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
Gold Action Knocks Out Weak Hands: Richard Russell
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Gold, silver, the dollar, the HUI and the Dow all turned on a dime at precisely 2:00 p.m. yesterday. There are no markets anymore... only interventions. Is a CFTC judge stacking the deck against investors? Indian traders bet big time on gold prices. John Embry speaks... and much more.
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Yesterday in Gold and Silver
Gold didn't do a whole heck of a lot in Far East trading during their Thursday... and that lack of enthusiasm continued through the first half of the London trading day. However, about an hour before New York opened [half past lunchtime in London], the selling pressure began... and by 9:00 a.m. in New York, gold was down about fourteen bucks.
The gold price gained about ten dollars of that back going into the London p.m. gold fix at 10:00 a.m. Eastern time, before the really serious selling began. Between the p.m. fix [gold's high of the day at $1,347.80 spot] and gold's low of the day in New York at 2:00 p.m. Eastern time, gold sold off $30... as the low of the day was reported as $1,317.10 spot.
The real action was in the only market that matters... and that's the silver market. Silver made an attempt to rally the moment that trading began on Thursday morning... but within an hour or so, the price got sold down to its Far East low of the day at 4:00 p.m. Hong Kong time... which also happened to be the open of the London market at 8:00 a.m. local time.
From there, silver gained about thirty cents up until that same half-past-lunchtime point in London that gold ran into. On the way, the silver price made a couple of attempts to break out above $24/ounce... but ran into a wall of selling at both attempts. The second attempt at 12:30 p.m. in London was much more forceful... and by 9:00 a.m. in New York, the 30 cent rise since the London open had been eliminated.
Then, like gold, the selling backed off and the silver price was up to it's New York high [$24.03 spot] by 10:15 a.m. Eastern time. Then, like gold, the selling began. The selling stopped at 2:00 p.m... and that was silver's low tick of the day at $23.04 spot. From that point, silver gained back about 15 cents going into the New York close.
On Thursday, gold was down 1.52%, silver was down 3.22%, platinum down 0.53%... and palladium down 0.17%. Any questions?
Did the dollar follow gold... or did gold follow the dollar? There was little [net] activity in the dollar yesterday... but the biggest dollar move was between 10:00 a.m. and precisely 2:00 p.m. Eastern time. During that period, the dollar rose a hair over 60 basis points... and gold got slammed for $30 at the same time. It was the bullion banks hiding behind the skirts of a 'dollar rally' once again.
As was to be expected, the gold shares didn't spend much time in positive territory yesterday. As soon as the big sell-off/dollar rally began shortly after 10:00 a.m... that was all she wrote. But, at precisely 2:00 p.m. Eastern time, the shares turned on a dime and marched higher... and the HUI finished well off its lows... down only 1.87%. Funny how that works, isn't it... gold, silver, the dollar, the HUI and the Dow all turned on a dime at precisely 2:00 p.m.
There are no markets anymore... only interventions.
The GLD took another small hit again yesterday. This time 43,724 ounces were withdrawn. There were no reported changes in SLV. There was nothing from the U.S. Mint... and the Comex-approved depositories showed that they had a net increase of 287,925 ounces of silver on Wednesday. The link to that action is here.
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¤ Critical Reads
SubscribeGSD Issues to Address
Before I start posting my stories for the day, I want to repeat those housekeeping items that I mentioned in this column on Tuesday, as I've added some things... and changed others.
Firstly, we are experiencing minor [but ongoing] problems with the Outlook e-mail interface. Anyone who has this e-mail system [which includes me] may have lines of text that are missing from the e-mail version of this column that arrives in your in-box every day. For whatever reason, the Outlook software is just dropping them. Obviously there are computer geniuses working on this while I write these lines... but if you're experiencing this problem, please click on the 'on line' version... and this problem will vanish. I'll let you know when it's fixed.
By the way, the on-line version is an infinitely better read than the version that you receive by e-mail... so I urge you to bookmark that page. And it's also posted on the Casey Research website long before you receive the e-mail version, so I urge you to check out that option.
Next, a quick word to thank everyone for the feedback and suggestions that have been submitted over the last several weeks. Many suggestions for the new GSD have already been implemented, and for all feedback about the design and usability of the GSD, I encourage you to continue using that 'Feedback' button on the right side of the page.
In addition to that Feedback button, we now have an "Add new comment" button, which you'll find at the bottom of each edition, just below my signature. When you wish to comment on what I write each day, please use this button instead of the Feedback button. You can only access this "Add new comment" button from the on-line version of this column... so you'll have to click on that link at the top of the page of the e-mail version that you receive.
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Banks Face Two-Front War on Mortgages, Foreclosures
My first story today is a Bloomberg piece about the unfolding real estate debacle. The headline of this article reads "Banks Face Two-Front War on Mortgages, Foreclosures". This will keep the lawyers busy for years to come. It's a long read, but the issue is huge... and if you have the time, you should run through it. I thank reader U.D. for sharing it with us... and the link is here.
Fannie, Freddie bailout cost is likely to rise to $154 billion, agency projects
The next story about the unfolding real estate fiasco is this piece out this morning's edition of The Washington Post. The headline reads "Fannie, Freddie bailout cost is likely to rise to $154 billion, agency projects". To tell you the truth, dear reader... this mortgage debacle will cost in the trillions before it's all said and done. I thank reader Scott Pluschau for sending me this story... and the link is here.
Foreclosuregate Goes Beyond the Banks
Lastly on the real estate front is this boots-on-the-ground commentary by Josh Wilburn over at The Motley Fool website. The headline reads "Foreclosuregate Goes Beyond the Banks"... and that it does! It's a short read... and it's well worth your time. I thank Florida reader Donna Badach for sending it me... and the link is here.
