The gold price was up about twenty-five bucks by 1:00 p.m. Hong Kong time yesterday...and then didn't do much until about 10:00 a.m. in London. From there, the price declined down to just above the $1,700 mark shortly before 9 a.m. in New York before rallying back to just under $1,725 spot. It held that price until shortly before the close of electronic trading, when it got sold off about ten bucks after it made it too close to the $1,725 spot mark...just like it did in Hong Kong and London much earlier on Thursday.
Gold finished at $1,717.70 spot...up $21.00 on the day. Despite the lack of price movement, net volume was an immense 219,000 contracts.
Up until 1:00 p.m. in Hong Kong, silver followed the same rally path as gold, but the subsequent sell-off ended very shortly before 12 o'clock noon in London...which looked suspiciously like an early silver fix.
From that low/fix, silver rallied in fits and starts...and all three attempts that it made to get too rambunctious to the upside in New York, immediately got swatted down...including the rally into the close of Comex trading at 1:30 p.m. Eastern. From there, silver basically traded sideways into the close of electronic trading.
Silver finished at $35.51 spot...up 87 cents on the day. Net volume was only half of Wednesday's...but still a monstrous 55,000 contracts.
Here's the New York Silver Spot Silver [Bid] chart on its own. It shows the three rallies that got sold off before they could get anywhere...the one at the Comex open, at 10:30 a.m...and the Comex close.
The dollar index did precisely nothing yesterday...and was obviously never a factor in the precious metals market.
The gold stocks pretty much followed the ups and downs of the gold price during the New York trading session...and, like the gold price, the shares sagged a bit into the close. The HUI finished up 0.80% when all was said and done.
Despite the nice gain in silver during the New York trading session, the shares were definitely a mixed bag...and Nick Laird's Silver Sentiment Index was only up 0.29%.
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Thursday's CME Daily Delivery Report showed that 44 gold and 137 silver contracts were posted for delivery on Monday. The biggest short/issuers in silver were HSBC USA and the Bank of Nova Scotia with 76 and 47 contracts respectively. The biggest long/stopper was JPMorgan in its proprietary [house] trading account with 122 contracts. The link to yesterday's Issuers and Stoppers Report is here.
When I posted Wednesday's Daily Delivery Report in my Thursday column, I inadvertently used the delivery numbers for palladium instead of silver. The real numbers showed that 160 silver contracts were posted for delivery on Friday...and the big long/stopper was JPMorgan in its proprietary [house] trading account. They'll have 137 contracts of that 160 total delivered today. I thank reader Harvey Organ for pointing out the error of my ways.
There were no reported changes in GLD yesterday but, surprisingly enough, authorized participants over at SLV added 874,386 troy ounces of silver. After Wednesday's drive-by shooting in both gold and silver, I must admit that I'm still waiting for the big withdrawals from both ETFs. Maybe today will be the day. Then again, maybe not.
The U.S. Mint started off the month with a small sales report. They sold 8,500 ounces of gold eagles...and 200,000 silver eagles.
There was a lot of activity over at the Comex-approved depositories on Wednesday. They received 618,921 ounce of silver...and shipped a rather large 1,190,391 troy ounces out the door. The link to that action is here.
Here's an interesting gold chart that reader Julius Adams sent me yesterday. Based on his T/A...his minimum target for gold is $2,015. We'll see how it goes.
(Click on image to enlarge)
I have the usual number of stories today...and I hope you find some of them worth your while.
We were speechless when we read this Bloomberg story...
The Bank of Israel will begin today a pilot program to invest a portion of its foreign currency reserves in U.S. equities.
The investment, which in the initial phase will amount to 2 percent of the $77 billion reserves, or about $1.5 billion, will be made through UBS AG and BlackRock Inc. (BLK), Bank of Israel spokesman Yossi Saadon said in a telephone interview today. At a later stage, the investment is expected to increase to 10 percent of the reserves.
A small number of central banks have started investing part of their reserves in equities. About 9 percent of the foreign- exchange reserves of Switzerland’s central bank were invested in shares at the end of the third quarter, the Swiss bank said on its website.
In other words, while the Fed's charter forbids it from buying US equities outright, it certainly can promise that it will bail out such bosom friends as the Bank of Israel, the Swiss National Bank, and soon everyone else, if and when their investment in Apple should sour.
This first story, posted over at zerohedge.com yesterday, is a must read. I thank reader U.D. for being the first one through the door with this item...and the link is here. You can't make this stuff up!
