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¤ YESTERDAY IN GOLD AND SILVER
Gold got sold down in early Far East trading, with the low of the day coming shortly after 10:00 a.m. Hong Kong time. From there it rallied it fits and starts until the Comex open in New York.
At that point, the price blasted skyward...just like it did in silver, platinum and palladium. Then, at precisely 9:00 a.m. Eastern, the gold price went vertical...and that's when a not-for-profit seller/HFT showed up.
Gold's high tick was $1,793.00 spot...but by 10:40 a.m. Eastern time, the gold price had been sold down by eighteen dollars to around $1,775 spot...and then traded sideways into the electronic close.
Gold finished the Monday trading session at $1,775.20 spot...up $4.10 on the day...and safely back below the magic $1,780 spot price mark, which has been the ceiling for this rally. Volume was around 197,000 contracts, which is pretty chunky.
At that point, the price blasted skyward...just like it did in silver, platinum and palladium. Then, at precisely 9:00 a.m. Eastern, the gold price went vertical...and that's when a not-for-profit seller/HFT showed up.
Gold's high tick was $1,793.00 spot...but by 10:40 a.m. Eastern time, the gold price had been sold down by eighteen dollars to around $1,775 spot...and then traded sideways into the electronic close.
Gold finished the Monday trading session at $1,775.20 spot...up $4.10 on the day...and safely back below the magic $1,780 spot price mark, which has been the ceiling for this rally. Volume was around 197,000 contracts, which is pretty chunky.
I won't provide the complete play-by-play on silver, as the chart looks pretty much the same as the gold chart. Silver's low [around $34.10 spot] came shortly after 11:00 a.m. Hong Kong time...and then rallied 20 cents into the Comex open.
Silver's high tick [$35.50 spot] came a couple of minutes after 9:00 a.m. in New York...and by 10:50 a.m. the silver price had been beaten down to $34.60 spot. The subsequent rally got sold down in the electronic market...and silver closed at $34.65 spot...up 16 cents on the day...and safely below the $35 spot mark once again, which has been the price ceiling for silver in this rally. Volume was very heavy...around 58,000 contracts.
Silver had an intraday price move of about $1.40.
While I'm at it, here are the platinum and palladium charts from yesterday. Their respective rallies ended in precisely the same fashion...and by precisely the same not-for-profit sellers I would suspect.
Silver's high tick [$35.50 spot] came a couple of minutes after 9:00 a.m. in New York...and by 10:50 a.m. the silver price had been beaten down to $34.60 spot. The subsequent rally got sold down in the electronic market...and silver closed at $34.65 spot...up 16 cents on the day...and safely below the $35 spot mark once again, which has been the price ceiling for silver in this rally. Volume was very heavy...around 58,000 contracts.
Silver had an intraday price move of about $1.40.
The dollar index rallied over the 80.00 mark very shortly after markets opened for business on Sunday night in New York. The high tick [80.13] in the index [around 10:30 a.m. Hong Kong time] pretty much coincided with the low price ticks of gold and silver.
From that point, the dollar index rolled over...and by the 10:00 a.m. Eastern time London p.m. gold fix, had been sold down to 79.59. From its nadir, the index rallied and closed at 79.81...for a net gain of only about 15 basis points on the day.
There certainly was some co-relation between the dollar index and the precious metals...but to say it was exact co-relation would mean one would have to lie with a straight face.
Not surprisingly, the gold stocks gapped up at the open...and the high tick came at the 10:00 a.m. London p.m. gold fix...and the nadir for the dollar. The stocks fell in conjunction with the sell-off in the gold price. This ended at 10:45 a.m...and it's equally as obvious in the share price action, as it was the price action of the metal itself. From that point, the gold shares traded sideways...and the HUI closed up 0.73%.
From that point, the dollar index rolled over...and by the 10:00 a.m. Eastern time London p.m. gold fix, had been sold down to 79.59. From its nadir, the index rallied and closed at 79.81...for a net gain of only about 15 basis points on the day.
