Gold & Silver Daily
 

¤ Yesterday In Gold & Silver

The gold price got sold down a few dollars in the first two hours of trading after the market opened at 6 p.m. EDT on Sunday evening---and then traded flat until noon Hong Kong time on their Monday.  From that point, gold had three tiny rallies, with the last one ending in a vertical spike just a few minutes before the Comex opened in New York.  And just minutes after the Comex open, that spike got dealt with in the usual manner.  The New York low came shortly before 11:30 a.m.---and from there the price rallied quietly higher into the close.

The low and high ticks were recorded by the CME Group as $1,234.90 and $1,249.30 in the December contract.

Gold finished the Monday trading session in New York at $1,246.90 spot, up $8.70 from Friday's close.  Net volume was pretty light at only 91,000 contracts, so it wasn't difficult for anyone with an agenda to move the price---either up or down.

Silver also got sold down at the 6 p.m. EDT open in New York on Sunday---and its low tick of the day came shortly before 9 a.m. Hong Kong time on their Monday morning.  From there, the silver price rallied in a similar fashion to gold, but began to rally anew shortly after the price was capped at the Comex open in New York. The high tick of the day came at, or shortly after, the London p.m. gold fix---and then it got smoked for all its New York gains, plus a bit more.  From its 11:30 a.m. EDT low in New York, it chopped quietly higher for the remainder of the trading day.

The low and high were reported as $17.25 and $17.52 in the December contract.

Silver finished the Monday session at $17.425 spot, up 15.5 cents, but would have obviously closed considerably higher if JPMorgan et al hadn't been in the room.  Net volume was pretty light as well, only 22,000 contracts.

Platinum traded mostly flat for the first two hours of the Monday trading session---and then it quickly rallied about fifteen bucks.  From that point it chopped slowly higher, hitting its high tick shortly after 1 p.m. in Zurich.  From there it got sold down a bit, before trading sideways from 11 a.m. EDT onwards.  Platinum finished the day up 11 bucks.

Palladium rallied five bucks after two hours of trading---and then tacked on another five in mid-morning trading in New York.  Price couldn't get, or wasn't allowed, over the $762 spot price---and it closed at $760 spot, up nine bucks from Friday's close.

The dollar index closed late on Friday afternoon in New York at 85.20.  It rallied a bit during Far East trading, with the 85.37 high tick coming about ten minutes before London opened.  It was all down hill from there, with the 84.92 low tick coming about 3:10 p.m EDT---and from there it rallied back and closed a hair above the 85.00 mark at 85.02---down 18 basis points on the day.

The gold stocks opened up a bit more than a percent---and didn't do much until their 10:20 a.m. EDT low.  From there they rallied in a choppy fashion for the rest of the day---and the HUI closed up 2.22%.

The silver equities gapped up about 1.5 percent at the open, before falling back almost immediately---and from there they spend the remainder of the Monday session crawling back to their earlier high.  It took a large portion of the day to get there---and then stay there.  The silver equities closed just off their high tick---and Nick Laird's Intraday Silver Sentiment Index closed up 1.69%.

The CME Daily Delivery Report showed that 220 gold and 5 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  For the second day in a row it was Barclays as the only short/issuer out of its in-house [proprietary] trading account---and also for the second day in a row, they were also the biggest long/stopper with 218 contracts in their client account.  The link to yesterday's Issuers and Stoppers Report is here.

As I just mentioned, the delivery activity in gold on Monday was a carbon copy of what was reported on Friday, where Barclays issued 230 gold contracts from its proprietary trading account---and stopped 228 of them in its client account.  I'd sure to know what that's all about.

The CME Preliminary Report for the Monday trading session showed that October open interest in gold dropped by 230 contracts---and that was the 230 contracts issued by Barclays on Friday for delivery today.  Gold open interest in October is now down to 607 contract---minus the 220 that was posted, also by Barclays, for delivery tomorrow.  October open interest in silver is down to 105 contracts after deducting the 72 contracts from Friday being delivered today as well.  October o.i. is now down to an even 100 contracts after subtracting the 5 contracts being delivered tomorrow.

GLD reported a good-sized withdrawal yesterday, as an authorized participant withdrew 288,402 troy ounces---a hair under nine tonnes of the stuff.  And as of 6:48 p.m. EDT yesterday evening, there were no reported changes in SLV.

There was no sales report from the U.S. Mint yesterday.

It was a pretty busy day in both gold and silver over at the Comex-approved depositories on Friday.  In gold, there was 12,860.000 troy ounces reported received---and 96,482.150 troy ounces shipped out.  The entire deposit, which works out to 400 kilobars, was made into the vaults over at Canada's Scotiabank---and of the exactly 3,001 kilobars reported shipped out, 3,000 were removed from JPMorgan's vault.  The link to that action is here.

