welched on Shevardnadze

Absent from U.S. media encomia for recently deceased former Soviet Foreign Minister Eduard Shevardnadze is any mention of the historic deal he reached with his U.S. counterpart James Baker in 1990 ensuring that the Soviet empire would collapse "with a whimper, not a bang" (Mr. Baker's words).

Mr. Baker keeps repeating that the Cold War "could not have ended peacefully without Shevardnadze." But he and others are silent on the quid pro quo. The quid was Moscow's agreement to swallow the bitter pill of a reunited Germany in NATO; the quo was a U.S. promise not to "leapfrog" NATO over Germany farther East. Washington welched on the deal.

It began to unravel in October 1996 during the last weeks of President Bill Clinton's campaign for re-election. Mr. Clinton bragged that he would welcome Poland, Hungary and the Czech Republic into NATO, explaining, "America truly is the world's indispensable nation" (and, sotto voce, can do what it wants).

Those three countries joined NATO in 1999, and by April 2009, nine more became members, bringing the post-Cold War additions to 12 — equal to the number of the original 12 NATO states. The additional nine included the former Baltic Republics that had been part of the USSR, but not Ukraine. NATO intentions, however, were made clear at its summit in Bucharest in April 2008, which formally declared, "Georgia and Ukraine will be in NATO."

This must read opinion piece showed up on the Internet site way back in mid-July of this year, but it's just as relevant now as it was back then.  I thank reader 'h c' for his second offering in today's column.


The West, the greatest cause of War in human history, stands stripped of all Legitimacy — Paul Craig Roberts

The Donetsk National Republic States The Facts---“Every time you come to Russia with a sword, from a sword you will perish.”

The former Russian provinces, which Soviet party leaders carelessly attached to Ukraine at a time when it seemed to make no difference as all were part of the Soviet Union, are now independent republics with their own governments. The West pretends that this isn’t so, because Washington and its puppet capitals don’t recognize the independence of formerly captive peoples. But the West’s opinion no longer counts.

In the last couple of days the newly formed military units of the Donetsk National Republic have defeated and surrounded large portions of the remaining Ukrainian military. Russian President Putin asked the Donetsk Republic to allow the defeated Ukrainians to return home to their wives and mothers. The Donetsk Republic agreed to Putin’s mercy request as long as the Ukrainians left their weapons behind. The Donetsk Republic is short on weapons as, contrary to Western lies, the Donetsk Republic is not supplied with weapons by Russia.

Washington’s puppet government in Kiev declined the mercy extended to its troops and said they had to fight to the death. Shades of Hitler at Stalingrad. Western Ukraine has remained the repository of Nazism since 1945, and it is Western Ukraine with which Washington is allied against freedom and democracy.

I watched the entire press conference myself [closed captioned] on the weekend---and it's well worth your while if you have the time.


How Can You Tell Whether Russia Has Invaded Ukraine? - Paul Craig Roberts

If you think that Russia is sending its regular units here, then let me tell you something. If Russia was sending its regular troops, we wouldn’t be talking about the battle of Elenovka here. We’d be talking about a battle of Kiev or a possible capture of Lvov.”  - Alexander V. Zakharchenko, Chairman of the Council of Ministers of the Donetsk National Republic.

Lvov is in western Ukraine near the border with Poland. In other words, if Russia invades Ukraine, the fighting will move from the east side to the west side of the country.

As I observed in a recent column, the fantasy spread by Western governments and their media whores that 1,000 Russian troops have invaded Ukraine is the height of absurdity.

Despite the absurdity of the claim, some of the Western tabloids, which is what all Western newspapers now are, have declared these 1,000 troops to be a “full-scale invasion.” All of this nonsense is a buildup to the upcoming NATO conference in Wales. Disinformation is being used to create hysteria and justification for a NATO military buildup on Russia’s borders that could easily result in the final war.

The article embedded at the end of this brief Paul Craig Roberts piece is also worth reading---and the stories from Roy just keep on coming.


Ex-NSA Director, U.S. Intelligence Veterans Write Open Letter to Merkel to Avoid All-Out Ukraine War

Alarmed at the anti-Russian hysteria sweeping Washington, and the specter of a new Cold War, U.S. intelligence veterans one of whom is none other than William Binney, the former senior NSA crypto-mathematician who back in March 2012 blew the whistle on the NSA's spying programs more than a year before Edward Snowden, took the unusual step of sending the following memo dated August 30 to German Chancellor Merkel challenging the reliability of Ukrainian and U.S. media claims about a Russian "invasion."