There certainly was some co-relation between the dollar index and the precious metals...but to say it was exact co-relation would mean one would have to lie with a straight face.
****
The CME Daily Delivery Report for Monday was a big one, as it showed that 2,696 gold and 15 silver contracts were posted for delivery on Day 3 of the October delivery sequence. The big short/issuer was Deutsche Bank, with 2,509 contracts posted for delivery tomorrow within the Comex-approved depositories. JPMorgan was the big long/stopper, with 1,337 contracts in its proprietary trading account...and 717 contracts in its client account. Coming in a distant second was another of the 'Big 4' short position holders...and that was the Bank of Nova Scotia with 493 contracts stopped.
In silver, the short/issuer was Jefferies on all...and the Bank of Nova Scotia was the stopper on most of them. The Issuers and Stoppers Report from yesterday is definitely worth looking at once again...and the link is here.
There were additions to both GLD and SLV yesterday. They reported receiving 58,163 troy ounces...and 435,924 troy ounces respectively.
There was no sales report from the U.S. Mint yesterday...and no changes to Friday's sales numbers, so the numbers I spoke of on Saturday, still stand. One thing I did forget to point out was the fact that September silver eagles sales were the second biggest of the year. Only January was higher. I hope you purchased your share, dear reader.
Over at the Comex-approved depositories on Friday, they reported receiving 600,333 ounces of silver...and shipped only 98,197 troy ounces out the window. The link to that activity is here.
A couple of things of interest...and the first is from Hong Kong reader G. Cheung...
"Hi Ed...Another great weekend issue..."
"FYI I want to alert you that the China markets will be closed for 1-5 Oct for National Day on 1 Oct with China's populace getting a total [of] 5 days off for holiday called Golden Week. Hong Kong will also be closed for China National Day and 2 Oct for Mid-Autumn festival."
In silver, the short/issuer was Jefferies on all...and the Bank of Nova Scotia was the stopper on most of them. The Issuers and Stoppers Report from yesterday is definitely worth looking at once again...and the link is here.
There were additions to both GLD and SLV yesterday. They reported receiving 58,163 troy ounces...and 435,924 troy ounces respectively.
There was no sales report from the U.S. Mint yesterday...and no changes to Friday's sales numbers, so the numbers I spoke of on Saturday, still stand. One thing I did forget to point out was the fact that September silver eagles sales were the second biggest of the year. Only January was higher. I hope you purchased your share, dear reader.
Over at the Comex-approved depositories on Friday, they reported receiving 600,333 ounces of silver...and shipped only 98,197 troy ounces out the window. The link to that activity is here.
A couple of things of interest...and the first is from Hong Kong reader G. Cheung...
"Hi Ed...Another great weekend issue..."
"FYI I want to alert you that the China markets will be closed for 1-5 Oct for National Day on 1 Oct with China's populace getting a total [of] 5 days off for holiday called Golden Week. Hong Kong will also be closed for China National Day and 2 Oct for Mid-Autumn festival."
"After that Friday ruling against CFTC position limits plus the above calendar, I think this is one of those weeks to be more watchful than usual when Asia markets do open on Monday with metals trading expected on the light side. After all, the 29 April 2011 silver take-down got triggered during an extended 4 day weekend (29 Apr-3 May) for the United Kingdom Royal Wedding & May Bank Holidays."
Next is this short commentary that Wesley Legrand, of Grand Private Equities Pty Ltd, that he sent to clients over the weekend...and it's definitely worth reading, as we don't hear much about what's going on in the precious metals world in Australia. From what I've read below, Wesley's take is spot on.
