Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

All four precious metal, which includes gold of course, got sold down the moment that trading began in New York on Sunday evening.  The low for gold came shortly before 11 a.m. Hong Kong time---and from there it rallied for a couple of hours before getting sold back down below $1,305 spot---and that pretty much where it traded for the remainder of the Monday session.

The high and low ticks, such as they were, were recorded as $1,301.10 and $1,309.40 in the August contract.

Gold finished the trading day at $1,303.50 spot, down $4.80 from Friday's close.  Apparently it was options expiry yesterday, so roll-over volume was pretty huge, but it netted out to only 64,000 contracts, which is basically no volume at all.

It was more or less the same chart pattern in silver, as it's low as also just before 11 a.m. in Hong Kong trading as well---and after that it recovered a bit---and then traded a dime either side of the $20.60 spot price mark for the rest of Monday.

The high and low ticks are barely worth mentioning---$20.775 and 20.55 in the September contract.

Silver finished the Monday trading session at $20.565 spot, down 18 cents from Friday.  Volume, net of July and August, was around 35,500 contracts, with about 3,900 contracts of that amount in the December 2014 and March 2015 delivery months, which may [or may not] have been roll-overs out of September.

Platinum traded flat until noon in Hong Kong---and then rallied eight bucks before trading flat until the Zurich open.  From there the price crept higher until its spike high just before noon in New York---and from that point it traded flat into the close.  The metal finished up ten bucks.

It was much the same for palladium, except the noon rally in Hong Kong had some decent legs---and that lasted until noon in Zurich---and from there it got sold down to basically unchanged, up on a buck on the day.

The dollar closed on Friday afternoon in New York at 81.04---and then didn't do a whole lot during the entire Monday trading session, closing at 81.00 on the nose, down 4 basis points.  Nothing to see here.

The gold stocks flopped around either side of unchanged until just before 1:30 p.m. EST---and then a rally ensued that took them back into positive territory to stay, as the HUI closed up 0.63%---and on its high of the day.

It was slightly different for the silver equities, as they hit their lows shortly before 10:30 a.m. EDT---and then they also climbed slowly into positive territory, as Nick Laird's Intraday Silver Sentiment Index closed up 0.18%.

The CME Daily Delivery Report showed that 50 gold and 35 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  Goldman Sachs stopped all 50 gold contracts---and JPMorgan stopped 34 silver contracts in its client account.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday---and as of 6:30 p.m. EDT yesterday evening, there were no reported changes in SLV either.

There was a small sales report from the U.S. Mint yesterday.  They sold 1,500 troy ounces of gold eagles---and 25,000 silver eagles.

There was decent movement in gold over at the Comex-approved depositories on Friday.  96,450 troy ounces were reported received---but only 403 troy ounces were shipped out.  All the gold went into the Manfra, Tordella & Brookes, Inc. depository, the second big shipment they've received in a week.  This is the most activity I've seen in this depository in years.  The link to that activity is here.

And, as is usually the case, there was much more activity in silver, as 39,115 troy ounces were reported received---and 642,278 troy ounces were shipped out the door.  Almost all the activity was at the CNT Depository.  The link to that action is here.

Not surprisingly, I have a lot of stories today---and I hope you have the time to wade through the ones you like.

 

¤ Critical Reads

Pending Home Sales Tumble From Recovery Highs, Biggest Miss in 2014

Following last week's collapse in new home sales (and last month's massive beat and surge in pending home sales), it was likely not a total surprise that pending home sales would slow, but the -1.1% MoM print is the worst in 2014 (and the biggest miss in 2014). The median existing home price continues to rise (up 4.3% year-over-year) but this is the slowest rate of gain since March 2012. NAR is quick with the excuses and this time.. no weather is to blame.

Lawrence Yun, NAR chief economist, says the housing market is stabilizing, but ongoing challenges are impeding full sales potential. “Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved,” he said. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.”

Yun forecasts existing-homes sales to be down 2.8 percent this year to 4.95 million, compared to 5.1 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and in 2015.

This worthwhile read, which includes a couple of excellent charts, was posted on the Zero Hedge website site at 10:06 a.m. EDT Monday morning---and I thank reader M.A. for today's first story.

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Sluggish New Housing Sales Threaten Economy

New home sales plunged 8.1 percent in June, putting the decline at 4.9 percent for the first half of the year, and that's not good news for the economy.

"Housing has clearly been a notable area of persistent sluggishness beyond early-year weather disruptions," Ted Wieseman, an economist at Morgan Stanley, told The Wall Street Journal.

The economy contracted 2.9 percent in the first quarter, though many analysts expect it to grow nearly 3 percent for the rest of the year.

Home sales have suffered from buyers' lingering fear after last decade's housing bust, the sharp rise of home prices last year and the surge of student-loan debt, John Burns, CEO of John Burns Real Estate Consulting, told The Journal.

