The gold price traded in a tight five dollar price range during Far East and early London trading on Friday...and by the time the Comex opened, the price was basically unchanged from Thursday's 5:15 p.m. close in New York.
Then the job numbers were released at 8:30 a.m....and the gold price blasted off, only to instantly run into a not-for-profit seller. The high of the day [$1,683.20 spot] came shortly before the equity markets opened in New York at 9:30 a.m...and by the time the London p.m. gold fix was in at 10:00 a.m. Eastern time, the price was back down to where it started at 8:30 a.m.
That also appeared to be the low tick of the day, which was $1,661.10 spot...and from there, the gold price rallied until 12:15 p.m. before getting sold down into the electronic close.
Gold finished the Friday session at $1,667.60 spot...up a whole $3.80. Volume was immense at 185,000 contracts...so you just have to know that JPMorgan et al threw everything they had at the gold price to prevent it from getting anywhere near the $1,700 spot mark...or beyond.
Here's the New York Spot Gold [Bid] chart on its own so you can see the price action that mattered in more detail.
The price path for silver on Friday was essentially the same as for gold, but with one important difference. The attempt to sell it down at the London p.m. gold fix wasn't nearly as successful...and it rallied quit a bit after that...and only got sold down a bit in electronic trading.
Silver closed on Friday at $31.84 spot...up 37 cents. Net volume was around 49,000 contracts, so it's obvious that silver's attempted rally did not go unopposed, either.
Here's the New York price action in silver on its own...
The dollar index opened at 79.20 on Friday morning in the Far East...and then slid 25 basis points by the time the job numbers were released in New York at 8:30 a.m. Eastern time. Then like the precious metals, the dollar index blasted higher...and by shortly before 10:00 a.m. in New York, it had reached its zenith at 79.28...but by 11:15 a.m. it had fallen to its low of 78.93. From there it rallied into the close...finishing the Friday session at 79.19...basically unchanged from where it started the day.
Good luck co-relating the action of the dollar index and the precious metals yesterday, as there was none that I could see.
The gold stocks gapped up almost two percent at the open...only to get sold back down to unchanged minutes after the 10:00 a.m. Eastern time London p.m. gold fix...the low in the gold price. From there they recovered in fits and starts, with the HUI finishing at 400.00 right on the button...up 1.55% on the day.
With only one exception that I could see, all the silver shares finished with green arrows on my stock list...and Nick Laird's Intraday Silver Sentiment Index closed up 1.63%.
(Click on image to enlarge)
Here's the historic Silver Sentiment Index to put this past week's price action in some perspective.
(Click on image to enlarge)
The CME's Daily Delivery Report for 'Day 3' showed that another 1,106 gold...along with 6 silver contracts were posted for delivery on Tuesday within the Comex-approved depositories. In gold, the big short/issuer was the Bank of Nova Scotia with 1,000 contracts. Only three long/stoppers were involved in yesterday's report. They were Deutsche Bank with 627 contracts...HSBC USA with 362 contracts...and JPMorgan with 117 contracts. In the first three days of the February delivery month...10,248 gold contracts have been posted for delivery...over a million ounces. I expect these volumes to fall off precipitously starting early next week...as the bulk of the deliveries occur during the first week of the delivery month. The link to yesterday's Issuers and Stoppers Report is linked here...and it's worth a quick look.
There were no reported changes in GLD yesterday...but over at SLV, an authorized participant added 1,498,949 troy ounces of silver...and that's after a withdrawal of 2.2 million ounces on Thursday.
There was no sales report from the U.S. Mint yesterday.
Over at the Comex-approved depositories on Thursday, they reported receiving a very chunky 2,550,785 troy ounces of silver...and didn't ship a single ounce out the door. The link to that activity is here...and it, too, is worth a look.
In case you've missed it, there was lots of silver in motion this past week...and record amounts for the month of January in total. One has to wonder what is going on...and I just know that Ted Butler will have more to say about this situation in this weekly review later today.