John Williams just warned that current problems have horrendous implications for the markets. Williams, who founded ShadowStats, also noted that Bernanke continues to pay lip-service regarding inflation-containment.
Here is what Williams had to say about the situation: “Recognition of an intensifying double-dip recession as well as an escalating inflation problem remains sporadic. The political system would like to see the issues disappear until after the election; the media does its best to avoid publicizing unhappy economic news; and the financial markets will do their best to avoid recognition of the problems for as long as possible, problems that have horrendous implications for the markets and for systemic stability.”
This short blog was posted over at the King World News website last night...and the link is here.
The International Swaps and Derivatives Association on Thursday said its EMEA Determinations Committee unanimously ruled that no "credit event" has yet occurred amid Greece's efforts to restructure its debt holdings. A declaration of a "credit event" would require a payout on credit default swaps held as insurance against nonpayment.
The panel ruled unanimously that a move effectively insulating the European Central Bank and national central banks from being forced to participate in the restructuring in the event that collective-action clauses are triggered didn't constitute a credit event. They also determined they hadn't received evidence that the restructuring itself met the definition of a credit event, ISDA said.
The organization added, however that the situation is still evolving and that market participants could submit further questions to the body "as further facts come to light."
The banks run the ISDA...and can come to any decision that's in their own self interest regarding Greece's credit default swaps...and this ruling fits that description perfectly. Many readers sent me this bit of news yesterday...but the first one in my in-box was reader 'David in California'. The story was filed from Frankfurt...and posted at the marketwatch.com website early yesterday morning. The link is here.
On Thursday, the International Swaps and Derivatives Association, the industry body that decides whether swaps should pay out, said that Greece’s proposed debt exchange did not currently activate swaps linked to the country’s debt. But the association added that the swaps could activate at a later date.
The body’s decision reignites the debate over the usefulness of the default swaps. If Greece had simply stopped paying interest or principal on its bonds, the swaps would have paid out. European policy makers, however, decided last year to try to use a voluntary debt exchange for Greece as a way to avoid setting off the swaps. The maneuver was a brusque reminder for investors that there are ways to circumvent the conditions of credit-default swaps.
“If a sovereign, and those trying to rescue it, tiptoe around the periphery to avoid triggering the C.D.S., it may impair the effectiveness of the C.D.S. as a risk management tool,” said Bruce Bennett, a partner at the law firm Covington & Burling.
This story was posted on The New York Times website late last night...and reader Phil Barlett sent it to me just minutes before I hit the 'send' button this morning. It's a must read as well...and the link is here.
In an effort to stabilize banks, businesses and governments, the European Central Bank (ECB) opened up a massive offering this week of unlimited low-interest loans. The second such offering in just over two months was snapped up on Wednesday by some 800 banks, which collectively borrowed a reported €529.5 billion ($712.4 billion).
Combined with the first offering from Dec. 21, 2011, this means that the ECB has injected more than €1 trillion into Europe's financial system. The first offering of some €489 billion encouraged banks to purchase government bonds, easing the euro zone's debt crisis and boosting investor confidence.
But it remains uncertain how banks will use the cheap money this time around, though the ECB hopes that the loans with 1 percent interest rates and maturities of three years will prompt banks to lend to small- and medium-sized companies, which would in turn create jobs and improve the economy.
This story showed up posted on the German website spiegel.de yesterday...and is Roy Stephens first offering of the day. The link is here.
European powers approved the release of funds for Greece's international creditors but delayed the decision to bail out Athens until March 12 - perilously close to the country's default deadline.
The delay will push Greece to within eight days of bankruptcy - a move likely to rattle global markets and put eurozone leaders on a collision course with America and China.
World leaders have demanded immediate action to stem the crisis but Athens faces a €14.5bn bond repayment on March 20th.
This story was posted on The Telegraph's website just before midnight local time in London last night...and is Roy Stephens second offering of the day. The link is here.
Brazil has declared a fresh "currency war" on the United States and Europe, extending a tax on foreign borrowings and threatening further capital controls in an effort to protect the country's struggling manufacturers.
Guido Mantega, the finance minister who was the first to use the controversial term in 2010, said the government would not "sit by passively" as developed nations continue to pursue expansionary monetary policies at the expense of Brazil.
"When the real appreciates, it reduces our competitiveness. Exports are more expensive, imports are cheaper, and it creates unfair competition for businesses in Brazil," he said on Thursday after announcing changes to the so-called IOF tax.
This must read story was posted in the Financial Times of London yesterday...and it's posted in the clear in this GATA release. The link is here.
