Nothing much should be read into the gold price action yesterday, except to note that the tiny gains that were present at the Comex open in New York on Wednesday, got cut in half by around 11:30 a.m. EDT. After the gold price traded flat into the 5:15 p.m. close of electronic trading.
Once again the low and high ticks aren't worth my effort to look up.
Gold closed in New York at $1,282.70 spot, up $2.10 from Tuesday's close. Net volume was extremely light at only 55,000 contracts.
Not much happened in silver yesterday, either---although the 'rally' from the London silver fix into the Comex open met the same fate as it has for the last three days in a row.
The price traded well within a two-bit range, so I shan't look up the low and high ticks for silver, either.
Silver finished the Wednesday session at $19.435 spot, up a whole 8 cents from Tuesday's close. And, as expected, gross volume was enormous at 79,000 contracts as the large traders had to be out of their September futures contracts by the end of Comex trading yesterday. Net volume was a tiny 3,600 contracts.
Platinum rallied about a percent---and hit its high at 10 a.m. Zurich time---and that was it for the rest of the day, although it rallied a handful of dollars a few minutes before the 5:15 p.m. EDT close. The metal finished up six bucks.
Palladium chopped around a dollar or two either side of unchanged until 9 a.m. EDT in New York. Then it rallied up to $891 spot---and wasn't allowed to trade any higher than that. Palladium got sold off four bucks going into the close of electronic trading---and only finished up 6 bucks at $887 spot.
The dollar index closed late on Tuesday afternoon in New York at 82.67---and then chopped sideways until London opened. The 82.41 low came around 10:45 a.m. EDT---and from there it rallied a handful of basis points, finishing the Wednesday trading session at 82.47---down 20 basis points on the day.
The gold shares traded basically sideways in a very tight range either side of unchanged---and the HUI finished down 0.12%. Nothing to see here.
The silver equities rallied into positive territory shortly after trading began at 9:30 a.m. EDT in New York yesterday, but it was quietly down hill from there, as Nick Laird's Intraday Silver Sentiment Index closed down 1.12%.
The CME Daily Delivery Report showed that 39 gold and one silver contracts were posted for delivery within the Comex-approved depositories on Friday. Morgan Stanley issued all of them---and Canada's Scotiabank stopped most of them. The link to yesterday's Issuers and Stoppers Report is here.
The CME Preliminary Report for the Thursday trading session showed that 39 gold and one silver contract were still open for August---and once you subtract out the deliveries posted in the previous paragraph, you'll see that the August delivery month is done. First day notice for delivery into the September silver contract should be posted on the CME's website late this evening EDT---and I'll have all the numbers for you in tomorrow's column.
There was no sales report from the U.S. Mint.
There was a decent amount of gold deposited over at the Comex-approved depositories on Tuesday. Canada's Scotiabank reported receiving 63,993 troy ounces---and none was shipped out. The link to that activity is here.
In silver, nothing was reported received, but 494,747 troy ounces were shipped out the door, with almost 90 percent of that amount coming out of the CNT Depository. The rest came out of Scotiabank. The link to that action is here.
For the second day in a row I don't have all that many stories, at least not compared to Tuesday's Critical Reads section.
Rallies from Brazil to Japan and the Standard & Poor’s 500 Index’s first trip above 2,000 sent the value of global equities to a record $66 trillion.
Shares worldwide added more than $2.2 trillion in value since Aug. 7, according to data compiled by Bloomberg. Optimism that central banks will support economic growth sent the MSCI All-Country World Index up 3.8 percent from its low this month. It was little changed at 9:40 a.m. in New York today. The S&P 500 has risen for 10 of the last 13 days and the NASDAQ Composite Index is about 10 percent from an all-time high.
Global markets are surmounting crises in Ukraine, the Gaza Strip and Iraq as investors renew bets that stimulus will revive growth. The Stoxx Europe 600 Index posted its biggest two-day gain since April after European Central Bank President Mario Draghi signaled policy makers may consider introducing an asset-buying plan. Japan’s Topix index is near its highest level since January, rebounding from losses earlier this year.
Beam me up, Scotty! There's no intelligent life down here. This Bloomberg article appeared on their website at 7:42 a.m. Denver time on Wednesday morning---and I thank West Virginia reader Elliot Simon for today's first story.
