The smallish rally that started in London didn't last long...and certainly didn't make it over the $1,700 spot price level. The high of the day [$1,698.50 spot] came at the 3:00 p.m. BST London p.m. gold fix...which was 10:00 a.m. in New York. It was all down hill from there...with the gold price getting sold off in two small stages...and closing virtually on its low.
Gold closed at $1,680.60 spot...down $9.30 on the day. Because of roll-overs out of the April contract, gross volume was monstrous. But once all the switches were subtracted, net volume turned out to be a tiny 70,000 contracts.
As it turned out, silver's high of the day came about twenty minutes before I hit the 'send' button on Tuesday's column...around 10 a.m. British Summer Time...with a secondary high at the London p.m. gold fix.
That was the last time on Tuesday that silver had a $33 price handle...as it was quickly sold off from there. Silver closed at $32.59 spot...down exactly two bits on the day. Net volume was pretty skinny...around 27,000 contracts.
The dollar index, which had opened the Tuesday trading day in the Far East around the 78.90 level, added a bit over twenty basis points during the next twenty-four hours...and closed Tuesday at the 79.15 mark. Nothing to see here, folks...please move along.
It should come as no surprise that the high of the day in the gold stocks came at the London p.m. gold fix...and that is the standout feature on this graph. From there, the shares got sold off in sync with the gold price. The HUI finished down 1.40%...barely off its low of the day.
The silver stocks didn't do any better...and Nick Laird's Silver Sentiment Index closed down 1.16%.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that zero gold contracts along with 51 silver contracts were posted for delivery on Thursday. In silver it was JPMorgan on the short/issuer side with all 51 contracts...and the Bank of Nova Scotia being the largest long/stopper with 41 contracts. For the first time in about four months, Jefferies was nowhere to be found.
The GLD ETF showed that an authorized participant withdrew a rather small 67,995 troy ounces...and there were no reported changes in SLV.
The U.S. Mint reported selling 25,000 silver eagles...and that was it.
Over at the Comex-approved depositories on Monday, they reported receiving 921,251 ounces of silver...and shipped 613,960 ounces out the door. The link to that action is here.
Here's an interesting chart that Washington state reader S.A. sent me yesterday. It's the median net worth of the 35 and younger vs. the 65 and older crowd over a 25-year period...adjusted for inflation.
Shortly after I received the above, reader Bob Fitzwilson sent me the Zero Hedge article that this chart came from. It's headlined "Guest Post: The Chart Of The Decade"...and the link is here.
Washington state reader S.A.'s second graph needs no further explanation from me...as its contents are self evident after a few seconds of study.
I have slightly fewer stories today, so I hope you have the time to sift through most of them.
MF Global’s top lawyer is expected to break her five-month silence on Wednesday to tell Congress that she was unaware of a gaping shortfall in customer money until hours before the brokerage firm filed for bankruptcy on Oct. 31.
Laurie Ferber, MF Global’s general counsel, was expected to tell a House panel that she “had no reason to believe” that the firm had raided customer accounts to meet its own obligations, according to a copy of her prepared testimony. While Ms. Ferber learned of a shortfall in customer money in the afternoon of Oct. 30, she said she believed it to be an accounting error.
“My impression throughout the afternoon and late into the evening was that the apparent deficit was a reconciliation issue and did not represent an actual shortfall in customer funds,” she planned to tell the oversight panel of the House Financial Services Committee.
This story was posted over at The New York Times website late on Monday night...and I thank reader Phil Barlett for sending it along. The link is here.
An internal MF Global document suggested that the firm was putting customer money at risk days before its bankruptcy filing, an executive said in prepared testimony that was released on Tuesday for a Congressional hearing on Wednesday.
The document showed “a substantial deficit” in the amount of firm money used to protect customer accounts, according to the testimony by Christine Serwinski, the firm’s North American chief financial officer. Futures firms typically keep a cushion of cash in customer accounts as a buffer to cover losses in case of volatile market swings.
The deficit, revealed in a report on Thursday, Oct. 27, did not in and of itself violate federal laws, she said. But Ms. Serwinski, who was on vacation during MF Global’s final week, had stated “clearly and repeatedly” that the firm should keep a surplus of cash to protect customer money.
This New York Times story was posted on their website at noon yesterday...and is Phil Barlett's second offering in a row. The link is here.
To the chagrin of consumer groups, the House gave overwhelming bipartisan approval Monday to two bills easing requirements that President Barack Obama's overhaul of financial regulations impose on some exotic financial instruments blamed for helping trigger the 2008 financial crisis.
