Ron Paul's Gold Audit Story Goes National

The gold price began to rise about 1:00 p.m. Hong Kong time during their Wednesday afternoon... perhaps in sympathy with the US$ which had begun to head south about four hours before that. The gold price continued to rise quietly right up until 8:40 a.m. Eastern time in New York. Then a not-for-profit seller showed up and sold gold down ten dollars over the next two and a half hour time span. The selling came to an end shortly after London closed at 11:00 a.m. Eastern time... and basically did nothing for the rest of the New York trading session. Gold's high and low of the day were both set in New York. The high was $1,256.00 spot... and the low was $1,241.80 spot.

Silver's price path was similar... with the exception of three price spikes that tested the $19.50 price level... two in London and one in New York. The middle spike was the London silver fix at noon local time... and the silver price was under light selling pressure from that point on. But, after 9:00 a.m. Eastern time, silver did absolutely nothing. Silver's high price in New York was $19.51 spot... with its low of $19.28 spot coming just minutes before floor trading ended at 1:30 p.m. Eastern time.

Platinum and palladium were the only two precious metals that were allowed to finish in the plus column yesterday. Platinum was only up 0.53%... but palladium was up a pretty chunky 3.40%. And, like silver, they both had odd upward price spikes a few minutes before they got sold off along with gold at 8:40 a.m. Eastern. I don't know what to make of that.

The world's reserve currency was on a slippery slope starting around 10:00 a.m. Hong Kong time in Far East trading on Wednesday morning. This decline ended twelve hours later at 9:10 a.m. in New York yesterday morning. The decline was about 95 basis points, but gained back about 20 points of that by the time the gold markets closed at 5:15 p.m. Eastern time.

Despite the fact that neither gold nor silver was hit that hard yesterday... and the Dow was screaming to the upside... the precious metals shares got sold off into negative territory and stayed there for the rest of the day. The HUI finished down 1.32%.

Wednesday's CME Delivery Report showed that 25 gold, 23 palladium and a smallish 9 silver contracts were posted for delivery on Friday. Both the GLD and SLV ETFs started the month of September off by adding to their stockpiles. GLD reported receiving another 48,868 ounces of gold... and SLV received a very chunky 1,712,676 troy ounces of silver. As a matter of interest, the SLV has added 3.38 million ounces of silver during the last seven business days... after adding nothing for months.

The U.S. Mint had no report yesterday... and the Comex-approved depositories showed a net decline of 453,087 ounces of silver for the last day of August. The link to that action is here.

Today's first story is posted over at cnn.com... and is courtesy of reader Scott Pluschau. The headline reads "Problem bank list climbs to 829"... The government's list of troubled banks hit its highest level since the second quarter of 1993, although the pace of growth continued to slow, according to a government report released Tuesday. That's all well and good, dear reader... but the fact of the matter is, that if every bank was forced to mark all their bad debts to market, over 90% of all U.S. banks would not be opening their doors this morning. Only accounting rule changes to keep these financial corpses alive has prevented most of the world's banks from sliding into insolvency. This story is well worth your time... and the link is here.

Here is the first of two stories from reader Roy Stephens. This one is posted over at gallup.com... and is headlined "U.S. Consumers Pulling Back on Spending in August". One sentence reads "A disappointing back-to-school sales season, declining consumer confidence, and a weak job market suggest that the perceived weakening of the U.S. economy is the reality on Main Street." One can only imagine what GM's reported 25% decline in auto sales will do to consumer confidence going forward. The link to the gallup.com story is here.

Roy's second offering is from this morning's edition of The Telegraph. The headline pretty much says it all... "IMF warns over UK debt in call for global fiscal reform". The International Monetary Fund has warned that long-term fiscal reforms will be required among advanced economies as it projected the UK's gross debt to gross domestic product would rise to 90.6pc in 2015. It's a short story along with an excellent graph... and the link is here.

