The gold price did very little on Wednesday, trading in a tight ten dollar price range for the entire day, and the highs and lows aren't worth mentioning. The high, such as it was, came at the London p.m. gold fix, and from there sold off gently into the close.
Gold closed the Wednesday session in New York at $1,252.30 spot, which was down $9.70 on the day. Net volume was on the lighter side at 126,000 contracts.
Except for the fact that silver's high tick came shortly before the equity markets opened in New York yesterday, the silver price chart was a carbon copy of the gold price chart. The silver price traded in a 25 cent price range for the entire day.
The low and high, such as they were, were reported by the CME as $20.245 and $20.44 in the March contract.
Silver closed at $20.30 spot, down 13 cents from Tuesday's close. Net volume was fairly decent at 34,000 contracts.
Platinum and palladium didn't do much, either. Here are the charts.
The dollar index closed late on Tuesday afternoon in New York at 79.98--and then chopped a hair lower during the Wednesday trading session, finishing the day at 79.87--which was down 11 basis points on the day. Nothing to see here.
Not surprisingly, the gold stocks opened down a bit, and then didn't do much until noon EST. Then a seller showed up for the rest of the day in what appeared to be a deliberate event, as the selling was relentless for the rest of the day, with the gold stocks closing right on their lows. The HUI finished down a whopping 3.81%--giving back almost all of Tuesday's big gain.
It was virtually the same in the silver equities. Even though silver was only down about half a percent, the stocks got bludgeoned in the same manner as the gold shares. Nick Laird's Intraday Silver Sentiment Index closed down 3.28%.
This is the second time in the last two weeks that a big 1-day gain in precious metal stocks had almost vanished by the end of the following trading day. Note the "Latest Month" insert on Nick's chart just above. None of this activity looked like natural market forces to me--but what is these days.
The CME's Daily Delivery Report showed that 44 gold and 23 silver contracts were posted for delivery within the Comex-approved depositories on Friday. Of the 44 gold contracts issued, JPMorgan stopped 43 of them, all in their in-house [proprietary] trading account. In silver they stopped 16 contracts in their proprietary trading account. The beat goes on despite the new Volcker rule, and the link to yesterday's Issuers and Stoppers Report is here.
Over at Switzerland's Zürcher Kantonalbank for the week ending on Friday, December 6--they reported a decline of 39,612 troy ounces in their gold ETF, but a tiny increase of 5,691 troy ounces in their silver ETF.
There was no sales report from the U.S. Mint.
Over at the Comex-approved depositories on Tuesday, they reported receiving 64,300 troy ounces of gold---precisely two metric tonnes to the ounce, so it was probably all in kilobar form once again. That gold went into JPMorgan's vault. There were 22,745 troy ounces shipped out, and all of that came from Scotia Mocatta. The link to that activity is here.
There was more volume activity in silver, of course. These same depositories reported receiving 479,614 troy ounces, and shipped out 202,762 troy ounces. The link to that action is here.
I have the usual number of stories for a mid-week column, and I hope you find a few in here that you find worthy of your attention.
Former OMB director David Stockman rages to none other than Rick Santelli that the budget deal is a "betrayal and a joke" and "the final surrender of the House Republican leadership to beltway politics." The dismal reality - that little to no one in the mainstream media will dare utter - the budget adds $70 billion to spending this year and next year, and "then they're going to pretend to save it in '22 and '23." Stockman blasts, "they've not only kicked the can down the road, but kicked it into low-earth orbit." The only hope of getting our fiscal house in order was if House Republicans stand up, and Stockman warns "will trigger an enormous negative reaction from Tea-Party Republicans." The truth hurts...
Santelli "we're not talking about kicking the timeline can til the mid-terms, " - "this is a two-year vacation on the fiscal budget."
"Just from the momentum built-in, our debt load will be $25 trillion by the end of the next Presidential cycle."
