Tuesday, September 17, 2013

Ed Steer's Gold and Silver report - September 17 , 2013 - Data , News and views touching on the precious metals !

Pre - Fed decision hi-jinks !

http://www.zerohedge.com/news/2013-09-17/spot-gold-rammed-below-1300-japan-opens


Spot Gold Rammed Below $1300 As Japan Opens

Tyler Durden's picture
Submitted by Tyler Durden on 09/17/2013 20:32 -0400



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Gold prices just legged down $15 as Japan opened, breaking bad below $1,300 for the first time in 6 weeks. No news (obviously). It seems the 'early' gold price rally when Summers stepped away was too much to bear... Equities and bonds rally because moar of the same dovish idiocy will remain at the Fed... and gold falls out of bed?


Gold futures down 9 of last 11 days, S&P futures up 10 of last 11 and the correlation is astounding...

and what's so special about the nominal price of the S&P being 1.3x Gold? seems to have been resistance and support a few times now...

Does make one wonder what will happen when the debt ceiling debates start?

Charts: Bloomberg


http://jessescrossroadscafe.blogspot.com/2013/09/gold-daily-and-silver-weekly-charts_17.html


17 SEPTEMBER 2013

Gold Daily and Silver Weekly Charts - Begin the Beguine


It is all about the Fed tomorrow and what level of market intervention they will maintain in buying public and private (Treasury and mortgage) debt.

I think a mix of both with a total below $10 billion may be a likely expectation. I think the taper will be slow, and the unwind of the balance sheet even much slower. I think we are looking at quite a few years, and not months. We will know once the economy has actually improved and we are certainly not there yet. Not with a stagnant median wage which dampens consumer demand.

There is a serious risk of a market dislocation, either in the dollar or stocks or both. I have not quite gotten a better feel for which way it will roll as it depends on some exogenous variables that I am insufficiently connected to foresee.

Either way, we can keep reading the short term signs. Gold and silver are coiled and look explosive, but given time. Timing is everything which is why cautious diversity is not a bad idea.

I was rereading some of Roger Babson's writings today, and came across theBabson Boulders of Dogtown which I had not known about that I can remember.

It is seems odd that I had never even heard of them because I had taken frequent car rides while at school along the coast from Boston to Ipswich to visit friends who lived near Crane's Beach.  I remember Rockport and Gloucester quite well, and the obligatory stop at Woodman's Tavern in Essex.

It wasn't like I did not get out on the weekends. I once make the trek to Thoreau's location on Walden Pond and left my own stone on the pile that commemorates it.  I even took the trip to the House of the Seven Gables at Halloween for the witches convention.  That was interesting. 

I am a big enough fan of Babson to have walked his trail if I had known of it when it was handy.  But I did not have an interest in financial things and Roger Babson until after an MBA sparked a keen interest in economics at 40.  Until then it was all gizmos, gadgets and coding.  And the classics, history and literature of course.  But that was due to youthful whimsy, which is why it is the best time for exploring your options.

Have a pleasant evening.



Von Greyerz: Fed will retreat from 'tapering,' gold very scarce

Submitted by cpowell on Tue, 2013-09-17 21:22. Section: 
5:15p ET Tuesday, September 17 , 2013
Dear Friend of GATA and Gold:
Swiss gold fund manager Egon von Greyerz, interviewed by King World News, predicts that the Federal Reserve will retreat from any reduction in its bond buying, speculates that the recent pounding of gold was engineered to prepare for the Fed's reversal of position, and reports that there is a serious shortage of real metal. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


