Gold and silver updates - October 1 -2 , 2013 ...... With Regulators away for the Shutdown , manipulators have a field day with shorting gold and silver ! By the way , check the link and note how much in total reserves has disappeared from the US , France , Germany , Greece , Italy et al ( from 2011 to 2012.) And then ask again , how much gold do these countries really have ?

http://harveyorgan.blogspot.com/2013/10/oct-2world-gold-bank-records-no-gold.html

( Highlighting the big , big news CNBC won'r mention.....)


Fellow Canadian Bryant Blake  (who goes by the handle Rhody) has discovered something huge with respect to accounting for gold by the World Bank. The world bank has hinted in the past that it wished to discount leased gold.  Its looks to me that they followed through on their promise.  I will send this to Reg Howe is the authority on these matters and I will report back on his findings.

  from  Bryant Blake


"please feel free to bring in any of your associates to investigate the drop in reserves for the U.S, Germany, and France that is shown on the World Bank reserve table 

 http://data.worldbank.org/indicator/FI.RES.TOTL.CD.

 You might want to post the world bank link table on LeMet in case the world bank removes it from the public domain. Below is a table which converts the drops in reserves to drops in gold holdings. Based on the numbers, all of the U.S. and German gold, and most of the French gold is gone if it is assumed that SDR and currency reserves stayed the same from 2011 to 2012. Even if the SDR and currency reserves for these countries dropped to zero, the 2012 reserves indicate gold holdings dropped about 70%. -Bryant

Change in Sovereign Reserves
Country	United States	Germany	France
2011 Gold Price	$1531/oz	$1531/oz	$1531/oz
2011 Total Reserves($Mil)	530,267	234,104	168,490
2011 Gold equivalent of reserves (mil oz)	350.92	152.91	110.05
2011 Gold equivalent of reserves (Tonnes)	10,915	4,756	3,423
Official Gold Reserves 9/13 (Tonnes)	8,134	3,391	2,435
% Gold value of total reserves	74.5%	71.3%	71.1%
% Gold value of total reserves WGC 9/13	71.6%	68.6%	66.8%
2012 Gold Price	$1657/oz	$1657/oz	$1657/oz
2012 Total Reserves($Mil)	139,138	67,422	54,230
2012 Gold equivalent of reserves (mil oz)	83.97	40.69	32.73
2012 Gold equivalent of reserves (Tonnes)	2,612	1,266	1,018
Drop in Gold Reserve (mil oz)	266.95	112.22	77.32
Drop in Gold Reserve (Tonnes)	8,303	3,490	2,405
Remaining Gold (Tonnes)	0	0	30
Total Gold Reduction (Tonnes) =   13,930
Total Gold Reduction (Mil Oz) = 447.86

***
More from Bryant...





http://www.usmint.gov/about_the_mint/?action=annual_report The 2012 us mint report on page 42 reports deep storage gold with a market value of $435 billion on 9/30/12. This compares with end of 2012 us reserve per world bank of $139.1 billion. I remember some talk of the world bank discounting leased gold a few years ago. If they have implemented this it appears the us has leased all of its gold and has none which is unencumbered.










http://www.blanchardonline.com/investing-news-blog/index.php

Gold rebounds, stocks fall on shutdown gridlock, poor jobs data

October 2, 2013

Fed official warns taper could take years with economy "treading water"

Gold rebounded back above $1,315 on Wednesday, reclaiming most of Tuesday's 3% loss as the U.S. government shutdown dragged into a second day and the debt-ceiling battle looms on the horizon.

"The market is jittery because of the government shutdown. If the economy numbers continue to be weaker than expected, we may see a slide in the dollar, and money in equities flow back into Treasuries and metals for the time being," said Tom Power of R.J. O'Brien.

Gold also found support from a disappointing ADP report on U.S. private-sector employment, showing an increase of only 166,000 jobs in September, versus expectations of 180,000, while both July's and August's job gains were revised down.

"And while, finally, some 1,000 manufacturing jobs were created in September, for the first time in over a year the high-paying financial sector saw an exodus of 4,000 jobs,"Zero Hedge noted. "Wave goodbye to the 'third half' 2013 recovery."

Fed official: "We should not reduce" stimulus
Jobs creation is important to gold prices because the Federal Reserve has linked the continuation of its bullion-friendly stimulus program to the unemployment rate. If the jobs picture improves, the Fed has said it will taper its massive purchases  of Treasuries and mortgage-backed securities (currently being acquired at a pace of $85 billion a month). On that note, Boston Fed chief Eric Rosengren warnedWednesday that the central bank shouldn't stop those purchases prematurely.

"If the economy evolves as expected, policy should in my view include only a very slow removal of accommodation over the next several years," he said. "It would have been premature to begin reducing the rate of Fed asset purchases" at its meeting last month.

The most recent data show the economy is only "treading water" rather than getting stronger, he said. While Fed officials still think the economy will pick up, they have pushed out that improvement until 2014, he noted. In any case, the Fed should not begin the tapering process until this improvement is apparent, he said.

"If the economy is not improving as expected, we should not reduce the monetary policy accommodation," Rosengren said. Specifically, the Fed will want to see that fiscal headwinds are subsiding and that consumers have become more confident, he said.

Shutdown could even force more QE
The Boston Fed president did not dwell on the government shutdown or the looming debt-ceiling deadline except to note that fiscal policy is generating uncertainty that could have "collateral impact" on the rest of the economy.
However, one analyst thinks an extended government shutdown could bring about added monetary easing. "The longer the shutdown goes, the more economic data is done, the more the Federal Reserve will print money," Brian Kellyof Brian Kelly Capital said Tuesday.

On CNBC's "Fast Money," Kelly said the Fed could even ramp up its stimulus program. "Whether it's effective or not doesn't really matter to the market, and it doesn't really matter to the Federal Reserve," he said. "They've shown already if they can get a half a percent of GDP, that's fantastic. I actually think if you get a three- or four-week shutdown, you end up with a Fed flare," or increase in stimulus.