I believe I posted a story about this on Friday or Saturday, but this moneynews.com story from Sunday courtesy of West Virginia reader Elliot Simon, sort of fit here, so you can read about now if you missed it last week.

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The Typical Household, Now Worth a Third Less

Economic inequality in the United States has been receiving a lot of attention. But it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.

The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 95 percent of the population had less wealth.) It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years. Other research, by economists like Edward Wolff at New York University, has shown even greater gains in wealth for the richest 1 percent of households.

This article appeared on The New York Times website on Saturday sometime---and it's the second contribution in a row from Elliot Simon.

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This stock bubble is ‘beyond 1929 and 2007,’ says John Hussman

John Hussman can generally be counted on for a bearish take on the stock market. But his latest weekly commentary letter is a doozy, with some particularly pointed remarks aimed at investors who continue to believe valuations are fair in stocks.

The economist runs Hussman Funds, and since the financial crisis he’s been a prominent critic of Federal Reserve policy. His investment choices are concentrated in “defensive” positions in stocks and U.S. Treasurys. And if you take a look at his writing, it’s no secret why. Here’s the money quote from the latest commentary:

Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme. The main difference between the current episode and that of 2000 is that the 2000 bubble was strikingly obvious in technology, whereas the present one is diffused across all sectors in a way that makes valuations for most stocks actually worse than in 2000.

This news item showed up on the marketwatch.com Internet site at 3:58 p.m. EDT on Sunday afternoon---and it's the first offering of the day from Roy Stephens.

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Marc Faber predicts 20% to 30% drop in stocks

Permabear Marc Faber said Monday he expects stocks to drop 20 percent 30 percent by October.

"Don't forget many stocks are already down 10 percent. The home builders are down roughly 15 percent. Airlines have just dropped around 10 percent," he said on CNBC's "Halftime Report."

Faber, publisher of the "Gloom, Boom & Doom Report," also noted that several large-cap stocks were down by double-digit percentages.

"So, we're not exactly in a uniformly strong market," he said. "The Russell 2000, which represents 2,000 companies, is down 2 percent for the year. And big deal, the S&P is up 6 percent, whereas the Philippines, Indonesia, India, Thailand, Vietnam are all up between 15 percent and 25 percent."

This 2:55 minute CNBC video clip showed up on their website around 11 a.m. EDT on Monday---and I thank reader Ken Hurt for sending it our way.

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Banks Cash in on Mergers Intended to Elude Taxes

Jamie Dimon, the chief executive of JPMorgan Chase, recently said, “I love America.” Lloyd Blankfein, the chief executive of Goldman Sachs, wrote an opinion article saying, “Investing in America still produces the best return.”

Yet guess who’s behind the recent spate of merger deals in which major United States corporations have renounced their citizenship in search of a lower tax bill? Wall Street banks, led by JPMorgan Chase and Goldman Sachs.

Investment banks are estimated to have collected, or will soon collect, nearly $1 billion in fees over the last three years advising and persuading American companies to move the address of their headquarters abroad (without actually moving). With seven- and eight-figure fees up for grabs, Wall Street bankers — and lawyers, consultants and accountants — have been promoting such deals, known as inversions, to some of the biggest companies in the country, including the American drug giant Pfizer.

This article appeared on The New York Times website at 9:02 p.m. EDT last night---and I thank Phil Barlett for sharing it with us.

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Moody's cuts bank outlook to 'negative' on Ottawa's bail-in rule

Investor ratings service Moody’s has changed its outlook for Canada’s biggest banks to negative from stable, citing concerns over the Canadian government’s plan to implement a “bail-in” system in the event of a bank failure.

The “bail-in” rule, included as part of the 2013 omnibus budget bill, asserts that the federal government would not necessarily bail out a bank on the brink of failure with taxpayer money.

Instead bank bondholders would be expected to assume the risk, though there is no guarantee that deposit-holders would not be hurt if they had more money in the bank than the $100,000 guaranteed by CDIC.

Canada has yet to set parameters for how a bail-in might work. Mark Carney, who was Bank of Canada governor at the time, said last April it was 'hard to fathom' a scenario where Canadians' deposits would be touched, as happened in the Cyprus bank failure.

This news item appeared on the cbc.ca Internet site way back on July 8, but for all Canadian citizens, it's still worth reading.  I thank reader Dave Malek for bringing it to our attention.

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U.S. Pollack confirms meeting with Argentine delegation tomorrow, without holdouts

Argentina will send a negotiation team to New York today for further talks with a US court-appointed mediator Daniel Pollack in its debt dispute with "holdout" investors, Cabinet Chief Jorge Capitanich said earlier, with just three days left to avert a default. In a statement released today, Pollack confirmed he will be receiving the Argentine delegation at his office tomorrow at 12 pm (Argentina time) and he "urged direct, face-to-face conversations with the Bondholders, but that will not happen tomorrow."

