Speaking of open interest numbers, gold o.i. on Thursday fell 3,216 contracts to 391,144…on absolutely monstrous volume of 174,662 contracts. Silver’s decline was much more modest…only 93 contracts to 96,309…on total volume of 18,664 contracts.

The Commitment of Traders report issued yesterday, was as expected. In silver, the bullion banks decreased their net short position by 1,522 contracts. This doesn’t seem like a very big number, but it’s impressive because o.i. fell in the face of a silver price that rose quite a bit during the reporting week. The full color COT report is linked here.

Gold o.i. was exactly as expected…with the bullion banks going short against every long…effectively stopping the gold rally in its tracks. The bullion banks increased their net short position by a staggering [but not surprising] 21,939 contracts. The bullion banks are now net short 204,226 contracts…20.4 million ounces. The full-color COT graph for gold is linked here.

We are now sitting with a COT structure that is bullish to very bullish for silver…and very bearish for gold. This situation has only existed a few times during the last ten years. Ted suggested [and not for the first time] that maybe ‘da boyz’ are trying to permanently separate silver and gold prices so that silver will rise independently of gold. That’s possible…but we’ll have to wait and see if it pans out that way.

The Comex Delivery Report for Friday showed that only 55 gold contracts were delivered…and nothing at all in silver. There were no changes in the alleged holdings of either GLD or SLV. The U.S. Mint has updated their production numbers in silver eagles again. This time they showed that another 275,000 silver eagles were minted…bringing the monthly total up to 2,300,000. Nothing was added for gold eagles. And the Comex-approved warehouses reported that 320,392 ounces of silver were withdrawn from their collective inventories.

The usual N.Y. gold commentator mentioned that The Gartman Letter’s buy stop at $955 was not triggered yesterday because gold did not, in fact, trade long enough above that price to trigger its buy. He also had this…”There is a good deal of commotion today regarding forecasts that China will pass India in gold consumption in some five years. It is odd that so many observers extrapolate about the intensely volatile Indian gold market based on a few months recent history. At the time of the enormous imports last summer, the talk might well have been of India monopolizing the world gold stock! In any case, China’s gold production, bolstered by subsidized fuel and the hugely undervalued Yuan apparently supplies almost all local demand (India mines almost no gold). How seriously can one take the Shanghai Gold Exchange, which today reports that the gold contract is backed by only 156 kilos of metal? The Bloomberg story is headlined “China May Overtake India in Gold Demand, Council Says”..and the link is here.”

The other day, several companies [i.e. Ford (NYSE:F), eBay (NASDAQ:EBAY) and AT&T (NYSE:T)] reported better than expected earnings and as a result, the stock market rallied on the news. While some companies have reported better than expected earnings for Q2/2009, others have struggled. Today’s chart provides some perspective on the current earnings environment by focusing on 12-month, as reported, S&P 500 earnings. You can see how earnings are expected [38% of S&P 500 companies have reported for Q2/2009] to have declined over 98% since peaking in Q3/2007, making this by far the largest decline on record…and the data goes back to 1936. I thank P.S. for providing this data…which is all [including the chart] courtesy of www.chartoftheday.com …the link to the website is here.

Besides the Bloomberg story embedded in the usual N.Y. gold commentator’s paragraph above, I have three other stories for your reading pleasure this weekend. The first is from yesterday’s edition of The Economist out of London. It bears the headline “Here today, gone by 2010: Russia reserve fund is emptying fast.” The story is certainly worth the read…and I thank P.S. for sending it along. The link is here.

The next story is from the hallowed halls of the The New York Times. It’s a story about high-frequency trading—which has become one of the most talked-about and mysterious forces in the markets. Casey Research’s own Bud Conrad was circulating this story around the company yesterday…and I thought it worthy of your time. It’s entitled “Stock Traders Find Speed Pays, in Milliseconds”…and the link is here.

The last story today is from commodityonline.com…and filed from Johannesburg. The title pretty much says it all…”New law boosts gold bar sale in South Africa.” Until I read this story, I wasn’t aware that South Africans were not allowed to own gold in bar form. You learn something new every day. The link is here.

Throughout all my years of investing, I’ve found that the big money was never made in the buying or the selling…the big money was made in the waiting. – Jesse Livermore

Today’s ‘blast from the past’ goes back to 1972. I believe that this was their biggest, if not their only, hit. But what a hit it was. Turn up your speakers and then click here.

Something appears to be up in the gold and silver market…which the latest COT confirms. Further rallies in gold never amount to much when the bullion banks are short this amount of gold. Sure, I’ve seen their short position as high as 26 million ounces…which is 55,000 contracts higher than we are today…so I guess we can go higher, but the odds are not in our favor. How high we go from here [if we do go higher] depends entirely on whether the bullion banks are prepared to take on an even larger short position. But once that high [whatever, and whenever it is] is in, there is only one direction gold can go…down. Will silver go with it? Don’t know, but Ted Butler says that they would have to get the price below its latest low, which is around $12.40…about $1.50 below where it closed yesterday…before there would be any more significant long liquidation by the tech funds and the small traders. The 200-day moving average is at $12.29. Ted doesn’t think they can do it. We’ll see.

I note in closing that this is the last edition of Casey’s Daily Resource Plus. I hope that you have found it to be both educational and entertaining. Many parts of it will be shuffled off into other reports…and as most of you already know, I’ve been fortunate enough to be given my own daily stand-alone column. That honor is entirely because of you, dear reader…and for that, I’m grateful, appreciative…and thankful.

Enjoy the rest of your weekend and I’ll see you next week with a brand new look…which I look forward to seeing for the first time myself…as I haven’t seen it yet either.

Source: And Then There’s This…Monday, July 27, 2009

Wednesday’s open interest in gold showed an increase of 3,421 contracts to 394,360…on big volume of 120,609 contracts. Silver o.i went the other way…down 1,867 contracts to 96,402…on decent volume of 22,687. Ted said that most of the decline in silver came from far-dated spreads being lifted. I was surprised that silver o.i. fell at all, considering the fact that silver rallied 30 cents in New York trading…at the same time that gold rose nine dollars…as did its open interest. Another unsolved mystery in the dichotomy that exists in the o.i. between these two metals. Since this occurred on Wednesday, one day after the Commitment of Traders cut-off, we won’t see the actual results of this until the COT on July 31st.

Speaking about the COT…the latest one comes out at 3:30 Eastern time this afternoon. Ted and I figure that the net short position in gold has deteriorated at least 20,000 contracts since the last report…and that the bullion banks are now short over 20 million ounces…again. And don’t forget that of that 20 million ounces, pretty close to 14 million ounces of that short position is held by ‘3 or less’ U.S. bullion banks.

The Comex Delivery Report showed that 66 gold and 38 silver contracts were delivered yesterday. There were no changes in the alleged gold holdings of either GLD or SLV either. There were no changes in production over at the U.S. Mint…and the Comex-approved warehouses showed a small decline in silver inventories of 117,180 ounces troy.

