Casey Research Publication
Gold & Silver Daily
"I still get the impression that there are forces beneath the surface that spell big changes ahead."
 

¤ Yesterday In Gold & Silver

The gold price traded in a tight range throughout the Friday trading session everywhere on Planet Earth.  It appeared that every time gold tried to break above the $1,740 spot price mark, it got sold off...with the sell off at that London p.m. fix being the most obvious.

The high tick of the day at the afternoon gold fix was $1,740.50 spot.  From there, gold got sold off...and closed for a small loss...down $1.10 on the day at $1,738.80 spot.  Net volume wasn't overly heavy at 117,000 contracts.

Silver traded sideways up until 10:00 a.m. in London...and then got sold down to its low of the day [around 32.05 spot] shortly after 1:00 p.m. GMT...about fifteen minutes before the Comex open.

The subsequent rally got hit hard the moment that the London p.m. gold fix was in at 3:00 p.m. GMT...10:00 a.m. in New York...and then traded sideways into the 5:15 p.m. Eastern time electronic close.  The high tick at the fix was $32.89 spot.

Silver finished the Friday session at $32.63 spot...up 32 cents on the day.  Net volume was pretty decent at 37,500 contracts...as I'm sure that JPMorgan et al were going short against all comers in that 2-hour early morning rally in New York, because it didn't look like a short-covering rally to me.

The dollar index opened at 80.81...and then traded lower...with the low tick [about 80.63] coming around 1:30 p.m. Hong Kong time.  From there it rallied until precisely 8:00 a.m. in New York, before trading mostly sideways for the remainder of the day.  The index closed just above the 81.00 mark at 81.05...up 24 basis points on the day.

The dollar index and the gold price were in sync right up until 8:00 a.m. in New York...and then broke down entirely.

Despite the fact that gold's high tick came at 10:00 a.m. Eastern time, there was absolutely no sign of it in the share price action...as they were under selling pressure right from the 9:30 a.m. open of the equity markets in New York.  The HUI finished virtually on its low of the day...down 1.60%.

Even though the silver price closed well into positive territory again, it didn't help the shares too much...and Nick Laird's Silver Sentiment Index closed down 1.09%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 4 gold and 8 silver contracts were posted for delivery on Tuesday.

Over at GLD, an authorized participant withdrew 29,068 troy ounces of gold.  But SLV went in the other direction.  For the second day in a row, an authorized participant added a big chunk of silver.  This time it was 1,452,249 troy ounces.  On Wednesday it was 1,549,091 troy ounces of silver that was added, so a hair over 3 million ounces was added in those two day alone...and since last Friday [Nov. 2]...SLV has taken in almost 4.3 million ounces in total.  I'm sure Ted Butler will have something to say about this in his weekend commentary to his paying subscribers later today.

Well, the good folks over at shortsqueeze.com finally updated their website with the latest short positions for SLV and GLD...but it was in the wee hours of this morning that it finally happened.  The short position in SLV declined by 9.24 percent...from 14,621,500 shares/ounces, down to 13,270,700 shares/ounces held short.  That's still a lot of silver that's owed to SLV...but don't forget that 4.3 million ounces have been deposited in SLV since the beginning of the month, so this new short position number is probably wildly out of date by now.

The GLD ETF went in the other direction, as the short position increased by 10.22 percent...from 16.99 million shares, to 18.73 million shares...or 1.87 million ounces in total.  That's 58.16 tonnes of gold that should be on deposit at GLD, but isn't.

It was another big sales day at the U.S. Mint.  They reported selling 6,000 ounces of gold eagles...2,000 one-ounce 24K gold buffaloes...and 350,000 silver eagles.  Month-to-date the mint has sold 37,500 ounces of gold eagles...5,000 one-ounce 24K gold buffaloes...and 1,548,000 silver eagles.  Based on these sales, the silver/gold sales ratio is a bit over 36 to 1.  And as I keep saying...I do hope you're getting your share, dear reader.

The Comex-approved depositories showed that 935,196 troy ounces of silver were received by them on Thursday...and 554,126 troy ounces were shipped the door on the same day.  Of the amount received, JPMorgan Chase took in 785,407 troy ounces, bringing their depository total up to 25,030,654 troy ounces.  The link to that activity is here.

