It was nice to see some positive price action in gold for a change...and by 3:00 p.m. Hong Kong time it was up about ten bucks...and was still up ten dollars going into the London p.m. gold fix, which came shortly before 10:00 a.m. in New York.
The gold price then jumped about $15 once the fix was in...and by lunchtime in New York, it had reached its high of day, which Kitco recorded as $1,584.80 spot. From there, gold got sold off ten dollars in short order...and then traded sideways into the close of electronic trading.
Gold closed the Thursday session at $1,574.30 spot...up $34.00 on the day. Net volume was immense once again at 182,000 contracts.
Silver had a pretty decent day as well...and was up about 50 cents by 3:00 p.m. Hong Kong time. From there the price slid until 1:00 p.m. in London...about twenty minutes before the Comex open. From there, the silver price rose in fits and starts until noon in New York. And, like gold, that was the high tick of the day...$28.35 spot...and from there silver got sold off to the $28 mark at the close of Comex trading...and then traded flat into the close electronic trading at 5:15 p.m. Eastern time.
Silver finished the Thursday trading day at $28.05 spot...up 78 cents. Volume was pretty heavy at 44,000 contracts.
The dollar index oscillated within about a 40 basis point price range yesterday...bouncing off the 81.6 price level for the second time in as many day...and finished up about 15 basis points. Not much to see here.
The gold stocks gapped up at the open in New York. The London p.m. gold fix at 10:00 a.m...and the New York high at noon yesterday, are the most prominent features on this chart. After the high tick was in, the stocks faded a bit, but held onto a large portion of their gains. The HUI finished up 4.45%.
For the most part, the silver stocks were on fire yesterday, but three of the seven stocks that make up Nick Laird's Silver Sentiment Index did not share in the fun...and the SSI finished up only 2.87%.
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The CME's Daily Delivery Report was another yawner, which it has a tendency to become once we get past the first full week of deliveries in any delivery month. They reported that 35 gold and 21 silver contracts were posted for delivery on Monday.
Both GLD and SLV had changes to report yesterday. GLD added 67,954 troy ounces of gold...but over at SLV an authorized participant added a whopping 3,299,537 ounces of silver. Considering the lousy silver price action of earlier this week...and the smallish increase in the price of silver yesterday...I would assume [like the counterintuitive deposit in SLV on Monday] that this deposit had something to do with covering a short position. But, as I mentioned yesterday, we won't really know for sure until the report comes out over at shortsqueeze.com next week...and even then I don't think that this addition will be in it, because I believe that it occurred after the cut-off date. We'll see.
The U.S. Mint did not have a sales report yesterday.
Over at the Comex-approved depositories on Wednesday, they reported receiving 605,838 troy ounces of silver...and shipped 288,396 ounces of the stuff out the door. The link to that action is here.
Today's first chart is courtesy of Washington state reader S.A. As you can see, it's the 3-year dollar index...and as one commentator over at Zero Hedge put it yesterday..."When the US dollar is your 'safe haven', you know you've hit rock bottom." Amen to that.
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Here's another happy looking chart...and should make everyone on a 'blue pill' diet feel a little better. The chart and dialogue say it all.
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I said I was going to post the charts on silver yesterday that German gold analyst Dimitri Speck sent me earlier this week, but they got preempted by others, so here they are now. The first one is the 14-year silver chart from August 1998 to the end of 2011. Three stand-out features are the 12 o'clock noon London silver fix...and in New York it's the secondary decline at the London p.m. gold fix at 10:00 a.m. Eastern time...and, surprisingly enough, the high for silver on average over the last fourteen years of Comex trading comes at twelve o'clock noon in New York...exactly what happened with silver during yesterday's price action. You can read into that what you wish.
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Dimitri's second chart for silver is just for 2011...and even a cursory glance tells you that it's an entirely different looking beast than the previous chart. Now the three stand-out features on this chart are the usual London silver fix at noon local time...but the high in Comex trading in New York is now 10:30 a.m....not noon. And the amazing thing is that there is now a secondary low equivalent to the London silver fix that occurs shortly after 3:00 p.m. in electronic trading...and the whole chart has a negative bias to it as well. As you can tell, the selling in the New York session last year became much more ferocious once the high was in for the day.
