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• Northern Rock & Gold Investing
• Will Silver And Silver Wheaton Continue To Rally?
• Is Central Bank Buying Just a Driving Force Behind Gold or Much More?! – Part II
• Morgan Stanley Intentionally Set Up to Fail
• Why Silver is Not Just a Semi-Precious Industrial Metal
• Gold’s Coming Rise
• Bill Gross Bullish on Gold, Netto Short Euro
• Silver Delivery Problems Expected: GATA
• Gold’s Rise To Continue Above $2,500/oz On Negative Real Interest Rates
• Caution Advised in Gold & Silver
• Cometis interview with GoldMoney's Alasdair Macleod
• Uh oh, time for a correction: Gartman turns bullish on gold
• Et Tu, Crudus?
• Rising gold exports to Iran curb Turkey deficit
• Gold Fields strike ends
• Vietnam’s central bank appoints SJC as official gold producer
• George Soros’s Three Month Window on Eurozone Crisis Management Is Up
• Federal Reserve: Honey, I Shrunk the Balance Sheet
• Gold Could Rise Above $2,500/oz. on Negative Interest
• ECB Action Could Be 'Supportive' for Bullion
• Gold "Has Seen the Lows for the Year", ECB Action Could Be "Supportive" for Gold
• Caution Advised in Precious Metals
• "This Report is Not a Love Letter to the Gold Standard" - Jim Reid, Deutsche Bank
• Kitco News' Daniela Cambone interviews GATA Chairman Bill Murphy
• GFMS says gold mine cash costs jumped 19% in first half of 2012
• Four Myths About the Gold Standard

Northern Rock & Gold Investing Posted: 05 Sep 2012 12:24 PM PDT Five years on, what does the Northern Rock crisis mean for Gold Investing...? read more

Will Silver And Silver Wheaton Continue To Rally? Posted: 05 Sep 2012 10:57 AM PDT By Lior Cohen: Shares of Silver Wheaton Corp. (SLW) continue to rally: during the past three weeks the stock hiked by nearly 15.4%. In comparison, during the same time frame, the price of silver rose by 16.4%. iShares Silver Trust (SLV) also increased by 16.3%. Will the FOMC announce in the next meeting another QE program which is likely to pull up the price of silver, and by extension Silver Wheaton? Also, will ECB's upcoming rate decision and bond purchase program also affect the price of silver? In the chart below are the normalized prices of Silver Wheaton, silver price and S&P500 (prices are normalized to April 2nd 2012). As seen, Silver Wheaton's stock and silver price hiked during last month. As a result of this rally, the stock has passed the growth of the S&P500. Nonetheless, the price of silver hasn't performed well during the year and is still slightly below the Complete Story »

Is Central Bank Buying Just a Driving Force Behind Gold or Much More?! – Part II Posted: 05 Sep 2012 10:46 AM PDT from news.goldseek.com: Part of the side-lining of gold from the monetary system was through either taxation on its sale (in some countries) or by undervaluing it as an asset. When the 2007 credit crunch hit hard, the loss in value of so many paper assets forced the sale even of those assets that did manage to retain both value and liquidity. Individual investors often sold gold, silver, and the like to cover margin requirements that screamed to be topped up in the hope of retaining assets that were losing value. That's why asset values on so many fronts declined so markedly. Even assets whose market fundamentals remained solid were sold down only to recover when the storm passed. Gold and silver were among those. Keep on reading @ news.goldseek.com

Morgan Stanley Intentionally Set Up to Fail Posted: 05 Sep 2012 10:45 AM PDT from beaconequity.com: Knowing the financial system will never recover following the derivatives blowup at Bear Stearns of 2008, the next bank-broker-dealer intentionally slated by the Fed to collapse as the next bad bank is Morgan Stanley, according Hat Trick Letter publisher Jim Willie. The evidence of the coming "killjob" on Morgan Stanley appears to jibe well with Willie's thesis, but only an analyst who naturally doubles as detective with a flare for nailing down the criminal profile of the syndicate leaders earlier than most can also see what others may wrongly regard as paranoia. "Morgan Stanley put on $8 TRILLION in interest rate swaps in the first half of 2010," Willie explained to readers of bullion dealer SilverDoctors. "I call them the designated hitter for Wall St. Why wasn't it JP Morgan, BOA, or Goldman Sachs? My theory is simple: THEY EXPECTED LATER TO KILL MORGAN STANLEY!" Keep on reading @ beaconequity.com

