Gold & Silver Daily

¤ Yesterday In Gold & Silver

The gold price did little in Far East trading on their Tuesday, but rallied sharply the moment that London opened.  The rally wasn't allowed to get far---and then at, or shortly before the London p.m gold fix, the HFT boyz showed up and spun the price back below the $1,300 spot mark, with the low of the day coming at 12:15 p.m. EDT.  From there the gold price poked its nose back above the $1,300 price mark, but wasn't allowed to close there.

The CME Group recorded the high and low ticks as $1,312.10 and $1,295.50 in the August contract.

Gold closed in New York yesterday at $1,298.80 spot, down $4.70 from Monday's close.  Gross volume was north of 350,000 contracts, but it netted out to an insignificant 8,500 contracts.

The price chart for silver was similar to gold's, but the price action was more volatile.  The high and low ticks for silver occurred at the same time as they did for gold.

The high and low ticks for silver were $20.845 and $20.505 in the September contract.

Silver finished the Tuesday session at $20.56 spot, down a half a cent.  Volume, net of July and August, was around 39,500 contracts---of which, about 3,700 contracts were traded in December 2014 and March 2015.

Platinum also rallied a bit at the Zurich open---and its rally ended an hour later---and it was pretty much all down hill from there, with platinum closing just about on its low of the day, down ten bucks.

It was more or less the same chart pattern for palladium, as its decent rally at the Zurich open also got capped---and then it followed a price decline similar to the one that it had on Monday.  The low tick came at 1 p.m. in New York trading---and the subsequent rally didn't get far.  Palladium closed down two bucks.

The dollar index closed late on Monday afternoon in New York at 81.00 right on the button.  It had a tiny up/down rally that lasted until about 9:40 a.m. BST in London---and from that low, headed higher.  I would surmise that someone hit the 'sell gold and silver, buy the dollar index' button at that point  All the gains were in by noon in New York---and it backed off a couple of basis points into the close.  The index finished the day at 81.21---up 21 basis points.

The gold stocks opened in the black---and then got sold down immediately when the gold price got hit just before the London p.m. fix.  After that they chopped sideways, although they did make a rally attempt off the 12:15 p.m. low tick, but that ran out of gas shortly after 2:30 p.m. EDT.  The HUI finished down 0.61%---giving back all of Monday's gain.

The silver equities followed a similar price path as gold stock during the first hour of trading, but then rallied quietly back into positive territory, with the high of the day coming at about 1:30 p.m. EDT---and from there the equities slid a bit into the close.  Nick Laird's Intraday Silver Sentiment Index closed up 0.22%.

The CME Daily Delivery Report showed that 50 gold and 26 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  Of the 26 silver contracts issued, 25 of them were stopped by the CME itself in order to fill delivery orders in the silver mini contract of 1,000 troy ounce good delivery bars.  You can check it all out in yesterday's Issuers and Stoppers Report, which is linked here.

Once again there were no reported changes in GLD---and as of 8:09 p.m. EDT, there were no reported changes in SLV, either.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the latest reports on the gold and silver ETFs at the close of business on Friday, July 25.  Their gold ETF declined by another 19,737 troy ounces---and their silver ETF shed 430,803 troy ounces.

There was a smallish sales report from the U.S. Mint.  They sold 260,000 silver eagles.

There was no in/out gold movement worth mentioning at the Comex-approved depositories on Monday.  In silver, there was 600,256 troy ounces reported received---and nothing shipped out.  All the silver deposited went into Brink's, Inc.

Just as a matter of interest, here's the 5-minute tick chart for gold from yesterday that reader Brad Robertson sent around.  The times shown are MDT, so add two hours for EDT.

Here's a brand new chart that Nick Laird sent my way early yesterday evening.  It shows the weekly deliveries into the Shanghai Gold Exchange---and he's presenting it in the same format as he does for the Russian Reserves, which I consider to be entirely appropriate.

Of course China is importing much more gold than this chart shows, but this---and what is imported through Hong Kong every month---is all that's visible

It's another day where I have more stories than I know what to do with---and that's why I just post 'em--and let you sort through them.


¤ Critical Reads

More than a third of U.S. adults pursued by collection agencies

More than a third of U.S. adults have bad debt that has been handed over to a collection agency and their average debt in collections is $5,178, according to a study published on Tuesday by the Urban Institute.

The authors of the report by the Washington, D.C.-based think tank said vicious cycles of bad debt can hold back families and entire communities.

