Casey Research Publication
Gold & Silver Daily
"I'd just love to see what the COT structure looked like after Friday's trading day was done."
 

¤ Yesterday In Gold & Silver

The engineered price decline in gold came to a halt less than half an hour before the noon London silver fix during their Friday morning...and the subsequent rally came to an end at the London p.m. gold fix...which was 10:00 a.m. Eastern time.

From there, the gold price got sold down a bit until about 11:35 a.m. in New York before resuming the rally...albeit at a much slower rate.  Shortly after 3:00 p.m. the gold price jumped up a few more bucks, before trading sideways into the 5:15 p.m. electronic close.

Gold's low price tick of the day in London was around $1,625 spot...and the high tick of the day [$1,659.80 spot] came late in electronic trading in New York.

Gold finished the Friday session at $1,646.80 spot...down $7.00 from Thursday's close.  Net volume was immense...around 230,000 contracts.

Of course it's always silver that JPMorgan et al are after...and they nailed it pretty good for the second day in a row.  The actual low price tick [around 29.20 spot] came around 10:30 a.m. in London...the time of the a.m. gold fix.  From there the silver price pattern pretty much followed the gold price pattern into the close of trading.  And, like gold, silver's high print of the day [$30.38 spot] occurred in electronic trading just before the market closed.

Silver actually finished in the green at $30.18 spot...up 8 cents from Thursday's close.  Volume was very heavy at around 72,000 contracts.

The dollar index opened at 80.50 on Thursday evening...and by 11:30 a.m. in London on their Friday morning, it had reached its high of the day, which was around 80.85.  It hung in there at that value until just before 8:30 a.m. Eastern time...and then gave up all of those gains during the New York trading session that followed.  The index closed almost where it started the day...at 80.49...down an eyelash from Thursday.

Not surprisingly, the gold stocks gapped down at the open...and spent most of the trading day down at least a percent.  But the sharp rally in gold [and silver] shortly after 3:00 p.m. Eastern caused an equally impressive pop in the gold shares as well...and the HUI actually finished in positive territory...up 0.14%.  Not a lot, to be sure, but better than the alternative.

With the odd exception, all the silver stocks finished in the green yesterday...but Nick Laird's Intraday Silver Sentiment Index only closed up the same amount as the HUI...0.14%...which I thought was rather strange.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 129 gold and zero silver contracts were posted for delivery on Tuesday from within the Comex-approved depositories.  Merrill was the only short/issuer...and the lion's share [116 contracts] were stopped by the Bank of Nova Scotia and JPMorgan Chase.  The link to yesterday's Issuers and Stoppers Report is here.

After the big withdrawal on Thursday, the GLD ETF showed that an authorized participant added 58,100 troy ounces of gold yesterday.  Over at SLV, an authorized participant withdrew 628,824 ounces of silver.

The U.S. Mint had a sales report for the third day running.  They sold 8,500 ounces of gold eagles...and another 1,500 one-ounce 24K gold buffaloes.  For the first three days of the year, the mint has sold 65,000 ounce of gold eagles, along with 14,500 one-ounce 24K gold buffaloes.

In January of 2012 the mint sold 127,000 ounce of gold eagles...and 13,500 one-ounce 24K gold buffaloes.  Based on mint sales to date, the January 2012 sales number should be beaten by quite a bit...and they already have in buffaloes.  But it's still my opinion that most of these sales happened in December, but were shoved into January.  And if I were an American citizen, I'd be buying 2013 silver eagles with both hands the moment they became available.

There was big activity over at the Comex-approved depositories on Thursday.  They reported receiving 2,163,705 troy ounces of silver...and shipped 600,440 ounce of the stuff out the door.  The link to all that activity is here.

The new Commitment of Trader Report came out yesterday at the usual time...and there were no surprises...and no big news.  All the 'juice' will be in the next COT Report...as the engineered price decline began on Wednesday, the day after the cut-off for yesterday's report.  As any long-term reader of this daily rant already knows, this is standard operating procedure for JPMorgan et al if they wish to hide their tracks for as long as possible.

