As per usual, the gold price didn't do a whole heck of a lot in Far East or early London trading. The London low was set at noon BST...7:00 a.m. Eastern time...and the gold price edged higher from there, but that tiny rally ran out of gas shortly after the Comex open.
From there it traded sideways until 11:30 a.m. in New York...and then rallied all the way up to its high of the day...$1,781.70 spot...which came about an hour later, just minutes after 12:30 p.m.
Once that high was in, the price backed off a few dollars and traded virtually ruler flat into the 5:15 p.m. electronic close.
Gold closed at $1,777.60 spot...up $24.30 spot. Net volume was pretty chunky at 188,000 contracts, so it was obvious that this rally did not go unopposed.
The silver chart looked like a carbon copy of the gold chart, with all the inflection points coming at the same times. Silver's London low, like gold, came at the 12 o'clock noon BST London silver fix. The only tiny difference was that silver's high tick [$34.88 spot] came in electronic trading around 3:30 p.m. Eastern time.
Silver closed at $34.66 spot...up 67 cents. Net volume was also very chunky...around 46,000 contracts.
The dollar index opened at 79.82 and then flopped around within 15 basis points of that value for many hours before hitting its zenith...79.91...at 11:20 a.m. Eastern time. From there it fell all the way down to 79.49 by shortly after 2:00 p.m. Eastern. The index rallied a hair from that low and closed at 79.55...down 29 basis points on the day. It was another failed attempt at breaking back above the 80.00 price level.
The dollar index may be in for another leg down at this point, but it's too soon to cast that comment into stone just yet.
The early rally from the noon London low had nothing to do with the currencies yesterday...and the 40+ basis point dollar index decline that began at 11:30 showed up immediately in the gold and silver price...but the rally in both metals ended ninety minutes before the index hit its low of the day.
The gold stocks gapped up at the open, dipped a bit...and then worked their way solidly higher for the rest of the New York trading session, despite the fact that the gold price didn't do a thing from 12:30 p.m. Eastern time onwards. The HUI finished up 2.66%.
The silver stocks were on a tear yesterday...and that's reflected in Nick Laird's Silver Sentiment Index which closed up 3.86%.
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The CME Daily Delivery Report showed what I expected...as only 4 gold contracts were left in the September delivery month...and they will be delivered within the Comex-approved depository system sometime today.
And also as expected, was the data for First Day Notice for the October delivery month...1,980 contracts in gold...and 49 contracts in silver. In gold, the only two short/issuers that mattered were Deutsche Bank with 1,000 contracts...and HSBC USA with 900 contracts...suspiciously even numbers. There were well over a dozen long/stoppers...the three largest were JPMorgan with 1,041 contracts split up pretty evenly between their client account and their proprietary trading desk...and Citigroup put in a surprise appearance receiving 404 contracts...and in distant third place was the Bank of Nova Scotia with 227 contracts stopped. The link to yesterday's Issuers and Stoppers Report is worth your time...and the link is here.
Both GLD and SLV took a breather yesterday...and reported no activity.
There was a smallish report from the U.S. Mint. They sold 7,000 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and a smallish 30,000 silver eagles.
Over at the Comex-approved depositories on Wednesday, they reported receiving 599,530 troy ounces of silver...and shipped out two good delivery bars weighing, in total, the magnificent sum of 2,018.450 troy ounces. The link to that activity is here.
I got an interesting e-mail from reader D.S. in California while I was slaving away on this column last night...and this is what he reported...
"I watched a surprising investor webcast by Jurrien Timmer, Co-Portfolio Manager of Fidelity® Global Strategies Fund and Director of Global Macro for Fidelity Management & Research Company (FMRCo). He spoke about global asset allocation, where we are in the business cycle, and about QE. He was skeptical that the central banks will be able to overcome the downward trends of global economies. He disclosed that he personally holds physical gold and gold mining shares."
"The kicker was a log chart that compared regressions for the price of gold and the total balance sheets of central banks. They tracked each other very nicely. The take-home message, evident from the chart, is that when central bank balance sheets double, so does gold. It was clear that $3,200 isn't far away for gold."
