As has been the usual situation these days, the gold price didn't do much of anything during Far East trading on Thursday, but did develop a positive price bias starting almost at the 8:00 a.m. BST London open...which also happened to be the low price print of the day as well.
There was a bit of a pop minutes after the Comex open, but that didn't last. The real fireworks started the moment that the London p.m. gold fix was in at 3:00 p.m. BST...which was 10:00 a.m. in New York. In one hour flat the gold price rose seventeen bucks, with the high tick of the day [$1,621.00 spot] coming a minute or so after 11:00 a.m. Eastern.
At that point a willing not-for-profit seller showed up...and gold gave up five bucks of those gains in very short order...and from there the gold price traded pretty flat into the close of electronic trading.
Gold closed the Thursday session at $1,614.70 spot...up $11.60 from Wednesday. Net volume was in the 112,000 contract area. The lion's share of that volume occurred during the New York trading session, so it's obvious [based on these volume figures] that the rally did not go unopposed.
It was pretty much the same price path in silver. Most of the gains were in by 11:00 a.m. Eastern, but the high tick of the day [$28.41 spot] came just a few minutes before the Comex close...but that spike got pounded flat immediately by the usual suspects, I would think...as there's barely a hint of it even on the New York Spot Silver [Bid] chart.
Silver closed at $28.22 spot...up 39 cents from Wednesday. Net volume was around 25,000 contracts.
Here's the New York Spot Silver [Bid] chart I just spoke of. You will note that there's no indication that the high tick of the day came anywhere near $28.41 spot.
The dollar index opened around the 82.65 mark...and rose to around 82.85 shortly before the London open. It hung in there reasonably well until shortly after 8:00 a.m. in New York, before it headed south.
Most of the approximately 45 basis point decline was in by shortly before 11:00 a.m. in New York...and it mostly traded sideways into the 5:30 p.m. Eastern close. When all was said an done, the dollar index was down about 25 basis points on the day.
Once again it's a stretch to find much co-relation between what gold and silver did...and what the dollar index did.
The gold stocks gapped up a hair at the open, but then away they went to the upside...with most of the gains coming before noon Eastern time. But the stocks continued to grind slowly higher from that point...and the HUI finished on its high tick of the day, up 3.40%.
The silver stocks put in a good show as well...and Nick Laird's Silver Sentiment Index closed up 3.75%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 131 gold and 26 silver contracts were posted for delivery inside the Comex-approved warehouses on Monday. There were only two short/issuers in gold...the Bank of Nova Scotia and Merrill, with 67 and 64 contracts issued. All but one of those contracts went to either HSBC USA [83 contracts] or Deutsche Bank [47 contracts]. The only thing about the deliveries in silver worth noting was the fact that the Bank of Nova Scotia was the long/stopper on all 26 contracts. The link to yesterday's Issuers and Stoppers Report is here.
GLD reported that an authorized participant[s] added 174,569 troy ounces of gold yesterday...and there were no reported changes in SLV.
It was another day of no sales report from the U.S. Mint.
The Comex-approved depositories reported receiving 599,490 troy ounces of silver on Wednesday...and shipped a smallish 32,813 ounces out the door. The link to that activity is here.
Here's a chart and some text from Peter DeGraaf's website at pdegraaf.com, that Australian reader Wesley Legrand sent me last night...and I thought you might find it useful.
"This is the Chart of the Day for August 17, 2012 AD."
"It's the index that compares the gold and silver producers of the HUI index to the price of gold. Historically whenever HUI outperforms bullion it represents a bull market for both sectors. Price broke out above the 50-day moving average on Thursday, and a close above the blue arrow will confirm the breakout, with a target at the green arrow. A breakout becomes all the more important when it comes off a double bottom, or an ABC bottom. The supporting indicators are positive."
"The Gold Direction Indicator [GDI...a personal indicator Peter uses] closed at 78% compared to 46%. The interpretation is: hold off buying until price backs off. Whenever the GDI rises above 70% we are close to a point where commercials start to sell."
I'll have more on this in 'The Wrap'.
As usual, I have a lot of stories for you again today...and a lot of them are gold-related
A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.