After spending $540 million, Anglo American dumps Pebble project in Alaska

Submitted by cpowell on Tue, 2013-09-17 04:04. Section: 
The destruction of the gold mining industry accelerates as the industry won't raise a finger to defend itself against market manipulation by central banks and their bullion bank agents.
* * *
Company Withdraws from Alaska Mine Project
By Becky Bohrer
Associated Press
via Yahoo News
Monday, September 16, 2013
JUNEAU, Alaska -- One of the partners in a massive and contentious proposed gold and copper mine in Alaska is pulling out, raising questions about the future of the project.
London-based Anglo American PLC announced Monday that a subsidiary, Anglo American Pebble LLC, is withdrawing from the Pebble Mine project, leaving Canada-based Northern Dynasty Minerals Ltd. as the sole owner.
Anglo American CEO Mark Cutifani said the decision follows a review of his company's backlog of projects. He said in a statement that Anglo American's focus has been on prioritizing money for projects with the highest value and lowest risks within its portfolio and on reducing the amount of money needed to sustain projects in the pre-approval phase.
Anglo's subsidiary had spent about $540 million on the Pebble project through June, Northern Dynasty said in a release. To retain its 50 percent interest in the project, Anglo American would have been obligated to fund $1.5 billion in project costs through permitting and construction, Northern Dynasty has said.
It's not clear what's next.
Sean Magee, vice president of public affairs for Northern Dynasty, said in an interview that his company has the resources and expertise to move the project into the permit process and to carry it in to what would likely be the next major milestone: bringing on a new partner. He said he expects the permitting phase to require lower levels of spending than have been seen in the past.
Mike Heatwole, a spokesman for the Pebble Limited Partnership, which was created to design, permit and run the mine, said by email that Pebble "remains an important project for Alaska and we will share additional information about the way forward for the project in the days and weeks ahead."
In April, Northern Dynasty said the goal was to begin permitting for the controversial project before the end of 2013, but the timeline for releasing project specifics and possibly moving into permitting has slipped several times over the last few years. Magee said there has been no decision to change plans at this point, but said officials are "re-evaluating everything."
Pebble has said the prospect is one of the largest of its kind in the world, with the potential of producing 80.6 billion pounds of copper, 5.6 billion pounds of molybdenum and 107.4 million ounces of gold. But it's located near the headwaters of a major salmon fishery. Given the significance of the project, Magee said it will almost certainly be developed by a consortium of major partners in the future. He declined to speculate on what future partnerships might exist, noting in part that this has been a difficult time in the markets for the mining sector.
The Pebble project has been the subject of a fierce public relations battle for years. Supporters of the project contend it would bring much-needed jobs to economically depressed rural Alaska, but opponents fear it could adversely affect a way of life in the region.
The U.S. Environmental Protection Agency is studying the impact of large-scale mining in the Bristol Bay region after concerns were raised about the project. A final report, expected this year, could affect permitting for the mine.
Tim Bristol, director of Trout Unlimited's Alaska program, said in a statement that he couldn't think of a development project in the state's history that has faced such "wide and deep opposition" from Alaska's citizens. Bristol, a critic of the mine project, said Anglo American's decision is no surprise, given the number of Alaskans who support efforts to protect the Bristol Bay region.








http://www.caseyresearch.com/gsd/edition/gold-repatriation-movement-arises-in-finland


¤ YESTERDAY IN GOLD & SILVER

The gold price spiked up at the New York open on Sunday night/Monday morning in the Far East, and that was the high for the day.  There was big volume up until noon Hong Kong time, so it was obvious from that, that someone was throwing a lot of paper contracts at the market to keep the price from moving high, or maybe it was just the high-frequency traders doing their thing.  I suspect the latter.
Then the gold price got sold down into the Comex open in New York, rallied into the London p.m. gold fix, and that was pretty much all she wrote, as gold got sold down to its low of the day [$1,302.70 spot] around 4:15 p.m. EDT in electronic trading.  From that low, gold rallied a bit into the 5:15 p.m. close.
Gold finished the Monday session at $1,313.90 spot, down an even 14 bucks from Friday.  Net volume was around 16,000 contracts, with about a quarter of that amount coming before the London open.
It was more or less the same chart pattern for silver as well.  Silver closed on Monday at $21.82 spot, down 44.5 cents from Friday.  Net volume was around 44,000 contracts, with a bit more than a quarter of that coming before the London open.
A cursory glance at the platinum and palladium charts below, shows that their chart patterns were derivatives of the chart patterns for gold and silver as well.  Palladium was the only one of the four precious metals that was allowed to finish up on the day.
The dollar index fell out of bed to the tune of about 20 basis points right at the 6 p.m. New York open on Sunday night.  From there it traded sideways, hitting its low of 80.98 a hair before 9 a.m. EDT in New York.  Someone was there to catch a falling knife, and the index rallied back to 81.31 before trading more or less sideways in the close.  The index closed at 81.28, which was down 22 basis points from Friday.


