Thursday, January 31, 2013

Ed Steer's Gold & Silver Report - January 31 , 2013...... news and views

http://www.caseyresearch.com/gsd/edition/gold-price-suppression-documentednot-conspiracy-theory-fund-manager-kaye-says


Gold Price Suppression is Documented...Not 'Conspiracy Theory,' Fund Manager Kaye Says

Jan
31
"The powers that be were lying in wait for the release of yesterday's U.S. GDP numbers"

¤ YESTERDAY IN GOLD AND SILVER

The gold price didn't do much in Far East trading on their Wednesday.  The tiny rally that did develop, rolled over around 3:30 p.m. Hong Kong time...and it was a slow slide from there into the Comex open in New York on Wednesday morning...and by that time, the price was basically back to unchanged from Tuesday's close.
Ten minutes after the open the GDP data came out...and away went the gold price...but ran into a not-for-profit seller almost immediately.  The high tick of $1,685.20 spot came around 10:30 a.m. Eastern time...and the price wasn't allowed to get any higher than that for the rest of the day.
From that high tick, the gold price got sold off about nine bucks into the 5:15 p.m. electronic close in New York.
Gold closed at $1,676.40 spot...up $12.50 on the day...and well off its high tick.  Net volume was immense...around 200,000 contracts...all of it in April [the new front month] or beyond.  It was blatantly obvious the JPMorgan Chase et al threw everything at this rally to prevent to from blowing through the $1,700 price level like a hot knife through soft butter.
Compared to what happened to the price in New York yesterday, the Wednesday price action in silver in both the Far East and early London trading looked comatose.  Silver also blasted off at 8:30 a.m...and within thirty minutes, two thirds of silver's gains were in for the day.  From there, the price worked its way slowly higher...with the high tick [$32.40 spot] coming in the electronic market...around 2:20 p.m. Eastern time.  The low tick of the day in New York...$31.18 spot...came right at the Comex open.
Of course silver wasn't allowed to close anywhere near its high....and finished the Wednesday session at $32.02 spot...up 64 cents.  Volume was a stunning 63,000 contracts...as "da boyz" were waiting to go short all comers...or maybe it was some of Ted Butler's raptors selling long positions for a profit.  What ever it was, the buyers ran into a tidal wave of selling.
Here are the charts for platinum and palladium...
Palladium actually finished down on the day after getting smacked pretty good at the Comex open.  No free markets to be found here, either.
The dollar index opened on Wednesday morning in the Far East at 79.57...and traded sideways until around 3 o'clock in the afternoon in Hong Kong...and then it began to head south...hitting its nadir at 11:30 a.m. in New York.  From there it traded almost ruler flat into the close...finishing the Wednesday session at 79.26.  The index closed down 31 basis points.  No correlation between the currencies and the precious metals again yesterday, either.