"If they post the chart, I will send it on to you."
Here are another couple of charts that Nick Laird sent me last night on the Intraday Price Movements of Gold. The first one is an update of the old chart that I used for several years...and was more than two and a half years out of date. Here's the new one that's current as of the end of August 2012...and it contains six and a half years of data, going all the way back to March 2006.
The five outstanding points [from left to right] as they appear on this chart are: 1] the high of day at 9:00 a.m. local time in London...an hour after the London open, 2] the London a.m. gold fix at 10:30 local time, 3] the low at the 8:20 a.m. Eastern time Comex open, 4] the New York high at the 9:30 a.m. open of the equity markets, 4] and the elephant in the room...the 3:00 p.m. local time London gold fix...10:00 a.m. Eastern in New York. The negative "London Bias" stands out like the proverbial sore thumb.
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The second chart is for the current year to date...January 1st to August 31st. All the salient points are the same, except the high of the day now comes about forty-five minutes before the London open, instead of an hour after it. All the other points of interest are the same. The "London Bias" just screams to be noticed here...as it's becoming an ever more prominent price management tool as the years go by....compared to the average shown in the 6.5 year chart above it.
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I don't have a lot of stories today, which suits me just fine, so I hope you can find the time to read the ones that interest you the most.
After years of emulating the flashy United States stock markets, countries around the globe are now using America as a model for what they don’t want to look like.
Industry leaders and regulators in several countries including Canada, Australia and Germany have adopted or proposed limits on high-speed trading and other technological developments that have come to define United States markets.
The flurry of international activity is particularly striking because regulators have been slow to act in the United States, where trading firms and investors have been hardest hit by a series of market disruptions, including the flash crash of 2010 and the runaway trading in August by Knight Capital that cost it $440 million in just hours. While the Securities and Exchange Commission is hosting a round table on the topic on Tuesday, the agency has not proposed any major new rules this year.
This story showed up posted on The New York Times website on Tuesday...and it's well worth reading. The HFT chart in the left side bar part way down is worth the trip all by itself. I thank Donald Sinclair for our first story of the day...and the link is here.
China-based Sheenson Investments Ltd and a stakeholder agreed to pay $1.5 million to settle U.S. charges that it violated rules on the size of positions traders can hold in the cotton and soybean futures markets, a U.S. regulator said on Tuesday.
Sheenson Investments exceeded position limits in the soybean oil market in February and March 2009, the U.S. Commodity Futures Trading Commission said in a brief release on the unusually large fine.
The CFTC order also found that Weidong Ge, through his ownership interest in Hong Kong-registered Sheenson and other firms, exceeded limits in the cotton market from January through February 11, 2011.
Of course the question begs to be asked...what about JPMorgan's groteque short position in silver, which is more than six times the current 5,000 contract limit for all months combined. I guess there are only violations when you are exceeding the limits on the long side. This Reuters story showed up on their Internet site early on Wednesday morning...and I thank Scott Pluschau for bringing it to our attention. It's a short must read...and the link is here.
Goldman Sachs Group Inc will pay more than $14 million to settle federal and state charges after it violated "pay-to-play" rules, in a case involving campaign contributions to former Massachusetts gubernatorial candidate Timothy Cahill.
Neil Morrison, a former vice president in Goldman's Boston office, worked extensively on Cahill's 2010 campaign while also soliciting underwriting business from the Massachusetts treasurer's office, the Securities and Exchange Commission said.
Cahill at the time was Massachusetts state treasurer.
In what the SEC described as its first "pay-to-play" case involving contributions other than cash, Goldman settled without admitting or denying the charges.
This is another offering from Scott Pluschau...and another Reuters story as well. It was posted on their website late Thursday afternoon...and the link is here.
The scene is a Buenos Aires city-centre side-street. I stand pretending to look in a shop window until I catch the eye of a man loitering in a doorway. He acknowledges me with a wink and I sidle over. We talk without moving our lips.
