Spot Gold
$ 1,374.68
$ -0.86 (-0.06%)
Spot Silver
$ 22.41
$ 0.00 (0%)
inthisissue
The gold price jumped up about five bucks right at the 6:00 p.m. Sunday evening open in New York, but that rally got crushed immediately by the high-frequency traders...and in less than a hour, gold was down a bit over twenty bucks from its Friday close.
After that, the gold price chopped around the $1,345 spot price mark until the London open. Then a rally began that tried to break out a couple of times before it really took off at noon in New York, as the market went 'no ask'...and the price went vertical. But, as has always been the case in the past, a not-for-profit seller stepped in and became the short seller of last resort. If they hadn't been there, the price would have gone supernova.
Then shortly before 3:00 p.m. in the thinly-traded New York access market, the rally resumed, hitting its zenith at precisely 4:00 p.m. before sliding a hair into the close.
The low tick [around $1,339 spot] came just before 8:00 a.m. in Tokyo on their Monday morning...and the high tick came in New York. However it's impossible to tell from the N.Y. gold chart below, whether the high tick came at noon or 4:00 p.m. EDT. Not that it matter, I suppose. Kitco recorded the high tick at $1,400.60 spot.
Gold closed at $1,394.10 spot...up $33.90 according to Kitco's numbers...and an intraday move of fifty-five bucks. Net volume was an immense 222,000 contracts. It was a wild and crazy day...and I'll have much more about it in 'The Wrap'.
Here's the New York Spot Gold [Bid] chart on its own...and the big price spike at noon is even more noticeable.
Of course it should come as no surprise that it was silver that JPMorgan et al were after. In less than an hour, the high-frequency traders had the price down to its low tick of the day, which the CME reported as $20.25 in the July contract, which is the next front month for silver. That's a two dollar drop from the spot closing price on Friday...and it all happened in about forty-five minutes. Ted Butler said that only about 1,600 contracts were sold between the Sunday night open...and the low tick. In such a thinly-traded market, that's all it took to drop the price that low.
Silver recovered a bit as morning trading wore on in the Far East...and from about noon in Hong Kong, the silver price began a rally that ended with a vicious 'no ask' price spike at noon in New York...just like gold.
After the seller of last resort showed up, the silver price chart looked more or less the same as the gold chart for the rest of the trading day...right down to the rally that ended at precisely 4:00 p.m. in electronic trading in New York.
As I mentioned above, the low tick in the July contract was $20.25...and Kitco recorded the spot high price as $23.40 spot...an intraday move of $3.15.
Silver closed at $22.92 spot...up 66 cents from Friday. Gross volume was immense...96,000 contracts.
Platinum did not go unscathed either...although palladium was pretty much spared the beating that the other three precious metals got. Palladium had its price capped shortly after 12:00 o'clock noon in New York as well, or all four precious metals would have closed the Monday trading session at prices that would have made your eyes glaze over. Here are their respective charts from yesterday.
What we saw in all four precious metals were key-reversals to the upside so big that no T.A. analyst could possibly miss them. And as I said on Saturday, "da boyz" can print any chart pattern they want...and yesterday's example, especially in silver, will be talked about for centuries.
The dollar index closed at 84.21 on Friday afternoon in New York...and got hit for a bit more than 10 basis points the moment that trading began at 6:00 p.m. in New York on Sunday night. It's high of the day [84.25] came three hours later at 9:00 a.m. in Hong Kong trading on their Monday morning...and it was all down hill from there. The low tick [83.72] came a few minutes after 3:00 p.m. in New York...and the index rallied a hair from there. The dollar index closed at 83.76...down 45 basis points from Friday's close.
As is most often the case, the dollar index had zip to do with yesterday's moves in the precious metals.
The gold stocks opened in negative territory by a bit, but that didn't last long...rallying strongly into the noon price spike in New York. From there they traded basically sideways until the smallish rally developed just before 4:00 p.m. in electronic trading. The shares tacked on another percent or so..and the HUI finished up 6.04%...almost on its high tick.
It was a very similar story in the silver stocks as well...and Nick Laird's Intraday Silver Sentiment Index closed up 6.70%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that 3 gold and 65 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday. In silver, JPMorgan was the short/issuer on 57 contracts...and they and the Bank of Nova Scotia stopped 55 contracts. The link to yesterday's Issuers and Stoppers Report is here.
