Quote of the day:
Amid a hot wave of gold investment, investors must be even more cautious about getting into the market; they must be alert to any gold price plunges triggered by sell-offs at central banks in overseas countries, including the United States.
~ Zou Pingzuo, a researcher with the People's Bank of China, quoted in "China c.bank researcher warns of gold price risks."
Observations - Statistics - Commentary
The State's "Inception" Fails Mises Daily by Llewellyn H. Rockwell Jr.
Two years ago, the economy was seriously dragged down amidst an amazing banking crisis that spread throughout the world. The illusion created by loose credit — that housing could go up in price forever and we could enjoy permanent prosperity due to monetary expansion — was shattered by events. Reality had dawned. We found ourselves in the midst of an economic depression.
http://jlne.ws/bGdQFL
** Lew Rockwell uses the film to draw analogies to our current economic state and the policies that got us here. Bipartisan and deeply pessimistic. Good read, though, even if you disagree.
FOMC: Fully at Odds Monetary Consensus?
Kitco - Commentaries - Jon Nadler
... A fresh, gold-cautionary comment from a PBOC researcher brought up the prospect of central bank selling (including that of the United States, said he) of the metal. The tiny news item was buried amid what appears to be uniformly bullish posturing among gold market times. Something that actually worries Marketwatch’s Marc Hulbert, more than a bit –even if only in the short-term. Walls of worry, slopes of hope. What would the markets do without them? Don’t know, really, but at least one analyst was quoted to say this morning that this market really needs to turn up the ETF gold-buying spigot if it is to make advances past $1,265.00 an ounce. Like we said on previous occasions; a market addicted to fund funds, this has become.
http://jlne.ws/dyODMH
Two years and a Volcker Rule later
FT Alphaville »
It seems JP Morgan is closing all proprietary trading desks, according to Bloomberg, starting with its commodities unit. Equities and fixed income desks will come later.
http://jlne.ws/9v2AcQ
** See Lead Stories for the Bloomberg story that contains all the details, and the story that follows it for a look at how JPM is ramping up Asia.
CEO Crybabies
Corporate bosses are whining, even though they're reporting record profits.
Slate Magazine by Daniel Gross
It's hard out there for a CEO. There's a Democrat in the White House, and Washington is being ruled by a coalition of socialists and anti-capitalist thugs. There's uncertainty about taxes and policy. Business leaders are constantly being vilified for taking home huge paychecks without providing meaningful returns to shareholders, or creating jobs, or boosting wages. The newly passed financial reform bill requires CEOs of public companies to measure and report the ratio of their pay to that of their workers. Blackstone Group CEO Steve Schwartzman is complaining that the Obama administration is like Hitler invading Poland.
http://jlne.ws/bHYtNH
** From the story: "In the second quarter of 2010, corporate profits were up 39.2 percent from the year-before quarter."
Gold and Silver Market Suppression Failures Flash Buy Signal, Part 2
Seeking Alpha
In Part 1 of this 5-part series, we discussed two agreements that Central Banks used to suppress the price of gold in the marketplace. Please read Part I before proceeding with this article. So do the Central Banks still have gold? A nice quote from the GATA article regarding availability of Canadian central bank gold.
http://jlne.ws/ajWfjJ
** In this second of a five part series, the author quotes and borrows heavily from GATA and comes to the shocking concludes that metals prices are being manipulated.
| JLN Metals Scorecard | 8/31/2010 |
| NYSE LIFFE US Total Volume | 9,974 |
| 100 oz. Gold Futures Volumes | |
| NYSE LIFFE US | 542 |
| CME/NYMEX (Globex + PNT) | 107,911 |
| CME/NYMEX Open Auction | 1,113 |
| NYSE LIFFE market share | 0.50% |
| NYSE LIFFE US Electronic market share | 0.50% |
| 100 oz. Gold Futures Open Interest | |
| CME/NYMEX | 577,352 |
| NYSE LIFFE US | 2668 |
| NYSE LIFFE US market share | 0.46% |
| Mini Gold Volume | |
| NYSE LIFFE US | 4,450 |
| CME/NYMEX miNY | 135 |
| CME/NYMEX E-mini | 30 |
| NYSE Liffe market share | 96.42% |
| 5,000 oz. Silver Futures Volume | |
| NYSE LIFFE US | 97 |
| CME/NYMEX | 29,949 |
| NYSE LIFFE US market share | 0.32% |
| Mini Silver Volume | |
| NYSE LIFFE US | 1,729 |
| CME/NYMEX miNY | 37 |
| CME/NYMEX E-mini | 0 |
| NYSE LIFFE US market share | 97.90% |
| Additional Metal Futures Volume statistics | |
