¤ YESTERDAY IN GOLD & SILVER
It was very quiet in Far East trading on their Monday. The gold price traded pretty flat until noon Hong Kong time...and then it drifted down to its low of the day, which came around 9:30 a.m. BST in London.
The subsequent rally was hardly worthy of the name, but it lasted until 2:00 p.m. in electronic trading in New York...and from there it drifted sideways into the 5:15 p.m. EDT close.
The gold price finished the Monday session at $1,387.00 spot...up $2.40 on the day. Gross volume was pretty light...around 114,000 contracts.
It was more or less the same chart pattern in silver, with the only real difference being that silver got sold down a bit after the rally ended at 2:00 p.m. in New York. Silver made it above the $22 spot price mark briefly, but wasn't allowed to close there.
Silver's high tick at 2:00 p.m. was recorded by Kitco at $22.20 spot.
Silver closed at $21.95 spot...up 26 cents on the day. Volume, net of roll-overs out of the July delivery month, were just under the 29,000 contract mark.
The platinum price followed the gold and silver price very closely...and it chart looked similar to the ones above. But palladium did much better...and ploughed its own field yesterday...up 1.56%.
The dollar index closed on Friday afternoon in New York at 81.66...and by 3:15 p.m. Hong Kong time on their Monday, it had rallied to 81.98...before falling back to 81.82 by 8:30 a.m. in New York. An hour later the index had rallied to its high of the day...a hair over 82.05...and from there it was all down hill to its low of the day...81.62...and that came shortly after 2:00 p.m. EDT...the hick tick for both silver and gold. After that, the dollar index rallied a hair into the close, finishing the Monday session at 81.69...basically unchanged from where it closed on Friday.
Nothing much to see here...although a drop of over 40 basis points during the New York trading session should have brought a bigger response in both gold and silver, but it didn't.
* * *
The CME's Daily Delivery Report showed that 195 gold and 2 silver contracts were posted for delivery within the Comex-approved depositories tomorrow. In gold, the largest short/issuer was JPMorgan Chase out of its client account once again. ABN Amro was in number two spot with 55 contracts issued. Once again, the two biggest long/stoppers were HSBC USA with 114 contracts...and Barclays with 77 contracts. The link to yesterday's Issuers and Stoppers Report is here.
Much to my surprise, an authorized participant actually added to GLD yesterday...86,995 troy ounces to be exact. After Friday's smash-down, both Ted Butler and I were expecting withdrawals...however, the week is still young. And as of 10:12 p.m. EDT last night, there were no reported changes in SLV.
The U.S. Mint had a decent sales report on Monday. They sold 5,000 ounces of gold eagles...2,500 one-ounce 24K gold buffaloes...and 678,500 silver eagles.
There was a lot of activity in silver over at the Comex-approved depositories on Friday. They reported receiving 622,560 troy ounces...and shipped 1,125,887 troy ounces out the door for parts unknown. The link to that activity is here.
In gold, 2 kilobars [64.30 troy ounces] were withdrawn from HSBC USA's vault on Friday. The link to that 'action' is here.
Selected news and views......
Prism Exposed: Data Surveillance with Implications for the World
The American intelligence director and the White House have finally confirmed what insiders have long known: The Obama administration is spying on the entire world. Politicians in Germany are demanding answers.
South of Utah's Great Salt Lake, the National Security Agency (NSA), a United States foreign intelligence service, keeps watch over one of its most expensive secrets. Here, on 100,000 square meters (1,100,000 square feet) near the US military's Camp Williams, the NSA is constructing enormous buildings to house superfast computers. All together, the project will cost around $2 billion (€1.5 billion) and the computers will be capable of storing a gigantic volume of data, at least 5 billion gigabytes. The energy needed to power the cooling system for the servers alone will cost $40 million a year.
Former NSA employees Thomas Drake and Bill Binney told SPIEGEL in March that the facility would soon store personal data on people from all over the world and keep it for decades. This includes emails, Skype conversations, Google searches, YouTube videos, Facebook posts, bank transfers -- electronic data of every kind.
"They have everything about you in Utah," Drake says. "Who decides whether they look at that data? Who decides what they do with it?" Binney, a mathematician who was previously an influential analyst at the NSA, calculates that the servers are large enough to store the entirety of humanity's electronic communications for the next 100 years -- and that, of course, gives his former colleagues plenty of opportunity to read along and listen in.