Marc Faber, publisher of the Gloom, Boom & Doom Report, talks about the outlook for global markets. Faber speaks with Matt Miller on Bloomberg Television's "In the Loop."
This 5:18 minute video interview appeared on the Bloomberg website on Tuesday sometime---and I thank reader Ken Hurt for sending it along.
I expect the next crisis to likely revolve around the harsh reality that central banks cannot guarantee robust and liquid markets. Actually, reflexivity ensures that perceptions of limitless cheap liquidity and market backstops ensure the type of excess that inevitably ends in liquidity crisis. When this historic Bubble bursts, corporate profits will be one of the more prominent casualties. And in the fascinating world of Bubble analysis, I can confidently posit that the Fed is oblivious to the unfolding financial stability problem. They clearly don’t appreciate the Bubble they have induced in corporate profits and the ramifications for the true overvaluation of corporate securities generally – both equities and bonds.
Soros has taken a bearish position through the purchase of put options on the S&P 500. Surely he is not alone in looking at relatively inexpensive market insurance for downside protection (as myriad risks become increasingly apparent). These types of instruments tend to exacerbate market volatility. In market declines, those that have sold/written market insurance must dynamically hedge this exposure, which can lead to self-reinforcing selling. At the same time, these types of bearish bets also provide buying power when markets reverse course and rally. This helps to explain why markets (think 1999 or 2007) tend to go into speculative melt-up mode right into the face of deteriorating fundamentals.
It’s also worth noting that the hedge fund industry is generally struggling with performance again this year. Ironically, all the “money” slushing into index products only makes the job of generating “alpha” from stock picking all the more challenging. There are many reasons I suspect the markets have entered a period of heightened volatility.
This commentary by Doug must have been posted on the prudentbear.com Internet site last Saturday, as it wasn't there late on Friday night when I checked it for inclusion in my Saturday column.
In the conclusion of a series of articles about "asset bubbles," Wednesday's Financial Times shows that it is fully aware of market manipulation by central banks but still can't bring itself to put those words together in the same sentence, nor to mention gold in that context.
From yesterday's article, written by the FT's Ralph Atkins:
"Investors have seen central bankers suppressing market volatility; the VIX index of expected U.S. share price movements, known as the 'Wall Street fear gauge,' is at a seven-year low. ...
"With their massively expanded balance sheets, central banks have come to dominate many markets, replacing the private sector. ..."
Too bad that the series ends short of any specification of the most sensitive market central banks are dominating. But mainstream financial journalism in the West can go only so far. Apparently mere hints are supposed to be considered heroic.
This Financial Times article from yesterday is posted in the clear in this GATA release---and I thank Chris Powell for wordsmithing the above preamble.
Cardiff city centre has been turned into a high security ‘prison’ with 10 miles of fencing - which is being dubbed the ‘ring of steel’ - ahead of the NATO conference next week.
Police have erected the nine feet high security fencing around Celtic Manor resort in Newport where Barack Obama, David Cameron and other world leaders will meet in Wales on September 4 and 5, as well as the city centre.
It comes as former foreign office minister, Kim Howells, issued fears that home grown Islamic State terrorists could be planning to attack the 2014 summit.
This rather imposing photo essay appeared on the dailymail.co.uk Internet site on Tuesday at 8:14 p.m. BST on Tuesday---and I thank reader Sean McLaren for bringing it to our attention.
Ah, the perils of European power politics.
A day after France revealed its new government, the person who so eagerly stepped in after DSK's [Dominique Strauss-Kahn] infamous and choreographed fall from grace and the IMF presidency (not to mention his derailed French presidential ambitions, green-lighting Hollande as what would become the worst French president ever), Christine Lagarde is about to be DSKed herself after "someone" clearly has set their sights on the former French finance minister.
Several hours ago the news hit that a French court has put Christine Lagarde, head of the International Monetary Fund, under a formal probe for negligence in a corruption investigation dating back to her days as finance minister.
