Gold closed Friday afternoon at $1681.80 up $14.50. Silver rose by 51 cents to $32.14.
The bankers are trying desperately to contain our two precious metals from rising. With the Dow rising, the fat fingers were not on the sell buttons that much.
Let us head over to the comex and see how trading fared:
The total gold comex OI fell by 3958 contracts to 436,578 from Thursday's level of 440,536. We had a very small mini raid so we must have lost a few weaker longs. The gold comex is certainly starting to trade like a strictly physical market. The front delivery month of October saw its OI fall 4 contracts from 784 to 780. We had only 1 delivery notice on Friday, so we lost 3 contracts to cash settlements. The big December contract which will no doubt be a battle Royale between the bankers and long holders saw its OI fall by over 4000 contracts to 268,102. The estimated volume continues to contract as players exit the crooked arena of the comex. The estimated volume on Friday registered 85,871. The confirmed volume on Thursday came it at 121,432. The lighter volume certainly had an influence in the rising gold price.
The total silver comex OI rose by 1100 contracts to 101,327. Many websites are reporting silver out at major bullion centers like the Perth Mint. The options expiry month of October saw its OI rise one contract from 125 to 126. We had zero deliveries yesterday so we lost zero oz to cash settlements and gained 1 contract of silver standing. The big December contract saw its OI rise from 59,580 to 60,306. This too will be a big battleground come December. The estimated volume was an extremely anemic 28,753 as most of our leveraged players abandoned ship. They refuse to play with the crooks. The confirmed volume on Thursday was also very light at 32,211.
Inventory Movements and Delivery Notices for Gold: Oct 15.2011:
Chart for Oct.
Again it is strange that we have seen no gold deposits into the dealer and no withdrawals by the dealer.
The only transaction was a customer withdrawal of 450 oz from Manfra.
We had no adjustments so the registered gold inventory at the gold comex remains at 2.286 million oz.
The CME notified us that we had 72 delivery notices for 7200 ounces of gold. The total number of gold notices served so far this month total 5861 for 586100 oz. To obtain what is left to be served, I take the OI standing (780) and subtract out Friday's deliveries (72) which leaves us with 708 notices or 70800 oz left to to be served upon.
Thus the total gold ounces standing in this delivery month is as follows;
586,100 oz (served) + 70,800 (oz to be served) = 656,900 oz or 20.43 tonnes of gold.
we lost 300 oz to cash settlements.
And now for silver
Total Gold in Trust
|Ounces of Silver in Trust||320,037,236.600|
|Tonnes of Silver in Trust||9,954.27|
no change in silver inventory for the SLV
Gold COT Report - Futures
Change from Prior Reporting Period
non reportable positions
Change from the previous reporting period
COT Gold Report - Positions as of
Tuesday, October 11, 2011
Those large specs that have been long in gold pitched a smaller number of contracts from last week to the tune of 1510 contracts.
Those large specs that have been short in gold covered 2856 contracts from their short side.
On now for our famous commercials:
Those commercials that have been long in gold and are close to the physical scene covered a very tiny 540 contracts from their long side.
Those commercials who have been short in gold from the beginning of time, added 3187 contracts to their short side.
The small specs who have been long in gold added 2962 contracts to their long side and are very happy campers this weekend.
The small specs who have been short in gold, added a tiny 581 contracts to their short side.
Summary: I would say we are neutral in bullishness as far as the COT report with the bankers still supplying the non backed paper.
And now for the silver COT report:
Silver COT Report - Futures
non reportable positions
Change from the previous reporting period
COT Silver Report - Positions as of
Tuesday, October 11, 2011
The large speculators in silver that have been long remained resolute by dumping only 288 contracts from their long side.
Those large speculators that have been short in silver covered almost an equal amount of 336 contracts.
And now for our famous commercials:
Those commercials that have been on the long side and are close to the physical scene,
pitched a rather large, 1,994 contracts.
And our commercials who have been short from the beginning of time like JPMorgan continued on their covering ways to the tune of 89 contracts.
Small specs: those that have been long in silver added 830 contracts to their long side and got it right.
Those small specs that have been short in silver feared the lay of the land and covered a rather large for them ,1027 contracts.
Summary: silver continues to be more bullish from a COT standpoint.
Let us now see some of the big stories which shaped markets on Friday.
