http://www.caseyresearch.com/gsd/edition/barrick-chairman-munk-to-retire-as-new-share-issue-falters
¤ YESTERDAY IN GOLD & SILVER
I'd forgotten all about yesterday's jobs report, so the $30 face-plant in the gold price starting at 8:30 a.m. EST was a bit of a shock. But once I realized what had caused it, then I calmed down a lot, as this is standard operating procedure for JPMorgan et al. and their associated high-frequency trading teams.
Gold traded around $1,310 spot [on very light volume] all of Friday right up until the jobs report release at 8:30 a.m. in New York. The low tick came at 10:30 a.m. in New York, right on the button, but the gold price managed to pare its losses as the trading day continued.
The CME recorded the high and low price as $1,313.40 and $1,280.50 in the December contract.
Gold closed late on Friday afternoon in New York at $1,289.50 spot, down $18.10 from Thursday's close. Gross volume was very high for the second day in a row, but once the roll-over and spreads were subtracted out, net volume was 151,000 contracts, the same as it was on Thursday.
Here's the New York Spot Gold [Bid] chart on its own, so you can see the Comex price action in more detail.
The silver price action was a virtual carbon copy of what happened in gold. The only difference was that the low tick came in a small spike down just moments before the 1:30 p.m. Comex close. The subsequent rally lasted until 2:45 p.m. EST, and then traded almost ruler-flat into the 5:15 p.m. electronic close.
The high and low prices as recorded by the CME were $21.905 and $21.25 in the December contract.
When all was said and done, silver closed the Friday trading session at $21.51 spot, down only 16 cents on the day, which wasn't a lot, all things considered. Net volume was 40,500 contracts, only a few thousand higher than Thursday's volume.
Here's the New York Spot Silver [Bid] chart on its own.
Friday's price action in platinum and palladium were basically mini versions of what happened in gold and silver. Here are the charts.
The Dollar Index closed on Thursday afternoon in New York at 80.86, and then traded flat until a rally began about 8:15 a.m. in New York. The subsequent rally ended at its high of the day [81.46] at 10:25 a.m. EST. By shortly after 12 noon EST, the Index was back down to 81.21 and traded sideways for the rest of the Friday session, closing at 81.23, which was up another 37 basis points.
Here's the one-year dollar chart, and I'd guess that the lion's share of this current rally is already behind us.
Gold traded around $1,310 spot [on very light volume] all of Friday right up until the jobs report release at 8:30 a.m. in New York. The low tick came at 10:30 a.m. in New York, right on the button, but the gold price managed to pare its losses as the trading day continued.
The CME recorded the high and low price as $1,313.40 and $1,280.50 in the December contract.
Gold closed late on Friday afternoon in New York at $1,289.50 spot, down $18.10 from Thursday's close. Gross volume was very high for the second day in a row, but once the roll-over and spreads were subtracted out, net volume was 151,000 contracts, the same as it was on Thursday.
Here's the New York Spot Gold [Bid] chart on its own, so you can see the Comex price action in more detail.
The silver price action was a virtual carbon copy of what happened in gold. The only difference was that the low tick came in a small spike down just moments before the 1:30 p.m. Comex close. The subsequent rally lasted until 2:45 p.m. EST, and then traded almost ruler-flat into the 5:15 p.m. electronic close.
The high and low prices as recorded by the CME were $21.905 and $21.25 in the December contract.
When all was said and done, silver closed the Friday trading session at $21.51 spot, down only 16 cents on the day, which wasn't a lot, all things considered. Net volume was 40,500 contracts, only a few thousand higher than Thursday's volume.
Here's the New York Spot Silver [Bid] chart on its own.
Friday's price action in platinum and palladium were basically mini versions of what happened in gold and silver. Here are the charts.
The Dollar Index closed on Thursday afternoon in New York at 80.86, and then traded flat until a rally began about 8:15 a.m. in New York. The subsequent rally ended at its high of the day [81.46] at 10:25 a.m. EST. By shortly after 12 noon EST, the Index was back down to 81.21 and traded sideways for the rest of the Friday session, closing at 81.23, which was up another 37 basis points.
Here's the one-year dollar chart, and I'd guess that the lion's share of this current rally is already behind us.
*****
The CME's Daily Delivery Report showed that zero gold and nine silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. The link to yesterday's Issuers and Stoppers Report is here.
There were no reported changes in GLD yesterday, and as of 10:16 p.m. EST last evening, there were no reported changes in SLV.
