All was quiet in the gold market on Friday until the jobs numbers came out at 8:30 a.m. Eastern time yesterday...then gold got hit for over twenty bucks.
Gold's low price of the day came at the London p.m. gold fix minutes before 10:00 a.m. in New York...and that was the dollar's exact low tick as well. Coincidence? Not likely.
The gold price recovered from that point, but still closed the day down $2.90 from Thursday.
Silver's fate was a carbon copy of gold's...but it managed to close sixteen cents higher than Thursday.
It's been a long while since the bullion banks reacted to the jobs report like this. In 'olden days' it would normally take days or weeks for the price to recover from these sorts of shenanigans...but this time it took less than a day...as the buyers showed up as soon as the selling stopped.
The jobs report set off a half-hearted rally in the dollar that came to an end at the London p.m. gold fix. From there, the dollar fell out of bed pretty quickly...and closed virtually on its low of the day.
The gold price was in the red all day long on Friday, but the stocks spent part of the day in positive territory before getting sold off with the rest of the equities going into the New York close. But, all in all, I was more than happy with the way that the gold shares performed yesterday. The silver shares turned in a mixed performance. Here's the HUI for the week that was.
Here's Nick Laird's "Silver Sentiment Index" for the week that was...and it's awfully close to breaking out to new highs.
The CME Daily Delivery Report showed that a very small 19 gold, along with 11 silver contracts, were posted for delivery on Tuesday. Nothing to see here, folks.
Neither GLD nor SLV had a report yesterday.
For the first day of the new month, the U.S Mint reported selling 19,000 ounces of gold eagles...along with a smallish 50,000 silver eagles. The final totals for March were as follows: gold eagles...73,500 ounces, one-ounce 24-K gold buffaloes 38,000...and 2,767,000 silver eagles.
The Comex-approved depositories weren't very busy on Thursday. They reported receiving 2,973 ounces of silver...and shipped 118,745 ounces out the door. Nothing to see here, either.
The Commitment of Traders report for silver was absolutely flat...as the Commercials only increased their net short position by 113 contracts...which is barely a rounding error.
In gold, things were a bit different...and even Ted Butler was somewhat surprised by what the report had to show...as the Commercial short position increased a chunky 15,970 contracts. To make matters more interesting, the '4 or less' bullion banks actually covered around 7,000 short positions, as it was the '5 through 8' bullion banks...plus the 'raptors'...that went short.
Ted says that the '4 or less' bullion banks now hold their lowest short position in gold in almost two years. Right now they are 'only' short 15.55 million ounces...about 20% of 2011 world gold production! The lion's share of that is held by JPMorgan.
Overall, Ted says that the COT is basically neutral for both gold and silver.
Here's Ted Butler's "Days to Cover Short Positions" graph...updated with yesterday's COT data. As always, I thank Nick Laird over at sharelynx.com for providing it.
Today's first story is courtesy of reader Scott Pluschau...and it's a piece out of yesterday's edition of The Wall Street Journal.
If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.
The link to the story is here.
British Columbia reader Bryan Bishop sent me the following video that was posted over at lewrockwell.com back on January 14th...but it's the first time I'd seen it.
In a five minute speech to Congress...Congressman from Texas points out all the wonderful things we have to look forward to once U.S. citizens are forced by their Federal government to use only the new "environmentally-friendly” CFL light bulbs by 2014. He sounds like Ron Paul here as he sounds off...and the video clip is worth five minutes of your time. The link is here.
Reader 'Rocky R' has our next read. It's a Bloomberg piece from yesterday.
Arab Banking Corp., the lender part-owned by the Central Bank of Libya of Libya, used a New York branch to get 73 loans from the U.S. Federal Reserve in the 18 months after Lehman Brothers Holdings Inc. collapsed.
“It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya,” Senator Bernard Sanders of Vermont, an independent who caucuses with Democrats, wrote in a letter to Fed and U.S. officials.
I'm sure that this is one of the secrets that 'The Creature From Jekyll Island' didn't want made public. The link to this very interesting read is here.
Here's Roy Stephens only contribution to today's column...and it's a piece by Pepe Escobar over at the Asia Times that was posted early this morning in Hong Kong.
You invade Bahrain. We take out Muammar Gaddafi in Libya. This, in short, is the essence of a deal struck between the Obama administration and the House of Saud. Two diplomatic sources at the United Nations independently confirmed that Washington, via Secretary of State Hillary Clinton, gave the go-ahead for Saudi Arabia to invade Bahrain and crush the pro-democracy movement in their neighbor in exchange for a "yes" vote by the Arab League for a no-fly zone over Libya.
With friends like this...who need enemies? I consider this a must read...and the link is here.
Here's a piece from Forbes from a couple of days ago that was sent to me by reader George Findlay.
The federal debt ceiling is but an arbitrary limit on the seemingly limitless potential for our debt to be absorbed around the world because it has the unique feature of reserve currency status. Likewise, U.S. dollars are debt-based instruments themselves without any independent value beyond more dollars, which the Federal Reserve can always inject into the banking system through its open market operations. It is as if the whole monetary system was set up to enable over-borrowing and big government in America.
