Casey Research Publication
Gold & Silver Daily
"I'm expecting the data to show another increase in JPMorgan's long-side corner in the Comex gold market"
 

¤ Yesterday In Gold & Silver

The gold price spiked up at the New York open on Sunday night/Monday morning in the Far East, and that was the high for the day.  There was big volume up until noon Hong Kong time, so it was obvious that someone was throwing a lot of paper contracts at the market to keep the price from moving high, or maybe it was just the high-frequency traders doing their thing.  I suspect the latter.

Then the gold price got sold down into the Comex open in New York, rallied into the London p.m. gold fix, and that was pretty much all she wrote, as gold got sold down to its low of the day [$1,302.70 spot] around 4:15 p.m. EDT in electronic trading.  From that low, gold rallied a bit into the 5:15 p.m. close.

Gold finished the Monday session at $1,313.90 spot, down an even 14 bucks from Friday.  Net volume was around 16,000 contracts, with about a quarter of that amount coming before the London open.

It was more or less the same chart pattern for silver as well.  Silver closed on Monday at $21.82 spot, down 44.5 cents from Friday.  Net volume was around 44,000 contracts, with a bit more than a quarter of that coming before the London open.

A cursory glance at the platinum and palladium charts below shows that their chart patterns were derivatives of the chart patterns for gold and silver as well.  Palladium was the only one of the four precious metals that was allowed to finish up on the day.

The dollar index fell out of bed to the tune of about 20 basis points right at the 6 p.m. New York open on Sunday night.  From there it traded sideways, hitting its low of 80.98 a hair before 9 a.m. EDT in New York.  Someone was there to catch a falling knife, and the index rallied back to 81.31 before trading more or less sideways in the close.  The index closed at 81.28, which was down 22 basis points from Friday.

Despite the fact that gold spent the entire New York session in the red, the gold stocks struggled valiantly to stay in positive territory.  But once the gold price began to head south at 2 p.m. EDT, it was just to much, and they slid into the red for the final time going into the close.  The HUI finished down 0.68%.  It could have been far worse.

However, the silver stocks got hit pretty hard, and Nick Laird's Intraday Silver Sentiment Index closed down 2.29%.  The silver stocks are down a bit more than 20% since their late-August highs.

The CME's Daily Delivery Report showed that two gold and 109 silver contracts were posted for delivery within the Comex-approved depositories tomorrow.  Jefferies was the short/issuer of note with 105 contracts.  The three largest long/stoppers were Canada's Bank of Nova Scotia, JPMorgan Chase out of its client account, and Merrill.  They will take delivery of 61, 27 and 12 contracts respectively.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes GLD; and as of 9:29 p.m. EDT, there were no reported changes in SLV, either.

Since yesterday was Monday, the U.S. Mint had a sales report.  They sold 1,500 ounces of gold eagles, 500 one-ounce 24K gold buffaloes, and 675,000 silver eagles.  I'm underwhelmed.

There was virtually no movement in gold over at the Comex-approved depositories on Friday.  They didn't report receiving any, and only 128.600 troy ounces was shipped out.  That's exactly four kilobars of the stuff, and it was all out of Brink's, Inc.

As usual, it was pretty busy as far as silver was concerned, as 224,291 troy ounces were reported received, and 649,045 troy ounces were shipped out the door.  The link to that activity is here.

Here's a new chart that Nick Laird has been working on for some time, and I asked him to write up an introductory paragraph, and here it is:

"The Gold Events Calendar developed by Nick Laird of www.sharelynx.com showcases all the major events that impact the gold price from Government reports (FOMC, NFP, IJC, ADP reports) to gold trading events (futures, options, GLD & COTs) to cultural holidays around the world to Indian auspicious & inauspicious days to buy gold. Also included are some gold metrics i.e. volatility, volumes, open interest plus the US Dollar Index vs the Euro & Copper vs Oil. The concept behind the chart is to see the effects of past events & therefore to see events coming months & weeks ahead."

It's divided into two different charts.  The first is the "Gold Events Calendar 2013" and the second is titled "Gold Events Calendar Menu". If you have any questions, they should be directed to Nick and not to me!

I was picking my way through some commentary that Miles Franklin dropped into my in-box yesterday, and I found this wonderful quote that he ripped from Ted Butler's column on Saturday, and since it's now in the public domain, here it is!

