Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

After the obligatory downtick at the open, the gold price didn't do much in Far East trading on their Monday---and shortly before the London open, it was back in positive territory---albeit barely.  There was a rally shortly before 1 p.m. BST in London, but that ran into a not-for-profit seller within 15 minutes or so---and by the 10 a.m. EDT London p.m. fix, the gold price was basically back to unchanged.  It managed to rally a few dollars from there, but that was it.

The low and high ticks were recorded by the CME Group as $1,307.90 and $1,319.00 in the August contract.

Gold finished the Monday trading session in New York at $1,312.20 spot, up $1.30 from Friday's close.  Net volume was very light at only 65,000 contracts, so anyone with an agenda had no problems influencing the price if they wished to do so---and some obviously did.

It was virtually the same price action in silver---and the late lunchtime rally in London ran into the same not-for-profit seller as soon as it broke above $21 spot, but the rally in that metal didn't get completely contained until shortly after the 8:20 a.m. Comex open.  And also by 10 a.m. EDT, the silver price was back to unchanged as well---and it chopped sideways into the 5:15 p.m. electronic close.

The low and high were reported as $20.86 and $21.165 in the September contract.

Silver closed yesterday at $20.925 spot, up 3.5 cents, but safely back under $21 the ounce.  Volume, net of July and August, was 23,500 contracts, which was pretty light.

Platinum followed a very similar price pattern on Monday as it did on Friday---and closed up $2.  Palladium didn't do much until shortly before 2 p.m. Zurich time.  That spike---and the one that followed shortly after 9 a.m. in New York---got dealt with in the usual manner, and from there palladium got sold down for a $4 loss on the day.  Here are the charts.

It was another day where not much happened with the dollar index.  It closed on Friday at 80.53---and when it opened on Sunday night in New York, it got sold down to its 80.43 low by 12:30 p.m. Hong Kong time, which was 30 minutes after midnight EDT.  The subsequent rally made it to its 80.59 high by the London p.m gold fix---and from there got sold down to close at 80.56---up 3 whole basis points.  Nothing much to see here.

The high tick for the gold stocks was right at the open of the equity markets in New York on Monday morning----and it was all downhill to their lows, which occurred at 12 o'clock noon EDT.  From there they crawled higher, making it almost back to unchanged, with the HUI closing down 0.10%.

The silver stocks followed virtually an identical path, but got sold down a bit lower than their golden brethren.  The  rally that began in the silver equities at 1 p.m. EDT only managed to get Nick Laird's Intraday Silver Sentiment Index back up to a loss of 0.88%.

The CME Daily Delivery Report showed that zero gold and 12 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  The link to yesterday's Issuers and Stoppers Report is here.

Over at GLD yesterday, every single ounce of gold that was deposited last Thursday was withdrawn on Monday.  And as of 7:02 p.m. yesterday evening, there were no reported changes in SLV.  The last activity in SLV was a withdrawal on July 2.

There was a small sales report from the U.S. Mint yesterday.  They sold 2,000 troy ounces of gold eagles---and 325,000 silver eagles.

There was no in/out gold activity worth mentioning at the Comex-approved depositories on Friday.  But it was a busy day in silver once again, as 1,835,523 troy ounces were reported received---and 548,249 troy ounces were shipped out the door.  The link to the silver action is here.

Since this is my Tuesday column, I have three days' worth of stories for you, so I hope you have the time for the ones that interest you.

 

¤ Critical Reads

First Detroit, Now Flint Warns Bankruptcy "Train Is Headed For the Cliff"

Flint may be Michigan’s second city to plunge into bankruptcy unless retirees accept cuts in health benefits that threaten to unravel a balanced budget. As Crain's Detroit reports, Emergency Manager Darnell Earley (Flint’s third emergency leader since it was placed under state control in 2011) warned "If we have no ability to mitigate the cost of retiree health care, that’s going to make it very difficult for the city to remain financially stable over the next few years." As Eric Scorsone notes, "Flint's at the forefront, but a lot of cities are on the same train, and that train is headed for the cliff."

Like Detroit, which a year ago this week filed the largest U.S. municipal bankruptcy, Flint has struggled with loss of population, jobs and revenue. The birthplace of General Motors Co. has only half its population of 1960.

Today's first news item was posted on the Zero Hedge Web site at 7:38 p.m. on Saturday---and I thank Brad Robertson for sending it our way.