Well, the Commitment of Traders Report showed improvements in the Commercial net short positions in both gold and silver...but certainly not as much as Ted Butler and I were expecting.

In silver, the Commercial net short position declined by 4,054 contracts, or about 20.3 million ounces.  The Commercial net short position in silver is now down to 248.4 million ounces.

The 'Big 4' traders are short 240.3 million ounces...virtually the entire amount of the Commercial net short position of 248.4 million ounces....and are also short a hair north of 45% of the entire Comex futures market in silver on a net basis.  The positions of the other 37 Commercial traders [the raptors] on the short side of the Comex silver market, are immaterial.

Ted figures that JPMorgan Chase is still short a bit over 155 million ounces of silver on it's own...and didn't improve their position much during the reporting week, despite the big sell off on Friday, November 2nd.  Ted said that the raptors...some of the other 37 small traders [other than the 'Big 4'] in the Commercial category...bought between 3,000-3,500 long contracts on that sell off.

In gold, the Commercial net short position improved by 15,022 contracts, or 1.50 million ounces.  The Commercial net short position is now down to 20.77 million ounces of gold.

The 'Big 4' short holders are short 13.10 million ounces of gold...and 31.9% of the Comex futures market in gold on a net basis.  The '5 through 8' traders are short an additional 5.41 million ounces of gold.  So the 'Big 8' are short 18.51 million ounces of gold, or 45.0% of the entire Comex futures market in gold on a net basis...the same as silver.  The short positions of the other 39 other traders in the Commercial short category are immaterial.

As you can see, the tail is wagging the dog in both silver and gold.

Here are the 'Big 4' and 'Big 8' short positions show in "Days of World Production to Cover Short Positions"...Nick Laird's most excellent graph that lays bare the price management scheme in all four precious metals for the world to see.  The silver short position is particularly egregious...as it always has been.

(Click on image to enlarge)

The Bank Participation Report for November also showed improvements in the short positions of both the U.S. and non-U.S. banks from the prior month.

In silver, 4 U.S. banks are net short 35,252 Comex silver contracts.  Ted figures that JPMorgan holds a bit over 31,000 contracts of that amount all by itself...and I'm guessing that virtually all of the rest are unequally divided up between HSBC USA, Citigroup...and one other U.S. bank...in that order.

The 15 non-U.S. banks are net short 14,286 Comex silver contracts...and I'd bet that between 70 and 80 percent of that amount is held by Scotia Mocatta...with the balance split up between the other 14 non-U.S. bank...whose individual positions would be immaterial.

From the October report to the November report in silver, the 4 U.S. banks reduced their net short positions by only 2,532 Comex contracts.  The 15 non-U.S. banks reduced their collective net short positions by 2,826 Comex contracts.

In gold, 5 U.S. banks are net short 98,101 Comex gold contracts, or 9.81 million ounces...a decline from 10.62 million ounces held short in October.

The 21 non-U.S. banks are net short 59,436 Comex gold contracts, or 5.94 million ounces...a decline from  7.86 million ounces held short in October.

As I mentioned in the Commitment of Traders report [from which the data for November's Bank Participation Report is extracted]...the big 4 in silver...and big 8 in gold...are short 45% of each of their respective markets on a net basis.

On a gross basis [before all market-neutral spread trades are subtracted] the Bank Participation Report shows that...15 banks are short 23.6% of the entire Comex palladium market...17 banks are net short 35.7% of the Comex platinum market...19 banks are net short 39.5% of the Comex silver market...and 24 banks are net short 38.4% of the entire Comex gold market.

Once the spread trades from each market are subtracted from the total open interest...then the short positions, on a percentage basis, shoot sky high...another 5.5 percentage points in silver...and 6.6 percentage points in gold.  I'm sure platinum and palladium would be similar.

This is precisely what Nick Laird's graph above shows in all four precious metals...except its shown in days of world production to cover those short positions...but the ratios remain the same no matter in what unit of measure the graph is computed.

I thank reader 'David in California' for providing this Reuters chart that requires no further explanation on my part.

