19 September 2015 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
It was a pretty quiet Friday session for gold. It sagged a few bucks in Far East trading, but starting around the London open it began to move higher but wasn’t allowed to stray too far above the $1,140 spot mark. The high tick came at precisely 3 p.m. in London, the p.m. gold fix. By the London close, the price was down five bucks off its high—and it crawled higher into the 5:15 p.m. electronic close in New York.
The low and high ticks are barely worth the effort to look up. The CME Group recorded them as $1,126.90 and $1,141.50 in the December contract.
Gold finished the Friday trading session at $1,139.90 spot, up $8.90 from Thursday’s close. Net volume was 132,000 contracts, a number far higher than I wanted to see for such a small price move.
Here’s Brad Robertson’s 5-minute tick chart—and despite the fact that it wasn’t a big dollar move in the price, there was a decent amount of background volume throughout most of the Friday trading session. Most of the volume that mattered was in the New York session, but there was some volume around the smallish London rally that got capped about three hours before the COMEX open. Midnight in New York is the vertical gray line, add two hours to the ‘x’ axis for EDT—and don’t forget the ‘click to enlarge‘ feature.
Like gold, the silver price sold off a bit in Far East trading—and then began to rally starting just before the London open. That rally developed some legs starting about ten minutes before the COMEX open, but got capped at its high tick at precisely 9 a.m. in New York. Then, and also like gold, it got sold down until shortly after London closed—and the price didn’t do a lot after that.
The low and high ticks in the precious metal were reported as $15.015 and $15.435 in the December contract. Net volume was just under 48,000 contracts—and I wasn’t at all happy to see a number of such size in this metal, either.
Platinum had a very similar chart pattern to both gold and silver. Platinum got capped at 9 a.m. like silver did—and from there it chopped lower into the COMEX close, and traded flat from there. Platinum was closed at $980 spot, down two bucks from Thursday.
Like the other three precious metals, palladium got sold down in Far East trading, but began to rally once Zurich opened. However, it wasn’t allowed past $610 spot for the remainder of the Friday session—and once the COMEX session was done, it got sold down for a loss as well. Palladium closed yesterday at $605 spot, down 3 dollars from Thursday.
The dollar index closed late on Thursday afternoon in New York at 94.54—rallied a to around 94.64 by shortly before noon Hong Kong time—and then rolled over with a vengeance. ‘Gentle hands’ appeared at the 94.06 mark at 10:25 a.m. in London—the London a.m. gold fix?—as the index showed signs of heading to the nether reaches of the earth. The ‘rally’ that followed topped out at 95.38 just minutes before the markets closed at 4 p.m. in New York—and it sold off a bit from there. The dollar index finished the day at 95.15—up 62 basis points from Thursday.
And here’s the 6-month U.S. dollar chart so you can keep up with the machinations of the Almighty Dollar with a longer-term perspective. It’s an excellent bet that the ‘rally’ in the index yesterday was purely a manufactured one.
The gold stocks opened almost on their highs of the day, as the high tick in gold came a precisely 10:00 a.m. EDT at the fix. From there they began to chop lower—and were actually in negative territory for a bit in mid-afternoon trading in New York. But some kind soul showed up at 2:45 p.m. EDT—and they popped back into the green, as the HUI finished the Friday session up 1.35 percent.
It was almost the same chart pattern for the silver equities, including the 2:45 p.m. EDT rally. Nick Laird’s Intraday Silver Sentiment Index closed up 1.02 percent.
For the week that was, the HUI closed higher by 8.26 percent—and Nick’s ISSI was up 11.68 percent. It’s nice to see a winning week for a change.
The CME Daily Delivery Report showed that zero gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday.
The CME Preliminary Report for the Friday trading session showed that September gold o.i. fell by 3 contracts, leaving 88 still open—and silver open interest dropped by the 113 contracts that appeared in yesterday’s daily delivery report for Monday. There are 256 silver contracts still open.
There were no reported changes in GLD yesterday—and as of 10:35 p.m. EDT yesterday evening, there were no reported changes in SLV, either.
Not surprisingly, there was no sales report from the U.S. Mint.
Month-to-date the mint has sold 93,500 troy ounces of gold eagles—16,500 one-ounce 24K gold buffaloes—and 2,054,500 silver eagles. Because the mint is on allocation across the board in its bullion coins, computing a silver/gold sales ratio from these sales numbers would be meaningless.
It was ultra quiet for in/out movement in gold over at the COMEX-approved depositories on their Thursday. The only activity was one good delivery bar that was shipped out of Delaware—and that was it.