Indeed, several studies have shown that the shutdown will hurt fourth-quarter GDP. Forecasting firm IHS Inc. says the shutdown may cost the U.S. at least $300 million a day in lost economic output.

If the political stalemate over the budget causes difficulties in reaching agreement over the debt ceiling, the U.S. could even be thrown back into recession, ex-Treasury official Mark Patterson told CNBC on Wednesday. "If [the shutdown] is allowed to persist and it really affects confidence, or it gets too close or merges with the debt ceiling debate -- and God forbid we actually have a problem getting the debt ceiling lifted -- then obviously it's a different ball game altogether," said Patterson, former top aide to Treasury chief Jacob Lew. "If the debt ceiling doesn't work out as it should then you could see serious negative economic effects [on the U.S. economy] including a potential return to recession."

"The debt ceiling and shutdown are conjoined"
"The partisan battles over the U.S. government shutdown and a potential debt default are beginning to merge into a single fiscal fight, raising the stakes for Republicans and Democrats to end the impasse," Bloomberg reported. "Lawmakers from both parties are linking the two issues more closely, a connection the White House is reinforcing, according to an administration official who asked for anonymity to discuss strategy. President Barack Obama met today with financial industry executives to focus attention on the risk of a default."

"There's no doubt in my mind now that the debt ceiling and shutdown are conjoined in one big tar baby," said Steve Bell, a senior director at the Bipartisan Policy Center in Washington. With the U.S. poised to hit its debt ceiling on Oct. 17, default would follow if the limit isn't raised. That would be "catastrophic," declared Erskine Bowles, co-founder of theCampaign to Fix the Debt. If the U.S. hits the debt ceiling and defaults on its obligations, it would be catastrophic not only domestically but around the world, he said. "This shutdown is bad. It's painful. It does hurt some people. It costs the taxpayers some real money. But it's not catastrophic. We hit this debt ceiling, That's catastrophic," Bowles said. 

Gold rises during shutdowns, history shows
As for the shutdown, the longer it lasts, the better it is for gold prices. "Renaissance Macro Research looked at how key markets moved during 17 previous shutdowns between 1976 and 1996," The Wall Street Journal reported. "There is a low, but noticeable, positive correlation between how long a shutdown lasts and how much the gold price goes up. In particular, for the six shutdowns that lasted three days or less, five saw gold prices drop by an average of 1.1%. By contrast, of the five that lasted 10 days or more, three saw gold rally by an average of 3.5%. ... The biggest gain for gold came during the 18-day shutdown in the fall of 1978, when it rose 5.5%."

And Sumit Roy of Hard Assets Investor found a similar performance in the 1995-96 federal shutdown: "Between Dec. 16, 1995 and Jan. 6, 1996, gold rallied as much as 7.5% from $386 on Dec. 15 to a high of $416 on Jan. 2."

And much has changed since those prior shutdowns. Today we're overwhelmed by debt, ETF Securities exec Mike McGlone told TheStreet. "The last shutdown in 1995 ... the debt-to-GDP level was about 65%. Now it's 100%. Investors should be looking at the bigger picture here. We're not getting it right; we've got to do something in this country to control our debt. ... We wouldn't be here if we weren't spending more than we're bringing in."

"We're expecting it to recover," he said of gold. "The key thing to watch is unemployment. Why did (Fed chief Ben)Bernanke not taper? Why did he continue the bond-buying program? The key reason was the unemployment number was weaker than expected. … If that continues, gold should continue to increase. ... I think $1,400 is good resistance" for gold, with solid support at $1,200." McGlone also pointed out that gold tends to rise along with the debt ceiling. And despite the uncertainties, "the debt ceiling has to be increased," he noted. If price holds, gold "will go back to $1,425"

With the shutdown still simmering and the debt ceiling still ahead, stay exposed to gold. With bullion bouncing on Wednesday, Jeff Kilburg of KKM Financial sees a possible bullish trade taking shape. "$1,305 is critical for the gold bugs," he said. "If we stay above $1,305, we will go back to $1,425."

And Grant's Interest Rate Observer publisher Jim Grantsays gold is still a good buy. "The world ought to have much less faith in central banks, and as that reasoned distrust of a broken model grows, the gold price, I think, will appreciate," Grant told Yahoo Finance's "The Daily Ticker." "Gold is cheap at this price."

and....







http://www.caseyresearch.com/gsd/edition/chinas-gold-fever-rises-showing-no-signs-of-abating-as-golden-week-holiday-kicks-off

¤ YESTERDAY IN GOLD & SILVER

All was calm in Far East trading on their Tuesday.  That state of affairs lasted until the dollar index dropped below the 80.00 mark shortly before the London open. The tiny rally that resulted from that, turned out to be the high of the day, and the gold price drifted quietly lower until precisely 1 p.m. BST in London, which was 20 minutes before the Comex open in New York.

The then high-frequency traders spun prices lower and the roof immediately caved in as sell stops were hit.  Most of the damage was done by within the first 40 minutes, but gold continued to sell off slowly from there, hitting its low tick [$1,281.70 spot] at 12:45 p.m. EDT.  The subsequent rally, such as it was, didn't get far.

Gold closed at $1,287.50 spot, down $40.40 on the day.  Net volume was very heavy at 220,000 contracts, with 90 percent of that occurring after the London open.

Here's the New York Spot Gold [Bid] chart on its own.

Of course silver, JPMorgan's biggest problem child, wasn't spared either.  After getting turned back at the $22 spot level once again going into the London open, the silver price got the same treatment as gold, although silver's low tick of $20.63 in the December contract came at 10:45 a.m. EDT, and not at 12:45 p.m EDT as it did for gold.