Before continuing further, I’d like to explain what I mean by “alleged” when I refer to the gold holdings of either the GLD or SLV. I know I’ve explained it before, but an e-mail that I received yesterday via Ted Butler suggests that I should do it again. Yes, I’m confident that there is gold and silver in these ETFs…but not all that they say they have. The individual prospectus on each of these ETFs is so full of holes, you could drive a Mack truck through most of them. There are no public audits, so there is no way of knowing whether all the metal they say they have, is actually there. The custodians for each do not lend confidence either. The two U.S. bullion banks with the biggest derivatives positions in the precious metals market…JPMorgan (NYSE:JPM) and HSBC USA (NYSE:HBC)…are the custodians of the silver and gold ETFs respectively. Both Ted Butler and I agree that JPMorgan is by far the biggest silver short…if not the only silver short…amongst all the U.S. bullion banks. You’ll excuse me [and the rest of the GATA crowd] if we think something stinks here.

This is one of the few areas that Ted and I totally disagree on. Our conversations turn ugly whenever this subject comes up…and he calls me a lot of terrible names at times. He thinks that it would be pure fraud if the ETFs did not have all precious metals they said they did. True…but how is one to find out? And I trust these two bullion banks just about as far as I can throw them. How about you?

The ETFs are fine for speculating on the price…but to say you own gold when you own one of these [or other] ETFs is pure fiction. The ETFs short their own shares whenever they don’t have the metal to back up demand. Ted and I agree that JPMorgan will rig a sell-off just so that it can buy back the shares they shorted and not have to physically deliver the metal to the SLV.

If you really want to make sure that whatever investment vehicle you buy in the precious metals arena has the physical to back it up, you have several choices…and here are a few of them…the first of which is Central Fund of Canada, James Turk’s GoldMoney, Bullion Management Group, Central Gold Trust (AMEX:GTU)…and soon CEF will have their Silver Trust up and running. I’d bet my life savings on the fact that these firms have the metal to back up their funds that they say they do. All you have to do is phone their auditors and ask. And I’m also fortunate enough to know the principals of all these firms…most of them personally.

But before you invest a dime in any of them, just make sure that your own personal stockpile of gold and silver [in your physical possession] is big enough, before you buy any fund…even GLD and SLV if you must. I don’t…and won’t…own either.

The usual N.Y. gold commentator also had this to say as well…”Amongst today’s buyers was apparently The Gartman Letter which cut its buy stop to $955/1 hour this morning. This will distress many of gold’s friends. [Yes, it does...but as I said earlier this week, I'm praying fervently that he is correct this time. - Ed] While TGL’s initial entry points for gold have a reasonable record, the history of its attempt to double up on breakouts is alarming. Perhaps TGL gets into the wrong hands! With the physical market faltering and Comex open interest and volume getting to levels seen at the late May/early June peak, this move has entered a risky phase.” [It has indeed!!! - Ed]

One of things that has gold where it is…and the bullion banks pulling out all the stops to prevent its rise…is the sheer amount of paper that the U.S. Treasury has monetized…or is about to sell. It is money printing on a scale not seen since Weimar Germany after WWI.

I note in Gregory T. Weldon’s latest edition of Weldon’s Money Monitor that he had this to say…”The most recent data reveals a HUGE single-week [sixth largest EVER] of debt monetization by the Fed, to the tune of $36.9 billion or, at an annualized pace, that would see the Fed monetize TWO Trillion Dollars worth of debt in a 12-month period.”

“Moreover, purchases were broad-based, providing the market with a GRAND-SLAM, covering all ‘four bases’ … with monetization of Treasury debt ($8.67 billion), Mortgage-Backed debt ($26.6 billion), Agency debt ($1.7 billion) and Term-Asset-Backed debt ($1.4 billion).”

And I see that Karl Denninger has gone apoplectic on this issue. Starting today, and ending next Thursday, there are $235 billion dollars in U.S. Treasuries being auctioned…almost a quarter of a Trillion dollars!!! Yep, you read that right! The article, courtesy of Craig McCarty, is entitled “Holy !@#!! Treasury Auction Schedule” and the link is here. There was a story about this in Bloomberg yesterday as well.

There should be a great smoking hole where the U.S. dollar used to be…along with a big four-digit gold price and three-digit silver price on such news…but we all know why there isn’t.

Besides the Denniger piece above, I have two other today. The first I found while I was reading Bill Murphy’s MIDAS commentary over at lemetropolecafe.com. It’s posted at the Ottawa Citizen…and is a reprint from The Financial Post. The story is headlined “On the road to higher gold prices: ‘Barometer of investor anxiety’”…and the link is here.

And lastly is this article in the Financial Times of London…written by Eckart Woertz, who is the Program Manager in Economics at the Gulf Research Centre in Dubai. Amongst other things, he recommends that…”they should engage in cautious currency diversification with gold being the ultimate dollar hedge.” The link is here.

The stock market is no longer the sum product of informed, or Captains of Industry, action. It is a rigged casino and asset bubble that is used to paper over declining US living standards. – Bill King, the King Report…23 July 2009

I’m still on the fence…but every reason why the price of gold and silver should explode…or why the price should be crushed…is on display in this commentary. Rampant money printing…and a large [and growing] gold short position that is well into the danger zone. But can they…or will they? The third possibility is that the bullion banks could get totally over run. I’m not optimistic about this scenario…but like I said before, if it does happen, the party’s at Ted Butler’s place!

All of us at Casey’s Daily Resource Plus hope you have a great weekend and I’ll see you on Saturday morning.

Source: And Then There’s This…Friday, July 24th, 2009

For the first time in quite a while, there were no deliveries in either gold or silver on the Comex Delivery Report. There were no changes [as usual] in the alleged holdings of the SLV ETF…but GLD showed a drop of 186,507 ounces yesterday. The U.S. Mint has another update for us…they increased their gold eagles by another 4,000 and their silver eagles by 150,000…bringing their monthly totals so far to 60,000 and 2,025,000 respectively. And lastly, there were no material changes in silver inventories over at the Comex-approved warehouses.

The only gold story of interest that I could find was over at mineweb.com where the headline read “Saudi retail gold sales plunge: Higher prices and fewer visitors force sales down 30%”…and the link is here. On top of that, the usual New York gold commentator mentioned in his commentary that neither India or Vietnam were importing gold yesterday.

In other news, I note in a Bloomberg story headlined “Credit Card Charge-offs rise again in June”. As a matter of fact, they rose to a record high. The Moody’s credit card charge-off index — which measures credit card loans that banks do not expect to be repaid — rose to 10.76% in June from 10.62% in May. Moody’s also mentioned that charge-offs should peak at 12-13% in mid-2010.” [I wouldn't bet any money on that. It sounds like another case of whistling past the graveyard to me. - Ed]

Not a lot of interesting stories…as it was a ho-hum kind of day everywhere yesterday. The first one is an item that I lifted from Bill Murphy’s MIDAS commentary over at lemetropolecafe.com. It’s a story from the BBC in London. The headline reads “U.K. Debt Hits a Record of £799 billion” One wonders how much hacking, slashing and outright cooking of the financial books it took to get that number below £800 billion? The link is here.

The next story is from Bloomberg. The opening paragraph reads…”The Federal Reserve is “embroiled” in politics and has “stretched beyond reason” its authority to make loans, said William Poole, who served as president of the St. Louis Fed from 1998 to 2008.” The ‘long knives’ are out for the Fed…even from their own people. The short article is well worth the read…and the link is here.

