Gold & Silver Daily
"Today is the 1-day FOMC meeting...and I have no idea what that portends for the precious metals...if anything."
 

¤ Yesterday In Gold & Silver

It was a very quiet day in the gold world yesterday.  The price didn't do much until early in the afternoon Hong Kong time...and the small rally that began at that point ran into a seller about ten minutes after the Comex open.

The sell-off, such as it was, was over by the London p.m. gold fix...and then gold traded sideways into the close of electronic trading.

Gold closed at $1,712.60 spot...up $8.10 on the day.  Volume was extremely light...around 84,000 contracts.

It was pretty much the same story in silver, with silver's high tick coming at the same 8:30 a.m. Eastern time as gold's...and from there got sold down into the London p.m. gold fix...and traded sideways from there as well.

Silver closed at $33.27 spot...up 16 cents on the day.  Volume was around 24,500 contracts.

The dollar index didn't do much either.  It rallied a hair...and it's high tick of the day [80.55] came about a half hour before the London open...and then declined about twenty-five basis points by the 8:20 a.m. Comex open.  The index didn't do a lot from that point...and closed at 80.33...down less than 10 basis points from Friday's close.

The gold stocks gapped up over a percent at the open...and hung onto most of those gains.  By the close of trading the HUI was in the black to the tune of 1.20%.

As a group, the silver stocks did better...and quite a few of the stocks in Nick Laird's Silver Sentiment Index did very well for themselves.  It closed up 2.36%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 45 gold and 128 silver contracts were posted for delivery on Wednesday.  In silver, the big short/issuer was Jefferies with 123 of those contracts...and the two largest long/stoppers were JPMorgan and the Bank of Nova Scotia with 104 contracts between them.  No surprises there.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in either SLV or GLD.

But the U.S. Mint had another sales report.  They sold 2,500 ounces of gold eagles...and 300,000 silver eagles.

It was a quiet day over at the Comex-approved depositories on Friday.  They received 97,664 troy ounces of silver...and shipped out a smallish 2,000 ounces of the stuff.  The link to that activity is here.

Well, I received a reply from the ombudsman at the Bank of Nova Scotia yesterday...and I must admit that I was somewhat taken aback by his answer.  Not only did he answer a question I didn't ask...he didn't answer the question I did ask...and I also got blown off as well...along with the comment that I shouldn't share the contents of this e-mail with anyone other than "a professional advisor (such as your lawyer or accountant) or the Ombudsman for Banking Services and Investments"...because their reply to me was "confidential".

I must admit that I expected to be treated better than this.  I guess my illusion that Canadian banks would be nicer than their American counterparts just got shredded.  Anyway, as promised, here is the e-mail I received in its entirety...

Dear Mr. Steer,

I am responding to the attached e-mail that you sent to my office on December 2nd.  Allow me to begin by apologizing for the delay in providing this response to you.  I would normally respond to you by letter but, as I did not have a reliable mailing address for you, I am responding by e-mail.

I would also like to inform you that all correspondence you receive from the Ombudsman’s Office must be treated as confidential.  This e-mail may not be shared with anyone other than a professional advisor (such as your lawyer or accountant) or the Ombudsman for Banking Services and Investments.

Turning to your request for information concerning information published by the Commodity Futures Trading Commission (CFTC), I have reviewed the response you received from Dave Shearim at Scotiabank.  Mr. Shearim indicated that Scotiabank has no connection with data provided by the CFTC and referred you directly to them for any further information concerning the data in their publications.  I must say that I find his response to be a reasonable one under the circumstances.  Therefore, I am not prepared to recommend to Scotiabank that it take any further action in this matter.

This is almost certainly not the response you were hoping to receive and you may, within six months of the date of this letter, have your concern, including this e-mail, reviewed by the office of the Ombudsman for Banking Services and Investments (OBSI), who will determine if your concern falls within his mandate.  The OBSI may be reached at:

Ombudsman for Banking Services and Investments
401 Bay Street
Suite 1505
P.O. Box 5
Toronto, ON
M5H 2Y4
Telephone: 1-888-451-4519
Facsimile:  1-888-422-2865
E-mail:       ombudsman@obsi.ca

In closing, I would like to thank you for writing to me and giving me the opportunity to investigate and respond to your concern.

Nowhere in that reply did I see them say....no, it wasn't them.  I got the impression that I was asked to take a long walk off a short pier.  I will try one more time...and let you know I make out.

