Gold & Silver Daily
"They took the precious metals lower than even I expected"
 

¤ Yesterday In Gold & Silver

NOTE:  I'm off to the Casey Conference in San Antonio tomorrow morning---and until my Tuesday column next week, my daily offerings from the Lone Star State [including the one tomorrow] are going to be shockingly short, with the Critical Reads and The Photos and Funnies sections taking the biggest hits.  Besides my presentation, I have lots of events I will be participating in while I'm there---and something has to get sacrificed.  I hope you'll agree that it's better than no column at all. - Ed

Gold got sold down a few dollars by the HFT boyz at the Sunday open in New York---and it printed another new low for this move down.  From there gold rallied a bit, with the high of the day coming shortly before 1 p.m. BST in London.  Then the New York crowd took over---and the gold price got sold down a bit, although it did manage to finish up on the day.

The low and high ticks, such as they were, were reported by the CME Group as $1,226.30 and $1,239.20 in the December contract.

Gold finished the Monday session at $1,232.70 spot, up $4.40 from Friday's close.  Net volume was pretty light at only 91,000 contracts.

Silver opened down, as usual---as it has except for one day this month so far.   Then, like gold, it rallied until around lunchtime in Hong Kong---and chopped sideways in a very tight range for the remainder of the Monday trading day.

The low and high ticks aren't worth the effort to look up.

Silver finished the Monday session at $18.655 spot, up 4.5 cents from Friday's close.  Net volume was certainly on the lighter side at only 24,500 contracts.

Platinum didn't do a lot, but rallied sharply just before lunch in Zurich.  That rally got stepped on around 2 p.m. Europe time---and 'da boyz' in New York turned a gain into a five dollar loss by the close of electronic trading at 5:15 p.m. EDT.  The trading pattern for palladium was very similar---and the decent rally in that metal also met its maker at 2 p.m. Zurich time, about twenty minutes before the Comex open.  Palladium finished up a buck.

The dollar index closed late on Friday afternoon in New York at 84.22---although the ino.com chart below shows it opened in New York on Sunday evening at 84.15.  From there it rallied to its 84.40 high minutes after 8 a.m. EDT, which was the time that the rallies in all four precious metals came to an end.

From that high, the index sold off 20 basis points by the 10 a.m. EDT London p.m. gold fix---and then rallied a handful of basis points into the close.  The index closed at 84.25.  Here's the 3-day chart.

The gold stocks opened in positive territory, but fell into negative territory right away---and then struggled back as the trading day in New York wore on.  The stocks managed to close in positive territory, as the HUI edged higher, up 0.12%.

The silver equities followed a similar path, but couldn't manage to get back above unchanged after their initial sell-off.  Nick Laird's Intraday Day Silver Sentiment Index closed down 0.36%.

The CME Daily Delivery Report showed that only 5 gold and 5 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  With a big chunk of silver contracts left to deliver in September, you have to wonder what the short/issuer[s] is/are waiting for, as it's not beneficial to them to wait until the last minute---unless, of course, they're waiting for the silver to deliver.

The CME Preliminary Report for the Monday trading session showed that there are still 33 gold contracts open in the September contract, down 12 contracts from Friday's report.  In silver, there are still 609 contracts left, down 15 from Friday---and subtracting the 5 contracts posted for delivery in each metal in the previous paragraph, doesn't change things much.

I was rather surprised [but happy] to see that there was no withdrawal from GLD yesterday---and as of 7:40 p.m. EDT yesterday evening there were no reported changes in SLV, either.

The U.S. Mint had another sales report yesterday.  They sold 7,000 troy ounces of gold eagles---3,000 one-ounce 24K gold buffaloes---and 200 platinum eagles.

Over at the Comex-approved depositories on Friday, there was a big 112,258 troy ounce gold deposit into HSBC USA---the custodian for GLD---and a tiny 1,794 troy ounces were reported withdrawn.  The link to that activity is here.

In silver, it was another fairly busy day, as there was 625,813 troy ounces deposited---and 5,049 troy ounces removed.  The lion's share of that disappeared into the vault over at Brink's, Inc.  The link to that action is here.

Since this is my Tuesday column, I have a fair number of stories for you today and, as usual, the final edit is all yours.

 

¤ Critical Reads

BIS central bank warns against 'illusion of permanent liquidity'

Loose monetary policies have created an "illusion of permanent liquidity" that is spurring investors to make risky bets and push up asset prices, the Bank for International Settlements said Sunday.

"The longer the music plays and the louder it gets, the more deafening is the silence that follows," Claudio Borio, who heads the BIS's monetary and economic unit, told reporters.

"Markets will not be liquid when that liquidity is needed most," he warned, urging "sound prudential policies (and) extra prudence on the part of market participants themselves".

