Gold & Silver Daily

¤ Yesterday In Gold & Silver

It wasn't much of a trading day in gold on Tuesday.  After trading flat until 12:30 p.m. Hong Kong time, gold got sold down about seven bucks between then and 9 a.m. BST in London.  It dipped a bit more at the Comex open, but at 8:30 a.m. EDT, the gold price spiked up a meaningful amount, but by about 20 minutes after the London p.m. gold fix, the price as back in the box again.  The tiny rally attempt after that ran into a not-for-profit seller---and gold chopped sideways for the remainder of the day.

The low and high ticks were recorded by the CME Group as $1,302.20 and $1,316.80 in the August contract.

Gold finished the Tuesday session at $1,307.50 spot, down $4.70 from Monday's close.  Net volume was 110,000 contracts, so JPMorgan et al. had to throw a decent amount of Comex paper at that early morning Comex rally to get the price back under control.

The silver price rally had a lot of characteristics that were similar to the gold price action.  The low price tick of the day came at the noon London silver fix---and the 8:30 a.m. EDT rally met a similar fate as gold's rally at the same time.  But that rally didn't get sold down as much---and the rally that began at precisely 11:30 a.m. in New York, took silver to its high of the day just minutes after 12 o'clock noon EDT.  That rally got capped---and the silver price sold down a bit into the Comex close.  From there it traded flat.

The low and high ticks were $20.785 and $21.12 in the September contract.

Silver finished the day at $20.965 spot, up four cents from Monday's close.  Volume, net of July and August, was up there at 38,000 contracts.

Platinum got sold down a bit in Far East trading---and its attempted rally above its Monday closing price shortly after the Comex opened in New York yesterday, got sold down.  Platinum closed down $4.

Palladium also got sold off in Far East trading, with the low tick coming at 1 p.m. Hong Kong time on their Tuesday afternoon.  The subsequent rally lasted until a few minutes after 12 o'clock noon in New York, just as it was about to break above the unchanged mark---and from there it got sold down a few handful of dollars as well.  Palladium was also closed down $4.

The dollar index closed at 80.56 in New York late on Monday afternoon---and traded mostly flat until noon Hong Kong time.  At that point it developed a positive bias---and the rally quickened starting at the 8 a.m. BST London open.  The rally topped out at 80.82 around 10:40 a.m. EDT---and from there gave up a small handful of basis points going in the close, as the index closed at 80.78, up 22 basis points on the day.

The gold stocks spent the entire day in negative territory---and the HUI closed down 1.03%.

Despite the fact that silver rallied strongly in New York yesterday---and actually finished up on the day, the stocks got sold down pretty hard.  Nick Laird's Intraday Silver Sentiment Index closed down 1.67%---and almost on its low tick.

The CME Daily Delivery Report showed that five gold and four silver contracts were posted for delivery within the Comex-approved depositories on Thursday.

After the withdrawal of all Thursday's GLD deposit on Monday, I was surprised to see that an authorized participant added 48,115 troy ounces on Tuesday.  The other surprise was in SLV, as an authorized participant withdrew 1,583,746 troy ounces.

9.5 million ounces of silver have been withdrawn from SLV since the silver rally began during the first week in June.  Ted figures that this particular ETF is owed around 7 million ounces of silver.

There was another sales report from the U.S Mint.  They sold 2,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 290,000 silver eagles.

There was no reported activity in gold over at the Comex-approved depositories on Monday.  But, as is almost always the case, it was another huge day for in/out movement in silver, as 1,457,097 troy ounces were reported received---and 542,498 troy ounces were shipped out the door.  And just as a matter of interest, there were 1,160,619 troy ounces of silver moved from the Registered to the Eligible category at the CNT Depository.  That doesn't mean much, but I thought I'd report on it, as it is a change.  The link to yesterday's action in silver, is here---and it's worth a quick peek.

I have a decent number of stories again today---and the final edit is yours.


