Casey Research Publication
Gold & Silver Daily
"I thought I'd toss in the 3-year HUI chart today. As you can see, we closed at a new high yesterday...and the RSI [Relative Strength Indicator] is about to pass into overbought territory."
 

¤ Yesterday In Gold & Silver

The gold price spent virtually the entire trading day in the black yesterday, with the low being the opening tick at 6:00 p.m. on Wednesday night in the New York Access Market before the Thursday trading day started in the Far East.

Gold's biggest rally began around 11:30 a.m. in London trading...and then hit a bit of a plateau starting at precisely 9:30 a.m. Eastern time in New York...the opening of the New York equity markets.  We've seen that phenomena quite a few time in the last month or so.  Then, around 2:00 p.m. in electronic trading, gold caught another bid...and closed up $52.30 spot, almost on its high of the day.  Volume was down quite a bit from Wednesday.

The silver price wandered around without too much direction until a few minutes before lunch in London...which might have been an early silver fix, which occurs around noon over in the U.K.

The subsequent rally took silver up to its high of the day [$42.77 spot] at precisely 9:30 a.m. Eastern time...the same moment that gold's rally ended.  From there, the silver price slid a bit over 40 cents as the rest of the New York trading day wore on...and closed up 79 cents.  Volume was decent, but quite a bit lower than Wednesday's.

The gold shares gapped up at the open...and then wandered around either side of the opening price...and closed within a whisker of that.  The high of the day occurred at the London p.m. gold fix at 10:00 a.m. Eastern time.  The HUI was up over two percent at one point, but finished up 1.80%.  We'll take it.

Despite the nice gain in the silver price, the associated shares in Nick Laird's Silver Sentiment Index turned in a mixed performance yesterday...and the index closed up only 0.17%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 32 gold and one lonely silver contract were posted for delivery on Monday.  Nothing to see here.

The GLD ETF showed a tiny decline of 29,205 troy ounces, which could have been a fee payment...and SLV had a withdrawal of 243,475 ounces.

And for the third day in a row, the U.S. Mint had no sales report.

There were some pretty impressive numbers out of the Comex-approved depository on Tuesday, as a chunky 1,460,512 ounces were reported received...and only 168,992 ounces were shipped out the door.  The link to all that action is here.

Jim Rickards has been saying that the Fed will be swapping its shorter maturing Treasuries for longer term ones...a 21st century version of "Operation Twist" that the Federal Reserve undertook back in the early 1960s...and he's been saying that for a while now.

Washington state reader S.A. sent me a graph that pretty much sums up what Jim was talking about...and I'm more than happy to present it here.

Despite merciless editing, I've still got a fair number of stories once again.

 

¤ Critical Reads

US falls to 5th in global competitiveness, survey shows

The forum praised the U.S. for its productivity, highly sophisticated and innovative companies, excellent universities and flexible labor market. But it also cited "a number of escalating weaknesses" such as rising government debt and declining public faith in political leaders and corporate ethics.

I borrowed this msnbc.com story from yesterday's King Report...and the link is here.

Read more...

Things are bad, but analysts can’t say ‘sell’

Here's another story I lifted from yesterday's King Report.

Consider, at a place and time such as this, with the economy teetering on the verge of another recession, none of the 1,485 stocks that make up the S&P 1,500 has a consensus “Sell” rating. And just five, or 0.3%, are ranked as being a “Weak Hold.”

And just 79 (or 5%) of the 1485 stocks have consensus “Buy” recommendations, while 1,003 (68%) are ranked “Buy/Hold,” 398 (27%) are ranked “Hold.”

This is a marketwatch.com story from Tuesday...and the link is here.

Read more...

CFTC may grant more relief from swaps regulations

The futures regulator looks set to grant the massive swaps market more relief from complying with new financial reforms until sometime in 2012 as the agency remains well behind in completing many of the largest and most contested rules.

And, for the first time, Gary Gensler outlined a timetable for the rules it expects to consider in 2011 and the first quarter of 2012. The agency expects to consider clearinghouse rules, end-user exception, position limits and real-time reporting this year, and rules for capital and margin, disruptive trading practices and swap execution facilities in 2012.

So we should find out soon enough if Gensler is going to do what is right...or will he do what he's told regarding silver position limits in the Comex futures market.  This Reuters story from yesterday was courtesy of Washington state reader S.A...and the link is here.

Read more...

Suing Banks Is Next Best to Letting Them Fail: Jonathan Weil

This op-ed piece was posted over at Bloomberg on Tuesday evening.  It's another one of those stories that comes out of the top drawer of the "You can't make this stuff up" filing cabinet...and the drawing the accompanies the article gives a pretty strong hint as to where this Catch 22-type story is headed...and the opening paragraph reads as follows...

