Casey Research Publication
Gold & Silver Daily
"I don't know if "da boyz" have a grand plan or not...but at the moment they seem to be making it up as they go along."
 

¤ Yesterday In Gold & Silver

With the US dollar index heading lower for the second day in a row on Tuesday, the intervention in gold was far more obvious than it was on Monday.

The price was under pressure right from the Far East open on Tuesday morning...and then there was the obvious hit just before 2:00 p.m. Hong Kong time...with the second one coming during the London lunch hour.

The low of the day [$1,690.00 spot] came shortly after 9:00 a.m. in New York...and the subsequent rally ended at the London p.m. gold at 10:00 a.m. Eastern time.  The price recovered a bit once the Comex trading session was done for the day at 1:30 p.m.

The gold price closed at $1,696.80 spot...down $19.20 on the day.  Net volume was immense at around 211, 000 contracts.

The price path in silver was almost the same, with the only real difference being the low price tick of the day...$32.59 spot.  That came about ten minutes before the Comex close.

Silver closed on Tuesday at $32.91 spot...down 75 cents from Monday...but had an intraday move of over a dollar.  Net volume was a very chunky 50,000 contracts.

The platinum and palladium charts looked more or less the same as the gold and silver charts.

The dollar index continued its slow grind lower.  It declined another 23 basis points and closed at 79.67.  Most of the day's losses were in shortly before 9:00 a.m. in New York.

It's almost pointless to mention that there was no co-relation between the dollar index and the precious metals yesterday.  JPMorgan et al saw to that.

After Monday's surprise decline in the precious metal stocks, I was fearful of what I would find when I checked the HUI for the first time around noon Eastern time.  I was amazed to see that the stocks rallied vigorously at the open...and by the London p.m. gold fix were up well over 2 percent off their lows.  The stocks sold off a bit after that, but then rallied back into positive territory.  The HUI finished the day up 0.25%...and I thank Scott Pluschau for providing the chart.

If you're looking for an answer to the obvious question, I don't have one.  Just like I didn't have a real answer for the counterintuitive price action of the metal vs. the shares on Monday.

(Click on image to enlarge)

And, considering the price action in silver, the shares themselves put in an amazing performance as well, as Nick Laird's Silver Sentiment Index closed up 0.32%.... wink

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 329 gold and 79 silver contracts were posted for delivery on Thursday within the Comex-approved depositories.  In gold, Jefferies and HSBC USA were the two biggest short/issuers with 170 and 143 contracts respectively.  The biggest long/stopper was JPMorgan with 212 contracts in its proprietary trading account...and another 53 contracts in its client account.

In silver the only short/issuer of note was Jefferies with 66 contracts...and JPMorgan the big long/stopper with 44 contracts in its client account.

The link to yesterday's Issuers and Stoppers Report is here.

Over at the GLD ETF, an authorized participant added 75,495 troy ounces of gold...and over at SLV, a very decent 1,033,794 troy ounces were added as well.  All this is happening despite what games were being played in the Comex paper market.

Over at Switzerland's Zürcher Kantonalbank, they updated their gold and silver ETF holdings as of the close of business on Monday.  Both gold and silver ETFs showed small withdrawals.  In gold it was 2,312 troy ounces...and in silver it was 197,341 troy ounces.

The U.S. Mint had a very decent sales report on Tuesday.  They sold 8,000 ounces of gold eagles...2,000 one-ounce 24K gold buffaloes...and 700,000 silver eagles.  It's my guess that some of those silver eagles sales occurred in the prior week...the last week of November...but were only reported yesterday.  It wouldn't surprise me if the mint pulled that same reporting stunt in the December 2012 to January 2013 period as well.  If they did, it would be three years in a row that they've done it.

Over at the Comex-approved depositories on Monday, they reported receiving 1,238,087 ounces of silver...and shipped only one good delivery bar out the door weighing 985.550 troy ounces.  The link to that activity is here.

No More Pennies Or Nickels Next Year in the U.S.A.

Mr. Geithner has been busy lately. Amongst his many other pressing tasks, he took the time to announce that the U.S. Mint will be removing the penny and nickel from circulation in the U.S. starting early next year. The reason is clear. It now costs the mint $US 0.048 to make a penny and $US 0.162 to make a nickel. They are still just above the break even point on the dime, which costs them $US 0.092 to produce. That won't last, according to Mr Geithner, so the dime will be the next to go - probably in 2014. - Bill Buckler, Gold This Week...01 December 2012

Here's a very unhappy looking chart that was sent to me by Washington state reader S.A. yesterday evening.

It was a slow news day yesterday...and I'm delighted to say that I don't have a lot of stories.

