Gold & Silver Daily
"It was obvious that there were not-for-profit sellers about...especially in the silver market."
 

¤ Yesterday In Gold & Silver

The gold price traded in a very tight range all through Far East and the first part of the London trading day.  The several attempts that the price made to break above the $1,695 spot mark, were easily turned back.

The New York high [$1,696.20 spot] came about twenty minutes after the Comex open...and that was it for the day, as a willing seller came along and sold the price down about ten bucks...and it recovered a few bucks after that.

The low price tick of $1,682.80  spot came around 10:40 a.m. Eastern time.

Gold closes at $1,684.80 spot...down an even $7.00.  Net volume was very light...around 96,000 contracts.

Like the Tuesday trading day, silver had a life of its own yesterday.  The price mostly chopped sideways in a twenty cent range during Far East trading.  The low of the day appeared to come shortly after the London open...and rallied from there.  It really took off at the Comex open...got smacked...and then rallied strongly again after the London p.m. gold fix was in.  The high tick was $32.58 spot...and that came around 10:25 a.m. Eastern.

That rally got hit even harder by a not-for-profit seller...and fifteen minutes later, silver hit its low price tick of $32.04 spot.  The subsequent forty cent rally lasted right up until very shortly before the Comex close and, like Tuesday, got sold off in the electronic trading that followed.

When the smoke cleared, silver was up the magnificent sum of 2 cents...closing the Wednesday session at $32.23 spot.  Volume was around 33,000 contracts.

I thought I'd include the New York Spot Silver [Bid] chart on its own, so you can see the details of the New York trading day with more clarity.  The footprints of JPMorgan et al are more than obvious.

The dollar index opened at 79.87 in early Far East trading on their Wednesday...and had another wild day like it had on Tuesday.  It traded as low as 79.71...and as high as 80.08...and closed 79.86, basically unchanged.  Except for the fifteen minute sell-offs in both silver and gold that accompanied a small portion of the morning dollar index rally in New York, there was virtually no co-relation between the precious metal prices and the currencies yesterday.

Here's the 3-day chart so you can see the bit of a ride the dollar index has had since the Tuesday morning open in the Far East...

Even though the gold price was flat going into the open of the New York equity markets, the shares headed for the nether reaches of the earth immediately...and never looked back despite what gold was doing.  The HUI finished on its absolute low of the day...down 2.87%.

Past experiences have taught me that counterintuitive price action in the shares is, at times, a precursor to a bear raid in the metal itself.

With the odd exception, the silver shares were down across the board as well...but the damage wasn't as bad.  Nick Laird's Intraday Silver Sentiment Index closed lower by 1.73%.

(Click on image to enlarge)

The CME's Daily Delivery Report is hardly worth mentioning, as only 7 silver contracts were posted for delivery on Friday.

Over at GLD they reported a withdrawal of 58,089 troy ounces of gold...and there were no reported changes in SLV.

There was no sales report from the U.S. Mint.

It was a very busy day over at the Comex-approved depositories on Tuesday.  They reported receiving 1,017,030 troy ounces of silver...and shipped 1,942,672 troy ounces out the door.  However...417,547 troy ounces of the activity on both sides of the ledger was a transfer out of the CNT Depository...and into Brink's, Inc.  The big withdrawal [1.52 million ounces] was from Scotia Mocatta.  Tuesday's activity is definitely worth a look...and the link is here.

There was a story out last night that the Royal Canadian Mint went on allocation with its silver maple leaf bullion coin yesterday morning.  At 1:05 a.m. Eastern time this morning, I went on the RCM's Media Room page and looked under News Releases...and saw nothing about it.  Maybe the story was posted elsewhere on the RCM's site...but until I see the hard copy confirmation somewhere, I'll stick this in the 'hearsay category.  However, I just wanted you to know that the story was out there.

Unbeknownst to silver analyst Ted Butler, I stole a couple of paragraphs from his mid-week commentary to his paying subscribers yesterday...which he'll discover when he runs through my column this morning.  The linked essays embedded in it..."Life After Bear Stearns"...is a must read.