The silver price didn't do much after that until gold began to rally at 12:45 p.m., and then away silver went to the upside.  The rally into the 1:30 p.m. Comex close had all the hallmarks of a short covering rally, and after that close, silver drifted higher, but then got sold down into the 5:15 p.m. electronic close just like gold.

Silver had an intraday moved of around $1.35, over five percent.

Silver finished the Tuesday trading session at $21.165 spot, which was down 54 cents from Monday, but well off its low.  Net volume was was on the heavy side at 56,000 contracts.  I was expecting a bigger volume number than that.

Here's the New York Spot Silver [Bid] chart on its own.

The platinum and palladium price charts look similar, so I'll spare you the details, which you already know.

The dollar index closed on Monday afternoon in New York at 80.22; and minutes after 10 a.m. Hong Kong time on their Tuesday morning, had reached its high of 80.31, and it was all down hill into the London open.  The low tick of 79.87 came about ten minutes before London began trading, and after that the dollar index chopped higher into the New York close.  The index finished the day at 80.18 which was down 4 basis points from Monday's close.

Of course there was no correlation between the dollar index and the precious metal prices once again.  Normally there certainly would be some if there was a free market, but neither the dollar index nor the precious metals exist in that sort of pricing environment.

****

The CME's Daily Delivery Report for "Day 3" of the October delivery month showed that 59 gold and 2 silver contracts were posted for delivery tomorrow within the Comex-approved depositories.  In gold, it was Canada's Bank of Nova Scotia that issued 47 contracts, and HSBC USA and JPMorgan stopped 42 and 17 contacts respectively.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday, and as of 10:07 p.m. EDT, there were no reported changes in SLV either.

Surprisingly enough, the U.S. Mint had another sales report.  They sold 500 ounces of gold eagles; 1,500 one-ounce 24K gold buffaloes; and 187,000 silver eagles.

Monday was the third day in a row where there was very little in/out activity at the Comex-approved depositories.  In gold, there were 3,215 troy ounces shipped out, and in silver they reported shipping out 130,780 troy ounces of the stuff.  Nothing was reported received in either metal.

I've got a couple of very interesting charts that Nick Laird sent my way after David Franklin wrote about palladium in Sprott's Thoughts yesterday.  This is the actual data that Nick uses to compute his "Days to Cover Short Positions" chart that I post in my column on Saturdays, and the monthly "Bank Participation Report".

Here's this "Days to Cover" chart from last week's Commitment of Traders Report, and the data for platinum and palladium in this particular chart, represent the last data points on the far right of the platinum and palladium charts posted further down.

This first chart is a 13-year "Days to Cover Short Positions" for palladium, and shows the palladium price [in black] against the short positions of the Big 4 and Big 8 traders in the Comex futures market over the same time period.  The short positions of each group are shown in two shades of blue.  Up until mid-2003 a short position of 10 days of world palladium production by the Big 4 and Big 8 short traders combined was a rarity, and look what the price was doing at the time.  That's called a free market in action.

But look what has happened since.  To prevent prices from rising as the speculators wishing to go long enter the market driving prices higher, they are now met by the sellers of last resort/not-for-profit sellers, and that has prevented a repeat of the big price rally we had in 2000/01.  This situation has become more grotesque as the years have gone by.  But starting in late 2012, the situation has gone from simply grotesque to the obscene.

It is a recognized and acknowledged fact both inside and outside the platinum and palladium industry [read the Sprott piece linked above] that these metals are going to be in a deficit position for years, if not decades, to come.  So the speculators, both small and large, are piling in on the long side, only to be met by the Commercial traders as short sellers of last resort; in this case the major New York bullion banks and Wall Street investment firms, including Canada's beloved Bank of Nova Scotia.

About a year ago, the Big 8 were short about 45 days of world palladium production.  As of last Friday's COT Report they were now short 127 days of world production.

Here's the platinum "Days to Cover Short Positions" going back 13 years as well.  As of last Friday's COT Report, the Big 4 and Big 8 were short 73 and 103 days of world platinum production respectively, the last data point on the right side of this chart.

I'll have the corresponding charts for gold and silver in tomorrow's missive.

****

Selected news and views....

Labor Department: No Unemployment Data During Shutdown

The Labor Department has no plans to release the closely watched U.S. monthly jobs report on Friday in case of a partial government shutdown that lasts through the week.

A Labor official with direct knowledge said Monday that there wouldn't be enough staffers on site to compile the jobs report. The official spoke on condition of anonymity because he wasn't authorized to discuss the matter publicly.

A document the department filed Friday said its Bureau of Labor Statistics, which prepares the jobs data, would have only three employees working in case of a partial government shutdown.

This news item was posted on the cnsnews.com Internet site just after the markets closed on Monday...and I thank reader M.A. for today's first story.  By the way, there's also a chance that there won't be a COT Report or Bank Participation Report on Friday, either.  I have more on that in The Wrap.

Barclays shuts down U.A.E. bank accounts

Barclays has started closing the accounts of some of its retail customers in the UAE, just weeks after the lender announced that it was selling off its local retail arm.

Arabian Business understands that around 500 accounts have now been frozen.

Business and personal banking customers said that they had been telephoned by the lender on Tuesday morning, and informed that their accounts were being frozen.

"I was asked by the bank to come into the Emaar Square headquarters this morning," one of the customers, a British expatriate, who preferred not to be named, said. "They told me my account was being closed, but refused to give me a reason why.

This short, but very interesting read, was posted on thearabianbusiness.com Internet site yesterday afternoon local time...and I thank reader 'David in California' for sending it my way.

Three King World News Blogs

1.  Robert Griffiths: "Top Strategist Says U.S. Responsible For Gold Take Down".  2. Andrew Maguire: "Gold Plunge, Who's Responsible and What's Next".  3. William Kaye: "Man Who Predicted Gold Take Down Tells Investors What's Next".

