Gold & Silver Daily
"JPMorgan et al. aren't going to let prices run too far to the upside"
 

¤ Yesterday In Gold & Silver

The gold price didn't do much in early Far East trading, but began to chop higher starting shortly after 11 a.m. Hong Kong time.  It peaked out at the 10:30 a.m. BST London a.m. gold fix---and then got sold down to it's closing price on Monday.  The short covering rally that began minutes after the Comex open ran into the usual not-for-profit sellers about 15 minutes later---and then gold chopped lower until shortly before 4 p.m. in electronic trading.  From that point it rallied a few dollars into the close.

The low and high ticks, such as they were, were reported by the CME Group as $1,245.70 and $1,255.60 in the December contract.

Gold finished the Monday trading session in New York at $1,249.40 spot, up $2.50 on the day---and obviously well off its high, as is usually the case.  Net volume was 128,000 contracts with about a third of that coming before 9 a.m. BST in London trading.

The silver price action was almost a carbon copy of the gold chart, so I'll spare you the details; and as usual, silver got sold down the moment trading began in New York on Monday evening.

The low and highs were reported as $17.355 and $17.655 in the December contract.

Silver closed yesterday in New York at $17.515 spot, up 9 cents from Monday.  Net volume was decent at 32,500 contracts.

Both platinum and palladium also followed a very similar price path as gold and silver right up until the Comex open.  Rallies in both began shortly after that---and both ran out of gas/got capped at the London p.m. gold fix.  The platinum price drifted lower into the close---and the palladium price traded almost ruler flat from 10 a.m. EDT onwards.  Platinum closed up $10---and palladium closed up $14.  Here are the charts.

The dollar index closed late on Monday afternoon at 85.02---and after dipping to its Tuesday low of 84.75 about 35 minutes before the London open, the index began to rally---and closed right on its 85.40 high, up 38 basis points on the day.

The folks over at finance.yahoo.com decided to provide access to only their interactive HUI chart starting yesterday---and have blocked access to their basic chart, which is what I've always used.  Unfortunately, you can't copy an interactive chart---and the new chart I was thinking of using doesn't have the line on it for the previous day's closing prices, so I'm stuck with this little one for now.  If you have a favourite HUI chart that you like to use, please send me the link, as I need something other than the dinky chart below.

Having got that out of the way, the gold stocks gapped up about 2% at the open---and then chopped sideways until shortly after 12:30 p.m. EDT.  Then, mysteriously, the shares got sold down into negative territory once again, although they did rally a bit during the last 30 minutes of trading.  The HUI closed down 0.28%.

The silver equities started the day off well into the black, but they too ran into a seller at the same time as the gold shares, but managed to hang on to some of their gains, as Nick Laird's Intraday Silver Sentiment Index closed up 0.86%.

The CME Daily Delivery Report showed that 154 gold and 100 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  Once again it was the "Barclays Show" in gold, as their proprietary trading account issued 154 contracts---and 152 of those contracts were stopped in its client account.  In the last three business days, 604 gold contracts have been transferred from one Barclays pocket to another.

In silver, the only short/issuer was ABN Amro with 100 contracts---and the three long/stoppers were Jefferies, Scotiabank and R.J. O'Brien.  There have already been 754 silver contracts posted for delivery in October, which is quite a few considering that October is not a traditional delivery month.  The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in October dropped by 219 contracts---and those were the Barclays deliveries scheduled for today.  Open interest in the current month is now down to 388 contracts---minus the 154 Barclays contracts mentioned in the previous paragraph.  Silver open interest in October now stands at 102 contracts, down 3 contracts from Monday's report.

There were no reported changes in GLD yesterday---and as of 9:42 p.m. EDT yesterday evening, there were no reported changes in SLV.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the changes in their gold and silver ETFs for the week ending, Friday, October 17---and this is what they had to report:  Their gold ETF declined by another 12,660 troy ounces, but their silver ETF went in the other direction for the second week in a row, adding 71,103 troy ounces.