Why Silver is Not Just a Semi-Precious Industrial Metal Posted: 05 Sep 2012 10:42 AM PDT from silverseek.com: Of all the charges we have heard against silver recently the one that annoyed us most was that silver is just a semi-precious industrial metal and that therefore gold is now a better future insurance policy against money printing by the central banks. Now just hold on a minute! Look back over the past decade or so at precious metal prices. Is it gold or silver that has given an investor the best return? Silver wins by a mile with gold up a maximum of seven times to silver's 15 at its recent high. Keep on reading @ silverseek.com

Gold’s Coming Rise Posted: 05 Sep 2012 10:40 AM PDT from news.goldseek.com: "Never make predictions, especially about the future." — Casey Stengel Last year on September 6, 2011, gold reached a high of $1920; but when bullion banks intervened by pushing gold lease rates deep into negative territory in early September, they made sure enough leased gold would reach the markets to drive the price of gold lower. By late September, gold had fallen back to $1600; and when gold began to again rise, gold lease rates were pushed even lower forcing gold this time below $1600. The bullion banks one-two punch took the momentum out of gold's 27 % summer rally and by year's end gold would still be at $1600. Keep on reading @ news.goldseek.com

Bill Gross Bullish on Gold, Netto Short Euro Posted: 05 Sep 2012 10:36 AM PDT Bloomberg's Alix Steel, Sara Eisen, Dominic Chu, Stephanie Ruhle and Adam Johnson update the top trading stories of the day. They speak on Bloomberg Television's "Lunch Money." (Source: Bloomberg)

Silver Delivery Problems Expected: GATA Posted: 05 Sep 2012 10:19 AM PDT Bill Murphy interviewed by Kitco's Daniella (OOooo LaLa)

Gold’s Rise To Continue Above $2,500/oz On Negative Real Interest Rates Posted: 05 Sep 2012 07:29 AM PDT gold.ie

Caution Advised in Gold & Silver Posted: 05 Sep 2012 07:21 AM PDT Tradeplacer

Cometis interview with GoldMoney's Alasdair Macleod Posted: 05 Sep 2012 07:15 AM PDT Cometis: At today's London PM Fix, the gold price was recorded at US$1,690.00 per troy ounce. But on this day one year ago it spiked to an all-time nominal high of $1,923/oz. Why has gold ...

Uh oh, time for a correction: Gartman turns bullish on gold Posted: 05 Sep 2012 06:57 AM PDT Gold Now 'Dominant Currency,' Gartman Says Published: Tuesday, 4 Sep 2012 | 5:55 PM ET In a significant shift, Dennis Gartman has turned bullish of gold in U.S. dollar terms, he told CNBC on Tuesday. "Gold's going up in all currency terms at this point. Gold seems to be the dominant currency. It doesn't really matter at this point," the editor of The Gartman Letter said on "Fast Money." Gold is gaining in euro, yen and dollar terms, he added. "I'm actually bullish for the first time in a long while. I'm actually bullish of gold in U.S. dollar terms," he said. "I know people always get angry at me for always wanting to trade gold in non-U.S. dollar terms. I do that because it tends during the day, when you do that, to ameliorate, or to reduce the risk of the dollar itself that's incumbent in gold. "And, quite honestly, if you have been long of gold in yen terms, or been long of gold in euro terms, you actually have done better than gold in dollar terms." video here: http://www.cnbc.com/id/48901425

