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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
Paper Silver and Gold markets Are "Nonsense" - John Hathaway
Mass withdrawals from South Korean banks continue. Blood runs in the street of Bahrain. Oil shock fears as Libya erupts...and much more.
¤ Yesterday in Gold and Silver
Well, it appeared that the precious metals markets were open for business in New York yesterday. And if not the Comex, then certainly the Globex system was up and running after the London close. Volume was very light, but that was almost beside the point after looking at some of the gains during Monday's trading day...especially in silver.
The price of gold climbed slowly but unsteadily for most of the Far East and London trading day...with the high tick [around $1,408 spot] coming shortly after high noon in New York. It closed the Comex trading session less than two dollars below that high. The low of the day was at the open of Far East trading during their Monday morning.
Except for the odd surge here and there, the silver price climbed slowly but steadily all during the Monday trading session...through the Far East, London and the U.S. Silver briefly climbed to $34.03 spot on Monday just before the markets closed in New York. The low was at the Far East open...which was basically Friday's closing price of $32.66 spot.
Although the world's reserve currency traded yesterday...with the U.S. closed for the day, the dollar didn't do much...as the graph below indicates.
With the equity markets closed in both Canada and the U.S. yesterday, there's not a thing to report on the gold and silver equities front. But if Monday's silver gains make it through to the New York open tomorrow...and maybe even add to them in early Tuesday trading...it would be a good bet that all p.m. shares will do well. But the silver stocks will certainly outshine the gold stocks once again.
With America shut tight, there was no report from the CME, the gold and silver ETFs, the U.S. Mint...nor the Comex-approved depositories.
Reader 'Silver Steve' sent me this very interesting chart that I thought was worth sharing. It's the 60-minute chart for silver for the first three weeks of February trading [plus yesterday's holiday-shortened session]. Note the high volumes during the New York trading sessions. It's almost as if what happens elsewhere in the world doesn't matter when New York is open which...according to silver analyst Ted Butler...it doesn't.
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¤ Critical Reads
SubscribeDeath toll in Yemen mounts as police and protesters clash
Besides the price activity in both silver and gold yesterday, the other reason I'm doing a report today is the large number of stories that I have to post...and I don't want to drop three days worth on you all at once...as two days worth is bad enough.
Reader Roy Stephens leads the parade today with this piece out of last Friday's france24.com website. A hand-grenade attack killed two anti-regime protesters and left 27 injured in the Yemeni city of Taez on Friday, while deadly clashes broke out in Aden, witnesses said. There's also a 1:10 video imbedded that's worth watching. The government in Yemen is another U.S. 'client state'...as are most countries in the Middle East...if they know what's good for them. Link here.
Blood Runs Through the Streets of Bahrain
This next story from the Middle East is courtesy of Washington state reader S.A...and was posted in the Friday edition of The New York Times. This kind of brutal repression is normally confined to remote and backward nations, but this is Bahrain. An international banking center. The home of an important American naval base, the Fifth Fleet. A wealthy and well-educated nation with a large middle class and cosmopolitan values...which is also a 'client state' of the U.S.A...whether they want to be or not. Link here.
There's also this very ugly [and very graphic] video of the 'blood in the streets' in Bahrain that was sent to me by reader Scott Pluschau. So, along with the story, here's a short youtube.com video from ground zero. It's brutally graphic...so don't say you weren't warned. It runs 43 seconds...and the link is here.
Meet The Objects Tunisia's Ben Ali Did Not Have Time To Steal
As the Al Arabiya News Channel reported, "Tunisia's ousted president stashed diamonds, gold and wads of cash in secret spots around his palace in the impoverished country's capital, according to video shown by state television on Saturday." The story is English...and the video clip is in Arabic. But it doesn't matter, as 'a picture is worth a 1,000 words' in any language. I thank Washington state reader S.A. for sharing this zerohedge.com story. Link here.
Five Stories from Libya
The situation in Libya has gone from nothing...to all-out rebellion in just a few days. The situation is extremely fluid...and is obviously changing by the hour. I have five stories...courtesy of readers Roy Stephens, U.D...and Mike Molleur. Here are the hyperlinked headlines...
1] Libya protests: 140 'massacred' as Gaddafi sends in snipers to crush dissent - The Telegraph
2] Libyan protests reach Tripoli as Gaddafi son warns of civil war - The Telegraph
3] Libyan unit "defects" as more Arab protests simmer - Yahoo News
4] 'I'm HERE in Tripoli': Gaddafi's claim as he emerges to defy protesters while capital burns at the hands of his troops - Daily Mail
5] Revolt in Libya: West Warns Gadhafi Against Escalation of Violence - Der Spiegel
Mass withdrawals made at savings banks despite government’s assurances
Last week I ran a story about a couple of South Korean savings banks being suspended. Well, the situation over there has gone from bad to worse. A total of 490 billion won was withdrawn from 98 savings banks Monday, despite the financial regulator’s assurance that there will be no more shutdowns of such institutions. It appears that a bank run is on in earnest in South Korea. It's a story posted over at koreatimes.co.kr...and it's worth your time. I thank reader David Crofton for sharing it with us. Link here.
Germany must choose EMU fusion or fission
This next story [along with the one following] is courtesy of Roy Stephens. It's Ambrose Evans-Pritchard up on his high horse in the Sunday edition of The Telegraph. He starts out the column thusly..."For the sake of peripheral nations, Mrs. Merkel has to stop paying lip-service to monetary union. For all her fiery language in defence of the euro - as if a currency trading so high against the yuan, dollar, and sterling could be under meaningful external attack - Chancellor Angela Merkel has not yet agreed to pay one cent in help to crippled debtor states. Nor has she faced up to the elemental question hanging over monetary union."
