It was a very quiet trading day on Wednesday everywhere on Planet Earth. Gold traded basically unchanged up until 1 p.m. BST in London, which was 20 minutes before the Comex open. There was a bit of price flurry in the first hour of trading in New York, but that was it---and gold traded mostly flat for the remainder of the day. Nothing to see here---and the high and low ticks aren't worth looking up.
Gold closed down for the third day in a row---and closed at $1,294.50 spot, down $4.30 from Tuesday's close. Volume, which had been microscopic for most of the day, netted out to 139,000 contracts, with the vast majority of that occurring in December, which is now the new front month for gold.
It was more or less the same for silver, as price action and volume during the early going didn't amount to much. Like gold, silver spiked up about 8:45 a.m. in New York, but that was quickly dealt with. The low, such as it was, came around 10:40 EDT---and from there it rallied unsteadily higher in the close.
The low and high ticks, which are barely worth the effort of looking up, were reported by the CME Group as $20.76 and $20.48 in the September contract.
Silver finished the Wednesday trading session in New York at $20.615 spot, up 5.5 cents from Tuesday. Volume, net of July and August, was around 35,000 contracts, of which 3,400 were in Dec/14 and Mar/15.
Platinum traded within five dollars of its Tuesday closing price for the entire Wednesday trading session---and closed up a buck. There wasn't much excitement in palladium---and it closed unchanged. Here are the charts.
The dollar index closed at 81.21 on Tuesday---and then tacked on another 10 basis points by 9 a.m. BST in London. From there it traded flat until the Comex open---and by 10:50 a.m. EDT was up to its 81.54 high, before giving some of that back going into the close. The index finished the day at 81.40---up 19 basis points.
The gold stocks gapped down a bit more than a percent at the open---and the sold off to their low which came minutes after 11:30 a.m. in New York. From there they chopped quietly higher, cutting their losses by a bit, as the HUI closed down only 1.13%.
Despite the fact that silver finished up on the day, the long knives were out for all the precious metal equities yesterday---and Nick Laird's Intraday Silver Sentiment Index closed down 1.31%.
The CME Daily Delivery Report for first day notice for the August delivery month showed that only 102 gold and and a surprisingly large 225 silver contracts were posted for delivery within the Comex-approved depositories on Friday. There were three short/issuers in gold---Jefferies, Deutsche Bank and ABN Amro---and the long stoppers were "all the usual suspects." In silver, there was only one short/issuer---and that was Jefferies. There were big deliveries in copper on first notice day as well---and if you wish to check out the details, the link to yesterday's Issuers and Stoppers Report is here.
The CME's preliminary report for the Wednesday trading session showed that there were 9,035 gold contracts still open in the August delivery month but, without doubt, that will shrink substantially by tomorrow, as the remaining trades from yesterday and today finally get reported. In silver, there were 237 contracts open in the August delivery month, so the lion's share of that showed up in the figures above. I'll update these numbers in this space in tomorrow's column.
There was no sales report from the U.S. Mint.
There was no in/out movement in gold worth mentioning at the Comex-approved depositories on Tuesday. In silver, there was 1,202,119 troy ounces reported received---and 5,210 ounces were shipped out. All the silver received went into Brink's, Inc. The link to that activity is here.
Once again I have a boat load of stories for you---and there should be some in here that are of interest.
A federal judge on Wednesday ordered Bank of America Corp to pay a $1.27 billion penalty for fraud over shoddy mortgages sold by the former Countrywide Financial Corp.
U.S. District Judge Jed Rakoff in Manhattan ruled after a jury last October found the second-largest U.S. bank liable for the sale by Countrywide of defective loans to government-controlled mortgage companies Fannie Mae and Freddie Mac.
Rakoff also ordered former mid-level Countrywide executive Rebecca Mairone, who was also found liable and was the only individual charged, to pay $1 million, citing her "leading role" in the fraud and calling some of her testimony "implausible."
While the bank's penalty was below the $2.1 billion sought by the U.S. Department of Justice, it marks another legal defeat for Bank of America over its disastrous July 2008 purchase of Countrywide, which has cost tens of billions of dollars in litigation, loan buybacks and write downs.
