The gold price ticked up slightly to its Far East high at the London open at 8:00 a.m. on Friday morning, but the not-for-profit sellers were lying in wait...and by the Comex open at 8:20 a.m. in New York, the low [$1,639.10 spot] was in for the day.
The subsequent rally from there managed to make it back to about the London opening high...around $1,664 spot price level...by 11:10 a.m. Eastern time, before getting quietly sold off about ten bucks going into the New York lunch hour. From there, the price crept slowly higher right into the close of electronic trading at 5:15 p.m.
Gold ended the New York trading session at $1,660.10 spot...up $2.80 on the day. And, like Thursday, it's obvious that the gold price wanted to move higher during the New York trading session, but was allowed that luxury. Net volume was a bit quieter...around 125,000 contracts.
The price pattern in silver was pretty much the same as it was for gold...and it wasn't allowed to close much over its Thursday highs, either.
Silver finished Friday trading at $32.05 spot...up the magnificent sum of 2 cents on the day. Net volume also cooled off, as 'only' 34,000 contracts were traded.
The dollar index rallied about 20 basis points during early trading in the Far East on Friday morning...and reached its zenith just minutes after 11:00 a.m. in London, which was 6:00 a.m. in New York.
Then shortly after 8:00 a.m. in New York, the dollar had a waterfall decline...and within two hours was pretty much at its low of the day, falling almost 70 basis points from it's earlier high. From there it traded flat into the 5:15 p.m. close.
The early morning rally in New York coincided perfectly with this fall in the dollar, but gold's attempt to break to new highs after that...despite a flat-lined dollar...is what got it sold off.
The gold stocks opened down about a percent, but immediately moved higher...only to run into a wall of selling every time it made any attempt to break above unchanged. No for-profit seller sells into a market like that...ever!
The high tick in the gold stocks came at the high tick in the gold price...right to the minute. And, for the second day in a row, the gold price finished higher and the stocks finished lower. The HUI finished down 0.53% on the day...and 6.56% on the week.
The silver stocks finished mixed as well...and Nick Laird's Silver Sentiment Index closed down 0.73%.
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The CME's Daily Delivery Report showed that 88 gold contracts were posted for delivery on Tuesday...and that was all.
There were no changes in either GLD nor SLV for the third day running so, once again, it's obvious that this week's smack-down in gold and silver was entirely a Comex paper affair...just like the Leap Day drive-by shooting that began on February 29th. As a matter of fact, since the 29th, the amount of gold and silver in both ETFs has actually increased a bit. That's quite amazing considering the fact that from the highs to the lows over those fourteen days...gold 'fell' $155...and silver 'fell' about six bucks.
The U.S. Mint had a sales report yesterday. They sold 3,000 ounces of gold eagles...and 150,000 silver eagles. Month-to-date the mint has sold 31,500 ounces of gold eagles...18,500 one-ounce 24K gold buffaloes...and 1,647,000 silver eagles.
There wasn't much activity over at the Comex-approved depositories on Thursday. They reported receiving only 62,765 troy ounces of silver...and shipped 45,554 ounces of the stuff out the door.
Yesterday's Commitment of Traders Report was pretty much a yawner in silver. The Commercial net short position in silver declined by only 165 contracts, which translates into 825,000 ounces of silver...a drop in the bucket in the grand scheme of things. Nothing to see here, folks.
It was a much happier situation in gold, as the Commercial net short position declined by 8,520 contracts...or 852,000 ounces worth. The Commercial net short position in gold is now down to 19.17 million ounces.
Neither Ted Butler nor myself were sure if Tuesday's post-Comex close trading data was in this report or not. Providing that we don't blast higher in price on Monday or Tuesday, all will be revealed in next Friday's COT report.
But one thing is for sure, with the price and volume activity over the 25-hour price period from 2:15 p.m. on Tuesday afternoon, until 3:30 p.m. on Wednesday...there's been another gigantic decrease in the Commercial net short position in both gold and silver. It won't be back to it's late-December lows but, under the circumstances, it will be as close to a total clean out as we'll probably get...fingers crossed!