I know that some have questioned how it could be possible for gold to decline so much in price if JPMorgan held a long market corner. The answer is clear, once you remember that prices only fall sharply in order to enable JPMorgan to buy. Near the bottom in gold prices at $1,200, JPMorgan was long 85,000 contracts. On the subsequent $250 rally, JPM sold off and closed out nearly 30,000 contracts of their long gold market corner, booking and realizing $350 million in profits. Now JPMorgan has decided to buy more and has cratered gold prices by more than $100 in order to re-buy as many new gold contracts as they can.

JPMorgan is not concerned that the market may have temporarily gone against their existing gold corner as they continue to buy as many contracts as possible. JPM wouldn't have any problem in meeting margin calls as it is presently structured; because it rests upon unlimited funding. When you look back at this year, it is crystal clear that JPMorgan made $3 billion in buying back big short positions in gold and silver and actually flipping their short corner in COMEX gold to a long corner that they've already milked for a $350 million profit recently, and so far. - Ted Butler, September 14, 2013

I also got a charge out of something that Barry Ritholtz wrote on Sunday afternoon about the fact that Larry Summers had withdrawn his name as a candidate for Fed Chairman, and I thought it was right on the money.  I thank readers "Jim and Elena" for sending it our way.

Here’s what President Barack Obama‘s statement on Lawrence Summers‘s decision to withdraw his name from consideration to be the next chairman of the Federal Reserve would have looked like after 40 milligrams of Sodium thiopental:

“Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve.

Larry was a critical contributor to the radical deregulation that was one of many causes of the worst economic crisis since the Great Depression. It was in no small part because of his lack of expertise, false wisdom, and inept leadership that the economy crashed and burned and even today is still failing to be to back to its full growth potential.

As Treasury Secretary, he helped to pass the Commodity Futures Modernization Act. This turned derivatives into a unique financial instrument with no oversight, reserve requirements, mandated disclosures, or listing minimums. The CFMA all but guaranteed that Derivatives would eventually implode. Summers further contributed to the crisis by Summers by overseeing the repeal of Glass Steagall. With this firebreak between Wall Street and Main Street effectively removed, the financial conflagration of 2008 spread from Wall Street to every corner of the economy.

Further, his terrible advice and lack of insight is in large part the reason we see so little progress being made today — the lack of economic growth, the concentrated bank power, the still dangerous financial system and of course, the sub-par job creation.

I will always blame Larry for the way he damaged my presidency. To anyone who  to seek his guidance and counsel in the future, please don’t make the same naïve errors I did.

"I think is quite a bit more truthful than the nonsense we heard earlier today." - Barry Ritholtz

I have very few stories for you today; but the final edit, as always, is up to you.

 

¤ Critical Reads

Larry Summers Withdraws Name for Fed Chair

The Wall Street Journal's David Wessel is reporting that Larry Summers has withdrawn his name for Fed Chair.

"I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery," Summers wrote in a letter to President Obama, Wessel writes.

Summers was running into opposition from all quarters.

The first person through the door with this story on Sunday was reader M.A. at 4:35 EDT.  This "Reader's Digest" version of it was posted on the businessinsider.com website yesterday.

Read more...

Greg Palast: Larry Summers...Goldman Sacked

Joseph Stiglitz couldn't believe his ears.  Here they were in the White House, with President Bill Clinton asking the chiefs of the US Treasury for guidance on the life and death of America's economy, when the Deputy Secretary of the Treasury Larry Summers turns to his boss, Secretary Robert Rubin, and says, "What would Goldman think of that?"

Then, at another meeting, Summers said it again:  What would Goldman think?

A shocked Stiglitz, then Chairman of the President's Council of Economic Advisors, told me he’d turned to Summers, and asked if Summers thought it appropriate to decide US economic policy based on “what Goldman thought.”  As opposed to say, the facts, or say, the needs of the American public, you know, all that stuff that we heard in Cabinet meetings on The West Wing.

Summers looked at Stiglitz like Stiglitz was some kind of naive fool who'd read too many civics books.

Summers did more than ask Rubin to channel the spirit of Goldman: Summers secretly called and met with Goldman's new CEO at the time, Jon Corzine, to plan out the planet’s financial deregulation. I’m not guessing:  I have the confidential memo to Summers reminding him to call Corzine.