After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.
The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government’s struggle to charge financial executives. Just a few individuals — none of them top Wall Street players — have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses.
Why should we be surprised at this outcome, dear reader? This story was posted on The New York Times website late on Wednesday night...and I thank Phil Barlett for sending it. The link is here.
In the past two years, or 106 weeks of market data, there here been 17 weeks of inflows, or 16% of the total, amounting to $31 billion. The remainder? Outflows for a total of $300 billion.
In the 32 weeks of YTD 2012 money flows, there have been 5 weeks of inflows for a total of $3.6 billion (which was also equal to the outflow in the last week alone) none of which coincided with market tops, and in fact the biggest outflows occurred just as the market hit interim highs.
This short must read article was posted on the Zero Hedge website yesterday afternoon Eastern time...and I thank reader U.D. for bringing it our attention. The chart is worth a look as well...and the link is here.
The Labor Department announced on Monday that it will be awarding almost $100 million in grant funding to states to prevent layoffs by allowing businesses to pay employees as part-time workers and the federal government will pick up the tab for the cost of a full-time paycheck.
The “work-sharing” program was passed as part of a Republican-led bill in the House, H.R. 3630, and Senate Amendment 1465 to extend the payroll tax deduction and unemployment benefits. In February 2012, President Barack Obama signed the bill into law, which included the $100 million in funding.
"Establishing or expanding work-sharing programs nationwide will help business owners better weather hard economic times by temporarily reducing their labor costs while still keeping their existing skilled employees," Labor Secretary Hilda L. Solis said in the press release announcing the grants. "This program is a win-win for businesses and employees alike."
This story was posted on the cnsnews.com Internet site on Wednesday...and I borrowed it from yesterday's King Report. The link is here.
The WikiLeaks founder has been holed up in the South American country’s London embassy for almost two months as he tries to avoid being sent to Sweden, where two women have accused him of sexual assault.
On Thursday the Ecuadorian government finally announced that it had agreed to give the maverick Australian asylum because of his fears of persecution over the secret files his whistle-blowing organisation has revealed, which he believes could see him sent to face an unfair trial in America.
There was applause as the foreign minister, Ricardo Patiño, made the declaration that Mr Assange had been given “diplomatic asylum” at a press conference in the capital, Quito.
“We believe that his fears are legitimate and there are the threats that he could face political persecution.
This story was posted on the telegraph.co.uk Internet site early yesterday afternoon BST...and I thank Roy Stephens for finding it for us. The link is here.
Wikileaks founder Julian Assange has made an admirable habit of enraging western governments over the last few years, particularly the United States.
Most notably, his release of classified diplomatic documents in 2010 proved ruthlessly embarrassing, shining a spotlight on the absurd, petty little world of international relations.
Ever since, the US government has done everything it can to stop him. Short of assassination. They shut down his website, but mirror sites instantly popped up. They sought legal action, but their efforts have been impeded by the bureaucratic deftness of his attorneys. They froze his bank accounts… but donations have poured in from all over the world.
Swarms of British police have now descended on the Ecuadoran embassy in London. This, on the heels of the British Foreign Ministry issuing a warning letter to Ecuador’s government threatening to “take actions in order to arrest Mr. Assange in the current premises of the [Ecuadoran] embassy.”
Such a move would be appalling, to say the least.
Embassies are hallowed sovereign ground, not to be trespassed. Ever. This is the most sacrosanct, fundamental, inviolable principle of international relations, explicitly codified in both the Vienna Convention on Diplomatic Relations (1961) and the Vienna Convention on Consular Relations (1963).
This piece showed up over at the sovereignman.com website yesterday...and is now posted over at the Zero Hedge Internet site. In light of the current situation, it's definitely worth reading...and it's another Roy Stephens offering. The link is here.
The Nordic state is battening down the hatches for a full-blown currency crisis as tensions in the eurozone mount and has said it will not tolerate further bail-out creep or fiscal union by stealth.
“We have to face openly the possibility of a euro-break up,” said Erkki Tuomioja, the country’s veteran foreign minister and a member of the Social Democratic Party, one of six that make up the country’s coalition government.
