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http://www.caseyresearch.com/gsd/edition/washington-agreement-another-gold-rig-former-fed-and-treasury-official-admits
24 HOUR GOLD
24 HOUR SILVER
http://www.caseyresearch.com/gsd/edition/washington-agreement-another-gold-rig-former-fed-and-treasury-official-admits
Washington Agreement is Another Gold Rig, Former Fed and Treasury Official Admits
Jan
2
"I'm guessing that what we saw on Monday was someone covering a short position for year-end book-squaring."
¤ YESTERDAY IN GOLD AND SILVER
I wasn't planning on having a column today...but Monday's price action, along with a list of excellent reading material, made me change my mind.
Of course volume was pretty light, but there was still notable structure in the gold price right from the open in the Far East on the last trading day in 2012. The gold price rallied right up until 9:00 a.m. in London, before getting sold down into the noon local time London silver fix.
From there, it didn't do much until around noon in New York...and then away it went to the upside in rather impressive fashion. Then shortly before 1:00 p.m. Eastern, either the buyer disappeared, or the vertical rally suddenly forced the appearance of the usual not-for-profit sellers. But once that event occurred, the gold price chopped sideways into the close.
Of course volume was pretty light, but there was still notable structure in the gold price right from the open in the Far East on the last trading day in 2012. The gold price rallied right up until 9:00 a.m. in London, before getting sold down into the noon local time London silver fix.
From there, it didn't do much until around noon in New York...and then away it went to the upside in rather impressive fashion. Then shortly before 1:00 p.m. Eastern, either the buyer disappeared, or the vertical rally suddenly forced the appearance of the usual not-for-profit sellers. But once that event occurred, the gold price chopped sideways into the close.
The low price tick [around $1,665 spot] occurred right at the New York open at 6:00 p.m. Eastern time on Sunday night...and the high tick [$1,681.50 spot] occurred around 12:50 p.m. on Monday afternoon in New York.
Gold closed the electronic trading session on December 31st at $1,675.20 spot...up $18.90 on the day. Volume, which had been extremely light up until the price took off, blew out to around 96,000 contracts when all was said and done.
Silver also rallied at the New York open on Sunday night...but then got capped at the $30.20 price level right up until 9:00 a.m. in London. Silver then suffered the same fate as gold...but the price drop into the noon London silver fix was even more pronounced...and I'm guessing the low price tick came in around the $29.80 mark.
Gold closed the electronic trading session on December 31st at $1,675.20 spot...up $18.90 on the day. Volume, which had been extremely light up until the price took off, blew out to around 96,000 contracts when all was said and done.
From the low of the day, silver rallied until 10:00 a.m. in New York...there was no p.m. gold fix in London on Monday...and then got sold off until lunchtime, before it took off as well. There's no doubt in my mind that JPMorgan et al showed up to slam this rally, as the price fight was obviously on starting around 12:45 p.m. Eastern. I'll have more on this in 'The Wrap'.
Silver's high tick [$30.55 spot] came around 3:00 p.m. in the New York electronic market...and from there got sold down a bit into the 5:15 p.m close.
Silver finished the day, month...and the year...at $30.35 spot...up 32 cents from its Friday close. And it's more than obvious that silver would have finished materially higher in price if "da boyz" hadn't shown up when they did. But volume was very light...only around 18,500 contracts...so it didn't require a lot of effort to cap the price. But what this action does confirm is that there are no legitimate short sellers in the market at this price level.
Silver's high tick [$30.55 spot] came around 3:00 p.m. in the New York electronic market...and from there got sold down a bit into the 5:15 p.m close.
Silver finished the day, month...and the year...at $30.35 spot...up 32 cents from its Friday close. And it's more than obvious that silver would have finished materially higher in price if "da boyz" hadn't shown up when they did. But volume was very light...only around 18,500 contracts...so it didn't require a lot of effort to cap the price. But what this action does confirm is that there are no legitimate short sellers in the market at this price level.
The action in both platinum and palladium was similar.
The dollar index action, although impressive looking on the chart, traded within a reasonably tight range on Monday. The index closed at 79.67 on Friday, dropped down a bit at the Sunday night New York open..and then rallied up to around the 79.80 mark shortly before 1:00 p.m. in Hong Kong on their Monday afternoon...and basically stayed there for the rest of the day...except for the obvious 20 basis point price dip/rally between 10 a.m. and noon in New York. The dollar index closed the year at 79.76...up only 9 basis points from Friday.