This Reuters story, filed from New York, showed up on their website at 4:44 p.m. EDT Wednesday afternoon---and today's first story is courtesy of Roy Stephens.
For the first time ever, the average price for a kilowatt hour (KWH) of electricity in the United States has broken through the 14-cent mark, climbing to a record 14.3 cents in June, according to data released last week by the Bureau of Labor Statistics.
Before this June, the highest the average price for a KWH had ever gone was 13.7 cents, the level it hit in June, July, August and September of last year.
The 14.3-cents average price for a KWH recorded this June is about 4.4 percent higher than that previous record.
This longish article was posted on the cnsnew.com Internet site at 2:20 p.m. EDT on Tuesday---and I thank West Virginia reader Elliot Simon for finding it for us.
The Commerce department reported Q2 GDP which blew estimates out of the water, printing at 4.0%, above the declining 3.0% consensus, as a result of a surge in Inventories and Fixed Investment, both of which added over 2.5% of the total print, while exports added another 1.23% to the GDP number.
As the BEA noted, "The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The "second" estimate for the second quarter, based on more complete data, will be released on August 28, 2014."
If you believe this, dear reader, then there's a bridge for cheap somewhere in your future. Expect this to be revised downwards as the months pass. This news item appeared on the Zero Hedge website at 10:30 a.m. EDT on Wednesday morning---and I thank Harry Grant for sending it our way.
There are certain underlying factors that play huge roles in gauging and signaling the stock market's general direction.
One of those is the level of margin debt at the New York Stock Exchange. This is the total dollar value of all securities purchased on that exchange using margin debt.
According to the latest report, NYSE margin debt is only 0.3% away from making a brand new all-time high.
This tiny story has an absolute must see chart. All of this was posted on thestreet.com Internet site at 10:25 a.m. EDT on Tuesday morning---and it's something I found in yesterday's edition of the King Report.
Former Federal Reserve Chairman Alan Greenspan talks about the outlook for financial markets, the U.S. economy and Fed policy. He speaks with Betty Liu and Tom Keene on Bloomberg Television's "In the Loop."
This 17:58 minute video clip was posted on the Bloomberg website yesterday sometime---and I must admit that I haven't had the time to watch it. I thank Casey Research's own Marin Katusa for passing it around yesterday.
Claudio Grass, Managing Director of Global Gold Switzerland, talks to Dr. Marc Faber about investing, markets and precious metals.
I wasn't expecting much when I started reading this interview, but quickly changed my mind. Marc lets it all hang out, especially when he's got the time to do it, as he does here---and he's not being manhandled by the main stream media like he was on CNBC the other day.
It was posted on the goldsilverworlds.com Internet site on Wednesday sometime---and it's definitely worth reading.
One of my favorite podcasts to listen to is The Peter Schiff Show.
Peter always does an excellent job of dissecting the latest economic news and cutting through the smoke and mirrors of government statistics.
Recently he had Doug Casey on his radio show to discuss what’s really happening with the economy. And it’s nothing close to what the talking heads in the financial media would have you believe.
Nick Giambruno, the Senior Editor over at the InternationalMan.com Internet site, sent me this commentary yesterday, as he thought you might enjoy it. Nick, who wrote "all of the above," also added in his e-mail that it's "A good discussion on the economy and gold [towards the end]".
Senior bankers could face bonuses being clawed back up to seven years after they have been awarded under new rules proposed by the Bank of England's Prudential Regulation Authority and the Financial Conduct Authority.
Andrew Bailey, the PRA's chief executive, said this would mean bankers would be more accountable for their own actions. Regulators around the world are attempting to weed out bad behaviour by making individuals responsible for risky or illegal activity, rather than the institutions themselves.
"We believe that enhancing individual accountability and improving the alignment of risk and reward should have a positive impact on behaviour and culture within banks," Mr Bailey said, outlining rules on bonus deferrals, clawbacks and criminal offences.
This commentary appeared on The Telegraph's website at 12:25 p.m. BST yesterday---and I thank South African reader B.V. for sending it our way.