Commodity benchmarks could fall under U.K. regulatory scrutiny

Key commodities benchmarks could be subject to UK market abuse rules, a British financial markets regulator said on Tuesday, with stiff fines or prison sentences possible as punishments for the manipulation of prices.

Global financial markets have come under increasing scrutiny from regulators following the scandal around the manipulation of interest rates -- namely the London Interbank Offered Rate (Libor).

"After the Libor scandal, we started to look at various benchmarks," Don Groves, technical specialist at the Financial Conduct Authority, told a gold industry conference in Rome.

This short, but must read Reuters commentary, filed from Rome, was posted on their Internet site early yesterday afternoon EDT...and I found it hiding in a GATA release.

Gold Coin Buyers Wrapping up a Stingy September

It’s the last day of the month, and sales of American Eagle gold bullion coins are running nowhere near the pace of early 2013, or the year-ago period.

With a day of sales left to record (today’s), the U.S. Mint has sold 27,500 American Eagle gold coins for the month, according to the mint's website.  It’s not even close. Last September’s figure was 104,000. January 2013′s was a remarkable 275,500, before a peak of 312,500 in April. Then the downtrend that bottomed in August as buyers took a vacation (21,000 coins).

Miller Tabak’s Andrew Wilkinson writes to tell clients this afternoon that sales are on track for the smallest two months in six years, which shouldn’t be surprising given August’s sales were themselves a six-year low.

This tiny story appeared on the Barron's website yesterday afternoon...and there's not much in here you don't already know, however it is worth skimming if you have the time.  But you've already read the most important bits.  It's another offering from Elliot Simon.

India’s Gold Imports Seen Declining on Curbs to Contain Deficit

Gold purchases by India, the world’s largest user, may fall 5.3 percent this year as the government curbs imports to contain a record current-account deficit.

Inbound shipments are seen at 800 metric tons in the 12 months through March, compared with 845 tons a year earlier, Economic Affairs Secretary Arvind Mayaram told reporters in New Delhi today. Falling bullion imports may help the nation cap the current account deficit at $70 billion this year, he said.

Gold imports were 58.37 tons between July 1 and Sept. 25 compared with 335.31 tons in the three months ended June 30, the finance ministry said in a statement today. The declining trend will continue, it said.  Purchases may not be more than 150 tons in the six months through December, according to Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation.

This Bloomberg story, filed from New Delhi, was posted on their Internet site very early yesterday morning Denver time...and it's the first offering of the day from Manitoba reader Ulrike Marx.

India's October gold imports seen picking up sharply

Shipments on October could rise sharply to 30 tonnes on month under the new rule, but still half of the usual monthly average, as exporters await supplies to process pending orders.

"We are starving for supplies," said Parekh, adding exporters need to complete orders taken from U.S. clients ahead of the peak Christmas season.

This Reuters story is similar in many ways to the Bloomberg story above, but with a slightly different spin.  It was filed from New Delhi/Mumbai yesterday evening IST...and is the second offering in a row from Ulrike Marx. Of the two, I'd pick this one as themust read.

China's Gold Fever Rises, Showing No Signs Of Abating As ‘Golden Week’ Holiday Kicks Off

Fresh market statistics from Thomson Reuters GFMS research and exchange operator CME Group paint a remarkable portrait of Chinese demand for gold in 2013, even as the metal has seen historic price declines and volatility this year.

Despite that, trading of spot contracts on the Shanghai Gold Exchange more than doubled in the first half of 2013.

Premiums in China hit an all-time high of $56/oz. on May 13, against the 2012 average of $6.5/oz. Compare that to premiums in India, which hit $40/oz. in September, even as record import taxes of 10 percent sparked gold smuggling.  Gold imports into Hong Kong, the main conduit for gold to China, rose 162 percent from the year before, for the first seven months of 2013...and Chinese jewelry production hit a record 345 metric tons for the first half of 2013.

This news item, with lots of charts, was posted on theInternational Business Times website yesterday...and it's another contribution from Ulrike Marx.  It's certainly worth reading.

How China is taking over the world, one gold bar at a time

The year 2013 in the gold investment market will be remembered as the year of China, so we’ve produced a stunning infographic detailing China’s great golden rise to power.

In just a few months the world’s largest country will overtake India as the biggest consumer of gold and its gold market continues to break records.

Whilst it may appear that China has exploded onto the gold scene this is by no means the case. China’s ancient monetary history is well documented. They are the world’s oldest scientists when it comes to different forms of money, having being the first to experiment with paper money and different metallic standards. Therefore during an international financial crisis one would imagine that the country with the longest and most diverse monetary history would be the place to turn to for direction.

Quite a few readers sent me this story when it was first posted, but because I felt there was nothing really new in it, I didn't include it in yesterday's column.  After some sober second thought, and re-reading it more carefully, I've changed my mind.  It was posted on therealasset.co.uk Internet site on Monday...and it's definitely worth your time.  Once again I thank Ulrike Marx for bringing it to our attention.

¤ THE WRAP

There are no market anymore, only interventions. - Chris Powell, GATA

So, welcome to October.  You don't need me to paint a picture of what happened yesterday, as I've described this sort of chart pattern before on many occasions.  As Ted Butler said on the phone yesterday, it was the high-frequency traders setting prices lower and watching the sell stops get hit as long holders puked up their positions, or went short.

Waiting to buy everything that fell off the table was JPMorgan Chase, the raptors, along with any other Commercial trader that wanted to cover a short position or go long.

Ted pointed out that there are a limited number of long positions left to liquidate in either the Non-Commercial or Nonreportable category, and he figures that a lot of the price pressure came from new short positions being put on.

If all of Tuesday's trading data is reported in a timely manner, it should show up in Friday's Commitment of Traders Report, if there is a report that is.  I checked the SEC's website just now [3:35 a.m. EDT] and it has been updated with yesterday's preliminary trading volumes, so this government department is still on the job at the moment.  Not only is there a COT Report on Friday, we also get the October Bank Participation Report as well, and hopefully all of yesterday's trading data will be included in them.  What I'm not sure about is the CFTC, as it's their website where both reports will be posted.  We'll find out in due course.

