Gold & Silver Daily
"It was another day where the high-frequency traders showed up during the Comex trading session"

¤ Yesterday In Gold & Silver

There was a tiny rally in gold during morning trading in the Far East on their Friday, but starting around 2:00 p.m. in Hong Kong, the gold price began to develop its usual negative bias.  That ended at the beginning of Comex trading...and the subsequent rally got cut off at the London p.m. gold fix.

Then at 10:45 a.m. EDT, the high-frequency traders showed up...and fifteen minutes later, the gold price was down another fifteen bucks.  The low tick [$1,311.70 spot] came at precisely 11:00 a.m. in New York...and from there the gold price rallied quietly until 3:00 p.m. in the electronic market, when the price popped up over ten bucks in short order before trading quietly into the the close from 3:30 p.m. onwards.

The gold price finished the day at $1,333.80 spot...down 30 cents from Thursday's close.  Volume, net of roll-overs was very light...around 88,000 contracts.  But gross volume was monstrous.

Here's the New York Spot Gold [Bid] chart on its own...and the fifteen minutes downward  price 'adjustment' between 10:45 and 11:00 a.m. EDT is more than obvious.

It was very much the same price pattern in silver, except the 10:45 to 11:00 a.m. EDT price adjustment was even more noticeable...and the subsequent rally didn't get silver back to anywhere near it's Thursday closing price.

Silver closed the Friday session at $19.99 spot...down 26 cents on the day.  Gross volume was very decent...around 43,000 contracts.  Net volume wasn't much below that.

Here's the New York Spot Silver [Bid] chart...complete with the fifteen minute price 'adjustment'.

Platinum and palladium did not escape yesterday's sell-off...although their respective price 'adjustments' came at slightly different times.

The dollar index closed late on Thursday afternoon in New York at 81.77...and when trading resumed in the Far East on their Friday morning, it spent the rest of the day chopping every-so-slightly lower...closing at 81.66...down 11 basis points.  Nothing to see here.

It should be obvious to anyone but the willfully blind, that yesterday's price action in all four precious metals had nothing whatsoever to do with the goings-on inside the currency markets.

Not surprisingly, the gold stocks spent most of the day in negative territory...but popped into winning territory on the back of the surprise gold price rally late in the electronic trading session.  The HUI finished up 1.29%.

The silver stocks weren't as fortunate...and Nick Laird's Intraday Silver Sentiment Index closed down 0.53%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 45 gold and 30 silver contracts were posted for delivery on Tuesday.  In gold it was Barclays as the only short/issuer...and the Bank of Nova Scotia as the only long stopper.  In silver, it was the same story as it has been all month...the short/issuer was JPMorgan out of its client account, with 24 contracts....and JPMorgan was the big long/stopper with 22 contracts out of its in-house [proprietary] trading account.  The link to yesterday's Issuers and Stoppers Report is here.

For a change, nothing happened in the GLD ETF yesterday...and an authorized participant withdrew a smallish 289,388 troy ounces out of SLV.

For the fourth day in a row,  there was no sales report from the U.S. Mint.

Over at the Comex-approved depositories in silver on Thursday...nothing was reported received, but 298,624 troy ounces were shipped out the door.  The link to that activity is here.

In gold, they reported receiving 32,137 troy ounces...and only shipped out a tiny 230 troy ounces.  The link to that activity is here.

The Commitment of Traders Report was a bit of a surprise in silver, as the Commercial net short position in that metal actually declined by 6.04 million ounces....and now sits at 60.7 million ounces in total.  Based on the price action during the reporting week, an increase appeared certain.  Ted Butler says that although this headline number looks great...under the hood, it wasn't quite as rosy.

In gold, the Commercial net short position increased by a healthy 1.0 million troy ounces...and the total Commercial net short position now stands at 3.47 million ounces.  Once again Ted mentioned that digger deeper into the numbers showed that the deterioration was a bit worse than even this number indicates.

So far, this rally off the lows in both metals has been very orderly.  I was hoping for disorderly, but up to this point, it hasn't happened.