“Six thirty five.”
“Deal. Give me five hundred.” With shifty glances over the shoulder, I complete the transaction and scurry away. Another day, another hit.
Bizarrely, the prohibited substance we are trading is the US dollar. But how, in the glittering, cosmopolitan capital of a proud and prosperous nation, did it all get so sordid? How did we sink so low?
This story originally showed up in The Telegraph Weekly World Edition...and was picked up by the businessinsider.com Internet site early on Thursday morning...and it's worth reading if you have the time. It's also Roy Stephens first offering of the day...and the link is here.
At the request of the Athens government, the British financial authorities recently handed over a detailed list of about 400 Greek individuals who have bought and sold London properties since 2009.
The list, closely guarded, has not been publicly disclosed. But Greek officials are examining it to determine whether the people named — who they say include prominent businessmen, bankers, shipping tycoons and professional athletes — have deceived the tax authorities by understating their wealth.
“These people have money and they are known — but it is not clear yet if they have violated any laws,” said Haris Theoharis, an official in the Greek Finance Ministry. Tax investigators have been examining the list to see whether there is any overlap between those who bought London properties and those already identified as being tax cheats.
This story showed up in The New York Times yesterday...and I thank Phil Barlett for digging it up on our behalf. The link is here.
Matteo Renzi is on a crusade to become Italy's next leader. With his calls for wholesale change in the political landscape, the mayor of Florence is generating excitement like few other recent Italian politicians. But his main opposition is coming from the bigwigs in his own party who would also get the boot if he won.
Last Monday, he was in Rome. A week earlier, he ploughed through northern Italy. In just two days, he made stops in 20 cities -- from Mantua and Monza to Bergamo and Brescia -- logging 3,250 kilometers (over 2,000 miles) in the process. Everywhere he went, the rooms were packed and the crowds were enthusiastic. Now his journey is taking him to southern Italy, starting with Naples.
The journey is being made in a white camper with the word "Adesso!", or "Now!", written in big letters on the exterior. Inside sits Matteo Renzi, the 37-year-old mayor of Florence. He is confident, relatively young for an Italian politician -- and sparking fear within the establishment. He is determined to win this spring's parliamentary election on his own, to become prime minister and to lead Italy for the next five years.
The resonance has been massive. More than anyone, young, Internet-savvy Italians are excited that someone is finally sounding the call to the barricades. After all, the older generation has yoked them with unemployment and debts. Even older conservatives who used to vote for former Prime Minister Silvio Berlusconi are jumping on the bandwagon. Fausto, for example, a self-employed construction engineer in his mid-50s, says: "If Renzi runs, he'll get my vote!"
Well, dear reader, Matteo Renzi is a man to watch...and the political establishment has every right to be fearful of him. This story showed up on the German Internet site spiegel.de yesterday...and is Donald Sinclair's second offering in today's column. The link is here.
We discover – yet again, you might say – that Germany, Holland, and Finland will not stand behind their solemn pledge of solidarity when push comes to shove.
Spain’s premier Mariano Rajoy has been betrayed. Nobody should be entirely surprised if he and the Spanish arch-nationalists in his circle offer a condign riposte, and bring down the entire temple on the heads of the creditor powers.
He bit the bullet and agreed to the highly intrusive terms of a €100bn eurozone rescue for the Spanish banking system on a specific understanding: that the ESM bail-out fund would ultimately take over the burden by recapitalising Spain’s banks directly.
This deal has been breached. Can we believe anything that the Chancellor of Germany, the prime minister of Holland, and the prime minister of Finland say from now on? The EMU rescue edifice is built on sand.
Ambrose is not a happy camper in this rather long blog that was posted on the telegraph.co.uk Internet site yesterday. It's certainly a must read...and I thank Roy Stephens for being the first one through the door with this story yesterday. The link is here.
Uncontrolled security threats on the Internet could return much of the planet to an era without electricity or automated transportation, top U.S. and Russian experts said on Thursday.