There was no sales report from the US Mint, either.
Over at the Comex-approved depositories on Thursday, there were no in/out movements in gold. And, as is always the case, the real action was in silver. This time 300,763 troy ounces were reported received, and 648,491 troy ounces was shipped out. The link to that activity is here.
The Commitment of Traders Report, for positions held at the close of trading on Tuesday, showed only a slight improvement [302 contracts to be exact] in the Commercial net short position in silver. I must admit that I was expecting more. The Commercial net short position as of this report was 129.2 million ounces. Ted Butler said that JPMorgan's short-side corner in the silver market was around 85 million ounces, which is down a few million ounces from the last reporting period. They are short about 17% of the entire futures market in silver.
It was a different story in gold, however, as the Commercial net short position declined by 1.29 million ounces, and is now down to 9.39 million ounces. Ted said that most of the change came from the managed money within the Commercial category, and the rest came from the technical funds in the Non-Commercial category. According to Ted, the numbers in the report also indicated that JPMorgan Chase increased their long-side corner in the gold market by three or four thousand contracts; and as of Tuesday, it currently sits at 7.5 million ounces. This amount represents about 23% of the entire Comex futures market in gold on a net basis.
You couldn't make this stuff up!
Here's Nick Laird's famous "Days of World Production to Cover Short Positions" of all physical commodities that are traded on the Comex. Note that the obscene "days to cover" for silver has now been over taken by the even more obscene "days to cover" for palladium.
Unless there are big rallies on Monday and Tuesday that will distort it, the next COT Report will show further improvement in the Commercial net short positions in both gold and silver, as the data from the two engineered price declines in both metals that occurred on Thursday, and again on Friday, will be in it. Only the amount of those improvements is unknown at the moment.
I was under the impression that there was going to be a companion Bank Participation Report as well yesterday. But the November BPR was a "no-show," so hopefully it will put in an appearance on Monday.
Here's another chart that Nick Laird sent my way late last night. It's titled "Monthly Chinese Gold Net Imports From Hong Kong". He said he finally got the raw data for September yesterday, and here it is now. Bloomberg broke this story on the last day of October, as they had an inside source that gave them the data, and I reported on it in my November 1 column.
There were no reported changes in GLD yesterday, and as of 10:16 p.m. EST last evening, there were no reported changes in SLV.
There was no sales report from the US Mint, either.
Over at the Comex-approved depositories on Thursday, there were no in/out movements in gold. And, as is always the case, the real action was in silver. This time 300,763 troy ounces were reported received, and 648,491 troy ounces was shipped out. The link to that activity is here.
The Commitment of Traders Report, for positions held at the close of trading on Tuesday, showed only a slight improvement [302 contracts to be exact] in the Commercial net short position in silver. I must admit that I was expecting more. The Commercial net short position as of this report was 129.2 million ounces. Ted Butler said that JPMorgan's short-side corner in the silver market was around 85 million ounces, which is down a few million ounces from the last reporting period. They are short about 17% of the entire futures market in silver.
It was a different story in gold, however, as the Commercial net short position declined by 1.29 million ounces, and is now down to 9.39 million ounces. Ted said that most of the change came from the managed money within the Commercial category, and the rest came from the technical funds in the Non-Commercial category. According to Ted, the numbers in the report also indicated that JPMorgan Chase increased their long-side corner in the gold market by three or four thousand contracts; and as of Tuesday, it currently sits at 7.5 million ounces. This amount represents about 23% of the entire Comex futures market in gold on a net basis.
You couldn't make this stuff up!
Here's Nick Laird's famous "Days of World Production to Cover Short Positions" of all physical commodities that are traded on the Comex. Note that the obscene "days to cover" for silver has now been over taken by the even more obscene "days to cover" for palladium.
Unless there are big rallies on Monday and Tuesday that will distort it, the next COT Report will show further improvement in the Commercial net short positions in both gold and silver, as the data from the two engineered price declines in both metals that occurred on Thursday, and again on Friday, will be in it. Only the amount of those improvements is unknown at the moment.
I was under the impression that there was going to be a companion Bank Participation Report as well yesterday. But the November BPR was a "no-show," so hopefully it will put in an appearance on Monday.
Here's another chart that Nick Laird sent my way late last night. It's titled "Monthly Chinese Gold Net Imports From Hong Kong". He said he finally got the raw data for September yesterday, and here it is now. Bloomberg broke this story on the last day of October, as they had an inside source that gave them the data, and I reported on it in my November 1 column.
