Gold & Silver Daily
"This is the way these engineered price declines always work"
 

¤ Yesterday In Gold & Silver

Well, JPMorgan et al, backed by their HFT specialists, were a force to be reckoned with right from the 6:00 p.m. EDT open on Wednesday evening in New York.  The low tick came about twenty minutes before the Comex close on Thursday afternoon---and the subsequent rally made it until 3:40 p.m. EDT before running into the algorithms once again.

The high and lows ticks were reported by the CME Group as $1,292.00 and $1,273.40 in the December contract.

Gold finished the Thursday trading session at $1,276.30 spot, down $15.10 from Wednesday's close.  Net volume was pretty decent at 136,000 contracts.

Here's the 10-minute tick gold chart courtesy of reader Brad Robertson---and the 'click to enlarge' feature works wonders here.  Note the monster volume at 2 a.m. EDT [midnight MDT on this chart] when the HFT boyz showed up with their algorithms.

Silver set a new low price for this move down just before 10 a.m. BST in London on their Thursday morning.  From there it rallied into the London p.m. gold fix where it ran into JPMorgan et al---and that was pretty much it for the day, although it did manage to poke its nose into positive territory just before 4 p.m. EDT.  That's when the gold price got sold down off its rally as well.  Ditto for silver.

The low and high ticks were reported as $19.285 and $19.48 in the September contract.

The silver price closed yesterday at $19.415 spot, down 3.5 cents from Wednesday's close.  Net volume wasn't overly heavy at 23,500 contracts.

Platinum was under a bit of selling pressure during Far East trading---and that continued until the Comex open, where the low tick was set for the day.  It recovered about five bucks off its low---and then traded flat for the rest of the day and closed down about 8 bucks.

Palladium didn't do much until Zurich opened.  At that point it dipped a few dollars before heading higher until about noon in New York.  After that it traded flat as well---and finished the Thursday session up 12 bucks.

The dollar index closed at 82.25 late on Wednesday afternoon in New York.  It rose to its 82.36 high at noon Hong Kong time.  From there it chopped quietly lower until around 11 a.m. EDT---and after that it pretty much traded ruler flat, finishing the day at 82.16---down 9 basis points on the day.  Here's the 2-day dollar index chart.  Note the noon high tick in Hong Kong on their Thursday.

Here's the 6-month dollar index with Thursday's data added.  Using the past as prologue, I'd say this dollar rally is getting a little long in the tooth---and if I were long this index, I'd be hitting the bid about now.

The gold stocks gapped down almost 2 percent at the open---and from there they sank to their low of the day around 12:10 p.m. EDT.  Then they traded flat before catching a bit of a bid in the last hour of trading.  The HUI finished down 1.99%---but well off its low.

The chart pattern in the silver equities was almost a carbon copy of the gold shares.  At one point the shares were down over 3 percent but, like gold, rallied a bit in the last hour of trading---and Nick Laird's Intraday Silver Sentiment Index closed down 'only' 2.37%.

The CME Daily Delivery Report showed that 233 gold and 6 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  In gold, the two big short/issuers were Morgan Stanley with 150 contracts---and Barclays with 77 contracts---and both out of their in-house [proprietary] trading accounts.  The two long/stoppers of note were Canada's Scotiabank with 133 contracts---and JPMorgan with 82 contracts in its client account once again.  The link to yesterday's Issuers and Stoppers Report is here.

The CME's Preliminary Report for Thursday shows that there are 372 gold contracts still open in August.  From that number you can subtract the 233 contracts mentioned in the above paragraph, so there are about 140 contracts left to deliver sometime before first notice day for September, which is next Friday.

There were no reported changes in GLD yesterday---and as of 10:15 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with what happened in SLV for their reporting week ending on Wednesday---and here's what he had to say.  "Analysis of the 20 August 2014 bar list---and comparison to the previous week's list:  4,078,051.2 oz were added---and no bars were added or had a serial number change."

"The bars added were from: Inner Mongolia Qiankun (0.9M oz), Solar Applied Materials (0.6M oz), Nippon Mining (0.6M oz), Henan Yuguang (0.6M oz), and 19 others."