Is it just me, or is a larger percentage of the in/out activity in Comex gold now in the form of kilobars, rather than the standard LBMA 100 and 400 troy ounce good delivery bars?

It was another very decent day in silver too, as 417,902 troy ounces were reported received---and 870,227 troy ounces were shipped out the door.  The link to that activity is here.

Since the 20th of the month fell on a week day, the good folks over at The Central Bank of the Russian Federation updated their website with their September data, including their gold reserve activity.  It was a big month for them, as they added a very chunky 1.2 million troy ounces.  This is the biggest one-month purchase they've ever made, besting their next biggest addition of 1.1 million ounces back in May of 2010.

Russia's Central bank reserves now stand at 37.0 million troy ounces---and Nick Laird's most excellent chart tells all.

Just as a matter of interest, the 1.2 million troy ounces [37.33 metric tonnes] is considerably more gold than Russia digs out of the ground in one month.  I get the impression from this big deposit in September that they have gold stashed away somewhere that doesn't show up in the books of the central bank, as a deposit that size can't be explained any other way.

It's my Tuesday epistle, so I have a fair number of stories for you today---and the final edit is yours.

 

¤ Critical Reads

Blood Red From Big Blue: Why IBM is Crashing---in Charts

Remember when three short months ago we revealed what was "the scariest chart in IBM's history", namely the one, showing IBM's total debt to equity ratio, which has exploded and surpassed Lehman highs, as the company scrambled to issue more and more debt and use it to repurchase more and more stock?

With this chart, incidentally, we also explained why IBM's ridiculous stock repurchasing strategy, which had seen $37.7 billion in stock buybacks since 2012, or more than the total debt issuance of $33.6 billion during the same period could not continue and why, inevitable, IBM would have a massively disappointing quarter.

Well, that quarter just hit, when moments ago in an early press release, IBM reported abysmal adjusted EPS of only $3.68, a huge miss to the $4.32 Wall Street expected, mostly a function of one simple thing: the buyback "strategy" finally hit a brick wall.

This very interesting Zero Hedge article appeared on their website at 7:42 a.m. EDT yesterday morning---and I thank reader Dan Lazicki for today's first story.

Read more...

Santelli & Schiff: "A Messy Exit is a Given... Ending Q.E. Will Plunge U.S. Into Severe Recession"

"Markets are slowly coming to grips with reality is not going to be as easy as everybody thought," Peter Schiff tells CNBC's Rick Santelli, noting the pick up in volatility across asset classes recently.

What The Fed clearly does not understand, Schiff blasts, is that "you cannot end quantitative easing without plunging the U.S. into a severe recession." Because of the Fed's extreme monetary policy and the mal-investment that flows from it, Schiff says, "The US economy is more screwed up now than it's ever been in history."

Most prophetically, we suspect, Santelli agrees that "a messy exit is a given," and Schiff believes they know that and that is why QE4 is coming simply "because it hasn't worked and they can't admit it's been a dismal failure."

This 2:40 minute CNBC video clip showed up on the Zero Hedge website yesterday at 5:49 p.m. EDT---and I thank Manitoba reader U.M. for her first contribution of the day.

Read more...

Fears That Pimco and Other Big Firms Could Be Unable to Unload Risky Bonds

When it comes to high-risk bonds, the asset management giant Pimco has pretty much cornered the global market.

Be it bonds issued by the automotive financier Ally Financial or the student loan financier SLM in the United States, or government bonds in Spain and Italy, Pimco holds a commanding position in these high-yielding securities.

But as Pimco’s portfolio managers double down on their bet that high-risk bonds will thrive in a world of low interest rates, a growing number of global regulators are warning that the positions being taken on by the big asset management firms pose a broad danger to the financial system.

These concerns were amplified this week as stock markets gyrated, the yields of high-risk corporate and European bonds spiked upward and, crucially, trading volumes evaporated.

This longish article showed up on The New York Times website last Thursday---and is worth reading, at least until your eyes begin to glaze over.  I found it in yesterday's edition of the King Report.

Read more...

FBI Director: If Apple and Google Won't Decrypt Phones, We'll Force Them To

Everyone is stoked that the latest versions of iOS and Android will (finally) encrypt all the information on your smartphone by default. Except, of course, the FBI: Today, its director spent an hour attacking the companies and the very idea of encryption, even suggesting that Congress should pass a law banning the practice of default encryption.

It's of course no secret that James Comey and the FBI hate the prospect of "going dark," the idea that law enforcement simply doesn't have the technical capability to track criminals (and the average person) because of all those goddamn apps, encryption, wi-fi network switching, and different carriers.

It's a problem that the FBI has been dealing with for too long (in Comey’s eyes, at least). Today, Comey went ballistic on Apple and Google's recent decision to make everything just a little more private.

This very interesting news item showed up on the motherboard.vice.com Internet site early afternoon last Thursday---and my thanks go out to Roy Stephens for his first offering of the day.