Here's a story from London's Financial Times that was sent to me by California reader Martin Arnest. One of the dangers of investing in countries with unstable political/military regimes is that the government of the day may decide to seize a mining company from its shareholders without compensation. This story is a case in point, with a headline that reads "Congo seizes First Quantum Minerals' assets". It's worth the read... and the link is here.

I have a lot of gold-related stories for you today... but first, here is another graph from Nick Laird over at sharelynx.com. It's Nick's 'PM Fund Index'. It finally shows a break-out above the red line. It's not a big break-out, so I shan't break out the party favours just yet [especially after what 'da boyz' did to gold in New York on Wednesday morning]... but it's certainly worth noting. I'm also sure that Nick will keep us abreast of any changes... and I will post them as soon as they show up in my in-box.

My next offering arrived late last night from Russian reader Alex Lvov. It's a Bloomberg interview from yesterday which was probably filed out of Europe or London. Charles Morris, a fund manager overseeing about $2.5 billion at HSBC Global Asset Management’s Absolute Return fund, talks about his decision to sell long-term bond holdings on Aug. 27 and agricultural commodities on August 31st. Morris, speaking with Mark Barton on Bloomberg Television's "Countdown," also comments on the outlook for gold. The headline reads "HSBC's Morris Says He Sold 30-Year Treasuries, Kept Gold". The interview runs a hair under four minutes and is a must watch. The link is here.

Here's a story that was posted over at businessweek.com yesterday. It's a Bloomberg piece of course... and the headline reads "IMF Gold Assets Fall 16.85 Tons as Russia Adds to its Holdings". The International Monetary Fund’s gold reserves fell by 16.85 metric tons in July as Russia added 16.2 tons to its holdings, according to figures from the Washington-based lender. The Russian gold story is not new, as I reported on that on August 20th, the day the data was loaded onto The Central Bank of the Russian Federation's website. But the IMF sales are. It's a handful of short paragraphs... and the link is here.

Today's last gold-related offering is a GATA release from yesterday bearing the headline "Fox News takes Kitco's Ron Paul gold audit story national". The New York Sun also ran a similar story on August 31st. The Fox News story is headlined "Rep. Paul Calls for Gold Audit, Questions Whether Fort Knox Is Empty". GATA's secretary treasurer Chris Powell wrote an extensive preamble to the story [with lots of links]... and that, too, is a must read as well... and the link is here.

And this just in from Eric King at 5:42 a.m. Eastern time this morning... a quick comment on early Thursday morning price action in London by James Turk that's posted over at King World News. It's a short must read piece headlined "James Turk - Big Money Buying Pullbacks in Gold and Silver"... and the link is here.

According to Bill King over at the King Report... "August was the worst showing for stocks since 2001 when the U.S. was in a mini-recession." I'm sure that the PPT wanted to start the month of September off with a shot to the upside... despite the horrific car sales numbers that were reported. They also took care of the precious metals before the equity markets opened as well. They obviously wanted nothing to spoil the orgy in the general equity markets... and they got their wish.

The big jump in the price of gold and silver on Tuesday was accompanied by a huge increase in open interest in gold... north of 14,000 contracts... and almost 2,000 contracts in silver. So there was pretty big deterioration in both metals that day. It still remains to be seen if that data will be in tomorrow's Commitment of Traders report. I wasn't sure if there was going to be a report or not... but 'Mike from The Republic of Texas' assured me that the report will be released as scheduled on Friday.

I don't quite know what to make of yesterday's action. It seemed obvious [at least to me] that the bullion banks stepped into the gold market early in the a.m... but I'm not sure whether there's more room to the upside, or are we going to see another 'failure' at this level. The precious metals are not hugely overbought by any stretch of the imagination... but that wouldn't stop the bullion banks from painting a chart, if that's what they want to do. The one from Nick Laird further up in this column is the one that comes to mind.

The world's reserve currency hasn't done much since trading began in the Far East earlier today... and both gold and silver are showing pretty decent strength as of 5:39 a.m. Eastern time. Volume is light.

One can only imagine what the U.S. bullion banks have in store for us today... and we won't have long to wait to find out.

I hope your Thursday goes well, dear reader... and I'll see you on Friday.