Late next week we'll find out the new short position in SLV...and what was up with that 18.3 million ounces of silver that was deposited on January 16th. Was it deposited to cover a short position...or for a new buyer? Whichever it was, it's certainly bullish for the price of silver going forward. Stay tuned.
Well, the Commitment of Traders Report was a surprise in gold and an even bigger surprise in silver silver. Based on the reporting week's price action, both Ted Butler and myself were expecting declines in the Commercial net short positions in both metals. We turned out to be half right...and I'll start with gold first this week.
There was a big decline in the Commercial net short position in gold...even bigger than what either Ted or myself were expecting. The Commercial net short position declined by a monstrous 28,853 contracts, or 2.89 million ounces of gold...and now sits at 16.71 million ounces. That was more than double the decline I was expecting.
The 'Big 4' bullion banks are short 10.85 million ounces of gold...and the '5 through 8' traders are short an additional 5.69 million ounces of gold. So the 'Big 8' short holders in gold are short 16.54 million ounces...or 99% of the Commercial net short position in that metal.
Once you removed all the market-neutral spread trades you can from the open interest, the 'Big 4' bullion banks are short 30.0% of the entire Comex futures market in gold...and the '5 through 8' traders add another 15.7 percentage points to that total. So the 'Big 8' are short 45.7% of the entire Comex gold market...and that's a minimum number.
It's my opinion that three of the 'Big 4' bullion banks are JPMorgan Chase, the Bank of Nova Scotia...and HSBC USA. The bullion bank in number four position is up for grabs...but if I had to pick a candidate, it would be either Citigroup, Deutsche Bank or Morgan Stanley.
And now for silver...
Instead of a decline in the Commercial net short position as there was in gold, there was a substantial increase...2,869 contracts to be precise...or 14.3 million ounces of silver. This is exactly opposite of the number that I was expecting. Considering the fact that silver declined by an appreciable amount during the Tuesday to Tuesday reporting week, this is amazing...and Ted Butler and I are still scratching our heads over it.
My first thought was that the CFTC made an error in reporting...and until Ted Butler's theory below pans out, or next Friday's COT Report is issued...that's my preferred explanation.
Ted's thinking on this is radically different. First of all, instead of covering short positions during the reporting week, JPMorgan added another 2,000 contracts to their already obscene and grotesque short position, which now sits at a bit more than 33,000 contracts. The small traders decreased their long positions and increased their short positions on that price decline...which is precisely what one would expect of them. But the big surprise was that the brain dead technical funds increased their long position by 3,711 contracts, instead of reducing it...which is NOT the action that one would normally expect on a week over week price decline. Ted is speculating that a surprise buyer shows up in the Non-Commercial category...and this forced JPMorgan et al to short massive amounts of the metal in order to prevent the price from blowing up.
I sure hope he's right...but I will be waiting to see if there is any corrections made to the silver portion of the COT Report as the week progresses. Maybe we'll have to wait until next Friday's report to find out. This will coincide with the updated short position in GLD and SLV over at shortsqueeze.com...so there's lots of eagerly awaited silver news coming out next week, so stay tuned.
Anyway, assuming the silver numbers are correct, the 'Big 4' are short 260.0 million ounces of silver...and the '5 through 8' short holders are short an additional 55.0 million ounces of silver. The Commercial net short positions checks in at 251.3 million ounces, so the 'Big 4' and 'Big 8' are short 103.5% and 125.3% of that amount, respectively.
Once you subtract out the market-neutral spread trades, it shows that the 'Big 4' traders are short 51.2% of the entire Comex futures market in silver...and the '5 through 8' traders are short an additional 10.8 percentage points. So the 'Big 8' are short 62% of the entire Comex futures market in silver on a net basis. JPMorgan is short almost 33% of the entire Comex futures market in silver all by itself! And no matter how you slice it or dice it, that is what I call an obscene and grotesque concentrated short position!
Here's Nick Laird's "Days of World Production to Cover Short Positions" chart updated with Tuesday's numbers.
