Welcome To The Golden Minerals HUB On AGORACOM
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
Silver Exports From China Down 60% From Last Year
Oct
20
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Silver eagle sales hit 2 million in October. China withholds 'rare earth' metals from the U.S.A. and Europe. Silver position limits delayed until mid-January? Jim Rickards says the mortgage debacle is far worse than most people imagine... and much more.
"¤ Yesterday in Gold and Silver
Gold was basically flat during all of Far East trading on Tuesday. This lasted right up until lunchtime in London... then 'da boyz' showed up. The first bought of selling lasted fourty-five minutes... up until 1:00 p.m. in London. Then gold flat-lined for an hour until 8:45 a.m. in New York when the second bought of selling began... with a little bid-pulling to help it along. This 'selling spree' lasted for another fourty-five minutes. From 9:30 a.m. Eastern until 12:15 p.m... the gold price recovered about $15... then the selling began anew... with the absolute low of the day [around $1,327 spot] coming around 2:15 p.m. in electronic trading. From that point, gold basically traded sideways until the close of trading at 5:15 p.m. From its Far East high, to its New York low, gold got clocked for about $35.
Silver's path was the same as gold's... but different in the fact that the absolute low of the day [around $23.25 spot] came around 3:45 p.m. From it's Far East high to its New York low, silver lost about $1.20... the biggest one intraday decline I can remember.
The dollar's absolute low was 77.00 cents early in the trading day on Tuesday. Six hour later... which was 3:00 a.m. in New York... the dollar was up 45 basis points. Gold responded by falling a few dollars... and silver was down about twenty cents. Then, between 3:00 a.m. and 5:00 a.m. Eastern, the dollar dropped back about 25 basis points. Gold responded by rising a couple of dollars... and silver gained about fifteen cents.
Then, starting at 5:00 a.m., the dollar began to slowly rally... but was only up another 10 basis points by 12:00 noon in London. That's when 'day boyz' showed up in gold and silver. The drop in gold and silver was out of all proportion to the subsequent rise in the dollar. The dollar was up about 90 basis between noon in London and 3:30 p.m. in New York.
The shares gapped down at the open... along with the rest of the equity markets... and by the time the carnage was over, the HUI was crushed for 5.08%.
In a nutshell, this was a bear raid on precious metals cloaked in a dollar rally. Volume in both metals was right off the charts... possibly the biggest volume day of the year. The open interest numbers [when they're available later this morning] should tell us a lot.
There was another small withdrawal from GLD yesterday. This time it was 29,306 ounces. There was no reported change in SLV.
The U.S. Mint had another sales report. They sold another 4,000 ounces of gold eagles, plus another 275,000 silver eagles. Month-to-date sales are 64,000 ounces and 2,000,000 ounces respectively.
Over at the Comex-approved depositories on Monday, they reported that another 492,356 ounces of silver were withdrawn from their collective inventories. The link to all the action is here.
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¤ Critical Reads
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Mortgage Buybacks May Cost Lenders $120 Billion, JPMorgan Says
My first story is a Bloomberg piece that I stole from yesterday's King Report... and was posted over at businessweek.com. The headline reads "Mortgage Buybacks May Cost Lenders $120 Billion, JPMorgan Says". Forced repurchases of soured U.S. mortgages may be the “biggest issue facing banks” even as errors in the foreclosure process draw attention to other industry risks, according to JPMorgan Chase & Co. analysts. In light of the story that follows this one, I'd recommend that you read this... and the link is here.
Pimco, NY Fed Said to Seek BofA Mortgage Repurchases
The ink was barely dry on the previous story when the following Bloombergstory hit the streets. The headline reads "Pimco, NY Fed Said to Seek BofA Mortgage Repurchases". Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York are seeking to force Bank of America Corp. to repurchase soured mortgages packaged into $47 billion of bonds by its Countrywide Financial Corp. unit. The chickens are finally starting to come home to roost... and this is just the thin edge of the wedge. The Mortgage Backed Security [MBS] as an investment vehicle is now officially dead and buried. This story, like the previous one, is well worth your time... and the link is here. One has to wonder about the motive and the timing of this action.
China Said to Widen Its Embargo of Minerals
My next offering today is courtesy of Australian reader Wesley Legrand. China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted shipments of those materials to the United States and Europe, three industry officials said on Tuesday. "Crucial minerals" is another name for rare earths. The headline from yesterday's edition of The New York Times reads "China Said to Widen Its Embargo of Minerals". This is a two minute read... and, in my humble opinion, is well worth it. The link is here.
Silver Exports From China May Slump by 40% This Year
My first precious metals-related story is courtesy of reader U.D... and is about silver. It's another Bloombergstory that appeared in yesterday's edition of The Washington Post. The headline reads "Silver Exports From China May Slump by 40% This Year". Customs data show [that] exports plunged almost 60 percent to 970 tons in the first eight months of 2010. But, when the bullion banks are on the rampage, this sort of silver-friendly news makes no difference. This is a must read... and the link is here.
Lacking trading data, CFTC may delay commodity position limits
The next story is a GATA release bearing the headline "Lacking trading data, CFTC may delay commodity position limits". It appears, at least from this story, that position limits in silver won't be set until mid-January. If you're a silver investor, this a must read... and the link is here.
Interview with Jim Rickards
My last offering today is another interview with Jim Rickards that's posted over at King World News. This interview has nothing to do with precious metals, it has to with the mortgage debacle. Jim says the situation is far worse than people realize. This is an absolute must listen... and the link is here.
¤ The Wrap
If those in charge of our society - politicians, corporate executives, and owners ofpress and television - can dominate our ideas, they will be secure in their power.They will not need soldiers patrolling the streets. We will control ourselves.- HowardZinn (1991)
As I said earlier in this column, yesterday's action was a bear raid in both silver and gold that was cloaked in a dollar rally. It also happened on a Tuesday... which is the cut-off for Friday's Commitment of Traders report. Will all of yesterday's trading action be included in this report? You'll excuse me while I remain a skeptic. However, we should see a big drop in open interest when the CME releases their final volume report later this morning.
In a note to his subscribers yesterday, silver analyst Ted Butler had the following to say... "There is widespread expectations of a corrective sell-off after such a large rally. While these expectations are natural, that doesn't mean they must be realized. I'm still an agnostic about the certainty of a short-term sizable sell-off. It appears to me that those most vocal about a silver sell-off have been expecting it for the last $5 of the rally. You must be emotionally and financially situated to withstand a short-term sell-off, but also be in position if silver rockets from here. There is a long way to go before silver is overvalued and we must not get shaken out by short term considerations." [That's good advice, which I follow myself. - Ed]
Both gold and silver sold off a hair in the first few hours of trading in the Far East... but since then, have risen... and are back in positive territory now that London has opened for the day. As of 4:31 a.m. Eastern time, volume in both metals is already quite high.
It's hard to say where we go from here. Will the bullion banks have more pain for us... or is this the best they can do? I'm somewhat surprised that they didn't press their advantage in the thinly-traded Far East markets earlier today. Maybe they're saving their firepower for New York.
Today is also the day that Russia's central bank reports its gold purchases for September... and I'll report on that tomorrow.
I hope your Wednesday goes well... and I'll see you here tomorrow.
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