Argentina has until Wednesday to either pay the New York hedge funds suing for full repayment on their bonds or reach a deal.

Otherwise, barring a suspension of the court-ordered July 30 deadline, Argentina will default for the second time in 12 years.

Here's an update on Argentina's bond situation.  This article was posted on the Buenos Aires Herald website yesterday sometime---and I thank reader M.A. for sending it our way.

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U.K.'s Lloyds Bank fined total of $370 million for rigging Libor

That will teach them!

Having received full credit for for co-operation and suspending some individuals, Lloyds Bank has been fined by the CFTC the staggeringly wrist-slap-like sum of $105 million for the "manipulation, attempted manipulation, and false reporting of Libor."

Total fines will amount to around $370 million across all UK and US regulators and all Lloyds divisions.

As the WSJ reports, the British bank becomes the seventh financial institution to strike a deal with U.S. and U.K. authorities who are conducting a long running probe into allegations of widespread attempts to manipulate Libor. With no less than the head of the Bank of England calling the bank's actions (manipulating JPY Libor for at least 2 years) "reprehensible," and the CFTC adds individuals behavior was a "gross breach of trust." Well we are sure after this they will never manipulate another market ever again.

Another licensing fee---and nobody is going to jail.  This Zero Hedge news item appeared on their website at 9:04 a.m. EDT on Monday morning---and I stole the headline from a GATA release, but the story itself is courtesy of reader M.A.  There's also a Reuters story about this linked here.

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The pound is overvalued, warns the IMF

The IMF has warned that the pound is overvalued by 5pc-10p, in an update of its wide-ranging annual assessment of Britain's economy.

After depreciating by 23pc between 2007 and 2009, the real exchange rate has gradually appreciated, and this trend accelerated from the middle of 2013, the fund said, as it praised the Bank of England for keeping interest rates low and welcomed signs that Britain's surprisingly strong economic recovery is broadening.

A high pound could affect the rebalancing of the economy, according to the staff report. A strong currency depresses domestic demand and encourages spending on imports.

"Further demand rebalancing is needed: net trade has made only a modest contribution to the recovery, and the real exchange rate is moderately overvalued," the report said on Monday.

This news item was posted on The Telegraph's website at 4:58 p.m. BST on their Monday afternoon---and I thank South African reader B.V. for sharing it with us.

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Keep U.K. interest rate low for now, IMF tells Bank of England

The International Monetary Fund has said U.K. interest rates should stay low for now, but the Bank of England policymakers must be ready to raise them should other measures fail to keep the housing market in check.

The IMF said that so-called macro-prudential measures should be the "first line of defence" against financial stability risks from the housing market. But ultimately more must be done to raise the supply of housing to meet demand, it said, echoing warnings from economists and the Bank of England's governor, Mark Carney.

The Washington-based IMF also warned of a check to George Osborne's ambitions to rebalance the economy towards manufacturing, as it warned that sterling was "moderately overvalued", while net trade has not been a strong factor in the economic recovery.

This article appeared on theguardian.com Internet site at 5:50 p.m. BST yesterday---and in some respects is similar to the story from The Telegraph that precedes it.  This is the second offering of the day from Roy Stephens.

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Russia Says West Taking No Action to Settle Ukraine Conflict

Russian Foreign Minister Sergei Lavrov reproached western countries Monday for their lack of political proposals to resolve the crisis in Ukraine, saying they are merely making demands of Russia and threatening sanctions.

“I have neither seen nor heard of any political initiatives from our western colleagues,” Lavrov told journalists.

“There were the Berlin agreements, now there are the agreements promoted within the OSCE. I want to ask our Western colleagues what their contribution to a political resolution is,” Lavrov said, criticizing the leaders for refusing to support the agreements made in the UN Security Council and the Organization for Security and Co-operation in Europe.

Lavrov said Russia’s western partners only say that Moscow needs to change its policy toward Ukraine.

This RIA Novosti news item, filed from Moscow, appeared on their website at 2:15 p.m. Moscow time on Monday, which is 6:15 a.m. EDT.  It's another offering from Roy Stephens.

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'Fake': Russian Defence Ministry rebuffs U.S. satellite image claims

Russia’s Defense Ministry has stated that “fake” satellite images of alleged shelling of Ukraine from Russian territory were created by U.S. counselors “with close links to Ukraine’s Security Council.”

The authenticity of the images is impossible to prove, the ministry added.

The Defense Ministry stated that the images posted by the U.S. ambassador Geoffrey Pyatt on his Twitter account, allegedly proving the shelling of Ukraine from Russian territory, are “fake,” ITAR-TASS reports.