"As of the time that the bar list was produced, it was overallocated 194.5 oz. All daily changes are reflected on the bar list, except for a 1,439,175.0 oz deposit Wednesday night."  The link to Joshua's website is here.

The U.S. Mint had a tiny sales report yesterday.  They sold 1,500 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes.

Over at the Comex-approved depositories on Wednesday, the didn't report receiving any gold, but 46,279 troy ounces were shipped out---and all out of Manfra, Tordella & Brookes, Inc.  The link to that activity is here.

It was quite a bit busier in silver, as it normally is.  394,615 troy ounces were reported received---and 650,056 troy ounces were shipped out.  All the activity was at HSBC USA and Canada's Scotiabank.  The link to that action is here.

I have a lot fewer stories for you today---and that suits me just fine.

 

¤ Critical Reads

The Schizophrenic U.S. Housing Market in One Chart

For those who are looking for just one chart with which to summarize the U.S. housing market, here it is courtesy of the NAR, which earlier today reported July existing home sales, which despite beating expectations, were still 4.3% below the 5.38 million annualized homes sold a year ago.

The chart shows that while the housing market for the low-end continues to collapse (the 12.9% drop was "only" -12% three months ago), and the mid-range is virtually frozen, all the upside activity, activity which pushes the median price ever higher ( in July it was $222,900, 4.9% percent above July 2013 and the 29th consecutive month of year-over-year price gains), was in the ultra-luxury segment, or houses which cost over $1 million as the "1%", both foreign and domestic, continues to convert their pieces of fiat paper into hard real-estate assets.

That's all there is to this brief article that appeared on the Zero Hedge website yesterday---and the chart is definitely worth the trip.  I thank reader M.A. for today's first story.

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Philly Fed Surges to Highest Since March 2011 Despite Plunge in Jobs and New Orders

Philly Fed has beaten expectations for 6 months in a row with its biggest surge since the 2009 lows. Against expectations of 19.3, Philly Fed printed 28.0 - highest since March 2011 all-time highs. All sounds awesome right? Ummm, no, as 7 of 9 internal declined including - New Orders tanked, Employment tumbled, Prices Paid plunged, and Prices Received slumped.

So, in case you were wondering how it is possible that Philly Fed surged given such shitty internals, the 6-month forecast index ("hope") just surged to 22-year highs. And not only that: put all hopes of that long-delayed CapEx renaissance on hold: "While most broad indicators of future growth have been improving, the survey’s future capital spending index has been slipping. Although the index decreased just 1 point this month, its reading, at 17.5, is now the lowest it has been in seven months."

Look forward to Yellen talking soon about lack of capital spending as a pretext to keep ZIRP on for much, much longer.

The three charts embedded in this second Zero Hedge story are also worth a quick look---and today's second story is also courtesy of reader M.A.

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New York Sun: The mystery of Jackson Hole

In commentary headlined "Mystery of Jackson Hole," The New York Sun today reflects on the wreckage of the United States economy as the annual economic conference of the Federal Reserve Bank of Kansas City convenes at the famous Wyoming resort. The Sun writes:

"Savers have been devastated. The market isn't what it seems. No one wants to lend and no one wants to borrow. Unemployment is still above where it was when Congress gave the Fed a mandate to bring it down. A new Fed chairman has made jobs her signature. But will anyone at Jackson Hole ask whether it is the fiat nature of our money that got us into this hole in the first place?"

This short editorial appeared on The New York Sun website yesterday--and it's definitely worth reading.  I found it over at the gata.org Internet site.

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Nobel guru fears it may be nigh impossible to stop deflation

A quick word from Lindau, where half the world's Nobel economists are gathered on a beautiful island with cobbled streets on Lake Constance, looking out across the Alps. It is a Wittlesbach jewel.

Christopher Sims – a monetary expert, who now thinks money indicators have been rendered "essentially obsolete" by modern finance – says it may be impossible to reverse deflation in the Western economies by any normal means, in which case we are in trouble.