"It has been an extremely difficult 15 months, but nimble investors who remained focused on the key underlying trends at play (monetary inflation, debt deflation, remonetisation of gold etc) were able to take advantage of ridiculously undervalued gold stocks on sale in June and July, and in the process were also able to cut losses in underperforming stocks and reposition for greater gains as suggested. The bizarre and unsustainable disconnect between gold and gold stocks had lasted for over a year but is correcting nicely now, with most quality gold stocks outperforming the gold price significantly in recent months; e.g. preferred gold stocks SLR up 40%, ABU up 60% and PXG up almost 100% have been standouts. For those still yet to restructure portfolios accordingly, it is certainly not too late, as gold stocks remain VERY cheap and HUGELY undervalued on any metric, as per James Turk’s outstanding ‘Gold vs. Gold Stocks’ chart updated below that we have discussed previously..."
Next is this short commentary that Wesley Legrand, of Grand Private Equities Pty Ltd, that he sent to clients over the weekend...and it's definitely worth reading, as we don't hear much about what's going on in the precious metals world in Australia. From what I've read below, Wesley's take is spot on.
"It has been an extremely difficult 15 months, but nimble investors who remained focused on the key underlying trends at play (monetary inflation, debt deflation, remonetisation of gold etc) were able to take advantage of ridiculously undervalued gold stocks on sale in June and July, and in the process were also able to cut losses in underperforming stocks and reposition for greater gains as suggested. The bizarre and unsustainable disconnect between gold and gold stocks had lasted for over a year but is correcting nicely now, with most quality gold stocks outperforming the gold price significantly in recent months; e.g. preferred gold stocks SLR up 40%, ABU up 60% and PXG up almost 100% have been standouts. For those still yet to restructure portfolios accordingly, it is certainly not too late, as gold stocks remain VERY cheap and HUGELY undervalued on any metric, as per James Turk’s outstanding ‘Gold vs. Gold Stocks’ chart updated below that we have discussed previously..."
"Gold is now entering its strongest seasonal period of the year, but the recent catalyst has been the latest folly of incompetent central banks in repeating that which has already failed – to print more money – as they have few options remaining after already manipulating interest rates to zero in a deliberate policy of ‘financial repression’. The European Central Bank announced ‘unlimited’ bond purchases and the US Federal Reserve announced ‘open-ended’ quantitative easing, whilst the Banks of Japan and England have naturally reacted by turning to the printing presses again as well, as the ‘race to the bottom’ in debasing fiat currencies escalates into a black hole, all the while robbing the people of the world of their purchasing power and wiping out the savings of the once dominant middle classes. This endless money printing now serves but one primary purpose; to bail out the grossly insolvent global banking system. So as we have been explaining since 2009, the west’s dominant fiat monetary system is coming to an end, and eventually we will most likely see new currencies backed by gold at multiples of today’s gold price."
****
some news item of note....
SEC Sues the One Rating Firm Not on Wall Street’s Take
In April, motivated by what I consider pure maliciousness, the SEC initiated a “cease and desist” administrative proceeding it deemed “necessary for the protection of investors and in the public interest” against Egan-Jones Ratings Co., a privately owned, 20-person firm based in Haverford, Pennsylvania, and against its principal owner, Sean Egan.
Egan-Jones, founded in 1995, is one of nine ratings companies that the SEC has accredited as “nationally recognized,” allowing the firm to rate the debt of sovereign nations, companies and asset-backed securities, among others. Notably, it is the only one of the nine that gets paid by investors instead of by the issuers of securities.
The bigger and better-known ratings companies -- Standard & Poor’s (owned by McGraw-Hill Cos. (MHP)), Moody’s Corp. (MCO) and Fitch Ratings Ltd. -- are paid by the Wall Street banks that underwrite the debt securities of corporate issuers. That is, the companies are beholden to the sellers of the products they are supposed to pass judgment on, not the buyers. That’s akin to allowing the Hollywood studios to pay the nation’s film critics for their opinions.
This op-ed piece showed up on the Bloomberg website at 4:33 Mountain Time yesterday...and I thank Manitoba reader Ulrike Marx for our first story in today's column. It's worth skimming. The link is here.
Egan-Jones, founded in 1995, is one of nine ratings companies that the SEC has accredited as “nationally recognized,” allowing the firm to rate the debt of sovereign nations, companies and asset-backed securities, among others. Notably, it is the only one of the nine that gets paid by investors instead of by the issuers of securities.
