http://www.caseyresearch.com/gsd/edition/steve-forbes-gold-can-save-us-disaster
Steve Forbes: Gold Can Save Us From Disaster
Oct
10
"We can also end up equally oversold as we have been overbought, but it's my opinion that a sell-off that severe is not in the cards"
¤ YESTERDAY IN GOLD AND SILVER
There wasn't big price activity in the Far East...or during the London trading day on Tuesday. Gold was up five bucks by the Hong Kong lunch hour...and was down five bucks by the 10:30 a.m. BST London a.m. gold fix.
A smallish rally began from there...and that got capped shortly after the Comex open...and then a thoughtful seller showed up around 10:30 a.m. in New York...and sold gold down about fifteen bucks in less than an hour. That proved to be the low price tick of the day...$1,759.50 spot. The gold price recovered a bit from there...and that tiny rally lasted until about 12:20 p.m. before getting sold down again until 3:30 p.m in electronic trading...and then traded sideways into the 5:15 p.m. New York close.
The gold price closed down $11.60 to $1,763.90 spot. Volume was pretty decent at 144,000 contracts.
It was precisely the same story in silver...and the charts look almost identical...except the sell-off into the New York low was much more severe for silver than gold. So what else is new?
The silver price recovered smartly off its low, but that rally got chopped off at the knees at 12:20 p.m. Eastern time...and from there it traded sideways into the New York close. Silver's New York high and low price ticks were $34.21 and $33.44 spot respectively.
Silver closed at $33.90 spot...down 8 cents from Monday. Volume was very decent at 40,000 contracts.
The dollar index had a fairly sharp rally going into the London open...but that had little effect on the gold price. And neither did the rally between 8:30 and 9:30 a.m. in New York. But, for whatever reason, the rally between 10:30 a.m. and 11:40 a.m. had a huge effect on the gold price.
After that, the index was basically flat for the rest of the trading day. It's a bit of stretch to get the gold and silver price action to fit the antics of the dollar index yesterday.
The index did make it above the 80.00 mark for a while...but finished the day a hair below it at 79.99...up 38 basis points from Monday's close.
A smallish rally began from there...and that got capped shortly after the Comex open...and then a thoughtful seller showed up around 10:30 a.m. in New York...and sold gold down about fifteen bucks in less than an hour. That proved to be the low price tick of the day...$1,759.50 spot. The gold price recovered a bit from there...and that tiny rally lasted until about 12:20 p.m. before getting sold down again until 3:30 p.m in electronic trading...and then traded sideways into the 5:15 p.m. New York close.
The gold price closed down $11.60 to $1,763.90 spot. Volume was pretty decent at 144,000 contracts.
The silver price recovered smartly off its low, but that rally got chopped off at the knees at 12:20 p.m. Eastern time...and from there it traded sideways into the New York close. Silver's New York high and low price ticks were $34.21 and $33.44 spot respectively.
Silver closed at $33.90 spot...down 8 cents from Monday. Volume was very decent at 40,000 contracts.
The dollar index had a fairly sharp rally going into the London open...but that had little effect on the gold price. And neither did the rally between 8:30 and 9:30 a.m. in New York. But, for whatever reason, the rally between 10:30 a.m. and 11:40 a.m. had a huge effect on the gold price.The index did make it above the 80.00 mark for a while...but finished the day a hair below it at 79.99...up 38 basis points from Monday's close.
***
The Comex Daily Delivery Report showed that 3 gold and 62 silver contracts were posted for delivery on Thursday within the Comex-approved depositories. In silver, JPM issued 53 contracts...and the Bank of Nova Scotia stopped 52 contracts. I've always suspected that the Bank of Nova Scotia was complicit in this one way or another, as they were always the most active issuer and stopper after JPMorgan. And after what the CFTC announced on Friday, it's pretty much a certainty that they and JPMorgan run the silver price management scheme...with HSBC USA in a distant third place. The link to yesterday'sIssuers and Stoppers Report is here.
There were no reported changes in either GLD or SLV...and no sales report from the U.S. Mint, either.
Switzerland's Zürcher Kantonalbank had an update to their gold and silver ETFs yesterday. They added 29,023 troy ounces of gold, but they reported that their silver ETF declined by 174,803 ounces.