In silver, the Commercial net short position declined by 1,372 contracts, or about 6.9 million ounces.  Ted Butler says that it was pretty much all raptor buying during the reporting week...and that the 'Big 4' didn't change their positions by much.  The Commercial net short position is now down to 226.7 million ounces.

The 'Big 4' bullion banks are short 239.8 million ounces of silver...which is 13.1 million ounces more than the entire Commercial net short position shown in the paragraph above.  On a 'net' basis, these four traders are short 49.0% of the entire Comex futures market in silver...but the truth of the matter is that it's only two traders in the 'Big 4' bullion bank category that really matter...and they are JPMorgan Chase and the Bank of Nova Scotia.  It's my guess that they are short about 45% of the entire Comex silver market all by themselves.

The '5 through 8' largest traders are short an additional 55.2 million ounces of silver...and on a 'net' basis are short an additional 11.3 percentage points of the entire Comex futures market in silver.  Adding up the numbers, the 'Big 8' bullion banks are short a bit over 60% of the entire Comex silver market.

In gold, the Commercial net short position actually increased by 995 contracts, or 99,500 troy ounces...and now sits at 18.86 million ounces.  The 'Big 4' bullion banks are short 11.81 million ounces of gold, which represents 33.3% of the entire Comex futures market on a 'net' basis.  The '5 through 8' bullion banks are short an additional 5.01 million ounces.  This represents 14.1% of the entire Comex gold market on a 'net' basis.  The total for the 'Big 8' comes to 16.82 million ounces of gold...and 47.4% of the entire Comex gold market.

Here's Nick's most excellent "Days of World Production to Cover Short Positions" chart that shows 'all of the above' in graphic form...and the links to the historic [and interactive] COT Reports are here for silver...and here for gold.  They take a while to load if you have an older browser.

(Click on image to enlarge)

Of course, this is all 'yesterday's news' as Ted Butler is wont to say...as the price action since the Tuesday Comex close has mostly relegated this last COT Report to the trash bin.  I would love to have seen what a new COT report would have looked like if the cut-off was at the Comex close yesterday.  I'm sure that with the big new low in silver...and the new low in gold...there were huge declines in the Commercial net short position in both metals, as the tech funds puked up their longs...and the Commercial traders covered short positions...and/or went long themselves.

I'll have more on this in 'The Wrap' section further down.

Since it's the weekend, I have more than the usual number of stories for your reading 'pleasure' today...and I hope you can find the time over what's left of your weekend to read the ones that interest you.

 

¤ Critical Reads

JPMorgan to BofA Get Delay on Rule Isolating Derivatives

JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. won a delay of Dodd-Frank Act requirements that they wall off some derivatives trades from bank units backed by federal deposit insurance.

Commercial banks including the Wall Street firms may get as long as an additional two years -- until July 2015 -- to comply with the rules, the Office of the Comptroller of the Currency said in a notice yesterday. The so-called push-out provision was included in the 2010 financial-regulation law as a way to limit taxpayer support for risky derivatives trades.

The Commodity Futures Trading Commission and other regulators need to complete swap rules to allow “federal depository institutions to make well-informed determinations concerning business restructurings that may be necessary,” the OCC said in the notice. Dodd-Frank requires that equity, some commodity and non-cleared credit derivatives be moved into separate affiliates without federal assistance.

Regulators including Federal Reserve Chairman Ben S. Bernanke had opposed the provision, saying it would drive derivatives to less-regulated entities. In February, the House Financial Services Committee approved with bipartisan support legislation that would let banks keep commodity and equity derivatives in insured units by removing part of the rule.

Well, dear reader, it's a good bet that if all of those listed above were opposed to it, it was probably in the best interests of the investing public.  This story showed up on the Bloomberg website early yesterday afternoon...and I thank Manitoba reader Ulrike Marx for our first story of the day.  The link is here.