“These materials were posted to Twitter not by accident, as their authenticity is impossible to prove – due to the absence of the attribution to the exact area, and an extremely low resolution. Let alone using them as ‘photographic evidence’,” Igor Konashenkov, the official representative of the ministry, stated.

This Russia Today story appeared on their website at 11:29 a.m. Moscow time yesterday morning---and it's also courtesy of Roy Stephens.

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‘Refusing to kill their own’: Over 40 Ukrainian soldiers flee to Russia

More than 40 Ukrainian soldiers have abandoned their military posts and crossed into Russian territory, stating that they refuse to fight against their own people, a Russian Federal Security Service spokesperson said.

At least 41 Ukrainian soldiers have made it to Russian territory after asking self-defense forces for help, the spokesperson from the Federal Security Service’s Rostov region border patrol unit, Vasily Malaev, told Itar-Tass.

"At around 20:30 Moscow time, 41 Ukrainian soldiers left their military bases and arrived at the Ukrainian border crossing checkpoint Izvarino. They appealed to the militia there for help to with cross into the Russian territory, in connection with the fact that they do not want to fight against their own people,” Malaev said.

All of the soldiers were able to cross into Russia at the Donetsk checkpoint, the spokesperson added.

This story appeared on the Russia Today Internet site at 2:00 a.m. Moscow time on their Sunday morning, which was 6 p.m. in New York on Saturday evening.  I thank Roy Stephens for sending it.

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Canadian Prime Minister Stephen Harper pens editorial about Russia for Globe and Mail

Prime Minister Stephen Harper says the western world can’t soften its tough stand toward Russia over the crisis in Ukraine, even at the expense of the economy.

In an unusual move, Harper has written an editorial on the situation in Ukraine that was published in Saturday’s Globe and Mail.

He writes that although militants in eastern Ukraine are referred to as ‘pro-Russian separatists,’ there is no doubt they are “an extension of the “Russian state.”

Harper accuses Russia of “aggressive militarism” that he says is a threat to not only Ukraine, but Europe and the values that bind Western nations.

As a Canadian, I'm totally embarrassed---and this shows you just how much this government has sold itself out to the Americans.  Harper can lie his ass off just as well as the rest of the leaders in the West.  This short CP article, filed from Toronto, was posted on the vancouversun.com Internet site on Saturday---and it's also courtesy of Roy Stephens.

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Court orders Russia to pay $50 billion for seizing Yukos assets

An international arbitration court ruled on Monday that Russia must pay $50 billion for expropriating the assets of Yukos, the former oil giant whose ex-owner Mikhail Khodorkovsky fell foul of the Kremlin.

Finding that Russian authorities had subjected Yukos to politically-motivated attacks, the panel made an award to a group of former Yukos shareholders that equates to more than half the entire fund Moscow has set aside to cover budget holes.

Russia, whose economy is on the brink of recession, said it would appeal the ruling by the Dutch-based panel, which judges private business disputes. It also said the "politically biased decision" was based on "current events" - an apparent reference to Moscow's dispute with the West over Ukraine.

Independent lawyers said it would be difficult to enforce the award to shareholders in the GML group, who had claimed $114 billion to recover money they lost when the Kremlin seized Yukos a decade ago.

This Reuters article, co-filed from Moscow, London and Amsterdam showed up on their Internet site at 4:38 p.m. EDT on Monday evening---and I thank Elliot Simon for bringing it to our attention.

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U.S. Says Russia Tested Cruise Missile in Violation of Treaty

The United States has concluded that Russia violated a landmark arms control treaty by testing a prohibited ground-launched cruise missile, according to senior American officials, a finding that was conveyed by President Obama to Russian President Vladimir V. Putin in a letter on Monday.

It is the most serious allegation of an arms control treaty violation that the Obama administration has leveled against Russia and adds another dispute to a relationship already burdened by tensions over the Kremlin’s support for separatists in Ukraine and its decision to grant asylum to Edward J. Snowden, the former National Security Agency contractor.

At the heart of the issue is the 1987 treaty that bans medium-range missiles, which are defined as ground-launched ballistic or cruise missiles capable of flying 300 to 3,400 miles. That accord, which was signed by President Ronald Reagan and Mikhail S. Gorbachev, who was then the Soviet leader, helped seal the end of the Cold War and has been regarded as a cornerstone of American and Russian arms control efforts. Obama administration officials concluded by the end of 2011 that the cruise missile test was a compliance concern, officials have said. Rose Gottemoeller, the State Department’s senior arms control official, first raised the violation concern with Russian officials in May 2013.

Surely they jest?  Someone's hands must have been shaking when they posted this piece of garbage on The New York Times website on Monday.  If this isn't a perfect example of the pot calling the kettle black, I don't know what is.  It's also courtesy of Roy Stephens.