"The Vietnam War gave us the expression, “We had to destroy the village in order to save it.” The same kind of thinking might help explain the U.S. bank rescues of 2008: We had to save the banks in order to sue them."

It's worth the read if you have the time...and I thank Washington state reader S.A. once again for sharing this story with us...and the link is here.

Read more...

Longshoremen clash shuts Northwest ports

A series of wildcat actions stopped work at ports in Seattle, Tacoma, Everett and Anacortes, and there was no indication Thursday night when workers would return.

Early Thursday morning, at least 500 Longshoremen and sympathizers stormed the Port of Longview and broke windows in the guard shack, according to Longview Police Chief Jim Duscha. As men wielding baseball bats and crowbars held six guards captive, others cut brake lines on boxcars and dumped grain, the chief said.

A freight train carrying 107 cars of corn from Splitrock, Minn., destined for the Longview port was vandalized, spilling grain from 72 of the freight cars onto the tracks, said Burlington Northern Santa Fe Railway spokesman Gus Melonas.

This story was out of yesterday's edition of The Seattle Times...and Washington state reader S.A. deserves our thanks once again...and the link is here.

Read more...

Greece rules out quitting euro as GDP shrinks further

Greece ruled out quitting the euro on Thursday, shrugging off warnings by its biggest creditor Germany and yet another set of bad economic figures showing it is struggling under the weight of EU/IMF-imposed austerity.

Faced with the threat of its EU partners blocking an 8-billion euro bailout tranche due next month if it does not get its act together, the country’s socialist government pledged on Tuesday to step up long-promised budget cuts and asset sales.

But economic figures released on Thursday show austerity is stretching the economy to the limit, making it more and more difficult for the country to meet its 2011 budget deficit target of 7.6 percent of GDP, from 10.5 percent last year.

This Roy Stephens offering was posted over at the france24.com website yesterday...and the link is here.

Read more...

Germany pushes Greece to the brink in dangerous brinkmanship

Germany and Holland have threatened to block rescue payments to Greece unless the country complies to the letter with bail-out terms, raising the spectre of default and a chain-reaction through southern Europe.

German finance minister Wolfgang Schauble said there will be no more money until Greece "actually does" what it agreed to do. "I understand that there is resistance among the Greek population to austerity measures. But in the end it is up to Greece whether it can fulfill the conditions necessary for membership of the common currency. We offer no discounts," he told Deutschlandfunk.

Brinkmanship it is...and this Ambrose Evans-Pritchard offering posted over at The Telegraph last night is a must read.  The link is here.  Roy Stephens sent me this story, for which I thank him.

Read more...

John Hathaway audio interview available at King World News

I ran the blog in this column yesterday morning...and then Eric sent me the link to the full audio interview yesterday afternoon.  Eric says that "He was tremendous as always"...and I know Eric wouldn't lie to us.  The link is here.

Read more...

Gold Stocks Prognosis: Catalyst, Please - Jeff Clark

Casey Research's own Jeff Clark, the editor of BIG GOLD, had a few things to say about gold stocks in yesterdays' edition of Casey's Daily Dispatch.  You have to scroll down to find this very worthwhile read...and the link is here.

Read more...

Potential buying opportunity in gold: Scott Pluschau

Reader [and often contributor of stories to this column] Scott Pluschau posts the occasional commentary for ETF Digest.  Scott is heavily into technical analysis...something I steer well clear of in a managed market.  But if T.A. is your bag, this is worth your time...and the link is here.

Read more...

GoldMoney interviews GATA's Ed Steer at London conference

I was not happy with this interview...and I begged Chris not to post as a GATA dispatch...but he talked me into it nonetheless.  I could barely bring myself to watch it and, mercifully, it only runs 5:28...and the link to the GATA release is here.

Read more...

How are Silver Coins Minted?

This is the third in an ongoing series of short educational videos that Endeavour Silver is producing about all things silver.  The first two, entitled "How Silver is Mined" and "The Value of Silver", appeared in this column earlier this year.

It's well worth watching but, like the two videos that preceded it, it's too brutally edited for my liking.  They could have run this video another three or four minutes...and put a lot more stuff in it.  I mentioned this fact to Hugh Clarke over at Endeavour after the first two came out...and he obviously didn't listen...but it's fascinating to watch nonetheless.  The link is here.

Read more...

Market Performance Since 9/11

With the 10-year anniversary of 9/11 coming up this Sunday, below we highlight how various asset classes have performed since then.  While gold and oil probably come to mind as two of the top performing assets over the last ten years, silver has actually done the best by a large amount.  As shown below, silver is up a whopping 900% since 9/10/11.  Ten years ago, silver was trading at $4.16.  The metal is currently at $41.57.  Gold has certainly done well also with a 10-year gain of 568%.  Oil ranks third out of the asset classes shown with a gain of 225%.

