July 23 - Gold $1335.10 down $1.30 - Silver $20.25 down 25 cents
Jim Sinclair: The Legend, I Knew Him Way Back When
"GET AFTER THEIR ASS!" … A Texas Football Coach
Living in Texas and being an ex-pro football player with the Patriots, that is one of my favorite quotes. One of those Texas football coaches, the legendary Darrell Royal of UT, and who recently passed away, made a comment way back when about my friend, and former roommate in Manhattan, Ed Marinaro. Ed went to Cornell right after I graduated and quickly became an All-American football player, who should have won the Heisman Trophy (he came in second to Pat Sullivan of Auburn). The only reason Ed did not win was because the gang in the South could not handle an Ivy Leaguer winning the big deal at that time. Ed went on to play in two Super Bowls with the Minnesota Vikings as a starting halfback and then starred on two TV sitcom big hits, Hill Street Blues and Sisters.
Why go there re gold and silver commentary? No reason other than today was a no surprise quiet day and the above quote is one of my favorites, especially as to how it relates to GATA. That is what we do.
AND, it relates to the title of this commentary re the legendary Jim Sinclair, whom I first knew of as a commodities trader in the late 1970’s with Shearson Hayden Stone when Sandy Weill was running that show. I joined Shearson right after Ray Dalio was fired for having a girl take off her fur coat (she was completely nude underneath) to make a hedging point) during a seminar in California. I was introduced to Ray who had just formed Bridgewater Associates and was struggling to make his new venture work. It is a most fun story. Ray needed a lot of work done and said, if I was willing to do it for him, I would be his broker. Long story short, I worked on material for Ray until 10:30 at night after night in lower Manhattan at Shearson headquarters before going back uptown where I lived.
There is so much more I could get into re Ray, who is now the number one hedge fund manager in the world and worth about $17 billion, but today is about another legend, Jim Sinclair.
Back then, I was involved with Ray re trading cattle, feeder cattle, and corn, along with trading hogs, pork bellies and soybeans. Get this: there were no financial futures markets re stocks and bonds back then. We were known as cowboys and not really respectable in the acceptable financial arena. We all know how that has all changed … well, at least in terms of the JPM/Goldman Sachs crowd.
Anyway, I became a good friend of a guy named Calvin Coppedge, who was Jim Sinclair’s broker at ContiCommodity Services. Calvin was some character. He was living with Princess Elizabeth of the British Crown Royal deal. She was delightful. Calvin was much fun and very bright. But, he was murdered years ago. The point is for this commentary is that Calvin (I was in my late 20’s) kept talking about this genius guy, Jim Sinclair. I was entertained, but into what I was doing with Ray Dalio in the ag world. Gold then went bananas.
(Could not resist adding what Jim sent me about Calvin C): "He gave me a human skull for my birthday from Macbeth."
What I remember most back then was what a big deal Jim was in New York. When gold was making its big run to $850 or so in 1980 Jim was the talk of the town. The politicians, actors, big money types were all following Jim. And, I THINK, he got many of them out of the trade at the right time. So, here’s to you Jim and to your second run at the big time in Manhattan, Connecticut, and Tanzania. You told everyone what was going on back then and were so right … and you will be so right again in your prediction of $3500 gold.
OK, now back to the nitty gritty of the day, which is pretty good to report. After yesterday’s surges, both gold and silver did some checking on the downside and held support. Gold fell to $1326 and then firmed up very well. Note that it left $1300 in the dust.
Silver was a bit different. It crashed back to $20, its key resistance now support level, before making a modest 50% comeback. While not as firm as gold today, its rejection of $20 on the downside in such a clear fashion may be the subtle Cat’s Meow.
More good news to report on the physical gold front. The AM Fix was $1326.75. In yet another anomaly, the PM Fix jumped to $1333.50. The physical market is in very good shape.
The gold open interest fell 5291 contracts to 439,414. So, part of yesterday’s big rally was due to a number of the latest commercial shorts and specs covering. No surprise there.
The silver open interest went UP 909 contracts to 133,641. You got me on that one? When are the JPM shorts going to be FORCED to give up?
Inputs and comments
*Dave from Denver late yesterday afternoon…
The plot thickens + 3+ more tonnes of gold removed from Comex on Friday
Just got off the phone with my NYC buddy (the one who gave me the heads up about wealthy Europeans demanding their gold from JPM and other bullion banks over there). He was at a convention on Friday for big institutional investment funds. The CIO of the Memorial Sloan Kettering fund gave a presentation in which he said "you have to buy physical gold and take possession of it or else you don't own gold - that's what we do." He said they use gold as a hedging device but that it doesn't work as a hedge unless you have it in your own possession. Every other form of gold is embedded with counterparty risk.
My friend said that what this means is that it's further confirmation that the very wealthy elite who are "plugged in" are buying a lot of gold and taking possession because funds like MSK have very wealthy insiders on the board.
a Speaking of which, another 3+ tonnes was removed Friday from the Comex "eligible" bin. This time for HSBC's eligible inventory. Total gold on the Comex is now down to 6.8 million ounces. Note that this is "reported" gold stocks, for which the CME now uses a disclaimer in reporting the numbers.
The total amount of gold futures open interest is now 47 times more than the registered gold (available for delivery gold) on the Comex.
A few things stood out today…
*Gold consolidated its gains VERY well and was so firm.
*The silver shorts continue to press their case, but it managed to hold the VERY key support at $20.
*JEEPERS CREEPERS ... gold just popped up to $1343 and silver recovered to $20.40. The BUMS are in trouble!
*Adnd YEAH BABY with the shares. The XAU rose 3.26 to 103.69 and the HUI gained another 7.59 to 262.52.
Considering yesterday’s blastoff, today was a comfortable win for our camp.
Upside fireworks still appear to be in the cards.
GATA BE IN IT TO WIN IT!