Silver To $30 In 18 Days: James Turk

MINING.COM Staff Writer | October 29, 2010 | 7:45 am Precious Metals Gold Silver 

Gold was basically flat all during Far East trading on Thursday, despite the fact that dollar continued to slide from its 1:30 p.m. Eastern time high tick on Wednesday.


Gold’s low of the day [around $1,323 spot] occurred around 9:00 a.m. in London… and from there gold rose about $15 until 9:00 a.m. in New York.  Then the gold price sold off a few bucks before launching vertically to its high of the day at $1,346.90 spot.  This price spike occurred at the dollar’s exact low of the day… which was shortly before 11:30 a.m. Eastern time.  After declining a few dollars off its peak price,  gold price basically traded sideways for the rest of the New York session.

Compared to gold, the silver price was comatose yesterday… with virtually all of its gains of the day coming at the same 11:00 a.m. price spike as gold’s in New York yesterday morning.  Silver managed to close almost on its high of the day, which was $24.06 spot.

Here’s the 3-day dollar chart.  From it’s 1:30 p.m. high on Wednesday… to it’s absolute low  moments before 11:30 a.m. on Thursday, the world’s reserve currency fell about 105 basis points.  During that time period, gold gained about $28, with the vast majority of that occurring between 9:00 a.m. in London and 11:30 a.m. in New York on Thursday.  Comparing the smooth and orderly decline of the dollar… the gold and silver prices were very volatile.  It’s obvious that the decline in the dollar was not the only force in the precious metal markets yesterday.

The gold stocks gapped up on Thursday morning, with virtually all of the gains coming before the 11:30 a.m. price spike in gold.  The HUI finished up 2.90%… but most of the juniors and virtually all of the silver companies didn’t join what was mostly a ‘large cap’ gold stock party.

First day notice for the November contract showed that 644 gold and 376 silver contracts were posted for delivery on Monday, November 1st.  With no exceptions, JPMorgan was the issuer of all of these contracts and, with the exception of one contract in gold, the Bank of Nova Scotia was the stopper [receiver] of all of these contracts.  There were no other participants.

The other standouts in this report showed that JPMorgan was trading heavily in its proprietary [house] account.  The other thing worth noting was that every single contract that was stopped [received] by the Bank of Nova Scotia was entirely for their own proprietary trading account.  Not one single contract was stopped [received] on behalf of any of their customers.  It was totally in-house trading.  I don’t know what to make of this, but it’s well worth looking at… and the link is here.

The GLD ETF showed a decline of 166,049 ounces yesterday… and SLV showed a decline of 1,369,142 ounces.  There was no sales report from the U.S. Mint… and nothing worth mentioning happened at the Comex-approved depositories on Wednesday.

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German boom creates ECB policy nightmare as south lags

Once again I have a lot of stories for you today.  The first one is from earlier this week that was sent to me by Roy Stephens.  It’s another Ambrose Evans-Pritchard offering, this one headlined “German boom creates ECB policy nightmare as south lags“.  Blistering growth in Germany is aggravating the growing gap between the eurozone’s North and South and may force the European Central Bank to tighten monetary policy long before the high-debt states are ready, Standard & Poor’s has warned.  This is a short read… and well worth your time.  The link is here.

EU ‘haircut’ plans rattle bondholders

Also from Roy Stephens is this second Ambrose Evans-Pritchard offering fromThe Telegraph that was filed late last night.  The headline from this story reads “EU ‘haircut’ plans rattle bondholders“.  Investors face large potential losses on eurozone debt under German plans likely to win backing from EU leaders on Friday – risking a boycott of Greek, Irish, and Portuguese bonds.  This story is very much related to the previous AE-P story… and the link is here.

Pimco likens US to ‘Ponzi’ scheme

Here’s another story from The Telegraph.  This one is by their economics editor, Philip Aldrick.  The headline reads “Pimco likens US to ‘Ponzi’ scheme“.  US authorities are operating a “brazen” Ponzi scheme in government debt by buying trillions of dollars of bonds to stimulate the economy, according to Bill Gross, managing director of Pimco, the world’s biggest bond house.  This is, of course, the absolute truth… and it’s about time that Bill spoke up about it.  The link to the story, which was sent to me courtesy of Nick Laird, is here.