He argues that the public (including investors) are convinced that there will have to be some sort of payback for all the debts accumulated during the great era of leverage and excess. They have "internalised" the prospect of future tax rises and spending that will make them feel poorer.

"Some 60pc of people in the U.S. say they doubt there will be any government benefits for them when they retire, and 60pc of those already retired think their benefits will be reduced," he said.

This Ambrose Evans-Pritchard blog showed up on the telegraph.co.uk Internet site yesterday sometime---and it's the first offering of the day from Roy Stephens.

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High-frequency trading critic Chilton joins HFT lobby effort

Former CFTC Commissioner Bart Chilton, who famously blasted high-frequency traders as "cheetahs" when he was a regulator, has gone to work with a leading high-frequency trading association, the group said Thursday.

The switch is a dramatic example of a regulator becoming a paid consultant for an industry he once criticized—and it says as much about how the high-frequency trading industry is changing its approach as it does about Washington's often-criticized revolving door.

Chilton, who left the CFTC earlier this year, joined the law and lobbying firm of DLA Piper as a senior policy advisor in April. On Thursday, the Modern Markets Initiative announced that Chilton and DLA Piper will work with the association's newly appointed CEO Bill Harts on "regulatory and public policy matters."

Both Ted Butler and I thought he was a good guy until we realized that although he talked the talk, there was no way he was ever going to walk the walk.  Now he's just another paid whore for Wall Street.  This 2:39 minute video clip, plus transcript, was posted on the CNBC website very early Thursday morning EDT---and I thank Dr. Dave Janda for passing it around yesterday.

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Chuck Hagel Goes Full Fearmonger: "ISIS Poses Greater Threat Than 9/11, Prepare For Everything"

U.S. Secretary of Defense Chuck Hagel talks about the "imminent threat" ISIS poses to the US and the World.. .and pulls no punches in his total fearmongering..."ISIL poses a threat greater than 9/11. ISIL is as sophisticated and well funded as any group we have seen. They're beyond just a terrorist group. They marry ideology with a sophisticated strategic and tactical military prowess and they're tremendously well-funded. This is way beyond anything we have seen. We must prepare for everything. Get Ready!"

Time for some QE-funded deficit-busting war spending...

Or maybe it's just a warning for the next big false-flag operation, such as a 9/11 redux---except maybe in several countries at once, dear reader.  We'll find out soon enough I would think.  This is another Zero Hedge posting---and it appeared on their website at 4:47 p.m. EDT yesterday afternoon.  I thank reader 'David in California' for sending it.  Then there's this related ZH piece headlined "Rick Perry "ISIS Could Be in U.S., Need to Be Eliminated Now"" that David sent as well.

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‘Only’ American fighter within Kiev forces dies in battle in East Ukraine

The only American known to have joined a volunteer unit within the Ukrainian military, fighting the anti-government forces in the country’s east, has been killed in action, authorities confirm.

The killed fighter is Mark Paslawsky, a New York-born 55-year-old investment banker and US army veteran who took Ukrainian citizenship just before joining the Donbas battalion - a volunteer unit fighting alongside Kiev troops - in April. He adopted codename ‘Franko’ there.

News of his death came in an August 20 Facebook post by Ukrainian Interior Ministry adviser Anton Gerashchenko, who said four fighters of the Donbas battalion died in a battle near the town of Ilovaysk, 35km from Donetsk, eastern Ukraine.

Among those dead is a Ukrainian citizen of American origin, codename ‘Franko’,” Gerashchenko wrote.

This news item, filed from Moscow, showed up on the Russia Today Internet site at 10:48 a.m. Moscow time on Thursday morning, which was 2:48 a.m. in New York.  I thank Roy Stephens for sending it.

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Red Cross Warns Against Indiscriminate Attacks in Ukraine's Populated Areas

The International Committee of the Red Cross (ICRC) on Thursday called on both sides of the conflict in Ukraine to avoid selecting military targets in populated areas and carrying out indiscriminate attacks, the ICRC statement said.

