Gold rose nearly 1% to $843.63 in Asia and traded slightly higher in London before it plummeted in later morning New York trade and dropped to as low as $784.80 by about noon EST. It then rebounded about 2% from that low in the last hour and a half of trade, but it still ended with a loss of 4.09%. Silver rose 19 cents to $10.30 at the open in New York before it also plummeted in later morning New York trade and dropped to as low as $9.20 by about noon EST. It also rebounded into the close, but it still ended with a loss of 5.39%.
Euro gold fell to about €99, platinum lost $85.50 to $876.50, and copper fell another 12 cents to a 33 month low at about $2.10.
Gold and silver equities fell about 10% by late morning before they rebounded in afternoon trade, but they still ended with about 8% losses.
The Economy:
Report
For
Reading
Expected
Previous
CPI
Sep
0.0%
0.1%
-0.1%
Core CPI
Sep
0.1%
0.2%
0.2%
Initial Claims
10/11
461K
470K
477K
Net Foreign Purchases
Aug
$14.0B
$30.0B
$8.6B
Capacity Utilization
Sep
76.4%
78.0%
78.7%
Industrial Production
Sep
-2.8%
-0.8%
-1.0%
Philadelphia Fed
Oct
-37.5
-5.0
3.8
Home builder sentiment sinks to record low Reuters
Paulson regrets mistakes on economy Yahoo
Weak U.S. output, job market point to recession Reuters
Tomorrow at 8:30AM EST brings Building Permits for September expected at 840,000 and Housing Starts expected at 870,000. At 10AM is Michigan Sentiment for October expected at 65.0.
The Markets:
The U.S. dollar index rose after oil closed below $70 for the first time since August 2007 as crude inventories built 5.6 million barrels, gasoline inventories rose 7 million barrels, and distillates fell 450,000 barrels. The EIA also reported that product demand declined again and OPEC moved up their emergency meeting to next Friday, October 24th.
Treasuries rose after economic data showed that Industrial Production dropped the most since 1974 and manufacturing in the Philadelphia region shrank by the most in almost 20 years.
The Dow fell as much as 380 by late morning and the Nasdaq and S&P followed suit on worries over the economy, but all three indices rose markedly in the last couple of hours of trade and ended with about 5% gains as some hoped the worst may now be over.
Among the big names making news in the market today were Peabody Energy, Southwest Airlines, Bank of New York Mellon, Citigroup, Merrill Lynch, Baxter, Google, Yahoo, and Harley.
The Commentary:
“Dear Friends,
There is one simple but extremely dangerous error being made by the man who is the world's greatest expert on the time period and economics of the Great Depression, Dr. Bernanke, Chairman of the Federal Reserve.
The Chairman is an expert on the history and consequences of that period. He is being guided by this deep knowledge, yet is totally oblivious to the consequences of the alternative actions he is taking to not make the same errors as the 30s. This is all in his attempt to prevent his president from going down in history along with other failed economic leaders.
The unprecedented creation of infinite dollars for the purpose of flooding the world's entire financial system is causing the birth an inflation of types unknown in a modern economy.
The test case for the CONSEQUENCES of present united central bank actions is the history of the Weimar Republic, but this time it is on a planetary basis.
CONSEQUENCES cannot be avoided by any means. They are economic equal and opposing forces. That is simple fact.
In an attempt to avoid what the Chairman see as consequences of incorrect central bank action in the 1929 - 1933 period, he is creating new and infinitely more dangerous, longer lasting, society changing, politically provocative new sets of unexpected economic CONSEQUENCES.
The only number that might compare to the nominal value of all OTC derivatives is a count of all the individual plankton in all the oceans of the world and then only maybe.
The world will never be the same because of the greed of these 29 year olds and the old goat bosses who sat at the long desk of the board of directors while looking the other way.
Upcoming events:
As a result of "This is it and It is NOW":
1. US exchanges will be closed. There is a chance all world exchanges will close down. Only gold and currencies which are planetary markets will continue to trade.
2. Retirement programs will not pay off.
3. Medicare and Medicaid will at best buy you a bandage or pay for 1/4 of a visit to a free clinic.
4. Social security, due to the massive upcoming inflation, will provide no security for any society.
5. Money Market Funds will not pay off.
6. A CD is a gift, but not to you.
7. Unified central bank action has a short life.
8. Central banks will soon revert to the strategy of everyone for themselves.
9. 401Ks not self directed are headed for the toilet forever.