Lawmakers of both parties said they were relaxing rules that would otherwise inhibit the ability of companies to manage the risks of prices and investments, ultimately reducing their profitability and job creation. Consumer groups said legislators were bowing to the interests of their corporate and finance-world contributors and taking steps that might prove harmful to the public.
The instruments are called derivatives, assets tied to the value of commodities like petroleum or fluctuating economic variables like interest rates.
This AP story was picked up by yahoo.com on Monday...and I thank reader Washington state reader Duane Zelinka for sending it along. I consider it worth running through...and the link is here.
U.S. home prices fell again in January, dropping to their lowest level since the housing crash occurred, according to the latest Standard & Poor’s/Case-Shiller Home Price Indices.
Home prices in the index of 20 major U.S. cities showed a monthly decline of 0.8 percent in January, dropping to their lowest level since the beginning of 2003. All told, average home prices are now down 34.4 percent since peaking in 2006.
Reader Eddie Costik, who sent me this story had this to add in the covering e-mail..."I can tell you, having been in the lumber business for 37 years, that the housing market will never come back. I know what it's like in this small market here in Pennsylvania. I can only imagine what's happening around the rest of the country. Even though I'm retired from the business, I stay in touch with key contractor friends and my old suppliers. I can report that no one in the industry is busy and wholesalers are either sitting with a lot of inventory, or running lean and mean. No one is making any money. Retailers are giving stuff away just to stay busy which affects margins and wholesales are cannibalizing each others territories...stealing business to stay alive! So don't believe any of the B.S. coming out of any politician's mouth."
This story was posted over a the mortgageloan.com website yesterday...and the link is here.
If you want to become a state trooper in Virginia, you should probably delete any indelicate information you have on Facebook. During the job interview process, the Virginia State Police requires all applicants to sign into Facebook, Twitter, and any social-networking site to which they regularly post information in front of an administrator.
“You sign a waiver, then there’s a laptop and you go to these sites and your interviewer reviews your information,” says Corinne Geller, spokeswoman for the Virginia State Police. “It’s a virtual character check as much as the rest of the process is a physical background check.” Geller says the practice has been around for only three months and is just one of many ways the state makes sure its law enforcement officials are ethically sound. (Potential troopers also have to submit to a polygraph test).
Virginia is not the only state to do this; other police departments and government entities have similar policies. Until recently, the city of Bozeman, Mont., and the Maryland Division of Correction both asked job applicants to hand over their passwords. Each has discontinued the practice—in Maryland’s case it was after a prison security guard named Robert Collins contacted the American Civil Liberties Union (ACLU) and complained. Now they go for the over-the-shoulder approach that Virginia favors. University of North Carolina at Chapel Hill has a unique method: It requires all student athletes to friend a designated coach or administrative official on Facebook so that he or she can monitor their pages.
This businessweek.com story was sent to me by West Virginia Reader Elliot Simon...and the link to this must read story is here.
The European Union should increase its financial firewall to about 1 trillion euros to restore market confidence in the euro zone and prevent the spread of fiscal contagion, the head of the Organization for Economic Cooperation and Development, Ángel Gurría, said on Tuesday.
Mr. Gurría’s comments came a day after Germany dropped its opposition to increasing the Continent’s total bailout capacity to more than 690 billion euros, or about $920 billion. That could help stop the spread of the crisis to large economies like Spain’s.
“The mother of all firewalls should be in place,” Mr. Gurría said at a news conference in Brussels. But he also said the current level of political commitment to the funds was not enough.
This is another story from The New York Times yesterday...and another offering from Phil Barlett. The link is here.
Under a compromise reached between the ruling parties and the opposition on Tuesday, Germany's parliament will decide on future measures to release billions of euros to bail out troubled EU member states. The deal fulfills a requirement for greater parliamentary powers stipulated by the country's highest court.
According to legislation drafted by the ruling conservative Christian Democrats and Free Democrats, along with the opposition Social Democrats and Greens, the whole parliament will decide on bailouts, even in urgent cases, contrary to earlier plans for a small parliamentary panel to give swift approval.
This story was posted over at the German website spiegel.de yesterday...and I thank Roy Stephens for bringing it to our attention. The link is here.
In a brief but as usual succinct statement, MEP Daniel Hannan points out the country that decided to say no to establishment-rules and stuck to its guns by taking losses, devaluing its currency, and growing its way out of its pit of despair.