Normally, press releases from the CFTC would not show up in my column, but this one is different. The headline reads…”CFTC to Hold Three Open Hearings to Discuss Energy Position Limits and Hedge Exemptions: First Hearing Scheduled for July 28, 2009″. Ted Butler sent it to me early yesterday morning. He pointed out the fact that one paragraph was all in bold type. Now why on earth would a government press release do that? It stands out like the proverbial sore thumb. Maybe its because the boys over at JPMorgan Chase (NYSE:JPM) [and the other silver shorts] can only read large print. But it sure looks like a warning to me. Ted went on to say that the 8-point list below that describes to a ‘T’ what has to be done in the silver market to bring it back into line with every other traded commodity on the planet. Or, it could mean nothing. You be the judge…and the link is here.

While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort, we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us. – Herbert Hoover, President of the United States…May 1, 1930

To make up for the lack of anything of much interest yesterday…here’s a video I ran at least 18 months ago. I’ve picked up a lot of new readers since then, so I thought I’d run it up the flagpole one more time. It’s not a music video, but turn up your speakers anyway, and then click here. Enjoy!

I’m still sitting on the precious metals fence…waiting to see which way the gold [and silver] price is going to go…but ready to jump into either the bull or bear camp, depending on the outcome. And as I’ve mentioned several times over the last week or so…I’ve got the perfect explanation as to why the price is going up or down…and by now, dear reader, you should have figured that out too.

Enjoy the rest of your day, and I’ll see you here on Friday.

Source: And Then There’s This…Thursday, July 23rd, 2009

I mentioned yesterday that the open interest decline on Friday [in that short-covering rally] would have been somewhat offset by the big rally that we had on Monday. Well, I was only partially right. Open interest for Monday’s big day showed a staggering increase…up 12,999 contracts to 393,536…on big volume of 139,361 contracts. Friday’s improvement in o.i. got buried by more than 10,000 contracts! I was stunned! Ted Butler was flabbergasted! Ted feels that the net short position in gold is now back over 20 million ounces, as the bullion banks have increased their net short position by 20,000+ contracts since last Tuesday’s Commitment of Traders report cut-off.

With these open interest changes for Monday now public information, it is more than obvious that bullion banks prevented an explosion in the gold [and silver too?] price on Monday. The reason I say that should be crystal clear to all…because if the bullion banks hadn’t been there to take the short side against all these speculators pouring in on the long side, there would have been nobody else to take the short side and the price of gold [and silver] would have been bid to the stratosphere in a New York minute! This was not an act of strength by the bullion banks…but rather one of extreme weakness…desperation, if you will.

With this untimely [and unhappy] turn of events, Ted and I spent most of our time on the phone discussing a ‘where to from here’ scenario for the bullion banks. In five trading days, they piled on the short positions that just took them five weeks to get out of…and again have a short position that would choke a whole herd of horses…but the questions that remain to be answered are…can they, or will they?

And in silver??? I’m glad you asked. Silver also had a robust day on Monday, and its price also got trashed along with gold’s. It would be fair to presume, would it not, that silver open interest would have soared as well? Well, one would be wrong to presume that. Silver o.i. on Monday rose a magnificent 191 contracts to 98,823…on decent volume of 21,428 contracts. Ted figures that there has been little, if any, deterioration in silver open interest since last Tuesday’s cut-off. I feel [and Ted agrees] that, at the absolute maximum, there are about 7,000 speculative long contracts left to be liquidated in silver for it to be all cleaned out on the downside. In gold, it’s 50-100,000 contracts…and more than that, if we talk about returning to the lows of last November.

It should also be obvious that the bullion banks are treating the silver market like it was a bucket of nitroglycerine…which, in fact, is exactly what it is. They have the kid gloves on here. Ted Butler has always said that the silver market is the center of the universe for the bullion banks…and he would be right about that. These changes in open interest…gold vs. silver…should speak volumes to you. The bullion banks [principally JPMorgan] do not want to go back on the short side of this market.

Many times in the past, the bullion banks have used the price of gold to smash the price of silver. But the question keeps coming up…can they? Will they? If this effort we saw over the last six weeks [gold down to $907...silver to $12.45 at the lows ten days ago] was the best they can do…well, it could get interesting to the upside. But…they have the firepower in their arsenal to blast gold down at least $100 from where it is right now if they choose to. But can they…or will they? The price action in the days and weeks ahead will tell us a lot. The rest of the summer could be really interesting.

Yesterday’s Comex Delivery Report showed that 3 gold and 42 silver contracts were delivered. There were no changes in the alleged holdings at SLV…and over at GLD, a smallish 68,713 ounces were withdrawn. And at last…after six days in a row…the U.S. Mint reported no changes in their production numbers on Tuesday. Over at the Comex-approved warehouses, total silver inventories dropped by four rather small good delivery bars…3,891 ounces.

The usual N.Y. gold commentator had the following…”[This week] the European Central Bank weekly statement of condition indicated no change in “gold and gold receivables”. At a glance, this is only the second time in almost a decade nothing was reported sold. Last week’s disposal was only €2 Million – 0.09 tonnes. The ECB squadron of banks appears to have withdrawn from the market.”

“[On Monday] very powerful opposition immediately materialized on gold’s challenging important technical levels. Both UBS (NYSE:UBS) and Mitsui have remarked that the Spec long as reported by the CFTC had, as of last Tuesday, come down to levels at which they could entertain the possibility of a rally. Perhaps the CFTC data influenced the instigator of yesterday’s move. Unfortunately, as of last night, open interest had added 23,027 lots (71.6 tonnes, or 6.2%) for a $26 rise (2.8%).” [Ted's comment in a prior paragraph that gold o.i. had increased 20,000+ contracts since last Tuesday's cut-off is obviously correct. - Ed]

Before I start on my stories for the day, I want to mention something from my commentary yesterday. One of the charts provided was the contraction of the Commercial Paper market. The chart I cut and paste wasn’t overly clear…so here is the URL where I got the chart from…and it’s infinitely better. The link is here.

Over at Bill Murphy’s lemetropolecafe.com came this item of interest. It appears that a Café member e-mailed David Einhorn of Greenlight Capital to get some clarification on the switch from GLD to bullion (Did Greenlight simply redeem its GLD shares for bullion from GLD, or did Greenlight sell its GLD shares and procure the bullion from a source other than GLD?). The reply he got from Einhorn was as follows…”We didn’t discuss the transaction at that level of detail (and don’t plan to).”

Today’s first story involves the U.S. Postal Service. It appears that four unions representing the nation’s postal workers are pleading for a meeting with the White House to address possible funding shortfalls for workers’ payroll and retiree health benefits. USPS top executives are now saying that the USPS will default on a $5.4 billion payment to prefund future retiree health benefits on September 30, 2009…and may not be able to make payroll in October and will be forced to issue IOUs instead. I thank Craig McCarty for the story over at myfederalretirement.com and the link is here.

In a story out of the Financial Times in London is this headline…”China to deploy foreign reserves”…”Beijing will use its foreign exchange reserves to support and accelerate overseas expansion and acquisitions by Chinese companies…” and the link is here.