(Click on image to enlarge)
The long-term interactive COT charts for silver and gold are here and here respectively. Speaking from personal experience, the silver charts are slow to load if you have an older computer and/or browser.
I have the usual large number of stories for a weekend, so I hope you can find the time in what's left of it to read the ones that interest you. A fair number of them are ones that I've been saving for this weekend column because of length or subject matter.
Amid the euphoria of the crossing of the Dow's Maginot Line at 14,000, Kyle Bass provided a few minutes of sanity in an interview with CNBC's Gary Kaminsky. Bass starts by reflecting on the ongoing (and escalating) money-printing as the driver of stock movements currently and would not be surprised to see them move higher still (given the ongoing printing expected). However, he caveats that nominally bullish statement with a critical point, "Zimbabwe's stock market was the best performer this decade - but your entire portfolio now buys you 3 eggs" as purchasing power is crushed.
Investors, he says, are "too focused on nominal prices" as the rate of growth of the monetary base is destroying true wealth.
This 6:32 minute video interview is embedded in a Zero Hedge story from yesterday...and I thank Phil Barlett for being the first person through the door with this story. It's a must watch...and the link is here. One thing I did notice, was that he never mentioned gold once, even though he was given the opportunity to do so.
Wall Street Journal editors are none too impressed with the Federal Reserve’s decision Wednesday to stick with its massive easing program.
The Fed is buying $85 billion of Treasuries and mortgage-backed securities a month and plans to keep short-term interest rates near zero until unemployment drops to 6.5 percent, from 7.8 percent in December.
“The Fed has led a parade of easing around the world, as other central bankers follow to prevent their currencies from rising too much,” according to a Journal editorial. “Yet the economic paradox of our time is slow growth and lousy job creation despite these monetary exertions.”
This article showed up on the moneynews.com Internet site yesterday morning...and it's courtesy of West Virginia reader Elliot Simon. The link is here.
Unrelenting trade and “capital” account deficits have ensured the ongoing injection of dollar financial claims into inflated global financial systems, markets and economies. Unending dollar flows have, in particular, bolstered “developing” Credit systems, economies and Bubbles. China and “developing” central banks have, then, continued the recycling of Trillions of surplus dollar balances directly back into U.S. Treasury and agency debt markets, in the process helping to monetize U.S. income growth, inflate securities markets and sustain the U.S. Bubble Economy. All along the way, perilous global imbalances know only one direction: bigger. And the greater the imbalances, the lower global central bankers peg rates and the more they resort to unfathomable “quantitative easing”/“money printing.”
I’m OK if every analyst in the world disagrees. It doesn’t change the reality that we’ve experienced another historic transformation in U.S. and global finance - and we are these days witnessing the consequence: history’s greatest synchronized Credit, market and economic Bubbles.
Kyle Bass would see eye-to-eye with Doug Noland on this...and both are saying the same thing, but in different ways. Both warn of the danger...and the ultimate end game. Doug's Friday Credit Bubble Bulletin is always a must read for me...and it's posted over at the prudentbear.com Internet site. I thank reader U.D. for sending it...and the link is here.
Between Hess' plant closing and scheduled maintenance, the squeeze appears to be on the refining space and wholesale gasoline prices are smashing higher. Along with flares in geopolitical risk (Ankara today and Israel/Syria earlier in the week) driving underlying crude prices, Gas prices (at the pump) are surging - to record highs for the first week of February as per AAA, hitting an all time high of $3.465 for this day and just surpassing last year's price of $3.455; and based on where wholesale prices are (given the lag), we could be seeing $4.00 gas at the pump in the next few weeks.
This short article was posted on the zerohedge.com Internet site yesterday...and the charts are well worth the trip. I thank Elliot Simon for sharing this story with us...and the link is here.
A U.S. judge on Thursday sentenced the founder of Peregrine Financial Group to 50 years in prison for looting hundreds of millions of dollars from the brokerage, saying his customers would probably never recover the money they lost.