¤ Critical Reads

IRS Seeks Help Destroying Another 3,200 Hard Drives

Days after IRS officials said in a sworn statement that former top agency employee Lois G. Lerner’s computer memory had been wiped clean, the agency put out word to contractors Monday that it needs help to destroy at least another 3,200 hard drives.

The Internal Revenue Service solicitation for “media destruction” reflects an otherwise routine job to protect sensitive taxpayer information, but it was made while the agency’s record destruction practices remain under a sharp congressional spotlight.

Congressional investigators of the IRS targeting of conservative groups have been hampered by the unexplained destruction of emails and other records of Ms. Lerner, the former head of the IRS tax-exempt division and a central figure in the scandal.

The loss of Ms. Lerner’s hard drive also raised broader questions about why the tax agency never reported the missing records to the National Archives and Records Administration, as required by the Federal Records Act.

Today's first story is from The Washington Times.  It was posted there on Monday sometime---and I thank reader M.A. for sending it.


Wall Street Cut From Guest List for Jackson Hole Fed Meeting

Wall Street doesn’t lead to Jackson Hole this year.

As the Federal Reserve Bank of Kansas City prepares to host next month’s annual gathering of central bankers in Wyoming, seasoned Fed watchers from the financial markets, including the chief U.S. economists of the biggest American banks, aren’t being invited, according to past participants.

Among those who didn’t make the guest list: Vincent Reinhart of Morgan Stanley, Jan Hatzius of Goldman Sachs Group Inc., and Bank of America Corp.’s Ethan Harris. Onetime conference regulars, including Mickey Levy of Blenheim Capital Management LLC and Meredith Whitney of Kenbelle Capital LP, also lose out.

They’ll miss a conference that has foreshadowed some of the Fed’s biggest monetary-policy shifts since the financial crisis, and a keynote speech by Chair Janet Yellen. Perhaps as importantly, they also will be deprived of the opportunity to mingle with policy chiefs over meals and on mountain trails.

This longish Bloomberg piece, filed from London, was posted on their Internet site at 4:27 a.m. Denver time on Tuesday morning---and it's the first offering of the day from West Virginia reader Elliot Simon.


Have Central Banks Been Breaking the Law?

The best way to destroy the capitalist system, the Russian revolutionary leader Vladimir Lenin is reputed to have said, is to debauch the currency. The world’s major central banks have certainly been having a fair old go at it. In the six years since the financial crisis first broke, they’ve been printing money like there is no tomorrow.

Fortunately, they have not yet managed to bring down the free market system. On the other hand, they have succeeded in putting a rocket under asset prices and, in so doing, they have greatly exaggerated the wealth divide.

In a number of cases, including the U.S. and the U.K., they have also significantly assisted governments in financing burgeoning fiscal deficits. To the extent that quantitative easing (QE) has had any effect at all, it is asset prices and governments that have been the prime beneficiaries.

Where has Jeremy been all these years?  This is what central banking is all about.  This commentary was posted on the Web site at 5:55 p.m. BST on their Monday afternoon---and I found the story embedded in a GATA release.  The link is here.


Draghi Cedes Euro Control to Yellen on Fed Rate Wagers

Mario Draghi’s ambitions to weaken the euro are at the mercy of Federal Reserve Chair Janet Yellen.

The U.S. central bank chief sent the euro sliding below $1.35 last week for the first time since February when she said U.S. interest rates may rise sooner than investors expect. Her European Central Bank peer is having less impact: Draghi’s unprecedented decision to drop a key interest rate to below zero last month pushed the shared currency up 0.2% before Yellen’s speech. The euro is also losing its link with the continent’s bond market, as its correlation to the yield spreads of Italy, Spain and Portugal approaches zero.

Dealers in euro-dollar, the world’s most-traded currency pair, say they’re increasingly influenced by the U.S. because they’ve assimilated the interest-rate cuts Draghi unveiled and concluded he has no further surprises in store. The prospect of a Fed rate boost is also deemed more important than the conflict in the Gaza Strip and international anger over the downing of a Malaysian airliner last week in Ukraine.

