Gold's on the Cusp of a Parabolic Move Up: John Embry

The gold price had another relatively quiet trading day on Thursday. The price didn't do much until shortly after the lunch hour had begun in London... and from there it got sold off to its low of the day [$1,159.10 spot] in New York... which occurred [according to the NY Spot Gold [Bid] chart] at the London p.m. gold fix at 10:00 a.m. Eastern time. From that low, gold rose in fits and starts until it reached its high of the day [$1,170.00 spot] at precisely 1:30 p.m... which was the close of Comex trading. From there it traded sideways for the rest of electronic trading in New York.

Silver's price path was the same as gold's for most of the day... with the low [$17.46 spot] coming at 8:30 a.m... shortly after Comex trading began. Silver's high [$17.78 spot] came in a small price spike right at the close of electronic trading at 5:15 p.m in New York on Thursday afternoon... only to be reversed [with interest] fourty-five minutes later when Far East trading began Friday morning in the Far East.

From the open of Far East trading on Thursday morning... right up until 9:30 a.m. Eastern time in New York... the world's reserve currency fell about 65 basis points. From there it traded sideways for the rest of the day. This had little affect on the gold price, as is usually the case when the bullion banks are doing their thing... like they were yesterday from 7:00 a.m. to 10:00 a.m. Eastern time.

It was difficult to tell whether the precious metals shares were following the gold price action... or the Dow price action. But when the smoke had cleared, the HUI had finished up 0.39% on the day.

The CME Delivery Report filed late Thursday evening was a surprise... as they posted deliveries for the August contract a day early... as I was under the impression that today [Friday] was first notice day... not Thursday. In gold, JPMorgan was the big issuer with 3,685 contracts, which represented about 99.5% of all contracts issued for delivery. The big stopper was HSBC USA with 2,064 contracts... with the balance spread out over several dozen other companies. Having these two particular bullion banks show up as the major issuers in this report should be no surprise to anyone... as these two companies are the ringleaders in the gold and silver price suppression scheme... and hold about 99% of all gold derivatives held by U.S. banks... at least according to the last OCC report.

In silver, the CME Delivery Report showed that 4 silver contracts were issued for delivery today in the July contract... plus 1 silver contract to be delivered on August 2nd.

The link to all this rather astonishing action is here... and I urge you to spend some time looking it over.

There were no changes reported in either GLD or SLV... and no sales reported by the U.S. Mint. But over at the Comex-approved depositories, they reported a net silver withdrawal of 318,038 troy ounces on Wednesday. The link to that action is here.

My first two stories today are courtesy of reader Scott Pluschau. The first is a story posted over at money.cnn.com. The headline reads "Cities threaten to cut 500,000 jobs". Cash-strapped cities and counties have been cutting jobs to cope with massive budget shortfalls -- and that tally could edge up to nearly 500,000 if Congress doesn't step up to help. It's not a long read... and the link is here.

The second item from Scott is real estate related... and is an AP story posted over at finance.yahoo.com. It bears the headline "Foreclosure activity up across most US metro areas". Households across a majority of large U.S. cities received more foreclosure warnings in the first six months of this year than in the first half of 2009, new data shows. The trend is the latest sign that the nation's foreclosure crisis is worsening as homeowners battling high unemployment, slow job growth and an uneven rebound in home prices continue to fall behind on their mortgage payments.

As I've said since the beginning of 2007, dear reader... call me in 2013 and we'll talk about the bottom of the U.S. real estate market. This story is worth your time... and the link is here.

What would this column be like without at least one story from reader Roy Stephens. This story is a video [9:46 long] from Canada's Business News Network here in Canada. Governor Arnold Schwarzenegger declared California in a 'fiscal state of emergency.' What can be done to keep the state from complete fiscal collapse? BNN asks Marshall Auerback, global portfolio strategist, RAB Capital. The link to the video interview is here.