It was a big sales day over at the U.S. Mint.  They sold 8,000 troy ounces of gold eagles---2,000 one-ounce 24K gold buffaloes---and 715,000 silver eagles.  Knowing what's going on in the physical retail market in real time, I can tell you without a word of lie that a huge chunk of these sales are not to the average retail investor.  This is most likely Ted Butler's 'Mr. Big' in action.

Over at the Comex-approved depositories on Monday, they didn't receive any gold, but 24,278 troy ounces were shipped out, with virtually every bar coming out of Scotiabank's warehouse.  The link to that activity is here.

In silver, there were 607,638 troy ounces received---and 425,900 troy ounces shipped out the door.  The link to that action is here.

I have a more reasonable number of stories for you in today's Critical Reads section---and I hope you'll find the odd one that interests you.

 

¤ Critical Reads

"Plunge Protection" Behind Market’s Sudden Recovery

Mysterious forces were trying their best, but they couldn’t keep the stock market from swooning [last] Wednesday.

They failed in the morning, despite massive purchases of stock index futures contracts. Within minutes of the market’s opening, the Dow Jones Industrial Average was down 350 points. Later in the day — after a lot of shocking ebb and flow — the Dow bottomed out with a decline of 460 points.

It was only in the last hour of trading that the market saviors managed to trim the Dow loss to just 173 points. And they succeeded only after Janet Yellen’s private, upbeat remarks about the economy were leaked.

Welcome to a new kind of stock market — one that the average investor should refuse to be invested in.

No surprises here, dear reader.  New York Post columnist John Crudele calls it the way it was.  This article appeared on their Internet site at 11:08 p.m. EDT on Monday evening---and I thank Howard Wiener for today's first story.  It's worth reading.

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Top Mortgage Firm Accused of Abuses

One of the nation's largest servicers of home loans may have denied struggling borrowers the chance to fix loan problems and avoid foreclosures, New York's financial regulator has alleged.

An investigation by the state's Department of Financial Services found that Ocwen Financial Corp. inappropriately backdated foreclosure warnings and letters that rejected mortgage loan modifications, making it nearly impossible for borrowers to appeal the company's decision.

Many borrowers who had fallen behind on loan payments also received warning letters months after the deadline for avoiding foreclosure had passed, department investigators found.

Potentially hundreds of thousands of backdated letters may have been sent to borrowers, likely causing them "significant harm," Benjamin Lawsky, New York's Superintendent of Financial Services, wrote in a letter to Ocwen released Tuesday.

This AP story showed up on their Web site at 5:11 p.m. EDT on Tuesday afternoon---and I thank Manitoba reader U.M. for her first offering of many in today's column.

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New Rules Adopted in Hopes of Spurring Home Loans

With the financial crisis and subprime mortgage bust receding further into history, the government is loosening some financial rules, hoping to inject more life into the country's still-recovering housing market.

Both banks and borrowers stand to benefit from the new rules unveiled Tuesday by six federal agencies. While banks will see relaxed guidelines for packaging and selling mortgage securities, fewer borrowers likely will need to make hefty down payments. The board of the Federal Deposit Insurance Corp. voted 4-1 Tuesday to adopt the new rules, and two other agencies approved them as well. The Federal Reserve has scheduled a vote for Wednesday, and two other agencies are expected to adopt the rules soon.

The regulators have dropped a key requirement: a 20% down payment from the borrower if a bank didn't hold at least 5% of the mortgage securities tied to those loans on its books. The long-delayed final rules include the less stringent condition that borrowers not carry excessive debt relative to their income.

Borrow and spend till you puke, but these changes are still a year away at least.  This AP story was picked up by the news.yahoo.com Internet site mid afternoon EDT---and it's courtesy of West Virgina reader Elliot Simon.

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Fed Emergency Update - Mike Maloney

"Ever since the 2008 crisis, I've been telling audiences that that crisis never ended, that the Federal Reserve is doing extreme emergency manoeuvres that show that there's still something very wrong with the world economy. Right now the entire economy really is on artificial life support." - Mike Maloney - October 20, 2014.

