I wouldn't read much into yesterday's price action in gold, as it was just another day off the calendar as Ted Butler is wont to say.
The low came around 12:30 p.m. in London local time...7:30 a.m. in New York...and the gold price attempted to rally from there.
The strange event of the day was the spike high tick [$1,735.50 spot] that came at precisely 2:00 p.m. Eastern time in the New York electronic market. It, along with every other tiny rally during the Comex trading session, got cut off at the knees before they could really develop into anything.
Gold closed at $1,727.60 spot...up $2.70 on the day. Net volume was pretty light at around 130,000 contracts...about 15 percent higher than on Tuesday.
Here's the New York Spot Gold [Bid] chart on its own. The spike at 2:00 p.m. is very noticeable here. I'm not sure it means a whole heck of a lot, put you hardly ever see this kind of price action in the New York electronic market.
The silver price action on Wednesday had a lot more structure to it...although its overall price pattern was virtually the same as gold's. The low, like gold [around $32.35 spot], came at 12:30 p.m. GMT in London...and the subsequent rally got hit at the 2:00 p.m. spike high [$33.05 spot] in New York electronic trading. The rally from the low to the high was around 70 cents.
Needless to say, the silver price got sold off after that...and closed at $32.74 spot...up 24 cents. Net volume was around 35,000 contracts...about 1,000 less than Tuesday.
I was going to post the New York Spot Silver [Bid] chart at this point but, once again, it's M.I.A. on Kitco's website.
It should be obvious once again that without the intervention of JPMorgan and friends, both silver and gold would have finished materially higher on Wednesday...and that applies to Monday and Tuesday New York price action as well.
The dollar index spent the second day in a row chopping around mostly above the 81.00 mark...and finished the day at 81.12.
Despite the fact that the gold price traded mostly in positive territory yesterday, the gold stocks turned out to be just stocks, as they got caught up in the sell-off of the general equity markets as well. Their price path mirrored the DOW almost exactly...and when the smoke cleared, the HUI was down 4.59%...closing almost on its low of the day.
The silver stocks got smoked as well...and Nick Laird's Silver Sentiment Index closed down 4.97%.
The CME's Daily Delivery Report showed that 14 gold and 1 silver contract were posted for delivery on Friday from within the Comex-approved depositories.
Over at GLD, an authorized participant withdrew 77,512 troy ounces of gold...and there were no reported changes in SLV.
There was a small sales report from the U.S. Mint. They sold 5,500 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and 500 silver eagles.
There was big activity over at the Comex-approved depositories on Tuesday. They reported receiving 1,145,782 troy ounces of silver...and shipped 1,514,655 troy ounces out the door. The link to that activity is here.
I have no charts today, so here are a couple of 'critter' photos that Nick Laird sent me over the last few days. The first is an Australian Bushturkey that he photographed from his front verandah. Unlike the domesticated variety, this fellow can fly and, despite its name and their superficial similarities, the bird is not closely related to the American turkey.
The spider below is not related to Shelob...but looks like it could be. It's a Golden silk orb-weaver...and in real life is about 15 cm [6 inches] across...which gives you some idea of the size of the web they spin. I saw one of the South American varieties of this spider when I was visiting Pucallpa in Peru...and it gave me the horrors. A big spider here in Canada would be 2 cm.
I have the usual number of stories for a week day, so I hope you have the time to at least skim the parts that I've cut and paste from each one. The first story could have come right from the front page of the National Enquirer...but it's actually from The Telegraph.
Twin Florida socialites who are at the centre of the David Petraeus affair gained intimate access to America's military and political elite through their high-rolling lifestyles even as they quietly racked up millions of dollars in debts and credit card bills.
Jill Kelley, whose complaint over threatening emails prompted the FBI inquiry that has ensnared two top generals, is mired in lawsuits from a string of banks totalling $4 million (£2.5 million), court filings obtained by The Daily Telegraph in Florida show.
Meanwhile Mrs. Kelley's identical twin Natalie Khawam – who obtained testimonies to her good character from both Gen Petraeus and Gen John Allen during her own separate legal battle – declared herself bankrupt earlier this year with liabilities of $3.6 million, filings show.
Someone is either going to make a movie out of this, or maybe even a television series...and I'm sure that someone has already started on the first of many books. This will get much uglier before this story breaths its last. I found it in yesterday's edition of the King Report...and the link is here.
In the run-up to negotiations that begin later this week over averting the looming fiscal cliff, the White House Tuesday made clear that only a balanced plan that does not include tax cuts for the wealthy will secure President Barack Obama’s approval, and urged immediate action on extending the tax relief for middle class Americans.