The big story was the release of the retail sales and the headline was a big increase to the tune of 1.1%.
September retail sales rise on car sales
You will note that his unemployment/underemployment SGS model is over 23%
The U3 is the government's own figures on unemployment.
U6 is the old format for calculating unemployment. It adds back the many temporary unemployed who cannot find jobs and are temporarily on benefit rolls and have failed to find work.
SGS uses U6 plus adding the permanent guys who cannot find jobs and the 99 weeks have passed without them finding work. It also adds those working on temporary jobs or part timers who desire a full time job.
(courtesy John Williams)
- September Retail Sales Gain Exaggerated by Poor-Quality Seasonal Adjustments
- Trade Deficit Still Suggests A Positive Contribution to Third-Quarter GDP www.ShadowStats.com
adjustments. As with other government figures, consider the release by the government as a total fabrication:
(courtesy: the Golden Truth...Dave from Denver)
FRIDAY, OCTOBER 14, 2011
The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment sagged to 57.5 from 59.4 the month before. It fell short of the median forecast of 60.2 among economists polled by Reuters.
Consumers' outlook also deteriorated with the gauge of consumer expectations falling to its lowest level since May 1980 at 47.0 from 49.4. The index had fallen to this level in early September before being revised up at the end of the month.
The component has shed more than 20 points since the beginning of the year.
"Overall, the data indicate that a recessionary downturn is likely to occur," survey director Richard Curtin said in a statement.
"Even if the economy manages to avoid the formal recession designation by (The National Bureau of Economic Research), real consumer expenditures will not be strong enough to enable the more robust job growth that is needed to offset the negative grip of economic stagnation on consumer behavior."
Thirty-nine percent of consumers cited income declines as the reason why their finances have recently worsened, while 65 percent of all households expected no income increase during the year ahead. Both levels were the highest ever recorded by the survey.
The survey's barometer of current economic conditions dipped to 73.8 from 74.9.
Improvement in inflation expectations was a silver lining, with the one-year inflation expectation easing to 3.2 percent from 3.3 percent. The survey's five-to-10-year inflation outlook fell to 2.7 percent from 2.9 percent.
This measures the cost of moving grains and other dry goods on ships across the globe
especially to China. We see that the index is rising so China is not dead yet:
Baltic Exchange Dry Index (BDI),
exponential average in red.
200 day exp. avr. green
Inflation is gathering speed and we are facing major headwinds.
Overall import prices increased 0.3 percent, the Labor Department said, after falling 0.2 percent in August.
Economists polled by Reuters had expected prices to drop 0.3 percent last month. Import prices were up 13.4 percent in the 12 months through September.
Stripping out fuel and food costs, import prices rose 0.3 percent after increasing by the same margin in August.
I pointed out to you on Thursday a massive redemption of foreign bonds which is highlighted by this graph:
This is why the USA dollar has been hit hard this past week despite European problems.
The problems continue for Greece. On Friday the government announced that its deficit for the coming year is now 15% of GDP instead of the projected 10%. I found that this commentary
by Wolf Richter (www.testosteronepit.com) to be a terrific summary as to why Greece has gotten into their mess and the massive public strikes that followed as the workers do not want to give up their lush benefits:
(courtesy Wolf Richter of testosteronepit.com):
Greece's Extortion Game
Civil servants of bankrupt Greece enjoy the most curious bonuses. Train engineers of the state-owned railroads, who make up to €7,000 a month, get an additional bonus for every driven kilometer. Their days off don't have 24 hours but 28 hours. Plus they receive €420 a month for hand hygiene, a bonus that other railroad workers also get. Bus drivers of the state-owned transportation firms in Athens are paid for the time they spend commuting, and if they show up on time, they're paid an extra €310 a month. Messengers for ministries get an extra €290 a month if they carry documents. Other ministerial workers get bonuses if they know how to use a PC. At the culture ministry, they get a clothing allowance. Workers at the partially privatized telecom OTE receive €25 a month for warming up company vehicles (investigation by Handelsblatt, article in German).
The following zero hedge piece is interesting in that the USA who basically funds the IMF with their 17% veto has poured cold water on their expansion plans with respect to European bailouts. This was released late last night:
At the conclusion of the zero hedge commentary Durden describes the credit default "event" which will cause without a doubt a "Lehman moment" and economic chaos (last two paragraphs):
(courtesy zero hedge)
US "Pours Cold Water" On IMF Expansion Plans, Leaves European Bailout To Europeans
They (the IMF) have very substantial resources that are uncommitted," Geithner said.