Read more...

Liesman: "The Fed Gets to Print Dollars"; Bullard: "Indeed We Do"

Fed mouthpieces Bullard and Lacker are out in force [yesterday] morning talking the market back from the edge of yesterday's FOMC Minutes and reassuring us that the economy is going to be weak enough for a lot longer to justify the Fed's actions. However, right at the end of Jim Bullard's interview with CNBC's Steve Liesman, we got a glimpse of the reality behind the curtain as the St. Louis Fed president threw Bernanke under the purge-ry perjury bus.

Following a discussion of fiscal policy uncertainty and the need to carefully spend what money we have, Liesman jokingly commented to Bullard that it is "Easy for you to say, you have a lot of dollars to spend; you get to print them!" To which the now foot-in-mouth Bullard replied, "Aaahh; indeed we do."

This short piece, along with an embedded CNBC video clip, was posted on the Zero Hedge website yesterday...and I thank Matthew Nel for bringing it to our attention.  The link is here.

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Gore Went to Bat for Al Jazeera...and Himself

Al Gore’s Current TV was never popular with viewers, but it was a hit where it counted: with cable and satellite providers. When he co-founded the channel in 2005, Mr. Gore managed to get the channel piped into tens of millions of households — a huge number for an untested network — through a combination of personal lobbying and arm-twisting of industry giants.

He called on those skills again after deciding in December to sell Current TV to Al Jazeera for $500 million. To preserve the deal — and the estimated $100 million he would personally receive — he went to some of those same distributors, who were looking for an excuse to drop the low-rated channel, and reminded them that their contracts with Current TV called it a news channel. Were the distributors going to say that an American version of Al Jazeera didn’t qualify, possibly invoking ugly stereotypes of the Middle Eastern news giant?

“The lawyers for the carriers couldn’t find their way around it,” said a person briefed on the negotiations who described them on condition of anonymity...and on Wednesday night, a deal was announced that will bring the Al Jazeera brand into at least 40 million homes in the United States. It will also make Mr. Gore, who is already estimated to be worth more than $100 million, an even richer man.

Gordon Gecko was probably right..."Greed is Good"...at least for the rich and well connected.  This story was posted on The New York Times on Thursday...and it's Roy Stephens first offering of many in today's column.  The link is here.

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White House wins fight to keep drone killings of Americans secret

A federal judge issued a 75-page ruling on Wednesday that declares that the US Justice Department does not have a legal obligation to explain the rationale behind killing Americans with targeted drone strikes.

Siding with the defendants in what can easily be considered as cloaked in skepticism, Judge McMahon writes that the Obama White House has been correct in refusing the FOIA requests filed by the plaintiffs.

"There are indeed legitimate reasons, historical and legal, to question the legality of killings unilaterally authorized by the Executive that take place otherwise than on a 'hot' field of battle," McMahon writes in her ruling. Because her decision must only weigh whether or not the Obama administration has been right in rejecting the FOIA requests, though, her ruling cannot take into consideration what sort of questions — be it historical, legal, ethical or moral — are raised by the ongoing practice of using remote-controlled drones to kill insurgents and, in these instances, US citizens.

"The Alice-in-Wonderland nature of this pronouncement is not lost on me; but after careful consideration, I find myself stuck in a paradoxical situation in which I cannot solve a problem because of contradictory constraints and rules — a veritable Catch-22,” she writes. “I can find no way around the thicket of laws and precedents that effectively allow the Executive Branch of our Government to proclaim as perfectly lawful certain actions that seem on their face incompatible with our Constitution and laws, while keeping the reason for their conclusion a secret.”

This article showed up on the Russia Today website early Thursday morning Moscow time...and is an absolute must read.  I thank Roy Stephens for sending it...and the link is here.

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Americans...never give up your guns

These days, there are few things to admire about the socialist, bankrupt and culturally degenerating USA, but at least so far, one thing remains: the right to bear arms and use deadly force to defend one's self and possessions.

