Gold & Silver Daily
"All the precious metals have clearly broken out to the upside...and it just remains to be seen how long these rallies last, or are allowed to last."

¤ Yesterday In Gold & Silver

I'm happy that Thursday was a quiet day in the gold market, as not much happened...and it was much the same yesterday up until shortly after the Comex opened in New York at 8:20 a.m.

There was a small sell-off between 8:30 and 9:00 a.m. Eastern time that cancelled the smallish gain that occurred during London's early Friday trading session.

But once the New York low was in at 9:00 rallied quietly for the rest of the day...and ended the day virtually on its high.

Gold closed at $1,737.30 spot...up $16.80 spot.  Gross volume on Friday was beyond immense...around 344,000 contracts...with virtually all of it roll-over and spread related.  Volume on Thursday was equally huge.

On Thursday, the silver price was much more 'volatile'...or much more managed, if you prefer that description.  On Friday it traded within 20 cents of $33.50 through all Far East and early London trading, right up until midmorning in New York...and from that point it moved quietly higher, closing right on its high of the day at $33.99 spot...up 52 cents from Thursday's close.

Volume on Thursday was about 37,500 contracts...and on Friday it dropped down to 29,500 contracts.

But, according to Kitco, there was a time when silver spiked up to $34.10...and if it really did, it had to be on one of the price spikes in morning trading in New York.  Here's the New York Spot Silver [Bid] chart on its own.

The dollar and the gold and silver prices were pretty much joined at the hip all through yesterday's trading day...with their respective trading charts almost the exact opposites of each other.  The dollar index closed down 56 basis points on the day.

Here's the 6-month dollar chart.  Since its top on January 16th, the dollar is down three full cents...and its 50-day moving average is in tatters.

The stocks rallied smartly at the open...and by 11:30 a.m. in New York had pretty much topped out...and then traded sideways for the rest of the Friday session.  The HUI finished up 2.41% on the day...9.4% on the week...and 10% year-to-date.

The silver stocks did even better...and Nick Laird's Silver Sentiment Index closed up 3.55%.

(Click on image to enlarge)

Just as a point of interest, the HUI finished up 0.94% on Thursday...and the SSI finished up 0.29%.

The CME Daily Delivery Report on Thursday showed that 6 gold and 52 silver contracts were posted for delivery on Monday.  In silver, it was the usual Jefferies, Bank of Nova Scotia, JPMorgan trio once again.

Friday's Daily Delivery Report from the CME showed that 6 gold and 30 silver contracts were posted for delivery on Tuesday.  In silver, it was Jefferies as usual as the short/issuer...and JPMorgan was one of the long/stoppers.  But the Bank of Nova Scotia was a no show...and it was UBS as a stopper this time.  Now we're up to 1,243 silver contracts delivered in a non-traditional delivery month.  The link to yesterday's delivery action is here.

I spoke to Ted Butler about this yesterday morning...and he's been watching this show as well.  Like me, he doesn't know what to make of it.

On Thursday, the GLD ETF showed another increase.  This time it was a smallish 48,601 troy ounces.  There were no reported changes in SLV once again.

On Friday, the GLD ETF took in another chunk of gold.  This time it was a monstrous 320,763 troy ounces...a whisker under 10 tonnes.  As usual, there was no silver reported received by the SLV ETF.

Here's some more incredible news regarding GLD and SLV.  Since the end of December, the GLD ETF has added 531,087 troy ounces of gold.  The SLV ETF has had 3.06 million ounces of silver withdrawn over the same period of time.

Since the close of trading on December is up about $170...a bit over 10%.  Silver is up about $6 from the close of the year.  That's well over 20%.  GLD has added over a half a million ounces of gold since then...and SLV has had more than 3 million ounces withdrawn???  Something stinks to high heaven.

Ted Butler also mentioned yesterday that the short position in SLV had risen by 6.71% over the past two weeks.  Over at the website they're showing that traders are now short 26.57 million ounces of silver, an increase from 24.90 million ounces.  That's 8.7% of the entire SLV ETF.  That's outrageous...and is probably much worse since the increase in price this week.

It appears obvious that there's no physical silver about, so the authorized participants have to short the shares in lieu of buying the metal itself.

