The gold price didn't do much of anything during Far East trading on Tuesday... but, an hour after London opened, the gold price began to move higher... with the rally lasting until about 8:45 p.m. in New York when the selling began. A dollar rally began in earnest about fifteen minutes later at 9:00 a.m. Eastern time. It was, as they say, all down hill from there... with an extra shot coming to the downside in electronic trading well after Comex trading was done for the day. Gold closed above $1,400 spot... but just barely.
From its high of the day [$1,432.50 spot]... to its low of $1,395.10 at 4:15 p.m. Eastern time... the gold price got clocked for $37.40.
But, the big hit was saved for silver... which, by now, should be no surprise to anyone. After doing nothing in Far East trading, silver began to rise steadily right from the London open at 8:00 a.m. GMT... hitting its high of the day [$30.73 spot] at the same second that gold did... about 8:45 a.m. in New York. By mid-lunchtime, silver was down a dollar... and then got absolutely slaughtered in electronic trading, about an hour after the Comex closed. The silver price dropped over a dollar in just over an hour... with its low of the day at $28.46 spot. During a seven and a half hour period, silver got taken down $2.27 cents!
Except for the take down the Friday afternoon after the U.S. Thanksgiving holiday, this had to be the most egregious example of silver price management I have ever seen... especially the dollar plus take down in electronic trading, where there was virtually no volume at all.
Ted Butler is not entirely sure who the culprit was yesterday. He didn't get the impression that it was all the bullion banks doing. He suggested that it might be high frequency traders unwinding a position... as silver volume's have been enormous lately, with very few changes in open interest. As I mentioned in this column yesterday, silver was 'in play'.
The other thing that Ted mentioned was the possibility that, with huge margin calls going out at the close of Comex trading, the price was taken down below Monday's opening price to prevent that from happening. But that doesn't explain who butchered the price between 3:20 p.m. and 4:20 p.m. yesterday afternoon.
But, regardless of all of the above, what happened yesterday was, as Ted put it, the most rigged commodity in the world, being aided and abetted by the crooks at the CME. The exchange and the CFTC should be all over this type of blatantly illegal market activity... but, knowing them, they won't do a thing. And neither will your silver companies.
The world's reserve currency fell about 40 basis points up until 8:45 a.m. Eastern time Tuesday morning. All of gold and silver's big gains of yesterday came between 3:00 a.m. and 8:45 a.m. Eastern time, as the dollar fell 18 basis points during that period. From that 8:45 a.m. time, the dollar began to work higher... and reached its absolute high at the close of electronic trading at 5:15 p.m. late Tuesday afternoon... up 77 basis points.
During the New York trading session, both gold and silver had their big losses between 8:45 a.m. and 12:30 p.m. During that time, the dollar had risen less than 30 basis points. The big smack-down in both metals in electronic trading occurred in an 80 minutes period between 3:00 p.m. and 4:20 p.m. During that time period, the dollar fell 10 basis points.
Was yesterday's dollar move in any way related in severity to the drop in price in both metals? Absolutely not. The only thing that is for sure, is that the precious metals sell off... and the dollar rally... began at the same instant... and there wasn't a damn thing in the real world of supply and demand to warrant the price action. It's amazing to watch JPMorgan et al [if it was all them] pull this stunt with all the lawsuits they have pending against them.
We had an 80 point rally in the dollar on Monday and virtually nothing happened, so why would Tuesday's 77 point rally be any different? Well, maybe 'da boyz' were celebrating the 69th anniversary of Pearl Harbor at the expense of the precious metals.
The gold stocks headed for negative territory the moment that equity trading began at 9:30 a.m. And, in actual fact, the precious metal stocks were recovering quite nicely until the plug got pulled shortly before 3:00 p.m. Eastern time. The HUI, which was down 2.45%, finished on its absolute low of the day. But, all things considered, it could have been far worse. Of the 67 stocks I track, there were actually 6 of them in the green at the close of trading... and a couple of them were silver stocks!
Yesterday's CME Delivery Report showed that 68 gold and 22 silver contracts were posted for delivery on Thursday. The link to that action is here.
Over at the GLD ETF yesterday, there was a tiny withdrawal of 9,763 ounces. However, it was an entirely different story over at the SLV ETF... where they reported receiving a staggering 4,007,652 troy ounces of silver. Ted says that despite yesterday's crucifixion, the SLV ETF is still owed a lot of silver.
The U.S. Mint had no sales report.
It was a busy day over at the Comex-approved depositories on Monday. At the end of the day, they reported a net withdrawal of 340,877 ounces of silver. There was activity in all four warehouses... and the report is worth looking through. The link is here.
I don't have many stories for you today which, after yesterday's deluge, is just fine by me.
My first two stories are ones that I stole from yesterday's King Report. The first is from The Telegraph... and was posted in the late evening on Monday. The headline reads "Euro collapse 'possible' amid deepening divisions over bail-out". 'It is feasible that the euro will not survive the current sovereign debt crisis sweeping Europe, one of the Treasury's leading independent forecasters has said.' This is, of course, no surprise at all. The link to the story is here.
The second story that I filched from the King Report is this story on global warming... and how its affecting Britain this winter. Middle class families are among millions of Britons who cannot afford to heat their homes this winter, as elderly ride on buses all day to stay in the warm. After a week of snow and freezing temperatures, a shocking picture has emerged of the bleak months ahead for 5.5 million households that are now classified as "in fuel poverty". The headline reads "Britain is Freezing to Death"... and the link is here. The video and the pictures are worth the trip.
