Wednesday, December 18, 2013

Gold and Silver Report - December 18 , 2013 Harvey Organ post highlights , data of the day and more news and views.....

Post - Fed Meeting Action December 19 , 2013..... Gold getting slammed so far this morning ....

Live 24 hours gold chart [Kitco Inc.]

Trying to test the lows from June ?


The gold price traded in a very tight range in Far East and Europe trading---and the price activity only started getting interesting in the lead-up to the 2 p.m. EST FOMC report.  The high of the day came shortly before that time---and the price gyrations upon the release of the news didn't go far in either direction.  By 3:25 p.m. the gold price was back to where it started at the close of trading on Tuesday.
Then out of the blue a seller appeared in the thinly-traded New York electronic market, and in less than half an hour had peeled over $16 off the price.  After that, the gold price traded sideways into the close.
The CME recorded the high and low ticks as $1,244.00 and $1,215.20 in the February contract.
Gold close the Wednesday session at $1,218.70 spot, which was down $12.40 from Tuesday's close.  Net volume was reasonably heavy at 165,000 contracts.
It was more or less the same chart pattern in silver, although there was a sharp spike up between 2:30 and 3 p.m. in electronic trading that got dealt with in the usual manner.  After that, the silver price pattern returned to the mirror image of the gold price---and was soon back below $20 spot---and that's where it remained for the rest of the day.
The high and low for the day were recorded by the CME at 19.425 and $20.265 in the March contract---an intraday price move of over 4%.
Silver finished the trading session at $19.73 spot, down 22 cents from Thursday's close.  Net volume was also pretty heavy at 47,500 contracts.
Platinum and palladium didn't do a lot on Wednesday, but did get caught in the 2 p.m. crossfire along with gold and silver, but the effects were more muted.  The downward price pressure was more in sympathy with the other two precious metals, rather than much direct interference.  Here are the charts.
The dollar index closed on Tuesday at 80.04---and then traded flat until around 9:30 a.m. in London.  The smallish rally from that point topped out at 80.19 at 8:30 a.m. EST in New York, before falling back to unchanged by the London p.m. gold fix.  There were some pretty wild gyrations shortly before---and immediately after---the Fed news, and the index had dropped below the 80.00 mark by 2:30 p.m. EST.  But someone was there to catch a falling knife---and the index blasted back above the 80 mark in very short order, and by 4 p.m. was at the 80.49 mark.  From there it traded up a bit into the close, finishing the day at 80.59---which was up 55 basis points from Tuesday's close.
I note that the dollar index chart over at stopped working shortly after 3 p.m. EST, so the best I could do on short notice, thanks to Nick Laird, was this 5-day chart from the website.


The CME's Daily Delivery Report showed that 31 gold and 38 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  30 of the gold contracts were stopped by JPMorgan in its in-house [proprietary] trading account.  In silver they stopped 21 contracts.  The link to yesterday's Issuers and Stoppers Report is here.
As usual, there was another withdrawal from GLD yesterday, this time an authorized participant took out 135,035 troy ounces.  And as of 7:51 p.m. EST yesterday evening, there were no reported changes in SLV.
The good folks over at Switzerland's Z├╝rcher Kantonalbank updated their gold and silver ETFs as of the close of business on Friday, December 13.  Their gold ETF showed a decline of 44,998 troy ounces---and their silver ETF showed a decline of 119,923 troy ounces.
And, for the third day in a row, there were no reported sales from the U.S. Mint.  One has to wonder if they are finished selling 2013 bullion products for the rest of December, as this lack of sales is unprecedented for this time of year.  We'll see.
There was very little in/out movement in either gold or silver at the Comex-approved depositories on Tuesday.  In gold, there were 1,428 troy ounces reported shipped out---and in silver there 989 troy ounces shipped out.  Nothing was reported received in either metal.


Selected news and views.....

Fed "Tightens", Tapers $10 Billion - Full Redline

Despite the world of mainstream media pundits proclaiming the U.S. is recovering nicely and that a taper is priced in (and the warning that the 5-year auction gave this morning that it's not), markets are already reacting violently to the Fed's decision to announce a small 'taper' (and more dovish forward guidance).