This is another Bloomberg story---and this one was filed from New York.  It was posted on their Internet site at 4:15 a.m. MDT yesterday---and it's the second offering of the day from Elliot Simon.


Global Stock Markets at Risk from Black Swan Spike in Oil Price

Global stock markets are at risk from a spike in oil prices which could derail the fragile economic recovery and lead to a major correction in share prices, warns Steen Jakobsen, chief economist at Saxo Bank.

Geopolitical risk has increased sharply following the events of last week, a point that has been largely ignored by the ever Panglossian global equity markets that march on upward---and it's at this point I'll hand over to the analysis by Mr Jakobsen:

"The simplest way to 'measure' geopolitical risk is to look at the price of energy. Energy is everything for a macro economist as it is a tax on the economy when high, and a discount when low.

"The way I measure this geopolitical risk is through measuring the spread between the fifthth contract of the WTI Crude and the first contract. Of course, there are other factor workings, but lacking a better alternative, it is what I use."

This article showed up on The Telegraph's website at 11:30 a.m. BST on Tuesday---and it's the first contribution of the day from Roy Stephens.


Bank of England Leads Push for Deposit Confiscation - Japan, China, Russia Against Bail-Ins

Bank of England officials led by Mark Carney, the Bank of England governor, are attempting to bridge sharp differences among leading G20 countries as they prepare a landmark set of proposals aimed at tackling the problem of “too big to fail” banks according to the Financial Times today.

Talks under the auspices of the global Financial Stability Board (FSB) over the summer are approaching a key stage as officials aim to clinch an agreement on bail-ins and the bailing in of creditors including depositors of banks.

Finance officials are hoping to pave the way for proposals to be tabled at the G20 leaders meeting at the Brisbane summit in November.

The issue is of major consequence to globally systemic lenders such as Citigroup, Barclays and BNP Paribas, as some will have to issue billions of dollars of fresh bonds earmarked to carry losses.

The issue is of major consequence also to depositors who could see their savings confiscated as happened in Cyprus.

This Zero Hedge piece was posted on their Web site at 4:38 a.m. EDT yesterday morning---and it's courtesy of South African reader B.V.


France Sticks to Warship Sale to Russia Despite Calls for European Arms Embargo, Sanctions

France says it will go ahead with the sale of a warship to Russia despite calls for an arms embargo against the country, highlighting how Europe's strong business ties are hindering its ability to punish Moscow over the crisis in Ukraine.

Western powers say Russia is supporting the insurgents in eastern Ukraine who allegedly shot down a Malaysian Airliner last week, killing all 298 people on board.

European Union foreign ministers met Tuesday to consider more sanctions against Russia but agreed only to impose more asset freezes on individuals, leaving economic relations untouched.

Some countries, like Britain, argue the plane crash has raised the stakes and Europe should not go soft on Russia.

This CP/AP story from yesterday was picked up by the Internet site.  I posted a story on this subject about 10 days ago, but there are new details added to this one---and I thank reader Doug Milne for sharing it with us.


N.Y. Fed Slams Deutsche Bank (and Its €55 Trillion in Derivatives): Accuses it of "Significant Operational Risk"

First it was French BNP that was punished with a $9 billion legal fee after France refused to cancel the Mistral warship shipment to Russia (which promptly led to French National Bank head Christian Noyer to warn that the days of the USD as a reserve currency are numbered), and now moments ago, none other than the 150x-levered NY Fed tapped Angela Merkel on the shoulder with a polite reminder to vote "Yes" on the next, "Level-3" round of Russia sanctions when it revealed, via the WSJ, that "Deutsche Bank's giant U.S. operations suffer from a litany of serious problems, including shoddy financial reporting, inadequate auditing and oversight and weak technology systems."

What could possibly go wrong? Well... this. Recall that as we have shown for two years in a row, Deutsche has a total derivative exposure that amounts to €55 trillion or just about US$75 trillion. That's a trillion with a T, and is about 100 times greater than the €522 billion in deposits the bank has. It is also five times greater than the GDP of Europe and more or less the same as the GDP of...the world.