In a daily press briefing that was dominated by questions about the ongoing soap opera surrounding disgraced former CIA Director David Petraeus, Press Secretary Jay Carney laid out what the president’s parameters will be heading into talks with senior lawmakers that kick-off Friday.
Obama is committed to extending the Bush-era tax cuts for 98% of Americas, Carney said, but will not sign a bill that extends the Bush-era tax cuts for the top 2% — and such a bill would not pass the Senate — because “it’s not good policy.”
This story was posted on the forexlive.com Internet site yesterday...and is the second in a row that I borrowed from yesterday's King Report. The link is here.
The budget deficit rose in October, the first month of fiscal year 2013, as looming negotiations over expiring tax cuts and imminent spending reductions dominated the post-election political landscape.
The Treasury said on Tuesday the October deficit was $120 billion, larger than economist forecasts for a $114 billion gap and up from $98 billion in October of 2011.
Growth in expenditures outpaced rising receipts, deepening the deficit. Outlays grew to $304 billion from around $262 billion in the same month last year while receipts rose to $184 billion from $163 billion.
This Reuters story from Tuesday was posted on the news.yahoo.com Internet site yesterday...and I thank Scott Pluschau for sending it. The link is here.
In 2011, the United States emerged from a damaging budget battle with a downgrade of its pristine triple-A rating for the first time in history. In 2013, it could be dealt even a bigger blow.
The battle over avoiding the so-called fiscal cliff is the first of a likely series of partisan confrontations in Washington in the coming year that, if not resolved, could cause more downgrades of the U.S. credit rating.
"The rating is in the hands of policymakers," said John Chambers, chairman of Standard & Poor's sovereign rating committee, the agency that downgraded the United States in August 2011.
In interviews with Reuters since the November 6 election, all three major rating agencies said cutting the U.S. debt rating - still among the world's strongest - is highly likely if next year's budget process replays 2011's debt ceiling debacle or if the seemingly simple goal of cutting deficits goes unmet.
No surprises here. This Reuters story showed up their website very late yesterday afternoon Eastern time...and I thank Roy Stephens for his first offering in today's column. The link is here.
Community banks say they may be pushed out of the residential mortgage market, leaving it in the hands of a few lending giants, because of an effort by global regulators to make banks hold more in their reserves in the event of a crisis.
The move will hit smaller banks harder than big ones, lessening their ability to provide mortgages and other loans to consumers, community bank advocates say.
Their complaints, which will be aired during a hearing on Capitol Hill Wednesday afternoon, follow long-standing concerns that out of the crisis a few behemoths, such as JPMorgan Chase and Wells Fargo, are dominating banking.
This story showed up in The Washington Post on Tuesday...and is Donald Sinclair's first offering of the day. The link is here.
Congressional investigators on Wednesday took aim at a former colleague, Jon S. Corzine, blaming the onetime senator’s risk-taking at MF Global for accelerating the brokerage firm’s demise.
In excerpts from a broader MF Global report that is to be released on Thursday, Republican members of a Congressional panel outlined a withering critique of Mr. Corzine’s 19-month reign at the firm. Mr. Corzine, a former Democratic senator and governor from New Jersey, resigned as MF Global’s chief executive last fall after the firm raided customer accounts during a futile fight for survival.
The attack on Mr. Corzine, leveled by Republicans on the oversight panel of the House Financial Services Committee, appeared to delineate political battle lines that have emerged after MF Global’s collapse. Democratic members declined to endorse the report, saying they needed additional time to study the findings.
What a surprise! This story showed up on The New York Times website early yesterday afternoon Eastern time...and I thank Washington state reader S.A. for being the first one through the door with this article. The link is here.
U.S. exchange operator CME Group has been granted more time to report trading data by the Commodity Futures Trading Commission after it sued the regulator in a spat over compliance that has split the derivatives industry.
The CME is suing the markets watchdog, seeking to prevent the enforcement of rules that require it to report swaps transaction data to a third party and which were due to go into effect on Tuesday. The CME wants to rely on its own data warehouse, or Swaps Data Repository, instead, and is seeking permission from the CFTC to operate one.
The CFTC has now granted the CME until December 4 to comply with the rules but it remains unclear whether this extension means it is likely to gain permission for its own data warehouse.
I ran this story past Ted Butler...asking him "How significant is this in the grand scheme of things?' His reply..."The main significance is that it confirms that the two main adversaries to the CFTC are the CME Group and JPMorgan Chase." Well, dear reader, why should we be surprised about that? This Reuters story was picked up by the finance.yahoo.com Internet site yesterday...and I thank Scott Pluschau for his second offering in today's column. I consider it a must read...and the link is here.