Here are a couple of charts that are courtesy of reader Phil Barlett that require no embellishment from me, as a few second of study will reveal all.
The first is titled "20 Years - Food, Fuel, Metals Price Indexes"...and the second is the "Real Home Price Index"
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Reader Scott Pluschau had a few things to say about copper once again. In his first e-mail early yesterday morning he said that..."Copper is knocking on the door again... the strength here may be what has kept silver from plunging off the head and shoulders. I definitely do not want to see copper get rejected off resistance or have a failed breakout, and then fall through support. That would probably crush silver temporarily."
Then later in the day he sent this..."Copper reversed right at that upper trend line in the coiled spring today. Probabilities will increase that it blasts through on the next visit... Let's hope it visits the upper trend line before the lower one..."
The link to Scott's blog on copper is here...and the charts are definitely worth looking at.
Being the weekend and all, I have a lot of stories for your reading 'pleasure' over the weekend...and I hope you find some of them of interest.
MF Global employees at the center of a federal investigation are expected to appear before a Congressional panel this month to shed light on the brokerage firm’s misuse of roughly $1 billion in customer money, according to people briefed on the matter.
One notable employee, Edith O’Brien, is expected to invoke her constitutional right against compelled self-incrimination, one of the people said. Ms. O’Brien has also declined to cooperate with federal prosecutors without first receiving immunity from criminal charges.
Ms. O’Brien would be the first MF Global employee to invoke her Fifth Amendment rights before Congress, potentially setting up a standoff with lawmakers.
I still can't figure out why Jon Corzine hasn't done the perp walk for this whole debacle. Phil Barlett sent me this story from the Thursday edition of The New York Times...and the link is here.
A top U.S. regulator said his agency plans to widen day-to-day monitoring of the commodities and futures markets, targeting the high-speed trading firms that are a growing force.
Instead of just policing completed futures trades, the Commodity Futures Trading Commission will seek to watch the fleeting buy and sell orders that increasingly influence the market, CFTC Chairman Gary Gensler said in an interview.
The move follows a Securities and Exchange Commission plan to sharpen oversight of stock trades following the 2010 "flash crash." Regulators are seeking to catch up with high-frequency trading firms that are responsible for roughly half of orders, the vast majority of which are never executed. The SEC is probing the close relationship between high-speed firms and the computerized exchanges they do business with.
The key word is "monitor"...but they'll do nothing to stop it. If it wasn't for all this HFT, the markets would have collapsed ten years ago. I found this Wall Street Journal story posted in the clear in this GATA release yesterday...and the link is here.
Finding themselves financially strapped, more seniors at an earlier age are trying to get reverse mortgages on their homes in order to survive, according to a new report.
The study says the percentage of people aged 62 to 64 applying for reverse mortgages has increased 15 percent since 1999.
The reason for the dramatic upswing among 'younger' seniors is simple, the report concludes: They need the money.
This story, posted over at the CNBC website yesterday, was sent to my by West Virginia reader Elliot Simon...and the link is here.
A "tidal wave" of defaults in the municipal bond market is still building and will eventually hit the United States, says Wall Street analyst Meredith Whitney.
Many U.S. cities, towns and municipalities are insolvent but are treading along similar to how Greece did for years before officially defaulting.
There's been every effort made on the part of the states to prevent this tidal wave of defaults, which is going to happen sooner or later. It's happening at an accelerating pace."
This is another offering from Elliot Simon...and it was posted over at the moneynews.com website on Thursday...and the link is here.
A little is all right. That’s the message Federal Reserve Chairman Ben S. Bernanke has been giving out recently when asked about the evidence of inflation in the U.S. recovery.
Sometimes Bernanke doesn’t even go that far. He simply says he doesn’t see inflation. The Fed chairman recently described the prospects for price increases across the board as “subdued.”
