Is Thailand's Central Bank buying gold? Gold Dinar Sells Out in Malaysia. Silver soars in early Tuesday trading in London. John Hathaway says that the bull market in gold has barely started… and the truth about gold and silver ETFs.
YESTERDAY IN GOLD AND SILVER
I wouldn't read a whole heck of a lot into yesterday's gold price activity on any market yesterday… even New York. Even though the dollar swooned, it didn't make one bit of difference to the gold traders on Monday. Both the high and low in Monday's trading action came during the New York session… with the low [$1,240.10] spot coming at 8:35 a.m. shortly after the Comex open… and the high [$1,429.90 spot] was minutes before 10:30 a.m. Eastern time. I wasn't entirely surprised to see the U.S. bullion banks turn the gold price back at the $1,250 spot level once again. This has been a line in the sand for the last week or so.
Here's the New York spot gold chart. It shows Monday's high spike very clearly. The above chart does not.
Silver was more 'volatile' yesterday. Like gold, its price didn't do much of anything in Far East and London trading. But at 8:45 a.m. in New York.. silver's price also took off to the upside… only to be stopped dead in its tracks at $20.25 spot… which, like gold, also occurred minutes before 10:30 a.m. Eastern time. An attempt was made to get silver back below the $20 spot price before the end of New York trading… and that attempt failed. Silver has not closed above that number since the middle of March 2008. One has to wonder if the highs from 18 months ago will fall as well. Time will tell.
As I mentioned in my discussion on gold, the world's reserve currency did a face plant during the Monday trading session. It gapped down at the beginning of Far East trading on Sunday evening New York time… stabilized a bit between 2 and 8:15 a.m. Eastern time… and then declined to its low of the day at 12 noon in New York… and almost closed on its low. The dollar lost around 108 basis points… or 1.3%. Gold should have been up about $15 on the day… but not-for-profit selling made sure that gold closed with a small loss on the day. I wonder who would be selling gold into a falling dollar scenario?
The HUI's high of the day came around the 10:30 a.m. price spike in gold… and then, along with the gold price, retreated into slightly negative territory… and finished with a small loss of 0.38% on the day.
Well, the CME Delivery Report on Monday showed that nothing of consequence was posted for delivery tomorrow… zero gold and seven silver contracts. Nothing to see here, folks.
The U.S. Mint filed a sales report today. They indicated that they'd sold another 12,500 ounces in their gold eagle program… and another 70,000 silver eagles… and nothing in the one-ounce 24-K gold buffaloes. Month-to-date, there have been 30,500 ounces of gold sold in the gold eagle program, 3,500 one-ounce 24-K gold buffaloes… and 390,000 silver eagles. These are pretty pathetic numbers, dear reader. And, to go along with these low number of silver eagles, comes this story courtesy of the good folks over at numismaster.com. They report that the United States Mint has ended rationing of silver eagle coins… at least until the next shortage… and the link to that story is here. It's worth the read.
The Comex-approved depositories reported that they added a net 349,747 troy ounces of silver into their warehouses on Friday. The link to that action is here.
Along with that story on silver eagle sales a few paragraph back, I have a lot of other stories for you today. The first is courtesy of Florida reader Donna Badach. It's a posting from last Friday over at cnbc.com… and the headline reads "EXCLUSIVE: Outlook Gloomy at Secret Billionaire Meeting". For 25 years, legendary Wall Street strategist Byron Wien, now with The Blackstone Group, has held summer meetings with high net worth individuals to get their outlook on the global economy and investing. This year’s group, totaling fifty individuals and including more than 10 billionaires, was decidedly pessimistic on the U.S. economy, investment opportunities and the Obama administration. The link to the story is here.
On Sunday afternoon in Basel, Switzerland… the world’s top bank regulators agreed on far-reaching new rules intended to make the global banking industry safer and protect international economies from future financial disasters. Where have we heard that sort of promise before? Reader Roy Stephens was the first through the door with a story from The New York Times linked here… but 'David from California' sent me the zerohedge.com story on this… and Tyler Durden [bless his heart] rips 'da Boyz from Basel' a new one. The link to this must read article is headlined "Basel III Summary, and the Fed's Endorsement of 20x+ Leverage" is here.
The next item is an Ambrose Evans-Pritchard story from The Telegraph that was sent to me courtesy of reader Roy Stephens. The neo-colonial rush for global farmland has gone exponential since the food scare of 2007-2008. The headline reads "The backlash begins against the world land grab". This is a very worthwhile piece… and I suggest you run through it… and the link is here.
As you are aware, I've posted many stories regarding real estate… and lately it's mostly about commercial real estate. Here's a Bloomberg posting sent to me by Australian reader, Wesley Legrand. Monthly losses on commercial property debt bundled into bonds have doubled since April as loan specialists gave up trying to restructure smaller mortgages, Deutsche Bank AG data show. It's ugly… as all real estate stories have been for the last three years. The headline reads "Commercial Property Losses Mount Amid Debt Triage"… and the link ishere.
The next item today is a GATA release headlined "Zero Hedge covers pervasive market manipulation every day" Imbedded in the release is a zerohedge.comstory headlined "First HFT Casualty As Finra Fines Trillium $1 Million For Quote Stuffing And General Market Manipulation (Again)". The story [and Chris Powell's preamble] are a bit of a read, but worth it in my opinion… and the link is here.
