The low price for gold [around $1,595 spot] during the Tuesday trading session came around 9:00 a.m Hong Kong time...and from there the price never looked back. It traded pretty flat during the first four hours of the London market, but shortly after 12 o'clock noon BST, gold began to rally anew...with the high tick of the day [$1,623.10 spot] coming about 11:45 a.m. in New York.
From there it got sold off for the rest of the day...and closed at $1,616.70 spot...up $19.80. Net volume was pretty light at around 97,000 contracts...as I'm sure traders were heading out the door early.
Silver's price path was very similar to gold's...with the low price and the high tick of the day [$28.51 spot] coming the same time as gold's as well.
From that high, silver got sold off 22 cents going into the close of electronic trading, ending the Tuesday session at $28.29 spot...up 77 cents on the day. Net volume was decent at around 30,000 contracts.
The dollar index didn't do much in Far East trading...but put on a bit of a rally starting early in London...and reaching its zenith [82.02] by 8:30 a.m. in New York. From there it sold of to its low of the day, which was around 81.71...just before noon Eastern time. From there it rose a hair and then traded sideways for the rest of Tuesday...closing around 81.80...down less than 10 basis points from its Monday close.
The low tick for the dollar index matched the high tick in the gold and silver price almost precisely...but the currency price movements certainly don't explain the fact that gold was in rally mode while the dollar index did very little during Far East and early London trading.
The gold stocks gapped up a bit over two percent at the open...and then tacked on another percent and change in pretty short order. With New York closing early, the HUI closed on its high tick of the day...up 3.61%.
Except for Pan American Silver once again, it was all green arrows in the silver equities yesterday, with a couple of junior producers up double digits. Nick Laird's Silver Sentiment Index closed up 4.10%...but a lot of the silver stocks did much better than that.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 12 gold and 301 silver contracts were posted for delivery on Friday. In silver, the big short/issuer was Jefferies with 300 contracts...and the two biggest long/stoppers were JPMorgan with 195 contracts...and the Bank of Nova Scotia with 103 contracts. As of the CME's preliminary report early this morning, there are still 2,277 silver contracts still open for July...minus the 301 that will be delivered on Friday.
There were no reported changes in either GLD or SLV...and no sales report from the U.S. Mint, either.
We finally have another report from the gold and silver ETFs over at Switzerland's Zürcher Kantonalbank. Between June 21st and July 2nd, they reported that 80,595 troy ounces of gold and 88,093 troy ounces of silver were added.
The Comex-approved depositories reported receiving 597,282 troy ounces of silver on Monday...and shipped a smallish 26,586 ounces of the stuff out the door. The link to that action is here.
John Paulson on Gold: "We view gold as a currency, not a commodity," Paulson says. "Its importance as a currency will continue to increase as the major central banks around the world continue to print money." He added that as the market keeps shuddering, demand for gold will stay high, and soon enough all of his depressed gold holdings should shoot up. He also thinks that "anyone in Greece, Italy, and France should pull all their money out of the banking system and purchase gold bars before the Continent collapses." … John Paulson, the founder of Paulson & Co., one of the world’s largest hedge funds, in Business Week on June 28, 2012 [Courtesy of reader U.D.]
Reader Scott Pluschau has posted a blog on his website about gold. This one is headlined "Gold once again approaching a major multipoint trend line". The link is here.
With the fourth of July holiday upon us, there wasn't much in the way of news stories to report yesterday, so I hope you can find the time to at least skim the cut and paste portions of the ones I've selected.
JPMorgan Chase & Co. is being investigated over potential power-market manipulation that inflated payments for electricity, according to the U.S. Federal Energy Regulatory Commission.
The FERC, which has pledged to combat manipulation of prices, began its probe after reports last year of bidding practices by JPMorgan that the California and Midwest grid operators deemed to be abusive, according to documents provided by the Washington-based agency.
“Three of the bidding techniques had together resulted in at least $73 million in improper payments,” the agency said in documents filed yesterday, citing estimates by the two system operators.
So, what else is new? This Bloomberg story was sent to me by Scott Pluschau who discovered it shortly after it was posted on their website late yesterday morning Eastern time. The link is here.
To quote Lando Calrissian..."this deal is getting worse all the time."
General Motors shares fell to a fresh 2012 closing low of 19.57 on Monday. The stock hit 19 in mid-December, the lowest since the auto giant came public at $33 in November 2010 following its June 2009 bankruptcy.
Normally you might say, tough luck investors. But this is Government Motors. The Treasury still owns 26.5% of GM, or 500 million shares. Taxpayers are still out $26.4 billion in direct aid. Shares would have to hit $53 for the government to break even.
Those shares were worth about $9.8 billion as of Monday. That would leave taxpayers with a loss of $16.6 billion.
