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Message: Ed Steer this morning
Swiss Bank Client Can't Get His Silver Back Two Months After Asking
Silver eagles outselling gold eagles 81 ounces to 1 in December so far. India's silver imports may jump 20% in 2010. Inflation and hyperinflation coming: John Williams. German 2-year bond auction fails... and much more.
Yesterday in Gold and Silver
The gold price came under selling pressure about three hours after Wednesday trading began in the Far East... and was down over ten bucks by lunchtime in Hong Kong. That was its interim low for the day... and once London opened for trading, the gold price began to inch higher. Then, shortly before lunch in London, gold got hit for $15. This decline lasted until New York opened at 8:20 a.m. Eastern time, when gold finally caught a bid... only to get sold off $25 by a not-for-profit seller of some sort between 9:40 a.m and 10:25 a.m... probably JPMorgan et al. The 10:25 a.m. Eastern low tick for gold was reported as $1,370.40 spot.
After that low, gold rose a bit, but every tiny rally attempt got sold off, but the gold price managed to close about eleven bucks off its low of the day.
Silver managed to keep its head above water... and in positive territory... right up until 9:15 a.m. Eastern time... then got smacked for over a buck. Silver's low price of $27.97 spot came at 10:50 a.m Eastern time... and from that point, it too, ran into selling pressure every time it attempted to rally any significant amount. All in all, silver's price path was virtually identical to gold's.
From it's open on Wednesday morning in Far East trading... to it's high of the day around 4:00 a.m. Eastern time... the world's reserve currency rose about 40 basis points. Then the dollar proceeded to give back all those gains between that early hour... and the close of trading at 5:15 p.m. Eastern time yesterday afternoon. So the dollar began and ended the day around 80.00 on the charts. There was absolutely no relationship between the dollar and the precious metals prices.
The gold shares rallied at the start of New York trading, but began to sell off within minutes of the open... and hit what appeared to be their lows around 10:45 a.m. Eastern... and then didn't do much for the rest of the day. The HUI finished down 2.25%... but, like Tuesday, there were still quite a few green arrows in the stock list I follow... so there's obviously a lot of bottom fishing going on, which is what I would be doing if I had any money left to invest.
Well, the CME Delivery Report on Wednesday showed a pretty big delivery from JPMorgan's client account... 1,307 contracts. The biggest stopper of note [876 contracts] was Deutsche Bank from its proprietory [house] trading account. Barclays and Goldman Sachs stopped [received] 133 and 114 contracts respectively. There were only 63 silver contracts posted for delivery on Friday. The link to all that action is here.
The GLD ETF reported that 78,108 ounces of gold were withdrawn... and there was no report from the SLV ETF.
The U.S. Mint sold another 4,000 ounces of gold eagles yesterday... along with another 275,000 silver eagles. Month-to-date, the mint has sold 8,500 ounces of gold eagles and 692,000 silver eagles. The silver/gold ratio in eagle sales in December currently sits at 81 ounces of silver for every 1 ounce of gold.
The Comex-approved depositories showed only a minor change on Tuesday... as they received 29,519 ounces of silver.
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¤ Critical Reads
SubscribeGerman 2-Year Auction Fails By 20% Of Notional As Rush From Government Paper Intensifies
Today's first story is from 'David in California'... and the headline over at zerohedge.com reads as follows... "German 2-Year Auction Fails By 20% Of Notional As Rush From Government Paper Intensifies". You know that bonds are on their last legs when Germany can't even sell their own debt paper. One has to wonder how much U.S. paper is being swallowed by the Fed to prevent the Treasury department's bond auctions from failing? The link to this rather short story is here.
Global bond rout deepens on US fiscal worries
Ambrose Evans-Pritchard has something to say about the unfolding bond debacle. In a piece filed late last night in The Telegraph, the headline reads "Global bond rout deepens on US fiscal worries". Agreement in Washington on a fresh fiscal package has set off a dramatic rise in yields of US Treasuries and bonds across the world, threatening to short-circuit any benefits of stimulus. The bond rout raises concerns that the US authorities may be losing control over events. Like the last story on German bonds, this story is worth your time as well... and the link is here.
Inflation and Hyper-Inflation Coming
The next story is from reader 'Chris' and is an interview posted over at Canada's Business News Network. It's with shadowstats.com's John Williams... and the title is "Inflation and Hyper-Inflation Coming". It runs for just under ten minutes... and it's more than worth listening to... and the link is here.
Iceland exits recession
Reader Roy Stephens has the next item for you today. It's from Tuesday's edition of The Guardian... and is headlned "Iceland exits recession". The decision to force bondholders to pay for their banking system's collapse appears to have paid off, as the economy grew 1.2% in third quarter. Nobel prize winner Paul Krugman has repeatedly called on most of the PIIGS to consider leaving the euro area and defaulting on debts. This is a short article... and highly recommended reading... and the link is here.
The Roving Eye: Naked emperor hails sex by surprise
Here's one I received from a reader who calls himself "Jîvasattha". It's a piece about WikiLeaks founder, Julian Asange. It's posted in today's edition of the Asia Times... and is authored by Pepe Escobar. The headline reads "The Roving Eye: Naked emperor hails sex by surprise". It's quite intriguing... and quite entertaining... and the link is here.