Et Tu, Crudus? Posted: 05 Sep 2012 06:37 AM PDT The global slowdown continues apace, with bellwether FedEx confirming: FedEx Corp. (FDX), operator of the world's largest cargo airline, projected its first decline in quarterly earnings in almost three years as slowing economic growth hurt demand for the express packages that provide most of its sales. …FedEx's forecast marks the second time since June the company has issued a profit estimate that trailed analysts'projections. The company is considered an economic bellwether because it moves worldwide goods ranging from financial documents to pharmaceuticals… In the Live Feed we are maintaining a trend short on UPS (after cashing for partial profits), along with additional global slowdown exposure via short vehicles like Boeing (BA) and the MSCI emerging markets ETF (EEM). One key question on our minds: Given the reality of what is happening – and the potential for the $USD to firm up in light of it – how much longer can crude oil stay strong? CLICK to ENLARGE Crude oil (West Texas Intermediate) has rebounded to the $95 per barrel range in recent months, after falling below $80 per barrel at the front-month June lows. But much of this rise has to be put down to weaker dollar / global growth rebound stimulus anticipation – a somewhat dumb reaction in our estimation (yes the market can have dumb reactions) in expectation of stimulus effects that will not be forthcoming (even if the stimulus itself is implemented). Given the potential for a crude stall and reversal, we are looking to some potential high beta energy names (as well as crude itself) for additional short opportunities as our bearish global slowdown thesis plays out. (All real money positions documented and time stamped in the Mercenary Live Feed.) NEWS FLOW Spain's Capital Flight Now Worse Than Asian Financial Crisis Money and People Leave Spain as Economic Gloom Deepens The problems of Europe are growing more serious by the day, with Spain's economy more leveraged than Indonesia's at the height of the financial crisis. A significant aspect of the problem is a heavy drain not just of investment capital – more than half of Spain's GDP is rolling out the door – but also of executive and entrepreneurial talent. Without a community of business owners and company builders to help revive the Spanish economy, a return to healthy economic conditions is that much farther off. This makes all future projected trends worse for Europe – longer recovery time, weaker economic foundations, greater need for outside assistance, ongoing susceptibility to even mild economic shocks… Given the reality of the situation we find it amusing that the market is still fixated on the idea of a weak $USD paired up with a strong euro. The EURUSD has been in a weekly chart downtrend ever since the highs of April 2011, but we anticipate that trend having much, much further to go with the euro eventually heading to par or below ($1.00 USD). Greece: Young and without a future – The Washington Post Youth Unemployment Set to Remain High in Europe – WSJ.com This is just horrible: Carles Vallecillo Folguera, 24, who got his degree in computers from the Polytechnical University of Catalonia, said he once thought that he would have a stable life after he graduated. Instead, he has found himself hopping from temporary job to temporary job to support his parents and his sister, who all lost their jobs over the past year. "Everything is very dark, and I feel like things are getting worse," Folguera said. A few hundred miles to the east in Italy, 24-year-old Tatiana Cavola, who received a degree in foreign languages at the prestigious University of Rome last year and had hoped to be a teacher, is working as a cashier and food-prep assistant at a McDonald's. "Everybody says I'm lucky because I have a good job. . . . It's true, I am lucky, but if you think this could be the job of my life, it is very sad," she said. Spain's Rajoy to seek German backing for a bailout | Reuters Analysis: Hesitant ECB bond buying could backfire | Reuters A significant and potentially fatal problem Europe faces – fatal to the prospect of ongoing monetary union anyway – is a lack of ideological buy-in from the fiscally sound northern countries. It is becoming increasingly clear that Europe needs the kind of "all or nothing" solutions that inspire absolute confidence that the euro will survive no matter what; in the absence of such confidence inspiring action, all measures become "half measures" subject to worry and gnawing doubt. Furthermore, this problem runs deeper than fickle investors willing to dump sovereign debt holdings, or the derivative levels of bank balance sheets. As long as the citizens of the periphery countries themselves see serious risk of becoming the next Argentina, crippling outflows of capital and talent will make a tough situation virtually impossible to overcome. September is a downer – Mark Hulbert – MarketWatch Via Hulbert: Septembers analyzed… Average September gain since 1896 All -1.24% When stock market rises in August -1.52% When stock market rises from Jul. 1 through Aug. 31 -0.48% When stock market rises from Jun. 1 through Aug. 31 -0.91% When stock market rises year to date through Aug. 31 -0.15% In Presidential election years -0.28% Majority of New Jobs Pay Low Wages, Study Finds – NYTimes.com Bernanke, Goldman Agree: 8% Jobless Rate Isn't Permanent – Bloomberg Food-Stamp Use Climbs to Record, Reviving Campaign Issue Michelle Obama reportedly gave an excellent speech at the Democratic National Convention, drawing a stark contrast between the rich Romneys and her and Barack Obama's hardscrabble upbringings. Normally we try not to comment on politics, as Washington is a cesspool either way and our basic stance, as far as Democrats and Republicans go, is "a pox on both their houses." But in this case it is absolutely disgusting, laughable even, for a left wing President (via his spouse) to channel Clintonesque overtones of "I feel your pain" to the poor even as the wholly endorsed policies of