Russell Wasendorf Sr., who had tried to kill himself just before the fraud was uncovered, received the maximum sentence allowed by law and was ordered to pay $215.5 million in restitution for his nearly 20-year scheme.
Wasendorf's fraud was revealed in 2012, triggering the collapse of the brokerage and further shaking investors' confidence in the U.S. futures industry, already rattled by the failure of larger rival M.F. Global.
"I'm very sorry for the financial and emotional damage I've caused to investors and employees of Peregrine Financial Group," Wasendorf said in a feeble voice at a sentencing hearing in Cedar Rapids, Iowa. "I feel I fully deserve whatever sentence I am given. My guilt is such I will accept that sentence."
Too bad that Jon Corzine won't meet the same fate. Today's first story is from Reuters...and was posted on the chicagotribune.com Internet site early on Thursday afternoon. I thank Marshall Angeles for sending it...and the link is here.
In the 21st century Americans have experienced an extraordinary collapse in the rule of law and in their constitutional protections. Today American citizens, once a free people protected by law, can be assassinated and detained in prison indefinitely without any evidence being presented to a court of their guilt, and they can be sentenced to prison on the basis of secret testimony by anonymous witnesses not subject to cross examination. The US “justice system” has been transformed by the Bush/Obama regime into the ”justice system” of Gestapo Germany and Stalinist Russia. There is no difference.
Paul may be controversial, but he's always right on the money as far as I'm concerned. This short must read commentary was posted on his Internet site on Thursday...and I thank Manitoba reader Ulrike Marx for sending it along. The link is here.
Argentina became the first country to be censured by the International Monetary Fund for not providing accurate data on inflation and economic growth under a procedure that can end in expulsion.
The declaration of censure was adopted yesterday by the IMF’s 24-member board of directors, the Washington-based fund said in a statement. While it doesn’t have immediate effects, the decision takes the country a step closer to sanctions that include being barred from access to IMF loans.
The IMF’s executive board found that Argentina’s progress in implementing so-called remedial measures “has not been sufficient,” according to the statement. The board called on Argentina to “address the inaccuracy” of economic data no later than Sept. 29, 2013. Managing Director Christine Lagarde is required to report to the board on Argentina’s progress by Nov. 13, 2013.
Of course, one would be foolish to think that any nation reports its unemployment numbers accurately...especially in the United States. This looks like a case of the pot calling the kettle black..and I hope that Argentina tells the IMF where to go...and how to get there.
This Bloomberg story was filed from Washington yesterday...and I thank Elliot Simon once again. The link is here.
European regulators have the means to shut down key parts of London’s financial centre at a stroke if Britain left the European Union and would not hesitate to do so, leading central bank experts have warned.
Membership of the EU single market is the UK’s only legal defence against an onslaught of regulations aimed at forcing banks and fund managers to decamp to the eurozone, they say.
“It would be catastrophic and suicidal for Britain to leave. The UK would lose the protection it currently enjoys as the eurozone’s major financial centre,” said Athanasios Orphanides, a former member of the European Central Bank’s governing council.
Mr Orphanides said the ECB is already clamping down on payments, clearing and settlement systems conducted in euros outside its jurisdiction, a move deemed necessary to head off future crises. “The only thing stopping regulation that would shift all such activities from London to the eurozone is the legal protection the City enjoys in the EU,” he told The Daily Telegraph.
This Ambrose-Evans Pritchard article was posted on the telegraph.co.uk Internet site late on Thursday evening...and I thank Roy Stephens for sending it. The link is here.
Yesterday we got one hint that not all is well in the European banking system, as far less than the expected €200 billion was tendered back to the ECB in the second LTRO repayment operation, when just 27 banks paid back some €3.5 billion.
Another, perhaps far bigger one, comes courtesy of AAA-rated Netherlands, which just experienced its first bank failure since 2008 following the nationalization of SNS Reall NV, as the previously announced bad loan write-down finally claimed the bank.
