Gold & Silver Daily
"One thing I did notice in the preliminary report was another big jump in gold open interest in the December delivery month...up 539 contracts."
 

¤ Yesterday In Gold & Silver

With trading winding down for the season, the lack of activity yesterday came as no surprise. The gold price traded between $1,615 and 1,600 spot the entire day...and closed at $1,605.40 spot, down $9.60.  Volume was a rather anemic 94,000 contracts.

The price action in silver was a bit more exciting, but only just.  Silver's low, close to $29 spot, came at 9:00 p.m. in Hong Kong...and then rallied sixty cents to its high of the day shortly before 9:00 a.m. in London.

From there, every tiny rally got sold off, with the low of day coming about 10:15 a.m. in New York.  From that point it traded quietly into the close.  Silver closed at $29.13 spot...down 19 cents on the day.  Net volume was around 20,000 contracts.

The US dollar index traded right at the 80 cent mark until 2:00 a.m. Hong Kong time, before heading lower.  The low of the day came at 8:30 a.m. in London...and by 9:00 a.m. in New York, had regained its 30 basis point loss.  From there, the dollar faded a hair into the close.

I guess it's fair to say that the gold price followed the dollar move pretty closely.  Silver did as well, but its 50 cent rise...followed by a 40 cent decline...was out of all proportion to the dollar move itself.

A question I keep asking myself these last few days is whether the precious metal prices are following the dollar naturally, or are they being 'assisted' in that regard?

Although the gold stocks never made it into positive territory yesterday, they did follow the general pattern of the Dow chart far more closely than what was going on with the gold price itself.  The HUI turned in a small loss of 1.01%.

The large cap silver producers did just about the same as the gold stocks...and Nick Laird's Silver Sentiment Index closed down 0.86%.  And as a group, most junior silver producers got hit harder than that.

(Click on image to enlarge)

I was expecting a rather insignificant set of numbers when I checked the CME's Daily Delivery Report.  I was surprised to see that 577 gold and 4 silver contracts were posted for delivery next Tuesday.  The silver number was no surprise, but the gold number certainly was.

The big short/issuer was a surprise as well...Goldman Sachs.  It's pretty late in the delivery month for the likes of them to be showing up.  I wonder why they waited so long?  They will be delivering 559 contracts.  The big long/stopper was no surprise, as it was JPMorgan.  They will receive 415  of these contracts in their proprietary [house] trading account...and 99 contracts in their client account.  A very distant second was the Bank of Nova Scotia with 54 contracts.  The action is worth a quick glance...and the link is here. [I have more on this in 'The Wrap' section further down]

For the second day in a row, the GLD ETF had a withdrawal.  This time it was 427,842 troy ounces.  Since the end of November...1.41 million ounces of gold has been withdrawn from GLD...and about 820,000 of that occurred yesterday and Wednesday.

The SLV ETF went the other direction, as they reported taking in a very tiny shipment of 48,621 troy ounces.

The U.S. Mint had a small sales report yesterday.  They sold 4,500 one-ounce 24K gold buffaloes and 100,000 silver eagles.  Month-to-date they have sold 65,000 ounces of gold eagles...20,000 one-ounce 24K gold buffaloes...and 2,009,000 silver eagles.

Wednesday was a busy day over at the Comex-approved depositories, as they reported receiving 1,195,568 troy ounces of silver...and shipped only 108,856 ounce of the stuff out the door.  The link to that action is here.

DUBAI --- or DO SELL?

Reader Bill Downey over at GoldTrends.net sent me the following e-mail that he received from a contact that has been in the Dubai gold industry for twenty years...and has an office there.

Bill asked him to comment on the 'Gold Buying in Dubai' article that I had posted in my column very recently...and this is what his contact had to say.  This gentleman's first language is obviously not English...and I've cleaned it up as best I could...and what I really didn't understand, I just left unedited...

"Bill this is b.s..... Today i literally went around [to] help my staff in retail to sell... As u know, the jewellery business here is dominated by men salesmen. Since the demand is almost zero in wholesale, i decided to go out to the retails and make a tour there [to] catch the clients by myself and try to convince them to buy. The clients are all pessimistic about gold.  I feel that crash from $1,900 made lots of them lose trust in buying jewellery.... The sidewalks are empty.  Before people use to walk in the road because the sidewalks were full...no space to walk.  All these almost from 100 walk-in customer, 75 will buy.... Each person minimum was about 50 grams to 100.  Now from 100 not even 5 buy...and the grams dropped dramatically to 15 grams, meaning each retail cannot cover the cost even by the end of the month...because gold is charged as gold...and manufacturing charges is a different premium. I'm starting to feel very negative.  This is one of the biggest jewellery markets after hong kong...it's the center of old dubai. Where are the jewellery were from 30-50 years.  But it's hopeless.  If the market is good, it's good for all...and when the market is bad, it's bad for all."

"On the bullion side, it's true there is a good demand.... But still less, less, less than before by large mostly speculative positions which they are going to exit after any bounce or spike....and physical bullion is picking up, but there is no comparison compared to the quantities in the beginning of the year the market is down by 80 percent or more..."

