In Case You Missed it Week Ended October 24, 2015

In Case You Missed it Week Ended October 24, 2015.

Stories from the week ended October 24, 2015.

Talk of a Federal Reserve interest rate hike was less frequent during the week ended October 24, 2015. The Fed meets next week and the “consensus” is there will be no rate hike announcement following that meeting.

Politics dominated the week’s news with Canada electing a socialist as Prime Minister, the right wing People’s Party of Switzerland (SVP)* scoring election gains Joe Biden announcing he would not run for President and Hillary Clinton testifying before Congress re her role in the attack on the U.S. Embassy in Bengazhi.

China’s dumping of U.S. Treasury Bonds seems to have limited or no impact on the treasury bond market.

Russia added 1.2 million ounces of gold to its reserves. (see chart below)

Gold and silver had an active week (see charts below)

The price of gold ended last week at $1177.70 and ended this week at $1164.00.

The price of silver ended last week at $15.82 and closed this week at $15.81.

Homebuilder sentiment soared.

*the SVP was behind last year’s failed “Save our Swiss Gold” initiative to force the Swiss National Bank to increase its gold reserves.

JM Bullion

Here are the stories we wrote, followed or commented on.

October 17, 2015


While the price of silver has struggled in recent years, the value of numismatic silver coins have soared, along with other asset classes preferred by the wealthy like art, stocks and real estate.


1794 Silver Dollar Sells for almost $5 million


Russian news service comments on Russia’s accumulation of gold:

SputnikInt: Smart Move: Russia Buys Gold and Wins

October 18, 2015


Canadian elections not expected to produce clear winner/provide clarity.

Swiss People’s Party Scores Big in Swiss elections

European QE II?

European Central Bank President Mario Draghi hinted at extending the ECB’s quantitative easing program in December.

More QE for Europe?

October 19, 2015


Wall Street Journal analyzes the price of gold bringing out the tired argument that gold is not doing well because “it does not pay interest”.

“The precious metal doesn’t pay interest and has an easier time competing with Treasuries when rates are pinned near zero.”

Gold has NEVER paid interest and has risen during many periods when interest rates were not at zero!

Gold also does not default, threaten to default or shrink in bank vaults.

Buy Gold Online


Chinese Bank to help fix silver price at LBMA


Economists: Greeks should get used to capital controls

U.S. Mint Sales Update

U.S. Mint sold 1.5K American Gold Eagles/699.5K American Silver Eagles today

MTD Sales 21.5K Gold Eagles; 2,704,500 Silver Eagles.

Last week we reported on the significant reduction in China’s U.S. Treasury holdings, through its Belgian proxy.

belgian treasury bond holdings

China’s selling of treasury bonds through Belgium has accelerated.

When the Fed ended its QE program last year under which they were buying 70-90% of the newly issued U.S. Treasury Bonds, many expected rates would rise as there would not be market demand for treasuries in sufficient quantities to cover the reduction in artificial demand of the Fed bond purchases. When the Fed ended QE, there was a masssive surge in U.S. Treasury Bond buying through Belgium that compensated for the lost demand of the Fed purchases.

A similar dynamic is occuring as China dumps a large portion of its U.S. Treasury Bonds. Many thought that if China ever started sellling off its massive treasury holdings, interest rates would rise as there would not be sufficient demand to compensate for any large scale selling of their treasuries.

Bloomberg noted this week, however, that while China has dumped a large portion of its U.S. Treasury holdings, demand has held constant as Americans are supposedly buying them.

Bloomberg: China Dumps U.S. Treasuries, Americans Buy Them

Gold and Silver at the U.S. Mint

U.S. Mint American Silver Eagle Allocation Set at 970K for Authorized Purchasers

Gold, Safe Havens and Interest Rate

The steady barrage of negative commentary from the main stream media continued today:

Reuters: Gold falls on “upbeat data” that boost interest rate hike prospects

Wall Street Journal- Gold losing role as safe haven investment

Real Estate

While new home starts remain about half of what they were a decade ago, home builder sentiment soared in the most recent homebuilder survey:

new home sales chart

New home sales are less than half of what they were in 2005.

Homebuilder Sentiment at Decade High

N.Y. Fed President Speaks

NY Fed President- too early to raise interest rates

Negative Interest Rates for the U.S.

Italian news paper noted that NY Fed President Dudley remarked that negative interest rates may be instituted “if necessary”

….and negative rates if necessary

China Reports GDP

China GDP at 6.9% beats expectations of 6.7% but lowest since 2009

October 20, 2015

China calls for global currency

Real Estate

New Home Starts 1.206 Ex 1.15 up 6.5%
Building Permits 1.103 Exp 1.2 down 5%

QE II for Europe

ECB QE2 Coming

Canada Elects Justin Trudeau as Prime Minister

Justin Trudeau wins Canadian Prime Minister spot


CNBC covers gold positively, sort of


Russia adds 1.2 million ounces to its reserves in September

russian gold reserves

Russian gold reserves rose by 1.1 million ounces in September 2015.

October 21, 2015

U.S. Mint Sales Update

U.S. Mint sold 1K American Gold Eagles/186.5K American Silver Eagles today

MTD Sales 22.5K Gold Eagles; 2,891,000 Silver Eagles.

Gold and Silver ETFs

Gold and Silver ETFs attract investment

gold etf holdings

While there has been an uptick in gold ETF holdings recently they are off 50% since their peak in 2013.

silver etf holdings

Silver ET holdings have remained relatively constant the past few years.

Joe Biden Decides Not to Enter President Race

Joe Biden decides not to run for President


The Financial Times downplays the recent gold rally:

FT says that the gold rally will be brief

Goldman Sachs also downplays the gold rally:

Goldman Sachs- Don’t believe the gold rally

October 22, 2015

U.S. Mint Sales Update

U.S. Mint sold no American Gold Eagles/40.5K American Silver Eagles today

MTD Sales 22.5K Gold Eagles; 2,931,500 Silver Eagles.

U.S. Treasury Note Auction Postponed

US Treasury postpones 2-Year note auction due to uncertainty over debt ceiling


Another Chinese Bank joins the London gold price fixing mechanism

India and Gold

Indian festival gold demand said to be sluggish

More ECB QE2 Talk

ECB to launch QE2 in December? ECB QE ensures a relatively stronger $ -far less need to hike

Initial Jobless Claims 259K, Exp. 265K, Last 256K

October 23, 2015


We updated Shanghai Gold Exchange and Hong Kong Kilo Bar withdrawals:

Shanghai Gold Exchange Withdrawals for the week ended October 16, 2015

SGE withdrawals October 2015

Shanghai Gold Exchange withdrawals are headed for a record in 2015.

IMF says Chinese Yuan May Get Reserve Currency Status

IMF says Yuan may get reserve currency status

Click here for an explanation of the International Monetary Fund’s Special Drawing Rights (SDR’s)

China Cuts Interest Rates

China cuts benchmark rate

Gold and silver immeditately soared, then inexplicably collapsed

gold price chart october 23 2015

Gold rose on news of the Chinese rate cut then collapsed.

silver price chart october 23, 2015

Silver also rose then followed the same path down as gold.

Dave Kranzler of Investment Research Dynamics explains the price action.

US Manufacturing PMI 54.0, Exp. 52.7, Last 53.1


Reuters piles on the anti gold message:

Reuters on Gold says investors “eschew gold” yet gold is even with Dow this year.

gold vs the dow october 23 2015

Gold and the Dow have produced near identical returns in 2015.

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