As a reminder, half a month ago we got news that "SNS Reaal NV, a Dutch bank and insurer struggling to wind down a money-losing real estate lending unit, fell the most in more than two months after a report said it may have to post a 1.8 billion-euro ($2.4 billion) write-down on property-finance loans." Today we got the inevitable conclusion: nationalization, one which will cost taxpayers about $5 billion to avoid contagion to what many see as Europe's "strongest" banking system.
This very interesting story was posted on the Zero Hedge website yesterday...and it's courtesy of Marshall Angeles. The link is here.
The EU should have legal mechanisms for countries to leave the euro, says Dutch Prime Minister Mark Rutte.
In a letter released on Thursday responding to a question in the Dutch Parliament, Rutte and his finance minister Jeroen Dijsselbloem, said that his governing coalition had agreed that "it should be possible under mutual consideration to exit from the community arrangements (Schengen, eurozone, European Union)."
"This requires in the case of the eurozone and Schengen a treaty change as the current EU treaty does not foresee this possibility," it concluded.
The letter follows Rutte's intervention last week at the World Economic Forum in Davos, where he said that it "should be possible" for countries to leave the eurozone and indicated that certain EU policy areas should be repatriated to national governments.
This item was filed from Brussels early yesterday afternoon European time...and I thank Roy Stephens for digging it up on our behalf. The link is here.
US Vice President Joe Biden is visiting Germany this week in an effort to strengthen trans-Atlantic ties. Global politics have come to a standstill in recent years, with the United States unwilling to show leadership and Europe and other major powers unable to fill the vacuum.
On Friday afternoon, Biden will hold a powwow with German Chancellor Angela Merkel in Berlin. On Saturday, he is scheduled to deliver a speech at the annual Munich Security Conference.
The reason is clear: Biden might still speak eloquently in public about trans-Atlantic cooperation. But, behind closed doors, his main message will be that America and its allies need to come up with a new way of divvying up responsibilities in this uncertain world.
In 1998, then-Secretary of State Madeleine Albright called America the "indispensable nation." But now, 15 years later, it is primarily an exhausted one, a global power in decline that has its gaze turned toward the domestic front rather than Afghanistan or the Middle East.
This essay was posted on the spiegel.de Internet site during Europe's lunch hour on Friday...and it's worth skimming. Once again I thank Roy Stephens for sending it our way...and the link is here.
Moscow announced that it has terminated an agreement with Washington to cooperate in law and drug enforcement, continuing the trend of deteriorating diplomatic relations.
“Russia is reforming its relationship with the US. We have terminated the third agreement with the U.S. in the last six months,” Aleksey Pushkov, the head of the Foreign Affairs Committee of the Russian Lower House, commented on Twitter.
Russian Prime Minister Dmitry Medvedev signed an order to terminate the bilateral deal, the government said in a statement on its official website on Wednesday. The agreement, formalized between Russia and the US on September 25, 2002, was declared “out of touch with today’s realities and has exhausted its potential,” the statement read.
As part of the now-defunct bilateral deal, the US agreed to provide financial assistance to relevant Russian entities for anti-crime measures, among other activities. Such philanthropy, however, has raised eyebrows in Russia and prompted questions over the real motive behind Washington’s efforts.
It was largely due to these suspicions that Moscow informed the US Agency for International Development (USAID) in September that its services in Russia were no longer wanted or needed.
It's about time! Those with an intimate understanding of the "New Great Game" will understand precisely why I said that. Russia, like Mexico, is another rich nation that insists on being poor. If I were Vladimir, I'd tell not only the US to shove it...but the IMF as well. This absolute must read showed up on the Russia Today website on Wednesday...and the link is here. The story, not surprisingly, is courtesy of Roy Stephens.
Much like its air campaign against Hamas targets inside the Gaza strip, Israel's airstrike in Syria looks like a well-timed tactical move—and the confusing media reports regarding the attack may be part of the plan.
The Jerusalem Post reports that a Western diplomatic source told Iraqi daily Azzaman that the attack took place more than 48 hours before it was leaked by Israel.
