Bundesbank Joins Fed in Demanding Secrecy For Gold Swaps
YESTERDAY IN GOLD AND SILVER
It was a very quiet day for gold on Wednesday. The high price tick was around $1,398 spot in very late morning trading in London… about 6:45 a.m. Eastern time. From that point, gold declined to its New York low [$1,381.20 spot] exactly four hours later… then didn't do much for the rest of the Wednesday trading session. Nothing to see here, folks.
Silver's price was pretty flat until late morning in Hong Kong… and then it began to rise… with its high of the day [around $28.85 spot] coming shortly after twelve noon in London. Silver's spike low [$28.09 spot] in New York came at the same moment as gold's low… 10:45 a.m. Eastern time. From that low, silver rose to $28.65 by half-past lunchtime on the east coast before getting sold off about two bits into the close of electronic trading at 5:15 p.m. Volatility such as this is to be expected in the most rigged market in the world.
The world's reserve currency hit its high of the day [around 81.35] shortly after trading began in the Far East on Wednesday morning and… except for a 35 point bounce between 9:00 a.m. and 11:20 a.m. Eastern time… it was all down hill from there into the dollar's low [80.57] at exactly half-past lunchtime in New York. Checking the dollar action against the gold price action, it's safe to say that there was barely any co-relation at all… as gold and silver's New York highs and lows bore little relationship to the dollar's price movements.
The gold stocks bottomed at 10:15 a.m… about fifteen minutes before the spike lows in both metals. Then rose to gold's New York high at 12:15 p.m. From that point the stocks more or less traded sideways for the rest of the day. The HUI finished up 1.29% on the day. I'm sure that if the Dow hadn't done as well as it did, the HUI would have probably finished in negative territory.
With silver up again, the silver stocks were [once again] the stars of the day.
Nick Laird over at sharelynx.com must have read my mind, because he provided his famous "Silver Seven Stock Index" graph… and you can see that we are rapidly approaching the old highs of early 2008. This is the reason that my own stock portfolio is 60/40 silver/gold.
I can't let Wednesday's general equity market action pass without commenting on the miracle rally in the Dow on Wednesday. There was a big POMO from the Fed yesterday… some say as much as $8 billion… and some of it obviously ended up in the futures market… and the ensuing short-covering rally fed on itself… as the Dow had broken through [and closed below] the 50-day moving average on Tuesday. Technically, the equity market was set up for a drop of biblical proportions… but that was not allowed to happen. This was all courtesy of the President's Working Group… aka the Plunge Protection Team. Note all the 'saves' at the 11,000 level lately… plus all the 'saves' at the 10,000 level in late August. It's my opinion that the Dow is worth less than ten cents on the dollar.
There are no markets any more… only interventions.
Yesterday's CME Delivery report showed that an additional 924 gold contracts were posted for delivery on Friday. The big issuers were Bank of Nova Scotia… and JPMorgan in both their client and proprietary accounts. The big stopper [receiver] was Deutsche Bank for its proprietary [house] account.
There was finally some decent deliveries in silver. 600 contracts were posted for delivery on Friday. The big issuer was JPMorgan in its house account… with the big stoppers being Bank of Nova Scotia for its house account… and JPMorgan for its client account. The action is certainly worth checking out… and the link is here.
There were some big additions in both the GLD and SLV ETFs yesterday. GLD added 234,340 ounces… and SLV added a rather chunky 1,759,557 troy ounces of silver. I'm sure that SLV is still owed quite a bit more than that.
The U.S. Mint reported that 2,000 one-ounce gold eagles were sold on December 1st. There was nothing reported for silver eagles.
There wasn't a lot of activity at the Comex-approved depositories on the last day of November. They showed a very small withdrawal of 11,137 ounces. The link to that 'action' ishere.
¤ CRITICAL READS
Today's first story is from yesterday's edition of The Wall Street Journal… and is posted as a GATA release because it's subscriber protected. The first paragraph reads… "The Federal Reserve, forced by Congress to release details on more than a trillion dollars' worth of loans made during the financial crisis, disclosed the breadth of its lending to U.S. businesses desperate to raise cash and the surprising degree to which it supported struggling foreign banks in the worst days of 2008 and 2009." Chris Powell's headline reads "Fed loaned hundreds of billions to foreign banks and companies"… and the link is here.
Here's another story from yesterday's Wall Street Journal on the same subject. This one was sent to me by Washington state reader S.A. The headline of the article reads "A Glimpse at the Socialist Senator Who Fought the Fed". It's a story about Senator Bernie Sanders… but also deservedly mentions Congressmen Grayson and Paul. The link to the story is here.
Washington state reader S.A. has one more piece on this Federal Reserve story. It's posted over at Bloomberg… and is headlined "Fed Names Recipients of $3.3 Trillion in Crisis Aid"… and the link is here.