The head of the review into standards in the British banking industry is this week expected to reignite the question of whether an oath for bankers is needed despite rejecting the idea when producing his original report.
Sir Richard Lambert, the former director general of the CBI, is scheduled to launch a research document which promotes the need for bankers to swear an individual “oath.”
His raising the idea of a Hippocratic-style oath - similar to the one sworn by doctors at the start of their career - will come even though his February review into how to continue the rehabilitation of the banking industry in the wake of the financial crisis dismissed the need for one.
Despite its merit, I doubt very much if this idea will go anywhere. This is another news item from The Telegraph. This one was posted at 12:08 p.m. BST on Monday---and it's the second offering of the day from Roy Stephens.
Bond yields have fallen to the lowest level in modern history in Germany, France and the eurozone’s core states, signalling a high risk of deflation and mounting concerns about sanctions against Russia.
The yield on German 10-year bonds fell to a record low of 1.11pc in intra-day trading, partly on safe-haven flows. French yields dropped in tandem to 1.5pc. These levels are far below rates hit during the 1930s or even during the deflationary episodes of the 19th Century.
“Yields fell this low in Genoa in the 15th century but there has been nothing like this in Europe in modern times,” said professor Richard Werner, from Southampton University. “This reflects the weakness in nominal GDP and a slow economic implosion caused by credit contraction. The European Central Bank is at last starting to act but it is only scratching the surface.”
This Ambrose Evans-Pritchard offering appeared on the telegraph.co.uk Internet site at 8:13 p.m. BST on Tuesday---and it's the second contribution in a row from Roy Stephens. There was another story from The Telegraph about this on Tuesday. It's headlined "European bond yields enter the death zone"---and I found it in yesterday's edition of the King Report.
The spigot of global reserve stimulus is slowing to a trickle. The world's central banks have cut their purchases of foreign bonds by two-thirds since late last year. China has cut by three-quarters.
These purchases have been a powerful form of global quantitative easing over the past 15 years, driven by the commodity bloc and the rising powers of Asia.
They have fed demand for US Treasuries, Bunds and Gilts, as well as French, Dutch, Japanese, Canadian and Australian bonds and parastatal debt, displacing the better part of $12 trillion into everything else in a universal search for yield. Any reversal would threaten to squeeze money back out again.
Jens Nordvig, from Nomura, said net foreign reserve accumulation by central banks fell to $63bn in the second quarter of this year, from $89bn in the first quarter, and $181bn in the fourth quarter of 2013. These data are adjusted for currency swings, and are fresher than the delayed figures published by the International Monetary Fund.
"There are major shifts going on global capital markets. People have been lulled into a false sense of security by low volatility and they haven't paid attention. We're not seeing any risk aversion in financial markets," he said.
This commentary by Ambrose Evans-Pritchard appeared on The Telegraph's website at 8:31 p.m. BST yesterday evening---and it's certainly worth skimming. Roy Stephens sent it our way just before I hit the send button on today's column.
1. Coordinated Sanctions Aim at Russia’s Ability to Tap Its Oil Reserves: The New York Times 2. Moscow: U.S. will feel ‘tangible losses’ from ‘destructive, myopic’ sanctions: Russia Today 3. E.U. sanctions: Moscow disappointed by E.U.’s inability to act independently of U.S.: Russia Today 4. E.U. sanctions on Russia will hit U.K. economy’ – Foreign Secretary: Russia Today 5. Moscow fights back after sanctions; battle rages near Ukraine crash site: Reuters
[All of the above stories are courtesy of Roy Stephens, for which I thank him]
Moscow is concerned by reports that Ukraine’s government troops have used ballistic missiles against independence supporters in the country’s east, Russian Foreign Minister Sergei Lavrov said Wednesday.
Ukraine’s President Petro Poroshenko Tuesday confirmed the country’s readiness to provide access to international experts to the crash site of the Malaysia Airlines passenger plane in Donetsk Region, declaring a unilateral ceasefire within a 20-kilometer (12-mile) radius.