*   *   *  

The CME's Daily Delivery Report for Wednesday [First Notice Day for the February delivery month in gold] was an eye-opener.  There were 7,588 contracts posted for delivery within the Comex-approved depositories on Friday...and it involved 'all the usual suspects'.  The two biggest short/issuers were JPMorgan Chase in its in-house [proprietary] trading account, with 6,633 of those contracts...and in distant second was the Bank of Nova Scotia with 910 contracts.
On the long/stopper side of the ledger was Deutsche Bank in its proprietary [in-house] trading account with 3,181 contracts...and HSBC USA with 2,529 contracts stopped.  Also involved as long/stoppers, but with much smaller amounts, were Goldman Sachs, Morgan Stanley...and JPMorgan Chase in its client account.
Not surprisingly, there were only 65 silver contracts posted for delivery on Friday...and it was all Jefferies and the Bank of Nova Scotia as short/issuers...and JPMorgan as basically the only long/stopper.
The link to yesterday's Issuers and Stoppers Report is a must to view...and the link is here.
As a recap for January...a traditional non-delivery month for both gold and silver...there were 1,063 gold contracts delivered...and 724 in silver.  The gold number isn't all that significant, but the silver number is huge in the grand scheme of things.  In the 'old days'...according to Ted Butler...there might be thirty or forty silver contracts delivered in a non-delivery month.
There were no reported changes in either GLD or SLV...at least not as of 11:06 p.m. Eastern time Wednesday evening.
Over at Switzerland's Zürcher Kantonalbank as of January 29th, they reported that 31,023 troy ounces of gold, along with 969,024 troy ounces of silver were withdrawn from these two precious metal ETFs since they last reported on January 23rd.
The U.S. Mint had another sales report yesterday...with a twist.  They sold another 10,000 ounces of gold eagles, but no silver eagles.  The gold buffalo sales went from 72,000 sold in January...all the way down to 500.  It's a good bet that whoever did the sales data entry at the mint yesterday will correct that error sometime today...and I'll have the final sales figures for January in tomorrow's column.
There was more activity over at the Comex-approved depositories on Tuesday.  They reported receiving 1,114,350 troy ounces of silver...and shipped 188,545 ounces of the stuff out the door.  The link to that activity is here.
Here are a couple of charts that Nick Laird sent our way last night...and I'm more than happy to post them here.  Note the record silver eagle sales in January 2013...and the big sales in January 2012...and again in January of 2011.  In all three Januarys, it was December sales being cannibalized in one form or another that caused the big spikes in January sales in those years...because if you go back further, there is little difference between December and January sales.
(Click on image to enlarge)
Here's some data that reader 'David in California' stole from Bill Murphy's MIDAScommentary over at his lemetrolpolecafe.com Internet site yesterday afternoon.  It's not like we need to be reminded of this fact.


*   *   * 

selected news .......

Moody’s downgrades Canadian banks over consumer debt exposure

One of the world’s leading debt rating agencies on Monday downgraded five of Canada’s big banks because of exposure to over-leveraged consumers, but stock markets seemed not to notice as bank shares continued on a winning streak that’s been going on more than six months.
The action “reflects our ongoing concerns that the Canadian banks’ exposure to the increasingly indebted Canadian consumer and elevated housing prices leaves them more vulnerable to unpredictable downside risks facing the Canadian economy than in the past,” said David Beattie, a senior credit analyst at Moody’s and lead author of the report.
Bank stocks have moved up more than 5% since June, suggesting investors are confident that real estate “is not going to crash,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier Inc., a Toronto-based asset manager.
[Canadian banks have never been the paragons of virtue that they've been painted by the world.  Even the Bank of Canada's Mark Carney knows better than that...as the BoC is carrying many tens of billions of dollar worth of worthless debt on its books that it had monetized to save the banks back during the crash of '08.  Carney has been warning for a year or more of the Canadian housing bubble and the over-indebted consumer.  Moody's made it official as to how over-extended the 'Big 5' Canadian banks really are. - Ed]
This story showed up on Canada's financialpost.com Internet site early Monday afternoon Eastern time...and I thank Brad Robertson for bringing it to our attention.  The link is here.


Spain's crisis strategy under fire as economy buckles again

Spain’s economy has tipped into an accelerating downturn as sales data and the money supply flash serious warnings, calling into question Madrid’s high-risk strategy of refusing an EU-IMF rescue.
The country’s retail sales plunged 10.7pc in December from a year earlier as austerity bites deeper, one of the worst months since the crisis began.
The Spanish car lobby (Anfac) said the country’s output of vehicles has fallen below 2m for the first time since 1993, crashing 17pc last year. The industry has shrunk by a third since the boom.
Ominously, car exports plunged even faster at 18pc, dimming hopes that foreign trade can lift the economy out of slump as internal demand shrinks. While Spanish exports have been a bright spot over the past three years - keeping pace with German exports - the momentum has faltered due to lack of investment.
The effects of the slump will overpower any gains from fiscal austerity. The bank said public debt will surge from 88pc to 110pc of GDP in just two years.
This Ambrose Evans-Pritchard offering appeared on The Telegraph's website early on Tuesday evening...and it's courtesy of Roy Stephens.  The link is here.


