Casey Research Publication
Gold & Silver Daily
"JPMorgan et al are riding shotgun over these markets every minute and hour of the day."
 

¤ Yesterday In Gold & Silver

The gold price didn't do much of anything during Far East and most of the London trading day on Thursday, as it sort of wandered around aimlessly within a ten dollar trading range below Wednesday's New York close.

However, a rally of some substance began to materialize about 8:40 a.m. Eastern time...about twenty minutes after the Comex open.  The fun ended at the London close at 4:00 p.m. GMT...11:00 a.m. Eastern time.  From there it more or less traded sideways into the close of electronic trading.

Gold's low and high ticks, which are obvious on the chart below, were $1,684.90 and $1,704.40 spot.

Gold finished the Thursday session at $1,700.00 spot right on the button...up $5.70 from Wednesday.  Net volume was pretty decent...around 140,000 contracts.

The silver price traded down about a percent by mid-afternoon in Hong Kong...before rallying back to almost unchanged by 11:00 a.m. in London.  From there it got sold off once again, with the low price tick [$32.46 spot] coming at the same as time as the low tick in gold...8:40 a.m. in New York.

The subsequent rally lasted until the same 11:00 a.m. Eastern time...$33.38 spot...and that proved to be silver's high tick of the day.  Then it got sold off until noon, before trading sideways into the close.

Silver closed at $33.03 spot...up a whole 12 cents.  Volume was pretty decent...around 41,500 contracts.

The dollar index closed on Wednesday at 79.82...and then traded a hair lower up until 8:00 a.m. in New York.  The subsequent rally took the index back up to around the 80.30 mark...and it hung around that number for the rest of the Thursday session...closing at 80.25.

There was little co-relation between the precious metal prices and the dollar index at all yesterday...especially considering the fact that gold and silver rallied together with the dollar index during the New York morning session.  I'm sure that had something to do with bad new on the euro front.

The gold stocks opened flat, but soon rallied to their 11:00 a.m. high...in lock-step with a rising gold price.  Once that high tick was in, the stocks got sold down to just above the unchanged mark...and proceeded to trade sideways from there until the equity markets closed at 4:00 p.m. Eastern time.  The HUI finished up 0.40%.

The silver stocks were mixed...and Nick Laird's Silver Sentiment Index closed down a smallish 0.34%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 53 gold and 156 silver contracts were posted for delivery on Monday within the Comex-approved depositories. The biggest short/issuer in gold was Jefferies with 50 contracts...and JPM and the Bank of Nova Scotia were the largest long/stoppers.  It was the same in silver as Jefferies and JPM were the two biggest short/issuers [149 contracts] and JPM and the Bank of N.S. were the biggest long/stoppers.  The link to that activity is here.

There were no reported changes in GLD yesterday...but a rather chunky 1,258,182 troy ounces of silver were deposited in SLV by an authorized participant.

The U.S. Mint had its third sales report in a row yesterday.  They sold 4,500 ounces of gold eagles...1,000 one-ounce 24K gold buffaloes...and 25,000 silver eagles.

Over at the Comex-approved depositories on Tuesday, they reported receiving 614,504 ounces of silver...and shipped 452,643 ounces of the stuff out the door.  The link to that activity is here.

Here are a couple of very interesting charts that Nick Laird sent my way yesterday evening...and they're definitely worth sharing.  Neither needs any further embellishment from me.  All comments regarding these charts should be directed at Nick...not me.

(Click on image to enlarge)

(Click on image to enlarge)

I have a decent number of stories for you today...and I hope you can find the time to read the ones that interest you the most.

 

¤ Critical Reads

Wall Street Job Reductions Seen Persisting After Citigroup Cuts

Wall Street’s cost cuts and dismissals, which have helped erase more than 300,000 financial- industry jobs in the past two years, are far from over.

Citigroup Inc.’s announcement yesterday of plans to eliminate 11,000 positions in units spanning equities trading to consumer banking is the latest sign of strain from a market slowdown, stiffer capital rules and weak economic growth. Lenders around the globe are likely to trim more jobs if revenue doesn’t rebound sharply next year, analysts and recruiters said.

“The knives are sharpened and ready,” said Jason Kennedy, chief executive officer of London-based search firm Kennedy Group. “These institutions are too big for the business they are generating but they are still quite bullish that the market will return by mid-2013. Unless the markets picks up, there will be more cuts in the first half.”

This Bloomberg story from early Wednesday evening Mountain time is worth reading...and I borrowed it from yesterday's edition of the King Report.  The link is here.

Read more...