This 10:40-minute video commentary, complete with attached charts, was posted on the hiddensecretsofmoney.com Internet site on Tuesday sometime---and from what I've seen so far, it's worth watching.

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Dr. Dave Janda Interviews Your Humble Scribe

I spent about 25 minutes talking to the good doctor on a variety of issues on Sunday---and it was posted on the davejanda.com Internet site on the same day.

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Forex-Rigging Fines Against Banks Could Reach $41 Billion Worldwide, Citi Report Says

Probes into allegations that traders rigged foreign-exchange benchmarks could cost banks as much as $41 billion to settle, Citigroup Inc. analysts said.

Deutsche Bank is seen as probably the "most impacted" with a fine of as much as 5.1 billion euros ($6.5 billion), Citigroup analysts led by Kinner Lakhani said yesterday, estimating that the Frankfurt-based bank's settlements could reach 10% of its tangible book value, or its assets' worth.

Using similar calculations, Barclays could face as much as 3 billion pounds ($4.8 billion) in fines and UBS penalties of 4.3 billion Swiss francs ($4.6 billion), they wrote in a note first sent to clients on Oct. 3.

But nobody will go to jail, so the ethics don't change.  This Bloomberg article, filed from London, showed up on their Web site at 9:37 a.m. Denver time yesterday morning---and I found it in a GATA release.

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EU Fines JPMorgan, UBS, Credit Suisse for Taking Part in Cartels

JPMorgan, UBS and Credit Suisse were fined a total of 94 million euros ($120 million) by the European Commission for taking part in cartels in the financial sector.

The Commission handed JPMorgan a 61.7-million-euro fine for rigging the Swiss franc Libor benchmark interest rate between March 2008 and July 2009. It was also fined 10.5 million euros for participating in a cartel on Swiss franc interest rate derivatives.

UBS' penalty in the derivatives cartel came to 12.7 million euros and that of Credit Suisse was 9.2 million euros. Royal Bank of Scotland alerted the Commission about both cartels and escaped total fines of 115 million euros.

The penalties are the latest by the European Commission, which along with authorities around the world, has handed down billions of euros in fines against top banks for rate-rigging, breaking trade sanctions and other misbehavior.

But nobody is going to jail, so what's the point?  This Reuters story, filed from Brussels, was updated at 11:31 a.m. EDT yesterday, as reader Harry Grant sent it to me at 8:01 a.m. EDT yesterday.  Reader U.M. sent the Zero Hedge take on this headlined "Europe Demands Banks Hand Over Their Lunch Money Following Swiss Franc Libor Rigging".  The ZH folks are certainly less charitable than those over at Reuters.

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ECB to Spend €1 Trillion on Covered Bonds to Kick-Start Euro Economy

The European Central Bank (ECB) has embarked on a spending spree that could see it pump €1tn (£790bn) into the eurozone’s financial system.

After months of debate, on Monday the Frankfurt-based central bank began buying covered bonds in the next stage in its battle to revive the eurozone economy and keep deflation at bay.

ECB president Mario Draghi has made it clear the programme should return the ECB’s accumulated assets to 2012 levels, which means that by the time officials in Frankfurt have finished, its balance sheet could have risen from €2tn to €3tn. The aim of the move is to ease bank credit in the 18-member currency union after a difficult year that has seen a decline in business lending hamper recovery.

Covered bonds have an income stream of debt repayments backed by pools of home or commercial property loans; 90% of the global market is based in Europe, especially in Denmark, Germany, Spain, France and Sweden.

Mortgage-backed securities [MBS] Europe style.  I posted a story about this in Tuesday's column, but this offering from theguardian.com Web site at 5:17 p.m. BST on Monday is more comprehensive---and is something I borrowed from yesterday's edition of the King Report.

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No Russia-Ukraine Gas Deal at EU Talks; Moscow Queries Finances

Russia and Ukraine failed to reach an accord on gas supplies for the coming winter in EU-brokered talks on Tuesday but agreed to meet again in Brussels in a week in the hope of ironing out problems over Kiev's ability to pay.