Read more...

Vote all you want. The secret government won’t change.

The voters who put Barack Obama in office expected some big changes. From the NSA’s warrantless wiretapping to Guantanamo Bay to the Patriot Act, candidate Obama was a defender of civil liberties and privacy, promising a dramatically different approach from his predecessor.

But six years into his administration, the Obama version of national security looks almost indistinguishable from the one he inherited. Guantanamo Bay remains open. The NSA has, if anything, become more aggressive in monitoring Americans. Drone strikes have escalated. Most recently it was reported that the same president who won a Nobel Prize in part for promoting nuclear disarmament is spending up to $1 trillion modernizing and revitalizing America’s nuclear weapons.

Why did the face in the Oval Office change but the policies remain the same? Critics tend to focus on Obama himself, a leader who perhaps has shifted with politics to take a harder line. But Tufts University political scientist Michael J. Glennon has a more pessimistic answer: Obama couldn’t have changed policies much even if he tried.

Though it’s a bedrock American principle that citizens can steer their own government by electing new officials, Glennon suggests that in practice, much of our government no longer works that way. In a new book, “National Security and Double Government,” he catalogs the ways that the defense and national security apparatus is effectively self-governing, with virtually no accountability, transparency, or checks and balances of any kind. He uses the term “double government”: There’s the one we elect, and then there’s the one behind it, steering huge swaths of policy almost unchecked. Elected officials end up serving as mere cover for the real decisions made by the bureaucracy.

No surprises here.  This author has just stumbled on the "powers that be" but doesn't give them a name.  G. Edward Griffin spells it out exactly in his book "The Creature From Jekyll Island"---or James Perloff's "The Shadows of Power: The Council on Foreign Relations and the American Decline".  This article appeared on the bostonglobe.com Internet site on Sunday---and I thank reader M.A. for sending it along.

Read more...

7 weeks of eruption: Stunning aerial video of Iceland’s Bardarbunga volcano

A breathtaking video filmed by an Icelandic helicopter pilot has documented the continuous eruption of the Bardarbunga volcano in northeast Iceland. Enormous fiery bubbles of lava and steam can be seen bursting from the ridges in the ground.

Helicopter pilot Gísli Gíslason captured the wondrous images while on several trips over the volcano – some of which were taken on Friday, and others a few days previously.

“Almost seven weeks have now passed since the Holuhraun lava eruption began. The eruption is continuing with few changes. The eruption is showing no signs of slowing down,” he wrote in the video’s description.

The Bardarbunga (Bárðarbunga) volcano is part of the second-tallest mountain in Iceland and located in the country’s Holuhraun lava fields - a volcanic system that spans some 200 kilometers by 25 kilometers.

This very interesting article, with lots of photos to along with the video clip, appeared on the Russia Today website at 8:48 p.m. Moscow time on their Thursday evening, which was 12:48 p.m. in New York.  It's courtesy of reader M.A.

Read more...

One simple reason why global stock markets are reeling

It is no mystery why global liquidity is evaporating. Central banks have turned off the tap. They have reduced net stimulus by roughly $125 billion a month since the end of last year, or $1.5 trillion annualized.

That is a shock for the financial system. The ratchet effect has been incremental, but relentless. We are finally seeing the consequences, with the usual monetary policy lag.

The Fed and People‘s Bank of China (PBOC) have stopped their two variants of global QE altogether (for now). Others have chopped their purchases of bonds by half or more. The Brazilians are net sellers, and in a sense they carrying out reverse QE. The Russians have just joined them again.

Fed tapering has taken out $85bn a month. The markets are having to go it alone as of this month, without their drip feed. Less understood is the effect of global reserve accumulation by the BRICS, emerging Asia, and the Petro-states. This has collapsed.

Here's Ambrose Evans-Pritchard, on behalf of his handlers, wringing his hands that the money printing is coming to a halt.  At the end, he echoes Jim Rickards when he states "...until the blinking starts at the Fed and the People‘s Bank. QE4 is creeping onto the table already."  It's the second offering of the day from Roy Stephens.

Read more...

Mark Carney launches investigation after real-time payment system crash delays house purchases

Mark Carney has launched an investigation into how one of the central pillars of the UK’s payments infrastructure collapsed for 10 hours, delaying hundreds of billions worth of deals.

The Bank of England Governor pledged to discover what had gone wrong and whether officials had responded properly after the enforced closure of the £277bn-a-day CHAPS payment system, which affected thousands of house purchases and major interbank money transfers.

The Bank said it would be carrying out “a thorough, independent review of the causes of today’s disruption”. “The review will cover the causes of the incident, the effectiveness of the Bank’s response and the lessons learned for future contingency plans. Its findings will be presented to Court which will then publish the full report and the response,” it added.

MPs had earlier in the day called on the Bank to explain the fault, attributed to a “technical issue related to some routine maintenance”.