The bigger and better-known ratings companies -- Standard & Poor’s (owned by McGraw-Hill Cos. (MHP)), Moody’s Corp. (MCO) and Fitch Ratings Ltd. -- are paid by the Wall Street banks that underwrite the debt securities of corporate issuers. That is, the companies are beholden to the sellers of the products they are supposed to pass judgment on, not the buyers. That’s akin to allowing the Hollywood studios to pay the nation’s film critics for their opinions.
This op-ed piece showed up on the Bloomberg website at 4:33 Mountain Time yesterday...and I thank Manitoba reader Ulrike Marx for our first story in today's column. It's worth skimming. The link is here.
California dairies going broke due to feed, milk prices
In nearly six decades of running a dairy in central California, Mary Cameron made a name for herself in a male-dominated industry: She led several dairy organizations and was honored as Outstanding Dairy Producer of the Year.
But the 82-year-old Cameron — who still drives a tractor and supervises her Hanford dairy — is on the brink of losing her life's work. She can no longer pay the bills. Her bank has classified her loan as distressed. And she can't afford enough feed for her 900 milking cows and 1,000 heifers.
"I have been in this business for 57 years and I have never been in financial trouble like I am right now," said Cameron, who runs the Atsma-Cameron Dairy with her two sons. "I'm on the verge of bankruptcy. It's horrible and inexcusable."
Since 2008, California has lost nearly 300 dairies, with 1,668 remaining as of January, according to the California Department of Food and Agriculture. There are no official estimates on how many dairies have shuttered in 2012 — but interviews with dairymen and experts indicate several hundred dairies could be in danger of going under.
This 2-page AP story was picked by news.yahoo.com Internet site on Saturday. You may think that this is a strange story for a must read, but I was raised on a farm...and as they say, you can take the boy out of the country, but you can't take the country out of the boy. This story goes right to the heart of the inflationary pressures that are boiling just under the surface for food prices...not only abroad, but here at home in North America. I thank Washington state reader S.A. for digging this story up on our behalf...and the link is here.Spanish Authorities Are Locking Up Trash Cans To Prevent People From Foraging For Food
Here's how bad the economic crisis has gotten in Spain, according to The New York Times' Suzanne Daley:
"So pervasive is the problem of scavenging that one Spanish city has resorted to installing locks on supermarket trash bins as a public health precaution."
The need to ask for help is deeply embarrassing, Daley write.
Some families go to food banks in neighboring towns so their friends and acquaintances will not see them.
This story was posted on the businessinsider.com website last Wednesday...and I thank Bill Busser for sending it our way. The link is here.
"So pervasive is the problem of scavenging that one Spanish city has resorted to installing locks on supermarket trash bins as a public health precaution."
The need to ask for help is deeply embarrassing, Daley write.
Some families go to food banks in neighboring towns so their friends and acquaintances will not see them.
This story was posted on the businessinsider.com website last Wednesday...and I thank Bill Busser for sending it our way. The link is here.
Spain to Borrow $267B in 2013 as Bailout Pressure Grows
Spain plans to borrow 207.2 billion euros ($266.5 billion) next year, the Budget Ministry said today, as pressure builds for Prime Minister Mariano Rajoy to tap the European rescue fund instead of financial markets.
Spain’s debt will widen to 90.5 percent of gross domestic product in 2013 as the state absorbs the cost of bailing out its banks, the power system and euro-region partners Greece, Ireland and Portugal. This year’s budget deficit will be 7.4 percent of economic output, Budget Minister Cristobal Montoro said at a press conference. Spain’s 6.3 percent target will be met because it can exclude the cost of the bank rescue, he said.
Spain’s borrowing plans may test investors’ willingness to continue financing the government with the European Central Bank waiting to buy the country’s debt should Rajoy agree to conditions. The government this past week unveiled 43 measures designed to boost economic growth that Economic and Monetary Affairs Commissioner Olli Rehn said go beyond the European Union’s recommendation for Spain’s restructuring.
