The gold price made it above the $1,700 spot price for a few hours in London, before getting sold off into the London p.m. gold fix shortly after 10:00 a.m. in New York. It took the rest of the New York trading session for gold to make it back to that level...and closed just a bit under it.
Gold closed Thursday at $1,699.50 spot...up $15.20 on the day. Net volume wasn't overly heavy...around 118,000 contracts.
Silver's foray above the $34.00 spot level lasted just about the same length of time in London, but once the p.m. gold fix was in, silver never made it back to that price level for the rest of the day.
Silver closed at $33.88 spot...up 45 cents. Net volume was pretty light...around 35,000 contracts.
The dollar index didn't take long to roll over once trading began in the Far East on their Thursday morning...and the absolute low of the day came minutes after 3:00 p.m. in New York. The index closed at 79.15...down about 55 basis points from Wednesday's close.
Even though the dollar index declined, it would be stretching the imagination to the breaking point if you could make the gold and silver price activity fit the dollar chart. There were obviously other forces at work in the precious metals yesterday.
The low at the London p.m. gold fix shortly after 10:00 a.m. Eastern time is a prominent feature on the HUI chart below...as is the quick sell-off after gold dipped a bit around 3:15 p.m. in New York. The HUI finished Thursday up 1.30% on the day.
The silver shares did OK as well...and Nick Laird's Silver Sentiment Index rose by 1.44%.
(Click on image to enlarge)
The CME's Daily Delivery Report was another yawner, as only 50 gold and 1 silver contract were posted for delivery on Monday.
There were no reported changes in either GLD or SLV.
The U.S. Mint had another small sales report. They sold 1,500 ounces of gold eagles...and 5,000 one-ounce 24K gold buffaloes.
Wednesday was another busy day over at the Comex-approved depositories. They reported receiving 2,939,984 troy ounces of silver...and shipped 336,601 ounces out the door. Virtually every ounce received was unloaded at the Scotia Mocatta warehouse...and the link to all the activity is here.
Here's an S&P 500 chart that Nitin Agrawal sent my way yesterday. A rising wedge on declining volume is almost always a danger signal. This is similar to a graph that reader Scott Pluschau shared with us last week.
It was a very slow news day yesterday...and my list of stories certainly reflects that...but there are quite a few must reads/watch/listens sprinkled throughout...so I hope you make time for those.
For a global economy that is "improving" we sure are getting a whole lot of records in the won't direction in the last two days. Yesterday it was Japan which printed a record current account deficit (yes, the most indebted country in the world was once upon a time supposed to export its way out of debt). Today, we learn that in February the US will report its largest budget deficit in history, as the Keynesian floodgates open full bore.
This zerohedge.com posting contains two excellent graphs...and only one paragraph of text. It will only take a minute of your time...and I thank West Virginia reader Elliot Simon for sending it. The link is here.
Bud is chief economist at Casey Research. He believes the US will opt for inflation (more money-printing) as the only way to deal with its massive and compounding debt.
As well as being chief economist for Casey Research, Bud is also author of the book Profiting from the World's Economic Crisis. He holds a Bachelor of Engineering degree from Yale and an MBA from Harvard. He has held positions with IBM, CDC, Amdahl, and Tandem. Currently, he serves as a local board member of the National Association of Business Economics and teaches graduate courses in investing at Golden Gate University. Bud, a futures investor for 25 years and a full-time investor for a decade, is also a regular lecturer for American Association of Individual Investors. In addition, he produces original analysis for Casey Research, including unique charts and research on the economy and investment markets.
This audio interview with Jim Puplava was done on Wednesday...and it runs a hair under twenty-nine minutes. It's posted over at the financialsense.com website...and it's well worth your time if you have it. The link is here.
Greece's youth unemployment rate hit 51.1pc in December, official statistics from ELSTAT showed on Thursday. In contrast, Germany's youth unemployment rate is just 7.8pc.
The worrying youth jobless figure in Greece has overtaken crisis-hit Spain, which has its own youth jobless rate of 49.9pc, according to the latest available figures.
Overall, the jobless rate in Greece hit 21pc, up from 20.9pc in November and twice the eurozone rate.
The youth unemployment rate is twice as high as three years ago, according to the figures, which are not adjusted for seasonal factors.
This Roy Stephens offering was posted over at The Telegraph yesterday afternoon...and the link is here.
Several readers sent me stories yesterday about the Greek bond situation, but that all got preempted by the following...