George Orwell's wet dream come true. This spiegel.de story from yesterday is amust read...and it's courtesy of Roy Stephens.
ECB says bond-buying program is unlimited
There is no limit to the European Central Bank's (ECB) bond-buying program, a spokesman for the bank said on Sunday, denying a German newspaper report published in the run-up to a court hearing on the scheme.
Frankfurter Allgemeine Sonntagszeitung on Sunday cited central bank sources as saying the ECB had set a limit of 524 billion euros on the Outright Monetary Transactions (OMT) scheme.
The bank had also had informed Germany's constitutional court - which will weigh the OMT's legality on Tuesday and Wednesday - of that limit, it said.
"The report is incorrect," an ECB spokesman told Reuters.
This Reuters piece, filed from Berlin, was posted on their website early Sunday morning EDT...and is another article I found in yesterday's edition of the King Report.
Japan’s Pension Fund Cutting Local Bonds to Buy Equities
Japan’s public pension fund, the world’s biggest manager of retirement savings, said it will reduce its holdings of local bonds and buy more shares.
The proportion of assets held in Japanese bonds will be cut to 60 percent from 67 percent, the health ministry said yesterday in Tokyo at a briefing to announce changes to the mid-term plan of the Government Pension Investment Fund. The weighting of local shares will be increased to 12 percent from 11 percent currently. The Health and Welfare Ministry, which oversees pensions, didn’t give a time frame for the changes.
GPIF’s shift toward higher-yielding assets comes as it prepares to fund retirements in the world’s most elderly population and Prime Minister Shinzo Abe tries to revive the economy through fiscal and monetary stimulus. Domestic shares have slid since Abe said on June 6 that a legislative campaign to loosen rules on businesses, the “third arrow” of his economic plan, won’t begin for months.
This Bloomberg news item, filed from Tokyo, was posted on their website late Friday afternoon Denver time...and I thank U.A.E. reader Laurent-Patrick Gally for finding it for us.
Seven King World Blogs/Audio Interviews
1. Hong Kong fund manager William Kaye: "The Ongoing War in Gold and Coming Currency Collapse". 2. James Turk: "Financial Chaos, Currency Destruction and Cracks in the System". 3. Philippa "Pippa" Malmgren: "Former White House Official - Expect More Government Theft". 4. Michael Pento: "Expect Massive Inflation and Pain For Ordinary Citizens". 5. Eric Pomboy: "Stunning Gold and Silver Charts Reveal Shocking Global Demand". 6. The first audio interview is with Dr. Philippa Malmgren...and the second audio interview is with John Embry.
Gold's strange 'bear market': Deutsche Bank opens gold vault in Singapore
Deutsche Bank is opening a vault in Singapore that can hold $9 billion of gold, as it hopes to tap rising demand for the precious metal in Asia amid a push by the city-state to burnish its image as a bullion-trading hub.
Singapore last year scrapped a goods-and-services tax on gold in a bid to help boost its share of global gold demand to 10-15% within a decade from around 2% in 2012 as it seeks to compete with more established bullion-trading centers.
"Gold has traditionally been stored in London, Zurich, and New York, but there is a serious shift in dynamics going on as the global financial crisis continues to evolve," Mark Smallwood, Deutsche Asset & Wealth Management's head of wealth planning in the Asia-Pacific region, told The Wall Street Journal on Friday.
This subscriber-protected story was posted on The Wall Street Journal website on Sunday...and is posted in the clear in this GATA release. I thank Marshall Angeles for first bringing this story to my attention...and now to yours.
CFTC Gold and Silver Bank Participation Report - Ted Butler's Comments
"Since the BPR of February 5, the US bank category position (in effect, almost exclusively JPMorgan) has swung by a net 100,000 contracts, from net short 70,000 contracts to net long 30,000 contracts (all rounded). There has never been a move of such magnitude before. Over that same time, the total net commercial short position (in the COT) declined by 113,000 contracts, meaning that JPMorgan accounted for almost 90% of the entire commercial decline. It is not possible for that extreme degree of concentration and market share not to be manipulation, pure and simple.
And here’s the manipulative icing on the cake – JPMorgan was able to flip a net short position in COMEX gold of 50,000 contracts in February to a net long position of 50,000 contracts on a gold price decline of as much as $350. I would submit that the singular purchase of 10 million ounces of gold (worth the equivalent of $15 billion) within four months on a greater than 20% price decline could only be accomplished if the price was manipulated lower by the purchaser. No other explanation would be possible...
