It was a very quiet and unexciting trading day in gold just about everywhere on Monday. Of course gold came under some selling pressure the moment that New York opened… and the selling pressure didn’t disappear until the Comex close at 1:30 p.m. Eastern time. The New York high and low was $1,209.70 spot and $1,198.30 spot. Volume was very light.
Silver price action was, as always, more ‘volatile’. It was under pretty big pressure right from the Comex open at 8:15 a.m… with the low of the day coming at the close of floor trading. The New York high was $18. 59 spot… and the low was $18.24 spot. Trading volume in silver was also very light.
For a change, both platinum and palladium got hit harder than gold and silver. Platinum was down 1.85%… and palladium was down 2.66%.
The world’s reserve currency didn’t do much until about 6:00 a.m. Eastern time, when a bit of a rally commenced… and by the end of trading on Monday… the dollar was up about 40 basis points. And since trading began in the Far East early this morning… the dollar’s rally has tacked on another 40 basis points as of midnight Eastern time last night. Once again, the gold price had little to do with what was happening with the US dollar.
The precious metals equities hit their nadir at the London p.m. gold fix around 10:00 a.m. in New York… and, despite the further declines in the metals, the stocks continued to trim their losses as the day went on… and the HUI only finished down 0.04%.
Monday’s CME Daily Delivery report didn’t have much to say. There were 140 gold and zero silver contracts posted for delivery on Wednesday. The big issuer was the Bank of Nova Scotia… with the big stopper being HSBC USA. The link to what action there was, is here.
There was nothing reported by either GLD or SLV on Monday.
But the U.S. Mint updated their website yesterday by revising downwards most of the sales they reported on Friday. Here’s my commentary on Friday’s sales as it appeared in my Saturday column… “They sold another 6,000 ounces of gold in the gold eagle program, plus another 3,000 24-K gold buffaloes, along with another 221,500 silver eagles. Month to date… the mint has sold 20,000 ounces of gold in gold eagles…. 7,500 24-K gold buffaloes… and 497,000 silver eagles.”
That was Friday. When I checked their website yesterday afternoon, they reported the following… All 6,000 ounces of gold in the gold eagle program they reported selling on Friday had vanished entirely… so they’re back to 14,000 ounces of gold for the month. Of the 3,000 24-K gold buffaloes they reported selling on Friday… every one of these sales had also vanished… and they’re back to 4,500 sold for the month. As for silver eagles… last Friday they reported sales of 221,500 for a total of 497,000 month-to-date. As of yesterday morning they had added another 345,500… bringing their month-to-date total up to 842,500. All very strange, but I suppose even the U.S. Mint is allowed to make mistakes every once in a while.
The Comex-approved depositories had a report yesterday… and as of Friday, they reported a smallish increase of 7,601 troy ounces of silver. The link to the action, such as it was, is here.
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Because of the weekend, I have quite a few stories to share with you. I hope you have time for them all… but if you don’t, please feel free to cherry-pick the list… as I know you already do, dear reader!
The first story is from the Friday edition of The New York Times. For a change, this story is posted in the clear. Some the of the states’ attempts to balance their budgets are becoming outright draconian. Even I was amazed at the severity of some of these cuts… and what they were cutting. It’s obvious that there are no sacred cows anymore… and it’s unfortunately a sign of things to come all over the U.S.A. The story is courtesy of reader Roy Stephens… and the headline reads “Governments Go to Extremes as the Downturn Wears On“… and the link is here.
Here’s a story that was posted at foxbusiness.com last Thursday. It was sent out as a GATA dispatch, and it’s important enough to mention here. Apparently this new financial regulation bill gave the SEC the right to deny all Freedom of Information requests… which they were only too happy to begin using… against Fox News. Well, that should be coming to an end… as four prominent members of the U.S. Senate introduced a bill Thursday that would strike the provision in the Dodd-Frank Act that potentially gives the Securities and Exchange Commission broad powers to deny Freedom of Information Act requests. The headline reads “Senators introduce bill to keep SEC under open-government law“… and the link is here.
As you are aware, dear reader… along with the residential real estate market, the U.S. Commercial real estate market is in a world of hurt… and I ran a graph on that early last week. Well, here’s how bad it is… and how much worse it’s going to get. The headline over at zerohedge.com tells all… “Commercial Real Estate Lobby Ask For Taxpayer Aid To Help Recapitalize Banks Saddled With Billions In Underwater CRE Loans“. There are over US$1 Trillion in commercial real estate loans outstanding. I thank reader ‘David’ for passing along this story… and the link to that [and the lobby letter] is here.