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Former Fed Vice Chairman Alan Blinder Rips House Bill to Regulate Fed More Tightly

Former Federal Reserve Vice Chairman Alan Blinder isn't too impressed with the new House bill designed to increase the central bank's accountability and transparency.

"While the House can't manage to engage on important issues like tax reform, immigration reform and the minimum wage, it's more than willing to propose radical 'reform' of one of the few national policies that is working well," he writes in The Wall Street Journal.

To be sure, the Federal Reserve Accountability and Transparency Act does include some good ideas, such as shortening the news blackouts before and after meetings of the Fed's policy-making Federal Open Market Committee, Blinder says.

Accountability and transparency are worthy goals, he says. But the bill "includes some corkers, such as requiring public disclosures—in advance—before entering into international negotiations, disclosures that could make such negotiations next to impossible," Blinder writes.

This story appeared on the moneynews.com Internet site at 10:21 a.m. EDT last Friday---and it's courtesy of West Virginia reader Elliot Simon.

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The Dollar's 70-Year Dominance Is Coming to an End

In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.

The U.S. was already the world’s commercial powerhouse, having eclipsed the British Empire several decades earlier. America was also on course to be among the victors of “Europe’s conflict”, even though its economy was largely unscathed by war. As such, Bretton Woods was U.S.-dominated and produced a settlement largely on US terms.

Seventy years ago this week, that fateful summit ended. Its close marked the moment the dollar’s unquestionable supremacy was secured. Since then, global commerce has been conducted largely in dollars and leading economies have held the greenback as their primary reserve currency.

The same system remains intact today, with the lion’s share of commercial settlements worldwide still clearing the U.S. banking system – even if the parties involved have nothing to do with the States.

This commentary, which is definitely worth reading, was posted on the telegraph.co.uk Internet site at 5:30 p.m. BST on Saturday afternoon London time---and the first person through the door with it was Elliot Simon, with his second contribution in a row to today's column.

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Government Agents "Directly involved" in Most High-Profile US Terror Plots

Nearly all of the highest-profile domestic terrorism plots in the United States since 9/11 featured the "direct involvement" of government agents or informants, a new report says.

Some of the controversial "sting" operations "were proposed or led by informants", bordering on entrapment by law enforcement. Yet the courtroom obstacles to proving entrapment are significant, one of the reasons the stings persist.

The lengthy report, released on Monday by Human Rights Watch, raises questions about the US criminal justice system's ability to respect civil rights and due process in post-9/11 terrorism cases. It portrays a system that features not just the sting operations but secret evidence, anonymous juries, extensive pretrial detentions and convictions significantly removed from actual plots.

"In some cases the FBI may have created terrorists out of law-abiding individuals by suggesting the idea of taking terrorist action or encouraging the target to act," the report alleges.

This very interesting [and not very surprising] story appeared on theguardian.com Internet site at 2:30 p.m. BST yesterday afternoon---and I thank South African reader B.V. for sharing it with us.

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Serious Fraud Office to Launch Criminal Probe into Forex Rigging

The Serious Fraud Office is poised to launch the first criminal investigation into alleged rigging of the £3 trillion-a-day foreign exchange markets at leading City banks.

The financial watchdog is expected to announce the move as early as this week, according to reports, raising the spectre of further multimillion-pound fines for Britain’s biggest banks over their behaviour during and after the financial crisis.

Investigators are expected to examine whether individual traders personally benefited by manipulating benchmark forex prices. It is claimed that traders colluded via online chatrooms in groups with names such as the Bandits’ Club, the Dream Team and the Cartel.

The SFO’s criminal inquiry into alleged currency markets rigging in London, home to more than 40% of the world’s foreign exchange trading, will join global investigations into forex market abuse by watchdogs across Europe, Asia, and the U.S.

This very interesting article put in an appearance on The Telegraph's website at 12:22 p.m. on Sunday afternoon London time---and it's something I found in a GATA release.

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Berlin Wants to Prosecute US Handlers of German Spies

Criminal prosecution is likely to be expanded on Americans involved in recruiting and supervising activities of German officials spying for the U.S. intelligence, Germany’s Justice Minister Heiko Maas told Welt am Sonntag.