As a reminder, here are the four reasons why the Fed was cornered into tapering... as we have noted numerous times before; the "taper" is all about economic cover for a forced move the Fed has to make.

Simply put, they were cornered and needed to Taper sooner rather later.

This commentary was posted on the Zero Hedge website at 2:01 p.m. EST yesterday...and is definitely worth reading.  I thank reader M.A. for today's first story.  There was also a 2-page story in the New York Times on this as well.  Roy Stephens sent it my way...and the link to that is here.

Three former bankers charged with €7.2bn fraud

Three former senior bank officials have appeared in court charged in connection with an alleged €7.2 billion fraud.
Former chief executive of Irish Life & Permanent (IL&P) Denis Casey and the bank’s former finance director Peter Fitzpatrick appeared today in the Dublin District Court along with the former head of treasury at Anglo Irish Bank John Bowe.
The three men were charged with conspiracy to defraud the public under common law.
In addition, a separate charge was brought against Mr Bowe for false accounting in relation to these deposits in Anglo Irish bank under section 10 of the Theft and Fraud Act.
This story was posted on the Internet site late yesterday afternoon GMT...and it's another contribution to today's column from Roy Stephens.

E.U. reaches deal to protect bank savings

E.U. lawmakers have made a breakthrough in banking union talks after agreeing on rules to protect people's savings, ending a two-year impasse between MEPs and ministers.
Under the deal brokered on Tuesday night (17 November), the first €100,000 of savings per depositor and per bank will be guaranteed if the bank gets into financial difficulty.
Banks will also be required, for the first time, to put in place financing schemes to ensure that money is available to reimburse savers.
This news item, filed from Brussels, was posted on Internet site yesterday morning Europe time...and once again I thank Roy Stephens for sending it along.

No immediate plans to remove gold distortions - RBI

The Reserve Bank of India (RBI) has no immediate plans to remove the distortionary restrictions it has placed on the gold market.
Speaking at a press conference after the announcement of the bank's mid-quarter review, RBI Governor Raghuram Rajan said "Gold restrictions are a a necessary distortion at this point to restore balance to the CAD. Going forward, we would not like this distortion to persist, and we would like to remove it."
He went on to add that the RBI measures, the prime driver to narrow the current account deficit (CAD) to 1.8% in the second quarter, would be withdrawn once the deficit stabilises on its own, beyond the imposed gold restrictions.
Although this story may seem similar to the two stories on this subject that I posted in Tuesday's column, there are some notable differences.  So if Indian gold demand is something that floats your boat, then this will be worth the read.  This news item, filed from Dubai, was posted on the Internet site yesterday...and I thank Ulrike Marx for sending it along.

John Embry: Suppression of precious metals continues

As we edge closer and closer to the end of 2013, gold and silver markets remain subdued.
For reasons financial, economic and geopolitical, they've had ample cause to rise.
But because precious metals are the canaries in the coal mine, the economic and political powers that be in the West are petrified that a rise in gold and silver would spike interest rates.
Very simply such a situation would put 'Paid' to the financial system as we know it.
This commentary by John was printed in the December edition of Investor's Digest of Canada...and it falls in the absolute must read category.  It was posted in the clear over at the sprott.comInternet site yesterday.