(Click on image to enlarge)

This next chart is courtesy of reader Anthony D. Cattani...and it doesn't require any further embellishment from me, either.

(Click on image to enlarge)

Since this is my Saturday column, here are all the stories that were still sitting in my in-box up until midnight last night.  I hope you can find the time to read the ones that interest you.

 

¤ Critical Reads

Divided States of America: Notes on the Decline of a Great Nation

The United States is frittering away its role as a model for the rest of the world. The political system is plagued by an absurd level of hatred, the economy is stagnating and the infrastructure is falling into a miserable state of disrepair. On this election eve, many Americans are losing faith in their country's future.

After a brilliant century and a terrible decade, the United States, in this important election year, has reached a point in its history when the obvious can no longer be denied: The reality of life in America so greatly contradicts the claim -- albeit one that has always been exaggerated -- to be the "greatest nation on earth," that even the most ardent patriots must be overcome with doubt.

This realization became only too apparent during and after Hurricane Sandy, the monster storm that ravaged America's East Coast last week, its effects made all the more devastating by the fact that its winds were whipping across an already weakened country. The infrastructure in New York, New Jersey and New England was already in trouble long before the storm made landfall near Atlantic City. The power lines in Brooklyn and Queens, on Long Island and in New Jersey, in one of the world's largest metropolitan areas, are not underground, but are still installed along a fragile and confusing above-ground network supported by utility poles, the way they are in developing countries.

This in-depth 4-part essay was posted on the German website spiegel.de on Monday...and I thank Swiss reader B.G. for the first story in today's column.  The link is here.

Read more...

Max Keiser: 'Barack Obama is clueless. Mitt Romney will bankrupt the country'

Some call Max Keiser a 'traitor' but America's most outrageous political pundit is about to become the most widely watched newscaster on the planet. Here, he explains why he won't be voting in Tuesday's US election.

A serf in the days of King John, Max Keiser argues, was in many ways better off than some US voters in 2012.

"Because in the age of Robin Hood," Keiser says, "at least the process of theft was transparent. The barons came to your house. They whacked you over the head then they took all your money." Even if the poor didn't exactly empathise with their oppressors, Keiser adds, they could at least comprehend their methods. "And the serfs," he continues, "did enjoy a modicum of stability. They got something in return for their enslavement. A small plot of land. Shelter. A relationship with the lord of the manor." In the modern age of "financial tyranny" orchestrated by what Keiser refers to as "the banksters" in charge of the major financial institutions in the US and Europe, he believes, "We have reverted to a more pernicious kind of neo-feudalism. The instruments of larceny have changed; that's all."

This rather long [and pithy] exposé on Russia Today's Max Keiser was posted on the independent.co.uk Internet site last Monday...and I thank U.K. reader Tariq Khan for bringing it to our attention.  The link is here.

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New York Subway Repairs Border ‘on the Edge of Magic'

Inside a sprawling Manhattan command center, a board that detects subway activity by sensor had gone quiet. No trains were running; the Metropolitan Transportation Authority had shut the system down as Hurricane Sandy approached.

Suddenly, the screens inexplicably crackled to life.

Something was moving down there. And it was not the trains.

To the subway’s chief maintenance officer, the storm’s encroaching waters were even more obvious. He was forced to flee with his flashlight from the South Ferry station in Lower Manhattan as the waters charged over the platform and up the terminal stairs, chasing him like an attack dog.

This 3-page story was posted on The New York Times website on Thursday...and I thank Donald Sinclair for the first of many stories today.  The link is here.

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Hillary Clinton confirms she will step down as U.S. Secretary of State

Well, Hillary's off and running for 2016...and also running away from the disaster in Benghazi. One has to wonder if that story will hurt her chances as more details are revealed.  We'll see.

This story showed up on the dailymail.co.uk Internet site on Thursday afternoon GMT...and I thank reader 'David in California' for bringing it to our attention.  The link is here.

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CIA Director David Petraeus resigns, cites extramarital affair

Petraeus disclosed the affair in a letter released to the CIA work force on Friday afternoon, writing: "Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours."

Petraeus told President Barack Obama of his affair and offered his resignation during a meeting Thursday, a senior official told NBC News. 