“Sudden” is more like it. The thing about inflation is that it comes out of nowhere and hits you. Monetary policy is like sailing. You’re gliding along, passing the peninsula, and you come about. Nothing. Then the wind fills the sail so fast it knocks you into the sea. Right now, the U.S. is a sailboat that has just made open water, and has already come about. That wind is coming. The sailor just doesn’t know it.
Another warning that massive inflation will wash over the U.S. in the not-to-distant future. This op-ed piece showed up posted over at Bloomberg on Thursday...and I thank Bob Fitzwilson for sharing it with us. The link is here.
This short blog was posted over at the King World News website yesterday...and is worth reading. The link is here.
The German Internet site Metallwoche this week interviewed Hinde Capital CEO Ben Davies, who spoke at GATA's Gold Rush 2011 conference in London last August, and the discussion heavily involved "financial repression" -- government market rigging -- and its associated political repression.
I borrowed the headline and the introduction from a GATA release yesterday...and the full text and audio of the interview are posted at the Metallwoche.de website. The link is here.
When Morgan Stanley said in January it had cut its “net exposure” to Italy by $3.4 billion, it didn’t tell investors that the nation paid that entire amount to the bank to exit a bet on interest rates.
Italy, the second-most indebted nation in the European Union, paid the money to unwind derivative contracts from the 1990s that had backfired, said a person with direct knowledge of the Treasury’s payment. It was cheaper for Italy to cancel the transactions rather than to renew, said the person, who declined to be identified because the terms were private.
The cost, equal to half the amount to be raised by Italy’s sales tax increase this year, underscores the risk of derivatives countries use to reduce borrowing costs and guard against swings in interest rates and currencies can sour and generate losses for taxpayers. Italy, with record debt of $2.5 trillion, has lost more than $31 billion on its derivatives at current market values, according to data compiled by the Bloomberg Brief Risk newsletter from regulatory filings.
First it was Goldman Sachs sticking it to Italy...now it's Morgan Stanley. This Bloomberg story was posted on their website early on Friday morning...and I thank Washington state reader S.A. for sending it along. The link is here.
Listen up muppet masters - if you have put in a bid for that Greek jewel of Santorini on Ebay, it may be time to quietly withdraw from the auction. Because, according to Georgia Tech, things may get rather shaky soon...literally. "After decades of little activity, a series of earthquakes and deformation began within the Santorini caldera in January of 2011,” said Newman, whose research is published by Geophysical Research Letters. “Since then, our instruments on the northern part of the island have moved laterally between five and nine centimeters. The volcano’s magma chamber is filling, and we are keeping a close eye on its activity.” Because the only thing that Greece, whose primary business is tourism, needs, is for the biggest Cyclades tourist attraction to go up in a pyroclastic cloud.
Earth scientists are used to working with caldera ground deformation in the microradians per day category on the big island of Hawai'i. 5-9 centimeters...2 to 4 inches...is Warp Factor 9 speed in such a short period of time. The last eruption of Santorini was thought to have brought the Minonan civilization to an abrupt end about 4,000 years ago.
That Plinian eruption resulted in an estimated 30 to 35 km (19 to 22 mi) high ash plume which extended into the stratosphere. In addition, the magma underlying the volcano came into contact with the shallow marine embayment, resulting in a violent steam eruption.
The eruption also generated a 35 to 150 m (115 to 490 ft) high tsunami that devastated the north coast of Crete, 110 km (68 mi) away. The tsunami had an impact on coastal towns such as Amnisos, where building walls were knocked out of alignment. On the island of Anafi, 27 km (17 mi) to the east, ash layers 3 m (10 ft) deep have been found, as well as pumice layers on slopes 250 m (820 ft) above sea level.
A geological disaster of that magnitude, or even a bit less, would be catastrophic beyond measure...and would end civilization as we know it in that area within weeks, if not days.
I dug this story up on the Zero Hedge website in the wee hours of this morning...and it's a must read for sure...and the link is here.