Rick Santelli Goes Beyond the Debt Ceiling

Rick's rant isn't very long today...only 3:30 minutes...but, as always, it's right on the money.  It's entitled "The Santelli Exchange: To Infinity and Beyond!".  I thank Ulrike Marx for sending it our way...and the link is here.

Read more...

The Total Animated, Annotated U.S. Debt

With debt ceilings being summarily dismissed and billions and trillions of dollars being thrown around like confetti, we have become almost entirely de-sensitized to the colossal size of the numbers involved...and to be frank de minimus impact from any 'compromise'. In order to comprehend the size of the US Debt load, Demonocracy created this video visualized in physical $100 bills. And you thought a Jumbo-Jet full of cash was a lot...

This short 2-minute video clip is a must watch...and it was embedded in the above story over at Zero Hedge yesterday afternoon.  I thank Matthew Nel for finding it for us...and the link is here.

Read more...

Why Apple is Bringing Manufacturing Back to the United States

Yesterday’s news from Tim Cook that Apple is bringing some Mac manufacturing from China back to the United States is encouraging for the first reason you’ll think of: it’s a tentative move to disengage from appalling labor practices at the company’s Chinese contractor, Foxconn, that tether anyone who owns an iPhone back to the developing world economy heart of darkness. But what does it mean for the American economy? For years, we’ve been told that the migration of manufacturing off-shore is an economic inevitability, the result of ironclad laws of trade, labor and capital. Steve Jobs himself said of the China off-shoring: “those jobs aren’t coming back.” 

But what if those assumptions are wrong? For some valuable background, I recommend my friend Charles Fishman’s excellent piece on the in-sourcing trend in the current issue of The Atlantic. It suggests that moves such as Apple’s are more than just post-crash green shoots, replacing lost jobs with new ones, but a genuine shift back to U.S. manufacturing with concrete – and previously unrecognized – advantages.

This very interesting story showed up in Forbes yesterday...and it's Roy Stephens first offering in today's column.  The link is here.

Read more...

The Citi's Matt King Presents: 'The Most Depressing Slide I've Ever Created'

Citi's Global Head of Credit Strategy, Matt King, has a knack for putting together useful illustrations.

Here, he examines one of the implications of one of the most powerful forces in all of economics: demographics.

King explained his charts to us like this: It's what I like to call "the most depressing slide I've ever created." In almost every country you look at, the peak in real estate prices has coincided – give or take literally a couple of years – with the peak in the inverse dependency ratio (the proportion of population of working age relative to old and young).

In the past, we all levered up, bought a big house, enjoyed capital gains tax-free, lived in the thing, and then, when the kids grew up and left home, we sold it to someone in our children's generation. Unfortunately, that doesn't work so well when there start to be more pensioners than workers.

This is short and sweet.  I've already posted all the words...and the embedded graph is definitely worth the trip.  It was posted on the businessinsider.com Internet site yesterday afternoon...and it's Roy's second offering in a row.  The link is here.

Read more...

Rossen Reports: New device can open hotel room locks

When you lock your hotel door, you assume both you and your belongings are safe, but thieves have developed a simple device that can unlock hotel doors in potentially millions of rooms. NBC’s Jeff Rossen investigates.

Wow!  It's immediately obvious to anyone that the major hotel chains have a problem on their hands.  This video.today.msnbc.com clip is a must watch for anyone who travels at all.  I thank reader Brad Robertson for bringing it to our attention...and the link is here.


 

Read more...

Outside View: Argentina's Politics of Intimidation

Experts from Carnegie Mellon University will join Robert J. Shapiro, my co-chair at the American Task Force Argentina, to brief lawmakers and Obama administration officials on U.S.-Argentine relations with a focus on Argentina's current standoff with the International Monetary Fund.

The briefing comes just days before an IMF compliance deadline, by which Argentina must show that it has rectified its false official statistics, including inflation and CPI numbers, or face censure.

To put this in perspective, Argentina is the only leading world economy whose economic data have been repudiated by the IMF and Managing Director Christine Lagarde recently pledged to use the "red card" against Argentina if Argentina failed to correct its numbers.

This UPI story from yesterday is Roy Stephen's third contribution to today's column...and the link is here.

Read more...

The Deutsche Bank Whistleblower Case May Be Just the Beginning

We’re likely to see more financial whistle blowing cases in the future. That’s because the Deutsche Bank case is part of a new program developed under the Dodd-Frank financial reform bill specifically designed to encourage insiders to share tips. As I explained in February, if a whistleblower provides original information that helps the SEC successfully impost sanctions of more than $1 million, the awards range from 10 percent to 30 percent, depending on a number of factors, such as the uniqueness of the information and whether the whistleblower reported the problems internally first.