This article showed up on the businessweek.com Internet site on Sunday...and I thank Washington state reader S.A. for his second story in today's column. The link is here.
Spain’s debt will widen to 90.5 percent of gross domestic product in 2013 as the state absorbs the cost of bailing out its banks, the power system and euro-region partners Greece, Ireland and Portugal. This year’s budget deficit will be 7.4 percent of economic output, Budget Minister Cristobal Montoro said at a press conference. Spain’s 6.3 percent target will be met because it can exclude the cost of the bank rescue, he said.
Spain’s borrowing plans may test investors’ willingness to continue financing the government with the European Central Bank waiting to buy the country’s debt should Rajoy agree to conditions. The government this past week unveiled 43 measures designed to boost economic growth that Economic and Monetary Affairs Commissioner Olli Rehn said go beyond the European Union’s recommendation for Spain’s restructuring.
This article showed up on the businessweek.com Internet site on Sunday...and I thank Washington state reader S.A. for his second story in today's column. The link is here.
Troubled Troika Europe Intent on Saving Greece Despite Lag in Reforms
Greece's creditors have been less than impressed with the country's willingness and ability to carry out much needed reforms. But Europe is likely to continue supporting the country anyway -- out of fear of the consequences should the country go bankrupt.
They're at odds, once again. The recent standoff in Athens between Poul Thomsen, chief envoy of the International Monetary Fund, and Greek Finance Minister Yannis Stournaras was, by all accounts, rather heated. Stournaras even threatened to resign rather than implement the cuts Thomsen was calling for, reported the New York Times.
"It doesn't matter to me," the IMF envoy allegedly replied, and then left.
On Friday, Sept. 21, it was time for the "Men in Black," as the Greeks call them, to depart once again -- without having accomplished anything. The troika, consisting of representatives of the IMF, the European Commission and the European Central Bank, had had enough.
This story showed up on the spiegel.de Internet site yesterday...and I thank Roy Stephens for sending it our way. The link is here.
They're at odds, once again. The recent standoff in Athens between Poul Thomsen, chief envoy of the International Monetary Fund, and Greek Finance Minister Yannis Stournaras was, by all accounts, rather heated. Stournaras even threatened to resign rather than implement the cuts Thomsen was calling for, reported the New York Times.
"It doesn't matter to me," the IMF envoy allegedly replied, and then left.
On Friday, Sept. 21, it was time for the "Men in Black," as the Greeks call them, to depart once again -- without having accomplished anything. The troika, consisting of representatives of the IMF, the European Commission and the European Central Bank, had had enough.
This story showed up on the spiegel.de Internet site yesterday...and I thank Roy Stephens for sending it our way. The link is here.
Rush to turn European paper gold into real metal vaulted in Singapore
Starting Monday, October 1st, the Southeast Asian city-state is scrapping a 7% tax on gold and silver in an effort to turn the city into a precious-metals trading hub to rival London and Zurich, where value-added taxes don't apply to the investment-grade gold trade.
Investors have flocked to gold and silver in recent years as the world economy sputtered. The most nervous among them shunned the futures and funds often used to invest in gold and instead bought bars, ingots and coins to stash their wealth.
Singapore, touting its image as a safe, stable, and few-questions-asked haven for investors, is hoping to store an increasing amount of that gold and silver.
"There has been a dramatic increase in customers wanting to move out of paper, that is over-the-counter gold, and into physical," said Cedric Chanu, director, Asia precious-metals trading at Deutsche Bank. "We're seeing customers wanting to move their gold from Europe into Singapore."
This subscriber-protected story was posted on The Wall Street Journal website on Sunday...and it's in the clear in this GATA release...and I thank Ulrike Marx for sending it our way. It's more than worth your while...and the link is here.
Investors have flocked to gold and silver in recent years as the world economy sputtered. The most nervous among them shunned the futures and funds often used to invest in gold and instead bought bars, ingots and coins to stash their wealth.