"Most people wouldn't blink if told that the majority of Americans carry some debt. But they would be shocked to learn that reported debt in collections is pervasive and threads through nearly all communities," said Caroline Ratcliffe, a senior fellow at the Urban Institute. "Delinquent debt can harm credit scores, which can tip employers' hiring decisions, restrict access to mortgages and even increase insurance costs."

This very interesting Reuters story, filed from Chicago, appeared on their Internet site at 1:43 p.m. EDT on Tuesday afternoon---and I thank reader Harry Grant for sliding today's first story into my in-box in the wee hours of this morning.


U.S. home ownership at 18-year low in second quarter

Home ownership in the United States fell again in the second quarter to the lowest level since the third quarter of 1995, suggesting many Americans are becoming renters. The seasonally adjusted home ownership rate fell to a seasonally adjusted 64.8% from 65.0% in the first quarter, the Commerce Department said Tuesday.

The residential rental vacancy rate dropped to 7.5% in the second quarter, the lowest level since 1997 and well below the peak of 11.1% in 2009.The increased demand to rent is driving prices higher. In the second quarter, the median asking monthly rent was $756, up from $735 one year ago. In another closely-watched sector, the home ownership rate among those under 35 was 35.9% in the second quarter, down from 36.7% one year earlier. Many analysts say the housing sector will remain weak until first-time buyers return to the market.

That's all there is to this tiny news item that was posted on the Internet site at 10:27 a.m. EDT on Tuesday morning---and I thank Washington state reader S.A. for sharing it with us.


Don't Be Fooled by the Fed's Placid Facade: Mohamed A. El-Erian

One of the unwritten rules of modern central banking is that, unless compelled by events on the ground, officials should refrain from making big policy changes during the summer. With many traders on holiday, any sudden moves risk destabilizing markets.

Look for the Federal Reserve to abide by this rule when it meets Tuesday and Wednesday — and the European Central Bank to do the same in early August. Janet Yellen and her colleagues on the policy-making Federal Open Market Committee will maintain their well-telegraphed, gradualist approach, reducing monthly bond purchases by another $10 billion, signaling no urgency in raising interest rates, and reminding us of the importance of looking beyond the unemployment rate to understand what's happening in the job market.

Still, behind this comforting “steady as she goes” facade, Fed officials will be dealing with five complex and inter-related issues, the resolution of which will be months in the making:

This commentary appeared on the Internet site at 8:21 a.m. EDT on Tuesday morning---and it's courtesy of West Virginia reader Elliot Simon.


Fed May Be Fooling All of Us With Its Exit Signs: Axel Merk

While we are busy arguing whether the Fed’s exit will consist of rising rates, reverse repos or the trimming of its massive portfolio, the Fed may well be fooling all of us. Investors must have been swallowing lots of blue pills not to see the illusion hiding in plain sight.

Let’s assume that we will indeed get a rate hike next year, and that the Fed will have figured out how to implement it. We may get our exit all right, but it’s not the sort of exit most appear to be expecting. That’s because in our humble view, an “exit” ought to reflect a path towards normalization, away from financial repression, back to an environment where pensioners might once again be able to live off income generated from their savings.

If anyone dares to take a red pill, you will learn that interest rates net of inflation, i.e. real interest rates, have not only continued to be negative, but become more negative of late, meaning inflation has started to inch upward. For normalization to occur, interest rates must move higher faster than the pace of inflation; and not only do real interest rates need to move higher, they ought to move into positive territory to suggest we might be exiting financial repression.

This longish commentary is the second one in a row from the Internet site---and the second in a row from Elliot Simon.  It was posted there at 10:54 a.m. EDT yesterday.


Wall Street Journal Reporter: “The Entire United States Market Has Become One Vast Dark Pool”

In 2012, Wall Street Journal reporter, Scott Patterson, released his 354-page prescient overview of U.S. market structure titled, Dark Pools: High Speed Traders, A.I. Bandits, and the Threat to the Global Financial System. (For those whose computer prowess is limited to turning on a laptop, like millions of fellow Americans, “A.I.” means artificial intelligence – machines teaching themselves to think like humans, but faster.)

