Gold & Silver Daily
"The other question remaining is, when these rallies get started, will JPMorgan et al go back on the short side?"
 

¤ Yesterday In Gold & Silver

December 24th trading was pretty quiet in gold.  The price rose to the $1,665 spot mark into the London open...and then slowly got sold off from there into an early New York close.  It finished the trading day on Monday at $1,658.30 spot...and it was no surprise that volume was very light.  I didn't even both writing it down.

On Tuesday, gold got sold down the moment trading began at 6:00 p.m. in New York on Christmas Day/evening...but an hour later, 9:00 a.m. in Tokyo on their Wednesday morning, the bottom was in.  The gold price made a rather slow recovery from there...but rallied as soon as the noon silver fix was in, in London...and was back to unchanged by the Comex open.  At that point a serious buyer showed up...and the usual not-for-profit sellers appeared around 9:20 a.m. Eastern.  If they'd waited until the 10:00 a.m. London p.m. gold fix, the gold price would have been a very large number by that time, as there were no legitimate short sellers in sight.  Gold's high tick at 9:20 a.m. was $1,669.00 spot.

After that, the gold price got sold down until about half past lunchtime in New York...and then traded sideways for the rest of the day.  The gold price finished the Wednesday session at $1,659.40 spot...up $1.10 from Monday...and would have finished materially higher if allowed to, which it wasn't.  Volume was fumes and vapours at around 55,000 contracts.

It was pretty much the same story in silver on the day before Christmas.  Silver's high tick on Monday came shortly after 9:00 a.m. in London...and then down it went, right along with the gold price, until 12:30 p.m. in New York.  It recovered about a dime into an early close.

In Wednesday trading, silver traded within a dime of it's Monday closing price right up until the noon silver fix in London...which turned out to be its low price tick over there.  The subsequent rally continued right through the Comex open before running into the same set of not-for-profit sellers that gold did at 9:20 a.m. Eastern time

The high tick of the day [$30.32 spot] came shortly after that...and it was, as they say, all down hill until about half past lunchtime in New York...the same as on Monday.  The silver price made another rally attempt from there, but got sold off after 3:00 p.m. in electronic trading.

Silver closed at $30.04...up twelve cents from Monday's close.  Net volume was a puny 14,500 contracts.

Despite some minor rallies and declines, the dollar index didn't do much.  It closed on Friday at 79.53...and traded pretty close to that price on Monday, Tuesday...and yesterday.  It's impossible to connect yesterday's currency activities to the rally/sell-off in gold and silver between 7:00 a.m. and 12:30 p.m. Eastern time.  Here's the 3-day dollar index chart...

The HUI closed up 0.49% on Monday...and then added another 0.57% gain yesterday.

Nick Laird's Silver Sentiment Index closed up 0.43% on Monday...and closed up a tiny 0.04% yesterday.

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The CME's Daily Delivery Report showed that 23 gold and 1 lonely silver contracts were posted for delivery on Friday within the Comex-approved depositories.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in either GLD or SLV yesterday...and the U.S. Mint reported selling only 2,500 ounces of gold eagles.

Over at the Comex-approved depositories they reported receiving 216,674 troy ounces of silver on Monday...and didn't ship any out.  The link to that activity, such as it was, is here.

On Saturday I posted a story about the new Valcambi 50 gram gold 'Combibar'.  I heard back from a couple of readers on this issue over the weekend...Roger B. and Paul Laviers.

Hi Ed...One of the bullion dealers I use, the Guernsey Mint, has recently started selling the Valcambi 50g Gold 'Combibar'. It's current price is £1,762.23, which I calculate to be a premium of around 7% on the current spot price...Paul.  [A hair more than I was hoping/expecting, but not too bad. - Ed]

I was just looking into these combibars, and have found that Valcambi also produce two silver combibars (10 x 10g) and (100 x 1g) and a palladium combibar (50 x 1g) as well as two Cook Islands CombiCoins...whatever they might be!  All the details, including prices, are linked here.

I have a fair number of stories saved up over the last five days...and that's the main reason for today's column.