Yep, blood is definitely running in the streets...and a major bottom is in when you hear gold dealers talking like that, regardless of what language they speak, or what culture or country they're from.

Sun-grazing Comet Lovejoy was photographed shortly before sunrise on December 21st by Colin Legg of Mandurah, Western Australia. A short exposure with was sufficient to reveal the comet's reflection in the waters of the Mandurah Estuary. [Photo courtesy of spaceweather.com]

I'm delighted to report that I don't have that many stories today, but the ones I do have are all worth your time, if you have some to spare.

 

¤ Critical Reads

A Christmas Message From America's Rich: Matt Taibbi

It seems America’s bankers are tired of all the abuse. They’ve decided to speak out.

True, they’re doing it from behind the rope line, in front of friendly crowds at industry conferences and country clubs, meaning they don’t have to look the rest of America in the eye when they call us all imbeciles and complain that they shouldn’t have to apologize for being so successful.

But while they haven’t yet deigned to talk to protesting America face to face, they are willing to scribble out some complaints on notes and send them downstairs on silver trays.

Matt is at the top of his game in this blog posted over at Rolling Stone magazine yesterday.  Once you've read it, you'll come to understand why the CEO of BlackRock probably doesn't give a flying #&!@ about the short position in SLV...as he's probably in on the rig job just like the rest of them.

This is a must read commentary...and is Roy Stephens first offering of the day.  It's a little on the long side, but well worth it...and the link is here.

Read more...

Sir Gus O’Donnell: The UK faces break-up

Britain's most senior civil servant Sir Gus O’Donnell has publicly questioned whether the United Kingdom will still exist in a few years’ time.

Writing in The Telegraph, Sir Gus O’Donnell asks whether the Union can survive increasing pressure for Scottish independence.

Sir Gus, who is the head of more than 440,000 civil servants in England, Scotland and Wales, says the future of the Union is one of several “enormous challenges” facing the political establishment in the coming years.

The admission from such a senior non-political figure that the break-up of Britain is now a real possibility is likely to push the issue up the political agenda.

This story appeared in The Telegraph late Wednesday night...and is Roy Stephens second offering of this column.  The link is here.

Read more...

London Brokers Shrink as Debt Crisis Bites

London's stockbrokers are shrinking as Europe's sovereign debt crisis and competition from international firms squeezes revenue and fees.

“This isn’t just a blip, this is much worse,” said Tim Linacre, who is stepping down as chief executive officer of Panmure Gordon & Co., a 135-year-old brokerage. “It’s a desert for activity, which is why you are seeing some firms throw in the towel.”

There's nothing in this Bloomberg story that should come as a shock to anyone.  It was filed from London yesterday...and I thank Matthew Nel for sharing it with us.  The link is here.

Read more...

Avery Goodman: Euro zone gets vast bond monetization through the back door

This GATA posting is prefaced by a very long introduction by Chris Powell, that's just too long to cut and paste.  The above headline pretty much spells out the direction of this story, but Chris Powell's preamble is a must read as well.  The link to the GATA release is here.

Read more...

Sir Mervyn King: debt crisis is causing a dangerous 'dependence on central banks'

Just a day after the European Central Bank (ECB) provided a record €489bn (£407bn) of cheap loans to banks, the Governor of the Bank of England said the crisis had been made worse by “negative inter-linkages”. He added: “Dependence on central banks has risen and signs are intensifying that stressed financial conditions are passing through to the real economy.” Sir Mervyn was speaking in Berlin following a meeting of the European System Risk Board.

His comments were taken as a view on the ECB’s radical refinancing operation unleashed on Wednesday. The action, which saw 523 banks borrow nearly half a trillion euros, is known as the “Sarko trade” after French leader Nicolas Sarkozy said the liquidity would allow each state to “turn to its banks” for finance. Economists have warned that making banks buy risky sovereign debt will not help the crisis.

This story was posted late last night in The Telegraph...and is Roy Stephens third offering in this column.  The link is here.

Read more...

In near-bankrupt Greece, crisis spurs gold fever

Not all Greek myths are ancient.

In rural towns and villages, where millennia-old pottery shards and broken classical masonry are sometimes found, shepherds and farmers have similar tales to tell.

They cite the buried golden sow with its seven golden piglets (which made a poor farmer rich), the coin hoards guarded by dragons from the times of Alexander the Great or the Byzantine emperors, the gold plunder squirreled away by long-dead Turkish pashas or fleeing Nazi officers. All it takes, they say, is a lucky thrust of a shovel.

Legends like that have taken on a new life in debt-crippled Greece.

This very interesting AP story was picked up by finance.yahoo.com yesterday.  It was sent to me by reader Scott Pluschau...and the link is here.

Read more...

Rick Rule - Here is What Investors Need to Look for in 2012

“It’s going to be an interesting time, Eric.  This is going to be a really good year for gold and silver stock speculators and for gold and silver owners.  I think the gold price goes higher and the silver prices goes higher over the next two years, but I think it goes higher in extremely choppy fashion.”

