Wild Speculation Lies Ahead in Gold: Richard Russell

• Yesterday in Gold and Silver
• Critical Reads
• The Funnies
• The Wrap

Virtually all of the positive action in gold on Thursday came on the back of a 70 basis point drop in the U.S. dollar that started the moment that trading began in the Far East... which was 6:00 p.m. New York time on Wednesday night. The dollar dive ended at 8:00 a.m. in London... and so did the rally in both precious metals. From that point, gold began a long slide... and was down about $17 from its London peak by 9:30 a.m. in New York. Gold didn't do a whole heck of a lot during the rest of the Comex trading session... but shortly after 1:00 p.m. Eastern time, gold began a rally that only ended at the close of electronic trading at 5:15 p.m. Eastern time. Gold ended the Thursday trading session up $9.30 at $1,381.20 spot.

Silver followed a very similar path... but the sharp rise to its high price of the day at the 8:00 a.m. London open stands out like sore thumb. From there, the silver price took the same path as gold's... falling about 80 cents until the same 9:30 a.m. New York time that gold hit its nadir. From that low [$24.06 spot], silver began rising... and by the end of the trading day on Thursday, it was all the way back up to its New York high of $24.69 spot. And look at that Kitco chart below! There's a $3.50 price range on it. I've been watching the silver market for at least ten years... and I've never seen a chart like this one before.

Here's the 3-day chart of the world's reserve currency. As I said in the first paragraph, the dollar took a header shortly after Far East trading began... with the bottom coming minutes before 8:00 a.m. in London yesterday morning. Taking a second look at this chart, I'd say the dollar fell a hair over 80 basis points... and recovered about 30 of those basis points by the close of New York trading on Thursday afternoon.

Here's the 3-year dollar chart... and it's ugly. One has to wonder just how long it will stay this oversold. Based on what appears to be happening out there, it could be quite a long while.

With the gold price slowly sliding from its London high, the shares took their cue from the Dow... with the HUI topping out at 11:00 a.m. Eastern time.. just like the general equity markets. Then there was a long slide until 3:00 p.m. At that point, the Plunge Protection Team showed up to save the Dow from falling below 11,000... but it didn't help the precious metals stocks very much... and the HUI finished down 0.60%.

The CME Delivery Report contained nothing worth mentioning. Most gold deliveries for October are already done... so I'm not going to report these numbers again until First Day Notice for November... which will be on October 29th.

Well, after five straight withdrawals since September 28th totaling 658,715 ounces... the GLD ETF added 615,459 ounces yesterday. The SLV ETF added another chunk yesterday... this time it was 1,222,680 troy ounces.

The U.S. Mint had another sales report. They sold another 5,500 ounces of gold eagles... and a further 90,000 silver eagles. Month to date, gold eagle sales are up to 57,500 ounces and silver eagles are at 1,440,000.

The Comex-approved depositories showed a very small decline of 21,137 ounces of silver on Wednesday.

¤ Critical Reads

SEIU Launches 'Where's The Note' Campaign To Help Homeowners Fight Foreclosure

My first story today is a continuation of the ongoing saga of 'Where's The Note?'. This is day three. The following story regarding this is posted over at the huffingtonpost.com website... and I thank Washington state reader S.A. for bringing it to my attention. The headline reads "SEIU Launches 'Where's The Note' Campaign To Help Homeowners Fight Foreclosure". Based on this piece, the whole campaign sounds perfectly legit to me. But I'll leave it up to you, dear reader, if you wish to pursue it further... despite the name[s] attached to the campaign. If you have a mortgage on your house in the U.S.A... this is a must read... and the link is here.

View full GSD edition

U.S. Home Seizures Reach Record as Lenders Review Foreclosures

Reader S.A. has another foreclosure-related story. This one is from Bloomberg... and the headline reads "U.S. Home Seizures Reach Record as Lenders Review Foreclosures". Lenders took over 102,134 properties in September. That was the highest monthly tally since the company began tracking the data in 2005, surpassing the August record of 95,364. Foreclosure filings, including default and auction notices, rose 3% from the prior month to 347,420. One out of every 371 households received a notice. The story has a lot of other statistics as well... and if you have an interest in this sort of thing, it's worth the read... and the link is here.

View full GSD edition

Here Comes The Scramble For Capital: JPM To Raise $4 Billion

The next item is a posting over at zerohedge.com, which was sent to me by 'David in California'. The headline reads "Here Comes The Scramble For Capital: JPM To Raise $4 Billion". Maybe they need the money to pay off their gold and silver short positions in the Comex futures market? It's less than a 2-minute read... and the link is here.

View full GSD edition

JPMorgan Sells $4 Billion of Debt Amid Loan Scrutiny

Australian reader Wesley Legrand sent me another story on the JPMorgan bond issue. It's a Bloomberg piece headlined "JPMorgan Sells $4 Billion of Debt Amid Loan Scrutiny". This story puts a different spin on things than the zerohedge.com piece, so it's up to you to decide which one is closest to the truth. This piece is a 1-minute read... and the link is here.