This short piece from Zero Hedge yesterday has the 3:52 minute Stockman/Santelli CNBC interview embedded in it, and I thank reader Ken Hurt for today's first news item.
The ratio of bulls to bears has never (that is ever) been higher according to (the perhaps ironically named) Investor's Intelligence. There are now more than 4x more bulls than bears and even more concerning, the only time "bears" have been lower than the current 14.3% was in the spring of 1987...
That's all the words there are to this tiny Zero Hedge piece from late yesterday morning EST, but the embedded chart is definitely worth your time. I thank Manitoba reader Ulrike Marx for her first contribution of the day.
Paul Volcker said he wasn’t involved with writing the final version of the rule that bears his name, staying abreast of developments from a distance as regulators crafted details of his curbs on trading by banks.
“It’s not my function to stay involved with the agencies,” Volcker, 86, said in an interview yesterday. “I get reports and updates, a problem here and a problem there, but nothing directly involved. I personally stayed away from talking with any of the principals.”
The former Federal Reserve chairman said he didn’t know how the final draft was worded before it was published yesterday. “You probably have read the rule more than I have,” Volcker said. “It’s complicated, but I was gratified to see that the rule itself is shorter than my own home insurance policy.”
This Bloomberg news item was posted on their Internet site early yesterday morning MST...and the first person through the door with it was Washington state reader S.A.
Mobs have taken over the streets across Argentina amid a police strike demanding higher salaries. Many shops have been looted and homes robbed. Police have refused to go out on patrol in 19 out of 23 Argentinean provinces. At least 10 people have been killed in the the violence that has gripped Argentina since last week.
This short photo-essay was posted on the Russia Today website late yesterday morning Moscow time...and it's a bit on the slow slide to change from one picture to the next. It's the first offering of the day from Roy Stephens.
German Finance Minister Wolfgang Schäuble met with his EU colleagues until midnight on Tuesday to discuss Europe's planned banking union. Berlin is playing it safe in the talks, but its hesitancy threatens to derail the project's core ambitions.
If there's one notion at the core of the planned European banking union, it's that of playing it safe. The union has been designed to ensure that the financial markets will become more stable and that shareholders and creditors will be held more liable than taxpayers. And it is meant to ensure that Europe will be better armed if the European Central Bank comes across unexpected holes in balance sheets when it conducts stress tests this spring on the euro zone's 130 largest banks.
But when German Finance Minister Wolfgang Schäuble of the conservative Christian Democratic Union (CDU) party appeared before journalists just before midnight in Brussels on Tuesday, it became clear that things, once again, are anything but secure. Schäuble negotiated for close to 14 hours with his counterparts in Europe over the banking union, which many champions of the European Union believe is as epochal an event as the launch of the euro.
This story showed up on the German website spiegel.de yesterday afternoon Europe time...and it's the second article in a row from Roy Stephens.
EU finance ministers finished marathon talks early on Wednesday - but they will try again next week to reach a deal on the eve of an EU summit.
Bank failures triggered the eurozone financial crises that struck the Republic of Ireland, Spain and Cyprus.
The new rescue blueprint would involve transferring powers to a new EU agency.
There are arguments over the future scope of that agency's powers - and the plan still has to be agreed with the European Parliament.
Once you start reading this, it's hard to believe that this story is on the same issue as the previous spiegel.de story...but it is. This version of events was posted on the bbc.co.uk Internet site very early yesterday morning GMT. This news item is courtesy of South Africa reader B.V.
Luxembourg and Austria came under attack on Tuesday after the two countries stood firm and blocked plans to increase transparency in tax reporting.
At a meeting of finance ministers in Brussels, the final formal gathering of 2013, ministers from the two countries insisted that they will not agree to a reformed savings tax directive until the E.U. has reached agreements on banking secrecy with nearby tax havens such as Liechtenstein and Switzerland.
E.U. tax commissioner Algirdas Semeta said he was "clearly disappointed," adding that the two countries' intransigence was "incomprehensible" and "out of sync" with the public mood.