U.S. Rep. Ron Paul, the iconic libertarian congressman from Texas, has delivered what will most likely be his final address to Congress.
In a sprawling, 52-minute speech to the House chamber, Paul lambasted U.S. government, politicians, and special interests, declaring that the American people must return to virtue before the government allows them to be free, and that the Constitution has failed to limit the scope of an authoritarian bureaucracy.
"Our Constitution, which was intended to limit government power and abuse, has failed," Paul said. "The Founders warned that a free society depends on a virtuous and moral people. The current crisis reflects that their concerns were justified."
The ABC News story, plus a link to the embedded video, is posted over at the gata.org website...and the link is here.
Douglas County, Colorado: Horses that have nearly starved to death has become a problem, and experts say it will only get worse as the cold days of winter move in.
Many horse owners say they just can’t afford to feed the animals because of sky-high hay prices, which are elevated due to the drought in Colorado and across the nation.
Drought conditions this year range from dry to exceptional for nearly every state west of the Mississippi River. That means less hay has been grown and prices are at three times the normal level.
This CBS story was filed from Denver on Tuesday...and I thank Scott Pluschau for this third offering in today's column. The link is here. [Note: I had some difficulties getting this web page to load properly. - Ed]
Large multinationals, many of them based in the United States, are masters at avoiding taxes on profits made abroad. Apple, for example, paid just $100 million in taxes in 2010 on overseas profits of $13 billion. But Germany would like to put a stop to the practice, and is finding some influential support.
Corporations like Pepsi, Starbucks and Intel sell their products around the world, and seek to establish reputations for being environmentally conscious, progressive and socially responsible. But when it comes to allowing the government to collect a suitable portion of their corporate profits, the icons of global capitalism prove to be antisocial in the extreme.
According to data compiled by independent tax experts, US technology giant Apple paid a paltry $130 million (€102 million) in taxes on foreign earnings of about $13 billion in 2010. Microsoft paid only $1.7 billion on $15 billion in foreign earnings, while software giant Cisco paid a tax bill of $400 million on foreign earnings of more than $8 billion.
This story showed up on the German website spiegel.de yesterday...and I thank Donald Sinclair for sharing it with us. The link is here.
Germany has a problem. Now that euro-zone finance ministers have agreed to grant Greece another two years to meet its budgetary goal of achieving a structural surplus of 4.5 percent, attention has turned to ensuring that the crisis-wracked country reduces its overall debt load. And the International Monetary Fund proposal to slash publicly held Greek debt could cost Berlin up to €17.5 billion ($22.3 billion).
Even worse, such a loss could endanger German efforts to balance its own budget by 2014 -- and would make unwanted headlines in coming months just as Chancellor Angela Merkel enters the heart of campaign season ahead of general elections next September.
Berlin, not surprisingly, is opposed to such plans. "Without speculating, we should concentrate on other solutions," German Finance Minister Wolfgang Schäuble said on Tuesday in Brussels. His French counterpart Pierre Moscovici supports the German position.
This is another story from the spiegel.de Internet site yesterday...and another offering from Donald Sinclair. The link is here.
Millions of Europeans joined together in general strikes and demonstrations on Wednesday to protest the strict austerity measures undertaken by their countries. In Portugal and Spain, hard hit by the debt crisis, locals conducted a 24-hour general strike that largely paralyzed public infrastructure, suspending train service and grounding hundreds of flights, in addition to shutting down factories.
Most of the protests remained peaceful, but in Madrid there were some violent clashes between demonstrators and police. Officers at Cibeles Square in the city center fired rubber bullets and used batons against protesters, reporting 34 injuries and the arrest of more than 70 protesters.
Officials warned the situation could escalate further on Wednesday night, with major protests planned for Madrid and Barcelona. A similar demonstration had also been planned for Portugal's capital city, Lisbon.
This Roy Stephens offering was also posted on the spiegel.de Internet site yesterday...and the link to that story is here.
Hamas top military leader Ahmed Al-Jabari has been killed in an Israeli targeted air strike, and now Israel may go a step further and put boots on the ground.
The strike was part of the Israeli Defense Force's (IDF) major bombing campaign aimed at crippling Hamas forces in the Gaza strip.
An IDF spokesman told Haaretz, "[The] Israeli military is ready for ground operation in Gaza, should there be need for an incursion."