Not much of anything happened in Far East trading on their Wednesday.  There was a bit of downdraft in all four precious metals that occurred shortly after 8 a.m. Hong Kong time, but prices quickly recovered.  London has been open about an hour as I type this paragraph, and not much is going on there, either.  Gold volume is pretty decent at around 29,000 contracts, but silver's volume is extremely light at around 4,500 contracts.  I can tell that virtually all of it is of the high-frequency trading variety.

The dollar index isn't doing a thing, but as you already know, what it's doing means nothing in the grand scheme of things.  But on the odd occasion that it does enter into the picture, it's usually a fig leaf that JPMorgan et al are hiding behind as the do the dirty to the precious metals.

And as I hit the "send" button on today's column at 5:15 a.m. EDT, all four precious metals have moved into positive territory in the last twenty minutes.  Gold's volume is now at 37,000 contracts, silver's volume is at 5,600 contracts, and the dollar index is down a handful of basis points.

After yesterday's bear raid, I have no idea what today's price action will bring as the Wednesday trading day continues to unfold in both London and New York.  Nothing will surprise me, and it shouldn't surprise you, either.

Enjoy your day as much as you can, and I'll see you here tomorrow.

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Gold on sale as "one big seller" reportedly takes down price amid shutdown

October 1, 2013

Price attractive as looming debt-ceiling battle could "cause a run on the U.S. dollar"

Today the U.S. government shut down for the first time in 17 years and gold ... fell? Yes. And here's why this is a buying opportunity not to miss.

What caused the plunge: Gold shed about $40 just after the opening of the New York trading session, and one look at the chart confirms the market rumors: A single big seller is to blame. "It's obvious it has to be a fund that is just now forced into liquidation" at the start of the third quarter, one floor trader told Reuters. "We heard there was one big seller,"confirmed an HSBC analyst. Added a Stifel Nicolausstrategist: "Around 8:40 (a.m.) when the bottom really came out of the metal, a billion dollars worth traded in the futures pit over a 10-minute period. I think a fair amount of it was stop losses when it took out the September low, and once it hit $1,300, it took out more."

Phoenix Futures and Options President Kevin Grady also agreed there were signs of at least one very aggressive seller when the futures market opened. "Open interest was up 5,000 contracts from Friday's trading," he said. "I just think with everything that was going on here ahead of the shutdown and because of the debt-ceiling issue, some people may have come in and said 'I want to be long going into this,' and I think the longs just got trapped."

Now that the smoke has cleared on this mini-"flash crash," gold seems to have stabilized.

What could happen next: The shutdown has only just begun, and the longer it drags on, the more damage it does to an already-weak U.S. GDP, the dollar, and the overall financial markets, potentially igniting a run into safe-haven assets like gold. And even if the shutdown is quickly resolved, it's only a prelude to the debt-ceiling fight ahead.

"It's really what's going on with the dollar," Grady noted. "I think the debt-ceiling issue is a lot more relevant" than the shutdown. "I think people think this (shutdown) is a short-term situation that will be dealt with. People don't want that for the debt ceiling. The markets do not like uncertainty."

The "bigger battle comes in two weeks (Oct. 17) with the debt ceiling," said Jeffrey Wright, managing director at H.C. Wainwright. "No deal on the debt ceiling will lead to safe-haven demand from all quarters and should cause a run on the U.S. dollar."If the shutdown is not resolved before Oct. 17, "the U.S. is likely to be downgraded in credit markets, its economy will falter, and confidence in the U.S. as leader of the global economy will stumble," GoldForecaster.com founder Julian Phillips warned. In that case, "we see the potential for an impact on the global system equal to the mid-2007 credit crunch. This will be more than a 'game of chicken' as it has been building up for years now."

http://harveyorgan.blogspot.com/2013/10/oct-1massive-raid-on-gold-and.html

Tuesday, October 1, 2013

oct 1/Massive raid on gold and silver/dealer and total comex gold falls/GLD and SLV remain constant/

Good evening Ladies and Gentlemen:

Gold closed down $43.50  to $1286.00 (comex closing time ).  Silver was down  59 cents to $21.05 

 In the access market today at 5:15 pm tonight here are the final  prices: 

gold: $1287.50

silver:  $21.16

This is the trading for gold contracts today.  Note the huge number of trades in such short of time:

from GATA this afternoon:

"What would you do if you had not only just been exonerated by the CFTC, but basically knew there is NO gold or silver manipulation that could run afoul of their "strict" criteria? Relentlessly bomb the hell out of it, that's what you would do. And indeed they are. As has been the constant pattern lately it only takes the cartel 2 or 3 crucial minutes to do the damage. The illiquid pre-Comex open, the first minute of the Comex open, and 10:00 AM are tried and true.

8:00 AM: 120 Dec. contracts traded
8:01 AM: 4,531 Dec. contracts traded
8:30 AM: 594 Dec. contracts traded
8:31 AM: 8,175 Dec. contracts traded

10:00 AM: 284 Dec. contracts traded
10:01 AM: 1,738 Dec. contracts traded

The key to any pre-planned avalanche is to set the dynamite in the perfect location. Just those 3 minutes blasted $27.80 off the POG. Those monstrous 8,175 contracts at 8:31 AM are right up there with any single minute of last April's smash job, an average of 136 per second. Note too the precise timing of the algo bombs- exactly one minute after the hour, or half-hour at 8:01 AM, 8:31 AM, and 10:01 AM. When the government has finally shut down you must deploy maximum MOPE, and step up your algo game. With the whole world now watching any U.S. reaction there must be stability of all paper instruments, and instability of the logical alternative. We now wait for the cartel trifecta X (at least) 3, with all manipulation rules now in full force."