"It’s just a fact of life that we can’t usually see the full picture on any significant silver development at the time. That’s because all the details aren’t available or visible when we first learn of something new. The best example I can give you was of JPMorgan’s takeover of Bear Stearns in 2008. I even wrote an article about it back then titled “Life After Bear Stearns” in which I talked about many of my usual themes, COMEX, COT, SLV and the first sell-out of Silver Eagles by the US Mint. I stand by everything I wrote in that article, but I admit that I had no clue at the time that Bear was the big COMEX silver short. Nor did I know that Bear Stearns most likely failed because of its giant silver short position and its inability to meet a $1 billion margin call on silver. It was only when the August 2008 Bank Participation Report was released and subsequent correspondence from the CFTC that the full facts became known."

"I feel similarly about the big SLV deposit in that we know it is significant, but all the details are missing. At this stage of the game, I feel confident that if and when the full story is known it will parallel and confirm the silver manipulation story to date, just as the real story on Bear Stearns did. The central conclusion of just about everything that comes out in silver is that this has been a manipulated market that is destined to end at some very high final price, no matter what is thrown at it in the interim."

Ted mentioned the August 2008 Bank Participation Report in silver in the above commentary.  Here's Nick Laird's chart of that monthly report in silver going back twelve years.  A cursory glance at the red bars on charts #4 and #5 for August 2008 shows the sudden appearance of Bear Stearns' mega-short position...now on the books of JPMorgan Chase.  Bear Stearns didn't have to report this position to the CFTC on a monthly basis, because it wasn't classified as a bank.  It was, in fact, an investment house.  But that certainly wasn't the case for JPMorgan.  They are a bank...and they had to report.  And they did. [The 'click to enlarge' feature is a must here.]

(Click on image to enlarge)

The other eye-opening development was the sudden appearance of the non-U.S. bank with a monster short position in silver. That showed up in October of 2012...and it's my belief that this non-U.S. bank was none other than Bank of Nova Scotia/Scotia Mocatta.  Note the blue bars in the last four months of data on Chart #4.  I asked them politely on several occasion if they were the new non-U.S. bank that the CFTC mentioned on their website.  They wouldn't say they were...but they didn't deny it, either.

I have a lot of stories again today, so I hope you can at least read the introductions to each one so you get the flavour of the story.

 

¤ Critical Reads

Withdrawn: $114 Billion From Big U.S. Banks

More than $114 billion exited the biggest U.S. banks this month, and nobody’s quite sure why.

The Federal Reserve releases data on the assets and liabilities of commercial banks every Friday. The most current figures, covering the first full week of 2013, show the largest one-week withdrawals since the Sept. 11, 2001, attacks. Even when seasonally adjusted, the level drops to $52.8 billion—still the third-highest amount on record, and one for which bank experts and analysts were reluctant to give a definitive explanation.

The most obvious culprit is the expiration of the Transaction Account Guarantee program, the extraordinary federal effort to shore up the country’s non-gigantic banks during the 2008 financial crisis. Big banks were considered “too big to fail,” while smaller ones were vulnerable to runs. The TAG program backstopped their deposit bases by temporarily offering unlimited insurance on money kept in non-interest-bearing accounts. That guarantee ended on Dec. 31, so a decrease in deposits would be expected first thing in January.

This story appeared on the businessweek.com Internet site yesterday...and our first article of the day is courtesy of Paul Laviers.  The link is here.

Read more...

Financial Crisis Suit Suggests Bad Behavior at Morgan Stanley

On March 16, 2007, Morgan Stanley employees working on one of the toxic assets that helped blow up the world economy discussed what to name it. Among the team members’ suggestions: “Subprime Meltdown,” “Hitman,” “Nuclear Holocaust” and “Mike Tyson’s Punchout,” as well a simple yet direct reference to a bag of excrement.

Then they gave it its real name and sold it to a Chinese bank.