And here’s the manipulative icing on the cake – JPMorgan was able to flip a net short position in COMEX gold of 50,000 contracts in February to a net long position of 50,000 contracts on a gold price decline of as much as $350. I would submit that the singular purchase of 10 million ounces of gold (worth the equivalent of $15 billion) within four months on a greater than 20% price decline could only be accomplished if the price was manipulated lower by the purchaser. No other explanation would be possible...
This absolute must read article was posted on the jessescrossroadscafe.caInternet site on Saturday. The author 'borrowed' far more of Ted Butler's Saturday commentary than I would ever dare ask for...but since it's now in the public domain...I'll be happy to 'borrow' it too.
I had extensive comments on June's BRP in my Saturday column as well...but you, dear reader,must consider Ted's work on this as definitive. He is the master...and the rest of us scribblers are just the messengers. Everything about the BPR [and the COT Report, for that matter] came through him first. I thank Marshall Angeles for the last story of the day.
¤ THE WRAP
I would ask you to consider that it would be impossible for any entity to buy 10 or 20 or 30 million ounces of gold in a matter of months on the deepest price decline in years. It would be like someone buying all the commercial office space in New York City in a few months 20% below market rates. Or someone buying all the stocks in the S&P in a short time frame at a big discount. That would be impossible. Just like it is impossible for JPMorgan to have bought as much gold (and silver) as they have over the past few months at such steep markdowns in price. The Bank Participation Reportof June 2013 shows that the big short crook has positioned itself massively on the long side of gold in a manner that would be impossible in a market that wasn’t manipulated. - Silver analyst Ted Butler...08 June 2013
I wouldn't read a whole heck of a lot into yesterday's price action. Volume was light...and there's a major holiday in China that lasts until mid-week.
This big news continues to be the sudden shift of JPMorgan Chase from the short side in gold...to massively long in the Comex futures market...and most likely other markets as well. It just remains to be seen how JPM will use this position to its advantage. It's a given that when JPMorgan allows the precious metal markets to fly, whoever is caught on the short side will be allowed to burn in hell...as JPMorgan et al probably won't be there to take the opposite side of the trade when the shorts start heading for the exits.
Since JPMorgan has been the overpowering force to the downside in the precious metals for the last few decades, I would expect that they will be just as much in control when they finally allow prices to fly...and they, and they alone, will determine what the 'new' prices for all four precious metals will be. However, if they allow a market-clearing event to occur with no interference, the final price will be very high by the time the last short position is covered. This is pure speculation on my part, but those are the only two scenarios that I can envision at the moment. Time will tell how close to the mark I am on either one.
The big smack-down on Friday's jobs number was pretty much preordained, as "da boyz" always hit the gold price at that point in time...and as Hong Kong fund manager and ex-Goldman Sachs alumnist William Kaye said in his interview at King World News posted further up in today's column..."The selling action on Friday was pretty well-foreshadowed. Virtually every Non-Farm Payroll report, irrespective of the number, we’ve seen the same type of downside action. The number, which is made up anyway, is always gamed." He would be right about that.
Today, like every Tuesday, is the cut-off for Friday's Commitment of Traders Report...and if we get through Comex trading with little or no upside price action, we'll get a pretty good idea of how much more improvement we get in the structure of that report from last Friday's engineered price decline.
Not much went on in Far East trading on their Tuesday, which is no surprise. Both gold and silver are down a hair, but I wouldn't read a thing into that. Volumes in both metals are exceedingly light as the London open approaches in five minutes as I'm writing this paragraph...and the dollar index is down 10 basis points.
And as I hit the 'send' button on today's column I'm sure you've already noted the price action in both gold and silver the moment that London began to trade earlier today. The high-frequency traders did their thing...and by 9:00 a.m. BST...and hour after the open...gold was down about seventeen bucks from yesterday's close in New York...and silver was down about 35 cents. Both metals recovered somewhat after that, but the selling started again at exactly 10:00 a.m. BST...so it's obvious that today's price action will be anything but quiet...and I wouldn't hazard a guess as to what might happen when the Comex opens in New York at 8:20 a.m. EDT.
As of 5:15 p.m. EDT...gold volumes are now triple what they were when London opened...and silver's volume has more than doubled. The dollar index isn't doing a thing.
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