If investigators find a body of evidence that alleged double agents in Germany’s federal intelligence service and Defense Ministry have been spying to the benefit of American intelligence, “the investigation would extend on their feasible patrons,” Maas declared.

According to Welt am Sonntag, the alleged spymaster is the U.S. citizen Andrew M., a 52-year-old international political consultant, who allegedly received confidential military documents from the Germans.

“The law applies to everyone without discrimination,” Maas said, stressing that intelligence security laws apply on friendly states either. “Those who do not abide by the law in this country may have to face criminal prosecution,” he said.

This news item was posted on the Russia Today Web site at 1:30 p.m. on Sunday afternoon Moscow time---and it's the first offering of the day from Roy Stephens.

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Juncker Faces Political Test As Fines Loom on Illegal German Trade Surplus

Germany’s current account surplus is the largest ever recorded in proportional terms and far above the threshold for EU sanctions, posing a major political test for the incoming commission of Jean-Claude Juncker.

The International Monetary Fund said the country’s surplus has reached 8.25pc of GDP when adjusted for the economic cycle and has become economically destructive, making it ever harder for eurozone crisis states to claw their way out of trouble.

The surplus is between three and six percentage points higher than is either “desirable” or justified by fundamentals, the IMF said in its annual health check on Germany.

This is unlikely to change much unless Berlin takes active steps to reduce the imbalance. The Fund called on Germany to do more to help weaker EMU states in “liquidity traps” by boosting its own internal demand.

What???  You couldn't make this stuff up.  Take two blue pills---and hope they work!  This Ambrose Evans-Pritchard offering put in an appearance on the telegraph.co.uk Internet site at 3:52 pm. BST yesterday---and it's the second contribution in a row from Roy Stephens.  It's worth reading.

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The Boomerang Effect: Sanctions on Russia Hit German Economy Hard

It wasn't that long ago that Kremlin officials could hardly avoid laughing when asked about the economic sanctions imposed on Russia by the West. As long as every NATO member state jealously sought to protect its own business interests, things "weren't all that bad," they gloated.

But since last week, their moods have darkened. For months, the European Union in particular had been reluctant to enact effective penalties against Moscow. Last Wednesday, though, the 28 EU heads of state and government cleared a psychological hurdle: For the first time, they opted go beyond sanctions targeting individual political leaders in Moscow, adding prohibitions against doing business with specific Russian companies that contribute to the destabilization of the situation in Ukraine. A concrete list is to be presented by the end of the month. European development banks have also been banned from providing loans to Russian companies.

The US, for its part, penalized a dozen leading Russian conglomerates, including oil giant Rosneft, natural gas producer Novatek, Gazprombank and the weapons manufacturer Kalashnikov. From now on, they are forbidden from borrowing money from American monetary institutions and from issuing medium- and long-term debt to investors with ties to the US.

For the companies involved, the penalties are a significant blow. It has become difficult to acquire capital in Russia itself, with both domestic and foreign investors withdrawing their money from the country in recent months. It is hardly surprising, then, that Russian Prime Minister Dmitry Medvedev spoke of a return to the Cold War and President Vladimir Putin warned that sanctions "usually have a boomerang effect."

This article appeared on the German Web site spiegel.de at 5:11 p.m. Europe time on Monday---and it's the third story in a row from Roy Stephens.

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Obama Seen Gaining on Putin As US Prods EU on Sanctions

President Barack Obama’s response to the downing of Malaysian Airlines Flight 17 over Ukraine reflects the consensus of U.S. officials that time, evidence, and world opinion are increasingly on his side as he takes on Russian President Vladimir Putin.

Secretary of State John Kerry cited the tragedy yesterday in an effort to prod Europeans into expanding sanctions against Russia, even at some peril to their own economies, in an effort to break Putin’s support for pro-Russian Ukrainian separatists.

“We are trying to encourage our European friends to realize this is a wake-up call,” Kerry said on “Fox News Sunday,” invoking a phrase used last week by Obama.

This is what passes as serious journalism in the U.S., U.K.---and Canada these days.  This is warmongering by insinuation, as there's not a shred of proof that Russia was either directly or indirectly involved. This Bloomberg offering appeared on their Web site at 11:25 Denver time yesterday---and once again my thanks go out to Roy Stephens for sending it.