Well, dear reader, one wonders if the New York Fed has had a gander at JPMorgan's derivatives book recently?  This Zero Hedge piece was posted on their website yesterday sometime---and a lot earlier than the 8:41 p.m. dateline shown on the article, as Washington state reader S.A. sent it our way about five hours before that.  It's definitely worth reading.


Developing Situation in Ukraine Unacceptable, Counterproductive, Destabilizing - Putin

Russian President Vladimir Putin said Tuesday that scenarios in the developing crisis in Ukraine are unacceptable, counterproductive and destabilizing the situation in the world.

“If we return to similar scenarios, as a whole, as I have already said, then this is absolutely unacceptable and counterproductive. This is destroying the modern world and order. Undoubtedly, such methods in regard to Russia won’t work,” Putin said during a Security Council meeting.

“Our people, our citizens of Russia won’t let that happen and they will never accept [this],” he said.

This short article appeared on the RIA Novosti Web site at 4:30 p.m. Moscow time yesterday afternoon---and it's another story from Roy Stephens.


Russia to Respond Adequately to NATO Expansion - Putin

Moscow will respond adequately and equitably if NATO continues its military presence expansion closer to the Russian borders, President Vladimir Putin said on Tuesday.

Russia will respond adequately and equitably to the expansion of NATO military infrastructure closer to the Russian borders and the ongoing buildup of NATO forces," Putin said at a meeting of the Russian Security Council.

He also said that Moscow clearly sees that NATO is demonstratively strengthening its presence in Eastern Europe.

Following Crimea’s reunification with Russia in March, the alliance has been systematically stepping up its presence near the Russian border, citing the need to protect its members from potential Russian aggression. Moscow has repeatedly expressed concerns over Western pressure on Russia.

This is another story from the RIA Novosti Web site.  This one put in an appearance at 6:03 p.m. Moscow time on Tuesday evening---and once again my thanks go out to Roy Stephens.


Russia Vastly Outgunned in Economic Showdown with West

The economic showdown unfolding between Russia and the West is almost entirely one-sided.

The U.S. has the power to bring Russia to its knees through hegemonic control over the world’s banking system, using an array of lethal financial weapons developed by a cell at the U.S. Treasury, and already deployed against Iran and North Korea.

Richard Christopher Granville, from Trusted Sources, said the U.S. “crossed the Rubicon” last week even before the apparent missile strike against Malaysia Airlines flight 17, imposing sanctions that effectively shut the energy trio of Rosneft, Novatek, and Gazprombank out of international finance.

“The Americans have the power to throttle Russia unilaterally because no European or Western bank of any importance is going to defy the U.S. after the fines imposed on BNP Paribas,” he said.

Guilty until proved innocent.  This is typical of the anti-Russia swill that fills the main stream media in Britain and the U.S. these days---and I, for one, wouldn't want to predict the outcome of this because, as Ambrose Evans-Pritchard so correctly points out, the hammer will fall on Europe the hardest.  This commentary appeared on the Internet site at 8:39 p.m. BST on Monday evening---and it's another offering from Roy Stephens.   And the anti-Russia sentiment aside, it's definitely worth reading---especially in conjunction with that Zero Hedge piece on Deutsche Bank posted further up.


Greek Sovereign Debt at 174.1 Percent of GDP in First Quarter

Eurozone public debt rose to 93.9% of economic output in the first quarter of this year, approaching the peak it is expected to reach later in 2014, official data showed on Tuesday.

Government debt of the 18 countries sharing the euro stood at 9.055 trillion euros ($12.21 trillion) in the first three months of this year, compared to 8.905 trillion euros in the last quarter of 2013, the EU's statistics office Eurostat said.

The EU's executive arm - the European Commission - expects the debt to peak at 96.0% of gross domestic product this year and then ease to 95.4% of GDP in 2015.

Nearly 80% of the bloc's debt is in bonds and treasury bills. Loans account for 17.9% of the debt.