the Federal Reserve are actively screwing the poor with relentless abandon. Everything the Federal Reserve is doing is making life worse for the lower poor – and most of the middle class too – via cost of living increases in food and energy, decreased savings via being "pushed out on the risk curve," and economic gains via paper asset inflation that overwhelmingly go to the wealthy (i.e. those with a substantial portion of their net worth in equities, which does NOT describe the vast majority of Americans). The hypocrisy is enough to choke a horse. Not that Republicans are much better, more that Federal Reserve trickle down economics and right wing Reaganesque trickle down economics are the same thing, helping the rich while screwing the poor in the hope that middle class voters get a few crumbs off the cake. The galling thing about the left wing / Democrat position, though, is that they pretend to be the party of the poor and the downtrodden (whereas at least Republicans do not pretend that) while wholly endorsing the actions of the Fed (and even clamoring for more). Investors lack basic financial literacy, study finds – CSMonitor.com Might this help explain why investors are so willing to gamble with their savings and ramp up exposure in the face of extremely precarious economic outcomes? As a nation we appear not to understand money at all, let alone risk… in light of all that's happened we suppose this makes sense… Chinese traders call 'price majeure' – FT.com Fortescue and the Wile E. Coyote moment for the A$ Miners Retrench in Australia – WSJ.com As this edition of GMN is being written the Aussie (AUDUSD) is tanking yet again, down 30 basis points, as the rest of the world comes around to a view we have been pounding the table on for some time now. We have been profitably short the Aussie at various points over the past year and currently have a pyramid short in place from roughly $1.05 levels. As Colm O' Shea has noted, the best macro trades are obvious, and we feel increasingly confident that, from the vantage point of a rear view mirror, short Aussie will prove to have been one of them. We will be adding to our position for third and fourth pyramids when we get the chance (though not prematurely, as it is our intend to hold this short possibly for months or even a year or two, depending on how the trend develops). Drought in India Devastates Crops and Farmers – NYTimes.com Drought's Grip Is Wide and Deep – WSJ.com Keep an eye on weather patterns and increased potential for geopolitical risk as countries at the margins face starvation… closer to home, if drought conditions do not fully subside, the longer-term impact will be  yet more stealth inflation (through rising food prices that the Fed ignores), in turn cutting into corporate profits as food-related companies absorb price hikes rather than lose additional sales to an already stunned middle class. Saudi Arabia May Become Oil Importer by 2030, Citigroup Says Canada is the new Africa in China's quest for oil NASA Helps Hatch Robots for Drilling Oil Without Humans Ocean-Shipping Firms Try LNG as Fuel – WSJ.com Saudi Arabia as oil importer is a wild thought. The possibility of much, MUCH lower oil prices may be a wild thought too, but one we should perhaps consider given the technology advances at hand: Traversing the Red Planet while beaming data through space has a lot in common with exploring the deepest recesses of earth in search of crude oil and natural gas. Robotic Drilling Systems AS, a Norwegian company developing a drilling rig that can think for itself, signed an information-sharing agreement with NASA to discover what it might learn from the rover Curiosity. The company's work is part of a larger futuristic vision for the energy industry. Engineers foresee a day when fully automated rigs roll onto a job site using satellite coordinates, erect 14-story-tall steel reinforcements on their own, drill a well, then pack up and move to the next site… - Gold Tops $1,700 on Bets Central Banks to Boost Stimulus Why you won't find hyperinflation in democracies | Felix Salmon We continue to look upon the precious metals rally with suspicion. Silver is a turbo-charged bottle rocket, but the move just feels too frenzied, and the macro rationale for buying gold here – the notion that stimulus is going to ignite an inflationary trend – seems knee-jerk and illogical, a side effect of all those "dollar is doomed' views where it is assumed the bottom is going to fall out of US treasuries any second and inflationary forces are going to materialize out of nowhere. It ain't happening, and in fact the prospect of QE3, 4, 5 etcetera may wind up being more deflationary than inflationary (an idea we will soon write up in a separate piece). CHART FLOW Major indices (Dow, S&P) still weak / extended below highs Transports ($TRAN) still not confirming Silver (SLV) going parabolic – but can it be trusted? Energy stocks (XLE) rolling over w/ crude Small cap domestics (IWM) continue to show relative strength Semiconductors (SMH) still looking sick POSITIONING We remain substantially net short with little taste for the long side as the market displays pervasive weakness against a very bearish macro backdrop. On top of precarious technicals and new evidence of global slowdown confirming daily, Europe-related macro catalysts are coming into view. If Mr. Market shakes all of this off we will be quite impressed – and also be largely sidelined, given our tight risk discipline – but for now the global slowdown seems to be deepening, not troughing out, with our various positions seeing benefit (all documented and time stamped in the Live Feed). By the way, we have heard multiple good things about the new GMN format. If you have comments or questions, or want to share an insight or a piece of research, we welcome all insights and feedback. cheers, JS (jack@mercenarytrader.com) p.s. Institutional allocator seeks talented traders and money managers. Potential allocation amount: $2 to $10 million. See if your track record qualifies...