10. Exchange Traded Funds will not return the assets upon which it is based to you.
11. Sliver will demonstrate the fact that it is more industrial a metal than precious.
12. Silver is not a currency because it is simply too HEAVY to settle debts or to be universally fungible.
13. Silver performs best when there is reasonable industrial demand and distrust of currency. When this happens rounding up the gang and their money will have a lot to do with which party is elected.
14. Credit card companies are going to have to be bailed out.
15. GE Capital is a nuclear capable entity that has the capacity to take down the good old toaster and refrigerator manufacturer - SIGMA ZERO.
16. GE Capital is a huge OTC derivative dealer but somehow I do not recall that fact being discussed.
17. Gold is the only Honest Money because it has no liability attached to it.
18. Gold coins are the best way to own gold for the average investor.
19. When you select a junior gold, I would look for the highest quality, most bashed, highest short positioned, with real assets and real people devoid of pussy management. The situation is best if it is based in another country than the country you live in while doing business in a third and trading in multiple areas. The benefit is obvious.
20. Nobody ever did or will ever trade items as insurance. That is a form of madness.
21. At $1650 I will take my leave, having been with you to the point I promised.
22. The only place you will find me then is at my place of business on the ground or the web.
There is no question that gold will trade at or above $1650 by January 14th, 2011.”- Jim Sinclair, JSMineset.com
“Here’s the deal at the moment the way I see it…
*Demand for physical gold is astonishing and yet the price goes nowhere. The dichotomy between the "real" gold market and the Comex is widening.
*The US Government is petrified of gold rising to any degree because of its importance, in that a sharply rising price will shed light on "Dracula" … or the hideous inflationary forces set in motion by Comrade Paulson’s bailout.
*The gold price suppression scheme is SO childish, yet most on Planet Wall Street fall for it, or eat it up because it is in their interest to do so … See No Evil, Hear No Evil, Speak No Evil
*They fall for it because they refuse "to go there" when it comes to understanding just how much the US has meddled with the gold price and in other financial markets.
*Gold, a barbaric relic? Hardly … to the contrary it is becoming more relevant than ever.
*The Gold Cartel has rendered the most widely watched barometer of US financial market health, gold, dysfunctional. The mainstream gold pundits come up with one silly notion after another why gold is not flying.
*The rigging of the price of gold was one of the main contributors to the financial market disasters of the day and GATA warned the world in our WSJ ad on Jan 31, 2008.
*The Gold Cartel is all over the price of gold because a few key ones are SHORT. The US Government is implementing another bailout of sorts to protect them and their own Gold Cartel position.
*I would much rather be making money with my gold, silver and sizeable share positions; however, each passing day The Gold Cartel proves how right GATA has been for a decade.
*For the most part the US financial market press refuses to give GATA the time of day. I guess they realize once we shine the light on Dracula to the general public, he is a goner. Anyone who can add 2 plus 2 can see what is occurring at the moment.
*It is only a matter of time before THE LIGHT is directed on The Gold Cartel and they will recoil.
*Several months ago we received reports that bullion dealers in the MidEast were making it much more difficult for buyers over there. Unfortunately similar reports are coming my way on a daily basis from all over the world that this trend is picking up speed. It appears governments and bullion banks are not banning gold, just making it very difficult to purchase.”- From yesterday’s Midas report by Bill Murphy of LemetropoleCafe.com
“December Gold closed down 34.5 at 804.5. This was 13.5 up from the low and 35 off the high.
December Silver finished down 0.545 at 9.635, 0.575 off the high and 0.335 up from the low.
The market closed sharply lower and blew through the October lows despite one of the highest volatility days in history in the stock market and continued anxiety in the world's financial markets. Ideas that the worst news in the banking industry is now behind us and a sharp break in raw commodity markets helped drive the market sharply lower. The flight to quality bulls in the gold market were disappointed again today and there was talk that hedge funds were selling off gold and gold stocks in order to raise cash for other issues. December gold moved under $800 and to the lowest level since September 17th.
The silver market drove sharply lower on the session and into new lows for the move with nearby futures moving to the lowest level since mid-February of 2006. Weakness in industrial metals helped drive the market lower early and a sharp sell-off in equity markets added to the negative tone. The strong recovery in stocks helped support a strong bounce off of the lows but the market still closed sharply lower. News of the worst industrial production decline in the US since the mid-1970's was seen as a bearish force. Fears of a continued contraction in the global economy and a strong US dollar were also seen as negative forces.”- The Hightower Report, Futures Analysis and Forecasting
