Rare Trading Action, Explosion Imminent: James Turk

The gold price drifted gently higher during Far East and London trading yesterday... and was almost at $1,260 spot by 8:00 a.m. Eastern time. Then, starting at 8:00 a.m... the gold price spiked to its high of the day [$1,263.40 spot] before a not-for-profit seller showed up moments after the Comex open and dropped gold to it's low of the day [$1,252.70 spot] in the space of 30 minutes. All subsequent rallies met the same fate... and gold closed unchanged from Tuesday.

Silver was in positive territory right from the Wednesday open... and, like gold, it spiked up to its high of the day [$20.18 spot] shortly after the Comex open, where it ran into the same not-for-profit seller.

The US$ was all over the place in a very tight range... and was not a contributing factor in yesterday's precious metals price activity.

The HUI started off in positive territory, but just couldn't hold those gains... and closed down 0.77%... its low tick of the day.

The CME Delivery Report yesterday showed that zero gold and 148 silver contracts were posted for delivery on Friday. JPMorgan was the big issuer in its client account... and the big stopper in its proprietary trading account. Out of one pocket and into another! It's worth a look... and the link is here.

There were no changes reported in either GLD or SLV yesterday... but over at the U.S. Mint they finally reported some sales for September. They sold 13,500 ounces worth of gold eagles... 2,500 24K one-ounce gold buffaloes... and 145,000 silver eagles. Not an impressive start to this, or any other month. The Comex-approved depositories reported receiving a net 533,639 troy ounces of silver on Tuesday. The link to that report is here.

I have another bunch of stories for your consideration today... and quite a few of them fall into the 'must read' category. The first is a story from China about real estate. It has quite an amazing headline which reads as follows... "There Are Now Enough Vacant Properties In China To House Over Half Of America". The story, posted at the businessinsider.com website, was sent to me by reader 'David from California'... and the link is here.

On the weekend I ran a story about a bank run in Kabul. Well, this story hasn't gone away... and has turned ugly now that the new week has started. This story is also courtesy of 'David from California'... and is headlined "Kabul Bank Literally Forced To Beat Back Depositors As Cash Reserves Run Low". It's worth the read... and the link is here.

David's has another contribution to today's column. This one is a follow-up to an item on this subject that I ran in Tuesday's column. It was an unhappy story about Ireland's Anglo Irish Bank. Well, there was closure of sorts yesterday. The Telegraph's Ambrose Evans-Pritchard writes about in a story headlined "Ireland breaks up Anglo Irish as EMU debt jitters return". Ireland is to break up the nationalized lender Anglo Irish Bank, hoping to end a disastrous saga that has shattered confidence in Irish finance and left taxpayers with a daunting debt. This story is worth your time as well... and the link is here.

The next item was a Bloomberg story contained in a GATA release yesterday. The headline read "Yuan Trading Against Ruble Said to Start Within Weeks". China's central bank sent out a document last week allowing banks to apply for ruble trading licenses and the approval process may take three weeks, according to one of the bankers, who asked not to be identified because the process isn’t public. “The push for the internationalization of the yuan is intensifying,” said a Hong Kong-based senior economist at Credit Agricole CIB. “This is meant to eliminate the dollar from trade settlement.” It will be interesting to see how the dollar does in the weeks and months to come with this news floating around... and the link is here.

The next story is from Florida reader Donna Badach... was filed from Havana... and is posted over at aolnews.com. Fidel Castro told a visiting American journalist that Cuba's communist economic model doesn't work, a rare comment on domestic affairs from a man who has conspicuously steered clear of local issues since stepping down four years ago. The man, dear reader, has a keen grasp of the obvious. The story bears a similar headline... "Fidel Castro says Cuban model doesn't work"... and the link is here.

'David from California' has one last story for us today. This was originally posted over at the Financial Times in London... which you have to sign up for to read. But I found a reprint of the FT story posted over at cnn.com. The headline pretty much says it all... "Goldman Sachs faces large fine in UK". But no matter how big the fine is, it will basically amount to a licensing fee to rip the face off the investing public until the next fine comes along. The link to the story is here.

