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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
SLV Takes in Another 2.34 Million Ounces of Silver
CFTC Should Resist Lobbying on Position Limits, Chilton Says. Muni bonds get crushed... again! A bloodbath in U.S. Treasuries. Another interview with Jim Rickards... and much more
¤ Yesterday in Gold and Silver
Gold got off to a good start in early Far East trading on Tuesday morning... up about ten bucks by 11:00 a.m. Hong Kong time. From there, it traded pretty much sideways until the New York open, with the high of the day [around $1,408 spot] coming shortly before noon in London... which was shortly before 7:00 a.m in New York.
The moment that New York opened for business at 8:20 a.m... the gold price got sold off to its low of the day [$1,391.10 spot] shortly before 10:00 a.m. Eastern time, which was probably the London p.m. gold fix. From that low, the gold price worked its way back over $1,400 once more, before getting sold off below $1,400 by a not-for-profit seller in the thinly traded electronic market around 2:20 p.m. New York time. Gold finished up from its Monday close, but not by a lot.
The silver price chart is a virtually a carbon copy of the gold price chart. Silver tried to make it above $30 on several occasions during Far East and early London trading... but just couldn't do it... or wasn't allowed to do it. Silver's high [around $30 spot] was also at the same time as gold's high... shortly before noon in London. Silver actually got sold off for a small loss on the day after the not-for-profit seller was through with it in electronic trading yesterday afternoon.
The world's reserve currency didn't do much yesterday... as it fell and rose about 60 basis points intra-day. It's low tick was minutes before 11:00 a.m. in London... and it closed up a hair from Monday. The dollar rose almost all that 60 basis points in a mini-rally that occurred between 8:00 a.m. and 10:05 a.m. That was, of course, when the big Comex sell-off in gold and silver occurred in New York. There was no such dollar rally when both metals got sold off in electronic trading during the afternoon in New York.
Not surprisingly, the gold stocks started the trading day slightly in the red... but were up more than 1% before the sell-off in electronic trading began around 2:40 p.m. Eastern time. After the $10 drop in the gold price, the shares managed to recover to close in slightly positive territory... with the HUI up 0.23%. Not surprisingly, most silver stocks finished in negative territory... but the losses were tiny.
The dollar rally and the gold and silver price decline that occurred at the Comex open.... and that ended shortly after the London p.m. gold fix, was simply too much of a coincidence for me. It's obvious that having gold close over $1,400 [and silver over $30] was not going to be allowed yesterday... and there was someone there to make sure that it didn't.
The same thing happened on Monday when the dollar got clocked for 120 basis points. Gold should have blasted through $1,400... and silver through $30... but, mysteriously, that didn't happen either... and I commented on that fact in yesterday's column.
Yesterday's CME Delivery Report showed that 102 gold and 39 silver contracts were posted for delivery on Thursday. JPMorgan is still trading in its proprietary [house] account.
There was movement in both ETFs yesterday. GLD showed a withdrawal of 97,628 ounces... and SLV took in an eye-opening 2,345,716 troy ounces... well over one day's worth of world silver production. And don't forget that the Zürcher Kantonalbank in Switzerland took one day's worth of silver production into inventory last week as well. So, in the last ten days, about 23% of world silver production disappeared in these two ETFs. One has to wonder how Sprott is making out with the 15 million ounces of silver they ordered over two months ago.
The U.S. Mint had a sales report yesterday. They sold another 13,000 ounces of gold eagles, but reported no sales of silver eagles. Month-to-date gold eagles sales total 35,500 ounces... and silver eagles sales sit at 1,422,000 ounces.
Not much happened at the Comex-approved depositories on Monday. Their report showed that only 35,374 ounces of silver were received. Comex silver stocks are currently down to a level that hasn't been seen since 2006.
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¤ Critical Reads
SubscribeUS Treasury Bloodbath Is Back: 30 Year Passes 4.50%, As 10 Year Prepares To Take Out 3.40%
Today's first story is courtesy of Australian reader Wesley Legrand. It's a posting over at zerohedge.com that's headlined "US Treasury Bloodbath Is Back: 30 Year Passes 4.50%, As 10 Year Prepares To Take Out 3.40%". It's a very short read... a couple of paragraphs, along with a couple of charts... and the link is here.
Munis Crushed... Again
While on the subject of the bond market. Here's an ugly picture of U.S. Munis. I ran this chart a couple of weeks ago... and it looked ugly then. It looks even worse, now. Reader U.D. provided the graph that's posted over at businessinsider.com... and the brief headline to the 2-sentence article reads "Munis Crushed... Again"... and the link is here. The graph is a stunner.