Of course, as it has always been for the last four and a half years, the activity in silver was a different beast entirely once again. There was 1,123,379 troy ounces reported received, of which another 525,319 troy ounces were deposited over at JPMorgan’s vault. Only 101,140 troy ounces were shipped out the door for parts unknown. The link to that action is here. JPMorgan’s silver vault now holds just a hair under 70 million ounces—and I just know that Ted will have something to say about all this in his weekly review to paying subscribers this afternoon.
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they made up for two quiet days in a row by receiving 10,024 kilobars—and shipped out 19,140 of them. These are breathtaking numbers, dear reader—and with the exception of 67 kilobars shipped out of Loomis International, the rest came out of Brink’s, Inc. as usual. The link to that activity, in troy ounces, is here.
The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday showed improvements in the Commercial net short positions in both gold and silver—and the numbers were even better than I expected.
In silver, the Commercial net short position declined by a very decent 4,203 contracts, or 21.0 million troy ounces. They did this by covering 4,028 short contracts, plus they added 175 long contracts, with the total of those two being the 4,203 contract improvement. This drops the Commercial net short position down to 106.8 million troy ounces.
Under the hood in the Disaggregated COT Report, it was all the Managed Money traders, as they increased their net short positions by 6,001 contracts, but they also added 686 long contracts—and that nets out to a change of 5,315 contracts on the short side. So the Managed Money traders increased their short position by more than the Commercial traders went long. The difference was made up in the “Other Reportable” and “Nonreportable” categories, as combined, they added 1,899 long contracts along with adding 787 contracts to their short position. The difference between those two numbers is 1,112 contracts on the long side—and once you subtract that number from the net short position of the Managed Money category, you get the 4,203 contracts that the Commercial traders improved their long position by. It’s all very neat!
Almost without exception, the Commercial traders—JPMorgan et al—are short against all other categories of traders. And the one and only reason they are there, is to prevent gold and silver prices from finding their true free-market values by being willing short sellers of last resort against all comers. That’s what the do-si-do between the Commercials on one side—and the Managed Money traders on the other—is all about.
Because if the powers-that-be weren’t involved in the COMEX futures market, we would see commodity prices through the roof, as investors would have long ago abandoned paper assets for hard assets—and that’s what the financial system is desperate to prevent.
In gold, the Commercial net short position declined by a very chunky 23,000 contracts, or 2.30 million troy ounces. This they did by covering 23,632 short contracts, and reducing their long position by 632 contracts. The net of those two numbers is precisely 23,000 contracts. The Commercial net short position now stands at 3.30 million troy ounces, which is within spitting distance of its record low in May I believe.
Under the hood in the Managed Money category, they only made up for 18,018 of the above 23,000 contracts that the Commercial traders went short. They did this by adding 9,634 contracts to their short positions—and reducing their long position by 8,384 contracts. The balance of the 23,000 contracts came from the “Other Reportables” and “Nonreportable” categories, as they collectively decreased their long positions by 2,013 contracts—and added 2,969 contracts to their short positions. Those two numbers added together come to 4,982 contracts—and if you add that to the 18,018 contracts that the Managed Money went short during the reporting week, you come up with 23,000 contracts, which is the change in the Commercial net short position. As I said about this in silver, it’s all very neat.
But as I said in yesterday’s column, today’s COT Report is already “yesterday’s news,” as the 3-day rally since the Tuesday cut-off has wiped out all these improvements—and then some—as the Managed Money traders ran for the hills by covering short positions and also going long. As I said in The Wrap yesterday, we’ll have to wait until next Friday’s COT Report to see how bad it is, but we’ve still got two more trading days before Tuesday’s cut-off—and anything can happen between now and then.
As Ted said on the phone yesterday, there will come a time when the numbers in the COT Report won’t matter, but that day has yet to arrive. And until it does, “da boyz” continue to have an iron grip on all of the Big 6 commodities.
Here, once again, is Nick Laird’s now world famous “Days of World Production to Cover COMEX Short Positions” of the 4 and 8 largest traders in this past week’s COT Report. The chart looks like it did 15 years ago—and very little has changed in the interim. The only difference is that the number of “days to cover” is so much larger now that the banks and trading houses are involved.