Of course the real question that I asked the CEO of the Bank of Nova Scotia [and the ombudsman] was this...

"All I need to know is if the "non-U.S. bank" that the CFTC is referring to in its comments below...and on its Bank Participation Report home page...is The Bank of Nova Scotia - Scotia Mocatta.

"A simple 'yes' or 'no' answer will suffice.

The comment states... "The October 2012 Bank Participation Report includes COMEX gold and COMEX silver futures and options positions for a newly classified non-U.S. bank, based upon the entity's self-description on its latest CFTC Form 40. Given the methodology of the Bank Participation Report, the entity's most recent Form 40 submission results in all of its futures and options positions now being included within the report. For more information on the methodology used for the Bank Participation Report, see Explanatory Notes" [Emphasis is mine. - Ed]

Here's a chart that Nick Laird sent me on the weekend it showed the average intraday price moves for silver during November.  Once you average out all 19 trading days, the price pattern is obvious.

(Click on image to enlarge)

I have way too many stories today...and I'm happy to leave the final edit up to you.  There are a lot of precious metals-related stories...and quite a few of them fall into the must read category.

 

¤ Critical Reads

73% of New Jobs Created in Last 5 Months Are in Government

In June, a total of 142,415,000 people were employed in the U.S, according to the BLS, including 19,938,000 who were employed by federal, state and local governments.

By November, according to data BLS released today, the total number of people employed had climbed to 143,262,000, an overall increase of 847,000 in the six months since June.

In the same five-month period since June, the number of people employed by government increased by 621,000 to 20,559,000. These 621,000 new government jobs created in the last five months equal 73.3 percent of the 847,000 new jobs created overall.

This story was posted on the cnsnews.com Internet site on Friday...and it's a story that I found in yesterday's edition of the King Report.  The link is here.

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Food Stamps Soar By Most In 16 Months: Over 1 Million Americans Enter Poverty In Last Two Months

And we thought last month's delayed food stamp data was bad. The just reported food stamp number for September was a doozy, with 607,544 new Americans becoming eligible for food stamps, as a record 47.7 million Americans are now living in poverty at least according to the USDA. The monthly increase was the highest since May 2011, and with August's 421K new impoverished America, over 1 million Americans made the EBT card their new best friend.

This is a very short read...but it's the graphs that make this a must read...and I thank West Virginia reader Elliot Simon for sending it.  It was posted over at the Zero Hedge website on Sunday...and the link is here.

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Mortgage Crisis Presents a New Reckoning to Banks

The nation’s largest banks are facing a fresh torrent of lawsuits asserting that they sold shoddy mortgage securities that imploded during the financial crisis, potentially adding significantly to the tens of billions of dollars the banks have already paid to settle other cases.

Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages.

Estimates of potential costs from these cases vary widely, but some in the banking industry fear they could reach $300 billion if the institutions lose all of the litigation. Depending on the final price tag, the costs could lower profits and slow the economic recovery by weakening the banks’ ability to lend just as the housing market is showing signs of life.

This story showed up on The New York Times website on Sunday sometime...and I thank Phil Barlett for bringing it to our attention.  The link is here.

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School District Owes $1 Billion On $100 Million Loan

More than 200 school districts across California are taking a second look at the high price of the debt they've taken on using risky financial arrangements. Collectively, the districts have borrowed billions in loans that defer payments for years — leaving many districts owing far more than they borrowed.

In 2010, officials at the West Contra Costa School District, just east of San Francisco, were in a bind. The district needed $2.5 million to help secure a federally subsidized $25 million loan to build a badly needed elementary school.

Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.

In the West Contra Costa Schools' case, that $2.5 million bond will cost the district a whopping $34 million to repay.

I'd bet big money that Wall Street and/or the 'Big 5' U.S. banks are behind all those 'loans'.  This showed up on the National Public Radio website yesterday...and the story is courtesy of reader Scott Pluschau.  The link is here.

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Chilton blasts 'puny' fine in case where Goldman Sachs used fake trades

An outspoken regulator lashed out at a $1.5 million settlement between Goldman Sachs and the Commodity Futures Trading Commission, calling the deal a steal for the Wall Street bank.

Bart Chilton, a CFTC commissioner, described the cash amount as "puny" and "a slap on the wrist" when compared to the whopping $8.3 billion trade at the center of the case.

In 2007, a Goldman trader hid the outsize trade as the market unraveled.

"This is another example of where puny penalties send the wrong message for these guys who are breaking the law," Chilton told The Post.