Furthermore, the source said the reports about a strike on a convoy carrying weapons into Lebanon were probably meant to divert attention away from the operation's main objective: To use F-16 aircraft to fire at least eight guided missiles at a military research center near Damascus.
This "brilliant tactical move" is also an act of war, dear reader...not that the rule of law means anything to the Americans, the British or the Israelis anymore. This story was posted on the businessinsider.com Internet site early yesterday afternoon Eastern time...and it's also courtesy of Roy Stephens. The link is here.
A bomb exploded at the US Embassy in the Turkish capital of Ankara on Friday, killing at least two and wounding several others, according to wire reports. Several witnesses and a police official speaking to the Associated Press on condition of anonymity said that a suicide bomber was responsible for the attack.
According to witnesses, the attacker set off an explosive device inside the security checkpoint at a side entrance of the embassy, sending smoke and debris flying into the street. The embassy itself has reportedly suffered no damage.
One Turkish security guard and the attacker were killed, though it remains unclear how many were wounded. Several emergency vehicles were dispatched to the area, and an AP journalist saw at least one woman who appeared to be seriously hurt being carried to an ambulance.
This story was posted on the spiegel.de Internet site early yesterday afternoon in Europe...and it's also courtesy of Roy Stephens. The link is here.
The US government appears close to opening a new front in its fight against Islamist militants by planning a new base for surveillance drones in the west African country of Niger.
American forces are already assisting a French offensive in neighbouring Mali that is aimed at recapturing the country's northern desert territory from the hands of Islamist rebels. On Monday the US signed a military agreement with Niger that paves the way legally for US forces to operate on its soil, prompting a series of reports that the Pentagon was keen on opening a new drones base there.
That news appeared to be confirmed by Niger government sources, who said the US ambassador in Niamey, Bisa Williams, had asked Niger's president, Mahamadou Issoufou, for permission to use surveillance drones and had been granted it.
"Niger has given the green light to accepting American surveillance drones on its soil to improve the collection of intelligence on Islamist movements," a Niger government source told Reuters.
This article was posted on The Guardian's website early on Tuesday evening. It's one of the stories that I've been saving for today...and it's also courtesy of Roy Stephens. The link is here.
Barack Obama launched his second term as president of the United States on January 21 with an impassioned speech promising to uphold and advance America's core values.
While he specifically promised the American people that,"a decade of war is now ending", China and Japan have increasingly militarized their standoff in the East China Sea, with Japan stating on the same day its ability to fire on any Chinese air patrols over disputed islands.
An American strategic "readjustment" that will see massive military forces parked off China's coast, and increasing tensions between the world's second and third largest economies, threaten to derail Obama's vision of a peaceful second term.
At the same time, a series of open letters to Obama from the Brookings Institution reveal the challenges that Sino-American relations may hold for Obama's presidency. The suggestions of America's political class expose the archaic and disingenuous nature of American political discourse on the People's Republic of China.
This is a must read...especially for students of the "New Great Game". It was posted on the Asia Times website on Wednesday...and I thank Roy Stephens for bringing it to our attention. The link is here.
The first interview is with Caesar Bryan of Gabelli & Company. It's headlined "This is Why Gold Will Vault to New All-Time Highs in 2013". The other blog is with James Dines...and it's headlined "Exclusive Look at His Stunning 2013 Predictions".
Pepe Escobar, who was born 1954 in Brazil, is one of the most outstanding journalists of our time with three decades of experience in covering politics and conflicts around the globe. He works for Hong Kong/Thailand-based Asia Times as “The Roving Eye.“ Moreover, he is the author of three books: “Globalistan: How the Globalized World is Dissolving into Liquid War,“ “Red Zone Blues: a snapshot of Baghdad during the surge,“ and “Obama does Globalistan.“
Mr. Escobar has been a foreign correspondent since 1985, based in London, Milan, Los Angeles, Paris, Singapore, and Bangkok. Since the late 1990s, he has specialized in covering geopolitical stories from the Middle East to Central Asia and has reported during this decade from Afghanistan, Pakistan, Iraq, Iran, the Central Asian Republics, China and the U.S.A.
