Russia's Central Bank Adds 200,000 Ounces of Gold to Their Reserves

The gold price didn't do a lot in Far East trading yesterday... and the first noticeable selling pressure showed up at 10:00 a.m. in London when the bullion banks went to work on the price. The absolute low of the day [around $1,174 spot] was about one minute before the Comex open at 8:15 a.m. in New York. From that low, gold rose to its high of the day [$1,194.70 spot] around 11:20 a.m. Eastern time. Volume was pretty chunky... even with all the spread trades and roll-over removed.

Silver's price decline began at the London open yesterday morning at 8:00 a.m. local time [3:00 a.m. in New York]... with the absolute low [around $17.37 spot] coming about 12:40 a.m. London time... 7:40 a.m. Eastern. From there, silver rose to its high of the day of $17.79 spot... at 11:20 a.m... the same time as gold's high. Volume was only average.

It was nice to see both metals turn around to the upside. But I wish to point out that, once again, gold and silver made new lows for this move down before they turned higher. So, there was more tech fund long liquidation in both gold and silver yesterday as well. Since yesterday [Tuesday] was the cut-off for this Friday's COT report... all of this activity should be in it.

The world's reserve currency had a huge gain yesterday. From 2:20 a.m. until about 8:20 a.m... the dollar tacked on about 80 basis points. Gold [and silver] actually fell during this time period... with gold's low coinciding with the dollar high at 8:20 a.m. So, for once, there was co-relation... and it's easy to spot on both the gold and silver charts above.

The precious metals shares pretty much followed the gold and silver prices... with the HUI finishing almost back at its high of the day... and up an even 2.00%.

Tuesday's CME Delivery Report showed that 2 gold and 267 silver contracts were posted for delivery on Thursday. Finally some serious deliveries are being made in silver. The big issuers were JPMorgan [200 contracts] and Bank of Nova Scotia [52 contracts]. The activity, which is well worth checking out, is linked here.

The GLD ETF showed a withdrawal of 195,562 ounces... and there were no changes reported for SLV. The U.S. Mint had another sales report. They showed that 3,000 ounces of gold were used in their gold eagle program... and another 1,000 24-K gold buffaloes were also sold. There were no reported sales in silver eagles.

There was a lot of activity over at the Comex-approved depositories on Monday... as every warehouse showed movement. By the time the dust had settled... 402,247 troy ounces of silver had been removed from their collective inventories. The link to all that action is here.

As I mentioned yesterday... and in the headline above today... the Russian Central Bank's gold holdings were updated for June... and they showed that they purchased another 200,000 ounces. Their total gold reserves now stand at 22.8 million troy ounces... which is 709.2 tonnes. So far this year, the RCB has purchased 2.1 million ounces for their reserves... and that's a lot! Here's the updated graph courtesy of Richard Nachbar and Susan McCarthy... and I thank them on your behalf, dear reader.

In a Reuters story posted over at Kitco yesterday morning came news that the European Central Bank's gold reserves inched up by €1 million yesterday... as one euro zone central bank purchased the gold. The link to this rather uninteresting story is here.

My first story today is courtesy of Washington state reader S.A. He sent it to me on Monday... but I just didn't have the space in my Tuesday column, so here it is today. It's from the Sunday edition of The Wall Street Journal and is headlined "China Tops U.S. in Energy Use: Asian Giant Emerges as No. 1 Consumer of Power, Reshaping Oil Markets, Diplomacy". It nearly goes without saying that China's emergence as the world's most voracious energy consumer has wide implications for U.S. national security and foreign policy. It's a longish read, but worth your time if you have it... and the link is here.

The rest of the stories I have today are all courtesy of Roy Stephens News Service! The first is from the July 8th edition of the Texas Observer. The headline says it all... "Texas Budget Mess Now as Bad as California's". The link to the story is here.

The next story is from the English language website of france24.com. The headline reads "Moody's cuts Ireland's debt rating by one notch". Ratings agency Moody's downgraded Ireland's sovereign bond from Aa1 to Aa2 on Monday, saying it would be years before banking and real estate would contribute meaningfully to economic growth... and the link to the story is here.

Here's a story from Tuesday's edition of The Telegraph from London. The headline reads "UK deficit fears reappear as debts hit £927bn". Plans to cut Britain's mountainous national debt have been given fresh urgency by new figures showing that the state of the public finances is even worse than feared. The link is here.

Another story from yesterday's edition of The Telegraph bears the headline "British banks face £390bn 'funding gap'." British banks face a funding crunch next year as they attempt to refinance debt amounting to double the amount they raised on average during the years of the credit boom. The link is here.

Lastly today is this piece from the Swiss website thedailybell.com. The new law imbedded in the health bill says that any payments to a vendor of more than US$600 will have to be reported to the IRS. I mentioned this about a week ago in this column... and now a discussion of it has appeared at the above website. It's headline reads "All Gold To Be Tracked?". It's not particularly long... and I consider it your must read for the day... and the link is here.

I must admit that I was rather amazed to see both silver and gold rally as they did off their lows yesterday... and I have no idea whether this is permanent, or only a temporary reprieve.

Options expiry for the August contract in gold is next Tuesday, July 28th... with the last day of trading in the July contract on the 29th... and first day notice for delivery into the August gold contract the following day. What may happen price wise between now and then is anyone's guess.

Not much happened during Far East trading earlier today... and that also goes for early trading in London this morning as well. Volume [net of roll-overs and spreads] was pretty light in gold... and about average in silver.

I look forward to today's trading in New York with great interest.

See you on Thursday.