It’s really quite simple – a manipulated market is defined by a concentrated position; a free market has no such concentration of holdings. Let me make it more specific. For the past six years, one entity (JPMorgan) has often been the sole new short seller on every silver price rally of significance. This is how and why the silver manipulation has persisted. This is how and why the manipulation will end, namely, JPMorgan not adding to Comex silver short positions. I suppose it is possible that this crooked bank may find a way to disguise future additional Comex silver short sales, but barring that it comes down to whether JPMorgan shorts more silver or not as to whether the manipulation is terminated.Silver analyst Ted Butler: 18 December 2013
Well, if there ever was a more perfect time when markets had to be managed to perfection, the FOMC news at 2 p.m. EST yesterday was one of them.  As GATA's Chris Powell so eloquently put it more than five years ago---"The are no market anymore, only interventions."  And as Bill King said in this morning's edition of theKing Report---"SPHs tanked on the announcement but someone immediately rescued the S&P futures with aggressive purchases. This phenomenon of rescuing stocks via SPH manipulation has become a market staple."
If any further proof was needed, here's what the DOW chart looked like yesterday.  It began to head south the moment the news broke, but strong hands were there to catch a falling knife.
The U.S. dollar index looked very similar to that before a not-for-profit buyer showed up there as well.
And, with that in mind, exactly the opposite happened in the precious metals, but they needed some help on their south-bound journey---and they got it, although some of that help arrived embarrassingly late.
In Far East trading on their Thursday, the rally attempts in both gold and silver were handled in the same old way, with the engineered price decline in silver being the most egregious.  Gold volume wasn't overly heavy during the Hong Kong/Tokyo trading session but, not surprisingly, silver's volume was much heavier.  And, with the London open about 20 minutes away, the dollar index---which had topped out at 80.65 at precisely 11 a.m. Hong Kong time---is now down 10 basis points from its New York close on Wednesday.
Five minutes after I wrote the above paragraph, the HFT boyz showed up---and took gold down once more.  Then shortly after the London open, both gold and silver---along with platinum---got hit once again.  Gold hit a new low of $1,198 in the March contract, a low that goes all the back to the July low.  Silver isn't back to its early December low yet, but it got close at $19.13 in the March contract.  Palladium is showing unchanged on the day at the moment.  Gross volume in gold is north of 60,000 contracts---and over 16,000 contracts in silver.  The dollar index is still down a bit as I sent this e-mail off to Stowe in Vermont at 5:15 a.m. EST.
Here are the latest charts just as I hit the send button.
How the rest of the Thursday trading session unfolds could prove interesting---and not just in the precious metal market, either..  The across-the-board market interventions are now so obvious, that only the willfully blind can't/won't acknowledge it; or as the famous Upton Sinclair quote goes---"It's difficult to get a man to understand something, when his salary depends upon his not understanding it."
See you on Friday---but if you live west of the International Date Line, the weekend is upon you already, so have a good one.

Wednesday, December 18, 2013

Dec 18.2013:/GLD loses another 4.2 tonnes of gold/SLV remains constant/USA tapers by 10 billion dollars/gold and silver slammed by the bankers/

Good evening Ladies and Gentlemen:  

Gold closed up $4.90   to $1236.10 (comex closing time ).  Silver was up 22 cents at $20.01. 

then came the FOMC report and the announcement of a 10 billion per month taper: 
 Closing prices for gold and silver at 5:15 pm from the access market

gold: $1218.50
silver:  $19.72

Gold was all over the board today as the bankers were doing everything in their power to suppress gold and silver.  I am glad that they announced the 10 billion dollar taper so they can now get this out of their system.  I would like to point out that the 10 year USA bond yield rose to 2.92% at one point after the taper announcement closing at 2.89%.  Once you see the 10 year at 3% then they will call off the tapering as the huge USA interest rate swap derivatives blow up. 


Comex gold/ contract month

Dec 18.2013   the December  contract month 

Withdrawals from Dealers Inventory in oz
Withdrawals from Customer Inventory in oz
 1428.35 (JPM)
Deposits to the Dealer Inventory in oz
Deposits to the Customer Inventory, in oz
No of oz served (contracts) today
 67  (6700 oz)
No of oz to be served (notices)
1483 (148,300 oz)
Total monthly oz gold served (contracts) so far this month
5207  (520,700 oz)
Total accumulative withdrawal of gold from the Dealers inventory this month

Total accumulative withdrawal of gold from the Customer inventory this month

43,549.152  oz



Dec 18/2013:

 December contract month  

Withdrawals from Dealers Inventory5041.10 (CNT)
Withdrawals from Customer Inventory 786,243.17 (Brinks,Scotia )
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory  1,133,903.89 (CNT,JPM)
No of oz served (contracts)8 (40,000 oz)
No of oz to be served (notices)117  (585,000 oz)
Total monthly oz silver served (contracts) 3180  (15,900,000)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month4,257,487.3 oz


And now the Gold inventory at the GLD:

Dec 18.2013: we lost another 4.2 tonnes of gold to Shanghai.