There was a very interesting Reuters story out yesterday that really caught my eye...and here, in part, is what had to say..."Russia, Ukraine. and Azerbaijan are among eight countries that increased their gold holdings in June, data from the International Monetary Fund shows, reflecting strong interest on the part of emerging economies to own gold as part of their reserves....Data showed Russia's gold reserves climbed 0.3 tonnes to a total of 996.4 tonnes in June for its ninth consecutive monthly increase."

It was such a small increase that it didn't even show up as a rounding error in their June data when they updated their website on July 19th.  Both May and June data showed their official reserves as 32.0 million ounces.

Since this is my Saturday column, I always use this occasion to empty out my in-box...and today is no exception.


¤ Critical Reads

Obama, Republicans gear up for bruising U.S. budget fight

Another dramatic showdown between Republicans and the White House over federal spending looks inevitable this fall, with scary talk of government shutdowns and default on government debt.

While Capitol Hill analysts are not predicting catastrophe, they have several reasons to worry that the conflict just weeks away could be even worse than usual.

The timing is particularly bad, they say, because the political climate in Washington is unusually frayed by a host of tangential issues not present in previous battles.

This Reuters story, filed from Washington, was posted on their website in the wee hours of yesterday morning EDT...and today's first story is courtesy of West Virginia reader Elliot Simon.


U.S. blows out $16.7 trillion debt limit

The US Treasury has already exceeded the federal legal borrowing limit of $16.7 trillion in May. That signals the main structural problems remain unresolved putting at risk the fragile recovery.

The country’s  outstanding public debt is already $38.82 million above the statuary debt ceiling and now at $16,738,220,000,000.00, according to Treasury data.

Christopher Weafer from the Economist Macro Advisory Consultancy says the numbers show “that the debt issue along with the deficit is two very structural problems in the US that remain unresolved and without any clear mechanism on how they are going to be resolved”.

In the short term it doesn’t cause any immediate crisis and that’s why I guess the news is not widely covered, ” Weafer told RT.

This piece showed up on the Russia Today website late yesterday morning...and it's the first contribution of the day from Roy Stephens.


Despite Declining Deficit, Foreigners Aren’t Bailing Us Out, So the Fed Will Keep QE Going

Foreigners recycling their trade surpluses have been an important source of purchases for US government debt. As you can see from the chart of long-term securities purchases by foreigners, that buying collapsed during the crisis. And, interestingly, it has recently fallen sharply again.

Offsetting the reduction in purchases of US debt by foreigners, the Fed has stepped in with multiple quantitative easings (QE), buying government securities itself in order to add liquidity and drive interest rates down. The shift into an accommodative policy is easy to see in the big picture of the holdings of Treasuries at the Fed.

The loss of foreign enthusiasm for US government debt would normally be a red flag for our economy. This time around, the slack is being papered over by the Fed, which is creating money out of thin air in order to buy what is, in essence, most of the new debt being issued by the federal government. By filling the gap left by exiting foreigners, the Fed has been able to sustain low interest rates—for the time being.

This most excellent commentary by Casey Research's own Bud Conrad, was posted on their Internet site yesterday.  The short article contains some excellent charts...and I consider it a must read.


Doug Noland: The One-Year Anniversary of "Do Whatever it Takes

As a whole, the global hedge fund community continues to struggle for performance. The volatile and policy-dominated “risk on, risk off” dynamic is tough on many trading strategies. Global risk markets – currencies, commodities, EM, bonds and equities – remain minefields, particularly for multi-asset class approaches. I believe enormous leverage has been employed by myriad strategies, certainly including global “carry trade,” corporate, MBS and municipal debt. I’ll assume there’s no egregious LTCM-like leveraging, but I still worry a lot about global derivatives markets. I believe the world of speculative finance is full of problematic “crowded trades.”

A few weeks back the markets were again indicating fragility – and the Fed once again demonstrated its market-pleasing low tolerance for market weakness. The flaw in aggressive QE is the notion that the Fed will be able to back away from market intervention without major consequences. Fed stimulus can spur debt issuance, market risk embracement and speculation. But if that debt is mispriced and predominantly non-productive, the system faces unavoidable debt problems. If speculative leverage is playing a prominent role in inflating securities and asset markets, the system face unavoidable de-leveraging problems. If the already vulnerable household sector continues to load up on mispriced stocks and bonds, there will be negative consequences.