Frankrupt Damage Control "France is a Truly Solvent Country, France is a Truly Credible Country"

In a move farcically reminiscent of Inspector Clouseau, the French Finance Minister made an impromptu appearance on the BBC to confirm what we all should have known all along: that "France is a truly solvent country, France is a truly credible country." As The Washington Post notes, the oh-so-honest faux-pasthat enfant terrible Monsieur Michel Sapin made on Tuesday - explaining how his nation is "totally bankrupt" - had French politicos scrambling today to recover their je ne sais pas.
It would appear the crisis management approach taken is the repetitive Jedi mind-trick and of course we should believe Moscovici - even as France faces near-record unemployment, ratings downgrades, fiscal atrophication thanks to a plunge in competitiveness, and backlash among the elites at its increasingly socialist policies. "This is not the France you are looking for," and sure enough, now we believe them.
LOL!  I don't know who the author of those above two paragraphs are, but they are worthy of some sort of literary award...but the three videos included are a little over the top.  This very short Zero Hedge piece [with some excellent links] is a must read...and it's courtesy of Marshall Angeles.  The link is here.


Super Mario Noose Tightens as Another Monte Paschi Derivative Emerges; Investigation Into Bank of Italy Opened

As we have been reporting over the past ten days, the one European scandal that gets virtually no coverage on this side of the Atlantic, remains the escalating fiasco involving Italy's third largest bank, Banca dei Monte Paschi, which gets worse by the day due to its extensive political implications - the bank is seen domestically as the domain of the front-running centre-left candidate, something Berlusconi reminds his followers at every opportunity, but also will likely ensnare the head of the ECB as we predicted a week ago when we noted the aggressive attempts by the Bank of Italy, which was headed by the former Goldmanite at the time, to wash its hands of having had anything to do with the BMPS fiasco...and thus by implication indemnify that other Goldmanite, Mario Monti.
As it turns out, and as Bloomberg reports today, the Bank of Italy did know of Monte Paschi's dirty laundry as long ago as 2010, but more importantly, and hence the title, the Italian law (and we use the term loosely) is now in play: "Prosecutors in Trani, Italy, opened an investigation into the Bank of Italy and market watchdog Consob’s supervisory activity on Monte Paschi, consumer group Adusbef said in an e- mailed statement today." Adding fuel to the fire is the just blasted headline from Reuters that Monte Paschi is now under investigation in Siena under law on company responsibility for crimes committed by staff, and suddenly life for the ECB head, not to mention the "stabeeleetee" of the banking sector looks quite problematic.
This very interesting story is another posting from the Zero Hedge website yesterday...and I thank reader "David in California" for sending it our way.  The link is here.


Clashes in Athens as protesters break into government building

Austerity enraged protesters broke into a government building and threatened the labor minister, Wednesday. Riot police then intervened with tear gas, batons and pepper spray, with one person taken to hospital.
The protest, by a few hundred people, was organized by a Communist backed labor union, and took place in front of the Labor Ministry building. The protesters were voicing their anger by the severe austerity measures that have gripped Greece since the financial crisis took hold in the country in late 2009.
At least one person was hospitalized and two others collapsed from the effects of pepper spray and were treated at the scene by other protesters. The government said damage was caused inside the office of minister Yianni Vroutsi and threats had been made against the minster himself.
This article appeared on the Russia Today website late yesterday...and it's courtesy of Roy Stephens.  The link is here.


Two King World News Blogs

Actually, I have three KWN items...but one is posted in a GATA release further down, as Chris Powell has a few things to say about it.
The first blog is copied from the Investors Intelligence report...and it's headlined "Global Stock Markets Very Close to a Top".  The second is withRichard Russell.  It's entitled "Silver Interesting, Massive Short Position".  It seems like everyone wants to lead the parade in silver.


Foreigners caught with 4 tons of gold in Roodepoort

Four foreign nationals were arrested for possession of illegally mined precious metals in Roodepoort on Wednesday, said the Hawks.
Hawks spokesperson Paul Ramaloko said the four men were caught travelling in a truck carrying four tons of unwrought gold, earlier on Wednesday.
Another ton was found abandoned in an open veldt.
The men were arrested after a sting-operation at the Durban Deep mine, along Main Reef Road in Roodepoort.
This very interesting story was filed from Johannesburg yesterday...and was posted on the South African website news24.com.  It's courtesy of Marc de Villiers...and the link is here.