Just as I was editing this column, I received an interesting piece from reader G.G. It was rather serendipitous for this article to show up on this day, considering that I had already selected the title for my column this morning. Since it's not precious metals related, I'll slide it in here. It's a posting over at chroniclesmagazine.org... and is written by Dr. Srdja Trifkovic. The headline reads "WikiLeaks, 1941". I'm intimately familiar with everything in this story, as I've read Robert Sinnett's classic novel Day of Deceit: The Truth About FDR and Pearl Harbor a couple of times. The link to the essay is here... and I consider it a must read.
Before posting my small handful of precious metals-related stories... here are a couple of 'feel good' graphs that Nick Laird from sharelynx.com slid into my inbox late last night. His comment, that accompanied both graphs, read as follows... "Here's the Silver 7 & PM Funds Index - you can't even notice yesterday's hit."
Here's the "Silver Seven Stock Index" graph...
Here's the "PM Funds Index" graph...
Today's first story is a GATA release that's headlined "Tax issues in moving or exchanging precious metals". I'm sure that this essay only applies to American citizens... and I suggest that if you have any questions in this area, that you consult your accountant. Chris Powell provides the preamble... and the link is here.
Here's another GATA release of a story out of yesterday's edition of The Wall Street Journal. The headline reads "New large-format 'America the Beautiful' silver coins in demand". These are 5-ounce rounds that has taken the U.S. Mint ages to produce. I'm not surprised at the interest... and I would guess just by looking at the mintage numbers, that getting your hands on one of these will be a pricey proposition... if you can even find one. The story is well worth the read... and the link is here.
Ben Davies, CEO of Hinde Capital, has posted a rather longish blog over at King World News that's headlined "Gold, Defaults & A New Brady Bunch". Ben compares the European central bankers to parachutists who "zone out" and forget to pull their ripcords. But, as the euro falters amid overwhelming debts, Davies writes -- Europe still has available to it a unifying currency -- the old one, gold. The link is here.
My last offering of the day is an essay that silver analyst Ted Butler wrote years ago... and it's just as relevant now as it was back then. It's dated July 5, 2006... so we're talking four and a half years. As important as Ted's commentary is... the letters written by Carl Loeb to the SEC, CFTC, and the House Committee on Financial Services, that are imbedded in this essay... are equally as important. The essay is headlined "The Road Ahead"... and it's posted over at silverseek.com. I highly recommend that you spend some time on this... and the link is here.
Columbus Gold Corporation (CGT: TSX-V) is a gold exploration company pursuing early to advanced stage opportunities in Nevada and Arizona in the US, and French Guiana in South America. The Company is an experienced project generator focused on advancing projects either through joint venture with industry partners or on its own where exploration risk is minimized and potential is particularly promising. In the US, exploration and generative activities are managed by Cordex, owned and operated by Andy Wallace who has a long and successful history of gold discovery and mine development. The Company currently has 12 of its 23 US projects joint ventured to major and junior mining companies, including Agnico-Eagle Mines Limited.
In French Guiana, Columbus has the recently acquired Paul Isnard Property containing a 2 million ounce gold deposit. This recent acquisition has the potential to push the company from an early stage gold explorer to a developer.
For more on Columbus Gold Corp., visit www.columbusgoldcorp.com
The lie can be maintained only for such time as the State can shield the people fromthe political, economic and/or military consequences of the lie. It thus becomesvitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy ofthe lie, and thus by extension, the truth becomes the greatest enemy of the State.-- Dr. Joseph Goebbels, Nazi Propaganda Minister
Yesterday's price action was as blatantly manipulative as one could possibly imagine. Volume was pretty big in both metals yesterday... so there was certainly liquidation of some sort, although the big take down in electronic trading certainly didn't involve much volume.
Of course all of this happened on the cut-off day for Friday's Commitment of Traders report... so I'd be prepared to bet a large sum of money that not all of yesterday's 'action' will be in Friday's report. I would suspect that all trading after the Comex close won't be included... and that's where the real damage was done. As I've pointed out many times, this is standard operating procedure for these crooks... and that's what they are. One can only imagine the amount of illegal profits that they stole yesterday... and how much in the way of losses they inflicted on the silver miners, the stockholders... and the leveraged speculators.
And to do all this right under the noses of the CFTC!!! These guys have gonads made from solid steel... as this action was a kick in the teeth to Gary Gensler at the CFTC. There's supposed to be a meeting about position limits tomorrow... December 9th... so hopefully we'll find out more then.
I note that both gold and silver got smacked again about 11:00 a.m. Hong Kong time... but have recovered somewhat... and are heading a bit higher now that London has opened this Wednesday morning. All this despite a dolar that's up 40 basis points as of this writing. Volume in gold is double [33,000 contracts] what it was on Monday... and silver's volume is already a monstrous 15,000 contracts net of all roll-overs... as of 4:55 a.m. Eastern time. As I said yesterday, with these enormous volumes and not much change in open interest, it's obvious that there are lots of day traders in the Comex silver futures market. And as I mentioned earlier in this column, Ted Butler figures that these traders may have been the ones at 'ground zero' of yesterday's silver price meltdown in electronic trading. Hopefully we'll find out soon.
Here's the 1-year silver chart. At the moment, yesterday's data point sort of gets lost in the day-to-day trading noise... and it remains to be see if this 'Pearl Harbor' correction is a one day affair, or do the bullion banks have something more serious in store for us all? We'll find out soon enough.
One thing is for sure... we've been here before and survived... and we'll survive this as well.
I'm still 'all in'.
See you on Thursday.