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Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Message: Ed Steer this morning
Sprott Physical Gold Trust Buys 6 Tonnes of Gold
Sep
17
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James Turk says $21 silver should be the trigger price for a price explosion. Sprott buys 6 tonnes of gold. US-China clash over yuan escalates, risking superpower stand-off. One-in-seven Americans living in poverty. Foreclosures Rise; Repossessions Set Record... plus much more.
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¤ Yesterday In Gold And Silver
The gold price in Far East trading meandered around unchanged yesterday. But, about an hour after London opened for business, a tiny rally began that lasted until moments after 8:00 a.m. in New York... and took gold to a new high price of $1,278.30 spot. At that point, someone appeared only too happy to sell the price down a bit... and then gold tracked sideways for the rest of the New York trading session.
Silver was a bit of different animal yesterday. It sold off a bit in Far East trading... and its low price of the day [around $20.47 spot] came shortly before 4:00 p.m. Hong Kong time. Then silver spent the next twelve hours working itself up to its high of the day [$20.84 spot] which came in electronic trading shortly after 2:00 p.m. in New York. From there, silver traded sideways into the close.
Despite the best efforts of all the world's central banks over the last day or so, the dollar has fallen all the back to where it was before the interventions began. Based on these failures... and the technical condition of the dollar at the moment... unless some other brave central banks wish to try their luck, I'd say the world's reserve currency has a long way to go to the downside. Here's the 3-day chart.
Gold's volume yesterday was pretty decent... a hair over 100,000 contracts net of all roll-overs. Silver's volume was pretty robust as well... and the CME preliminary report from the wee hours of this morning shows that we are now down to 926 silver contracts still open in September that have to sold, rolled over... or delivered into by September 29th.
The HUI spent the entire day in positive territory yesterday... and even managed to close a hair above the 500 level... up 1.22%. The large cap silver stocks were very strong yesterday... and I'm most encouraged by this.
The CME Daily Delivery report showed that the Comex posted 2 gold and 42 silver contracts for delivery on Monday. Both JPMorgan and the Bank of Nova Scotia were trading for both their customer accounts and their proprietary trading accounts. The link to what little action there was, is here.
There were no reports from either GLD or SLV... and the U.S. Mint sold another 2,000 ounces of gold in their gold eagle program. Sales of bullion coins over at the mint have fallen off a cliff in the last six weeks. Over at the Comex-approved depositories they received a net 269,825 ounces of silver on Wednesday... and the link to that report is here.
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¤ Critical Reads
SubscribeReserve Bank of India hikes lending, borrowing rates
I have another bunch of stories for you today. The first one is a marketwatch.com item filed from Hong Kong early on Thursday morning. The headline reads "Reserve Bank of India hikes lending, borrowing rates". “Inflation remains the dominant concern in macroeconomic management,” the central bank wrote in a statement accompanying its mid-quarter monetary-policy decision. Food price inflation in India is particularly worrisome. I thank reader Scott Pluschau for sending it along... and the link is here.
US-China clash over yuan escalates, risking superpower stand-off
Here's another Ambrose Evans-Pritchard offering that I found imbedded in a GATA release yesterday afternoon. US Treasury Secretary Tim Geithner has issued his harshest attack to date on China’s currency policy, the latest move in an escalating superpower clash across the gamut of commercial and strategic relations. The tough talk comes amid concerns that the global currency order is unravelling, with countries breaking ranks in a `beggar-thy-neigbour’ use of 1930s-style devaluation to help exporters and shore up their economies. At the same time, Canada's central bank chief Mark Carney was also talking the same trash as Geither. The headline reads "US-China clash over yuan escalates, risking superpower stand-off"... and the link to the story is here.
About 44 million in U.S. lived below poverty line in 2009, census data show
The next item was sent to me by Florida reader Donna Badach. It's from yesterday's edition of The Washington Post. Last year, one in seven Americans lived in homes in which the income was below the poverty level, which is about $22,000 for a family of four. That is the largest number of people since the census began tracking poverty 51 years ago. This is a very depressing statistic. The headline reads "About 44 million in U.S. lived below poverty line in 2009, census data show"... and the link is here.
Foreclosures Rise; Repossessions Set Record
Here's another story courtesy of reader Scott Pluschau. It's an item posted over at cnbc.com. It bears the headline "Foreclosures Rise; Repossessions Set Record". US foreclosure activity rose in August from the previous month, and banks and lenders took ownership from homeowners at a record pace, according to a new report released Thursday. One in 381 U.S. households received a foreclosure notice in August. The link to this very unhappy read is here.
Losses from Fannie Mae, Freddie Mac seizures may near $400 billion
While on the subject of real estate, here's Scott Pluschau's third offering of the day. This one is from yesterday's Los Angeles Times. The headline reads "Losses from Fannie Mae, Freddie Mac seizures may near $400 billion". Federal Housing Finance Agency is seeking billions in repayment from banks that sold bad loans to the mortgage giants to help offset taxpayer losses, but some financial institutions are balking. I'd say that this $400 billion number will prove to be wildly optimistic by the time this depression breaths its last. The link to the story is here.