Rising gold exports to Iran curb Turkey deficit Posted: 05 Sep 2012 06:33 AM PDT

Gold Fields strike ends Posted: 05 Sep 2012 06:32 AM PDT

Vietnam’s central bank appoints SJC as official gold producer Posted: 05 Sep 2012 06:31 AM PDT

George Soros’s Three Month Window on Eurozone Crisis Management Is Up Posted: 05 Sep 2012 06:07 AM PDT Three months ago, on June 2, 2012, George Soros gave a widely circulated speech about the Eurozone crisis. He mentioned "three months" four times in the speech. In my judgment the authorities have a three months' window during which they could still correct their mistakes and reverse the current trends. By the authorities I mean mainly the German government and the Bundesbank because in a crisis the creditors are in the driver's seat and nothing can be done without German support. I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement. But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall. By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months' window. Correcting the mistakes and reversing the trend would require some extraordinary policy measures to bring conditions back closer to normal, and bring relief to the financial markets and the banking system. These measures must, however, conform to the existing treaties. The treaties could then be revised in a calmer atmosphere so that the current imbalances will not recur. It is difficult but not impossible to design some extraordinary measures that would meet these tough requirements. They would have to tackle simultaneously the banking problem and the problem of excessive government debt, because these problems are interlinked. Addressing one without the other, as in the past, will not work. Banks need a European deposit insurance scheme in order to stem the capital flight. They also need direct financing by the European Stability Mechanism (ESM) which has to go hand-in-hand with eurozone-wide supervision and regulation. The heavily indebted countries need relief on their financing costs. There are various ways to provide it but they all need the active support of the Bundesbank and the German government. That is where the blockage is. The authorities are working feverishly to come up with a set of proposals in time for the European summit at the end of this month. Based on the current newspaper reports the measures they will propose will cover all the bases I mentioned but they will offer only the minimum on which the various parties can agree while what is needed is a convincing commitment to reverse the trend. That means the measures will again offer some temporary relief but the trends will continue. But we are at an inflection point. After the expiration of the three months' window the markets will continue to demand more but the authorities will not be able to meet their demands. It is impossible to predict the eventual outcome. As mentioned before, the gradual reordering of the financial system along national lines could make an orderly breakup of the euro possible in a few years' time and, if it were not for the social and political dynamics, one could imagine a common market without a common currency. But the trends are clearly non-linear and an earlier breakup is bound to be disorderly. It would almost certainly lead to a collapse of the Schengen Treaty, the common market, and the European Union itself. (It should be remembered that there is an exit mechanism for the European Union but not for the euro.) Unenforceable claims and unsettled grievances would leave Europe worse off than it was at the outset when the project of a united Europe was conceived. But the likelihood is that the euro will survive because a breakup would be devastating not only for the periphery but also for Germany. It would leave Germany with large unenforceable claims against the periphery countries. The Bundesbank alone will have over a trillion euros of claims arising out of Target2 by the end of this year, in addition to all the intergovernmental obligations. And a return to the Deutschemark would likely price Germany out of its export markets – not to mention the political consequences. So Germany is likely to do what is necessary to preserve the euro – but nothing more. That would result in a eurozone dominated by Germany in which the divergence between the creditor and debtor countries would continue to widen and the periphery would turn into permanently depressed areas in need of constant transfer of payments. That would turn the European Union into something very different from what it was when it was a "fantastic object" that fired peoples imagination. It would be a German empire with the periphery as the hinterland. I believe most of us would find that objectionable but I have a great deal of sympathy with Germany in its present predicament.The German public cannot understand why a policy of structural reforms and fiscal austerity that worked for Germany a decade ago will not work Europe today. Germany then could enjoy an export led recovery but the eurozone today is caught in a deflationary debt trap. The German public does not see any deflation at home; on the contrary, wages are rising and there are vacancies for skilled jobs which are eagerly snapped up by immigrants from other European countries. Reluctance to invest abroad and the influx of flight capital are fueling a real estate boom. Exports may be slowing but employment is still rising. In these circumstances it would require an extraordinary effort by the German government to convince the German public to embrace the extraordinary measures that would be necessary to reverse the current trend. And they have only a three months' window in which to do it. The ECB is now apparently pledging "unlimited, sterilized bond buying", the German Constitutional Court is ruling on whether the ESM is constitutional, and German manufacturing is contracting. Spanish yields are roughly where they were in early June. And it's been three months.

Federal Reserve: Honey, I Shrunk the Balance Sheet Posted: 05 Sep 2012 05:45 AM PDT Precious metals opened lower for the midweek session this morning as market participants held back from making major commitments at or near six-month highs in gold ahead of the ECB meeting tomorrow.