Can you imagine, dear reader, if these authorized participants had to go into the market and buy the physical metal to make good on these short positions, what the price of silver might be?  That 26.57 million ounces is two weeks worth of world silver production...and then add the more than 5 days of world silver production that Eric Sprott just bought last week as well.

Even the short position in GLD shares is a very high 4.8% of GLD's physical gold stash.

The U.S. Mint sold 100,000 silver eagles on Thursday...and that was it.  On Friday they reported selling 6,500 ounces of gold eagles...500 one-ounce 24K gold buffaloes...and no silver eagles.  Month-to-date the mint has sold 121,000 ounces of gold eagles...11,000 one-ounce 24K gold buffaloes...and 5,697,000 silver eagles.

The Comex-approved silver depositories were busy on both Wednesday and Thursday.  On Wednesday they reported receiving 1,348,827 ounces of silver...and shipped 960,057 ounces of the stuff out the door.  On Thursday they received 1,251,791 troy ounces...and shipped a tiny 7,044 ounces out the door.  The link to Thursday's action is here.

I'm just guessing here...and Ted Butler would know the exact numbers...but in the last six weeks or so, it appears that the Comex-approved depositories have taken in about 20 million ounces of silver...and the question that just begs to be asked, is the following...How come this silver is ending up in the Comex...and not in JPMorgan's vaults in London where SLV's silver is stored?  Not only has 3 million ounces of silver been withdrawn from SLV since the beginning of the year...but the short position in SLV is now north of 26 million ounces.  Something just doesn't compute.

The Commitment of Traders Report [for positions held at the close of trading on Tuesday, January 24th] showed that the Commercial net short position in silver increased by 4,639 contracts...and now sits at a smidgen over 25,000 contracts, or 125 million ounces.  That's about 55 million ounces off rock bottom, but still a bullish number.

Ted said that all the increase in the Commercial net short position came from the raptors [small traders] selling their long positions to the technical funds [Non-Commercials] for a profit as prices rose.  The thing that pleased Ted the most was that there was very little technical fund buying on the price break above the 50-day moving average on Friday, January 20th.  That may have changed since the Tuesday cut-off, but we'll have to wait until next Friday's COT report to know for sure.

It was a similar circumstance in gold...but the Commercial net short position only increased by a smallish 6,792 contract which, considering the price move over the period, wasn't a heck of a lot.  But, like silver, we'll have to wait and see what happened after the Tuesday cut-off to know who did what during the surprise Wednesday trading day, which occurred the day after the cut-off.

And all this enormous volume we've had since the Tuesday cut-off will also be in next week's all the volume and open interest data right up to [and including] the January 31st First Day Notice for delivery into the February gold contract.  So next Friday's COT report should be a sight to see...and will hopefully tell us a lot.

Ted Butler's report on the COT in his report to paying subscribers today will be definitive, of course...and I'll steal what I can for my Tuesday column.

I have a lot of stories today...and I hope I'm well enough to post them all.


¤ Critical Reads

Skipping the Political Pomp

Tim Thomas is the All-Star goaltender for the Boston Bruins, winners of the National Hockey League’s 2011 Stanley Cup — which “was won by defense as much as by offense,” President Barack Obama said on Monday at a White House event honoring the team:

Tim Thomas posted two shutouts in the Stanley Cup finals and set an all-time record for saves in the postseason, and he also earned the honor of being only the second American ever to be recognized as the Stanley Cup playoffs MVP.

But Thomas wasn’t there to hear the president’s praise. He chose not to attend.

This story has been around a few days, but I had no room for it in my weekday column, so here it is now.  It takes gonads the size of basketballs to do what he did...and I salute him for it, as he did the right think in my opinion.

The story was posted over at the website...and I thank Casey Research's own Doug Hornig for passing it along.  The link is here.


Dow Highest Since May 2008? Maybe Not?

The headlines are crowing of the magnificent CAT earnings (channel stuffing?) which in turn is helping the Dow reach its highest point since May 2008 (CAT is responsible for 27 of the Dow's 30 point gain today alone). This must be the signal that we-the-consuming-people need to borrow-and-spend again right? Well, no. Unfortunately, as many already know, the process of indexing is implicitly flawed in many ways - most importantly survivorship bias.