Insider Selling volume at Highest Level Ever Tracked

My next offering today is from reader Scott Pluschau and is posted over at cnbc.com.  The headline reads “Insider Selling volume at Highest Level Ever Tracked“.  According to Alan Newman over at crosscurrents.com, top executives of the largest companies in three of the most important leading sectors of the market are selling their stock at an eye-popping sell to buy ratio of 3,177 to one.  The link is here.

Insane Fed Should Beware Unquantifiable Outcomes

My last non-precious metal story today is an op-ed piece from Mark Gilbert,Bloomberg‘s London bureau chief.  In a similar vein to what Bill Gross said in an earlier story… Gilbert tees off on ‘Helicopter’ Ben with a column headlined “Insane Fed Should Beware Unquantifiable Outcomes“.  Gilbert says… “When the law of unintended consequences kicks in, the nasty surprise is, almost by definition, unforeseen and unpredictable. I struggle to see how this movie won’t end badly.”  I thank Australian reader Wesley Legrand for sending me the story… and the link is here.

Gold vs. Bonds

My first of many precious metal-related stories today was sent to me by reader U.D.  It’s written by Nick Barisheff over at bmgbullion.com.  It’s a longish read that bears the headline “Gold vs. Bonds“.  There are a lot of great graphs… and it’s extremely well written.  So, if you have ten minutes, it’s worth your time. It’s posted over at the goldseek.com website… and the link is here.

Gold vs. the Fed: The Record is Clear

The next story is from yesterday’s edition of The Wall Street Journal.  The headline pretty much says it all… and reads “Gold vs. the Fed: The Record is Clear“.  Writer Charles W. Kadlec points out that “There were no world-wide financial crises of major magnitude during the Bretton Woods era from 1947 to 1971.”  The story, which is subscriber protected, is printed in the clear in this GATA release… and the link is here.

Current scenario suggesting much higher gold prices in the next 12 months – Embry

Nick Laird of sharelynx.com fame, sent me the following story yesterday.  It’s a John Embry interview that’s posted over at the mineweb.com website.  John says that the world remains in a financial bind, the likes of which it has probably never seen… and those people calling for corrections or bubbles in the gold market, are flat out wrong.  The headline reads “Current scenario suggesting much higher gold prices in the next 12 months – Embry“.  It will take you about three minutes to run through this… and the link is here.

Traders Accuse HSBC, JPMorgan of Silver Manipulation

Well, the story about the silver lawsuit against JPMorgan and HSBC made it intoForbes yesterday.  This story has a lot more detail than any of the stories that I posted in my Thursday column, so I consider it a must read.  The headline reads “Traders Accuse HSBC, JPMorgan of Silver Manipulation“.  If you get the feeling, as you read through this article, that you’ve heard this all before… you would be right about that.  I’ve been writing about it since day one right here in this column.

Although GATA gets a prominent [and well deserved] mention in this article, I’m ever mindful of the fact that the original source for all this information was silver analyst Ted Butler.  He was steaming away at the CFTC about the concentrated short position fifteen years before I’d ever heard of GATA… and long before Bill Murphy and Chris Powell threw $1,000 in the pot and founded the organization… of which I am now a director.  As I said, this story is a must read… and the link is here.

Will the CFTC Actually Act to Protect Silver Investors?

Here’s another short read about what’s currently happening in the silver market.  It was sent to me late last night by reader Allister Headland.  It’s a short piece [with an excellent graph] that’s posted over at 24hgold.com… and it’s headlined “Will the CFTC Actually Act to Protect Silver Investors?”  This is a also a must read… and the link is here.

Silver Manipulation Lawsuit

While I’m talking about it… a copy of the “Silver Manipulation Lawsuit“… is posted over at that GATA website… and for all you legal types that wish to peruse it, the link to the 30-page pdf file is here.