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EU Under Pressure to Broaden Russia Sanctions

The U.S. and the U.K. are putting pressure on the E.U. to impose tougher sanctions on Russia in the wake of the Malaysia Airlines disaster.

The calls come ahead of an E.U. foreign ministers’ meeting in Brussels on Tuesday (22 July) - the first opportunity for the bloc to discuss the incident, in which hundreds of Europeans, mostly Dutch people, lost their lives.

The U.S. and the U.K. have said pro-Russia rebels shot down the plane using a Russian-supplied missile.

U.S. secretary of state John Kerry added on Sunday on Fox News: “We are trying to encourage our European friends to realise this is a wake-up call, and hopefully they will also join us in these tougher sanctions”.

This article, filed from Brussels, was posted on the euobserver.com Internet site at 10:25 a.m. Europe time yesterday [5:25 a.m. EDT]---and it's another story courtesy of Roy Stephens.

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Five Ukraine, Russia, and Flight MH17 Stories

1. "Putin: Task force at Malaysia MH17 crash site not enough, full-scale international team needed" - Russia Today  2. ‘Too good opportunity to miss’: MH17 blame game has political motives, may lead to warRussia Today - Op Edge  3. Ukrainian militia hand over MH17 flight recorders to Malaysia: Russia Today  4. Blogger finds missile believed to have shot down Flight MH17: The New York Post  5. Ukrainian Su-25 fighter detected in close approach to MH17 before crash: Russia Today

[The above stories are courtesy of Brad Robertson, Harry Grant---and Roy Stephens]

Note:  I had no luck getting on the Russia Today Web site early yesterday evening---and I had the same problem at times on the weekend.  I'm not sure what to make of it, but the Web site hasn't complained of a DoS attack, so I'm not sure what the reason might be.  Maybe it's just my ISP.

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Guilt By Insinuation: How American Propaganda Works — Paul Craig Roberts

Why hasn’t Washington joined Russian President Putin in calling for an objective, non-politicized international investigation by experts of the case of the Malaysian jetliner?

The Russian government continues to release facts, including satellite photos showing the presence of Ukrainian Buk anti-aircraft missiles in locations from which the airliner could have been brought down by the missile system and documentation that a Ukrainian SU-25 fighter jet rapidly approached the Malaysian airliner prior to its downing. The head of the Operations Directorate of Russian military headquarters said at a Moscow press conference today (July 21) that the presence of the Ukrainian military jet is confirmed by the Rostov monitoring center.

The Russian Defense Ministry pointed out that at the moment of destruction of MH-17 an American satellite was flying over the area. The Russian government urges Washington to make available the photos and data captured by the satellite.

President Putin has repeatedly stressed that the investigation of MH-17 requires “a fully representative group of experts to be working at the site under the guidance of the International Civil Aviation Organization (ICAO).” Putin’s call for an independent expert examination by ICAO does not sound like a person with anything to hide.

Always controversial, but never too far off the mark in my opinion, this commentary by Paul was posted on his website on Monday sometime---and I thank Brad Robertson for being the first reader through the door with it yesterday.  It's definitely worth reading.

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Russia Calls for Investigation of Foreign Mercenaries' Participation in Ukraine Hostilities

Russia’s Foreign Ministry on Monday demanded that Sweden, Finland, the Baltic states and France conduct a thorough investigation into alleged involvement of mercenaries from these countries in hostilities in eastern Ukraine.

“We demand the authorities of the above-mentioned countries to conduct a thorough investigation into these facts and condemn the participation of mercenaries in the hostilities in eastern Ukraine,” the ministry said in a statement.

The ministry said this while commenting on an article in Italy’s Il Giornale newspaper which was published over the weekend. The publication reported that mercenaries from ex-Soviet Baltic states, as well as Sweden, Finland and France fought in the Azov Battalion, a paramilitary group supporting the Kiev government troops and financed by Ukrainian oligarch and governor Ihor Kolomoiskyi.

This short RIA Novosti article, filed from Moscow, appeared on their Internet site at 8:57 p.m. on Monday evening Moscow time---and once again I thank Roy Stephens for finding it for us.

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Neighborhood Ravaged on Deadliest Day So Far for Both Sides in Gaza

The mayhem began in the early hours of Sunday morning in Shejaiya, an eastern neighborhood of Gaza City, where Israeli forces battled with Hamas militants. Terrified civilians fled, sometimes past the bodies of those struck down in earlier artillery barrages. By dusk it was clear that Sunday was the deadliest single day for the Palestinians in the latest conflict and the deadliest for the Israeli military in years.

