Gold to $2,000, Silver to $60 Without World's Collapse
YESTERDAY IN GOLD AND SILVER
Although gold got sold off ten bucks shortly after the open in Far East trading during their Monday morning… it had gained all of that back by the London open at 8:00 a.m. GMT yesterday morning. From that point, the gold price declined unevenly until its low of the day [$1,354.20 spot], which came at precisely 3:00 p.m. in London… 10:00 a.m. Eastern… which you now know is the London p.m. gold fix. From that low, gold gained about $12 during the next 90 minutes of trading… and then did little for the rest of the New York trading session… both floor and electronic.
All in all, it was a nothing sort of day. I expected little else considering it was the final trading day in the November gold and silver contract… and both months are now in the history books.
The price of silver on Monday was far more 'volatile'… which is, of course, the norm for the most rigged commodity the world has ever known. The price was all over the place in early Far East trading, but reached an interim high at the 8:00 a.m. London open, which is 3:00 a.m. Eastern time. From there [like gold] it got sold off in fits and starts until its New York low of $26.47 spot. Then it rose [once again in fits and starts] to its high of the day [$27.27 spot], which occurred in electronic trading around 3:00 p.m. Eastern time… and that was it for silver on Monday.
Well, the world's reserve currency was pretty easy to analyze. The low came at the London open… and the high of the day came at the London p.m. gold fix… 3:00 a.m. and 10:00 a.m. Eastern respectively… right on the button for both times. Not too many shades of gray here… as it's all pretty much black and white. From the bottom to the top of that 7-hour rally, the dollar gained about 105 basis points… before giving back about 30 points of that going into the close of trading at 5:15 p.m. Eastern time.
So, what were the chances that what happened with the world's reserve currency and the precious metals prices between 3:00 a.m. and 10:00 a.m. Eastern time precisely, were random market events? None at all, dear reader.
As an extension of the above managed markets in the dollar and precious metals… it should come as no surprise that the precious metals shares bottomed at precisely 10:00 a.m… the dollar's high right at the London p.m. gold fix. You could have set your watch by what JPMorgan et al were doing yesterday. I don't know why they didn't take out a front-page ad inThe Wall Street Journal and have a brass band march down Wall Street… but I digress.
Anyway, from that precise low, the stocks managed to climb back into positive territory… almost finishing on their highs… which occurred at 3:45 p.m. in New York yesterday. Anyway, the HUI finished up 0.50%. As both gains and losses were concerned, the gold and silver stocks were a pretty mixed bag yesterday… in both the majors and the juniors.
The last CME Delivery Report for November was issued early on Monday morning… and showed that 16 gold contracts were posted for delivery yesterday, November 29th… the last delivery day for November.
Then, at 10:16 p.m. Eastern time last night, the CME posted the First Day Notice numbers for delivery into the December gold and silver contract. There were 5,016 gold contracts posted for delivery on December first… and it should come as no major surprise that the big New York bullion banks… JPMorgan and HSBC were in the thick of it. They were the big issuers. And they were just about the only issuers… with HSBC delivering 3,000 contracts and JPMorgan delivering 1,996 contracts. All of these deliveries were out of the proprietary [house] trading accounts. Goldman Sachs, Deutsche Bank, Bank of Nova Scotia, JPMorgan [client account]… and Barclays were the big stoppers [receivers]. And, with the exception of Goldman Sachs' and JPMorgan's client accounts, the big stoppers were all trading in their 'house' or proprietary trading accounts.
And I'm not finished with this report yet. Now onwards to silver. What was in this part of the report was a shocker… and I must admit that I don't know what to make of it… but maybe its nothing. However, only 56 silver contracts were posted for delivery tomorrow… and there should have been many thousands. We'll have to see what tomorrow's CME Delivery Report brings.
The CME Delivery Report is well worth spending a few minutes on… and the link is here.
Ted Butler was speculating on the phone to me yesterday that maybe the 6 million ounces of silver that were taken out of the SLV in London last week were meant to cover December deliveries on the Comex in New York. If that's the case, then maybe that explains why there we no deliveries worth mentioning for December 1st… as they're sitting twiddling their thumbs waiting for it. Sure, there's lot of silver sitting on the Comex… but it's either not for sale… and if it is, it's not for sale at a price that the issuing banks are prepared to pay without driving the price to the moon and the stars. We'll see.
Their was a minor amount added to the GLD ETF yesterday. This time it was 48,822 troy ounces of gold. There was no reported change in SLV.
