I Buy Gold. I Don't Know What Else to Buy: Marc Faber

Gold didn't do a whole heck of a lot all through Far East trading, but around the London a.m. gold fix at 10:30 a.m. local time… 5:30 a.m. Eastern time… gold finally caught a bit of a bid. Then, about 15 minutes before the Comex opened, gold accelerated to the upside… hitting $1,245 spot.  And, except for a spike to its high of the day [$1,252.50 spot] at half past lunchtime in New York, that's where gold closed at 5:15 p.m. Eastern time.  It was obvious, at least to me, that there was a not-for-profit seller lurking about to make sure that gold didn't close about $1,250 spot.

Silver, once again, hoed its own row yesterday.  Between the Far East open on Thursday morning and precisely 9:00 a.m. in London [4:00 a.m. in New York], silver fell about 15 cents.  That proved to be its absolute low of the day.  Then, for the next four hours, silver gained all that back.  Then, like gold, silver really took off to the upside just minutes after 8:00 a.m. in New York.  Silver hit its high of the day of $18.90 spot around 9:15 a.m. Eastern time… before the usual not-for-profit seller showed up to end the fun… and, from that point, silver spent the next five hours falling back to $18.70 spot… and it closed the day around that price.

The dollar hit a high of 86.52 shortly after 3:00 a.m Eastern time… then lost 85 basis points in less than three hours.  From that point, it wandered around the 85.70 mark for the rest of the day.  There's not a thing in this chart that suggests any correlation between the dollar's face plant… and gold and silver's big gains of the day.

With most of the big gains in gold and silver already in by the time that the equity market opened at 9:30 a.m. yesterday morning, the HUI opened up… and stayed up for the rest of the day… closing the trading session with a gain of 2.72%.  Most of the silver stocks did pretty well for themselves.

The CME's Delivery Report yesterday showed that 86 gold and 2 silver contracts were posted for delivery on Monday.  Virtually all the gold action involved the 'usual suspects'… and the link to that is here.

The GLD ETF added another 58,691 ounces to its holdings yesterday.  The SLV ETF added nothing once again.  During June so far, GLD has added about 1.3 million ounces… and SLV holdings have declined about 1.6 million ounces.  I wonder how much silver SLV is owed that they just can't get?  And, after yesterday's silver action, I'm sure that SLV is owed a lot more.

The U.S. Mint had another report yesterday.  They used another 9,500 ounces of gold in their gold eagle bullion coin program… they sold another 2,500 24-k gold buffaloes… plus another 136,500 silver eagles as well.  Month-to-date, the mint has sold 1,861,000 silver eagles… 27,500 24-k gold buffaloes… and they've used 103,500 ounces of gold in their gold eagle bullion coin program.  Now that the mint is selling fractional values in gold eagles again… I'm just using the total ounces consumed for this program, rather than the total number of coins.

The Comex-approved depositories showed a rather large decline on Wednesday, as 1,288,098 troy ounces of silver were withdrawn… with all of it coming from two depositories… Scotia Mocatta and HSBC, USA.  The link to the action is here.

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Well, my first gold-related story today is a must watch video posted over atcnbc.com.  This one's imbedded in a covering story at zerohedge.com.  The covering story gives an excellent executive summary of the interview… and is worth reading… just as much as the video is worth watching.  Marc Faber says "I Buy Gold… I don't know what else to buy."  That's good advice… and I thank Russian reader Alex Lvov for finding this story and sharing it with us.  The link is here.

My only other gold-related story was a GATA release from last night.  It's an item from the Wednesday edition of the Financial Times in London.  Do you think that gold is not a currency… and doesn't pay interest? In Vietnam it is… and does.  The headline reads "Vietnam's Gold Habit Weighs Down Dong"… and it's amust read from one end to the other as well… and the link is here.

