It was another basically 'nothing' day in the gold market on Planet Earth on Thursday. But, like Wednesday, gold hit its low of the day just a few minutes before the Comex open in New York.
From there, the gold price rallied...if you want to dignify it with that name... right up until a few minutes before the Comex close. The high tick of the day, around 1:25 p.m. Eastern time, was $1,619.50 spot...up about twenty bucks off its 8:00 a.m. Eastern time low. From there it traded sideways into the 5:15 p.m. electronic close.
Net volume was pitiful once again...around 75,000 contracts...and gold closed the trading day at $1,617.00 spot...up $4.40.
It was pretty much the same price path for silver, except the high print [$28.31 spot] on the silver price came just a few minutes before 11:00 a.m. in New York, which was just a few minutes before London closed for the day at 4:00 p.m. BST.
And also like Tuesday, the silver price got sold off about two bits into the close of electronic trading in New York.
Silver closed the Thursday session at $28.14 spot...up a dime...gaining back Wednesday's loss and more! I'm underwhelmed. Net volume was a microscopic 16,000 contracts, give or take.
Platinum and palladium were obviously trading on another planet yesterday, as there are almost no signs of these shenanigans in their respective price charts, which are here...and here. Thursday's price action is the red trace.
The dollar index opened around 82.30 in Far East trading...and hit its low around 1:00 p.m. Hong Kong time. From that point a rally worthy of the name developed...and that hit its zenith at the 82.79 mark about 11:40 a.m. in New York. After that it got sold down to, and closed at, the 82.60 mark.
Just eye-balling the gold and silver charts above, it would certainly be hard to make a case that the activity of the dollar index had much of a bearing on what was happening in any of the four precious metal markets yesterday...especially during the New York session.
The gold shares sold off a hair at the open, but found their feet about fifteen minutes later...and by shortly after 11:00 a.m. Eastern, the stocks had pretty much hit their highs of the day...and only sold off a bit in the last half hour of trading. The HUI finished up 1.37%.
With the odd exception, the silver equities had a very decent day as well...and Nick Laird's Silver Sentiment Index closed up 1.81%.
(Click on image to enlarge)
For the second day in a row, there was a pretty decent Daily Delivery Report from the CME. They reported that 269 gold contracts were posted for delivery within the Comex-approved depositories on Monday. The two biggest short/issuers were the Bank of Nova Scotia and JPMorgan out of its client account...with 180 and 88 contracts respectively. The big long/stoppers were HSBC USA and Deutsche Bank with 155 and 88 contracts respectively. One lonely silver contract was also posted for delivery at the same time.
For the second day in a row there were no reported changes in either GLD or SLV...and for the third day in a row there was no sales report from the U.S. Mint.
On Wednesday, the Comex-approved depositories reported receiving 168,218 troy ounces of silver...and didn't ship any out. The link to what little action there was, is here.
I have the usual number of stories again today...and a lot of them are worth reading. But, as always, the final edit is up to you.
Neither Goldman Sachs Group Inc. nor its employees will face U.S. criminal charges related to trades they made during the financial crisis that were highlighted in a 2011 U.S. Senate report, the Justice Department said on Thursday.
The unusual announcement not to prosecute criminally came in an unsigned statement attributed to the department.
Few expected the bank to face criminal charges, but in April 2011, U.S. Senator Carl Levin asked for a criminal investigation after the subcommittee he leads spent years looking into Goldman.
Levin's subcommittee held televised hearings as part of its inquiry, which centered on a subprime mortgage product known as Abacus. He said Goldman misled Congress and investors.
As everyone knows already. There are two kind of laws...one for the rich and powerful...and one for the rest of us. The story was posted on the foxbusiness.com Internet site late yesterday...and I thank California reader Ron Hanna for sending it. The link is here.
Common sense leads us to the "obvious" conclusion that the U.S. stock market is a rigged skimming operation that is essentially a form of legalized, officially sanctioned fraud.
As regular folks continue to pull their money out of the market, either tiring of losses and volatility or recognizing it is rigged to their disadvantage, trading volumes have declined, making official but "secret" intervention both cheaper and easier.