****

The CME's Daily Delivery Report showed that two gold and 109 silver contracts were posted for delivery within the Comex-approved depositories tomorrow.  Jefferies was the short/issuer of note with 105 contracts.  The three largest long/stoppers were Canada's Bank of Nova Scotia, JPMorgan Chase out of its client account, and Merrill.  They will take delivery of 61, 27 and 12 contracts respectively.  The link to yesterday's Issuers and Stoppers Report is here.
There were no reported changes GLD; and as of 9:29 p.m. EDT, there were no reported changes in SLV, either.
Since yesterday was Monday, the U.S. Mint had a sales report.  They sold 1,500 ounces of gold eagles, 500 one-ounce 24K gold buffaloes, and 675,000 silver eagles.  I'm underwhelmed.
There was virtually no movement in gold over at the Comex-approved depositories on Friday.  They didn't report receiving any, and only 128.600 troy ounces was shipped out.  That's exactly four kilobars of the stuff, and it was all out of Brink's, Inc.
As usual, it was pretty busy as far as silver was concerned, as 224,291 troy ounces were reported received, and 649,045 troy ounces were shipped out the door.  The link to that activity is here.
Here's a new chart that Nick Laird has been working on for some time, and I asked him to write up an introductory paragraph, and here it is:
"The Gold Events Calendar developed by Nick Laird of www.sharelynx.comshowcases all the major events that impact the gold price from Government reports (FOMC, NFP, IJC, ADP reports) to gold trading events (futures, options,GLD & COTs) to cultural holidays around the world to Indian auspicious & inauspicious days to buy gold. Also included are some gold metrics i.e. volatility, volumes, open interest plus the US Dollar Index vs the Euro & Copper vs Oil. The concept behind the chart is to see the effects of past events & therefore to see events coming months & weeks ahead."
It's divided into two different charts.  The first is the "Gold Events Calendar 2013" and the second is titled "Gold Events Calendar Menu".  The "click to enlarge" feature will be a must here, and if you have any questions, they should be directed to Nick and not to me!
I was picking my way through some commentary that Miles Franklin dropped into my in-box yesterday, and I found this wonderful quote that he ripped from Ted Butler's column on Saturday, and since it's now in the public domain, here it is!
I know that some have questioned how it could be possible for gold to decline so much in price if JPMorgan held a long market corner. The answer is clear, once you remember that prices only fall sharply in order to enable JPMorgan to buy. Near the bottom in gold prices at $1,200, JPMorgan was long 85,000 contracts. On the subsequent $250 rally, JPM sold off and closed out nearly 30,000 contracts of their long gold market corner, booking and realizing $350 million in profits. Now JPMorgan has decided to buy more and has cratered gold prices by more than $100 in order to re-buy as many new gold contracts as they can.
JPMorgan is not concerned that the market may have temporarily gone against their existing gold corner as they continue to buy as many contracts as possible. JPM wouldn't have any problem in meeting margin calls as it is presently structured; because it rests upon unlimited funding. When you look back at this year, it is crystal clear that JPMorgan made $3 billion in buying back big short positions in gold and silver and actually flipping their short corner in COMEX gold to a long corner that they've already milked for a $350 million profit recently, and so far. - Ted Butler, September 14, 2013
I also got a charge out of something that Barry Ritholtz wrote on Sunday afternoon about the fact that Larry Summers had withdrawn his name as a candidate for Fed Chairman, and I thought it was right on the money.  I thank readers "Jim and Elena" for sending it our way.
"Here’s what President Barack Obama‘s statement on Lawrence Summers‘s decision to withdraw his name from consideration to be the next chairman of the Federal Reserve would have looked like after 40 milligrams of Sodium thiopental":
“Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve.
Larry was a critical contributor to the radical deregulation that was one of many causes of the worst economic crisis since the Great Depression. It was in no small part because of his lack of expertise, false wisdom, and inept leadership that the economy crashed and burned and even today is still failing to be to back to its full growth potential.
As Treasury Secretary, he helped to pass the Commodity Futures Modernization Act. This turned derivatives into a unique financial instrument with no oversight, reserve requirements, mandated disclosures, or listing minimums. The CFMA all but guaranteed that Derivatives would eventually implode. Summers further contributed to the crisis by Summers by overseeing the repeal of Glass Steagall. With this firebreak between Wall Street and Main Street effectively removed, the financial conflagration of 2008 spread from Wall Street to every corner of the economy.
Further, his terrible advice and lack of insight is in large part the reason we see so little progress being made today — the lack of economic growth, the concentrated bank power, the still dangerous financial system and of course, the sub-par job creation.
I will always blame Larry for the way he damaged my presidency. To anyone who  to seek his guidance and counsel in the future, please don’t make the same naïve errors I did.
"I think is quite a bit more truthful than the nonsense we heard earlier today." - Barry Ritholtz
****

Selected non redundant news and views....