"Equally, each party to the conflict must, to the extent feasible, avoid locating military objectives within or near densely populated areas. Indiscriminate attacks are prohibited, as is the use of weapons which by their nature are indiscriminate, i.e. which cannot distinguish between civilians and objects on the one hand and military objectives on the other,” the statement read.

This story, filed from Moscow, was posted on the RIA Novosti website at 8:59 p.m. Moscow time on their Thursday evening---and it's another contribution from Roy Stephens.

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Ukraine border guards begin checks on Russian aid trucks

Ukrainian border guards began on Thursday to inspect a Russian truck convoy carrying aid earmarked for humanitarian relief in eastern Ukraine that has been stranded at the frontier between the two former Soviet republics for nearly a week.

Kiev believes the convoy of some 260 trucks, carrying water, food and medicines, could prove a Trojan horse for Russia to get weapons to pro-Russian separatists battling Ukrainian forces in the region - a notion that Moscow has dismissed as absurd.

"I can confirm that at 2:15 p.m. (1115 GMT/7.15 a.m. EDT) the Ukrainian side began border-customs formalities relating to the Russian humanitarian cargo," border guard spokesman Andriy Demchenko told Reuters.

Asked on whose territory the cargo was, he replied: "On the territory of the Russian border point."

This Reuters story is datelined 4:42 p.m. EDT yesterday afternoon---so it's obviously been edited, as Roy Stephens sent it to me at 12:55 a.m. EDT.

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Moscow Urges to Prevent Disruptions of Aid Delivery, Warns of Provocations

The Russian Foreign Ministry on Thursday called on all parties concerned to prevent any disruptions in the delivery of Russian humanitarian cargo to eastern Ukraine.

“The most important task for now is to ensure that the convoy reaches its destination point without any disruptions,” the ministry said in a statement. “The Russian side reiterates its firm security guarantees. Similar guarantees have also been provided by the Ukrainian authorities and the militia.”

The ministry also warned of “possible provocations aimed at disrupting the delivery of aid.”

Ukraine’s National Security Council spokesman Andriy Lysenko said earlier today that Kiev had no information on when the Russian humanitarian aid convoy can enter the country.

This article appeared on the RIA Novosti website at 8:39 p.m. Moscow time on their Thursday evening---and it's another contribution from Roy Stephens.

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Meeting Between Russian, Ukrainian Presidents Step Toward De-Escalation – Lawmaker

A meeting between the Russian and Ukrainian presidents slated for August 26 in the Belarusian capital of Minsk is a step forward in de-escalating the conflict in Ukraine, Russia’s lower house speaker Sergei Naryshkin said Thursday.

“The Minsk meeting is one of the stages to de-escalating this conflict," State Duma Speaker Naryshkin said.

Naryshkin stressed that the de-escalation of the Ukrainian conflict requires establishing a dialogue involving “all the political powers and all the regions of the country.”

On Tuesday, deputy head of the Ukrainian presidential administration Valeriy Chaliy said the coming two weeks would be decisive for a peaceful settlement in Ukraine, and that Kiev wants to resolve the conflict through diplomacy.

This is another article from the RIA Novosti website.  This one showed up at 1:18 p.m. Moscow time yesterday---and I thank reader M.A. for sending it along.

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No Brie for Moscow as Cheese Stacks Up in France on Ban

At Alexander Krupetskov’s one-window cheese store in central Moscow, sales of products from France have tripled in the past two weeks.

Shoppers are stocking up on foods set to become scarce after Russia banned a range of products from the European Union and the U.S. in retaliation for sanctions over Ukraine. The nation of 143 million has been one of the fastest-growing export markets for French cheesemakers as Moscovites acquire a taste for creamy brie, pungent Camembert and spicy Roquefort.

“The very foundation of the shop has been cast into major doubt,” said Krupetskov, who has four weeks of inventory left.

This Bloomberg article, co-filed from Paris and Moscow, appeared on their website at 4:52 a.m. Denver time yesterday morning---and I thank Roy Stephens for sending it our way.