There was big activity at the Comex-approved depositories on Monday. They reported receiving 1,298,253 troy ounces of silver, with almost the entire amount going into JPMorgan's depository, which is now up to 21.83 million ounces. Also on Monday, a very chunky 1,677,758 troy ounces were shipped out...most of it from Brink's Inc...and the rest from Scotia Mocatta. The link to all that activity is here...and it's worth a quick look.
Here's a chart that Washington state reader S.A. stole from a Zero Hedge article yesterday.
The red line is total federal spending...the blue line is total federal tax revenue...and the green bars are the net surplus/deficit. It's an ugly sight...and shows how America has declined since I was a small child back in the early 1950s. Note in particular the debt that was run up during WW2 vs. what has been happening over the last couple of decades.
There were no reported changes in either GLD or SLV...and no sales report from the U.S. Mint, either.
Switzerland's Zürcher Kantonalbank had an update to their gold and silver ETFs yesterday. They added 29,023 troy ounces of gold, but they reported that their silver ETF declined by 174,803 ounces.
There was big activity at the Comex-approved depositories on Monday. They reported receiving 1,298,253 troy ounces of silver, with almost the entire amount going into JPMorgan's depository, which is now up to 21.83 million ounces. Also on Monday, a very chunky 1,677,758 troy ounces were shipped out...most of it from Brink's Inc...and the rest from Scotia Mocatta. The link to all that activity is here...and it's worth a quick look.
Here's a chart that Washington state reader S.A. stole from a Zero Hedge article yesterday.
The red line is total federal spending...the blue line is total federal tax revenue...and the green bars are the net surplus/deficit. It's an ugly sight...and shows how America has declined since I was a small child back in the early 1950s. Note in particular the debt that was run up during WW2 vs. what has been happening over the last couple of decades.
Here's another chart from Washington reader S.A...and it requires no explanation from me. I attempted to post this in Saturday's column, but got a second copy of Nick Laird's "Days to Cover short positions" graph in its place...so I'm trying again now.
***
A Firm Has Taken Responsibility For Tuesday's Violent Stock Swings
On Tuesday morning, dozens of stocks, including Pandora and Nokia, experienced violent price swings due to one trading firm's activity within a "dark pool."
Dark pools are private stock markets that connect buyers and sellers electronically so no party's identity is revealed.
According to the WSJ, the firm responsible for today's price madness has been identified, and securities regulator FINRA is looking into the matter.
What caused the trades is still a mystery. They were corrected, but even the way that was done leaves questions, according to Eric Hunsader, an executive at Nanex, a Chicago based firm that tracks market data.
This is very similar to the story that I ran on this subject yesterday...and now here is something that is brand new. This businessinsider.com article was posted on their website very early yesterday evening...and I thank Roy Stephens for our first story of the day...and the link is here.
Dark pools are private stock markets that connect buyers and sellers electronically so no party's identity is revealed.
According to the WSJ, the firm responsible for today's price madness has been identified, and securities regulator FINRA is looking into the matter.
What caused the trades is still a mystery. They were corrected, but even the way that was done leaves questions, according to Eric Hunsader, an executive at Nanex, a Chicago based firm that tracks market data.
This is very similar to the story that I ran on this subject yesterday...and now here is something that is brand new. This businessinsider.com article was posted on their website very early yesterday evening...and I thank Roy Stephens for our first story of the day...and the link is here.
German Chancellor to Athens: 'We Are Partners and We Are Friends'
In her first visit to Greece since 2007, Angela Merkel offered verbal support for Athens, saying "there is progress every day." The German chancellor also announced two Berlin-funded development projects focusing on health care and regional administration. She was greeted by some 50,000 demonstrators in Athens protesting her tough demands for economic reforms.
They didn't necessarily represent the majority, but the message they brought with them was a bitter one. Some of the estimated 50,000 protesters on the streets of Athens greeted the German chancellor on Tuesday with swastikas, signs with epithets like "Out with the Fourth Reich" and placards depicting her face and a painted-on Hitler mustache.
This story showed up on the German website spiegel.de yesterday...and I thank Roy for finding this story for us. The link is here.
They didn't necessarily represent the majority, but the message they brought with them was a bitter one. Some of the estimated 50,000 protesters on the streets of Athens greeted the German chancellor on Tuesday with swastikas, signs with epithets like "Out with the Fourth Reich" and placards depicting her face and a painted-on Hitler mustache.