The program started in the summer of 2011, and its results are starting to pop up. In August the agency released its first whistleblower award, a $50,000 payment as the first installment in a case that resulted in more than $1 million in sanctions. The SEC denied paying a second whistleblower in that same case, saying the tipster’s information didn’t directly lead to the sanctions. In its annual report last month, the SEC whistleblower office said it had received 3,001 tips in the 2012 fiscal year.

This story showed up on the Bloomberg Businessweek website yesterday...and I thank Washington state reader S.A. for finding it for us.  The link is here.

Read more...

Interview with UBS Chairman Axel Weber 'We Have Learned Our Lesson'

In a Spiegel interview, UBS board chairman Axel Weber says his bank is better prepared than most others for new, stricter capital requirements. UBS has learned from the mistakes of the financial crisis, he says, and explains why the Swiss financial giant has moved away from investment banking.

For those of you who have suitcases full of money...legally earned, or otherwise...this is certainly an interesting read.  It was posted on the spiegel.de Internet site yesterday...and I thank Roy Stephens for sending it our way.  The link is here.

Read more...

Draghi seeks to allay German concerns on banking union

European Central Bank chief Mario Draghi on Thursday (6 December) sought to downplay a clash of views with the German government over the scope of a new banking supervisor by suggesting a bigger role for national supervisors when it comes to small regional banks.

Setting up the new supervisor for all 6,000 banks in the eurozone is "crucial" to boost market confidence at a time when eurozone recession is now projected to last well into 2013, Draghi said during a press conference following the monthly meeting of the ECB governing council.

Worsening prospects for the eurozone economy are "mainly related to uncertainties about the resolution of sovereign debt and governance issues in the euro area," he said.

This euobserver.com story was filed from Frankfurt yesterday evening...and once again it's courtesy of Roy Stephens.  The link is here.

Read more...

Turning Point? Light Seen at End of Euro-Crisis Tunnel

The worst of the euro crisis has passed, says European Commissioner Olli Rehn, who points to the common currency area's falling budget deficits in an interview on Thursday. Greek Prime Minister Samaras is also optimistic, saying that his country is now on the right track.

Rehn, commissioner for economic and monetary affairs, told the Financial Times Deutschland on Thursday: "The last high point of the crisis was in June, around the time of the Greek elections. Now we have a reverse trend."

Rehn defended the strict austerity measures applied in countries like Greece, Portugal and Spain, and credited such policies with successfully reducing the combined budget deficit in the euro zone from 6.2 percent of the currency area's gross domestic product in 2010 to 3 percent this year and a projected 2.5 percent in 2013.

Whistling past the proverbial graveyard, one would think. This Roy Stephens offering is also from the spiegel.de Internet site...and the link is here.

Read more...

ECB mulls negative rates as Europe's economic crisis deepens

The European Central Bank has slashed its eurozone growth forecasts and warned that recession will drag on into the middle of next year, sending the euro plunging below €1.30 to the dollar. 

Mario Draghi, the ECB’s president, said the governing council had discussed a cut in overnight deposit rate to below zero for the first time, and was "operationally ready" to do so if needed.

The comment sent the euro into a nosedive, dropping from $1.3075 to $1.2950 in just two hours. "A negative deposit rate is the mother of all sell signals for a currency," said Hans Redeker, currency chief at Morgan Stanley.

"You only do it if your purpose is to drive down the exchange rate to help exports. We know from Japan’s experience that you lose control of monetary policy if you go that route. We don’t think it will happen because the cost is too high, so we expect the euro to rebound."

This Ambrose Evans Pritchard commentary was posted on the telegraph.co.uk Internet site early yesterday evening...and it's certainly worth reading.  I thank Ulrike Marx for her second offering in today's column...and the link is here.

Read more...

Egypt demonstrators reject Morsi call for dialogue

Demonstrators rejected a call from Egypt's Islamist President Mohamed Morsi for a national dialogue after deadly clashes around his palace, demanding the "downfall of the regime" - the chant that brought down Hosni Mubarak.

Morsi said in a televised speech late on Thursday that plans were on track for a referendum on a new constitution on December 15 despite clashes that killed seven people. He proposed a meeting on Saturday with political leaders, "revolutionary youth" and legal figures to discuss the way forward after that.

But a leading activist group rejected the offer, and fresh demonstrations were called for Friday.

The "April 6" movement, which played a prominent role in igniting the revolt against Mubarak said on its Facebook page that Friday's protests would deliver a "red card" to Morsi.