Since the 20th of the month falls on a Sunday this month, the good folks over at The Central Bank of the Russian Federation updated their website with August’s data. What it showed is that they added 1 million troy ounces of gold to their official reserves, or 31.1 tonnes. I found out about this in a Bloomberg story over at the Sharps Pixley website yesterday, as my usual source hadn’t updated their data. Here’s the updated chart courtesy of Nick Laird—and as you may notice, it’s in tonnes, rather than millions of ounces. I didn’t know he had such a chart, but when I saw it yesterday evening for the first time, I decided to make the switch as of now. The ‘click to enlarge‘ feature really works wonders here, as it does with the two charts that follow this one.
Nick had a couple of more charts for us. The first one is the withdrawals from the Shanghai Gold Exchange as of Friday, September 11—and what it showed was that 73.692 tonnes was withdrawn during the reporting week.
The last chart is one that Nick has aptly renamed to read “Silk Road Gold Demand“. The chart only shows data up until the end of June because, according to Nick, India is very tardy about reporting their gold imports—and that’s the last month he has their official records for. What it shows, in plain English, is the fact that the 257.4 tonnes that these countries imported, withdrew, or added to reserves during June, was 100 percent of all the gold mined during that period. And if you look at the smaller chart below the big one, you’ll see that that this is not an isolated case—and over the last two years, these four countries have been consuming/saving/storing [on average] all the gold mined during that period, plus a bit more. Where, oh where, dear reader is all the gold coming from to supply the demand from the rest of the world?
I’m several hours behind schedule tonight, so I’ve hacked and slashed and I’ve got the number of stories down to a reasonable level—and a decent number of these are ones that I’ve been saving for my Saturday column as well.
CRITICAL READS
Fed is riding the tail of a dangerous global tiger
The U.S. Federal Reserve would have been mad to raise interest rates in the middle of a panic over China and an emerging market storm, and doubly so to do it against express warnings from the International Monetary Fund and the World Bank.
The Fed is the world’s superpower central bank. Having flooded the international system with cheap dollar liquidity during the era of quantitative easing, it cannot lightly walk away from its global responsibilities – both as a duty to all those countries that were destabilized by dollar credit, and in its own enlightened self-interest.
Dollar debt outside the jurisdiction of the US has reached $9.6 trillion, on the latest data from the Bank for International Settlements. Dollar loans to emerging markets have doubled since the Lehman crisis to $3 trillion.
The world has never been so leveraged, and therefore so acutely sensitive any shift in monetary signals. Nor has the global financial system ever been so tightly inter-linked, and therefore so sensitive to the Fed.
This commentary by Ambrose Evans-Pritchard put in an appearance on the telegraph.co.uk Internet site at 2:53 p.m. BST on their Thursday afternoon, which was 9:53 a.m. EDT in New York. I thank Richard Saler for today’s first story—and it’s definitely worth reading.
Interbank Credit Risk Soars to 3-Year Highs – Is This Why Janet Folded?
Last week we warned of the ominously rising risks evident under the surface in U.S. financials. Following Yellen’s decision to chicken-out yesterday, it appears interbank counterparty risk is even ominous-er. With bank stocks prices tumbling, catching down to credit market’s concerns, the TED Spread – implicitly measuring interbank credit risk – jumped over 21% yesterday – to its highest in 3 years.
Is this the real reason The Fed did not hike?
The question is – is this the tail that is wagging the Fed’s dog? Given the Fed’s ownership structure, any rise in the banks’ cost of financing, in an era of surging counterparty risks may be the straw that break the “confidence camel’s” back.
If so – then we have a problem – The Fed’s dovish inaction is not helping alleviate any concerns.
This short Zero Hedge piece appeared on their website at 8:40 p.m. EDT Friday evening—and I thank Richard Saler for this news item as well. The two charts are worth the trip.
Doug Noland: Now What?
There is today extraordinary confusion and misunderstanding throughout the markets. Policymakers are confounded. Years of zero rates, Trillions of new “money” and egregious market intervention/manipulation have left global markets more vulnerable than ever. Now What? I’m the first to admit that global Credit, market and economic analyses are these days extraordinarily complex – and remain so now on a daily basis. We must test our analytical framework and thesis constantly.
I am confident in my analytical framework and believe it provides a valuable prism for understanding today’s complex world. The current global government finance Bubble is indeed the grand finale of serial Bubbles spanning about 30 years. Importantly, each Boom and Bust Bubble Cycle – going back to the mid-eighties (“decade of greed”) – spurred reflationary policy measures that worked to spur a bigger Bubble. Inevitably, each bursting Bubble would ensure only more aggressive inflationary policy measures.