****
Selected news and views......
Alasdair Macleod: There's a Liquidity Crunch Developing
GoldMoney research director Alasdair Macleod writes that declining liquidity in secondary bond markets has been caused by the central bank policy of suppressing interest rates. "Once a central bank embarks on a policy of printing money as a cure-all," Macleod writes, "it is impossible to stop or even just to taper without risking a liquidity crisis. Increasingly illiquid markets are now telling us that QE should be increased."
Amen to that, dear reader! This very short essay by Alasdair is amust read...and I found it in a GATA release early yesterday morning.
Marc Faber: We're in a Worse Position Than in 2008
A credit boom in countries such as China means that the world is in a worse position than it was in 2008 when a global financial crisis tipped the world into recession, Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, told CNBC Asia.
"If I am telling you that we had a credit crisis in 2008 because we had too much credit in the economy, then there is that much more credit as a percent of the economy now," Faber said.
"It will end badly and the question is whether we will have a minor economic crisis...and then huge money printing, or get into an inflationary spiral first," Faber added.
This 2:58 minute video interview with Marc was done very early on Friday morning Hong Kong time and, because of the International Date Line, was posted on the CNBC website on Thursday evening EST. It's a must watch for sure...and I thank reader Ken Hurt for sending it along. There's a transcript as well, but the video clip is better.
France's "AA": Hollande Pays Price for Kowtowing to EMU Deflation Madness
Standard & Poor’s downgrade of France to AA is an indictment of Euroland’s entire contraction regime.
Yes, S&P says France has bottled it on reforms. Francois Hollande’s patchwork of measures—losing momentum anyway since early 2013—will not be enough to pull the country out of sclerosis.
It warns too that France is on borrowed time with a state sector over 56pc of GDP, now higher than Sweden, but without Swedish labour flexibility and free enterprise. We all know this.
But the deeper critique is that France has been set an impossible task.
Here's Ambrose Evans-Pritchard doing what he does best...bashing Europe. This blog was posted on thetelegraph.co.uk Internet site sometime on Friday...and it's the second offering in a row from Roy Stephens.
World from Berlin: "A Last Warning Shot" for Southern Europe
The decision by the European Central Bank to lower interest rates on Thursday is proof that the debt crisis still plagues the eurozone. The move is controversial in Germany, where editorialists warn it could affect savings and pensions.
"Unprecedented low interest rates substantially devalue savings in Germany and the euro area and increase the danger of bubbles," the Association of German Public Banks said in a statement.
ECB President Mario Draghi is hoping the lowest interest rate in the history of the common currency can help to reinvigorate the eurozone's economy. The main interest rate is the one given to major financial institutions, who are in turn expected to pass the cheap money on to consumers and businesses.
This commentary was posted on the German website spiegel.deduring the European lunch hour on Friday...and it's definitely worth reading. It's the third article in a row from Roy S.
Two King World News Blogs
The first commentary is by Egon von Greyerz...and it's titled "The Next Wave of Massive Wealth Destruction is Imminent." The other interview is with Bill Fleckenstein. It's headlined "The Last Hurrah For Maniac Central Bankers."
Barrick Chairman Munk to Retire as New Share Issue Falters
Barrick Gold Corp. publicly announced the pending retirement of chairman Peter Munk on Friday, after a week in which bankers faced a tepid response to the company’s $3-billion (US) share sale.
Barrick said Friday that it expected to update investors before year-end on various initiatives to renew its board, following discussions this year between directors and institutional shareholders regarding compensation practices and governance. The initiatives include “succession in the chairman role at the company, consistent with Mr. Munk’s desire to retire as chairman,” Barrick said.
The message that Mr. Munk would announce his retirement by year-end had been quietly conveyed by some bankers working on Barrick’s big share sale over the past week, according to sources familiar with the situation. Some investors had indicated they wanted more clarity on the board revamp before agreeing to buy any stock.
Barrick had for some time internally laid out a succession plan for Mr. Munk as well as that of another long-term board member, former Prime Minister Brian Mulroney. This person also said that at least one large investor was given notice prior to the official announcement.
I was wondering as I began to read this Globe and Mail story from yesterday, if Brian Mulroney's name was going to come up in this article, and I wasn't disappointed. I've been a Brian Mulroney watcher since he ran for the leadership of Canada's Progressive Conservative Party...and right up until the time that he was appointed to Barrick's board of directors. I found this must-read news item in a GATA release that Chris Powell filed from New Orleans late last night.