This, however, did not stop Angela Merkel from delivering some encouraging words to Greece on Tuesday. The chancellor said Germany stood ready to continue helping Greece through its economic crisis, while recognizing that the country has covered "much of the ground" necessary for recovery.
"There is progress every day," she said in Athens. "But I believe that this path, as difficult as it may be, will pay off for Greece."This story showed up on the German website spiegel.de yesterday...and I thank Roy for finding this story for us. The link is here.
The Egoists' Hour: Debt Crisis Gives European Separatists a Boost
The debt crisis is fueling the fortunes of separatists in a handful of European Union countries. Affluent regions in Spain, Britain, Belgium and Italy no longer feel a sense of solidarity with poorer parts of their own countries -- but they want to remain part of the EU.
Spain isn't the only country where the economic crisis is fueling independence movements. The Scots are planning to hold a referendum on independence in the fall of 2014. In Northern Ireland, Molotov cocktails are flying through the air and shots are occasionally being fired. And in communal elections in Belgium next Sunday, the leader of the Flemish separatists, Bart de Wever, stands a good chance of being elected mayor of Antwerp, the country's commercial capital. His supporters see the office in the largest Flemish city as a springboard for the position of leader of an independent Flemish state.
This spiegel.de story from yesterday was sent to me by Roy Stephens...and it's your first must read in today's column. The link is here.
The Catalans, who make up one-fifth of Spain's total economic output, have grown tired of "not making any progress within Spain." For the last 30 years, says Mas, the central government has invested too little in his region.
Just as concerns are growing in Europe over Spain's government finances, the economically powerful Basque Country is also on the rise. Polls show that the separatists are likely to do well in Basque regional elections scheduled for the Sunday after next.Spain isn't the only country where the economic crisis is fueling independence movements. The Scots are planning to hold a referendum on independence in the fall of 2014. In Northern Ireland, Molotov cocktails are flying through the air and shots are occasionally being fired. And in communal elections in Belgium next Sunday, the leader of the Flemish separatists, Bart de Wever, stands a good chance of being elected mayor of Antwerp, the country's commercial capital. His supporters see the office in the largest Flemish city as a springboard for the position of leader of an independent Flemish state.
This spiegel.de story from yesterday was sent to me by Roy Stephens...and it's your first must read in today's column. The link is here.
Plans For Tougher Rule Enforcement: EU At Risk of Remaining a Toothless Tiger
The EU plans to enforce its rules by imposing tough penalties in the future. But experience suggests it won't be able to gets its way against major EU countries. Even the much-vaunted fiscal pact pushed through by Chancellor Angela Merkel to underpin the euro is at risk of being watered down.
According to this proposal, the European Commission, the EU's executive, would gain the right not only to recommend amendments to national draft budgets, but also to enforce them. If a government resists, the Brussels-based institution would have the power to impose fines.
In many European capitals, though, Van Rompuy's reform plans are controversial. Indeed, many politicians have been put off by the numerous rules and regulations that Brussels has already used to intervene in the economic policies of crisis-stricken countries. Until now, the threat of EU sanctions has mainly been confined to smaller member states.
By contrast, large countries such as Spain, Italy and France have so far had little to fear. Olli Rehn, the European commissioner for economic and monetary affairs in Brussels, knows better than to antagonize certain countries by imposing sanctions.
This is another Roy Stephens offering from the spiegel.dewebsite yesterday...and the link is here.
According to this proposal, the European Commission, the EU's executive, would gain the right not only to recommend amendments to national draft budgets, but also to enforce them. If a government resists, the Brussels-based institution would have the power to impose fines.
In many European capitals, though, Van Rompuy's reform plans are controversial. Indeed, many politicians have been put off by the numerous rules and regulations that Brussels has already used to intervene in the economic policies of crisis-stricken countries. Until now, the threat of EU sanctions has mainly been confined to smaller member states.
By contrast, large countries such as Spain, Italy and France have so far had little to fear. Olli Rehn, the European commissioner for economic and monetary affairs in Brussels, knows better than to antagonize certain countries by imposing sanctions.
This is another Roy Stephens offering from the spiegel.dewebsite yesterday...and the link is here.
Marin Katusa: Is Hyperinflation About to Light a Middle Eastern Powder Keg?
