GLD ETF Adds Another 684,832 Troy Ounces

If you needed further proof that the gold and silver markets are made in New York trading and nowhere else… you got it on Thursday.  As I mentioned in my closing commentary in yesterday's column, volume in both precious metals had been microscopic by mid-morning in London… and I expected any serious price action to occur during Comex hours.

Well… it did.

But, having said that, the gold chart clearly shows that the high water mark yesterday was at the London open… at just under $1,225 spot.  Then… about 8 hours and $10 later… [at precisely 11:30 a.m. in New York] with gold down to about $1,215… the rug got pulled and gold dropped to its low of the day [$1,200.10 spot] at precisely 12:30 p.m. Eastern time.  'Normal' trading action resumed at that point, but the price wasn't allowed to recover much… as volume dropped to next to nothing into the close of electronic trading at 5:15 p.m.

But, as usual, it was silver that really got it in the neck.  This should be no surprise, because 'da boyz' are trying to extricate themselves from the grotesque short positions that they hold in this metal.  Yesterday was just another day in that process.

Silver's high was also at the London open… but the real selling began in New York about 9:15 a.m… and you can see how the price got 'walked down' in three very discernable steps.  Silver's low price of the day was at precisely 12:30 p.m… the same as gold's low price.

As I've said many times in the past… you can set your watch by these guys.  Here's the N.Y. gold and silver charts to show the precision of their timing.  I'm sure they co-ordinate by telephone… as I can't believe they'd be stupid enough to leave an e-mail record of what they're doing… and when they're doing it.

If you, dear reader, don't feel that this is organized market intervention… then I urge you to stop reading my daily commentary from now on… and start reading the daily commentary linked here.

And, for once, the dollar 'rallied' as gold 'fell'.  The dollar's low tick at 86.30 was at exactly 2:00 a.m… and the high tick at precisely 12:30 p.m. in New York was 87.27 cents… gold and silver's lows of the day… to the minute!  It's been weeks or months since there's been any areal co-ordinated price movement between gold and the dollar… and I found this particular one to be more than coincidental.  How about you?

The gold stocks pretty much followed the gold price action yesterday… and the HUI only finished down 1.73%… which isn't bad, all things considered.

The CME's Daily Delivery report showed that 110 gold and 5 silver contracts were posted for delivery on Monday.  Newedge USA was the big issuer in gold… and the big stoppers were all the 'usual suspects'.  The link to the action is here.

The GLD ETF took in another huge amount of gold yesterday.  This time it was 684,832 troy ounces… 21.3 metric tonnes.  A strange occurrence considering how badly gold got smacked yesterday.  I sure would like to know what's going on behind the scenes that you and I don't know about.  And, as per usual, the SLV showed no changes.

There was no sales report from the U.S. Mint yesterday, either.  There arerumours out there that the mint is out of blanks for both gold and silver eagles at the moment… and we'll find out within the next few days how much truth there is to that.

Over at the Comex-approved depositories, they reported a huge draw-down on their silver stocks.  This time it was 2,168,151 troy ounces of the stuff.  The big withdrawal was from Brink's, Inc… and the link to Wednesday's action is here.

The Commitment of Traders Report is due out this afternoon at 3:30 p.m. [sharp] Eastern time.  If you follow this sort of thing, the link is here.  Both Ted Butler and I will have a few things to say about it in Saturday's commentary.

My first gold-related story today is one I found over at Kitco yesterday afternoon.  It's posted at the busrep.co.za website out of South Africa.  The headline reads "S.A. gold coin output jumps 50 percent to 25-year high".  It's not a particularly long story… and I consider it well worth the read.  The link ishere.

Well, the Australian government's planned tax on mine profits in that country has claimed another major casualty… Xstrata Plc.  The Bloomberg headline reads "Xstrata Halts Spending on A$6.6 Billion of Projects".  This story is a must read… and I thank Dr. Jim Willie over at goldenjackass.com for sending it to me… and the link is here.

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Here's another story from Dr. Willie…. and it's one that's posted over atyahoo.com.  As he said in his covering e-mail… "Like worker tax revenue and trucker miles logged, it's impossible to doctor and falsify this statistic.  Of course, all this during an economic recovery."  The headline reads "American Electric Power to keep 10 units off line most of the year".  The recession has dampened demand for electricity, especially from industrial customers. Electricity demand fell for the past two years, the first time that's happened since 1949.  It's a short story… and very much worth the read… and the link is here.