Along with Philadelphia yesterday [and the ongoing bankruptcy saga in California] is this Bloomberg story headlined “Jefferson County, Alabama, to Put One-Third of Workers on Leave”…and unpaid leave at that! The link is here.

Thanks to Bill King over at the King Report on Sunday night, came this insider story posted over at advancedtrading.com. It’s a fascinating look into the world of “proprietary algorithmic trading codes”…the story that engulfed Goldman Sachs (NYSE:GS) just recently. Despite its rather complex subject matter, the article is pretty easy to understand…and very much worth your time. The article is entitled “The Real Story of Trading Software Espionage”…and the link is here.

And lastly is another article by silver analyst Ted Butler. Now that the U.S. Commodity Futures Trading Commission is talking seriously about imposing position limits in silver, Butler says the suppression of silver prices can be broken. But only if silver investors express themselves and encourage the new regime at the CFTC, every step of the way. For the commodity exchanges will fight behind the scenes to preserve the status quo…and the illicit profit it ensures for the market manipulators. Butler’s new commentary is headlined “The Real Solution” and is linked here.

It is hard to imagine a more stupid or more dangerous way of making a decision than by putting those decisions in the hands of people who pay no price for being wrong. – Thomas Sowell

I’d forgotten that Gentle Ben was giving his semi-annual monetary policy report to the House Finance Services Committee yesterday morning. That may have been part of the reason why there was no follow-through in the gold market on Tuesday. As to what’s coming down the pipe…if you’ve carefully read what I had to say further up…it’s really a crap shoot. Either gold and silver get killed and the bullion banks cover as many shorts as they can…or the price continues to rise and the bullion banks just get more mega-short. Then there’s the issue of the CFTC’s position limit changes…if, and/or when they happen. I think I’ll flip a coin instead.

See you on Thursday.

Source: And Then There’s This…Wednesday, July 22nd, 2009

There wasn’t big volume yesterday, so not too much should be read into this action…but it’s always noteworthy so see that parabolic rises in prices are never allowed to get too far out of hand before the usual ‘not for profit’ sellers show up.

Despite the fact that Thursday was a quiet trading day and neither metal did much price wise…open interest in gold increased another 3,100 contracts to 383,107 contracts. Volume was decent….74,589 contracts. Open interest in silver rose as well, another 410 contract to 99,744…on volume of 15,052 contracts.

The Commitment of Traders report came out yesterday as per usual. In silver, the bullion banks decreased their net short position by a respectable 2,807 contracts…but are still net short 34,625 contracts or 173.1 million ounces of silver. Virtually all of that net short position is held by two U.S. banks…JPMorgan (NYSE:JPM) and HSBC USA (NYSE:HBC). Since the Tuesday cut-off for this report, the bullion banks have decreased their net short position a bit more. The full-color COT graph for silver is linked here.

In gold, the bullion banks decreased their net short position by 9,020 contracts…but are still net short 182,287 contracts…which is quite a bit…18.23 million ounces of the stuff. What’s really unfortunate in gold is that since the Tuesday cut-off, these same bullion banks have put the entire 9,020 short contracts back on…plus more! A ‘back-of-the-envelope’ calculation indicates that they’re short position is now back up to around 19.5 million ounces as of the close of trading on Thursday…and they probably added more on Friday when they capped that $10 rally. So, from a COT point of view, gold is still well into the danger zone…and the chance of a huge sell-off in gold is still a distinct possibility. The full-color COT graph for gold is linked here.

But…under current circumstances…can they, or will they??? This is why I find this price capping at $940 so suspicious. If they’re painting the charts with a false top, we could get creamed in the near future. But…then again…maybe not. The COT says ‘yes we will’…and current circumstances say ‘no we won’t.’ And as I said yesterday, I could easily explain a big price move in either direction for both metals. I’m sure glad that I don’t have to bet any money on the near-term outcome of all this.

As far as deliveries went yesterday, the Comex reported that 55 gold and 42 silver contracts were delivered. There were no changes in the SLV ETF…but over at GLD, I see that they reversed the transaction of the piddling 9,817 ounces they added on Thursday…and have now removed it. Much to my amazement, the U.S. Mint had another update to their production numbers. This is five days in a row…a record! On Friday they reported another 5,500 gold eagles and another 75,000 silver eagles…bringing the monthly totals up to 56,000 in gold and 1,800,000 in silver. And over at the Comex-approved warehouses, another 208,010 ounces of silver were withdrawn on Thursday. Friday’s changes will be reported on Monday.

The big precious metals news yesterday was in the silver market…and I’m surprised that nobody has picked up on this already…and I thank Ted Butler for sending it to me in the wee hours of Saturday morning. The story is posted at newswire.ca and the headline reads “Claymore Silver Bullion Trust Closes its IPO”. The IPO was for 3.6 million units at $10 [probably Canadian dollars since it's a Canadian fund]…plus a full warrant. The fund has also granted the agents an over-allotment option for up to an additional 540,000 fund shares [plus warrant] during the next 30 days. A quick guess says that they should be able to pick up about 2.6 million ounces of silver if everything works out. Central Fund of Canada and their silver trust should be out of the starting gate pretty soon too, I would think. The link to the Claymore IPO story is here.

Today’s first story is from cnsnews.com. Just when you thought you’d heard everything, here is U.S. Vice President Joe Biden saying “We Have to Go Spend Money to Keep From Going Bankrupt”. I wonder if the Chinese government has read this article and heard the video? I thank P.S. for this story…and the link is here.

The next story comes from the …and I thank the usual New York gold commentator for bringing it to my attention. In what some on Wall Street are calling the biggest blockbuster deal in the history of the financial sector, Goldman Sachs confirmed that it was in talks to acquire the U.S. Treasury Department. I know that it’s ‘impossible!!!’ to believe, but the story is linked here, so you can draw your own conclusions.

The third story today is from over at the mineweb.com…and I thank Bill Murphy over at lemetropolecafe.com for running it in his MIDAS commentary yesterday, or I would have missed it entirely. The headline reads “Vault Space Shortage: Swiss banks running out of storage space for gold bullion”. This is a problem that sounds like it’s going to get much worse before it gets any better. The link is here.

And lastly is this piece from Hugo Salinas Price. Not only is Hugo one of the richest men in Mexico, he is also the President of the Mexican Civic Association for Silver…an organization that is getting very close to re-monetizing silver in that country. When he is talking, I’m only too happy to listen. His latest commentary is entitled “Causes and effects” and the link is here.

There is only one way to kill capitalism…by taxes, taxes and more taxes. – Karl Marx

Today’s ‘blast from the past’ is somewhat different this week. The rock band Toto scored its biggest hit with Africa back in 1982. But this is not the 1982 version linked here…it has, as they say, been reinvented. It is sung a cappella…by a jazz choir called Perpetuum Jazzile from Slovenia of all places! And before you dismiss this out of hand, I urge you to give it a listen. It’s absolutely amazing! I was totally blown away. It was a Paul Potts/Susan Boyle [Britain's Got Talent] kind of moment when I heard this for the first time. I like it even more than the original version…and I thank reader Dave Delve for sending it to me. This piece definitely requires that you turn up your computer’s speaker system…then click here. Enjoy!!!