This AFP story appeared on the france24.com Internet site at 4:25 p.m. Europe time on Sunday---and I thank South African reader B.V. for today's first story.  Reuters had a similar story.  It was headlined "Central banks inflating 'elevated' asset prices: BIS"---and I found that one at the gata.org Internet site on Sunday.

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Inflation Watch: How Much $1 Used To Get You!

The dollar ain't quite what it used to be.  While a buck can't get you more than a quick snack today, you once could get three barrels of whiskey or ounce of silver for it.  Here are a few things that you used to get for just 110 cents from inflation [rampant money printing - Ed] stepped in.

This tiny, but very interesting article, is certainly worth a minute of your time.  It showed up on the Zero Hedge website at 3:06  p.m. EDT on Sunday---and it's courtesy of reader Harry Grant.

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Record S&P 500 Masks 47% of NASDAQ Mired in Bear Market

Beneath the U.S. stock market’s record-setting gains, trouble is stirring.

About 47 percent of stocks in the NASDAQ Composite Index are down at least 20 percent from their peak in the last 12 months while more than 40 percent have fallen that much in the Russell 2000 Index and the Bloomberg IPO Index. That contrasts with the Standard & Poor’s 500 Index, which has closed at new highs 33 times in 2014 and where less than 6 percent of companies are in bear markets, data compiled by Bloomberg show.

The divergence shows the appetite for risk is narrowing as the Federal Reserve reins in economic stimulus after a five-year rally that added almost $16 trillion to equity values. It’s been three years since investors saw a 10 percent decline in the S&P 500 and they’re starting to avoid companies that will suffer the most when the market stumbles, said Skip Aylesworth, a portfolio manager for Hennessy Funds in Boston.

No surprises here, as this bubble is being blown up by fewer stocks each passing day.  This Bloomberg article, filed from New York, showed up on their Internet site at 2:33 p.m. Denver time on Monday---and it's another article I found in a GATA release.

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Deutsche Bank Strategists: Bonds are in a Bubble

Most of the bubble talk these days focuses on stocks. But Deutsche Bank strategists led by Jim Reid see frothiness brewing in the global government bond market.

"The worry is that there is nowhere left for this bubble to go given that it is now in the hands of the lenders of last resort (governments and central banks with regulators ensuring other large captive buyers)," they write in a commentary obtained by MarketWatch.

"Although we think this bubble needs to be maintained to ensure the solvency of the current financial system, the best case scenario is that it slowly pops over time via negative real returns for bondholders. The worst-case scenario being future restructuring."

The Barclays U.S. Treasury 20-Year-Plus index has returned 15.5 percent so far this year.

Bond-investment star Jeff Gundlach, CEO of DoubleLine Capital, doesn't see a bubble brewing in Treasurys. He told CNBC that doesn't anticipate major moves by Treasurys for the rest of the year, with the Federal Reserve unlikely to raise interest rates anytime soon.

This article put in an appearance on the moneynews.com Internet site at 9:08 p.m. EDT on Sunday evening---and I thank West Virginia reader Elliot Simon for sharing it with us.

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NYT: Subprime Loans Rear Their Ugly Heads Again

Remember the subprime mortgage loans that helped spark the 2008-09 financial crisis?

They may be gone for a while, but other areas of the subprime lending market, particularly auto loans, have begun to look worrisome, The New York Times reports.

Deep subprime auto loans, those made to people with credit scores below 550, soared 13 percent in the second quarter from the year-earlier period, according to Experian.

"We're five years into the new cycle, so you've got to imagine that there are excesses cropping up," William Ryan of Portales Partners research firm told the paper.

Why should anyone be surprised at this turn of events?  This is another news item from the moneynews.com Internet site.  This one showed up there at 1:31 p.m. EDT yesterday---and it's the second offering in a row from Elliot Simon.

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Calpers to Exit Hedge Funds, Divest $4 Billion Stake

The California Public Employees’ Retirement System plans to divest the entire $4 billion that it has with hedge funds, saying they’re too expensive and complex.

The decision to eliminate 24 hedge funds and six hedge fund-of-funds, isn’t related to the performance of the program, said Ted Eliopoulos, the interim chief investment officer. The board of the $298 billion pension, known as Calpers, hasn’t decided where to invest the money after the pullout, which will take about a year, he said.

“We concluded that we would eliminate the hedge fund program in order to reduce the complexity, reduce the costs in the program, particularly in relation to our view that given the scale of Calpers, we would not be able to scale a hedge fund program to a size that would really move the needle,” Eliopoulos said today in an interview.

The largest U.S. pension is getting out of hedge funds even as other large public plans such as New Jersey’s add to the private portfolios. Calpers has been working to reduce risk after the global financial crisis wiped out more than a third of its wealth, forcing it to increase contributions from taxpayers to cover losses. Calpers first invested in hedge funds in 2002 to help meet target returns to cover the growing cost of government retiree benefits.