 

¤ Critical Reads

U.S. Treasury to take steps to avoid borrowing limit

The U.S. Treasury Department will begin taking steps on Friday to delay hitting the government's $16.4 trillion borrowing limit on Dec. 31st.

Treasury Secretary Timothy Geithner said in a letter Wednesday to congressional leaders that the department will use accounting measures to save approximately $200 billion. That could keep the government from reaching the limit for about two months.

The move comes as President Barack Obama and the GOP congressional leadership resume negotiations over how to avoid a series of tax increases and spending cuts, known as the "fiscal cliff," that are scheduled to take effect in the new year.

Obama has sought to include an increase in the borrowing limit in any agreement to avoid the cliff. But Speaker John Boehner and other Republican leaders have demanded concessions in return. The negotiations hit a stalemate last week. Obama and lawmakers are returning to Washington this week to try again.

This AP article was picked up by the finance.yahoo.com Internet site yesterday...and I thank Scott Pluschau for today's first story.  The link is here.

Read more...

ProPublica: Government Now Runs the US Mortgage Marketplace

The American home mortgage market has, for all practical purposes, become nationalized since the 2008 financial meltdown, according to an analysis by ProPublica, the non-profit investigative journalism project.

The takeover, without which the housing market could barely function, has occurred against a backdrop of little planning or public discussion.

In fact, nine out of every 10 new mortgages are now backed by the U.S. taxpayer, up from three in 10 in 2006.

This item was posted on the moneynews.com Internet site last Friday...and it's courtesy of West Virginia reader Elliot Simon.  The link is here.

Read more...

MF Global Overseers Reach Accord Over Claims

The officials supervising the wind-down of MF Global’s remains said on Saturday that they had reached a broad settlement over claims among the entities they oversee.

The trustees representing the failed firm’s main brokerage arm and its holding company, James W. Giddens and Louis J. Freeh, agreed to settle claims with the administrators of MF Global’s London arm.

The deal means that an estimated $500 million to $600 million will be returned to MF Global’s brokerage unit, which has been paying back customers. Mr. Giddens had previously sought to take back about $700 million from the London unit.

The CME Group should have made MF Global's customers whole the day after this happened, but didn't.  This fits in nicely with the fact that the CME is up to their necks in the silver price management scheme as well.  This article showed up on The New York Times website on Saturday...and I thank Phil Barlett for sending it.  The link is here.

Read more...

Chilling economic report strikes fear into CEOs

Over an early-morning coffee with the chief executive of a FTSE 100 business last week, talk turned to the outlook for 2013. Where I had expected some guarded optimism, instead I heard a chilling analysis.

The CEO said he had been reading a new paper from Boston Consulting Group headed “Ending the Era of Ponzi Finance”. The lessons he had taken from it were miserable. [The report appears to be free, but you have to sign up for it. - Ed]

The BCG study by Daniel Stelter which is doing the rounds of corporate C-suites does not pull its punches. In fact, its punches are really just a softening-up exercise for a barrage of kicks and painful blows aimed at anyone who thinks that kicking the can down the road is a suitable substitute for radical action.

The West was not going to find its way to the right economic path with a little tweaking at the edges, the CEO said. What is needed is a wholesale overhaul of the economic system to tackle record levels of public and private debt. Was anyone brave enough to do it, he wondered aloud.

This commentary, plus the link to the report, was posted on the telegraph.co.uk Internet site late on Saturday evening BST...and it's courtesy of Nick Laird.  The link to 'all of the above' is here.

Read more...

Who Is François Hollande? Crisis Will Reveal French President's True Contours

Is French President François Hollande a reformer or a traditional leftist? He's a man who enjoys his role as France's leader, but many voters are asking themselves who it is they elected. He's a staunch opponent of Angela Merkel's austerity measures and has made combating them a priority. His true political agenda may only become apparent as the euro crisis continues.

François Hollande has been speaking for two hours and 37 minutes, from his place at the podium in the grand ballroom of the Elysée Palace. It is mid-November, and this is the French president's first press conference since taking office. He hasn't yet even broken a sweat.

Hollande evokes the economic situation in France in a dramatic tone and reports a laundry list of measures he is either considering or has already implemented. Then he answers the journalists' questions, all delivered in a deferential tone and some of them equally as flowery as the president's answers. At one point Hollande says, "And now I will answer another question no one has asked." He's allowed to do that.