Patterson comes to an epiphany on page 339 of his book, writing in the notes section: “The title of this book doesn’t entirely refer to what is technically known in the financial industry as a ‘dark pool.’ Narrowly defined, dark pool refers to a trading venue that masks buy and sell orders from the public market. Rather, I argue in this book that the entire United States stock market has become one vast dark pool. Orders are hidden in every part of the market. And the complex algorithm AI-based trading systems that control the ebb and flow of the market are cloaked in secrecy. Investors – and our esteemed regulators – are entirely in the dark because the market is dark.”

This short essay was posted on the Internet site yesterday---and I thank reader U.D. for passing it around.


JPMorgan Paying $650K to Settle CFTC Charges

JPMorgan Chase will pay $650,000 to settle charges by federal regulators that it filed inaccurate reports on the trading positions of some of its large customers.

The Commodity Futures Trading Commission announced the settlement Tuesday. The CFTC said that JPMorgan continued to submit inaccurate reports to the agency from 2012 through February of this year even though CFTC staff found errors in them and notified JPMorgan.

The New York bank neither admitted nor denied wrongdoing in the settlement. It agreed to certify in writing that it has improved and tested its procedures for filing reports. A company spokesman declined to comment.

Coffee money---and certainly not big enough to be a licensing fee.  Ted said that they were fined for misreporting large traders in the futures and options market on the Comex, but the commodities affected weren't mentioned.  This article showed up on The New York Times website on Tuesday sometime---and it's courtesy of reader Phil Barlett.


UBS comes to €300 million deal with Germany

UBS has reached a settlement with the authorities in Germany over helping clients evade taxes. The Swiss bank will pay €300 million (CHF364.4 million) in the agreement marking another step in the bank’s resolving the problems of its past.

UBS revealed it had settled the investigation in July while reporting its second quarter earnings on Tuesday.

The bank said it had entered CHF120 million ($132 million) in provisions in connection with the German settlement in its second quarter results, where it posted a net profit of CHF792 million.

This article was posted on the Internet site at 10:50 a.m. Europe time on their Tuesday morning---and I thank South African reader B.V. for sharing it with us.


British Petroleum's Faustian Pact with Russia goes horribly wrong with Yukos verdict

The Permanent Court of Arbitration in The Hague has thrown the book at the Russian state, or more specifically at Vladimir Putin and his Siloviki circle from the security services.

The $51.5bn ruling against on the Kremlin unveiled this morning has no precedent in international law. The damages are 20 times larger than any previous verdict.

Lawyers for the Yukos-MGL-Khodorkovsky team tell me that they cannot pursue the foreign bond holdings of the Russian central bank if the Kremlin refuses to pay up when the deadline expires on January 15, as seems likely. Moscow has already dismissed the case as “politically motivated”.

Nor can they go after embassies and other sovereign assets that enjoy diplomatic immunity, though they are eyeing a list of Russian state targets that slipped through the net.

This Ambrose Evans-Pritchard blog appeared on the Internet site on Monday sometime---and my thanks go out to Roy Stephens for finding it for us.


Dutch Prime Minister Urges Kiev to Stop Fighting Near MH17 Crash Site

Dutch Prime Minister Mark Rutte has called on Kiev authorities to stop its military operation against independence supporters around the Malaysia Airlines flight MH17 crash site in eastern Ukraine, Agence France-Presse reported Tuesday, citing a government representative.

"The prime minister this morning called the Ukrainian president with a request to halt hostilities around the crash site," Jean Fransman said.

Ukrainian President Petro Poroshenko told Rutte that he would take all measures “to allow investigators access” to the scene, according to the government spokesman.

"Rutte expressed his concern about the fact it appeared the investigators may today yet again not reach the site. This is important because we want to get to the crash site as quickly as possible to get the victims and bring them home," Fransman said.

This article, filed from Moscow, was posted on the RIA Novosti website at 5:07 p.m. Moscow time on their Tuesday afternoon, which was 9:07 a.m. in New York.


Kiev forces fire ballistic missiles into E. Ukraine – CNN

In the past two days Kiev’s forces have launched several short-range ballistic missiles into areas in east Ukraine controlled by self-defense forces, CNN reports, citing U.S. government sources.

The move “marks a major escalation” in the Ukrainian crisis, CNN said.

Three U.S. officials confirmed to me a short time ago that U.S. intelligence over the last 48 hours has monitored the firing of several short-range ballistic missiles from territory controlled by Ukraine government forces into areas controlled by the pro-Russian separatists,” Barbara Starr, CNN’s Pentagon correspondent, said in a live report.

