GLD Adds Another 296,693 Ounces of Gold to its Stockpile

Gold was under pressure most of Thursday's trading session… and both rally attempts [one in London… and the other in New York after the London p.m. gold fix at 10:00 a.m. Eastern time] ran into not-for-profit sellers.  Gold's high price for Thursday was pretty much its closing price on Wednesday in New York… which was $1,233.10 spot.

The low of $1,214.30 spot [when you look at the graph below] looked like it occurred in New York electronic trading about 3:45 p.m. Eastern time… but, in actual fact, if you look at the New York trading graph on its own… the low was at the London p.m. gold fix at 10:00 a.m. Eastern.

Silver blazed its own trail yesterday… with its low [somewhere below $17.90 spot] coming in early London trading.  From there it gained back some of its Thursday's losses… but it really took off into the London p.m. gold fix… and then hit its high of the day [$18.46 spot] about 11:30 a.m. in New York.  It got sold off from that point, but still managed to finish in positive territory for the day.

During the Thursday trading day, the dollar lost a full cent.  Obviously there was absolutely no-co-relation between the gold price and the dollar yesterday.  Will there ever be again?  Who knows… but there certainly hasn't been one for quite a while.  Here's the chart.

Despite the huge run-up in the U.S. equity markets yesterday, I'm still rather surprised that the gold stocks did as well as they did… considering that gold got clocked for $15.40 spot.  I have no idea what to make of it… and anything I say about it would be pure conjecture on my part.  The HUI finished up 0.85%.

The CME Delivery Report showed that 57 gold and 9 silver contracts were posted for delivery on Monday.  The link to yesterday's action is here.  The GLD ETF keeps on truckin'… adding another 244,563 ounces yesterday.  The SLV ETF showed no changes.  The U.S. Mint had no report… and the Comex-approved depositories showed that another 296,693 troy ounces of gold were added to their collective inventories yesterday.

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I have another pile of stories for you today… but I'll start off with a couple of charts that Nick Laird over at sharelynx.com sent my yesterday.  The first graph shows that the 1970-1980 bull market resulted in a price increase of 2,403% from bottom to top.  The second graph shows the current bull market that started back in 1999.  So far, gold is up 387% in this bull run… which is obviously far from over.

I'll get the non-gold stories out of the way first… but even these are worth your time… or I wouldn't include them.  The first one is from yesterday's edition of The Telegraph in London… and is courtesy of reader Roy Stephens.  Angela Merkel, the German Chancellor, and Nicolas Sarkozy, the French President, co-signed a letter urging the European Commission to bring forward proposals for tougher rules on financial speculation – including a ban on naked short selling.  The headline reads "German-Franco call for EU ban on short selling".  The story is not overly long… and the link is here.

Here's Roy's second offering of the day for us.  It's also from The Telegraph… and the headline says it all… "Barack Obama warns Iran of world's 'unmistakable message' on nuclear programme".  Iranian President Mahmoud Ahmadinejad was underwhelmed… and the link to the story is here.

The next item is a Bloomberg piece courtesy of reader Danny Cheung.  George Soros is now saying what I have been going on about for the last five years… "The collapse of the financial system as we know it is real, and the crisis is far from over."  Where have you been, George?  The headline reads… "Soros Says ‘We Have Just Entered Act II’ of Crisis"… and the link to this must read piece ishere.

The next seven stories are all gold-related in one form or another.  The first is a rather unhappy one that was sent to me by several readers.  Florida reader Charles Dubelier ended up with the short straw on this one.  At least 160 people are dead in Nigeria [mostly innocent villagers] after being exposed to gold ore containing lethal levels of lead.  It's a yahoo.com posting that was filed from Yargalma, Nigeria.  The headline reads "Gold, and lead, bring illness and death in Nigeria"… and the link to this very unhappy, but worthwhile story, ishere.