I have no idea what gold and silver prices will do next week. If they scream higher…I’ll understand the reasons. And if they get killed…I’ll understand the reasons for that, too.

But, that’s two days away. So forget about it, and enjoy the rest of your summer weekend and I’ll see you on Tuesday morning.

Source: And Then There’s This…Monday, July 20th, 2009

Yesterday’s low tick on the U.S. dollar occurred around 2 p.m. in New York at 79.72 cents…plus or minus a couple of ticks. Gold’s peak price in the first few days of June was around $990…when the dollar printed a low of about 78.70 cents. In five weeks, the U.S. dollar has gained a full cent [one percent and change], while the US$ gold price has been hit for 77 big ones. That’s a drop of 7.8%.

The point I’m making here is that this decline in the gold and silver price over the last five weeks has had nothing to do with the dollar. It has been entirely dependent on who is buying or selling contracts on the Comex…and how many. Of course large and long-term moves in the US$ make a difference…especially if you look back ten years.

But right now, the dollar has been trying mightily to rise since its low in the early days of June…and this is the best it could do…so far. In order for gold to get sold off heavily from here, we will have to see a real [or manufactured] rally in the US$. It’s so much easier for ‘da boyz’ to hit the precious metals when the dollar is rising. This week the U.S. Treasury has been busy selling oodles of paper products [about $125 billion worth]. Eager to buy them are other central banks, not because they want them, but because if they didn’t, the world’s financial system would disintegrate right on the spot.

So, regardless of what the dollar does, both gold and silver could explode to the moon tomorrow if the four bullion banks that are sitting on their respective prices would either start covering their grotesque short positions, or fold their arms and do nothing…i.e. don’t go short against virtually every long that’s being placed…which is what they’ve been doing now for the last 10+ years.

The changes in open interest for Wednesday’s price action [as reported by the NYMEX] were a joke. Wednesday was a huge down day in both gold and silver and there was big liquidation…but the numbers, once again, did not show any sign of that. Gold o.i. actually rose 1,058 contracts to 374,043…on monstrous volume of 145,432 contracts. Silver o.i. was also reported as being up…515 contracts to 100,891…on 26,823 contracts traded. There are only two explanations for this dichotomy…the numbers were either not reported in a timely manner, or someone is lying big time. Ted Butler figured that there were about 15,000 gold contracts and maybe 3,500 silver contracts liquidated on Wednesday. So…where are they? Hopefully they will show up in today’s report when it’s released later this morning.

Today’s Commitment of Traders report will be issued at 3:30 Eastern time today, and I will report on it on in my Saturday commentary. For those of you who can’t wait…and want to see the report the moment it’s posted…the link is here.

The Comex Delivery Report yesterday showed that 30 gold contracts and 61 silver contracts were delivered. There were no changes in the alleged holdings of either GLD or SLV…and the Comex-approved warehouses reported that a further 563,172 ounces of silver were withdrawn from their inventories.

Very little in the way of gold news yesterday. The only thing of note I could find was posted over at Kitco. It was a Reuters story filed from Johannesburg stating that gold output in May had dropped 10.5% from the same month in 2008…and total production of non-gold minerals fell 15.1%.

Today’s first story is about AIG. In a piece filed at Bloomberg yesterday, an analyst at Citigroup “said the firm may have no value left for shareholders after repaying the U.S.” [If that isn't the pot calling the kettle black, I don't know what is! - Ed] Then there was a washingtonpost.com story that stated that “AIG was preparing to pay millions of dollars in bonuses this month to several dozen top corporate executives.” As can be imagined, AIG stock got hammered yesterday…falling 27%. The Bloomberg story is linked here.

In a Reuters story, China once again called “for reform to the reserve currency system at a meeting of world leaders in one of its most direct attacks on the dollar’s global dominance.” The headline reads “China demands currency reform, France backs debate”…and the link is here.

Here’s a piece [courtesy of the King Report] by Ambrose Evans-Pritchard from The Telegraph in London. The headline reads “Shipping flashes early warning signals again”. This short piece is definitely worth reading…and the link is here.

In the next story…a Reuters piece filed from Zurich and posted over at newsmax.com…it appears that the Swiss government is about to put its foot down and defend the secrecy of the Swiss banking system by preventing UBS from handing over client information to U.S. tax authorities…”Switzerland will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS,” the Swiss government said. This story is also very much worth reading, and I thank Casey Research’s Jeff Clark for bringing it to my attention. The link is here.

And lastly comes this piece posted from the GlobalEurope Anticipation Bulletin posted at leap2020.eu. The story bears the title of “Global systemic crisis in summer 2009: The cumulative impact of three rogue waves”. Because this is a European website, the story is available in three other languages besides English. This story, although dated from June 17th, is also very much worth the read. I thank Brad Robertson for sending it along…and the link is here.

The foremost corporate responsibility is to serve others so well that you produce a profit. – James Cook

The G8 meeting in Italy was another non-event. I note, in looking at the chart of the Dow, that it has now broken down from its ‘head and shoulders’ pattern…and I see that another dollar ‘rally’ is in progress from its low yesterday afternoon in New York. I also note that the high in gold and silver for Friday are probably already in…their tops occurring at the close of Sydney trading in their Friday afternoon. Gold has already given back all of its magnificent three dollar gain from yesterday…and the silver price has ‘dropped’ like a rock now that London has opened for trading today. ‘Da boyz’ are back in town…and probably gunning for those 200-day moving averages. This could be an interesting day. Take two red pills and I’ll see you tomorrow.

All of us at Casey’s Daily Resource Plus hope you have a good weekend and we’ll see you here sometime on Saturday.

Source: And Then There’s This…Friday, July 10, 2009

After that, gold had a double top at the beginning of trading in London yesterday morning. Between the London open and the London close, gold shed another $7. But once London closed at 11:00 a.m. Eastern time, the rug really got yanked, and another $13 got carved off the price in short order. After the bottom for the day, which came at precisely 12:30 in New York, gold recovered $5 in what was left of Comex trading…but once electronic trading began after the Comex close, the gold price flat-lined.

Silver didn’t really develop a downward trend until 11:00 a.m. in London…while the east coast of the U.S. was still sound asleep. From there, silver was under considerable pressure [with even more pressure coming once London closed] right up until its low tick of the day, which occurred at 12:15 in New York. From there, silver recovered about 15 cents before trading closed.

I wasn’t expecting much of a change in open interest for Tuesday’s trading…and I guessed right. But I was also happy that both numbers showed an improvement. In gold, o.i. fell another 1,632 contracts to 372,985…on decent volume of 88,693 lots. In silver, o.i. also fell…in this case by 619 contracts to 100,376…on smallish volume of 16,573 contracts. Because Tuesday was the cut off for Friday’s Commitment of Traders report…this data will, hopefully, be in it tomorrow.

Yesterday’s trading volume was monstrous…with huge liquidation in both gold and silver as well. Today’s open interest report should be impressive. In retrospect, I shouldn’t have been surprised at Wednesday’s big down day in both metals…and [probable] massive open interest decline…as it’s too late for tomorrow’s Commitment of Traders report…so this data won’t show up until next Friday’s COT report on the July 17th. This is standard operating procedure when the bullion banks want to hide what they’re doing until the last possible moment. I’ve mentioned this trading pattern on many occasions.