Gold price suppression is documented...not 'conspiracy theory,' fund manager Kaye says

In the third and final excerpt of his interview with King World News, Pacific Group fund manager William Kaye predicts a short squeeze in silver even bigger than the one he expects in gold:
In the full audio of his interview, Kaye praises GATA's work and says there is much documentation of central bank intervention in the gold market to suppress the price and that such complaints are not mere "conspiracy theory".
All of this, including the links, are contained in this GATA release posted over at the gata.org Internet site.  The audio interview is a must listen for sure...and the link is here.


¤ THE WRAP

Clearly, there is no total valuation concern in silver. If anything, the current near microscopic total valuation of all the world’s silver bullion argues that something is amiss. Even if silver tripled in price while gold’s price remained unchanged, the entire world’s silver bullion (1,000 oz. bars) would still be worth only one percent of all the gold in the world. I think the relative total valuation benchmarks not only favor silver compared to gold, but also suggest that any future price bubble will most likely appear in silver rather than gold. - Silver analyst Ted Butler...30 January 2013
Well, you don't need a degree in rocket science to know that the powers that be were lying in wait for the release of yesterday's U.S. GDP numbers...and they were there to crush the precious metals and their shares at their first opportunity.  If they hadn't been, yesterday's price activity in both gold and silver would be a far different tale at this juncture.
However, a quick peek at the preliminary volume/open interest numbers for yesterday only showed a small increase in gold...but it was far more substantial in silver.  But I've learned that you can be easily lead astray by these numbers.  Conveniently, this price run-up happened on a Wednesday...the day after the cut-off for tomorrow's Commitment of Traders Report...so we won't have any inkling of what happened yesterday until next Friday, which is a lifetime away in these markets.
Here are the 6-month charts for both silver and gold with yesterday's price action included.  We broke above...and closed above gold's 200-day moving average yesterday.  And we broke above...and closed above silver's 50-day moving average.  As you know, JPMorgan et alcan paint a chart with the best of them...and only the brain-dead technical funds are stupid enough to believe chart patterns in a rigged market...but such idiots still exist.
(Click on image to enlarge)
Where we got from here price-wise is anyone's guess...but based on what I saw yesterday, these rallies are going to end the same way as every other rally, because "da boyz' are going short against all comers.  We shall find out soon enough.
The next newsworthy event are the job numbers at 8:30 a.m. Eastern time tomorrow...and you always get a 'reaction' from both gold and silver...you can set your watch by it.  I'm already wondering how hard they'll hit the prices when the numbers are announced.  We shall find out soon enough.
Here's a very interesting pictorial that reader Oto Godfrey sent me yesterday...and you'll need to use the 'click to enlarge' feature to do it justice.  It's worth a minute of your time.
Precious metal prices were dead in overseas markets on their Thursday...at least they were going into the 8:00 a.m. GMT London open.  Volumes were very light...with gold now trading in the new front month...April.  Pretty soon the roll-overs out of the March silver contract will begin...and the countdown to the March first day notice in silver will begin as well.  The dollar index is comatose.  And as I hit the 'send' button a couple of hours later...at 4:44 a.m. Eastern time, nothing much has changed, volumes are still light, the dollar is still comatose...and gold and silver prices are basically back to unchanged from Wednesday's close.
I'm not expecting big price action in New York today.  But I wasn't expecting big price action yesterday, either...so who really knows.  And as I mentioned above, the next news that will 'move' gold is tomorrow's job numbers.  But at this stage of the game, the enivitable black swan will glide in from somewhere out in left field...and things will get interesting.
If you're reading this column just west of the dateline, enjoy your upcoming weekend...and I'll see you here on Saturday...and if you live anywhere else on Planet Earth, I'll see you on Friday.


No comments:

Post a Comment