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Dimitri's gold Intraday Price Movements charts for gold showed up on the Internet about ten years ago and caused a sensation when they did. This is the first time he's done it for silver, so these charts are new for me as well.
I have the usual number of stories...and I hope you find a few that float your boat.
The unit at the centre of JPMorgan Chase's $2 billion trading loss has built up positions totalling more than $100 billion in asset-backed securities and structured products -- the complex, risky bonds at the centre of the financial crisis in 2008.
These holdings are in addition to those in credit derivatives that led to the losses and have mired the bank in regulatory investigations and criticism.
The unit, the chief investment office (CIO), has been the biggest buyer of European mortgage-backed bonds and other complex debt securities such as collateralised loan obligations in all markets for three years, more than a dozen senior traders and credit experts have told the Financial Times.
This Financial Times story was posted on their website shortly after midnight...and is posted in the clear in this GATA release...and the link is here.
Details continue to emerge regarding JP Morgan's shocking multi-billion trading losses.
However, the biggest behind-the-scenes report so far was just published by The Wall Street Journal and written by Monica Langley.
Here's how Dimon first found out about the losses: On April 30, associates who were gathered in a conference room handed Mr. Dimon summaries and analyses of the losses. But there were no details about the trades themselves. "I want to see the positions!" he barked, throwing down the papers, according to attendees. "Now! I want to see everything!"
When Mr. Dimon saw the numbers, these people say, he couldn't breathe.
This story was posted on the businessinsider.com website late yesterday evening...and I thank Roy Stephens for sending it along. The link is here.
Just when you thought that bankers didn't have a soul, here's a 2:32 minute video clip from ABC News that will warm the cockles of your heart. Of course he's not a New York banker, so that's probably one of his saving graces. It's cute and definitely worth watching. I thank reader Brad Robertson for sending it along...and the link to the youtube.com video is here.
Something funny happened in the aftermath of the US fraudclosure settlement, in which millions of backlogged housing units were supposed to enter the foreclosure process and begin the clearing of the nearly 9 million housing units in shadow inventory: nothing.
Because as RealtyTrac disclosed overnight, in April the US saw a mere 188,780 foreclosures events of various type (NOD, auction, REO) take place. Why is this number significant? Because it is the lowest in 5 years, despite shadow inventory in the US now being virtually the highest ever.
This zerohedge.com posting from yesterday was sent to me by Casey Research's own Alex Daley, for which I thank him...and the link is here.
Hewlett-Packard Co. is considering cutting as many as 25,000 jobs, or 8 percent of its workforce, to reduce costs and help the company contend with ebbing demand for computers and services, people briefed on the plans said.
The number to be cut includes 10,000 to 15,000 from Hewlett-Packard’s enterprise services group, which sells a range of information-technology services and has been beset by declining profitability, said these people, who asked not to be identified because the plans aren’t final and may change.
Meg Whitman, chief executive officer since September, is seeking to reverse the growth slump that led to the ouster of her predecessor, Leo Apotheker. The company’s PC sales are dropping as consumers favor tablets, such as Apple Inc.’s iPad, and it has been slow to adapt to the shift toward cloud computing, away from the IT services Hewlett-Packard provides.
This Bloomberg story was courtesy of reader 'David in California'...and the link is here.
A survey of manufacturing activity from the Federal Reserve's Philadelphia branch tumbled to -5.8 this month from 8.5 in April, where any reading below zero signals contraction.
Although Thursday's survey only covers Pennsylvania and surrounding states, economists take it as an early reading on America's wider manufacturing industry.
The steep decline comes as Europe's escalating debt crisis dominates thinking in Wall Street and Washington. Federal Reserve policymakers cited the region's woes at the central threat to the US recovery this week.
Should the drop in the manufacturing index prove to be the start of a run of weaker activity, economists expect Federal Reserve chairman Ben Bernanke to take further measures to help the economy.
This story was posted in The Telegraph yesterday evening...and it's Roy Stephens second offering of the day. The link is here.