Gold Could Rise Above $2,500/oz. on Negative Interest Posted: 05 Sep 2012 05:33 AM PDT Even though real rates are have risen slightly, they remain below their historical average and levels below 2% have still been supportive of rising gold prices. The 2% real interest rate threshold has served as an inflection point for gold prices.

ECB Action Could Be 'Supportive' for Bullion Posted: 05 Sep 2012 05:11 AM PDT Spot market gold prices fell briefly below $1,690 an ounce Wednesday morning in London trading, remaining close to six-month highs, while stocks and commodities were also broadly flat, ahead of tomorrow's policy announcement from the European Central Bank.

Gold "Has Seen the Lows for the Year", ECB Action Could Be "Supportive" for Gold Posted: 05 Sep 2012 05:07 AM PDT

Caution Advised in Precious Metals Posted: 05 Sep 2012 03:51 AM PDT The summer doldrums likely marked the bottom of this correction, and the metals have turn the corner higher. However, both gold and silver investors will likely have their resolve tested once again in the coming weeks before the metals are able to break higher.

"This Report is Not a Love Letter to the Gold Standard" - Jim Reid, Deutsche Bank Posted: 05 Sep 2012 03:17 AM PDT ¤ Yesterday in Gold and Silver The gold price made a rather feeble attempt to break through the $1,700 spot price mark early in the afternoon Hong Kong time on Tuesday.  When that got turned back, the price slowly sank to its 12 o'clock noon London low. From that low, gold made another run at $1,700...and that ran into a not-for-profit seller ten minutes after the Comex open.  The low of the day [$1,687.10 spot] came ten minutes after the equity markets began trading in New York. Gold began to rally once again...and the moment the London p.m. fix was in at 10:00 a.m. Eastern time, the gold price blasted higher, hitting its high tick of the day...$1,700.30 spot...about fifteen minutes later. That rally also met with another not-for-profit seller...most likely the same one that showed up at 8:30 a.m.  Once that rally was squashed, gold began to move higher once again, even gaining ground in the electronic market, before getting sold off a bit once it got a sniff of the $1,700 price mark once again. Gold closed on Tuesday in New York at $1,696.20 spot...up $3.60 from Monday's holiday-shortened trading session.  Volume was pretty chunky, even once Monday's volume was subtracted.  Both days combined was around 190,000 contracts. Here's the New York Spot Gold [Bid] chart so you can see the New York shenanigans in more detail. Silver traded in a reasonably tight price range yesterday but, it obviously had some help doing that, as every serious attempt to move higher got sold off.  Silver's last rally of the New York trading session [during electronic trading] took it to its high of the day...$32.53 spot...around 3:20 p.m. Eastern time, before it got sold down a bit going into the close. Silver finished the Tuesday session at $32.36 spot...up 26 cents on the day.  Net volume, including Monday's volume, was in the neighbourhood of 62,000 contracts...which I thought was pretty heavy. Here's the New York Spot Silver [Bid] chart for a close up of the New York price action. It should be obvious that if the usual not-for-profit sellers hadn't been around, both metals would have finished materially higher...with the emphasis on 'materially'. The dollar index opened around the 81.20 mark on Monday night...and within four hours had hit its low tick of the day around 81.05.  The next rally began just before London opened at 8:00 a.m. BST yesterday morning...and then moved higher until 9:00 a.m. in New York...and more or less traded sideways into the 5:30 p.m. Eastern time close.  The dollar index closed at 81.34...up a whole 14 basis points. One would be hard pressed to find much co-relation between the precious metals prices and the currency moves yesterday. The gold stocks opened lower...and hit their nadir at gold's 9:40 a.m. Eastern time low tick.  The subsequent rally didn't get far...and the gold shares more or less traded sideways into the close.  It should come as no surprise that it was the poor performance of the South African gold stocks that caused the index to finish in negative territory. The HUI finished down 0.52% yesterday. However, it was an entirely different story in the silver stocks...as virtually every one finished well into the green yesterday...especially most of the junior producers.  Nick Laird's Silver Sentiment Index closed up 2.26%. (Click on image to enlarge) The CME's Daily Delivery Report was a yawner yesterday.  It showed that 7 gold and only 27 silver contracts were posted for delivery on Thursday within the Comex-approved depositories.  Just 348 silver contracts have been posted for delivery in the September delivery month...and according to the CME's preliminary volume report from yesterday, there are still 2,008 silver contracts open in September.  What are the short/issuers waiting for?  Maybe they're waiting for silver to be shipped in to the Comex-approved depositories so they can deliver it to the long/stoppers. The GLD ETF reported that an authorized participant added 16,357 troy ounces of gold yesterday.  But over at SLV, it was the same old story...instead of silver pouring into the ETF, an authorized participant[s] withdrew a very chunky 2,519,572 ounces and shipped it off to someplace where it was obviously more desperately needed.  