After a day of talks widely expected to be the final word, European Energy Commissioner Guenther Oettinger told a news conference the three parties agreed the price Ukraine would pay Russia's Gazprom - $385 per thousand cubic meters - as long as it paid in advance for the deliveries.

But Russian Energy Minister Alexander Novak said Moscow was still seeking assurances on how Kiev, which earlier in the day asked the EU for a further 2 billion euros ($2.55 billion) in credit, would find the money to pay Moscow for its energy.

Dependent on Western aid, Ukraine is in a weak position in relation to its former Soviet master in Moscow, though Russia's reasons were unclear for wanting further assurances on finances, beyond an agreement to supply gas only for cash up front.

This Reuters news item, filed from Brussels, appeared on their Web site at 5:29 p.m. EDT on Tuesday afternoon---and I thank Jim Skinner for digging it up for us.  It's worth reading.

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Ukraine Used Cluster Bombs, Evidence Indicates

The Ukrainian Army appears to have fired cluster munitions on several occasions into the heart of Donetsk, unleashing a weapon banned in much of the world into a rebel-held city with a peacetime population of more than one million, according to physical evidence and interviews with witnesses and victims.

Sites where rockets fell in the city on Oct. 2 and Oct. 5 showed clear signs that cluster munitions had been fired from the direction of army-held territory, where misfired artillery rockets still containing cluster bomblets were found by villagers in farm fields.

The two attacks wounded at least six people and killed a Swiss employee of the International Red Cross based in Donetsk.

If confirmed, the use of cluster bombs by the pro-Western government could complicate efforts to reunite the country, as residents of the east have grown increasingly bitter over the Ukrainian Army’s tactics to oust pro-Russian rebels.

This article, filed from Donetsk, Ukraine, put in an appearance on the New York Times Web site on Monday sometime---and I thank Roy Stephens for sending it.

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Turkey to Let Iraqi Kurds Cross to Syria to Fight ISIS

Turkey will allow Iraqi Kurdish forces, known as peshmerga, to cross its border with Syria to help fight militants from the group called the Islamic State who have besieged the Syrian town of Kobani for more than a month, the Turkish foreign minister announced Monday.

The decision represents an important shift by the Turkish government, which has angered Kurdish leaders and frustrated Washington for weeks by refusing to allow fighters or weapons to cross its border in support of the Kurdish fighters defending the town. Speaking at a news conference in Ankara, the Turkish foreign minister, Mevlut Cavusoglu, said that his government was “helping the pesh merga cross over to Kobani.”

The announcement, along with an American decision to use military aircraft to drop ammunition and small arms to resupply Kobani, reflected escalating international pressure to push back Islamic State militants. As the United States-led coalition has increased its airstrikes as well as its coordination with the Kurdish fighters, who have provided targeting information, the militants have lost momentum after appearing close to overrunning the town.

This is another story from the New York Times Web site.  This one was posted there on Monday as well---and filed from Mursitpinar, Turkey---and it's also courtesy of Roy Stephens.

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Jim Rickards: China GDP Figures Are Bogus

Jim Rickards, chief global strategist at West Shore Funds, explains why he's not closely watching China's gross domestic product figures.

This 4:21-minute CNBC Squawk Box video clip appeared on their Web site at 8:15 p.m. EDT on Monday evening---and I thank Harold Jacobsen for bringing it to our attention.  It's worth your time if you have it.

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James G. Rickards: In the Year 2024

Writing for The Daily Reckoning, fund manager, author, and geopolitical strategist James G. Rickards imagines life in the year 2024 as being under the totalitarian control of a world central bank that has outlawed not only gold but also markets and money itself.

While Rickards' nightmare scenario is the perfectly logical consequence of the trend of central banking, we still have a few years to push the world toward a different future.

Rickards' essay is headlined In the Year 2024 and it's posted at The Daily Reckoning Web site---and it falls into the absolute must-read category.  [NOTE: I posted a story that critiqued Jim's article in yesterday's column.  It was headlined All the world’s gold to be confiscated and buried in Switzerland by 2020 argues Jim Rickards.  Now that I've read the original Rickards article, courtesy of reader Dan Lazicki, the title to the story is highly misleading, as is the author's commentary in spots, and I'm glad that I have the real deal for you today. Ed]

The first two paragraph of introduction are courtesy of GATA's Chris Powell---and I found the original Rickards essay posted on the gata.org Internet site yesterday.