If there are major risk misperceptions endemic in the global marketplace – including with ETFs, the hedge funds, derivatives and perceived low-risk strategies – then there is latent market fragility that is only exacerbated by central bank liquidity injections and backstop assurances. I fully expect history to look back at the past year’s Draghi Plan, Fed open-ended QE, and Bank of Japan “Hail Mary” monetary inflation as misguided market interventions that set loose historic market Bubble excess. I will posit that global systemic risk is significantly higher today than it was a year ago. And if the current trajectory of global central bank market intervention continues, systemic risk will be even more problematic one year from now.

Doug's weekly Credit Bubble Bulletin is always worth reading...and yesterday's offering over at the Internet site, is no exception.  I thank reader U.D. for sending it our way.


Feds tell Web firms to turn over user account passwords

The U.S. government has demanded that major Internet companies divulge users' stored passwords, according to two industry sources familiar with these orders, which represent an escalation in surveillance techniques that has not previously been disclosed.

If the government is able to determine a person's password, which is typically stored in encrypted form, the credential could be used to log in to an account to peruse confidential correspondence or even impersonate the user. Obtaining it also would aid in deciphering encrypted devices in situations where passwords are reused.

"I've certainly seen them ask for passwords," said one Internet industry source who spoke on condition of anonymity. "We push back."

A second person who has worked at a large Silicon Valley company confirmed that it received legal requests from the federal government for stored passwords. Companies "really heavily scrutinize" these requests, the person said. "There's a lot of 'over my dead body.'"

This very disturbing story was posted on the Internet site late on Thursday morning...and I thank U.K. reader Tariq Khan for bringing it to our attention.


Pentagon to deploy huge blimps over Washington, D.C. for 360-degree surveillance

A pair of high-tech Army blimps is coming to the greater Washington, DC area, and soon they will be able to provide the military with surveillance powers that spans hundreds of millions of acres from North Carolina to Niagara Falls, Canada.

The airships are part of Raytheon’s Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System, or JLENS, and when all is said and done they’ll offer the United States military what the defense contractor calls “an affordable elevated, persistent over-the-horizon sensor system” that relies on “a powerful integrated radar system to detect, track and target a variety of threats.”

Once above the nation’s capital, JLENS will allow the Army to see for 320 miles in any direction from 10,000 feet above the earth. The system can be set up to operate on its own for an entire month without requiring refueling, and offers the Pentagon surveillance capabilities that dwarf other options at a penny of the cost.

This essay, with lots of great photos, was posted on the Russia Today website early on Thursday evening...and I thank reader M.A. for sending it along.


Justin Raimondo: Is America a Free Country?

Jimmy Carter is making waves: “America does not have a functioning democracy at this point in time,” he told a meeting of the American Bridge, held in Atlanta, when asked about Edward Snowden’s exposure of Washington’s secret global surveillance system. Looks like the only outlet that covered the meeting was Der Spiegel, but word is spreading and it won’t be long before the Usual Suspects start ranting about what a flake Carter is, and that he should shut up already and go lock himself in his presidential library. But think about it: for a former President to say this is unprecedented in modern times.

The NSA spying scandal, he went on to tell his audience, is subverting democracy around the world: he warned that one consequence of the Snowden revelations will be increasing suspicion of American online platforms, such as Facebook and Google, both of which he characterized as major factors energizing pro-democracy movements abroad.

Carter’s previous statements about the Snowden affair were mildly supportive: he told CNN he thought “the secrecy that has been surrounding this invasion of privacy has been excessive,” and that Snowden’s bringing the secret surveillance of Americans “to the public notice has probably been, in the long term, beneficial.” Yet this new statement goes way beyond that: it is a sweeping condemnation of the current regime. That a former US President would say such a thing has got to be the scariest public pronouncement I’ve heard since the Watergate era. What’s even scarier: Carter is right.

This excellent...and right on the money commentary...was posted on the Internet site on July 19th...and I've been saving it for today's column.  I thank Danish reader Jan Gindrup for finding it for us.  It's certainly a must read for all students of the New Great Game...and certainly all Americans.


