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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
SLV ETF Adds a Record 11,342,666 Troy Ounces of Silver
Asian buyers have silver shorts checkmated: KWN. China's inflation rate hits 4.4%. Yesterday's 30-year bond auction came close to failing. Rumors of Irish bailout sweeps financial markets. Interviews with John Embry and Doug Casey...and much more
Yesterday in Gold and Silver
After the bullion bank-inspired sell-off on Tuesday, gold managed to recover somewhat, but every rally attempt on Wednesday ran into a willing seller... in the Far East, London... and New York. Despite all that, gold finished in the plus column yesterday... and back over $1,400 spot.
Silver had a day very similar to gold's... except the sell-offs were much more pronounced... and obvious. The high in both silver and gold was set in early London trading yesterday morning.
There was general co-relation between the dollar and gold yesterday... but nothing that I would want to hang my hat on... as the changes in the dollar were small in relation to the swings in the gold price.
The precious metal stocks followed the precious metal prices pretty much to the tick... and the HUI finished up a robust 2.67%... almost on its high of the day... which is a lot, considering the relative gains of the metals themselves. It's obvious that the 'buy the dip' mentality was going strong yesterday. I was one of them.
In commentary to his subscribers yesterday, silver analyst Ted Butler had the following to say about the CME's increase in silver margin requirements... "The real scandal in this silver margin increase was not that it occurred, but that it took so long to be enacted. Over the past three months, the price of silver increased by around 50%. Yet the exchange never increased margins once. That was irresponsible. The reason the CME didn't increase silver margins over this time was because to do so as prices were rising would have put more pressure on the shorts... something the exchange wants to avoid at all costs. The CME is almost totally interested in protecting the interest of the big shorts, like JPMorgan, who are the most important members of the exchange. The exchange would never do anything against the interest of its most important constituents, unless it had a gun to its head."
"Since raising margins becomes inevitable in a price rally at some point, the exchange did the next best thing... it timed the margin increase so that it came at a time when it would least likely hurt, and maybe help, its big constituent member short holders. That time is always best when the price makes a sudden reversal down after a big climb."
And that, dear reader, is probably one of the reasons why the CME has told CFTC chairman Garry Gensler to drop dead regarding position limits on commodities in general... and silver in particular. The CME is protecting its big constituents which, in silver and gold, are the '8 or less' bullion banks... led by JPMorgan.
The CME's Delivery Report didn't have much to show in the way of deliveries yesterday... 41 gold contracts and 4 silver contracts.
But the U.S. Mint had another sales report... adding 12,500 ounces of gold eagles and another 675,000 silver eagles. The month-to-date figures are now up to 33,000 ounces and 1,590,000 ounces respectively.
The GLD ETF reported a minor decline yesterday. This time it was 39,066 ounces. But the SLV ETF was a shocker... and I checked with both Ted Butler and Nick Laird to make sure that I wasn't seeing things, as the SLV was up a mind-blowing 11,342,666 troy ounces!!! That is a record daily receipt that will probably stand for a long time, as it's equivalent to about six days of world silver production... and is well over 25% of what the United States will dig out of the ground in all of 2010!!! One wonders where they got it all from, as virtually all of U.S. silver production disappears into the silver eagle program. And lest we forget, Sprott is still owed about 15 million ounces of top of that.
Nick Laird over at sharelynx.com couldn't resist sending me the updated graph for the SLV ETF... and I couldn't resist posting it.
Over at the Comex-approved warehouses, another decline in their respective silver stocks was reported on Tuesday. This time it was 159,419 troy ounces. The link to that action is here.
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¤ Critical Reads
SubscribeChinese Inflation Just Hit Its Fastest Pace in Two Years
Today's first story is from businessinsider.com and was sent to me by 'David in California'. The headline reads "Chinese Inflation Just Hit Its Fastest Pace in Two Years"... growing 4.4% in October. It's a short story [only a handful of small paragraphs] and the link is here.
Ugly 30-Year Comes At 4.32%, Gaping 5 Bps Tail To WI, Lowest Bid To Cover In A Year
David's second offering is a piece that showed up over at zerohedge.com yesterday. Apparently Wednesday's 30-year bond auction was not a happy event... as it came within an eyelash of failing... with the Primary Dealers and Directs saving the day. The one paragraph [plus a chart] is headlined "Ugly 30-Year Comes At 4.32%, Gaping 5 Bps Tail To WI, Lowest Bid To Cover In A Year". As T.D. says... "This is what happens when the general [Bernanke] does not give marching orders in advance [POMO Schedule]. Apparently Rick Santelli over at CNBC gave it an F minus grade! I recommend you read this, even if you don't quite understand all of it... and the link is here.