Italy increased security Thursday at 14,000 sites, and assigned bodyguards to protect 550 individuals after a nuclear energy company official was shot and letter bombs directed to the tax collection agency.
Under the enhanced measures, Interior Minister Anna Maria Cancellieri deployed 20,000 law enforcement officers to protect individuals and sensitive sites. In addition, 4,200 military personnel already assigned throughout Italy will be redeployed according to new priorities.
"Based on a thorough analysis of the situation, Interior Cancellieri has confirmed the need to maintain a high level of vigilance, strengthen the security measures against sensitive targets and those exposed to specific risks," the Interior Ministry said in a statement.
This AP story was filed from Rome yesterday...and was posted in The Atlanta Journal-Constitution. I thank reader 'David in California' for his second offering in today's column...and the link is here.
The European Central Bank has stopped providing liquidity to some Greek banks as they have not been successfully recapitalized, the ECB said on Wednesday, confirming news earlier reported exclusively by Reuters.
The news sent the euro lower against the dollar, fanning concerns among investors and in Greece that the country may have to leave the euro zone.
The development highlights the weak state of the banking sector in Greece, where Greeks are pulling euros out of the banks in fear that their country may exit the European single currency despite the declared determination of EU powers Germany and France to keep Athens in the monetary union.
This Reuters piece filed from Berlin and Frankfurt was posted on their website Wednesday afternoon...and I lifted it from yesterday's King Report. The link is here.
Bank of America said it expects a "powerful short squeeze" in risk assets as speculative funds unwind positions, led by a rebound in battered bank stocks and Club Med bonds. The euro would surge 10pc to $1.40 against the US dollar after dipping first to $1.20 in the immediate panic.
The benign outcome assumes that the European Central Bank steps in with massive support, backed by the US Federal Reserve, the Bank of Japan, and key central banks along the lines of concerted action in 2008-2009.
Bank of America said EU authorities will pull out the stops to keep Greece in the system as they weigh the full dangers of contagion. Should that fail, it expects a series of dramatic moves.
"The global central banks are going to respond with the biggest flood of liquidity the world has ever seen. It will make the LTRO (the ECB's €1 trillion lending to banks) look like small change."
This story was posted on The Telegraph's website early yesterday evening. I thank Nick Laird for bringing it to our attention...and it's a must read. The link is here.
Spain moved back into the eye of the eurozone storm on Thursday, as the country’s borrowing costs rocketed to unsustainable levels and the country's banking sector was hit by mass downgrades.
Moody's slashed the ratings of 16 Spanish banks on Thursday evening, citing the reduced ability of the Spanish government to provide support to the sector, as well as the "adverse operating conditions" characterised by a renewed recession.
The rating agency also downgraded Santander UK, although, at "A2," it is still rated one notch above its parent bank Banco Santander. Moody's highlighted that Santander UK has "no direct exposure to the Spanish government (or regional governments)".
Earlier in the day, shares in Bankia, the country’s fourth biggest bank, plunged by as much as 29pc amid reports that depositors had pulled out €1bn in the past week.
This story was posted in The Telegraph late Thursday evening...and I thank Roy Stephens for bringing this article to our attention. The link is here.
Sir Mervyn said the recovery would be "slow and uncertain" as the economy tried to navigate its way through a potential "storm heading our way from the continent."
"We have been through a big global financial crisis, the biggest downturn in world output since the 1930s, the biggest banking crisis in this country's history, the biggest fiscal deficit in our peacetime history, and our biggest trading partner, the euro area, is tearing itself apart without any obvious solution," Sir Mervyn King said.
This video, posted over at The Telegraph late Wednesday afternoon, runs 2:22 minutes...and is worth watching. I thank Roy Stephens for his final offering in today's column...and the link is here.
China's "Big Four" banks made almost no new loans in the first two weeks of May, after a surprise drop in new loans in April, highlighting liquidity strains that have persisted despite the central bank's monetary easing.
Citing an unidentified insider, the China Securities Journal reported that two of the banks saw only minor loan growth of less than 10 billion yuan ($1.59 billion), while new lending actually contracted at the other two. The article didn't say which banks fell into either category.