This isn't the U.S. we're talking about here...this is from Australia. They're only five years behind what has happened in the U.S. Boy, are they in for a rude shock.
New home sales slumped in January, posting their biggest ever monthly fall since records began in October 2000, a survey of Australia’s 100 largest builders shows.
Sales of new homes fell 7.3 per cent in seasonally adjusted terms in January this year, dragged lower by a slowdown in Victoria, HIA-JELD-WEN new home sales figures show.
New home sales in Victoria fell in January to 1675, their lowest level since November 2006.
This story was posted in The Sydney Morning Herald on their Wednesday...and I thank reader "John in Australia" for sharing it with us. The link is here.
China has made a sharp shift away from purchases of U.S. securities, slashing the dollar's share of the country's foreign reserves in what may signal a change in strategy for managing the massive cash pile, Dow Jones calculations indicate.
The portion of China's reserves parked in the U.S. appears to have sunk to a decade-low 54% as of end-June from 65% in 2010 and 74% in 2006, according to the Dow Jones calculations. The calculations are based on data on China's holdings of U.S. securities from an annual U.S. Treasury survey, and China's own data on the value of its foreign-exchange reserves.
The exact allocation of China's $3.2 trillion reserves -- by far the world's biggest war chest -- has always been a mystery. But the Treasury survey provides the best guide as to how much the State Administration of Foreign Exchange -- the organization charged with managing those reserves -- has invested in dollar assets.
This story showed up in The Wall Street Journal yesterday...and is posted in the clear in this GATA release. The link is here.
I had the great pleasure of sitting beside The Motley Fool's Precious Metals Analyst, Christopher Barker, at a dinner held in GATA's honour at the Vancouver Resource Conference in Vancouver, British Columbia back in January.
In his latest column, Christopher had lots to say about the goings-on in the precious metals world on Wednesday.
One of his three conclusions read as follows...
"Gold price manipulation is all too real. Much to the chagrin of those who have preferred to vilify and ridicule anyone who proposed the notion rather than engaging in a thoughtful review of the evidence amassed by GATA and others, the intervention events have only grown more obvious as the bull market has matured and the stakes for central bankers have grown."
"I have been entirely convinced for several years now that the bullion banks have engaged in market-rigging activity (as CFTC Commissioner Bart Chilton himself conceded). I held out for quite some time before conceding for myself that the central banks were directly involved (indeed in a coordinating role!), but I for one have now seen all the evidence I need to conclude that central banks -- including the U.S. Federal Reserve -- do indeed engage in periodic gold price manipulation."
This must read blog was posted on The Motley Fool website on Wednesday...and the link is here.
Friends have sent the full text of the CIBC gold market note from Wednesday that was quoted in part at the goldalert.com website. The first paragraph of the note reads as follows...
"Looks like a large seller of gold in the market, as a 10,000 contract traded, down-ticked the price by $40 per ounce, and represents 1 million ounces of gold sold. Roughly 200,000 contracts trade per day, but unusual to see such a large single trade. Not likely due to contract expiry either. Bernanke isn't really helping either, but we haven't seen any either-size transactions post the one big trade, so hopefully will see the price decline settle down. Shortly after the 10,000 order, which was closer to 11,000 contracts, looks like one size seller out there. Sold 1.8 million ounces of gold on the day. Smells like a liquidity squeeze."
You can read the rest of it in this GATA release from yesterday. It's not a big read, but it's well worth your time. The link is here.
Another gold fund manager, Gabelli's Caesar Bryan, told King World News yesterday that Wednesday's bombing of gold was done by a not-for-profit seller, the strange sort of selling that keeps turning up at strategic moments in the market, and he's starting to wonder if it has something to do with central bank intervention.
Welcome to Planet Earth, Mr. Bryan!
This is another GATA release, which includes a must read introduction by Chris Powell...and the link is here.
Hugo Salinas Price, president of the Mexican Civic Association for Silver, told King World News last night that Wednesday's smashing of the gold price was a central bank operation that should not deter anyone from continuing to acquire the monetary metals.
Salinas Price says: "If I saw the price declining little by little, day after day, that would be a worrisome signal. That would mean the market is not eager to acquire more gold or silver, but that's not the case. ... When I see that kind of collapse in gold, I know it's not the natural market doing that. Nobody getting rid of their gold and silver is going to dispose of it in that manner. They are going to do it little by little. This seller was definitely not interested in losses. What they were interested in was suppressing the price."
Hugo...and his good wife, Esther...are two of the nicest people that I have ever had the good fortune to meet. The blog is posted at the KWN website...and the link is here.