This Bloomberg news item, filed from Sacramento, appeared on their Internet site at 5:30 p.m. EDT yesterday---and I thank reader G. Roberts for sending it our way.

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A constitutional amendment to take Big Money out of U.S. politics dies quietly

This week the U.S. Senate considered a constitutional amendment that would have allowed Congress and state legislatures to limit the power of money in politics. The debate was not much covered in the media because the outcome was so predictable. But the party-line vote that killed it should not go unnoted.

A remarkable majority of the American public — 79 percent according to Gallup — want campaign finance reform. The right and left, the Tea Party and Occupy Wall Street, even Jon Stewart and Bill O’Reilly agree that, left unchecked, Big Money corrupts politics and undermines democracy.

That was one of the few things Thomas Jefferson and Alexander Hamilton agreed on, and both the American and French Revolutions were fought in part to get the financial power and privilege of aristocracy out of governance.

But even George III after Yorktown and Louis XVI on the eve of execution were more popular than Congress is today, and the strangely perverse partisanship that characterized the debate on the amendment this week helps to explain why.

This interesting Reuters article appeared on their website last Friday sometime---and I thank Harry Grant who sent it our way on Saturday.

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Scots Independence Campaign Nears Climax as Polls Diverge

Prime Minister David Cameron will return to Scotland for the second time in a week to fight for the future of the U.K. as campaigning ahead of the referendum on independence reaches its climax.

Activists were out in force across Scotland during the final weekend before the Sept. 18 ballot that might trigger the breakup of the union after more than three centuries. With opinion polls showing contradictory findings, both the “yes” and “no” campaigns said they were poised to win, introducing further uncertainty to financial markets fixed on Scotland.

Scottish First Minister Alex Salmond, the head of the pro-independence campaign, and Alistair Darling, the former U.K. chancellor of the exchequer who fronts the Better Together group, reprised arguments today over the economy, the pound and state-funded health care if Scots back independence. With the debate increasingly polarized, the focus now is on appealing to undecided voters in the final three days of the campaign.

This Bloomberg article, co-filed from London and Edinburgh, showed up on their Internet site at 8:30 a.m. MDT on Sunday---and it's the first offering of the day from Roy Stephens.

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Treasure Map: The NSA Breach of Telekom and Other German Firms

According to top-secret documents from the NSA and the British agency GCHQ, the intelligence agencies are seeking to map the entire Internet, including end-user devices. In pursuing that goal, they have broken into networks belonging to Deutsche Telekom.

When it comes to choosing code names for their secret operations, American and British agents demonstrate a flare for creativity. Sometimes they borrow from Mother Nature, with monikers such as "Evil Olive" and "Egoistic Giraffe." Other times, they would seem to take their guidance from Hollywood. A program called Treasure Map even has its own logo, a skull superimposed onto a compass, the eye holes glowing in demonic red, reminiscent of a movie poster for the popular "Pirates of the Caribbean" series, starring Johnny Depp.

Treasure Map is anything but harmless entertainment. Rather, it is the mandate for a massive raid on the digital world. It aims to map the Internet, and not just the large traffic channels, such as telecommunications cables. It also seeks to identify the devices across which our data flows, so-called routers.

Furthermore, every single end device that is connected to the Internet somewhere in the world -- every smartphone, tablet and computer -- is to be made visible. Such a map doesn't just reveal one treasure. There are millions of them.

The breathtaking mission is described in a Treasure Map presentation from the documents of the former intelligence service employee Edward Snowden which SPIEGEL has seen. It instructs analysts to "map the entire Internet -- Any device, anywhere, all the time."

This longish, but very interesting essay, showed up on the German website spiegel.de at noon Europe time on Sunday---and my thanks go out to Roy Stephens once again.

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Outrage as E.U. blocks democratic challenge to U.S. trade deal: Comment

There is something rotten in the state of Europe when an unelected, unaccountable EU body can glibly inform millions of us that we no longer have the right to question its most dangerous and unpopular policies.

This is exactly what has just happened, as the European Commission has announced that it will not allow a European Citizens' Initiative (ECI) to challenge the secret trade talks it is holding with the US government, supposedly on our behalf.

The ruling is a slap in the face for the 230 civil society organisations from across Europe that have lined up behind the initiative, and the millions of European citizens they represent. The ECI is the only vehicle available to us to challenge the shadowy bureaucrats of the European Commission. Now even this seems to be too much scrutiny for them.

The negotiations on the Transatlantic Trade and Investment Partnership (TTIP) have become one of the hottest political topics across Europe. TTIP is effectively a new bill of rights for multinational corporations, granting them unprecedented powers and undermining vital labour, environmental and food safety standards in the name of 'free' trade.

This commentary appeared on the politics.co.uk Internet website at 10:03 a.m. BST last Friday afternoon---and it's worth reading.   I thank South African reader B.V. for his second contribution to today's column.