The next gold-related item was sent to me by reader Ken Metcalfe.  It's a posting over at mineweb.com.   Anecdotal evidence suggests [that] some major U.S. asset managers prefer to hold gold outside the U.S. for fear of confiscation in an echo of Roosevelt's 1933 decree.  I'm not entirely convinced that this will ever happen again, dear reader… but for those of us that keep looking for black bears in dark rooms that aren't there… this is a must read.  The headline states "U.S. asset managers worried Obama could confiscate gold"… and the link ishere.

I see that even China is trying to talk gold down.  If there was ever a signal to buy gold and silver with both hands… this may be it.  It's a Reuters story filed from Beijing… and posted at the forexyard.com website.  The headline reads "China says gold market too small for asset allocation".  If that's the case… how come they secretly built up their gold reserves to 1,054 tonnes… and are probably still accumulating the stuff?  Just asking!  It's two short paragraphs… and the link is here.

Reader Brad Robertson sent me today's next offering.  It's a posting from over at theaureport.com that bears the headline "Rob McEwen: Looking Ahead of the Curve".  I've met Rob a couple of times… and he's nobody's fool.  The interview is a bit on the longish side… but it's better than being too short.  I consider it a must read… and the link is here.

Here's a GATA dispatch that's more than worth your time.  Having moved toCNBC Asia, former Bloomberg TV Asia journalist Bernie Lo yesterday injected GATA into a discussion of gold on CNBC's "Squawk Box" program.  The interview is definitely worth watching… and the link is here.

Jonathan Kosares and Randall Strauss of Centennial Precious Metals in Denver have updated Centennial's annual analysis of the success of buying gold during its summer doldrums, in June and July, a practice that, over the last 39 years, has averaged a gain of 7.5% by the end of the year… and over the last nine years has averaged a gain of more than 11% by the end of the year. The Kosares and Strauss analysis is headlined "Getting Gold: Seasonal Price Trends are Favorable for Summer Purchases".  It's another must read… and the link is here.

For my last offering today, here is Part II of the street.com's interview with Sprott Asset Management's CEO, Eric Sprott.  The headline pretty much sums up Eric's thinking… not only in this interview… but also in my private conversations with him.  It's also a must read… and I thank Scott Pluschau for sharing it with us.  The title reads "Gold: The Only Asset Worth Owning"… and the link ishere.

Slowly, but surely, the gold price has been heading lower since the big run-up on Monday.  In the short term, it could do anything.  Yesterday I pointed out one of the possible negative scenarios for gold.  So far its worked out that way for one whole day… and we'll have to wait and see if this continues or not.  Nothing would surprise me… and I watch the precious metals indexes like a hawk.  They've been up the last two days in a row… despite what the metals [and the rest of the equity markets] are doing.  Is this good or bad?  Don't know.

Both Ted and I are waiting for the silver price to blow up.  Ted heard rumoursyesterday that it will take the Central Fund of Canada the better part of five or six months to get all the silver they purchased on their latest offering last month.  If that's the case, then the world is effectively out of silver right now.  I'm sure that's the reason why the SLV is still running miles behind the GLD ETF… as gold continues to pour into it… regardless of the price action.  You would be perfectly within you right, dear reader, to ask… what is going on out here?  The answer from me is… I don't know.  But that's why I'm 'all in'.

Whether or not we experience a 'summer doldrums' in the precious metals this year, is still open to debate.  If we do have one… it will be courtesy of the bullion banks… and nothing to do with supply and demand fundamentals in the real world.

Volume in Far East and early London trading is once again very light this Friday at 4:51 a.m. Eastern time.  Both metals are up a tad as of this writing… but, as you know, that can change dramatically once New York opens.  There are now some serious roll-overs from the July to the September contract in the silver arena… and this will continue until the end of June… as July is another big delivery month for silver.

When I was at the Vancouver conference this past weekend, I stopped by to listen to Louis James in his workshop session on Monday.  After that was over, we broke some bread at the Pan Pacific Hotel… and had a chat.  No flies on this guy.  Louis is the editor of Casey Research's flagship publication, theInternational Speculator… and I urge you to seriously consider subscribing.

I also had a brief word or two with Jeff Clark… the editor of the monthly Casey's Gold and Resource Report… another publication worth your while.

I hope you have a great weekend… and I'll see you tomorrow.