The connection between currency debasement and social upheaval makes sense - hyperinflation only occurs in times of domestic drama. For example, in 1946 Hungary experienced the greatest episode of hyperinflation on record - in the context of a small, economically limited nation wracked by the Great Depression and then Nazi occupation in World War II. Zimbabwe earned second place in hyperinflation's record books when its dollar inflated 7.96 billion percent from early 2007 to late 2008. The cause? Robert Mugabe's land-reform policy slashed agricultural output and destabilized a fragile society.
That brings me to today... and to Iran, where that volatile mix of domestic drama and hyperinflation is pushing a fragile society to the brink of revolution.
If history repeats itself and Iran descends into revolution, the outcome is both unclear and obvious. In the unclear category: the details of the resulting regime and how far an Iranian revolution might spread through the Middle East. What is obvious, though, are the generalities: a post-revolution Iran would remain Islamist and vehemently anti-US.
This article by Marin was posted in Tuesday's Casey Daily Dispatch...and is well worth reading. The link is here.
That brings me to today... and to Iran, where that volatile mix of domestic drama and hyperinflation is pushing a fragile society to the brink of revolution.
If history repeats itself and Iran descends into revolution, the outcome is both unclear and obvious. In the unclear category: the details of the resulting regime and how far an Iranian revolution might spread through the Middle East. What is obvious, though, are the generalities: a post-revolution Iran would remain Islamist and vehemently anti-US.
This article by Marin was posted in Tuesday's Casey Daily Dispatch...and is well worth reading. The link is here.
Trading-Limit Ruling Appeal Considered by CFTC
The U.S. Commodity Futures Trading Commission may decide as soon as this week to appeal a judge’s ruling against trading limits for oil, natural gas and other commodities, according to two people briefed on the matter.
The five-member commission plans to vote following a recommendation from the agency’s general counsel’s office to appeal the ruling, according to the people, who spoke on condition of anonymity because the schedule is private. U.S. District Judge Robert Wilkins ruled on Sept. 28 that the CFTC failed to assess whether the limits imposed under the Dodd-Frank Act were necessary and appropriate.
The decision blocked rules scheduled to take effect Oct. 12 that were challenged by the Securities Industry and Financial Markets Association and International Swaps and Derivatives Association Inc. The associations represent JPMorgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley and other banks and energy-trading firms.
This Bloomberg story was posted on their website during the New York lunch hour yesterday...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.
The five-member commission plans to vote following a recommendation from the agency’s general counsel’s office to appeal the ruling, according to the people, who spoke on condition of anonymity because the schedule is private. U.S. District Judge Robert Wilkins ruled on Sept. 28 that the CFTC failed to assess whether the limits imposed under the Dodd-Frank Act were necessary and appropriate.
The decision blocked rules scheduled to take effect Oct. 12 that were challenged by the Securities Industry and Financial Markets Association and International Swaps and Derivatives Association Inc. The associations represent JPMorgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley and other banks and energy-trading firms.
This Bloomberg story was posted on their website during the New York lunch hour yesterday...and I thank West Virginia reader Elliot Simon for sending it along. The link is here.
Are oil price benchmarks rigged just like LIBOR?
One of the world's largest oil trading groups has warned of "inaccurate pricing" in the benchmarks for the energy market that underpin billions of dollars of trading each day in contracts such as Brent and West Texas Intermediate.
Total Oil Trading SA, the trading arm of Total of France, has told international regulators that "several times a year, estimates of market prices on key [energy] indices ... are out of line with our experience of the day."
The International Organisation of Securities Commissions, an umbrella group of financial regulators, last week backed away from its initial tough proposals for regulation of the benchmarks in the physical energy market.
This Financial Times story was posted on their website on Monday...and showed up in the clear in this GATA release yesterday. It's worth reading...and the link is here.
Total Oil Trading SA, the trading arm of Total of France, has told international regulators that "several times a year, estimates of market prices on key [energy] indices ... are out of line with our experience of the day."
The International Organisation of Securities Commissions, an umbrella group of financial regulators, last week backed away from its initial tough proposals for regulation of the benchmarks in the physical energy market.
This Financial Times story was posted on their website on Monday...and showed up in the clear in this GATA release yesterday. It's worth reading...and the link is here.
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