Singapore, touting its image as a safe, stable, and few-questions-asked haven for investors, is hoping to store an increasing amount of that gold and silver.
"There has been a dramatic increase in customers wanting to move out of paper, that is over-the-counter gold, and into physical," said Cedric Chanu, director, Asia precious-metals trading at Deutsche Bank. "We're seeing customers wanting to move their gold from Europe into Singapore."
This subscriber-protected story was posted on The Wall Street Journal website on Sunday...and it's in the clear in this GATA release...and I thank Ulrike Marx for sending it our way. It's more than worth your while...and the link is here.
PIMCO: GOLD – The Simple Facts
When it comes to investing in gold, investors often see the world in black and white. Some people have a deep, almost religious conviction that gold is a useless, barbarous relic with no yield; it’s an asset no rational investor would ever want. Others love it, seeing it as the only asset that can offer protection from the coming financial catastrophe, which is always just around the corner.
Our views are more nuanced and, we believe, provide a balanced framework for assessing value. Our bottom line: given current valuations and central bank policies, we see gold as a compelling inflation hedge and store of value that is potentially superior to fiat currencies.
We believe investors should consider allocating gold and other precious metals to a diversified investment portfolio. The supply of gold is constrained, and we see demand increasing consistent with global economic growth on a per capita basis. Regarding inflation in particular, we feel that the Federal Reserve’s decision to begin a third round of quantitative easing makes gold even more attractive.
You know that the world is undergoing a paradigm shift when you see Pimco's researchers whispering sweet nothings in your ear about gold. This essay was posted over at the pimco.com Internet site yesterday...and I thank Donald Sinclair for his last story of the day. It, too, is worth reading...and the link is here.
Our views are more nuanced and, we believe, provide a balanced framework for assessing value. Our bottom line: given current valuations and central bank policies, we see gold as a compelling inflation hedge and store of value that is potentially superior to fiat currencies.
We believe investors should consider allocating gold and other precious metals to a diversified investment portfolio. The supply of gold is constrained, and we see demand increasing consistent with global economic growth on a per capita basis. Regarding inflation in particular, we feel that the Federal Reserve’s decision to begin a third round of quantitative easing makes gold even more attractive.
You know that the world is undergoing a paradigm shift when you see Pimco's researchers whispering sweet nothings in your ear about gold. This essay was posted over at the pimco.com Internet site yesterday...and I thank Donald Sinclair for his last story of the day. It, too, is worth reading...and the link is here.
Ted Butler: Arguments Against Silver Manipulation
Silver market analyst Ted Butler, first to expose the manipulation of that market, writes at GoldSeek's companion site, SilverSeek.com, that the big issue of manipulation remains the concentrated short position held by JPMorganChase.
Ted has a lot more to say about the silver price management scheme than mentioned above. This is an excerpt from his mid-week commentary that was posted on his Internet site www.butlerresearch.com last Wednesday for the benefit of his paying subscribers...and I'm glad to see that he's seen fit to publish this important work in the public domain.
If I had to pick just one story for you to read today...this would be it...and the link is here.
Ted has a lot more to say about the silver price management scheme than mentioned above. This is an excerpt from his mid-week commentary that was posted on his Internet site www.butlerresearch.com last Wednesday for the benefit of his paying subscribers...and I'm glad to see that he's seen fit to publish this important work in the public domain.
If I had to pick just one story for you to read today...this would be it...and the link is here.
and from Turd Ferguson........
Guest Post: Andrew Maguire responds to "Trader David R"
Last week, the good folks at Miles Franklin created quite a stir by posting a blog from a supposed bullion bank insider. It seemed a rather cunning bit of disinformation so I asked my friend, Andrew Maguire, to read the piece and write up a few "clarifications". Read more...
Breathtaking Audacity
I don't normally spend time parsing the words of The Bernank. However, parts of his speech today in Indianapolis were so audacious, so utterly disingenuous, that I am compelled to discuss it here. Read more...
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