Silver Headed to $100, Gold Shares Manipulated: John Embry

The gold price didn't do a whole heck of a lot anywhere on Planet Earth yesterday. The price ground slowly higher all through Far East and London trading...and hit it's high of the day [$1,407.40 spot] in New York at 10:45 a.m. Eastern time.

From there it got sold off back to under $1,400 the ounce, before recovering above that number in the thinly-traded electronic market...and closed up about five bucks on the day.

For about twelve hours, the silver price traded within two bits of its opening price in Far East trading, before catching a bid around 11:15 a.m. London time. From there, it climbed about eighty cents to its New York high of $35.10 at the same 10:45 a.m. time as gold...before it, too, ran into the same seller...and down went the price.

Silver's low of the day [$33.84 spot] came in electronic trading at 2:15 p.m. Eastern time. From there it recovered a bit into the close.

The dollar gained about 50 basis points between its open in the Far East...and its high of the day, which was shortly after 2:00 p.m. in New York. From there it got sold off a bit...and finished up about 30 basis points on the day. That small drop in the dollar around 2:15 p.m. Eastern, stopped the decline in both the gold and silver price, right in their tracks. But, other than that, there was no co-relation whatsoever between what the dollar was doing...and what the gold and silver prices did during the Wednesday trading day.

The gold stocks followed the gold price pretty much tick for tick...with the high coming at 10:45 a.m...which was the absolute high of the day for both metals...and the low of the day came at the dollar low around 2:15 p.m. That's when the precious metals prices reversed to the upside...and that why the gold stocks responded as they did.

Despite the fact that gold finished in the black yesterday, the HUI was down 2.22%. And, without doubt, a lot of that had to do with the decline in the general equity markets.

The silver equities were a mixed bag...but there were enough green arrows in my silver stock portfolio to make me feel lots better. It was obvious that there was more bottom fishing going on in the silver stocks again yesterday.

The CME's Daily Delivery Report showed that only 1 [one] gold, along with 131 silver contracts, were posted for delivery on Friday. The only issuer of note was Prudential...and the biggest stopper was Barclays. JPMorgan was nowhere to be found. This is getting stranger by the day. The report is worth the look...and the link is here.

Well, I was expecting the worst when I checked the inventories of the GLD and SLV ETFs yesterday...and was thunderstruck to see that both of them actually added metal yesterday. This certainly flies in the face of Tuesday's price action in both precious metals...especially silver.

The GLD ETF added a very healthy 146,295 troy ounces...and in the SLV it was a chunky 1,220,250 ounces. Someone with very deep pockets was obviously buying the dips...and I hope you're doing the same.

I certainly don't know what to make of that...but it's much nicer to see that, then the alternative.

The U.S. Mint finally had a sales report. They sold another 3,000 ounces of gold eagles...along with another 700,000 silver eagles. Month-to-date, the mint has sold 35,500 ounces of gold eagles, along with 1,417,000 silver eagles. I only hope that you're getting your share.

The Comex-approved warehouses reported receiving 372,891 ounces of silver on Tuesday...and they shipped out 123,229 ounces, for a net gain of 249,662 troy ounces. The link to the action is here.

Silver analyst Ted Butler has the following comments on Tuesday's silver price 'action' in a note to his subscribers yesterday. "The sell-off began, as it almost always does, during one of the most illiquid times of the trading day, during the wee hours of the Comex Globex session. That this is a recurring circumstance is no accident. Very rarely do we see sharp spikes up during these quiet trading times. It's much easier for the dominant Comex commercial crooks to dictate prices at such thin trading times. They can sell a few hundred silver contracts to get the snowball rolling down the hill in order to get speculative long liquidation to join in.

"The commercials then buy back the contracts that the leveraged speculators sell in greater quantities than what they initially sell short at the outset. The process is then repeated until the long speculators are flushed out."

"In this case, it was important for the sell-off to commence when it did because the news from Japan was likely destined to cause precious metals prices to jump in the absence of such collusive commercial manipulation. Given the state of the silver market, had the commercials not rigged prices lower in the wee hours, it would have been much harder for the crooks to contain a rising price. This is the essence of the 25-year silver manipulation."