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Bulgaria's Prime Minister resigns as banking crisis unfolds

The Prime Minister of Bulgaria Plamen Oresharski has resigned his post. His decision came after accusations by opponents of failing to cope with the worst banking crisis in 17 years.

The decision was supported by 180 lawmakers in the parliament, only 8 voted against, and 8 abstained, reports Bloomberg.

The Oresharski government lasted for only 16 months of the 4 years it was elected for. New elections on October 5 will see the country’s fifth prime minister since Bulgaria joined the European Union in 2007.

“My cabinet worked in unprecedented conditions of hostility…Despite that we achieved good results. All business indicators improved in the year we ruled,” Reuters quotes Oresharski’s speech just before the vote.

This story put in an appearance on the Russia Today website at 3:06 p.m. last Friday afternoon Moscow time---and I thank Harry Grant for sending it.

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Facing Escalating Violence, U.S. Evacuates Staff From Its Embassy in Libya

The United States closed its embassy in Libya on Saturday and evacuated the embassy’s staff under military guard, in what the State Department said was a response to escalating violence in the Libyan capital, Tripoli.

Officials called the evacuation “temporary” and said they were looking for ways to reopen the embassy, even as the State Department issued a new travel warning on Saturday, advising United States citizens to leave Libya “immediately.”

Weeks of heavy fighting between rival Libyan militias for control of Tripoli’s international airport had in recent days edged closer to the heavily fortified embassy, which is on the main road to the airport. The clashes have all but destroyed the airport, severely limiting air travel to Libya.

This article appeared on The New York Times website on Saturday sometime---and I think it's worth reading.  Once again I thank Roy Stephens for sending it along.

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Israel says Gaza campaign will continue 'until mission is accomplished'

The war in Gaza erupted afresh on Monday as Israel warned of a protracted military campaign to destroy cross-border tunnels and disarm Hamas and other militant groups.

"We need to be prepared for a long operation until our mission is accomplished," Israeli prime minister Binyamin Netanyahu said in a televised press conference, rejecting mounting international calls for an immediate and unconditional ceasefire.

Netanyahu – who described the conflict as a "just war" - spoke after a series of dramatic events following a lull in fighting on Sunday and early Monday. Eight children playing in a park in a Gaza refugee camp were killed, the main public hospital was struck, four Israeli soldiers were killed in a mortar attack and militants from Gaza infiltrated Israel through a tunnel.

This story showed up on theguardian.com Internet site at 7:48 BST on their Monday evening---and it's the final offering of the day from Roy Stephens, for which I thank him.

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Singapore expresses intent to join China-led regional bank

The Republic has expressed its intention to accept China’s invitation to become a founding member of a new regional bank to fund infrastructure projects in Asia, said Singapore’s Ministry of Foreign Affairs (MFA).

Singapore’s intention was conveyed by Deputy Prime Minister Teo Chee Hean at a meeting in Beijing on Monday (July 28) with Chinese Vice-Premier Zhang Gaoli, who had invited Singapore to be part of the Asian Infrastructure Investment Bank (AIIB).

“Mr Teo and Mr Zhang discussed how the AIIB can complement existing multilateral development banks (MDBs), stay open and inclusive and draw upon the best practices of existing MDBs in terms of governance and operations,” said the MFA in a statement.

This article put in an appearance on the channelnewsasia.com Internet site at 9:54 a.m. Singapore time on their Tuesday morning---and I thank reader M.A. for sliding it into my in-box late last night.

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'Corruption and elitism' fueling inequality in China: Jim Rickards

The top one percent of households in China control more than a third of the country's wealth, a study found. As analyst James Rickards tells DW, inequality is becoming so extreme it threatens to cause social disorder.

The findings published in a Peking University report released on July 25, reveal the extent of China's social inequality. "One percent of households at the top level nationwide control more than one third of the country's wealth. Twenty-five percent of families at the bottom level only own one percent of the country's wealth," the website of the People's Daily newspaper reported on the university's statistics. The main reason behind the disparity is said to be the difference between wages in the cities and the rural areas.

The report also included the Gini coefficient, a measure of income distribution with 0 representing total equality and 1 representing total inequality. Government statistics claim the figure stood at 0.47 in 2012, which would put it close to the US, which had an index figure of 0.56 in 2009, according to the World Bank.

James Rickards, a U.S. writer, lawyer and economist, says in a DW interview that China has now surpassed the U.S. in terms of income inequality, adding that both countries are approaching the point where this disparity becomes so extreme that it threatens to cause social disorder.

This very interesting interview was posted on the dw.de Internet site yesterday---and I thank reader Harold Jacobsen for finding it for us.

