Golden Minerals Company

Nothing to see here, folks...

Although the Kitco gold chart for the last 24-hour time period looks impressive... it's mainly because of the scale on the graph. Wednesday's trading was basically within five bucks of $945. Yes, gold bottomed in early London trading yesterday... and peaked shortly after 12:00 p.m. in New York. But the 'rally' was only about one percent, so I'm not going to read a lot into that... even though it appeared that the price was capped at the $950 level. Besides which, the volume was so low to render any analysis almost without meaning. The usual N.Y. commentator stated that "Volume was an unimpressive 39,977 lots at 11:00 a.m."

The dollar's fall was helpful, but I wouldn't read much into that either. As I've said many times before, the PM prices are virtually 100% determined by the fact that the [primarily U.S.] bullion banks are prepared to go short against all gold and silver longs in any sort of price rally... regardless of what the dollar is doing. The day they stop doing that is the day the prices of both metals explode to the upside... as everyone else on the Comex is net long against them.

The price swings in silver were a little more dramatic... as they most often are. Silver followed a similar price path to gold's... but the rally from the early-morning London low until the peak in after-hours electronic trading in New York, was an impressive 50 cents.

Open interest for Tuesday's trading was as follows. Gold o.i. fell a smallish 2,172 contracts to 385,002... on the lightest volume number I can remember... 56,711 contracts. Silver o.i. rose for the second day in a row, this time by 1,120 contracts to 104,790... on pretty decent volume [considering gold's] of 32,005 lots. I don't know what to make of that. Since Tuesday [at the close of N.Y. trading] was the cut-off for tomorrow's Commitment of Traders report... hopefully this data will be in it.

The Comex Delivery Report for Wednesday showed that 152 gold contracts [1 contract = one hundred troy ounces] were delivered yesterday... and nothing in silver. There were no reported changes in either the GLD or SLV ETFs yesterday. The U.S. Mint provided an update yesterday... and since their last report, they've produced another 9,000 gold and 250,000 silver eagles. This brings the monthly totals for August up to 23,000 gold eagles and 630,000 silver eagles. And over at the Comex-approved warehouses, another 66,073 ounces of silver were withdrawn from their inventories.

The usual New York gold commentator had the following yesterday... "Reuters published its periodic story on Eastern kilobar premiums today. Singapore remains at a respectable 70 cents; Hong Kong softened 10 cents to 20-30 cents and Tokyo added 25 cent to a 25 cent discount... getting close into line with regional prices. The report recounts Indian dealers making fairly positive noises as the festival season gets underway: of course India has so much local gold on hand, that business has to be quite brisk to warrant imports. The Reuters story, filed from Singapore and Mumbai, is linked here.

The only interesting precious metals story of note yesterday was a piece over at mineweb.com about Q2/09 global gold hedge book reduction. As of the end of June, the global gold hedge book was down to 14.7 million ounces... 458 tonnes. About 70% of that total is hung around the necks of only two mining companies... AngloGold Ashanti, and the Darth Vader of gold companies... Barrick Gold. This is a well researched and well written report... and definitely worth your time. The link is here.

Today's first three stories are real estate related. The first two are stories from Monday, as I just couldn't squeeze them in any sooner than today. The first has to do with the quickly-deteriorating situation in the commercial real estate market... the next shoe to drop in the ongoing real estate debacle in the U.S. A quote from the Bloomberg article states... "Commercial property is certainly going to be a significant drag” on growth, said Dean Maki, a former Fed researcher who is now chief U.S. economist in New York at Barclays Capital Inc., the investment-banking division of London-based Barclays Plc. “The bigger risk from it would be if it causes unexpected losses to financial firms that lead to another financial crisis." With hundreds of billions of dollars in losses still forthcoming, it's a good bet that that will be the case. I thank Craig McCarty for providing it, and the link to the story headlined "Fed Focusing on Real-Estate Recession as FOMC Meets" is here.

The second piece on real estate is courtesy of the King Report. The opening sentences pretty well sum up the residential real estate crisis in the U.S.A... "There is no second foreclosure wave coming" says Sam Hater, senior economist, First American CoreLogic. "To say there is a second wave implies that the current wave has receded," Khater told me. "I don't see that the wave has receded." It's a very short article... and the graph is an eye-opener. The story is posted at mortgagefreeblogging.com and is headlined "Foreclosure wave gathers momentum" and the link is here.

The last real estate-related story is a commentary this morning from Jonathan Weil over at Bloomberg... and I thank P.S. for sending it along. As I've said before [as have many others] the entire U.S. banking system [and most of the rest of the Western World's banking system] is insolvent... and would be seen to be, if they were forced to carry their loans at market value rather than book value. And all the money printing in the world won't change that fact. The story is entitled "Next Bubble to burst Is Banks' Big Loan Values" and the link is here.

The next story is posted over at politicsdaily.com and I thank Donna from Florida for sending it along. It appears that the IRS and the U.S. Justice Department have failed in their attempt to pry open Swiss banking secrecy laws. The story... headlined "U.S. Lets Swiss Banking Giant UBS Off the Hook"... is well worth the read, and the link is here.

And lastly [finally!] is this story from The Telegraph in London. I haven't posted a piece by Ambrose Evans-Pritchard in a while... but here's one. The headline pretty much spells out the tenor of the story... and reads "Credit tightening threatens China's 'giant Ponzi scheme'". I thank Brad Robertson for sharing this, and the link is here.

Inflationism is a dreadful cancer that is gnawing at the backbone of the civilized order. - Hans F. Sennholz

The U.S. dollar appears to have failed once again in its attempt to break through its 50-day moving average to the up-side... and both gold and silver are sitting slightly above their respective 50-day moving averages. London has just opened for trading this Thursday morning as I write these last words... and I see that both metals are trading higher. As I said in my title this morning, there was 'nothing to see' in the precious metals market yesterday... just another day off the calendar.

Will prices go higher today? Maybe... but it all depends on what the U.S. bullion banks do when N.Y. opens... as 90-95% of all contracts are traded during Comex hours. Then there's also the DIVORCE between gold and silver prices that Ted Butler is forecasting. And please don't forget the bullion banks 23 million ounce gold short position. It has to be resolved one way or another. It's just a matter of whether it will be sooner... or later.

See you on Friday.