While we're on the subject of zerohedge.com… here's another eye-opener from that website. The headline reads "Market Liquidity Update: 112 Stocks Now Account For Half The Day's Trading Volume". The top 20 stocks account for 26% of all domestic volumes, and the first 1,029 stocks are responsible for 90% of all volume, meaning the remaining 17,349 account for just 10% of all dollar traded. It's not a long read… and the chart [click to enlarge] is a stunner. It's amust read… and I thank reader U.D. for sending it along… and the link is here.
The rest of my offerings today are all precious metals related. The first is a story posted over a week ago in the Malaysian newspaper The Star. It was sent to me by Netherlands reader Victor de Waal… and the headline reads "Dinar sold out in Kelantan"… Kelantan Gold Trade (KGT) Sdn Bhd that issues the gold dinar and the silver dirham, said about RM1.5mil worth of dinar and RM1mil worth of dirham had been sold since it was introduced on Aug 12th. The link ishere.
Here's a Financial Times blog from yesterday headlined "Thailand: Who's Buying Gold?". It's contained in a GATA release headlined "Is the Bank of Thailand buying gold on the sly?". I'm linking the GATA release, as the FT story requires a [free] subscription… and the link to this must read article is here.
My next offering is your long read of the day. It was sent to me by reader Randall Reinwasser… and the street.com headline reads "The Truth About Gold and Silver ETFs". I found this 7-page essay to be very excellent… and confirms [at least to me] why I won't own either the GLD or SLV ETFs. This is a must read commentary from one end to the other… and the link is here.
Here's a silver story that's posted over at the mineweb.com that was sent to me in the wee hours of this morning by California reader Ray Wiberg. It was filed yesterday from Mumbai and bears the headline "In India, silver tops the charts". Though the price of silver has scaled to dizzying heights, investment demand in India is at the helm of the price fever. As the country celebrates the Ganesh festival, silver ornaments and coins fly off the rack. It's an interesting view on silver from a part of the world we don't hear much from, so I urge you to read it… and the link is here.
The next piece is a posting over at kitco.com. It's a short synopsis of what Frank Holmes had to say at Kitco Metals eConference yesterday. I know Frank quite well and he's one of the brightest guys I know… and he's also a very good friend of GATA. It will take you about two minutes to run through this very worthwhile read that's headlined "Holmes does Not See A 'Bubble' In Gold"… and the link is here.
Lastly today is another piece posted over at kitco.com… and, it too, is a synopsis of a speech given at their eConference yesterday. This one is by John Hathaway over at Tocqueville Asset Management… and when he's talking… I'm listening. This is a must read as well… and the headline states "Hathaway Says Gold Bull Run At Midway Point". The link is here.
Well, I thought that was the last story until Eric King over at King World Newsslipped the following James Turk commentary into my in-box around 5:45 a.m. Eastern time. Turk stated in an interview earlier this morning that "We are very close to the upside explosion." From your lips, to God's ears, James! It's headlined "Gold and Silver Will Lead the Way"… and the link to this short must read piece is here.
Well, if you look at the New York Spot gold chart at the top, you'll see that gold did try to break out above $1,250… but was turned back. Silver also ran into the same not-for-profit seller. One would suspect, on the face of it, that it was probably JPMorgan.
Trading volume in gold on Monday was on the lighter side… and moderate in silver.
Needless to say, I've been watching Tuesday's price moves in the Far East and early London trading with great interest since 6:00 p.m. Eastern time last night. Both metals were on a bit of a tear… and showed signs of going parabolic starting at 8:00 a.m. London time… but both got capped shortly after London opened for business. And, without doubt, it was the major U.S. bullion banks [who have offices in London as well as New York] who stepped into the market and put an end to the fun.
It will be interesting to see if we break out to new all-time highs today in both silver and gold… or are these early morning price spikes in London the high ticks for the day? Obviously, as I write this at 5:57 a.m. Eastern time, it's too soon to say.
After watching every twitch in the gold and silver price for the last ten years, I'm still skeptical… and still camped out in Missouri. But, with all these supposed changes in the works, I am very hopeful… but when you're up against white collar criminals such as these… a healthy dose of skepticism doesn't hurt. I'd love to be wildly bullish… but nothing is worse, or more embarrassing, than being wrong at the top of your voice… and there's this little matter of credibility as well. The fact that I'm 'all in' should tell you a lot. Besides which, I'm just as happy to let James Turk [and others] stick their necks out.
I'm sure hopeful we'll break out to much higher prices in both metals… but I'm also wary of the fact that 'da boyz' are still out there and have some pretty monstrous short positions in both metals. I'd love to see these bastards get over run with these full short positions on… but, like I've said before… if it does happen, it will be for the very first time.
As I put this report to bed for another day, I see that gold is up $8.50 the ounce, with silver up 29 cents. These are big moves for this time of day… especially for silver. I'd love to read something into it, but I won't. But I am looking forward to New York trading today… and what I will find when I turn my computer on later this morning.
So pour yourself a big mug of coffee and watch to see what kind of show JPMorgan et al put on for us when trading begins in New York.
See you on Wednesday.