Just as the U.S. stock market now depends on high-frequency trading, it also depends on official intervention to stop any decline.
How is it legal for HFT computers to skim profits that are unavailable to human traders? Clearly, this is legalized fraud, or if you prefer, embezzlement.
This excellent article by Charles Hugh Smith was posted on this oftwominds.com Internet site yesterday...and it's certainly worth the read. I thank reader U.D. for bringing it to our attention...and the link is here.
Details about a secretive government program to bail out money-market mutual funds are finally coming to light.
Acting without any explicit congressional authority, the U.S. Treasury guaranteed in excess of $2.4 trillion of money market funds after the giant Reserve Primary Fund "broke the buck" following the bankruptcy of Lehman Brothers. The program, which ended on Sept. 18, 2009, seems to have prevented a panicked run by money-market fund investors.
But until now the Treasury has kept the identities of the funds that received government backing and the amounts guaranteed secret. It was not clear how many funds obtained backing or for how much taxpayers were on the hook during the program's duration.
The data from the Treasury show that taxpayers were backing in excess of $2.4 trillion through the mutual fund program. Hundreds of funds participated in the program, amounting to almost 99 percent of the total money-market mutual fund assets.
This story showed up on CNBC's website early yesterday morning...and I thank Scott Pluschau for being the first one through the door with it. The link is here.
As channel-stuffing shifted from the US to China and Europe, so the new vehicle sales data has disconnected from a number of realities. Whether it is economic growth or Ford's share price, things look a little over-cooked in the land of if-we-build-it-the-government-will-buy-'em.
However, there is one index that tends to see through all the unreality much more clearly than our analysis above, that is the Used Vehicle Price index. Each time this index has dropped and broken below its two-year average, the auto industry has tended to fade rapidly.
This very short Zero Hedge article contains an extraordinary graph...and is well worth the 1-minute of your life it will take to read this. I thank Casey Research's own David Galland for sending it around to the Casey Research Discussion Group yesterday...and the link is here.
That "hissing" sound you hear is the air leaking out of the bond market bubble.
No one seems to notice – or, rather, no one seems to care – that interest rates have spiked over the past two weeks...
The yield on the 10-year Treasury note bottomed at an historic low rate of 1.4% two weeks ago. Yesterday, it closed at 1.62%. That's a 15% increase in borrowing costs. And it likely signals an intermediate reversal in the direction of interest rates.
This short read [with an excellent graph] was written by Jeff Clark over at Stansberry & Associates...and was posted on their growthstockwire.com website yesterday. I thank Nitin Agrawal for sending it along...and it's definitely worth running through. The link is here.
The list of global banks that have been accused in recent years of laundering foreign transactions totaling billions of dollars has been growing — Credit Suisse, Lloyds, Barclays, ING, HSBC — and now Standard Chartered.
The details in each case are different, with the international banks suspected of using their American subsidiaries to process tainted money for clients that included Iran, Cuba, North Korea, sponsors of terrorist groups and drug cartels.
What the cases have in common is that the accused banks took advantage of a law that was not changed until 2008 and that allowed banks to disguise client identities and move their money offshore. The cases, including one filed this week by New York’s banking regulator against Standard Chartered, also cast a harsh light on just how much activity with Iran was permitted in the years leading up to 2008 and whether the practices had violated the spirit, if not the letter, of the law.
This very interesting read was posted on The New York Times Internet site on Wednesday...and I thank Phil Barlett for finding it for us. The link is here.
Now that a state regulator in New York has accused Standard Chartered, one of London’s most reputable banks, of colluding with Iran, Britain seems to be drawing a line against what many here consider American overreaching.
On Wednesday, even Mervyn A. King, the central bank governor who has been one of the industry’s harshest scolds, seemed to defend Standard Chartered against the New York allegation that it had schemed with the Iranian government to launder billions of dollars for the potential support of terrorist activities.
“All that the U.K, authorities would ask is that the various regulatory bodies that are investigating a particular case try to work together and refrain from making too many public statements until the investigation is completed,” Mr. King said at a news conference. “That seems to me the appropriate time to make clear what the judgment is and what the punishment is.”