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Eight King World News Blogs/Audio Interviews

1. Michael Pento: "Forget the Propaganda, This is What's Really Happening"  2. John Embry: "The Shocking Reason Why Gold May Quickly Hit $2,000"  3. Robert Fitzwilson: "Investors Must Prepare Now For Chaos and Wealth Destruction"  4. Andrew Maguire: "Hundreds of Tons of Gold Bought By East in 14 Days"  5. James Turk: "Expect a Wild Trading Week in the Gold and Silver Markets"  6. Richard Russell: "I'm Afraid We Will See Blood in the Streets"  7. The first audio interview is with Andrew Maguire---and the second audio interview is with Art Cashin

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]

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Technical analysis of markets begins to suspect its obsolescence

Acknowledging that the usefulness of technical analysis is increasingly doubted as market manipulation intensifies, newsletter writer and technical analyst Tim W. Wood notes today that manipulation is as old as markets themselves and quotes various authorities to the effect that manipulation cannot long defeat any market's "primary trend."

But Wood's authorities all precede the seizure of absolute economic power by the U.S. government, implemented by the Federal Reserve and Treasury Department and Treasury's Exchange Stabilization Fund -- the power to create infinite amounts of money and to trade secretly in any market, power that even former central bankers now acknowledge as "financial repression."

Wood argues that "the very basis of technical analysis is that everything is discounted into price."

Really? So on April 11, 2013, did technical analysis forecast the coordinated and overwhelming attack on the gold market by central banks that would begin on the following day? Does the foresight of technical analysis today really extend into government chancelleries as policies are decided privately and then implemented by intermediaries through various instruments and mechanisms, from derivatives to high-frequency trading?

As you are well aware, dear reader, I have always trashed technical analysis of the precious metal markets for all the reasons given in this story---and that can now be said about the equities market.  This longish commentary by Chris Powell was embedded in this GATA release from late last night EDT---and it's definitely worth reading.  As Chris said back in April 2008---"There are no markets anymore, only interventions."

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"London Fix" Gold Rigging By Bullion Bank Exposed In Class Action Lawsuit: The Complete Charts

Some interesting news crossed the tape late afternoon yesterday when it was reported that the silver bullion banks (Deutsche Bank, Bank of Nova Scotia and HSBC) were sued for manipulating the silver fix in a class-action lawsuit. However, a closer look reveals that the plaintiff in the lawsuit, J. Scott Nicholson, has a recurring bone to pick with the banks as this is certainly not his first lawsuit alleging precious metals rigging, and as such we are convinced it will be tossed out shortly, along with every other lawsuit alleging a manipulated precious metals market since discovery could lead to some very unpleasant revelations about the primary source of gold and silver rigging: the central banks themselves, alongside the BIS.

Instead, we uncovered something that was missed several few weeks earlier: a far more informative and detailed class action lawsuit filed by Edward Derksen on July 9, 2014 against the London gold fix member banks: Bank of Nova Scotia, Barclays, Deutsche, HSBC and SocGen (profiled here in From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold).

Recall from "How Gold Price Is Manipulated During The "London Fix"" that this was one of the first conspiracy theories about gold manipulation to end with a bank, and following the official revelation (as opposed to merely on the pages of fringe blogs) that over 100 years the price of gold was consistently manipulated during the London fix (and during every other period as well but that is a revelation for a different time) the very process of the Gold and Silver Fix itself was finally ended (only to be replaced with a comparable process run by the very same people who manipulated gold and silver from Rothschild's London office on St. Swithin’s Lane for decades.

This very long article was posted on the Zero Hedge website at 6 p.m. EDT on Sunday evening---and it's worth your time if you have any left.  If you find the charts familiar, it's because they're all the work of Dimitri Speck and Nick Laird---and a decade in the making.  You've seen most of them in my column many times over the years.

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Possible discrepancy in GLD's gold bar accounting

The Perth Mint's Bron Suchecki calls attention to what seems like a serious discrepancy in the gold exchange-traded fund GLD's accounting of its gold bars.

The discrepancy is headlined "GLD Trade Spreadsheet vs. GLD Bar List" and is detailed at the Screwtape Files  Internet site.  I found this gold-related story embedded in a GATA release yesterday.

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Is There Gold in Fort Knox?

"Is there any gold in Fort Knox?" was one of the most frequently asked questions I got when I was the director of the U.S. Mint.

The answer is yes.

The U.S. Bullion Depository, commonly known as Fort Knox, was built to accommodate the dramatic increase in gold reserves resulting from President Franklin D. Roosevelt's controversial executive order in 1933. The gold reserves of the United States from 1933 to 1937 increased threefold to approximately $12 billion because Americans were forced to sell their gold coins to the Federal Reserve and accept bank notes instead.

Completed in 1936 on land transferred from the U.S. Army, it took more than 500 train cars to deliver the existing gold bullion, newly made bullion bars from the melted coins and some gold coins. They came mostly from Philadelphia and the New York Assay Office.