Well, Bart...let's see what you have to say when your buddies at JPMorgan Chase and the CME Group get out of the silver and gold price management scheme without going to jail, or paying a fine.  Where's your righteous indignation when it comes to JPMorgan Chase/Scotiabank price management scheme in silver?  This story showed on the New York Post website on Saturday...and I found it in a GATA release.  The link is here.

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Jim Rickards: Fed is Trying to Import Inflation

We haven't heard much from Jim lately...but he makes up for it here in this 3:01 minute Bloomberg video from last Wednesday.  Jim says that "gold is absolutely the place to be."  This makes the clip a must watch...and I thank Australian reader Wesley Legrand for bringing it to our attention.  The link is here.


 

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Central Banks Ponder Going Beyond Inflation Mandates

Inside the world’s oldest central bank, a new debate is raging over a dilemma facing monetary authorities around the globe.

Policy makers at Sweden’s 344-year-old Riksbank and elsewhere are arguing about how far they can look beyond their price mandates and focus instead on economic growth, employment or financial stability when inflation threats are either not pressing or deemed to be passing. This marks a shift from three decades in which central bankers battled inflation, an enemy they understood so well that most made it their singular emphasis in the 1990s.

“There are lots of things central banks are worried about at the moment, and inflation is not the highest priority,” said Stephen King, chief economist at HSBC Holdings Plc in London and a former U.K. Treasury official. “As long as people believe central banks are committed over the longer term to price stability, there is leeway to play around with other objectives.”

Such as???  I can't believe he said that!  Be very afraid. This Bloomberg story was posted on their website in the wee hours of yesterday morning Mountain Standard Time...and I thank Casey Research's own David Galland for sending it along.  The link is here.

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Return of the Un-dead: Berlusconi Revival Puts EU Leaders in Tight Spot

Chancellor Angela was by all accounts relieved to see the back of Silvio Berlusconi when he stepped down in 2011. Now, however, she and other European leaders are horrified at the prospect of his return to the pinnacle of Italian politics.

Not again! Just 13 months ago, European heads of state and government joined forces to usher Italian premier Silvio Berlusconi into retirement. Chancellor Angela Merkel and then-French President Nicolas Sarkozy marshalled all of their persuasive powers to clear they way for a reform government in Rome under the leadership of Mario Monti.

Now, with Prime Minister Monti having said over the weekend that he would resign as soon as he pushes through a key budget law, Italy's least serious politician is back. And Europe is groaning in displeasure. The French leftist paper Libération wrote "The Mummy Returns," a reference to a 2001 movie of the same name. And the otherwise dour German radio broadcaster Deutschlandfunk noted, "It is like a horror film: The undead keep coming back."

You couldn't make this stuff up.  This news items appeared on the German website spiegel.de yesterday...and it's Roy Stephens first offering of the day.  The link is here.

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Ambrose Evans-Pritchard: Mario Monti's exit is only way to save Italy

Italy has only one serious economic problem. It is in the wrong currency.

The nation is richer than Germany in per capita terms, with some €9 trillion of private wealth. It has the biggest primary budget surplus in the G7 bloc. Its combined public and private debt is 265pc of GDP, lower than in France, Holland, the UK, the US or Japan.

It scores top of the International Monetary Fund’s index for “long-term debt sustainability” among key industrial nations, precisely because it reformed the pension structure long ago under Silvio Berlusconi.

“They have a vibrant export sector, and a primary surplus. If there is any country in EMU that would benefit from leaving the euro and restoring competitiveness, it is obviously Italy,” said Andrew Roberts from RBS.

You would be able to knock me over with a feather if the decision was made to leave the euro...especially by Italy.  But in reality...no European country should be forced to use the euro as a currency.  This A.E.-S. offering was posted on the telegraph.co.uk Internet site at 9:09 GMT yesterday evening...and I thank Manitoba reader Ulrike Marx for digging it up on our behalf.  The link is here.

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Paris hit by wave of street muggings and grave robberies

Last week, police in the French capital arrested three people as part of a widening grave robbery investigation.

There was further public outrage after two masked intruders shot dead a 52-year old precious metal worker when he tried to stop them stealing gold from his foundry in the chic central Parisian district of Le Marais.

Police said sky-high market prices for precious metals are acting as a magnet for thieves with scant regard for the living or the dead.

In Pantin cemetery, in the north of Paris, dozens of bodies have recently been dug up, with gold teeth and jewellery stolen from them.