Japan's main opposition leader Shinzo Abe, seen as the most likely next premier if a snap election is held next month, called on the central bank to print "unlimited yen" to achieve a new inflation target.
In comments on Wednesday, he didn't spell out what the inflation target should be. But in recent weeks he has called for the Bank of Japan to achieve 3 percent inflation, three times higher than the current target, after years of deflation pressures.
Abe's remarks keep the Bank of Japan under pressure ahead of its two-day rate review next week when its policymakers may debate the need for further economic stimulus to try to lift an economy widely seen as in recession. The economy contracted 0.9 percent in the September quarter, data showed this week, and many analysts expect another contraction in the current quarter.
Are we having fun yet? It's a rush to see who melts their printing presses down first. This Reuters story showed up on the cnbc.com Internet site very early Wednesday morning Eastern time. I thank West Virginia reader Elliot Simon for sharing it with us. It's worth skimming...and the link is here.
The first blog is with Nigel Farage...and it's headlined "This is My Single Greatest Fear". The second one is with Rick Rule and it bears the title "Turkey Pushes for Gold & Global Gold Production to Plummet". And lastly is this blog with Dr. Stephen Leeb...and it's entitled "This Will Be the Most Frightening Period of My Lifetime".
Christie's auctioned off the Archduke Joseph Diamond for nearly $21.5 million Tuesday night, a world auction record price per carat for a colorless diamond.
The Archduke Joseph Diamond was the first of two out-of-this world diamonds being auctioned off this week in Geneva. Sotheby's on Wednesday will auction what it calls an exceptionally rare fancy deep blue briolette diamond of 10.48 carats expected to get up to $4.5 million.
The Archduke Joseph Diamond went for $21,474,525 including commission at Christie's auction. That was well above the expected $15 million and more than triple the price paid for it at auction almost two decades ago. The 76.02-carat diamond, with perfect color and internally flawless clarity, came from the ancient Golconda mines in India.
This AP story was filed from Geneva on Tuesday...and was picked up by the yahoo.com Internet site. The photo alone makes it worth the trip...and I thank Scott Pluschau for 'digging' this story up. The link is here.
This story is a history lesson from just about 70 years ago...and if you haven't heard of this before, then it's a must read for sure.
“In Saudi Arabia, gold coins have always been important in the monetary system. For years, in fact, paper money was unacceptable, and to pay royalties to the government, Aramco once flew kegs of both gold and silver coins to Jeddah. In 1952, when the Saudi Arabian Monetary Agency (SAMA) was formed, the first coin issued was a Saudi sovereign – a gold coin equal in weight and value to the British sovereign – that was later demonetized and today sells for about $124.
To collectors, however, the most interesting Saudi gold coins weren’t coins at all; they were “gold discs”. Similar to coins, they were minted by the Philadelphia Mint in the 1940’s for Aramco, and bore, on one side, the U. S. Eagle and the legend “U. S. Mint, Philadelphia, USA” and, on the other side, three lines on the fineness and weight. They looked like coins, they were used as coins, but, technically, they weren’t coins.
The story was posted on the coinlink.com Internet site back in March of 2010...but that takes away nothing from its historical value. I thank Carl Lindfors for bringing it to our attention...and the link is here.
Platinum and palladium will return to the biggest shortages in at least a decade this year as strikes and safety stoppages in South Africa and falling sales from Russia cut supplies, Johnson Matthey Plc said.
Labor disputes in South Africa will help cut platinum output to the least since 2000 and leave the market short by 400,000 ounces, the most since 2002 and compared with last year’s surplus of 430,000 ounces, London-based Johnson Matthey said today in a report. Palladium supply will lag demand by 915,000 ounces, the most since 2000 and compared with 2011’s glut of 1.26 million ounces, on lower output from mines and stockpiles in Russia and record usage from automakers.
Unrest over pay erupted into fighting and deaths at Lonmin Plc's Marikana mine and spread to other operations this year in South Africa, the largest platinum producer. Miners in Russia are extracting less palladium from rock at a time when state inventories are probably almost depleted, Johnson Matthey said. Manufacturers are using more of the metal in pollution-control devices as sales, particularly for gasoline models, increase.
This Bloomberg story was filed from London sometime on Tuesday...and I thank Elliot Simon for finding it for us. It's worth reading...and the link is here.
It’s a case of whether you want to hear the good news first or the not-so-good news. India is right in the middle of its festive season, Diwali - the festival of lights, and reports coming in from all quarters suggest that new gold sales milestones may well be set this year.
One gold association has noted that the sale of gold jewellery this season has jumped up by over 30% as compared to the same period last year. That's the good news.
