Well, there wasn’t a snowball’s chance in hell that the bullion banks were going to allow gold price to stay above $1,200 during the Comex trading session yesterday… and they didn’t. The gold price edged over the $1,200 mark a couple of times during floor trading on Tuesday… but there was always a not-for-profit seller there to knock it gently down again. Gold did manage to close above $1,200… but that was in electronic trading after the Comex close… and that didn’t matter, because option expiry had already passed. Once again it was ‘mission accomplished’ for the bullion banks… as all those tens of thousands of call options expired out of the money. Gold’s low [around $1,186 spot] occurred at the London open… and the high [$1,205.50 spot] occurred moments before New York electronic trading ended at 5:15 p.m. Eastern time.
The silver market was more ‘volatile’… as it got clocked for more than 30 cents about two hours after Tuesday morning trading began in the Far East. It’s absolute low for the day [$17.51 spot] came at 9:45 a.m. in New York. But from that low, silver began a slow but steady rise… gaining back all its Tuesday loses… finishing up 6 cents from Monday’s close.
There was no co-relation between the dollar and the gold price yesterday… and if you can find some, please let me know. Here’s the 2-day dollar chart… which starts at the beginning of Monday morning trading in the Far East… and ends at midnight Eastern time on Tuesday night… which is 11:00 p.m. Central time on this chart.
The precious metals shares spent the first 30 minutes of Tuesday’s trading day climbing back to unchanged… which was a hell of an accomplishment considering how badly the Dow cratered at the open. From there, the shares traded virtually flat until 2:00 p.m. in New York. Then, a rally that began in the general equity markets about that time, that spilled over into the gold and silver shares… as there was nothing going on in the precious metals at that moment to warrant the 2.93% increase in the HUI… but don’t tell anyone. A lot of stocks had big percentage gains yesterday… especially in the juniors. And it would be my guess, just looking at the price action, that these were strong hands buying yesterday.
Well, the CME’s Daily Delivery report wasn’t very exciting… now that we’re down to the last few delivery days in May. Yesterday the reported that 2 gold and 9 silver contracts were put up for delivery on Thursday.
The lack of excitement there, was more than made up for by what happened in GLD yesterday… as they socked away the biggest one-day pile of gold that I can remember. This time it was… wait for it… 978,424 troy ounces of the stuff! That’s 30.4 tonnes! It’s also another new record high, as the GLD is sitting at 40,745,654 troy ounces of gold. I’m just praying that it’s all actually there. There were no changes in SLV again. Ted Butler thinks that the SLV sponsor [in this case its Blackrock] is shorting the shares because they can’t get the metal they’re owed.
About three hours after I wrote the above paragraph, I received the following GLD chart from Nick Laird of sharelynx.com in Australia. His timing was impeccable… and I thank him on your behalf, dear reader.
Well, Zürcher Kantonalbank provided their ETF report yesterday. The reason it wasn’t out on Monday was because of a religious holiday… and Swiss reader B.M. was kind enough to point that the 3rd Monday in May is a Catholic holiday in that particular canton and it was simply a day off… and the report was a day late because of that. Anyway, the ZKB added 63,803 troy ounces of gold and 883,277 troy ounces of silver to their respective ETFs last week. I thank Carl Loeb and Ted Butler for these numbers.
For a change, the U.S. Mint didn’t have a sales report yesterday… and over at the Comex-approved depositories, they added another 614,645 ounces of silver to their inventories on Monday… with all of it going into the Delaware warehouse. Here’s the link to that report.
The European Central Bank weekly statement of condition reported a 2 million euro decline in ‘gold and gold receivables’ caused by ‘trading of gold coin by two Eurosystem central banks.’ I thank the usual New York gold commentator for that tidbit.
Once again I have a lot of stories/interviews for you today… and I mean a lot. I’ll start out with a gold story that should warm the cockles of your heart.
Sprott Asset Management in Toronto has just announced plans to buy another 6 metric tonnes of gold for their new Sprott Physical Gold Trust. Zero Hedge‘s Tyler Durden gives a great introduction to the story… and the longish headline reads ‘Eric Sprott To Buy $235 Million In Gold, Or Over 6 Metric Tonnes, As Part Of PHYS Follow-On Offering‘… and the link to this must read story is here.