In a statement, Obama said he accepted Petraeus’s resignation on Friday.

This story was posted over on the NBC website yesterday...and I thank Manitoba reader Ulrike Marx for sending it along.  The link is here.

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Congress Sees Rising Urgency on Fiscal Deal

Senior lawmakers said Thursday that they were moving quickly to take advantage of the postelection political atmosphere to try to strike an agreement that would avert a fiscal crisis early next year when trillions of dollars in tax increases and automatic spending cuts begin to go into force.

Senator Bob Corker, Republican of Tennessee, said he had begun circulating a draft plan to overhaul the tax code and entitlements, had met with 25 senators from both parties and “been on the phone nonstop since the election.”

Senator Olympia J. Snowe, the Maine Republican who will retire at the end of the year, made it clear that she intended to press for a deal to avert the so-called fiscal cliff and get serious on the deficit, lame duck or not.

“The message and signals we send in the coming days could bear serious consequences for this country,” she said. “It could trigger another downgrade. It could trigger a global financial crisis. This is a very consequential moment.”

This story was posted on The New York Times website...and I thank Donald Sinclair for this second story in today's column.  The link is here.

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Federal Reserve delays Basel III bank capital buffer rules

U.S. regulators on Friday delayed the effective date of a global agreement on greater bank capital buffers reached in response to the financial crisis of 2008.

The rule delay could help big banks such as J.P. Morgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. who must ultimately comply with the rules, as well as smaller banks who also will have to meet the requirements.

Specifically, the Federal Reserve and two other bank regulators introduced a proposal in June to implement the global agreement known as Basel III that suggested an effective date for institutions to comply of Jan. 1.

However, the U.S. regulators agreed Friday that “due to the wide range of views” expressed by interested institutions and others that a delay was necessary.

This marketwatch.com story was posted on their Internet site on Friday morning...and it's another item courtesy of 'David in California'.  The link is here.

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Stuxnet goes out of control: Chevron infected by anti-Iranian virus, others could be next

America’s cyber-war is already seeing collateral damage, and it’s hitting the country’s own billion-dollar companies. Oil giants Chevron say the Stuxnet computer virus made by the US to target Iran infected their systems as well.

California-based Chevron, a Fortune 500 company that’s among the biggest corporations in the world, admits this week that they discovered the Stuxnet worm on their systems back in 2010. Up until now, Chevron managed to make their finding a well-kept secret, and their disclosure published by The Wall Street Journal on Thursday marks the first time a US company has come clean about being infected by the virus intended for Iran’s nuclear enrichment program. Mark Koelmel of the company’s earth sciences department says that they are likely to not be the last, though.

“We’re finding it in our systems and so are other companies,” says Koelmel. “So now we have to deal with this.”

This news item was posted on the Russia Today Internet site yesterday...and it's courtesy of Roy Stephens.  The link is here.

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8N knock out for Cristina Fernandez who nevertheless said “I will never give up”

Hundreds of thousands of protestors, probably a million according to some estimates, took to the streets of Buenos Aires on Thursday evening to hold the 8N pot-banging demonstration against the administration of Argentine President Cristina Fernandez.

Similar gatherings took place in the Greater Buenos Aires and other major Argentine cities as well as in tens of overseas cities in front of Argentine embassies and consulates, as confirmed by the social networks and twitters.

Earlier in the afternoon President Cristina Fernandez evoked her late husband, Nestor Kirchner and criticized without mentioning it, the 8N demonstration and pledging to never give up.

This item was posted on the mercopress.com Internet site in the wee hours of Friday morning.  I thank Casey Research's own Louis James for bringing it to my attention...and the link is here.

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HSBC investigation: Drug dealers, gun runners and Britain’s biggest bank

Britain’s biggest bank is at the centre of a major HM Revenue and Customs investigation after it opened offshore accounts in Jersey for serious criminals living in this country, The Telegraph can disclose.

The tax authorities have obtained details of every British client of HSBC in Jersey after a whistleblower secretly provided a detailed list of names, addresses and account balances earlier this week.