Via AntiWar and ConsortiumNews, highlights ours

MEMORANDUM FOR: Angela Merkel, Chancellor of Germany
FROM: Veteran Intelligence Professionals for Sanity (VIPS)
SUBJECT: Ukraine and NATO

We, the undersigned, are longtime veterans of U.S. intelligence. We take the unusual step of writing this open letter to you to ensure that you have an opportunity to be briefed on our views prior to the NATO summit on September 4-5.

The must reads just keep on coming.  This one appeared on the Zero Hedge website at 8:55 p.m. EDT yesterday evening---and I thank reader M.A. for finding it for us.


Lawmakers seek to fast track law on personal data storage in Russia

A group of State Duma MPs want to speed up the enforcement of the recently-approved law obliging all web firms, including social networks, to store the personal data of Russian users on the country’s territory.

The suggestion is being sponsored by lawmakers from parliamentary majority party United Russia, nationalist party LDPR and the Communist Party of the Russian Federation. They say that the bill, initially scheduled to come into force on September 1, 2016, must be introduced already on January 1, 2015, quoting security concerns and increasing pressure from foreign nations provoked by the ongoing crisis in Ukraine.

MP Evgeny Fyodorov (United Russia) has said in an interview with mass circulation daily Izvestia that the faster Russia gets control over servers with users’ data, the more secure it would be against the attempts to influence its domestic politics from abroad.

The internet is a direct tool of the orange intervention and we all know that such intervention is followed by mass killings of tens of thousands of people,” the lawmaker said. “Internet campaigns are usually the first stage of the process and they are done through sanctions and through manipulations with foreign-based data centers. They censor and revise all events that take place in Russia. All information that is stored there can be used against Russia. Therefore, we must take these sites under national control in order to protect our country.”

This news story was posted on the Russia Today website at 10:10 a.m. Moscow time on their Monday morning---and it's another Roy Stephens offering.


Putin breaks ground on Russia-China gas pipeline, world's biggest

Russian President Vladimir Putin and Chinese Vice Premier Zhang Gaoli have launched the construction of the first part of Gazprom’s Power of Siberia pipeline - which will deliver 4 trillion cubic meters of gas to China over 30 years.

“The new gas branch will significantly strengthen the economic cooperation with countries in the Asia-Pacific region and above all - our key partner China,” Putin said at the ceremony outside the city of Yakutsk - the capital of Russia's Republic of Yakutia on Monday.

Both President Putin and Vice Premier Zhang Gaoli signed the freshly-welded pipeline in a time-honored Russian tradition. The 'Power of Siberia' was welded together by workers from Chayanda gas field, overseen by CEO Aleksey Miller.

"Gazprom is always a reliable supplier of gas to its customers - which also applies to the ‘Power of Siberia," Miller said.

This article put in an appearance on the Russia Today website at 10:01 a.m. Moscow time yesterday---and it's the second last offering of the day from Roy Stephens.  The BBC also had a story about this.  It was headlined "Russia and China launch gas pipeline"---and it's courtesy of reader M.A.


A Two-Faced Friendship: Turkey Is 'Partner and Target' for the NSA

Documents from the archive of US whistleblower Edward Snowden that SPIEGEL and The Intercept have seen show just how deeply involved America has become in Turkey's fight against the Kurds. For a time, the NSA even delivered its Turkish partners with the mobile phone location data of PKK leaders on an hourly basis. The US government also provided the Turks with information about PKK money flows and the whereabouts of some of its leaders living in exile abroad.

At the same time, the Snowden documents also show that Turkey is one of the United States' leading targets for spying. Documents show that the political leadership in Washington, DC, has tasked the NSA with divining Turkey's "leadership intention," as well as monitoring its operations in 18 other key areas. This means that Germany's foreign intelligence service, which drew criticism in recent weeks after it was revealed it had been spying on Turkey, isn't the only secret service interested in keeping tabs on the government in Ankara.

Turkey's strategic location at the junction of Europe, the Soviet Union, and the Middle East made the NATO member state an important partner to Western intelligence agencies going back to the very beginning of the Cold War. The Snowden documents show that Turkey is the NSA's oldest partner in Asia. Even before the NSA's founding in 1952, the CIA had established a "Sigint," or signals intelligence, partnership with Turkey dating back to the 1940s.

This very interesting essay appeared on the German website at noon on Sunday Europe time---and it's the final offering of the day from Roy Stephens, for which I thank him.


Six King World News Blogs/Audio Interviews

1. John Ing: "Legend Warns We Are Set For Serious Fireworks in September"  2. Robert Fitzwilson: "Massive Global Earthquakes---and a Truly Terrifying Event"  3. Michael Pento: "Here is the Corrupt---and the Dangerous Endgame All Investors Face"  4. The first audio interview is with David Stockman---and the second audio interview is with Egon von Greyerz

[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]


Gold hungry Indians boost imports in UAE

Among the most popular imports into the UAE in the first three months of the year, were gold and diamonds. The country’s consumers bought about 20,000 kilograms of the material, valued at around Dhirham 37.9 billion. Most of the buyers were Indian staying in the UAE, or those visiting the country.