This very interesting article, filed from Brussels, was posted on the euobserver.com Internet site on Tuesday evening...and it's another story from Roy Stephens.
Italy's Economy Minister Fabrizio Saccomanni said on Tuesday that public intervention on troubled banks should come after inflicting losses on bondholders through a minimum bail-in of 8 percent of total bank liabilities.
Yet, Saccomanni the introduction of bail-in clauses may spread risks across the euro zone banking sector.
"In case of a systemic crisis, public intervention would be preferable to the risk of contagion generated by an extended use of bail-in (clauses)," Saccomanni said speaking at a meeting of European Union finance ministers in Brussels.
That's all there is to this tiny Reuters piece, filed from Brussels on Tuesday morning EST. It's an item I found in yesterday's edition of the King Report.
Protests of the so-called "Pitchfork Movement" spread across Italy Wednesday as demonstrations against tax hikes driven by austerity measures gained ground.
Protest leaders threatened a large-scale demonstration in Rome if members of parliament did not withhold their votes from a confidence measure, ANSA reported.
In the third day of anti-government demonstrations, protesters in Turin blocked traffic while other protests around the city shut down food markets and other businesses.
This short article was posted on the UPI website yesterday morning EST...and once again I thank Roy Stephens for sending it.
Pro-E.U. protests in Kiev have been marked by western politicians’ regular visits to the protesters’ camp, and their emotional condemnations of Ukraine’s authorities. This is seen by some analysts as unprecedented meddling in a country’s internal affairs.
U.S. Assistant Secretary of State, Victoria Nuland, handed out snacks on Wednesday to protesters on Kiev’s Independence Square (or ‘Maidan’ as it’s nicknamed), making those who witnessed the scene wonder if a reciprocal gesture would be imaginable during something like an Occupy Wall Street protest in New York.
Nuland’s act of philanthropy and meeting with President Viktor Yanukovich, where she reprimanded him for “absolutely impermissible” treatment of the protesters, came hours after John Kerry made a very strong statement on Ukraine.
This story showed up on the Russia Today website yesterday afternoon Moscow time...and it's also courtesy of Roy Stephens. It's worth reading if you're a serious student of the New Great Game.
Russia unveiled a sign Wednesday that will be used to represent the ruble alongside other major world currencies.
The new symbol, which resembles the Latin letter "P" with a horizontal score through it, will be used by the Central Bank and appear on Russia's coins and banknotes, financial officials told reporters.
The sign was approved by the central bank after a period of public consultation, during which 61 percent of participants voted for the eventual winner, Central Bank chairwoman Elvira Nabiullina said.
The decision to seek a symbol for the ruble comes as Russia strives to extend its global economic reach. Prime Minister Dmitry Medvedev has championed a drive to make Moscow an international financial center in recent years, and has called for the ruble to become one of the world's reserve currencies.
This very interesting news item was posted on themoscowtimes.com Internet site yesterday sometime...and it's a story that I found over at the gata.org Internet site.
Russia’s Foreign Minister is on his first visit to Iran since President Rouhani took office. Consistent implementation of the key Geneva agreement on the Iranian nuclear program is paving the way to regional stability and international security.
The Geneva agreement on the Iranian nuclear program allows us to address some of the most pressing concerns about the nature and direction of Iran's nuclear activities. The Joint Action Plan, adopted by the P5+1 and Iran, includes specific measures aimed at enhancing transparency, to be undertaken in close cooperation with the IAEA.
In parallel with the implementation of the first steps, the sides are to continue the work on a final and comprehensive agreement. It provides for full use of the inalienable rights of Iran as a party to the Non-Proliferation Treaty. It also suggests a gradual weakening of anti-Iranian sanctions regime.
This is another story from the Russia Today website. It was posted their early yesterday morning Moscow time...and constitutes the final offering of the day from Roy Stephens. It's worth reading, especially if you're a student of the New Great Game.