The whole monetary system in the U.S. was set up to support the totalitarian empire that it has now become...and the author realizes that the only way out is a return to the gold standard. This story is well worth your time...and the link is here.
I have two stories on this issue that surfaced in the last twenty-four hours. The first was sent to my by George Findlay...and is posted over at the mineweb.com. The link to that story is here.
Here's the second one...and it's a GATA release of a story that was posted over at The Wall Street Journal yesterday. The story is subscriber protected...and the link to the GATA release is here.
Here's another GATA release of a story that appeared in Thursday's edition of The Wall Street Journal.
The next chapter in the struggle over sound money may be the case of a newly minted felon named Bernard von NotHaus. Mr. von NotHaus was convicted this month of counterfeiting money by issuing silver coins called Liberty Dollars. His company's website says it's been taken down by court order, and absent a successful appeal he could spend years in jail.
This is definitely worth the read...and the link is here.
Here's a story that appeared in yesterday's edition of London's Financial Times. The FT title reads "Fund Managers Look Beyond the Dollar for a Base". They talk about the yen, the pound. the euro, the dollar and even the renminbi...but dance around the only real currency that would do the job...and that is gold.
The story is contained in another GATA release...and the link is here.
Yesterday I ran a must read James Turk blog that was posted over at King World News. Eric just slipped the entire audio interview with Turk into my in-box moments ago. Obviously I haven't had the time to listen to it...but I would think it's a must listen...and the link is here.
My last story is certainly not gold-related...but it's your long read of the day that was sent to me by reader 'Greg R' earlier this week.
For more than half a century, Helen Thomas owned the most valuable piece of real estate in the White House briefing room. Her front-row seat at presidential press conferences and its attendant benefits—she was often called on first and usually ended the gatherings with a signature “Thank you, Mr. President”—made her the unofficial dean of the White House press corps. Her bold, irksome questions were like hot pokers to 10 U.S. presidents, and her fearless approach rattled press secretaries and set a tone for generations of straight-shooting, badgering reporters.
Here is a candid conversations with the disgraced dean of the White House press corps. It's posted in the April edition of Playboy magazine...and needless to say, it's a very interesting read. The link is here.
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Because of it length, today's 'blast from the past' comes in two parts...and is courtesy of reader Dave Mancini. Boléro is a one-movement orchestral piece by French composer Maurice Ravel. Originally composed as a ballet commissioned by Russian ballerina Ida Rubenstein, the piece, which premiered on November 22, 1928 in Paris, is Ravel's most famous musical composition.
Much to the surprise of the composer, the composition was a sensational success right from opening night. He had originally said that the piece was "completely devoid of music"...and predicted that most orchestras would refuse to play it.
In a newspaper interview with The Daily Telegraph in July 1931 he spoke about the work as follows: It constitutes an experiment in a very special and limited direction, and should not be suspected of aiming at achieving anything different from, or anything more than, it actually does achieve. Before its first performance, I issued a warning to the effect that what I had written was a piece lasting seventeen minutes and consisting wholly of "orchestral tissue without music" — of one very long, gradual crescendo. There are no contrasts, and practically no invention except the plan and the manner of execution.
The rest, as they say, is history. After eleven years on the board of the Edmonton Symphony Orchestra, I can tell you from first-hand experience that any concert that features this work will be sold out...regardless of what else is on the program, as it brings down the house every single time. You haven't lived until you've heard this performed live by a large orchestra.
Gold volume on Friday was a bit over 155,000 contracts net of all roll-overs...and the preliminary open interest number, considering the price action, was a pretty chunky 5,764 contracts. Both Ted and I were expecting to see a decline after a big drop in price that size...but maybe that fact was covered by a new spread trade being put on...and we won't know that for sure until Monday's final number is posted...or next Friday's COT report.
Gold's final open interest number dropped to 5,014 contracts...and although that's down by half from the preliminary number, it's still pretty big considering Thursday's price action.
Silver's open interest on Friday was a bit over 65,000 contracts net...and the preliminary open interest number was up an eye-watering 4,413 contracts, which did not warm the cockles of my heart. Like gold, that's a very large increase for the trading action we saw yesterday.
Silver's final open interest number for Thursday showed what I had hoped...and that was a smallish decline of 32 contracts, which is far better than the large positive number that was in the preliminary report.
The spreads tightened in a few pennies in the nearer delivery months in 2011 and 2012...but the silver price doesn't really slip into backwardation until the July 2013 delivery month. The April 2011 to December 2015 spread still sits at seventy-two cents...the same number as Thursday.
Here's the 1-year silver chart...and the both the 50-day and 200-day moving averages continue to climb steadily higher.
And here's the 1-year gold chart.
I'd like to be able to say [one way or another] how next week's price action in both metals is going to go...but I'm not a prophet. However, the long-term price direction in both metals is not in doubt.
Once again, there's still time left to either readjust your portfolio...or get fully invested in the continuing major up-leg of this bull market in both silver and gold...and I respectfully suggest that you take a trial subscription to either Casey Research's International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best [and current] recommendations...as well as the archives. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.
See you on Tuesday.