How Blatantly Obvious Can You Get?

Well, at least I don't have to spend too much time on what happened in Far East and early London trading on Thursday... as everything of consequence happened in New York. The top for gold [around $1,243 spot] was pretty much high noon in London... and the price was already starting to slide a little as the Comex opened for trading. The price continued to slide into the London p.m. gold fix which was moments after 10:00 a.m. Eastern time... and then things really got serious to the downside. JPMorgan et al pulled their bids, and the tech funds found themselves selling into a vacuum... and down went the price.

The selling continued right through the end of Comex trading and into the electronic market... with the low of the day [$1,195.40 spot] coming a few minutes after 4:00 p.m. Eastern time... and gold closed below the $1,200 mark at $1,199.40 spot. From its high to its low... gold was smacked for almost 50 bucks!

Silver followed virtually the same price path as gold... except the worst of the selling was over at precisely 12:30 p.m. in New York... with the low price of the day set at precisely 3:00 p.m. Eastern time... two and a half hours later. Silver finished close to its low of the day, which was $17.71 spot... and the high [around $18.65 spot] was set in pre-New York trading. From it's high to its low... silver was slammed for just under a buck.

The world's reserve currency topped out around 3:25 a.m. Eastern time on Thursday... with the bottom occurring around 4:00 p.m. in New York... a bit over twelve hours later... dropping 175 basis points over that time... the biggest one-day drop I can remember.

The falling dollar didn't make any difference to either gold or silver yesterday. Normally, a rapidly falling dollar would result in a corresponding rise in commodity prices. This was not allowed to happen yesterday... and in the face of this dichotomy... JPMorgan et al did their thing in full view of the entire world. Like the headline to today's column states... how blatantly obvious can you get?

With the gold price down 3.46% yesterday [4% from the high to the low]... the shares only sold off 4.57%. Under normal circumstances, with gold down $50... the shares could have easily got hit for 8-10%... and it didn't happen. A lot of the decline in gold price shares occurred during the vicious sell-off in the Dow early yesterday morning... and that could have accounted for a lot of the loses as well... so look on the bright side!

As Ted Butler said... in a rather scathing note to private clients... "It was strictly a COMEX affair, involving paper contracts and not physical metal. There was no silver or gold-specific news reported to account for the declines." There was massive trading volume in both metals... and a lot of key moving averages [especially the 50-day moving averages] were taken out... and both metals closed below those averages. There was a lot of tech fund liquidation yesterday... and until next Friday's COT report is published, we won't know how much that was.

Talking about the Commitment of Traders report. Since today is Friday, the new one will be published at 3:30 p.m. Eastern time... sharp... and the link to that, when it's posted, is here.

The CME Delivery Report for July 1st showed that 3 gold and 672 silver contracts were posted for delivery on Tuesday. The big issuers and stoppers in silver were JPMorgan and the Bank of Nova Scotia. All of the action is linked here.

The GLD ETF reported a small withdrawal yesterday... 39,122 ounces. The SLV ETF had an even bigger withdrawal yesterday. This time it was 685,639 ounces. The U.S. Mint had no report. The Comex-approved depositories showed a lot of activity on Wednesday... and by the time the smoke had cleared, they had received a net 449,647 troy ounces of silver. The link to that action is here.

I have two charts for you today... the 1-year gold and the 1-year silver charts.

How much lower in price JPMorgan et al are going to be able to drop these prices is anyone's guess. As I've mentioned before, the total open interest [especially in gold] is quite high... so they may be able to do more damage. The bullion banks are trying to cover as many shorts as they can... so we'll see what they can do from here.

Today's first story is courtesy of Washington state reader, S.A. It's a Bloomberg piece bearing the headline "Gillard Reaches Deal With Miners on Australian Tax". Australian Prime Minister Julia Gillard reached an agreement with mining companies on a new resources tax, ending a dispute that cost her predecessor Kevin Rudd his job. It appears that the new tax will apply to iron ore, coal, oil and gas. I didn't see the words gold or silver mentioned anywhere... and you can read all about it here.

The next item is about the falling out between Israel and Turkey. This AFP story is posted over at the france24.com website and bears the headline "Israel and Turkey in secret talks to ease flotilla crisis". It appears that Turkish and Israeli ministers met secretly in Brussels to seek ways of mending fences amid a deep crisis over a deadly raid on Gaza-bound aid ships last month, a Turkish official said Thursday. Obviously this was supposed to be hush-hush... but it didn't turn out that way. I thank reader Roy Stephens for sending it along... and the link is here.

While we're talking about Turkey... here's a story about their neighbour to the southeast... Iran. I can tell you right now that is a must read from one end to the other... especially for my American readers. A little history lesson from this country may help you understand the current situation in over there. The story is posted over at the Asia Times Online website... and the headline reads "BP in the Gulf - the Persian Gulf". Once again I thank Roy Stephens for digging up this wonderful story. It's not very long... but you should give it your undivided attention... and the link is here.

From Iran... to poor Al Gore. Not only did we find out that all this climate change stuff he's been touting is pure fiction... but he and his wife split the sheets after 40 years... and now he's being accused of sexual assault. Tsk tsk... it's all so inconvenient. I again thank Roy Stephens for this story which is posted at The Telegraph in London... and is headlined "Al Gore faces new police probe over sex assault claims"... and the link is here.

This last item is your big listen/read of the day... and unless you have all the time in the world right now... some of this listening and reading will stretch into the weekend. Yesterday I closed my column with a King World News interview of Jim Rickards of Omnis, Inc. I must admit that I didn't listen to much of it before I posted it... and it was only after I hit the 'send' button that I finally listened to the whole thing. Well, if you didn't listen to it yesterday, you can put it on your 'must listen' list right now... along with another big essay he wrote.

I sent all of the above to GATA's secretary treasurer, Chris Powell yesterday... and he wrote an enormous and must read preamble to both the interview... and Rickards' presentation to the 2009 Unrestricted Warfare Symposium. Both the interview and the presentation are linked in this GATA release.

Without doubt, this is one of the most important stories that I have ever presented in this column... and when I say they're a must listen/read... I'm not kidding, dear reader. Chris Powell's headline to the whole thing reads "Jim Rickards: Gold is money and probably manipulated for its deadly power". So blow the froth off a cool one and click here.

So long as the people do not care to exercise their freedom, those who wish to tyrannize will do so; for tyrants are active and ardent, and will devote themselves in the name of any number of gods, religious and otherwise, to put shackles upon sleeping men. - Voltaire, 1764

Well, I'm not going to belabour what happened yesterday, dear reader. I think you pretty much understand the routine by now. As Ted Butler also said yesterday... "Aside from wondering what the CFTC does all day, the only question is how close we have come to the exhaustion of selling by paper long holders on margin. The answer will only be known in hindsight, but considering the rate of liquidation today it should come soon... if it's not already here." Ted Butler's website is linked here.

As of this writing... 5:31 a.m. Eastern time... both gold and silver are doing pretty well for themselves. Gold is up a hair over $10... and silver is up 30 cents in early London trading. Volume in both metals is already pretty healthy for this time of day.

But, as you know, what happens in the Far East and London trading means squat... as the real action starts the moment that the Comex opens in New York and 'da boyz' sit down in front of the computer screens... so all eyes should be on that.

I wish all my American readers a happy and safe Independence Day holiday... and I'll see you here on Saturday morning.

God Bless America!