Here's another commentary from goldmoney.com founder, James Turk.  This one is headlined "Germans are Voting with Their Pocketbook".  The first paragraph reads "Icelanders voted in a referendum to address their debt problem.  Germans have a problem too, but they are voting with their pocketbook.  They're dumping the euro and buying physical gold, the demand for which is soaring in Germany."  This is, of course, one of the big reasons why all the mints world-wide [the U.S. Mint included] have been producing gold and silver bullion coins as fast as they can make them.  This story is only a small handful of paragraphs… and definitely worth your time.  The link is here.

The following story that was sent to me by Roy Stephens in the wee hours of this morning.  It was posted late last night over at The Telegraph in London.  It has to do with Israeli raid on those Turkish-flagged relief ships bound for Gaza.  This story is headlined "Gaza flotilla: Turkey accused of behaving like Iran by Israel".  I would suggest, dear reader, that there's a lot of truth to this story, as relations between Turkey and Israel [and Turkey and the U.S. for that matter] had been deteriorating long before this incident.  I would suggest, dear reader, that you peruse this article carefully… and the link is here.

Every day without fail I spend about five minutes at the spaceweather.comwebsite, just to keep tabs on what's happening outside earth's atmosphere… and I found this rather interesting item posted there on Wednesday.  Moonlighting engineers at NASA's Jet Propulsion Laboratory in Pasadena, California have helped build an extraordinary Rube Goldberg contraption for the rock band OK Go.  A reader sent me this video about a week ago, and I thought it was as phony as a $3 bill.  This, as it turns out, was not the case.  Rock 'n' roll may never be the same.  The video is embedded in a nasa.gov blog.  The article is worth the read… and the video is worth watching… and the link is here.  Enjoy… and don't forget to turn up your speakers!

The fact is that government produces nothing.  It merely extracts wealth from those who produce it and redirects that wealth into areas where those who produce it would not place it if given a choice in the matter. – Bill Buckler, The Privateer, May 30, 2010

In my opinion, it was another day of managed market… the dollar, gold and silver… and, in case you missed it, the Dow was headed down towards 10,000 again yesterday and got 'saved' at 12:30 p.m… which was the top for the dollar and the bottom in the precious metals.  Another coincidence?  Not bloody likely!  There are no markets anymore… only interventions.

At 8:30 a.m. this morning the jobs numbers will be reported.  The bullion banks didn't hit the gold price when those numbers were released in May… let's see if they do it today.  This number is supposed to be a secret… but this time it probably isn't… as "Obama apparently leaked the coming Employment Report once again when he told an audience at Carnegie Mellon to ‘expect a strong employment report’ on Friday."  The very short story on this is headlined "Watch Out Shorts: Obama Just Leaked Friday's Jobs Report"… and is posted atbusinessinsider.com.  The link is here.  Both the quote and story are courtesy of Thursday's King Report.

Thursday's drop in the silver price took it well below its 50-day moving average once again.  I would suspect that all the longs that were placed during the mini-rally of the last week or so got blown out of their positions yesterday.  Here's the 1-year silver chart for your viewing pleasure.

Gold's 50-day moving average [at $1,171] is considerably below its current spot price.

At this moment [5:32 a.m. Eastern time] neither gold nor silver are doing much of anything… but are both down a bit.  The dollar has been moribund since its 12:30 p.m. high in New York yesterday afternoon.  And, as I pointed out yesterday, gold and silver's prices are always set in New York… and today will prove that once again.  Gold's volume at the moment is slightly higher than yesterday… but not by a lot.  Silver's volume is actually less than it was this time yesterday.  I didn't think that was possible.  With these low volume levels, it doesn't take much buying or selling to drive the price up or down by a noticeable amount… as we discovered yesterday.

I will be at the Joe Martin's World Resource Investment Conference in Vancouver, B.C. for the next four days.  I will have a report on Saturday and Tuesday morning as per usual… although I can't guarantee how much will be in them… or whether they will be filed in a timely manner.  I need a bit of a break… and with all due respect, dear reader, it will have to be at your expense.  My apologies in advance.

Enjoy your weekend… and I'll see you right here on Saturday… sometime.