Saudi Arabia is preparing to extend this year's unexpected jump in oil sales to the United States, adding to speculation about the response of the world's top oil exporter to sanctions against Iran and a rally in prices.
The Kingdom's shipments to the United States have quietly risen 25 percent to the highest level since mid-2008, according to preliminary U.S. government data, a sizeable leap that appears at least partly related to the imminent completion of a major expansion at its joint-venture refinery in Texas.
The White House has been scrambling for options to bring down gasoline prices — at a seasonal record high — during an election year, after concerns over an Iranian supply disruption launched benchmark Brent crude to lofty peaks over $120 a barrel not seen since the record price run of 2008.
This news item was posted over at the CNBC website late Friday afternoon...and I thanks Elliot Simon once again for sending me the story. The link is here.
Looking at the tranquil sea that is the S&P one may be forgiven to ignore the rapid intraday surge in Brent which was up over $3 in a few hours, approaching $126 once again. But why? After all the FOMC minutes were oh so very slightly hawkish, and not to mention that the Fed's scribe Hilsenrath told everyone at best the Fed would proceed with sterilized QE which would leave risk prices untouched.
Maybe it has something to do with this. According to Israel's NRG, in a just completed cabinet vote, for the first time Netanyahu has gotten a majority (8 over 6) supporting an Iran attack.
This Zero Hedge piece is another story that Elliot Simon has provided. It's worth the read...and the link is here.
The clock is ticking closer to the midnight hour regarding a strike in Iran. Israel might do it alone, but will likely have the backing of the U.S.
Is a war imminent, or are these moves just meant to scare Iran? Here are 5 signs that have piled up very recently.
This short piece was posted over at the businessinsider.com website yesterday morning...and I thank Roy Stephens for bringing it to our attention. It's a short read...and the link is here.
As media reports continue to imply that a military confrontation with Iran is closer than ever, rhetoric demonizing the Iranian government is rampant, particularly among Israeli leaders and most Republican presidential candidates—so much so that former Israeli Mossad director Efraim Halevy recently complained that Mitt Romney is “making the [Iran] situation worse” with his statements.
So it should come as no surprise that according to a 2012 Gallup poll, Iran is Americans' “least favored nation” and has consistently ranked unfavorably since 1989. Gallup is not specific about why an overwhelming majority of respondents have such a low “overall opinion” of the Islamic Republic, but they suggest that “heavy scrutiny and criticism from the West over its nuclear programs” sheds light on American reasoning. Alarmist notions about Iran's foreign and nuclear policy that spread through the media perpetuate a negative image that is oftentimes inaccurate--and help pave the path to war, which experts say would have disastrous consequences for Israel, the broader Middle East and the U.S.
This story was posted on the alternet.com website on March 8th...and Roy Stephens went it to me last Saturday. I decided that it would be better to leave it for my Saturday column...and here it is. It's a bit of a read...but worth it in my opinion...and the link is here.
This hour-long program was aired on PBS over a year ago...and runs for just under an hour. I've posted it before when it first came out but, under the current circumstances, I think it's worth a re-visit. This is the other side of the Iran story that the American powers-that-be don't want you to know anything about.
If you read/watch nothing else in this column today, this is the one that I would pick on your behalf. This youtube.com video is posted over at the brasschecktv.com website...and was sent to me by reader Julius Adams last Saturday. For obvious reasons, I had to save it for the weekend.
As I said, it's a must watch...and make sure you bring it up to full-screen size for maximum visual impact. The link is here.
President Hamid Karzai insisted Thursday that the United States confine its troops to major bases in Afghanistan by next year as the Taliban announced that they were suspending peace talks with the Americans, both of which served to complicate the Obama administration’s plans for an orderly exit from the country.
Mr. Karzai’s abrupt planning shift was at odds with a pledge offered just hours earlier by President Obama to stick to a 2014 withdrawal schedule for troops in Afghanistan. It also ran up against the Pentagon’s stark assessment that Afghan security forces were not yet ready to take over control of the country.