Value US$32,140,372,067.64

US to export a record 750 tonnes of gold this year, mainly to China as local investors respond to high domestic inflation

Posted on 18 December 2013 with no comments from readers
If you want any more proof of the massive accumulation of gold this year by China then consider the latest US gold export figures. This will come as no surprise to precious metal traders or those in the industry who know only too well that world gold reserves are moving from the West to the East.
Total exports of US gold hit 573 tonnes in the first nine months of 2013, if you include the 157 tonnes listed in other categories as well as bullion, and that means around 750 tonnes will be the total for US gold exports this year.
Re-exports to China
In the first nine months of 2013 Hong Kong received 176 tonnes, Switzerland 131 tonnes and the UK 26 tonnes, according to the latest data from the USGS Gold Mineral Industry Surveys. Most of the gold sent to Switzerland and the UK was re-exported to China after refining into smaller bars as we know from earlier revelations on the website (click here).
How much gold China has bought in total in 2013 is a matter of considerable speculation in the gold industry. Lower estimates say 1,500 tonnes, upper estimates 4,000 tonnes, with the truth doubtless somewhere in the middle.
Why is China buying all this gold while the price is falling on global markets? Well some insiders say they are fixing the market to buy at a low price (click here). More likely China is experiencing a hyperinflation in local currency terms – with wage rises surging out of control and property prices on a tear – and gold is the obvious hedge against such inflation.
Chinese investors also have limited options in their domestic markets and have stayed away from stocks as inflation is smashing company profit margins. Bonds have also taken a pasting this year with interest rates surging to a 10-year high.
Exporting inflation next?
Will Chinese inflation next breakout and infect the rest of the world where ironically ultra-low headline inflation is given as a reason for selling gold this year? It is hard to say though the flight of capital from China through purchases of foreign assets by rich Chinese is growing apace.
That only has an effect at the margin. Much more important would be rises in the prices of the ubiquitous Chinese goods in world markets. That’s inevitable if local inflation continues to put upward pressure on business costs.
Certainly if Chinese inflation gets out of the bag then they are doing the right thing buying gold because its price will then only have one way to go: up and up!

Bill Holter discusses what would happen if interest rates become negative.  He also addresses JPMorgan's 5 consecutive 2.000 tonnes of gold deposited into its customer or eligible account

(courtesy Bill Holter/Miles Franklin)

Happy anniversary and goodbye Ben.

Next Monday is the 100th anniversary of the Congress ramrodding a midnight vote to create the Federal Reserve.  We all know how that has worked out, the "Dollar" which had held its value for the prior 100 years has lost 98%+ of its purchasing power since then.  How fitting that Ben Bernanke will preside today over his last Fed meeting (or second to last) on this anniversary since he is the one who captained the ship onto the shoals?  Don't get me wrong, Bernanke is not the one who "did it", he is merely the one who delusionally thought he could "fix it". 

  Today we will hear from the Fed on the issue of tapering (slowing the printing press) or not (continuing full steam ahead).  Early this morning I caught the tail end of debate on CNBC where Rick Santelli went on a rant regarding where interest rates "ought to be".  The guest suggested that they should be negative to "get the economy going" while Santelli argued there shouldn't even be a Fed or a model that set rates...the free market should do this.  Where do you think interest rates would be if let alone to seek a free market level?  Higher ?  Lower?  Negative (LOL) ? 

  I would chime in with the obvious.  How much in the way of deposits would the banks gather if they "charged" to "safeguard the money you lend them"?  I know, this doesn't really matter anymore because the banks are not really banks anymore and deposits are not their lifeblood anymore.  The flip side of this is lending.  Negative interest rates would mean that borrowers got "paid" to borrow.  In effect, negative interest rates would make debt balances smaller over time...who couldn't like this right?  I would also add that we are told almost daily that the economy is "recovering" (but not expanding), so then why the need to push rates negative ?