This is probably the most important story in today's column...along with the link to the "The Confidential Memo at the Heart of the Financial Crisis" that embedded in it...and it's an absolute must read.  I thank reader U.D. for sharing it with us.  There's also a video interview with Greg Palast on this exact subject that Dr. Dave Janda sent me on Sunday...and the link to that is here.

Read more...

Obama: 'I Will Not Negotiate' With Congress on Debt Ceiling

President Barack Obama warned Republicans in Congress on Monday that he will not negotiate over an extension of the U.S. debt ceiling as part of a budget battle that will soon dominate Washington, with a deadline fast approaching.

Pivoting to domestic policy after devoting weeks to the crisis in Syria, Obama scolded his political opponents for threatening a government shutdown and attempting to attach conditions to funding the budget for the 2014 fiscal year that begins October 1.

"Let's stop the threats. Let's stop the political posturing, let's keep our government open. Let's pay our bills on time. Let's pass a budget," Obama said.

He faces yet another budget showdown as Republicans in Congress attempt to force more spending cuts and remove funding for Obama's signature achievement, the 2010 healthcare law that is facing a rocky roll-out.

This article was posted on the moneynews.com Internet site early yesterday afternoon...and it's courtesy of West Virginia reader Elliot Simon.

Read more...

Jim Rickards Speaks at the Charles Koch Institute

This video  runs for 72 minutes...and I haven't had the chance to look at it yet.  When you click on the webpage, it doesn't show much until you run your cursor over the top left-hand corner of the page, and then the controls show up.  You can also bring it up to full-screen size as well.  It's annoying in the fact that the audio is not synced with the video.  That make it disconcerting to watch, but it sounds OK.  I thank reader Harold Jacobsen for sending it our way.

Read more...

BIS veteran says global credit excess worse than pre-Lehman

Extreme forms of credit excess across the world have reached or surpassed levels seen shortly before the Lehman crisis five years ago, the Bank for International Settlements has warned.

The Swiss-based `bank of central banks’ said a hunt for yield was luring investors en masse into high-risk instruments, “a phenomenon reminiscent of exuberance prior to the global financial crisis”.

This is happening just as the US Federal Reserve prepares to wind down stimulus and starts to drain dollar liquidity from global markets, an inflection point that is fraught with danger and could go badly wrong.

“This looks like to me like 2007 all over again, but even worse,” said William White, the BIS’s former chief economist, famous for flagging the wild behaviour in the debt markets before the global storm hit in 2008.

This Ambrose Evans-Pritchard offering was posted on the telegraph.co.uk Internet site early Sunday afternoon BST...and it's definitely worth reading.  I thank Roy Stephens for his first contribution to today's column.

Read more...

'Follow the Money': NSA Monitors Financial World

The NSA monitors banks and credit card transactions -- sometimes in apparent violation of national laws and global regulations. The European SWIFT financial transaction network is being tapped on different levels, internal documents from the US spy agency show.

"Follow the Money" is the name of the NSA branch that handles these matters. The name is reminiscent of the famous catchphrase by former FBI Associate Director Mark Felt, the whistle blower known as "Deep Throat" who offered the information to Bob Woodward and Carl Bernstein, the Washington Post reporters investigating the Watergate scandal in 1972.

"Money is the root of all evil," joke the intelligence agents. According to the classified documents, the spies' activities primarily focus on regions like Africa and the Middle East -- and their efforts often focus on targets that fall within their legal intelligence-gathering mandate. However, in the financial sector, just as in other areas, the NSA also relies on maximum data collection -- an approach that apparently leads to conflicts with national laws and international agreements.

This two-page essay was posted on the German website spiegel.de on Monday afternoon Europe time...and it's the second contribution in a row from Roy Stephens.

Read more...

Merkel allies win in Bavaria a week before German election

Angela Merkel's allies swept to victory in a state election in Bavaria on Sunday, regaining the absolute assembly majority they lost in 2008 and providing a show of conservative strength for the chancellor a week before Germany goes to the polls.

The Christian Social Union (CSU), sister party of Merkel's Christian Democrats (CDU), won 49 percent according to TV projections, putting them back more firmly in the saddle of the prosperous southern state they have governed for 56 years.

But the Bavarian ballot also delivered a worrying message for Merkel, as the pro-business Free Democrats (FDP), with whom she governs Germany in a center-right coalition, slumped to just 3 percent, below the 5 percent level needed for assembly seats.

The FDP sought to put a brave face on Sunday's disastrous result, which thwarted recent upward momentum for the party.