The U.S. Mint had nothing to say for itself yesterday in either gold or silver eagle sales… and we're still hovering just under the 4 million silver eagle sales mark, like we have been for at least a week. Is the mint going to allow that to be broken today… the last day of November? We'll find out soon enough.
There was a reasonable amount of activity at the Comex-approved depositories last Friday… and by the time the day was done, the numbers showed a net increase of 28,645 ounces of silver. The link to all the action was here.
I was underwhelmed by the Commitment of Traders report that was issued yesterday afternoon. It showed an increase in silver's short position by the Commercial traders [bullion banks] of 1,199 contracts… 6.0 million ounces of silver. The net short position in the Commercial category sits at 234.2 million ounces, with the '8 or less' bullion banks short 306.4 million ounces.
In gold, the bullion banks managed to reduce their net short position by a smallish 1,015 contracts… which is basically no change at all. The Commercial net short position sits at 26.4 million ounces, of which the '8 or less' bullion banks are short 28.2 million ounces.
Here's Ted Butler's "Days to Cover Short Position" graph updated for positions held at the close of trading on November 23rd… the date of the current COT report.
¤ CRITICAL READS
I have a rather embarrassingly large number of stories to post today… and I'm going to post them all, as heaven only knows how many more I may have in my column tomorrow. And, as per usual, you're certainly under no obligation to read them all.
Today's first story is from reader Larry Galearis and is posted over at theopinion-maker.org website. The headline reads "The U.S. Economy: Stand by for more worse news". It's only a half-dozen paragraphs, and it's not happy reading… and the link is here.
Here's another even uglier story from reader 'David in California'. It's azerohedge.com offering that's headlined "Smart Money Preparing For Sell Off Like Never Before". The insider selling to buying ratio is now 8,279 to 1. That should tell you all you need to know… and the link to the rest of the story ishere.
Here's a story that showed up as a GATA release late last night. Chris Powell stuck on his own headline which reads "Senate fails to repeal $600 tax-filing requirement". Under the new law, nearly 40 million U.S. businesses would start filing tax forms in 2012 for every vendor that sells them more than $600 in goods. Many Democrats who supported the filing requirement now acknowledge that it would create a paperwork nightmare, but whether to make up for the lost revenue has divided senators who agree it should be repealed. It's my opinion that this bill will be repealed long before the 2012 deadline… as everyone now realizes what a bad idea it truly is. The link to the story is here.
Well the WikiLeaks documents created a firestorm in the diplomatic world. I have four stories about that… all 'borrowed' from Monday's King Report. The first if from the Sunday edition of The Guardian… and is headlined "US embassy cables leak sparks global diplomatic crisis". The second is from yesterday's edition of The New York Times… and that story is headlined "Leaked Cables Offer Raw Look at U.S. Diplomacy". The last two are posted at the German website spiegel.de. The first one calls it "nothing short of a political meltdown for US foreign policy"… and is headlined "The US Diplomatic Leaks: A Superpower's View of the World". The second story is headlined "Orders from Clinton: US Diplomats Told to Spy on Other Countries at United Nations". They show Pax Americana at its ugliest. No surprises for me here.
Washington state reader S.A. had another story about WikiLeaks yesterday. It's a Reuters piece from late yesterday evening. The founder of whistle-blower website WikiLeaks plans to release tens of thousands of internal documents from a major U.S. bank early next year. One can only hope that it will be JPMorgan. The headline of this story reads "WikiLeaks plans to release a U.S. bank's documents"… and the link is here.
Here's a story that was sent to me by Florida reader Donna Badach. It's aBloomberg piece from late last week that's headlined "Hungary Follows Argentina in Pension Fund Ultimatum". Hungary is giving its citizens an ultimatum: move your private-pension fund assets to the state or lose your state pension. They want to use the money to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim. This is effectively a nationalization of private pension funds. I've heard rumours on the Net to the effect that Obama was thinking out loud about the same thing some time back. The link to the story is here.
While everyone is talking about the PIIGS over in Europe… another European country that's sliding closer to the edge is Belgium. There are serious problems between the Dutch-speaking Flemish and the French-speaking Walloons… and one has to wonder how long it might be before this problem becomes serious. I've run a couple of stories on Belgium before. This one is headlined "The Next Sovereign Crisis – Belgium?"… and it's posted over at safehaven.com… and the link is here. I thank reader U.D. for sharing it with us.