This is the reason why my personal portfolio is 70/30 silver/gold.  It's a must read...and the first chart shown in this story is worth the trip all by itself.  The story is posted over at the bespoken.com website...and I thank reader Randall Brainwasher for sending it along.  The link is here.

Read more...

Expect Enormous Gains in Gold and Silver - Stephen Loeb

With continued volatility in gold & silver yesterday, King World News interviewed acclaimed money manager Stephen Loeb to get his thoughts on gold, silver and what's happening with the Fed.  When asked about the comments by Chicago Fed Governor Charles Evens, Loeb responded, “It’s the first time, at least in my lifetime and I think in the history of the Fed, where they have said explicitly that fighting unemployment is much more important than worrying about inflation.  That’s a very big deal.  When people think of central banks they think of one thing, controlling inflation.”

A big deal it is...and the link to this very worthwhile KWN blog is here.

Read more...

Asia gold buyers rush in after prices sink; India eyed

Physical gold purchases swelled after prices dipped below $1,800 on Wednesday, as physical demand is expected to rise ahead of India's wedding season and the cloudy outlook of the global economy continues to brighten gold's appeal as a safe haven.

"We see more buying now and no one is selling," said a Singapore-based dealer.

This short Reuters piece was filed from Singapore yesterday morning...and is Roy Stephens last offering of the day.  The link is here...and the photo makes the trip worthwhile.

Read more...

Julian Phillips...and even Dennis Gartman...see gold price suppression

Here's a GATA release from yesterday, which includes an extensive preamble by Chris Powell.  Here is the first paragraph to give you the flavour of the rest of it...

Julian Phillips of Gold Forecaster today takes note of the cables from the U.S. embassy in Beijing confirming the Chinese government's knowledge of the Western central bank gold price suppression scheme. Phillips writes: "The Chinese are absolutely correct in believing that the United States and Europe have suppressed the price of gold. The evidence is glaring at us through history."

The rest of Chris Powell's preamble, plus all the associated links, are must reads...and the link is to the GATA release is here.

Read more...

Now even Goldman Sachs talks openly of gold price manipulation

Yesterday afternoon Zero Hedge quoted the chief gold trader for Goldman Sachs, Zak Dhabalia, as acknowledging that "authorities" may be tampering with the gold market.  Maybe JPMorgan will soon admit that they are the ringleader of the whole thing?

It's obvious that this whole market-rigging operation is becoming more widely accepted...and it's also common knowledge at the highest levels of some of the world's governments.

The zerohedge.com story is well worth your time...and the link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

Everybody, sooner or later, sits down to a banquet of consequences. - Robert Louis Stevenson

Gold's net trading volume yesterday came in around 205,000 contracts which was quite a drop from Wednesday, but still pretty heavy.  Silver's net volume was around 31,000 contracts.  The preliminary open interest numbers, which I'm not going to post, look encouraging...so there may have been a lot of short covering in yesterday's rally...but that won't be known for sure until next Friday's Commitment of Traders Report.

Today we get the latest COT report for positions held at the close of trading on Tuesday, September 6th and, as I was mentioning yesterday, I wish that Wednesday's big down day would be included, but it won't.  I haven't the foggiest idea what the report will show, so I'm ready for anything.

We should also get the monthly Bank Participation Report for August.  This data is extracted from Tuesday's COT data.  It's the one time per month where we find out what all the U.S. and foreign bullion banks' long and short positions are in both gold and silver...and can compare apples to apples.  JPMorgan's short position in silver is the first thing I'm going to be looking at, but I doubt that it has changed very much from July.  We'll see.

I thought I'd toss in the 3-year HUI chart today.  As you can see, we closed at a new high yesterday...and the RSI [Relative Strength Indicator] is about to pass into overbought territory...and the MACD trace is getting up there as well.  You can tell from looking at the RSI over the last three years, that this indicator never gets much above the 70 level before we get a 'correction'.  Will this time prove any different?  I don't know, but I expect that we'll find out very soon...maybe even today.

(Click on image to enlarge)

Neither gold nor silver did much in the thinly-traded Far East market during their Friday.  Both got sold off a hair, but then rallied into the London open...and both metals are now up slightly from Thursday's close.  As of 5:09 a.m. Eastern time, volume is already pretty high in gold...about the same as it was this time on Thursday...and net volume in silver is on the light side.

That's it for today.  But, before I close, I'd like to remind you one more time of this FREE on-line Casey Research sponsored event happening on Wednesday, September 14th at 2:00 p.m. Eastern time.  It's entitled "The American Debt Crisis"...and it's posted over at the americandebtcrisis.com website.  The introductory trailer runs 8:33...and if you want to register for this FREE webinar, you can just type in your e-mail address in the spot indicated in the right sidebar.  The link to all of the above, is here.

I hope you have a great weekend...and I'll see you here tomorrow.