This is a fascinating moment for two reasons. For one thing, it shows how France's presidential democracy works. Hollande's press conference is not really a press conference, but rather a symbolic performance that demonstrates the president's authority.

You couldn't make this stuff up.  The story was from the German website spiegel.de yesterday...and the first of two in a row from Roy Stephens.  The link is here.

Read more...

Greece not doing enough to fight tax dodgers, say EU and IMF

Athens has collected just half the tax debts and conducted less than half the audits it was supposed to under the targets set by its lenders, according to a survey by the country's international lenders which was compiled in November.

The lenders urged Greece to improve tax collection and focus on the cases most likely to produce results. "Doctors and lawyers are a good place to start," they said.

Tax evasion is endemic in Greece, making it more difficult for the government to shore up its finances under its €240bn international bailout.

This story, which is worth skimming, was posted on The Telegraph's website early Monday afternoon local time and, as mentioned above, is the second of two in a row from Roy Stephens.  The link is here.

Read more...

Japan's incoming PM keeps up pressure on BOJ to attack deflation

Incoming Japanese Prime Minister Shinzo Abe kept up his calls on Tuesday for the Bank of Japan to drastically ease monetary policy by setting an inflation target of 2 percent, and repeated that he wants to tame the strong yen to help revive the economy.

"We have advocated beating deflation, correcting the strong yen and achieving economic growth during the election, so we must restore a strong economy," he said, adding that the stagnant economy was also undermining Japan's diplomatic clout.

Abe, a security hardliner was sworn in as premier on Wednesday...and he is also expected to appoint his cabinet, is prescribing a mix of aggressive monetary policy easing and big fiscal spending to beat deflation and rein in the strong yen.

Print...or die!  The disease is now terminal in the Western world.  This Reuters story was filed from Tokyo on Christmas Day...and I found it in yesterday's edition of the King Report.  The link is here.

Read more...

Seven King World News Blogs/Audio Interviews

1. John Embry: "Catastrophic Loss of Confidence to Spike Gold & Silver".  2. Michael Pento: "Who Has Been Naughty or Nice & What to Expect in 2013".  3. Andrew Maguire: Audio interview Part One. 4. Andrew Maguire: Audio interview Part Two.  5. Audio interview with Gerald Celente.  6. Audio interview with Egon von Greyerz.  7. Richard Russell: "Put 33% to 50% into Gold & Sidestep Bubbles".

Read more...

John Embry to preside at GATA fundraiser with Bob Bishop in Vancouver

Sprott Asset Management's chief investment strategist, John Embry, will be master of ceremonies for GATA's fundraising reception with retired newsletter writer Bob Bishop at the conclusion of the Vancouver Resource Investment Conference on Monday, January 21.

Embry, known worldwide for his advocacy of ownership of the monetary metals and the companies that mine them, is a longtime GATA supporter and will be speaking during the Vancouver conference as well.

Bishop, retired editor of the Gold Mining Stock Report newsletter, spoke at GATA's Washington conference in 2008 and his expertise long has been sought by thousands in the precious metals sector.

You can read the rest of this GATA post at the gata.org Internet site...and the link is here.

Read more...

GoldMoney's Turk gives outlook for gold from 2013-15

In a video posted this week at GoldMoney's Internet site, GoldMoney founder and GATA consultant James Turk reviews and elaborates on the forecast for gold he made in Forbes magazine in 2003, explaining why he still thinks the gold price will reach $8,000 by 2015. Currency debasement, Turk notes, is both policy and compelling politics in the West, and the long-term charts he presents prove it. Turk's presentation is titled "James Turk's Outlook for Gold for 2013 to 2015".

I borrowed 'all of the above' from a GATA release on Saturday...and the link is here.

Read more...

A forecast for a silver default on the Comex

Interviewed by Lars Schall for GoldSwitzerland, GoldMoney research director and economist Alasdair Macleod explains why he thinks the New York Commodities Exchange will default on its silver contracts and why central banks put themselves in great jeopardy when they start being candid about their gold reserves.

