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Message: Ed Steer this morning

Return of the Gold Standard as World Order Unravels

With the world's financial and monetary system broken beyond repair, it will be interesting to see how things play out in the gold and silver for the rest of the summer months."

¤ Yesterday in Gold and Silver

Well, there wasn't much follow-through from Wednesday in the gold price action during the Thursday trading day. It managed to get above $1,590 spot in early London trading...and stayed there until it got sold off ten bucks at 10:30 a.m. in New York. The price didn't do much after that...and only finished a couple of dollars above Wednesday's close. Volume was very decent, but not as heavy as it was on Wednesday.

Silver's price path was much the same...making it above $39 spot, then getting sold off along with gold at 10:30 a.m. in New York. From there, silver got sold off even more in the thinly-traded New York Access Market...and actually finished below Wednesday's close. Volume was heavy once again.

The dollar hit its low of the day at 8:00 p.m. New York time on Wednesday evening, which was early Thursday morning in Far East trading...and by the close of trading at 5:15 p.m. yesterday afternoon in New York, the dollar had gained a bit over 50 basis points from that low.

The gold stocks gapped up a percent at the open of trading...and then got sold off below Wednesday's close after the gold price got hit at 10:30 a.m. in New York. The HUI finished down 0.70% on the day.

The silver stocks did well for themselves in the early going, but got sold off as the day progressed, closing close to their respective lows of the day. Nick Laird's Silver Sentiment Index was down a smallish 0.30%

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 91 silver contracts were posted for delivery on Monday. The biggest issuers [short sellers] were Jefferies and Merrill...and the biggest stoppers/receivers [long holders] were the Bank of Nova Scotia and JPMorgan. The link to the action is here.

There was no activity reported in either GLD or SLV yesterday.

The U.S. Mint had another sales report yesterday. They sold 5,000 ounces of gold eagles...1,500 one-ounce 24K gold buffaloes...and another 41,000 silver eagles. Month-to-date sales are as follows: 22,500 ounces of gold eagles...4,000 one-ounce gold eagles...and 1,361,000 silver eagles.

Over at the Comex-approved depositories on Wednesday, they reported receiving 408,642 ounces of silver...and shipped 601,937 ounces of the stuff out the door. The link to the action is here.

¤ Critical Reads

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Uprising in Belarus: Internet Generation Takes on Europe's Last Dictator

The end of Belarusian dictator Alexander Lukashenko's era appears to be approaching, as thousands take to the streets in Minsk to protest against the country's economic crisis. The Internet-savvy demonstrators are finding ever-more-creative ways to voice dissent, but Lukashenko is responding with violence.

This story was posted over at spiegel.de yesterday...and is Roy Stephens first offering of the day. The link is here.

Debt Quicksand: Europe Fights the Growing Currency Crisis

In spite of massive cash transfusions and bailout packages, the euro-zone has started trembling again over its weakest members. The future of the common currency is, again, at stake. Ireland and Portugal will receive billions of euros in support, and a second bailout for Greece is in the works. And just as European politicians were starting to think about their summer vacations, Italy's public debt has slipped into focus.

This is another story from spiegel.de...and is, once again, courtesy of Roy Stephens. The link is here.

Capital controls, oppressive regulation likely after collapse, Zulauf tells King World News

Fund manager Felix Zulauf of Zulauf Asset Management in Switzerland told King World News yesterday that he fears capital controls and oppressive government regulation of the economy will result from the impending economic collapses in Europe and the United States. An excerpt from the interview is headlined "Felix Zulauf: Collapse Will Cause Governments to Change Rules".

I stole this KWN blog, and Chris Powell's introduction to it, from a GATA release...and the link is here.

Gold will reach $2,000 this year, Ben Davies tells King World News

Here's something else from GATA...and rather than cut and paste Chris Powell's preamble...here's the entire GATA release, with the KWN blog of the Davies interview imbedded. It's well worth the read...and the link is here.

Sprott Physical Gold Trust Announces Follow-on Offering of Trust Units

Washington state reader S.A. sent me this press release from the Sprott website yesterday where they announced that they are doing an offering for PHY.U/PHYS. It will be of great interest to see how much money they raise, as there hasn't been one for quite a while...and the gold price is at a record high.

I'll report on this as soon as I find out...and the link to the press release is here.

Gold shines before euro zone meeting

Here's the first of three in a row from Roy Stephens...and the first is a Reuters piece filed from Hong Kong early Friday morning.

When I first posted this story last last night, it had the above headline...but when I was checking the links to see if they worked before hitting the 'send' button...it had been changed to read as follows..."Stocks, euro fall before Europe bank stress tests". It's obvious that the 'thought police' are ever present at all news services.

Gold slipped on Friday though was on track to match its biggest winning streak in four decades, with debt crises in the eurozone and the United States leaving investors few alternatives but to keep piling into the metal.

The link is here.