This will probably come as a total shock to most of my Western readers, but at one point, Russia was one of the most heavily armed societies on earth. This was, of course, when we were free under the Tsar. Weapons, from swords and spears to pistols, rifles and shotguns were everywhere, common items. People carried them concealed, they carried them holstered. Fighting knives were a prominent part of many traditional attires and those little tubes criss-crossing on the costumes of Cossacks and various Caucasian peoples? Well those are bullet holders for rifles.

Various armies, such as the Poles, during the Смута (Times of Troubles), or Napoleon, or the Germans even as the Tsarist state collapsed under the weight of WW1 and Wall Street monies, found that holding Russian lands was much, much harder than taking them and taking was no easy walk in the park but a blood bath all its own. In holding, one faced an extremely well armed and aggressive population Hell bent on exterminating or driving out the aggressor.

This well armed population was what allowed the various White factions to rise up, no matter how disorganized politically and militarily they were in 1918 and wage a savage civil war against the Reds. It should be noted that many of these armies were armed peasants, villagers, farmers and merchants, protecting their own. If it had not been for Washington's clandestine support of and for the Reds, history would have gone quite differently. [Emphasis mine. - Ed]

This is a must read for all Americans in general...and all students of the "New Great Game".  Washington's support for the Communists during the revolution is covered in G. Edward Griffin's classic tome..."The Creature From Jekyll Island".  It was posted on the pravda.ru Internet site on December 28th...and I thank reader U.D. for bringing it to our attention.  The link is here.

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Oldest Swiss bank Wegelin to close after admitting aiding US tax evasion

Switzerland's oldest bank is to close after pleading guilty to helping some of the US's richest people evade paying taxes on at least $1.2bn (£750m) which was hidden in secret offshore accounts.

Wegelin, which was founded in 1741, said it would "cease to operate as a bank" after it admitted it had allowed 100 US taxpayers to hide their money.

The bank agreed to pay $57.8m in fines and restitution to the US authorities after admitting to conspiracy charges related to helping US taxpayers living overseas evade payments to the Internal Revenue Service (IRS) for almost a decade.

This short article showed up on the guardian.co.uk Internet site yesterday afternoon GMT...and I thank Swiss reader B.G. for sharing it with us.  The link is here.

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Euros discarded as impoverished Greeks resort to bartering

It's been a busy day at the market in downtown Volos. Angeliki Ioanitou has sold a decent quantity of olive oil and soap, while her friend Maria has done good business with her fresh pies.

But not a single euro has changed hands – none of the customers on this drizzly Saturday morning has bothered carrying money at all. For many, browsing through the racks of second-hand clothes, electrical appliances and homemade jams, the need to survive means money has been usurped.

"It's all about exchange and solidarity, helping one another out in these very hard times," enthused Ioanitou, her hair tucked under a floppy felt cap. "You could say a lot of us have dreams of a utopia without the euro."

This article was posted on The Guardian website early on Wednesday afternoon GMT...and it's courtesy of Marshall Angeles.  The link is here.

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An amazing mea culpa from the IMF’s chief economist on austerity

Consider it a mea culpa submerged in a deep pool of calculus and regression analysis: The International Monetary Fund’s top economist today acknowledged that the fund blew its forecasts for Greece and other European economies because it did not fully understand how government austerity efforts would undermine economic growth.

The new and highly technical paper looks again at the issue of fiscal multipliers – the impact that a rise or fall in government spending or tax collection has on a country’s economic output.

That it comes under the byline of fund economic counselor and research director Olivier Blanchard is significant. Fund research is always published with the caveat that it represents the views of the researcher, not the institution itself. But this paper comes from the top, and attempts to put to rest an issue that has been at the center of debate about how fast countries should move in their efforts to tame large debts and deficits.