When Irish Eyes Are Smiling: The Story of Canada's Gold?
This story was written back in November of 2002, after nearly two years of research. It is my take on how Canada's gold (all 660 tonnes) got sold out from under the noses of the Canadian people.
The intriguing part of this story is that a man by the name of Brian Mulroney was the Prime Minister of Canada when most of Canada's gold was sold. Mulroney was invited on to Barrick Gold's board shortly after he resigned as Prime Minister back in 1993. At the time, he was the chairman of Barrick's "International Advisory Board," whatever that was, as no other gold company has got one. For more on this Board and who is on it, check out the bottom of page 117 in Barrick's 2003 Annual report. It's rather impressive, and that's putting it mildly.
Is there a connection between what may have happened back then, and now? You be the judge. Except for some changes in hyperlinks because some had become inactive, not one word has been changed from the original essay.
When I started writing this column about seven hours ago, dear reader, the thought that I might be posting this essay I wrote 11 years ago never crossed my mind. But it did the moment that I saw Brian Mulroney's name in that Globe and Mail story posted above.
Eleven years ago, I was just starting as a writer, posting blogs on GATA chairman Bill Murphy's website lemetropolecafe.com...and this is where this story was first posted. It was picked up by thefinancialsense.com Internet site a bit later, and this is the version posted here.
If I had the opportunity to rewrite/edit this article now that I've had more than 10 years' writing experience under my belt, I would certainly have written it in a different style, but the facts of the case as presented would remain unchanged.
It's a long read, but if you haven't read it before, it's more than worth your while. So top up your coffee or blow the froth off a cold one and get started.
Inside Story: The Bush Gang and Barrick Gold Corporation
This very interesting essay was written back in the year 2000...and has been sitting in my "saved" file since September of 2006. It was sent to me long after I'd written the above essay about Canada's gold, and there are a lot of things in it that corroborate what I said in my essay above...and after posting my own efforts, this story came to mind as well, as it's never seen the light of day since it was first posted on theafrocentricnews.com Internet site at the turn of the last century.
The rest of the essay is just plain scary...and some of it sounds so unbelievable, you wonder whether it's true or not, but a lot of it comes from Munk's autobiography, so it gives the whole essay a lot of credibility, at least in my eyes.
But you can be the judge and jury yourself. It's a big read as well, but I'll happily classify it as a must read.
China’s Gold Appetite Key Price Driver: Nichols, Klapwijk
In his latest commentary on gold, New York-based specialist precious metals analyst Jeff Nichols looks to the huge Chinese appetite for the yellow metal as likely to be the key gold price driver in the months and years ahead.
Ever since China legalised private gold investment in 2002, the country’s and its citizens’ gold demand has been growing every year. In part, this is because gold is built into the Chinese psyche as a safe store of wealth and as an inflation protector, but it also recognises the continuing growth in the Chinese middle class and its steadily accumulating wealth. As Mineweb pointed out earlier this week, September was the fifth month in a row and the sixth month this year that China’s net imports of gold via Hong Kong exceeded 100 tonnes. Indeed, China seems set to import more than 1,000 tonnes of gold via this route this year, almost certainly seeing it surpass India as the world’s No. 1 gold consumer.
The title to this essay is highly misleading, as the price of all four precious metals are controlled by JPMorgan Chase in the Comex futures market. They have a long-side corner in gold, a short-side corner in silver, and they probably have big short-side corners in platinum and palladium as well. I'd bet big money on that. But this story by Lawrence Williams posted on themineweb.com Internet site yesterday is still worth reading.
Indian Gold Imports Slide, but Exports Jump
Early signs are coming in that India could slip from its position as the world's largest consumer of gold. A senior official of the Metals and Minerals Trading Corporation of India (MMTC) has noted that gold imports are likely to decline by 41% to 500 tonnes this financial year, on account of the curbs imposed by the government.
MMTC is the largest bullion player in India. Chairman D S Dhesi said around 400 tonnes were imported in the first six months of this fiscal, and that a maximum of 100 tonnes would be imported by the end of the financial year.
Another official said, "Both August and September witnessed very low imports. Though October saw a jump, given the Diwali season and buying for the Christmas season, imports are not likely to exceed 500 tonnes this financial year.''