He was in Afghanistan in Summer of 2001 and interviewed the military leader of the anti-Taliban Northern Alliance, Ahmad Shah Masoud, just a few weeks before his assassination, and he has been one of the first journalists to reach Kabul after the Taliban’s retreat. He is a renowned expert on the network of pipelines hardwiring the countries of the Middle East, Central Asia, Russia, and Europe that he has dubbed “Pipelinestan.” Mr. Escobar lives in Sao Paulo, Bangkok, and Hong-Kong.
This 33:48 minute audio interview is a must listen in my opinion...as I have all the time in the world for whatever Pepe has to say. I've been posting his Asia Times articles in this column for many years...including one today. This interview is posted on the larsschall.com Internet site...and the link is here.
People longing for a break from the bitter cold may especially enjoy Cambridge House's California Resources Investment Conference next month, to be held Saturday and Sunday, February 23 and 24, at the Hyatt Regency Indian Wells Resort and Spa in Indian Wells, California, just down the road from Palm Springs.
In addition to GATA Chairman Bill Murphy and your secretary/treasurer, speakers will include GATA favorites Frank Holmes of U.S. Global Investors, Rick Rule of Sprott Global Resource Investments, David Morgan of Silver-Investor.com, and Al Korelin of the Korelin Economics Report. Dozens of resource companies will be exhibiting.
The Hyatt Regency has an outstanding golf course and a great restaurant and is located near many other great restaurants if just sitting around warm and dry on the hotel bar's delightful patio isn't wonderful enough for northerners.
Admission to the conference is free for those who register in advance. But the conference also is offering a golf tournament and gala reception for $180. With golf club rentals, the charge for the tournament and reception will be $245.
To learn more about the conference and to register, please visit their Internet site here.
Is your precious-metals portfolio ready for 2013? We want to get positioned in the best performers ahead of the industry's next big move to maximize profit while minimizing risk.
Some readers may question if gold stocks really have snapped out of their funk. We could discuss this topic for many pages, but the bottom line for us at Casey Research is simple: if you believe gold and silver prices are going higher, then equity prices will follow.
Precious metals are headed higher for reasons we've outlined before: intractable levels of government debt, reckless deficit spending, and worldwide money printing. GDP growth won't be near strong enough to meet future liabilities, and neither politicians nor the public will agree to austerity measures that will be austere enough. Gold and silver will move higher as the value of currencies declines as governments attempt to pay existing and future obligations.
This BIG GOLD editorial is by Casey Research's own Jeff Clark. It's certainly worth reading...and the link is here.
The Reserve Bank of India plans to introduce three to four gold-linked products in the next few months in an effort to bring 20,000 tonnes of gold held in households into the banking system, but the measure is unlikely to cut bullion imports sharply, a senior official said.
The RBI plans to mobilise the unused gold by lending it to importers and exporters of the yellow metal, in a move it hopes will bring down the demand for physical gold.
India is the largest importer of gold, which is its second biggest import item after oil and contributes around 10 percent to the total import bill.
Large gold imports are a worry for the government and the RBI, with the current account deficit shooting to a record high in the September quarter, pressuring the rupee and adding to inflationary pressures.
[Note to all the good folks in India...DON'T DO IT!] This Reuters story was filed from Mumbai on Friday evening India Standard Time...and it's definitely a must read. I found it hidden in a GATA release yesterday...and the link is here.
With the Indian government cracking down on gold, the metal's poor cousin, silver, has shot into the limelight. Silver jewellery exports are expected to lead this fiscal year, given the geographical expansion into the markets of CIS (Commonwealth Independent States) and eastern Europe, both of which have benefited silver jewellery.
Silver exports are likely to jump 30% this financial year in India, against $797 million a year ago. In December alone, provisional exports of silver jewellery touched $73.85 million.