This Reuters story was filed from Cairo yesterday...and posted on their Internet site late yesterday evening.  It's Roy Stephens final offering in today's column...and the link is here.

Read more...

U.S. likely to extend Iran sanction waivers to India, others

The United States is likely to exempt India, South Korea, Turkey and others from Iranian financial sanctions for another six months on Friday as a reward for reducing crude purchases from the Islamic republic, two U.S. government sources said.

Oil shipments by Iran have more than halved in 2012 in the face of U.S. and European Union sanctions aimed at cutting Tehran's foreign exchange earnings and funding for a nuclear program they suspect is designed for a military purpose. Iran denies that the program is for nuclear weapons.

The U.S. sanctions, which target financial transactions, have gradually tightened the noose on Iran's crude sales. But exports took a deep hit in July when EU sanctions kicked in, largely because they effectively, overnight, banned insurance cover on ships carrying Iranian crude.

This Reuters story was filed from Washington at 1:12 p.m. India Standard time today...and I thank Ulrike Marx for her third and final offering in today's column.  The link is here.

Read more...

Singapore Wages May Worsen Fastest Rich-World Inflation

When dozens of Chinese bus drivers held Singapore’s first strike in 26 years last week, the island deported the perpetrators. Getting rid of the soaring prices that are emboldening calls for higher wages won’t be as easy.

Rising housing, transportation and business costs have given the city state the fastest inflation among the developed world’s biggest economies. The illegal protest by the SMRT Corp. (MRT) drivers in late November may herald a further escalation in price pressures, as even foreign laborers whose cheaper wages have helped restrain inflation express dissatisfaction with their incomes.

Singapore is grappling with the elevated inflation that comes with years of economic growth and population expansion on an island smaller than New York City, with rising demand fueling record property and car prices. The country tightened monetary policy this year while neighbors from Thailand to the Philippines cut interest rates, spurring gains in the currency even as the government predicts gross domestic product will rise at the slowest pace in three years.

This longish Bloomberg piece was filed from Singapore late on Wednesday evening Mountain Time...and is a must read if you know don't know a lot about the place.  I thank West Virginia reader Elliot Simon for sending it...and the link is here.

Read more...

Two King World News Blogs

The first blog is with Citi analyst Tom Fitzpatrick...and it's headlined "Despite Choppiness, Gold to Have Massive Breakout in 2013".  The second is with Ben Davies.  It's entitled "Gold Shorts Are Now Exposed to a Price Spike". 

Read more...

Beware This Gold Trade, Dennis Gartman Says

Small investors are piling into the gold trade, which would suggest a top. But that's not necessarily the case, commodities trader Dennis Gartman said Monday.

"I think you've got the public piling into gold, which happens, and we have to be careful because when the public comes into something, the pros tend to think, 'Well, that's the end of the move.' And the last time we saw gold coin sales of this consequence was actually in 2008, and gold moved from $900 an ounce, almost relentlessly, to $1,700 an ounce," he said.

On CNBC's "Fast Money," Gartman warned investors about one particular trade.

"I will counsel people to be careful when buying gold coins because the markup on gold coins can be preposterous, stupid, egregious, silly," he said. "The last time this happened, gold took off on the upside. It didn't top out."

This CNBC story [plus 3:04 minute video clip] was posted on their website late Monday afternoon Eastern time...and I thank reader "Mike" for bringing it to my attention...and now to yours.  The link is here.

Read more...

Downside manipulation in gold gets noticed in Dubai

Spot gold prices tumbled to a near 30-day low of $1,687 a troy ounce Thursday morning, down $63 per ounce from last week's high of $1,750 per ounce as rumours of a mystery seller unwinding a major hedged position gained currency.

"We're actually seeing a fairly mysterious seller in the Asian time zone over the last week on two occasions," said Jeff Rhodes, CEO of the Dubai-based INTL Commodities.

The large sell orders in a thinly traded market have had "quite an impact," says Rhodes, with gold plunging from $1,750 to just above $1,690. "It's mysterious. I can't explain it," he says. "It's almost as though there is a speculator or speculators who are just trying to trigger a technical move to the downside," Rhodes maintains.

That pretty much sums it up...except he didn't call it by its real name...an engineered price decline.  It was posted on the emirates247.com Internet site yesterday...and I found it hiding in a GATA release.  The headline reads "Will Gold Sink to $1,650 as 'Mystery Sellers' Dump Yellow Metal?" It's worth skimming...and the link is here.

Read more...

Alasdair Macleod interviewed on safety issues with GLD and SLV

Interviewed for GoldMoney by Andy Duncan, GoldMoney research director Alasdair Macleod elaborates on his recent study, published by GATA, of the reduction in safety for metal held in custody by the exchange-traded funds GLD and SLV.