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Citi Buys Deutsche Commodities Trading Book in Expansion Push

Citigroup Inc has bought Deutsche Bank AG's energy and metals book, a source familiar with the matter said, in the latest sign of expansion from the U.S. firm in commodities trading as rivals retrench.

Citi won Deutsche's oil, metals and power books this summer and autumn, the source said, after a bidding round that saw several Wall Street firms and trading houses chasing the opportunity to take on the positions of a once top-five commodities bank.

The deal will help Citi close the gap with top banking rivals in commodities trading, even as some exit the sector under increased regulatory scrutiny and lower margins.

Deutsche Bank, which once competed with Barclays and JPMorgan Chase & Co to challenge the long-running energy and metal franchises of Goldman Sachs and Morgan Stanley, announced it was largely exiting the sector late last year.

But, dear reader, Deutsche Bank is keeping its precious metal trading division.  This Reuters news item, filed from London, was posted on their Web site at 1:59 p.m. EDT on Monday afternoon---and I thank reader M.A. for another offering in today's column.

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First Swiss Gold Poll Shows Pro-Gold Side in Lead at 45%

GoldCore's Mark O'Byrne reported yesterday that the first opinion poll on Switzerland's gold repatriation referendum proposal shows 45% of respondents in favor and 39% opposed.

Chris Powell wrote the above---and I borrowed the headline from a GATA release as well, but the first person through the door with this story was reader U.M.

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UBS: Swiss Gold Exports At 7-Month High; Physical Demand Absorbing Investor Liquidations

Swiss trade data show gold exports hit a seven-month high in September and that the flow to Eastern from Western nations continues, says UBS. Swiss exports were 172.6 metric tonnes last month, the most since February.  Gold shipments to China jumped to 12 tonnes after averaging around three tonnes during the previous four months.

Shipments to Hong Kong increased to 24.7 tonnes, the most since April. Switzerland exported 58.5 tonnes to India last month, the largest shipment year to date and nearly twice the average monthly volume, UBS says.

Meanwhile, September gold imports into Switzerland were also high at 194.6 tonnes. Inflows from the U.K. jumped to 63.3 tonnes from 8.6 in August. “This suggests that a good portion of investor liquidations in September, that pushed the prices through the $1,200 psychological level, were absorbed by physical demand, with metal making its way from London vaults into Swiss refineries for refining/recasting and ultimately shipped to physical buyers in Asia,” UBS says.

This short commentary appeared on the kitco.com Internet site yesterday at 9:38 a.m. EDT---and you may have to scroll down a bit to get to it, but you've read most of it already.  It's another contribution from Manitoba reader U.M., for which I thank her.

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Dhanteras Sales Jump 20% over Lower Gold, Silver Prices

This Dhanteras saw jump in sales of jewellery in various parts of the country by at least 20% over last year following lower gold and silver prices in the retail markets. People are preferring lightweight jewellery and gold coins over traditional jewellery. In Ahmedabad the local jewellers expected the business to cross Rs 250-300 crore till Diwali (October 23).

Average gold prices that were around Rs 32,500 per 10 grams during last Diwali, were hovering around Rs 27,500 per 10 grams this year. Also, silver prices this year before Diwali were around Rs 39,000 per kg compared to around Rs 49,000 per kg last year during Diwali.

In Ahmedabad, upbeat over the lower prices of the yellow metal, as many as 60 jewellers under the Ahmedabad Jewellers' Association had launched the grand shopping festival "Swarna Utsav" which concludes on Diwali, with primary objective to recover the losses incurred by them in the past six months due to lack of business.

"During Dhanteras the sales of gold and silver has been significantly higher than last year. We expect sales to rise by 15-20% this year over last season," said Shantibhai Patel of the Ahmedabad Jewellers' Association. He said that this was due to lower price of the precious metals.