Chink of Light Shed on New York Fed Gold

Next is a GATA release of a story that appeared in yesterday’s edition of theFinancial Times out of London.  As Chris Powell states in his preamble… “Once again official gold data of long standing is shown to be no good… and suddenly the FT is demonstrating a little curiosity about it.”  The headline reads “Chink of Light Shed on New York Fed Gold“.  This, too, falls into the must readcategory… and the link is here.

Gold Will Outlive Dollar Once Slaughter Comes

John Hathaway, managing director of Tocqueville Asset Management LP, has a column posted over at bloomberg.com which was a GATA release late last night.  The stunning headline reads “Gold Will Outlive Dollar Once Slaughter Comes“.  Even though the story was posted at 9:00 p.m. Eastern time, the ‘thought police’ over at Bloomberg have already placed it in their archives… plus given it a new URL.  I have dug it up… and the new link is here.  I would think that it’s worth the read.

Silver to $30 in 18 days, Turk tells King World News

Here’s another story that was sent to me by Eric King… but I’m just going to steal Chris Powell’s preamble from his GATA release instead of wordsmithing my own… “In an interview yesterday with King World News, GoldMoneyfounder and GATA consultant James Turk does some chart work and predicts that silver will be at $30 in 18 days. The last time Turk made such a specific prediction about a precious metals price explosion, he was off by 48 hours. His friends forgave him that much… and maybe he’ll do better this time. In any case, from Turk’s lips to the Great Market Manipulator’s ear — and we don’t mean Bernanke’s. You can find excerpts from the interview with Turk at theKing World News Internet site.  It’s headlined “Silver to $30 in 18 days, Turk tells King World News“… and the short blog is linked here.

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¤ THE WRAP

Had you been reading The Wall Street Journal in autumn ’71,” Frank Byrd, director of research at Fielder Research & Management, reminded the Grant’s conference-goers, “there would have been almost no clue that inflation was at hand… “But suddenly, within 18 months, a tremendous inflation emerged,” Byrd went on. “In response, the Fed tightened aggressively–hiking [the] fed funds [rate] from 4% to 10% within a year and a half. But it was too late. Huge imbalances had been building behind a wall of price and capital controls. When the dam finally broke, the Fed’s sand castles were no match for the crushing wave of inflation. CPI tripled from 4% to 12% within two years.” Not only could it happen again, it is happening at this very moment.– Jim Grant, Grant’s Interest Rate Observer

Except for that spike in the gold price when the U.S. dollar hit its nadir yesterday, nothing much of consequence happened in either silver or gold on Thursday.  The obscene short positions are still sitting there… and we still await resolution on that.  Volume was pretty decent in both metals.  I also note that almost every open contract for November delivery was posted for delivery yesterday, so unless a big buyer comes out of the woodwork sometime during the new month, there won’t be much to see in the CME’s Daily Delivery report until November 30th.  I’ll have more to say on that in my Saturday column.

Not much happened in Far East trading during their Friday session… and not much is happening in early trading in London, either.  The dollar is up about 22 basis points as of this writing [4:14 a.m. Eastern time]… and both metals are slightly lower.  Volume appears to be pretty average.

Eric King sent me a blog early this morning where he states that he expects the gold and silver commercial signal failure today.  The link to that is here. I’m not prepared to stick my neck out that far, but if it does happen [or a reasonable facsimile thereof], I will be the first to bow down and apologize.

Two things that I consider of some importance before I close out this column.  The first being that you shouldn’t forget that today is your last chance to become a BIG GOLD subscriber for $39 a year – a savings of $90 off the new list price. But even better than the price, you’ll have 3 FULL MONTHS to cancel for a full refund if you don’t absolutely love it, so you’ve got nothing to lose.  If you don’t already subscribe to BIG GOLD, now is the time to try it.  I urge you to check it out… and the link is here.

Lastly, and on a personal note… I will be taking another week off starting on November 1st for the full week. However, I will be watching what’s happening… and if the silver [and gold] market start running away to the upside while I’m gone, then I’ll have a very brief commentary.  That’s not only for your benefit, dear reader… but for mine as well.  I’ve been waiting for this moment for ten years… and I wouldn’t miss it for the world.

See you tomorrow.

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