The Comex Delivery Report for Wednesday didn’t show a lot of activity…as most deliveries for July are already done. There were 17 gold contracts and 24 silver contracts delivered. Over at GLD, there was a rather large 333,798 ounces removed from their stockpile…and at SLV there were no changes…again. The U.S. Mint is a busy place these days! For the third day in a row they have updated their gold and silver one ounce eagle mintings. Gold eagles rose another 6,000 to 18,000 so far for July…and silver eagles are up another 200,000 to 650,000 for the month. Over at the Comex-approved precious metals warehouses, a smallish amount of silver was removed from inventory…74,327 ounces.

The usual N.Y. gold commentator had a few things to discuss yesterday…and here they are…”This morning’s weekly statement of condition from the European Central Bank indicated a €5 million fall in ‘gold and gold receivables’ attributed to a sale by one captive central bank. This is a derisory 0.23 tonnes [7,510 ounces] – last week’s quantum was 4.33 tonnes. Perhaps it was an option being exercised. The recent behavior of the European central bank flock suggests that the 403 tonnes of IMF gold is desperately needed to sustain the 400-500 tonne central bank pace of the last decade.”

And then in commentary late yesterday evening, this was added…”UBS raises the implication that gold and silver, with huge stock/consumption ratios and politically insignificant private sector consumers, might escape: ‘we believe that gold and silver, with vast above-ground, liquid and near-to-market stocks, are the only traded commodities that are not a play on scarcity…We suspect gold and silver will be at the bottom of this list, if they are on it at all.’ Andy Smith has been arguing for some time now that the precious metals could well emerge as the only venue for the expression of what one might call ‘Free Market’ sentiment. There is, of course, considerable evidence that these metals, especially gold, have been under political price management for the better part of 20 years. But after so many years of official sector selling, the question becomes as to who will take up the selling slack when central bank dispositions come to an end.”

Ted Butler would vehemently disagree with what UBS and Andy Smith had to say in the previous paragraph. He feels that [and I'm not disagreeing] the CFTC et al will use the upcoming legislation to enforce position limits as an opportunity to get these grotesque short positions in both gold and silver cut down to size. I spoke about this yesterday But regardless of who is right…or wrong, we won’t have to wait too long before we find out.

After yesterday’s pounding, it’s now a pretty good bet that the bullion banks are going to “go the distance” and take both gold and silver prices below their respective 200-day moving averages. And despite the big liquidation yesterday…the still gigantic gold short position is the 800 pound gorilla sitting in the living room. Last year at the October lows, the bullion banks only had a short position of around 7.5 million ounces in gold…which is about 10 million ounces lower than we are now. That’s why I’m so alarmed at the current size of this short position that the bullion banks are holding. The question that Ted and I are wrestling with is the following…”Will this be a garden variety correction to below the 200-day moving averages…or will it be much worse? If it’s just a garden variety correction, the process is well along, and we might only have 30,000 contracts [or so] left to liquidate. But if they do what they did last year at this time…God help us!

Right now, if you check the RSI [Relative Strength Indicator] on the graph below, we’re fast approaching oversold on silver…and about three quarters of the way there in gold. In dollar terms, it’s about $40 in gold…and in silver it could be a dollar or so. That’s if we get the garden variety correction. The other kind of correction involves the lows approximating those of last November. Which will it be?

I have four stories today. The first story from Bloomberg shows some of the ugly truths about real estate in the U.S. The fact of the matter is that it’s worse than this story makes out…but at least it hints at it. Like I said since February of 2007…call me in 2013 and we’ll talk about the bottom of the U.S. real estate market. The story bears the headline “Delinquencies on U.S. Home Loans Reach Record” and the link is here.

The second story is also real estate related…and also understates the scope of the problems in both residential and commercial real estate. The Reuters story is entitled “U.S. mortgage fraud ‘rampant’ and growing – FBI”…and the link is here.

Here’s a story that’s really hot off the presses at The Wall Street Journal. It’s gold related…something you don’t normally see in an establishment newspaper of this calibre. It’s entitled “Catching The Gold Bug” and the link is here.

The last story today is also gold related. Speaking Wednesday on Judge Andrew Napolitano’s “Freedom Watch” program on Fox News, U.S. Rep. Ron Paul, R-Texas, remarked that one of the purposes of his increasingly popular legislation to audit the Federal Reserve is to expose how the Fed has been manipulating the price of gold to support the dollar. His comment on gold price manipulation comes at 4 minutes and 30 seconds into the interview…and the youtube.com video is linked here.

There are none so blind as those that will not see. – Rev. Matthew Henry

That quote popped into my mind when I listened to what Ron Paul had to say. I know full well that the good Lord himself could show up at the Washington monument to Thomas Jefferson, with his Son at his side carrying two stone tablets…and announce to the world that the gold market was rigged seven ways to heaven…and there would be those who would still not believe….nail holes or no nail holes! It boggles the mind.

See you on Friday.

Source: And Then There’s This…Thursday, July 9, 2009

And by the time that gold trading was over for the day…most of that gain had been made to disappear…and gold finished down about a dollar from Monday’s close.

Silver’s path was almost identical to gold’s…but wasn’t anywhere near as volatile price-wise. The only big difference in the price action of both metals was that while gold’s low of the day was at the London open…silver’s low was at the end of trading in New York at 5:15 Eastern Daylight Time. And never forget for a second that silver is the center of the universe for the bullion banks. Gold is pretty easy to get…but there is no silver [in size] to found anywhere. As they have done in the past…and will probably do again in this selloff…they will use the gold price to beat the living snot out of the silver price. At least that’s their usual modus operandi these days.

I’ve been carefully noting gold’s reaction to movements in the dollar…or is it movements in the dollar reacting to the gold price? In the two days trading that we’ve had this week, I’ve been struck by the fact that when the gold price gets hit hard [Monday about 1:40 a.m. Eastern time...and 7:40 a.m. Eastern time on Tuesday...almost 18 hours apart to the minute], the US$ stages big rallies at precisely the same instant…with no lead or lag times. One does not follow the other…there is no cause and effect…no action/reaction sequence. Both occur simultaneously. This is not possible under any free-market conditions that I can think of. Here is Tuesday’s US$ graph. Kindly compare the time of gold’s vertical price spike on the Kitco chart above, to the beginning of the dollar rally on the ino.com US$ chart below. They are one and the same. The identical condition occurred on Monday morning at 1:40 a.m. Eastern when gold got creamed in Hong Kong trading.

Well, Monday’s open interest numbers finally showed some improvement…but both Ted and I were still underwhelmed. Gold o.i. only fell 6,670 contracts to 374,617…with volume of 87,864 contracts. In silver, o.i. only fell 402 contracts to 100,995…on volume of 22,485 contracts. Remember what I said yesterday about the bullion banks taking their time about this liquidation process? Well, molasses in January it is. I’d much prefer ‘death by one single thrust’…then this ‘death by a thousand cuts’ that we’re getting.