To be sure, this development is hardly a shock: recall that it was over a year ago when "IMF's Lagarde Flat Raided Over French 'Payout' Probe" with her ascent to the head of the IMF also riddled with numerous allegations of impropriety involving the Tapie matter. However, until now, such outside interventions were below the radar, and certainly never escalated to anything formal or official. Alas, it now appears that Madame's time has come, even if Lagarde hasn't grasped it just yet.
This very interesting news item got the Zero Hedge treatment yesterday---and it's worth reading. I thank reader M.A. for sharing it with us.
Europe will remain heavily reliant on Russian gas for at least another decade, according to a leading rating agency.
Fitch said a lack of alternative sources meant policymakers would have no choice but to continue buying gas from Russia until at least the mid-2020s and "potentially much longer".
Europe already buys a quarter of its gas from Russia, and analysts expect consumption to increase by a third by 2030 as economies recover from the debt crisis and gas-fired electricity generation replaces old coal and nuclear power.
The fear-mongering never stops. One thing that this Ukraine/Russia imbroglio has highlighted for me, is that the mainstream Western media have all become propaganda channels for Washington and NATO. It's shameless, as is this piece that was posted on the telegraph.co.uk Internet site on Wednesday at 3:57 p.m. BST---and it's the first offering of the day from Roy Stephens.
Russian President Vladimir Putin said Wednesday his hands are tied in terms of the dispute over natural gas to Ukraine because of pending court issues.
The Ukrainian government filed a case in an international court of arbitration challenging the gas bills sent by Russian energy company Gazprom. In April, Gazprom sent Ukraine an $11 billion bill for not taking enough gas in 2013 under a take-or-pay contract.
Putin said from Minsk, where he met directly with Ukrainian President Petro Poroshenko, that settling the gas issue would have to wait.
"Right now, we cannot even accept any suggestions regarding preferential terms, given that Ukraine has appealed to the arbitration court," he said.
This short UPI article appeared on their website at 9:08 a.m. EDT?---and it's worth skimming. It's the second offering of the day from Roy Stephens.
Russia is set to fulfill its European gas delivery contracts, regardless of political situation in transit nations, including Ukraine, Russian Energy Minister Alexander Novak said Wednesday.
"I would like to stress that Russia’s stance on this issue remains unchanged: we will make maximum efforts to fulfill our contract obligations to European importers regardless of current political situation in this or that transit nation," the Russian minister said.
Ukrainian Prime Minister Arseniy Yatsenyuk claimed earlier in the day that Russia was planning to «cut all delivery of energy resources to Ukraine» and "halt gas transit in winter completely, even to European Union consumers."
Commenting on the reports, Novak said Russia was "perplexed by statements about Russia’s alleged intentions to halt gas transit to E.U. countries, made by certain Ukrainian politicians."
This news item showed up on the RIA Novosti website at 9:30 p.m. Moscow time on their Wednesday evening---and I thank reader M.A. for another contribution to today's column.
Determined to preserve the pro-Russian revolt in eastern Ukraine, Russia reinforced what Western and Ukrainian officials described as a stealth invasion on Wednesday, sending armored troops across the border as it expanded the conflict to a new section of Ukrainian territory.
The latest incursion, which Ukraine’s military said included five armored personnel carriers, was at least the third movement of troops and weapons from Russia across the southeast part of the border this week, further blunting the momentum Ukrainian forces have made in weakening the insurgents in their redoubts of Donetsk and Luhansk farther north. Evidence of a possible turn was seen in the panicky retreat of Ukrainian soldiers on Tuesday from a force they said had come over the Russian border.
Russia, which has denied it is helping the insurgents, did not acknowledge the military movements. But the Russians have signaled that they would not countenance a defeat of an insurgency in the heavily Russian eastern part of Ukraine, which would amount to a significant domestic political setback for President Vladimir V. Putin of Russia in his increasingly fractious relationship with the United States and its European allies.
I mentioned a couple of months back that I wasn't going to post any more stories from The New York Times about the Ukraine/Russia situation because they [along with the WSJ] had become such whores for Washington and NATO. But I just couldn't help myself today, as they really outdid themselves with this one. This is such bulls hit, that it's hard to believe that any 'reporter' worth his salt would put their names on such shlock. I'm not sure whether I should thank Roy Stephens for sending it our way, or not. And by the way, the headline has been changed to read "Ukraine Reports Russian Invasion on a New Front"
To prevent Russia from skirting international sanctions via Switzerland, the Swiss government has taken additional steps to reflect sanctions imposed by the EU in connection to the Ukraine crisis.