It is fundamental to Credit Bubble Theory (heavily influenced by “Austrian” analysis) that the scope of each new Bubble must be bigger than the last. Credit growth must be greater, speculation must be greater and asset inflation must be greater. This Financial Sphere inflation is essential to sufficiently reflate the Real Economy Sphere – i.e. incomes, spending, corporate earnings/cash flows, investment, etc. Reflation is necessary to validate an ever-expanding debt and financial structure, including elevated asset prices. Ongoing rapid Credit growth is fundamental to this entire process, much to the eventual detriment of financial and economic stability.
This must read Credit Bubble Bulletin from Doug appeared on his website late on Friday evening.
Fed Audit Shocker: They Come from Planet Klepto
While the world breathlessly awaits the outcome of this week’s FOMC meeting—will the Federal Reserve raise interest rates or won’t it?—one thing is clear regardless: the Fed is driving the U.S. into a 2nd depression in order to carry out its one and only remit now that America’s ability to produce real jobs has been reduced to ash, namely, propping up criminal banks with multi-trillion-dollar giveaways.
What’s so disturbing about the fatal path that the Fed has been on for 7 years is that it’s one the Fed went down before, when—by its own admission—it extended and deepened the Great Depression in the late 1930s with a foolhardy policy that jacked up total reserves and destroyed bank lending. In the words of Janet Yellen, “[t]he economy plunged back into depression.” (6/23/09 tr. at p. 175)
That’s curious, because exactly the same dynamic is at work now, as total reserves have skyrocketed since 2008 in perfect dollar-for-dollar tandem with a plunge in lending. The effect on the birth- and death rates of new and existing businesses, respectively, has been catastrophic.
And what has propelled total reserve balances into the stratosphere? Why, it’s the Fed’s fateful decision to pay banks interest for holding money with the Fed–money provided by none other than the Fed itself when it printed $1.73 trillion and handed it to the bust out banks in exchange for worthless mortgage-backed securities. The Fed pulled nearly exactly the same stunt in 1936-37 when it suddenly required banks to maintain higher reserves at the Fed. In both cases, the Fed’s diversion of monies away from the economy proved disastrous. It remains to be seen whether the Fed will need another world war to cover up its ruinous acts.
This very interesting 19:49 minute youtube.com video appeared on their website on Monday—and it’s certainly worth watching if you have the time. I thank ‘MichaelG’ for sending it to me on Wednesday—and it’s the first of several stories that had to wait for today’s column.
Mark Spitznagel Warns: If Investors Thought August Was Scary, “They Ain’t Seen Nothin’ Yet”
The man who made a billion dollars on Black Monday sums up his strategy perfectly in this excellent FOX Business clip with the money-honey, “I’m a hedge fund manager that actually hedges for his clients. This is something of an old fashioned idea in this day of just gambling on the next Fed bailout.” Spitznagel, who is wholly unapologetic in his criticism of The Fed (and any central planner), unleashes eight minutes of awful truthiness on what is going on under the surface of the so-called ‘market’, concluding ominously, “if August was scary for people, they ain’t seen nothin’ yet.”
Grab a beer and relax…
This Zero Hedge piece has an 8:19 minute video clip embedded, that’s worth your while. But if you don’t have the time to watch it, the mini-transcript below should give you the executive summary. This is the third article from Richard Saler so far in today’s column.
Johnson Controls to Cut 3,000 Jobs in Next Two Years
U.S. auto parts maker Johnson Controls Inc. said it would cut as many as 3,000 jobs over the next two years as part of its ongoing cost savings program.
The company said the job cuts represent about 2.5 percent of its total workforce and would deliver up to $250 million in annual cost savings.
Johnson Controls initiated a cost-cutting program in July ahead of the spinoff of its $22 billion “automotive experience” business by 2016.
The business makes automotive seating, overhead systems, floor consoles, door panels and instrument panels.
This brief Thomson/Reuters piece was picked up by the newsmax.com Internet site at 9:42 a.m. yesterday morning EDT—and this one is courtesy of Brad Robertson.
Microsoft slips user-tracking tools into Windows 7, 8 amidst Windows 10 privacy storm
Windows 10 is a deliciously good operating system, all things considered, but its abundant user-tracking has prompted many privacy-minded individuals to stay pat with older versions of Windows. Now, Microsoft’s providing those concerned individuals a reason to upgrade.
No, the company’s not walking back its privacy-encroaching features. Instead, Microsoft’s quietly rolling out updates that bake new tracking tools into Windows 7 and Windows 8.
Yes, really.
The story behind the story: Privacy concerns have marred an otherwise sterling launch for Windows 10, which is already installed on 75 million PCs. Rolling out this Windows 7 and 8 updates amidst the controversy smacks of insensitivity—and it’s just plain poor timing, to boot.