At least 60 Palestinians and 13 Israeli soldiers and officers were killed in Shejaiya alone, and the shattered neighborhood was quickly becoming a new symbol of the long-running Israeli-Palestinian conflict, underlining the rising cost of this newest Gaza war.

The death tolls and the withering assault on Shejaiya appeared to shake the international community, with world leaders continuing to carefully call for both sides to step back but with criticism of Israel rising. Within hours, President Obama had called the Israeli prime minister for the second time in three days, the United Nations Security Council had called an emergency session at the urging of the Palestinians, and Secretary General Ban Ki-moon had issued a statement calling the attack on Shejaiya “an atrocious action.”

This New York Times story, filed from Gaza City, was posted on their Web site on Sunday sometime---and it's the final offering of the day from Roy Stephens.

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Renminbi Swap Deal Brings Swiss Hub Dream Closer

The Swiss National Bank (SNB) and China have signed a currency swap agreement in a bid to allow Beijing to expand its renminbi business in Switzerland. The finance ministry has hailed the accord as an important step.

The three-year deal, signed in Beijing on Monday, sets the conditions for the central banks of the two countries to purchase and re-purchase Chinese renminbi or Swiss francs up to CHF21 billion ($23.4 billion).

“The swap agreement is a key requisite for the development of a renminbi market in Switzerland,” the SNB said.

The SNB can also buy up to CHF2 billion worth of Chinese bonds, helping it diversify its foreign-exchange reserves which have swelled to almost CHF450 billion.

This article appeared on the swissinfor.ch website at 3:39 p.m. on Monday Europe time---and it's the second offering of the day from reader B.V.

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Three King World News Blogs/Audio Interviews

1. John Embry: "This is the Most Dangerous Period in 69 Years"  2. James Turk: "Historic Shift in the Gold and Silver Markets"  3. Richard Russell: "War, $10,000 Gold---and Worldwide Collapse"

[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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"Dr. Doom" Faber: Stocks in a Bubble, Buy Gold

Marc Faber, publisher of the Gloom, Boom & Doom Report, talks about his view that stocks are in a "bubble" and not a good value. Faber speaks with Alix Steel on Bloomberg Television's "Surveillance"---and she goes out of her way to bait Marc at every opportunity, to the point of being obtuse.

This 5:25-minute video clip was posted on the Bloomberg Web site yesterday---and I thank Washington state reader S.A. for bringing it to our attention.

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Gold Worth Millions Recovered from 1857 Shipwreck

Millions of dollars worth of gold has been recovered from a famous 19th-century shipwreck off South Carolina being fought over in court, the first inventories of the salvaged cargo show.

A federal judge in Virginia overseeing the recovery effort from the S.S. Central America released the mid-April-to-mid-June tallies late Wednesday, the Associated Press and The Columbus Dispatch reported Thursday. An updated list is likely soon.

AP based the estimated value of the gold coins and bars on treasure that was sold for $50 million to $60 million after the shipwreck was found in 1988 by Tommy Thompson of Columbus, Ohio, now a fugitive and the target of lawsuits from jilted investors who bankrolled his expedition.

This interesting article was posted on the usatoday.com Web site at 10:40 p.m. EDT last Thursday---and it's another offering from Elliot Simon.

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Farmers Flock to Gold-Backed Loans in India

Farmers in Andhra Pradesh appear to have taken more loans by pledging gold bars and ornaments, than loans from banks for purely agricultural purposes. Some have even diverted the agri loan and bought gold.

According to official records, up to March 31, 2014, farmers have taken loans worth $5.7 billion (Rs 348 billion) by putting up gold as collateral, while $4.2 billion (Rs 257 billion) was taken as crop loans.

In their review meetings, bank officials have noted that a majority of the loans, particularly by pledging gold, were taken by farmers after January 2014. Officials said the reason for this could be attributed to the fact that the interest rate on loans meant for agriculture is far less, than other loans like personal loans, education loans, or home building loans, etc.

Another reason for the rising number of loans was Chief Minister N Chandrababu Naidu’s election promise of waiving off all farm loans after coming to power. This spurred farmers to go all out and take more loans, with some diverting loans, ostensibly taken for agriculture, to actually buy bullion.