This news item put in an appearance on the telegraph.co.uk Internet site at 9:30 p.m. BST on their Monday evening---and I thank West Virginia reader Elliot Simon for sending it our way.

Read more...

ECB Unleashes (Covered) Bond Buying Program, Sovereigns Sell O

Draghi, we have a problem. Just as Coeure 'promised' the ECB, according to he FT, began its bond-buying program this morning. However, peripheral sovereign bond-buying front-runners banking on the ECB greater fool to offload to are disappointed as they are go no easy money love. The initial program is covered-bond-buying (similar to U.S. MBS, but a considerably smaller market) and the ECB will reveal how much it has bought each Monday afternoon (starting next week). Greek bonds are suffering the most with 5Y yields at cycle highs once again and prices at lows (vanquishing all of Friday's gains).

As the Financial Times reports:

The European Central Bank has started to buy covered bonds, launching its latest attempt to stave off a vicious bout of economic stagnation in the eurozone.

The purchases are the first in a bond-buying programme that is expected to see the ECB place billions of euros of covered bonds and asset-backed securities on its balance sheet over the next two years in an attempt to revive lending and growth across the region.

The ECB confirmed that the central bank had begun purchasing the assets on Monday. The purchases of asset-backed securities are expected to start later this year.

The central bank will reveal how much it has bought every Monday afternoon, starting next week.

This story appeared on the Zero Hedge website at 8:40 a.m. EDT on Monday morning---and it's worth reading.  It's the second contribution of the day from reader U.M.

Read more...

Credibility meets compromise in Europe's bank stress test

When Europe announced its latest health check of top banks early last year it promised a "comprehensive assessment" of how well prepared they were to withstand another financial crisis.

In practice, a spirit of comprehensive compromise has been just as important. 

A series of Reuters interviews with officials, bankers and others involved in the European Central Bank's financial inspection of the euro zone's biggest banks shows that in the seven months since it began, the ECB has had to shoot down countless pleas from banks and national supervisors for special treatment.

At the same time, according to sources who spoke on condition of anonymity, supervisors have revised the way they value assets and banks have failed to provide all the data demanded - multiple compromises that could cumulatively threaten the tests' reputation as tough and consistent.

This Reuters article, filed from London, was posted on their website at 7:12 a.m. EDT yesterday---and I thank Harry Grant for sharing it with us.

Read more...

The Reckoning For Swiss Banks is Far From Over

IN 2008 Bradley Birkenfeld, an American working for UBS, blew the whistle on the giant Swiss bank's offshore operations, which had helped thousands of rich Americans to dodge their taxes.

Among the lurid details that he revealed was the use of encrypted laptops, the smuggling of diamonds in toothpaste tubes for clients, and evidence of bankers travelling to America on tourist visas to avoid arousing suspicion.

UBS was sent reeling by the revelations. In recompense, in 2009 it paid a $780m fine to the American government and turned over data to the authorities on more than 4,000 clients.

The biggest fish to be caught in the net is now about to have his day in court. On October 14th jury selection started in a federal court in Florida for the trial of Raoul Weil, who as head of UBS's global private-banking business was responsible for the division that had fallen foul of the authorities. In 2009 America issued an international arrest warrant for Mr Weil. He was nabbed last year at an Italian hotel, while on holiday with his wife, and was extradited to the United States, where he has been under house arrest.

This news story showed up on the businessinsider.com Internet site at 4:40 p.m. EDT on Sunday afternoon---and it's the second article in a row from Harry Grant.

Read more...

Deadly Ukraine Crash: German Intelligence Claims Pro-Russian Separatists Downed MH17

After completing a detailed analysis, Germany's foreign intelligence service, the Bundesnachrichtendienst (BND), has concluded that pro-Russian rebels were responsible for the crash of Malaysian Airlines Flight MH17 on July 19 in eastern Ukraine while on route from Amsterdam to Kuala Lumpur.

In an Oct. 8 presentation given to members of the parliamentary control committee, the Bundestag body responsible for monitoring the work of German intelligence, BND President Gerhard Schindler provided ample evidence to back up his case, including satellite images and diverse photo evidence. The BND has intelligence indicating that pro-Russian separatists captured a BUK air defense missile system at a Ukrainian military base and fired a missile on July 17 that exploded in direct proximity to the Malaysian aircraft, which had been carrying 298 people.

Evidence obtained shortly after the accident suggested the aircraft had been shot down by pro-Russian militants. Both the governments of Russia and Ukraine had mutually accused each other of responsibility for the crash. After a Dutch investigative commission reviewed the flight recorder, it avoided placing any blame for the crash. Some 189 residents of the Netherlands perished in the downing of Flight MH17.