In his gold market commentary yesterday, Ross Norman, proprietor of the London bullion broker Sharps Pixley Ltd. and founder of TheBullionDesk.com, joins those who attribute gold's smash down yesterday to a single source who was "out for effect." Norman writes:
"A reported 31-tonne sell order on the Chicago Mercantile Exchange rocked gold, which saw prices collapse from a high of $1,790 in London hours to $1,703 during New York trading, followed by a further dip to the low of $1,687 in out-of-hours electronic trading. ... Ordinarily if a seller wanted to get the best price for his metal he would seek to finesse the selling over time, hunting out liquidity (finding people who are the other side of his sell order) and thereby ensure he gets the best possible profit. This seller was clearly simply out for effect."
I borrowed all of the above from a GATA release yesterday
Norman's must read commentary is headlined "Gold Fall Creates a Fantastic Window of Opportunity for Potential Buyers" and it's posted at the Sharps Pixley Internet site here.
Will gold mining stocks ever catch up with bullion prices? GoldMoney founder, Free Gold Money Report editor, and GATA consultant James Turk writes tonight that the current underperformance of the shares is lasting longer than previous periods of underperformance. In any case Turk continues to see the shares as undervalued and he expects rising earnings to lift them up.
His commentary is headlined "Mining Stocks -- Still on the Runway" and it's posted at the Free Gold Money Report Internet site. I stole this preamble from a GATA release...and the link is here.
Leading gold fund manager Evy Hambro on why he doesn't expect the bullion price to fall.
Gold has emerged as one of the few winners from the financial crisis. Turbulence across markets globally and returns of next to nothing on cash over the past two years saw investors pour money into bullion. As a result, the gold price soared and Evy Hambro's BlackRock Gold & General fund saw inflows of nearly £1.5bn in the past 24 months alone, bolstering the fund to £3.4bn.
The best performing commodities manager tells us the gold rally is far from over.
This story was posted over at The Telegraph yesterday afternoon...and is Roy Stephens final offering of the day. The photo imbedded in the article is worth the trip all by itself...and the link is here.
This very interesting graphic presentation was posted over at the zerohedge.com website yesterday...and I thank Australian reader Wesley Legrand for sharing it with us. It's worth a look...and the 'click to enlarge' feature is a must if you want to see all the fine detail. The link is here.
(Clicck on image to enlarge)
Avrupa Minerals Ltd. is a growth-oriented prospect generator focused on aggressive exploration for valuable mineral deposits in politically stable and prospective regions of Europe with a growing pipeline of prospects in Portugal, Kosovo and Germany.
Share structure and cash on hand (12/31/2011):
Please visit our website for more information.
I don't mind if you are wealthy. I do mind if you got there by cheating. I don't mind if you are on welfare. I do mind if you got there by cheating. - Author unknown
After Wednesday's debacle, it was pretty calm on Thursday...but I still got the impression that the subsequent rallies in both gold and silver were being watched over pretty carefully...and it was particularly noticeable in silver.
However, what really was surprising was the number of well respected commentators that finally came out of the closet and stated the obvious [in public] about Wednesday's hatchet job in the precious metals...and that it was done by not-for-profit sellers...and for it's "effect value".
This is not just GATA saying it now...it's completely obvious to everyone and, in the end, it could backfire on the perpetrators, because now everyone is watching these markets with fresh eyes.
When people such as these raise their voices in unison like this, you know that everyone is now in on the game...and the jig is up. At last, talk of rigging the gold and silver markets has now become respectable. Only the demise of this Anglo/American monetary and financial atrocity awaits.
And it can't come too soon for me...regardless of the consequences. As I've said many times over the years, if the powers that be weren't propping up everything that wanted to crash...and suppressing the price of everything that wanted to blow sky high...the world's financial system would be a smouldering ruin within five business days.
It's going to happen anyway...and the longer this stinking, putrid mess is held aloft, the worse it's going to be for everyone on Planet Earth when it finally does crash and burn.
All that will be left standing will be the precious metals...and I hope that will be enough.
In overnight trading, both gold and silver trended quietly lower. At the moment...5:18 a.m. Eastern time...gold is down about two bucks...and silver is down about 35 cents. Gold volume is already pretty decent...and silver's volume is relatively quiet. The dollar index has been in rally mode since precisely 10:00 a.m. Hong Kong time...and is up about 35 basis points as I hit the 'send' button.
With JPMorgan et al putting the metals and their shares back on sale for a limited time only, there's still the opportunity to either re-adjust 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. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
I'm done for the day. See you tomorrow.