If fiscal multipliers are small, countries can cut spending faster or raise more in taxes without much short-term damage. If they are large, then the process can become self-defeating, at least in the short run, with each dollar of government spending cuts, for example, costing the economy more than a dollar in lost output and thus actually increasing debt-to-GDP ratios.

They didn't need to publish a fancy research paper to prove that.  Ambrose Evans-Pritchard has been saying that for as long as I can remember...and he's certainly not alone in that department.  The IMF now has a keen grasp of the obvious.  Let's see what they do now.  I thank Ulrike Marx for her second story in today's column.  It appeared on The Washington Post's website during the Thursday lunch hour...and the link is here.

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The silent revolution inside the IMF

The International Monetary Fund, at long last, has begun to open up. Gone are the days when it acted as a handmaiden of Western, mainly US, economic orthodoxy. It is even throwing a gauntlet down to the mighty US Federal Reserve, questioning the effects its constant monetary boosting has had on the rest of the world.

Given that the IMF is the key arbiter on many key issues of global finance and economics, and hence also over global fairness and equity, the change should be greatly welcomed. Over the past decade, the reform debate had centred mainly on giving emerging market economies more voting power, by commensurably reducing the voting shares of the "rich" world.

Given the global economic dynamics, the adjustment was of course long overdue. One clear indication is that the IMF's senior-level staff members have become much less American and less European. But now, the first substantive consequence of these shifts are beginning to emerge.

This story appeared on the asianewsnet.net Internet site yesterday...and international capital controls are discussed.  It's worth your time, if you have it...and it's also Ulrike Marx's third offering in today's column.  The link is here.

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The Imperial Dream of the Muslim Brotherhood

The end will justify the means to unite the Islamic peoples into a world of virtue and prosperity to where the Muslim Brotherhood says that it will bring them.  Egypt is their launching platform.  The entire Islamic world is their objective.

If they were running for office in the United States or any European country on their economic platform of job creation, the sanctity of private property, and a social safety net, they will likely win.  It all sounds perfect.   Then, you learn that you have just voted for the Muslim Brotherhood.

Members of the movement come from the upper levels of Egyptian society.  They are the businessmen, doctors, university professors, military officers, and other professionals.  Over their eighty four year history, they have infiltrated every area of government, education, and industry. 

If its economic policies are all there is about the movement, it would pose no threat in the public mind.  What does frighten so many is the secrecy that shields the organization from scrutiny and the negative propaganda spread by worried authoritarian regimes.  Under such circumstances, it is understandable that the attacks by various governments would have forced the Brotherhood to protect itself beneath a cloak of secrecy.

Roy Stephens sent me this essay...and it's another must read for students of the "New Great Game".  It was posted over at the oilprice.com Internet site on Wednesday...and the link is here.

Read more...

Tensions flare between UAE and Muslim Brotherhood

Tensions between the United Arab Emirates and the Muslim Brotherhood, Egypt’s largest Islamist movement, do not appear to be easing in the new year.

On January 1, Emirati newspaper Al Khaleej reported that authorities in the Gulf state had arrested 10 members of an Egyptian Muslim Brotherhood cell. “The Egyptian Muslim Brotherhood has conducted many courses and lectures for the members of the secret organisation regarding the election and the ways of changing regimes in Arab countries,” the paper said.

The suspects are accused of holding “secret meetings” in the Emirates, recruiting “Egyptian expats in the UAE to join their ranks”, and raising “large amounts of money which they sent illegally to the mother organisation in Egypt”. The article also alleged that the suspects collected classified information regarding matters of UAE defence.

So, the game has obviously already begun...and it's another must read for students of the "New Great Game".  Not surprisingly, it's another offering from Roy Stephens...and it was posted on the france24.com Internet site yesterday.  The link is here.