This gold-related news item appeared on the bullionbulletin.in Internet site at yesterday IST sometime---and it's another story from reader U.M.

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Chinese and Indian Gold Buyers Back in Market in a Big Way

What has been particularly strange about the gold market over the past two years is that the stronger the physical demand appearing for gold, the weaker the gold price has tended to get.

In the past few months, the gold price has fallen back from around $1,340 down at one time to $1,190 and now hovering back seemingly trying to breach $1,250 on the upside again, yet by all accounts demand in the two biggest consuming nations has been soaring and they are, between them, taking in virtually everything the world’s gold mines can produce.

The two countries are India and China. A mild relaxation of some of the import controls put on gold in the former saw gold imports rise to around 95 tonnes in September, while the weekly withdrawal statistics from the Shanghai Gold Exchange show that gold demand has latterly also picked up extremely well in China after a good start to the year, but then a marked downturn from March to August.

Indeed the latest weekly figures from the SGE could be seen as particularly strong given that the markets were closed for half the period due to China’s Golden Week holiday. While the total for the two weeks at around 68 tonnes may not seen spectacular, given that these purchases were actually made in only five days (September 29 and 30 and October 8, 9 and 10) due the long holiday market closure could suggest that Chinese demand is indeed soaring enormously.

Supply and demand no longer matter in all key commodities as the banks have hijacked the price discovery mechanisms on the Globex/Comex---and Lawrie knows that.  This commentary appeared on the mineweb.com Internet site yesterday---and it's worth skimming.

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Top Bullion Consumer China Works on First Gold Forwards, Options

The Shanghai Gold Exchange (SGE) is working on plans for China's first forwards and options in gold, sources say, potentially putting China ahead in the race to set an Asian pricing benchmark that might eventually rival the London gold fix.

China, which overtook India last year to become the world's biggest consumer of gold, bans trading in commodity options and forwards at present to limit speculation.

But Beijing is setting the stage for the launch of such derivatives as it opens up its markets, and gold could be among the first commodities on the list, although it remains unclear when trading might start.

The state-run SGE, at the forefront of China's efforts to dominate bullion pricing, opened an international bourse last month and foreign banks have shown strong interest in trading its yuan-denominated contracts. The exchange now wants to expand its product line to boost liquidity.

This longish Reuters article, co-filed from Singapore and Shanghai, appeared on their Web site at 2:50 a.m. IST on their Wednesday morning---and it's also courtesy of reader U.M.  It's also her last contribution to today's column, for which I thank her on your behalf.

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China Admits 40% of Magnetic Rare Earths Supply Is Illegal

World's dominant supplier of rare earth elements reveals a huge portion of supply used in magnets is illegally mined; much larger than initially anticipated

China – the world's leading producer of rare earth elements – has revealed that 40% of its supply used in high strength magnets is from illegally mined sources in the country.

The figure was revealed by rare earths expert Prof. Dudley Kingsnorth of Industrial Minerals Company of Australia (IMCOA) at a high level conference in Milan, the European Rare Earths Competency Network (ERECON).

Prof. Kingsnorth, who is the leading source of data in the rare earths market, was citing experts within China who are not only involved in the mining of the elements but also the government-led rare earths association.

I had a story about this in my Tuesday column, but this one is far more comprehensive.  It was posted on the mining.com Web site yesterday---and I thank reader M.A. for bringing it to my attention, and now to yours.

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¤ The Funnies

Here are two of the four photos that I kept from my hour or so of sitting around the old pond late Sunday morning.  At this time of year---and at this latitude in North America---all that's left in the way of birds is the migratory waterfowl, plus a few magpies---and they won't head south until the arrival of the first snow of the season finally forces them to leave.

This first photo is a group of Canada geese neatly surrounding an immature common goldeneye duck.  This shot is from about 50 meters or so.

