Casey Research Publication
Gold & Silver Daily
"As I've said before, we seem to be in some sort of holding pattern. Silver is all cleaned out to the downside...and it's pretty much the same in gold as well."
 

¤ Yesterday In Gold & Silver

Gold hugged the $1,730 spot mark right up until the London a.m. gold fix at 10:30 a.m. GMT...which is 5:30 a.m. Eastern time.  From there, gold got sold off until the open of Comex trading at 8:20 a.m. Eastern.

Gold was up twenty bucks in minutes before a not-for-profit seller showed up...and the gold price traded with a slightly positive bias for the rest of Comex trading session...before flat-lining into the close of electronic trading at 5:15 p.m.  Gold closed virtually on its high at $1,743.10 spot...up $13.70 on the day.  Net volume was pretty light...around 105,000 contracts.

Silver sold off about twenty cents the moment that Far East trading began on Wednesday morning.  It's London high came at 9:00 a.m. local time, before declining into the Comex open.

Then, like gold, the silver price blasted off...and was up over 60 cents in just a few minutes before JPMorgan et al showed up.  From that point on, every rally attempt got hit before it could get far...and silver closed at $32.51 spot...down two bits on the day. Volume was 30,000 contracts...give or take.

Here's the New York Spot [bid] chart for silver yesterday, because the full-day Kitco chart doesn't show the detail that this chart does...especially the vertical price spike at the Comex open.

The dollar low on Wednesday came shortly after 2:00 a.m. Eastern time...and by 9:15 a.m. Eastern time the dollar had risen 40 basis points before rolling over and falling to its New York low at precisely 1:00 p.m. Eastern...giving back virtually all of the prior 40 point gain.  The dollar finished basically unchanged on the day.

If there was much co-relation between the dollar and the gold price yesterday, it certainly isn't to be found on this graph.

The stocks chopped around either side of unchanged until the gold price was firmly in the black...and by that time, the shares were in the black as well.  But even though the gold price continued to rise slowly, a seller showed up around 1:30 p.m. Eastern and sold the shares down more than a percent.  But the moment that seller disappeared, the stocks popped back into positive territory...and the HUI finished up a smallish 0.29%.

The silver shares closed mixed...and Nick Laird's Silver Sentiment Index showed that as well...down 0.35%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 77 gold and 24 silver contracts were posted for delivery on Friday.  In silver, Jefferies was the only issuer...and every one of the silver crooks was standing there to take their tiny share.  It's was a dream 'perp walk' list of the '8 or less' traders.  The Issuers and Stoppers Report is worth scanning...and the link is here.

The GLD ETF showed a withdrawal of 68,079 contracts yesterday...but SLV went the other way, as 972,618 troy ounces of silver were added.

The U.S. Mint had a smallish sales report.  They sold 1,500 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and, for the second day in a row, no silver eagles.

On Tuesday, the Comex-approved depositories received 302,204 ounces of silver...and shipped 150,198 ounces out the door.  The link to that activity is here.

Silver analyst Ted Butler posted his mid-week commentary yesterday...and here are a few free paragraphs...

"SLV investors have been damaged by the excessive short selling in shares of SLV, but it would be a mistake to assume the damage is confined to SLV investors. As the largest holder of silver on the planet, the SLV has a profound influence on the price of silver. Since the excessive short selling of SLV shares influences the price of those shares, it automatically also influences the price of silver itself. From the beginning of this year to the price peak in April, the short position in SLV grew by 25 million shares to 37 million shares. Legitimate investors bought those 25 million newly shorted shares. If those newly shorted shares had instead been backed by real silver deposited into the Trust as proscribed by the SLV prospectus, the price of silver would have climbed much higher than the $49 price achieved. That’s because there wasn’t 25 million real ounces of silver available at that time at then-current prices...and any attempt to purchase that amount of real silver would have driven prices much higher. Thus, the short sellers of those 25 million shares/ounces of SLV did an end-run around the prospectus and interfered with actual supply and demand fundamentals. That is a flat-out a violation of the laws governing interstate commerce and commodity law."

"This excessive paper short selling in SLV has every bit the same manipulative effect on the price of silver as does the excessive paper selling on the COMEX. In fact, I believe that the same price manipulators are behind both SLV and COMEX short selling. If I am correct, it would prove silver manipulation beyond any shadow of a doubt. And all it would take is the regulators objectively looking at the data. Innocent silver investors and producers alike are, and have been, victimized by both instances of manipulative short selling, SLV and COMEX alike. That’s why I intend to continue to press the current sponsor of SLV, BlackRock, to eliminate the excessive short selling in shares of SLV. This is not just a concern to SLV investors, but to all whose fortunes ride on the price of silver."