The next item is a posting from zerohedge.com that was sent to me by reader 'David in California'. The flight from domestic equity funds in the U.S.A. is unrelenting. The headline reads "30 Weeks of Consecutive Equity Fund Outflows". I suggest you find the time to run through this… as the graph alone is worth the trip. The link is here.
David has another zerohedge.com posting for us today. It's U.S. real estate related… and it's as ugly as my worst nightmares could imagine. The headline reads "Q3 Foreclosure Sales Volume Plunges As Discount On Foreclosed Homes Hits 5 Year High". It's depressing, but not surprising… and I suggest you spend a few minutes reading through it… and the link is here.
Last week I ran a video clip of British politician Nigel Farage ripping the European parliament a new one. He's at it again, as he makes it abundantly clear that the money issue is what it always has been, a core question of democracy. There are two interviews posted in this GATA release… and if you have the time, they are worth listening to. The headline reads "Nigel Farage: The money struggle is the struggle against totalitarianism". Chris Powell's preamble is worth your time as well. The link to all is here.
My last four items today are all precious metals related. The first one is another GATA release bearing the headline "Flash: Bundesbank joins Fed in demanding secrecy for gold swaps". The Bundesbank brushed off 13 specific questions posed by the German journalist Lars Schall, whom GATA had encouraged to pose the questions. The first of the questions was: "Does the Bundesbank have gold swap arrangements with the United States/Federal Reserve?". The answer to that question… along with the other 12 questions… is linked here.
In a Bloomberg story filed from Beijing earlier this morning is this headline that reads "China Gold Imports Soar Almost Five fold on Inflation". Hidden in the story, is this paragraph… "Gold imports this year by India have already exceeded 2009 levels as consumers boost jewelry purchases, the World Gold Council said Nov. 17. Imports totaled 624 metric tons by the end of the third quarter, compared with 559 tons in all of 2009, according to the London-based industry group today." I thank reader U.D. for sending this along very late last night. In my opinion, it's a must read… and the link is here.
Here's an Interview With CFTC Commissioner Bart Chilton. It was sent to me by reader Chris Jansel early yesterday morning. Silver analyst Ted Butler also mentioned it in his letter to subscribers yesterday… and I'm just going to steal his intro and post the link… "An important force for the advancement of action on position limits seems to be forming in the person of CFTC Commissioner Bart Chilton. This is extremely encouraging. On Sunday, fellow subscriber, Dr. Dave Janda, conducted a very informative and constructive interview with Commissioner Chilton on his radio program. Ihighly recommend you have a listen"… and the link is here.
Lastly today, is a little something from James Turk. Reflecting on the great recent performances of gold and silver, Free Gold Money Report editor James Turk writes that the precious metals increasingly are in strong hands and aren't likely to be sold for national currencies at any price… but rather more likely to be spent in themselves. That is, writes Turk, the founder of GoldMoney and consultant to GATA, the metals will have become the premier currencies. Turk's commentary is headlined "The Precious Metals Power Higher". The link to this must read commentary is here.
¤ THE WRAP
Volume was pretty light in both gold and silver yesterday… at least light compared to the last couple of weeks. It appears that an elevated level of volume in Comex gold and silver trading is now the new norm.
December open interest continues to shrink rather rapidly in both metals… as contracts are delivered, closed out, or switched to future months. I suppose there still could be delivery issues in silver this month, but it appears that the CME and JPMorgan have avoided it for the moment.
Tuesday's big up day for both gold and silver showed a rise in open interest in both metals… which is what I expected. However, I was pleasantly surprised that the increases were quite small. When I pointed this out to Ted yesterday, he mentioned that Monday's Commitment of Traders report showed that the '4 or less' traders in both gold and silver had not increased their short positions during the prior week… and that's why silver had such a nice gain. Ted also pointed out that this lack of shorting by the 'big 4' is proof positive that the markets are managed by them. When they're not lurking about going short against all longs, the prices for both metals move smartly higher. One can only imagine what kind of price moves are in store for the markets when the bullion banks actually decide to cover… if they don't get over run first… or default.
In Far East trading today, both silver and gold prices ended in the plus column. But the moment that London opened at 8:00 a.m. local time… 3:00 a.m. Eastern, both metals came under a bit of selling pressure. Volume is very light… and the dollar isn't doing much either.
I'm not sure what will happen when New York opens this morning. Will the Dow have another big up day? It all depends if the futures market is spun higher as we approach the opening of trading.
But, I'm still optimistic about both metals… especially silver. Ted Butler's commentary to his private clients yesterday was headlined "Hitting on All Cylinders"… and that pretty much sums up the silver situation as I see it as well.