This is another story I found sequestered in a GATA release. The interview is 31 minutes long and its audio is posted at the goldmoney.com Internet site.  The link is here.

Interviewed for GoldMoney by Andy Duncan, GoldMoney research director Alasdair Macleod elaborates on his recent study, published by GATA, of the reduction in safety for metal held in custody by the exchange-traded funds GLD and SLV.

This is another story I found sequestered in a GATA release. The interview is 31 minutes long and its audio is posted at the goldmoney.com Internet site.  The link is here.

Read more...

On Gold; Morgan Stanley Is Buying What Goldman Is Selling

Just yesterday, Goldman Sachs suggested its clients should sell their gold (to them?) as the precious metal cycle had turned. It seems Morgan Stanley disagrees; the firm's preferred fundamental metal exposure for 2013 is Gold.

Expecting Silver to outperform also (given its 'cheaper' store of value), MS believes nothing has changed on the fundamental thesis for owning gold as the adoption of QE 3 (and 4...) and the ECB's commitments (and BoJ) remain the most important factors for a continuation of weakness in the TWI trend for the US Dollar.

They also add that low nominal and negative real interest rates, ongoing geopolitical risk in the Middle East and continued mine supply issues are also supportive.

The analysts at Morgan Stanley have a keep grasp of the obvious.  This Zero Hedge story was posted on their Internet site yesterday afternoon...and I thank reader U.D. for being the first through the door with it.  The link is here.

Read more...

Thunder Road Report: Ultimate bubble is in money itself

MineWeb's Lawrence Williams today reports on the latest edition of Paul Mylchreest's "Thunder Road Report," which maintains that central banks are creating the ultimate bubble in money itself.

"The end game," according to Mylchreest, "is an inflationary/currency crisis, dislocation across credit and derivative markets, and the transition to a new monetary system, with a new reserve currency replacing the dollar. This makes gold and silver the 'go-to' assets for capital preservation."

Williams' report at the mineweb.com Internet site contains a link to a PDF copy of the full Thunder Road Report...and that link is here.  The report is 75 pages long...so pack a lunch!

Read more...

 

¤ The Funnies

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¤ The Wrap

The highbrows are also scared...and that's the way it should be.  They should be more afraid than all us regular folk put together.  We don't understand a thing...and they understand how much we don't.  They look into the bottomless pit and know that it's inevitable. They  must go down into it. Their hearts catch, but they must go down...and descend they do. But how? And what will they find at the bottom...and most important, will they be able to climb out? - Arkadi and Boris Strugatskii...Roadside Picnic [1972]

One has to wonder how high the prices of all four precious metals would have climbed if left to their own devices once London closed for the day at 11:00 a.m. Eastern time yesterday.  A lot more, would have been my guess.  It should be obvious to just about everyone now that JPMorgan et al are riding shotgun over these markets every minute and hour of the day.

I have nothing much to add to what I said yesterday in this space. Except for palladium, which is now in overbought territory, the other three precious metals are below their respective 50-day moving averages...and it's still a big unknown whether "da boyz" will be gunning for the 200-day moving averages between now and the new year.

This afternoon at 3:30 p.m. sharp, we'll get both the Commitment of Traders Report and the December Bank Participation Report...and it will be interesting to see how much short covering that the Commercial traders [read bullion banks] have been able to achieve during the reporting week, which ended at the Comex close on Tuesday.  Whatever the numbers are, I'll have them in tomorrow's column.

There wasn't a lot of price action during the Friday trading session in the Far East.  Gold and silver prices rose a bit until lunchtime was over in Hong Kong...and then got sold back to just about unchanged by the London open.  London has been open for more than two hours since I wrote that last sentence...and both metals are now slightly below their closing prices in New York on Thursday.  Volumes are pretty light, so I wouldn't read much into the price action.  The dollar index, which had been flat through almost all of Far East trading, ticked up shortly before 3:30 p.m. Hong Kong time...about half an hour before the London open...and is now up about 13 basis points from Thursday's close as I hit the 'send' button at 5:15 a.m. Eastern time.

Today is Friday, December 7th...the 71st anniversary of the Japanese attack on Pearl Harbor...and I'm hoping the JPMorgan et al don't use this occasion to bomb the precious metal markets in New York in remembrance.

I don't want to end yet another column on a gloomy note, so here's a 35-second youtube.com video clip to lighten things up a little.  I thank my friend Stan Connolly for sending it along last evening...and the link is here.

Enjoy your weekend, or what's left of it...and I'll see you here tomorrow.