Taking effect on Wednesday, the new measures strengthen the ordinance that Switzerland adopted in April. The policies – outlined in detail in a statement – affect the finance sector and items requiring an export licence, in particular military supplies and dual-use goods that could be used for civilian as well as military purposes. There is also a ban on imports of such goods from Russia and Ukraine. Another embargo applies to the import and export of key goods used to extract oil and gas.
In addition, the cabinet “acknowledged the measures taken by Russia in respect of agricultural goods” and stressed that “Switzerland is not engaged in any state measures to promote additional Swiss exports to Russia”.
The cabinet said it would continue to monitor the situation in Ukraine closely, reserving “the right to take further measures depending on how the situation develops”.
So much for Switzerland's famous neutrality. This article appeared on the swissinfo.ch Internet site at 5:14 p.m. Europe time on Wednesday afternoon---and I thank South African reader B.V. for finding it for us.
Russia’s Foreign Minister Sergey Lavrov said that the West started its “irrational attacks on Russia long before” this spring’s events in Ukraine, but insisted that Moscow is seeking to avoid “spiraling sanctions” with the EU and the US.
“We are not interested in confrontation, we are not interested in a sanctions spiral,” the minister said in a speech to an audience at the Lake Seliger youth camp in central Russia.
“I can only note that long before events in Ukraine the West’s attacks on Russia assumed an irrational form. It all started long before this spring.”
Lavrov accused Western political leaders of “stirring up” anti-Russian feelings among their electorates, saying that their attitudes towards Russia “require a reevaluation.”
This commentary was posted on the Russia Today website at 1:13 p.m. Moscow time, which was 5:13 a.m. in New York. It's another offering from Roy S.
Russian oil company Gazprom Neft said it agreed Wednesday to accept rubles and the Chinese yuan for crude oil deliveries.
For exports from the Novoportovskoye field in the arctic, the company said it would accept the Russian currency, while China could use its own currency for oil delivered from the Eastern Siberia-Pacific Ocean pipeline.
The switch could help the Russian economy reduce its dependency on the U.S. dollar in an era when Western economies are imposing tough sanctions on Moscow in response to the ongoing crisis in Ukraine.
This brief UPI item appeared on their Internet site at 9:57 a.m. yesterday EDT?---and once again I thank Roy Stephens for bringing it to our attention.
The Russian Central Bank and the government’s financial and economic departments have prepared a bill to create a Russian analog of the SWIFT international financial message system, Deputy Finance Minister Alexei Moiseyev said on Wednesday.
“We have prepared a bill. We have consulted with the banking industry and the Central Bank,” Moiseyev said.
Russia will go ahead with the bill as soon as it becomes clear that the Central Bank is technologically prepared “to transfer all operations to internal processing inside Russia.”
Central Bank First Deputy Chairman Georgy Luntovsky said in July that SWIFT was discussing a possibility with the Russian regulator to establish an operational center in Russia. SWIFT Director for Russia, CIS and Mongolia Matvei Gering confirmed this information at that time.
This very interesting news story put in an appearance on the ITAR-TASS website at 3:06 p.m. Moscow time on Wednesday afternoon---and it's certainly worth reading. I thank 'David in California' for passing it around yesterday.
America’s spanker-in-chief is at it again—threatening to bomb Syria owing to the uncivilized actions of its inhabitants. And when it comes to Syria, Washington avers that there are punishable malefactors virtually everywhere within its borders.
Exactly one year ago Obama proposed to take Bashar Al Assad to the woodshed because he had allegedly unleashed a vicious chemical attack on his own citizens. That was all pretext, of course, because even the CIA refused to sign-off on the flimsy case for Assad’s culpability at the time—-a reluctance corroborated since then by the considerable evidence that hundreds of Syrian civilians were murdered during a false flag operation staged by the rebels with help from Turkey. The aim of the rebels, of course, was to activate American tomahawk missiles and bombers in behalf of “regime change”, which was also the stated goal of the Obama Administration.