Twice bailed-out Greece was the eurozone's most indebted country with sovereign debt of 174.1% of GDP, followed by the bloc's third-biggest economy Italy, with debt equivalent to 135.6% of GDP in the first quarter.

This short Reuters piece, filed from Brussels, showed up on the Internet site earlier this morning Athens time---and I thank reader Harry Grant for sliding it into my in-box just before 4 a.m. EDT this morning.  It's worth reading.


Turkey's Erdogan: "I Stopped Talking to Obama"

Turkish Prime Minister Recep Tayyip Erdogan said he ceased direct phone contact with US President Barack Obama once the U.S. backed away from use of military force against Syria last fall.

Erdogan, a supporter of rebel fighters opposed to Syrian President Bashar Assad’s government, was upset, he said, that the United States did not follow through with military action against Damascus amid the fierce civil war there.

"In the past, I was calling him (Obama) directly. Because I can't get the expected results on Syria, our foreign ministers are now talking to each other," Erdogan said Monday in an interview with the pro-government ATV channel.

"And I have talked to (US Vice President Joe) Biden. He calls me and I call him.”

This news item was posted on the Russia Today Web site at 3:18 p.m. yesterday afternoon Moscow time, which was 7:18 a.m. in New York.  It's also courtesy of Roy Stephens.


China Warns Against Politicizing Malaysian Boeing Crash Until Investigation Is Over

“Pending the outcome of the investigation, the parties should not speculate or prejudge, and most importantly we should not artificially politicize [the situation],” Wang Yi said in a statement published on the ministry’s website.

China’s Foreign Minister also welcomed the U.N. Security Council’s resolution adopted late Monday, which condemns the downing of the passenger plane, and called to implement it.

“The primary focus at the moment is to implement the resolution, in particular, to provide international investigators access to the site of the catastrophe for a full fledged investigation,” Wang Yi added.

Excellent advice!  Now there are two adults in the room.  This story, filed from Moscow, was posted on the RIA Novosti Web site at 4:46 p.m. Tuesday afternoon Moscow time---and it's the final offering of the day from Roy Stephens.


Argentine Default in Balance as Government Refuses to Capitulate

Argentine President Cristina Fernandez's unflinching poker face in the battle against "holdout" investors suing the country is increasing the odds that her government will default for a second time in 12 years at the end of this month.

She has refused to budge from her stance that Argentina cannot pay out in full to the holdout hedge funds, which snapped up bonds on the cheap after its $100 billion default in 2002. That is despite indirect talks aimed at cutting a deal.

Fernandez last week told leaders of the BRICS emerging economies that it was "impossible" to pay holdouts the full face value of the debt they hold. The funds, she said, could enter a bond swap matching the terms of restructuring deals in 2005 and 2010, which saw creditors accept large write-downs.

It is an old offer the holdouts have previously scoffed at and they have no reason to take it now given that U.S. courts have ruled in their favor and put Argentina, Latin America's No. 3 economy, on the verge of default.

This Reuters story, filed from Buenos Aires, put in an appearance on their Web site yesterday---and I thank reader D.W. Mong for sending it our way.


Venezuela Admits Its Ever-Growing Dependency from China

Venezuela confirmed Monday that its relations with China have become a fundamental pillar for making progress in almost all sectors of its economy. With a new portfolio of accords and almost 5.7 billion in loans, Beijing will provide support in many key areas.

Facing China's Xi Jinping at the closing ceremony of the 13th bilateral Mixed Commission, President Nicolas Maduro told his Chinese counterpart that his visit of little more than 24 hours had “surpassed all expectations.”

Maduro and Xi closed the meeting having added a number of new pacts to the more than 500 already accumulated in their bilateral relations.

This article was posted on the Internet site early yesterday morning---and I thank Casey Research's own Louis James for passing it around.