If we compare the performance of the components of the Dow at the start of 2008 to the actual Dow index performance, there is a very significant divergence of around 7% (or around 900 points). This is actually understating the difference (as it is an average) as we note that 5 of the 30 names from 2008 have lost more than 70% of their value (GM, AIG, C, BAC, and AA) since January 2008 (averaging -88% among those).

This story is well worth your time...and even if you only skim it, it's an eye-opener.  I thank Australian reader Wesley Legrand for sending it...and the link is here.


Central bank policy is obscuring market values, Warsh tells Stanford audience

Central banks are now so heavily influencing asset prices that investors are unable to ascertain market values, former Federal Reserve Board of Governors member Kevin M. Warsh told the Stanford University Institute for Economic Policy Research tonight.

This influence is especially evident, Warsh said, with the Fed's purchase of government bonds, which has made it impossible for investors to use bond prices to learn anything about markets.

Warsh, who disclosed during GATA's freedom-of-information litigation with the Fed in 2009 that the central bank has secret gold swap arrangements with foreign banks, added that the Fed is trying to do too much and the rest of the government not enough to encourage economic growth.

While he said nothing explicitly about gold, Warsh seemed to come pretty close to GATA secretary/treasurer Chris Powell's observation almost four years ago that there are no markets anymore, just central bank interventions.

This GATA release is worth the read...and the link is here.


Fed disinformation hides greater inflation, Rickards tells King World News

Geopolitical analyst James G. Rickards told King World News yesterday that the Federal Reserve is engaged in a massive disinformation campaign about its intentions, which are far more inflationary than believed. Rickards adds that the U.S. economic embargo of Iran may hasten the move of other countries away from the dollar as a trading currency.

This must read KWN blog is linked here...and I thank Chris Powell for providing the introduction.


U.S. Problem Bank List Hits 15-Year High

The number of problem banks jumped by 36% in the second quarter, hitting 416, while assets held by such banks also saw a whopping increase, rising 36% to $300 billion, the FDIC said Thursday.

The story is posted at the website...and you have to register or subscribe if you want to read the whole story.  However, the first paragraph is bad enough...and the link to the hard copy of that, is here.

Here's a video on a very similar topic.  This one is headlined "1,000 Banks to Fail in Nest Two Years: Bank CEO"...and that link is here.  Both links came out of yesterday's edition of the King Report.


China’s very mysterious data

A quick observation.

I could not help noticing that China’s imports from Japan fell 16.2pc in December. Imports from Taiwan fell 6.2pc.

The Shanghai Container Freight Index fell 1.4pc to a record low of 919.44 in November, after sliding relentlessly for several months. It has picked up slightly since.

The Baltic Dry Index measuring freight rates for ores, grains, and bulk goods, has fallen 44pc over the last year. Kasper Moller from Maersk in Beijing said weak Chinese demand for iron ore was the key culprit.

Chinese electricity use was flat in over the Autumn, with a sharp fall in the (year-on-year) growth rates from 8.9pc in September, to 8pc in October, and 7.7pc in December.

Residential investment has been contracting on a monthly basis, and of course property prices are now falling in all but two of China’s 70 largest cities.

So how did China pull off an economic growth rate of 8.9pc in the fourth quarter?

Beats me.

This must read Ambrose Evans-Pritchard blog was posted in The Telegraph yesterday...and is courtesy of Roy Stephens.  The link is here.


Revenge for EU Sanctions: Iran Set to Turn Off Oil Supply to Europe

The European Union embargo on Iranian oil will only come into effect in six months, but the leadership in Tehran wants to act first: Exports to Europe are set to be halted immediately. It is a move which could mean added difficulties for struggling economies in southern Europe.

It's a move which has tit-for-tat written all over it, but one which could nonetheless have a serious impact: The Iranian government wants to present a bill to parliament this weekend calling for an immediate halt to oil deliveries to Europe. The move, with most reports citing the Iranian news agency Mehr, has come about in response to the EU agreement to impose sanctions against Iran, which were announced earlier this week.

We'll find out how this all turns out tomorrow.  This must read story appeared on the German website yesterday...and it's Roy Stephens first offering of the day.  The link is here.