***

Comex gold/September contract month

Oct 1.2013  opening  standings for October contract month

Gold	Ounces
Withdrawals from Dealers Inventory in oz	nil
Withdrawals from Customer Inventory in oz	3215.00 (HSBC)
Deposits to the Dealer Inventory in oz	nil
Deposits to the Customer Inventory, in oz	nil
No of oz served (contracts) today	118  (11,800)
No of oz to be served (notices)	2007 (200,700)
Total monthly oz gold served (contracts) so far this month	2126  (212,600)
Total accumulative withdrawal of gold from the Dealers inventory this month	xxx
Total accumulative withdrawal of gold from the Customer inventory this month	3697.2

and....

Silver:

Oct 1/2013:  

Opening  for the October contract month
  

Silver	Ounces
Withdrawals from Dealers Inventory	nil
Withdrawals from Customer Inventory	130,780.02(Brinks,Delaware)
Deposits to the Dealer Inventory	nil
Deposits to the Customer Inventory	nil
No of oz served (contracts)	6  (30,000 oz)
No of oz to be served (notices)
Total monthly oz silver served (contracts)	9  (45,000)
Total accumulative withdrawal of silver from the Dealers inventory this month	xxx
Total accumulative withdrawal of silver from the Customer inventory this month	219,425.82

This is a bit of a stunner ! Consider the implications for both Germany and the US and their supposed gold reserves if these numbers are correct for TOTAL RESERVES - then consider what if anything is left after the manipulations during 2013 ?  No wonder Germany had a panic concerning their alleged gold in New York back in late 2012 and early 2013 ?

 If you check the table  Austria , France , Germany , US , Cyprus , Egypt , Greece , Italy , Ireland , Iceland ,  Jordan , Macao , Netherlands , Pakistan , Portugal , Slovak Republic , Spain , Venezuela show large losses of gold from 20111 to 2012  !

Countries reflecting large gains in gold reserve include Yemen , Vietnam , UAE , Switzerland , Qatar , Bangladesh and Saudis !


Check out this table of each countries reserves by the world bank 

http://data.worldbank.org/indicator/FI.RES.TOTL.CD.

 Something is very rotten, not in Denmark, but in the U.S. and Germany. The gold component of each countries reserves is calculated using the closing London fix price on the last day of the year. For the last day in 2011, the fix price was $1531 and for 2012 it was $1657. The US. Reserves were $537,267,272,428 in 2011 and $139,133,877,266 in 2012. Using the London fix prices, these reserves equate to 350.92 million ounces of gold in 2011 and 83.97 million ounces in 2012. Now I always thought the U.S. had about 241 million ounces of gold. This fits in nicely with our 2011 reserve, but what happened in 2012? If our SDR’s and foreign reserves are zero, than we sold 157 million ounces of gold. Germany in 2011 had reserves of $234,104,163,354 and in 2012 they dropped to $67,422,252,402. Using the London prices, these reserves equate to 152.91 million in 2011 and $40.69 million in 2012. I thought Germany had over 100 million ounces of gold so it appears they lost over 60 million ounces. I would be curious to hear what James Turk or Rob Kirby makes of this. Thanks,
Bryant

RE: Bryant Blake - World Bank Reserve Data

(courtesy Rob Kirby)


I’ve rethought this and there is something wrong with the numbers as presented: America claims to possess 8000 metric tonnes of gold. 8000 metric tonnes at 1500 per oz is roughly 385 600 000 000 on IT’S OWN. If total US reserves [including all the things listed in red below] were only 139,133,877,266 in 2012 – then there is a HUGE problem. One caveat I have with this is the following: it has always been my understanding that the US carried all of its 8000 tonnes on their books at 20 bucks per oz. [not sure about Germany] would only be 5 152 000 000 [a little over 5 billion]. If the US simply gave the World Bank the data and they "plugged it in" – could explain this. However, it does seem that the World Bank went out of their way to state that,
"The gold component of these reserves is valued at year-end (December 31) London prices."

It seems that at the very least – the World Bank is using a different basis to value gold bullion in reserve data. Something is WRONG here. Good catch to Bryant and more investigation is certainly warranted/needed.
R

Proposed legislation would forbid minting U.S. gold and silver coins in current format

Submitted by cpowell on Tue, 2013-10-01 04:00. Section: Daily Dispatches

11:55a HKT Tuesday, October 1, 2013

Dear Friend of GATA and Gold:

Legislation that has been proposed in Congress to prevent the minting of U.S. coins whose manufacturing cost exceeds their denomination would stop the U.S. Mint's issuance of gold and silver coins, Mike Zielinski notes in commentary at Coin Update. This is probably an oversight on the part of the legislation's drafters, but imagine if the bill was amended not to exempt gold and silver coins but to require imprinting an honest denomination on them. Zielinski's commentary is posted at Coin Update here:

http://news.coinupdate.com/would-save-ii-act-also-prohibit-bullion-and-n...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Dutch pension fund defeats central bank, wins right to invest in gold

Submitted by cpowell on Tue, 2013-10-01 03:49. Section: Daily Dispatches

By Den Haag
De Rechtspraak
The Hauge, Netherlands
Tuesday, September 10, 2013

http://www.rechtspraak.nl/Organisatie/CBb/Nieuws/Pages/DNB---aanwijzing-...

Tuesday, September 10, saw the final ruling of the Board of Industry Appeals (College van Beroep voor het Bedrijfsleven) on the gold case brought by the Dutch pension fund Vereenigde Glasfabrieken against De Nederlandse Bank (DNB, the Dutch central bank) in 2011. The pension fund objected to an earlier directive of DNB.

This ruling is in favor of the pension fund, because the judges of this college, following an earlier decision in March 2012, not only ruled that a fund may decide how to implement its investment policy, but also ruled that DNB failed to underpin its concerns as expressed in the directive imposed [onto the pension fund].