It should be obvious to just about anyone that there was no co-relation between the currencies and the precious metals on Monday...especially between noon and 1:00 p.m. Eastern when the bulk of the price action occurred.
The dollar index action, although impressive looking on the chart, traded within a reasonably tight range on Monday. The index closed at 79.67 on Friday, dropped down a bit at the Sunday night New York open..and then rallied up to around the 79.80 mark shortly before 1:00 p.m. in Hong Kong on their Monday afternoon...and basically stayed there for the rest of the day...except for the obvious 20 basis point price dip/rally between 10 a.m. and noon in New York. The dollar index closed the year at 79.76...up only 9 basis points from Friday.
It should be obvious to just about anyone that there was no co-relation between the currencies and the precious metals on Monday...especially between noon and 1:00 p.m. Eastern when the bulk of the price action occurred.
* * *
The CME's Daily Delivery Report for Monday showed that 58 gold and 1 lonely silver contract were posted for delivery on Thursday. In gold, it was all JPMorgan and the Bank of Nova Scotia. The link to the Issuers and Stoppers Report is here.
There were no reported changes in GLD...but it was an entirely different story over atSLV, as 1,257,683 troy ounces of silver were added on Monday. According to my records...a bit more than 10.5 million ounces of silver have been deposited in the SLV ETF since December 3rd. Both Ted Butler and myself will be looking forward to the next report from shortsqueeze.com [due around January 10th according to Ted] because we both feel that we'll see a substantial reduction in SLV's short position, which currently sits at 18.12 million ounces.
This huge increase in deposits at SLV has flown in the face of an almost four dollar price decline in silver between early December and December 21st...which was the day that 4.8 million ounces of silver was deposited in SLV. So 6 million of the 10.5 million ounces of silver mentioned in the previous paragraph were deposited on just two days....the 21st and 31st of December.
The U.S. Mint had one final sales report on Monday, as they sold an additional 6,500 ounces of gold eagles. Unless they report some additional December sales later today, the U.S. Mint sold 76,000 ounces of gold eagles...8,000 one-ounce 24K gold buffaloes...and 1,635,000 silver eagles, for the month that was.
The silver eagles sales for 2012 were cut off early, as the mint ran out. Normal December sales would be in the three to four million range...and this certainly affected the silver/gold ratio which finished the month of December at just under 20 to 1.
For the entire year, the mint sold 753,000 ounces of gold eagles...132,000 one-ounce 24K gold buffaloes...and 33,742,500 silver eagles. The silver/gold sales ratio for the year was a hair over 38 to 1...but would have finished a bit over 40 to 1 if December silver eagles sales had been normal.
Over at the Comex-approved depositories on Friday, they reported receiving 1,491,457 troy ounces of silver...and shipped 367,414 ounces of the stuff out the door. The link to that activity is here.
There were no reported changes in GLD...but it was an entirely different story over atSLV, as 1,257,683 troy ounces of silver were added on Monday. According to my records...a bit more than 10.5 million ounces of silver have been deposited in the SLV ETF since December 3rd. Both Ted Butler and myself will be looking forward to the next report from shortsqueeze.com [due around January 10th according to Ted] because we both feel that we'll see a substantial reduction in SLV's short position, which currently sits at 18.12 million ounces.
This huge increase in deposits at SLV has flown in the face of an almost four dollar price decline in silver between early December and December 21st...which was the day that 4.8 million ounces of silver was deposited in SLV. So 6 million of the 10.5 million ounces of silver mentioned in the previous paragraph were deposited on just two days....the 21st and 31st of December.
The U.S. Mint had one final sales report on Monday, as they sold an additional 6,500 ounces of gold eagles. Unless they report some additional December sales later today, the U.S. Mint sold 76,000 ounces of gold eagles...8,000 one-ounce 24K gold buffaloes...and 1,635,000 silver eagles, for the month that was.
The silver eagles sales for 2012 were cut off early, as the mint ran out. Normal December sales would be in the three to four million range...and this certainly affected the silver/gold ratio which finished the month of December at just under 20 to 1.
For the entire year, the mint sold 753,000 ounces of gold eagles...132,000 one-ounce 24K gold buffaloes...and 33,742,500 silver eagles. The silver/gold sales ratio for the year was a hair over 38 to 1...but would have finished a bit over 40 to 1 if December silver eagles sales had been normal.
Over at the Comex-approved depositories on Friday, they reported receiving 1,491,457 troy ounces of silver...and shipped 367,414 ounces of the stuff out the door. The link to that activity is here.