This investors.com story from yesterday is Scott Pluschau's second contribution in a row to today's column...and the link is here.
[Yesterday] morning, British investment bank Barclays announced that its CEO Bob Diamond would immediately resign in the wake of a massive fine over manipulating interest rates a few years ago.
Specifically, Barclays has been accused of submitting false numbers about the rate at which it was borrowing money, skewing LIBOR (which is an index measuring the rate at which banks borrow money).
Diamond will be at a government hearing tomorrow, and in preparation for that, Barclays has submitted a stunning letter to the government, basically accusing the Bank of England of being the real conspirator behind the interest rate manipulation scheme.
This businessinsider.com story was posted on their website midmorning Eastern time yesterday...and I thank Roy Stephens for his first offering of the day. The link is here.
A memo published by Barclays suggested that Paul Tucker gave a hint to Bob Diamond, the bank’s chief executive, in 2008 that the rate it was claiming to be paying to borrow money from other banks could be lowered.
His suggestion followed questions from “senior figures within Whitehall” about why Barclays was having to pay so much interest on its borrowings, the memo states.
Barclays and other banks have been accused of artificially manipulating the Libor rate, which is used to set the borrowing costs for millions of consumers, businesses and investors, by falsely stating how much they were paying to borrow money.
The bank claimed yesterday that one of its most senior executives cut the Libor rate only at the height of the credit crisis after intervention from the Bank of England.
This story showed up on the telegraph.co.uk Internet site last night...and is Roy's second offering in today's column. The link is here.
The LIBOR manipulation story has exploded into a major scandal overseas. The CEO of Barclays, Bob Diamond, has resigned in disgrace; his was the first of what will undoubtedly be many major banks to walk the regulatory plank for fixing the interbank exchange rate. The Labor party is demanding a sweeping criminal investigation. Mervyn King, Governor of the Bank of England, responded the way a real public official should (i.e. not like Ben Bernanke), blasting the banks:
It's time to do something about the banking system…Many people in the banking industry are hardworking and feel badly let down by some of their colleagues and leaders. It goes to the culture and the structure of banks: the excessive compensation, the shoddy treatment of customers, the deceitful manipulation of a key interest rate, and today, news of yet another mis-selling scandal.
The furor is over revelations that Barclays, the Royal Bank of Scotland, and other banks were monkeying with at least $10 trillion in loans (The Wall Street Journal is calculating that LIBOR affects $800 trillion worth of contracts).
Matt Taibbi, in his usual pithy prose, tees this story up and drives it down the fairway. It's a fairly longish blog, but well worth your time if you have it. It is, of course, posted on the Rolling Stone website...and I thank Roy Stephens once again for sending it along. The link is here.
The British seem to have a taste for referendums at the moment. Next year, the inhabitants of the Falkland Islands will vote on their status as a British overseas territory. Then, in 2014, the Scottish government will hold a referendum on independence from the United Kingdom. Now it looks like there could be another nationwide referendum after that -- on Britain's membership of the European Union.
The pressure from euroskeptics puts Cameron, who does not want to be rushed into holding a vote, in a tricky situation. In a speech to parliament on Monday on the outcome of last week's EU summit, the prime minister said that although he is not in favor of an immediate referendum on EU membership, he does not want to rule one out for the future. He insisted that the "status quo" was unacceptable in any case. If the euro zone grows ever closer together into a political union, it will change Britain's relationship with the EU, Cameron said.
This Roy Stephens offering was posted on the German website spiegel.de yesterday...and the link is here.
Bavarian governor Horst Seehofer, the leader of the conservative Christian Social Union party (CSU) which is part of Chancellor Angela Merkel's center-right federal government coalition, has criticized the outcome of last week's European Union summit and threatened to let the government collapse if Berlin makes any further financial concessions to ailing euro member states.
"The time will come when the Bavarian government and the CSU can no longer say yes. And I wouldn't then be able to support that personally either," Seehofer said in an interview with Stern magazine released on Tuesday. "And the coalition has no majority without the CSU's seats."
The CSU is the Bavarian sister party to Merkel's Christian Democratic Union.
This is the second story in a row from the German website spiegel.de...and I thank reader Marshall Angeles for sending it. The link is here.
The common currency union was supposed to benefit the economy of the entire European Union. Now that the euro is struggling, however, it is bringing growth down with it. Germany's economy, once seemingly immune to the crisis, is now facing mounting difficulties.
This under-the-hood story about what's really going on in Germany is well worth the read, if this sort of in-depth story interests you. It's from Roy Stephens, of course...and it's posted on the spiegel.de Internet site. The link is here.
The Kremlin won't make any movement on arms reductions with the United States unless concessions are made in Europe, a senior Russian official said.
