Global Gold Hedge Book Falls 2 Million Ounces in Q3

YESTERDAY IN GOLD AND SILVER

Gold was up five bucks right at the Far East open on Monday morning, but ran into stiff opposition within a few minutes.  An interim top was set at 2:30 p.m. Hong Kong time… and from there it was all down hill until minutes after the London close.  This was gold's low price of the day which Kitco reported as $1,347.60 spot.


From that point, the strong selling virtually disappeared… and a rally [not unopposed] began that ran gold up to its high price of the day at $1,368.90 spot shortly before 4:00 p.m. in electronic trading in New York.

Silver went ballistic the moment trading began in the Far East on Monday morning… but it, too, ran into the same not-for-profit seller.  At one point, I saw silver up 53 cents from its Friday close of $27.35 spot… with that point occurring the same time as gold's interim peak in Far East trading… shortly after 3:00 p.m. Hong Kong time.

All in all, the silver graph is almost a carbon copy of gold's graph… with the New York low [$27.10 spot] occurring at the same moment as gold's low.  The subsequent rally took silver up to its high of the day [$27.90 spot]… and it closed close to that.

One can only imagine what the prices of both metals would have done if they'd been left to their own devices yesterday.

The world's reserve currency gapped down about 25 points right at the open of Monday trading… with its absolute low occurring shortly at 2:30 a.m. New York time.  This was also gold's high tick of the day at 3:30 p.m. in Hong Kong.  Then the dollar didn't do much until 5:00 a.m. Eastern, when a rally [that could justify the name] got under way.  The top of the rally was in around 1:30 p.m. Eastern.  From the absolute bottom to the absolute top… the dollar was up about 85 basis points.  From that high… and right into the close… the dollar lost another 25 basis points.

It would be naïve to believe that there was any connection between the dollar rally and the gold price action on Monday… but we are meant to think there was.  I believe that the dollar rally was contrived to hide the sell-down in the gold and silver prices earlier in the day.  If one believes that there was a solid connection between the dollar and the precious metals prices yesterday, please explain [relative to the dollar price action] the gold rally between 11:00 a.m. and 5:00 p.m. New York time yesterday.

The gold stocks mirrored the gold price action almost to the tick yesterday.  As I write this paragraph, I'm looking at the HUI and the New York Spot Gold chart… and it's almost impossible to tell them apart.  The HUI finished up 1.54% on the day.

Once again, it was the silver stocks that put on the show on Monday… as the silver price continued to outperform its more expensive cousin… and the gold/silver ratio continues to narrow.

The CME Delivery report on Monday showed that there were no gold deliveries posted for tomorrow, but JPMorgan issued 41 silver contracts from their client accounts.  The link to that 'action' is here.

A lot of action in the two ETFs yesterday.  GLD showed a withdrawal of 136,711 ounces of gold… and SLV received 879,910 ounces of silver.

For the week that was, Switzerland's Zürcher Kantonalbank reported an increase of 21,571 ounces of gold in their gold ETF… and a withdrawal of 197,760 ounces of silver from their silver ETF.  I thank Carl Loeb for those numbers.

The U.S. Mint had no sales report yesterday.

Over at the Comex-approved depositories, they reported that a net 500,936 ounces of silver were withdrawn from their warehouses on Friday… and the link to that action is here.

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Debt Delenda Est

It was a pretty busy weekend for stories… and I have quite a few for you to pick and chose from.

Today's first offering is from reader Robert Bentley.  One of the best writers on the Internet by far is Bill Bonner.  Here's a short piece he wrote on the subject of debt… all kinds of debt.  I've seen few people that can cut to the chase in such few words on such a big subject as Bonner can.  This 3-minute read, posted over at lewrockwell.com, is very much worth your time… and is headlined "Debt Delenda Est"… and the link is here.

Walker's World: The Price of Ireland

My next item is from reader Roy Stephens… and the first paragraph reads as follows:  "It cannot be reported as fact, but rumor and logic suggest that a highly secret group of German officials is secluded in a discreet Frankfurt office suite and trying to draft a contingency plan for a return to the deutsche mark."  The story is from UPI's Editor Emeritus, Martin Walker… and was filed from Brussels yesterday.  The headline reads "Walker's World: The Price of Ireland"… and the link is here.

Europe's Never-ending Crisis: Can the Euro Still Be Saved?

Here's Roy Stephens second offering of the day… and it's a bit of a read.  It was posted yesterday over at the German website spiegel.de… and is headlined "Europe's Never-ending Crisis: Can the Euro Still Be Saved?"  The link is here.

China Allows Yuan to Start Trading Against Ruble

This next piece was a GATA release last night.  It's a Bloomberg article headlined "China Allows Yuan to Start Trading Against Ruble".  The link is here.

Top banks face $100 billion Basel shortfall: report

The following story comes courtesy of reader Scott Pluschau.  It's a piece that was posted on Sunday over at finance.yahoo.com.  The first paragraph reads as follows:  "The new Basel III banking rules will leave the biggest U.S. banks short of between $100 billion and $150 billion in equity capital, with 90 per cent of the shortfall concentrated in the top six banks.  Without even checking the last OCC derivatives report,  the six banks in question hold more than 90% of all derivatives held by U.S. banks.  The headline reads "Top banks face $100 billion Basel shortfall: report"… and it's a handful of short paragraphs.  The link ishere.

Consuelo Mack interview with David Einhorn

Reader Charlie Orr sent me a rather longish Consuelo Mack interview with David Einhorn of Greenlight Capital that's posted over at pragcap.com.  This was the first time I'd laid eyes on this guy… or heard him speak… and he's a real sharp cookie.  I've listened to most of the interview… and he talks about gold quite a bit… but other things as well.  The interview runs about half a hour… and is well worth your time.  The link is here.