We are never going to have a full understanding of what bad behavior bankers engaged in, in the years leading up to the financial crisis. The Justice Department and the Securities and Exchange Commission have failed to hold big wrongdoers to account.

We are left with what scraps we can get from those private lawsuits lucky enough to get over the high hurdles for document discovery. A case brought in a New York State Supreme Court in Manhattan against Morgan Stanley by a Taiwanese bank, which bought a piece of the same deal the Chinese bank did, has cleared that bar.

The results are explosive. Hundreds of pages of internal Morgan Stanley documents, released publicly last week, shed much new light on what bankers knew at the height of the housing bubble and what they did with that secret knowledge.

This longish article showed up on The New York Times website at noon yesterday...and I thank Phil Barlett for sending it along.  The link is here.

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The Untouchables: How the Obama administration protected Wall Street from prosecutions

PBS' Frontline program on Tuesday night broadcast a new one-hour report on one of the greatest and most shameful failings of the Obama administration: the lack of even a single arrest or prosecution of any senior Wall Street banker for the systemic fraud that precipitated the 2008 financial crisis: a crisis from which millions of people around the world are still suffering. What this program particularly demonstrated was that the Obama justice department, in particular the Chief of its Criminal Division, Lanny Breuer, never even tried to hold the high-level criminals accountable.

What Obama justice officials did instead is exactly what they did in the face of high-level Bush era crimes of torture and warrantless eavesdropping: namely, acted to protect the most powerful factions in the society in the face of overwhelming evidence of serious criminality. Indeed, financial elites were not only vested with immunity for their fraud, but thrived as a result of it, even as ordinary Americans continue to suffer the effects of that crisis.

Worst of all, Obama justice officials both shielded and feted these Wall Street oligarchs (who, just by the way, overwhelmingly supported Obama's 2008 presidential campaign) as they simultaneously prosecuted and imprisoned powerless Americans for far more trivial transgressions. As Harvard law professor Larry Lessig put it two weeks ago when expressing anger over the DOJ's persecution of Aaron Swartz: "we live in a world where the architects of the financial crisis regularly dine at the White House." (Indeed, as "The Untouchables" put it: while no senior Wall Street executives have been prosecuted, "many small mortgage brokers, loan appraisers and even home buyers" have been).

No surprises here in this excellent must read essay posted in The Guardian yesterday.  However, the 1-hour embedded PBS program will take a chunk of your time...and you may want to revisit that part of it later...but I would bet it's worth watching.  I thank U.K. reader Tariq Khan for sharing this with us...and the link is here.

Read more...

Central bankers should be brought to heel by elected parliaments

Intellectual fashion is changing. Central bankers around the world no longer command the charisma of a high priesthood.

Nor should they after stoking a global bubble and then tightening just as the money supply was collapsing in mid-2008.

The onus is falling on them to justify why monetary independence is self-evidently a good thing, and why central bankers should operate beyond democratic control.

The humbling of the Bank of Japan (BoJ) this week is just the start, as Bundesbank chief Jens Weidmann warned. “It is already possible to observe alarming infringements, for example in Hungary or in Japan, where the new government is massively involving itself in the affairs of the central bank, is emphatically demanding an even more aggressive monetary policy and is threatening an end to central bank autonomy,” he said.

Ambrose Evans-Pritchard is on a tear...and this commentary was posted on the telegraph.co.uk Internet site on Tuesday evening.  It's Roy Stephens first offering of the day...and the link is here.

Read more...

Cameron: I'll hold an in-out vote on Europe

The Prime Minister warned yesterday that democratic consent for the EU is currently “wafer thin” and that “it is time for the British people to have their say”.

The pledge to hold a referendum if the Conservatives win the next election was made in Mr Cameron’s long-awaited speech on Europe, which was delivered yesterday morning.

He stressed that, for the sake of “generations to come”, Britain should remain a member of the EU, but that the terms of the relationship should be renegotiated. Mr Cameron is not expected to set out which powers he believes should be repatriated from Brussels.