You have to be a real techie to figure this all out. This article showed up on the pcworld.com Internet site back on August 31—and I thank Roger Truloff for sending it to me last Saturday. For obvious reasons it had to wait for today’s column.
Bank of England chief economist suggests negative interest rates and banning cash
The Bank of England may need to push its interest rates into negative territory to fight off the next recession, its chief economist has said.
Andy Haldane, one of the Bank’s nine interest rate setters, made the case for the “radical” option of supporting the economy with negative interest rates, and even suggested that cash could have to be abolished.
He said that the “the balance of risks to UK growth, and to UK inflation at the two-year horizon, is skewed squarely and significantly to the downside”.
As a result, “there could be a need to loosen rather than tighten the monetary reins as a next step to support UK growth and return inflation to target”.
This guy is a real sick puppy, which is probably a requirement considering he’s the chief economist over at the Bank of England. And as Chris Powell said in his comment about this story in a GATA release yesterday—“The mad totalitarians are fully in charge now.” This story appeared on The Telegraph‘s website at 12:56 p.m. BST on Friday afternoon.
Moody’s Downgrades France, Blames “Political Constraints”, Sees No Material Reduction In Debt Burden
Citing “continuing weakness in the medium-term growth outlook,” Moody’s has downgraded France:
*FRANCE CUT TO Aa2 FROM Aa1 BY MOODY’S, OUTLOOK TO STABLE
Apearing to blame The EU’s “institutional and political constraints,” Moody’s expects French growth to be at most 1.5% and does not expect the debt burden to be materially reduced this decade.
Moody’s Investors Service has today downgraded France’s government bond ratings by one notch to Aa2 from Aa1. The outlook on the ratings is stable.
The key interrelated drivers of today’s action are:
1. The continuing weakness in France’s medium-term growth outlook, which Moody’s expects will extend through the remainder of this decade; and
2. The challenges that low growth, coupled with institutional and political constraints, poses for the material reduction in the government’s high debt burden over the remainder of this decade.
This news story was posted on the Zero Hedge Internet site at 4:45 p.m. on Friday afternoon EDT—and it’s the final contribution of the day from Richard Saler, for which I thank him.
Europe Lacks Strategy to Tackle Crisis, but Migrants March On
Europe’s failure to fashion even the beginnings of a unified solution to the migrant crisis is intensifying confusion and desperation all along the multicontinent trail and breeding animosity among nations extending back to the Middle East.
With the volume of people leaving Syria, Afghanistan and other countries showing no signs of ebbing, the lack of governmental leadership has left thousands of individuals and families on their own and reacting day by day to changing circumstances and conflicting messages, most recently on Thursday when crowds that had been trying to enter Hungary through Serbia diverted to Croatia in search of a new route to Germany.
Despite the chaos, there were few signs that European Union leaders, or the governments of other countries along the human river of people flowing from war and poverty, were close to imposing any order or even talking seriously about harmonizing their approaches and messages to the migrants. Instead, countries continue to improvise their responses, as Croatia did Thursday, and Slovenia — the next stop along the rerouted trail — is likely to do in coming days.
The migrants did not shift course to Croatia on a whim. When Hungary effectively blocked their access on Tuesday with a border crackdown — which resulted in an ugly skirmish Wednesday between the police and migrants — they had few options.
This New York Times article appeared on their Internet site on Thursday sometime—and I thank Patricia Caulfield for sending it along in the wee hours of yesterday morning.
Stephen Cohen: Ukraine Situation More Dangerous than Middle East!
This 20:38 minute Thom Hartman video interview with Stephen appeared on the russian-insider.com Internet site. The dateline on the website says 16 September.
It’s a definite must watch for any serious student of the New Great Game—and I thank Larry Galearis for bringing it to our attention.
Russia’s game plan: Compel Obama to meet with Putin
On Syria, Moscow is driving the Barack Obama administration nuts. This is coercive diplomacy at its best.
With about three weeks to go for the UN General Assembly session to begin in New York, Russia abruptly stepped up its military intervention in Syria. The intervention is no longer ‘below-the-radar’. Moscow intended to create misgivings in the American mind. And it has succeeded.
Yet, no one in Washington knows what the Russian intentions are. The Russian statements have been assertive and rhetorical.
The point is, a full-throttle Russian military intervention in Syria is not financially sustainable for Moscow and it will not be popular domestically.