The news item appeared on the German website spiegel.de at 8:08 a.m. Europe time on their Sunday---and I thank Jim Skinner for finding it for us.  A companion story appeared on the RIA Novosti website on Sunday evening Moscow time.  It's headlined "German Intelligence Agency Chief Says Kiev Falsified Data on MH17 Crash" and it's courtesy of reader M.A.

Read more...

Oil prices won’t recover above $100 – Russian Finance Ministry

Decreasing oil prices are “inevitable” and the chance they will exceed $100 per barrel is “unlikely” the Russia’s Finance Ministry said. However, the Russian budget can withstand lower prices.

“The market is biased in favor of excess supplies. That is why price reduction is inevitable; it will have a structural character. We are unlikely to see prices higher than $100 per barrel in the near future,” Maksim Oreshkin, the head of the Russian Finance Ministry's strategic planning department told RBC TV in an interview.

“In general, the current downward price movement is structural. Investments in oil production have increased dramatically in the past ten years,” Oreshkin said.

Russian officials have stressed there will be no sharp rise in Russia’s budget deficit, but the country's largest bank, Sberbank, says an oil price of $104 is required to balance the 2015 budget. A drop of prices to $80 per barrel could cost Russia 2 percent of GDP.

The Russians have to look no further than the Comex to discover why oil prices are where they're at.  This Russia Today article showed up on their Internet site at 11:19 a.m. Moscow time on their Monday morning, which was 3:19 a.m. in New York.  I thank reader 'h c' for digging it up on our behalf.

Read more...

Egypt signs with six international firms to dredge new Suez Canal

Egypt signed contracts with six international firms on Saturday to carry out dredging of the new Suez Canal, the flagship project in President Abdel Fattah al-Sisi's program to revive an economy battered by years of political turmoil.

The companies are National Marine Dredging Company of the United Arab Emirates; Royal Boskalis Westminster and Van Oord, both based in the Netherlands; Jan de Nul Group and Deme Group, both of Belgium; and U.S.-based Great Lakes Dredge and Dock Company.

Lieutenant General Mohab Memish, head of the Suez Canal Authority, announced the consortium at a news conference in Cairo alongside Prime Minister Ibrahim Mehleb.

Egypt hopes the new canal will more than double revenues from the waterway by 2023 to $13.5 billion from $5 billion. It also plans to develop 76,000 sq km (29,000 sq miles) in the area into an international industrial and logistics hub to attract more ships and generate income.

This Reuters news story, filed from Cairo, showed up on their Internet site at 2:30 p.m. EDT on Saturday afternoon---and I thank South African reader B.V. for bringing it to our attention.

Read more...

U.S. airdrops supplies to Kurds battling IS militants in Kobane

U.S. military aircraft dropped weapons, ammunition and medical supplies late on Sunday to Kurdish forces battling the Islamic State (IS) group, also known as ISIS or ISIL, in the Syrian border city of Kobane.

U.S. Central Command said C-130 cargo aircraft had made "multiple" drops of supplies provided by the authorities in Iraq’s autonomous region of Kurdistan that were "intended to enable continued resistance against ISIL's attempts to overtake Kobane".

Early on Monday, a spokesman for Kurdish forces in Kobane confirmed they had received a large quantity of weapons and ammunition.

The airdrops Sunday were the first of their kind and followed weeks of U.S. and coalition airstrikes in and near Kobane, which is located on Syria’s northern border with Turkey.

This news item put in an appearance on the france24.com Internet site yesterday sometime---and it's courtesy of Roy Stephens.

Read more...

The Iraqi Army Never Was

In a bloody ISIS attack on an Iraqi Army base just north of Fallujah on September 21, upwards of 500 government soldiers perished or disappeared, fleeing into the marshlands, the woods, or to the next base camp four miles away. Few were left behind alive, surrounded by militant fighters who by all accounts were supposed to be less equipped, less trained, and less organized than Iraq’s professional fighting force.

But the Iraqi security forces, into which American taxpayers poured some $25 billion over the course of a decade, had in the span of a summer, crumbled.

While pro-war critics blame the Iraqi military’s failures on the current administration for leaving the country too soon, American veterans and journalists who spoke with TAC say the army was corrupt, incompetent, and unmotivated from the beginning, and that top U.S. officials papered over this inconvenient fact for years in order to protect their commands and maintain public support for the U.S. intervention.

No surprises here.  This longish, but very interesting article appeared on theamericanconservative.com website back on Thursday, October 9---and is definitely worth the read if you have the time and/or the interest.  It's the second offering of the day from reader Dan Lazicki.

Read more...

Iran acts to comply with interim nuclear deal with powers: IAEA

Iran is taking further action to comply with an interim nuclear agreement with six world powers, a monthly U.N. atomic agency report showed, a finding the West may see as positive ahead of a November deadline for clinching a long-term deal.

The report by the International Atomic Energy Agency (IAEA), seen by Reuters, made clear that Iran is meeting its commitments under the temporary deal, as it and major powers seek to negotiate a final settlement of a decade-old nuclear dispute.