German Finance Minister Wolfgang Schaeuble agreed the euro zone debt crisis was for Europe to solve, and expressed confidence that EU leaders would produce a plan at the October 23 summit that would be convincing for financial markets.
The United States is among countries keen to keep pressure on the Europeans to act more decisively to end the two-year-old debt crisis that began in Greece but has since spread to Ireland and Portugal and is lapping at Spain and Italy.
"The first priority here is for Europeans to put their own house in order," Australian Finance Minister Wayne Swan said.
G20 sources said most BRICS economies were in favor of bolstering the IMF's capital as a crisis-fighting tool.
"We have said this before and have conveyed this again, that if emerging economies and the BRICS are called upon to contribute, we can do it via the International Monetary Fund," one of the sources said. "India is open to it, China and Brazil are also okay with the idea."
The Franco-German crisis plan is likely to ask banks to accept bigger losses on their Greek debt than the 21 percent spelled out in a July plan for a second bailout of Athens, which now looks insufficient.
"It will be more, that's more or less certain," French Finance Minister Francois Baroin said.
The lead negotiator for private holders of Greek debt has said that investors are unwilling to accept greater losses on their bonds than the 21 per cent agreed in July, jeopardising eurozone plans to finalise a second Greek bail-out by the end of next week.
Charles Dallara, managing director of the Institute of International Finance, criticised European leaders on Friday for failing to allow the July deal to proceed. He said any greater losses imposed on Greek bondholders could prompt investors to sell the sovereign debt of other eurozone countries, destabilising the single currency.
“We do not see that a compelling case has been made to reopen the deal,” Mr Dallara told the FT. “A deal is a deal.”
Securing a voluntary “haircut” from Greek bondholders has been the centrepiece of the second €109bn ($150bn) Greek bail-out after a German-led group of creditor countries demanded private investors bear more of the rescue burden so eurozone taxpayers would not be saddled with the entire bill, as in previous bail-outs.
ECB Tells Belgium Not To Backstop Dexia Interbank Deposits, Says Bailout Plan May Be Against The Euro Charter
Guarantees on interbank deposits “could entail substantial distortion in the various national segments of the euro-area money market by potentially increasing short-term debt issuance activity across member states,” the ECB said in the statement.
“It could also affect the transmission of monetary policy decisions.”
Jim Rogers Sees Devastating Stagflation, Would Quit If He Was A Bond Portfolio Manager
"A difference is when Japan did that they were the largest creditor nation in the world, America is the largest debtor nation - not just in the world - but in the history of the world and the U.S. dollar has been - and is the world's reserve currency. So there are some factors that might not keep the interest rate down in the U.S.
The U.S. economy is likely to experience a period of stagflation worse than the 1970s, which would cause bond yields to spike, commodity bull Jim Rogers told CNBC on Friday in Singapore. Rogers said governments were lying about the inflation problem and the recent rally in Treasurys was a bubble.
"As the inflation numbers get worse and as governments print more money and as governments have to issue many, many more bonds - somewhere along the line we get to the point when (bond prices) go down."
Between 1974 and 1978 average inflation in the U.S. was at 8 percent, while unemployment hit a peak of 9 percent in May 1975. Currently, unemployment is at 9.1 percent while CPI is at 3.8 percent.
Rogers believes inflation will get much worse this time because, he
said, in the 1970s only the Fed was printing money, whereas now many
global central banks have been easing monetary policy.
"Bernanke is obviously backing the market again and the Federal Reserve has more money than most of us - so they can drive interest rates down again. As I say they are making the bubble worse."
For now though Rogers is playing it safe and avoiding bonds. Instead, he's betting on stagflation by being long commodities and currencies (such as the Chinese yuan) and shorting stocks.
"I wouldn't advise anybody to buy bonds, I would advise you to sell bonds," he said. "If I were a bond portfolio manager, I would get another job."
"In the 70s you didn't make much money in stocks, you made fortunes owning commodities," Rogers added.
Guest Post: You Don’t Need A PhD In Economics– You Just Need To Understand Basic Arithmetic
Words that come to mind to describe Chile? Clean, advanced, polite, friendly, orderly. It is a world away from its neighbors.”