Here's an Ambrose Evans-Pritchard offering that should go on your must readlist. It's a piece from yesterday's edition of The Telegraph. The headline reads "Contagion strikes Italy as Ireland bail-out fails to calm markets" The EU-IMF rescue for Ireland has failed to restore confidence in the eurozone debt markets, leading instead to a dramatic surge in bond yields across half the currency bloc. Ireland's Sinn Fein leader Gerry Adams said it was "disgraceful" that the Irish people should be reduced to debt servitude to foreign creditors of reckless banks. He's got that exactly right… and the link is here.
To put this whole ECB/IMF bailout of all of Europe into perspective, here's azerohedge.com story courtesy of 'David in California'. The headline reads "A "Who Is Who" Of Countries About To Fund The IMF's Bail Out Of Europe". This is a study in the absurd… a Rube Goldberg Machine made of paper money of all kinds. The link to the story is here.
And now for all my precious metal stories… of which there are many.
The first was posted on Saturday over at King World News. It's headlined "Richard Russell – Stocks Repeating 1930, Gold Building Base". It's a short blog… only a handful of paragraphs… and the link is here.
Here's a story out of yesterday's edition of Canada's Globe and Mail newspaper that's based out of Toronto. It's a story by columnist Neil Reynolds that bears the headline "Could gold once again be our guide?". It's a quick read… and the link is here.
Reader John Steinke sent me the following gold related story that's posted over at my friend David Tice's website, prudentbear.com. It's a rather longish piece by Martin Hutchinson that's headlined "Renaissance Of The Gold Standard?" But, despite it's length, it is very much worth the read… and the link is here.
Here's another piece on gold that Australian reader Wesley Legrand sent me late last night. It's a posting over at mises.org that's headlined "The Gold Standard Never Dies". It will take less than five minutes of your time to run through this… and the link is here.
I now have four GATA releases for you… as I'm going to post the remaining gold and silver stories this way, as I'm getting crunched for time this morning. The first is headlined "Central bank gold sales equaled return of leased gold". Chris starts out his extensive preamble with this paragraph… "Excerpts in English from GATA consultant Dimitri Speck's recent book, "Geheime Goldpolitik" ["Secret Gold Politics"], which so far has been published only in German, have been posted at the book's Internet site and make fascinating reading. Yes it does, along with all the excellent graphs… some of which I've used [with Dimitri's permission] in this column. Chris Powell's introduction is worth your time as well… and the link to 'all of the above' is here.
Here's a King World News interview headlined "Gold to $2,000, silver to $60 without world's collapse, Agnico CEO Boyd says". The link to Chris Powell's introduction… and the link to KWN… is here.
The third GATA release is headlined "Silver can cure your portfolio, and maybe colds too". It's a story out of the October 17th edition of The Telegraph… and the link to the GATA release and the story, is here.
The last GATA release is a Reuters story from yesterday about IMF gold sales that Chris has headlined "IMF says it sold less gold in October". The link to this rather short story is here.
My last story today is a silver-related blog that was posted late last night over at King World News. The headline reads "Pan American Silver CEO – End Users Having Trouble Getting Silver". The link is here. Of course Geoff Burns didn't mention a word about the silver price manipulation that the CFTC has alluded to… nor the 25 lawsuits currently filed against the perpetrators, JPMorgan/HSBC. If he did, then Pan American would have to actually do something about it themselves… which, in the grand tradition of past CEO Ross Beaty, they would never do.
¤ THE FUNNIES
¤ THE WRAP
Well, considering the orchestrated strength of the dollar yesterday… and the gold and silver prices that went with it… it's obvious that the precious metals are chomping at the bit to move higher. Volume was very heavy… but Monday was the last trading day in the November contract… and the traders were clearing the last of November's business off the boards. Net volume was pretty light in both metals.
I'm sure you remember me talking in the not-to-distant past about the end of the world's economic, financial and monetary system as we know it. Well, that's where we're heading right now. The only way out is to go back on a gold standard of some sort… but I'm sure the world's banks and governments will crash and burn the current system before that ever happens. And we're drawing ever closer to that event with every passing week and month.
As of 5:12 a.m… both gold and silver were in positive territory in London, after struggling a bit in early going in the Far East. Volumes were pretty light, all things considered. Gold's front month is now February… and silver's is March. With November now in the history books, it will be interesting to see if the bullion banks finally let these metals fly to the upside… and I'm sure we'll find that out soon enough.
As of last night's volume report from the CME, there are about 11,000 contracts left to be delivered in December… and 5,200 in silver. Both these numbers will continue to decline as the days pass. There are quite a few people calling for a Commercial Signal Failure in either metal… but those claims have been made just about every major delivery month for the last three or four years… and nothing has happened so far. Will this December be any different? Who knows.
I hope your Tuesday goes well… and I'll see you here tomorrow.