By contrast, the underpinning of the pension fund was so clear that the judges fully agreed. They agreed with the pension fund that there may be circumstances that justify deviation from ordinary investment policies. Such circumstances included the financial crisis that began in 2008 and the euro crisis that was an extension of this financial crisis.

These crises were indeed at the root of the defensive investment of the pension fund. DNB turned a blind eye to these circumstances and considered only an ALM study (Assets & Liability Management), a study that ignored any negative factors in an economy. Furthermore, DNB did not present relevant examples on gold investment other than a blurred report by JP Morgan, which stated that one should invest only 1 percent in a commodity. That study -- rather dubious and lacking detail -- turned out to be their sole defense.

It is also noticeable that the supervisors at DNB have not the slightest idea of gold's function in finance and economy. They are in good company, because most economists in the Netherlands don’t know either. Gold is the de-facto foundation of our economic system and it is therefore essential for any pension fund (or any other investment fund) to have gold in the portfolio as a hedge against unforeseen system risks. In the world of financial investment, gold is insurance and the return on that investment is not in interest or dividends but protection against inflationary measures of the government. The return on that investment is the safety of the portfolio.

Risks such as high monetary inflation, collapse of the system, war, and other major events are fully hedged in this way. Especially in high-risk times like today, gold is a buffer and a safe haven for many investors.

Unfortunately, this knowledge is not yet widespread, as DNB and large investment companies still blindly trust completely outdated studies like ALM. It is a tragedy that many funds have already incurred considerable losses due to this one-sided approach.

The great advantage of this final ruling (no further appeal is possible) is that pension funds again are free in their investment policy without the need to anticipate improper intervention by DNB. The ruling clearly indicates that DNB needs to substantiate its decisions carefully and that lax directives without valid arguments will no longer be tolerated.

This is truly a revolution: DNB is a supervisor, not an investment adviser. A supervisor should limit its directives to cases of clear malpractice or destructive financial policy. In other words, as the judges also indicated, supervision needs to keep its distance.

and....






http://jessescrossroadscafe.blogspot.com/2013/10/gold-daily-and-silver-weekly-charts.html

Gold Daily and Silver Weekly Charts - Pigmen Rampant on a Field of Greed

There was a very obvious hit on the precious metals today. I commented on it with pictures here.

Basically the pros saw the broader population of small specs leaning into protection, and took them for a ride today. As Bart Chilton said, there are no regulators watching these markets because of the government shutdown, so you are on your own.  At least that is what he implied.

I laid out the basic market strategy at work today in the stock market commentary. I am sure the Wall Street financiers think that this shutdown will be temporary, a few fleeting days that will harm no one or nothing about which they care.

The masters of the universe who are a bit closer to the inner circle of Moloch will almost certainly have a word with their servants and retainers in the Congress, and bring them to heel after a few days.  It is all a game after all, isn't it?

The G20 is having a meeting  of their central bankers and finance ministers in Washington DC on October 10-11.

A man hears of things that might be said at such a gathering.  It certainly caught some people by surprise when the Italian Central Bank came out and endorsed gold as a key reserve asset,  at Monday's LBMA meeting.   France and Germany chimed in, even though they are disingenuously at odds with what they say about never selling compared to what they do with leasing the metal.

An economist disciple of Greenspan unreservedly endorsed the idea of the trillion dollar platinum coin today, or more precisely 1,000 billion dollar coins so everyone important can have one for their very own.   Non-specialists may not understand all that this implies in their political zeal, but surely he must know better.  Well, it is a disgraced profession after all.

Hey why fight it?  Let's go all in for it.  The US should announce that striking piece of "monetary innovation" at the G20 meeting, so all the US' major creditors can see what a cynical act of brazen seigniorage looks like up close.  Why hide it?   After all, the whole of the law for the exceptional is to do what thou wilt.

There was some minor movement of gold out of HSBC today, and a recategorisation of some bullion in the JPM warehouse as well, following their impressive move to bolster confidence in the threadbare COMEX registered inventory yesterday.   I might post something about that later on.

We are now in October delivery.  October is not a big month for the futures, but it is an active delivery month so we will be interested to see what happens.

http://jessescrossroadscafe.blogspot.com/2013/10/excess-reserves-no-government-shutdown.html

01 OCTOBER 2013

Excess Reserves: No Government Shutdown There

And besides, the Banks own the Fed which is not a part of the government as you may recall.

And by statute the Congress must not skip a single payday or perk. So no problems there either.

Obama is meeting with the Bankers today, who will be asked to help him out with the Congress.

Is Putin coming for the G20 meeting in Washington on October 10-11? Perhaps he can mediate the deadlock amongst the keepers of the world's reserve currency.

We know he likes Super Bowl rings. Maybe he would like a souvenir billion dollar platinum coin ahead of the holiday rush.

I hear the Chinese like bright shiny things and would gladly trade their nasty Treasuries for newly minted billion dollar coins.

Where is Peter Minuit when you really need him?

30 SEPTEMBER 2013

Central Bank of Italy: Gold Is a Key Asset For Central Banks Because It Has No Counterparty Risk

"Gold is unique among assets, in that it is not issued by any government or central bank, which means that its value is not influenced by political decisions or the solvency of one institution or another."

Salvatore Rossi, Chief of the Central Bank of Italy, 30 Sept 2013

Bam!  Grazie mille, signore.

And that is why gold is the king of assets, Bernanke you great prune.

And thanks to Gordon Brown, the Brits have bugger all.  At least the Germans have a receipt from the Fed in die keksdose.

The other major European Central Banks (France and Germany) say in the second story below that "they will not sell their gold reserves, as they can provide a level of confidence, an element of diversification and can absorb some volatility from the central bank's balance sheet."

This implies that they are not going to account for their gold at an artificially low fixed price on their Balance Sheet, as the Federal Reserve does at the ludicrously out of date price of $45 per ounce.