The Telegraph understands that among those identified on the list are Daniel Bayes, a drug dealer who is now in Venezuela; Michael Lee, who was convicted of possessing more than 300 weapons at his house in Devon; three bankers facing major fraud allegations and a man once dubbed London’s “number two computer crook”. A series of other accounts containing six-figure deposits are also registered to modest addresses in relatively poor parts of the country.

The disclosures raise serious questions about HSBC’s procedures in Jersey, with the bank already preparing to pay fines of around $1.5 billion in America for breaking money laundering rules.

No surprises here, dear reader.  As I said in this space within the last month...most of the world's large banks are heavily involved in money from drugs, arms...and other illegal/shady activities.  Crooks have to bank somewhere!  This story was posted on the telegraph.co.uk Internet site late on Thursday evening...and is another story courtesy of Donald Sinclair. The link is here.

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EU Budget Battle: Berlin and Brussels Demand More from London and Paris

The European Commission and top German politicians are becoming increasingly exasperated with both France and Britain as the summit in Brussels to determine the EU budget for the seven-year period from 2014 to 2020 approaches.

Both countries have been insistent on getting their way as member states position themselves for what promise to be difficult talks -- and both London and Paris have threatened to veto the budget if it doesn't meet their expectations. In response, European Energy Commissioner Günther Oettinger, Germany's representative on the EU's executive body, has harshly criticized the two countries.

In a speech before the German association representing magazine publishers in the country, Oettinger warned against "cheap populism" when reporting on Greece, before saying "my problem children are France and Great Britain." By way of explanation, he said that with its anti-EU course, London has "taken leave of its senses." He added that tabloids such as The Sun appear to be trying to force Britain out of the EU. Turning to France, he said the country had too little industry and innovation.

This Roy Stephens offering showed up on the spiegel.de website yesterday...and the link is here.

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Greek bailout cash 'unlikely to be unlocked on Monday'

Greece faces a week of tense brinkmanship with its international paymasters after officials in Brussels conceded that a long-awaited deal to release €31.5bn of bailout cash is unlikely to be finalised on Monday.

Athens is due to repay €5bn-worth of debts next week, and had hoped to unlock the latest tranche of rescue funds at Monday's meeting of eurozone finance ministers.

But privately senior officials in Brussels say that the Europeans and the IMF are in deep dispute about Greece.

Greece will have to leave the E.U. sooner or later, so it's best for all that it's sooner rather than later.  This story was posted in The Guardian on Friday...and it's another contribution from Roy Stephens.  The link is here.

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Ripped apart by financial crisis, Greek society in free-fall

A sign taped to a wall in an Athens hospital appealed for civility from patients. "The doctors on duty have been unpaid since May," it read, "Please respect their work."

Patients and their relatives glanced up briefly and moved on, hardened to such messages of gloom. In a country where about 1,000 people lose their jobs each day, legions more are still employed but haven't seen a paycheck in months. What used to be an anomaly has become commonplace, and those who have jobs that pay on time consider themselves the exception to the rule.

To the casual observer, all might appear well in Athens. Traffic still hums by, restaurants and bars are open, people sip iced coffees at sunny sidewalk cafes. But scratch the surface and you find a society in free-fall, ripped apart by the most vicious financial crisis the country has seen in half a century.

This AP story, filed from Athens on November 1st, was picked up by Fox News...and is something I've been saving for a weekend.  I thank reader John Sanders for digging it up on our behalf...and the link is here.

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In Egypt streets, Islamists throw their weight around

Mohamed Talaat didn't like the fact Christian music was being played at a party to promote interfaith harmony in the Egyptian town of Minya south of Cairo, so together with a group of like-minded Islamist hardliners, he showed up to put a stop to it.

It was simply un-Islamic to broadcast Christian songs, Talaat explained.

"Egypt is Islamic and so we all have to accept Islamic rules to halt any strife," he said by telephone.

Four months since Egypt elected veteran Muslim Brotherhood politician Mohamed Mursi as president, human rights activists say hardliners are trying to impose Islamist ways on society.

This Reuters story was filed from Cairo on Wednesday...and I thank Roy Stephens for his final offering in today's column.  The link is here.