Iceland proposal to write off debt triggers S&P outlook downgrade

Rating agency Standard & Poor’s yesterday added its voice to a chorus of warnings against a pledge by Iceland’s new government to write off as much as 20 per cent of all its citizens’ mortgage debt, announcing that it had revised downwards its outlook for the country from stable to negative.

The revision reflected a one-in-three chance that the agency could lower Iceland’s credit rating within the next two years, S&P said. The country’s triple B minus rating is considered the lowest investment grade, just one notch above junk. The proposed debt write-down could cost 10 per cent of 2013 economic output, and “possibly much more”, the agency said.

The promise of debt relief was the main campaign pledge of the Progressive party and the Independence party, who went on to form a coalition after the election. They focused on inflation-linked loans, payments on which soared following the country’s deep financial crisis owing to a 36 per cent depreciation of the currency.

This story appeared on the Internet site in the wee hours of this morning BST...and I thank Roy Stephens for his second offering in today's column.


Banks shiver as UBS swallows $885 million U.S. fine

UBS will pay $885 million in a settlement with a U.S. regulator over allegations the Swiss bank misrepresented mortgage-backed bonds during the housing bubble, paving the way for billions more to be paid by other banks.

European and U.S. lenders such as Credit Suisse and Deutsche Bank have set aside money to cover the cost of any losses arising from the dispute with the Federal Housing Finance Agency but estimates vary widely.

The FHFA said late on Thursday UBS will pay $415 million and $470 million respectively to government-sponsored housing enterprises Fannie Mae and Freddie Mac to resolve claims related to securities sold to the companies between 2004 and 2007.

UBS is just one of 18 banks the FHFA pursued in 2011 for allegedly misrepresenting the quality of the collateral backing securities during the run-up to the financial crisis.

File this under the cost of doing business, as it's little more than a licensing fee.  This Reuters story, co-filed from London and Frankfurt, was posted on their website early yesterday morning EDT.  My thanks to Elliot Simon for sharing it with us.


Russia and Iran: A postmodern dance

If, as expected, Russian President Vladimir Putin undertakes the trip to Tehran in August, it will be rich in symbolism - even if he were to give up the travel plan to take a boat across the Caspian Sea to reach the Iranian shore. The congruence of interests of the two regional powers, which are neighbors, has never been in doubt.

But then, this year is also, by a curious coincidence, the 70th anniversary of the Tehran Conference of 1943, which was a poignant event in Russo-Iranian relations in their rich tapestry of history dotted with blood and betrayal.

The history of Russian-Iranian relations is stunning. Putin has been the only Russian leader to visit Tehran since the Bolshevik revolution in 1917. Yet, both countries are ancient players on the geopolitical arena.

Putin's return to Tehran nearly seven years after his hugely successful first visit in 2007 leaps out of a morality play. Russian foreign policy has come full circle. Putin hopes to clean up the Aegean stables, by literally removing the debris that accumulated during the years when he was not in the Kremlin.

This Roy Stephens offering, his last in today's column, was posted on the Asia Times website early Friday morning Hong Kong time...and it's an absolute must read for all students of the the New Great Game.


Why Buffet Bailed on India

India has long been viewed as a value investor’s dream: rapid growth, 1.2 billion people pining for a taste of globalization, and underdeveloped industries ripe for turnarounds. So it surprised few when the genre’s guru, Warren Buffett, placed a bet on the world’s ninth-biggest economy.

What did come as a surprise, though, was last week’s decision by the billionaire’s Berkshire Hathaway Inc. to give up on India’s insurance market after just two years. Adding to the drama, the withdrawal came the same week India unveiled plans to open the economy as never before to foreign-direct investment.

Buffett isn’t alone in voting with his feet. Wal-Mart Stores Inc., ArcelorMittal (MT) SA and Posco are pulling back on investments in India that they had announced with great fanfare. What’s scaring foreigners away? A rampant political dysfunction that has stopped India’s progress cold

This very interesting commentary by Bloomberg columnist William Pesek was posted on their website last Saturday...and if you know nothing about the business climate in India, this is definitely worth reading.  I thank Nitin Agrawal for sending it...and I've been saving it for today's column.  Jim Rogers thought this story was spot on.


