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Message: Ed Steer this morning
World Bank President Sees Gold Regaining Monetary Functions
Gold pops over $1,400 the ounce. Gold is likely to rise $100 in a matter of days: James Turk. CDs now pay under 1%. Is an ATM cash shortage coming? Another Ron Paul revolution coming up! Another must listen Jim Rickards interview... and much more.
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Yesterday in Gold and Silver
Gold got sold off about five bucks by lunchtime in Hong Kong on Monday morning... and then basically hugged the $1,390 spot price level until the London p.m. gold fix was in at 10:00 a.m. Eastern time. From that point, the price moved briskly to the upside, closing almost on its high of the day, which was $1,411.60 spot. Not a big move, but the price closed above $1,400 for the first time ever.
Silver was, once again, the star of the day... up 3.74% by the time the New York close was in at 5:15 p.m. Eastern time. Silver's price path was similar to gold's... with the price not straying too far from the $26.75 spot level during Far East and most of London trading. Then, like gold, silver began moving sharply higher once the gold fix was in... and by the time the smoke cleared, silver was up about a buck on the day. It's high tick was $27.78 spot.
The dollar dropped 20 basis points in early Far East trading on Monday. Then, out of the blue, it jumped up about 60 basis points to 77.00... and hovered around that valuation for the rest of the trading day. Only during early Far East trading was there any noticeable impact on the prices of either gold or silver. The dollar certainly wasn't a factor in New York trading yesterday.
Here's the U.S. dollar chart going back about four years. It certainly doesn't look very healthy... despite the fact that it's oversold... it's also breaking through support to the downside. The graph is courtesy of Nick Laird over at sharelynx.com.
It was another terrific day for the precious metal stocks. Just about everything was well into positive territory... with the silver stocks once again leading the way by a wide margin. As you know, I'm of the opinion that silver and its shares will vastly outperform gold going forward... and as you also know, my portfolio is 60/40 silver/gold... and that ratio is increasing daily in favor of silver, as this metal [and its shares] continue to outperform their golden cousins.
The HUI finished up 3.27% to another record high.
The CME Delivery Report was a non-event on Monday, with only 29 gold and 5 silver contracts posted for delivery tomorrow.
For a change, the GLD ETF showed an addition yesterday... up 78,133 ounces. SLV also reported another inflow. This time it was a rather large 1,857,934 troy ounces. As I mentioned in my Saturday column, it's my bet that both ETFs are owed huge amounts of metal... especially SLV.
Over at Switzerland's Zürcher Kantonalbank for the week that was, there was a net decline of 575,113 ounces in their silver ETF... but their gold ETF was up 14,994 troy ounces. One has to wonder who might be withdrawing silver from an ETF under the current price circumstance. I thank Carl Loeb for those numbers.
The Comex-approved depositories reported a smallish net decline in their silver stocks last Friday... 19,056 ounces, which is hardly worth the effort to report it.
The U.S. Mint had another sales report on Monday. They sold another 5,000 ounces in their gold eagle program... plus another 225,000 silver eagles. Month-to-date, the mint has reported selling 12,500 ounces of gold eagles, plus 480,000 silver eagles. These are not big numbers considering the fact that the bullion dealers that I keep in touch with are doing a roaring business... especially in all things silver. I bought some more yesterday myself
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¤ Critical Reads
SubscribeGold Bullion For Only 4.75% Over Spot…
While I'm on the subject of gold and silver bullion, here's a special offer I just found out about that really made me stand up and take notice. Andy Schectman, a bullion dealer at Miles Franklin, has acquired a limited lot of one-ounce gold bullion coins at below-market cost, and is able to pass on the savings to us. He has brand new 2011 Canadian Maple Leafs, along with 2010 Australian Kangaroos, and can offer them to us for only 4.75% above spot. He also has 2011 Silver Maple Leafs for only $2.35 over spot for any quantity. I've searched the web and can tell you this is one of the lowest premiums in the industry. My coin guy here in Edmonton can't even buy the gold coins wholesale at this price!
You know how I feel about owning physical bullion – it's a must, given the precarious nature of all currencies... and that we're nowhere near out of the woods of this crisis. This is a great way to add to your holdings at a below-market price. If you're interested in buying a Maple Leaf or Kangaroo for a 4.75% premium... or a silver Maple Leaf for $2.35 over spot, call Miles Franklin at 1-800-822-8080. Mention you're calling from my letter, Ed Steer's Gold & Silver Daily, to get the discount. [Note: Miles Franklin is open from 8am to 5pm, Central time.]
The G20 Must Look Beyond Bretton Woods II
Today's first story is my headline piece of the day. The president of the World Bank, Robert Zoellick, had an op-ed piece in Sunday's edition of the Financial Times. In it he stated that "The G20 Must Look Beyond Bretton Woods II". Zoellick also says he sees gold playing a part in whatever new currency is agreed to. Not that I want to be overly suspicious, but I'll believe it when I see it. Having said that, to hear the word 'gold' come out of Zoellick's mouth with a positive spin on it, can't be all that bad either. I thank reader Scott Pluschau for bringing this story to our attention... and the link to this must read article is here.
Whistleblower accuses HSBC and JP Morgan of silver futures scam
I see that the lawsuits against JPMorgan and HSBC finally made it into Monday's edition of The Telegraph. Banking giants HSBC and JP Morgan have been accused of "intentionally and unlawfully" suppressing the price of silver futures traded on the Comex exchange in New York after an ex-employee of Goldman Sachs in London blew the whistle on the scheme. The headline reads "Whistleblower accuses HSBC and JP Morgan of silver futures scam". I thank reader Roy Stephens for sending it along... and the link to this short read is here.
