The gold price didn't do a whole heck of a lot during Monday trading anywhere. The only price movement of any note occurred was that $8 spike to its high of the day at $1,428.70 spot in electronic trading in New York shortly before 4:00 p.m. Eastern time yesterday afternoon. Gold close up about $10 on the day.
The silver price ran up a decent amount during Far East trading, but ran into some selling pressure around 3:00 p.m. Hong Kong time... about an hour before London opened for their trading day at 8:00 a.m. GMT. From there, silver slid lower... and didn't show any signs of life until the London silver fix at noon local time [7:00 a.m. in New York]. Then, it fits and starts, the price worked its way slowly higher...hitting it's high price of the day at 4:00 p.m. Eastern time... before selling off a hair into the close. This is the first silver price close over $30 in more than 30 years.
Although the world's reserve currency rose about 80 basis points from its Monday open in the Far East... right up until its high at 8:30 a.m. in New York... this had no impact on precious metals prices whatsoever. And, by the close of trading at 5:15 p.m. Eastern time, the dollar had given back half of those gains. Nothing to see here.
Except for the little sag in gold stock prices between 11:45 a.m. and 12:30 p.m. Eastern... when the gold price had a little dip... it was another good day for the gold stocks. The HUI finished up 1.62%.
But, with all due respect to the gold stocks, the silver stocks went ballistic almost across the board. I looked at my own portfolio with my mouth wide open. I just can't imagine what I'm going to be thinking when silver blasts through $60, $100... and then to the moon and the stars.
I sold half my position in a small Canadian gold producer yesterday... and bought positions in two different silver stocks with the proceeds. I'm closer to 65/35% silver/gold now.
Monday's CME Delivery Report showed that 113 gold and 78 silver contracts were posted for delivery tomorrow. A back-of-the-envelope calculation indicates that there are still about 3,000 gold contracts and around 650 silver contracts still to be delivered in December. And, if silver shortages develop as the month wears on, it's entirely possible that there could be more requests for delivery posted. This would most likely be followed with almost immediate draw-downs of the physical inventory from the Comex-approved depositories. The link to yesterday's action is here.
The GLD ETF had no report yesterday... but there was another big chunk of silver deposited in the SLV ETF. This time it was 1,221,892 troy ounces.
Over at Switzerland's Zürcher Kantonalbank last week, they reported adding 24,134 ounces of gold to that ETF... but a withdrawal of 471,394 ounces of silver during the same period. One has to wonder if physical shortages aren't developing in Europe as well. As usual, I thank Carl Loeb for these numbers.
The U.S. Mint had a sales report on Monday. Another 2,500 ounces of gold eagles were sold... along with another 375,000 silver eagles. Month-to-date... there have been 4,500 ounces of gold eagles... and 417,000 silver eagles sold.
The Comex-approved depositories on Friday showed that a smallish 22,567 ounces of silver were withdrawn. All of the activity was with the Bank of Nova Scotia... although there were some adjustments in other warehouses. The link to that action is here.
Before moving on, I'd like to point out an error I made in my analysis of the Commitment of Traders report in Saturday's column. I had said that the bullion banks had decreased their net short position in gold by 6,576 contracts. The fact is that they increased their short position by that amount. All the other COT gold facts I provided, were correct.
With the weekend and all, I have a lot of stories today. Bernanke's interview on 60 Minutes didn't hold any surprises... Part I and Part II. Ben looked [and sounded] nervous. I suppose we'd all be somewhat nervous if we had to lie our faces off on national television. Anyway, he confirmed that deflation is a danger... and he will run the printing presses until it goes away. Here's a "US M3 - in $Billions" graph to show you what he's up against. I thank Nick Laird over at sharelynx.com for the graph.
With Bernanke talking about deflation... he's obviously not talking about commodity prices that affect the consumer out in the real world. Here's a graph from Casey Research that's headlined "The Real Cost of Living". Note the government CPI index in the last column. I thank reader 'David in California' for sharing it with us.
My first story today is about inflation. It appeared in Friday's edition of the Financial Times and is headlined "UK Ram Raiders Flock to Rustle Sheep". Criminal gangs targeted manhole covers and copper wiring when rocketing Chinese demand rendered them valuable commodities. Now they have a new target: sheep. The link to the story... posted in the clear in this GATA release... is here.
While I'm over in England... here's a story from Saturday's edition of The Telegraph that's headlined "JP Morgan Revealed as Mystery Trader that Bought £1 billion Worth of Copper on LME". When I ran this copper story in my Saturday column, the identity of the 'mystery buyer' wasn't known. Now it is... and the link is here.
Today's next item is a zerohedge.com piece that's also courtesy of 'David in California'. It appears that one way or another, the IMF will provide a lot more American money to the European rescue. Reuters and Bloomberg both report that, according to the IMF, the euro zone should have a bigger rescue fund... and the European Central Bank should boost its bond buying to prevent the sovereign debt crisis from derailing economic recovery. The longish headline reads "IMF Tells Eurozone To Buy More, More, More Bonds And That It Needs A Bigger Boat, Er, Rescue Fund; Belgium Wants A Bigger Pie Too". The link to the story is here.