The second shot is from less than 20 meters---and it's a study in depth of field, as even though I had the f-stop cranked up to the DLA of the camera, at this distance and using a 400mm telephoto lens, sharp depth of field is only about a meter at most, as the geese in the foreground and background are progressively more out of focus.  The red colour in the water is the reflection of a building in the distant background.  I have too many photos of Canada geese already---and I only took this one because they were all nicely lined up.

I didn't take this seagull photo below, but I can tell you that it was taken with an ultra-wide angle lens---14mm or wider---as everything from 10 centimeters to 10 kilometers away is in razor-sharp focus.  And because of that, the photo looks almost surreal.

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¤ The Wrap

There were additional withdrawals from the big silver ETF, SLV, this [past] week and again the withdrawals seem counterintuitive when held up against [the] price action (mostly flat) and trading volume (mostly subdued). From the recent top of 350 million oz, some 6.5 million oz of silver have been delisted from the SLV, as shares outstanding has dropped accordingly. I can’t prove it, but my strong sense is that a big buyer might be converting shares of SLV to direct physical metal ownership so as to avoid reporting more than a 5% stake to the SEC. My strong sense results from me wanting to do exactly the same thing were I so fortunate to be able to do so financially. Try to imagine having the money to buy as much silver as you could. Next, imagine how you would actually go about it and didn’t want to openly disclose the purchase while it was being made. If you can imagine a better way than by what I am speculating might be occurring in SLV presently, please drop me a line.

I confess to maybe hearing and seeing things that might not exist, particularly when so many unusual things appear to be present in silver, but the sales reporting pattern for Silver Eagles from the U.S. Mint still suggests a big buyer is present.  Sales for the month are impressive, but more notable is the uneven pattern of daily sales; some days 50,000 coins are reported sold, or none at all---and on other days, more than 500,000. If broad public retail demand was behind the recent surge in Silver Eagles, that would manifest itself with steady day-to-day reported sales. Since that is not the pattern at all, the most plausible explanation would be a single big buyer picking the time and price for purchase. Regardless, it should still be close to a record year for sales of Silver Eagles. - Silver analyst Ted Butler: 18 October 2014

With the obvious price capping in both gold and silver at the Comex open yesterday morning and, to a certain extent, platinum and palladium as well---it leaves little doubt in my mind that JPMorgan et al. aren't going to let prices run too far to the upside, regardless of the supply/demand fundamentals.

Of course the Managed Money shorts in both gold---and particularly silver---still have boat loads of positions to cover, but based on the price action since the lows of last week, especially in gold, any rally that is allowed, will be well contained.

There's always the possibility that something could go sideways that changes all that, but at the moment, that's the way I see it.  The share price action is equally as lousy---and as I've stated several times since the lows in both metals, it appears that they are being actively managed as well.

The message from the powers-that-be is clear, as it appears they don't want investors anywhere near the precious metal complex, at least for the time being.

Here are the six-month charts for the "Big 6" commodities---

And as I type this paragraph, the London open is about 20 minutes away.  Both gold and silver are down small amounts---and platinum and palladium are both trading unchanged at the moment.  Gold volume is just under 12,000 contracts---and silver's volume is just under 2,700 contracts.  The dollar index is down 13 basis points.  Nothing much to see here.

Just looking at the six-month gold chart above, you can see some of the Managed Money headed for the exits the moment the price broke above gold's 50-day moving average---and how the seller of last resort and their algorithms were there to drive the price back down to its 50-day moving average once again, just to stop more shorts from getting the same idea.  I'll be extremely interested in how the price is allowed to react once that moving average is broken with some authority---and I'm also concerned, as I mentioned yesterday, that 'da boyz' could engineer a rally "failure" at this juncture as well.

So we wait some more.

And as I send this off to Stowe, Vermont at 4:45 a.m. EDT, I note that all four precious metals are trading lower since London opened, with silver down the most of all, of course---and these smallish selloffs are probably coming on the back of the reversal in the dollar index.  It was down 13 basis points two hours ago---and is now up 10 basis points.  Gold volume is up to a bit over 21,000 contracts---and silver's volume is now at 5,700 contracts---neither of which is very heavy for this time of day.

I'm off to bed---and I'll see you here tomorrow.