“It is not something that anybody — even the True Finns [eurosceptic party] — are advocating in Finland, let alone the government. But we have to be prepared,” he told The Daily Telegraph.
“Our officials, like everybody else and like every general staff, have some sort of operational plan for any eventuality.”
Mr Tuomioja’s intervention is the bluntest warning to date by a senior eurozone minister. As he discussed the crisis, the minister had a copy of the Economist on his desk. It had a picture of Angela Merkel, the German Chancellor, reading a fictitious report entitled “How to break up the euro”, with a caption: “Tempted, Angela?”
Ambrose Evans-Pritchard is in fine form in this posting at The Telegraph yesterday evening BST...and it's certainly worth reading. I thank Manitoba reader Ulrike Marx for bringing this story to our attention...and the link is here.
The lesson of history is that covert contacts and back channels can pave the way to peace.
The British spy was known to his interlocutors as “mountain climber”; his contact was a passionate Irish republican imbued with Christian pacifism. This unlikely pair established a secret channel between the IRA and the British government that started as long ago as 1973 and was crucial to settling Northern Ireland’s conflict. Michael Oatley, an MI6 officer (the “mountain climber”), and Brendan Duddy, a Derry businessman, were the joint custodians of this open line between two supposedly implacable foes.
There may be no obvious link between covert peacemaking in the back streets of Belfast four decades ago and the latest talk of war between Israel and Iran, but all intractable conflicts share one common feature: they will never be resolved by open, set-piece diplomacy alone.
The nuclear-tipped confrontation between Iran and the rest of the world is no exception – and the urgency of defusing this ticking time bomb beneath global affairs has become greater this week. Once again, Israel is making clear that its patience is wearing thin: unnamed “decision-makers” have briefed the local press that if no one else prevents Iran from seizing the ability to make nuclear weapons, then the Israeli air force might have to do the job.
This is another Roy Stephens offering from The Telegraph...this one from Wednesday evening...and the link is here.
The first is with Egon von Greyerz...and it's headlined "Expect Massive Short Covering In Gold Within Weeks". The second blog is with Citi analyst Tom Fitzpatrick. It's entitled "The Gold Market May Stun Participants With A Move To $6,300".
A broker--previously disciplined by the CFTC and the National Futures Association in a 1993 commodities options scheme--is again facing charges for a Ponzi-scheme involving precious metals bullion investment.
Four men were scheduled to be arraigned Wednesday before a federal magistrate in Miami, Florida, on charges of conspiracy to commit mail and wire fraud in connection with a precious metals bullion investment scheme.
The indictment was brought by federal and state agencies including the U.S. Attorney for the Southern District of Florida, the FBI, the U.S. Postal Inspector Service and the State of Florida's Office of Financial Regulation.
The indictment claims that, instead of purchasing the physical bullion as promised, the defendants "merely established investment accounts for Capital Asset Management with a broker/dealer in London and used the account to purchase derivative contract investments in precious metals but never actually purchased any physical metal for the investors."
This gold-related story is the first of four in a row from reader Donald Sinclair. It was filed from Reno, Nevada yesterday...and is posted on the mineweb.com Internet site. The link is here.
Latest figures from the World Gold Council show that global gold demand fell back in Q2 2012 compared with a year ago, but Central Bank buying rose to a new record level.
In its latest Gold Demand Trends report, the World Gold Council estimates, on figures provided by Thomson Reuters GFMS, that global gold demand in Q2 2012 was 990.0 tonnes, down 7% from the 1,065.8 tonnes in Q2 2011. The organisation does point out though that demand in Q2 2011 was exceptionally high.
However perhaps one of the most interesting findings of this latest analysis is that gold buying by the world's Central Banks hit a new record of 157.5 tonnes , more than double the level of Q2 2011 and accounting for 16% of overall global demand. This, by our reckoning is also around 22.5% of total gold supply over the period extrapolating from the WGC's own annual figures for 2011. Central banks that significantly bolstered their holdings during the quarter included the National Bank of Kazakhstan, and the central banks of the Philippines, Russia and Ukraine.