Another day...another withdrawal from GLD. This time an authorized participant took out 222,371 troy ounces...and there was also a withdrawal from SLV. This time it was 1,738,029 troy ounces.
The U.S. Mint finally had another sales report. They sold 2,000 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and 611,500 silver eagles.
Over at the Comex-approved depositories on Friday, they reported receiving 1,260,558 troy ounces of silver...and shipped 211,435 troy ounces of the stuff out the door. The link to that activity is here.
In gold on Friday, these same depositories did not report receiving any, but shipped 32,001 troy ounces out the door...all from Scotia Mocatta. The link to that activity is here.
Since yesterday was the 20th of the month, The Central Bank of the Russian Federation updated their website with their April data. It showed that they added another 200,000 troy ounces of gold to their reserves...bringing their total up to 31.8 million troy ounces. Here's Nick Laird's most excellent chart updated with that data...
(Click on image to enlarge)
Here's a chart that reader 'David in California' sent our way yesterday. It's a comparison of the 1976 bull market in gold compared to the one going on right now.
(Click on image to enlarge)
And here's your "cute quota" of the day...
Being a Tuesday column, I have more stories than normal, so I hope you have the time to read/listen to the ones you like.
Warren Buffett's Berkshire Hathaway Inc. had its credit rating cut one notch by Standard & Poor's, which cited a new methodology for evaluating insurers and Berkshire's dependence on its insurance business for dividend income.
The rating was cut to "AA" from "AA-plus," and S&P assigned a "negative" outlook, suggesting another cut could occur within a few years. S&P left its credit and financial strength ratings for Berkshire's insurance operating units at "AA-plus."
"The lower credit rating on Berkshire better reflects our view of Berkshire's dependence on its core insurance operations for most of its dividend income," S&P analyst John Iten wrote.
This moneynews.com story from last Friday was sent to me by West Virginia reader Elliot Simon on Saturday afternoon...and I thank him for today's first story.
America’s ticking debt bomb has been reset. Washington has suspended the debt ceiling, setting a date, and not a concrete dollar sum as a deadline, an unprecedented first in US history.
Citing ‘extraordinary measures’, the US Treasury has further delayed tackling America’s debt, and will wait until Labor Day, September 2nd, to revisit the burgeoning crisis. The ceiling has been lifted, and the Treasury has promised it will keep cash pumping into government spending programs beyond the debt limit through a series of emergency cash tools.
“It will not be until at least after Labor Day" when Washington will have reached their full borrowing capacity, Treasury Secretary Jacob Lew, told CNBC television on May 10th.
Elliot Simon also sent me this Russia Today story. It was posted on their website mid-morning Moscow time.
While we have wondered on numerous occasions previously if the collapse in lumber prices is the far more accurate indicator of end demand for housing (as confirmed by the recent collapse in multi-family housing starts), perhaps an even better indicator of trends in housing (and by implication the broader economy) is private sector intermediate end demand, such as Caterpillar North America sales, which unlike government data, are far less subject to political intervention, interpolation, guesswork, seasonal adjustments and otherwise, general manipulation.
And even though we have previously reported on the woes ailing the world's largest seller of bulldozers, excavators and wheel loaders, such focus was primarily targeted in the offshore markets, and especially China (the abysmal European market needs no mention). So maybe the time has come to shift attention to the US, where as Caterpillar just reported, not only are all foreign markets still trending at several impacted levels, but where US machine retail sales just saw the biggest tumble in three years, falling 18% Y/Y: the most since early 2010. What is more disturbing is that CAT equipment is used in far-broader economic activities than merely housing, and likely is a far more accurate indicator of true industrial end-demand than any other number cherry-picked by the government.
This short article was posted on the Zero Hedge website...and I thank 'David in California' for sending it our way.
“We don’t have to worry about a recession — we are in a depression,” says James Rickards.
“If you take the classic definition of a sustained, long-term downturn with economic growth below trend, then we are in the midst of a depression,” says the senior managing director of Tangent Capital and author of “Currency Wars.”
Rickards doesn’t see Fed Chairman Ben Bernanke as having the solution to the economic malaise gripping the county.
“Bernanke’s not a trader, so doesn’t think like a trader; he has no exit plan,” Rickards points out.
“There’s a good possibility I may never see another rate hike in my lifetime,” says Rickards.
This very short item was posted on the New York Post website late on Saturday night...and my thanks go out to Harold Jacobsen for bringing it to our attention.