Moody's May Cut US Rating on Tax Package
To add to the litany of woes in the U.S. is this story that's courtesy of reader Scott Pluschau. It's a posting from over at cnbc.com that's headlined "Moody's May Cut US Rating on Tax Package". This is a bit of a laugh because, in actual fact, all of the world's debt paper is junk already... it just hasn't been made 'official' yet. The link to the story is here.
Vallejo’s Bankruptcy ‘Failure’ Scares Cities Into Cutting Costs
Two years ago, Vallejo, California was one of the first American cities to file for bankruptcy. The city is back in the news again, this time as a nation-wide symbol for distressed municipal finances. Washington state reader S.A. provides this fairly lengthy Bloomberg piece that's headlined "Vallejo’s Bankruptcy ‘Failure’ Scares Cities Into Cutting Costs". The link is here.
Reformer from NY Fed gets reformed himself ... by Goldman Sachs
Today's next item is a GATA release that Chris Powell has headlined "Reformer from NY Fed gets reformed himself ... by Goldman Sachs". Theo Lubke, who served for 15 years at the Federal Reserve Bank of New York and headed its efforts to reform the private derivatives market, joined Goldman Sachs Group Inc., according to a memo obtained by Bloomberg News. It's not an overly long piece... and the link is here.
CFTC Should Resist Lobbying on Speculation Limits, Chilton Says
The next story is also a Bloomberg item from Tuesday. This one was sent to me by Dr. Dave Janda. The headline reads "CFTC Should Resist Lobbying on Speculation Limits, Chilton Says". As I mentioned about a story in Monday'sWSJ in this column yesterday... the CFTC was feeling pressure about positions limits from "inside and outside the agency"... and those were precisely the words that Bart used in his prepared speech. He also said that "Regulators should resist lobbying pressure aimed at getting them to set rules while putting off the date when they take effect." The big CFTC meeting is tomorrow... and I suggest that you put this article on your must readlist... and the link is here.
Capitalizing on the Euro Crisis: China Expands Its Influence in Europe
Roy Stephens provides our next story. This is a posting from the German website spiegel.de... and is headlined "Capitalizing on the Euro Crisis: China Expands Its Influence in Europe". China is seizing on Europe's debt problems to expand its influence on the continent with large-scale investments and purchases of government bonds issued by highly-indebted states. The strategy could push Europe into the same financial dependency on China that is posing a dilemma for the US. The link to this one-page essay is here.
When That Happens, the Game Is Over
I have two gold-related blogs from over at King World News as my next offerings. The first is one I ripped from a GATA release late last night. Eric King has excerpts from an intriguing interview with an anonymous London bullion market source about the indirection used by Asian buyers to obtain precious metal without exploding the price and causing commodity exchange default. The interview is headlined "When That Happens, the Game Is Over". How true all this is, we may [or may not] find out in the fullness of time. The link is here.
Interview With Victor Sperandeo
The next KWN offering is an audio Interview With Victor Sperandeo... a man who used to work with George Soros at the Quantum Fund. Victor clears up where Soros really thinks gold is headed. The link to the story is here.
Interview With Jim Rickards
My last offering today is another Interview With Jim Rickards. Here he is being interviewed by Dr. Dave Janda over at davejanda.com. Jim discusses the economy, the financial system... and gold. The link to this rather longish audio interview, is here.
¤ The Wrap
The money power preys upon the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces as public enemies, all who question its methods or throw light upon its crimes. It can only be overthrown by the awakened conscience of the nation.- William Jennings Bryan
Tuesday's volume in both metals wasn't overly heavy. Monday's open interest data showed an increase on the rise in the price of both gold and silver on that day. This was not unexpected. But, the changes weren't overly large... with gold o.i. up 5,708 contracts... and silver o.i. up a smallish 1,612 contracts. It's entirely possible that all of Monday's increases could have been negated by Tuesday's price action... and we won't know that until yesterday's final open interest numbers are posted on the CME's website later this morning. Whatever these numbers show will be in Friday's Commitment of Traders report... a report that both Ted and I are really looking forward to seeing, because all of the 'Pearl Harbor' bombing of the silver and gold price on that date [December 7th] will be in it.
I note that the world's reserve currency is on the rise again in Far East and early London trading... with the dollar up about 33 basis points as of this writing at 4:43 a.m. Eastern time. Gold is down over four bucks... and silver's down 27 cents... as we await the New York open.
Here's the 6-month silver chart. Although we are well above both 50 and 200-day moving averages, the internal structure of the COT in silver is actually in great condition... despite the bullion banks' short position. The set-up is very price positive... but if we do get a sell-off, it will have nothing to do with what's going on with the real world supply and demand situation... it will be because 'da boyz' engineered it.
It will be interesting to see if the U.S. bullion banks smack the metals down the day before the CFTC meets to set position limits in the silver market. We'll find out soon enough.
See you on Thursday.
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