“Now, unfortunately, actions suggest the opposite: Donetsk, Luhansk and other villages in these regions are being shelled with Grad rocket launchers, artillery and tanks.”
On Tuesday, citing U.S. officials CNN reported that Ukraine’s government troops used short-range ballistic missiles in the east. The weapons have a range of about 50 miles and pack warheads of up to 1,000 pounds.
This RIA Novosti article appeared on their Internet site at 6:27 p.m. Wednesday evening Moscow time, which was 10:27 a.m. EDT. It's courtesy of Roy Stephens.
“Russia will continue doing its utmost to end the bloodshed and create conditions for the negotiations between the conflicting parties in accordance with the April 17 Geneva Accords made by Russia, the US, EU and Ukraine. The goal of this document is the immediate launch of a nationwide dialogue involving all the regions and seeking a political settlement that would ensure the rights of all the citizens and regions of Ukraine,” Lavrov said in Dushanbe.
According to the minister, Kiev authorities who carried out a coup in February ignored the requests of southeastern Ukraine to equal footing in long-anticipated constitutional reforms. Kiev is now seeking a military victory over the local defense forces forced to take up arms to defend their lands.
“The deep crisis in Ukraine is of high concern. Despite numerous warnings to our Western partners against attempts to make Ukraine choose between the West and the East, we were not heard. As a result, the country was plunged into a civil war,” Lavrov said.
This story is also from the RIA Novosti website yesterday evening Moscow time as well---and it's also courtesy of Roy Stephens.
The British Prime Minister, David Cameron, has said Britain was not going to "launch a European war or send the fleet to the Black Sea" over the Ukraine crisis, applying economic pressure instead.
Mr. Cameron, was addressing a Q&A session with staff at the headquarters of United Utilities in Warrington when he said that the West had to stand up to Russia.
The Prime Minister alluded to the lessons the U.K. learned dealing with Germany’s aggression in Europe before the first and second world wars.
You'll need your barf bag handy to read this garbage commentary from Cameron. It was posted on the Russia Today website at 6:55 p.m. Moscow time yesterday evening---and Roy slid it into my in-box just after midnight this morning.
The extraordinary propaganda being conducted against Russia by the U.S. and U.K. governments and Ministries of Propaganda, a.k.a., the “Western media,” have the purpose of driving the world to war that no one can win. European governments need to rouse themselves from insouciance, because Europe will be the first to be vaporized due to the U.S. missile bases that Europe hosts to guarantee its “security.”
As reported by Tyler Durden of Zero Hedge, the Russian response to the extra-legal ruling of a corrupt court in the Netherlands, which had no jurisdiction over the case on which it ruled, awarding $50 billion dollars from the Russian government to shareholders of Yukos, a corrupt entity that was looting Russia and evading taxes, is telling. Asked what Russia would do about the ruling, an advisor to President Putin replied, “There is a war coming in Europe.” Do you really think this ruling matters?”
The West has ganged up on Russia, because the West is totally corrupt. The wealth of the elites is based not only on looting weaker countries whose leaders can be purchased (read John Perkins’ Confessions of an Economic Hit Man for instruction on how the looting works), but also on looting their own citizens. The American elites excel at looting their fellow citizens and have wiped out most of the US middle class in the new 21st century.
This short, but absolute must read essay from Paul, was posted on his website on Monday---and I thank reader U.D. for sharing it with us.
So Obama, Merkel, Cameron, Hollande and Italian Premier Matteo Renzi - let's call them the Fab Five - get on a video conference call to muster their courage and "increase pressure" asking for a cease-fire in Gaza. Later in the day, Israel's Benjamin "Bibi" Netanyahu delivers his answer, in plain language: he remains dead set on achieving his version of a Final Solution to Gaza.  With or without "pressure".
So what's left for the Fab Five after having their illustrious Western collective behinds solemnly kicked? They decide to dump Gaza and instead sanction Russia - again! How brilliant is that as an exit strategy?
Not even Hollywood could come up with such a plot; Israel gets away with unlawful premeditated mass murder of civilians, while Russia gets framed for a (smaller-scale) airborne mass murder of civilians that has all the makings of being set up by the Kiev vassals of Russia's Western "partners".