This news item, filed from Mumbai, was posted on themineweb.com Internet site yesterday...and it's another offering from Ulrike Marx.
India Mulling Easing Gold Import Restrictions
Compressed demand for gold and other imports, a tempered demand for oil, and an improvement in exports has put the smile back on the face of the Indian government. With the government happy and relatively unfazed at the spurt in gold imports in October, traders are expecting a roll back of certain norms related to gold imports.
"All the signs appear to be looking good. The inward shipment of the precious metal has been severely compressed in the current fiscal. Forex reserves are rising. The announcement to ease some of the restrictive norms should be out soon," confirmed an official of the All India Bullion and Jewellers Association.
As a first step, the Indian government and the Reserve Bank of India (RBI) are said to be looking at easing the 80:20 rule with regards to gold imports. The rule requires importers of the commodity to supply at least 20% of their imports to exporters.
We'll see how this turns out in the weeks ahead. I thank Ulrike Marx once again for bringing this mineweb.com story to our attention.
*****
¤ THE WRAP
Undoubtedly, JPMorgan will try to exploit the role it plays in market making as justification for its holdings being way above proposed position limits. The crooked bank will try to convince the CFTC that it is providing necessary liquidity to silver and gold; in essence, claiming that without JPM’s buying on sell offs and selling on rallies, silver and gold prices would be disorderly. This is rich – JPMorgan manipulates prices and then claims that if they stop their manipulation, prices would go crazy. I can’t help but think of the guy who kills his parents and then pleads for mercy because he’s an orphan. Will the CFTC buy JPMorgan’s bologna? - Silver analyst Ted Butler: 06 November 2013
You don't need me to fill in the blanks as to what happened to precious metal prices yesterday. It was the high-frequency traders doing their thing when the jobs numbers came out. I hope you're not surprised, as this happens pretty much all the time when this event occurs, or when the FOMC minutes are released, or when some other precious metal-positive news comes out.
Where we go from here is the big unknown. Can JPMorgan et al., along with their associated high-frequency trader buddies, wring more blood out of this stone by rigging prices lower? I suppose, but as Ted says, we won't know it's over until we're looking at the bottom through the rear-view mirror of the subsequent rally.
Of course when that rally occurs, will JPMorgan et al. be there as not-for-profit sellers/short sellers of last resort once again? Beats the hell out of me, but as I mentioned yesterday, all we can do is wait it out.
December is probably the biggest delivery month for gold and silver for the year, and the lead-up to that is the roll-overs out of that delivery month and into various delivery months in the new year. There's a lot of outstanding open interest that has to dealt with between now and First Day Notice, and as I've said before, if you're holding a December contract [either long, short, or a spread trade] you only have three choices before the end of the month.
You can either sell, roll it over into a future delivery month, or stand for delivery on First Notice Day. Every contract of open interest, except for those standing for physical delivery, has to be out by the end of the month, and there's lots of open interest left to go, so guessing what happens price-wise between now and the end of the month is really a mug's game, and entirely up to JPMorgan et al.
That's it for today, as I've been at this for almost ten hours. I'm off to bed.
From Jesse...........
Gold Daily and Silver Weekly Charts - 'Claims Per Deliverable Ounce' Rises to Record High 60.38
That was not to be, not that it didn't impact jobs, but it did not impact the way in which the government counted jobs in what is the headline, 'establishment' report. The 'Household Report,' which is based on a direct survey of people, and the Labor Participation Rate which compares people who are working versus those who are available for work, were in the tank. Some other aspects like wages and hours worked were not looking very good either.
There was intraday commentary on the Non-Farm Payrolls Reporthere.
But hey, Wall Street was happy, with both stocks and the dollar rallying, and the SP and DJIA reaching new all time highs. Naturally in keeping with Non-Farm Payroll tradition gold and silver were hit hard, and not all that subtly. The reason for this was that the great jobs number would bring out the Fed taper talk again, but not for stocks, which were just frothing. Except of course for Twitter which had its frothy moment yesterday.
The 'claims per deliverable ounce' for gold on the Comex rose to an all time high of 60.38 contracts per ounce said to be in their warehouses and available for delivery. There was very little action in or out of the Comex gold warehouses yesterday. They are the pretty magician's assistance on the stage. The real action is taking place behind the screens.
Most of the commentary from the US financial media was funny, but in a very sad sort of way.
Let's see how the delivery process for gold plays out into year end.
Have a pleasant evening.
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