Wonder Why Market Just Surged? One Word - POMO
Here's a short item I picked up from yesterday's King Report. It's a one-paragraph posting from Wednesday over at zerohedge.com headlined "Wonder Why Market Just Surged? One Word - POMO". POMO is an acronym for 'Permanent Open-Mark Operation'... which basically means that the Fed is giving free money to the primary dealers so they can prop up the stock market for the rest of September. This will prevent hedge funds from receiving "a tsunami of redemptions requests" at the end of the third quarter. As you know, money is flowing out of the stock market by the billions every week... and huge redemptions out of hedge funds would only multiply the losses and force these very same hedge funds to liquidate even more stock. I guess they don't want a market crash for this November's elections. The link to this short read is here.
Regulators to Target 'Window Dressing'
Here's a story from Casey Research's own John Grandich that he sent me yesterday. It's out of Thursday's edition of The Wall Street Journal that's headlined Regulators to Target 'Window Dressing'. Federal regulators are poised to propose new disclosure rules targeting "window dressing," a practice undertaken by some large banks to temporarily lower their debt levels before reporting finances to the public. The practice isn't illegal, but it masks banks' true levels of borrowing and risk-taking. The link to the story is here.
Ian Gordon: It's Winter, Own Gold
Australian reader Wesley Legrand sent me the following audio interview with Long Wave Group's Ian Gordon. Ian [a very good friend of mine] isn't the most exciting guy to listen to, but what he has to say is more than worth your while. The headline of the interview reads "Ian Gordon: It's Winter, Own Gold"... and is posted over at commoditywatch.podbean.com... and the link to this must listen interview is here.
Sprott Raises Capital To Buy Another 6 Tons ($250 Million Worth) Of Gold
I have two other gold and silver-related stories for you today. The first was sent to me by 'David in California'. It's another zerohedge.com piece that bears the headline "Sprott Raises Capital To Buy Another 6 Tons ($250 Million Worth) Of Gold". Here's the link to the press release out of Toronto yesterday. This is definitely worth reading... and the link is here.
Greenspan vs. gold's anti-salesman
My last gold-related story today is a GATA release from yesterday afternoon headlined "Greenspan vs. gold's anti-salesman". The release focuses on Greenspan's comments regarding gold to the Council on Foreign Relations on Thursday... the wonderful work by Dimitri Speck from Germany. Chris Powell also comments on Kitco's Jon Nadler... and ex-British Chancellor of the Exchequer... Gordon Brown. The preamble... and the enclosed links, are all must reads... and the link to all of this is here.
¤ The Wrap
As we said before, there has been about $1 trillion of debt deleveraging that has occurred in the U.S. household sector over the past two years and to normalize debt/asset and debt/income ratios, there is another $6 trillion to go, and likely to last another five years if the historical record is any indication. - David Rosenberg, Gluskin Sheff & Associates
It's obvious that gold and silver want to go up in price, but are running into opposition in New York and, at times, London. But regardless of what market this opposition is coming from, it's all basically the U.S. bullion banks selling that keeps the prices of both metals in check. The moment they stop going short against all the long positions being placed... look up, look way up... as the prices of both silver and gold would explode instantly, as there are no legitimate short sellers left against all the long positions that are being place... and the markets would be bid to the stratosphere in a heartbeat.
Here's the 3-year silver chart. You can see that we are well into overbought territory... and a short, sharp 'correction' courtesy of 'da boyz' would not suprise me in the slightest somewhere along the road. But there's no doubt in my mind that we are going higher in price in the medium and long term, as silver is an accident waiting to happen.
As I write these last few paragraphs, I see that the silver price just stuck its head above the $21 dollar level... and the gold price is now parked [for the moment at least] above $1,280 spot. Volume in both metals is moderate.
Today at 3:30 p.m. Eastern time [sharp] comes the weekly Commitment of Traders report. Ted and I are expecting to see big increases in the net short positions of the '8 or less' traders... as the price action in both metals over the last week indicates that's what it will show. The higher that gold and silver prices rise, the bigger the net short positions of the bullion banks. The link to the report, when it's issued, is here.
With the shares poised to blast off to new highs in the very near future, I would deem it prudent to be as fully invested as you wish to be... starting right now. I'm still urging you to put your investment dollars to work. The first place I'd start would be with a subscription to either Casey's Gold and Resource Report... or Casey Research's flagship publication... the International Speculator. Please click on the links, as it costs nothing to check them out... and the subscriptions come complete with CR's usual money-back guarantee.
Well, the price action in the Far East and early London trading looks positive... and how "irrationally exuberant" it will be allowed to get is entirely up to JPMorgan et al. Today is Friday, so nothing would surprise me when trading in New York begins.
I hope you have a great weekend, dear reader... and I'll see you here tomorrow.
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