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Abe blind to Japan's lost dynamic

Japan is in dire straits. Its economy recently entered its fifth economic recession in 15 years, and Beijing's claims to the disputed Senkaku/Diaoyu Islands proved more serious and costly last year than in any other time since the end of the Second World War. In addition, the recovery effort following the disastrous earthquake and tsunami in 2011 remains a monumental administrative and economic burden. Despite these daunting challenges, the political environment in Japan has been plagued by endemic indecision.

The result of the December general elections revealed that the hope invested by the electorate in the Democratic Party of Japan (DPJ) has been exhausted. Since taking power in 2009, the DPJ's greatest accomplishment was arguably the deal between the Yoshihiko Noda administration and the now-ruling Liberal Democratic Party (LDP) to double the consumption tax in exchange for an early election.

Despite the mandate that Shinzo Abe and the LDP won in the House of Representatives as a result of that early election (taking 294 seats out of 480), the fundamental problem that rendered the past three DPJ administrations ineffective remains in place.

This essay was posted on the Asia Times website early Saturday morning in Hong Kong...and it's also courtesy of Roy Stephens.  The link is here.

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US, China set for a year of surprises

The United States and China have completed their respective leadership transitions. Now the two powers can begin developing their ever-transforming relationship in an atmosphere of (relative) domestic political stability. Last year brought about important changes to the Sino-American dynamic - most notably the US's much-heralded "pivot" to Asia. The Chinese leadership is increasingly vocal regarding perceived US interference in China's strategic front yard. The major trends in the relationship will continue in 2013, although there are some potentially destabilizing developments afoot.

The US military "pivot" towards Asia, and American backing for Japan in the territorial dispute over the Diaoyu/Senkaku Islands are causing serious and open strains.

Compounding these new sources of tension is a longest-standing disagreement over American weapons sales to the government of Taiwan. The stage is set for a period of increasing - and increasingly open - confrontation between the United States and China in 2013.

Another must read for all students of the "New Great Game"...and my thanks to Roy Stephens once again.  It was posted on the Asia Times website early Saturday morning as well...and the link is here.

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Media Report: North Korea Enlists German Help to Prepare Economic Opening

On New Year's Day, North Korean leader Kim Jong Un called for a "radical" economic renewal for his country and an end to decades of conflict with South Korea. Now, a German media report says he is moving quickly to fulfill at least the first pledge.

According to an article to be published on Saturday by the daily Frankfurter Allgemeine Zeitung, the communist regime in Pyongyang is preparing to open up the country's economy to foreign investors. Moreover, it has enlisted the assistance of German economists and lawyers to lay the groundwork for the move.

"There is a master plan," one of the economists involved in the plan told the paper. "They want to open up this year." The FAZ did not identify the economist, but noted that he works at a respected German university and that he had advised other governments in Asia in the past.

This short article was posted on the German website spiegel.de yesterday...and I thank Roy once again for sharing it with us.  The link is here.

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3-D Printing: Technology May Bring New Industrial Revolution

3-D printing technology, used industrially for the last few decades, is poised to break into the mass market. Its endless and swiftly developing possibilities -- from entrepreneurial manufacturing to the potential sculpting of human organs -- could become the next industrial revolution.

When the TV series Star Trek first brought the starship Enterprise into German living rooms, the concept of a replicator was pure science fiction, a fantastical utopian vision we might experience one day centuries in the future. Replicators, something of a mixture between computer and miniature factory, were capable of creating food and replacement parts from next to nothing. They were highly practical devices, since Captain Kirk couldn't exactly take along a lot of supplies for his journeys through outer space. That futuristic vision, though, has receded far into the past -- overtaken by the present.

The real-world replicator-like technology poised to revolutionize the world is known as 3-D printing, though that term is misleading, since the process has little to do with printing. Three-dimensional printers can be as small as a suitcase or as large as a telephone booth, depending on the object they are meant to faithfully replicate from a 3-D computer blueprint. Inside the machine, the product is assembled by stacking extremely thin layers of material on top of one another, sort of like reassembling an apple that has been cut into super-fine slices.