At 1:00 a.m. Eastern time this morning, the Greek government said that 85.8pc of bondholders had accepted the bond swap offer, moving the country closer to another much-needed bail-out, and this will rise to 95.7pc with the use of collective action clauses to enforce the deal.
The situation is very fluid at the moment...and I'm posting this blog from The Telegraph less than two hours after the 'deal' was announced. I'm sure we'll hear much more about this as the day rolls on. The link is here.
Europe has ring-fenced Greece's debt crisis for now but its escalating recourse to legal legerdemain has shattered the trust of global bond markets and may ultimately expose Portugal, Spain, and Italy to greater danger.
At the start of the crisis EU leaders declared it unthinkable that any eurozone state should require debt relief, let alone default. Each pledge was breached, and the haircut imposed on banks, insurers, and pension funds ratcheted up to 75pc.
Last month the European Central Bank exercised its droit du seigneur, exempting itself from loses on Greek bonds. The instant effect was to concentrate more loss on other bondholders. "This has set a major precedent," said Marchel Alexandrivich from Jefferies Fixed Income. "It does not matter how often the EU authorities repeat that Greece is a 'one-off' case, nobody in the markets believes them."
The Greek parliament's retroactive law last month to insert collective action clauses (CACs) into its bonds to coerce creditor hold-outs has added a fresh twist. These CAC's are likely to be activated over coming days. Use of retroactive laws to change contracts is anathema in credit markets.
This Ambrose Evans-Pritchard offering was posted in The Telegraph at 9:00 p.m. GMT. It's a must read for sure...and I thank Roy Stephens for his second offering in a row. The link is here.
In the 32 years of his benighted rule, Zimbabwe's President Robert Gabriel Mugabe has done more damage to the country than its white-led minority government ever did.
With the exception of the smuggling of "blood diamonds" the country's economy, once the "breadbasket of Africa," resembles nothing so much as a slow motion train wreck.
One of the foundations of modern nations' economic prosperity are reliable sources of power and here too, Mugabe and his Zimbabwe African National Union cronies have managed to screw things up.
I have a very soft spot in my heart for Zimbabwe...or Rhodesia as it was called when I was there in my youth. If you want to see what happens when a country with a totally corrupted political system tries to solve its financial and economic problems via the printing press...then this rather short essay is a must read.
This piece started off life posted over at the OilPrice.com website...but the copy posted here is from safehaven.com...and I thank Roy Stephens for digging it up on our behalf. The link is here.
Forget the past (Saddam, Osama, Gaddafi) and the present (Assad, Ahmadinejad). A bet can be made over a bottle of Petrus 1989 (the problem is waiting the next six years to collect); for the foreseeable future, Washington's top bogeyman - and also for its rogue North Atlantic Treaty Organization partners and assorted media shills - will be none other than back-to-the-future Russian President Vladimir Putin.
And make no mistake; Vlad the Putinator will relish it. He's back exactly where he wants to be; as Russia's commander-in-chief, in charge of the military, foreign policy and all national security matters.
Anglo-American elites still squirm at the mention of his now legendary Munich 2007 speech, when he blasted the then George W. Bush administration for its obsessively unipolar imperial agenda "through a system which has nothing to do with democracy" and non-stop overstepping of its "national borders in almost all spheres"."
For all students of the new "Great Game" this 5-minute essay is a must read from one end to the other...and should probably be read more than once. As a matter of fact, if I had to pick only one story out of today's column for you to read...this is the one. It was posted over at the Asia Times website earlier today...and is another offering from Roy Stephens. The link is here.
Even though the topic is energy, Chilton manages to bring up the fact that one player controls 30% of the silver market. Of course he doesn't mention JPMorgan by name, but we know who it is. And it's equally obvious, at least to me...having been interviewed many times myself...that Bart helped Lou out by giving him some lead-directing questions just so he could make that point.
This interview was posted over at the foxbusiness.com website late last night...and I thank reader Tom Germain for bringing it to our attention. It runs for just under six minutes...and it's worth watching. The link is here.
Fund manager Egon von Greyerz told King World News yesterday that the perpetually imminent bailout for Greece will collapse eventually and require trillions more in euro money printing to insulate banks against all un-payable European debt. He expects hyperinflation as a result and in any case thinks the "correction" in gold and silver is over.
I thank Chris Powell for providing the headline and the introduction. The link to the KWN blog is here.