| EUREX Gold Futures | 3 |
| TOCOM Gold Futures* | 39,158 |
| TOCOM Mini Gold Futures* | 7,884 |
| TOCOM Silver Futures* | 486 |
| MCX India | 45382 |
| Dubai Gold & Commodities Exchange | 1,166 |
| * Today's date |
| METAL ETFS | Symbol | Metal ETFs |
| ProShares Ultra Silver | AGQ | 377,374 |
| Powershares DB Base Metals Fund | DBB | 237,819 |
| Market Vectors Gold Miners | GDX | 12,208,438 |
| MARKET VECTORS JUNIOR | GDXJ | 1,126,346 |
| SPDR Gold Trust | GLD | 12,257,100 |
| ProShares UltraShort Gold | GLL | 262,968 |
| iShares COMEX Gold Trust | IAU | 4,805,927 |
| ETFS PHSYICAL PALLADIUM SHARES | PALL | 53,576 |
| ETFS PHYSICAL PLATINUM SHARES | PPLT | 28,342 |
| ETFS GOLD TRUST | SGOL | 194,213 |
| ETFS SILVER TRUST | SIVR | 319,281 |
| iShares Silver Trust | SLV | 8,232,564 |
| Market Vectors Steel | SLX | 282,997 |
| ProShares Ultra Gold | UGL | 103,034 |
| ProShares UltraShort Silver | ZSL | 264,364 |
Lead Stories
JPMorgan Said to End Proprietary Trading to Meet Volcker Rule
Bloomberg
JPMorgan Chase & Co. told traders who bet on commodities for the firm’s account that their unit will be closed as the company, the second-biggest U.S. bank by assets, starts to shut down all proprietary trading, according to a person briefed on the matter.
http://jlne.ws/9cpnhc
JPMorgan Chase Appoints Eyles as Asian Commodities Head; Dawe to Leave
Bloomberg
JPMorgan Chase & Co., the second- biggest U.S. bank by assets, has appointed Ray Eyles as chief executive officer of its commodities business in Asia, according to an e-mail sent to Bloomberg News.
http://jlne.ws/ddKw8j
China c.bank researcher warns of gold price risks
Reuters
Investors must be cautious in buying into gold and alert to possible gold price 'plunges' caused by heavy selling by overseas central banks, said Zou Pingzuo, a researcher with the People's Bank of China.
http://jlne.ws/9uTQNy
IMF's Gold Assets Fall 16.85 Tons in July as Russia Adds to its Holdings
Bloomberg
The International Monetary Fund’s gold reserves fell by 16.85 metric tons in July as Russia added 16.2 tons to its holdings, according to figures from the Washington-based lender.
http://jlne.ws/99cLY9
Japan's New Stimulus: Good for Gold
When Quantitative Easing causes inflation, people naturally turn to Gold Investment...
Gold News
THE BIG ISSUE in global markets is the meeting of the Bank of Japan, writes Julian Phillips of the Gold Forecaster, where they debated what to do about a Yen strong enough to damage Japanese exports, the mainstay of the Japanese economy.
http://jlne.ws/98pN3i
Futures & ETF News
Gold price to double in five years - Frank Holmes
Mineweb
Historically, September is a very good month for gold. On average, the price of the yellow metal rises around 2.5% from its August price.
http://jlne.ws/a6Vkrg
Bullion-Buying in China and India, Part 3
TheStreet by Jeff Nielson
In Part 1 of this series, I discussed the general flaws in analyzing global, gold supply and demand. In particular, I took a closer look at the bullion market of China. In Part 2, I expanded on this theme, and shifted my focus to India's gigantic gold market. In the conclusion to this series, I will look at India's equally important silver market.
http://jlne.ws/9TzOfO
Commodities Report: Gold Hits $1,248.30 on Recovery Jitters
WSJ.com
Gold futures crept closer to record highs Tuesday, rising on continued insecurity about the economic recovery as global equity markets struggle. Comex gold for September delivery rose 0.9% to $1,248.30 an ounce. The most actively traded gold futures contracts, for delivery of the yellow metal in December, finished 0.9% higher at $1,250.30 an ounce.
http://jlne.ws/bUGPzz
Silver outperforms Gold on MCX
www.commodityonline.com
Within last seven days, Silver prices have risen by approximately 7 percent outpacing Gold prices, which have risen by less than 3 percent during the corresponding period.
http://jlne.ws/9JQibb
A Golden August: Gold rises to within a hair of its record close, but some are skeptical
MarketBeat - WSJ
Stocks may have taken a hit in August, but gold? Gold shone, with Comex gold futures for September delivery gaining 5.6% to within a hair of its exchange record close of $1257.20, back in June. Since that peak, gold has dipped, but with mixed signals flying left and right over inflation, deflation and matters geopolitical and macroeconomic, goldbugs are in command for the time being.
http://jlne.ws/butJE6
Weinberg Says Gold May Hit New High in `Couple of Weeks': Video
Bloomberg
Eugen Weinberg, an analyst at Commerzbank AG, talks about the outlook for the gold market and investment strategy.