Here's another offering from reader Scott Pluschau. This is a Bloomberg piece from yesterday headlined "Bullard Urges Fed Buy Bonds If Deflation Risk Grows". Is Q.E. 2.0 right around the corner? With a massive deflationary implosion staring the U.S. government right between the eyes, my bet is that they will run the printing presses white hot in order to prevent that from happening. It's "Inflate... or die". Not that it matters, because they're dead anyway... and the link to the story is here.

Here's a piece from Wednesday's Financial Times of London... courtesy of reader 'David'. The headline states... "Banks plan for loss of eurozone member". Banks have started early-stage planning to deal with the potential fallout on the derivatives and bond markets of a European country being forced to leave the euro. I guess this is one of many reasons why the Eurobor rate has been rising steadily. This is not a long story... and I urge you to read it. The link is here.

My last three stories of the day are all gold related. The first is an item by columnist Peter Brimelow that's posted over at marketwatch.com with a headline that reads "Gold down, but radical bugs aren't out... as the metals supporters put faith in physical demand". The story goes on to say that gold may be under the gun, but it's not the first time. Amid general panic, the radical gold bugs remain confident. It's a recommended read... and the link is here.

The next gold-related offering is from GoldMoney founder James Turk that was posted over at Kitco yesterday. To quote Chris Powell's preamble to this story... James "speculates on the architecture and purpose of the gold swap recently undertaken surreptitiously by the Bank for International Settlements." The story... and the rest of Chris Powell's preamble to it... are a must read from one end to the other... and the link to the GATA release headlined "Deciphering the BIS Gold Swap" is here.

Lastly today is another must read article. This one is John Embry's July column for the Canadian publication Investor's Digest of Canada. John is chief investment strategist at Sprott Asset Management in Toronto. I only found out about it when he mentioned it to me during a phone conversation we had yesterday... and here it is. The headline reads "Gold's on the cusp of a parabolic move up"... and the link is here.

A model displays pure gold Disney character dolls showing Snow White and the seven dwarfs, priced at 30 million yen ($300,000 USD) and produced by Tanaka Kikinzoku Jewelry in Tokyo on November 4, 2009 for the promotion of Blu-ray disks of Disney movies. [YOSHIKAZU TSUNO/AFP/Getty Images]

I'm still somewhat taken aback by the fact that gold deliveries for the August contract were posted on the CME's website late last night. I checked their website one more time just now [4:39 a.m. Eastern]... and it confirms that today is First Notice Day for delivery into the August contract... and I wasn't expecting to see these numbers until late this evening... or early Saturday morning. I don't exactly know what to make of it... but maybe it's nothing. However, it's the first time I've seen it handled this way.

With the July contract now off the board... the next big delivery month is December... with a smaller delivery month in October preceding that... so the front month for gold is now October. The front month for silver is September... as August is not a specified delivery month for silver.

Volume in both gold and silver on Thursday was not anywhere near as high as the volume on Wednesday. Ted Butler informed that the really big traders had to exit the July contract on Wednesday... and the smaller traders had to be out by the end of Thursday's trading day. This was the reason why volume was lighter yesterday.

Not much happened in Far East and early London trading on Friday. Volumes were very light. Most of gold's trading volume was in the December contract... and most of silver's trading volume [what little there was] occurred in the September contract.

This afternoon the latest Commitment of Traders report will be published... and it will be interesting to see how much [if any] of Tuesday's trading activity shows up in this report. For those of you who keep track of such things, the report is posted at 3:30 p.m. Eastern time sharp... and the link is here.

I'm also wondering whether the bullion banks are through on the downside on this price move... or do they still have work to do in gold? Don't know... but we'll find out soon enough. Today is Friday... and, considering what's happened already this week, I'm not sure what to expect... but we'll find out shortly after the Comex opens in New York this morning.

I'm still all in.

I hope you have a relaxing weekend... wherever on Planet Earth you call home.

See you on Saturday.