Three King World News Blogs

1. Dr. Stephen Leeb: "Gold and Silver to Skyrocket as We Move to a New World Order"  2. KWN Special Feature: "Gold and Silver Set to Make History---Art Cashin---and 3 Great Charts"  3. Rick Rule: "A 2008-Style Event, Propaganda---and the $64 Billion Question"

[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]


London Zinc Hits Three-Year High, Aluminium a 16-Month Peak

Zinc hit a three-year high and aluminium touched a 16-month peak on Tuesday as investors sought more exposure to commodities with tightening supply-demand balances and were encouraged by falling inventories and firm equity markets.

London Metal Exchange stocks of zinc fell by 400 tonnes to 656,275 tonnes, their lowest in 3-1/2 years, while aluminium stocks fell by 9,075 tonnes to 4.938 million tonnes, their lowest in nearly two years.

Investors are slowly being drawn back into commodities, attracted by stronger global economic growth and more volatility within some sectors, typified by current investment flows out of grains into industrial metals.

"There's a certain amount of relative value going on where investors prefer one metal over another," Macquarie analyst Vivian Lloyd said.

One wonders how much money would plow into silver if the big investors understood the real supply/demand fundamentals in silver.  But JPMorgan et al are doing a fine job of making sure that fundamentals are never reflected in the silver price---and the prices of the other three precious metals as well.  This Reuters story, filed from London, appeared on their Web site at 9:02 a.m. EDT yesterday---and my thanks go out to Elliot Simon for sending it our way.


Credit Suisse to Exit Commodities, Posts Big Quarter Loss

Credit Suisse Group AG said it will abandon commodities trading as a $2.6 billion fine to settle a U.S. tax investigation pushed the Swiss bank to its biggest quarterly loss since 2008.

The bank’s net loss in the second quarter was 700 million Swiss francs ($779 million), compared with a profit of 1.05 billion francs a year earlier and a 691 million-franc estimate from analysts. Zurich-based Credit Suisse posted higher-than-forecast earnings at the investment bank and lower profit in wealth management even as it attracted more net new money from rich clients than analysts had estimated.

Chief Executive Officer Brady Dougan is reporting a second quarterly loss in less than a year as Credit Suisse grapples with regulatory probes. Analysts and investors have said Credit Suisse should step up efforts to shrink its investment bank and focus on wealth management to boost returns and shore up capital eroded by the U.S. fine. The bank reaffirmed plans to cut at least 4.5 billion francs in annual costs by the end of next year compared with 2011.

Of course they're not going to "abandon" precious metals trading.  How can banks rig these markets if they can't trade them?  I would guess that Credit Suisse has a decent short position in the Comex precious metal market, but they're not a really big player.  This Bloomberg story, filed from Zurich, showed up on their Internet site at 5:29 a.m. Mountain Daylight Time on Tuesday---and I thank Elliot Simon for his final contribution to today's column.


Hambro "Horrified" by Tampering of London Gold Fix

Peter Hambro, chairman of gold producer Petropavlovsk Plc, said he was "horrified" by the manipulation of the London fix given its importance to the industry.

"When I read the reports on what people had been doing to it, I was horrified," Hambro said in an interview today. "It is something that is really important to people in the industry. It's something that we use in a big way as we deliver our gold. That's how we price."

"To have something that we can rely on is vitally important," said Hambro, who previously traded bullion at Marc Rich Group and Mocatta & Goldsmid Ltd. "I look forward to its continuing existence."

Hambro is more than aware of the price management scheme in gold and the other precious metals, so his comments are certainly disingenuous---and that's being kind.  This short gold-related "news" item, filed from London,  showed up on the Bloomberg Web site in the wee hours of Tuesday morning Denver time---and I found it embedded in a GATA release.


Lawrence Williams: Escalating Ukraine Crisis Could Blow Gold Sky High

It is thus perhaps a wonder that gold, as the safe haven of choice, is not flying far and away higher than it is at the moment---and the logic here is that it is indeed being held down by a bullion banking sector which could find itself in serious default if the gold price ran sky-high.  And if some of the analysts on the bullish side of the gold equation are correct in their assumptions that many Western central banks (with the approval of their governments whether they are deemed independent or not) have leased out much of their gold reserves, and that the banks to which they have leased them are in no position to return the bullion, then the proverbial could well be set to hit the fan as banks default in their commitments – should government allow that to happen!