This Reuters piece was posted on their website on Sunday afternoon Europe time.  It's courtesy of U.A.E. reader Laurent-Patrick Gally.  There was a similar UPI story on this as well.  It's headlined "Walker's World: Woes Beneath Merkel's Calm"...and it's courtesy of Roy Stephens.

Read more...

Separating Fact from Fiction In Accounts of Germany’s Renewables Revolution

I recently wrote about—and debunked—the renewables “disinformation campaign” that spreads misinformed and falsely negative stories about the growth of renewable energy. A special focus of such disinformation has been reportage on Germany’s efficiency-and-renewables revolution.  The impressive success so far of the German Energiewende (energy turnaround) is an important existence proof for the world, because Germany is cloudy, high-latitude, heavily industrialized, highly competitive (it rivals America’s merchandise exports with one-fourth its population), and the world’s fourth-biggest economy.

Perhaps because German success would therefore belie the supposed necessity of fossil-fuel and nuclear energy, some media regularly report the Energiewende’s failure or supposed impossibility. As I highlighted, Germany’s renewables revolution is in fact highly successful and strong as ever, but that hasn’t stopped three myths from gaining traction in the media: 1) Germany’s supposed turn back to coal, 2) how renewables undermine grid reliability, and 3) how renewables subsidies are cratering the German economy. None of those are true, and here’s why.

I posted two stories about this subject in my Saturday column...and both had a definite negative slant to them.  This is the story from the other side of the aisle...and I thank reader Gary Woloshyniuk for sharing it with us.

Read more...

Blow to Abenomics as Japan shuts last nuclear reactor

Failure to revive Japan’s nuclear industry is a major setback for premier Shinzo Abe, who had hoped to restart at least eight of the country’s 50 reactors this year to cut reliance on ruinously expensive crude oil and liquefied natural gas (LNG). While a surge in output from solar and other renewables has plugged a gap equal to three reactors, it too comes at a high cost.

Mr Abe’s dash for growth after 15 years of deflation and perma-slump depends crucially on affordable energy, but Japanese companies must now pay three times as much as US rivals for power.

Tokyo says it costs four time more produce power from oil compared to coal or nuclear reactors, creating an incentive to build new coal plants.

The cost squeeze threatens to offset gains from a 20pc fall in the yen against the dollar since Mr Abe first signalled his monetary blitz last year. It has also wiped out Japan’s trade surplus, leading to deficits in 2011 and 2012 for the first time in over 30 years. Junko Nishioka from RBS said this takes away a key shield protecting Japan against a bond market crisis.

This short commentary by Ambrose Evans-Pritchard was posted on The Telegraph's website early Sunday evening BST...and it's the final offering of the day from Roy Stephens.

Read more...

Seven King World News Blogs/Audio Interviews

1. John Embry: "The BIS and the Coming Gold and Silver Super-Surge".  2. Andrew Maguire:  "Fed, LBMA, Comex and Banks on the Edge of Disaster".  3. Michael Pento: "More Fallout...Crushing JPM Gold and Silver Whistle-blower News".  4. James Turk:  "Incredible Events Now Unfolding in the Gold and Silver Markets".  5. Richard Russell: "Center of the World, the U.S. Dollar and Silver".  6. The first audio interview is with Eric Sprott...and the second audio interview is with Andrew Maguire.

[Although I post all of Eric King's interviews, I wish to go on the record as saying that I don't necessarily agree with everything that's said by some of his guests. - Ed]

Read more...

It’s Time to Harden Your Assets—NOW

What sort of currency, gold, or other financial instruments can you take with you when you travel? What do you have to declare? It all seems to get more complicated and difficult every day.

Doug Casey has been predicting ever more stringent currency controls for some time, along with greater scrutiny of every financial move made by every person on earth—and that was before the NSA's snooping on everyone became public knowledge.

This is worth fighting as a matter of principle: the president and every member of Congress who votes against shutting down the NSA's illegal and unethical activities should be voted out of office. With prejudice.

But there are also very pragmatic and near-term financial consequences to think about. Doug believes the global economy has started down a spiral that will eventually become known as the Greater Depression. Whether you agree with Doug's view or not, it is beyond question that the state's vise grip on our lives is tightening, and that governments are particularly keen to use these increasingly Orwellian powers to secure their lifeblood: money. Just Google the new G-20 agreement on sharing taxpayer information. I rest my case.