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Sony's credit rating heads toward junk pile

Sharp, one of Japan’s biggest electronics firms, may be set to go under. We also note how other Japanese tech mega-corporations, including Panasonic and Sony, aren’t doing too well either. After Sharp posted its most recent loss, its financial rating fell to junk status, and the company is now seeking a government bailout. Panasonic was also hit with a near-junk rating by Fitch earlier this month, after it posted a loss 30 times larger than analysts had estimated.

Now, Sony—the biggest of Japan’s big dogs—can’t escape the bad news either. On Friday, Moody's downgraded Sony’s long-term debt rating from Baa2 to Baa3, one notch above junk status. This marks the second time in a month Sony has been hit with a downgrade.

"Without robust restructuring in the coming 12 to 18 months, Sony's non-financial services businesses will at best achieve roughly break even, and are also at risk of remaining unprofitable," the rating agency said in its report.

I must admit that all of the above was news to me.  This story was posted on the arstechnica.com Internet site early Friday morning Mountain Standard Time...and it's courtesy of Alberta reader Brad Robertson.  The link is here

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Three King World News Blogs

The first blog is with Rob Arnott...and it's headlined "The Greatest Fear of a $100 Billion Asset Manager Going Forward".  Next is Gerald Celente.  It's entitled "Gold, Silver Riots, Theft & Global Collapse".  And lastly is this blog with Egon von Greyerz...and it bears the headline "What's Next for Gold as Governments Become More Desperate".

Read more...

Sprott's Physical Silver Trust [PSLV] collects almost US$270 million

Sprott Physical Silver Trust, announced on Friday that it has priced its follow-on offering of 20,500,000 transferable, redeemable units of the Trust at a price of US$13.15 per Unit. As part of the Offering, the Trust has granted the underwriters an over-allotment option to purchase up to 3,075,000 additional Units. The gross proceeds from the Offering will be US$269,575,000 (US$310,011,250 if the underwriters exercise in full the over-allotment option).

Well, if the green shoe is fully exercised, PSLV's holdings will increase somewhere between 8 and 9 million ounces...the final number depending on how much cash they hold back.  There's a possibility that the run-up in the silver price yesterday morning may have been the first part of the Sprott order hitting the market.

All the details are to be found in this Globe and Mail story from yesterday morning...and the link is here.

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Fear pushing Investors back to gold

Gold's price pattern since the results of the U.S. Presidential election has been an interesting one.  Most analysts had predicted that gold would rise if President Obama retained his position, and now other factors have come into play - perhaps most noticeably that the post-election nervousness about the path of the U.S. economy, coupled with no end in sight to the Eurozone problems (indeed things appear to be getting worse with expectations that the Eurozone is heading for recession - including mighty Germany).

What had been surprising about the path of the gold price through the past year or so is that it often fell back on poor global economic news when the old safe haven arguments for the yellow metal might have been thought to come increasingly into play.

To an extent that was because of relative dollar strength which meant that falls in the headline dollar price were not necessarily the case in other currencies - and given that the gold price tends to be quoted in U.S. dollars virtually everywhere as the general guideline price, the psychological impact of an apparent fall on investors, even if it hadn't fallen back in their own currency, should not be underestimated.

But, since the U.S. Presidential election it has been noticeable that gold in general has been rising in price regardless of U.S. dollar strength - admittedly this has only been over a short period of time so far but could be an indicator that gold's safe haven appeal is returning.

This mineweb.com item was written by Lawrie Williams, their General Manager and Editorial Director...and posted on their Internet site yesterday.  I thank Donald Sinclair for sending it our way...and the link is here.

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Gold's shifting floor price

While the U.S. election aftershocks and the looming fiscal cliff have energised the yellow metal, some have asked questions about the current price floor.

In its latest Metals Magnifier report, the Barclays Capital writes, "The floor for gold prices has weakened with the seasonally strong period for demand providing less support than expected."

Adding that although volumes have improved since QE3 was announced, "volumes in India are still softer y/y. Buying in China has also provided a deflated cushion, with buying materialising amid a rising price environment."

The bank does point out, however, that physical bar premiums in Asia have started to improve with premiums in Singapore rising to their highest since July and to their highest in two months in Hong Kong.