One has to wonder just how much silver the SLV ETF is owed...and just how many shares have been sold short in lieu of providing the real metal.  We'll have some sort of clue when shortsqueeze.com posts that data for the last two weeks of August...and Ted Butler says that will happen around the September 12th.  If that's the correct date...then that's next Wednesday, a week from today. The U.S. Mint had a smallish sales report to start off the month.  They sold 2,000 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and 250,000 silver eagles.  I sure hope you're getting your share, dear reader! It was a pretty busy day over at the Comex-approved depositories on Friday.  They reported receiving 1,248,363 troy ounces of silver, but only shipped 239,318 troy ounces out the door. The link to that activity is here. I have the usual number of stories again today...and I hope you have time to read the ones that interest you. Email Print What is glaringly apparent is that there is no short covering going on by any of the major players in the Commercial category. Kitco News' Daniela Cambone interviews GATA Chairman Bill Murphy. GFMS says gold mine cash costs jumped 19% in first half of 2012. SLV has another 2.52 million ounces of silver withdrawn. ¤ Critical Reads Subscribe Record 46 Million Americans Are on Food Stamps Those receiving benefits through the Supplemental Nutrition Assistance Program numbered 46.37 million, the government said in a report that hit just days ahead of the monthly nonfarm payrolls report, which the Labor Department releases Friday. The two numbers are inextricably linked as the economy battles its way back from the crippling recession that the National Bureau of Economic Research says ended in 2009. "The unemployment data is not really telling us the true story of how many people are underemployed," says Peter Cardillo, chief market economist at Rockwell Global Capital in New York. Food stamps are "a good indication of how the income of the workforce has stagnated and more and more people are applying for food stamps." With 22.4 million households using food stamps, fully 15 percent of the American population is on the program. This CNBC story was posted on their website mid-afternoon yesterday...and I thank West Virginia reader Elliot Simon for today's first story.  The link is here. View full GSD edition How a Plan to Help Stockton, California Pay Pensions Backfired Jeffrey A. Michael, a finance professor in Stockton, Calif., took a hard look at his city's bankruptcy this summer and thought he saw a smoking gun: a dubious bond deal that bankers had pushed on Stockton just as the local economy was starting to tank in the spring of 2007, he said. Stockton sold the bonds, about $125 million worth, to obtain cash to close a shortfall in its pension plans for current and retired city workers. The strategy backfired, which is part of the reason the city is now in Chapter 9 bankruptcy. Stockton is trying to walk away from the so-called pension obligation bonds and to renegotiate other debts. After reviewing an analysis of the bond deal, underwritten by the ill-fated investment bank, Lehman Brothers, and watching a recording of the Stockton City Council meeting where Lehman bankers pitched the deal, Mr. Michael concluded that "Stockton is entitled to some relief, due to deceptive and misleading sales practices that understated the risk." "Lehman Brothers just didn't disclose all the risks of the transaction," he said. "Their product didn't work, in the same way as if they had built a marina for the city and then the marina collapsed." This sounds like a mini version of Jefferson County, Alabama vs. JPMorgan.  This story appeared in The New York Times on Monday...and I thank Donald Sinclair for bringing it to our attention...and the link is here. View full GSD edition France to rescue mortgage lender CIF France's government plans to intervene to rescue Crédit Immobilier de France after the struggling mortgage lender was hit by a liquidity crisis following a recent downgrade by credit rating agency Moody's, Le Figaro newspaper reported on Saturday. CIF's board met on Friday night and formally demanded government help, the newspaper said, without naming its sources. The lender, which has about 300 branches throughout France, did not immediately return a phone call seeking comment. The government was not immediately available for comment. CIF has been looking for a buyer since at least May after its future was thrown into doubt by the evaporation of once-cheap funding from credit markets, on which it depends to finance its operations. This Reuters story was filed from Paris...and is one I found in yesterday's edition of the King Report.  The link is here. View full GSD edition Euro Crisis Starts to Bite: German Export Orders Fell Sharply in August German exporters suffered their biggest drop in international orders in more than three years in August, according to a survey released on Monday. Retailers too are starting to feel the impact of the euro crisis. Europe's largest economy, it seems, is losing its immunity to Europe's debt problems. Exports are a major pillar of the German economy, but now the sector is starting to feel the impact of the euro crisis and the global economic slowdown. German export orders fell in August by the highest rate in more than three years, the Markit financial information company announced Monday after conducting a survey of 500 industrial firms. "Survey respondents commented on a general slowdown in global demand and particular weakness in new business inflows from Southern Europe," the institute said. The firms hardest hit by declines are manufacturers of machinery and other investment goods as well as producers of intermediate goods such as chemicals. This story was posted on the German website spiegel.de on Monday...and I 'borrowed' it from yesterday's edition of the King Report as well.  