Roy also sent me a similar story out of the Asia Times that was posted early Saturday morning.  It's headlined "Iranian Oil Embargo Blowback"..and the link to that Pepe Escobar offering is here.


Growing elite opposition to strike on Iran

Like the imminent prospect of one's hanging, to paraphrase the 18th century British essayist Dr (Samuel) Johnson, the suddenly looming possibility of war can concentrate the mind wonderfully.

If that aphorism didn't apply in the run-up to the United States invasion of Iraq nearly 10 years ago, it appears to be the case now for key sectors of the US foreign-policy elite - notably, liberal hawks who supported the Iraq war - with regard to the sharp rise in tensions between Iran and both the US and Israel earlier this month.

Amid a crescendo of threats by senior Israeli officials to attack Iran's nuclear facilities, the murder, presumably by Mossad, of a fifth Iranian nuclear scientist in the past several years, and a sharp escalation of Western economic sanctions designed to "cripple" Iran's economy, Tehran's threat to close the Strait of Hormuz brought the until-then hypothetical possibility of war - whether by design, provocation or accident - sharply into view.

This another Asia Times story...and it's also courtesy of Roy Stephens.  The link is here.


Looking into the Syrian abyss

Hatay province southern Turkey - Five weeks before the beginning of Syria's unarmed uprising against the rule of President Bashar al-Assad, Turkish Prime Minister Recip Tayyip Erdogan and his Syrian counterpart Prime Minister Mohammad Naji Otri laid a symbolic cornerstone for the so-called "Friendship Dam" that was to help control the course of the Orontes River (known as the Asi River in Turkey) that flows through what has traditionally been - and is once again - a bitterly divided Levant region.

But when Syria began convulsing in the death throes of Nasserism that rocked the Arab world throughout 2011, Erdogan quickly cooled on Assad by the end of April when it became evident reprisal acts by that regime would not simply let up on their own.

The ongoing crisis in Syria has reignited old feuds. The border has been heavily militarized on the Syrian side since the influx of refugees - including a number of army defectors - from Jisr al-Shigour and the surrounding rural areas of the troubled Idlib governorate since a siege in early June.

This very interesting 2-page essay is background information on what's happening in that part of the world...and is well worth the read.  I thank Roy Stephens once again for sending me this third story from the Asia Times website.  It was posted on their website earlier this morning...and the link is here.


Speech in Davos: Merkel Refuses Role of Rescuer in Euro Crisis

As fears mount that the euro crisis could trigger a global recession, all eyes are on Germany to take an even stronger lead in the rescue efforts. But Chancellor Angela Merkel has disappointed these expectations, warning against placing too many burdens on Germany.

Merkel insisted that the country was prepared to do what it takes to save the euro, but the comments that followed showed she wasn't ready to get overly ambitious on that front.

"Germany is thought to be especially strong," she said, adding that this is not entirely wrong. But when Germany makes a promise "that through tough attacks on the market is also not redeemable, then Europe has a totally open flank."

The comment echoed another she made in an interview she gave on Wednesday to six European newspapers, including German daily Süddeutsche Zeitung, when she warned about placing too many financial burdens on Germany. "Amid all the billions in aid and rescue funds, we Germans also must watch that we do not lose our strength in the end -- because our possibilities are not endless either, and that would not help Europe as a whole," Merkel added. "We show solidarity, but must not forget (countries') own initiative."

This Roy Stephens offering was posted on the website on Thursday...and the link is here.


The World from Berlin: 'There Is No European Emergency Plan'

Greece is struggling to reach an agreement on debt relief with its private-sector creditors. But even if it ultimately does, the country may need vastly more funding than has been envisioned so far. German commentators on Friday say it's time for a bit of honesty from Europe's leaders.

Greece needs more money. That would seem to be the growing consensus in Europe as negotiations over debt relief between Athens and the private sector drag on. On Friday, Jean-Claude Juncker, who chairs meetings of euro-zone finance ministers, became the most recent European politician to sound the warning bell.

"If Greece's ability to sustain debt is proven and there is an overall understanding with the private sector, the public sector will also have to ask itself whether it will not provide help," he told the Austrian daily Der Standard in an interview published Friday.

