More Ignorant Snickering About Gold

There certainly isn’t a thing that can be read into Monday’s silver price activity.  I provide the graph for entertainment purposes only.  Volume in silver was very light as well.

The dollar didn’t do much from the beginning of trading in the Far East at 6:00 p.m. Eastern time Sunday night… and hugged 83 cents right up until gold’s low price was in around 11:00 a.m. Eastern time Monday morning.  Since then, it’s rallied a bit… but nothing that looks too serious at the moment.

It’s hard to tell whether the precious metals shares followed the gold price… or the general equity markets yesterday… as they both traced out pretty much identical patterns.  The HUI had a very similar chart pattern on Friday as well.  Yesterday the HUI finished down 1.27%.

There was little activity in the CME’s Delivery Report on Monday… as only 7 gold and 1 silver contract were posted for delivery tomorrow… and neither GLD nor SLV had an update.

They finally had a sales report over at the U.S. Mint that was worthy of the name.  Yesterday they reported selling another 11,000 ounces of gold into the gold eagle program…. along with 5,000 24-K gold buffaloes… and 550,000 silver eagles.  Month-to-date sales are as follows:  40,000 ounces into the gold eagle program… 15,000 ounces into 24-K gold buffaloes… and 1,656,000 silver eagles.  August is on track to have the lowest bullion coin sales of any month this year.

There wasn’t a lot of activity at the Comex-approved depositories on Friday.  When the dust had settled, a smallish 162,403 ounces of silver were taken into inventory.  The link to what action there was, is here.

My first story is courtesy of reader Scott Pluschau and is from the Saturday edition of The New York Times. Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year, according to the Investment Company Institute.  The headline reads “In Striking Shift, Small Investors Flee Stock Market“… and the link is here.I’ve edited the list of stories I’ve received during the last 72 hours down to what I consider to be the bare minimum… which is still quite a few.  You, dear reader, can conduct the final edit as you go.

Scott’s second offering today is a Bloomberg story from yesterday headlined “Bond Funds Gain Cash Like Stocks in Dot-Com Era: Credit Markets“.  The amount of money flowing into bond funds is poised to exceed the cash that went into stock funds during the Internet bubble, stoking concern [that] fixed-income markets are headed for a fall… and the link is here.

Today’s next item is a video clip from CNBC that reader Ken Metcalfe was kind enough to send my way over the weekend.  It’s an interview withlegendary hedge fund manager Kyle Bass.  He doesn’t mince words or gild lilies here.  The interview runs for just under nine minutes… and is a must watch… and the link is here.

Here’s a real short interview that ‘David from California’ sent me yesterday.  I also saw this posted in the King Report yesterday as well.  In this case, the interview is imbedded in a zerohedge.com article.  The headline reads “Watch Former Fed Governor Fred “Napoleon Dynamite” Mishkin In Dire Need Of A Diaper Change“.  As the report says… “Watch the attached clip to see a former Fed director go from comfortable, to fidgety, to stuttering, to thoroughly discredited, to in dire need of diaper change, in under 2 minutes.”  It’s disquieting to watch… but it’s a must to view… and the link is here.

Well, Ambrose Evans-Pritchard had a column over the weekend.  This one’s headlined “America no longer needs Chinese money, for now“… As the Sino-American showdown in the South China and Yellow Seas escalates into the gravest superpower clash since the Cold War, the United States cannot wisely rely on China to help fund its budget deficit for any longer. This story should be high on your list of things to read today.  I thank reader Roy Stephens for sending this along… and the link is here.

My first precious metals-related story is about silver… and it’s from James Turk over at fgmr.com. A fair amount that’s in this short piece is what Ted Butler has spoken of over the years, but there are few interesting divergences from that… plus an excellent graph… that make this well worth the read.  The headline states “Manipulating the Silver Market“… and the link is here.

The next story is gold related… and was sent to me by Australian reader Wesley Legrand.  It’s a very positive story that was posted at Kitco over the weekend.  I think the reason that it’s so positive is because the Tokyo Rose of the gold world didn’t write it.  It appears that “Indian gold-jewelry demand for the upcoming festival season is likely to be stronger than a year ago although not back to historical highs, according to analysts and traders.”  The headline states “Traders: Indian Demand for Gold during Festival Season Expected to Improve“… and the link is here.

The last precious metals-related story is a GATA release from late yesterday.  Chris Powell uses the headline “Over lunch with FT, more ignorant snickering about gold“. The headline from London’s Financial Times reads “Lunch with the FT: Adam Fergusson“.  Powell’s headline is right on the money… as is his lengthy preamble.  The link to that, and the FT story, is here.  Both are must reads.