 

¤ Critical Reads

Outside View: Soaking the rich won't solve much

To avert the fiscal cliff, U.S. President Barack Obama may get Republican cooperation in soaking the rich but the deal that emerges could put the nation in dire straits by the end of the decade.

The Budget Act of 2011 requires the president and Congress to cut federal deficits by $1.2 trillion over nine years, or annual defense and non-entitlement outlays automatically will be reduced $107 billion annually on Jan. 1. Also, the Bush tax cuts, payroll tax reductions and other assorted programs expire.

Overall, annual spending would be cut $136 billion, taxes raised $532 billion and economists fear a staggering recession would result pushing the unemployment rate into the teens.

This UPI op-ed piece was posted on their Internet site yesterday...and I thank Roy Stephens for our first story of the day.  The link is here.

Read more...

Cops to Congress: We need logs of Americans' text messages

State and local law enforcement groups want wireless providers to store detailed information about your SMS messages for at least two years -- in case they're needed for future criminal investigations.

CNET has learned a constellation of law enforcement groups has asked the U.S. Senate to require that wireless companies retain that information, warning that the lack of a current federal requirement "can hinder law enforcement investigations."

They want an SMS retention requirement to be "considered" during congressional discussions over updating a 1986 privacy law for the cloud computing era -- a move that could complicate debate over the measure and erode support for it among civil libertarians.

As the popularity of text messages has exploded in recent years, so has their use in criminal investigations and civil lawsuits. They have been introduced as evidence in armed robbery, cocaine distribution, and wire fraud prosecutions. In one 2009 case in Michigan, wireless provider SkyTel turned over the contents of 626,638 SMS messages, a figure described by a federal judge as "staggering."

This story was posted on the cnet.com Internet site on Monday...and my thanks go out to Roy Stephens for his second story in a row in today's column.  The link is here.

Read more...

GM Channel Stuffing

Those who have been reading our 2-plus year series tracking the ridiculous "bottom-left to top-right" trend in GM dealer inventory channel stuffing, know all there is to know about the modern day equivalent of AOL (in which the purchases of modern equivalents of "dial up connections" are funded by loans from the US government itself), in both (non government backstopped) business continuity terms as well as in channel stuffing notoriety.

Which is why we will present the November update of total dealer "inventory" (which rose to a record for the fresh-start company of 788,194...or a record 99K increase in two months) without commentary.

You've just read the entire Zero Hedge story...but you must click here to see the graph...and it's definitely worth the trip.  I borrowed this story from yesterday's edition of the King Report.

Read more...

Senator: 'Increasingly Clear [Obama's] Comfortable Going Off the Cliff'

"I think the president is increasingly showing his hand that he is comfortable going off the cliff," Barrasso tells The Weekly Standard, in response to a question about President Obama's negotiation strategy. "He’s not involving Republicans in the process. He was playing golf this weekend with Bill Clinton, Ron Kirk, and ex-DNC chair Terry McAuliffe. He’s not seeming to be one to work together. He seems to be lecturing more than listening. And I just think that it’s increasingly clear he's comfortable going off the cliff."

The Republican senator believes Obama's posture is being reinforced by bad advice he's getting from some of his fellow Democrats. "[T]hat’s what he’s being advised to do by a number of his Democratic colleagues—Howard Dean, former chairman of the DNC said they should go off the cliff, Patty Murray, who ran the senatorial committee, said they should go off the cliff," says Barrasso in a phone interview, referring multiple times to Obama’s weekend golf outing with Democratic stalwarts.

As a Canadian watching this from north of the 49th parallel...I find this whole "fiscal cliff" affair like some sort of bad dream that I'm going to wake up from soon.  To watch my neighbour commit economic, financial, and monetary suicide within my lifetime is increasingly unbearable to watch.

This story showed up on the weeklystandard.com Internet site on Monday afternoon...and is another story that I borrowed from yesterday's edition of the King Report.  The link is here.

Read more...

French economy buckles as car sales collapse

France’s industrial woes deepened last month as car sales crashed 19pc and French brands lost market share at an dramatic pace, raising fears of a serious economic crisis next year once austerity hits.

Markit’s purchasing managers’ index (PMI) for French manufacturing remained stuck in slump in November at 44.5 and is now the weakest in the eurozone after Greece.

"The figures are shocking," said sovereign debt strategist Nicholas Spiro. "France has been sailing dangerously close to the wind for some time but is now tipping into outright contraction."

The Committee of French Automobile Producers (CCFA) said this has been the worst year for the French car industry since 1997 - and for almost half a century in total volume - with little chance of recovery next year as Paris pushes through scorched-earth fiscal tightening of 2pc of GDP to meet EU deficit targets.

This Ambrose Evans-Pritchard offering was posted on The Telegraph's website on Monday evening GMT...and it's another story courtesy of Roy Stephens.  The link is here.