Here's another absolute must read, as Pepe doesn't mince words or gild lilies. His commentary showed up on the Asia Times Internet site yesterday sometime---and it's also courtesy of Roy Stephens.
The U.S. has barred a shipment of Kurdish crude oil from reaching the Texas coast amid concerns independent oil sales from Kurdistan could further weaken Iraq's fragile central government as it struggles to contain a Sunni military offensive.
A U.S. District judge ordered a U.S. Marshal to seize the cargo — about 1 million barrels of crude oil, worth about $100 million — aboard the tanker United Kalavryta in response to a complaint filed by the Iraqi government claiming the oil was smuggled out of Kurdistan without its permission.
However, the tanker, anchored some 60 miles off the Galveston coast, is in international waters and thus outside U.S. jurisdiction. If it moves in closer so that smaller vessels can deliver its oil to shore, the U.S. Marshal will act on the court warrant and seize the cargo from those vessels, spokesman Dave Oney said.
This AP story, filed from Fort Worth, Texas at 5:30 p.m. CDT on Tuesday afternoon, was picked up by the finance.yahoo.com Internet site---and I thank reader Victor George for sending it. There was a similar story posted on the aljazeera.com Internet site yesterday---and it's headlined "U.S. judge says unable to seize Kurdish oil". It's courtesy of reader B.V.---and it's worth reading.
U.S. Secretary of State John Kerry forecast a transformation on Wednesday (July 30) in Washington's troubled relations with India as he headed to New Delhi for ice-breaking talks with new Prime Minister Narendra Modi.
For the past two decades, the world's two largest democracies have described themselves as natural allies, sharing similar concerns over China's rise and Islamic extremism. but incidents including the U.S. arrest of an Indian diplomat last year sent ties plunging to their lowest point in years, and the Hindu nationalist Modi had been treated as an outcast by Washington before he led his party to a decisive victory in April-May elections.
A new row is brewing over a customs deal but the Obama administration has been keen to emphasise areas where the two sides can make common cause in the build-up to the visit by Kerry and US Commerce Secretary Penny Pritzker who is already in India.
This news item put in an appearance on the channelnewsasia.com Internet site at 4:03 p.m. Singapore time on their Wednesday afternoon---and I thank reader M.A. for bringing it to our attention.
A clash in Xinjiang, home to China's mostly Muslim Uighur minority, left nearly 100 people dead or wounded, an exile group said on Wednesday (July 30) after what authorities called a "terror attack" on a police station and township.
Dozens of civilians and assailants were killed and injured in the attack by a gang armed with knives and axes, Chinese state media reported late Tuesday.
Official news agency Xinhua said police officers at the scene shot dead dozens of members of the mob. It did not give a precise breakdown of the casualties from Monday's incident, and information in Xinjiang is often difficult to verify independently.
Xinjiang's government web portal Tianshan on Wednesday described the violence as a "terror attack" that killed or wounded "several tens" of Uighur and Han. The Han are China's largest ethnic group, whose members have migrated in large numbers to Xinjiang in recent decades.
This is the second story in a row from the channelnewsasia.com Internet site on Wednesday---and it's also courtesy of reader M.A.
China’s trade numbers still don’t add up.
A discrepancy between Hong Kong and Chinese figures for bilateral trade remains even after a crackdown last year on Chinese companies’ use of fake export-invoicing to evade limits on importing foreign currency. China recorded $1.31 of exports to Hong Kong in June for every $1 in imports Hong Kong tallied from China, for a $6.4 billion difference, based on government data compiled by Bloomberg News.
Analysts offered at least three possible explanations for the gap, including differences in how China and Hong Kong record trade in goods that pass through the city, as well as a persistence in fraud at a lower level. Any discrepancies make it tougher to gauge the impact of global demand on a Chinese economy that’s projected for the slowest growth in 24 years.
“It’s still a bit of a mystery,” said Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong. Regarding fraudulent invoices, “the fact that the ratio is like that would suggest that some of that is still going on,” he said.