Last week I ran several stories about how bad things were in Pakistan. It’s hard to believe that it could get worse… but it has. This UPI story was sent to me by reader Roy Stephens. The article is headlined “Commentary: Pakistan: Turmoil to upheaval“… and the link to what I consider a must read story, is here.
Here’s a graph that Nick Laird of sharelynx.com slid into my in-box in the wee hours of the morning. It’s the price of gold in Indian rupees. Notice how the slope of the line has changed since 2005. It’s just one of many reasons why India loves gold.
Here’s an item that ended up as a GATA release and, once again, I’m just going to steal Chris Powell’s preamble… “In an essay posted at King World News, market strategist Jim Rickards of research and consulting firm Omnis Inc. meditates on the tightrope the Federal Reserve is walking between deflation and hyperinflation and he concludes with some investment portfolio recommendations. Rickards’ commentary is headlined “Portfolio Recommendations” and, not surprisingly, gold is in it. As you know, I consider anything that Jim writes [or says]… well worth your time. This short piece is no exception… and the link is here.
Reader ‘David’ has one more contribution today. Following China’s decision to open up the gold sector by allowing more banks to trade in bullion, Indian banks have also decided to approach the Reserve Bank of India for permission to trade in gold… and are also seeking permission to trade in gold in the domestic market and even hedge their requirements on futures exchanges. At present, banks are allowed to only sell gold; they cannot buy it. Banks import gold for selling to jewellers. They also sell gold coins to retail investors and this has gained popularity. However, when an investor wants to sell the investment in gold coin back to the banks, that is not allowed.
Needless to say, this [along with China’s similar action last week] are all gold positive. An article about these proposed changes in India can be found posted over at mineweb.co.za. The headline reads “China pushes for gold: India follows suit“… and the link to this must read article is here.
Here’s another story I discovered while poking around over at the mineweb.co.za website yesterday. It’s an essay [with lots of graphs] by my good friend Frank Holmes of U.S. Global Investors. Frank states that September has been the strongest month of the year for gold and gold stock price advances in seventeen out of the past twenty-one years. Find out why in this most excellent piece headlined “Get Ready, Get Set, Gold! – the best months are just ahead“… and the link to this worthwhile read is here.
Today’s last offering is an interview with John Hathaway… senior managing director & portfolio manager over at Tocqueville Funds. John is another one of those individuals in the gold world that I have lots of time for. And, as usual, anything that he has to say is worth listening to. The interview is posted over at kingworldnews.com… and the link is here.
When plunder becomes a way of life for a group of men… they create for themselves, in the course of time, a legal system that authorizes it, and a moral code that glorifies it. – Frederic Bastiat, The Law 
Monday was sort of a nothing day in the gold and silver market. Yes, ‘da boyz’ went after silver again… but what else is new. As Ted Butler mentioned in his interview with Eric King in my Saturday column… we could see another smash down before prices are allowed to take off to the upside… so don’t be surprised if it happens.
Also to be considered is the FOMC meeting that’s currently underway in Washington. The bullion banks never like to see gold rise while the meeting is in progress… although it has happened a time or two. So we have to see how thing turn out this time.
Frankly, I’m unconcerned. I know how all this is going to turn out, as a manipulation of any kind [most of which are on the long side] comes to an end sooner or later… one way or another. This is a short-side manipulation… and sooner or later the physical market will catch up to these guys… and no amount of paper on the Comex will be able to hide that fact when it does happen.
Both metals weakened slightly in Far East trading during their Tuesday trading day… and both came under a bit more selling pressure when London opened earlier today and also once the London a.m. fix was in at the Hong Kong close at 5:30 a.m. Eastern time. I also note that silver is back below its 50-day moving average already. Some of that had to do with the dollar, of course… but the dollar rally I spoke of earlier in this column, kind of ran out of gas around 1:00 a.m. Eastern time. And, like yesterday, it remains to be seen whether the price action of the world’s reserve currency has any effect on the gold price once New York opens for business this morning. I suspect it won’t.
I believe that the FOMC will have some sort of statement this afternoon… and everyone will be analyzing what they have to say. It will be interesting to see how gold and silver ‘react’ to the news when it does come.
I hope your Tuesday goes well… and I’ll see you here tomorrow.