Russia will conceivably put ‘boots on the ground’ in the Middle East without a UN mandate. The bottom line, therefore, is that through an admixture of veiled threats, strategic posturing, blackmail and sheer bluster and timely diplomatic overtures, Kremlin is actually seeking a high-level Russian-American engagement regarding the Syrian conflict. Plainly put, Moscow is pressing for a meeting between Putin and Obama.
This excellent commentary by Ambassador M.K. Bhadrakumar, who served as a career diplomat in the Indian Foreign Service for over 29 years, was posted on the Asia Times website on Wednesday. It’s certainly a must read for any serious student of the New Great Game. I thank U.K. reader Tariq Khan for sending it our way on Thursday—and is another one of those postings that had to wait for my Saturday missive.
U.S. Begins Military Talks With Russia on Syria
As the first Russian combat aircraft arrived in Syria, the Obama administration reached out to Moscow on Friday to try to coordinate actions in the war zone and avoid an accidental escalation of one of the world’s most volatile conflicts.
The diplomatic initiative amounted to a pivot for the Obama administration, which just two weeks ago delivered a stern warning to the Kremlin that its military buildup in Syria risked an escalation of the civil war there or even an inadvertent confrontation with the United States. Last week, President Obama condemned Russia’s move as a “strategy that’s doomed to failure.”
But the White House seemed to acknowledge that the Kremlin had effectively changed the calculus in Syria in a way that would not be soon reversed despite vigorous American objections. The decision to start talks also reflected a hope that Russia might yet be drawn into a more constructive role in resolving the four-year-old civil war.
This New York Times article, filed from London, put in an appearance on their Internet site on Friday sometime—and I thank Roy Stephens for sharing it with us. There was also a Reuters article on this—and it’s headlined “U.S. sees military talks with Russia on Syria as important next step: Kerry“—and I thank Patricia Caulfield for that one.
Geoff Rutherford Interviews Eric Sprott
Listen to Eric Sprott share his thoughts on the recent Federal Open Market Committee Meeting, interest rates, demand in the physical PM markets, and a possible shift in sentiment to precious metals.
This 9:41 minute audio interview was posted on the sprottmoney.com Internet site yesterday afternoon EDT—and it’s worth your while if you have the time.
Bitcoin is officially a commodity, according to U.S. regulator
Virtual money is officially a commodity, just like crude oil or wheat.
So says the Commodity Futures Trading Commission (CFTC), which on Thursday announced it had filed and settled charges against a Bitcoin exchange for facilitating the trading of option contracts on its platform.
“In this order, the CFTC for the first time finds that Bitcoin and other virtual currencies are properly defined as commodities,” according to the press release.
While market participants have long discussed whether Bitcoin could be defined as a commodity, and the CFTC has long pondered whether the cryptocurrency falls under its jurisdiction, the implications of this move are potentially numerous.
This Bloomberg news item appeared on their Internet site at 3:58 p.m. Denver time on Thursday afternoon—and I found it over at the gata.org Internet site.
140 Workers Laid Off at Barrick’s Golden Sunlight Mine in Whitehall, Montana
Pink slips were issued to dozens of employees at the Barrick Golden Sunlight Mine in Whitehall with the layoffs to become effective just before the holidays. Officials at the mine fault the declining price of gold as the reason behind the massive job cuts.
About 140 employees at the Barrick Golden Sunlight Mine got the news Wednesday that at the end of November their job will come to an end. Management for Golden Sunlight Mine, which sits above Whitehall, said over the last few years the price of gold has plummeted. The average price currently sells for $1,100 an ounce and that just isn’t cutting it.
“From its’ peak four years ago it’s down close to 700 dollars an ounce and so that’s the main pressure on our costs at Sunlight,” said Dan Banghart, mine manager at Barrick Golden Sunlight Mine.
Golden Sunlight produced 86,000 ounces of gold in 2014 at all-in sustaining costs of $1,181 per ounce. Proven and probable mineral reserves as at December 31, 2014, were 127,000 ounces of gold.
In 2015, gold production is expected to be 90,000-105,000 ounces at all-in sustaining costs of $1,000-$1,025 per ounce.
The layoffs will account for about 3/4 of the workforce at Golden Sunlight Mine, the majority of which operate in the open mine pits. Officials for the mine said all 140 workers who received a layoff notice will also receive a severance package, but still employees are upset.
This story, along with a couple of paragraphs [in italics] I took off the mine’s website, showed up on the abcfoxmontana.com Internet site on Thursday morning MDT, but was updated yesterday morning MDT. I thank Ottawa reader Lawrence Clooney for digging it up for us.