Greg Palast: Larry Summers...Goldman Sacked

Joseph Stiglitz couldn't believe his ears.  Here they were in the White House, with President Bill Clinton asking the chiefs of the US Treasury for guidance on the life and death of America's economy, when the Deputy Secretary of the Treasury Larry Summers turns to his boss, Secretary Robert Rubin, and says, "What would Goldman think of that?"

Then, at another meeting, Summers said it again:  What would Goldman think?

A shocked Stiglitz, then Chairman of the President's Council of Economic Advisors, told me he’d turned to Summers, and asked if Summers thought it appropriate to decide US economic policy based on “what Goldman thought.”  As opposed to say, thefacts, or say, the needs of the American public, you know, all that stuff that we heard in Cabinet meetings on The West Wing.

Summers looked at Stiglitz like Stiglitz was some kind of naive fool who'd read too many civics books.

Summers did more than ask Rubin to channel the spirit of Goldman: Summers secretly called and met with Goldman's new CEO at the time, Jon Corzine, to plan out the planet’s financial deregulation. I’m not guessing:  I have the confidential memo to Summers reminding him to call Corzine.

This is probably the most important story in today's column...along with the link to the "The Confidential Memo at the Heart of the Financial Crisis" that embedded in it...and it's anabsolute must read.  I thank reader U.D. for sharing it with us.  There's also a video interview with Greg Palast on this exact subject that Dr. Dave Janda sent me on Sunday...and the link to that is here.

Obama: 'I Will Not Negotiate' With Congress on Debt Ceiling

President Barack Obama warned Republicans in Congress on Monday that he will not negotiate over an extension of the U.S. debt ceiling as part of a budget battle that will soon dominate Washington, with a deadline fast approaching.

Pivoting to domestic policy after devoting weeks to the crisis in Syria, Obama scolded his political opponents for threatening a government shutdown and attempting to attach conditions to funding the budget for the 2014 fiscal year that begins October 1.

"Let's stop the threats. Let's stop the political posturing, let's keep our government open. Let's pay our bills on time. Let's pass a budget," Obama said.

He faces yet another budget showdown as Republicans in Congress attempt to force more spending cuts and remove funding for Obama's signature achievement, the 2010 healthcare law that is facing a rocky roll-out.

This article was posted on the moneynews.com Internet site early yesterday afternoon...and it's courtesy of West Virginia reader Elliot Simon.

BIS veteran says global credit excess worse than pre-Lehman

Extreme forms of credit excess across the world have reached or surpassed levels seen shortly before the Lehman crisis five years ago, the Bank for International Settlements has warned.
The Swiss-based `bank of central banks’ said a hunt for yield was luring investors en masse into high-risk instruments, “a phenomenon reminiscent of exuberance prior to the global financial crisis”.
This is happening just as the US Federal Reserve prepares to wind down stimulus and starts to drain dollar liquidity from global markets, an inflection point that is fraught with danger and could go badly wrong.
“This looks like to me like 2007 all over again, but even worse,” said William White, the BIS’s former chief economist, famous for flagging the wild behaviour in the debt markets before the global storm hit in 2008.
This Ambrose Evans-Pritchard offering was posted on thetelegraph.co.uk Internet site early Sunday afternoon BST...and it'sdefinitely worth reading.  I thank Roy Stephens for his first contribution to today's column.

'Follow the Money': NSA Monitors Financial World

The NSA monitors banks and credit card transactions -- sometimes in apparent violation of national laws and global regulations. The European SWIFT financial transaction network is being tapped on different levels, internal documents from the US spy agency show.
"Follow the Money" is the name of the NSA branch that handles these matters. The name is reminiscent of the famous catchphrase by former FBI Associate Director Mark Felt, the whistle blower known as "Deep Throat" who offered the information to Bob Woodward and Carl Bernstein, theWashington Post reporters investigating the Watergate scandal in 1972.
"Money is the root of all evil," joke the intelligence agents. According to the classified documents, the spies' activities primarily focus on regions like Africa and the Middle East -- and their efforts often focus on targets that fall within their legal intelligence-gathering mandate. However, in the financial sector, just as in other areas, the NSA also relies on maximum data collection -- an approach that apparently leads to conflicts with national laws and international agreements.
This two-page essay was posted on the German websitespiegel.de on Monday afternoon Europe time...and it's the second contribution in a row from Roy Stephens.