The UAE’s non oil trade reached Dh 256 billion in the first quarter of 2014, reflecting the continuous momentum of the country’s non oil foreign trade, driven by stronger performance in all the economic sectors, preliminary data of the Federal Customs Authority (FCA) showed.

A World Gold Council report has also alluded to this. Total gold demand in the United Arab Emirates (UAE) reached 25.4 tonnes in the first quarter of 2014. The 16% increase from Q1 in 2013, was largely driven by Indian tourists choosing to buy gold in the UAE, rather than their homeland in an attempt to bypass the Indian gold import tax.

This gold-related article, filed from Mumbai, was posted on the Internet site yesterday.


Some deferred gold-buying finally comes around in India

Manish Kedia, bullion retailer, said that with India's central bank allowing more entities to import gold, premiums have fallen and supplies have eased, much to the relief of buyers.

"Last year, Diwali was preceded by very high demand in the first half and imports hit a record in April and May. Jewellers also took a stand that they would not sell gold coins as anti gold sentiment was at its peak across the country,'' he added.

This year, he said the sentiment had changed and people who had deferred purchases were coming back to the market, albeit slowly.

With the Indian government reducing the import tariff value on gold and silver on Saturday, supplies would also be eased. Tariff value was reduced to $420 per 10 grams for gold and $645 per kilogram for silver. For the first fortnight of this month, the tariff value on imported gold was $426 per 10 grams, while that for silver was $650 per kilogram.

This is another gold-related story filed from Mumbai on Monday---and it, too, appeared on the Internet site.


Koos Jansen: Chinese weekly gold demand highest since February

Off-take from the Shanghai Gold Exchange for the week ending August 22 was the most in 25 weeks, gold researcher and GATA consultant Koos Jansen reported on Friday. He estimates that the gold reserves of the People's Bank of China likely have reached 4,000 tonnes, while admitting that he has no hard data indicating such a total.

Jansen's commentary is headlined "Chinese Weekly Gold Demand Highest Since February"---and it was posted at Internet site at 10:29 p.m. Singapore time on their Friday evening.  I found it in a GATA release on Saturday---and I thank Chris Powell for wordsmithing 'all of the above.'


China banks boost precious metals hoard amid lease demand

The value of precious metals held by China's biggest lenders surged 66 percent from a year ago as banks lease more gold to customers because tighter borrowing rules make it harder to lend funds.

Precious metals held by Industrial & Commercial Bank of China Ltd., China Construction Bank Corp., Agricultural Bank of China Ltd., and Bank of China Ltd., the country's four biggest lenders, were worth 378 billion yuan ($62 billion) at the end of the second quarter, according to financial reports. The growth since last year outpaced the gain in benchmark bullion prices, which rose 7.5 percent over the same period.

China is seeking to rein in credit by raising borrowing costs and cutting off lending to sectors considered at risk of default amid a property slump and rising number of bad loans. That's prompting banks to hold more precious metals as they expand their gold-leasing business because it's not subject to loan caps and is considered off-balance sheet lending, according to Industrial Bank Co.

This very interesting Bloomberg article appeared on their website at 9:52 p.m. MDT yesterday evening---and I found it posted on the Internet site.


New silver fix mechanism won't stop futures price suppression in New York, Speck says

Manipulation of the silver market has been greater than manipulation of the gold market, financial researcher and GATA consultant Dimitri Speck remarks in an interview with Gold and Silver Worlds.

He adds that this manipulation is not likely to be eliminated by the relatively minor changes in the mechanism used to establish the benchmark price in London, since the manipulation is heaviest in the futures market in New York.

The interview with Speck is headlined "Can the New Silver Fix End the Ongoing Silver Price Manipulation?" and it was posted on the Internet site last Thursday---and it's certainly a must read.  The charts alone are worth your time.


Central banks get discounts for trading EVERYTHING through CME Group and Comex

Zero Hedge reports that Eric Scott Hunsader, founder of market data research firm Nanex in Winnetka, Illinois, which exposed the algorithm trading responsible for the flash crash in gold futures on January 6 this year has discovered documentation at the U.S. Commodity Futures Trading Commission showing that CME Group, operator of various futures markets, including the New York Commodity Exchange (Comex), has been providing to central banks outside the United States, since at least July 1, 2013, a program of discounts for trading equity market, bond market, and commodity market futures, including gold and silver futures.