Now the White House is threatening to bomb Syria again, but this time its “regime change” objective has been expanded to include both sides! In 12 short months what had been the allegedly heroic Sunni opposition to the “brutal rule” of the Assad/Alawite minority has transmuted into the “greatest terrorist threat ever”, according to the Secretary of Defense.
So Obama has already unleashed the drones and surveillance apparatus to identify targets of attack that will help bring down a regime in northern and eastern Syria—the so-called Islamic State—which did not even exist a year ago. And a regime that is now armed to the teeth with America’s own latest and greatest weaponry as previously supplied to the disintegrated Iraqi army and the Syrian rebels trained by the CIA in Jordan.
This commentary by David showed up on his Internet site yesterday sometime---and it's worth reading as well. I thank Roy Stephens for his second-last contribution to today's column.
U.S. officials are taking a wary view of the disclosure this week that Iran – one of four countries the United States accuses of supporting terrorism – has begun arming the Kurdish Regional Government in northern Iraq, as the Kurds scramble to combat the threat posed by ISIS.
ISIS, also known as the Islamic State, has seized large swaths of territory in Syria and Iraq, and recently came close to overrunning Erbil, the capital of the KRG in the semi-autonomous Kurdish region. It was the immediate threat to Erbil, where the U.S. has a number of diplomats stationed, that prompted President Obama to launch airstrikes against ISIS.
While the Kurds are grateful for American intervention, they also say the central Iraqi government in Baghdad has starved them of cash and military hardware in this time of grave threat. “We asked for weapons and Iran was the first country to provide us with weapons and ammunition," KRG President Massoud Barzani said during an appearance in Erbil on Tuesday with Iran’s foreign minister.
It's hard to know what is fact---and what is propaganda. This news item appeared on the foxnews.com Internet site on Wednesday sometime---and I thank reader M.A. for his final offering in today's column.
Constructive relations between Russia and China are important for international stability and security, the head of Russia’s General Staff of the Armed Forces, Valery Gerasimov, said after talks with his Chinese counterpart Fang Fenghui and Vice Central Military Commission Chairman Fan Changlong in Beijing Wednesday.
“We put great importance on the development of military links with China. Russia highly appreciates the state of and the prospects for the military departments’ cooperation. Today, this is especially important,” Gerasimov told the press.
Among other issues, the general staff chiefs discussed regional security.
“The military and political state of the region is characterized by the high pace and contradictory character of events. On the one hand, the intention to search for new forms of political and economic interaction is increasing. On the other, there is a political tension in the region Gerasimov said.
This rather short article showed up on the RIA Novosti website at 7:59 p.m. Moscow time on their Wednesday evening, which was 11:59 a.m. in New York.
The first interview is with Dr. Philippa Malmgren---and it's headlined: "Ex-White House Official - Tragedy, Chaos and Human Suffering". The second is with Keith Barron---and it's entitled: "We Are Now Living in a World That is Teetering on the Brink".
[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]
Learning that U.S. Navy commissioning coins were made in China is more than Middle Paxton Twp. resident Gene Stilp can tolerate.
The citizen activist doesn't like seeing the "Made in China" label on any product, knowing it signals the continued erosion of America's manufacturing base. But having the United States military buying Chinese-made commemorative coins is an insult to those who wear its uniforms, he said.
On Monday, Stilp asked U.S. Sen. Bob Casey, D-Pa., to push for a federal law barring any branch of the military from buying collectible coins minted outside the nation's borders.
This interesting article was posted on the pennlive.com Internet site on Tuesday evening EDT---and I thank Elliot Simon for bringing it to our attention.
GoldMoney research director Alasdair Macleod, interviewed by financial journalist Lars Schall for Matterhorn Asset Management's Gold Switzerland, offers what he considers the three primary reasons for owning gold.
But just as interesting, Macleod argues that the London gold market is declining because of its lack of transparency, that gold will remain money if only because Asia increasingly says so, that countries are beginning to realize that they cannot be independent if they rely on the U.S. dollar and U.S.-controlled payment systems, and that Germany's Bundesbank has made itself ridiculous by its inability to recover its gold from custody by the United States.
Schall's interview with Macleod is 17 minutes long and can be viewed at the goldswitzerland.com Internet site. I thank Chris Powell for wordsmithing the above paragraphs of introduction.