King World News has posted a wonderful interview with gold trader and mining entrepreneur Jim Sinclair, who says central banks are restraining the gold price so it won't expose "quantitative easing" quite so much. Sinclair adds that the increasing number of mechanisms being established for bypassing the U.S. dollar in trade settlement foreshadow the dollar's decline.
Once again I thank Chris Powell for providing the headline and the preamble...and the link to this KWN blog is here.
It's the most valuable treasure we Germans have: 3,401 tonnes of pure gold -- about 1,800 euros for each of us. Absolutely disaster-proof, divided between high-security vaults in Frankfurt, Paris, London, and New York. And the German Federal Bank (Bundesbank) isn't looking after it!
The incredible gold scandal! On the 19th of November 2011, BILD magazine reported that the German Federal Bank last looked at our gold reserves in New York in 2007, and has thereby even alarmed the Federal Audit Office. (Inquiries are ongoing.)
A clear breach of the law, leading accountancy lawyer Prof. Jorg Baetge told BILD. "A tally of the ingots has to be made at least every three years." The Federal Bank hasn't done that.
This English translation of this story showed up in a GATA release last night...and it also contains the link to the original German language story as well. The link to both is here...and it's a must read for sure.
One of my regular readers is a gentleman by the name of Tolling Jennings. He lives on a small island on the west coast of Canada that's not only off grid...but has no road access or car ferry. I found out yesterday that he operates a very small mint [with the emphasis on the word 'very'] from that location.
He told me that he sent a short letter to the judge in the Von NotHaus case...and I thought it well worth reading. It's posted over at The Lasqueti Mint website...and the link is here. If you scroll further down, you'll see examples of the products they mint...and I consider them to be almost works of art. The low mintage numbers are shocking.
Prophecy Coal Corp (TSX-V: PCY) is a Mongolian thermal coal producer with over 1.4 billion tonnes of surface minable thermal coal resources. Prophecy’s primary coal assets are the Ulaan Ovoo coal mine and the Chandgana coal property. Ulaan Ovoo has 209 million tonnes of resources and is operational (only the second mine in Mongolia to be commissioned by a Canadian company). The Chandgana coal property has 1.2 billion tonnes of resources and will feed the Chandgana 600 MW mine-mouth power plant, which Prophecy is developing. Prophecy also owns significant equity interests in Canadian nickel and PGM assets through a 45% interest in Prophecy Platinum Corp (TSX-V: NKL) and a 9.8% interest in Victory Nickel Inc (TSX-VI) and an 8% equity interest in a Canadian metallurgical coal exploration company, Compliance Energy Corporation (TSX-V-CEC). Overall, Prophecy’s Mongolian coal assets are strategically located to being a key supplier in meeting Asia’s growing energy needs. Please click here to learn more about Prophecy Coal.
The Fed is a patsy. It is a pathetic dependent of the big Wall Street banks, traders, and hedge funds. Everything it does is designed to keep this rickety structure from unwinding. - David Stockman, former budget director, Reagan Administration
Gold and silver weren't allowed to do much on Thursday. Their respective attempts to break through $1,700 and $34 were turned back shortly after London opened...and that was pretty much it for the day. There wasn't a lot of volume associated with both rallies, so 'da boyz' didn't have a hard time capping the prices.
There's not much else to report on...but one thing of note is the fact that gold broke through its 200-day moving average to the upside yesterday...but it still remains to be seen how far this rally will allowed to get...as it could 'fail' here. Silver is still well under it's 200-day m.a.
I was hoping that the CFTC would post the Bank Participation Report early, as they sometimes do, but they didn't this month...so I'll have to discuss it tomorrow. It's also Commitment of Traders day today as well...and I'll be awaiting the CFTC data at 3:30 p.m. Eastern time, sharp.
In overnight trading, the smallish rallies in both metals that began when the TOCOM opened in Japan got capped two hours later as they again tried to break above the $1,700 and $34 spot price levels. As of 5:18 a.m. Eastern time, silver is safely under that price for the moment...and gold is hanging on to the $1,700 price level by its fingernails. Volume in both metals, which was very light before London opened, is now getting up there...and the dollar index has rallied about 25 basis points.
With not much happening in the precious metals arena at the moment, it's impossible to tell how trading action will develop in New York today. But since it's Friday, I'll be ready for anything.
Enjoy your weekend...and I'll see you here on Saturday.