According to provisional data from the Gems and Jewellery Export Promotion Council, exports of silver jewellery during April to December 2012, jumped 24.68% in Rupee terms.
Nothing would blow JPMorgan et al out of the water faster than a monstrous and permanent demand spike from India if silver sales really start to fly in that country...and it just might. Silver would become the new gold virtually overnight if the gold price got out of reach...and/or the Indian government made it more expensive to import. This must read story was filed from Mumbai yesterday as well...and I found it on the mineweb.com Internet site in the wee hours of this morning. The link is here.
A global gold 'production cliff' is coming in 2017, according to analysts at Canada's National Financial Bank.
Pierre Lassonde, chairman of Franco-Nevada Corporation – a leading gold royalty and stream company – also drove home this point yesterday at a mining conference in Vancouver, urging participants in the gold mining industry to address the coming production decline.
The gold supply-side story of the past decade is not encouraging. Big new deposits have been elusive. The number of "supergiant" discoveries has dwindled from two in the past five years to zero in the past two years. Comparing this to the impressive deposit discoveries of the 1970s and 1990s, one begins to get a sharper sense of the 'cliff'.
Quality, too, is an issue. Ore grades have tumbled from an average of 12 grams per tonne in 1950 to roughly 3 grams in Australia, Canada and the US. In some cases, cutoff grades have dipped to 1 gram per tonne. "The next cutoff," claimed Lassonde, "is dirt."
Pierre is well aware of the fact that precious metal prices are firmly in the grip of JPMorgan Chase et al...but won't lift a finger to do anything about it. If he tried to use his high profile position in the gold mining world to expose this criminal conspiracy, it's a pretty good bet that his body would never be found.
This short article was posted on the mining.com Internet site yesterday...and I thank Manitoba reader Ulrike Marx for our final story in today's column. It's an absolute must read...and the link is here.
Gold is Poised to Rebound Aggressively Will You Be on Board?
The last time there was a buying opportunity this good in gold was during the financial crisis of 2008. During that year, gold lost 27.7%, only to shoot up 166% over the next three years (from $712.50/oz to $1,895.50/oz). How high it will rebound this time is anyone's guess, but one thing's for sure – you'll kick yourself if you're not on board.
Don't wait for $2,000 gold before you get in – act now to make the most of the raging bull market.
The 2012 Gold Investing Guide from Casey Research tells you all about ways to leverage gold – from bullion to stocks to ETFs and more. Get it ABSOLUTELY FREE today.
Americans have the right and advantage of being armed, unlike the citizens of other countries whose governments are afraid to trust the people with arms. -- James Madison, The Federalist Papers
Sadly, today's pop 'blast from past' was easy...and here is the story that made it that way. I was born three years after the end of World War Two...so the Andrews Sisters were household names when I was growing up on the prairies of Manitoba back in the 1950s. Here are two of their most famous recordings...and they are not only classics, but they defined the times they were performed in. The first song is here...and the second one is here. I thank Marshall Angeles for sending me the AP/foxnews.com story from Wednesday.
Once again JPMorgan et al had to haul out the heavy artillery to prevent gold and silver from doing what they've wanted to do for over a decade now...and that's to re-price all the world's goods and services against the only true forms of wealth...gold and silver. And, once again they were crushed attempting to do exactly that.
But for how much longer can these attempts be squashed? My guess is...not much longer.
The world continues to float off the rails...helped along by USA, which is going all out in its efforts to become a world-wide empire. Sooner or later, they and their 'allies' are going to run into someone who is going to push back in one form or another...and then the fight will be on.
As everyone at Casey Research has said on more than one occasion...you should have a crib overseas...and part of your wealth far away from where your national government can get their mitts on it. This is particularly true of Amerikan citizens.
Where we go from here...and how fast we get there...is anyone's guess. But I get the impression that we aren't going to make it much further before everything starts to unravel...and I just hope that we're all ready.
See you on Tuesday.