Here's a chart that West Virginia reader Elliot Simon sent me yesterday.  The Fed calls it the "Money Multiplier"...but its more often called 'the velocity of money'.  As long as it remains at these dismal levels, the chances of hyperinflation, or even serious inflation of any amount, is impossible.  But it's a chart that bears careful watching over time.

(Click on image to enlarge)

I have a fair number of stories for you today.  As usual, it's up to you to pick and chose.  The last piece is a huge read, but well worth it.

 

¤ Critical Reads

Citi cuts 4,500 jobs, will take $400 million charge

CEO Vikram Pandit, speaking at the Goldman Sachs Financial Services Conference, said the bank would record a $400 million charge in the quarter for severance and other expenses related to the layoffs.

The cuts are equal to about 2 percent of Citi's workforce of 267,000 employees at the end of third quarter 2011.

Pandit said the cuts would be completed over "the next few quarters" and would come from a range of businesses.

Citi joins other banks worldwide that have cut more than 120,000 jobs as regulations have imposed tighter industry rules and the economy remains weak.

This Reuters story was posted early Tuesday evening...and it's an article that I borrowed from yesterday's King Report.  The link is here.

Read more...

Jim Rogers on CNBC: 06 December 2011

Jim Rogers is bearish...and is short just about everything except commodities...which he holds big long positions in.  He speaks the obvious when he says that you can't borrow your way out of debt.  Gold and silver are his favourites...but silver comes out number one!

This 6:26 CNBC video is courtesy of Nitin Agrawal...and it's posted over at youtube.com.  It's well worth watching...and the link is here.

Read more...

If one EU bail-out fund flops, create two

If you think that running together Europe’s old rescue fund (EFSF) with the new one (ESM) to double firepower to €880bn is a reassuring move – as some analysts apparently do – you should have your head examined.

The idea of combining the two is an admission that attempts to leverage the fund to €1 trillion plus have essentially failed. The clever ruse by German finance minister Wolfgang Schauble to circumvent the €211bn limit on guarantees imposed by the Bundestag has run into investor scorn.

That Bundestag ceiling remains – and those of us who watched the debate know how emotional it was – so how on earth can Germany’s share be bumped up in this fashion to over €400bn? No wonder a "senior German official" has rubbished the plan today in irate language.

Ambrose Evans-Pritchard's contempt is more than obvious in this rant in yesterday's edition of The Telegraph.  It's Roy Stephens first offering of the day...and the link is here.

Read more...

Forget the 'big bazooka' bailout fund idea, it has no ammo

On paper the idea looks great: a fully-loaded €940bn fund created by a powerful combination of the impressively named European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM)...and there could be additional backing from International Monetary Fund (IMF) to boot.

Wunderbar! Magnifique! This is the “comprehensive” plan we’ve been waiting for.

Except that’s the point: it’s still only a plan. And, even by eurozone standards, a very sketchy one.  The idea was circulated yesterday in a paper by the Herman Van Rompuy, president of Europe. It has key flaws.

First off, it’s Van Rompuy’s proposal, not Germany or France’s. Van Rompuy is a bit like the bail-out funds - impressively titled and important, but lacking real power.

LOL!!!  A better description of Van Rompuy I have not seen anywhere...and I'm sure that Nigel Farage would agree!  This is another story that showed up in The Telegraph yesterday...and I thank Roy Stephens once again for sending it along...and the link is here.

Read more...

Fateful Day for Europe: Four Ideas to Save the Common Currency

European Union leaders will be gathering in Brussels today and tomorrow for one of the most anticipated EU summits ever. Some say that the very survival of the common currency is at stake. But even as Germany's Angela Merkel will be focused on stricter budget rules, several other proposals are also on the table. Spiegel Online provides an overview.

[But] as the summit approaches, however, that scenario is looking increasingly optimistic. Some might say naïve. Indeed, with Standard & Poor's raising the specter of a downgrade for 15 of 17 euro-zone countries along with the euro backstop fund, the European Financial Stability Facility (EFSF), the pressure is greater than ever to push through a package of measures that will deeply impress investors.

This very long read was posted over at the German website spiegel.de yesterday...and is Roy Stephens third offering in a row.  The link is here.

Read more...

Bank of France debts jump tenfold on capital flight

The Bank of France faces surging debts to Germany's Bundesbank and fellow central banks in the EMU system as foreign investors pull large sums out of French accounts. 

French lenders lost €100bn (£86bn) in short-term deposits in September alone, mostly due to precautionary moves by US money market funds and Asian investors afraid of France's exposure to Italy. "There were huge net capital outflows," said Eric Dor from the IESEG School of Management in Lille.