This Bloomberg story, filed from Beijing, was posted on their Internet site at 2:47 a.m. Denver time on Tuesday morning---and it's another article I found embedded in yesterday's edition of the King Report.
Japan's June industrial output fell at the fastest rate since the earthquake and tsunami of March 2011 as companies slowed production to offset a build-up in inventories, clouding the outlook for the economy.
The 3.3 percent month-on-month drop far exceeded the median 1.2 percent fall forecast in a Reuters poll of economists, and followed a 0.7 percent increase in May, data from the Ministry of Economy, Trade and Industry (METI) showed on Wednesday.
In unusually frank language, a METI spokesman said the data showed shipments of goods fell for five consecutive months - a pattern similar to the last time Japan was in recession in the middle quarters of 2012.
The data and the METI official's comments suggest the economy may struggle to rebound in the current quarter following an expected contraction in the second quarter from the sales tax hike, with a Reuters poll conducted in July projecting a 1.4 percent quarterly drop.
This Reuters story, filed from Tokyo, showed up on their website just after midnight EDT on Tuesday, July 30---and I credit the King Report for this story as well. It's worth reading.
Standard & Poor’s declared Argentina in default after the government missed a deadline for paying interest on $13 billion of restructured bonds.
The South American country failed to get the $539 million payment to bondholders after a U.S. judge ruled that the money couldn’t be distributed unless a group of hedge funds holding defaulted debt also got paid. Argentina, in default for the second time in 13 years, has about $200 billion in foreign-currency debt, including $30 billion of restructured bonds, according to S&P.
Argentina and the hedge funds, led by billionaire Paul Singer’s Elliott Management Corp., failed to reach agreement in talks today in New York, according to the court-appointed mediator in the case, Daniel Pollack. In a press conference after the talks ended, Argentine Economy Minister Axel Kicillof described the group of creditors as “vulture funds” and said the country wouldn’t sign an accord under “extortion.”
This Bloomberg news item, co-filed from Buenos Aires and New York, appeared on their website at 8:10 p.m. MDT yesterday evening---and I thank Howard Wiener for bringing it to my attention---and now to yours.
The meeting between Argentine private bank representatives and the so called “vulture funds” over the debt held by the hedge funds has been adjourned and will be resumed on Thursday.
Ámbito.com has revealed that banks will contribute around 1.4 billion dollars in order to buy the titles from the holdouts investors, which means that Argentina will avoid falling into default for any substantial period of time.
Banks offered to pay 250 million dollars upfront and the rest in several payments. Hedge funds appear to have accepted the initiative, but requested the money to be paid fully at once.
Negotiations will continue tomorrow, top sources told Ambito.com.
Here's the view from Argentina on the same issue---and the above four paragraphs are all there is. This was posted on the Buenos Aires Herald website yesterday sometime---and it's also courtesy of Howard Wiener.
1. KWN Commentary: "Billionaire Paul Singer Warns of Major Social Unrest in U.S." 2. Victor Sperandeo: "Legend Warns Unknown Event May Trigger Avalanche of Selling" 3. Andrew Huszar: "Man Who Executed QE1 for Fed Warns Major Turmoil is Coming"
[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]
For his Internet radio program, "Turning Hard Times into Good Times," newsletter writer Jay Taylor interviewed GATA's secretary/treasurer and mining executive---and financial consultant and market analyst David Jensen about gold and silver price suppression. The interview with Chris Powell is 21 minutes long---and the interview with David Jensen is 28 minutes long. They can be heard at Taylor's Internet site jaytaylormedia.com.
Gold has few friends and so it has gone into hiding on the eve of a new dark age, Hugo Salinas Price writes.
But, he adds, gold and silver will never lose their attraction to people.
His commentary is headlined "Welcome to the New Dark Age" and it's posted at the 24hgold.com Internet site. I thank Chris Powell for wordsmithing 'all of the above'---but reader U.D. was the first person through the door with this story in the wee hours of yesterday morning. It doesn't make for happy reading, but it's a must read nonetheless.