NATO leaders, during their annual summit in Chicago, issued a proclamation saying the "appropriate mix of nuclear, conventional and missile defense capabilities" was vital for the security of the alliance.
Washington and its allies say a missile defense shield in Europe would counter regional aggression for adversaries such as Iran. Russia says it views the plan as a threat to its national security, warning it may take corresponding action along its western border.
This very short UPI story was posted on their website on Monday...and I thank Roy Stephens for sharing it with us. The link is here.
The United States has quietly moved significant military reinforcements into the Persian Gulf to deter the Iranian military from any possible attempt to shut the Strait of Hormuz and to increase the number of fighter jets capable of striking deep into Iran if the standoff over its nuclear program escalates.
The deployments are part of a long-planned effort to bolster the American military presence in the gulf region, in part to reassure Israel that in dealing with Iran, as one senior administration official put it last week, “When the president says there are other options on the table beyond negotiations, he means it.”
But at a moment that the United States and its allies are beginning to enforce a much broader embargo on Iran’s oil exports, meant to force the country to take seriously the negotiations over sharply limiting its nuclear program, the buildup carries significant risks, including that Iran’s powerful Islamic Revolutionary Guards Corps could decide to lash out against the increased presence.
This story appeared in The New York Times yesterday...and I thank reader W. Busser for sending it along. The link is here.
China's factory downturn worsened in June as a key activity index hit a seven-month low, data expected to raise expectations the central bank may seek more policy easing to revive the world's second-largest economy.
The official Chinese purchasing managers' index (PMI) fell to 50.2 in June after seasonal adjustments, the National Bureau of Statistics said on Sunday, above forecasts for 49.8, but down from May's 50.4.
That was the worse reading since November last year, and a sharp fall in export orders and shrinking new orders suggested a recovery is not in sight. This would fuel bets that Beijing could further relax monetary policy as soon as this month, an analyst said.
This Reuters piece was filed from Beijing on Sunday...and I lifted it from yesterday's edition of the King Report. The link is here.
The first is with John Embry. It's headlined "Fixes From The 70s Won't Stop This Disaster"...and it's a must read. The second blog is with Rick Rule. It's entitled "We are Seeing Dislocations in Many Financial Markets". And lastly is this one with Citibank analyst, Tom Fitzpatrick. It bears the title "2 Key Markets: The Euro vs. Dollar & Stocks".
GoldMoney founder and GATA consultant James Turk interviewed financial writer Robert Blumen about a crucial difference gold has from commodities -- that it is produced for hoarding as money and is not consumed...and that nearly all gold ever produced remains available to the market. As a result annual gold production from mines has relatively little influence on the metal's price. The interview is 20 minutes long and it's posted in audio format at the GoldMoney.com Internet site...and the link is here.
Do You Feel Like You Missed Out on Gold's Great Bull Market?
If you didn't get in early on precious metals, don't sweat it. There's another, "Super-Bull" market right around the corner – and it's just getting started.
Dearest Beloved Comrades...errrr...Commissioners: The citizenry is curious as to what is holding up the STUDY on silver manipulation by the Bankster known as JP MORGAN. It seems as if the citizenry is well aware of this.... Why pray tell are you not??? This Fraud de Jour is listed here! As scandals grow by the hour...yesterday it was LIBOR. Today's newest is JPMorgan and energy! Surely you do not wish to be the last to take action!!!!! Time to truly step up...or STEP DOWN!!!! - Reader 'David in California' in an e-mail to the CFTC about the CNBC video on silver manipulation from Monday.
It's impossible to tell whether the quiet advances by all four precious metals on Tuesday was short covering, or new speculative longs being placed. Gold and platinum broke through, and then closed above, their respective 50-day moving averages. Silver has a ways to go yet...and palladium is still miles away from its 50-day moving average.
Yesterday at the close of Comex trading was the cut-off for this Friday's Commitment of Traders Report...and hopefully that will tell us more.
With the U.S. closed for the Independence Day holiday, the volume in the precious metals during Far East trading during their Wednesday was microscopic...and that was certainly reflected in the price action in both gold and silver during that time period. And as I hit the 'send' button at 4:40 a.m. Eastern time, London has been open for about ninety minutes. Volume is still non-existent...and prices are still comatose...and the dollar index isn't doing much, either.
Before signing off, I'd like to point out the upcoming "Casey's Fall Summit - Navigating the Politicized Economy". It's being held over three days...September 7-9th at the Park Hyatt Aviara Resort in Carlsbad, California. It's being co-sponsored by my good friend Eric Sprott...and it will be well worth attending...and like every other Casey Research summit, it will sell out quickly. You can find out more by clicking here.
I hope all my American readers get the opportunity to celebrate the real meaning of their Independence Day holiday today. Gold Bless America!
See you on Thursday...maybe. And if not Thursday, then Friday for sure.