This next story is really interesting. Quite frankly I was amazed by it… and I’m sure that most North American readers will be as well. This is a story that was posted in The Times of London… and reprinted in The Australian yesterday. It’s courtesy of Australian reader Wesley Legrand… and the headline reads ‘Greeks queue to buy gold sovereigns for financial security in turbulent times‘. ‘They were parachuted in during World War II to fund local resistance to the Germans. And now, with a population mired deep in another — if very different — crisis, British gold sovereigns once again are the foreign currency of choice in Greece.’ Is this a must read, you ask? You betcha… and the link is here.
This next gold-related story showed up in yesterday’s online edition of The Wall Street Journal… so it was posted in the clear. The headline reads ‘Is Gold the Next Bubble?‘ This is the first of a three-part series that the author Brett Arends will write on gold. I will post the other two as they become available. The link to this first one is here.
The next piece is courtesy of Washington state reader S.A. It’s a longish Bloomberg audio interview of one Mr. Shishmanian… who just happens to be the current president of the World Gold Council… and organization that I [and the rest of GATA] have no time for. But, this interview is interesting in the fact that Shishmanian says that gold will never go below $1,000 again… and that gold, as an invest class, is now main stream. This will make the ‘Tokyo Rose’ of the gold world very unhappy. Too bad. The interview took place at a gold conference in Lima, Peru… and it’s certainly worth listening to… and the link is here.
Toronto-based Inter-Citic Minerals Inc. (TSX: ICI) is a gold exploration and development company, developing what could be one of China’s largest open-pit gold deposits. Inter-Citic’s 279 sq km Dachang Gold Project in Qinghai Province, China, with 50,000 meters of drilling underway in 2008.
The total NI 43-101 compliant Inferred Mineral Resource Estimate at Dachang now stands at 2.9 million oz Au contained (approximately 25 million tonnes with an average grade of 3.6 gpt Au), with more drilling underway on the DMZ to further define the existing 43-101 inferred mineral resource estimate in preparation for a scoping study, as well as additional drilling in highly prospective new areas focused on resource expansion. Gold mineralization in the Dachang Main Zone begins at surface and has not been significantly drilled below 150 meters, and numerous known areas of surface gold mineralization on adjacent and other parts of the property have the potential for further discoveries. The Dachang Main Zone itself remains open at depth and along strike.
Under a 30-year joint venture agreement with the Qinghai Geological Survey Institute (QGSI – the provincial geological survey body), Inter-Citic has a fully-vested 83% interest in the property, with 17% belonging to QGSI. Inter-Citic has a further option to increase its total interest to 90% at pre-feasibility. The Dachang property consists of several exploration license areas. They have all been renewed by the Company as they have come due in regular course. The business license for the Dachang Gold Project is currently valid to December 26, 2033.
Here’s another interview that’s more than worth your time as well. Gold mining giant Pierre Lassonde, chairman of Franco Nevada Corp., has just been interviewed by Eric King of King World News. They discussed the possibility for gold stocks to outperform gold, gold’s renewed recognition as money, the proposed increase in mining taxes in Australia, the bull market in hard assets, and consolidation in the mining industry. The first part of the interview is 20 minutes long and the link is here. Their website was down early this morning when I posted this story… so I sure hope it’s back up by the time you try to download it.
I’ll take a break from the gold-related stories to deal with other very worthwhile news. The first item was sent to me by reader U.D. This is two paragraph piece with a most excellent graph that you can gobble down in less than a minute. It’s posted over at ritholtz.com and the headline reads ‘Volatility Index: 20-Year Chart‘. You must see this… so click here.
This next story is posted over at the Adelaidenow.com.au website in Australia. It’s an alarming piece that sounds suspiciously like the final days of the U.S. housing bubble. If this doesn’t make American readers’ blood run cold… I don’t know what will. As a 27-year veteran of residential real estate here in Canada… this is shocking and depressing… as this sort of rampant speculative lending would never be tolerated by Canada’s banking system. You can’t make this stuff up. The headline reads ‘Revealed: The home loan that could save you a fortune‘. I thank reader ‘Vern from Ventura’ for bringing it to my attention… and now to yours. The link is here.
As you know, I’m not a big fan of Max Keiser over at russiatoday.com… as I think he’s full of himself. But, having said that, when his guest is Jim Rickards… what is one to do? Anyway, this interview [probably a clip from a bigger interview] lasts a whole 1 minute and 29 seconds. In it, Jim calls Goldman Sachs an ‘enemy of the State!’ I was shocked… and I’ve been around. It’s true, of course… and you can throw JPMorgan and a few other U.S. investment houses and bullion banks in their for good measure as well. But, dear reader, I urge you to take 89 seconds out of your busy day and hear Rickards say those words yourself. I stole this story from Bill Murphy’s MIDAS commentary over at lemetropolecafe.com yesterday… and the link is here.
