Opportunity of a Lifetime

There wasn't much to get excited about in Tuesday's gold action... but gold managed to eke out a small gain by the time the trading day was over. Both gold's low and high price yesterday [such as they were] were both set in New York... at $1,231.10 spot and $1,243.70 spot respectively.

Silver's path was similar... except that silver's low [about $18.58 spot] was at the London silver fix around noon local time. From there, silver rose to it's high of the day of $19.01 spot shortly before lunch in New York. Then it got sold off into the close.

The dollar did nothing worth mentioning... as the price action in both metals [such as they were] was obviously unrelated to any moves in the currency market.

The precious metals stocks spent most of the day in slightly positive territory... but got sold off starting around 2:00 p.m. Eastern time, as the general equity markets rolled over. The HUI finished down a smallish 0.47% on the day.

The CME Delivery Report, which is always updated late in the evening, showed that 140 gold and 1 silver contract were posted for delivery on Thursday. The Bank of Nova Scotia was the big issuer... and a lot of the 'usual suspects' were the stoppers. Tuesday's activity is linked here.

The GLD ETF yesterday showed an increase of 166,282 ounces of gold yesterday... and, as per usual, there was no increase in SLV holdings. Month-to-date, GLD is up about 1.5 million ounces... and SLV is down about 1.6 million ounces. The last day that any silver was added to SLV was on May 28th. There have been seven additions to GLD in June so far.

The U.S. Mint reported that another 12,000 ounces of gold were sold in their gold eagle program... and there were no sales reported in 24-k gold buffaloes or silver eagles. Over at the Comex-approved depositories, however... they reported that a chunky 1,607,906 troy ounces of silver were removed on Monday. That's almost one full day of world silver production, dear reader. The withdrawals were from HSBC and Brink's. Click here to view the action for yourself.

I'm delighted to say that I don't have a lot of stories today. The first one is gold related... and was sent to me by Australian reader Wesley Legrand in the wee hours of Monday morning. I could have included it then, but my column was already bursting at the seams as it was... so I thought the better of it... and I'm glad I did. The article is about three weeks old, but this is the first time I've seen it. It's an interview with Charles Oliver, investment strategist for Sprott Asset Management's Gold and Precious Minerals Fund. Charles says "I expect gold to be at $2,000 roughly two years from today. . .if I'm wrong I'll shave the hair off my head." It's an exclusive interview with The Gold Report... and it's headlined "Gold Headed to $2,000 in Two Years"... and the link is here.

Yesterday I mentioned that the World Gold Council announced that Saudi Arabia had mysteriously doubled their gold reserves right out of the blue. I also said that you hadn't heard the last of this story. Well, I got a reply from James Turk over at goldmoney.com yesterday... and it went something like this: "One key point is that it shows that trying to compile annual supply/demand statistics is totally impractical. The news announcement last year by China that they had doubled their reserves over several years is another good example of this." That's why, dear reader, we at GATA have always looked at the yearly gold and silver reports from Gold Field Mineral Services and CPM Group with deep suspicion. This new story does nothing to increase their credibility.

Here's a Bloomberg story filed from London yesterday with a gold-friendly headline that reads "Gold to Be Best Performer in Rest of Year, Poll Finds". The story is courtesy of Russian reader Alex Lvov. It's not very long... and the link is here.

My next two offerings are courtesy of reader Roy Stephens. One is about Iran... the other about Turkey. Both are must reads. The first is from Monday's edition of The Telegraph out of London. The headline reads "Iran bans two UN nuclear inspectors from country". This will do nothing to defuse the tense situation over there. The link to the story is here.

The story about Turkey was posted at upi.com yesterday... and, in a way, is related to the previous story about Iran. Do not underestimate the roll that Turkey has, and will play, in the unfolding drama of the 21st century version of the "great game". As I said in the last paragraph... this is a must read as well. The headline states "Commentary: Talking Turkey"... and the link to this unfortunately rather short article is here.

If it wasn't for reader Roy Stephens, I wouldn't have had any stories at all worthy of the name today. Here is his last offering for us, which arrived in my in-box in the wee hours of this morning. It's piece by Ambrose Evans-Pritchard from The Telegraph in London... and the headline reads "Euphoria cools over Chinese moves to weaken yuan". As I mentioned in this column yesterday, the Chinese didn't specify when, or by how much, they would allow the yuan to appreciate or depreciate... and the markets reacted accordingly. The link to the story is here.

My last item today is one from Jim Cook, the president of Investment Rarities, Inc... a precious metals firm out of Minneapolis. Jim asked Ted Butler to write about silver for his clients starting about ten years ago. Ted agreed, but only if what he had to write was published in the public domain as well. A deal was struck... and the rest, as they say, is history.

In a private essay to his subscribers yesterday, Ted wrote the following introduction to Jim's essay... "Considering how things have turned out, I thought you might benefit from Cook's thinking now. Although we have only met once in the ten years I have known him, we do talk on the phone daily. I don't think I'm speaking out of turn by telling you that Cook wasn't a particular believer in silver when he first asked me to write for his company. Judging from his own words, he is now. Please keep in mind that Cook is a smart and successful businessman, one who is not easily fooled. He has pestered me daily for ten years with penetrating questions... and seeks constant confirmation on anything I say or write. My prime purpose in publishing his thoughts today is not to have him pat me on the back, but to demonstrate that once someone smart picks up the scent in silver and digs into the facts, he will end up buying silver. Count on it." Cook's essay [posted at investmentrarities.com] is headlined "Opportunity Of A Lifetime"... and it almost goes without saying that it's a must read... and the link is here.

While I'm on the subject of silver... here's the 3-year silver graph.

I'd like to point out that silver's 200-day moving average is now at $17.51 the ounce as of yesterday's close. It's been almost 30 years since its been that high. The day will come when we'll find it hard to believe that it was ever that low.

It was just another day off the calendar yesterday as far as the precious metals were concerned. It's impossible to tell whether or not the bullion banks will show up again or not. The open interest in both gold and silver is back up to almost record territory once again... and, if prices do get slammed from here, dear reader... there's only one reason for it... and that's the paper game that these bullion banks are playing on the Comex. It will have nothing to do with real supply and demand factors whatsoever. So we'll just have to wait it out.

The FOMC meeting is in progress at the moment... and I don't expect anything from that. As I mentioned yesterday, the G-20 meeting here in Canada is almost upon us as well. Options expiry [which I said yesterday was occurring on Monday] is actually happening tomorrow... and I thank Ted for pointing out the error in my thinking. Monday is the expiry for the futures market in both gold and silver... with the last notice day of delivery in the June contract on Tuesday... and first day notice for delivery into the July silver contract on Wednesday.

With all these factors on our doorstep, I'll believe just about anything as far as a price for both gold and silver goes. With neither metal trading in a free market, 'da boyz' can do what they wish, when they wish to do it... and they will.

There are very faint signs of life in the gold and silver markets now that London is open... but volume in both metals is basically non-existent... and any serious buying or selling will move the markets noticeably. But, as per usual, virtually all of the price action worth mentioning occurs in New York trading... and we won't have long to wait for that.

I hope your Wednesday goes well... and I'll see you here on Thursday.