This article appeared the day before he spoke...and I've changed the above to read in the past tense as the speech was given after this article was written.  It showed up on The Telegraph's website late on Tuesday night...and it's Roy Stephens second offering in a row.  The link is here.

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Nigel Farage Couldn't Stop Laughing During David Cameron's Big EU Speech

Last Friday morning, there had been bacon rolls, an enormous pile of them – Nigel Farage's press officer gestured with his hand to show just how enormous – ready for the journalists who would assemble to watch the Ukip leader watch David Cameron's long-trailed speech on Europe.

The prime minister, preoccupied with the hostage crisis in Algeria, was forced to postpone the speech, but not in time for Ukip to cancel breakfast at the European parliament's HQ in London, where Farage has an office. "It was awful," said the aide. "I had to hand them out around the commission building."

After months of postponements and procrastinations from No. 10 on the timing of the speech, Farage's office weren't about to be burned again. And so there was no hospitable snack for the reporters and camera crews who gathered before daybreak on Wednesday, poised to capture every skeptical twitch of the Ukip leader's eyebrow as he followed the prime minister's speech on TV.

This story first appeared in The Guardian...and then was picked up by the businessinsider.com early yesterday afternoon Eastern time. It's fun to read...and also courtesy of Roy Stephens.  The link is here.

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Minister says EU referendum 'good news for Ireland'

Five years of doubt about the United Kingdom’s membership of the European Union will help Ireland’s fight for foreign investors, the Welsh first minister, Carwyn Jones, has warned.

The EU referendum speech yesterday of British prime minister David Cameron had created “uncertainty for business”, said Mr Jones. He arrives in Dublin today for a speech tomorrow to the British-Irish Chamber of Commerce.

“It is good news for Ireland, because Ireland will be seen as a place to invest in because it is part of the EU and so has the access. That’s right to say,” the first minister told The Irish Times.

However, the UK’s departure from the EU – if that were to happen after a referendum in 2017-18 – would create “unknown problems” for the Republic, given the Border with Northern Ireland.

This news item showed up in The Irish Times just after midnight last night...and I thank Roy Stephens once again for sending it.  The link is here.

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Angela Merkel: we will seek EU compromise with Britain

Mrs. Merkel, the German Chancellor, said she wants to see a deal after David Cameron called for radical EU reforms and promised a public vote on Britain's membership.

"Germany, and I personally, want Britain to be an important part and an active member of the European Union," she said today.

"We are prepared to talk about British wishes but we must always bear in mind that other countries have different wishes and we must find a fair compromise. We will talk intensively with Britain about its individual ideas but that has some time over the months ahead."

Her intervention will be seen as a major victory by Mr Cameron, who has always argued it is possible for Britain to get a "fresh settlement" with Brussels.

This item appeared on the telegraph.co.uk Internet site late yesterday morning GMT and, as usual, it's courtesy of Roy Stephens.  The link is here.

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Oldest Bank In The World Plunges, Halted As Chairman Resigns In Aftermath Of Latest Derivatives Fiasco

Last week, following documentation from Deutsche Bank (and Nomura), it became clear that Italy's Monte Paschi (BMPS) bank (the oldest in the world) has engaged in derivatives with the German and Japanese banks in order to save itself during the financial crisis.

The derivatives, according to Bloomberg, were done off-market and allowed the booking of large upfront gains which covered losses optically that the bank faced as European liquidity dried up completely - the offsetting 'losses' are now coming due.

Today, amid growing outcry over the 'deal', the former head of BMPS has resigned. Bloomberg reports that Giuseppe Mussari, now Italy's top banking lobbyist, was the Chairman of BMPS during the derivative deal period. BMPS shares were halted after plunging dramatically as investors are still unclear of the extent of losses it faces on derivatives.

This rather short Zero Hedge piece from yesterday is well worth the read...and I found it in an e-mail from Bill Holter yesterday.  The link is here.

Read more...