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‘Zero effect’, if E.U. asks to stop trade with Russia – Brazil

Brazil has not received a request from the E.U. to halt increasing exports to Russia, but if it does, Brasilia wouldn’t care, Ambassador Antonio Jose Vallim Guerreiro told a news conference in Moscow Thursday.

"No E.U. official has approached the leadership of Brazil with such an initiative of the sort yet," as ITAR-TASS quotes the ambassador.

Guerreiro is certain that even if there were a request from the E.U., its effects would be "equal to zero."

He said he was aware of reports saying the E.U. leadership might ask Brazil to refrain from taking its share of the Russian market. Brazil’s leaders have no leverage to influence businesses or put pressures on them, he added.

This Russia Today story was posted on their website at 11:52 a.m. Thursday morning Moscow time---and it's the second-last contribution of the day from Roy Stephens.  RIA Novosti had their story on this issue as well.  It's headlined "Brazil Hopes to Increase Trade With Russia – Ambassador"---and this represents the final offering of the day from Roy.

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Russian Rocket Engines Delivered to U.S. Despite Escalating Tensions

Two Russian-built rocket engines have arrived in the U.S. aboard a giant Antonov cargo plane despite fears that tensions between the U.S. and Russia could disrupt the supply of engines needed to launch U.S. satellites into space.

"Today, United Launch Alliance received two RD-180 engines at our factory in Decatur, Alabama, that will support critical near-term U.S. missions," Jessica Rye, spokeswoman for the joint venture of Boeing and Lockheed Martin Corp, said Wednesday. ULA uses the Russian engines to help launch a range of NASA and other government satellites into space.

Rye said the deliveries occurred as scheduled, bringing the company's current inventory of RD-180 engines to 15. Three additional rockets are due to arrive this fall, she said.

For now, Washington remains dependent on the Russian engines since it could take years and billions of dollars to design and build a U.S.-built alternate engine, according to U.S. government officials and industry executives.

Can you spell hypocrisy?  So much for the all that talk from the U.S. government.  This Reuters article was picked up by themoscowtimes.com Internet site at 8:55 a.m. Moscow time on their Thursday morning.

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Council on Foreign Relations: The Ukraine Crisis is the West’s – Not Putin’s – Fault

We’ve previously reported that it’s the West’s encirclement of Russia – breaking a key promise which led to the break-up of the Soviet Union – which is behind the Ukraine crisis.

We’ve also noted that the U.S. State Department spent more than $5 billion dollars in pushing Ukraine towards the West.  The U.S. ambassador to Ukraine (Geoffrey Pyatt) and assistant Secretary of State (Victoria Nuland) were also recorded plotting the downfall of the former Ukraine government in a leaked recorder conversation.  Top-level U.S. officials literally handed out cookies to the protesters who overthrew the Ukrainian government.

And the U.S. has been doing everything it can to trumpet pro-Ukrainian and anti-Russian propaganda. So – without doubt – the U.S. government is heavily involved with fighting a propaganda war regarding Ukraine.

Now the news is starting to go mainstream---specifically, the Council on Foreign Relations (CFR) is a very mainstream, hawkish group.  CFR’s flagship publication – Foreign Affairs – has just published a piece blaming the Ukraine crisis on the West.  The piece by John Mearsheimer – in it’s September/October 2014 issue.

This commentary appeared on the Zero Hedge website at 12:56 p.m. EDT yesterday---and it's a must read---especially for all serious students of the New Great Game.  I thank reader M.A. for bringing this article to our attention.

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Robert Fisk: Middle East crisis---We know all too much about the cruelty of Isis – but all too little about who they are

For centuries, governments told their soldiers and their people to “Know Your Enemy”. The problem with the Isis “Caliphate” – and it is a big problem for President Obama after journalist James Foley’s murder – is that we don’t know who it is. We are told of its butchery, cruelty, its kidnapping of women, its burying alive, its viciousness towards Christians and Yazidis and its public beheadings, but that is all. Even the Isis leader, Abu Bakr al-Baghdadi, comes across as a mad combination of the Mahdi who murdered Gordon of Khartoum, the assassinated Osama bin Laden and Oliver Cromwell, who did to the civilians of Drogheda what the Muslim Lord Protector al-Baghdadi has done to his enemies.