The not-so-good story emerged from India’s rural areas, normally a market with its own set of demands.
The high price of the yellow metal coupled with high inflation and a poor monsoon this year ensured that demand from rural India was unable to keep pace with its urban counterpart. Even the small, downward correction in the price of gold right before the start of the festive season failed to bolster sales.
This story was posted over on the mineweb.com Internet site yesterday...and the link is here.
Global gold demand dropped 11 percent in the three months to September from record levels seen in the same period last year, dampened mainly by fading Chinese fervour as its economy slowed, with stronger Indian demand stemming a larger fall, the World Gold Council said.
Chinese gold consumption fell 8 percent in the July to September period to 176.8 tonnes, the WGC's quarterly demand trends report showed on Thursday, with both jewellery and investment demand hurt by a slowing economic growth.
Data last month showed China’s economy slowed for a seventh straight quarter in the July to September period. Chinese bar and coin investment dropped 12 percent to 53 tonnes, while jewellery buying fell 5 percent to 123.8 tonnes.
I wouldn't believe a word that comes out of that pathalogical anti-gold organization that bears the name World Gold Council. However, like the previous story, it's necessary to run stories from the Dark Side of The Force...as I don't want to be branded a Polyanna-type cheerleader. I found this Reuters story, which was posted early this morning in London, on the mineweb.com Internet site...and the link is here.
Hong Kong's Chinese Gold & Silver Exchange Society (CGSE) is in initial talks with Chinese officials to set up a bonded warehouse on the mainland in a bid to boost business with exchanges and traders there, its president said on Tuesday.
The CGSE is a leading physical gold marketplace in Asia. President Haywood Cheung said the CGSE was seeking to set up a warehouse for gold and silver in Qianhai, a new financial zone in the southern city of Shenzhen.
"We are definitely interested in setting up warehouses in the mainland," Cheung told Reuters in an interview. "Officials for Qianhai have said that initially this can be considered and is a good idea."
I found this Reuters story in a GATA release yesterday. It was filed from Hong Kong on Tuesday...and the link is here.
Great Panther Silver Limited, (TSX: GPR NYSE.A: GPL)headquartered in Vancouver, Canada, is a profitable primary silver producer operating two 100% owned mines in Mexico. Over 94% of revenues are derived from unhedged precious metals production with approximately 74% generated from silver sales and 20% from gold. Since entering production in the first quarter of 2006, the Company has seen five consecutive annual increases in revenues and provides strong leverage to future rises in precious metals prices.
The Company has also been growing its resource and reserve base at both 100% owned operations. A new resource/reserve estimate is expected for the Guanajuato Mine Complex and the San Ignacio Project in the second quarter of 2012 and a new resource/reserve estimate for the Topia Mines during the third quarter of 2012. Great Panther continues to replace mined ounces, grow resources and reserves at both operations, and is targeting a 10 year mine live at each.
I feel quite comfortable predicting that gold prices will, within the next year, be at $2,000...perhaps higher. - Barrick Gold CEO Jamie Sokalsky
The gold price didn't do much of anything on Wednesday...and it's been more or less like that ever since this week began. Volumes have been very light as well. As I said yesterday, this has to change, as all the owners of Comex December futures and options contracts have to sell, roll, or stand for delivery between now and the end of the month...and there are mountains of these contracts still on the books. I would guess that the real serious activity won't start until next week. Whether or not we get a big engineered price decline between now and the end of the month, is still debatable...but I'm always on the lookout for such an event.
I wasn't enamoured with the share price action yesterday. Even though the Dow was down, it wasn't down that much...and both gold and silver spent most of the day in positive territory...and closed in the black as well.
All of us old warriors in the GATA camp will have our hi-gain antennas turned up in anticipation of a price smash...because in the 'old days'...an out-of-blue-for-no-good-reason drop in the precious metal equities, was pretty much always a precursor to a waterfall decline in metal prices. Will that be the case this time? Beats me...but if it is, I won't be surprised.
Tomorrow we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday...and I'll be more than interested to see if last Wednesday's monstrous volume spike had any internal effect on the Commercial net short positions in both metals.
Nothing happened price or volume wise in either precious metal during Far East trading on their Thursday...and that situation has carried over into the first couple of hours of London trading as well. The dollar index is flat. However, I expect the Comex trading activity to be quite different. As I hit the 'send' button on today's column at 4:45 a.m. Eastern time, gold is down a couple of bucks...and silver is down a bit over a dime.
I hope your day goes well...and I'll see you here tomorrow.