The documentation consists of a letter, dated January 29 this year, from CME Group's managing director and chief regulatory counsel, Christopher Bowen, notifying the CFTC of changes to the discount trading program for central banks. In his letter, Bowen insists, "The program's incentive structure does not impact the exchanges' ability to perform their trade practice and market surveillance obligations under the CEA [Commodity Exchange Act]. The exchanges' market regulation staff will monitor trading in the program's products to prevent manipulative trading and market abuse."

This absolute must read Zero Hedge item showed up embedded in a GATA release on Saturday---and it's by far the most important story in today's column.  The link to the actual CME/CFTC document confirming all of this, is posted on the CFTC's website here.



¤ The Funnies

Here are a couple of photos I took on Sunday.  As you can see by the water in both, it was rather windy---and these juvenile horned grebes that were practicing their take offs and landings with rather comical results, were just about all there was worth taking a photo of.

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¤ The Wrap

I continue to be amazed at the performance of gold and silver against the backdrop of increasing world tensions and unprecedented central bank monetary accommodation; which has resulted in high valuations for just about every asset class (stocks, bonds, real estate, art, collectibles, rare cars, etc.) except gold and silver. I can’t include all the precious metals in the non-performance category, as palladium has hit 13 year highs. My amazement is triggered by the understanding that money creation and world unrest were generally always accepted as reasons for gold and silver to rise in price.

My amazement is not all pervasive, of course, because I understand fully that there exists an overriding influence for why gold and, particularly, silver have been out of synch with all other assets. In fact, not only is the ongoing COMEX manipulation a greater price force than any other single influence on gold or silver (or copper), it is the only logical explanation for price behavior. So clear is the COMEX’s manipulation of price that the only question that matters is how long it can continue? Admittedly, that’s a tough question to answer, primarily because questions of timing always take on an aura of prophecy. - Silver analyst Ted Butler: 30 August 2014

I have little to add to what I said earlier, as Monday was a 'nothing' day---but I still had the feeling that there was a guiding hand there to make sure the precious metal price didn't create any excitement, even briefly during morning trading in London. If you look at the Kitco charts at the top of the page, the guiding hand was all too obvious on Friday going into the North American long weekend.

And as I type this paragraph, the London open is still 90 minutes away. All four precious metals got sold down a bit after Globex trading began at 6 p.m. EDT on Monday evening---and all are still down at the moment, but not by much.  Volumes in both gold and silver were insignificant on Monday---and almost the same can be said about them now.  The dollar index is up 11 basis points.

Returning to today's big story about the open invitation for central banks to rig the commodities prices through the Globex trading system [for fun, profit---and price management] for a moment. GATA and others have always suspected that this was the case---and we already had reams of evidence to back it up.  But this CME document posted on the CFTC's website really was the smoking gun---and there should be no doubt in anyone's mind at this point that some central banks are using the CME Group's carte blanche invitation to keep commodity prices exactly where they want them, regardless of supply and demand.

Ted Butler had a good reason for calling the CME Group, JPMorgan and the CFTC, crooks---and this is certainly the final piece in the puzzle.  Now we can surmise why the CFTC wouldn't do anything about the price management scheme in silver, no matter how obvious the evidence. Now it remains to be seen how the main stream press will handle this, if they touch it at all.

Peter Warburton in his classic essay of April 2001---"The Debasement of World Currency: It is inflation, but not as we know it"---had it figured out over a decade ago, but now the mechanism for how it is done has become a totally open book with yesterday's revelations.  You don't have to read the whole essay---but you should, anyway---you just need to read the three paragraphs under the sub-heading "Central banks are engaged in a desperate battle on two fronts."  More than ten years ago when I discovered this essay, along with those three paragraphs, I immediately called them "the three most important paragraphs in the world."  I still feel that way today.

And as I send this off to Stowe, Vermont at 4:20 a.m. EDT, I note that all four precious metals got hit by the HFT boyz starting moments before London opened.  It wasn't a lot in any of them, but it was obviously coordinated, since they all occurred at the very same time---and had nothing to do with the what was happening in the currencies, as the dollar index is about unchanged from when I reported on it about three hours ago.  Of course gold and silver volumes have blown out quite a bit, but with the Tuesday's numbers from the CME contaminated with Monday's trading volumes, I can't exactly tell how bad it is.

Now that we're in a brand new month, it's difficult to say how trading will proceed as the month unfolds.  But, as I've pointed out many times, if one uses the current configuration of the latest Commitment of Traders Report as a guide, neither Ted nor I are overly optimistic.  However, as I've pointed out on countless occasions as well, there's still that black swan out there, which could/would instantly negate the situation in the paper market on the Comex.

So we wait.

See you tomorrow.