This commentary by Casey Research's Chief Metals & Mining Investment Strategist, Louis James, was contained in yesterday's edition of the Casey Daily Dispatch...and it's definitely worth reading.

Read more...

Dr. Dave Janda interviews your humble scribe

The good doctor was kind enough to interview me on his "Operation Freedom" radio show on Sunday afternoon over at all-talk WAAM 1600 AM Radio out of Ann Arbor, Michigan.  The program runs for about twenty-five minutes.

Read more...

Anglo American dumps Pebble project in Alaska

The withdrawal of Anglo American from one of the most controversial mining projects in the United States, the Pebble Project in Alaska should not come as a major surprise to those who have following the project since 2001, the year it was acquired by Northern Dynasty Minerals.

On Monday, however, Anglo American CEO Mark Cutifani—who is definitely no dummy when it comes to determining project feasibility—said: “Despite our belief that Pebble is a deposit of rare magnitude and quality, we have taken the decision to withdraw following a thorough assessment of Anglo America’s extensive pipeline of long-dated project options.”

“We wish the project well through its forthcoming permitting process and express our thanks to all those who have supported Pebble and who recognize the opportunities and benefits that such an investment may bring to Alaska,” he added. Anglo will take a $300 million write down on its Pebble investment.

In a conference call with analysts and shareholders Monday, Northern Dynasty Minerals tried its best to put a positive spin on a devastating announcement, which prompted a number of Northern Dynasty’s shareholders to sell their shares.

As GATA's Chris Powell said in his covering e-mail..."The destruction of the gold mining industry accelerates as the industry won't raise a finger to defend itself against market manipulation by central banks and their bullion bank agents."  He's exactly right about that, as it appears that no mining company will stand up and do the right thing.

Read more...

Gold repatriation movement arises in Finland

A gold repatriation movement has sprung up in Finland just two weeks after such a movement arose in Poland.

GATA's friend, Ilkka Mikael Hikipää, CEO of gold dealer KultaEeva Oy, kindly provides the translation of the movement's announcement that is embedded in this GATA release.  It's worth reading.

Read more...

 

¤ The Funnies

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¤ The Wrap

Invariably, JPMorgan has bombed the gold and silver market sure enough, but not by selling many thousands of contracts; but by first selling relatively few or pretending to sell many (spoofing) contracts in order to scare and induce others into selling many contracts so that the crooks at JPM can buy. Always, always, always, is it true that JPM and the commercials are net buyers on the big down days; and always is it true that the only reason for the big down days is to allow JPMorgan to buy at distressed prices. JPMorgan is perhaps the most crooked financial institution ever, but you must acknowledge that they are sophisticated crooks. They don’t stick up 7-Elevens; they conduct sophisticated financial fraud against other supposedly sophisticated market participants. - Silver analyst Ted Butler -- 14 September 2013

Because of the enormous volume during the Far East trading session on their Monday, it was obvious [at least to me] that a lot of effort was expended in keeping the precious metal prices under control.  That effort extended into the rest of the trading sessions in both Europe and North America, but at reduced volumes.

As we head into the FOMC meeting, and the "tapering" that may or may not accompany it; we're all interested in seeing how the metals "react" when the "news" is released on Wednesday afternoon.  In the meantime, all we can do is watch and wait.

If we manage to get through the rest of the Tuesday trading session without a major rally, this Friday's Commitment of Traders Report will clearly show the results of the big engineered price decline that we experienced on Thursday of last week.  I'm expecting the data to show another increase in JPMorgan's long-side corner in the Comex gold market, along with a decline in their short-side corner in the silver market.

In Far East trading on their Tuesday, there wasn't much price activity worth noting, but with all the high-frequency trading going on, it's really impossible to tell what's really happening under the hood.  I see that all four precious metals have spiked up a bit at the London open this morning.  However, the same thing happened on Monday, and those gains were wiped out if just an hour or so.  It remains to be seen if that happens again today.  But if I had to bet ten bucks, I'd guess that today's price action may end up looking a lot like yesterday's price action.  Time will tell.

Volumes are already pretty decent now that London has been open about thirty-five minutes, although it isn't as heavy as it was this time on Monday.  Not that it matters, but the dollar index, which had been up a handful of basis points in morning trading in the Far East, is now down about the same amount.

That's all I have for today, which wasn't a lot, and I'll see you here tomorrow.