As I said in this space yesterday, the large international banks make a lot of money working the shady and outright criminal side of the street...and it wouldn't surprise me if this Standard General story was made to disappear in short order. It showed up in The New York Times on Wednesday as well...and I thank Donald Sinclair for sending it along. The link is here.
The world’s oldest shipping company sold its last vessel and is going out of business, according to the liquidator.
Stephenson Clarke Shipping Ltd., started in 1730, has been placed into liquidation, according to a statement from accounting firm Tait Walker. The Newcastle-Upon-Tyne, England- based shipper, which employed nine people, sold off its final vessel in July, according to the statement.
This Bloomberg story was filed from London yesterday early yesterday morning Eastern time...and I thank reader Scott Pluschau for his second offering in today's column. The link is here.
Greek youth unemployment figures released on Thursday (9 August) by the Hellenic Statistic Authority marked another record high at 54.9 percent in May compared to around 41 percent to the same period last year.
“It is indeed a matter of deep concern for the commission and the unprecedented level of unemployment in Greece, in particular for youth unemployment,” European Commission spokesperson Olivier Bailly told reporters in Brussels.
Bailly said the ‘troika' - the EU, European Central Bank and International Monetary Fund (IMF) - along with the Greek authorities will need to address the rising unemployment issue among its youth.
This story, filed from Brussels, showed up on the EUoserver.com website yesterday afternoon local time...and I thank Roy Stephens for sending it. The link is here.
Factory gate prices in China fell at an accelerating rate of 2.9pc in July as the economy flirted with industrial recession, prompting calls for further stimulus to head off Japanese-style deflation.
“Severe deflation pressures are rippling across the country,” said Alistair Thornton and Xianfeng Ren from IHS Global Insight. “Deflation, not inflation, is the greatest short-term threat to the Chinese economy.”
“The hard landing has happened,” said Charles Dumas from Lombard Street Research. “We don’t believe official data. We think GDP slowed to a 1pc rate in the second quarter.”
A blizzard of weak data has caught policy-makers off guard, though shares rallied in Shanghai on hopes for monetary loosening from China’s central bank after consumer price inflation (CPI) fell to 1.8pc.
This story showed on the telegraph.co.uk Internet site late yesterday evening...and is another offering from Roy Stephens. The link is here.
Japan's biggest bank Nomura has issued an 11-page study evaluating the likelihood that the UK will leave the European Union entirely or partly.
Events could accelerate as soon as this autumn if eurozone woes force the Government to commit to a firm date for a BRIXIT referendum.
"The effect a looser relationship with the EU would have on the UK economy in general and on the financial services sector in the UK in particular is not clear at this time, even though British eurosceptics argue that being freed from EU regulation would be a booster. However, the prospect is, in our view, bound to raise concerns – indeed, is doing so already in the City."
The core point is that the eurozone may have to take drastic steps in integration (fiscal union, etc) to save the euro, making it nigh impossible for a fully sovereign state to remain part of the Project.
This long Ambrose Evans-Pritchard blog was posted on The Telegraph's website yesterday...and I thank Roy Stephens for sending it. The link is here.
The British—slightly less than a thousand of them—used to govern India. Without air-conditioning.
Conan O’Brien was not the only one who watched the London Olympic opening ceremonies with amazement. “Hard to believe my ancestors were conquered by theirs,” he tweeted. Every Indian watching must have been thinking the very same.
Until their TVs went dark.
The recent power outage in India interested me more than the Olympics. (I had a very British reaction to the opening ceremonies: I found them excruciatingly embarrassing.) The Indian blackout was surely the biggest electricity failure in history, affecting a staggering 640 million people. If you have ever visited Delhi in the summer, you will have some idea what it must have felt like.
“Every door and window was shut,” Rudyard Kipling recalled of summer in the scorched Indian plains, “for the outside air was that of an oven. The atmosphere within was only 104 degrees, as the thermometer bore witness, and heavy with the foul smell of badly-trimmed kerosene lamps; and this stench, combined with that of native tobacco, baked brick, and dried earth, sends the heart of many a strong man down to his boots, for it is the smell of the Great Indian Empire when she turns herself for six months into a house of torment.”