Yahoo, Dell, swell Netherlands’ $13 trillion tax haven

Inside Reindert Dooves’s home, a 17th-century, three-story converted warehouse along the Zaan canal in suburban Amsterdam, a 21st-century Internet giant is avoiding taxes.

The bookkeeper’s home office doubles as the headquarters for a Yahoo! Inc. offshore unit. Through this sun-filled, white-walled room, Yahoo has taken advantage of the law to quietly funnel hundreds of millions of dollars in global profits to island subsidiaries, cutting its worldwide tax bill.

The Yahoo arrangement illustrates that the Netherlands, in the heart of a continent better known for social welfare than corporate welfare, has emerged as one of the most important tax havens for multinational companies. Now, as a deficit-strapped Europe raises retirement ages and taxes on the working class, the Netherlands’ role as a $13 trillion relay station on the global tax-avoiding network is prompting a backlash.

This very interesting story showed up on the Bloomberg website late on Tuesday evening Mountain Time...and I thank Washington state reader S.A. for sharing it with us.  The link is here.

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Tax on financial transactions approved for 11 E.U. states

EU finance ministers on January 22 approved a move by Germany, France and nine other EU nations to introduce a tax on financial transactions to help pay for a bailout of European banks and discourage risky trades.

A group of 11 European Union countries was given the go-ahead Tuesday to work on the introduction of a tax on financial transactions.

The tax is designed to help pay for the rescue of Europe’s banks and discourage risky trading. It would apply to anyone in the 11 countries who makes a bond or share trade or bets on the market using complex financial products called derivatives.

This News Wires story was picked up by the france24.com Internet site yesterday...and I thank Roy Stephens for this story as well.  The link is here.

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Japan Says a 17th-Century Document Proves it Owns the Disputed Islands

The main point of contention over the disputed East China Sea islands consuming a feud between China and Japan is simply who controlled them first.

China claims to have controlled the area where the islands sit since the Ming dynasty about 600 years ago, but Japan unveiled a report calling that claim into question.

The Tokyo 'paper Yomiuri Shimbun cites a 17th century document from a Chinese official sent to a Japanese envoy explaining the dynasty's control ended far short of the Senkaku Islands.

This very short read showed up on the businessinsider.com Internet site mid-afternoon yesterday Eastern Time...and its Roy Stephens' second-last offering in today's column.  The link is here.

Read more...

Doug Casey: LIVE at the 2013 Vancouver Investment Conference

This 12-minute video interview contains Doug's comments on his latest book, the economy...and how to invest.  It's embedded in yesterday's edition of Conversations with Casey...and the link is here.

Read more...

Four King World News Blogs

The first is with Keith Barron...and it's headlined "Massive Squeeze Coming as WGC Confirms Gold-Backed Yuan".  In second place is this interview with Dr. Stephen Leeb.  It's entitled "China May Now Have World's Second Largest Gold Reserves".  Next comes Kevin Wides...and it bears the title "Final Pulse May Be a Stunning $8,000 for Gold & $5,000 Silver".  And lastly comes this blog with an excerpt from the latest Investors' Intelligence report.  It's headlined "Global Stocks May Be Setting Up For a Huge Selloff".

Read more...

Forget Germany, its Turkey's Central-Bank we should be watching

Amid the brouhaha over Germany's gold reserves at the Bundesbank, there's another central bank using gold actively to bolster its currency and financial stability.

The strategy looks the same – sitting on big stockpiles of the stuff. But the aim differs, because gold is much closer to the everyday financial system. The tactics differ too. Because the central bank hasn't bought and paid for this gold. Private citizens have.

"Although much criticised for its use of 'unconventional measures'," the Financial Times added in December, "few would argue that the decision last year by Turkey's central bank to allow the country’s banks to buy gold was anything less than a roaring success."

Buying gold isn't quite right. Starting in October 2011, the central bank began allowing commercial banks to hold a portion of their "required reserves" – needed to reassure depositors and other creditors they had plenty of money to hand – in physical gold bullion. Starting at 10%, that proportion was then raised to 30%.