Three months after hackers working for a cyber-unit of China’s People’s Liberation Army went silent amid evidence that they had stolen data from scores of American companies and government agencies, they appear to have resumed their attacks using different techniques, according to computer industry security experts and American officials.
It is not clear precisely who has been affected by the latest attacks. Mandiant, a private security company that helps companies and government agencies defend themselves from hackers, said the attacks had resumed but would not identify the targets, citing agreements with its clients. But it did say the victims were many of the same ones the unit had attacked before.
In interviews, Obama administration officials said they were not surprised by the resumption of the hacking activity. One senior official said Friday that “this is something we are going to have to come back at time and again with the Chinese leadership,” who, he said, “have to be convinced there is a real cost to this kind of activity.”
This article was posted in the Sunday edition of The New York Times...and it's Roy Stephens' first offering in today's column.
The once almighty U.S. dollar has lost its luster in some corners of the world.
But there's one outpost where greenbacks have never been stronger: in socialist, anti-imperialist Venezuela, whose government rails against American-style capitalism as the bane of humanity. The dollar is not just holding steady here -- it is flourishing like nowhere else, the byproduct of the fast-wilting economy President Hugo Chavez left behind when he died in March.
Black-market dealers operating on the thriving underground market sell greenbacks at more than four times the official, government-set rate of 6.3 bolivars to the dollar. And the price they're getting these days -- 28 per dollar -- is more than three times what it was just eight months ago.
This very interesting read was filed from Caracas...and showed up on The Washington Post website on Friday. I found it over at the gata.org Internet site on the weekend.
Rumors that Brazil's social security fund called Bolsa Familia was to be cancelled led thousands of people to rush to withdraw money from a Brazilian bank over the weekend.
Customers lined up at ATMs at dozens of bank branches of Caixa Economica Federal, a government-owned bank, which pays the social security subsidy on Saturday and Sunday.
"The bank branches themselves aren't open on Saturdays. What happened is that once the rumor gained momentum, people flocked down to their local branches to try to withdraw money from the ATMs," Rafael Carregal, a journalist at Brazil's main TV network Globo told CNBC.
Brazilian newspaper Estado de Sao Paulo reported that at five branches in the northeastern city of Sao Luiz and four others in the state of Maranhao, depositors broke into branches. Most of the branches that were affected were in the poorer northeast region of the country.
This short CNBC article was posted on their website early on Monday morning EDT...and I thank U.A.E. reader Laurent-Patrick Gally for sliding this into my in-box in the wee hours of this morning.
Monetarists across the world have warned that the International Monetary Fund and the Bank for International Settlements are making an historic error by calling for a withdrawal of emergency stimulus before the global economy has fully recovered.
The two watchdogs launched broadsides against central bank largess last week. The BIS -- the forum of central banks -- was particularly blunt, seeming to imply that quantitative easing "does not work".
Critics say this risks undermining the credibility of radical measures when more may yet be needed. They fear central banks could repeat the mistake made in 1937 when the Federal Reserve lost its nerve and tightened too soon, tipping America back into depression.
"The BIS and the IMF are deeply misguided and risk doing the world a grave disservice. The biggest threat right now is irrational fear of bubbles among central banks," said Lars Christensen, a monetary theorist at Danske Bank.
This longish piece by Ambrose Evans-Pritchard was posted on the telegraph.co.uk Internet site on Sunday afternoon BST...and it's Roy Stephens' second offering of the day.
Conservative activists have begun defecting to the UK Independence Party in protest at the Tory leadership’s “arrogant and insulting” attitude towards grassroots members.
Local Conservative party campaigners, including the chairman of one constituency association, will this week pledge their support for Nigel Farage after one of David Cameron’s allies described grassroots Tories as “mad, swivel-eyed loons”.
Mr Farage uses an advertisement in Monday's Telegraph to urge Conservative voters to back Ukip. The “loons” description, he says, is “the ultimate insult” from a party leadership that has betrayed the trust of its own supporters.
He writes in the advertisement: “Only an administration run by a bunch of college kids, none of whom have ever had a proper job in their lives, could so arrogantly write off their own supporters.”
This short article appeared on The Telegraph's website late on Sunday evening...and is also courtesy of Roy Stephens.