In response to what happened in the silver market on Tuesday, Dr. Dave Janda over at WAAM 1600 Radio in Ann Arbor, Michigan, sent the following note to Bart Chilton over at the CFTC...."Bart, Over the past two weeks there have been at least two HUGE Criminal takedowns of the precious metals markets. Unfortunately, the CFTC has remained mute. So, I thought I would pass on a quote that I feel is very appropriate regarding the relationship which has developed between The CFTC, Jamie Dimon, Blythe Masters, JP Morgan, HSBC and The CME Group.

"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it...and a moral code that glorifies it." –Frederic Bastiat

Please feel free to pass this on to Gary Gensler, the other Commissioners and ALL of the staff at the CFTC. Dave Janda

¤ Critical Reads

Reality Check: Who's Afraid of Reforming Wall Street?

Today's first item is courtesy of Washington state reader S.A...and is posting over at time.com.

"Three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail," said Charles Ferguson, accepting a well-deserved Oscar for Inside Job, his documentary about the great Wall Street heist. It's a very interesting read...and the link is here.

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Wholesale prices up 1.6 pct. on steep rise in food

Reader Scott Pluschau provides the next story, which is an AP item posted over at finance.yahoo.com. Wholesale prices jumped last month by the most in nearly two years due to higher energy costs and the steepest rise in food prices in 36 years. Excluding those volatile categories, inflation was tame. So all of us that don't eat or use energy, are not suffering from the ravages of inflation. This is good to know...and the link to the story is here.

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U.S. Debt Jumped $72 Billion Same Day U.S. House Voted to Cut Spending $6 Billion

Scott Pluschau's second offering is this story posted over at cnsnew.com. The second paragraph of this item reads as follows..."If Congress were to cut $6 billion every three weeks for the next 36 weeks, it would manage to save between now and late November as much money as the Treasury added to the nation’s net debt during just the business hours of Tuesday, March 15th." You can't make this stuff up...and the link is here.

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Geithner says Congress must raise debt limit

Scott's third and last contribution to today's column is this Reuters story from yesterday. Geithner also repeated a warning that it would have "catastrophic" consequences for the economy if the debt ceiling was not raised and the country defaulted on its debt obligations. Something tells me that we're not in Kansas anymore, Toto...and the link is here.

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Readers Pick Doug Casey's Brain

Here is Part 1 of a live Conversation With Casey that took place at the Prospectors & Developers Association of Canada conference in Toronto earlier this month. Doug answers the questions...and Louis James, the editor of Casey Research's International Speculator, moderates.

This just arrived in my in-box...so I haven't had a chance to listen to it myself. It runs about twenty-six minutes...and the link is here.

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Radioactive cloud spreading in Japan nuclear crisis

Here's a story that Nick Laird sent my way about an hour after I filed my Wednesday column...and it was posted over at theaustralian.com.au website yesterday. Japan's nuclear crisis escalated dramatically yesterday as two further explosions and a fire at the earthquake-crippled Fukushima Daiichi power plant sent dangerous levels of radiation into the atmosphere. The link is here.

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'Fukushima heroes' battle to tame nuclear plant as Japan watches

Elite squads of technicians face fire, radiation and exhaustion in cramped and potentially lethal conditions to cool reactors. The 70 or so technicians and engineers, known as the Fukushima 50, have been working under the constant threat of radiation sickness, fires and explosions since they became the sole occupants of an area that has become a no-go zone for tens of thousands of petrified residents.

I thank Swiss reader B.G. for sharing this story that was posted in The Guardian yesterday...and the link is here.

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Today's Nikkei Plunge Protection Invoice: ¥5 Trillion [For Now]

Here's a story that showed up at zerohedge.com late last night. The BOJ just released the official injection number and it is a measly ¥5 trillion. And by measly we mean US$63 billion. Add this to the ¥28 trillion already deployed by the BOJ and get an even more modest ¥33 billion, or roughly $420 billion, which is the cost to preserve the Nikkei from plunging for a 4th consecutive day. This is a very short read, but well worth your time...and the link is here.

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USD/JPY Goes Bidless

Here's another zerohedge.com story...and this one is courtesy of reader U.D. At the Far East open this morning the currency markets went into convulsions...especially the yen and the dollar. This very short piece is three lines of text and three nifty graphs...and the link is here.