Not just inflation fears boosting gold
In his Monday column over at marketwatch.com, columnist Peter Brimelow has a most interesting commentary that's very much worth your time. The headline reads "Not just inflation fears boosting gold"... and Brimelow opines towards the end of his commentary that GATA may actually be right. The link to this very worthwhile read is here.
And they complain that gold doesn't pay any interest
In a GATA release yesterday headlined "And they complain that gold doesn't pay any interest"... comes this story out of the Monday edition of Barron's. The piece headlined "CDs Fall Below 1% First Time Since the 50s". How can anyone retire with interest rates that low? It's less than a two minute read... and the link is here.
Gold is likely to rise $100 in a matter of days
Court Finds Bank Of America Can Not Foreclose On Property Which Has Existing IRS Tax Lien
In other non-precious metal-related news, here is a zerohedge.com story sent to me by reader 'David' in California'. It's getting worse by the minute for all these corrupt banksters, as the headline reads "Court Finds Bank Of America Can Not Foreclose On Property Which Has Existing IRS Tax Lien". It's just another brick in the wall... and the link is here.
Is An ATM Cash Shortage Coming?
David sent along another story from zerohedge.com. This one is headlined "Is An ATM Cash Shortage Coming?" Tyler Durden is careful to qualify this story... and until proven true... I'd just consider it as an interesting rumor. The link is here.
By the way, talking about qualifying a story. One of the ones I posted in my Saturday column about 34 U.S. navy ships accompanying President Obama to India appears to be completely false.
Ireland's new toxic loans will spark social conflict, says economist
My next story is courtesy of Swiss reader B.G. It's from Monday's edition of The Guardian... and the headline reads "Ireland's new toxic loans will spark social conflict, says economist." A leading economist who predicted Ireland's property collapse is forecasting a new wave of toxic debt could sink the country entirely, this time related to domestic mortgages. As the premium demanded by investors to hold Irish debt hit fresh highs today, Morgan Kelly predicted a 19th-century-style land revolt by the public, warning their patience over the bank bailout is wearing thin. Could this happen in the U.S.A.? The article is worth your while... and will take about three minutes to run through... and the link is here.
Ron Paul Is About to Totally Revolutionize the House Monetary Policy Panel
Here's a story from cnbc.com that was posted at their website last Thursday... which showed up as a GATA release yesterday. The headline reads "Ron Paul Is About to Totally Revolutionize the House Monetary Policy Panel". It's a handful of short paragraphs which are well worth the read... and the link is here.
Interview with market analyst Jim Rickards
Lastly today is an interview with market analyst Jim Rickards that's posted over at King World News. It's imbedded in a GATA release... and I'll let Chris Powell do the introductions... and the link to this absolutely must listen interview is here. It runs about 20 minutes... so a coffee refill might be in order before you hit the 'play' button.
¤ The Wrap
So, here’s the bottom line on money printing, or QE if you prefer. If nothing happens, the whole thing was a waste of time. If inflation takes off, the Fed will have to choose between holding bonds and letting inflation get worse or selling bonds and going bankrupt in the process. Since no entity goes down without a fight, the Fed will naturally hold the bonds and let inflation take off. Do not ask about the exit strategy from QE; there is no exit.- Jim Rickards... November 5, 2010
Monday was another big volume day for both gold and silver... although not as big as Thursday and Friday of last week. We're starting to see a lot of roll-overs as we approach options expiry and first notice day for delivery into the December contract. December is a big delivery month for both metals... and anything can [and probably will] happen between now and the end of the month. Price volatility is about to become a permanent way of life in the precious metal markets.
Options expiry for both gold and silver is on Tuesday, November 23rd... and for the futures market [the Comex] it's Friday the 26th... the day after the U.S. Thanksgiving holiday. The last trading/delivery day in the November contract is on Monday the 29th... and first notice day for delivery into the December contract in both metals is on the 30th. All of these dates will certainly increase the price volatility as we count down the days.
But hanging over the market is the now-very-public grotesque and obscene short positions that are held by the two U.S. bullion banks. The pain on the smaller and less well-capitalized short holders must have claimed some casualties... and as I mentioned on Saturday, the bodies have just not materialized as of yet... but they will.
Then there's the matter of the G-20 financial leaders meeting in South Korea later this week. Nothing will be resolved, of course... but it could add more fuel to the gold and silver bonfire.
Nick Laird slid another couple of graphs into my in-box in the wee hours of this morning. One is the "Silver Sentiment" graph shown below... which is up 77% in this rally so far.
The other chart is the "PM Mutual Funds Sentiment" graph... which has now decisively broken out into new high ground.
Volume in both metals [as of 4:34 a.m. Eastern time] is already pretty heavy. Part of that has to do with the price activity... and the rest is switches, roll-overs and spreads. I expect we'll see big volume every day from now until the end of the month.
Today's trading activity will [hopefully] be included in this coming Friday's Commitment of Traders report. And I'm expecting some sort of fireworks either today or tomorrow. As James Turk pointed out in an earlier comment above... a gap up in gold could certainly be in the cards. Both Ted and I have been expecting one for some time... particularly in silver... but it has failed to materialize. However, it certainly will at some point in the not-too-distant future.
I hope your Tuesday goes well... and I'll see you tomorrow.
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