Here's another story from the mineweb.com Internet site yesterday...and it's certainly worth reading.  I thank Donald Sinclair once again for bringing it to our attention...and the link is here.

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Frank Holmes...Chart of the Week: Gold and an Ever-Growing Balance Sheet

While Americans were still submitting their ballots, gold rallied on the possibility of a President Barack Obama reelection. With presidential results confirmed, it appears that Ben Bernanke’s job of hovering over the economy and dropping parachutes of money out of his helicopter is secure.

“Gold could not have asked for a better outcome,” with a second term for Obama, a Democratic Senate and Republican House, says UBS Investment Research. As the research firm explains in its morning note, “the high likelihood of political gridlock up ahead as attention now turns to the fiscal cliff and the debt ceiling certainly presents upside opportunities for gold.”

UBS says the gold market isn’t even pricing in the outcome of the next Federal Open Market Committee meeting in December when the “conclusion of Operation Twist will morph into further quantitative easing.”

This short post from Frank...along with an excellent chart...was posted on the usfunds.com Internet site on Thursday.  It's well worth skimming...and I thank West Virginia reader Elliot Simon for sharing it with us.  The link is here.

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Gold fever sweeps South Sudan ahead of new mining law

Taking a break from the toil of digging, Leer Likuam sat on the edge of a shallow trench, puffed his pipe and boasted he once found a 200-gram gold nugget bigger than his thumb.

In Nanakanak, a village of stick huts in an area that has attracted hundreds of diggers since Sudan's civil war ended in 2005, Likuam's find would have been lucrative but unexceptional.

"Everything is luck," he said through a translator. On an average day he might dig up six grams, worth around 1,200 South Sudanese pounds ($270), he said. "Some days you're lucky."

Word of Nanakanak's riches has spread. In the capital Juba, international mining firms are lining up at South Sudan's ministry of petroleum and mining, aiming to get their hands on part of the vast, unexplored territory.

This longish piece is also courtesy of Donald Sinclair...and it, too, was also posted on the mineweb.com Internet site yesterday...and the link is here.

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Ancient Thracian gold hoard found in Bulgaria

Bulgarian archaeologists unearthed ancient golden artifacts, including bracelets with snake heads, a tiara with animal motifs and a horse head piece during excavation works at a Thracian tomb in northern Bulgaria, they said on Thursday.

The new golden artifacts are dated back to the end of the fourth or the beginning of the third century BC and were found in the biggest of 150 ancient tombs of a Thracian tribe, the Getae, that was in contact with the Hellenistic world.

The findings also included a golden ring, 44 applications of female figures as well as 100 golden buttons.

This story was posted on the argophillia.com Internet site yesterday...and is Donald Sinclair's final offering in today's column.  The pictures alone are worth the trip...and the link is here.

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Zero Hedge: Fed, Bank of England deceived Bundesbank on coin-melt bars in 1968

Citing Bank of England records, Zero Hedge reveals that as the London Gold Pool was collapsing in 1968 the Federal Reserve and the Bank of England conspired to conceal from the German Bundesbank the deficient gold content of U.S. gold bars, apparently made from coin melt, that were being transferred to the Bundesbank to conclude gold swaps. This is, Zero Hedge says, another reason why the Bundesbank might want to cut off inquiry into the security of its foreign-vaulted gold.

GATA's chairman, Bill Murphy, pointed out to me that this ZH story still doesn't touch on the other major issues, mainly...1] has Germany swapped its gold with another country, 2] has it leased any of its gold, 3] is German gold encumbered in any way? [All excellent points, of course. - Ed]

Chris Powell also had this to say about this story..."Well, for years now we've been aware of the coin-melt issue from the days of the London Gold Pool. The really interesting thing here is just what ZH points to: the Fed and Bank of England conspiring to deceive the Bundesbank. If they were lying to the Bundesbank then, why not now as well?"

I thank Chris Powell for the headline and the paragraph of introduction.  The Zero Hedge report is headlined "Bank of England to the Fed: 'No Indication Should, of Course, Be Given to the Bundesbank"...and I thank Marshall Angeles for being the first person through the door with this story yesterday.  As I said in this space about a week ago, this German gold story has got miles to go before it breathes its last...and the link to this absolute must read ZH commentary is here.