But it is ironic that France confirms their gold leasing activities. If gold is an item on the balance sheet, one might expect a full disclosure of encumbrances and commitments for any variable balance sheet asset to be disclosed, ne c'est-pas? You know, any counterparty risks you may have accrued for a pittance of a yield on your premiere riskless asset.

And they will get that gold bullion back once it has been melted down and shipped to China how?

"Oh what a tangled web we weave,
When first we practise to deceive."

Sir Walter Scott, Marmion

Theory founders on the rocky shoals of reality once again. This may get even more interesting than I thought, once gold breaks and run higher again.  All those shorts to cover, and lease obligations to fulfill, and no one with bullion in size wishing to sell.  Quel dommage!

Have a pleasant evening.

Banca d'Italia-Les réserves d'or: un élément clé d'indépendance

30/09/13 à 22:00  

ROME, Sept. 30  (Reuters) - Gold reserves are a key element of central bank independence, said an official of Banca d'Italia in a conference on Monday, undermining rumors of the sale of part of its bullion assets.

The crisis in the euro zone has triggered speculation that the central bank may have to sell some of its huge gold reserves to support its economy. Banca d'Italia has the fourth largest gold reserves among central banks in the world.

Central bank regulations prohibited this use of gold reserves [for retiring debt], but the concerns rose after a document from the European Commission claimed in April that Nicosia planned to raise about 400 million euros by sale of its gold surplus. (And see)

In a speech at the annual conference of the London Bullion Market Association, Salvatore Rossi, CEO of the Italian central bank, said that gold had a specific role in the central bank's reserves.

"Not only does it have essential characteristics that allow for diversification, particularly in financial markets that have been largely globalized, but it is also unique among assets because it is not issued by a government or central bank, which means that its value can not be influenced by political decisions or the solvency of an institution or another," he said.

"These features, combined with historical factors and psychological stress the importance of gold as part of the reserves of central banks," he said. "Gold supports the independence of central banks in their ability to (act) as the ultimate guarantor of national financial stability."

Read the entire article (in French) here

Banca d'Italia says gold reserves key to cenbank independence
Mon, Sep 30 13:23 PM EDT
By Jan Harvey and Clara Denina

ROME, Sept 30 (Reuters) - Keeping gold reserves is a key support to central banks' independence, an official from Banca d'Italia told a bullion industry conference on Monday, dampening talk that it might sell some of its holdings.

Speculation has emerged since the financial crisis hit the euro zone that Banca d'Italia might be pressured to leverage or even sell some of its huge gold reserves - the fourth largest among the world's central banks - to help prop up its economy.

Regulations covering central bank independence restrict them from using bullion reserves this way, but concerns grew after an assessment of Cypriot financing needs prepared by the European Commission showed Cyprus under pressure to sell gold to raise around 400 million euros (341.1 million pounds) to help finance its bailout.

In a keynote address to the London Bullion Market Association's annual conference, Salvatore Rossi, director general of the Italian central bank, told delegates that gold plays a special role in central banks' official reserves.

"Not only does it have the vital characteristic of allowing diversification, in particular when financial markets are highly integrated, in addition it is unique among assets in that it is not issued by any government or central bank, so its value cannot be influenced by political decisions or by the solvency of any institution," he said.

"These features, coupled with historic... and psychological reasons, stand in favour of gold's importance as a component of central bank reserves," he said. "Gold underpins the independence of central banks in their ability to (act) as the ultimate bearer of domestic financial stability."

Italy holds 2,451.8 tonnes of gold in its reserves. A slim majority of Italians polled by the World Gold Council in March believed their government should use the country's gold holdings to offset high public borrowing costs, although they did not believe they should sell them.

Italy used gold to collateralise bonds in 1974, when it received a $2 billion bailout from Germany's Bundesbank and put up 500 tonnes of metal as a collateral.

EUROPEAN BANKS WON'T SELL

Other European central banks including the Bank of France and the Bundesbank said at the conference that they will not sell their gold reserves, as they can provide a level of confidence, an element of diversification and can absorb some volatility from the central bank's balance sheet.

"We have no plan to sell gold," Bank of France Alexandre Gautier, director of market operations department, told delegates in a presentation. "We are still active in the lending market, but not retail loans. We can see some yields that are attractive, but we realise that we can't lend gold without collateral."

Number two holder Germany also said at the meeting that it will keep its 3,390 tonnes of gold. (This presumes they can find it, for now they are holding a bag of receipts for some of it - Jesse)

PRICE ACTION IMPACTS CENTRAL BANKS DECISION

Gold price volatility this year has impacted the buying decisions of emerging countries' central banks like Argentina, Juan Ignacio Basco, deputy general manager at the Central Bank of Argentina, said.

Bullion fell by $200 an ounce in two days in its sharpest slide in 30 years in April before hitting a three-year low in June and then regaining 13 percent from that level.

"It's very difficult to decide when to enter the market as we don't follow trends ... (but) the recent volatility in prices has changed the way we have look at gold," Basco said.

"That's why we have started with the product options because volatility in the market is not good for us."

Argentina slowly re-started to rebuild its gold reserves in 2000s after selling them at the bottom of the market in December 1997 to buy U.S. Treasuries. (Q. What do Argentina and England have in common?  Jess)  It currently holds 61.7 tonnes of the metal, representing seven percent of its assets.

"We are accumulating slowly ... and we have to move slowly," Basco said. "We must remember that we are like elephants." (And some are like dinosaurs. - Jess)

Read the entire story here

Gold futures tumble as investors shun safe havens
Oct. 1, 2013, 8:50 a.m. EDT

NEW YORK (MarketWatch) -- Gold futures tumbled Tuesday morning, with the traditional safe haven failing to find support asinvestors shrugged off a long-anticipated shutdown of the U.S. federal government to bid up equities and other assets perceived as risky..."