Police sources said the three men seized last week were gravediggers employed by the city's cemeteries.

Phil Barlett sent me this story that was posted in on The Telegraph's website on Sunday evening...and the link is here.

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De Facto Loss of Sovereignty: Cyprus Makes Big Concessions for Bailout

Dimitris Christofias had a serious look on his face as he turned to the cameras and spoke of what a "gut-wrenching" decision it was, but added that it was also a "necessary evil." The Cypriot president was not giving his people good news.

His staff realized how bad it would be when Christofias, in his televised address last Tuesday, reminded viewers of his country's darkest hour, the Turkish invasion of northern Cyprus in 1974.

Although Cyprus is not about to suffer the same fate, it is already clear that in return for billions of euros for the debt-ridden country from the European bailout fund, the "troika," made up of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), will essentially take control of the Mediterranean island.

This must read story showed up on the spiegel.de Internet site yesterday...and it's Roy Stephen's second offering in today's column.  The link is here.

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World risks fresh credit bubble, Switzerland's BIS warns

“Some asset prices appeared highly valued in a historical context relative to indicators of their riskiness,” said the bank in its quarterly report.

Yields on mortgage bonds have fallen to the lowest level ever recorded. Spreads on corporate debt have narrowed to the wafer thin margins of 2007, even though default rates are currently three times higher than they were then for junk bonds and twice as high for investment-grade companies.

The venerable Swiss-based institution – almost alone in warning of a global debt crisis in the build-up to the Great Recession – said it is rare for markets to gather steam at a time when the major forecasters are turning gloomy.

The International Monetary Fund and the OECD have downgraded their outlooks for 2012 and 2013, with sharp cuts for much of Europe as well as for Brazil, China, and India.

This is another article courtesy of Roy Stephens.  It was posted on the telegraph.co.uk Internet site on Sunday evening...and the link is here.

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The West is signing its own death sentence

When the Edward Gibbon of the 22nd century comes to write his History of the Decline and Fall of the West, who will feature in his monumental study of the collapse of the most successful economic experiment in human history? In this saga of the mass suicide of the richest nations on earth, there may be particular reference to those national leaders who chose to deny the reality that was, from the vantage point of our future chronicler, so obviously looming. Or maybe the leadership of our day in Washington, London and Brussels will appear to have been swept helplessly along by irresistible forces that originated before their time.

But for us, right here, right now, it matters that Barack Obama and George Osborne are playing small-time strategic games with their toy-town enemies while the unutterable economic truth stares them in the face. (The political leadership of the EU seems to have passed through the looking glass into a world where the rules of economics do not apply, so their statements and actions are beyond analysis.) Mr Obama is locked in an eye-balling contest with a Republican Congress to see who can end up with more ignominy when the United States goes over the fiscal cliff. It is clear now that the president will be quite happy to bring about this apocalypse – which would pull most of the developed world into interminable recession – if he could be sure that it would result in long-term electoral damage to his opponents.

This right-between-the-eyes commentary by Janet Daley was posted on The Telegraph's website on Saturday evening GMT...and I thank reader Paul Laviers for bringing it to our attention.  The link is here.

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Not so noble: EU’s Peace Prize win sparks debate over legitimacy

The European Union's presidents have received this year's Nobel Peace Prize on behalf of the 27-member group. However, growing numbers of critics have pointed to the EU’s economic and foreign policy failures, arguing the prize is undeserved.

The French and German representatives at the ceremony – President Francois Hollande and Chancellor Angela Merkel, respectively – greeted the award with standing ovations. 

But critics argued the award was an inappropriate honor. Six EU leaders, including British Prime Minister David Cameron, did not attend the event. The initial news that the European Union won the 2012 Peace Prize sparked heated debate over whether the award was being discredited, a debate that also raged after US President Barack Obama’s win in 2009.

The Peace Prize win comes amid Europe’s worst financial crisis in decades, as well as numerous accusations of supporting large-scale conflicts abroad.

In my lifetime the Nobel Peace Prize has become so politicized at times, that it is meaningless as an award.  I consider this Russia Today story from yesterday to be spot on...and I thank Roy Stephens for sending it.  The link is here.

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Egypt's Morsi annuls decree on expanding powers

Egypt’s President Mohammed Morsi on Saturday annulled a November 22 decree expanding his powers after the move sparked weeks of violent protests. Morsi did not, however, delay a referendum on a draft constitution in line with opposition demands.