Mr. Karzai’s surprise announcement, which would confine American troops to their bases a year earlier than Mr. Obama proposed, was initially made at a Thursday meeting with Defense Secretary Leon E. Panetta, who spent a fraught two days here apologizing in person to the Afghan president for the massacre of civilians by an American soldier last Sunday at a village in Kandahar Province. Upon Mr. Panetta’s arrival, an Afghan interpreter working for coalition forces crashed a stolen pickup truck near his plane.
A new deal allowing the United States and its NATO allies to use a Russian air base for transit of troops and military cargo to Afghanistan would help ensure Russia's own security, Russia's foreign minister said Wednesday.
Sergey Lavrov said a plan to permit the U.S. and other NATO nations to use the base in the city of Ulyanovsk on the Volga River will soon be considered by the Russian Cabinet. If approved, the deal could help repair Russian ties with the United States, which have become increasingly strained over Washington's missile defense plans in Europe and the Syrian crisis.
Moscow has provided the U.S. and other NATO member states with air corridors and railway routes for carrying supplies to and from Afghanistan. The new agreement would for the first time allow alliance members to set up a logistics facility for troops and cargo on Russian territory.
Lavrov strongly defended such a deal, saying the success of NATO's mission is essential for fending off the spread of terrorism and illegal drugs from Afghanistan into ex-Soviet Central Asian nations and Russia.
I must admit that I was quite surprised to read this story...as it's rather strange piece in the new "Great Game" puzzle. One has to wonder what the quid pro quo on this deal might be? It's an AP story that was picked up by the news.yahoo.com website on Wednesday...and was filed from Moscow. I thank Australian reader Wesley Legrand for sharing it with us...and it's definitely worth reading. The link is here.
Gold fund manager Egon von Greyerz told King World News that long-term fundamentals -- particularly the diminishing utility of debt -- will be carrying the gold price upward just as a growing number of investors will be pushed into gold for wealth preservation. Recent government intervention against the monetary metals, von Greyerz says, will come to be no more than "a blip on a chart."
I borrowed the headline and preamble from another GATA release. An excerpt from the interview is posted at the KWN blog...and the link is here.
The Silver Institute says, "Sturdy investment demand has pushed the silver price up 20% in the first ten weeks of 2012, outperforming platinum, palladium and gold during the period."
In a news release issued Thursday, the institute said silver-based ETFs now account for 586 million ounces of silver, up from 576 million ounces at the end of 2011.
"Also contributing to a strong silver price over the course of this year will be strengthening global silver industrial demand after a record 2011," the institute noted. A silver report commissioned by the Silver Institute published a year ago forecasted that silver industrial demand will grow by 36% to 666 million ounces from 2010 to 2015.
This short story was posted over at the mineweb.com website a week ago...and I thank reader "Another Joe" for sending it our way. It's a short must read...and the link is here.
GoldMoney distributed a wonderful study by Walt Sosnowski of SRC Capital Management in Rockwall, Texas, that attempts a "scientific" approach to gold and other precious metals, including their functionality as money. There's plenty of documentation here for concluding that gold's performance is far superior to that of the major government currencies, at least for the holders of money. Of course governments issuing currency may consider superiority a matter of currency's ease of debasement, so maybe it's just a matter of which end of the transaction you're on. Sosnowski's study is something you may want to show your investment adviser and elected officials to see if they can think of any way to dispute it -- at least if you'd be happy never to hear from them again.
I thank Chris Powell for providing the headline and wordsmithing the introduction..It's titled "The Science of Gold and Other Precious Metals". It's a 17-page report that I've had no time read, but maybe you do. It's posted at over at the GoldMoney Internet site...and the link is here.
India, the world's biggest bullion buyer, increased the tax on gold imports for the second time this year after record purchases widened the current-account deficit. Gold for immediately delivery fell.
The government will tax gold bars and coins and platinum at 4 percent, Pranab Mukherjee, finance minister, said in his budget speech for the year starting April 1. That's up from 2 percent set in January. There was no change on the silver tax.