Ambrose is one of the glamour boys from the "New World Order" crowd...and he shows his true colours in this article...and it's a bit on the long side. Link here.
Walker's World: The real G20 crisis
Once again, the weekend summit of the Group of 20 lived down to the sinking expectations this purported new system of global governance has already inspired. But there was one significant exception. Meeting for the first time in Paris, under this year's chairmanship of French President Nicolas Sarkozy, they at least discussed the elephant in the room: the rise in food prices and the consequent threats of inflation and unrest.
I noticed that they didn't discuss one of the other reasons for high commodity prices...and that's rampant money printing on the part of all nations...or the nature of money itself. This is worth the read. Link here.
Oil shock fears as Libya erupts
Ambrose Evans-Pritchard has one last offering for us today. This story was posted at The Telegraph late Monday evening...and was sent to me by reader Roy Stephens...and it's his last contribution to today's column. The spectre of full civil war in oil-rich Libya and reports of the creation of an Islamic emirate in country's "Barqa" region has moved the Mid-East crisis into a more dangerous phase, setting off an explosive rise in US crude prices. Link here.
Justice Dept.: High Court Shouldn't Consider Fed Disclosure Case
The only story that I found from the U.S. that was really interesting over the weekend was this piece out of the Friday edition of The Wall Street Journal that was sent to me by Washington state reader S.A. The Justice Department, in a legal brief filed Friday, took a position that could lead to the release of Federal Reserve emergency-lending data that major banks are trying to keep secret.
The Clearing House Association, which represents large commercial banks, appealed to the Supreme Court last fall. It argued that Fed disclosure of the lending data would harm banks by allowing the public to observe their borrowing during the financial crisis and "draw inferences—whether justified or not—about their current financial conditions." [I feel for them...but I can't quite reach them. - Ed] Link here.
Turk - Silver Backwardation Now “Unprecedented 73 Cents”
GoldMoney founder and GATA consultant discusses the growing backwardation in silver with Eric King...and wonders why arbitrageurs are not playing it. Turk thinks the answer must be either that nobody wants fiat money anymore or there simply isn't enough silver to deliver to allow arbitraging.
The backwardation of 73 cents that James speaks of is between the next delivery month [March 2011] and the furthest contract posted at the CME, which is December 2015. Check the 'Prior Settle' column on the CME's Silver Futures page linked here. The KWN blog [above] with Turk is worth your time. Link here.
Interview With John Hathaway
John Hathaway, manager of the Tocqueville Gold Fund, told King World News that the paper markets for gold and silver are "nonsense" and a short squeeze seems to be developing. This blog is worth the read. Link here.
GoldMoney's James Turk interviews GATA's secretary/treasurer
Last month on the eve of Cheviot Asset Management's Sound Money Conference in London, GoldMoney founder and GATA consultant James Turk interviewed GATA secretary treasurer Chris Powell for 34 minutes about government manipulation of the gold market and about GATA's work. This is well worth watching. Link here.
¤ The Wrap
Clearly, there is a global rush for the precious metals. Clearly, this one is the biggest and most concerted in the decade long bull market. The best proof of that is that Silver - "poor man's Gold" - has broken out above old highs first this time.- Bill Buckler, Gold This Week, 19 February 2011
Both metals did particularly well on Monday...and took off the moment that trading began in the Far East on Tuesday morning. Then a 'surprise' rally in the U.S. dollar began about two hours into the Far East trading day...and both metals have been under 'pressure' ever since...especially silver, which has been sold off back to Friday's close as of 4:34 a.m. Eastern time.
Since New York wasn't open yesterday, there are no final Friday numbers...or preliminary Monday numbers to report. What activity there was yesterday will all be lumped into Tuesday's trading day...and that will be in my Wednesday report.
There is backwardation of two full cents between the March and May delivery months in silver...as I write this at 4:35 a.m. this morning. It was narrower earlier in the evening. The March 2011/December 2015 backwardation that James Turk spoke of earlier, is now back in contango. There was 63 cents worth of backwardation when the Far East markets opened last night. As you can tell, this amount changes by the hour...as do the backwardation/contango between every other future delivery month. I expect it will be no different once New York trading gets going in earnest.
In closing, I can do no better than quote silver analyst Ted Butler's last paragraph of his note to clients over the weekend where he had this to say..."Of course, now that silver prices have advanced as far as they have, we must be prepared for increased price volatility. That means sharp price movements both up and down. But if we do get a manipulated sell-off by the commercials looking to liquidate the tech funds who have come onto the long side [as expected], it shouldn't last long, although it may be sharp. However, the odds have also increased that silver could really get uncorked to the upside, especially if demands for physical silver intensify on both the Comex and in the SLV and other [silver] ETFs."
"Considering the financial punishment accruing to the shorts...and the overall tightness in physical silver, the ingredients for an upside price event are in place. The advice to silver investors remains the same -- hold on for what may be the ride of a lifetime. Sharp sell-offs are painful, but stepping aside to repurchase at lower levels has been difficult at best. Being largely out of an historic silver price move higher might prove to be a lot more painful than enduring sharp temporary sell-offs."
It could be a wild day...and a wild week...in the silver and gold markets. I await the New York open with great interest.
See you on Wednesday.
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