Liabilities jumped suddenly in late July, rising from €10bn to €98bn by September. Ireland's central bank owes €118bn, Spain's €108bn and Italy's €89bn. Mr. Dor said there had been an exodus from distressed states into German, Dutch and Luxembourg banks.

This story was filed late Tuesday night in The Telegraph...and is another story that I borrowed from yesterday's King Report.  The link is here.

Read more...

In Europe, Traders in Bonds Fear Layoff

Pity the European bond trader.

Once the master of a booming euro zone universe spanning Greece, Italy and Germany, he now presides over a shrunken, fear-struck bond market — and might well lose his job by the end of the year.

Panic that the default of a euro zone economy might lead to a crackup of the monetary union has turned European bonds, once freely traded and viewed as risk-free, into semi-poisonous hot potatoes that in some cases trade only by appointment.

This story, posted in yesterday's edition of The New York Times, was sent to me by reader Phil Barlett...and is your first must read of the day.  The link is here.

Read more...

Attempt Made On Deutsche Bank Head's Life: Explosive Package Addressed To CEO Intercepted

It seems that popular anger at the banker minority will no longer be confined to tent-based vigils in public parks. In Germany, someone just escalated a bit, to quite a bit. The irony, in this case, is that the package was addressed from the ECB. If it weren't for a potentially sensitive topic, the amusing implications could be severe.

An abbreviated version of this Reuters story is posted over at zerohedge.com...and I thank Australian reader Wesley Legrand for sharing it with us.  The link is here.

Read more...

Banking system near collapse, Turk tells King World News

GoldMoney founder and GATA consultant James Turk told King World News yesterday that the European banking system nearly collapsed last week under the weight of withdrawals, that national over-indebtedness is always followed by currency devaluation, and that gold and silver still seem to him to be poised for a breakout.

This is part of the introduction that Chris Powell wrote for this blog that's posted in this GATA release...and I'll leave the rest to him.  The link to this must read is here.

Read more...

When All Else Fails, Change The Math: Japan To Fudge GDP Calculation, Will Add Up To 2% To GDP

Proving once again that when it comes to fudging numbers, Japan (which previously was best known for changing the minimum legal radiation absorption dose on a daily basis following the Fukushima disaster, anyone remember that?) is leaps and bounds ahead of even China and the US.

This short one-paragraph read is posted over at zerohedge.com...and is another offering from Wesley Legrand.  The link is here.

Read more...

Hinde's Davies talks with MineWeb about intervention against gold

Interviewed this week by MineWeb's Geoff Candy, Hinde Capital CEO Ben Davies talks about central bank intervention in the gold market and gold's re-establishment as money, preferably trading freely rather than as part of a gold standard. Audio as well as text of the interview are posted.

I borrowed this story and the short introduction from a GATA release that Chris posted late last night.  I haven't had the time to listen to it yet, but it's probably worth your while...and the link is here.

Read more...

Banks step up gold lending for dollars

"'It's hard to understand,' said one New York-based bullion banker."

No, it's not hard at all to understand in the context of the need of governments, central banks, bullion banks, and commercial banks to suppress the gold price during a crisis.

This story was posted in the Financial Times yesterday...and is posted in the clear in this GATA release.  It's a must read...and the link is here.

Read more...

Marc Faber: "I Have A Very Special Stock Tip For You. The Symbol Is G-O-L-D"

It has been a while since the Marc Faber graced Zero Hedge. It is time to remedy that. Providing his traditional dose of snark, tragedy and realism, the Gloom, Boom and Doom report author spoke to Bloomberg TV, and when asked what his outlook for the euro is, dispensed the following pearl: "I have a very special stock tip for you. The symbol is g-o-l-d. That is what I prefer to hold.

This 7:17 interview is imbedded in this zerohedge.com story...and is Wesley Legrand's final offering in today's column, for which I thank him.  It's well worth your time...and the link is here.

Read more...

Eight Commitment of Traders Charts

Reader EWF sent me this excellent COT work he did in silver. Fuller says that..."I read your column every day and it's great.  I thought you might be interested in the 8 COT charts I created to supplement Ted Butler's analysis."

I was.

"Multiyear extremes matter when it comes to the Commitments of Traders report.  We look for extreme levels of bullishness or bearishness across all three classes of traders.  The most bullish COT configuration occurs when the commercials are bullish and the speculators are bearish.  This is currently the case in silver." - EWF

This analysis is for the last COT report...for positions held as of Tuesday, November 29th.  This is certainly worth a few minutes of your time...and it's posted over at his website ewfresearch.com.  The link is here.