Egyptian President Mohamed Mursi has cancelled a decree that gave him sweeping powers and sparked deadly violence, but did not delay this month’s referendum on a new constitution as his opponents had demanded.

The announcement that Mursi had scrapped his Nov. 22 decree followed hours of talks on Saturday at his presidential palace, billed as a “national dialogue” but which was boycotted by his main opponents and had little credibility among protesters.

Egypt is toast.  This News Wires story was picked up by the france24.com Internet site on Sunday...and it's another Roy Stephens offering.  The link is here.

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Citigroup’s Amazing Abu Dhabi Adventure

Off in a small corner of the judicial system is a big-time Wall Street lawsuit that neither side in the dispute wants anyone to know much about.

Thanks, however, to George B. Daniels -- the federal judge in the case -- we can catch a rare glimpse of what happens when a multibillion-dollar investment in a supposed pillar of Wall Street goes terribly wrong.

At issue is the $7.5 billion investment that Abu Dhabi Investment Authority, a large sovereign wealth fund, made in Citigroup Inc. in November 2007, just after the bank fired chairman and chief executive officer Chuck Prince. Michael Klein, one of Citigroup’s most senior investment bankers, negotiated the deal; Robert Rubin, the former Treasury secretary, in nearly his first official act after taking over for Prince as Citigroup’s chairman, flew off to Abu Dhabi to bless it.

A year later, of course, Citigroup collapsed, and American taxpayers bailed it out to the tune of $45 billion, plus another $306 billion to ring-fence a pile of toxic assets. ADIA, as the Abu Dhabi fund is known, lost nearly its entire investment after Citigroup’s shares were diluted down to pennies on the dollar by the rescue financing.

You couldn't make this up if you tried. This very interesting op-ed piece showed up on the Bloomberg website on Sunday afternoon Mountain Time...and it's certainly worth your time if you have it.  I thank Washington state reader S.A. for digging it up on our behalf...and the link is here.

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Japan Sinks Into Recession as Abe Calls for More Stimulus

Gross domestic product shrank an annualized 3.5 percent in the three months through September, the Cabinet Office’s second estimate showed in Tokyo today, matching a preliminary reading. The government revised the previous quarter to a 0.1 percent contraction, meeting the textbook definition of a recession.

Abe, whose Liberal Democratic Party is leading in polls to win elections on Dec. 16, has called for more fiscal stimulus and “unlimited” monetary easing, and has said that economic conditions next year will determine whether the sales tax rise goes ahead. Banks including Citigroup Inc. forecast another contraction this quarter as exports fall and domestic demand stays weak.

“It’s likely that Japan’s economy hit bottom in the last quarter,” said Shuichi Obata, senior economist at Nomura Securities in Tokyo. “The new government will aim to have solid growth by the middle of next year as they have to decide whether to raise the sales tax or not.”

Unless Japan is allowed to devalue their way out of this...they are done like dinner...as per Jim Rickards comments in the interview at the beginning of today's "Critical Reads" section...and if you didn't spend the three minutes listening to him, you should make amends after reading this Bloomberg story from late Sunday night, early Monday morning, in Japan.  The link is here.

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Inflation rises in China

Chinese consumers paid 2% more for goods and services in November than they did a year ago, the government's National Bureau of Statistics reported Sunday. 

While that's up from a 1.7% annual increase in October, it nevertheless represents tame inflation for the world's second largest economy. A year ago, the country was experiencing an annual inflation rate of 4%.

The Chinese government prefers to keep its annual inflation rate below 4% -- a level it sees as consistent with healthy economic growth and consumer demand.

I'm sure that the Chinese government is as good at lying about their inflation statistics as the U.S. is.  This money.cnn.com Internet site early Sunday afternoon...and it's courtesy of Elliot Simon.  The link is here.

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Five King World News Blogs

The first blog is with John Embry...and it's headlined "This is Why Silver Will Smash Through $100".  The second blog is with James Turk.  It's entitled "The Key Chart Every Silver Investor Needs to Watch".  Next is Richard Russell..."Stage Now Set For Public to Enter the Gold Market".  Last by not least is this interview with John Hathaway.  It's titled "This is What is Going on Behind the Scenes in the Gold War".  The audio interview is with Egon von Greyerz.


 

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Brett Arends: In gold investing, forget the metal and focus on stocks

Want to buy some cheap gold? Consider gold-mining stocks.