Short-range ballistic missiles can carry warheads of up to 1,000 pounds (450 kg) and are capable of killing dozens of people at a time, Starr said.

This news item put in an appearance on the Russia Today Internet site at 6:07 p.m. on Tuesday evening Moscow time---and once again I thank Roy Stephens for sending it.


Over 30 civilians killed during two days of shelling in Gorlovka, East Ukraine

Two days of shelling in Gorlovka, in the Donetsk region of Eastern Ukraine, have resulted in 31 civilians being killed there, local authorities say. Ukrainian troops and anti-government forces are blaming each other for the bloodshed.

The town of Gorlovka witnessed more shelling Tuesday morning, RIA Novosti news agency reported.

“Over the past 24 hours 17 residents of Gorlovka, including three children, have been killed in the center of the town, which got under artillery fire. 43 civilians have been wounded,” Itar-Tass reported the press service of the Gorlovka city administration as saying.

This is another Russia Today news item---and it's also courtesy of Roy Stephens.  It appeared on their website at 2:09 p.m. Moscow time on their Tuesday afternoon.


Over 48,000 Ukrainians Apply for Refugee Status in Russia

More than 48,000 Ukrainian citizens have already applied for refugee status in Russia, the Russian Emergencies Ministry press office said Tuesday.

“To date … over 48,000 Ukrainian citizens have asked for temporary accommodation and refugee status, over 27,000 [refugees] have applied for Russian citizenship,” the ministry reported.

Earlier on Tuesday, Russia's children's rights ombudsman Pavel Astakhov reported that more than 230,000 Ukrainians have been granted refugee status in Russia.

This is developing into a human tragedy of biblical proportions.  This RIA Novosti article was posted on their website at 11:49 p.m. Moscow time Tuesday evening---and it's worth reading.  I thank Roy Stephens for sending it.


Putin Vows Assistance in Taking Ill Children Out of Crisis-Hit East Ukraine

Russian President Vladimir Putin promised Tuesday to help in evacuating children who require urgent medical assistance from violence-hit eastern Ukraine.

The head of the presidential human rights council, Mikhail Fedotov, told Putin at a meeting that the Kiev government keeps silent on Russia’s offer to evacuate the children.

“I expect that we will be able to agree with human rights activists and Ukrainian authorities,” Putin said. “We will try to help.”

The Russian leader added: “This is an important humanitarian sphere and I would ask you to seek the response of the Ukrainian colleagues in a non-conflict manner.”

This commentary appeared on the RIA Novosti Internet site at 5 p.m. Moscow time on their Tuesday afternoon.  It's another contribution from Roy Stephens.


On Dominoes, WMDs and Putin’s “Aggression”: Imperial Washington is Intoxicated by Another Big Lie

Imperial Washington is truly running amuck in its insensible confrontation with Vladimir Putin. The pending round of new sanctions is a counter-productive joke. Apparently, more of Vlad’s posse will be put on double probation, thereby reducing demand for Harry Macklowe’s swell new $60 million apartment units on Park Avenue. Likewise, American exporters of high tech oilfield equipment will be shot in the foot with an embargo; and debt-saturated Russian state companies will be denied the opportunity to bury themselves even deeper in dollar debt by borrowing on the New York bond market. Some real wet noodles, these!

But it is the larger narrative that is so blatantly offensive—that is, the notion that a sovereign state is being wantonly violated by an aggressive neighbor arming “terrorists” inside its borders. Obama’s deputy national security advisor, Tony Blanken, stated that specious meme in stark form yesterday:

Russia bears responsibility for everything that’s going on in Eastern Ukraine” and “has the ability to actually de-escalate this crisis,” Blinken said.

Puleese! The Kiev government is a dysfunctional, bankrupt usurper that is deploying western taxpayer money to wage a vicious war on several million Russian-speaking citizens in the Donbas—-the traditional center of greater Russia’s coal, steel and industrial infrastructure. It is geographically part of present day Ukraine by historical happenstance. For better or worse, it was Stalin who financed its forced draft industrialization during the 1930s; populated it with Russian speakers to insure political reliability; and expelled the Nazi occupiers at immeasurable cost in blood and treasure during WWII. Indeed, the Donbas and Russia have been Siamese twins economically and politically not merely for decades, but centuries.

This absolute must read essay by David Stockman was posted on his website yesterday---and as Roy Stephens said in his covering e-mail---"it is the most articulate and accurate summary of the Ukraine situation that I have read to date!"  I agree totally.