Here’s a graph that Washington state reader S.A. was kind enough to send me yesterday that keeps everything in solid perspective.  It’s the gold index [GDX] plotted along side the SPX.  This chart shows the GDX up 16.06%… and the SPX down 3.02% year-to-date.  Any question, dear reader?

The next story is a must read interview of Max Kaiser of Russia Today fame that was sent to me by Florida reader Donna Badach.  He’s interviewed by Lars Schall over at the German website chaostheorien.de.  The high-profile financial pundit Max Keiser doesn’t shy away from crystal-clear, unmistakable statements. The following exclusive interview is no exception. Mr. Keiser sees an attack exercised against the majority of people in the U.S., sets out why gold is in no bubble at all, points at a remarkable move by Harvard University… and has advice to some US-American billionaires disguised as noble philanthropists: “Just pay your taxes and shut up!”  It’s a longish interview headlined “America: a walking dead-zombie country“… but it’s very much worth your time.  The link is here.

My second-last story is a UPI offering filed from Paris yesterday… and headlined “Walker’s World: Autumn Crisis Looms“.  It’s written by Martin Walker, UPIEditor Emeritus… and since I stumbled across his writings, I’ve found that they’re excellent… and always worth my time.  Walkers says that “the autumn crisis will start in the eurozone… and if the global economy was recovering healthily, it could take the shock of the new eurozone crisis that will begin in Greece once the tourists leave.  But it isn’t… so it won’t.”  I thank reader Roy Stephens for sharing this with us… and the link to this very worthwhile article ishere.

Here’s my last story… and your long read of the day.  I thought I posted this last week, but I couldn’t find it anywhere in any of my columns, so I’m presenting it now.  It’s from Egon von Greyerz over at Matterhorn Asset Management in Switzerland.  The first sentence of the essay says it all… “No, there will be no double dip. It will be a lot worse. The world economy will soon go into an accelerated and precipitous decline which will make the 2007 to early 2009 downturn seem like a walk in the park.”  The story has lots of excellent graphs… and is well worth your while.  I thank reader “Bob from Saigon” for bringing it to my attention… and now to yours.  The essay’s title reads “There Will Be No Double Dip“… and it’s an absolute must read from one end to the other… and the link is here.

Yesterday didn’t amount to much in the grand scheme of things… but in trading activity in the Far East and early London today… things appear to be quite a bit different.  Both gold and silver were under selling pressure right from the Far East open… and then got hit about 9:00 a.m. Hong Kong time.  It was only for six bucks in gold and a dime in silver… but moments after London opened the prices of both metals went straight down.  Silver came within a penny or so of its 200-day moving average.  Gold got down to $1,218 spot… which is still about eight bucks over its 50-day moving average.  This has all the signs of a forthcoming bear raid on both metals in New York trading this morning… although I reserve the right to be wrong!  However, I’ve seen such counter-intuitive price action before at these times of day… and I pretty much know what to expect when I see it.

I mentioned in my Saturday column that the bullion banks may use gold to go after silver one last time.  There are plenty of leveraged technical longs in place for the bullion banks to pull the lever on… and ring the cash register one more time.  As Ted Butler pointed out in his Saturday interview, gold was up almost $75 from its late July low… and these would be tech longs that they would love to flush out.

There’s still the possibility of them going after gold’s 200-day moving average… which is now up to $1,159 spot… but it’s far too soon to tell if that’s their game plan or not.  Here’s the 6-month gold chart.

For comparison, the six month silver chart is below.  As I said a few paragraph before, the price came within an eyelash of the 200-day moving average in London right after the open.  It would take little effort on the bullion banks’ part to drop it another 50 cents.  But will they?

Volume so far this morning [as of 5:57 a.m. Eastern time] is light, once all the roll-overs are removed… but it’s quite a bit heavier than yesterday morning at this time of day.  We are getting very close to the end of the month.  Options expiry in the OTC market for gold and silver is on Thursday, with options expiry in the futures market [Comex] on Friday.  Last day of trading in the August [gold and silver] contract is Monday… and First Notice Day for September delivery is the Tuesday the 31st.  We have a busy week ahead of us.

But, whatever ‘da boyz’ may, or may not, do… it pretty much has to be done in the next five business days before August goes off the board.

Today [at the close of trading] is also the cut-off day for this Friday’s Commitment of Traders report.  All of last week’s big price moves will be in it… including yesterday’s activity.  But, if today [Tuesday] is a big day [either up or down], the bullion banks will most assuredly withhold that data from Friday’s report.

We’ll have to wait and see how this unfolds on the Comex today, dear reader.  Will gold’s 50-day moving average get punctured to the down side… or will it hold?  Whatever happens, Tuesday’s trading activity could be very entertaining.

See you on Wednesday.