This must read story by the Bullion Vault's Adrian Ash was posted on the mineweb.com Internet site early this morning...and the link is here.

Read more...

First ton of SOFAZ physical gold placed today in Central Bank’s safety vaults in Baku

The State Oil Fund of Azerbaijan (SOFAZ) has placed today the first ton of physical gold in the safety vaults of the Central Bank in Baku, purchased at the London Stock Exchange of Precious Metals (LBMA) within the SOFAZ investment policy.

According to the Fund, today British company Brink’s Global Services delivered from London to Baku and placed 1 tonne (32,150 ounces) of gold owned by SOFAZ in the CBA vaults.

The Oil Fund has been acquiring physical gold since February 2012 in batches of 10,000 ounces a week. By early 2013 SOFAZ brought its gold assets up to 14,934 kg (480,146 ounces).

Initially London-based warehousing units of JP Morgan were selected for storage, but now all the gold will be gradually transferred to storage in Azerbaijan. Prior to the completion of construction of a new residence of SOFAZ this gold will be stored in the CBA vaults, and then will be transferred to the Fund’s own store in its residence at Heydar Aliyev Avenue in Baku.

This is all there was to this abc.az item from back on January 11th...and the link to the hard copy is here.

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Silver Bars Being Secured By HSBC – Buys $876 Million Worth From Poland

HSBC has quietly moved into acquiring large amounts of silver bullion.

The bank has secured another deal to buy silver bars from KGHM which brings their total purchases of silver from KGHM alone in the last 12 months to $876 million or PLN 3.65 billion.

KGHM is one of the largest producers of silver in the world and is the second-largest producer of refined silver in the world.

They produce silver bars registered under the brand KGHM HG that are attested to by “Good Delivery” certificates issued by the London Bullion Market Association and the Dubai Multi Commodities Centre.

Ted Butler explained to me that HSBC USA was just locking in a supply of silver that is to be delivered over time, not all at once.  Unless you can actually see a copy of the contract, there's no way of knowing the terms or price that the silver is being purchased under...or the time over which the silver has to be delivered.  But, having said all that, it's worth noting as another data point on the silver highway...and it's timing [at least to me] is more than coincidental after the big deposit into SLV a week ago.  This must read Zero Hedge piece from yesterday is courtesy of Ontario reader Richard O'Mara...and the link is here.

Read more...

India And Vietnam Are Trying To Get Their People Off Gold

When uncertainty reigns, investors all over the world turn to gold as a safe haven.

But some countries are starting to take issue with their residents’ preference for storing wealth in gold bars, rather than bank accounts.

Large gold imports can throw off a country’s current account balance – the difference between what a country earns and what it spends on foreign trade.

Widespread investments in physical gold also mean that large pots of wealth sit idle, instead of being put to work in the broader economy.

It's incredible the b.s. that passes for intelligent journalism these days...especially when a story is trying to disparage gold.  This article showed up on the businessinsider.com Internet site yesterday...and I thank Roy Stephens for his final offering in today's column.  The link is here.

Read more...

Jeff Nielson: Thinking silver? Talk to the gold bugs

Jeff Nielson of Bullion Bulls Canada reflects on GATA's presentations at the Vancouver Resource Investment Conference, noting that the organization stresses research and public record rather than "conspiracy theory" and that GATA's research into market manipulation has heavily involved silver as well. Nielson's commentary is headlined "Thinking Silver? Talk to the Gold Bugs".

I borrowed 'all of the above'...including the headline from a GATA release yesterday.  Jeff was kind enough to even mention what I had to say...and included Nick Laird's excellent Days of World Production to Cover Short Positions chart that I was using in my presentation.  My only regret is that I didn't include Nick's Bank Participation Report chart as well.  I'll make amends for that at the conference in June.

It's not a big read...and it's worth a quick look. It was posted over at the bullionbullscanada.com Internet site yesterday...and the link is here.

Read more...