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The E.U.’s Fiscal Watchdogs—–Still Howling and Toothless as France and Italy Pile on the Debt

When it comes to fiscal policy in the E.U., you can break whatever fiscal rules you want, provided you are big enough.

France qualifies, so does Germany. If you are small like Greece and Cyprus, then you may find yourself in bed with the Troika.

For the third time France has declared it will heavily overshoot its already twice-delayed budget deficit target next year, setting up tough negotiations with European partners previously reluctant to grant Paris more time to bring its public finances within E.U. limits.

Michel Sapin, finance minister, announced that the required deficit target of 3 per cent of national output was being pushed back a further two years to 2017 in the latest sign of the deep-seated economic problems confronting President François Hollande and his socialist government.

This excellent commentary by Mike 'Mish' Shedlock was posted on David Stockman's website on Sunday---and I thank Roy Stephens for sending it.

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Only a monetary 'nuclear bomb' can save Italy now, says Mediobanca

The OECD has drastically cut its growth forecast for Italy. The depression will drag on though most of 2015.

The economy will contract by 0.4pc this year. It will remain stuck in the doldrums next year with growth of just 0.1pc.

If so, Italy’s public debt will spiral to dangerous levels next year, ever further beyond the point of no return for a country without its own sovereign currency and central bank.

“This is catastrophic for the finances of the country. We’re heading for a debt ratio of 145pc next year,” said Antonio Guglielmi, global strategist for Mediobanca.

This Ambrose Evans-Pritchard blog is datelined Monday---and it's certainly worth reading.  I thank Roy Stephens once again.

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Slovak Prime Minister Warns Ukraine of ‘Ultimate Disintegration’

Slovakia's Prime Minister Robert Fico on Saturday warned Ukraine about the perils associated with the European and possibly NATO integration, saying the east European nation was tittering on the brink of an ultimate collapse.

"I think that Ukraine will find it hard to stand against all the challenges associated with the EU integration, because it is now facing an absolute disintegration… I also disagree with the assumption that Ukraine could one day become a NATO member since this would undermine security in the region," Fico said in an interview with the Bratislava-based newspaper Novy Cas.

"Only diplomatic steps can put an end to what is now happening in Ukraine. Look, there's already been a third wave of senseless sanctions, and what has changed? Nothing. We can only expect more firm response measures from Russia," the Slovak official noted.

Robert Fico also told the country's daily that he would sooner step down than see a NATO military base built in Slovakia.

This short, but very interesting article put in an appearance on the RIA Novosti website at 9:16 p.m. Moscow time on their Saturday evening, which was 3:16 p.m. in New York.

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Dutch stage tomato fight against Russian sanctions

Dutch stage tomato fight against Russian sanctions, and under one of the photos it says; The Netherlands vies with Mexico as the world's largest tomato exporter, and it sent $100 million worth to Russia last year. Dutch farmers have been offered a subsidy to either dispose of excess crops or donate them to food banks.

This 6-photo AP 'news' item appeared on the cbc.ca website, but it doesn't say what day.  I thank reader 'Andres A' for bringing it to our attention.

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NATO members 'start arms deliveries to Ukraine'

NATO countries have started delivering arms to Ukraine to help its soldiers fight pro-Russian separatists in the east, the defence minister says.

Valery Heletey did not give details of the weapons being delivered or name the countries involved.

A similar statement earlier was denied by five NATO members, including the U.S.

This article appeared on the bbc.com Internet site at 3:07 p.m. EDT on Sunday afternoon---and it's courtesy of reader James Skinner.

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Lavrov: No haste in MH17 tragedy probe, despite media hype

The report on the Malaysian jet crash is very “calm” and doesn’t provide much information about the tragedy, said Russian Foreign Minister Sergey Lavrov. He added that despite all the hype around the crash, the investigators do not seem to be in a hurry.

In a Saturday interview to Russian channel TV-Center, Foreign Minister Sergey Lavrov revealed he was disappointed by the latest report from Dutch experts on the reasons of Malaysia airplane crash. Malaysian airplane with 298 people on board crashed in Donetsk region July 17. Many western media outlets started accusing Russia without providing any evidence.

However, despite the political tensions, the report provided by the Dutch Safety Board from September 9 is “calm” while the investigators are taking their time with the probe.

“There are no demands that experts resume their work at the crash site,” Lavrov said. “There were also no attempts to go there to collect, as they say, the wreckage and to see how the whole plane looked like. Nobody spoke about it out loud.”

This Russia Today news item appeared on their website at 2:15 p.m. Moscow time on their Saturday afternoon, which was 6:15 a.m. EDT.  It's another contribution from Roy Stephens.

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E.U., Kiev, Moscow gas talks suspended

A spokesperson for the Russian Energy Ministry said Monday it was postponing trilateral talks with the European Union and Ukraine.