Turkish PM happy to return American-Jewish ‘peace’ award

Turkish Prime Minister Tayyip Erdogan says he will gladly return an award given to him by a Jewish-American association a decade ago in a letter released by his office, which also called on the US group to condemn Israel’s government policies in Gaza.

The New York-based American Jewish Congress said in a letter to Erdogan last week that he had become the world's "most virulent anti-Israeli leader" and it demanded that he return the prize. He had been given the award partly for his efforts to broker peace between Israel and the Palestinians 10 years ago.

"Prime Minister Erdogan will be glad to return the award given back in 2004," Turkey's ambassador to Washington Serdar Kilic said in the letter addressed to American Jewish Congress President Jack Rosen.

This news item showed up on the Russia Today website at 3:24 p.m. Moscow time on Tuesday afternoon---and is another contribution from Roy Stephens.


China Confirms Targeting Microsoft for Anti-Trust Scrutiny - Reports

A Chinese industry and commerce agency confirmed Tuesday it is probing US software giant Microsoft for allegedly operating a monopoly, according to The China Post.

“According to legal regulations, the SAIC (State Administration for Industry and Commerce) has set up a case to investigate Microsoft for alleged monopoly actions,” the Chinese paper quoted the regulator as saying in a statement.

The inquiry came two month after China banned the use of the company’s Windows 8 operating system on government computers, citing security concerns. Up to 95 percent of operating system software in the country stems from Microsoft.

This RIA Novosti story, filed from Moscow, showed up on their website at 10:0 p.m. yesterday evening local time.  I thank reader B.V. for his second contribution to today's column.


How Argentina’s Default May Trigger $29 Billion in Claims

By defaulting today, Argentina may trigger bondholder claims of as much as $29 billion -- equal to all its foreign-currency reserves.

If the overdue interest on Argentina’s dollar-denominated securities due 2033 isn’t paid by July 30, provisions in bond indentures known as cross-default clauses would allow the nation’s other debt holders to also demand their money back immediately. The amount corresponds to Argentina’s debt issued in foreign currencies and governed by international laws.

U.S. District Court Judge Thomas Griesa blocked Argentina’s attempt last month to transfer the $539 million in interest after the nation didn’t set aside money for holdout creditors, who won a ruling that entitled them to full repayment of obligations that Argentina repudiated in 2001. While Citigroup Inc. says there’s little chance investors will invoke the pay-back clauses in coming weeks, potential claims are large enough to exhaust the country’s reserves.

This news item appeared on the Bloomberg website at 11:24 a.m. Denver time on Tuesday---and I thank Roy Stephens for his final contribution to today's column.


Three King World News Blogs

1. Dr. Stephen Leeb: "This Will End in Tears For the West as Gold and Silver Soar"  2. Rick Rule: "Silver is the Wild Card as Metals to Surge Higher"  3. Grant Williams: "Black Swan to Engulf the World in Catastrophe"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]


Goldman unit eyes foray into China amid metals financing scandal

Goldman Sachs Group Inc's metals warehousing unit is exploring its first foray into China, and privately held C Steinweg has expanded capacity there, sources said, as a financing scandal in a major Chinese port fuels a scramble for market share.

The alleged scam - in which a Chinese trading firm is suspected by local authorities of fraudulently using a single cargo of metal as collateral for multiple loans - has shaken the confidence of banks and merchants in Western metals storage firms that rely on local agents to oversee warehouse operations.

It has intensified a battle between new entrants and entrenched rivals in the multi-billion dollar business of securely storing the world's commodities in China, the world's biggest producer and user of base metals.

This longish Reuters article, co-filed from New York, Sydney and London, was posted on their Internet site at 1:52 p.m. EDT on Tuesday---and I thank Harry Grant for finding it for us.


Lawrence Williams: China’s Hong Kong gold imports continue to dive

The conundrum that is the gold price continues to confound.  Last year the gold price dropped dramatically despite an enormous level of ongoing  gold flows from West to East – particularly into China.  Yet yesterday the reports of the lowest monthly level of net gold imports from Hong Kong into mainland China since January 2013 was followed by the gold price putting on something of a surge – it having been driven down to around the $1,290 level during the week, but then shooting up to comfortably above $1,300 in late trading Friday.