Read more...

Stashed in the Alps: A Tax Evasion Bonanza Hidden in a Swiss Bank

Yet another CD has surfaced containing data on German tax evaders who have stashed billions in a Swiss bank. The city of Bochum is hoping for a windfall as a result. But the discovery further undermines a stalled deal between Germany and Switzerland to crack down on tax evasion.

Public prosecutors in the western German city of Bochum have found some €2.9 billion hidden in accounts at the Swiss bank UBS after analyzing a CD with the names and bank data of clients thought to be evading taxes, according to a Monday newspaper report. Authorities said the discovery was one of their most lucrative ever.

The Tuesday edition of the Süddeutsche Zeitung reports that the CD contains 1,300 cases of potential tax evasion -- 750 of them involving German foundations.

This story was posted on the German website spiegel.de yesterday...and I once again thank Roy Stephens for sharing it with us.  The link is here.

Read more...

Spain to get bank bailout next week

Eurozone finance ministers agreed Monday that €39.5 billion will be paid to prop up Spain's banks.

Speaking with reporters after the meeting, Jean Claude Juncker, who chairs the 17 member Eurogroup, stated that Spain had taken steps to fulfill its terms of the bailout..."The implementation of the program is well on track, meeting all required conditionality steps as enshrined in the memorandum of understanding," he said.

The four nationalised Spanish banks will receive €36.97 billion in European aid. Of this, €17.96 billion - will go to Bankia, which holds 10 percent of Spanish savings deposits, while €5.43 billion will be disbursed to Novagalicia, €9.08 billion to CatalunyaCaixa and €4.5 billion to Banco de Valencia.

This story was filed from Brussels...and was posted on the euobserver.com Internet site early yesterday morning local time.  Once again it's courtesy of Roy Stephens...and the link is here.

Read more...

Islamist vs. Secularists: The Post-Revolution Struggle for the Arab Soul

The rise of political Islam following the Arab Spring has many worried that the democratic achievements of the revolution could be lost. In Egypt and Tunisia alike, citizens are once again taking to the streets. But this time they are opposing Islamism. Does secularism still stand a chance?

Egypt's strongman was sitting in the first row of the mosque. "Anyone who criticizes the president is worse than the heretics who attacked the Prophet in Mecca," the imam preached in his sermon. Then he handed the microphone to Egyptian President Mohammed Morsi, saying that he should address the faithful himself. But he never got a chance.

"Down with Morsi! Down with the Muslim Brotherhood!" chanted hundreds of men who were now pushing their way to the front. "Enough is enough!" they shouted. "No to tyranny!" For them, it was intolerable to hear the president being compared with the Prophet Muhammad. Morsi, surrounded by bodyguards, had to leave the mosque on Friday. It was both a scandal and a first for Egypt.

But it was only the beginning. Later, more than 100,000 people gathered on Tahrir Square again to protest the actions of their president.

This another story from spiegel.de yesterday...and the stories from Roy just keep on coming.  The link is here.

Read more...

Egypt's Morsi leaves palace as police battle protesters

Egyptian police battled thousands of protesters outside President Mohamed Morsi's palace in Cairo on Tuesday, prompting the Islamist leader to leave the building, presidency sources said.

Officers fired teargas at up to 10,000 demonstrators angered by Morsi's drive to hold a referendum on a new constitution on December 15. Some broke through police lines around his palace and protested next to the perimeter wall.

The crowds had gathered nearby in what organizers had dubbed "last warning" protests against Morsi, who infuriated opponents with a November 22 decree that expanded his powers. "The people want the downfall of the regime," the demonstrators chanted.

This Reuters story was filed from Cairo yesterday evening Eastern time.  I thank Roy for his final offering in today's column...and the link is here.  [Note: I posted this story very late last night, I now see that it has been pulled...and another story posted in its stead.  This one is headlined "Egypt's Morsi back at palace after night of protests"...and was filed from Cairo in the wee hours of this morning Eastern time.  The link is the same.]

Read more...

Three King World News Blogs

The first is with James Turk...and it's headlined "Here is Why They are Pounding Gold & Silver Today".  Next is Richard Yamarone.  It's entitled "The Collapse is Getting Even Worse".  And lastly is this blog with Dr. Stephen Leeb.  It bears the incredible title of "This is Going to Require 30% - 50% of Global Silver Production".

Read more...

Copper stolen from Newark church

Thieves have targeted a Newark church twice in the past month, causing extensive damage by tearing out almost all of the copper piping in the structure.

The Clinton Avenue Presbyterian Church has had to close its soup kitchen because of a lack of heat and running water.

"It was devastating," church clerk Loretta Hazelwood said.