Alasdair makes this grand statement about a Comex closure in silver...but then just leaves it lay there without further explanation...and I'll have more on that in the next story.  This Macleod/Schall interview was posted on the goldswizerland.com Internet site on Saturday...and the link is here.

Read more...

Don't Close the COMEX: Ted Butler...07 October 2003

As you can see from the above headline, this 'Close the Comex' issue is nothing new.  And as I've said countless times, there's nothing about silver that hasn't already been advanced by Ted Butler long before I, or anyone else, could even dream this stuff up.

Ted re-visited this issue within the last six weeks in one of his commentaries to his paying subscribers...and I've mentioned it a time or three in my own column over the years, but even these comments were based on what Ted had said almost a decade prior.  Please keep this sort of thing in mind when you're reading the latest silver 'expert' out there.

The difference between my 'expert' advice...and others 'expert' advice on silver is that I acknowledge the source, where others just steal his stuff without attribution.  I also note that large chunks of what GATA has dug up over the years is now starting to appear as sage commentary from other gold 'experts'...also without attribution.  It's unacknowledged theft...but theft nonetheless.

Here's Ted's gold commentary from 9+ years ago.  If the story line sounds suspiciously familiar, it's because the story hasn't changed during the intervening years.  The only real differences are that the concentration is now extreme...and we know the identities of the two largest silver shorts.  This is an absolute must read...and the link is here.

Read more...

TF Metals Report: Ted Butler: Very Early Monday

It's going to be a while before I can write up a full new post so, with the current post pushing 40,000 views, I thought I'd better give you a new thread to chew on overnight.

Following along with the previous post here at TFMR, Uncle Ted crafted these two paragraphs in his Weekly Review back on Saturday. Concise but with an added level of detail I failed to provide, these two paragraphs provide an essential background to the entire silver manipulation story.

I hope that Uncle Ted doesn't mind. He's the patriarch of our movement and, as you know, I hold him in very high regard. I would strongly encourage you to consider subscribing to his site, especially at this critical moment in our history.

Since Mr. Ferguson already 'stole' this from Ted...and it's in the public domain...I'm only too happy to steal it as well.  It, too, is an absolute must read...and it's posted on the tfmetalsreport.com Internet site.  The link is here.

Read more...

Iraq boosts gold reserves by 25 tonnes

Iraq has joined the growing list of countries buying gold for their official reserves, purchasing more than 25 tonnes of the precious metal in the market to beef up the gold reserves of its central bank for the first time in years.

The purchases by Baghdad come as Iran is using gold as a currency to settle import-export transactions with neighbouring countries, including Turkey. But Iraq has so far not disclosed any gold transaction with Tehran.

Analysts said it was unclear whether the purchases showed dealings with Iran or were simply a sign that the Iraqi central bank is diversifying its foreign exchange reserves, as others in emerging countries have done recently.

This story showed up in the Financial Times of London on Friday...and it's posted in the clear in this GATA release.  The link is here.

Read more...

In gold's own country -- Kerala, India

Lord Padmanabha, the presiding deity of Thiruvananthapuram, also known as Trivandrum, the capital of Kerala, who is depicted as reclining on a gigantic snake, Anantha, suddenly went up in the estimation of his devotees recently, when it was discovered that he has an inestimable treasure of gold in his custody.

Kerala values nothing more than gold, and it is comforting for the people of the state to know that their erstwhile rulers too had a fascination for the yellow metal, which they stored in the temple as an offering and as an insurance against famine. The innumerable jewelry shops around the temple and elsewhere in Kerala may be handling as much gold as the temple has accumulated. "God's Own Country" is fast becoming "Gold's Own Country."

With only 3 percent of India's population, Kerala gobbles up 20 percent of the country's gold every year, and the World Gold Council estimates that India, the largest consumer of gold in the world, consumes 30 percent of the global supply. Two hundred thousand people are employed in the gold industry in this tiny state. Such is the love of gold in Kerala that there may be no household without some gold, tucked away as savings, either to be given away as wedding gifts for daughters or to raise cash by way of gold loans or outright sale.