Japan Prices Rise Most Since ’08 in Boost for Abe

Japan consumer prices rose the most since 2008 in June, an early sign that the world’s third-biggest economy may be starting to shake off 15 years of deflation.

Consumer prices excluding fresh food increased 0.4 percent in June from a year earlier, the statistics bureau said in a statement today. The median estimate of 29 economists was for a 0.3 percent gain, a Bloomberg News survey showed. Excluding energy as well, prices dropped 0.2 percent, continuing more than four years of declines.

As Prime Minister Shinzo Abe’s policies weaken the yen and energy costs rise, the increase in consumer prices could stoke inflation expectations and encourage companies and consumers to spend more, bolstering the economic recovery. After April’s unprecedented monetary easing, the next challenge for Abe is to loosen constraints on the labor market and companies to achieve sustained growth and a goal of 2 percent inflation.

“Japan’s economy is on the right track to pull out of deflation,” said Tomo Kinoshita, chief economist at Nomura Holdings Inc. in Tokyo. “The relatively large increase in prices should have a knock-on effect of enhancing consumer and business inflation expectations.”

This Bloomberg news item was posted on their Internet site late on Thursday evening MDT...and I found it yesterday's edition of the King Report.


Morgan considers exiting commodities business, but will stick with gold

JPMorgan Chase revealed on Friday that it was considering a sale of its physical commodities business, signalling the potential exit of one of Wall Street's biggest traders of cargoes of oil, coal and industrial metals.

The announcement capped a week of intensifying scrutiny of banks' role in the raw materials supply chain. The Federal Reserve said on July 19 it was reviewing a landmark decision to permit banks to own physical commodities, not only paper derivatives. On Tuesday witnesses at a Senate hearing raised questions about metal warehouses, power plants and tanker vessels owned by banks.

JPMorgan's physical commodities business includes trading in energy markets such as oil, gas, coal and emissions, and base metals. Its longstanding precious metals vaulting and commodity derivatives businesses are not part of the strategic review.

All of the early stories on this topic yesterday did not include the fact that the precious metals were not part of this restructuring...much to everyone's disappointment...including mine.  But this story from the Financial Times of London pointed it out...and it's posted in the clear in this GATA release.   It's worth reading.


Ted Butler: Market Dominance

In the weekly review on July 20th, I referenced several news stories about JPMorgan.  A few hours after publishing that report, another big news story made the scene – a comprehensive front page story in Sunday’s New York Times concerning the big banks and base metal warehouse shenanigans. In a nutshell, the story alleged that giant financial firms, like Goldman Sachs and JPMorgan, had amassed vast holding of metals warehouses and then engaged in schemes involving artificial metal movements for personal profit (at the expense of the consumer and user communities)

This story was followed by news of senate committee hearings yesterday and CFTC interest in the warehousing issue and more commentary about the Federal Reserve having doubts about whether the big banks should be allowed to deal in physical commodities.  This issue is potentially as important as it gets. And it certainly begs the question I have asked repeatedly - why in the world should big banks be dealing in physical or derivatives on commodities in the first place?

Over the past few years, much has been written and discussed about the Volcker Rule that would outlaw proprietary trading by commercial banks.  The main purpose of the proposed rule was to end the risks to the financial system caused by reckless speculation by banks backed by insured deposits that were deemed too big to fail. The idea of the Volcker Rule is to get the big banks out of proprietary trading and eliminate any need for taxpayer bailouts for big bets gone wrong. While the big banks have held the Volcker Rule at bay and prevented its enactment to date, it occurred to me that there is an even more compelling reason why these banks, and especially JPMorgan, should not be allowed to trade commodities for their own accounts. Potential risk is one thing; clear and present damage is another.

This absolute must read essay by silver analyst Ted Butler was posted on the Internet site yesterday.


Dennis Gartman insists that there are no conspiracies in gold

Wednesday's "Talking Numbers" program by CNBC and Yahoo Finance concocted a silly pillow fight between two talking heads, commodity letter writer Dennis Gartman and UBS and CNBC analyst Art Cashin, over "gold conspiracy theories," Cashin having remarked this week, if a bit incoherently, that something seems to be wrong in the gold market.