This is a very interesting and worthwhile read. It was posted on thedailybeast.com website on Monday...and I thank David Galland at Casey Research once again for his second story in today's column. The link is here.
International food prices rose sharply in July after three months of decline, driven by a spike in grain and sugar prices, a United Nations report said Thursday.
Severe drought gripping the U.S. Midwest has sent corn prices soaring by almost 23 percent and expectations of worsened crop prospects in Russia because of dry weather sent world wheat prices up 19 percent.
The United States is the world's No. 1 exporter of corn, soybeans and wheat and the price hikes are expected to be felt across the international marketplace, hurting poor food-importing countries, said a study by British charity Oxfam issued on the eve of the U.N. report.
The Rome-based U.N. Food and Agriculture Organization said in its monthly price report on Thursday that its index climbed 6 percent in July although it was well below its peak reached in February 2011.
This AP story was filed from Rome early yesterday morning...and was picked up by the finance.yahoo.com Internet site. I thank reader Scott Pluschau for his third and final offering in today's column...and the link is here.
The first is with Ben Davies...and it's headlined "There is a Massive Buyer in the Gold Market". The second blog is with Bill Haynes. It's entitled "We Are Now Seeing Huge Orders For Physical Gold & Silver". And lastly is this audio interview with Peter Schiff...and according to Eric, he covers gold quite a bit.
Market analyst and GATA consultant Dimitri Speck posted a study on the safehaven.com Internet site yesterday...a study of what he concludes was a high-frequency trading attack on the gold futures market on June 7th that drove the price down $20 in two minutes. Speck concludes:
"Although in the past central banks repeatedly intervened in the gold market, it is unlikely that this action was done by a central bank. In the field of high-frequency trading, the technical complexity and the necessary level of experience and specialization are probably too high. Therefore, a private financial institution must have done the high-frequency price manipulation to achieve a trading profit. This was a well-defined incident in thin trading, limited to a short time period and to a single market. These conditions make it ideal for a successful investigation by the regulatory authorities."
The rest of the preamble by Chris Powell, along with the link to the story itself, is contained in this GATA release. It's posted over at the gata.org Internet site...and the link is here. I thank reader U.D. for being the first to alert me to this story.
Tocqueville's John Hathaway says as more investors realize that capital safety is the real reason to own gold, safe storage is more important than ever.
The Gold Report: John, you predicted $2,000/ounce (oz) gold prices. After rising to $1,900/oz last fall, the price has hovered at $1,500-1,600/oz much of 2012. What will cause it to take the next leg up?
John Hathaway: There are several factors that I think will drive gold higher. On the monetary side, central bankers and treasury secretaries are bobbing and weaving, making it up as they go. They lack a comprehensive solution to the sovereign debt crisis in Europe, to the forces that are pulling the Eurozone apart or to the stagnation in the world's key economies. Ultimately, all of this will further debase the value of paper currency.
More quantitative easing may also be on the table, and I have read a good deal about taking nominal rates to less than zero. That would mean people who have money in savings accounts would be charged a fee for keeping the money, as opposed to earning interest. It would not surprise me to see that evolve as a way to get all of these free reserves in the banking system into the economy.
This interview with John was posted over at The Gold Report late Wednesday. Donald Sinclair sent it to me in the wee hours of yesterday morning, but Thursday's column was already bursting at the seams, so it had to wait until today's column...and here it is now. This copy of it is posted over at the mineweb.com Internet site...and the link to this must read interview is here.
China's interest in obtaining gold, as planned at the highest levels of the government, is recounted in a couple of postings at Centennial Precious Metals' USAGold.com Internet site.
Yesterday, silver market analyst and market manipulation exposer Ted Butler responded to the infamous report in the Financial Times earlier this week that the U.S. Commodity Futures Trading Commission will drop its nearly 4-year-old investigation of the silver market.
Butler concludes that while the big silver short, JPMorgan Chase, is bigger than the U.S. government, publicity has trapped the bank so that it will be screwed whether it maintains its silver short position or tries to get out of it.
Ted's commentary is headlined "The CFTC Silver Investigation"...and it's posted over at the silverseek.com Internet site. It's a must read from one end to the other...and the link is here. I've already read it twice.
