Russian Intelligence Found Gold Market Info 'Very Valuable' FBI Says
Gold didn't do much in either Far East or London trading on Monday. But, about an hour after Comex trading began, a buyer worthy of the name showed up… and gold tacked on about ten bucks in an hour. The top of this rally [$1,263.90 spot] proved to be the high of the day. Then the dealers began to sell, pulled their bids [twice]… and very quickly gold got clocked for almost $30… as gold 'fell' to its low of the day of $1,234.70 spot around 1:15 p.m. in New York. After that, gold didn't do a thing… and closed for close to its low of the day. Volume was pretty heavy.
Silver's pattern was very similar… except it endured three different bouts of 'selling' during the New York session… on its way to its low of the day. Like gold, silver's high was around 10:45 a.m. Eastern time… and its low also came at 1:15 p.m… shortly before Comex trading ended. The New York high was $19.27 spot… and the low was $18.64 spot, a 'trading range' of 63 cents. Silver recovered a bit into the close of electronic trading at 5:15 p.m. Eastern… but it hardly mattered.
There's not a thing in Monday's chart of the world's reserve currency that would indicate that yesterday's pounding was at all currency related. This was a bear raid by the New York bullion banks, pure and simple. However, the dollar's high price tick yesterday occurred at the precise lows for both gold and silver… 1:15 p.m. Eastern time.
Well, the HUI made it over the 500 mark for a few hours yesterday… but that was it. However, considering how badly that 'da boyz' beat the living snot out of the gold and silver prices yesterday… I consider the HUI's loss of only 1.12% to be a win for the good guys. I'd like to think that the buyers of gold equities are starting to wise up to the fact that JPMorgan et al pull these stunts regularly… and now aren't as easily frightened off as they used to be. But it could also have been 'da boyz' buying the shares to sell later when they really want the HUI to drop. I know that both Eric Sprott and John Embry of Sprott Asset Management in Toronto are of the opinion that that's what they do at times… and I'm in that camp as well. We'll find out soon enough.
The CME's Daily Delivery report for Monday showed that 72 gold and 11 silver contracts were posted for delivery on Wednesday. The link to all the 'action' ishere. There were no reported changes in either GLD or SLV yesterday. But over at Switzerland's Zürcher Kantonalbank last week, they reported adding another 24,982 ounces of gold… and 541,614 troy ounces of silver.
As Ted Butler mentioned on the phone yesterday, the dichotomy between the SLV [which has been declining for the last month]… and the ZKB ETF for silver… couldn't be more pronounced. The ZKB silver ETF is adding silver virtually every week… the SLV is showing a net withdrawal of about 1.6 million ounces in the last 30 days… and is probably owed a big chunk of silver as well. As always, I thank Karl Loeb for those numbers.
The U.S. Mint had report on Monday. They reported selling a very tiny 1,000 ounces worth of gold in the gold eagle program… and an even smaller 500 24-k gold buffaloes. However, they redeemed themselves with silver eagle sales… reporting that an additional 467,500 silver eagles were sold. This brings June sales figures in silver eagles up to 3,001,000 for the month so far. I would expect that we might hear from the mint one more time before month end. But, on the other hand, these numbers could be it. We'll find out soon enough.
The Comex-approved depositories were very busy on Friday. Their latest update on Monday showed activity in all warehouses… both in and out. When the smoke cleared, they reported receiving a net 547,748 ounces of silver last Friday. As I said, there was a lot of action… and the link to that is here.
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It's real a chore trying to edit down a mountain of weekend stories to a manageable number. I have nine today, dear reader… I hope that's manageable? Three of these have to do with the BIS… the Bank for International Settlements… a virtually top secret organization that very few people know anything about.
But the first item today is a gold-related story from GATA. In the wee hours of Monday morning, Chris Powell, GATA's secretary treasurer, issued this release headlined "Why central banks do care about gold: the connection to interest rates". It's really two stories in one… and for those of you who are new to the price management antics of the bullion banks… this is certainly worth spending time on. It's posted over at gata.org… and the link is here.
The second gold-related story is another GATA dispatch… and is the first of three stories on the B.I.S… this one is from a November 1983 article about the organization written by Edward Jay Epstein for Harper's magazine. What would be worth reading in a 27-year old story, you ask? Well, dear reader, you'll find out. The article is three pages long… and is a must read from one end to the other… as is the preamble to the story by GATA's Chris Powell. The headline reads "1983 magazine profile shows BIS constantly intervening in gold market in secret"… and the link is here.