Gartman disagreed today, insisting that there are no conspiracies in gold. So apparently Gartman would have investors believe, just for starters:

1) The Federal Reserve has no secret gold swap arrangements with foreign banks, since such undertakings among two or more entities would define conspiracy, and Fed Governor Kevin M. Warsh was lying when he admitted such secret arrangements.

2) The Bank for International Settlements is not constantly and secretly trading gold, gold futures, gold options, and other gold-related derivatives on behalf of its members, which are exclusively central banks -- again, action undertaken secretly in concert by two or more entities, or conspiracy -- and that admissions of such trading, including the BIS' own annual reports and Power Point presentations, are lies or forgeries.

GATA's Chris Powell has a thing or two to say about this...and this commentary from him is posted on the Internet site.  It's definitely worth reading.


Gold Smuggling Soars In India

India, the world's largest gold consumer, meets almost all of its demand via imports, and purchases from abroad require buyers to sell the rupee to raise greenbacks. Government efforts to curb imports is meant to limit that downward pressure on the currency but has instead driven a surge in illegal imports (smuggling) of the precious metal.

The rupee has fallen more than 10% in the past couple of months and the country has sharply increased the import tax on gold to 8% (from 1% in Dec 2011) and last month India's central bank banned the use of credit to procure gold (requiring dealers to pay in advance for imports). As the WSJ reports, the measures are having an effect. Gold imports declined 11% to 859.7 tons in 2012 from 969 tons in 2011 and the total for June fell about 80% to 30 tons from 162 tons.

But while supply may be falling, demand isn't - "Trying to manage this demand, which is so diversified, by restricting supply will lead to undesirable consequences." Sure enough, "smuggling of gold seems to be increasing month on month," the number of people arrested by the department for gold smuggling rose to 32 in Q2 2013 from just 4 the year before - and officials are able to "detect only about 5% to 10% of the gold smuggling."

This article was posted on the Zero Hedge website early yesterday morning...and I thank Elliot Simon for his last contribution to today's column.


Seizure of smuggled gold in India zooms 365% in Q1

After a two-decade lull, gold smugglers seem to be back in business in India, thanks to recent hikes in import duty on gold — from about one per cent to eight per cent in 18 months. In the April-June quarter of this financial year, seizure of smuggled gold hit Rs 59.82 crore — an increase of 365 per cent over Rs 12.86 crore in the same period a year ago. In volume terms, the increase would be even higher, because the average gold price in the quarter came down 6.6 per cent from that in the same quarter last year.

Seizure of the yellow metal in 2012-13 had doubled from the previous year to Rs 99.34 crore. This year, revenue authorities expect this to rise 150 per cent over last year to around Rs 250 crore. Further spike in seizures is expected in the coming quarters on the back an increase in import duty in June — from six per cent to eight per cent — as well as the Reserve Bank of India’s recent measures to curb gold imports.

Here's another story on the same subject.  This one, filed from New Delhi, was posted on the Internet site just after midnight this morning IST...and I thank Marshall Angeles for finding it for us.


Indian jewellers in a quandary over 20-80 export restriction

The gems and jewellery industry in India is in a quandary. Facing a severe liquidity crisis, retailers are up in arms about the new 20-80 principle worked out by the Reserve Bank of India to curb gold imports.

Consumers, on the other hand, are waiting on the sidelines and watching. With gold premiums in India soaring to new heights, the rise in premiums and a weak rupee have together denied buyers the benefit of the fall in the global prices.

The price of gold hit new highs in the Mumbai market this month, with 10 grams of gold costing around $477.20 (Rs 28,150) on Friday, though it had slipped a bit to $471.31 (Rs 27,800) per ten grams on Thursday, July 25.

Retailers say the new  guidelines by India's apex bank have also led to severe confusion in the market. Vinod Hayagriv of bullion house C Krishnaiah Chetty & Sons said, ``Ever since the announcement, availability of gold in the market has drastically slipped. It is becoming increasingly difficult to get supplies.''

This story, filed from Mumbai, was posted on their website yesterday...and it's definitely worth reading as well.  I thank Manitoba reader Ulrike Marx for sending it along.