Shares of the leading precious-metals companies have lagged behind the price of physical gold bullion so steeply in recent years that they now trade for significantly less than the value of the companies' gold reserves, analysts say. In fact, they say, the gap is among the widest ever seen.

And although mining stocks can be more volatile than bullion in the short term, over the medium to long term they could boom if gold -- which remains about 10% below its 2011 peak -- resumes its bull run.

Gold has risen 10% this year, but the Philadelphia Gold & Silver Index, which tracks the stocks of the world's leading precious-metal mining companies, has fallen 8% on concerns that mining costs and political risks are increasing. Over the past five years, while gold has more than doubled to $1,721, the Philadelphia index has fallen 2%. It is near its lowest level versus the gold price since FactSet began tracking the data in 1984.

This story was posted in The Wall Street Journal on Friday...and is posted in the clear in this GATA release.  The link is here.

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Peter Grandich: What a Turnaround in Junior Gold Mining Stocks Will Look Like

The fundamentals at many junior mining companies have improved, yet their stock prices continue to languish. In this interview with The Gold Report, market guru Peter Grandich gives his thoughts on when this may end and where gold is headed in 2013, and names some of his picks in unlikely jurisdictions.

This interview was posted on theaureport.com Internet site yesterday...and the link is here.


 

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Alasdair Macleod: Markets, not Paul van Eeden, determine value

GoldMoney research director Alasdair Macleod can't resist replying today to the recent assertion of Cranberry Capital's Paul van Eeden that the true value of gold is about $900 per ounce, a little more than half the current price. (GATA called attention to van Eeden's calculation 10 days ago: http://www.gata.org/node/11976.)

"According to the glossary of von Mises' 'Human Action,'" Macleod writes, "value is 'always relative, subjective, and human, never absolute, objective, or divine.' It is reflected in human conduct, placing value in the same subjective category as fairness and morality. So all Mr. van Eeden is basically doing is expressing a personal subjective opinion when he talks about the value of gold. ... If Mr. van Eeden's view of value was fundamentally justified, one would expect foreigners, particularly central banks and over three billion Asians, to cash in their gold for dollars. Instead they are keen gold buyers, and we get no explanation why, other than the implication that they are all wrong and Mr. van Eeden is right."

I found this story embedded in a GATA release yesterday.  Macleod's commentary is headlined "The Value of the Dollar" and it's posted at GoldMoney's Internet site here.

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Platinum: Fear vs. Fundamentals

This subject was contained in yesterday's edition of the Casey Daily Dispatch...and the author is Casey Research's own Andrey Dashkov.  The short introduction was written by Senior Metals Investment Strategist, Louis James.  It's posted on the CR Internet site...and the link is here.


 

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Mike Kosares: Saving gold -- old reliable stands tall in crisis atmosphere

Mike Kosares, proprietor of Centennial Precious Metals in Denver and its Internet site, USAGold.com, has done a year-end review of inflation-adjusted rates of return on investments, and while 2012 has not been a spectacular year for gold, he reports that gold still is far outpacing interest-paying securities like bank certificates of deposit.

This is another essay that I found posted in a GATA release from yesterday.  Kosares' study is headlined "Saving Gold: Old Reliable Stands Tall in Crisis Atmosphere" and it's posted at USAGold.com Internet site here.


 

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Adrian Ash: When governments steal gold

In a new essay, Bullion Vault's research director, Adrian Ash, tells three fascinating and little-known stories of how governments confiscated gold: fascist Italy in 1935; Nazi Germany in 1939 with the assistance of the Bank of England and the Bank for International Settlements, two organizations of barely greater integrity that are still around; and -- how can we not call it "fascist"? -- Britain in 1966.

There's more preamble to this story contained in this GATA release from yesterday.  It's a must read, of course...and the link is here.
 

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Liberty Dollars ban goes into effect at eBay

At the request of the U.S. Secret Service, eBay has begun purging the online auction site of listings offering for sale Liberty Dollar medallions in gold, silver, platinum and copper.

Officials at eBay indicate the systematic removal beginning Nov. 29 of the listings is intended to conform with its policy implemented Feb. 20 banning the listing of counterfeits and replicas on eBay.com.

In emails sent by eBay to sellers whose listings for Liberty Dollars were canceled, officials at the online auction site expressed their regrets for having to take the action.

You just know that a police state...or worse...is just around the corner when you see stuff like this happening.  The story was posted on the coinworld.com Internet site early yesterday morning...and I thank Elliot Simon for his last offering in today's column.  It's worth reading...and the link is here.