India's silver imports may jump 20% in 2010
Today's first silver-related story is a 2-paragraph article that I found posted over at Kitco yesterday. The headline reads "India's silver imports may jump 20% in 2010". This will just add to the bullion banks' litany of woes in the silver market. It's a 1-minute read... and is posted over at opalesque.com... and the link is here.
Silver 101: Production By Country
A couple of readers sent me this nifty graph of world silver production by country... and the first person through the door was Randall Reinwasser. The graph is imbedded in a short piece posted over at zerohedge.com that bears the headline "Silver 101: Production By Country". The USA is tied for 9th place with Poland. It's one paragraph, plus the chart... and it's definitely worth looking at. The link is here.
Swiss bank client can't get his silver back two months after asking
The next story is a must read James Turk interview with King World News that's imbedded in the following GATA release headlined "Swiss bank client can't get his silver back two months after asking". This investor had been paying storage fee for years as well... and when he went to ask for delivery, the cupboard was bare. If you don't have it in hand, do you know where your gold and silver really is, dear reader? The link to this short blog is here.
GCC urged to boost gold reserves
The only gold-related story I have today is this piece posted over at thenational.ae website in the United Arab Emirates. The headline reads "GCC urged to boost gold reserves". GCC is the acroynym for the Co-operation Council for the Arab States of the Gulf. GCC states should boost their foreign reserve holdings of gold to help shield their billions of dollars of assets from turbulence in global currency markets, say economists at the Dubai International Financial Centre Authority... and the link to the story is here. Even if you don't read the article, the imbedded photo is worth looking at.
Speed
Today's last precious metals-related story is this piece that I got from Ted Butler yesterday... and it's your big read of the day. He sent me the link to CFTC Commissioner Bart Chilton's latest speech entitled "Speed"... saying it was the best one that Bart had ever given. It was presented before the High Frequency Trading World USA 2010 Conference in New York yesterday. The speech raised Ted's expectation of what may come from the CFTC, as Bart did seem to hit on all the important issues. It's posted over at cftc.gov... and the link is here. As I said at the beginning... it's a long read, but definitely worth your time. The word 'silver' never came up... but a chunk of Chilton's speech was about position limits... and position limits in silver is the centre of the precious metals universe.
¤ The Wrap
Where there are too many laws, there is no justice. - German proverb
Well, silver and gold's 'day of infamy' on Tuesday showed absolutely no change in gold open interest at all... even though the price was down $30... and silver's open interest actually rose 449 contracts... which is not credible, since silver was clocked for well over two bucks from its Tuesday hight to its Tuesday low. Obviously, whatever changes in open interest there were, will be posted today... and nothing of Tuesday's crucifixion in either metal will be in tomorrow Commitment of Traders report. As you know, these bullion banks are excellent at hiding their tracks.
While on the subject of December 7th's big melt-down... here's what silver analyst Ted Butler had to say about it in his private note to clients yesterday... "You want to be careful about labeling every sell-off in silver as a manipulation, but sudden large moves for no apparent economic reason deserve examination."
"I don't sense that Tuesday's sell-off was the typical game of the commercials tricking the tech funds into selling, so that the commercials could buy back shorts as the tech funds liquidate positions. That manipulative game appears largely over. For one thing, the tech funds are not holding big positions... and no important moving averages were violated. Tuesday's sell-off was more like the silver sell-off we witnessed the day after Thanksgiving... and [appears] closely related to the 'flash crash' that occurred in the stock market on May 6th. I believe it had everything to do with the high-frequency computerized trading that has become common to many markets. I don't believe the spread of this computerized trading is a healthy development for any market. Hopefully, the regulators at the CFTC ad the SEC feel likewise."
There was monstrous volume traded in gold on Wednesday... even with all the roll-overs taken out. Silver volume was gargatuan as well... around 100,000 contracts net. I wouldn't be surprised if a lot of this was carry-over from what was supposed to have been reported on Wednesday... that the bullion banks withheld until Thursday. I'll know more when the final volumes are posted later this morning... and I'll report on it tomorrow.
Neither silver or gold were doing much of anything in either Far East or early London trading this morning at 4:57 a.m. Eastern time... but I was happy to see that they were both in positive territory... although both were beginning to roll over as the dollar had caught a bid. Volumes in both metals were substantially lower today then they were this time on Wednesday.
But, as you are more than aware by now, what happens in Far East and London trading is of generally no consequence. Only trading in New York matters... and we'll find out what 'da boyz' have in store for us in pretty short order.
To wrap up, I can do no better than quote what Ted Butler had to say in his closing comments to his paid subscribers yesterday... "It's hard to predict the very short-term price direction of anything in normal times. That becomes even harder in extraordinary times. Therefore, I would sugest you try to refrain from short-term prognostications on the price of silver. Instead, try to imagine the uprecedented circumstance of the world coming to grips with a genuine physical sortage of an item that heretofore had never been in a shortage in history. Try to imagine... and then position yourself for such an unusual circumstance, as I can assure you that those of you who are prepared... mentally and financially... will fare better than those who don't see it."
See you on Friday.
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