Here's a chart courtesy of Washington state reader S.A. that he stole from somewhere. As he said in his covering e-mail..."The bull market has a long way to go." He would be right about that.
Here's the 20-Year Silver Chart that Nick Laird was kind enough to send our way at my request last evening. It shows how ruler flat the silver price was for a period going back well over ten years on this chart. It's been anything but since 2004...and especially since the beginning of the last quarter of 2008.
Only the drive-by shooting on May 1, 2011...and all the other price smashes since...have prevented silver prices from exploding to the outer edges of the know universe. I doubt very much that JPMorgan et al will be able to keep this up for much longer.
As I mentioned at the top of this column, I have a fair amount of reading material saved up since Saturday...and it's all posted below. I hope you can find the time to read the ones that interest you the most.
As I mentioned at the top of this column, I have a fair amount of reading material saved up since Saturday...and it's all posted below. I hope you can find the time to read the ones that interest you the most.
and selected news and views.....
United States avoids calamity in "fiscal cliff" drama
The United States averted economic calamity on Tuesday when lawmakers approved a deal to prevent huge tax hikes and spending cuts that would have pushed the world's largest economy off a "fiscal cliff" and into recession.
The agreement hands a clear victory to President Barack Obama, who won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans. His Republican antagonists were forced to vote against a core tenet of their anti-tax conservative faith.
The deal also resolves, for now, the question of whether Washington can overcome deep ideological differences to avoid harming an economy that is only now beginning to pick up steam after the deepest recession in 80 years.
Note to Obama: We're still in a "deep recession"...and will be for a very long time. This Reuters story appeared on their website around 2:00 a.m. Eastern time this morning...and I thank Casey Research's own Bud Conrad for our first story in today's column. The link is here.
The agreement hands a clear victory to President Barack Obama, who won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans. His Republican antagonists were forced to vote against a core tenet of their anti-tax conservative faith.
The deal also resolves, for now, the question of whether Washington can overcome deep ideological differences to avoid harming an economy that is only now beginning to pick up steam after the deepest recession in 80 years.
Note to Obama: We're still in a "deep recession"...and will be for a very long time. This Reuters story appeared on their website around 2:00 a.m. Eastern time this morning...and I thank Casey Research's own Bud Conrad for our first story in today's column. The link is here.
Stocks to soar as world money catches fire, Calvinist Europe left behind
Bears beware. A monetary revolution is underway.
The US, Japan, Britain, as well as the Swiss, Scandies, and a string of states around the world, are actively driving down their currencies or imposing caps.
They are tearing up the script, embracing the new creed of nominal GDP targeting (NGDP), a license for yet more radical action.
The side-effects of this currency warfare -- or "beggar-thy-neighbour’ policy as it was known in the 1930s -- is an escalating leakage of monetary stimulus into the global system.
So don’t fight the Fed, and never fight the world’s central banks on multiple fronts.
Stock markets have already sensed this, up to a point, lifting Tokyo’s Nikkei by 23pc and Wall Street by 10pc since June.
This must read Ambrose Evans-Pritchard article was posted on thetelegraph.co.uk Internet site on New Year's Day local time in London...and it's also courtesy of Roy Stephens. The link is here.
The US, Japan, Britain, as well as the Swiss, Scandies, and a string of states around the world, are actively driving down their currencies or imposing caps.
They are tearing up the script, embracing the new creed of nominal GDP targeting (NGDP), a license for yet more radical action.
The side-effects of this currency warfare -- or "beggar-thy-neighbour’ policy as it was known in the 1930s -- is an escalating leakage of monetary stimulus into the global system.
So don’t fight the Fed, and never fight the world’s central banks on multiple fronts.
Stock markets have already sensed this, up to a point, lifting Tokyo’s Nikkei by 23pc and Wall Street by 10pc since June.
This must read Ambrose Evans-Pritchard article was posted on thetelegraph.co.uk Internet site on New Year's Day local time in London...and it's also courtesy of Roy Stephens. The link is here.
Japan lashes out over depreciating dollar and euro
Japan's new finance minister upped the ante in the country's war of words against the strong yen, lashing out at the U.S. and Europe for letting their currencies weaken dramatically and calling on the U.S. to strengthen the dollar.
The tirade from Taro Aso, Prime Minister Shinzo Abe's point person on currency strategy, underscores the increasingly pugnacious stance of the fledgling Abe government against what it sees as a global trend of currency devaluations.