Gold repatriation movement arises in Finland

A gold repatriation movement has sprung up in Finland just two weeks after such a movement arose in Poland.
GATA's friend, Ilkka Mikael Hikipää, CEO of gold dealer KultaEeva Oy, kindly provides the translation of the movement's announcement that is embedded in this GATA release.  It'sworth reading.

¤ THE WRAP

Invariably, JPMorgan has bombed the gold and silver market sure enough, but not by selling many thousands of contracts; but by first selling relatively few or pretending to sell many (spoofing) contracts in order to scare and induce others into selling many contracts so that the crooks at JPM can buy. Always, always, always, is it true that JPM and the commercials are net buyers on the big down days; and always is it true that the only reason for the big down days is to allow JPMorgan to buy at distressed prices. JPMorgan is perhaps the most crooked financial institution ever, but you must acknowledge that they are sophisticated crooks. They don’t stick up 7-Elevens; they conduct sophisticated financial fraud against other supposedly sophisticated market participants. - Silver analyst Ted Butler -- 14 September 2013
Because of the enormous volume during the Far East trading session on their Monday, it was obvious [at least to me] that a lot of effort was expended in keeping the precious metal prices under control.  That effort extended into the rest of the trading sessions in both Europe and North America, but at reduced volumes.
As we head into the FOMC meeting, and the "tapering" that may or may not accompany it; we're all interested in seeing how the metals "react" when the "news" is released on Wednesday afternoon.  In the meantime, all we can do is watch and wait.
If we manage to get through the rest of the Tuesday trading session without a major rally, this Friday's Commitment of Traders Report will clearly show the results of the big engineered price decline that we experienced on Thursday of last week.  I'm expecting the data to show another increase in JPMorgan's long-side corner in the Comex gold market, along with a decline in their short-side corner in the silver market.
In Far East trading on their Tuesday, there wasn't much price activity worth noting, but with all the high-frequency trading going on, it's really impossible to tell what's really happening under the hood.  I see that all four precious metals have spiked up a bit at the London open this morning.  However, the same thing happened on Monday, and those gains were wiped out if just an hour or so.  It remains to be seen if that happens again today.  But if I had to bet ten bucks, I'd guess that today's price action may end up looking a lot like yesterday's price action.  Time will tell.
Volumes are already pretty decent now that London has been open about thirty-five minutes, although it isn't as heavy as it was this time on Monday.  Not that it matters, but the dollar index, which had been up a handful of basis points in morning trading in the Far East, is now down about the same amount.
That's all I have for today, which wasn't a lot, and I'll see you here tomorrow.

16 SEPTEMBER 2013


Gold Daily and Silver Weekly Charts - JPM To Pay About $800 Million Fine for London Whale


"On Sunday afternoon, facing a revolt by his own party’s senators, Obama dumped Larry as likely replacement for Ben Bernanke as Chairman of the Federal Reserve Board...

But the fact that Obama even tried to shove Summers down the planet’s throat tells us more about Obama than Summers—and whom Obama works for. Hint: You aren’t one of them."

Greg Palast, Larry Summers: Goldman Sacked

JPM has agreed to admit wrongdoing and will pay about $800 Million in fines for concealing the huge trading losses in the case of the London Whale.

The precious metals rallied with stocks overnight as Larry Summers released Obama from having to cut him loose as a candidate for Fed Chairman.

The reason that Larry and Obama did this is quite simple.  There was broad bipartisan opposition to Summers in the Senate which precluded a confirmation. Sometimes it really is that simple.  Obama's own Senators refused to go along with it on principle and practicality.  That is how bad it was.  And that is pretty bad.

There was little other support to be gained as footing, except from Wall St insiders, with over 400 economists signing a petition that said Summers was a poor choice, giving their endorsement to Yellen. It was a policy battle that could not be won, and for which no strong allies were to be found.  One has to wonder what motivated Obama into such an awkward display in pursuit of a hopeless and apparently cynical policy decision.

Just like Syria.

So what next. The metals were capped all day in a concerted manner. I suspect that this will continue until the FOMC announcement on Wednesday.

Let's see if any additional physical offtake is prompted by this, or if just a steady flow in background will still continues. Keep in the mind that COMEX is not a primary delivery exchange of any real importance. But the low inventories of gold bullion are more of a indicator of trends than a hard stop on anything. The COMEX will probably not be the locus of a failure to deliver. That honor is more likely to be held by the LBMA, perhaps even in response to some market dislocation in Shanghai or Hong Kong.

Have a pleasant evening.

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