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Think Like a Thief

Today's first gold related story is contained in yesterday's Casey's Daily Dispatch...and it's by BIG GOLD editor Jeff Clark.

"It’s official: the greatest number of responses to any article I’ve written since joining Casey Research was to Robbed!, the story of my friend’s gold being stolen and the suggestions for storage. It’s clear the article struck a nerve – of those who’ve also been a victim of theft, to those who were simply looking for additional ideas for storage locations."

This short essay is very much worth the read...but you have to scroll down a bit to find it...and the link is here.

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Washington Nugget: Huge piece of gold up for bid

It's humongous. It's rare. It's the sort of thing prospectors used to get shot over. It's the 98.6-ounce Washington Nugget - the largest piece of smooth California gold in existence. The nugget was dug up with a pick last March by a man strolling his land near the historic Sierra Gold Rush town of Washington in Nevada County.

The story was sent to me by reader John Steinke...and it's posting in yesterday's edition of the San Francisco Chronicle. The picture alone is worth the trip...and the link is here.

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Mining shares manipulated too, Embry tells King World News

Today's last precious metals related story is something that Eric King sent me, which also showed up in a GATA release yesterday...and I'm just going to steal everything out of the article, headline included.

Eric King of King World News interviewed Sprott Asset Management's John Embry yesterday...and got him to remark that gold and silver market manipulation seems to extend to gold and silver mining company shares. But Embry noted that the disaster in Japan has not goosed the U.S. dollar and he expects the precious metals to break upward. Excerpts of the interview are headlined "Silver Headed to $100, Gold Shares Manipulated". This is a must read blog...and the link is here.

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With the gold price action rather muted yesterday, the volume numbers reflected that as well, as only 135,000 contracts net of all roll-overs were traded yesterday. The volume in the silver shares was still right up there, with 75,000 net contract traded.

The preliminary open interest numbers in both metals were rather small, so I'm expecting to see a decline in the o.i. of both metals when the CME posts the final numbers later this morning.

The final open interest numbers for Tuesday's blood bath shows that gold o.i. only fell 3,912 contracts...and silver o.i. fell only 1,179 contracts. A lot of Tuesday's trading activity could have easily been hidden by spread trades...or Ted Butler's 'raptors' buying long positions. The raptors would include some of the thirty or so smaller commercial traders that aren't in the '8 or less' traders category.

I would also suspect that some of Tuesday's open interest numbers weren't reported in a timely manner at the end of Tuesday trading...and will show up in Wednesday's final o.i. numbers when they're posted later this morning.

March open interest is currently sitting at 1,045 contracts...down 34 contracts from yesterday. The 131 contracts posted for delivery tomorrow will be subtracted from this total when Friday's volume report is published.

The backwardation situation in silver on Wednesday remained virtually unchanged from where it was at the close of trading on Tuesday.

I noted with some disgust that as the dollar did a face plant in early Far East trading earlier today, the dealers went 'no bid' at the opening of gold trading...so the both gold and silver fell as well. The dollar cratered by almost half a cent in fifteen minutes, while the gold price headed south. Free markets do not behave like this.

As I said earlier in this column, the entire world's financial system seems to be floating off the rails...and as I've said before on many occasions, that if the banking system wasn't keeping everything propped up that want to crash...and suppressing the price of everything that wanted to explode to the moon and beyond...the world's financial system would be a smouldering ruin virtually overnight. It's my opinion that we're very close to that point right now.

I also note that the dollar made a miraculous recovery shortly after it fell out of bed...but has now rolled over at the start of the London trading day at 8:00 a.m. GMT...3:00 a.m. Eastern.

Gold hit its low in Far East trading about 9:00 a.m. Hong Kong time this morning...and has been recovering in fits and starts ever since...and is almost back to unchanged, after being down about fifteen bucks at its low. Silver got hit for about seventy-five cents during early trading in the Far East...now it, too, is back to unchanged from yesterday's New York close.

I must admit that I have no idea what the U.S. bullion banks are going to do during the rest of the Thursday trading day. They have almost 24-hour trading access to the gold and silver markets through the Globex trading system...and can enter the markets anytime they choose. You can tell from looking at the precious metals charts these past few days, that they've been sticking their nose in the silver and gold markets on a very regular basis.

So, based on all these shenanigans, I await the New York open with great interest.

See you on Friday.