The Comex Delivery Report yesterday showed that only 15 gold contracts were delivered along with 404 contracts in silver. It didn’t take long for most of the deliveries to get done in July. There’s only about 25 left in gold…and about 700 in silver…plus whatever new orders for delivery show up during the rest of the month. It’s surprising how quickly the screams of an imminent Comex delivery default have died away. There were no changes in either GLD or SLV yesterday. But last week over in Switzerland at the Zürcher Kantonalbank, their gold ETF added another 59,929 ounces…and their silver ETF was up another 570,588 ounces. Their total holdings stand at 4.8 million ounces of gold and a substantial 49.4 million ounces of silver…plus they have platinum and palladium ETFs as well. I thank Carl Loeb [as usual] for these numbers. The U.S. Mint updated their production for the second day running. They didn’t add any one ounce gold eagles yesterday, but they did add a substantial 175,000 silver eagles…bringing silver eagle production for July up to 450,000. Over at the Comex-approved precious metals warehouses, another 1,199,471 ounces of silver were withdrawn.

The usual N.Y. gold commentator reported that Dennis Gartman had the following to say yesterday…”The seller, whoever it is or has been, between $970-$1,000 has succeeded rather clearly in turning gold back in recent weeks, and we note that this is the third time in a year that [this] seller has succeeded in thwarting the gold bulls…with the trend line that can be extended on the daily charts back to the lows made in October of last year at $680, and which extends on through the lows in the early spring of this year at $860, a break through $915 would be devastating. We’ve no position in gold at the moment, nor would we wish to have one…but if we did, it would be as a seller.”

I have three stories and a video today. The first story comes from Bloomberg where the headline reads “Oil, Gas Market Speculation May Face Restrictions”. The words silver and gold are never mentioned, but Ted Butler feels that these two metals [especially silver] will be front and center in whatever decision is made. Butler feels that 99% of all the complaints that the CFTC has ever received from the public have to do with the silver and gold market…and the boys at the CFTC and the SEC want to get this monkey off their collective backs without making themselves look incompetent, asleep at the switch…or permanent residents at the Crowbar Hilton, like Bernie Madoff has just become. The link is here.

Speaking of silver analyst Ted Butler, here’s his latest commentary which is definitely worth reading. It’s entitled “This May Be The Last Time”. We all hope that it is…and the link is here.

In a story out of The Times in London comes this headline…”Joe Biden speech sparks fierce response from Ayatollah Ali Khamenei” It appears the American Vice-President said that “the U.S. would not stop Israel from bombing Iran’s nuclear plants.” How to win friends and influence people! The link is here.

And lastly, here’s a little mirth and merriment regarding the sub-prime housing bubble and its effect on different people. The video clip is entitled “Real Estate Downfall”. I thank Kevin Cassidy for sending it along and the link is here.

The issue is always the same: the government or the market. There is no third solution. – Ludwig von Mises

As I put this to bed in the wee hours of Wednesday morning, I note that the ‘usual suspects’ showed up to hammer the gold price at the usual time…in the Sydney/London gap when only the thinly-traded Hong Kong market is open. It’s obvious that the attempt ran into some serious buying almost immediately. Then gold got hit again on the London open. It could be another wild and wooly day in the gold and silver pits in New York today.

I hope your day goes well…and I’ll see you here on Thursday.

Source: And Then There’s This…Wednesday, July 8, 2009

With both metals firmly set back on their respective heels, both Ted Butler and I felt sure that the bullion banks would continue to press their advantage once trading in New York began…but they did not…and gold and silver recovered somewhat as the trading day wore on. Volume in both metals was very low. The shares got creamed…but closed off their lows of the day.

Thursday’s big down day in gold and silver before the long weekend should have shown big declines in open interest in both metals…but, once again, that didn’t happen. Open interest in gold rose 2,928 contracts to 381,287…on huge volume of 114,743 contracts. In silver, o.i . rose only 428 contracts to 101,397…on smallish volume of 20,172 contracts. Ted and I didn’t know what to make of this, as these numbers are ludicrous…unless someone loaded up on short positions in both metals….or are the open interest numbers not being reported in a timely manner? I guess the July 4th long weekend may have slowed them down a little. Let’s see how the rest of the week shapes up. Today [at the close of trading] is the cut-off for this Friday’s COT report.

The Commitment of Traders report [which was released yesterday instead of the Friday holiday] was not hugely positive either. In silver, the bullion banks only improved their short position by 1,509 contracts…and in gold, open interest for the week that was [for the close of trading a week ago today] actually showed an increase in the bullion banks’ short position of 3,388 contracts. There certainly has been an improvement since then…but I start to have my doubts about that when I have the daily numbers that I reported in the previous paragraph so out of whack with what the metal prices actually did.

And from the usual N.Y. commentator..”The [Indian] budget today doubled the import duty on gold and silver to R20 [20 Rupees]…$600/kilogram of gold and R1…30 cents/kilo for silver, effective immediately. The Indian bullion trade is naturally hostile to the duty increases…making dire predictions in this Reuters story filed from Mumbai linked here. In reality, UBS is probably right in suggesting that at about $6 an ounce, the impact on gold is marginal.”

The Comex Delivery Report for Monday showed that 21 gold contracts and 59 silver contracts were delivered. GLD dropped a minor 11,465 ounces and SLV was unchanged for the umpteenth day in a row. The U.S. Mint reported another 7,000 one ounce gold maple leafs and another 225,000 silver maple leafs stamped out. And over at the Comex-approved warehouses, 724,141 ounces were shipped in last Thursday…just before the long weekend.

In other news I noted that the CIC… the China Investment Corporation…purchased a 17% interest in Teck Resources here in Canada. For those of you who are non-Canadians, that’s one of Canada’s largest resource companies. I see in a story posted at Kitco that the Bank of Korea is making noises about buying gold. The headline reads “Bank of Korea to Buy Gold for First Time in 11 years” and the link is here. And I noted an article posted at China Economic Net that’s headlined “China encouraged to further boost gold reserves”. The link is here.

And lastly, I see that GATA was cited on CNBS by Dennis Gartman. He remarked that “‘the conspiratorialists are out there buying gold, the GATA boys are out there buying gold, and gold acts rather poorly. … I’d rather leave gold alone. It still looks like it wants to go lower.’ Gartman speculated that gold could go down to $880.” [Note to Dennis: A nice, safe call...the 200-day moving average. I guess that's why you get paid the big bucks. - Ed]
Last Thursday, Al Korelin of Korelin Economics was kind enough to take the time to interview me. If you care to listen, the link is here.

Here’s a graph that I thank P.S. for sending along. While jobs/job loss is traditionally a lagging indicator, the numbers increasingly suggest that Greenspan’s celebrated “green shoots” are actually weeds.

Today’s first story is from the The Wall Street Journal. “France, Russia and India questioned the role of the dollar as the world’s reserve currency during the weekend, indicating its status is likely to be a strong talking point in this week’s Group of Eight leading nations’ summit in Italy.” It’s entitled “Dollar’s Role Under Debate In Run Up to G8 Summit” and the link is here.

The next piece is from thedailybell.com in Switzerland. This is an interview with James Turk over at goldmoney.com. It’s headlined “James Turk on how the elites always destroy the paper money they value – and why gold wins.” The link is here.