Mr. Abe made weakening an unduly strong yen a plank in his party's campaign during national elections, which he won resoundingly in mid December. The strong, explicit rhetoric on yen levels from Mr. Abe and his deputies have sparked worries recently that Japan could be fanning the flames of a global currency war.
Hmmmm...it seems to me that he's just echoing what Jim Rickards has been saying for a couple of years...and also what AE-S had to say in the previous story. This article made an appearance on The Wall Street Journal's website on Saturday...and is posted in the clear in this GATA release. It's worth the read...and the link is here.
The tirade from Taro Aso, Prime Minister Shinzo Abe's point person on currency strategy, underscores the increasingly pugnacious stance of the fledgling Abe government against what it sees as a global trend of currency devaluations.
Mr. Abe made weakening an unduly strong yen a plank in his party's campaign during national elections, which he won resoundingly in mid December. The strong, explicit rhetoric on yen levels from Mr. Abe and his deputies have sparked worries recently that Japan could be fanning the flames of a global currency war.
Hmmmm...it seems to me that he's just echoing what Jim Rickards has been saying for a couple of years...and also what AE-S had to say in the previous story. This article made an appearance on The Wall Street Journal's website on Saturday...and is posted in the clear in this GATA release. It's worth the read...and the link is here.
Six King World News Blogs/Audio interviews
1. Richard Russell: "2013 & the Greatest Bubble in World History". 2.John Embry: "The Price Of Silver Will Go Ballistic in 2013". 3. John Mauldin...Part I: "This Will Be One of the Greatest Trades of My Life". 4.John Mauldin...Part II: "The Financial Crisis in 2013 Will Be a Debacle". 5.Bill Haynes: "Public Buying "Monstrous" Amounts of Physical Gold & Silver". 6. The audio interview is with Michael Pento
Diplomatic cables disclose more conspiring by Western governments to rig gold market
Two U.S. State Department diplomatic cables from 1974 obtained by GATA researcher R.M. show Western central bank and treasury officials engaged in secret discussions -- that is, conspiring -- to control the price of gold and prevent any increase in its recognition as money.
The first cable was sent in May 1974 by then-Treasury Undersecretary Paul Volcker, who went on to become chairman of the Federal Reserve Board, from the U.S. embassy in Paris to the U.S. secretary of state in Washington for forwarding to another treasury undersecretary. The cable conveys a report by Netherlands Treasurer-General C.J. Oort about a meeting of European Community finance ministers in the Dutch city of Zeist on April 22 and 23.
Two proposals for controlling the gold price were discussed in Zeist. Oort wrote, according to Volcker's cable: "One is that monetary authorities periodically fix a minimum and a maximum price below or above which they would not sell or buy on the market. The other consists in creating a buffer stock to be managed by an agent who would be charged by the monetary authorities to intervene on the market such as to ensure orderly conditions on the free market for gold."
This is just the first three paragraphs of an extensive preamble by GATA's Chris Powell. The GATA release which this...and more...is embedded, is amust read. The link is here.
The first cable was sent in May 1974 by then-Treasury Undersecretary Paul Volcker, who went on to become chairman of the Federal Reserve Board, from the U.S. embassy in Paris to the U.S. secretary of state in Washington for forwarding to another treasury undersecretary. The cable conveys a report by Netherlands Treasurer-General C.J. Oort about a meeting of European Community finance ministers in the Dutch city of Zeist on April 22 and 23.
Two proposals for controlling the gold price were discussed in Zeist. Oort wrote, according to Volcker's cable: "One is that monetary authorities periodically fix a minimum and a maximum price below or above which they would not sell or buy on the market. The other consists in creating a buffer stock to be managed by an agent who would be charged by the monetary authorities to intervene on the market such as to ensure orderly conditions on the free market for gold."
This is just the first three paragraphs of an extensive preamble by GATA's Chris Powell. The GATA release which this...and more...is embedded, is amust read. The link is here.
Washington Agreement is another gold rig, former Fed and Treasury official admits
Coordination of European central bank gold sales under the Washington Agreement on Gold, an agreement made in 1999 and updated in 2004 and 2009, is "the modern counterpart" of the London Gold Pool of the 1960s, which controlled gold prices until it collapsed in March 1968, a former Federal Reserve and U.S. Treasury Department official told an international investment conference a month ago.
The former official, Edwin M. Truman, went on to describe an enduring system of daily communication among Western central banks in which they share "confidential information" that includes "the size, currency, and nature of their foreign exchange market operations."