POMO Schedule
While on the subject of the POMO Schedule [Permanent Open-Market Operation... i.e. free money to the primary dealers who never have to pay it back... ever!]... it was released yesterday after the auction. As Tyler Durden said... "The Fed's marching orders to the Primary Dealers are now public: $105 billion in 18 nearly-daily operations over the next month. Let the Fed front-running begin." Nick Laird sent me the one-paragraph zerohedge.com story on this... and it's a must read... as it's the blueprint for the further decline of the U.S. dollar and hyperinflation of the currency. The link is here.
Wall Street Takes $4 Billion From Taxpayers as Swaps Backfire
The next story is a Bloomberg piece courtesy of Australian reader Wesley Legrand. The headline reads "Wall Street Takes $4 Billion From Taxpayers as Swaps Backfire". What happened to Jefferson County in Alabama has become the poster child for all that financial engineering that went on. All of it has, or is in the process of, blowing up... and the termination payments to the Wall Street firms that dreamt up all this stuff, are adding to the financial woes of cities and states. It's a long read, but worth it, if you have the time... and the link is here.
Rumors of Irish bailout sweep through financial markets
The next story is from yesterday's edition of The Guardian... and was sent to me by Swiss reader B.G. Long-term Irish interest rates soared as austerity cuts seem to have failed to convince international investors that their debts can be [or ever will be] repaid... and concerns of a Greek-style bailout are swirling ever faster. The headline reads "Rumors of Irish bailout sweep through financial markets". This is definitely worth the read... and the link is here.
Arbitration claim will target Morgan, HSBC for silver market rigging
My first precious metals-related story today is a GATA release that's headlined "Arbitration claim will target Morgan, HSBC for silver market rigging". It's only a paragraph long... and the link is here.
A 24-Karat Safety Net for Investors
The next story was posted as a GATA release yesterday that Chris Powell headlined "Gold is a vote to throw the bums out of the investment world". But the actual headline from The New York Timesstory reads "A 24-Karat Safety Net for Investors". I thank reader Phil Barlett for sharing it with us... and the link is here.
Doug Casey on Gold's New High, the Fed, and the Greater Depression
Just as a change of pace, I'm going to post the latest weekly "Conversations With Casey" interview... the 'fireside chats' of the gold world with Doug Casey... as interviewed by Louis James, Editor of Casey Research's flagship publication, the International Speculator.
If you don't subscribe to this free service, you should... and you can sign up for it when you click on the interview. This week's commentary is headlined "Doug Casey on Gold's New High, the Fed, and the Greater Depression"... and is definitely worth your time... and the link is here.
Asian Buyers Have Silver Shorts Checkmated
Eric King over at King World News sent me the following blog in the wee hours of this morning. The headline reads "Asian Buyers Have Silver Shorts Checkmated". This commentary is a must read in my opinion... and the link is here.
John Embry: Die Was Cast Before Elections
Lastly today is an interview posted over at theaureport.com... with John Embry, chief investment strategist at Sprott Asset Management in Toronto. The headline reads "John Embry: Die Was Cast Before Elections". Anything that John has to say is worth your time... and the link to this longish interview is here. I thank reader Brad Robertson for sending it along.
¤ The Wrap
Though it is likely for the current loose monetary policy to postpone the occurrence of difficulties, yet in the long run, it will be proven to be a practice resembling drinking poison to quench [your] thirst.- Chinese rating agency Dagong Global, discussing Bernanke's QE2 plans.
Well, it was another 'volatile' day yesterday. Gold volume was almost as big as it was on Tuesday... and silver's volume was 'only' 145,000 contracts net of spreads! I wouldn't be surprised if this volume contained a lot of spill-over from Tuesday's trading day which, conveniently, won't be in the next Commitment of Traders report... which is coming out on Monday because of the Remembrance Day holiday today.
By the way... in case you missed my e-mail on Tuesday, you might want to check out "The Case for $60 Silver"... and the link to that report is here. I personally believe that we'll see a silver price many multiples of that before the dust finally settles... but I don't want to get carried away with a prediction of that size at this point in time. But, having said that, when the end does finally come, I expect it to happen in a very short period of time. And please don't send me any e-mails asking me what my definition of "very" is. I don't need a Bill Clinton moment, as I have enough e-mails to answer every day as it is.
All was relatively quiet in Far East trading this Thursday morning. Both metals popped shortly after London opened... and gold is up $10.80... and silver is up 53 cents as I hit the 'send' button at 5:51 a.m. Eastern time. Volume in both metals is pretty decent. There's fairly big roll-over activity in silver... but very little in gold at the moment.
In closing, I just want to mention that Ted Butler also had this to say yesterday... "How long the current sell-off may last is anyone's guess. But mine is... not very long."
I'm still 'all in'.
That's it for another day... and I'll see you right here on Friday.
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