It said Iran had diluted more than 4,100 kg of uranium enriched to a fissile concentration of up to 2 percent down to the level of natural uranium. This was one of the additional steps Iran agreed to undertake when the six-month accord that took effect early this year was extended by four months in July.

Refined uranium can be used to fuel nuclear power plants, Iran's declared goal, but can also provide the fissile core of a nuclear bomb if processed to a much higher degree, which Western states fear may be the country's ultimate aim.

This Reuters article, filed from Vienna, appeared on their Internet site at 1:36 p.m. EDT on Monday---and it's another contribution from reader U.M.

Read more...

Saudi, Kuwait Seen Curbing Oil Output at ’Opportune Time’

Saudi Arabia and Kuwait halted production at a jointly run oil field late this week, a move that could help ease a supply glut that has pushed global prices down 25 percent.

The 300,000-barrel-a-day Khafji field, located in the neutral zone between the two countries, was being shut because of environmental concerns, a person familiar with Saudi Arabian oil policy said yesterday, who asked not to be identified because the information isn’t public.

The shutdown comes as Saudi Arabia and other OPEC members face increasing pressure to scale back production while supply expands from the U.S. and other countries and demand growth slows. Asia’s oil market has become particularly flooded as the U.S. imports fewer cargoes.

This oil-related Bloomberg news item was co-filed from San Francisco, Manama, Bahrain---and Houston.  It appeared on their Internet site at 7:20 p.m. Denver time last Friday evening---and it's the second article I borrowed from yesterday's edition of the King Report.

Read more...

China sets tougher restrictions on illegal mining, exporting of rare earths

China is stepping up efforts to restrict illegal mining and exporting of rare earths with a five-month campaign that ultimately aims mainly to avoid a further plunge in prices.

Launched earlier this month and until March 31, five official bodies will work together to investigate and punish illegal miners and smugglers of the highly coveted elements.

Provincial and city governments will supervise the effort, Investor Intel reports.

This is not the first time China attempts to streamline the rare earth industry by giving control to state-owned miners and setting production quotas on a small number of authorized companies.

This article appeared on the mining.com website on Monday---and it's another offering from reader M.A.

Read more...

All the world’s gold to be confiscated and buried in Switzerland by 2020 argues Jim Rickards

In what pretends to be a history looking back from the future ‘Currency Wars’ author and fund manager Jim Rickards argues that by 2020 all the gold of the G-20 nations will be confiscated and buried in a former nuclear bunker under a mountain in Switzerland to take it out of the global financial system.

This is the conclusion to the astonishing tour de force article that kicks off his new monthly newsletter ‘Rickards’ Strategic Intelligence’ for Agora Financial, publisher of highly successful financial newsletters like Chris Mayers’ ‘Capital & Crisis’. Has the normally sober and thoughtful Mr. Rickards lost his marbles?

I must confess to having my doubts on reading his first issue with one absurd conclusion leading to another and then to a totally unrealistic world gold confiscation scenario. How would that happen? The G-20 meetings struggle to agree on a final communique. How could they agree something like that?

Mr. Rickards doesn't stop there. In his world not only does money die and cease to exist but there is a sort of death of capitalism that Marx prescribed and Stalin tried to implement without notable success. There are no markets, bonds nor money by 2024 and equality rules.

WTF!  Whatever Jim is smoking, I don't want any of it.  And don't look to me for answers on this one, dear reader, as I'm just as much in shock as you are.  This amazing commentary appeared on the arabianmoney.com Internet site on Sunday evening---and it is certainly a must read.  I thank Dr. Dave Janda for sending it along.

Read more...

Taking Your Gold for “The Greater Good”

But returning to the subject of a crash in the paper-gold market, this suggests that the spin that allows the banks of the world to simply steal all deposits over €100,000 could easily be applied to a similar, ongoing banking scam in the paper-gold market.

Let’s say that, rather than wait for the Emperor’s new clothes to be seen to be an illusion, the banks of the world decide to preempt this embarrassment in a proactive manner. Let’s say that, with the support of their friends in the governments, an announcement is made to the public that a decision has been reached that will aid tremendously in saving the “essential” banks. And—here’s the best part—it would not impact the “little man” who has already had to bear so much abnegation as a result of the greed of the rich.

The announcement states that the banks have been given the go-ahead to simply cancel the paper-gold certificates that they have sold. This will enrich the banks by billions of dollars, and the only losers will be the greedy rich who have so much money to burn that they have purchased gold certificates.

Were the banks to do this, they would, instead of being vilified for selling assets that they did not possess, be praised for taking affirmative action for “The Greater Good.”

This commentary appeared on the internationalman.com Internet site on Monday.

Read more...