Eric King sent me this Rick Rule blog last night...and it's certainly worth your time.  It's posted over at the King World News website...and the link is here.

Read more...

Coins in your pocket..."safety cookies" - Terry Coxon

Terry Coxon is the senior economist at Casey Research...and he had a very interesting special report posted on the CR website yesterday.  The headline reads "A simple plan to keep your assets safe from an out-of-control government".

This is a must read for all U.S citizens...and I thank my good friend Bron Suchecki from The Perth Mint for bringing it to my attention.  The link is here.

Read more...

Precious Metals 2012: Bullish and Bearish Arguments

After the sharp drop in precious metals recently, many people (including me) wonder what will happen next with Gold & Silver (& other PM's).

To be honest, I don't know where gold will be in 1 week or a 1 month from now. However, there are some facts that are compelling, which can help us in our decision-taking process.

In this article, I will describe both the Bullish & Bearish arguments for Gold, Silver and PM Stocks.

The author, Willem Weytjens, is unknown to me...but this most excellent even-handed presentation is well worth the read.  It's fairly long, but it's mostly charts...and lots of them.  This is Roy Stephens fourth and final offering of the day.  This essay is posted over at the safehaven.com website...and the link is here.

Read more...

Gold market manipulation losing force: Peter Grandich

Interviewed by Kevin Michael Grace at Resource Clips about the year in gold, market analyst and mining company consultant Peter Grandich, who spoke at GATA's Gold Rush 2011 conference in London in August, hopes for a shift from the paper to the physical market and notes that manipulations in the paper market, whose effects used to last for months, now may have much impact only for days or even hours.

The interview is headlined "Grandich on 2011" and it's posted at the resourceclips.com website.  I thank Chris Powell for providing the headline and the introduction.  It's worth reading...and the link is here.

Read more...

Naylor-Leyland tells CNBC Europe that gold is 'a rigged market'

CNBC Europe this week broadcast a spectacular interview with Cheviot Asset Management's investment director, Ned Naylor-Leyland, in which, amazingly, he was allowed to discuss the collusion of central and commercial banks "selling leveraged paper" in gold, to characterize this as "the modern manifestation of the London gold pool," to note that there may be as many as a hundred times more paper claims to gold than real metal is available, and to conclude that gold is "a rigged market."

Naylor-Leyland, who spoke at GATA's Gold Rush 2011 conference in London in August, added that market interest is shifting from paper to physical.

The interview, which I've been told has now been pulled from the CNBC website, is a little more than five minutes long and, fortunately, it's posted at the cheviot.co.uk Internet site.  Once again I thank Chris Powell for the title and introduction.  This is a must watch/listen...and the link is here.

Read more...

 

¤ The Funnies

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The Greatest Heist in World History…Exposed

When most investors hear the word “inflation,” they instinctively think of gold. But what if everything you knew about gold was untrue? What if…there was no gold in Fort Knox?

Here’s the story you haven’t been told…

 


 

¤ The Wrap

Every dollar the Federal Government does not take from us, every decision it does not make for us will make our economy stronger, our lives more abundant, our future more free. - Ronald Reagan

With this being another short report, I thought I'd throw in another Christmas-type song for your listening pleasure today.  This is 11-year old Anna Graceman...and if you couldn't see her, you'd never know her age.  It's hard to believe such a big voice comes out of such a little person.  Gifted children like her are rare...and one can only imagine how far she will go if fame and fortune shine their light on her in the years ahead.  I thank reader Eldon Johnson for sharing this 4:35 youtube.com video with us...and it's definitely worth a listen.  The link is here.

Considering the lack of price activity, there was a surprisingly large increase in gold's open interest in the CME's preliminary report early this morning.  Maybe it was spread trades.

Silver's price activity was far more pronounced than gold's...and silver's o.i. was up, but not by a lot.  All will be revealed in next Friday's Commitment of Traders Report.

One thing I did notice in the preliminary report was another big jump in gold open interest in the December delivery month...up 539 contracts.  That pretty much explains the surprising gold number in yesterday's Daily Delivery Report from the CME at the top of this column, where I reported that 577 gold contracts had been posted for delivery on Tuesday...almost all from Goldman Sachs.

First Day Notice for delivery into the January contract is next Friday.  January is not a big delivery month for either metal, but it will be interesting to see if there are any more December delivery surprises between now and then.

And while on the subject of the COT report, today's version will be posted at the CFTC's website at 3:30 p.m. sharp...and I'll be sitting in front of my computer waiting for it.

With the western world winding down for the Christmas break, I'm sure that absenteeism will be high in Europe, England and the U.S.A. as the Friday trading day wears on.

As of 5:08 a.m. Eastern time, both precious metals are in the plus column at the moment.  London has been open for about two hours...and trading volume in gold is tiny...and silver's volume is almost invisible.

That's all for today...and I'll see you here sometime on Saturday.

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