Quantitative Easing – The Next Chapter


Well, what excitement there was at the London open on Tuesday morning, vanished shortly after the London a.m. gold fix was in at 10:30 a.m. local time. From there, gold began a slow decline that lasted until the FOMC meeting ended at 2:15 p.m. Eastern.

The news from that caused gold to spike up over $20 during the next few hours… and the bullion banks had to throw a fair amount of paper at it to prevent it from blasting through $1,300 spot. As it was, gold hit a new high price [$1,292.00 spot] during electronic trading in New York yesterday.

Tuesday's silver price action looked very similar to gold's… with silver blasting through $21 shortly before 4:00 p.m. yesterday afternoon… and it took a bit of work for 'da boyz' to get the price back under the $21 mark before electronic trading closed at 5:15 p.m. in New York, but they did it.

Well, the story yesterday was all about the world's reserve currency's reaction to the news from the FOMC meeting yesterday afternoon… and it did not take the news well. The dollar fell off a cliff… and the precious metals prices responded accordingly. The dollar weakness is also continuing into Wednesday trading in the Far East as I write this paragraph. The dollar graph below tells all.

The precious metal shares, which had been in negative territory all day, responded as expected to the jump in gold and silver prices…and the HUI managed to close up 0.61% by the end of Tuesday trading.

Well, the CME Delivery Report was a big surprise yesterday. Only 30 gold Comex contracts were posted for delivery on Thursday… but a real chunky 484 silver contracts were also posted for delivery on the same day. Except for HSBC USA, all the big bullion bank names were there as issuers and stoppers. JPMorgan received a whopping 339 silver contracts in their proprietary trading account. The report is well worth looking at… and the link is here.

And the silver surprises just kept on coming yesterday. The GLD ETF reported a smallish withdrawal of 9,771 ounces, which was probably a fee payment of some sort… but, over at the SLV ETF, they reported receiving a monstrous 4,109,397 troy ounces of silver! I'm pretty sure that's a one-day record receipt for that ETF.

Nick Laird over at sharelynx.com was kind enough to send me the updated graph for the SLV ETF. You'll note that the 128 tonnes of silver they took in yesterday, barely registers as an up-tick on this chart.

I reported on last week's happenings over at the Zürcher Kantonalbank in Switzerland in my column yesterday… but that information was added about two hours after it was first posted, so some of you early birds may have missed that… so here it is again. They reported adding 23,860 ounces of gold and 809,074 ounces of silver to their respective gold and silver ETFs last week.

The U.S. Mint had a small sales report yesterday. They sold another 10,000 ounces of gold in their gold eagle program, bringing it up to 53,000 ounces for September so far. We are miles ahead of August's poor sales numbers in gold eagles already.

Over at the Comex-approved depositories, they reported a net decline in their silver inventories on Monday. This time it was 553,438 troy ounces. The link to that activity is here.