5 full years after the fact and no "expansion"?  What's up with this?  Never before...(well maybe in the 30's) has the economy gone flat and bottom bounced like this.  I can't even believe that "rational" human beings are even debating any of this, 6 years ago ALL of this would have been unheard of and laughed out of town!  Now, "high level" and "important" people are actually debating over pure idiocy.

  Think about negative interest rates for a moment.  Isn't this just another "bullet" that would debase the currency even further?  Isn't each and every "policy" that is trotted out basically just another way to debase the currency?  Fiscal policy, monetary policy...they're all the same with respect to "hoped for goals".  All policy today has this one goal in mind, create inflation and debase the currency, period.  Never mind what they say, just look at what they do.  You see, "inflate or die" really does exist and without inflation we really will die (financially).

  This is an odd concept because "verbally" the Fed must talk "no inflation" and have the perception that they really are the "guardians" of the currency.  The reality is that they know, they know that without inflation the system will collapse upon itself AND take the value of the Dollar with it since Dollars are "debt based" (have value supported by the debt).  Do not be fooled by this "accelerator and brake" action simultaneously which is exactly what "taper no taper" is.  As I've said before, you cannot ever taper a Ponzi scheme even for a moment. Were Ben Bernanke try to save his legacy with a "minute before midnight" taper, the markets would convulse so badly that an opening for Jan. 1st would probably be less than a 50/50 prospect.

  Before I finish I want to remind you that for all intents and purposes the COMEX has ALL registered Gold already spoken for.  Will they have Gold delivered in to make full deliveries?  Where exactly will it come from?  It seems to me that obvious (if you are looking) monkey business is already going on there as JP Morgan has reported 5 straight days of "triple zero" deposits.  "Triple zero" as in EXACT weights.  They have now supposedly taken in EXACTLY 2 tons each day for 5 days.  Yes we will hear that "these are kilo bars" and are exactly two tons each day, I don't buy it.  Are you going to tell me that "kilo" Gold is shipped in from Switzerland only to then be shipped out again to the East?  There have been far too many other days with ".000" that are not divisible by kilo weights to be "coincidence".  Statistically a ".000" deposit or delivery can only happen once every 1,000 times, 25 or more in a year have less odds than winning the lottery.

  February has open interest that represents over 20 million ounces, what if that month ends with another 500,000 or 1 million ounces that stand?  Where will the metal come from?  China will import nearly 100% of global production this year and the ETF's, COMEX and LBMA have lost massive weight already, how much more are Western central banks willing to lose?  How much more do they even have left to deliver.  I will leave you with this quote from Harvey Organ, "I don't know how much Gold is left or where future Gold will come from but I do know one thing, China will get their Gold before anyone else does".  This quote is spot on and you can bet your financial life that when the day comes that "they don't get their Gold", you will know it within 24 hours !  

Regards,  Bill H.

Gold Daily and Silver Weekly Charts - FOMC Day in Paperland - The Fed Chairman Wears Nada

Today was pretty much what I had expected. It was Christmas meat on the table from the Fed, mostly roasted jawbone.

The 'taper' was meaningless, except to take the talk about when it would start off the table. The FOMC went out of its way in the verbage to signal accommodative policy and money for nothing for the foreseeable future.

Despite the big rally in stocks, what did the Treasuries market do?  Nada.  I rest my case.

The hit on gold and silver was consequential only because JPM has locked up most of the registered inventory on the Comex, and after all, today was an FOMC day when monetary inflation was affirmed. Rik Green has some interesting observations about this here. 

Goldbroker published an interview with Le Patron on the correction in the Gold Market today here.

The problem these jokers are going to run into is that as they increasingly run policy to form a dual economy, with the wealthiest few taking the majority of the gains, the lack of demand in aggregate is going to continued to pressure the real economy, and eventually stretch the social fabric to the breaking point.

And some may expect this, and look at it as an opportunity. Winning.