Sprott's Thoughts: The Sun Shines on Silver

Solar power appears to be coming back with a vengeance on the back of recent announcements by China and Japan. Both countries are pushing for new programs to significantly increase their solar power capacity in the years ahead.

Last week, China’s State Council backed targets to more than quadruple the country’s solar generating capacity to 35 gigawatts by 2015. This target had been previously stated by China’s State Grid, which manages the country’s electricity distribution, but now has the official backing of China’s cabinet and its top governing body. According to the statement from the State Council, China will add around 10 GW per year from 2013-2015. If completed, this effort will significantly increase China’s solar power generating capacity, which stood at eight GW at the end of 2012.

Meanwhile, Japan is now expected to become the world’s largest solar energy market this year. According to a report by U.S. research firm IHS Inc., an estimated 5.3 gigawatts of generation capacity will be added this year, supplying  the output roughly equivalent to five nuclear reactors.  Japan’s domestic solar power market is forecast to reach $19.8 billion (¥1.91 trillion) in 2013, surpassing that of Germany, which was the biggest solar market from 2009 to 2012, according to IHS.

This very short essay by Messrs. David Franklin and David Baker over a Sprott Asset Management also falls into the must read category.


Reg Howe: Chinese GPS -- payback in full with benefits

Gold price-fixing litigator Reginald H. Howe writes this week that the world financial system can be set right only by China, whose U.S. dollar reserves, trading position, and interest in gold give it the power to discipline all governments and currencies. Howe proposes that China peg the world reserve currency, the dollar, to gold by giving gold a floor price in dollars. Howe's commentary is titled "Chinese GPS: Payback in Full with Benefits" and it's posted at his Internet site.

This lengthy essay by Reg was posted over at the Internet site on Thursday...and is definitely worth reading...and it certainly doesn't fall into the "Gold 101" category.  I found this posted in a GATA release yesterday.



¤ The Funnies

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¤ The Wrap

Cautious, careful people, always casting about to preserve their reputation and social standing, never can bring about a reform. Those who are really in earnest must be willing to be anything or nothing in the world's estimation, and publicly and privately, in season and out, avow their sympathy with despised and persecuted ideas and their advocates, and bear the consequences. - Susan B. Anthony

Today's pop 'blast from the past' is from 1969.  The British rock group that made this song a hit, was formed back in 1962...and I remember their three biggest hits very well.  This was the final big one.  If you're of that vintage, you should know it instantly...and the link is here.

The classical selection today is from the Baroque era...George Frideric Handel's "Water Music". It premiered on the banks of the Thames river on 17 July 1717.  What makes this particular performance special is that they're playing it not only with period instruments, but wearing period costumes as well.  Even the furniture is of that era.   My first impression when I saw it, was that it was a scene ripped out of the movie Amadeus...and if you haven't seen that movie, you owe it to you to do so.  The movie is a feast for the eyes as well as the is this Handel performance linked here.  I've never seen anything like it before.

It was another day where the high-frequency traders showed up during the Comex trading session...and they did it to all four precious metals at once.  They don't even try to hide anymore.  Except for that, I wouldn't read much into yesterday's price we are in the final days of rolling out of the August delivery month in gold.

Yesterday was also the last day for the large traders to roll out of their August positions...and was one of the reasons why gross volumes in both gold and silver were as high was they were.  The preliminary volume numbers from the CME for Friday showed that there are still 54,000 gold contracts open for August...and the lion's share of that will vanish by first notice day.  There are about 100 contracts left in the July delivery month in silver...all of which will have to be dealt with by the end of Tuesday trading as well.

I'm not expecting a lot of price activity between now and the end of the month...just more chopping and flopping around.  But never forget for a second that JPMorgan is in total control of the precious metal markets...and regardless of whether the price is rising rapidly or falling rapidly, they most certainly will be the guiding hand behind it all.

Here's the weekly Total PMs Pool chart courtesy of Nick Laird...and it certainly looks like things have bottomed out for the world's precious metal depositories.

(Click on image to enlarge)

That's it for the day...and the week.

Enjoy what's left of your weekend...and I'll see you here on Tuesday.