The "Big Four" - Industrial & Commercial Bank of China Ltd, China Construction Bank Corp, Bank of China Ltd and Agricultural Bank of China Ltd - usually account for 30 percent of new yuan loans each year.
The dismal performance followed an overall drop in new loans last month. Financial institutions in China extended 681.8 billion yuan of loans in April, a sharp fall from 1.01 trillion yuan in March and far below market expectations.
This story showed on the chinadaily.com.cn website early yesterday morning...and I thank Hong Kong reader Graham C. for sending it along. The link is here.
Spot gold rallied more than 2 percent on Thursday for its largest one-day gain since late January, as technical buy signals and new signs of a sluggish U.S. economy more than offset deepening despair over the euro zone.
After flirting with a bear market on Wednesday, down more than 20 percent from its September record, bullion rallied early after Philadelphia Federal Reserve data showed a contraction in factory activity in the U.S. mid-Atlantic region. The data rekindled some hope the Fed would plow more money into the system to stimulate the economy, traders said.
The dramatic $24 bolt higher started just before the release of the Philly Fed statement at 10:00 a.m. EDT (1400 GMT) and continued for about 20 minutes, accompanied by a spike in volume.
This Reuters story was filed from New York yesterday...and was posted over at the finance.yahoo.com website. I thank reader Peter Handley for sending it...and the link is here.
As African governments seek to extract more revenue from their mining sectors, the continent's biggest economy has given gold producers a much-needed tax break that removes at least one head wind from a struggling industry.
Gold Fields, the world No. 4 bullion producer, on Thursday became the latest South African gold miner to report better-than-expected earnings partly on the back of the new, lower tax regime. It benefited to the tune of close to 1 billion rand ($120.46 million) from the change in the first quarter.
The companies' gain will cause some shareholder pain as the burden has been partly sifted to dividends, but analysts generally agree that the Treasury's revenue stream from the gold sector will be less as a result.
This Reuters story was filed from Johannesburg yesterday...and I plucked it from a GATA release late last night. The link is here.
The first is with Peter Schiff...and it's headlined "The Market Rollover, QE3 Bottom & Gold". The next blog is with Citibank analyst, Tom Fitzpatrick. It bears the title "Despite Pullback, Gold to Hit New All-Time Highs". And lastly is this commentary with Mike Roth who, according to Eric King, is the "Number 1 oil analyst in the world." It's headlined "Fears of '08 Credit Metldown Impacting Markets".
One of gold’s greatest powers is that it is a unit of account which cannot be fudged nearly as easily as the fiat all-you-can-print buffet.
But gold is still gold. It’s still that same shining yellow metal that investors have for thousands of years held up as a unit of account and store of value, and a medium of exchange.
Central bankers can’t just abolish history. On the other hand, history may very well abolish the central bankers and their fiat currencies.
I've never heard of the author...John Azia of Azizonomics...however his short commentary, with some really incredible graphs, was posted over at the zerohedge.com website yesterday...and is a must read. I thank Australian reader Wesley Legrand for sending it to me...and the link is here.
In his presentation at the New York Hard Assets Conference, market analyst and mining company consultant Peter Grandich says gold will never find respect from the financial and news media establishment even though its performance over the last decade far exceeds any other asset class. He maintains that gold's bull market is far from over. Grandich's presentation is 14 minutes long.
This is another item that I pulled from a GATA release last night...and the link to the youtube.com video is here.
In an essay posted Thursday at GoldSeek, financial writer Doug Casey of Casey Research asks for evidence of gold market manipulation and some explanation of its purpose.
GATA's secretary treasurer Chris Powell picked up that torch...and provided the link not only to Doug's commentary, but to all the evidence that GATA and its consultants have gathered since he and Bill Murphy founded the organization back in 1999.
There's lots to read in the links provided...and its up to each individual reader/investor to weight the evidence presented to them by all parties...not just here in my daily blog, but everywhere they roam on the Internet. As you can tell, there are dissenting voices everywhere and, for the moment, Freedom of Speech is still legal in North America.