I see that the “vampire squid [Goldman Sachs] with its tentacles wrapped around the face of humanity” was in the news again. It appears that some its proprietary trading codes were ’stolen’ and a lawyer for GS said “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.” I guess Goldman (NYSE:GS) fears infringement of its market-rigging power…and that someone other than they can now do it as well. Why is it that when GS does it…it is seen as a “fair way”…but when the manipulator is someone else…the ways become “unfair?” Just asking. The Bloomberg headline reads “Goldman Trading-Code Investment Put at Risk by Theft” and the link is here.

I see in a GATA dispatch that Austrian silver euro coins are being used to beat German taxes. The headline…in a story filed in spiegel.de from Germany…reads “Quick Silver: A New Austrian Coin Trick”…”Hot tip for German investors: an Austrian silver coin that can be smuggled legally. It’s music to the ears of Germans who bank in Austria. But how long can the party last?” It’s a very interesting read…and the link is here.

I place [the] economy among the first and most important virtues, and public debt as the greatest of dangers to be feared…we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty…or profusion and servitude. – Thomas Jefferson

The liquidation of the spec longs in gold and silver is proceeding like molasses in January. The bullion banks are obviously in no rush to get this done. It appears that they have all the time in the world…and are drawing the process out for as long as possible. A manufactured ’summer doldrums’ if you will. Even though gold is down $65 from its high…and silver over $3…the 200-day moving averages are still quite a ways off…and there hasn’t been very much short covering by the bullion banks during this decline. If JPMorgan (NYSE:JPM), HSBC USA (NYSE:HBC) et al really put their minds to it…it could get ugly, as we could get another monster sell-off like last year. Ted Butler and I spent part of yesterday talking about this scenario…a scenario that I’ve spoken of several times during the last month or so. But can they…or will they? Here’s hoping they can’t…but based on past history, I don’t like the odds.

See you tomorrow.

Source: And Then There’s This…Tuesday, July 7, 2009

Does this price have any significance? Who knows, but I can easily tell that ‘da boyz’ have been defending this price with great enthusiasm since June 15th…as the daily market action has been so obvious lately…confirmed by the graph below.

Silver didn’t show up for this party, but still managed to add 15 cents to its price by the close of electronic trading in New York at 5:15 p.m. yesterday afternoon. The precious metals shares did surprisingly well, but did give back some of their gains as the day wore on.

Of course the dollar fell a bunch yesterday…and it was encouraging to see gold gain back everything it had lost from the prior day. But it didn’t tack on those gains in lock-step with the dollar decline…but put all its gains into two big moves…one at exactly 8:00 a.m. and the other at exactly 12:00 noon Eastern time. With everything seeming to happen precisely on the hour in New York…what are the chances that these are random events? Just asking.

As I mentioned yesterday, I expected Tuesday’s open interest to decline significantly after the huge declines in the gold and silver prices that we had on that day. Well, that’s not what the report showed when I checked yesterday. Gold o.i. actually rose another 632 contracts while silver o.i. rose 95 contracts. Volume in gold was 109,797 contracts, while silver volume was only 27,320…the lowest it’s been in a while. Despite what the report showed, there was liquidation, as tech funds pitched longs and/or went short…while the bullion banks went almost exclusively long against them…and did not cover shorts. That’s why the open interest numbers showed an increase in the face of obvious liquidation. Since this happened on Tuesday [which is the cut-off for this week's COT], this data should be in the next report…which won’t be published until Monday because of the U.S. holiday tomorrow. But will it…as the bullion banks are known to hold back information until it suits them to publish it.

Ted Butler and I were both surprised how few contracts were delivered on first day notice on Tuesday. Well, they made up for it on Wednesday…especially in silver, as July is a big silver delivery month. There were 1,885 silver contracts delivered…that’s a bit over half of the 3,642 silver contracts that are shown to be standing for delivery at the moment. There were 42 gold contracts delivered yesterday as well. There were no changes in either GLD or SLV. Over at the U.S. Mint…5,000 one ounce gold eagles and 50,000 silver eagles were reported produced in their July 1st update. The Comex-approved warehouses showed that their silver inventories only increased by a very small 8,829 ounces. Their total silver inventory at the end of June stood at 117,583,739 ounces.

In other gold news, I note that India was a buyer in the gold market yesterday. The usual N.Y. commentator had one other thing to mention as well…”In times gone by, the Istanbul Gold Exchange would promptly publish Turkey’s gold import data on the first of the month. Now they are tardier. But a report has appeared saying the country imported at least 4.1 tonnes in June. While this is modest compared to the 15-20 tonnes/month Turkey has usually imported in recent years, it is the strongest import in 8 months and suggests this traditionally stalwart buyer is getting back into line.”

I do have a couple of gold-related stories for you today. The first is a Liberty Dollar prosecution update. Bernard von NotHaus, founder of the Liberty Dollar, has provided an update on the legal situation of himself and the other Liberty Dollar people being prosecuted by the federal government on counterfeiting charges. Von NotHaus reports that a long slog through the courts is ahead and that he and his people will be grateful for any assistance. You can read the von NotHaus’ update toward the bottom of the Liberty Dollar dispatch linked here.

And the second story…Mike Zielinski, proprietor of the Mint News Blog, reports that U.S. Senator Mike Crapo [R-Idaho] has introduced legislation to provide precious metal investors the same favorable capital gains tax treatment afforded to stock and mutual fund investors. The legislation is entitled “Fair Treatment for Precious Metals Investors Act” and the link is here.

Two other stories today. The first is from The Times in London. It’s a story that discusses which central bank is debasing their currency the fastest…the Euro by the ECB, or the US$ by the Fed. The story is entitled “How the ECB’s fig leaf has completely withered away”. It’s a longish piece, but definitely worth the read, and I thank Craig McCarty for sending it along. The link is here.

And, with another tip of the hat to Craig McCarty, comes this Bloomberg piece entitled “CFTC Looking at All Options for Fair Markets, Gensler Says”…”The CFTC will use all of its regulatory power to ensure fair operations of futures markets for oil, agriculture, currencies and interest rates, the agency’s chairman said.” I didn’t see him mention either gold or silver. Maybe they’re only concerned about manipulation on the long side of the market. The bullion banks’ obscene short-side corner in the silver and gold markets may be of no concern to them. The link is here.

The world’s most powerful investment bank [Goldman Sachs] is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. – Matt Taibbi, Rolling Stone magazine, June 2009.

We are now celebrating the first anniversary of the beginning of the big commodities crash of 2008. It came out of nowhere and crushed every commodity on the planet. Donald Coxe, global portfolio strategist at a Canadian bank, BMO Financial Group, blamed it on a secret plan cooked up by the U.S. Federal Reserve. The link to the interview on this subject is here. Listening to the first eight minutes will suffice. Will it happen again? Don’t know…but nothing would surprise me…as there are no markets anymore, only interventions.

All of us at Casey’s Daily Resource Plus hope that all of our American readers have a great Fourth of July holiday weekend, and we’ll see you right here tomorrow morning.

Source: And Then There’s This…Thursday, July 02nd, 2009