On the face of things the latest gold import figures via Hong Kong certainly suggest a sharp downturn in Chinese demand, which started to kick in after some exceedingly strong import figures around the Chinese New Year.  As the table above shows import figures for the four months from March to June are very substantially below those of a year earlier – and overall, for the first six months of the year net imports via Hong Kong are down by 12% - but the trend is rather worse than that figure might suggest with the March to June period net imports down a massive 42%.

The decline in imports via Hong Kong is indeed an indication of falling Chinese demand so far this year and is supported by other data – notably the Chinese Gold Association’s recent announcement stating that Chinese gold demand in the first half of the year was down 19.4% year on year to 569.45 tonnes, compared with 706.36 tonnes a year earlier.  Thus the latest Hong Kong figures may not be indicative of the true fall in demand any more.

This commentary by Lawrie was posted on the Internet site on Saturday---and it's worth reading.


We’re Ready to Profit in the Coming Correction—Are You?

Sometimes I see an important economic or geopolitical event in screaming headlines and think: “That’s bullish for gold.” Or: “That’s bad news for copper.” But then metals prices move in the opposite direction from the one I was expecting. Doug Casey always tells us not to worry about the short-term fluctuations, but it’s still frustrating, and I find myself wondering why the price moved the way it did.

As investors we’re all affected by surges and sell-offs in the investments that we own, so I want to understand. Take gold, for example. Oftentimes we find that it seems to tease us with a nice run-up, only to give a big chunk of the gains back the next week. And so it goes, up and down…

The truth is—and it really is this simple, but so obvious that people forget—that there are always rallies and corrections. The timing is rarely predictable, but big market swings within the longer-term megatrends we’re speculating on are normal in our sector.

This commentary by Casey Research analyst Laurynas Vegys was posted on their website yesterday.


Peter Schiff exclusive interview: On the dollar crisis, Federal Reserve and future for gold prices

BGG: Precious Metals. And I just wanted to sit down with you and ask you a little bit about the future of gold and the markets. You famously predicted the crash of 2008, 2009, and I loved watching your interviews on television where they would just laugh at you, and just ridicule you, but in the end you had the last laugh.

Peter Schiff: Not yet. Not even yet. Because the people that were ridiculing me back then are still ridiculing me, because I’m still warning that the real crisis hasn’t even happened yet. Because everything that the Federal Reserve has done, everything that the government has done since the financial crisis of ’08 has just made the problems that they were trying to solve worse. Problems that they caused.

BGG: They’ve learned nothing. They’ve learned absolutely nothing because they don’t understand what caused it.

Peter Schiff: No, they still don’t understand even after the fact. So we’re going to live through a worse financial crisis. Next time I think it’s going to be a dollar crisis, which is going to be much more painful than a banking crisis. And in that environment gold is going to shine a lot brighter than it did in the last crisis. And so the reasons to own it now are even more numerous than they were then.

There's a 13:11 minute audio interview, or you can read the transcript.  It was posted on the Internet site on Monday.


Comex gold market data is likely corrupted, Sprott says

Comex gold market data is likely corrupted to facilitate the paper gold market's domination of the physical gold market, Sprott Asset Management CEO Eric Sprott remarks in his latest interview with Sprott Money News.

Sprott praises GATA's work exposing gold market manipulation, cites GATA consultant Dimitri Speck's book "The Gold Cartel," and says he sees no need for a daily silver price-fixing mechanism. The interview is 24 minutes long but if you can read faster than you can listen, a full transcript is posted with the audio at the Sprott Money Internet site.

I thank Chris Powell for providing the above paragraphs of introduction.


London gold fixing set for new administrator by year-end

The banks that conduct the century-old gold fixing and the London Bullion Market Association will seek proposals next month for a new administrator to run a revamped process for the benchmark by year-end.

The London Gold Market Fixing Ltd., which manages the procedure, and the LBMA will open a market consultation in late August and plan to announce a third-party administrator by the end of September, the association said in a statement today. The process will be open and not restricted to firms who pitched to run a mechanism that will replace the silver fixing on August 15.

The gold fixing company said July 16 that the LBMA will help with a request-for-proposals exercise and that it’s seeking an independent chairman for the price-setting ritual that takes place twice a day by phone. A similar process for silver will be replaced by an electronic, auction-based mechanism run by CME Group Inc. and Thomson Reuters Corp. next month after Deutsche Bank AG’s planned withdrawal would leave just two banks to conduct fixings for that commodity.

This Bloomberg article, filed from London, was posted on their website at 12:09 p.m. MDT yesterday---and I found it embedded in a GATA release.