This very interesting read, filed from Mumbai, was posted on the mineweb.com Internet site yesterday sometime---and it's the final contribution of the day from Elliot Simon.

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Silver Imports Slump in India in June

India's silver imports have slid by 53.4% to $212.8 million in June from $457 million in June last year, according to the data released by the Union ministry of commerce.

In volume terms, imports fell from 579 tonnes last June to 323 tonnes this year.

In May last year, the Reserve Bank of India had directed banks not to import gold on a consignment basis, denting inflows in June. This year, with some easing in the number of entities allowed to import, gold imports have surged to $3.1 billion in June, from $1.9 billion a year earlier.

This is another story filed from Mumbai and posted on the mineweb.com Internet site yesterday.

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Koos Jansen: Chinese Wholesale Gold Demand Year to Date Is Nearly 1,000 Tonnes

Chinese wholesale gold demand for the year through July 11 has reached 998 tonnes, gold researcher and GATA consultant Koos Jansen reported yesterday. While off-take from the Shanghai Gold Exchange for the week ending July 11 was somewhat diminished, Jansen writes, copper has been trading in backwardation in Shanghai for two weeks.

Jansen's commentary is posted at bullionstar.com Internet site---and I found this gold-related news item embedded in a GATA release yesterday.  It's worth reading.

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New Gold Miner ETF Avoids Primary Investment in Barrick

It looks like you can now buy a gold-mining stock exchange-traded fund without putting the biggest part of your money in Barrick Gold, the biggest gold hedger and enabler of gold price suppression, the company that 11 years ago, by virtue of its enormous hedging, claimed to be the agent of central banks in the gold market.

The new ETF is the Sprott Gold Miners ETF, which began trading last week. According to its announcement, the ETF is based on the Sprott Zacks Gold Miners Index and "uses a transparent, rules-based methodology designed to identify 25 gold stocks that historically have the highest beta to the spot price of gold, with each stock's weighting in the index adjusted based on its quarterly revenue growth and long-term debt to equity."

The ETF received favorable notice from the Wall Street Cheat Sheet, which noted that "each quarter the fund is re-weighted. This means that the fund is going to take profits on its out-performers and reallocate this capital to the under-performers. The Market Vectors Gold Miner ETF does no such thing. In fact, when the fund sees capital inflows, it pumps more money into the top performers because these are the companies that become the highest-weighted stocks in the fund."

Of course GATA is no investment adviser, but nobody who wants a free and transparent market in the monetary metals can be enthusiastic about any investment that abets gold price suppression.

This commentary by Chris was posted on the gata.org Internet site just before midnight EDT last night.

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Wary Investors Slow to Warm to Barrick Gold's Latest Shakeup

Worried they may be given the cold shoulder by an imperious leadership, shareholders of Barrick Gold Corp, the world's biggest gold miner, are taking a "show me" approach to the company's latest management shakeup.

Barrick said last week that Chief Executive Jamie Sokalsky will leave the company in September. He will be replaced by two co-presidents, a move that concentrates power in the hands of Executive Chairman John Thornton, a man handpicked for the job by Peter Munk, who founded the company and headed it his way for decades.

"The concern in this situation is that the person setting the strategy does not listen to the shareholders, who are the real owners of the company," said Chris Mancini, an analyst at Gabelli Gold Fund, which owns more than 2.4 million shares in Barrick according to Thomson Reuters data.

"There was a concern within the market that Mr. Munk was not listening to shareholders...And so if Mr. Thornton also doesn't listen to shareholders that could be a problem again."

The problem, dear reader, as you already know, is the fact that none of the precious metal mining companies gives a flying %$&@ about their shareholders.  They're quite happy to sell their products at, or below, the cost of production---and will never lift a finger to do what has to be done.  John Embry was quite right.  The mining companies are either ignorant, naïve---or complicit.  Barrick fits into the last category.  I found this story, filed from London this morning, on the mineweb.com Internet site just before I hit the send button on today's missive.

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¤ The Funnies

Sponsor Advertisement

Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization

Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.

Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.” 

Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained. 

Please visit our Web site for more information about the project.