Most people that are familiar with this issue have pretty much chosen sides already. I made up my mind long before I ever heard of GATA...or Casey Research...when I read the essay "The Golden Pyramid" by John Hathaway that my friend/full-service broker gave me more than ten years ago. Hathaway knew that something was amiss in the gold market even back then...and it still is. Nothing that I've read or heard since has changed my mind. On the contrary, with the evidence that has been brought to light since, my opinion is more strongly held than ever.
But it's a free country on both sides of the 49th parallel for the moment...and most everywhere else on Planet Earth as well...and everyone is entitled to their opinion, whatever it may be. In the future...and probably in the not-to-distant future...the matter will be settled in both gold and silver. Then Doug and I can compare notes over a glass of Torrontés.
I thank reader Howard Brown for being the first one through the door with Doug's commentary. The link to it...and all the evidence gathered...is posted in this GATA release linked here.
On May 9th, Forum Uranium Corp. and Mega Uranium Ltd. announced a new basement-hosted uranium discovery on the Opie target on the NW Athabasca property. Seven of nine holes drilled on the Opie zone encountered uranium mineralization at shallow depths, within a zone of strong red hydrothermal alteration in basement rocks. The zone remains open along strike and down dip, so there is great potential for more mineralization within the zone. There are 15 more gravity targets , untested by drilling, which could prove to be multiple mineralized zones on the property. With further discoveries like Forum's, the western Athabasca Basin, could prove to be on the same scale as the Eastern Athabasca Basin. Attached is the link to a more descriptive analysis of the discovery and buy recommendation issued by Dundee Securities.
The vast majority of people do not seek wisdom; they seek affirmation of their core beliefs. - Author unknown
I don't know what to make of yesterday's price action. I was certainly happy to see prices move higher...but I found the huge volume that went with it rather disturbing. I'd rather see light volume on big price moves...and that certainly wasn't the case yesterday.
Well, all the stories that I've been posting this week have led me...and probably yourself...to the obvious conclusion that the entire world is starting to float off the rails, especially in Europe. But don't kid yourself, if Greece goes, it won't be too long before the rest of the E.U...and it's beloved currency...follow it down the drain. Right after that will come the rest of the world, as the economic, financial and monetary systems of this planet are one giant Gordian Knot...and no amount of cheating or 'thinking outside the box' will make any difference. There's no way out of this where there will be one man standing. And if there is one man standing, it will redefine the word Pyrrhic Victory.
The only thing left of value will be hard assets...with gold and silver at the top of the list...whether it is remonetized or not.
Today we get the much anticipated [at least by me] Commitment of Traders Report...and as I've mentioned several times already this week, it will be one for the record books. I'm particularly interested in seeing the situation in silver...the Commercial net short position...and the positions of the '1-4' and '5-8' short holders in that metal. It's just too bad that it won't include what happened during the 24 hours and 15 minutes after the Tuesday cut-off, as that included the absolute low.
Here's the Total PMs Pool for all precious metals that Nick Laird keeps updated on a daily basis. We just hit another new high [barely] in physical ounces in all four precious metals combined. If you check the period from the end of December to the close of trading yesterday on this chart, you will see that the 'total ounces held' has been in a permanent up-trend. During that time period gold rose and fell about $250...and silver rose and fell more than $10...platinum rose and fell about $310...and palladium rose and fell about $150. None of this price movement had anything to do with the physical market...it was all paper trading in the Comex futures market.
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The gold price did nothing through all of Far East trading on their Friday afternoon, but shortly after London opened, the price has ticked up about ten bucks. Silver traded within a 20 cent range during the same time period, but is also up in mid-morning London trading. Volume's are already monstrous, so it's obvious that these rallies are running into massive resistance from JPMorgan et al. It will be interesting to see how things unfold once trading begins in New York at 8:20 a.m. Eastern time.
And as I hit the 'send' button at 5:20 a.m. Eastern time, it appears that the rallies in both gold and silver have been stopped in their respective tracks for the moment. Gold is currently up ten bucks...and silver is only up 17 cents.
There's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) recommendations...as well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
I hope you have a good weekend...and I'll see here tomorrow sometime.