The link is here. View full GSD edition Spanish Unemployment to Swell as Public Jobs Vanish: Euro Credit Jerez de La Frontera, a Spanish town of 214,000 in southern Andalusia, is negotiating with unions to fire 13 percent of the 2,000 government workers who absorb 80 percent of its budget. "It's not easy because these are people and families," said deputy mayor Antonio Saldana. With a quarter of Spain's workforce already jobless, Prime Minister Mariano Rajoy's efforts to retain investor confidence by shaving more than two-thirds off the nation's budget deficit by 2014 will worsen the highest unemployment rate in the European Union. Ten-year yields at 6.86 percent mean "we can't finance ourselves," Rajoy said on Sept. 1. "There's going to be less hiring and more firing for the spending cuts to be made," said Ricardo Santos, an economist at BNP Paribas SA in London who sees unemployment climbing to 27 percent next year from 24.6 percent currently. "The more unemployment persists, the more difficult it'll be for the government to meet budget goals and implement reforms." This Bloomberg story, filed from Madrid in the wee hours of yesterday morning, was sent to me by Manitoba reader Ulrike Marx.  The link is here. View full GSD edition Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain It is, Julio Vildosola concedes, a very big bet. After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Mr. Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks. "The macro situation in Spain is getting worse and worse," Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. "There is just too much risk. Spain is going to be next after Greece, and I just don't want to end up holding devalued pesetas." This story originally appeared in The New York Times on Monday...and was picked up by CNBC later that evening.  Reader Elliot Simon sent it to me on Tuesday morning...and the link is here. View full GSD edition Brinkmanship as Spain warns over bail-out terms Spain has issued a veiled warning that it will not accept a full bail-out from Europe if the terms are too harsh, a move that would paralyse the European Central Bank and call the euro's survival into question. In an escalating game of brinkmanship, Spanish finance minister Luis de Guindos said his country is not yet willing to sign a Memorandum giving up fiscal sovereignty to EU inspectors. "First of all, one must clarify the conditions," he told German newspaper Handelsblatt. Mr de Guindos said the crisis engulfing the region is larger than any one country and warned north Europe not to scapegoat Spain. "My colleagues are aware that the battle for the euro will be fought in Spain. Spain is right now the breakwater for the eurozone," he said, adding that "solidarity" would be well-advised. This Ambrose Evans-Pritchard story was posted on the telegraph.co.uk Internet site late last evening...and I thank Ulrike Marx for her second offering in today's column.  The link is here. View full GSD edition A Bleak Autumn for Monti: The Catastrophic State of Italy's Labor Market Kitco News' Daniela Cambone interviews GATA Chairman Bill Murphy Posted: 05 Sep 2012 03:17 AM PDT Kitco News' Daniela Cambone interviews GATA Chairman Bill Murphy Interviewed by Daniela Cambone of Kitco News yesterday, GATA Chairman Bill Murphy discussed gold and silver price manipulation, the everlasting investigation by the U.S. Commodity Futures Trading Commission of the silver market, and likely supply shortages in silver. I borrowed this story from a GATA release yesterday. The video interview is nine minutes long and posted at the kitco.com Internet site...and the link is here.

GFMS says gold mine cash costs jumped 19% in first half of 2012 Posted: 05 Sep 2012 03:17 AM PDT GFMS says gold mine cash costs jumped 19% in first half of 2012 While global gold mine production was at best flat in the first half of 2012, average total cash costs jumped 19% to a new high of $727 per ounce. According to Thomson Reuters GFMS's Gold Survey 2012 Update 1, some of the reasons behind the hiatus in production are declining grades across the industry, construction and commissioning delays and slower than expected ramp-ups of output at a number of properties. Added to this, the group said, were exogenous factors like geotechnical problems, extreme weather and labour strikes. read more

Four Myths About the Gold Standard Posted: 05 Sep 2012 03:17 AM PDT Four Myths About the Gold Standard For the first time since the age of Reagan, the Republican Party is considering the gold standard. The platform adopted last week at the GOP convention includes a plank in favor of a commission to study the way back to a fixed value for the dollar. Such a commission would jumpstart a national debate on monetary reform, something needed now more than ever. But instead of participating in this, critics have objected with myth after myth about the gold standard...and here are four of the most popular... read more

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