I saved my only four gold-related stories until the very end. The first is from reader Roy Stephens and is posted over at the German website spiegel.de. A rise in global demand for gold has sparked a hectic search for the precious metal in Peru's rainforests. Indigenous people and adventurers from all over the world are digging up riverbanks in the region -- with dire consequences for the environment. The headline states "Digging for Riches: High Gold Prices Spark New Peruvian Gold Rush"... and is well worth the read. The link is here.

The next precious metals-related story came in a brief market note extracted from an interview with Eric King at King World News. In it, GoldMoney founder James Turk says trading patterns indicate that gold and silver prices are about to take off. Turk's comments are headlined "Rare Trading Action, Explosion Imminent"... and the link to this must read commentary is here.

Yesterday, market analyst Peter Grandich over at grandich.com joined Jim Sinclair and James Turk in waxing apocalyptic about the struggle of gold and silver to break free of decades of price suppression and rigged markets. Grandich's commentary is headlined "Gold and Silver Alert: The Final Battle". It's only one paragraph long... and the link is here.

Lastly today is another commentary posted over at King World News that Eric slid into my in-box in the wee hours of this morning. He states that "Ben Davies, CEO of Hinde Capital put together this piece exclusively for the KWN blog which gives an outstanding synopsis of both the fourty-one page slideshow presentation and his twenty-three page speech. It discusses US government suppression of the gold price and the unsustainable debt of the US and UK. It gives some staggering potential price figures for gold. The staggering prices that Davies gives are in line with what Jim Rickards was mentioning in his two interviews and blog that I posted yesterday. The Ben Davies commentary, headlined "Gold Wars - A Golden Renaissance", is a must read as well... and the link is here.

In recessions, the economy is stimulated by the government sector. In depressions, the economy is sustained by the government sector. You choose which backdrop today’s economy more closely resembles. - David Rosenberg, Chief Economist & Strategist, Gluskin Sheff & Associates

Well, gold came close to breaking out to a new high yesterday... and it was only the intervention by not-for-profit sellers that prevented that from happening. The same applied to silver, although its been above its June 21st high for a few days now... but has a bit to go before it breaks above its old high of March 2008. Its attempt to do that yesterday suffered the same fate as gold.

As I pointed out in Wednesday's column, we are getting into overbought territory, especially in silver, but that wouldn't prevent both metals from breaking out to new high ground at any moment if there were enough determined buyers [read brain-dead technical funds] around.

And, as I also mentioned recently, we are in the strongest months of the year for both metals... and I just can't see the U.S. bullion banks from holding this back. But we won't be going higher in a straight line, as there are certain to be JPMorgan-initiated air pockets along the way.

There's always the chance that the bullion banks could get over-run...getting their heads handed to them at the same time. But, as Ted Butler always points out to me... if it does happen, it will be for the very first time.

Volume in gold yesterday was pretty chunky, even when you remove all the spread and roll-overs. Silver's volume was pretty decent as well. And just looking at Wednesday's preliminary numbers from the CME earlier this morning, I'd guess that open interest went up another bunch in both metals as well. So there's absolutely no sign that the bullion banks are doing any covering. On the contrary, they are still going short against all the new longs that are coming into the market. The day they do start to cover will be obvious... as the price action will tell all. As Ted keeps reminding me, the day that price management scheme is over will be so clear, that nobody will have to ask "Is this it?"

As of 4:56 a.m. Eastern time, gold volume is getting up there... and silver volume is pretty chunky. Prices in both metals aren't doing a lot. I'm hoping that prices will break to new highs this morning in New York... but I'm also emotionally prepared for 'da boyz' to pull their bids and ring the cash register on all these new tech longs. If not today, then soon. But as I've also said, any sell-off should be violent and very short lived.

I'm ready for 'any or all of the above'... and I hope, dear reader, that you are too.

See you on Friday.