1. Dan Norcini: "Incredibly Important Developments in Gold and Silver Markets". 2. Egon von Greyerz [#1]: "The Big Upside Move in Gold and Silver is Now in Front of Us". 3. Hong Kong fund manager William Kaye: "Gold and Silver Smash and What Soros and Major Players are Doing". 4. Robert Fitzwilson: "Gold, Silver, Massive Leverage and Super Wealthy Panicking". 5. Andrew Maguire: "This Key Level to Trigger Huge Central Bank Buying". 6. Egon von Greyerz [#2]: "Clients Denied Gold at Major Banks as Shortage Intensifies". 7. The first audio interview is with Art Cashin...and the second audio interview is with Andrew Maguire.
Stocks are for lovers and gold is for haters. That's how one especially supercilious strategist (is there another kind?) sizes up the two markets, and it's clear he's been feeling the love lately. Stocks are at new highs in the U.S. and many other venues, while Japan's market is strapped to a rocket ship, all propelled by money fresh off the printing presses of the world's central banks.
Fans of the yellow metal, meanwhile, are feeling rather battered and bruised these days from the beating they've taken over the past month or so and, indeed, for more than a year and a half. Given all the quantitative easing -- which is how money printing is referred to in polite company these days, one would think gold would be getting a little love (or a facsimile of the same that cash can sometimes provide.)
I thank Ken Hurt for finding this Barron's article from Saturday for us...and I thank Chris Powell for providing the 'new and revised' headline. The actual headline reads "This Time Gold Bugs May Have a Point".
In his new commentary former Assistant U.S. Treasury Secretary Paul Craig Roberts squarely accuses the Federal Reserve of using the futures markets to suppress gold and silver prices to protect the U.S. dollar and the Fed's "quantative easing" policy.
"What," Roberts asks, "does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse."
Roberts' commentary is headlined "Washington Signals Dollar Deep Concerns" and it was posted on his Internet site on Saturday. I thank Chris Powell for the above introductory paragraph...and the headline...but the first reader through the door with this story was Rob Bentley.
The Hong Kong Mercantile Exchange will go ahead with a planned US$100 million rights issue and be ready within months to reapply for the trading licence it handed back to regulators at the weekend after it became clear the struggling commodity trader could no longer meet crucial financial criteria.
HKMEx chairman Barry Cheung Chun-yuen told the Sunday Morning Post that the decision to surrender the trading licence and not reopen for business tomorrow would have no impact on investors and that client contracts would be honoured.
"There is no question of not getting your money back or anything like that," Cheung said. "People absolutely do not have to worry about that and I don't think they are. The only thing they will want to know is what settlement price will be used."
This story, filed from Hong Kong, was picked up by the South China Morning Post on Sunday...and I found it in a GATA release.
India needs to bring down its gold demand from about 1,000 tonnes a year to 700 tonnes, which prevailed only a few years ago, a top policymaker has said.
This is necessary as increased gold imports are worsening the current account deficit, C. Rangarajan, chairman to the Prime Minister's Economic Advisory Council, said.
The demand for gold can be reduced by taming inflation and enhancing the real rate of return on financial products, Rangarajan said in his inaugural address at the 6th International Gold Summit, organised by Assocham here on Wednesday.
In the last two fiscal years -- 2011-12 and 2012-13 -- the country's gold imports in quantitative terms stood at 1,079 tonnes and 1,017 tonnes respectively.
This story was posted on thehindubusinessline.com Internet site last Wednesday...and I found it in a GATA release on Saturday. The actual headline reads "Need to Bring Down Gold Deman, Says Rangarajan".
The sudden vulnerability of bank deposits to confiscation for bank rescues is sending money out of banks and into equities, bonds, and gold, GoldMoney's Alasdair Macleod writes on Sunday. But for the time being, bullion banks are coping with increased demand for gold delivery by rationing metal to customers. Macleod's commentary is headlined "Bank Balances and Gold" and it's posted at the goldmoney.com Internet site.
I found this commentary in a GATA release on Sunday.
While we have become used to the almost daily trading-halts in Japanese government bonds, when the CME reports that Silver trading was halted four times overnight, it is increasingly clear that this market is anything but 'normal'.
This very short piece was posted on the Zero Hedge website yesterday morning...and I thank Elliot Simon for sending it along.
Gold prices continue to take a beating with futures at $1,354 an ounce.
Marc Faber, publisher of The Gloom, Boom and Doom Report, told Talking Numbers that he is buying physical gold and will buy more if it hits the $1,300 mark.