India doubled the tax on gold and silver on Jan. 17 by imposing a levy on imports as a percentage of the price, compared with the previous system of tax by weight. Global bullion prices rallied for an 11th year in 2011 as purchases by India peaked at 969 metric tons. Futures in India gained 32 percent last year, exceeding the 10 percent advance in global prices, as the currency slumped to a record low.
In the preamble to this GATA release, Chris Powell pointed out that..."The essence of this is that the Indian people want gold to be their money and the Indian government doesn't want to let them have it because gold as money restricts government power." The link to this Bloomberg story, posted on their website on Friday, is here.
This 37-minute interview with Jim Puplava was posted on the financialsense.com website just after midnight...and it pretty much goes without saying that it's a must listen from one end to he other...and the link is here.
Also on Jim's weekend program are interviews with Bart Chilton, Eric Sprott...and Dave Morgan. All of this should keep you off the street for a serious chunk of time.
I thank reader Kevin Cassidy for providing all of today's St. Patrick's Day cartoons for our viewing pleasure.
Pelangio Exploration Inc. (PX:TSX-V; PGXPF:OTC) announced the results of seven diamond drill holes totaling 1,574 metres from its ongoing drilling program at the Pokukrom East zone on the Manfo Property in Ghana. Highlights of the results included:
· 1.19 g/t gold over 113 metres, including 9.05 g/t gold over 7 metres;
The results continued to confirm a higher grade, shallow north plunging core of Pokukrom East zone with an open plunge of 600 metres from near surface in previously reported hole SPDD-088 (7.01 g/t gold over 19 metres) to 210 metres depth in the holes reported this week. Warren Bates, Senior Vice President Exploration, commented: “These are our best holes on the Manfo Property to date. These holes represent the north-plunging core of higher grade mineralization at Pokukrom East, now demonstrating an open plunge length of 600 metres.” Please visit our website to learn more about the project and request additional information.
I’ll take some poetic license here. Mr. Smith laments “ripping eyeballs out” of “muppet” clients – the decline of “the firm’s moral fiber.” I believe a crucial facet of what’s unfolding is that employees throughout Wall Street, and global finance more generally, are working diligently to extract as much “money” as quickly as possible before the whole thing blows up. It’s as reprehensible as it is perfectly rational in light of today’s monetary and policymaking environment. In a backdrop where politicians spend as much as they want and central bankers “print” as much as they want – where prudence, fairness and reasonableness have been completely abandoned - of course those working amidst this monetary profligacy will feel perfectly compelled to take as much as they can get. Read monetary history. - Doug Noland, Credit Bubble Bulletin, March 16, 2012
It's hard to believe that this doo-wop song is almost 60 years old. It's a tragedy that they don't write music like this anymore. I thank reader Rob Bentley for sharing this youtube.com video with us...and the link is here.
One can only hope that the worst is behind us, but there's still no guarantee of that. Could JPMorgan et al engineer prices lower from here? Sure...but will they? Nobody knows the answer to that...and we'll just have to wait see how this all plays out. I'm sure that next week's price activity will give us some clues.
Of course, if prices rise from here, the always looming question is...who are the sellers going to be that take the short side of the technical funds' long position? Will the cycle repeat itself again...just like it's been doing for 25+ years...or will things be different this time? I don't have an answer for that either.
I note that the CFTC has taken down that anonymous whistleblower comment from it's website...and Zero Hedge made note of that in a short piece posted on their website late yesterday...and the link to that is here. It's living, breathing proof that you can't believe everything you read on the Internet...but there are legions of eyeballs that are obviously prepared to believe anything, even if there isn't a shred of evidence to back it up.
To me, this is just another buying opportunity on the road to what will turn out to be the biggest bull market ever...but that "wall of worry" is ever present.
With the precious metals and their shares still on sale...but for how much longer, nobody knows...there's still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) recommendations...as well as the archives. Don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
I'm done. See you on Tuesday.