 
 

¤ The Wrap

Leaving aside whether my contention that the technical funds are being snookered by their commercial counterparties is accurate, neither would anyone argue that technical funds, as their name implies, don’t follow technical fund signals or price changes. These funds buy on higher prices and sell on lower prices - period. Therefore, while it may appear that the technical funds bought on Thursday’s rally due to the airline disaster, the actual news had little to do with why the technical funds bought. The technical funds bought because prices moved higher, no less, no more. This may seem to be a distinction without a difference, but it is a key fact to be aware of.

Recently, I read a report which claimed these funds (which weren’t referred to as technical funds) bought so many gold and silver contracts because of what Fed Head Janet Yellen said. These funds couldn’t care less what anyone said as far as buying or selling gold and silver contracts; all that matters to them is price action. The downside to this is that if prices are controlled on the COMEX by the commercials (as I contend), the technical funds can be influenced to buy and sell at the commercials’ control. That’s why I get an uneasy feeling when the technical funds are overloaded on the long side (like now). - Silver analyst Ted Butler: 19 July 2014

With low volume, it wasn't much of a day in the precious metals on Monday---but JPMorgan et al. showed up as required and killed whatever rallies developed in any of the four precious metals.   Here are the six-month gold and silver charts.

There's not much to be read into either chart except to note what I pointed out a week ago---and that's the fact that the overbought situations in both gold and silver no longer exists, but the danger of an engineered price decline is ever present, especially in silver.

Today, at the 1:30 p.m. Comex close, is the cutoff for this Friday's Commitment of Traders Report. So if nothing goes bump in the night between now and then, we should get a pretty good read on the reporting week's price activity, including the remainder of the engineered price decline early last week, along with the price/volume data that accompanied the airplane crash in Ukraine last Thursday.  And after my last two 'guesses' as to what might be in the previous two Friday's COT Reports, I'm batting zero for two, so I'll just quietly wait for the numbers and report what they are.  However, I will set the tone by saying I'm not optimistic.

I started today's column mid-afternoon yesterday, so I'm miles ahead of where I normally am this time of evening, so as I report on what's happening in the Far East, it's shortly after 11 a.m on their Tuesday morning---and the London open is still about four hours away.  Both gold and silver began with the usual sharp sell-off at the New York open, but as I write this, both metals are back in the black, but by the tiniest of amounts---and both platinum and palladium are down a few bucks.  Volumes in both gold and silver are virtually nonexistent--- well under 4,000 contracts in gold, and less that 1,300 in silver.  The dollar index is unchanged from its New York close on Monday.

Looking at the gold price these days, it's sure hard to believe that there is so much economic and monetary strife going on out there---and the geopolitical icing on the cake is the Ukraine/Russia situation---along with the Israel/Palestine military action currently underway.  And I believe it was just last week the China told the U.S. to keep its nose out the South China Sea as well.

I suspect that commodity prices in general, along with the four precious metals in particular, have become crucial elements in the Pentagon's "Full Spectrum Dominance" doctrine that F. William Engdahl wrote about back in October of 2009---and if you haven't read the book, you should!  JPMorgan et al. are just doing the dirty work in the Comex futures market on their behalf---and it's not just American bullion banks, either.

So, where do we go in price from here?  Could we go higher from here, as the RSI traces shows that we're not 'overbought' in any of the four precious metals at the moment.  Sure, but as I mentioned a few paragraphs ago, we're almost at a five-year high short position in silver for the technical funds---and unless the commercial traders get over run by some black swan event, the usual engineered price decline outcome is a foregone conclusion.  And if that turns out to be the case, only the timing remains unknown.  Of course gold will also meet the same fate at the same time.

We got a taste of that on Monday and Tuesday of last week.  But why "da boyz" didn't press the issue on Wednesday is still a mystery---and then there was the airplane incident in Ukraine on Thursday.  So we await developments.

And as I send this off to Stowe, Vermont at 4:45 a.m. EDT, all four precious metals got sold down since late morning trading in the Far East---and are now a bit off their current low ticks of the day now that London has been open 90 minutes, but none are back to anywhere near their Monday closing prices in New York yesterday afternoon.  Gold and silver volumes are up substantially from many hours ago, but still on the lighter side.  The dollar index has been crawling slowly higher since noon in Hong Kong---and is currently up 11 basis points on the day.

Absolutely nothing will surprise me for the rest of the Tuesday trading session, nor should it you---and I'll see you here tomorrow.