But, he said that he isn't keeping it in the U.S. "I bought gold at $1,400, I buy every month some gold, and I have an order to buy more at $1,300 because I want to keep an allocation towards gold – physical gold – and not stored in the United States at all times."
This short commentary also has the entire CNBC video interview embedded as well...and it was posted on the businessinsider.com Internet site yesterday morning EDT.
Changi Airport, Southeast Asia’s largest freight airfield, plans to attract more gold bars, tuna and vaccines to Singapore as it seeks to increase handling of high-value cargo to make up for slowing trade.
“An underlying demand for these things is growing with the rise of the Asian middle class,” Fong said in a May 15 interview. “People want higher-value, higher-quality food. Demand in North Asia is growing fast.”
The airport is offering 50 percent rebates on landing fees since the start of the year to help cargo airlines struggling with lower demand amid sluggish economies in the U.S. and Europe. Changi is enticing carriers of high-yield cargo with a tax-free maximum-security vault to store valuable art, gold and gems, as well as Southeast Asia’s biggest refrigerated facilities for perishable goods.
This story, filed from Singapore, was posted on the Bloomberg Internet site early yesterday morning Mountain Daylight Time.
The prospect of fresh strikes in South Africa's already embattled mining sector resurfaced on Sunday after representatives of the National Union of Mineworkers (NUM) said it would seek pay rises of up to 60% from gold and coal producers.
This comes as mining companies battle higher costs and falling prices in an already heated labour climate, and as the country is hoping to avoid the 2012 wildcat strike action at platinum and gold mines that claimed the lives of 50 people and cost the industry and economy billions in lost revenue and production.
Mineworkers are mobilising to assert themselves, with the NUM fighting a challenge to its once near monopoly in the shafts from the Association of Mineworkers and Construction Union (Amcu), which has poached tens of thousands of platinum miners from it in a violent struggle for members.
NUM said it was seeking an entry-level minimum monthly wage of R7 000 for gold and coal surface workers and R8 000 for those underground in a submission to the Chamber of Mines.
This Reuters piece was picked up by the fin24.com Internet site on Sunday evening...and I thank Matthew Nel for digging it up for us.
Platinum is a precious metal, as is palladium, though to a lesser degree. However, like silver, both are also industrial metals. Unlike silver, it's their industrial use that is the primary price driver for both platinum and palladium – and that use is undergoing a fundamental shift.
The largest source of demand for platinum and palladium is the automotive industry, for use in auto catalysts. In turn, the fortunes of the auto industry are sensitive to the health of the world's major economies. We've been bearish on platinum-group metals for years, primarily because we weren't convinced a healthy – much less roaring – world economy could be sustained when so many governments continue spending beyond their means.
We reconsidered the market last year, when strikes in South Africa – home to 75% of global platinum production and 95% of known reserves – threatened supplies. But as we wrote last December, the strikes ended without great impact on long-term supply.
Since then, however, the fundamentals of this market have changed. Others may disagree with our economic outlook, which is still bearish, but it's due to supply issues – not demand – that our interest is now drawn to these metals, and particularly to palladium.
This commentary by Jeff Clark was contained in yesterday's edition of the Casey Daily Dispatch...and it's definitely worth reading.
Daily Bell: Why did the price of gold plummet?
Doug Casey: Once again, I see it as just the normal, albeit large, fluctuation. It's not like you shouldn't expect a market that's risen steeply for a dozen consecutive years to come off at some point. Especially since not only does everything look rosy in the stock and bond markets, but even real estate spears to be recovering. A lot of conventional – and foolish, in my view – people think that printing trillions of new currency units has solved the crisis, and obviated the need for owning gold. So there's selling. Perhaps a big trader sold a bunch of contracts to set off a lot of stop losses and panic the market. If so, it was a smart trade, and it worked.
Now, I know that that's not a very sexy explanation. But I'm a believer in Occam's Razor, which hold that the simplest explanation of something is usually the correct one. However, I'm afraid it leads me to a pet subject of mine, one that will both take a while to explain, and will, regrettably, antagonize some of your readers. Many gold bugs (but not all, because I too am a gold bug) seem to think that a coterie of malefactors of great wealth sit around a huge boardroom table, perhaps chaired by Dr. Evil cradling his white cat, and send forth their minions, "Da Boyz," to "smack down" the depressed and struggling gold and silver markets. A large number of gold bugs are also conspiracy bugs. They have all of these standard catchphrases for describing what's happening. I've read their stuff for years and, frankly, it impresses me as little more than accusations, name-calling and conjecture.