Fed's Bullard Says QE2 Decision Not To Come Until After Q3 GDP Announcement, Which "May Be Stronger Than Q2 GDP"
There's lots of talk going around about QE2, which everyone expects will be announced when the FOMC issues a statement on November 3rd. Tyler Durden over at zerohedge.com has a quick comment about that. The headline reads Fed's Bullard Says QE2 Decision Not To Come Until After Q3 GDP Announcement, Which "May Be Stronger Than Q2 GDP". This is a very short must read... and the link is here. I thank 'David in California' for sharing it with us.
Permanent Open Market Operations [POMO]
I've spoken about Permanent Open Market Operations [POMO] by the Fed as free money for the primary dealers to rig the markets. Well, that's what it is... and they even have a schedule for it... and the link is here! You will note that there's a POMO scheduled for today. It's a Friday... and the election is coming up hard... so let's see what happens. It will also be interesting to see how much money they give away this time. On Wednesday, it was only $600 million, which is a pittance. Sometimes it's ten times that amount... but that data won't be released until Monday, which is the settlement date. I thank reader Scott Pluschau for providing the link to this chart.
Commodity Futures Trading Commission judge says colleague biased against complainants
Here's a story that surfaced earlier this week... which finally made into the main-stream media yesterday. It appears that a retiring CFTC judge says that his colleague is biased... and requested that all his pending cases be given to some other judge who might be impartial. The story broke in The Washington Post on Tuesday... and the headline reads "Commodity Futures Trading Commission judge says colleague biased against complainants". This is a must read... and the link is here.
Is a CFTC Judge Stacking the Deck Against Investors
The reporter on that Washington Post story was David Hilzenrath. He was interviewed on CNBC about this story... and this is well worth watching. CNBC headlines the story "Is a CFTC Judge Stacking the Deck Against Investors?" I thank reader 'David in California' for providing this video clip... and the link is here.
CFTC Judge Claims Colleague Issued Biased Rulings
The original source for the previous two stories showed up over a week ago posted at the futuresmag.com website. The headline there reads "CFTC Judge Claims Colleague Issued Biased Rulings". The actual notice sent to complainants, plus the December 2000 story from The Wall Street Journal about Judge Levine, are linked in this story and are worth a look. The link to all of this is here.
Indian Traders bet big time on Gold prices
The rest of today's article are gold related in one way or another. Reader 'David in California' has also provided the first gold story. This one is posted over at commodityonline.com... and is filed from Ahmedabad. It bears the headline "Indian Traders bet big time on Gold prices". It's not overly long... and the link is here.
Richard Russell - Gold Action Knocks Out Weak Hands
Over at King World News yesterday, came this blog from Eric King headlined "Richard Russell - Gold Action Knocks Out Weak Hands". It's a very short must read... and the link is here.
No bubble as gold, silver rise on U.S. dollar woes
Next is an offering from John Embry, chief investment strategist over at Sprott Asset Management in Toronto. It's his monthly column that he provides for Investor's Digest of Canada. The title to this essay reads "No bubble as gold, silver rise on U.S. dollar woes". I thank Australian reader Wesley Legrand for sending me this story, which I'm only too happy to post in this column... and the link to this must read commentary is here.
Out of Knowledge of money comes freedom
Lastly today is a GATA release that arrived in my in-box in the wee hours of this morning. Chris Powell was burning the midnight oil early this a.m... and stayed up long enough to dispatch the following... "Ben Davies, CEO of Hinde Capital in London and the rising star of the gold world, was a sensation Thursday evening in his U.S. speaking debut at the fall dinner meeting of the Committee for Monetary Research and Education at the Union League Club in New York. His address is appended with a short preface... your secretary/treasurer's introduction of him at the meeting." It's a long speech headlined "Out of Knowledge of money comes freedom"... but very much worth your time... and the link is here.
¤ The Wrap
There are no markets anymore... only interventions.- Chris Powell, GATA
Well, Thursday was another day where JPMorgan et al were taking no prisoners. They killed both metals behind the thinnest of dollar rallies that one can imagine. Platinum and palladium barely budged. But the positive news was in the precious metal stocks. Even though gold got hit for about $30 [silver for 99 cents] intraday... the HUI just gave back what it gained in an $8 up-move on Wednesday... so look on the bright side.
Volume in both metals yesterday was immense... over 200,000 contracts in gold... and 75,000+ in silver. I would assume that the open interest in both metals will have taken a tumble as the tech longs puke up their positions... and the bullion banks rush to cover, or go long themselves. Unfortunately, we won't see any of this until next Friday's Commitment of Traders report. Once again 'da boyz' timed it so that we have to wait until the following Friday before we can see what they were up to this week. It was ever thus!
Talking about the COT report. This week's report [for positions held at the close of trading on Tuesday] will be posted at 3:30 p.m. Eastern time [sharp] this afternoon. If you wish to check it out, the link is here. I expect that most of Tuesday's big down-day was not reported in a timely manner... so today's COT report probably won't tell us a lot, as all of the big action occurred after the cut-off.
Gold didn't do a lot in Far East trading earlier today... and the silver price was far more volatile... but both were up slightly going into the London open at 8:00 a.m. local time... 3:00 a.m. Eastern. Then the bullion banks went to work immediately... and it didn't take them long to get to new lows for this move down. Volume [as of 4:41 a.m. Eastern time] is already immense in both metals
I know that it's hard to think about buying stocks at a time like this... but when the selling is finally all over, it will be another huge buying opportunity. In my opinion you should make your preparations ahead of time, so you'll be ready when the bottom is in... and 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.
Well, 'da boyz' are certainly serious in London. I'm only guessing, but I'd say that it could be a fairly ugly day in New York when the Comex opens at 8:20 a.m. Eastern time.
See you on Saturday.
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