Russia obviously believes in gold – as seemingly does China, the other modern day superpower. Does the West believe in it any longer? It’s hard to tell. On the face of things no. But who knows what is said behind closed doors except those directly involved – and they aren’t saying.
Thus it is still perhaps a good idea to hedge one’s bets and hold some gold against yet another global financial crisis precipitated by tit for tat sanctions. Particularly when one is aware that today’s fiat currencies have virtually no backing at all and could revert to the value of the paper on which they are printed.
Let’s hope it doesn’t happen, but it may be better to be safe than sorry.
This excellent commentary by Lawrie was posted on the mineweb.com Internet site yesterday---and it's certainly worth reading.
Rare 5x Investment Is a Buy Again
Every time the Casey Research team recommends this one unique investment, it’s delivered a 5-to-1 return. The first time, it quickly returned 568%; the second, a gain of 656%. And now it’s a buy again. The only drawback: it’s extremely rare. In two decades, this is just the third time they’ve seen this buying opportunity. If you missed it before—now is your chance to get in while the window is open.
Until the physical tightness in silver develops into a genuine shortage, the price manipulators on the COMEX will determine what prices do. Currently, the commercials responsible for maintaining the manipulation are not positioned for a silver shortage. That doesn’t mean it is impossible for prices to rise sharply and the commercials to get overrun, but that’s not the high probability bet. This was the high probability bet two months ago when the technical funds were massively short and the commercials (the raptors anyway) were holding record net long silver positions. The high probability bet two months ago did play out, although the big surprise (and disappointment) was how small was the price jump and how large and aggressive was the accompanying commercial selling.
To be fair, I suppose the high probability bet in the short term is for the collusive COMEX commercials to snooker the technical funds to the downside, given the historical scorecard. Offsetting that, the extremely high probability bet for the longer term is for the price of silver to climb far higher than most would imagine. Admittedly, that creates a dilemma or anxiety for silver investors. - Silver analyst Ted Butler: 30 July 2014
It was another yawner in the precious metal market yesterday as the roll-overs out of August ended quietly---and nothing happened yesterday from a price perspective that's worth noting. Volume was below ultra light for most of the day, but picked up substantially once New York began trading. The traders in New York are the prime movers in the prices of all four precious metals, as their reach is global through the Globex trading system. And if it's not them directly, it's their agents in other markets that are doing the dirty work on their behalf.
Here are the 6-month charts for both gold and silver, updated with yesterday's price/volume data. There's nothing much to see here.
And as I type this paragraph, the London open is about 35 minutes away. Gold, silver and platinum are down tiny amounts---and palladium is up a couple of bucks. Nothing to see here. Net gold volume is 10,000 contracts---and silver volume is microscopic once again at only 2,350 contracts. The dollar index has been trading pretty much ruler flat all day long in the Far East---and is still flat approaching the London open.
I must admit that I don't know how to read the precious metal markets at the moment, but I'm always mindful that JPMorgan et al are riding shotgun over them at all times. And not to be forgotten in all of this is the monstrous Commercial net short position in silver that hangs like the sword of Damocles over that market, along with the decent-sized Commercial net short position in gold as well. "Da boyz" can engineer another price decline in these metals when it suits them---and the only thing we don't know, is when.
But unless they get over run by a physical shortage in silver, or a black swan out of left field, the 'powers that be' will harvest the technical fund longs for fun, profit and price management at some point.
I know you're probably getting tired of reading the above comments, as I've been saying this in one form or another for the last three weeks, but in the grand scheme of things, these are the only things that matter.
I'm off to bed earlier than usual this morning as well, as there's still not much going on now that London has been open an hour and change. All four precious metals are trading close to unchanged as of 4:20 a.m. EDT. Gold volume has increased by 50 percent since I last reported on it, which is still very light for this time of day---and silver's trading volume has doubled, but even at 4,800 contracts, it's still ultra light. The dollar index isn't doing much, either.
Today is the last day of the month---and I haven't the foggiest idea how the rest of the Thursday session will unfold, but I would suspect that any decent price action in either direction will occur in New York.
See you tomorrow.