Former National Security Agency Director Michael Hayden warned that the United States had yet to resolve basic questions about how to police the Internet, let alone how to defend critical infrastructure such as electric generation plants.
And if recently discovered and government-sponsored intrusion software proliferates in the same way that viruses have in the past, "somewhere in 2020, maybe 2040, we'll get back to a romantic time - no power, no cars, no trains," said Eugene Kaspersky, chief executive officer of Moscow-based Kaspersky Lab, the largest privately held security vendor.
The back-to-back presentations at a Washington conference painted the starkest picture to date about the severity of the cyber-security problem.
This businessinsider.com article was posted on their website late yesterday afternoon...and I thank Roy Stephens for his final offering in today's column. The link is here.
The first is with BMO's Don Coxe...and it's headlined "Gold Now Trading at All-Time Highs as a Global Asset". Next is Jean-Marie Eveillard. It's entitled "A Faltering Global Economy, Neo-Keynesians & $15,000 Gold". Last but not least is Caesar Bryan...and his blog bears the title "Gold Could Easily Double From These Levels".
Acquiescing to significantly higher wage demands would put South Africa's gold miners into a very difficult position.
It was gathering the same talismanic quality as the Occupy Movement's 99%. And, bolstered by the steely determination of workers not to see slain comrades die in vain, the demand echoed throughout the platinum district, striking fear into the hearts of Lonmin investors and management.
The workers employed by the world's third largest platinum miner eventually lowered their demands somewhat, but the final settlement of 11 - 22% was nothing to sneeze at and Lonmin's workers were understandably happy.
Given that the increase came as the result of an unprotected strike, the most cynical of capitalists could argue that these miners should be happy just to still have a job, let alone an increase of unprecedented magnitude.
But, if there was a glimmer of hope that the strikers had been appeased by the settlement at Lonmin, it was soon dashed by spreading strikes not just to other platinum mines but, to gold and coal mines as well. And, while some began as disputes over union leadership, increasingly "the number" has returned.
This longish article was posted on the mineweb.com Internet site yesterday sometime...and I thank Donald Sinclair for his final offering in today's column. It's certainly worth reading...and the link is here.
The miner has opted to play the waiting game against its striking workforce whilst mulling its dismissal options.
Gold Field's CEO, Nick Holland, has said the company will not be negotiating with illegal strikers and that, if need be, it can outlast its striking workforce.
"This is a war of attrition, if need be we can sit it out, we are financially very strong, we don't have to do anything anytime soon" said Holland in an interview with Moneyweb's Alec Hogg on SAFM radio Thursday.
Holland is hoping that the on-going strikers will be worn down through lack of financial means.
It will be interesting to see which side caves in first. I found this story on the mineweb.com Internet site just now. It was filed from Johannesburg earlier this morning...and it's definitely worth your time, if you have it. The link is here.
Nick Barisheff is President and CEO of Bullion Management Group Inc., a bullion investment company that provides investors with a secure, cost-effective and transparent way to purchase and store physical bullion. Recognized worldwide as a bullion expert, Barisheff is an author, speaker and financial commentator on bullion and current market trends.
This interview with Nick was posted on the commodityhq.com Internet site on Monday...and is definitely worth reading. The link is here.
Hedge funds are the most bullish on silver in seven months and investors’ holdings are expanding toward a record on speculation the metal will outperform gold as central banks seek to boost growth.
Wagers on rising prices jumped 10-fold since June, U.S. Commodity Futures Trading Commission data show. Investors bought 717.2 metric tons valued at $797 million through exchange-traded products this quarter, the most in a year, according to data compiled by Bloomberg. Prices will increase for at least the next three quarters and average $38 an ounce in the three months through June, or 9.9 percent more than now, based on the median of 14 analyst estimates compiled by Bloomberg.
If history is any guide, silver will beat gold after the Federal Reserve announced a third round of debt-buying and central banks from Europe to Japan pledged more action. Silver rose about 53 percent in the Fed’s first quantitative easing from December 2008 through March 2010, twice as much as gold, and 24 percent during the second phase ending in June 2011, three times as much. Silver will probably keep beating gold in the next several quarters, Morgan Stanley predicts.