Foley’s ritual slaughter is enough to dissuade even the most foolhardy of journalists from seeking an interview with al-Baghdadi. Never before in the Middle East has so much land been out of bounds to the Western media. So ignorant are we of this Islamic State in Iraq and the Levant – a dark land in which the reports we see of it are their own phone videos – that the Obamas, Camerons and Hammonds can only gnash their teeth at this unspeakable enemy. Easy reaction – but not much to go on. Yet Isis knows how to do one thing: confront Obama with his very own hostage problem, the same conundrum Tony Blair faced when Ken Bigley appeared before the video lens. Do you ignore the warnings, thus proving that you don’t care about your individual citizens when undertaking military operations – which is the truth – or do you turn into Jimmy Carter, curtsy to every whim of your enemies, go down on one knee and tell the Pentagon to “Hold it right there”?

Now Obama has seen the next American reporter threatened with beheading. Will he blink? He can’t, can he?

This opinion piece showed up on the independent.co.uk Internet site on Wednesday---and it's a disturbing read.  I thank South African reader B.V. for this contribution to today's column.

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Three King World News Blogs

1. Egon von Greyerz [#1]: "Swiss Gold Repatriation to Send Shock Waves in Gold Market"  2. Gerald Celente: "E-mail Exposes Scary Economic Collapse in the U.S."  2. Egon von Greyerz [#2]: "We Are Just Beginning to Experience a Global Hyperinflation"

[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]

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Infographic: The world's largest diggers

There's some really gigantic mining equipment out there---and there are four of them presented in this article that showed up on the mining.com Internet site yesterday---and I thank reader M.A. for his final contribution to today's column.

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Transnistria to Introduce Plastic Circulation Coins

The Transnistrian Republican Bank have announced that they will issue new currency units that will be made of composite materials. The currency items are primarily being issued to commemorate the twentieth anniversary of the national currency. The composite material or Plastic coins will have a different geometric shape and color depending on denomination.

The four coins, from one ruble to ten rubles are to replace the banknotes of the same denomination. The Press office of the Bank have indicated that the new money will combine the best qualities of both coins and banknotes with high wear resistance and a wide range of security features. The Press office have also indicated that the coins for use in Transnistria were developed in Russia.

I thought plastic 'paper money' was scraping the bottom of the barrel, but now this!  This article appeared on the coinupdate.com website yesterday---and it's an interesting, but depressing, read.  I thank West Virginia reader Elliot Simon for finding it for us.

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U.S. Mint platinum coins bypassed in rush for gold

Five months after the U.S. Mint began producing coins made with platinum, sales have all but collapsed as investors continue to favor gold and silver.

“It’s not considered a currency,” said Jason Carstensen, a medical-sales representative in Ventura, California, who spends about $2,000 a month on coins. Gold and silver have value as hedges against a devaluation of the dollar, while platinum is viewed as an industrial commodity, he said.

The Mint, which resumed production of platinum coins in March after a six-year halt, has sold 13,600 ounces this year, including zero in July. By comparison, the Mint sold 313,500 ounces of gold coins and 27.71 million ounces of silver, fueled by concern that the Federal Reserve is inflating the economy with paper money to stimulate growth.

Yep, the new 2014 platinum eagle has been a bust.  At this mintage rate, they may cancel the program entirely before the years is out---and then it might be a collector's item some day.  This Bloomberg article found a home over at the mineweb.com Internet site on Thursday sometime---and it's the second offering in a row from Elliot Simon.

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What if China, Russia Succeed in Going off the Dollar? -- Alasdair Macleod

Alasdair Macleod writes the blog financeandeconomics.org. His research aims to explain the relationship between the dollar and gold, and to warn investors about the biggest threats to their wealth from macro-economic events. 

