Published on January 18 2013

Ambrose Evans-Pritchard: A New Gold Standard is Being Born

If you thought yesterday’s price activity in gold and silver was the free market in action, please click here

Gold did almost nothing in Far East or early London trading on their Thursday…and spent the entire time period within about three bucks of the $1,680 mark…which was Wednesday’s New York close.  Then at exactly 8:30 a.m. Eastern time, ten minutes after the Comex open, the gold price got sold down around $17…with the low of the day [$1,665.90 spot] coming at precisely 9:00 a.m.

From there, gold rallied back about five bucks going into the London p.m. gold fix…and once that was out of the way, the price really took off, only to run into a not-for-profit seller within about fifteen minutes.

Gold traded mostly sideways from there, but popped a bit just minutes before 1:00 p.m. Eastern, before getting hammered flat before it could break through the $1,700 spot price mark.  That proved to be the high tick of the day…$1,698.80 spot.  Not surprisingly, the gold price got sold off right into the close of electronic trading.  If you check the Kitco chart below, you’ll note that this has been the late-day trading pattern for the last three days running.

Gold closed at $1,687.10 spot…up $7.10…and obviously would have finished far higher than this if not for the obvious presence of JPMorgan et al.  Net volume was monstrous…around 175,000 contracts, so “da boyz” had their hands full keeping the gold market under control yesterday.

Here’s the New York Spot Gold [Bid] chart on it’s own, so you can see the New York price action in more detail.  Note the exact 8:30 and 9:00 a.m. time periods where gold got hit…and then rallied.  There was nothing free market about this…or much of anything else that happened during yesterday’s Comex trading day.

The Far East trading day in silver had a bit more structure to it than gold.  The low tick in silver during their trading day came shortly before lunch in Hong Kong on their Thursday…and then rallied back to almost unchanged by the Comex open before suffering the same fate as gold…and at precisely the same times.

After that, silver followed the same price path as its yellow cousin…with its low of the day occurring at precisely 9:00 a.m. Eastern…and Kitco recorded that at $30.97 spot…and the high minutes before 1:00 p.m. was $32.03 spot.

Silver finished the Thursday trading session at $31.73 spot…up 24 cents.  Volume was chunky…around 58,000 contracts.

And here’s the New York Spot Silver [Bid] chart on its own…

The dollar index opened at 79.81…and then chopped sideways in a very tight range.  This state of affairs lasted until just before the London open.  From there the index declined a bit over 20 basis points…and then gained a big chunk of that back between the 8:20 a.m. Comex open…and about 9:10 a.m.  The index didn’t do much from there…and closed at 79.71…down 10 basis points from Wednesday.

Good luck trying to hang yesterday’s gold and silver price action on what was happening in the foreign exchange markets yesterday.

The share price action was lousy on Thursday…and even the post-London p.m. gold fix price rally could only get the shares back to barely above unchanged.  From there they traded sideways…and the HUI closed down 0.42% on the day.  Considering the fact that the Dow did well yesterday…and the gold price finished well into positive territory…this was terrible price action.

John Embry called me yesterday morning…and we talked about the price management in the mining shares…and I’d consider yesterday a typical example of that activity.

Almost the same thing can be said about the silver stocks…as they finished mixed…and Nick Laird’s Intraday Silver Sentiment Index eked out a tiny gain of 0.09%.

(Click on image to enlarge)

The CME’s Daily Delivery Report showed that 64 gold and 13 silver contracts were posted for delivery on Monday from within the Comex-approved depositories.

The GLD had its ninth withdrawal in a row yesterday, as an authorized participant withdrew another 58,093 troy ounces of the stuff.  There were no reported changes in SLV…so it appears that the 18.4 million ounces deposited on Wednesday was legitimate.

Joshua Gibbons, the proprietor over at about.ag/SLV, had this to about Wednesday’s big surprise deposit…”I’m still trying to figure out who is holding the $500 million new shares of SLV created by that deposit.  This 18.3 Moz deposit into SLV yesterday was the largest in the two years I’ve been tracking SLV…the second largest was 10 Moz on May 9, 2011…with only four other daily deposits greater than 5 Moz.”

And as I said in this space yesterday, if that silver is being used to pay down the short position in SLV, then things could get interesting going forward.  But because that silver was deposited in SLV after the middle of the month, the data on it from the shortsqueeze.com Internet site won’t be available until sometime around February 10th.

I know for sure that Ted Butler will have lots to say about this in his weekend commentary to his paying subscribers tomorrow…and if I’m wrong about the date, Ted will set me straight…and I’ll let you know on Tuesday.

After taking a day off, the U.S. Mint had another sales report yesterday.  They sold 8,500 ounces of gold eagles…and a very chunky 875,000 silver eagles.  Silver eagles sales just made it over the six million coin mark yesterday at 6,007,000.  Not too shabby for less than two weeks sales.

The U.S. Mint has advised their authorized dealers that they are sold out of 2013 silver eagles for the moment…and there won’t be any more available for sale until at least the week of January 28th.  I have the must read story on that further down, but if you just can’t wait that long…the link is here.