This observer is thus more and more being drawn to the possibility of a big gold price escalation looming sooner rather than later, as opposed to the $1,050 year-end call being reiterated by the perhaps exposed banks like Goldman Sachs.  But this viewpoint is very much one’s own interpretation of what is going on in global geopolitics which itself is reliant on attempts to interpret the various media spin coming from  both sides and, as can be seen from the above commentary, this is no easy thing to do.  Who can one really believe in this day and age of political spin?

This very well-balanced commentary by Lawrie was posted on the Internet site yesterday---and it's definitely a must read.



¤ The Funnies

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¤ The Wrap

Now that the technical funds are so overloaded to the long side of Comex copper futures, the copper market is in the same dangerous territory as is Comex silver and gold. And just as is the case in Comex gold and silver, if there is a substantial price decline in copper, it will undoubtedly be caused by technical fund selling (after the collusive commercials pull the price rug out from the funds). At the very least, all three markets are set up for disorderly pricing regardless of price direction, the exact thing that the regulators should be striving to avoid.  There is too much outsized speculation on the Comex---and it only exists because the CME greedily seeks trading volume without regard for the consequences to the rest of the world. Why else would the crooks at the CME preside over such a scam? - Silver analyst Ted Butler: 19 July 2014

It was another reasonably quiet trading day on Tuesday---and the powers that be only put in an appearance where required---and it was required a few times yesterday, as both the gold and silver charts indicate.

Here are the six-month charts for both metals once again---and it was just another day off the calendar where prices were forced to trade in a tight range. 

Yesterday at the close of trading was the cutoff for Friday's Commitment of Traders Report---and based on the price capping, I'd guess that "da boyz" were shorting all comers, or selling long positions to put those rally fires out.  We'll know in a couple of days.

As I write this paragraph, the London open is less than 10 minutes away.  The gold price hasn't done much of anything except chop around in a two- or three-dollar price range since the close in New York late yesterday afternoon---and silver has traded within a dime.  Volumes are vanishingly small---barely over 8,000 contracts in gold---and 3,200 contracts in silver.  The HFT boyz and their algorithms are nowhere in sight.  But, without doubt, they are ever watchful---and ready to pounce if their price management services are required.  The dollar index is trading ruler flat---and unchanged.  Not a creature is stirring out there at the moment.

As for what might happen going forward, the best I can do is cut and paste a paragraph from The Wrap section of yesterday's column:

"So, where do we go in price from here?  Could we go higher from here, as the RSI traces shows that we're not 'overbought' in any of the four precious metals at the moment.  Sure, but as I mentioned a few paragraphs ago, we're almost at a five-year high short position in silver for the technical funds---and unless the commercial traders get over run by some black swan event, the usual engineered price decline outcome is a foregone conclusion.  And if that turns out to be the case, only the timing remains unknown.  Of course gold will also meet the same fate at the same time."

This is more or less what Lawrie Williams had to say in his piece posted further up---and as Ted Butler mentioned in his quote above.

The other thing I mentioned yesterday was the Pentagon's Full Spectral Dominance policy.  I can also add the Wolfowitz Doctrine, of which the Full Spectral Dominance policy would be a key component.  In a nutshell it states that "Our [the U.S.] first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power."  There's a 3-minute read about this posted at Wikipedia---and I highly recommend it.  The link is here.

And as I prepare to send this off into cyberspace at 4:45 a.m. EDT, I see that nothing much has changed now that London has been open about two hours.  Prices still aren't doing much---and volumes in both metals are still extremely light.  And starting around 9 a.m. in London, the dollar index has declined by 5 basis points.

It's too quiet out there---but there's no way of knowing if this will continue for the remainder of the Wednesday trading session or not.  If things do change, it's a coin toss as to which direction precious metal prices will go.  So nothing should come as a surprise as the trading day continues to unfold.

Enjoy your day---and I'll see you here tomorrow.