Gold researcher and GATA consultant Koos Jansen today translates into English and publishes commentary written in June by Chinese financial management executive Zheng Gang about what he considers a financial war being waged against the world by the United States.
"The strategic 'game' to preserve the U.S. dollar's global status is now the focus of international political and economic activity," Zheng writes. "The U.S. makes a new kind of non-military offensive against developing and transforming countries derived from her ability to set favorable rules, an ability she possesses through dollar hegemony."
This longish commentary was posted on the Swiss Internet site ingoldwetrust.ch yesterday. It's well worth reading in my opinion...and it's another story I found posted inside a GATA release yesterday.
1. John Ing: "This 2014 Surprise is Going to Cause Gold to Super-Surge". 2. Tom Fitzpatrick: "This Fantastic Chart Predicts a Massive $275 Surge in Gold". 3. Rick Rule: "Spectacularly Bullish Gold News We Haven't Seen in 3 Years".
[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]
There seems to have been the suggestion of something of a turnaround in sentiment on gold, ironically as virtually every bank analyst and his dog has been predicting a continuing downturn in the gold price – which, I suppose is the time to buy on true contrarian thinking. Now whether the latest move upwards – not a big one so far by any stretch of the imagination – is sustainable, remains to be seen, but the factors surrounding the upturn are, to say the least, interesting.
One does not exactly need a long memory to recall that every indication that the U.S. Fed may actually implement any kind of taper since the proposal was first put forward by Ben Bernanke has been met with a sharp downturn in the gold price – until perhaps a couple of weeks ago when the opposite seems to have happened. For the person in the street – and the investment herd which should know better but never does – the recent seeming improvement in U.S. employment statistics has been taken as suggesting the Fed may implement some form of taper sooner rather than later. Never mind how distorted these figures may have been by the government statistical shutdown in October, nor how downwardly massaged they have been by changes in assessment criteria in recent years. Other (massaged) official statistical data have also purported to suggest the U.S. economy is improving to the extent that a tapering of the Fed bond buying program, even a small one, could actually happen. Yet news supporting such a scenario over the past couple of weeks has seen the gold price rise, rather than fall. What does this mean?
This commentary by Lawrie, which is definitely worth reading, was posted on the mineweb.com Internet site early on Tuesday morning GMT...and it's courtesy of Ulrike Marx.
Faced with analysts and investment trading houses that are undervaluing the company, Iamgold announced Wednesday that “it has suspended future dividend payments until further notice.”
In a news release Wednesday, Iamgold CEO Steve Letwin said, “While our outlook for gold over the long term is optimistic, in light of the current gold price we are suspending the dividend to preserve our balance sheet.”
“We are on target to reduce costs by $100 million this year and will continue to look for further reductions next year,” he said. “This decision to suspend the dividend allows us to conserve cash and ensure we maintain the flexibility we need to take advantage of opportunities when they arise.
I note that nowhere in the story that there was going to be any attempt by anyone at Iamgold to delve into the reason why gold prices might be as low as they are. Their shareholders know, but that matters not. This story was posted on the mineweb.com Internet site just after midnight earlier this morning EST
Prime Minister's Economic Advisory Council chief C. Rangarajan today said India can tolerate USD 30 billion worth of gold imports. A major reason for high current account deficit (CAD) in the last fiscal was high imports of gold.
"As inflation comes down and as financial assets become more attractive, perhaps this part of demand for gold can come down and we can probably tolerate USD 30 billion worth of import of gold," Rangarajan said at the Delhi Economic Conclave. Earlier inaugurating the conclave, Finance Minister P Chidambaram said India can neither finance a CAD of the order of USD 88 billion as it did in 2012-13 nor can afford to pay for import of gold in the order of USD 50 billion or more.