“The recent announcements on the part of central banks really sparked the rally,” said Peter Sorrentino, who helps manage $14.6 billion of assets at Huntington Asset Advisors in Cincinnati. “Silver has now become a two-way play, getting bids both on industrial demand as well as a monetary hedge.”
It's hard to believe that this really decent article about silver actually showed up on Bloomberg's website yesterday, but that's precisely what happened. It's a must read for sure...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.
Gold climbed to a record priced in euros and Swiss francs on concern that central banks’ moves to boost economies will devalue currencies, spurring demand for the metal as an alternative investment.
Bullion for immediate delivery in London reached 1,379.32 euros an ounce and has rallied 14 percent this year, data compiled by Bloomberg show. Gold priced in dollars rose 13 percent this year to $1,771.30 by 4:49 p.m. local time and is trading 7.8 percent below the all-time high set in September 2011. The commodity set a record 1,667.18 Swiss francs today and peaked in Indian rupees earlier this month.
Bullion, typically priced in dollars, is extending 11 consecutive annual gains as the Federal Reserve announced a third round of quantitative easing and as central banks from Europe to China to Japan also pledged more action this month. Nations from South Korea to Kazakhstan are boosting their gold reserves and metal held in bullion-backed exchange-traded products rose to a record 2,551.9 metric tons valued at $145.3 billion on Sept. 25, data compiled by Bloomberg show.
This is another story from Bloomberg yesterday...and I thank Washington state reader S.A. for our final story in today's column. The link is here.
Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization
Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.
Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.”
Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained.
Please visit our website for more information about the project.
Rarely have there ever been such multiple and documentable proofs of manipulation as are contained in recent COT data. They say you can lead a horse to water but can’t force him to drink. Likewise, you can present all the documentation to the regulators proving that JPMorgan is manipulating the price of silver [with their own data], but you can’t force them to regulate. - Silver Analyst Ted Butler, September 22, 2012
It was a nice surprise to wake up on Thursday morning and finding these rallies staring me in the face on my computer screen. But if you look at the 1-year gold and silver charts below, you'll notice that these two precious metals have spent the last ten trading days attempting to break above the $1,780 spot price in gold...and the $35 spot price in silver. Was that little dip we had earlier this week...and the last few days of the prior week...the 'correction' I've been expecting? I wouldn't bet the ranch on it...but who the heck really knows for sure? Not me.
Here are the 1-year gold and silver charts. As you can see in gold, the 50-day moving average has already crossed the 200-day moving average going in the right direction. In silver, that event is just about to occur...and when it does happen, it will be the first time that the 50-day m.a. has been above the 200-day m.a. since late October 2011.
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As the headline of today column points out, gold hit a new high against the euro again yesterday...and this is what the 1-year chart of that ratio looks like.
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Today we get the new Commitment of Traders Report for positions held at the 1:30 p.m. Eastern time close of Comex trading on Tuesday. I'm not expecting it to have changed much from the prior week, but you just never know. Whatever it shows, I'll have a comment about it in this column tomorrow.
Except for a slight bump up in price just before 9:00 a.m. Hong Kong time on their Friday, both gold and silver did absolutely nothing all through Far East and early London trading earlier today...and the charts reflect that. However, now that London has been open for a couple of hours, gold is up about six bucks...and is now above the $1,780 mark by a few dollars...and silver is up about fifteen cents. But volumes are pretty heavy in both metals already...so it's obvious that the high-frequency traders are doing their thing. The dollar index is down 13 basis points as I hit the 'send' button at 5:20 a.m. Eastern time.
With today being the last trading day of the week, month and quarter...I wouldn't want to bet on the price action...up or down...or by how much.
So far, the big bad correction I've been expecting is M.I.A...and it may stay that way for quite a while. But as I said a bit further up, who really knows? I don't.
With gold and silver shares moving higher with some conviction now, there's still an 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 out 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...and I'll see you here tomorrow.