Read more...

Eric Sprott like you've never heard him before!

This 34:24 minute video presentation that Eric made back in October is a must watch.  I've only heard Eric talk like this in private.  The entire presentation is all about the precious metals...and he pulls no punches.  As I said, this is a must watch from one end to the other...and I found the web page a little slow to load, so be patient.  I thank reader Chris Jansel for finding it for us on the au.finance.yahoo.com Internet site...and the link is here.

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¤ The Funnies

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¤ The Wrap

Liberals seem to assume that if you don't believe in their particular political solutions, then you don't really care about the people that they claim to want to help. - Thomas Sowell

I have a couple of musical selections for you today...one a pop classic from the early 1970s...and the other one was a 'classic' from Billboard's Top 10 in 1834.

The tune from 1972 that was a big hit...and the only hit for British singer Daniel Boone...a.k.a. Peter Charles Green...and I remember playing it on radio station CHAR when I was in Alert, North West Territories.  If you can remember the words, feel free to sing along, because I'm sure you'll remember the tune...and the link is here.

Niccolò Paganini (1782–1840) encouraged Hector Berlioz (1803–1869) to write Harold en Italie. The two first met after a concert of Berlioz’s works conducted by Narcisse Girard on 22 December 1833, three years after the premiere of Berlioz’s Symphonie fantastique. Paganini had acquired a superb viola, a Stradivarius — "But I have no suitable music. Would you like to write a solo for viola? You are the only one I can trust for this task."

Berlioz began "by writing a solo for viola, but one which involved the orchestra in such a way as not to reduce the effectiveness of the orchestral contribution." When Paganini saw the sketch of the allegro movement, with all the rests in the viola part, he told Berlioz it would not do, and that he expected to be playing continuously. They then parted, with Paganini disappointed.

Harold in Italy was premiered on 23 November 1834 with the Orchestre de la Société des Concerts du Conservatoire, Chrétien Urhan playing the viola part, Narcisse Girard conducting.

Paganini did not hear the work he had commissioned until 16 December 1838; then he was so overwhelmed by it that, following the performance, he dragged Berlioz onto the stage and there knelt and kissed his hand before a wildly cheering audience and applauding musicians. A few days later he sent Berlioz a letter of congratulations, enclosing a bank draft for 20,000 francs.

The viola is a strange instrument...and some string players, notably violinists, look on it with thinly disguised contempt.  One first violinist with the Edmonton Symphony Orchestra told me the most famous of viola jokes...and it goes something like this... Q: What's the difference between a viola and an onion? A: Nobody cries when you chop up a viola... wink

But, having said that, this 4-moment symphony is a jewel...and it took me many listenings before I began to appreciate the work for what it is...and it would be certainly included in any 'desert island' collection I was putting together.

This video recording is from 1976...and features the Orchestre National de France.  Donald McInnes is the soloist...and Leonard Bernstein conducts.  It's posted over at the youtube.com Internet site...and the link is here.

I wouldn't read too much into yesterday's price action, although it was obvious that JPMorgan Chase et al were standing by at the London p.m. gold fix to make sure that none of the four precious metals got out of hand to the upside once the 'fix' was in.

Although I'm happy that we're enjoying a bit of a rally since the big smack-down on November 2nd...I'm still not prepared to break out the party favours just yet.  The Commercial net short positions in both silver and gold in the Commitment of Traders Report, although better, are nowhere near a wildly bullish buy point...so I'm still on the look out for "in your ear".

But, having said all that, I still get the impression that there are forces beneath the surface that spell big changes ahead.  It's just the timeline that I'm not certain about.  One thing that I would be happy to bet some money on is that by May 1, 2013 the price of both silver and gold will be substantially higher than they are at the moment...as JPMorgan Chase et al can't keep this up forever.  How fast we get there and how high we go, will very much depend on whether the bullion banks are still in control of the price as these expected rallies get underway.

Will they be short covering rallies...or will the powers-that-be just stand aside for a little while and let the prices rise in sort a controlled retreat fashion...which is the process they've been using since 1999.  I don't know the answer to that...and only time will tell.

But I'm still 'all in'.

See you on Tuesday.