Read more...

John Hathaway: Audio Interview posted at King World News

I posted the Hathaway blog in this column yesterday...and Eric slid the now-edited audio version into my in-box late last night.  The link is here.

Read more...

Forgotten Treasure: Library Janitor Discovers Silver Coin Cache

A curious library caretaker in the Bavarian city of Passau has discovered a treasure trove of ancient silver coins and medals that went overlooked for more than two centuries. The surprise find is reportedly worth as much as six figures.

Janitor Tanja Höls had often passed by an unassuming wooden box stowed away in an archive in Passau's historic state library, but it wasn't until about two weeks ago that curiosity got the best of her and she was decided take a look inside.

What she found were dozens of coins, most of them made of silver. "I had no idea that I'd found a treasure," the 43-year-old told the German news agency DAPD on Wednesday. But when she told the head of the library in the Bavarian city what she had seen, he soon realized their value.

This story was posted over at spiegel.de yesterday...and I thank Roy Stephens for sharing it with us. The gallery of nine photos is worth the trip all by itself.  It's a very interesting read...and the link is here.

Read more...

Ron Hera interviews Hugo Salinas Price about remonetizing silver

Financial letter writer Ron Hera interviewed Hugo Salinas Price, president of the Mexican Civic Association for Silver and a speaker at GATA's Gold Rush 2011 conference in London in August, about his plan for remonetizing the silver ounce Libertad coin in Mexico and the plan's prospects in Mexico's Congress.

I stole the above introductory paragraph from a GATA release...and I thank reader Matthew Nel for being the first one through the door with this story yesterday. The interview is headlined "Hugo Salinas Price: What Every Politician Needs to Know about Silver" and it's posted over at the silverseek.com website...and the link is here.

Read more...

Paper Markets Creating Precious Metals Gyrations: Nick Barisheff

Nick Barisheff, CEO at Bullion Management Group Inc. sees the paper markets creating opportunities for precious metals investors. Nick also believes that $10,000 gold is coming sooner than you think.

Nick has focused on the world of precious metals and the advantages of investing in gold, silver, and platinum bullion for the past decade.

This 25-minute audio interview was done with Jim Puplava about ten days ago.  It's posted over at his financialsense.com website...and the link is here.

Read more...

Canada's Gold Problem, It Has None

Eric Sprott was interviewed on the CTV network here in Canada earlier this week...and it was all about gold.  In the interview, Eric mentioned that Canada sold all its gold about ten years ago.  In actual fact it was way before then, as it started when Brian Mulroney was the Prime Minister of Canada, Margaret Thatcher was the Prime Minister of England...and Ronald Reagan was in the White House.

This must watch 4:52 video arrived in my in-box in the wee hours of this morning...and I thank reader 'Rocky R' for sending it along.  The link to the youtube.com video is here.

Read more...

Why The UK Trail Of The MF Global Collapse May Have "Apocalyptic" Consequences For The Eurozone, Canadian Banks, Jefferies And Everyone Else

I received this zerohedge.com piece just before midnight last night courtesy of Nick Laird.

It's very long, very involved...and, if true, the word "Apocalyptic" would certainly apply.

This is a monster read...and don't be surprised if you can't quite grasp it all, as I couldn't either.  But I don't think it's the parts that you don't understand that will scare the hell out of you.  I would think that we'll find out in pretty short order if any or all of this is true.

As I said, it's a zerohedge.com posting...and the link is here.

Read more...

 

¤ The Funnies

(Click on image to enlarge)

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¤ The Wrap

Well, it was a nothing sort of day yesterday.  Gold was up a bit, but silver wasn't allowed to join the party...and the preliminary open interest numbers didn't mean much.

As I've said before, we seem to be in some sort of holding pattern.  Silver is all cleaned out to the downside...and it's pretty much the same in gold as well.  It's just a matter of waiting it out...a condition that I'm used to after twelve years of this.

It will be very interesting to see what happens in Europe over the next two days.  I doubt very much that anything will come out of these meetings that will save the EU or its currency.  Any solution will involve kicking the can further down the road...and will just delay the inevitable collapse, not only in Europe, but everywhere.

Very little happened in Far East trading earlier today...and not much is happening now that London has been trading for a couple of hours.  Gold is down about five bucks...and silver is up about 15 cents.  Gold volume as of 5:05 a.m. Eastern time [if it is to be believed] is around 14,500 contracts, which is fumes and vapours.  Silver's volume is still not available.

That's all I have for today.

I hope your Thursday goes well...and I'll see you here on Friday.