Talks were scheduled for Saturday. A ministry spokesperson told state news agency RIA Novosti an alternate date depended on Energy Minister Alexander Novak's schedule.

"We told the European Commission that the proposed date is not suitable for us," the spokesperson said. "Another date is being discussed."

The European Union last week enforced new sanctions on the Russian energy sector in response to ongoing crises in eastern Ukraine.

This UPI story, filed from Moscow, appeared on their website at 8:58 a.m. EDT on Monday---and it's another contribution from Roy Stephens.

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Washington’s War Against Russia — Paul Craig Roberts

The new sanctions against Russia announced by Washington and Europe do not make sense as merely economic measures. I would be surprised if Russian oil and military industries were dependent on European capital markets in a meaningful way. Such a dependence would indicate a failure in Russian strategic thinking. The Russian companies should be able to secure adequate financing from Russian Banks or from the Russian government. If foreign loans are needed, Russia can borrow from China.

If critical Russian industries are dependent on European capital markets, the sanctions will help Russia by forcing an end to this debilitating dependence. Russia should not be dependent on the West in any way.

The real question is the purpose of the sanctions. My conclusion is that the purpose of the sanctions is to break up and undermine Europe’s economic and political relations with Russia. When international relations are intentionally undermined, war can be the result. Washington will continue to push sanctions against Russia until Russia shows Europe that there is a heavy cost of serving as Washington’s tool.

This commentary by Paul was posted on this website on Sunday---and certainly falls into the must read category, especially for all students of the New Great Game.

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Iran Blames U.S. for Violating States’ Sovereignty Under Pretext of Fighting IS

The Secretary of Iran’s Supreme National Security Council (SNSC) Ali Shamkhani blamed Washington for violating Syria’s and other regional countries’ sovereignty, Straits Times reports.

“The U.S. seeks to continue its unilateralism and violate the countries’ sovereignty under the pretext of fighting terrorism,” said Shamkhani in a statement, cited by the official IRNA news agency.

He also expressed his doubts concerning the efficiency of U.S. counter-terrorism policy, claiming that airstrikes targeting ISIS fighters won’t have any positive effect and will only strengthen the radical group’s positions.

Iran’s Parliament Speaker Ali Larijani supported Shamkhani’s position, calling US strategy “irrational”. He said that U.S. way of countering terrorism would not lead to transformation in the Middle-East and help to dismantle ISIS, but rather cause waves of alienation and resentment in the region.

This article was posted on the RIA Novosti website at 9:25 p.m. on Saturday evening Moscow time---and I thank reader B.V. for finding it for us.

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Iran refuses to help 'self-serving' U.S. fight ISIS

Iran has refused an offer from the United States to join a global alliance preparing to combat Islamic State militants, according to Iran's supreme leader, Ayatollah Ali Khamenei.

Khamenei said Monday that the US offered to discuss a coordinated effort with Iran against Islamic State (IS, also known as ISIS or ISIL), a common foe in the region, in the midst of an escalating campaign of violence that continues to claim lives across Iraq in Syria.

“The American ambassador in Iraq asked our ambassador (in Iraq) for a session to discuss coordinating a fight against Daesh (Islamic State),” said Khamenei, the state-run Islamic Republic News Agency reported, according to Reuters.

“Our ambassador in Iraq reflected this to us, which was welcomed by some (Iranian) officials, but I was opposed. I saw no point in cooperating with a country whose hands are dirty and intentions murky.

This is a news item that appeared on the Russia Today website at 4:20 p.m. Moscow time on their Monday afternoon---and it's the second last contribution of the day from Roy Stephens.

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China to invest $100 billion in India over 5 years

Chinese president Xi Jinping will bring along with him $100 billion or Rs 6 lakh crore of investment commitments over five years during his upcoming India visit next week. This is nearly thrice the $35 billion secured by Prime Minister Narendra Modi during his Japan trip.

Jinping will land in Modi's home state Gujarat on September 17 — the Prime Minister's birthday — following his visit of Tajikistan, Maldives and Sri Lanka.

Confirming this, Liu Youfa, China's consul-general in Mumbai, told TOI, "On a conservative estimate, I can say that we will commit investments of over $100 billion or thrice the investments committed by Japan during our President Xi Jinping's visit next week. These will be made in setting up of industrial parks, modernization of railways, highways, ports, power generation, distribution and transmission, automobiles, manufacturing, food processing and textile industries."

The above three paragraphs are all there is to this brief story that appeared on The Times of India website at 1:55 a.m. IST on their Saturday morning---and it's the final offering of the day from reader B.V.

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Snowden claims NSA collected data on New Zealanders

Documents from former National Security Agency contractor Edward Snowden claim Australian and New Zealand Internet data on private citizens was collected by the NSA.