Jim Grant: Gold is the inoculation against hare brained central bankers

"The central bank imposed interest rates are the source of global financial instability now and in the future," warns Grant's Interest Rate Observer's Jim Grant, adding that "The Fed... has manipulated us into a period of quite eerie stability and measured volatility."

Grant believes, given the values (and aware of the risks) that Russian "stocks stand to do very well," and also likes mining stocks as he warns credit markets are overvalued (especially sovereign debt). His conclusion, own gold as "it stands to benefit from the demonstrated, as opposed the theoretically likely, crack up of the [current] monetary arrangements."

Gold, he explains, "is the ultimate inoculation against the harebrained doctrine of modern central bankers."

This 2:34 minute video clip was embedded in a Zero Hedge piece from yesterday, but the video clip itself was M.I.A. inside the ZH piece, so I've posted it on its own.  I thank both Phil Barlett and Elliot Simon for bringing this story/video clip to our attention.



¤ The Funnies

Here's another photo that Nick Laird sent me on Monday evening.  This rather fearsome-looking creature is Tailed Emperor Caterpillar.  But to give you some idea of scale, note the ant in the top left-hand corner.

I had to dig around a bit, but here's what it looks like when it finally turns into a Tailed Emperor butterfly.

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¤ The Wrap

Including the buying of new long contracts in the managed money category of some 20,000 contracts, the technical funds have bought an incredible 53,000 net contracts in COMEX silver futures since the beginning of June, the equivalent of 265 million oz. It is not possible that the buying of 265 million oz of COMEX silver futures over the course of 6 weeks would not result in more than a rally of close to $2 were it not for collusive and deliberate commercial selling designed to cap the price. Everything about the CME, which oversees COMEX trading, screams out that this is a criminal enterprise.

While this [past] week’s COT changes are inconsequential, the same can’t be said about the change over the past 6 or 7 weeks; I’m still shaking my head over what has transpired on the COMEX. Simply put, COMEX futures positioning is the sole explanation for the (tepid) price rise---and will, most likely, be the sole explanation for what occurs next. - Silver analyst Ted Butler: 26 July 2014

As I said in The Wrap yesterday, Tuesday was the day for the large traders on the Comex to clear out their August positions unless they were standing for delivery.  And as I mentioned at the top of this column, gross volume was around 354,000 contracts yesterday---and with the exception of a few thousand contracts, it was all roll-overs out of August and into future months.

The rest of the traders have to be out today---and tomorrow is first notice day for the August delivery month---and I'll have all the details in tomorrow's column.

Here are the 6-month charts for both gold and silver once again.

I wasn't happy to see "da boyz' 'show up with their trading algorithms and drop the gold price below $1,300 spot at the London p.m. gold fix---but what can you do?  JPMorgan et al run the precious metal show on the Comex---and nobody is going to stop them.  I've said a number of times that precious metal prices probably fall under the national security umbrella now---and if that's the case, nothing will change from a price perspective unless it's allowed.

As I write this paragraph, the London open is about 30 minutes away.  All four precious metals have done sweet tweet during the Far East trading session on their Wednesday.  Net volume in gold is barely 6,500 contracts---and most volume is now in the new front month, which is December.  Silver volume is hardly worth mentioning at 1,800 contracts.  The dollar index isn't doing much.

Yesterday was also the cut-off for this Friday's Commitment of Traders Report---and it will be interesting to see how much of Tuesday's price action shows up in Friday's report.  I'm not expecting much change in Friday's report, but my track record at guessing hasn't been that great for the last little while, so I'll just reserve judgment until then.

I'm heading off to bed earlier than usual this morning, because there isn't much going on anywhere.  Gold and silver prices are flat now that London has been open about 90 minutes---and platinum and palladium are up a bit.  Volumes are fumes and vapours---and that's being kind.  As I fire this out the door at 4:25 a.m. EDT, net gold volume is barely 10,000 contracts---and silver volume is 2,800 contracts.  The dollar index is now up 7 basis points.  Nothing to see here, as the church mouse has obviously left the building.

As I said in Tuesday's column, I wasn't expecting much in the way of price volatility for the remainder of July---and so far this has turned to be the case.  There's an FOMC meeting next week---and it will be interesting to see what "da boyz" have in store for us when the smoke goes up the chimney on Wednesday, or maybe sooner.

That's all I have this time.  I hope your day goes well---and I'll see you here tomorrow.