The CAD touched a lifetime high of USD 88.2 billion in 2012-13 mainly due to high gold imports (845 tonnes) and firm crude oil prices. Higher CAD also led to the battering of rupee which plunged to all time low of 68.85 in August-end. The government as well as Reserve Bank took a slew of measures to curb gold imports. The measures showed results as in-bound shipment fell significantly.
This short, but very interesting news item was posted on the moneycontrol.com Internet site late yesterday afternoon IST...and I thank Ulrike Marx for her last contribution to today's column.
Reports out of South Korea (ROK) suggest that North Korea is selling ‘large amounts’ of gold to China because of an economic crisis within the country. With South Korea always prepared to believe the worst of its northern neighbour, with which it is still technically at war, perhaps such claims should be viewed with a certain amount of scepticism – but with some undoubted cross border contacts the South Korean news agencies which reported the sales, may well have an inside track as to what is going on in the North – they are certainly better informed on their northern neighbour than anyone else.
While North Korea does not report its gold holdings to the IMF and thus do not appear in official statistics, reports back in 2007 suggested the country held gold reserves of around 2,000 tonnes, which would make it one of the world’s largest holders of the precious metal. Indeed, if that figure is anywhere near correct then this is around double what China says it holds in reserves, although most people think China has been building its reserves to well above the official reported holding of 1,054 tonnes.
This must read news item by Lawrence Williams was posted on the mineweb.com Internet site sometime yesterday.
Doug Casey’s New Book: Right on the Money
Just released, Doug Casey's new book, Right on the Money is about profiting in an upside-down economy. This follow-up to Totally Incorrect (the second in a series of "Conversations With Casey" books) includes several conversations between Doug Casey and Louis James that weren't distributed in our former column by that name. In the book, Doug and Louis delve into the specifics of how to apply his contrarian philosophy to making money.
To read quotes from the book and learn more, click here.
This is a very unusual set up, bullish almost beyond description and not one that I can recall seeing previously. There are many tens of thousands of technical fund short positions open in Comex silver and gold that are close to turning into a very large loss. Importantly, the 50-day and 200-day moving averages are only slightly higher than the loss demarcation point. My strong sense is that the technical fund shorts are trapped--and in a short time that will become obvious in the price. It’s also important to remember that the technical funds have chosen to establish record short positions with gold and silver prices close to or below the marginal cost of production. This highlights the precarious nature of the tech fund short positions. - Silver analyst Ted Butler: 11 December 2013
I must admit that I was expecting somewhat more price action than we got during the Wednesday trading session, and I'm at a bit of a loss to explain the big sell-off in the precious metal equities, because they were out of all proportion to the price declines in both gold and silver.
There isn't much I can add to what I said at the top of th is column. We're still all set up to blast off, if that is the will of JPMorgan et al---plus we get the Commitment of Traders Report tomorrow afternoon.
But since Ted mentioned the 50 and 200-day moving averages in both gold and silver in the quote above, I thought maybe I should post the six-month charts on both metals so you can see them for yourself---and here they are.
Far East trading was comatose from a price perspective on their Thursday, and volumes were extremely light in both metals. And not much is happening now that London has been open about 15 minutes as I write this paragraph. The dollar index is chopping sideways just under 80.00 mark.
And as I prepare to send today's efforts down to Stowe, Vermont---I note that a not-for-profit seller put in an appearance just before 9:30 a.m. GMT in London. Both platinum and palladium are down a hair, but the real selling pressure, as usual, is in both silver and gold. Gold is down about fifteen bucks from its high at the London open, and silver is down almost 45 cents. Needless to say, volumes have really blown out, as they are well over double what they were before this bout of selling began. The dollar index is up a handful of basis points, but not over the 80 cent mark as of 5:15 a.m. EST.
Here's the Kitco silver chart as of 5:17 a.m. EST.
What this portends for price action in New York today is not known, but nothing will surprise me when I check in after I roll out of bed later this morning. However, it's obvious that JPMorgan et al are still at it.
See you tomorrow.