Miners to cut outstanding gold hedges by 20 Tonnes in 2012

Mining companies are expected to cut the outstanding gold hedge book by around 20 tonnes in 2012 after they left their hedges nearly unchanged in the third quarter, precious metals consultancy GFMS said on Wednesday.

Ten companies saw an increase to their hedge positions in the third quarter, while 27 companies saw their hedge positions fall on a delta-adjusted basis, resulting in a slight increase of an insignificant 19,000 ounces, GFMS said.

Most of the cuts came as part of scheduled deliveries or options expiries rather than concerted moves to remove hedge cover, GFMS said.

This Reuters story was posted on the mineweb.com Internet site early this morning in London...and it's a must read.  The link is here.

Read more...

Jay Taylor interviews GATA secretary Chris Powell as Vancouver conference concludes

GATA's secretary/treasurer was interviewed for about 20 minutes on Tuesday at the conclusion of the Vancouver Resource Investment Conference by newsletter writer Jay Taylor on his Internet radio program, Turning Hard Times Into Good Times. Topics included the Bundesbank's attempted repatriation of some of Germany's gold reserves as well as GATA's work generally.

The interview begins at the 15:30 mark at the voiceamerica.com Internet site...and the link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

When the white missionaries came to Africa, they had the Bible...and we had the land.  They said "Let us pray."  We closed our eyes.  When we opened them, we had the Bible...and they had the land. - Desmond Tutu

Even though volume was light yesterday, it was obvious that there were not-for-profit sellers about...especially in the silver market.  Heaven only knows how high the price would have gone if left to its own devices.  The fact that "da boyz" stepped in three times during the Comex trading session should tell you a lot.

I was also less than amused about the performance of the shares, as they stunk up the place once again.  And as I mentioned further up, this counterintuitive price action in the shares is, at times, a precursor to a bear raid in the metal itself.  We'll see if this is the case this time...as the charts in both gold and silver are potentially set up to 'fail' at their respective 50-day moving averages.

One other thing about that big deposit into SLV last week. Ted Butler pointed out that it was made on the morning of January 16th.  The cut-off for the bi-monthly short position report posted over at shortsqueeze.com Internet site is at the end of trading on January 15th.

Ted mentioned in his bi-weekly commentary yesterday that the latest report from shortsqueeze.com will most likely be posted on their Internet site tomorrow...and because that big deposit was carefully made after the cut-off date, it won't be in that report.

It's my opinion that this was a deliberate act...but maybe I'm looking for black bears in dark rooms that aren't there.

If one were of a suspicious nature, you would have to ask yourself what might happen during the next couple of weeks in the silver market that required the precise timing of the monstrous surprise deposit in SLV.  Based on my suspicion, I'd guess that it was made to cover a short position...and that they wanted to hide what they were doing for as long as humanely possible.  As they say, we will find out in the fullness of time.

It was also quite a coincidence that this HSBC USA purchase of Polish silver occurred within a very short time of the SLV deposit.  It may be nothing in the grand scheme of things, but the fact that it wasn't public knowledge until KGHM was forced to report it, is just another data point for consideration.

In overnight action, both gold and silver were sold off a bit in Far East and very early London trading...and then really took a turn for the worse at 10:00 a.m. GMT...as it appears that we may be in the early stages of the engineered price decline that I spoke of earlier.  As I hit the 'send' button at 5:35 a.m. Eastern time, gold is down a bit over ten dollars.  At one point, silver was down over 50 cents...and has recovered only slightly since.  Gold volumes, which had been a little heavier than normal at the London open, have now blow out quite a bit...and there are considerable roll-overs out of the February contract, which hasn't been the case lately...at least not this early in the trading day.  Silver's net volume was already very heavy by the open in London...and is now heavier still...around 11,000 contracts.

I note that this price pressure is confined to gold and silver...because platinum and palladium appear to be trading without much interference.  The dollar index is bouncing around the 80.00 mark pretty good at the moment...but what it means, if anything, is hard to tell.  It could get interesting when Comex trading begins at 8:20 a.m. Eastern time.

That's all for today...and I'll see you here on Friday.