Overall the WGC notes that if the Central Bank buying continues at the current rate where they have bought 254 tonnes against 200 tonnes H1 2011 this could be a record year, for Central Bank buying.
This is Donald Sinclair's second story in a row from the mineweb.com Internet site...and it's worth reading. The link is here. Don also sent a similar, but different story on this that was posted over at theglobeandmail.com website yesterday. It's headlined "Gold expected to pull out of slump"...and the link to that is here.
David Levenstein looks at the many reasons he sees gold going higher and why $1,600 is the metal's new support level.
It was only two weeks ago, that the price of gold struggled to breach the key resistance of $1600 an ounce. Now it has remained above this level for enough time to consider it to be the new support level. Thus any dips to this level should be bought while we await a break above the $1625 an ounce level which I believe will occur shortly.
This rather longish commentary was filed from Johannesburg yesterday...and I thank Donald Sinclair for his fourth and final offering in today's column. It's also posted on the mineweb.com Internet site...and the link is here.
Jamie Sokalsky has made his first big move as Barrick Gold Corp.’s chief executive officer, putting the company’s high-cost Africa unit on the block as part of a larger shift in strategy.
The world’s largest gold miner is in preliminary talks to sell African Barrick Gold PLC to state-owned China National Gold Group Corp. A successful deal, which analysts expect would bring in about $2.5-billion, would give some financial relief to Barrick Gold as it struggles with billions in cost overruns at a key growth project in the southern Andes, and continues to absorb the $7.3-billion cash purchase of Equinox Minerals last year.
The negotiations, which the company said are “at an early stage,” are a signal of intent by Mr. Sokalsky, who was appointed in early June to replace Aaron Regent, who was sacked by the board. The new CEO has pledged to focus on generating higher returns from its projects, rather than simply increasing production. They also highlight China’s growing desire to be an owner of large-scale resource projects around the world, an ambition that led another state-owned corporation, CNOOC Ltd., to make a $15.1-billion bid for Calgary oil and gas producer Nexen Inc.
The mines of African Barrick – all in Tanzania – include some of the largest producers on the continent, but they are also some of the most expensive to run for a company that is otherwise among the world’s lowest-cost gold producers. The cost of producing an ounce of gold at the four mines was on average $938 an ounce in the first half of the year, compared to between $550 and $575 for Barrick as a whole.
This rather lengthy story showed up on the Globe and Mail website in the wee hours of yesterday morning...and I thank Roy Stephens for his final offering in today's column. It's worth the read if you have the time...and the link is here.
Paulo Oliveira and his wife sold their wedding rings to pay the rent after he lost his job as a builder last month. They were the couple’s last pieces of jewelry.
“We have no more gold to save us from being kicked out this month,” the 46-year-old said as he stood in the area of downtown Lisbon popular with cash-for-gold stores. “Everyone I know is struggling, even the gold stores are empty because nobody has any more gold left to sell.”
Oliveira encapsulates a growing trend in debt crisis- stricken Europe as household gold supplies dry up after record prices and a deepening recession prompted a proliferation of places to exchange the metal for money.
In Portugal, the historical home of some of Europe’s biggest gold reserves, the number of jewelry stores, which include cash-for-gold shops, increased 29 percent in 2011 from a year earlier, a study commissioned by parliament found. In the first quarter, an average of two new stores opened every day, the report said. Now some of them are closing.
“Business has gone from great to terrible in a matter of months,” Luis Almeida, whose family has owned a gold store near Lisbon’s Rossio Square for more than 40 years, said in an interview. “The sad truth is that most of my clients have already sold all of their gold rings.”
This Bloomberg story, filed from Lisbon early yesterday morning, is a must read in my opinion...and I thank Manitoba reader Ulrike Marx for her second story in today's column. The link is here.
Yesterday, GoldSeek Radio's Chris Waltzek revisited the "Fear Index" concept of GoldMoney founder and GATA consultant James Turk...and calculated that both gold and silver have a long way upward to go before entering the "mania" stage.