The documents indicate a major undersea telecommunications cable -- linking New Zealand, Australia and North America -- was tapped to collect the data, beginning in 2012 or early 2013. Moreover, the documents suggest the government of New Zealand was aware of the program.

Information on the data collection was published Monday in the Sydney, Australia, Morning Herald and the website The Intercept.

New Zealand Prime Minster John Key denied his country's intelligence agency, the Government Communications Security Bureau, was involved in the mass surveillance of citizens, although Snowden claimed Key was aware of the program.

This UPI article, filed from Auckland, showed up on their website 10:37 a.m. EDT on Monday.  It's the final offering of the day from Roy Stephens, for which I thank him.

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Seven King World News Blogs/Audio Interviews

1. David P:  "Gold, Crazy Markets, War in Russia---and "The Entrance to Hell"  2. Dr. Paul Craig Roberts: "Accuses U.S. Banks of Gold and Silver Smash"  3. Robert Fitzwilson: "The Global Ticking Time Bomb, Economic War---and World War III"  4. James Turk: "We Are About to See a Repeat of 2011 in Gold and Silver"  5. Richard Russell: "Total Systemic Failure---and Worst U.S. Nightmare"  6. The first audio interview is with John Mauldin---and the second audio interview is with Dr. Paul Craig Roberts

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

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Sprott Money's Weekly Wrap-Up interviews your humble scribe

With Eric and John not available for the second Friday in a row, I drew the short straw once again.  This audio interview runs for 7:36 minutes---and it was posted on the sprottmoney.com Internet site on Friday.

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Koos Jansen: China again buys the dip in gold---and silver gets scarcer

Declining gold prices again have pushed demand up on the Shanghai Gold Exchange as China buys the dips, while silver inventories on the Shanghai Futures Exchange continue to fall, gold researcher and GATA consultant Koos Jansen reports.

It was posted on the bullionstar.com Internet site on Friday at 3:57 p.m. Singapore time---and I found it embedded in a GATA release yesterday.  I thank Chris Powell for wordsmithing the above paragraph of introduction.

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Ron Paul: Will the Swiss vote to get their gold back?

Former U.S. Rep. Ron Paul writes today that he hopes that the people of Switzerland vote to repatriate their gold when they hold a referendum on the issue on November 30.

Paul argues that approval of the proposal at referendum will repudiate the financial elites behind unlimited government. He writes:

"The Swiss people appreciate the work their forefathers put into building up large gold reserves, a respected currency, and a strong, independent banking system. They do not want to see centuries of struggle squandered by a central bank. The results of the November referendum may be a bellwether, indicating just how strong popular movements can be in establishing central bank accountability and returning gold to a monetary role."

Paul's commentary is headlined "Will the Swiss Vote to Get Their Gold Back?" and it was posted at the Internet site of the Ron Paul Institute for Peace and Prosperity on Sunday.  This article is one I found on the gata.org Internet site on Monday.

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Anxious Scottish investors have been buying gold

Scottish investment in physical gold has surged by 42 percent in the past fortnight -- on top of the traditional rise in gold demand at this time of the year.

The figure, which comes from Bullionvault.com, the world's biggest online platform for private investors who want to trade physical gold and silver, suggests that anxious Scotland-based investors are turning to gold as a means of insuring against the uncertainties posed by a 'yes' vote in Thursday's referendum.

Bullionvault analysed customer data over the year, stripping out those of 50,000 customers who lived in the UK and then dividing this group further into postcodes north and south of the border.

It then averaged the proportion of transactions typically undertaken by Scotland-based traders out of the whole of the UK over the past year. That figure was then compared to the proportion of Scottish transactions undertaken in the first half of September.

This gold-related news story was posted on the telegraph.co.uk Internet site at 2:36 p.m. BST on their Monday afternoon---and it's another article I found over at the gata.org Internet site yesterday.

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Export Growth to Lift Italian Gold Jewellery Demand and Bullion Imports to Six-Year High

Metallis are releasing this snapshot on Italy’s export-focused gold jewellery fabrication to coincide with the recent conclusion of the Vicenza Fair as this marks a good opportunity to review developments so far this year and prospects for the rest of 2014 for Italy and its main overseas markets.

The key findings of the consultancy’s recent research is that Italian gold jewellery demand is on track to rise 11% in 2014 to a six-year high of 128 tonnes. This marks a continuation of the growth seen in 2013, when fabrication made a historic turnaround; then a 24% rebound began a recovery from a decade or so of consecutive losses.

Domestic scrap is also forecast to finish 2014 down 22%, while inflows of scrap could fall by almost 30%. All this is slated to lift gross gold bullion imports by 15% to just over 105 tonnes, their highest level since 2008.

Even stronger growth of 39% for the first half is reported in shipments to China/Hong Kong. Meader noted, “this boom is interesting as it shows the 18-carat segment in China is still going strong, even if the far larger 24-carat sector, which Italy doesn’t serve, couldn’t match 2013’s heady results”.