This is all very interesting, especially what he has to say in the last paragraph.  One has to wonder who has title to all this gold---and what the purity is?  Does part of this belong to Germany---and is it coin melt?  Questions with no answers---and this commentary doesn't help.  It was posted on the moneynews.com Internet site way back on June 6---and I thank Michael Cheverton for sliding it into my in-box just after midnight.

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Gold Bugs Meet Bitcoin Believers to Supplant the Dollar

Call it bitgold.

It’s what you get when you combine bitcoin, one of the world’s newest would-be currencies, and gold, one of the oldest. Add mistrust of centralized authority, a dash of rebelliousness and a dollop of profit motive and you might have the Independence Coin, the first gold-backed crypto-money, unveiled this month at FreedomFest, a libertarian convention in -- where else? -- Las Vegas.

“A staunch person who believes in the gold standard says bitcoin is valueless and ultimately a Ponzi scheme, and people who didn’t dig gold but really got bitcoin would say that this is ridiculous, it’s just a dumb metal,” Anthem Hayek Blanchard, chief executive officer of Anthem Vault Inc., the company behind the Independence Coin, said in an interview. “We don’t need to fight. We can coalesce.”

This very interesting Bloomberg story appeared on their Internet site at 10 p.m. Denver time on Sunday evening---and I thank Casey Research's own Laurynas Vegys for passing it around yesterday.  It's worth reading.

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Gold and bitcoin fuel demand for each other in India

In a fresh possible headache for regulators, including in India, "gold for bitcoin" trades are emerging as a new fad in the world of anonymous transactions, fueling further the appetite for virtual currencies.

This comes at a time when the count of virtual currencies available in the market is fast moving closer to the 500 mark, although the price of top-ranked bitcoin has begun showing signs of stability at around $500-$600 level after remaining highly volatile for most part of its half a decade existence.

According to bitcoin traders, the stabilisation in bitcoin rates is making the case stronger for exchanging them for gold, which currently trades at less than $1,300 per ounce or about Rs28,000 per 10 grams in India.

This is another very interesting story about gold and bitcoin---and it's worth reading as well.  It was posted on the business-standard.com Internet site on Sunday IST---and was filed from New Delhi.  I found it on the gata.org Internet site yesterday.

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GoldCore's O'Byrne discusses market manipulation with Jan Skoyles on 'Get Real'

Interviewed on "Get Real," the television program of The Real Asset Co.'s Jan Skoyles, GoldCore's Mark O'Byrne discusses silver's prospects, its effective greater practical rarity than gold, and manipulation of the gold and silver markets and GATA's work exposing it.

The program is 27:51 minutes long and  was posted on the youtube.com Internet site last Friday.  I've only had time to listen to the first half---and up to that point I'd give it a miss.  It does improve markedly in the second half, which starts just before the 14-minute mark---and even GATA gets a mention there.  Ted Butler's name didn't come up, but just about everything silver-related in the second half of the interview has his name written all over it.  If you start watching at the 14-minute mark, you won't have missed much---and the second half is worth your time.  This silver-related story is something I found in another GATA release from yesterday.

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Financial Times deleted gold manipulation story because it was too 'sensitive'

With great persistence and a little encouragement from GATA our friend R.B. in Britain has more or less solved the mystery of the Financial Times' quick deletion from its Internet site of its February 24 report about gold market manipulation, "Fears Over Gold Price Rigging Put Investors on Alert; German and U.K. Regulators Investigate."

The explanation is pretty much what one might expect: For the Financial Times, one of the many news organizations to which GATA repeatedly has provided its full documentation of gold price suppression by Western central banks---the issue is simply too "sensitive."

In fairness to the FT, please note that the issue seems to have been too "sensitive" for all those other news organizations as well.

R.B.'s account of his repeated inquiries to the Financial Times is appended.

This must read commentary was posted on the gata.org Internet site yesterday.

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¤ The Funnies

Here's a photo the Nick Laird sent my way last night---and here's what Nick had to say about it: "This Noctuidae moth is named after the golden colour - Eudocima aurantia.  It flew in the other night while we were on the verandah enjoying a wine.  It's a fruit eating moth and described as common, though it's the first I've seen." [They have a wing span of about 90mm, so that's some moth! - Ed]

Here's a photo of a dragonfly that I took early yesterday evening.  There was obviously something wrong with it, as I could approach and handle it with ease.  So I coaxed it onto a rock so that the detail and colour of the body and wings would stand out, which they do.  Depth of field is an issue at these focal lengths---and it certainly was here.  I cropped it a bit for maximum visual impact.





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¤ The Wrap

This past week, an incredible 8.35 million oz of metal either came into or was removed from the COMEX-approved silver warehouses, as total inventories ticked up 1.1 million oz to 175.6 million oz. That’s almost double the already high average weekly turnover this year and annualized (434 million oz) is more than 50% of total annual silver mine production. And yes, we’re still stuck at the same level of total inventories at which we began the year.