The pipers were cut to the furnace.  The pipes were also cut to the boiler and the thieves even tore out the water meter, leaving water pouring into the basement.

This story was posted on the myfoxny.com Internet site early yesterday evening Eastern time...and I thank Scott Pluschau for sliding it into my in-box in the wee hours of this morning.  The link is here.

Read more...

BIS gold report hints at repatriation by central banks

I have been checking on the changes that have taken place to the gold banking business carried out by the Bank for International Settlements since March 2009 and the bank's use of gold derivatives (essentially all are gold swaps), which have grown from zero as of March 31, 2009. All the data in the table below is sourced from BIS annual reports and from the bank's 2012 interim report published in early November.

In March 2009 the BIS held gold sight accounts -- unallocated gold -- with a number of major central banks, presumably those based in traditional gold-trading markets. Apart from the bank's own gold, the source of the gold sight accounts arose from gold that was deposited in sight accounts with the BIS with all or most of it deposited with the BIS by other central banks. Historically and especially during World War II central banks used the BIS to act as an intermediary in the gold market to protect against their gold sight accounts being confiscated or blocked by the bank holding the gold deposit. So, as an example, during World War II the German central bank held gold in a BIS sight account that was in turn deposited by the BIS in London, and consequently this gold was not confiscated or blocked by the United Kingdom government in the war.

This commentary showed up in a GATA release yesterday.  It was provided by Robert Lambourne...a British businessman and consultant to GATA.  I must admit that what he's talking about is well above my pay grade, so I'm not able to offer an opinion on it one way or another, so please don't ask.  And if your eyes start to glaze over, dear reader...don't be surprised or disappointed.  The link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

It is a maxim that in every government, there must exist, somewhere, a supreme, sovereign, absolute, and uncontrollable power; but this power resides always in the body of the people; and it never was, or can be delegated to one man or a few; the great Creator has never given to men a right to vest others with authority over them, unlimited either in duration or degree. - By the Great and General Court of the colony of Massachusetts-Bay, House of Representatives, January 23, 1776; Watertown, Mass...printed by Benjamin Edes, 1776...Massachusetts History Society

It hardly seems necessary for me to point out the obvious once again, but it was JPMorgan et al in the market again yesterday...and what they did was very much an extension of what they did on Monday.  With the dollar declining below the 80.00 mark, the most likely escape route was taken away as an attractive alternative.

But they can't keep it up forever...but to hazard a guess as to what's going to happen on a daily or weekly basis going forward is still a mug's game...and all we can do is wait this out. I don't know if "da boyz" have a grand plan or not...but at the moment they seem to be making it up as they go along.  And with the monstrous short positions in silver and gold hanging over the market, it remains to be seen how this plays itself out between now and the end of the year...and perhaps beyond.

However, with the big volumes associated with yesterday's engineered price declines in all four precious metals, it's a reasonable bet that the short positions of the 'Big 4' in both silver and gold have declined by a substantial amount.  This won't be known for sure until Friday's Commitment of Traders Report and, hopefully, all of yesterday's activity will be included.

In Far East trading on their Wednesday, both gold and silver have been working their way slowly higher...and as I write this paragraph, the London open is only fifteen minutes away.  At the moment, gold is back above the $1,700 spot price mark...and silver is back above $33.00 spot.  Volume is on the lighter side in both metals...and the dollar index has been trading sideways for the last sixteen hours or so.

And as I hit the 'send' button at 5:15 a.m. Eastern time...10:15 a.m. in London...I note that both metals were turned a bit lower at the London open.  Volumes are higher now, of course, but nothing out of the ordinary...and the dollar index is still trading sideways.

I won't hazard a guess as to what may or may not happen for the balance of the Wednesday trading session, but it's a reasonable bet that most of the price and volume activity will occur once New York begins trading at 8:20 a.m. Eastern time.

Before heading out the door this morning, I have a housekeeping item that the nice ladies that work at Casey Research asked me to run by you.  This is Casey Research's most elite service...the Casey Investment Alert [CIA].

It has been closed to new members since last November. When we decided to limit the total number of members last year, we decided to only open the doors annually or biannually, as spots became available.

Membership in this unique service is strictly capped because most of the junior explorer stocks recommended in it are very thinly traded. If we were to let membership grow too much, buying pressure based on our recommendations could skew some exceptional profit opportunities.

So now we're accepting new registrations for the next two weeks, or until available spots are filled.

This service is not cheap...and is obviously for serious investors onlyIt's priced at US$3,600 annually, or US$989 quarterly...and there's a 10% processing fee on all cancelations during the 30-day trial period.  But it costs nothing to read all about it...and the link to that is here.

I'm off to bed...and I'll see you here tomorrow.