This interesting story appeared on the sharpspixley.com Internet site on September 5.

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Private homes in Iran hold more gold than Central Bank

The Shahrvand Daily reports that according to Gold and Jewelry Producers and Exporters, more than 100 tonnes of the country's gold is stashed in people's homes.

Although the former head of Iran's Central Bank under the Ahmadinejad administration had said the Bank had 500 tonnes of gold in storage, recent reports from the Central Bank put its gold stores at 90 tonnes: in other words, less than what is stored in Iranian homes.

The report by Shahrvand indicates: "Few countries in the world see the public move toward buying gold or foreign currency as investment and steering away from investing in production and adding value to the economy."

These three paragraphs are all there is to this gold-related story that appeared on the pyavand.com Internet site on Sunday---and it's another article I found on the sharpspixley.com Internet site.

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AngloGold Ashanti of South Africa Abandons Spin Off Plans

AngloGold Ashanti, one of the world’s largest gold mining firms, said on Monday that it would abandon plans to spin off its international mining operations and raise $2.1 billion in new capital.

The company, based in Johannesburg, said last week that it was planning to spin off its operations outside of South Africa into a new entity to be listed in London. AngloGold Ashanti had also sought to raise new capital in order to reduce its debt ahead of the restructuring.

On Monday, the company said that a number of shareholders, although supportive of the strategic logic of the transaction, expressed concerns about several aspects of the deal, including the level of fund-raising needed for the restructuring to go forward.

“AngloGold Ashanti has, therefore, decided not to proceed with the restructuring and capital raising, as currently proposed,” the company said in a news release on Friday. “The company will continue to evaluate all options to address debt levels and unlock value, taking into account the feedback from its shareholders and its business needs.”

This news story showed up on The New York Times website at 9:31 a.m. EDT on Monday---and it's another story that Chris Powell posted on the gata.org website yesterday.

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South African gold, PGM, diamond and copper outputs down sharply

The South African mining sector seems to be going through a particularly rough patch at the moment and this will also have a strongly negative effect on the country’s economy given the importance of metals and minerals in the country’s exports. According the latest Statistics South Africa preliminary data for July, the country’s overall mining production decreased by 7.7% year-on-year.

Not surprisingly, given that the month covered the tail end of the country’s debilitating platinum mining strike, platinum group metals output was down a huge 45.2% year on year.  PGMs had been one of the country’s most significant metal exports of late having comfortably overtaken gold – which, somewhat surprisingly, also saw a 14.6% year on year reduction in output.  Diamond production was down 10% and copper 15.9%

Top places for South African mineral sales values in July were held by coal at R8.13 billion (US$739 million) and iron ore R5.16 billion (US$469 million) despite the fall in global prices for these bulk metals and minerals. Even with the strike impact, PGMs followed close behind at R5.1 billion ($464 million) with gold nowadays only at R3.69 billion ($335 million).

The above three paragraphs are all there is to this interesting story that was posted on the mineweb.com website last Friday.  It's certainly worth skimming.

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Indian trade deficit widens as gold imports surge 176%

India's trade deficit widened in August from a year earlier as imports of gold surged 176 percent after policy makers eased shipment curbs.

The shortfall was $10.8 billion last month, wider than $10.7 billion a year earlier, with exports rising 2.4 percent and imports growing 2.1 percent. Gold shipments surged to $2 billion from $739 million in August last year after the government allowed more banks and traders to buy bullion overseas.

India is easing emergency measures taken when the current-account deficit widened to an all-time high, as faster growth boosts inflows. While the shortfall will widen this year through March 2015 after shrinking in the previous 12 months, it will stay sustainable, according to a Reserve Bank of India report last month.

"We can manage with monthly gold imports of about $2 billion and the jump in the August number is largely due to last year's low base after a sudden clampdown," Shubhada Rao, an economist at Yes Bank Ltd. in Mumbai, said yesterday. "The jump may look alarming, but there is no reason for panic."

This Bloomberg article, filed from New Delhi, put in an appearance on their Internet site at 12:30 p.m. Denver time on Monday---and it's another gold-related story I found over at the gata.org Internet net site.

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Diver Finds 2,750-year-old Gold Coin in Bulgaria

A diver has found what is believed to be the oldest gold coin ever discovered in Bulgaria, Bulgarian news agency BTA reported on September 9. The coin was found in shallow waters near the resort town of Sozopol on Bulgaria’s Black Sea coast.

The diver saw the gleaming coin by accident, the report said, and later passed it on to Bozhidar Dimitrov – a native of Sozopol and former diver himself, who is now head of the National History Museum in Sofia.