This is another must read story.  This blog/story was posted on The New York Times website the day before Christmas...and I found it in a GATA release yesterday.  The link is here.

Read more...

R.J. O'Brien's Senior Commodity Broker: Silver is His #1 Commodity Pick for 2013

Phil Streible spends a minute or so telling viewers why silver is his number one pick.  But unspoken in this Bloomberg interview from December 24th is the fact that RJ O'Brien is an insider in the silver market.  If they aren't part of the '5 through 8' silver traders on the Comex...they are certainly one of Ted Butler's raptors.  I would be prepared to bet a few dollars that he's placing his bets on the basis of insider information...although he looks far to young to be a "senior analyst" of anything... wink

The 4:40 minute video interview was posted on the bloomberg.com Internet site on the day before Christmas...and I thank Matthew Nel for digging this story up for us.  It's definitely worth watching...and the link is here.

Read more...

Eric Sprott: Why are [Smart] Investors buying so much more silver than gold?

Sprott Asset Management CEO Eric Sprott muses on the extraordinarily greater demand for silver [must it carry the adjectives "real" or "physical"?] than for gold, wonders how long the paper markets will be able to continue to suppress the silver price, but concludes that buying silver when demand is so disproportionate to production is a good idea.

Eric's Markets at a Glance commentary for December is titled "Why Are [Smart] Investors Buying 50 Times More Physical Silver than Gold?" and it's posted at the Sprott.com Internet site.  The link is here...and it's a must read as well.

Read more...

 

¤ The Funnies

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Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization

Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.

Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.” 

Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained. 

Please visit our website for more information about the project.


 

¤ The Wrap

The one good thing about this [past] week’s price smash in silver (and gold) is that it should have removed any doubt that it was anything other than COMEX price manipulation. By anything I mean the smash had nothing to do with physical market fundamentals or the trading of metals in any other market; this was a COMEX production pure and simple. It was actually refreshing that it was so clearly a COMEX generated smash, as it made any attempt at alternative explanation look silly. If one doesn’t see that paper COMEX trading was the cause of this week’s sharp price declines, it can only be because of a refusal to see the clear facts. - Silver analyst Ted Butler...22 December 2012

With volume so small, I wouldn't read much into the price action during the first two trading days of this week...although I must admit the price patterns looks sadly familiar.

As we sit here and twiddle our collective thumbs for the rest of the 2012 year, I'm still asking the same question that I did in Saturday's edition of 'The Wrap'...and that is, is JPMorgan et al done to the down side?  I'm not entirely sure, but I'd guess that they could continue the price pressure to the downside if they so wished.

The Commitment of Traders numbers are certainly far more positive in gold than they have been in a long time...and although the short positions in silver has probably improved significantly, it's a good bet that a grotesque short position still exists.

I'm basing my thoughts above on the fact that tomorrow's Commitment of Traders Report will show huge improvements in the Commercial net short positions in both metals.  It only remains to be seen how the 'Big 4' are positioned in both gold and silver when the report is posted on the CFTC's website on Friday afternoon.

Looking at the 6-month charts for gold, silver, platinum and palladium...it's easy to see that three of these four precious metals are at, or well into, oversold territory...and it's from these lows that new rallies begin.

And the other question remaining is, when these rallies get started, will JPMorgan et al go back on the short side of the new longs that pour back into the markets as the 200-day moving averages get broken to the upside?  Time will tell.  But until they decide to stand aside and let the prices run to the upside, they are 100 percent in control of the precious metals market...and even then it will only happen because they allow it.

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Not much his going on in overnight trading in the Far East...and volumes are thin and that's being kind.  The dollar index has barely moved since it opened in Japan on their Thursday morning.  That also applies to the London open as well.  It's pretty dead out there as I hit the 'send' button at 3:35 a.m. Eastern time.  It will be interesting to see what develops at the noon silver fix in London...and/or at the Comex open this morning.

I have no idea how the rest of this year's trading will unfold.  I'm hoping for the best, but I'm always on the lookout for "in your ear".  And in closing I want to pass along the investment advice that Mr. Ferguson gave in the last sentence of his December 24th commentary that I posted in the 'Critical Reads' section above..."Good luck and BTFD."

See you on Friday.