Besides what the Fed is doing by printing money, there is another big threat to the dollar, said Alasdair. Countries in Asia are banding together in order to rid themselves of using the dollar in international trade.

He also warned that credible allegation of misconduct at the London bullion exchange could accelerate the trend of Shanghai becoming the world’s trading hub for gold.

This short, but very interesting read/interview was posted under the Sprott's Thoughts banner over on the sprottglobal.com Internet site yesterday---and it's worth your while.

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¤ The Funnies

The first three photos are obviously of Canada geese.  The first two are baby pictures [along with proud, but very protective parents] that I took on May 18.  The third one, which I took on August 17, is of the graduating class of 2014---fledged, and all ready to head south.  It's virtually impossible to detect the difference between the adult birds and the juveniles.

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¤ The Wrap

The stage is set for something the world has never experienced previously - an asset bubble accompanied by an industrial shortage. The two greatest upward price forces known to man, an asset bubble and a genuine commodity shortage, appear set to combine in silver. Either one alone would have a profound impact on the price, but the combination seems both inevitable---and almost impossible to contemplate in terms of how high the price of silver could be driven. It’s hard to see how intense investment buying wouldn’t trip off industrial user attempted inventory stockpiling, or vice versa---and it doesn’t matter which comes first. - Silver analyst Ted Butler: 20 August 2014

"Da Boyz" took another big slice out of the gold salami yesterday, plus they set a new low in silver for this move down as well.  Volume was decent, but not overly heavy in gold---and pretty light in silver.  But there should be no doubt in your mind dear reader of what happened on Thursday---and who was the cause of it.  First the HFT traders in the Commercial category used their algorithms to set prices lower---and then the technical funds sold as sell stops and moving averages were hit.  This, with no exceptions, is the way these engineered price declines always work.

Without doubt a large chunk of yesterday's volume in both metals was the technical funds in the 'Managed Money' category puking up longs---and probably going short as well, now that the 200-day moving average in gold was smashed to the downside---and that silver hit a new low.  It was their actions that caused prices to fall.  Of course JPMorgan et al were buying whatever longs the technical funds were selling---and happily taking the long side of any short position that these same funds wanted to place.

Here are the 6-month charts for both gold and silver with yesterday's price action included.

Are we done the downside?  Probably not.  And although I'm not happy to say that, there's still a ways to go yet in both metals.  The bottom will be in when JPMorgan et al can't entice any more technical funds to sell longs, or put on further short positions---and whatever price that is when that event occurs, will be the bottom.

Unfortunately, as Ted Butler rightly says, we won't know exactly when that happens until after the fact.

As I write this paragraph, the London open is less than 20 minutes away.  At the moment, all four precious metals are slightly above their Thursday closing prices in New York---having traded quietly all day long on Friday in the Far East.  Gold's net volume is a bit over 11,000 contracts, which isn't a lot---and silver's net volume is a microscopic 2,400 contracts.  Nothing to see here.  The dollar index has been creeping lower since mid-morning trading Hong Kong time---and is currently down 8 basis points.

Today we get the Commitment of Traders Report for positions held at the close of Comex trading on Tuesday and, unfortunately, it won't include any data from Thursday or Wednesday, which were both big down days in gold, but we'll see decent improvement in the Commercial net short position in both metals nonetheless.  I'll have all that for you tomorrow.

Including today, there are five trading days left in August---and by the close of Comex trading next Thursday everyone has to have rolled or sold their September futures contracts, except those standing for delivery.  It's also a pretty safe bet that these five trading days should be a sight to see from a price perspective.

We may hit the lows for this move down in both silver and gold before the end of the month, although I wouldn't bet the ranch on that.

So we wait to see what 'da boyz' do between now and then.

And as I sent this off to Stowe, Vermont at 4:55 a.m. EDT, nothing much has changed since I reported on things over two hours ago.  Prices are still about the same---and volumes are only slightly higher and still very much on the lighter side.  The dollar index is still down a bit.

I await the New York open with great interest.  I hope you have a good weekend, or what remains of it if you live west of the International Date Line---and I'll see you here tomorrow.