In Silver Doctors interview, GATA secretary discusses developments in market manipulation

Interviewed for about a half hour last week by Silver Doctors, your secretary/treasurer discussed recent developments in market manipulation, speculated that gold will be revalued overnight by major central banks as part of a general world currency revaluation, and cautioned that China's drive to obtain gold isn't intended to establish a free market in gold but to wrest control of the gold market from the United States.

The interview was conducted last Wednesday---and the audio interview, which runs for 32:17 minutes, appeared in a GATA release on Saturday.  It's worth your time.

Read more...

Mad about yellow: India's love affair with gold

We worship it, buy it for investment, wear it as jewellery, weave it into cloth and even eat it. India's love affair with gold crosses the boundaries of religion and also class — and reaches its zenith in the run-up to Diwali.

"We buy at least a small gold coin in our family every Dhanteras and get the house repainted after Dussehra to welcome Goddess Lakshmi home," says Kandivali resident Ravindra Dave.

Dave is not alone, of course. Most Hindu families work towards purchasing gold at this time. "The ritual is akin to inviting Lakshmi, the goddess of wealth and prosperity," explains Anant Joshi, a priest from Bhuleshwar. "While some prefer jewellery, most buy gold coins with Lakshmi embossed on the front and her symbol, the Shri Yantra, embossed on the other side. Some have both Lakshmi and Lord Ganesha, the remover of obstacles, embossed on the coins."

This gold-related news article, filed from Mumbai, showed up on the dnaindia.com Internet site at 9:09 a.m. IST on their Sunday morning.  It's another offering from reader U.M.

Read more...

Government to Re-Impose Gold Import Curbs to Check Trade Deficit

Barely months after gold import rules were eased, the government is looking to re-impose curbs as the country's insatiable appetite has led to a surge in the yellow metal coming into India, threatening to undermine the improvement in external balances.

The finance ministry's revenue department has flagged the issue and asked the Department of Economic Affairs and the Reserve Bank of India to review the May 21 relaxation in the import rules issued by the latter.

The so-called 80-20 rule was relaxed in May by the RBI at the behest of the finance ministry after jewellers, bullion dealers, authorised dealer banks, and trade bodies sought easier rules. Under the 80-20 scheme, nominated agencies were allowed to import gold on the condition that 20 percent of the import would be exported. The easing of rules meant more entities were allowed to import gold.

The trade deficit worsened to an 18-month high of $14 billion in September following a 450 percent rise in gold imports as importers rushed to take advantage of lower prices. "Gold imports have risen since the norms were relaxed....There is a concern," a finance ministry official said. "We have written to the DEA and the RBI."

This article, filed from New Delhi, put in an appearance on The Economic Times of India website at 4:02 a.m. India Standard Time on their Monday morning---and I found it posted on the gata.org Internet site.

Read more...

Reserve bank of India will not change gold import rules, says sources

Reserve bank of India will not change its gold import rules, sources with knowledge of the matter said, responding to a report that the world's second-largest consumer of the precious metal was keen to limit imports.

The central bank has already eased some import controls by allowing seven trading houses to import the metal, driving a sharp jump in overseas buying despite a record import duty of 10 percent.

A surge rise in gold imports widened the trade deficit to an 18-month high of $14.25 billion in September, creating concerns for the new government of Prime Minister Narendra Modi, an unidentified Finance Ministry official told the Economic Times newspaper.

The ministry also sent a letter to the central bank seeking a review of the May relaxations, according to the report. But two officials familiar with the central bank's policies told on Monday it was not considering any change.

This article, also from the Economic Times of India appeared on their website at 7:47 p.m. EST on their Monday evening---17 hours before the previous Times of India article posted above.  It's the final offering of the day from Manitoba reader U.M.---for which I thank her.

Read more...

Koos Jansen: The Chinese precious metals market is on fire

China's gold demand, as signified by off take from the Shanghai Gold Exchange, has reached "extraordinary" levels in recent days, while silver is growing shorter in supply as well, according to gold researcher and GATA consultant Koos Jansen.

Jansen's analysis is headlined "The Chinese Precious Metals Market is on Fire" and it was posted on the Singapore Internet site bullionstar.com at 11:07 p.m. local time on their Sunday evening.  It's worth reading---and it's another gold-related item I found in a GATA release yesterday.

Read more...

 

¤ The Funnies

The first photo below is one I took a couple of Sunday's ago at the usual location, but never bothered to download off the camera until this past Sunday evening.  It's a female common merganser with Canada Geese all around.  It was taken from over 100 meters away---and even though I used a 400mm telephoto lens, I still had to crop the heck out of it to get the bird to appear a decent size---and it's at the limit of what I consider to be an 'acceptable' shot.

Sponsor Advertisement

Cypress Development Corp. is a Canadian gold, silver and base metals exploration company developing projects in Red Lake, Ontario, Canada, and in Nevada, U.S.A.