A judge has dismissed London Metal Exchange Ltd as a defendant from U.S. antitrust litigation accusing banks and commodity companies of conspiring to drive up aluminum prices by restricting supply, hurting manufacturers and purchasers.
In a decision made public on Tuesday, U.S. District Judge Katherine Forrest in Manhattan concluded that the LME was an "organ" of the U.K. government, and therefore immune from the lawsuit under the Foreign Sovereign Immunities Act.
Forrest acknowledged that her decision may at first glance seem "somewhat surprising and counterintuitive," noting that the LME is a privately-held, for-profit company subject to extensive regulation. But she said the relevant case law "tips decidedly" toward a grant of immunity, noting that the LME is required by law to perform "the decidedly public function of market regulation".
This Reuters piece, filed from New York, put in an appearance on their website at 2:35 p.m. on Tuesday afternoon EDT---and I found it on the gata.org Internet site yesterday.
South Africa’s Witwatersrand basin contains another 1.3-billion ounces of gold, almost as much gold as has been mined there since 1886 – but miners can only get to another 200-million ounces of it using today’s mining methods.
If the industry does not come up with a new way of mining, more than a trillion dollars worth of gold will not be mined, because the 1.1-billion ounces in question are either below the cutoff for the current mining method, or they are at depths where there are no technical solutions to get to mine those ounces.
Moreover, safety has reached a plateau and unless significant change is made to what creates this plateau, death and injury in mines will continue, which is totally unacceptable.
There is thus an absolute need to change – and senior VP technology and projects Shaun Newberry is at the forefront of an AngloGold Ashanti move that could result in all three billion Wits basin ounces being mined and not merely 1.9 billion of them.
A much higher gold price wouldn't hurt, either. But as reader B.V. pointed out in an e-mail exchange we had yesterday, that's not the real issue here. This very interesting article appeared on the miningweekly.com Internet site yesterday sometime---and my thanks go out to reader B.V. for bringing it to my attention---and now to yours.
Gold researcher and GATA consultant Koos Jansen reports that silver prices reported from Shanghai have been including a 17-percent sales tax, complicating their comparison to prices outside the country. Jansen writes that he'll be investigating this subject.
His commentary was posted on the Singapore-based Internet site bullionstar.com Internet site at 5:00 p.m. local time on their Tuesday afternoon. It's another article I found on the gata.org Internet site yesterday.
You may be familiar with the story of how the U.S. government confiscated gold bullion and then made owning it illegal back in 1933.
Actually this event is more accurately termed a nationalization. Americans were forced under harsh penalties to sell their gold at an artificially low “official price.” If it were an outright confiscation, the government would have just taken the gold without giving anything in return. But no matter how you label it, the end result was the same: the theft of purchasing power.
Many have speculated that the U.S. government could once again turn to gold confiscation/nationalization if it became desperate enough. These fears are not unfounded given the abysmal financial situation of the U.S. government that only continues to get worse, coupled with a total lack of political will to cut spending.
But would the US government really turn to a 1933-style grab again?
I would argue that they wouldn’t, but that doesn’t mean the threat to your gold has diminished. Quite the opposite.
This commentary by International Man senior editor Nick Giambruno appeared on his Internet site yesterday---and is certainly a must read.
Today's first photo is one of Australia's many varieties of jumping spiders---munching on its hapless victim. The photo is courtesy of Nick Laird---and he said that this little fellow is about 7 mm long, which is about average for a jumping spider. And as you can tell from the photo, depth-of-field is a huge issue in macro photography, as there's about 3 mm worth in this shot.
Bayfield Ventures Corp. (TSX-V: BYV) is exploring for gold and silver in the Rainy River District of northwestern Ontario.
Bayfield owns 100% of the mineral rights to its flagship "Burns" Block gold-silver project located in the Richardson Township, Rainy River District of northwestern Ontario. The Burns Block is surrounded by New Gold's (TSX: NGD) Rainy River project and adjoins the immediate east of New Gold's multi-million ounce ODM17 gold-silver deposit and adjoins the immediate west of New Gold's expanding Intrepid gold-silver zone.