View full GSD edition

U.S. is currency war's "tomb maker" - China economist

The next item is a Reuters piece that was filed from Beijing in the wee hours of Thursday morning. The headline reads "U.S. is currency war's "tomb maker" - China economist". In a front-page commentary in the overseas edition of the People's Daily, Li Xiangyang said that The United States fired the first shot in the currency war and the rest of the world must be on guard for its deliberate strategy to devalue the dollar. Currency wars it is... and the link to that story [which is well worth the read] is here.

View full GSD edition

We're at risk of financial collapse': Ken Clarke's warning for Western economies.

And, in a story posted at Britain's Daily Mail late yesterday, I see that Justice Secretary Kenneth Clarke has warned that the West is in "grave danger of financial collapse". It's my opinion that he's got that exactly right... it's only the timing of that event that's not clear. The headline reads 'We're at risk of financial collapse': Ken Clarke's warning for Western economies. I thank Nick Laird for sending me the story. In my opinion it's a must read... and the link is here.

View full GSD edition

Global warming fraud: the tide begins to turn

In a blog posted in the October 12th edition of The Telegraph, writer James Delingpole tees off on global warming... and the headline reads "Global warming fraud: the tide begins to turn". Having spent many years in meteorology in Canada's high arctic back in the late 1960s and early 1970s... I have some knowledge in these matters. If this topic interests you, then it's a must read... and the link is here. I thank reader U.D. for sharing it with us.

View full GSD edition

Snippet From Goldman Sachs

I don't have much in the way of gold-related stories for you today. The first item is a snippet about silver from Goldman Sachs of all places. Coming from G.S... one must consider it wildly bullish for the lagrimas de la luna... or 'tears of the moon'. Note his comment regarding fiat currencies as well.

"The market that is getting real attention within the precious space is Silver, which hadbeen lagging gold for much of the year until last month. It has rallied about 35% in the last few weeks from $18 to $24.50. I think we are in the process of a complete re-prising in silver, as above-ground stocks in notional dollars are minimal relative to gold... and the majority ofannual mine production is getting consumed into industrial product. With what is fast becoming a realization that FIAT currency is questionable, then silver will be a much moreaccessible product in the physical bar/coin community than gold for the vast majority of people who have less wealth to protect. The process will take time but I believe silver will continue to outperform gold." [Amen to that! - Ed]

View full GSD edition

Wild Speculation in Gold Lies Ahead

Eric King over at King World News sent me the following blog. It's commentary by Richard Russell... and the headline reads "Wild Speculation in Gold Lies Ahead". It's not a very long read, but it's a must read... and the link is here.

View full GSD edition

Pity the Fool Who Doesn't Invest in Gold

We must be getting close to a raging bull market, because Mr. T [of the "A-Team" TV show]appeared on Bloomberg Television to talk up the precious metal yesterday. The headline reads "Pity the Fool Who Doesn't Invest in Gold". It's a handful of paragraphs... and the interview lasts a bit over five minutes... and the link is here.

View full GSD edition

Brian Sack at the New York Fed stressed the need for the Fed’s actions to bolsterasset inflation as to boost the wealth effect on spending [QE "adds to household wealth by keeping asset prices higher than they otherwise would be..."]. We just can’t seem towean ourselves off this asset-dependent economy — and how directed by a Fed official that the attempt here is to bring asset values above their intrinsic value. Amazing way to run an economy.Whatever happened to skills, productivity, education, job creation, innovation? Or thrift — when did that virtue become a dirty six-letter word?- David Rosenberg

Gold, silver... and the dollar, didn't do much during the Friday trading sessions earlier today... and not much is happening in early London trading, either. Gold volume at the moment [4:10 a.m. Eastern] looks to be average... but silver volume is pretty heavy for this time of day.

I'll be very interested in today's Commitment of Traders report, as Ted Butler mentioned to me that if there has been any short covering in either gold or silver during the prior week, it should show up as a decline in total open interest for both metals... so I'll be watching for that. If you're a COT wonk... then click here at precisely 3:30 p.m. Eastern time this afternoon... and the new data will be posted.

As I mentioned earlier in this column, the PPT showed up in the equity markets at exactly 3:00 p.m. Eastern time yesterday in order to prevent the Dow from taking out 11,000 to the downside. The news from JPMorgan and Citi was not what the markets wanted to hear. It will be interesting to see if they're needed again today.

The guys and girls over at Casey Research HQ in Stowe, Vermont are pleased to announce that they’ve launched a new page on the CR site dedicated to Casey’s NexTen. A new generation of serially successful entrepreneurs is emerging within the natural resource sector. And, just like the legendary names before them - Ross Beatty, Lukas Lundin and Robert Friedland to name a few - the companies and projects associated with these rising stars will be best positioned to generate serious wealth for investors.

Casey Research has identified the 10 most promising names of this new generation what we're calling Casey's NexTen. You can learn all about it by clicking here.

Regardless of where the short-term price is headed in either metal... the medium to long term is not in doubt. That's why I deem it prudent to be as fully invested as you wish to be... starting right now. Despite the big price gains in silver and gold lately, there's still time to put your investment dollars to work. The first place I'd start would be with a subscription to either Casey's Gold and Resource Report... or Casey Research's flagship publication... the International Speculator. Please click on the links, as it costs nothing to check them out... and the subscriptions come complete with CR's usual money-back guarantee.

I'm not sure what will happen in gold and silver when the Comex opens this morning, so I'm prepared for anything.

Have a great weekend... and I'll see you on Saturday.