BTA quoted numismatist Vladimir Penchev from the National History Museum saying that the coin is not solid gold, but made of electrum – the naturally occurring alloy of gold and silver, used to mint some of the earliest metal coins in human history.

This particular coin appears to have been minted in the kingdom of Lydia in western Anatolya, sometime in the second half of the seventh century BCE, which put the coin’s age at more than 2750 years, he said.

This short, but very interesting article---with a photo to match---was posted on the sofiaglobe.com Internet site last Tuesday---and it's another article that Chris Powell posted on the gata.org Internet site yesterday.

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¤ The Funnies

I was out at the usual spot on Sunday---and it was a lovely day.  I was surrounding by Canada geese on all sides, a few hundred.  Since there are only a dozen or so raised on the pond, the rest were obviously not local birds, as they're beginning to gather for the long migration to the southern U.S.A.  The first shot is of a group a bit less than 20 meters away---and this photo came right out of the camera untouched---and uncropped.

Sitting still for an hour or more has its virtues---and I got these excellent red-necked grebe shots.  It's just too bad about the reflection of the red building in the water.  I took a couple of dozen photos---and since I couldn't decide which of these two were the best, you're getting them both.  I'm sure the day will come when the parents stop feeding their brood, but it wasn't Sunday.

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¤ The Wrap

[Last] week, 9.1 million ounces of silver were moved into or taken out from the COMEX silver warehouses, about the highest weekly turnover yet, as total inventories rose 1.6 million oz to 181.8 million oz.  Taken with the above average turnover over the past few weeks, if anything, the turnover seems to be intensifying. The 9.1 million oz turnover this week was more than 56% of all the silver mined in the world for a week (16 million oz). Considering that this spectacle of physical turnover is unprecedented in any other commodity, is it unreasonable to wonder why it exists only in silver and in the warehouses licensed by the COMEX?

An additional signal in the physical silver market that has been unusual and unexpected (at least by me) are the deposits into the big silver ETF, SLV. This week close to 6.5 million oz of silver were deposited into the trust and over the past four weeks nearly 14 million oz have been deposited. I don’t recall a previous occasion of extended price weakness and significant metal inflows into the SLV, so the deposits were certainly unexpected by me. Clearly, there have been no net inflows into the big gold ETF, GLD, further highlighting the deposits into SLV. Between a different COMEX warehouse movement pattern and dissimilar ETF metal flows, the stagnant level of silver/gold price ratio becomes even more suspicious. - Silver analyst Ted Butler: 13 September 2014

All in all, it was a pretty quiet trading day in both gold and silver on Monday---but both metals, along with platinum and palladium began to head south around 8 a.m. EDT as the dollar index peaked and began to head south as well.

Not that I want to stick my neck out, but if forced to bet, I'd guess that the bottom is in for all four precious metals and, like I said on Saturday, if we're not at the bottom, we're very close.  I said about a week or so ago that it wouldn't surprise me in the slightest if we got one more kick in the ass to downside before we were done---and that not only turned out to be the case, but they took the precious metals lower than even I expected.

Here are the 6-month gold and silver charts with Monday's data included.

If things remain quiet until the Comex close at 1:30 p.m. EDT this afternoon in New York, we should see another Commitment of Traders for the record books on Friday.

And as I write this paragraph, the London open is about 55 minutes away.  After opening flat in New York at 6 p.m. yesterday evening, the gold price rallied a few bucks---and is now trading sideways.  Ditto for silver, platinum and palladium.  Net gold and silver volumes are very quiet---gold a hair over 13,000 contracts and silver a few contracts over 3,600.  The dollar index, after falling 15 basis points in early Far East trading, is back to unchanged.

But as wonderful as current bullish structure is in the Comex futures market, how fast and how high we rally will be determined by how the Commercial traders respond as the technical funds/managed money traders begin to cover and go long.  Nothing else matters!!!

The last rally off the record COT structure back in very early June only added $100 to the gold price and $2.75 to the silver price, as the Commercial traders let the managed money traders off with barely a spanking.  If JPMorgan et al decided to put their hands in their pockets and go on vacation for a couple of weeks, we would have precious metal prices [particularly silver] that would be the stuff of legend for a thousand years.

So, we wait some more.

And as I hit the send button on today's effort at 5:55 a.m. EDT, I note that three of the four precious metals are moving higher, but palladium isn't doing much.  Net volume in gold is 19,000 contracts, but certainly doesn't reflect the volume associated with this current move to the upside, as the CME volume data is delayed by at least ten minutes.  The same can be said for silver, as its net volume is 5,800 contracts at the moment.  The dollar index went through a 25 basis point down-up-down move that has brought it back to basically unchanged.

Here's the Kitco gold charts as of 4:53 a.m. EDT.

With all four precious metals totally sold out to the downside, nothing will surprise me when I check the Kitco charts when I get up later this morning.

Enjoy your day---and I'll see you here tomorrow.