From that story in 1983, to this Bloomberg article dated yesterday, comes this very short piece about the latest annual report from the BIS. The BIS asks the questions that have to be asked… like, how long is this insanity in the financial markets going to last… and how soon are they going to be ended before the whole thing comes crashing down? That's a good question, dear reader, and sounds suspiciously like the ones that I [and others] have been asking for the last few years. The headline to this 2-minute read states "BIS Says It's Time to Consider an End to Measures". I thank reader Scott Pluschau for sending it… and the link is here.
It's my opinion that this report from the BIS is a tacit admission that we are only one financial and monetary disaster away from total collapse of everything as we know it.
My last item on the BIS is a blog by Eric King posted over at his website… King World News. Unlike me, Eric King has actually spent some time face down in the BIS report itself… and he feels exactly the same way. This is a short, but must read article, as well. It's headlined "Secretive and Powerful BIS Annual Report Released"… and the link is here.
Following hard on the heels of the BIS annual report, is this op-ed piece by Paul Krugman that appeared in the Sunday edition of The New York Times. Krugman lays his marker down with this statement… "We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense." The headline reads "The Third Depression"… and I thank Scott Pluschau for sending it along. It's a short read… and the link is here.
Below is graph sent to me on Sunday by Nick Laird over at sharelnyx.com. I've run this graph before… but this one is updated as of last Friday. It shows 17 global indices with a 41% weighting to the USA. There's a reason why the BIS and Krugman are raising the alarm… and this graph shows why.
Here's a silver-related story from Bloomberg of all places… and I thank Russian reader Alex Lvov for sharing it with us. The headline states that "Silver in Best Streak Since 1980 as Economy No Hurdle"… It's a fairly long, but very positive, read… and the link is here.
And, in another absolutely must read GATA dispatch from late last night, comes this headline… "Russian intelligence found gold market info 'very valuable' FBI says". Russian spies in the United States whose arrest was announced Monday, conveyed information about the gold market last year that the Russian security service considered "very valuable"… and forwarded it to the Russian finance ministry and ministry of economic development, according to the criminal complaint filed by the FBI with U.S. District Court in New York. The gold angle in the story was highlighted in reporting Monday night by the Economic Policy Journal, based in Washington, D.C. The link is here.
My last story today is an Ambrose Evans-Pritchard offering that was in the Sunday edition of The Telegraph out of London. The headline reads "RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve". RBS is the Royal Bank of Scotland. As the recoveries start to stall in the US and Europe… with echoes of mid-1931… bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve. I know the speech all too well, dear reader. This story deserves your undivided attention… and the link is here.
As I mentioned earlier, yesterday's New York action in both gold and silver was an obvious bear raid to stop the upward momentum of the gold price that began last week after last Monday's hammering.
Nothing has changed in the over-all world economic, financial and monetary situation… except that the outcome is now becoming even more well defined… with the BIS and Krugman both stating the obvious. It's inflate… or die a horrible death by a deflationary collapse. It's the Keynesians vs. the Hayeks of the world… and no matter which side wins, gold will [sooner or later] become king.
As far as this financial reform package is concerned, I note the following comment over at jessescrossroadscafe.blogspot.com that "gold and silver were exempted from proprietary trading restrictions for the big banks in the 'financial reform' legislation." And to make matters worse [at least for the moment]… it appears that this financial regulation package is now in jeopardy. With the death of Democrat Robert Byrd… Senator Russell Feingold said on Monday that he will not vote to advance the financial-reform bill, denying his fellow Democrats the 60th vote they need to clear a final hurdle in Congress. This is a Reutersstory that I 'borrowed' from this morning's edition of the King Report… and I suggest you run through it. The headline to this one-paragraph story reads "Feingold says won't vote to advance Wall Street bill"… and the link is here.
I note that [as of 5:02 a.m. Eastern time] both gold and silver were under pressure during Far East trading earlier today… and this pressure has intensified now that London has opened. Volume in both metals… especially in gold… is pretty chunky for this time of day. Platinum and palladium are getting whacked pretty good, as well. However, I also note that the dollar is in a 'rally mode'… and I'm sure that 'da boyz' are using that as a cover to do their dirty work this time… as the dollar's action for the last many months has never been a good indicator of what the precious metal prices are going to do.
With the last day of trading in the June contract being today… and first day notice for delivery into the July silver contract on Wednesday… I'm expecting both metals to be really 'volatile' for the next couple of days… and we'll find out the New York bullion banks meaning of the word 'volatile' when the Comex opens this morning.
I hope your Tuesday goes well… and I'll see you here tomorrow.