Freegold Ventures Limited is a North American gold exploration company with three gold projects in Alaska. Current projects include Golden Summit, Vinasale and Rob. Both Vinasale and Golden Summit host NI 43-101 Compliant Resource Calculations.
The 2012 exploration program includes additional drilling on both Golden Summit and Vinasale. An updated NI 43-101 resource was calculated on Golden Summit in December 2011 and using a 0.35 g/t cutoff is 14,840,000 tonnes @0.66 g/t Au - hosts 316,000 ounces in the indicated category and 50,0460,000 tonnes @0.61 g/t Au - hosts 991,000 ounces in the inferred category. Drilling has been underway on this road accessible project since mid January. To date over 36,000 feet have been drilled since January on the project, of which 30,000 feet have been aimed at resource expansion. Drilling remains ongoing. An updated NI 43-101 is expected to be completed in Q3.
Additional drilling is also underway on Vinasale. Vinasale currently hosts recently updated NI 43-101 resource calculation of 49,320,000 mt @1.09 g/t for a total of 1,735,000 contained gold ounces in the inferred category using a 0.5 g/t cutoff. Please visit our website for more information.
I wouldn't read much of anything into yesterday's price action in gold and silver. It was another day similar to Bill Murray's movie Groundhog Day. It was just about the same as Wednesday's. Nothing to see here, dear reader, please move along.
Well, it didn't take Ted very long to take my rather pithy advice to post his landmark essay in the public domain...as that's where it deserved to be...and I hope you agree now that you've read it.
The Capital Account TV interview with Chris Powell...and now this brass knuckles essay from Ted, is a double shot across the bows of the CFTC, the CME Group...and JPMorgan. They're all naked as jay birds, as everyone is on to them...and now we just have to wait for their next move.
The thing that amazes me the most as I put the finishing touches on today's column, is that silver and gold miners just sit their like lumps, even though a lot of them know precisely what's going on. We should be asking ourselves why we are invested in these companies when there isn't one company whose management and/or board of directors hasn't had the gonads to write to Gary Gensler and ask him for some sort of explanation. Not once in four years have any of them gone through this process. As I've said before...by their very silence, they are just as complicit as JPMorgan et al. Too bad there isn't capital punishment for cowardice.
Maybe they don't want to be associated with us 'conspiracy theorists'. Well, as one well-known gold analyst over at goldcore.com put it recently..."I expect conspiracy theory is about to become conspiracy fact."
Just about every precious metals mining executive [and analyst] reads everything that either Eric Sprott or John Embry has been writing over the last five years...and they haven't exactly been quiet about their beliefs...and their phones aren't ringing off the wall, either. You have to ask yourself why that is the case. What is it with these people?
I note with some interest the recent management changes at Barrick and Kinross. As bad as their managements are, or are not...that's not the issue...and they know it too. None of these problems would exist if the gold and silver prices were allowed to find their true market value, which they aren't. But when it does finally happen, mining executives will become like rock stars.
And in case you're wondering, I'm still "all in".
During Far East trading during their Friday, both metals were under a bit of selling pressure...and that intensified a hair shortly after the London open. Gold volume is light, but about 50 percent heavier than this time on Thursday...and silver volume, net of roll-overs out of the September contract, is about the same as it was Thursday. The dollar index isn't doing a thing. And as I hit the 'send' button at 5:20 a.m. Eastern time, gold is down about seven bucks...and silver about 30 cents.
Like it has been all week, you can't read too much into this price activity when volume is this light. We could blast higher from here at any time...but the opposite is true as well...so we just have to continue waiting to see how this situation resolves itself.
And if it does resolve itself to the upside, the first question on your mind should be "who is taking the short side of the trade?" I get tired of saying this, but the answer to that question will determine how fast and how high we go from here.
Today we get both the weekly Commitment of Traders Report...along with the August Bank Participation Report. The data for both is as of the close of Comex trading on Tuesday...so we can compare apples to apples in both reports for that one day per month, as the BRP is derived from the COT data on that date.
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.
Enjoy your weekend, or what's left of it if you're west of the International Dateline...and I'll see you on Saturday...or Sunday.