A cautionary tale for gold and silver buyers

Pretty much all of the remaining stories are gold or silver related and… like the stories above… you can pick and choose.

The first story is from the Saturday edition of the Los Angeles Times… and bears the headline "A cautionary tale for gold and silver buyers".  Some Monex customers allege that they were misled and even lied to by the Newport Beach firm and lost thousands of dollars on their precious metal investments, despite the bull market in gold and silver.  The paragraph about Monex's margin account agreement is a real eye-opener.  The link to this story, which is definitely worth your time, is here.

Silver Sales to Jump as Demand Gains, Perth Mint Says

The next story is a Bloomberg piece that was sent to me by reader Donna Badach.  Silver-coin sales will climb as investors seek to protect their wealth from weakening currencies, according to the Perth Mint, producer of about 6 percent of the world’s gold bullion.  The headline reads "Silver Sales to Jump as Demand Gains, Perth Mint Says"… and the link is here.

Soros Gold Bubble Expanding as ETP Holdings Increase

Here's another Bloomberg story… and the first person through the door with this one was Russian reader Alex Lvov in the wee hours of Monday morning.  It showed up as a GATA release later in the day bearing Chris Powell's headline of "Bloomberg can't note gold's rise without disparaging it".  The actual headline reads "Soros Gold Bubble Expanding as ETP Holdings Increase".  As you read the story, you can decide which headline is more applicable… and the link is here.

Gold, Silver to Beat Farm Commodities, SocGen Says

Reader 'David in California' has another Bloomberg piece on the precious metals.  This headline reads "Gold, Silver to Beat Farm Commodities, SocGen Says".  Palladium, gold and silver will extend their rallies next year and investors should remain overweight in precious metals, which will outperform farm products including sugar, according to Société Générale SA.  The link ishere.

Global gold hedge book falls further 2 million ounces in Q3

David also provides the next story, which is a posting from over atmineweb.com.  The headline reads "Global gold hedge book falls further 2 million ounces in Q3".  The graph is worth the trip all by itself… and note that AngloGold paid $1,300/ounce to get out of their hedge book!!!  I'm sure they put most of their hedges on between $300-400/ounce… just like the brain trust over at Barrick.  This story is an absolute must read… and the link is here.

A Head-and-Shoulders in Gold

Australian reader Wesley Legrand sent me this rather interesting and somewhat disquieting chart.  Wesley's comment was that "it looks like someone is trying to paint A Head-and-Shoulders in Gold".  We shall see.

James Turk – Developing Banking Crisis Bullish for Gold

Eric King of King World News fame sent me a couple of short blogs yesterday.  The first one is Headlined "James Turk – Developing Banking Crisis Bullish for Gold"… and the link is here.

George Soros – Conditions Ideal for Gold to Rise

The second one is headlined "George Soros – Conditions Ideal for Gold to Rise"… and the link to that one is here.

Take all the metal you can, but it won't break Morgan Chase

The next item for your reading pleasure is a GATA release from yesterday afternoon that's headlined "Take all the metal you can, but it won't break Morgan Chase".  This is an absolute must read from one end to the other… and the link is here.

A Chemist Explains Why Gold Beat Out Lithium, Osmium, Einsteinium…

Here's a really interesting piece that reader John Steinke sent me yesterday.  This was an article posted over at National Public Radio last Friday… and it bears the headline "A Chemist Explains Why Gold Beat Out Lithium, Osmium, Einsteinium…".  As a curiosity piece, it's worth your time… and the link is here.

Ted Butler is interviewed about silver by Chris Martenson

Lastly today, I want to re-post a story that I ran on Saturday.  I should have posted it with the rest of the day's stories, but didn't.  This time it's imbedded in a GATA release headlined "Ted Butler is interviewed about silver by Chris Martenson".  The interview runs about 33 minutes… and with that kind of time, Ted has the opportunity to lay out how his 25 years of work getting to the bottom of the silver price suppression scheme… and how it has finally all come to fruition.  If you didn't have the time for it on the weekend, you should make the time now… and the link is here.

¤ THE FUNNIES

¤ THE WRAP

Gold's volume on Monday wasn't overly heavy… at least compared to other days.  Net of all roll-overs it was around the 180,000 contract mark.  Silver's net volume was around 74,000 contracts.

Based on the price action yesterday, I'd guess that open interest in both silver and gold will be down a reasonable amount when the CME posts the final figures later this morning.  Whatever numbers are reported will be in this Friday's Commitment of Traders report.  Actually, because of the Thanksgiving holiday in the U.S. on Thursday, there may not be a COT report until Monday.

Today is also options expiry… and it will be interesting to see what the bullion banks do in light of that fact.  I'll also be interested to see what happens on Friday, as everything has to be squared away in the futures market on that day.  Then there's the last trading day for the November contract on Monday the 29th… with First Day Notice for delivery into the December contract for both gold and silver on Tuesday the 30th… and that should be quite a sight to see as well.

In Far East trading earlier today, both metals were under selling pressure the moment that the Globex trading system opened in the Far East.  This lasted for six hours… with the low coming at 1:00 p.m. Hong Kong time.  Since then, silver and gold have been climbing slowly and unsteadily… and this trading pattern has continued into very early London trading at 9:55 a.m. London time… as I hit the 'send' button.  Volume is average… whatever that means these days.

The next five business days will be an education.  If we get past that without prices blowing sky high, then all bets will be off starting on December 1st.

I'm still 'all in'.

See you on Wednesday.