Thirteen years ago as assistant treasury secretary for international affairs, Truman denied in a letter to GATA that the Treasury Department was involved in manipulation of the gold market. But he did not volunteer any awareness of gold market manipulation from other sources.
You've heard of the expression..."if you see one cockroach, there are sure to be more." Well, here's a cockroach that Bill and Chris identified as such the moment their respective paths first crossed in May 2000...as you'll read in this GATA dispatch from yesterday linked here. It's a must read for sure...and if I could pick only one item for you today, this one would be it.
The former official, Edwin M. Truman, went on to describe an enduring system of daily communication among Western central banks in which they share "confidential information" that includes "the size, currency, and nature of their foreign exchange market operations."
Thirteen years ago as assistant treasury secretary for international affairs, Truman denied in a letter to GATA that the Treasury Department was involved in manipulation of the gold market. But he did not volunteer any awareness of gold market manipulation from other sources.
You've heard of the expression..."if you see one cockroach, there are sure to be more." Well, here's a cockroach that Bill and Chris identified as such the moment their respective paths first crossed in May 2000...as you'll read in this GATA dispatch from yesterday linked here. It's a must read for sure...and if I could pick only one item for you today, this one would be it.
¤ THE WRAP
Whether the gold commercials [JPMorgan Chase et al - Ed] colluded by prearrangement or by circumstance, it is easy to see that they all happened to be on the same page – the one where it is written that if you knock the price below important technical fund levels, you will force the funds to sell so that all the commercials can buy at deliberately distressed prices. Or stated differently, if you (the commercials) rig prices lower, they (the tech funds) will sell. - Silver analyst Ted Butler...29 December 2012
I was expecting a quiet close to the 2012 year...at least as far as the precious metals were concerned. I'm guessing that what we saw on Monday was someone covering a short position for year-end book-squaring purposes...and they obviously left it to the very last minute. I took a peek at the preliminary volume and open interest numbers for Monday's trading day...and they showed only tiny increases in both metals. I'm hoping that the final numbers, which will be posted later this morning on the CME's website, will show a big decline in open interest...although I'm not about to bet the ranch on that outcome...especially when viewing the silver chart from Monday afternoon. We'll see.
Fortunately, all this trading action occurred on Monday...and if JPMorgan et al report their data in a timely manner, whatever happened on that day will show up in this Friday's Commitment of Traders Report.
Gold rose above...and then closed above...it's 200-day moving average on Monday...and it remains to be seen how much follow-through we get as the New Year gets underway. But the only question you have to concern yourself with, dear reader, is whether or not JPMorgan et al will show up as short sellers of last resort...again. Absolutely nothing else matters.
I was expecting a quiet close to the 2012 year...at least as far as the precious metals were concerned. I'm guessing that what we saw on Monday was someone covering a short position for year-end book-squaring purposes...and they obviously left it to the very last minute. I took a peek at the preliminary volume and open interest numbers for Monday's trading day...and they showed only tiny increases in both metals. I'm hoping that the final numbers, which will be posted later this morning on the CME's website, will show a big decline in open interest...although I'm not about to bet the ranch on that outcome...especially when viewing the silver chart from Monday afternoon. We'll see.
Fortunately, all this trading action occurred on Monday...and if JPMorgan et al report their data in a timely manner, whatever happened on that day will show up in this Friday's Commitment of Traders Report.
Gold rose above...and then closed above...it's 200-day moving average on Monday...and it remains to be seen how much follow-through we get as the New Year gets underway. But the only question you have to concern yourself with, dear reader, is whether or not JPMorgan et al will show up as short sellers of last resort...again. Absolutely nothing else matters.
The other precious metals chart that I'm watching with some interest, is palladium. Of all four precious metals it, according to the monthly Bank Participation Report, is the least 'price managed' of the lot. The engineered price decline in the other three precious metals took them well below their respective 200-day moving averages just before Christmas...but not palladium. It barely budged...and is very close to its high tick of the last six months. What it means going forward is unknown to me...but I will continue to keep an eye on it. Here's the 1-year palladium chart.
(Click on image to enlarge)
Even though the dollar index took a 40 plus basis point header in early Far East trading on their Wednesday, the precious metal prices didn't react immediately...but gained some ground going into the London open. And as I hit the 'send' button at 5:20 a.m. Eastern time, I note that gold is up about seven bucks...and silver is up 48 cents. The dollar index is still down over 30 basis points...and volumes are average in both metals for this time of day.
But, as we've already seen on most days...it's the price action during the New York trading session that really matters...and I expect that to hold true again today.
See you on Thursday.
See you on Thursday.
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