Notable drill results from Bayfield's 100,000 metre drill program include 60.05 grams per tonne gold and 362.96 grams per tonne silver over 11.2 metres in hole RR11-71, as well as 35.93 grams per tonne gold and 359.65 grams per tonne silver over 10.0 metres in hole RR10-18 located approximately 350 metres to the south with numerous high grade holes drilled in between. Please visit our website for more information.
Try to imagine for a moment that the warehouse movements were occurring, not in silver, but in another commodity, like gold or copper. If the equivalent of two full days of world production were being moved weekly into and out from the COMEX gold or copper warehouses, as is the case in silver, would anyone notice?
I would think that if 550,000 oz of gold came into and out from the COMEX gold warehouses on a weekly basis for years, that movement would be a prime topic of conversation. No, check that – tongues would be wagging in trying to discern why so much gold was being physically moved. Likewise, if 100,000 tonnes of copper (2 days world production) on average came into and out from the COMEX warehouses on a weekly basis, all would be astounded (especially seeing as total COMEX copper inventories are around 26,000 tonnes).
Since gold is not primarily an industrial commodity, it’s hard to imagine the motivation investors would have in physically moving so much metal in and out. And even though copper is very much an industrial metal, it’s almost impossible to imagine that much copper being moved. Then what the heck is going on in COMEX silver? If it isn’t extreme tightness, I don’t know what it is. And I hope no one asks that if silver is experiencing such tightness due to demand then why is the price so low? - Silver analyst Ted Butler: 23 August 2014
I wouldn't read a thing into the price action of either gold or silver yesterday. As I've been writing about since Saturday, Wednesday was the last day for the large traders to sell or roll their September Comex contracts. There wasn't much volume in gold, as September is not a traditional delivery month, but it is for silver---and as I said in The Wrap in my Wednesday column, I expected silver volume to pick up substantially as the trading day wore on, and that's exactly what happened.
Glancing at the CME's Preliminary Report for the Wednesday trading session once again, I see that open interest in the September silver contract took a big hit, as it plunged by more than 50 percent from Tuesday---and is now down to 12,328 contracts. Expect that number to decrease just as dramatically in tomorrow's report, as the rest of the traders in the September contract have to be out by the end of Comex trading at 1:30 p.m. EDT this afternoon. And as an aside, there are now 579 gold contracts still open in the September delivery month---and that's an increase of 63 contracts from Tuesday. If forced to bet ten bucks, I'd guess that virtually all these contract holders will be looking for physical delivery next month.
Here, once again, are the 6-month charts for both gold and silver---and although they both show a positive bias at the moment, I'm still choked with caution, as JPMorgan et al show no signs of loosening their iron grip on precious metal prices.
And as I type this paragraph, the London open is about 45 minutes away---and all four precious metals are up a bit from their respective closes on Wednesday afternoon in New York. Gold's net volume is a bit over 7,000 contracts, which is fumes and vapours---and silver's net volume is only 1,900 contracts. Absolutely nothing to see here, although I know for a fact, as I mentioned earlier, that we'll see another big volume day in silver once again. The dollar index is down a handful of basis points.
And as I fire this out the door at 5:05 a.m. EDT, there has certainly been some price activity in the precious metals worthy of the name, especially in silver. As I mentioned in the previous paragraph, there were tiny rallies underway in Far East trading, but shortly after 2 p.m. Hong Kong time---and about 45 minutes before London opened, silver took off to the upside. It ran into JPMorgan et al a couple of times, but that didn't slow the rally down by much. However, shortly after 9 a.m. BST, it looks like they got the job done, at least for the moment. Here's the Kitco silver chart as of 4:55 a.m. EDT.
Gold volume has now exploded out to a bit over 26,000 contracts, as the rally in gold ran into "da boyz" as well. Silver's net volume has blown out to around 11,000 contracts, more than five times what it was just 45 minutes before the London open, so it's obvious that JPMorgan et al were at battle station selling however many Comex contracts it took to put out this silver price spike, because if they hadn't, we'd be looking at 3-digit silver price right now.
I'm surprised to see this sort of price action on the last day of the roll-overs out of the September silver contract, as I though it would be rather quiet from a price perspective, sort of like it was on Wednesday. Obviously that theory is out the window---and I await the New York open with great interest.
See you tomorrow.