http://jlne.ws/9U1fwn
HSBC's Morris Says He Sold 30-Year Treasuries, Kept Gold: Video
Bloomberg
Charles Morris, a fund manager overseeing about $2.5 billion at HSBC Global Asset Management’s Absolute Return fund, talks about his decision to sell long-term bond holdings on Aug. 27 and agricultural commodities yesterday.
http://jlne.ws/bjImbd
Three ETFs to Play High Copper Prices
TheStreet
iPath Dow Jones Copper Index ETN, PowerShares DB Base Metals and the iShares MSCI Chile Index should benefit from high copper prices -- despite weakness in U.S. demand.
http://jlne.ws/cds754
Investments
High correlations reveal unhealthy market: strategist
MarketWatch
Yesterday my intrepid colleague Sam Mamudi was out with a story making the rounds in the blogosphere about how investors are ditching active managers and piling into index funds. Meanwhile, money continues to flow into index-tracking ETFs.
http://jlne.ws/9L8ueF
ING Fund Returns 26% With Iben as No. 1 Manager Fueled by New Guinea Gold
Bloomberg
Nuveen Investments Inc.’s David Iben has a pet peeve: index huggers.
http://jlne.ws/bcsFMs
Production News
Key Gold Announces the Acquisition of the Musset Lake Copper Property Containing a Near Surface Historic Mineral Resource of 110 Million Tonnes Grading 0.23% Copper
MARKETWIRE via COMTEX
Robert Seguin, president, is pleased to announce that Key Gold has signed a Binding Letter of Agreement to acquire a 100% interest in the Musset Lake Copper Property consisting of 82 mining claims covering 3,998.1 hectares or 40 km2.
http://jlne.ws/cMZjDY
Colombian Mines Updates Progress at Yarumalito, Rio Negro and Venecia Projects
MARKETWIRE via COMTEX
Colombian Mines Corporation is pleased to announce the discovery of two new gold bearing zones at Rio Negro and the continued definition of high grade gold mineralization on the Yarumalito drill project.
http://jlne.ws/a3DZ5r
Regulatory News
CFTC begins comments period for OTC derivatives rulemaking
Lexology
Today, the Commodity Futures Trading Commission (CFTC) filed a notice that it will begin to accept the views of interested parties in connection with its rulemaking process to regulate the over-the-counter (OTC) derivatives marketplace. The CFTC’s announcement follows the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) on July 21, 2010. The Dodd-Frank Act, among other things, mandates comprehensive regulation of OTC derivatives.
http://jlne.ws/9EiwEO
Reports, Macroeconomics & Inflation
Europe's economies: Turbocharged Germany
The Economist
THE machine that sputtered badly during the slump in world trade is now firing on all cylinders. Figures released on August 13th showed that the German economy grew by 2.2% (an annualised rate of close to 9%) in the three months to the end of June, well above even the most optimistic forecasts. The German figures, the best since reunification almost two decades ago, meant that the euro-area economy had a good quarter, too. GDP in the 16-country block rose at an annualised rate of 4%—much faster than in America and only a bit shy of surprisingly strong growth figures in Britain.
http://jlne.ws/bMEtBQ
Global FX trade jumps to $4 trln a day -BIS
Reuters
Trade on global currency markets has jumped by a fifth over the past three years to $4 trillion a day, roughly equal to the annual economic output of Germany, a major central bank survey showed on Wednesday.
http://jlne.ws/bgWzel
Miscellaneous News
Vuvuzelas banned from Euro 2012, Champions League
The Early Lead - WaPo blogs
Vuvuzelas will be banned from stadiums for European League and Champions League matches, UEFA has announced. UEFA said it wants to make sure that the European tradition of singing at soccer matches is not drowned out by the monotonous, gnat-like buzzing of the plastic South African trumpets that were alternately mesmerizzzzzzing and maddening at the World Cup this summer.
http://jlne.ws/a3kKgs
Physicals & Company News
Copper Ore `Seller's Market' for Five Years, Sumitomo Metal's Kemori Says
Bloomberg
Copper ore mined from Chile to Indonesia will be in short supply for at least five years, forcing Sumitomo Metal Mining Co., Japan’s second-biggest smelter, to keep producing at a reduced rate, the company said.
http://jlne.ws/9iZqwi
Gold One under pressure
miningmx.com
The Gold One share price is being held back by production problems at the Modder East mine as well as the finalisation of the $65m debt facility needed to cover put options that fall due in December.
http://jlne.ws/bBrh6l
Gold One now cashflow positive as gold production ramps up
Mineweb
South African gold miner, Gold One International (ASX, JSE: GDO) which was formed out of the merger of South Africa's Aflease and Australia's BMA Gold, says its flagship Modder East gold mine has now moved to a cashflow positive position with life-of-mine cash costs still expected to be below US$300 an ounce.
http://jlne.ws/adIAvl