I have two more stories about Europe's trials and tribulations... and both are worth your time. Both are from reader Roy Stephens... and the first is posted over at the German website spiegel.de... and is headlined "Row Over ECB Handling of Euro Crisis: The Lonely Fight of Monetary Dogmatist Axel Weber". The head of the German central bank, Axel Weber, is openly critical of the way the European Central Bank has handled the euro's debt woes. He is fighting to uphold purist monetary principles that are untenable in the current crisis. His chances of succeeding Jean-Claude Trichet as ECB chief are waning as a result. If you have the time, this is worth the read... and the link is here.
The last story on the disaster unfolding for the euro and the European Union is this UPI story that was filed from Washington yesterday. It's headlined "Walker's World: The euro's endgame". The first paragraph reads "It doesn't take a seer to predict the next agonizing crisis for the eurozone. It simply requires a calendar." This is another story that's worth your time... and the link is here.
And my last non-precious metals-related story is this piece posted over at businessinsider.com that was sent to me by 'David in California'. The whole world is abuzz with what's going on over at Wikileaks... and here's the latest story on that. The headline readsJulian Assange Now Threatening To Drop A 'Poison' WikiLeaks Bomb If He's 'Killed Or Arrested'. The link to the story is here.
On Saturday night, GATA issued a release that stated the following: "Gold and silver are in unprecedented backwardation, Free Gold Money Report editor and GATA consultant James Turk reports tonight. That is, prices for immediate delivery are higher than prices for future delivery, indicating strong physical demand and concern about counterparty risk. Turk's commentary is headlined "The Scramble for Physical Metal Intensifies"... and you can find it linked here.
About ten days after Vietnam announced that they were going to import more gold before the end of the year in order to stabilize internal gold prices... this story appeared in the Thanh Nien Daily. The headline reads "Vietnam urges ‘strong measures’ to stabilize forex, gold". It appears that the dong is in the toilet again. I found this short story posted over at Kitco... and the link is here.
Here's a Richard Russell blog that's posted over at King World News. The headline reads "Fight Against Deflation Will Kill the Dollar". As per usual, Richard is telling everyone who will listen to sell everything and buy gold. The link to this short read is here.
The silver market manipulation and squeeze story is spreading as the metal hits $30 yesterday. Publicity about that comes from Benzinga.com and its staff writer, Scott Rubin, whose commentary, "J.P. Morgan Getting Squeezed In Silver Market?" can be found posted at the San Francisco Chronicle... and the link to that item is here.
Next is a story posted over at marketwatch.com yesterday. It's a Peter Brimelow offering that's headlined "Is gold in a perfect (bullish) storm?" It was a good week for gold... especially because China finally seemed to be chiming in. It's not a long read... and the link is here.
Here's a GATA release from yesterday afternoon that bears the headline "New law lets Treasury diminish gold, silver coin production". The story says that the "current law requires the Treasury department to mint gold and silver coins "in quantities sufficient to meet public demand."... but the new law would require the department to mint gold and silver coins "in quantities and qualities that the secretary determines are sufficient to meet public demand." It's soon to be a whole new ball game out there, dear reader... so buy as many gold and silver eagles as you can, because you can bet your last nickel that the day will come [soon] when they just won't be available in "quantities sufficient to meet demand". The link to the story is here.
The video linked here contains some really, really bad 'X' rated language... so, if you don't want to be offended, or you don't want anyone else to hear... then don't listen to it, or listen to it with the volume turned way down. The title of this GATA release [that has the youtube.com video imbedded in it] is headlined "At YouTube, the 'Downfall' of gold and silver price suppression"... and I'll let Chris Powell do the introductions... and the link to Powell's preamble... and the video itself... is here. And don't say you weren't warned! But having said that... it's a hoot!
Lastly today, is your only must listen interview today. I featured it in the headline to today's column. I'm not going to bother stealing Chris Powell's intro... I'm just going to post the whole thing. Not only is the video a must listen... Powell's preamble is a must read as well. The headline is a shocker... "Get your gold out of the banking system, Rickards tells King World News". This is "Part 2" of the interview that I posted in this column on Saturday. The link to "Part 2" is here...and the link to "Part 1" on the interview page.
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Gold volume on Monday was nothing special... but very chunky in silver, around 80,000 contracts net of all roll-overs. That's a lot.
Friday's big up day showed an increase in the open interest in both gold and silver... but nothing alarming. This o.i. data, plus Monday's... and today's... will be in Friday's Commitment of Traders report.
Neither gold nor silver did much in Far East trading earlier today... but the moment that London opened at 8:00 a.m. GMT... 3:00 a.m. Eastern, silver spiked higher. Volume in gold is light... and pretty chunky in silver... as of 4:39 a.m. Eastern time. The metal is obviously 'in play'.
As I've been mentioning lately, the silver price [and especially the silver equities] are starting to leave their golden brethren far behind. At $60 silver, one can only imagine what some of these silver stocks are going to be bid up to. As our grand poobah [Doug Casey] is wont to say from time to time... when this bull market really takes the bit between its teeth, it will be like trying to get the entire contents of Hoover Dam through a garden hose. We're starting to get a sniff of that now.
But, we ain't seen nothin' yet... so hang on tight. It will be the ride of your life before this is all over... and one for the history books.
See you on Wednesday.