U.K.’s most expensive domain name: gold.co.uk sells for record £600k
A British billionaire has paid a record-breaking fee of £600,000 (US$937,000) for gold.co.uk – making it the most expensive U.K. domain name ever sold publicly. The eye-watering sum overtakes cruise.co.uk, which was sold for £560,000 in 2008.
The proud (and lighter pocketed) owner of the site is gold dealer Rob Halliday-Stein, an entrepreneur who buys and sells gold, silver and coins online. Halliday-Stein is the founder of BullionByPost, which he established in 2008 with just £10,000 and is now the U.K.’s biggest online dealer with turnover amounting to over £100 million a year. With this profit he was able to buy the gold.co.uk domain he long sought.
It is reported that Halliday-Stein attempted to buy gold.co.uk from its original registered owner, Jack Gold, for around £40,000 back in 2008 but the transaction fell through. Since then it has been passed on to different owners and was eventually sold by a savvy broker to Mr Halliday-Stein for the hefty sum. But Halliday-Stein believes in his soul that his investment will pay off.
“Whilst this is a significant amount to pay I strongly believe the domain will prove to be great value over the long term,” said Mr Halliday-Stein.
This gold-related story appeared on the ibtimes.co.uk Internet site at 12:10 p.m. BST on their Friday afternoon, which was 7:10 a.m. EDT in New York. I thank ‘Teresa in the U.K.’ for finding it for us.
Impala Platinum plans to cut 1,600 South Africa mining jobs
Impala Platinum Holdings, the world’s second-largest producer of the metal, plans to cut as many as 1,600 jobs at its Rustenburg operations in South Africa as the prices have fallen to six-year lows.
Workers at the Rustenburg Lease mine, northwest of Johannesburg, were handed notices about the personnel cuts on Wednesday, spokesman Johan Theron said by phone on Thursday.
Chief Executive Officer Terence Goodlace said on Sept. 3. that the company was considering closing one shaft and sections of another operation at the mine, the world’s largest.
“We have now started that process,” Theron said. Impala employed 55,840 people at the end of its 2014 fiscal year, according to data compiled by Bloomberg.
It’s hard to believe that so-called intelligent full-grown men don’t see what’s happening to them. This is the second South African platinum producer in as many days to hand out pink slips—and there’s no earthly reason for it, as they all know perfectly well what’s happening to the prices—and why. I found this Bloomberg story posted on the mineweb.com Internet site at 7:49 a.m. BST on their Friday morning.
Blue diamond valued at record $35m for sale at Sotheby’s
Sotheby’s plans to auction a blue diamond that it estimates may be worth 34 million Swiss francs ($35 million), which would break the record for a stone of that hue.
The 12.03-carat diamond, which has the highest possible color grade of fancy vivid blue, will be put on the block at a Nov. 11 jewelry auction in Geneva, Sotheby’s said in a statement Thursday.
The gem, called the “Blue Moon,” was polished out of a 29.62-carat rough diamond found by Petra Diamonds Ltd. at the Cullinan mine in South Africa. Cora International, a New York- based gemcutter, purchased the diamond and took more than six months to prepare the stone.
Blue diamonds are formed when boron mixes with carbon when the gem is formed. Sotheby’s set the record for highest price for a blue diamond in auction when it sold the 9.75-carat “Zoe Diamond” for $32.6 million in New York in November 2014.
This tiny Bloomberg story, filed from Geneva, is another story I found on the mineweb.com Internet site when I was poking around there in the wee hours of this morning.
The PHOTOS and the FUNNIES
I went back to the old fishin’ hole on a weekday, which is something I’ve never done before. And lo and behold the great blue heron that was there last Saturday, was still there on Wednesday. I had to chase it around the pond a bit, but I did get some photos worth keeping—and here are four right here. I’ll have some more next week. You can use the ‘click/double click to enlarge‘ feature to bring these photos up to full screen size.
The WRAP
The 280,000 extra oz of Gold Eagles bought over the last three and a half months is more than the 250,000 oz or more of physical gold that I said would be difficult to take delivery of on COMEX futures without driving gold prices higher. I would contend that is precisely the reason that quantity of gold was purchased in the form of Gold Eagles and not in COMEX deliveries. If my speculation is correct, what does this mean for prospective gold (and silver) prices?
For one thing, no one buys a large quantity of any investment asset without the expectation of higher prices to come. Therefore it’s safe to say that the buyer of the $325 million of extra Gold Eagles over the past 3.5 months expects gold prices to move higher at some-future-yet-undetermined point. But I also can’t help but feel that because it looks so obvious to me that the 280,000 oz of extra Gold Eagles were purchased by someone big who was gaming the system, that this slick method of accumulation won’t continue for much longer.