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Royal Canadian Mint Offers 1912-1914 Gold Coins

The Royal Canadian Mint announced that they are offering for sale to the public a collection of Canada’s first gold coins, which were produced from 1912 to 1914. The $5 and $10 gold coins in the collection have been stored at the Bank of Canada for more than 75 years.

The highest quality examples of the coins will be offered for sale to convert the proceeds into quality fixed-income securities. Less visually appealing examples will be refined into 99.99% pure gold to liquidate the balance of the holdings.

The obverse designs of the coins feature the effigy of King George V wearing coronation robes and the Imperial State Crown. The reverse features a shield bearing the national arms of the dominion of Canada: Ontario, Quebec, Nova Scotia, and New Brunswick. The shield is encircled with maple branches with the inscription “Canada” above and the date and denomination below.

These five and ten dollar gold coins are the just about the last of Canada's gold "reserves"...and they've been sitting in mint bags gathering dust for almost a 100 years.  The story was posted on the Royal Canadian Mint website in late November...and I thank Tolling Jennings for bringing it to my attention...and now to yours.  The link is here.

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Latin America catches the gold bug

The trendsetter was Mexico, which last year snapped up close to 100 tonnes in a couple of months. More recently Brazil, holder of the region's largest international reserves, has joined the party. In September and October, according to IMF data, the central bank bought 18.9 tonnes.

"We bought some gold," Alexandre Tombini, central bank governor, confirmed to journalists recently in Brasilia.

Yet Brazil appears to have much further to go: Gold still accounts for just 0.8 per cent of its reserves of $379 billion, the world's eighth-largest. Of the 20 largest holders of international reserves, it has more gold than only Hong Kong and Malaysia.

This story showed up in the Financial Times on Monday...and is posted in the clear in this GATA release.  It's definitely worth your while...and the link is here.

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Gold Imports by China From Hong Kong Decline on Weaker Demand

Gold imports by China from Hong Kong dropped 32 percent in October from a month earlier as slowing economic growth cut purchases.

Mainland China bought 47,478 kilograms (47.478 metric tons), including scrap and coins, compared with 69,712 kilograms in September. Shipments were 45 percent less than the 86,314 kilograms a year earlier, data from the Census and Statistics Department of the Hong Kong government show.

Gold, which slipped 2.9 percent in October, is in the 12th year of a bull run as investors seek to hedge against weaker currencies as central banks around the world take action to boost economic growth. China’s gross domestic product is poised to expand 7.7 percent this year, the weakest pace since 1999, according to a Bloomberg survey. Growth was 7.4 percent in the three months through September, the weakest in three years.

This very short Bloomberg story was filed from Singapore during their Friday afternoon...and I thank David Galland for sharing it.  The link is here.

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Silver surplus – what silver surplus?

One of the biggest difficulties facing serious silver analysts, rather than those who just interpret data without looking at, or understanding, its true background is that many of those conducting 'independent' (i.e. those who are not themselves  'silver bugs') analyses mostly predict a weak silver price ahead because of what they see as a large silver production surplus.

Gold analysts, on the other hand, have come to accept that any surplus in gold production over normal jewellery and industrial demand is largely accounted for by investment demand.

Surely this is currently exactly the same for silver, and given that this demand appears to be growing sharply, perhaps silver’s demand ‘surplus’ should actually be re-classified as a deficit?

Lawrence Williams, the Mineweb's General Manger and Editorial Director, is the author of this excellent article that was posted on their website early on Monday.  I thank Ulrike Marx for sharing it with us...and it's definitely worth reading.  The link is here.

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Fort Knox on Thames. Barclays’ big new London gold vault

Barclays has built, and has already opened, three months ago, what is believed to be Europe’s largest privately-owned vault for the storage of gold and silver (and platinum, palladium and rhodium) as vaulting space at other locations is being filled up by unprecedented demand for storage for physical metal. For security reasons the location of the vault is secret – Barclays will only say that it is within the M25 – London’s orbital motorway which circles the capital between 25 and 40 miles from the city centre.

Britain’s Sunday Times newspaper was accorded a behind the scenes tour of the ultra-secure facility which has security features out of a James Bond movie protecting it, but only, the newspaper says, on condition that it would not reveal too many of the vault’s wonders. Suffice it to say it has the capacity to hold many tens of billions of dollars worth of precious metals.