"...I don't want the GATA guys and their supporters to take this personally. I simply think they're wrong..."
Doug explains why he feels that the gold market is free and fair...and why all us price management believers are out to lunch. Doug holds nothing back...and whether you believe him or not...it's worth reading. I thank Doug for sending it to me.
Interviewed yesterday by The Daily Bell, Casey Research Chairman Doug Casey once again dismissed complaints of gold market manipulation.
"I don't doubt that the powers-that-be would prefer to have the price of gold lower," Casey says, "just like they would prefer to have the price of wheat and copper and lumber and everything else lower. But there's no evidence that I've ever been shown other than, frankly, just assertions."
This is distressing but maybe, to get Clintonistic, it depends on the meaning of "shown." Though GATA has sent to Casey -- and once even handed to him face to face -- all sorts of documentation of gold market manipulation, if he has not looked at it, has he ever been "shown"? But then the question becomes whether he wants to look at it, though one might hope that anyone might want to look at the evidence before commenting on an issue.
In his interview with The Daily Bell, Casey acknowledges the likely motive of central banks in wanting gold and commodity prices lower. But he refuses to acknowledge their opportunity along with the evidence lest faith in markets be shaken.
GATA believes in markets as much as anyone could. Indeed, gold price suppression is a catastrophe for the world precisely because it is the prerequisite for the destruction of all markets, the mechanism by which a few unelected grandees strive to control the price of all capital, labor, goods, and services in the world, resulting in their worldwide misallocation.
This commentary [with multiple links] by GATA's secretary treasurer Chris Powell, was posted on the gata.org Internet site yesterday evening and...along with Doug's interview at The Daily Bell...it, too, is worth reading.
The last time that Doug got up and spoke against the price management scheme by JPMorgan and a small handful of bullion banks, was back in April of 2012. GATA's Chris Powell had a lengthy response then as well...but has updated in his comments above, so it would serve no purposed to link that older article.
But James Turk had something to say about Doug's comments back then...and Mr. Turk's commentary, although rather long, are still as relevant today as they were back then...so I've decided to include it in today's column.
As I said, it's a long read, so top up your coffee before you get started.
Here's another item I've posted before. This is an audio interview with silver analyst Ted Butler by Jim Puplava over at financialsense.com that was recorded on March 17, 2012. In it, Ted describes in minute detail how the silver [and gold] price management scheme is orchestrated on the Comex/Globex futures market.
It explains exactly how every waterfall decline in silver [and gold] happens...and the sequence of events that precede it...and follow it. It's been the same pattern for over twenty years. Ted has been following the goings-on in silver on the Comex futures market for about 30 years...and is a world authority on it.
So if you want to know what happened on April 12/15th...and yesterday in the thinly-traded Far East market...Ted has the answers.
Because of his work, the Commitment of Traders Report is now widely followed just about everywhere, even if some of the commentators using it don't interpret the data correctly. The other report that Ted uncovered was the Bank Participation Report...and as Ted put it in a commentary for paying subscribers within the last week...if JPMorgan could kill these two reports, they would...as it exposes their movements [and others] to the naked light of day.
If you've listened to this before, it's time for a refresher...and if you haven't, it's a must listen.
You know that gold bear market that the financial press keeps touting? The one George Soros keeps proclaiming? Well, it is not there. The gold bear market is disinformation that is helping elites acquire the gold.
Certainly, Soros himself doesn’t believe it, as the 13-F release issued by the Securities and Exchange Commission on May 15 proves. George Soros has significantly increased his gold holding by purchasing $25.2 million of call options on the GDXJ Junior Gold Miners Index.
In addition the Soros Fund maintains a $32 million stake in individual mines; added 1.1 million shares of GDX (a gold miners ETF) to its holdings which now stand at 2,666,000 shares valued at $70,400,000; has 1,100,000 shares in GDXJ valued at $11,506,000; and 530,000 shares in the GLD gold fund valued at $69,467,000. [values as of May 17]
The 13-F release shows the Soros Fund with $239,200,000 in gold investments. If this is bearish sentiment, what would it take to be bullish?
This commentary by Paul was posted on this website yesterday...and I thank reader Ken Hurt for bringing this to our attention.