Yes, I know that it has gone on for 4.5 years in Silver Eagles, but everything seems to be coming to the point of resolution by many measures. Accordingly, this recent aggressive accumulation of Gold Eagles looks like a finishing touch before a trip uptown in prices. Certainly no one, not even JPMorgan could have purchased an additional $325 million worth of physical silver over the past 3.5 months (although it did buy plenty) without causing silver prices to surge. Adding this amount of gold was doable without impacting prices in the manner I’ve laid out. So gold prices go up along with silver and JPM makes money on both (but much more on silver). At the least, if it was JPMorgan behind the purchase of the extra 280,000 oz of Gold Eagles, then they recovered the 275,000 oz they “lost” in making delivery on the COMEX in August.
The most important point is that if I am close to being accurate in my speculation (connecting and explaining verifiable facts), then I am describing a very tight physical circumstance in gold (to go along with an even tighter situation in silver). Unless there’s a more plausible explanation for the sharp increase in sales of Gold Eagles than I’ve just outlined, the physical market appears aligned with the market structure on the COMEX in strongly suggesting higher prices to come. — Silver analyst Ted Butler: 16 September 2015
Today’s pop ‘blast from the past’ is a tune from the 1985 movie St. Elmo’s Fire. I have the soundtrack to this movie—and with David Foster as the producer, I knew it would be fantastic even before I slid it into my CD player way back then. If you own this CD—and have any kind of stereo system worthy of the name, you’ll know what I’m talking about. The link to the title track is here.
Today’s classical ‘blast from the past’ is the Prelude in G minor, op. 23 No. 5 by Sergei Rachmaninoff that he composed in 1901. It’s a short virtuoso piece that pianists use as an encore work—and the crowds just eat it up. I know that for sure, because I’ve been there, done that—and have the t-shirt to prove it! Here’s Valentina Lisitsa tearing up the keyboard—and the link is here.
I didn’t read anything into yesterday’s price action except the fact that volumes in both gold and silver were much higher than I wanted to see considering the price action. And as I said in my comments in the Commitment of Traders Report earlier, it’s undoubtedly due to the Managed Money traders covering short positions and going long, while JPMorgan et al were there was sellers of last resort to prevent price from exploding higher.
Here are the 6-month charts for the Big 6 commodities once again. The copper price got taken back down to its 50-day moving average—and crude oil closed below its. Based on that, one wonders for how long these rallies in the precious metals will be allowed to continue.
I sit here in front of my computer at 2:38 a.m. EDT contemplating Doug Noland’s headline of “Now What?“—as that perfectly describes the situation we have in front of us today. The Fed’s ZIRP continues intact—and it remains to be seen if the proverbial can, can be kicked down the road for much longer before the whole system implodes regardless of their Thursday afternoon capitulation to Wall Street and the world-wide financial system that underpins it.
But whatever comes next, the efforts to save the current economic, financial and monetary system will become more bizarre with each passing month—and the story from the Bank of England chief economist about negative interest rates in the U.K. along with removing cash from the system, is certainly the thin edge of the desperation wedge.
All the while China and Russia accumulate gold at a record-setting pace, as do Ted Butler’s ‘big buyers’ of silver and gold eagles from the U.S. Mint. And I’m still waiting for someone other than Ted to explain to the world why JPMorgan’s vault continues to fill up with every 1,000 ounce good delivery silver bar that isn’t nailed down—and also why the turnover of physical silver in the COMEX-approved depositories continues its manic pace.
Somewhere under the surface where us mere mortals can’t see, or tread, there is a connection between the last paragraph I wrote—and the two that precede it.
Trying to figure all this out reminds me of an expression I heard thirty-five years ago from the great motivational speaker Zig Ziglar. “Trying to find your way in this mess is like walking in fog. You go as far as you can see—and when you get there, you’ll be able to see further.”
And as Deep Throat said to Bob Woodward in the parking garage in the movie “All the President’s Men”—“Just follow the money.” And the big money is, as I said, buying up every ounce of precious metals that isn’t nailed down, all the while buying it in such forms as to not blow precious metal prices to the moon in the process.
It’s my belief that we have now arrived at that place in time where this is all we can do as well.
Let’s hope it’s enough.
See you on Tuesday.
Ed
The post Russia’s Central Bank Buys 1 Million Troy Ounces of Gold in August appeared first on Ed Steer.