Cypress holds a 100% interest in the approximately 1140 acre Gunman Zinc-Silver Project located in White Pine County, northeast of Eureka, Nevada. Three RC drill programs totaling approx. 38,000 feet have been completed by Cypress on the Gunman project with significant grades between 5% to 33% per ton zinc and 0.5 to 15.0 oz per ton silver over considerable widths encountered. Zinc could represent the next big base metal play due to ongoing demand growth and the closures of 3 major mines in Canada, Australia and Ireland and not enough supply coming on stream from new projects. Sentiment could shift towards zinc, with prices potentially rallying in anticipation of tightening supplies. Please visit our website for more information.


 
 

¤ The Wrap

As I mentioned previously, JPMorgan’s concentrated short position in COMEX silver is now lower than it has been since acquiring Bear Stearns in early 2008. If anything, JPM’s COMEX silver short may even be lower than I have calculated, simply because it is no longer that large relative to the holdings of the three other big shorts. With just over 34,000 contracts held short by the big 4, once you subtract JPM’s 10,000 short contracts, the remaining three shorts average 8,000 contracts each. This is a far cry from years earlier when JPMorgan singlehandedly held as many as 40,000 contracts of COMEX silver net short and represented close to 70% of the big 4’s total silver shorts. Both the longer term and recent trends seem to indicate JPMorgan may not wish to remain the prime silver manipulator as it clearly had been in the past.

Throw in my previous speculation that JPMorgan has been buying physical silver over the past three and a half years with a reckless abandon and may, in fact, be Mr. Big when it comes to buying in SLV and in Silver Eagles; it is easy to conclude that JPM may hold an extreme net long position in silver despite holding 10,000 COMEX contracts (50 million oz) short. As such, it would appear JPMorgan could be positioned much better for an upside move in silver than at any time in the bank’s history, both before and after Bear Stearns. And as a bonus to the bank, none of its suspected holdings on the long side of silver would appear to be reportable; thus keeping the holdings and any eventual gains undisclosed. - Silver analyst Ted Butler: 20 October 2014

With such low volume, I'm not prepared to read much into yesterday's price action in gold or silver, although seeing their respective rallies get capped either at the Comex open, or the London p.m. gold fix, should have come as no surprise, as the New York bullion banks are up and running during those hours.

Here are the 6-month charts for the 'Big 6'---and there's not much to see in the four precious metals, but both copper and West Texas Intermediate were under selling pressures again yesterday.

Gold came within a dollar or so of closing above its 50-day moving average yesterday---and is now at that point as of 12:30 p.m. Hong Kong time on their Tuesday afternoon.  It will be interesting to see what JPMorgan et al do at this point as the Managed Money starts to cover their short positions.  Will 'da boyz' let the price run, or will we see a 'failure' at this point?  Beats me, but we won't have long to wait to find out.

And as I type this paragraph, the London open is an hour and forty minutes away.  The gold price didn't do much in morning trading in the Far East on their Tuesday, but did add a couple of dollars to the price with a tiny rally that started shortly after 11 a.m. Hong Kong time and, as I mentioned above, is now at, or a hair above, its 50-day moving average.  Silver, which got sold down about 15 cents by 11 a.m. Hong Kong time is now a nickel above the unchanged mark.  Platinum and palladium are a few dollars higher as well.  The volume in gold is already very decent at 19,000 contracts---and silver's volume is about 3,800 contracts.   The dollar index, which had made it just above the 85.00 mark by the close of trading on Monday in New York, is now down 20 basis points.

Today, at the close of Comex trading, is the cut-off for this Friday's Commitment of Traders Report, so I'll be paying particular attention to the price action in all of the 'Big 6' commodities as the Tuesday trading session in New York plays out, especially in gold.

As I hit the 'send' button on today's column at 4:55 a.m. EDT, I see that gold rallied up until shortly before 9 a.m. in London trading---and has been trading flat since.  But it's much too soon to tell if that's the end of the 'rally' or not.   Volume has now blown out to 38,000 contracts, so it's obvious that even this tiny rally is being met with a blizzard of Comex paper---and I'm certainly not happy about that.  The silver price is now back to unchanged, but has been trading mostly lower since its 11 a.m. low tick in Hong Kong.  Volume is now up to 6,200 contracts.  Platinum is up 8 dollars----and palladium is currently up two bucks.  The dollar index is down 15 basis points.

And as I head off to bed, I'd like to mention Marin Katusa's new book one more time.  Marin is the Chief Energy Investment Strategist here at Casey Research---and the book is titled "The Colder War: How the Global Energy Trade Slipped from America's Grasp".  There's a 1-minute video clip about it at the youtube.com Internet site---and you can watch it by clicking here.  But the real 'juice'---along with how to pre-order it---is linked here.

It could prove to be an interesting day for gold---and the price action during the New York session could tell us a lot about what may happen going forward, at least in the short term.

See you here tomorrow.