The past week or three have been, to say the least, disappointing for precious metals investors. Gold and silver have continued to step downwards towards new interim lows as money continues to move from bullion (or at least from paper variations of it) to the general stock markets which have been continuing to perform well. All this despite, so we hear, continuing high demand for physical gold and silver from Asian markets in particular. But this physical metal demand growth seems to be being more than countered by some strange precious metals sales patterns – the latest of which saw silver plunge 10% in 4 minutes on a big computer sell order – from a single client according to a major Japanese bank – at a light trading time.
If anything out there demonstrates how the dice are loaded against the individual investor in today’s markets, then the recent goings on in gold and silver prices surely do. This is not a natural market. Sure, prices can move up and down and people can get their fingers burnt but when we come across sales of the kind of magnitude seen recently they have to be a hugely concerted attempt to move the market to the perpetrator’s advantage.
This article by mineweb.com's Lawrie Williams was posted on their website early this morning in London...and it's definitely worth reading.
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If I am correct in my assumption that JPMorgan has established big long gold positions in COMEX futures, actual metal and gold derivatives as a hedge against their remaining COMEX silver short positions, that may be especially bullish for gold prices once we get the turn up. That’s because JPMorgan is more likely to let gold prices rip higher than they might normally. And if JPMorgan escaped regulatory action for manipulating silver prices lower, there is little chance the bank would face any actions for letting prices soar. Also in mind is that these big long gold positions were only established because of the brutal nature of the sell-off this year. This suggests to me that this is not something that can be replicated easily...or at will...and may make it a unique circumstance that must be taken advantage of accordingly. In other words, I don’t know how often JPMorgan or the commercials will be able to so favorably positioned in the future as they are currently. They better make hay while the sun is shining. - Silver analyst Ted Butler...18 May 2013
Just when I thought it was over, JPMorgan et al came calling one more time. Although gold and platinum got hit a bit, it was more than obvious that silver was the metal that they were after. A drop of two bucks in about 45 minutes...about a 10 percent move...and not a word from the CFTC, the CME Group, or the miners.
Now if the Dow had dropped that percentage in 45 minutes, all hell would have broken loose as everyone would want to get to find out what happened. But when it comes to the precious metals...zip, nada, nothing.
But under the hood, there was, without doubt, more speculative long selling...but not too much, as there's almost nothing left to sell on the long side. It's a good bet that there are now more short positions in place, especially in silver...and JPMorgan et al were going long against all comers.
Today is the cut-off for Friday's Commitment of Traders Report...and if we can get through the rest of the trading day today with little or no price activity, then we should see another COT Report for the record books. But as we found out after the smash of April 12/15th...the volume data associated with that event was not reported to the CFTC in a timely manner...and it took two more weeks of reports before we finally got to see the whole thing. That may happen again this time...and it will be the first thing I check for when it's posted on Friday.
And as I pointed out further up, the powers-that-be painted key reversals to the upside so large, that even Stevie Wonder could see them. All that remains is the upside triggering event...and I'm sure not looking forward to that...whatever it may be.
Here are the 6-month gold and silver charts from stockcharts.com...and the silver chart is one for the record books.
(Click on image to enlarge)
(Click on image to enlarge)
As Ted pointed out in the paragraph I borrowed from this Saturday commentary to his paying subscribers, he feels that JPMorgan is now massively long the gold market...and with that, has basically covered its remaining short position in silver. I would guess that they added to their comfort level with Sunday evening's engineered price decline at the New York open.
There was no follow-through in Far East trading on their Tuesday...nor during the first couple of hours of London trading, either. The one attempt that gold made to break above the $1,400 spot price mark got turned back in short order...and the prices of both gold and silver have been in slow, but steady, decline since. Gold is down about ten bucks...and silver is down 40 cents as I hit the 'send' button on today's column at 4:55 a.m. EDT. Volumes are over 40,000 contracts in gold and 11,000 contracts in silver...with almost all of it of the HFT variety. The dollar index, which hadn't done much all night long, took off around 9:00 a.m. BST in London...and is up 28 basis points as of this writing...and north of the 84.00 mark again.
Before heading out the door, I'd like to remind you that TODAY at 2 p.m. Eastern Daylight Time, Casey Research is premiering a must-see online video event for anyone with a drop of contrarian blood in their veins. It's entitled: The Myth of America's Energy Independence: Is Nuclear the Ultimate Contrarian Investment? If you have the time and the interest, it will certainly be worth it.
See you on Wednesday.
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