The eloquent Englishman notes Iceland's current enviable position in terms of not just growth but Debt to GDP and proffers upon his European Parliamentarian peers that perhaps, just perhaps, there is a lesson in here for all European governments (cough Greece/Portugal cough)...as 67% of Icelanders are now against joining the Euro.
This 1:20 minute video is posted over at zerohedge.com...and I thank Dutch reader Victor de Waal for bringing it to my attention. It's a must watch...and the link is here.
Treasury forecasters rely on odds calculated by William Hill, the bookmaker, to assess the likelihood of another economic collapse, a top official has revealed.
In a candid admission to MPs, Professor Steve Nickell said he turned to the betting shop to find out whether Euro is likely to fail in the course of his work at the Office of Budget Responsibility.
Professor Nickell is one of the independent experts brought in by George Osborne, the Chancellor, to make sure Britain’s economic estimates are robust.
You just can't make this stuff up! This story was posted in The Telegraph late on Monday evening...and it's worth the read. I thank Roy Stephens for sending this story to us...and the link is here.
Fund manager Robert Fitzwilson gave King World News his impression of central bank intervention in the monetary metals markets: "There is a limit that central banks have imposed on the price of gold and silver. When it gets to that limit, the central banks pile in and drive the price of gold and silver back down. The smart central banks then buy the bullion at incredibly cheap and subsidized prices. ... The advance in gold and silver is being managed."
This blog was posted over at the KWN website on Monday...and then appeared in this GATA dispatch from yesterday. The link is here.
This year's New York Hard Assets Investment Conference, to be held Monday and Tuesday, May 14 and 15, at the Marriott Marquis Hotel in Times Square, will be filled with GATA-supportive speakers.
Admission is free for registrants and the conference has arranged a discount room rate at the Marriott Marquis. The conference's Internet site...hardassetsny.com...has all the necessary information...and the link is here.
The first blog is with Caesar Bryan, manager of the Gabelli gold fund, and is headlined "Watch Gold as Europe Headed into Crisis Again". The second blog is with Rick Rule. Its entitled "Gold, Silver, Oil, Global Turmoil & Quiet Markets". Lastly is this audio interview with Jim Sinclair. I posted the blog on this the other day.
Zero Hedge's Tyler Durden calls attention to Turkey's increasing recognition that gold is money, with an important place in the country's banking system.
The Zero Hedge post is headlined "Turkey Once Again Proves that Gold Is First and Foremost Money". I borrowed the introduction from a GATA release...and I thank reader 'David in California' for being the first one through the door with this story. As you've probably already surmised, this is a must read...and the link is here.
Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization
Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.
Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.”
Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained.
Please visit our website for more information about the project.
Ineptocracy [in-ep-toc'-ra-cy] - a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.
With net volumes at extremely low levels...especially in gold...it was a very quiet trading day yesterday...so I wouldn't read much into Tuesday's price activity in either gold or silver.
Today and Thursday are the last days for roll-overs out of the April delivery month. I must admit that I was expecting much higher volume to be associated with this event, but that hasn't happened so far.
Gold closed slightly below it's 200-day moving average...and silver came within 20 cents of hitting its 50-day moving average...but closed well below it. Until these moving averages are taken out to the upside with some authority, it's doubtful if the technical funds will move back onto the long side of this market until that happens. As I've said a couple of times during the last week, I expect things to remain quiet until after we get past First Day Notice on Friday, so it could be next week before anything happens...or is allowed to happen.
Yesterday at the close of Comex trading at 1:30 p.m. Eastern time was the cut-off for Friday's Commitment of Traders Report...and it will be interesting to see what this report has to say when it's released at 3:30 p.m. Eastern on Friday.
Overnight trading was as dead as I've ever seen it. The gold price did virtually nothing in the Far East during their Wednesday...and hasn't done much of anything now that London has been open a bit over two hours. Net volume is exremely light, as the last of the traders begin their rolls out of the April delivery month...and into the next front month, which is June. I've don't recall ever seeing net volume numbers in gold as low as this at this time of day...and this time of month.
Silver drifted lower through all of the Far East trading day on their Wednesday, but the moment that London opened, the price popped a bit and, as I hit the 'send' button at 5:18 a.m. Eastern time, the silver price is down about a dime from Tuesday's New York close. Volume is on the lighter side.
The dollar index was comatose right up until about 7:40 a.m. in London...and is down about 10 basis points from its overnight high...such as that was.
I will be watching the rest of this week's trading activity with great interest...and I'm ready for anything that JPMorgan et al have in store for us.
See you tomorrow.