I found this short item in a GATA release...and I thank Chris for the headline...and the paragraph of introduction. Waltzek's commentary is headlined "Current Gold Fear Index"...and it's posted at the radio.goldseek.com Internet site. The link is here. The chart is worth the trip...and the article is worth reading.
Tosca Mining Corporation's goal is to acquire advanced stage projects that can be placed into production quickly. The company's primary asset is the Red Hills Molybdenum/Copper project located in Presidio County, Texas. A program to confirm, and expand the considerable size and potential of the project and evaluate various economic scenarios was completed in 2011.
Tosca recently received results from the 13 remaining holes from its phase two, 16,000 M (4,873 m) diamond drill program. Per Tosca’s Chairman, Dr. Sadek El-Alfy, “the drill program has successfully verified historic drill results of the shallow Copper-Molybdenum cap and confirmed the presence of a deeper, well mineralized Molybdenum Porphyry deposit.” The results of 21 holes drilled through the copper/moly cap in Tosca's 2011 drill program give a weighted average grade of 0.39 % Cu over a core length of 113 feet (34.5 m). Since the copper cap is subhorizontal, the average core length can be interpreted as being approximately equivalent to true width. The copper/moly cap is crescent shaped, approximately 4,000 feet (1220 metres) long and 400 feet (122 m) to 1000 feet (305 m) wide.
The 2011 program encountered numerous thick Molybdenum mineralized intervals including Hole TMC-25 wich intersected 1,189 feet (362.4 m) averaging 0.089 per cent Mo including 830 feet (253 m) of 0.1 per cent Mo from 359 feet (109.8 m) to the bottom of the hole. Hole TMC-29 cut 989 feet (301.4 m) averaging 0.09 per cent Mo including 139 feet (42.4 m) of 0.16 per cent Mo. The molybdenum grades are similar and in some cases higher than those of projects currently considered of potential economic interest."
Aggressive plans are in place for 2012 to conduct metallurgical tests, produce an updated resource estimate and Pre Economic Assesment. Tosca is operated by an experienced mine development team, operates in Texas, a mine-friendly jurisdiction and its property iseasily accessible with infrastructure in place to advance operations. Please visit our website to learn more about the company ad request information.
There are no markets anymore...only interventions. - Chris Powell, GATA
The dollar index hit the skids just about the time the Comex opened yesterday but, for whatever reason, gold and silver got hit the moment they started rallying at the open...and they weren't allowed to go anywhere until the London p.m. gold fix was in. From that point they were away to the races. I wonder how far they would have gone if they hadn't run into a willing seller less than five minutes after trading began in New York?
Since the mid-May bottom in the gold price, every rally attempt, no matter how tiny, has been sold off by JPMorgan et al. I count six times in total on the 6-month gold chart below...and I'm wondering out loud if the current 'rally' will meet the same fate. Time will tell.
(Click on image to enlarge)
As Peter DeGraaf mentioned further up in this column, once we get past a certain point, we can look forward to a sell-off of some sort. Normally we have to wait until we get into overbought territory around the 70 level on the RSI on the above chart, but that certainly hasn't been the case since the mid-May low, as gold and silver both get sold off the moment they develop any upward momentum at all. 'Da Boyz' are keeping things range bound, but for what reason...and for how much longer?
I was really encouraged by the share price action yesterday...and I'm hoping that this is a harbinger of things to come. But, as you know, I'm always on the lookout for "in your ear"...and until we have a clear break-out, you should be, too.
As has been the case for quite a while, the gold and silver price action in the Far East on their Friday was comatose...and not much is going on in early London trading, either. Volumes are astonishingly light once again...and the dollar index [as of 5:20 a.m. Eastern time] isn't doing much of anything. It's obvious that if there is going to be any excitement in the precious metals market today, it will happen in New York...or five minutes after I hit the 'send' button on today's column.
Today we get the latest Commitment of Traders Report...and based on the reporting week's price action, there may be minor declines in the Commercial net short position in both gold and silver. Whatever the number are, I'll have comments about them in tomorrow's column.
There's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) recommendations...as well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
Enjoy your weekend, or what's left of it, depending where on Planet Earth you live.