Here’s a story from the English language edition of the German website spiegel.de. This is my second story on Greece today… but this one, like the first one, looks at another aspect of the unfolding Greek tragedy. This one is in the tourist trade, as 400 hotels are for sale. Business is bad… and getting worse. The headline reads ‘Vacationers Staying Away: Crisis Hits Greek Tourism as Cancellations Soar‘. I thank reader Roy Stephens for the story… and the link is here.
Here’s a 9-minute interview with former financial regulator, William K. Black. You may remember that I ran an interview he did with now-retired PBS news anchor, Bill Moyer. Here he is again over at therealnews.com discussing the new financial regulatory bill that was just been passed by the Senate. He says that it does have a few good reforms… but it maintains ‘structural blackmail’. The headline reads ‘Finance Bill: a few good measures, but mostly show‘. You can watch/listen to the interview… but there’s also a verbal transcript if you scroll down a little. I thank reader Ken Metcalfe for sending it along… and the link is here.
My last story today is courtesy of reader Roy Stephens. It was filed late last night at The Telegraph in London by their economics writer, Edmund Conway. With the growing fear that the banking system could crumble under the weight of the sovereign debt crisis… LIBOR has risen for the 11th day in a row. The headline reads ‘FTSE and Dow plummet amid market turmoil‘. It’s not a particularly long piece… and the link is here.
Well, the Plunge Protection Team was out in full force yesterday morning… keeping both feet on the gold and silver price into options expiry… and catching a falling knife with both hands, as the Dow cratered at the open once again. The U.S. equity markets want to die… but the Fed and U.S. Treasury are doing everything in their power to prevent it… and the world-wide stock market crash that would inevitably ensue. As I’ve said before, it’s my opinion that the U.S. equity markets are worth less than 10 cents on the dollar.
But, there were strong hands buying gold and silver stocks yesterday… and I’ve been watching the gold and silver prices carefully for the last six hours as I write today’s column… and they’ve broken out to the upside in early London trading. Gold is up $12.80… and silver’s up 32 cents as I write this paragraph.
I was shocked when I checked the volume numbers in gold trading so far this morning… 6:10 a.m. Eastern time. Once you take out the roll-overs, gold volume is only 14,900 contracts! And London has already been open almost three hours as I write this. That’s a tiny fraction of what I thought it would be! This is very bullish. But silver’s net volume is a pretty chunky 7,400 contracts. My guess is that there’s some short covering going on right now.
I can’t say for sure what’s going to happen from hereon in, but like I said yesterday, once options expiry was out the way, we might get a surprise to the upside… despite the fact that the last trading day in the May contract is on Friday… and first notice day for delivery into the June gold contract is on Monday.
Gold and silver are now disappearing into the gold funds and gold ETFs at a frantic rate… and that’s just the stuff that I’ve reported. Heaven only knows what’s going on behind the scenes that we can’t see. But I hope you have your share, dear reader… as things could get out of hand really quickly from this point on.
As you already know, I’m ‘all in’… and very happy that I am. As far as gold and silver… and their respective shares are concerned… it’s my opinion that the slogan ‘sell in May and go away’ will not apply to the precious metals market this year. The signs are all too clear [if you’ve read any of the stories that I’ve posted over the last few weeks] that the end is fast approaching… and I’ve seen nothing in the last 24 hours to change my mind one bit.
If you still have any spare change lying around, I would suggest that it might be an idea to invest it in a combination of physical metal… and the shares of the companies that produce it. The 40 tonnes of gold that disappeared into GLD yesterday… along with the 6 tonnes into Sprott’s PHYS gold fund… and the 2 tonnes that went into the ZKB last week, indicates that high net worth investors are buying gold [and silver] many orders of magnitude faster than its being dug out of the ground, as they know what’s coming.
So, once again, I must shamelessly plug Casey’s Gold and Resource Report… and Casey Research‘s flagship publication… the International Speculator. It’s hard to go wrong with the stock recommendations that they contain. The time for wealth preservation is now… and I’ll slide into bed this morning, comfortable in the fact that my family and I are all protected.
If what’s going on in London is any indication… and if the U.S. bullion banks decide that they’ve had enough and throw in the towel… it could be a very interesting day in New York trading when the Comex opens this morning.
See you tomorrow.
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