It was another busy day over at the Comex-approved depositories on Wednesday.  They received 800,622 troy ounces of silver…and shipped 1,058,428 ounces of the stuff out the door.  The link to that activity is here.

Yesterday I mentioned that I would be adding a new weekly feature to this part of the column…and this is what I said…

“Slaving away in virtual total obscurity over at the about.ag/SLV Internet site is a chap by the name of Joshua Gibbons.  Apparently his calling in life is to keep a detailed account of every silver bar that’s ever been deposited or withdrawn from the SLV ETF since it started.  I’ve been following his site on weekly basis for quite some time…ever since Ted Butler provided me with the link. Now you can too.  This is what he had to say in his latest weekly commentary posted on his website.”

The data I posted from his website yesterday was from Wednesday, January 9th.  Now he has updated it with a week’s worth of data…and his latest short commentary for January 16th was posted on his Internet site yesterday.  This is what he had to say…

“Analysis of the 16 Jan 2013 bar list, and comparison to the previous week’s list….677,588.0 oz were added (all to Brinks London), no bars were removed or had serial changes. The bars added were from: Solar Applied Materials (0.3 Moz), Nippon Mining (0.1 Moz), Krasnoyarsk (0.1 Moz), and 5 others. As of the time that the bar list was produced, it was over-allocated 599.7 oz.”

[Please note that the big 18.4 million ounce deposit into SLV yesterday…January 17th…won’t be reported until next week at this time. – Ed]

You can read what else Joshua has to say at the about.ag/SLV Internet site…and that link is here.

Here’s a chart that Australian chartist Nick Laird sent my way yesterday…and it’s certainly worth sharing.  But, as I’ve said countless times in the past, this breakout will only occur if it is allowed to occur…and how high and how fast we get there if we do break out, is still 100% up to JPMorgan et al.

(Click on image to enlarge)

Also from the “land down under” is this 5.5 kg. gold nugget that was dug in Oz the other day.  The story is posted in the ‘Critical Reads’ section below.

I have the usual number of stories for a weekday column…and I hope you can at least find the time to skim the ‘cut and paste’ portions of each story.

A politician thinks of the next election…a statesman, of the next generation. – James Freeman Clarke

If you thought yesterday’s price activity in gold and silver was the free market in action, please click here…and don’t come back. Most markets that matter…and the U.S. financial system can control…are rigged seven ways to heaven…and this certainly includes the precious metals, with yesterday’s price action being another case in point.

I have no idea as to when all this madness will end, but I would think that we’ll find out sometime after the presidential inauguration coming up on Monday.

The way that gold and silver bullion are flying off the shelves at the U.S. Mint is only one of many canaries in the coal mine that are singing their lungs out at the moment.  “Currency Wars” is another.  And as I’ve said on many occasions, one of the first things that the powers that be can do to instill higher inflationary expectations in the general population, would be to allow the precious metals to run up a significant amount.  Time will tell whether my thoughts are anywhere close to the mark.

I’m off to the Vancouver Investment Conference later this morning…and I can tell you right now that both my Saturday and Tuesday columns will be as short as I can possibly make them.  So if you detect a slide in quantity and quality from my next two tomes…well, that will be the reason, as I have lots on my plate during the four days that I’ll be in attendance.

All four precious metals didn’t do much during the Far East trading session on their Friday…and all are up a bit now that London has been trading for a couple of hours.  Volumes are average for this time of day…and the lack of roll-overs out of the February delivery month in gold indicates to me that virtually all of this volume is high-frequency trading related.  The dollar index is dead.

As Doug Casey pointed out in Friday’s column last week, the precious metal stocks have never been this cheap versus the price of gold itself.  So I’d like to remind you one more time that there’s still an opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold…and I respectfully suggest that you take out a trial subscription to either Casey Research‘s International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations…as well as the archives. Don’t forget that our 90-day guarantee of satisfaction is in effect for both publications.

Enjoy your weekend…or what’s left of it if you live West of the International Date Line…and I’ll see you here tomorrow.

Sponsor Advertisement

Aben Resources (TSX.V: ABN) is a Canadian gold and silver exploration company with a focus on developing properties in the Yukon and Northwest Territories. The Company owns a 100% interest in the 18,314 acre Justin Gold Project located in SE Yukon. A 2,020 metre diamond drill program was carried out in 2011 to test never before drilled zones. Aben made a significant new greenfields gold discovery when it intercepted 60m of 1.19 g/t Au in hole JN11009 at the POW Zone. Additionally, a new high grade silver-copper zone was discovered at the Kangas Zone with hole JN11003 returning 1.07m of 7320 g/t Ag (234 oz/ton) and 3.52% Cu. Aben carried out an aggressive exploration and drill program in 2012 to follow up on the initial discoveries. The first drill hole in 2012, JN12011, returned 46.4m of 1.49 g/t Au and extended the gold mineralization at the discovery zone 85 metres laterally. The Company has four other prospective Yukon and NWT projects in its portfolio along with a seasoned management and geological team. Aben’s chairman, Ron Netolitzky, is credited with exploration success on numerous properties including three Western Canadian gold and silver projects which became producing mines. Please visit our website to learn more about the company and request information.