Gold price hits record high as eurozone woes spread across Atlantic

Finance ministers set to call emergency meeting as Greece inches towards default – and US hints it may have to print more money.

Panicky investors drove the price of gold to an all-time high yesterday, amid renewed fears for the future of the European and US economies and rumours that European finance ministers are set to call yet another crisis meeting this Friday, presumably to coincide with what are expected to be disappointing results from so-called "stress tests" on the strength of leading Italian, French and German banks.

This story is posted over at independent.co.uk...and the link is here.

Gold: ‘The upside is wide open’: Peter Brimelow

Roy's last gold-related story of the day is this piece by columnist Peter Brimelow over at marketwatch.com that was filed late last night from New York.

"A great day for gold — and the bugs (mostly) think more are to come.

"European sovereign-debt markets in chaos threatening the viability of the euro — budget deadlock in Congress — Ben Bernanke implying yet more monetary ease — and this evening Moody’s threatening a downgrade on U.S. debt … and gold goes to new highs?

"Duh! Many would say: How could it not?"...and the link to this must read story is here.

Gold Milestone at $1,764 Paves Way to $12,000: Jim Sinclair

Eric King of King World News fame sent me this Jim Sinclair blog in the wee hours of this morning. I haven't read it yet, but I'm sure it's worth your time...and the link is here.

July edition of the Gold Standard Institute's journal

Here's another GATA release where Chris has already done the heavy lifting...so I'll let him tell you what this story is all about...and the link is here.

Return of the Gold Standard as world order unravels

Here's an Ambrose Evans-Pritchard article that was posted over at The Telegraph late last night...and found it's way into a GATA release.

As the twin pillars of international monetary system threaten to come tumbling down in unison, gold has reclaimed its ancient status as the anchor of stability.

On one side of the Atlantic, the eurozone debt crisis has spread to the countries that may be too big to save - Spain and Italy - though RBS thinks a €3.5 trillion rescue fund would ensure survival of Europe's currency union.

On the other side, the recovery has sputtered out and the printing presses are being oiled again. Brinkmanship between the Congress and the White House over the US debt ceiling has compelled Moody's to warn of a "very small but rising risk" that the world's paramount power may default within two weeks. "The unthinkable is now thinkable," said Ross Norman, director of thebulliondesk.com.

"It is very scary. The flight to gold is accelerating," said Peter Hambro, chairman of Britain's biggest pure gold listing, Petropavlovsk. "One of the big U.S. banks texted me today to say that if QE3 actually happens, we could see gold at $5,000 and silver at $1,000. I feel terribly sorry for anybody on fixed incomes tied to a fiat currency because they are not going to be able to buy things with that paper money."

This is another must read story, of course...and the link is here.

¤ The Funnies

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¤ The Wrap

Socialism is a philosophy of failure, the creed of ignorance and the gospel of envy. Its inherent virtue is the equal sharing of misery. -- Winston Churchill

Gold volume on Thursday was about 20% lower than it was on Wednesday, at approximately 145,000 contracts net of all roll-overs. The preliminary open interest number was shockingly low...only showing an increase of 3,115 contracts. I'm more than curious to see what the final number will be later this a.m.

Gold's final open interest number on Wednesday was right up there...but well off the 25,000 plus preliminary number...finishing up 11,551 contracts. That's a very big number...and pretty much indicates that JPMorgan is not going let this gold rally get too far.

Silver's net volume was down quite a bit from Wednesday, but at 72,000 contracts, that's still pretty high...and the preliminary open interest number showed an increase of 2,341 contracts. Wednesday's final open interest number in silver was up a rather large 3,373 contracts.

I note that there are 485 July silver contracts still open...that's an increase of 65 from yesterday.

Since today is Friday, we'll get the latest Commitment of Traders Report at 3:30 p.m. Eastern time today. I will be more than interested in what it shows...but it's now next Friday's COT report that I'm most interested in seeing, because the big run-up in price that we had this week will all be in there...and we'll see how much deterioration in open interest there's been as the bullion banks have been going short this gold rally since it began last week...and I'm sure there will be deterioration show up in today's report as well.

Gold is down about seven bucks...and silver is down a couple of pennies...and both are recovering slightly from their lows at the open of London trading this morning. Volume is already pretty decent in both metals...and the world's 'reserve' currency is basically unchanged as I write this paragraph at 5:04 a.m. Eastern time.

With the world's financial and monetary system broken beyond repair, it will be interesting to see how things play out in the gold and silver for the rest of the summer months. As various commentators have stated in this column, the sky is pretty much the limit pricewise, as the current fiat currency system crashes and burns around us.

Since today is the last trading day of the week, I'm pretty much prepared for anything when the Comex opens in New York later this morning...either up or down.

And, as I say every week at this point, there's still time left to either re-adjust your portfolio...or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations...as well as the archives. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

Enjoy your weekend...and I'll see you here sometime on Saturday.

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