I've been following this technology for a while...and had a hard time believing it, even when I saw it.  But, it's the real deal.  This fascinating 2-page essay about it appeared on the spiegel.de Internet site yesterday...and I thank Roy Stephens for digging it up on our behalf.  The link is here.

Read more...

Three King World News Blogs

The first is with James Turk...and it's headlined "A Black Swan Event, Global Monetary Reset & Chaos".  The next blog is with Art Cashin.  It bears the title "2013 Predictions, Warnings & Outlook".  Lastly is this interview with Eric Sprott...and it's entitled "Fed has no Exit Plan & There is no Exit"

Read more...

Why is Everyone Talking About a Platinum $1 Trillion Coin?

I can't believe the number of readers that sent me this story over the last few days.  This has gone viral on the Internet...and it's being talked about even in a lot of main stream media outlets that normally wouldn't touch this sort of thing with a 20-foot barge pole.

Is it for real?  I wouldn't bet a nickel on it...and I have no idea what's in the Kool-Aid everyone is drinking, as it sounds like b.s. to me...but it has developed a life of its own.  If there was a grain of truth to all this, the platinum price would have blown sky high already...which it hasn't.  I have four stories on this...and they're linked here, here, here...and here.  And once you've read them, take two blue pills and call me in the morning.

Read more...

Gartman: The Gold Bug Thesis is Officially in Tatters

Gold plunged over 3 percent yesterday after the release of FOMC minutes, which revealed that several members of the Fed wanted to end QE3 by the end of 2013.

Now, Dennis Gartman, publisher of The Gartman Letter, writes that gold bugs who have operated on the thesis that the Fed has lost control of money supply are in tatters.

"Commodity prices are falling and in some instances are falling quite sharply. Clearly that is the case with gold, for the minutes of the FOMC’s last meeting have shaken the hopes of the most violent “Gold Bugs” malevolently, and have shaken our gold position rather materially. We are, however, rather nicely insulated from the real damage being done to the simplistic gold bugs who have owned and who still own gold predicated upon their thesis that the Fed has lost control of the money supply. That thesis is now in tatters... or at least has been very badly torn in the past twenty four hours... following the single sentence from the Fed’s minutes noted at length above.

Dennis, the full moon was on December 28th.  I can't believe anyone takes this guy seriously when he's talking about anything...especially gold.  He, like Jon Nadler and Jeff Christian, have been mostly bearish all the way up during this 12-year bull market in the precious metals.  He's very familiar with GATA's work...and knows better.  If there ever was a contrarian indicator, Mr. Gartman's comments surely fit the bill.  You should be buying with both hands when he's talking trash like this.

This article, if you can bear to read it, was posted on the businessinsider.com Internet site yesterday morning Eastern time...and I thank Roy Stephens for his final offering in today's column.  The link is here.

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Jim Sinclair: Campaign to discredit gold indicates worst desperation yet

Jim Sinclair wrote to a Comrade in Golden Arms yesterday:

"Have you ever considered how bad it must be out there if the Fed and gold banks are working so hard to paint gold bearish and the U.S. dollar bullish? It must be fundamentally the worst of the various economic crises in my more than 50 years in gold.

"There has never been this level of effort on all fronts to discredit gold. That must reflect the dire condition of the balance sheets of the Western world's financial industry. Anyone with eyes in their head can see this move has been contrived. In my opinion profit on the short side is a secondary motive."

I found this commentary in a GATA release yesterday.  Sinclair's commentary is headlined "Jim's Mailbox" and it's posted at JSMineSet here.

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Turkish gold exports rise 800 percent on demand from Iran

Turkey's gold exports rose nearly 800 percent last year on the back of soaring sales to Iran and the trade will continue, despite tightening U.S. sanctions on Tehran, Turkey's economy minister said on Friday.

Turkish gold exports rose to $12.7 billion in the first eleven months of 2012 compared to the $1.47 billion exported in the whole of the previous year, Economy Minister Zafer Caglayan told a briefing in Istanbul.