Ambrose Evans-Pritchard has been rather prolific this week… and he had another column in The Telegraph last night that's certainly worth your time.  It appears that Fitch Ratings has warned that it may take massive asset purchases by the European Central Bank to prevent Europe's sovereign debt crisis escalating out of control.  Money printing… Troubled Asset Relief Program [TARP]… debt monetization… call it what you will, but it all spells currency debasement in one form or another.  The headline reads "ECB must buy 'hundred of billions' of bonds to tame Europe's debt crisis".  I thank reader Roy Stephens for sending it along… and the link is here.

Talking about printing money out of thin air… James Turk, founder of GoldMoney, has a new [and very short] commentary for us today that's posted over atfgmr.com.  The title reads "Banks are lending again".  If you don't spend more than 15 seconds looking at the graph, the whole story will take about a minute of your time… and it's worth it.  The link is here.

My next story is all about real estate… and is courtesy of reader Scott Pluschau.  It's a piece posted over at money.cnn.com.  Most borrowers who have had their mortgages modified through a government-sponsored program will re-default within 12 months, according to a report released Wednesday.  This is absolutely no surprise to me whatsoever, as I knew it was doomed from the start.  The headline reads "75% of modified home loans will default"… and the link ishere.

Here's a first-rate piece of journalism out of the July/August edition of The Atlantic Magazine. In today's stock exchanges, strong programs prey on weak ones, humans are hard to find, and the SEC struggles to keep up.  This is the world of computer algorithms and High Frequency Trading.  It's written in plain English for us dummies… and explains the positives and the negatives of the modern trading platforms housed in the computers over at Citigroup.  The headline reads "Monsters in the Market"… and I thank reader U.D. for sharing it with us.  It's a five minute read which is definitely worth your time… and the link is here.

I have three stories on Iran… but I'm only going to put one of them up today… and the other two will be in my Saturday column.  Roy Stephens sent me this one yesterday.  It's a piece out of The Telegraph once again… and bears the headline "Iran raises stakes by announcing four new nuclear reactors".  The announcement appeared to mark the death knell for diplomatic efforts to supply the country's only functioning nuclear plant with fuel processed in France and Russia.  It's not a long read… and I urge you to give it the time it deserves… as the other two stories on Iran that I have for you tomorrow, are directly related to this one.  The link is here.

Well, this next video [thanks to reader G.G.] is the Tuesday edition of The Daily Show with Jon Stewart.  I just love this guy… and he [and his writers] rip Obama a new one.  This is a hoot from one end to the other… and the further he gets into the routine, the funnier [and sadder] it gets.  His guest that follows his comedy routine is worth listening to as well.  It's in four parts… which run consecutively… with tiny adverts interspaced.  Anyway, here are the links to the show.  If you live in Canada… please click here.  If you live anywhere else on Planet Earth… you need to click here.  Enjoy!!!  I'm posting his equally funny Wednesday show in this column tomorrow.

I was quite pleased to see both gold and silver move higher yesterday… especially silver.  Gold made an attempt to break through $1,250 spot… but got stopped in its tracks.  I was reading commentary by Dan Norcini over atjsmineset.com yesterday… and he pointed out that this was gold's fourth attempt since early May to break above $1,250 spot.  Will it succeed or fail?  Only 'da boyz' know that for sure… and we shouldn't have long to wait to find out.  Here's the 1-year gold chart that makes Dan's point.

Today at 3:30 p.m. sharp… Eastern time… the new Commitment of Traders report will be posted at the CFTC's website.  Open interest in both gold and silver has been climbing steadily since the prior Tuesday cut-off… so it will be very interesting to see what the numbers show.  Both Ted Butler and myself will have something to say about them in this column tomorrow.  The link to the new COT report, when it's released, is linked here.

As of 5:08 a.m. Eastern time, all was [very] calm in Far East and early London trading this morning.  Volume in both gold and silver is very light once again… especially in silver.  And, as you already know dear reader, only what happens during the New York trading session really matters.  Since today is Friday, I'm ready for any eventuality… especially after that amazing 'recovery' in the Dow late yesterday afternoon.

I hope your Friday goes well… and that you have a good weekend.

See you on Saturday.