This is the second article in a row from Lawrie Williams over at the mineweb.com...and it's Ulrike Marx's third and final offering in today's column.  The link is here.

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Market manipulation discussed by Sprott on Russia Today

Market manipulation was the topic of today's interview of Sprott Asset Management CEO Eric Sprott by Lauren Lyster on Russia Today's "Capital Account" program.

Eric told "Capital Account" that central banks suppress the gold price to conceal disquieting trends in the world economy. His interview is 28 minutes long...and it's posted over at the youtube.com Internet site.  This is another item I found in a GATA release yesterday evening...and the link is here.


 

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IMF study in 1999 found 80 central banks lending 15% of official gold reserves

A study by the International Monetary Fund in 1999, obtained last week by GATA's researcher R.M., reported that more than 80 central banks had lent 15 percent of official gold reserves into the market and that central banks then lending gold included the German Bundesbank, the Swiss National Bank, the Bank of England, the Reserve Bank of Australia, and the central banks of Austria, Portugal, and Venezuela.

The IMF study, commissioned as the agency pondered selling some of its own gold, emphasized the lack of transparency in the gold market and the secrecy demanded by central banks.

"Information on the gold market is patchy," the study said. "Transactions are characterized by a high degree of secrecy. Apart from the relatively small amount of open trading on exchanges, gold trades are private, over-the-counter transactions, and little is reported on these transactions. ... Official information on gold lending is virtually nonexistent."

This story begins with an extensive preamble by Chris Powell...and the whole GATA release is a must read.  It was posted on the gata.org Internet site on Sunday...and the link is here.

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Secret IMF report: Hide gold loans and swaps for market manipulation

Western central banks conceal their gold loans and swaps because information about them is "highly market-sensitive" and accountability about them would hinder secret currency market interventions by central banks, according to a confidential report by the International Monetary Fund obtained this week by GATA.

The report, provided to GATA by its researcher R.M., was written in March 1999 as the IMF staff proposed to strengthen financial reporting standards for central banks. The report shows that the objections by gold-lending central banks were decisive in weakening the standards. While the first draft of the new reporting rules would have required disclosing central bank gold loans and swaps, the revised rules, later adopted, allowed central banks to hide their gold loans and swaps within their gold reserves and even not to disclose the amount of their monetary gold at all, just the value assigned to it.

That is, the explicit but secret policy of Western central banking toward gold is to deceive and manipulate markets, as GATA long has complained.

The confidential IMF report says that to strengthen its financial reporting standards for central banks -- its Special Data Dissemination Standard reserves template -- IMF staff members consulted top officials of the organization as well as the Bank for International Settlements, the European Central Bank, the Bank of England, the German Bundesbank, the Bank of France, and other European central banks.

This is today's BIG STORY...and Chris sent it to me very late yesterday evening.  If I had to pick just one item for you to read from today's column...this would be it.  It's posted on the gata.org Internet site...and the link is here.

Read more...

 

¤ The Funnies

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¤ The Wrap

What else has to be done to us before we understand? Isn't this enough? But he knew that it wasn't. He knew that millions upon millions of people knew nothing and wanted to know nothing, and even if they found out would ooh and aah for five minutes and then go back to their own routines.Arkadi and Boris Strugatskii...Roadside Picnic [1972]

With such a low volume day in the precious metals, I'm not going to read much into yesterday's price action...except for the fact that the rallies that had developed in both gold and silver ran into sellers within ten minutes of the Comex open.  However, the dollar index 'rallied' a hair at that point, so that was all the excuse that was needed.

I was not surprised by what Jim Rickards said in his interview further up in the 'Critical Reads' section.  He says that the Fed wants inflation...and I agree.  One way to get everyone's attention would be to let the price of gold and silver run a bit.  That may be in the cards at some point, but it certainly isn't obvious at the moment.  Time will tell.

Not much happened in Far East trading during their Tuesday, but both metals got sold down a hair, even though the dollar index declined a bit as well.  London has been open for a bit more than two hours as I write this paragraph...and the volume levels are exceedingly light...and the dollar index is down a bit.  Based on this activity level, I wouldn't read a thing into the price action at the moment.

Today is the 1-day FOMC meeting...and I have no idea what that portends for the precious metals...if anything.  But whatever associated action there may be, won't show up until New York starts to trade. 

I was going to post a couple of Chinese gold import charts that Nick Laird sent me on the weekend, but this column has gone on long enough...for you and for me...so they can wait.

See you tomorrow.

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