I don’t understand why and how this documented and easy-to-verify movement is not a prime focus of all involved in analyzing silver, yet it is hardly mentioned in most circles. To be sure, I never expected or predicted this frantic physical turnover to begin more than three years ago---and to persist and intensify; I’m just observing and reporting. For all I know, maybe it will end tomorrow (although I doubt that it will). - Silver analyst Ted Butler: 26 July 2014

I wouldn't read a thing into yesterday's price action, especially in gold as the July trading month draws to a close.  Gross volume was way up there, but net volume was microscopic.  Unless a black swan shows up, I'm not expecting huge price moves between now and the end of the month.

Here are the 6-month charts for both gold and silver.

I believe that yesterday was options expiry---and today all the big traders have to be out of the August contract, with the smaller traders following suit on Wednesday.  Thursday is first notice day for gold in the August delivery month.

As I mentioned in Saturday's column, this Ukraine/MH17/Russia dynamic has certainly changed things, as the West is pushing Russia like never before as the Wolfowitz Doctrine is in now in their face.  Reader Nitin Agrawal sent me a short John Browne essay off of Peter Schiff's website on Sunday---and I really wanted to link it, but since it's subscriber protected, I can't do it.

But I will steal a couple of paragraphs that pretty much sums up the entire situation---and here they are:

"The tragic downing of the Malaysian airliner, more likely than not to be a mistaken attack by Ukrainian separatists, significantly complicates the situation for Putin and Russia, and further galvanized Western interests against him. However, the speed with which conclusions have been drawn about Putin's culpability, despite conflicting evidence, may catalyze the convergence [of] non-western interests as well. Time Magazine highlighted this, quoting an official Chinese source as saying:

"The Western rush to judge Russia is not based on evidence or logic. Russia had no motive to bring down MH17; doing so would only narrow its political and moral space to operate in the Ukrainian crisis. The tragedy has no political benefit for Ukrainian rebel forces, either. Russia has been back-footed, forced into a passive stance by Western reaction. It is yet another example of the power of Western opinion as a political tool."

I have often wondered what world event will bring an end to the precious metals price management scheme.  Several have come and gone over the years---and still JPMorgan et al have kept a vice grip on their respective prices.  Will the Ukraine/Russia situation be the catalyst?  Beats me, but for the moment it doesn't make any difference what's going on out there from an economic, financial or political standpoint---or even supply and demand for that matter---as "da boyz" are still 100 percent in charge.  But if it does blow up, or melt down, as the case may be, it can all be blamed on those pesky Russians.  Or maybe the Russians, along with the Chinese, will be the ones that pull the rug out from under this entire scheme, as they're both more than aware that its going on.   We'll find out in the fullness of time---and I'm starting to get the feeling that it won't be too much time, either.  So we wait.

And as I write this paragraph, the London open is about 75 minutes away.  Gold is currently up a bit over a buck, but the other three precious metals are down a hair from Monday's New York close.  Net volume in gold is vanishingly small---and in silver it's virtually non-existent.  The dollar index is up a handful of basis points.

With all this talk about price management at the London fixes for both gold and silver---and the associated lawsuits flying around, you think that the miners, through their industry representatives the World Gold Council and The Silver Institute, would be there eager to help---and would throw the resources of their respective organizations behind such efforts.  But they're not---and you have to wonder why they aren't.  The answer is simple.  These organizations' sole purpose is to ensure that precious metal prices stay as low as possible for as long as possible.  It's worse than that, the member companies all deny that the price management schemes exist, regardless of the evidence in front of them.  So they remain silent, having abandoned all fiduciary responsibilities to their shareholders long ago.  How the %$#& did it come to this?

And as I send this off to Stowe, Vermont at 5:15 a.m. EDT, I see that all four precious metals rallied a bit at the London open.  These rallies weren't allowed to get too far---and are being sold back down as I write this.  Gold volume has exploded, but once the roll-overs out the August contract are subtracted out,  net volume is extremely light.  Silver volume is more elevated, but not by a lot---so it's a decent assumption that these rallies didn't occur on a lot of volume---and at least for the moment, not much should be read into them.  The dollar index, which had been up 5 basis points earlier, rolled over a bit at the London open---and the index is now holding on to the 81.00 mark by its proverbial fingernails.

Before heading off to bed, I'd like to mention a new special report from Miller's Money Forever at Casey Research.  It's entitled "The Truth About Annuities".  Annuities are sold as the perfect solution for retirement---a way to collect guaranteed, worry-free income no matter what happens. But this guarantee isn't all it’s cracked up to be---and here you can get the full truth on annuities from an independent resource.

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That's all I have for today, which is more than enough---and I'll see you here tomorrow.