Around half of the exports - $6.5 billion worth - went to Iran, while $4.2 billion went to the United Arab Emirates. Turkey exported just $54 million worth of gold to Iran in 2011.

This very short must read Reuters story was filed from Istanbul yesterday morning around 10:30 a.m. Eastern time.  I thank Ulrike Marx for her final contribution to today's column...and the link is here.

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GoldCore: Gold in manipulative selloff? Nice new year's gift

Friday's commentary by GoldCore in Dublin notes the usual counterintuitive action with the gold price and raises the possibility of market manipulation.

"Bullion banks with large concentrated short positions," GoldCore says, "are using the pretext of the Federal Reserve minutes to manipulate the price lower, both to profit and to allow them to close out their significant short positions at more advantageous prices and possibly even go long.

...Gold has broken below the December low of $1,635/oz and below the 50-, 100-, and 200-day moving averages. However, technical analysis should be ignored in favour of fundamental analysis given that there are strong grounds for suspecting that the gold and silver markets are subject to manipulation by certain banks in the same way that interest rates were in the LIBOR manipulation."

I didn't see attribution given to Ted Butler [or GATA] in this article...as I'm sure he didn't come up with the words "large concentrated short positions" on his own.

But, he's speaking the unvarnished truth...so I guess we should be grateful for that.  This commentary was posted over at the goldcore.com Internet site yesterday...and it's a must read.  I found it embedded in a GATA release yesterday...and the link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

An idea not coupled with action will never get any bigger than the brain cell it occupied. - Arnold H. Glasow

I've got a couple of musical selections for you today...starting off with an 8-year old trumpet-playing prodigy.  Here he is blowing a medley of old Herb Alpert tunes...and he sounds just like him, too.  This kid is definitely going places...and once his physical size catches up to his playing ability...look out.  It's posted over at the wimp.com Internet site...and it's courtesy of Roy Stephens.  The link is here.

Going back a lot further in time is this short piano piece by French composer Claude Debussy.  He started the composition on the suite that contains this work back in 1890, but he didn't finish or publish it until 1905...and this piece is the third movement of that suite.  This as good a recording of this work as you will find anywhere...and you should know it straight away.  It's posted on the youtube.com Internet site...and the link is here.

Without doubt, JPMorgan Chase et al managed to flush out a lot more of the technical fund long positions yesterday, as they hit new lows for both gold and silver for this move down.  Although they're after as many of the technical fund long holders they can get in all the metals, it's more than obvious...as it has always been...that silver is the metal that always gets pounded the hardest.

Below are the 2-year charts for both gold and silver to put this last 30-day price move in both metals into a longer-term perspective and, as Ted Butler said once again on the phone yesterday..."Are they done to the downside yet???"  Nobody knows, but we came a giant step closer with the early price action on Friday.  The big surprise for me was that "da boyz" didn't press their advantage in the New York trading session.

And as I mentioned in my discussion on the COT Report, I'd just love to see what the COT structure looked like after Friday's trading day was done...because without doubt, it would look totally different than it did in the report from Tuesday's cut-off.

(Click on image to enlarge)

(Click on image to enlarge)

From a technical viewpoint, I really liked the 'positive hammers' that yesterday's price action painted on the charts above.  But, as I've mentioned on many occasions in this space, the bullion banks can read these charts as well...and can paint any pattern they want when necessary.

But whenever the 'bottom' arrives, it always boils down to what JPMorgan et al will do on the subsequent rally.  Will they become the short sellers of last resort once again...like they've been doing for 25 years...or will they stand there with their hands in their pockets, or maybe do some short covering themselves? What they do...and only what they do...will determine how high we go in price...and how fast we get there, once that day arrives.

That pretty much covers what I have to say for the day...and the week.  I hope you had the opportunity to 'buy the dip' as I suggested...and if we go lower from here, you should be buying that dip as well.  I certainly will be.

See you on Tuesday.