A successful conclusion to the negotiations is necessary before a final agreement can be reached on a second bailout package for Greece. With Greece facing €14.5 billion in bond redemptions in March, time is of the essence. The European Central Bank is also currently considering whether to accept losses on the Greek bonds it holds.

Greece is toast.  The link to the story from yesterday is also thanks to Roy Stephens...and the link is here.


Greek debt deal hit by eurozone ratings downgrades

Hopes of a Greek debt deal were undermined on Friday night after Fitch downgraded the ratings of five eurozone countries, including Italy and Spain.

Following similar action from rival Standard & Poor's (S&P) earlier this month, Fitch downgraded Italy, Spain and Slovenia by two notches and Belgium and Cyprus by one notch. Fitch took no action on France's AAA credit rating despite S&P downgrading the country two weeks ago.

The rating agency warned that the eurozone crisis would only be resolved "as and when there is broad economic recovery" and with "greater fiscal integration".

It was also being reported last night that the German government wants Greece to hand over control of tax and spending decisions to a 'budget commissioner' appointed by the rest of the eurozone, before the country gets its second bail-out.

This story was posted in The Telegraph just before midnight last night...and it's another Roy Stephens offering.  The link is here.


The European fallacy of Ireland and the Baltics

"This could be a wake-up call to those who think aggressive fiscal tightening alone will stabilise public sector finances. By following the German orthodoxy, much of the euro area is now caught up in a downward debt spiral," said Marchel Alexandrovich from Jefferies Fixed Income.

Ireland and the Baltics have all been subjected to brutal contractions. As small open economies with flexible labour markets, they have survived this shock.

Survival does not in itself vindicate the policy. We usually require a higher standard.

In the case of the Baltics, the proper question to ask was whether it was worth causing a violent rise in unemployment for the sake of a euro-peg and the sanctity of the EMU project. Output has not regained its former level. The economies have suffered lasting damage, and a great number of lives have been blighted.

This Ambrose Evans-Pritchard blog was posted on The Telegraph's website yesterday...and I thank Roy Stephens, once again, for bringing it to my attention.  The link is here.


India open to all mechanisms to buy Iranian oil

Unfazed by the US and EU sanctions, India on Thursday said that it is open to all mechanisms for payment, "whatever it takes," to buy Iranian oil as it contributes around 12 per cent of New Delhi's oil imports and it's difficult to find replacement on this scale.

It could include a mix of options that will enable India to buy Iranian oil without violating the UN sanctions, highly-placed government sources told a day after an Israeli website suggested that India has agreed to pay Iran in gold for oil purchases.

Sources added that India is confident of finding "a way out" to buy Iranian oil without being seen as breaker of UN sanctions.

All options are open, said sources involved with decision-making on this sensitive issue. They neither confirmed nor rejected the option of paying for Iranian oil in gold.

This 'oil for gold' update was filed from New Delhi on Thursday evening...and is posted at The Economic Times of India...and I thank reader Avinash Raheja for sharing it with us.  It's worth the read...and the link is here.


Volcker confirms central bank need to suppress gold to stabilize exchange rates at 'critical point'

Yesterday, former Federal Reserve Chairman Paul Volcker defended government intervention in the gold market to counter "exchange rate instability at a critical point."

Volcker's comments came in response to inquiry from the German freelance journalist Lars Schall, who noted GATA's reference to Volcker's expression of regret, recorded in his memoirs, about the failure of Western central banks to intervene to suppress gold prices during a currency revaluation in 1973. Volcker's support of gold price suppression was cited by GATA's Chris Powell in his address to the Vancouver Resource Investment Conference last Saturday:

In his comments to Schall yesterday, Volcker added that, "to the best of my knowledge," the United States has not intervened in the gold market for more than 40 years.

That, dear reader, might be close to a true statement, as most of the intervention is done in London between the a.m. and p.m. gold fixes.  I spoke on this very issue during two of my presentations in Vancouver last weekend...and I have more on it the next story.  The link to this must read GATA release is here.


The overnight gold trade that is up 1,700% since 2001

Benzinga Radio's Luke LaVanway this week interviewed Sam Kirtley of SK Options Trading in Wellington, New Zealand, about profitably trading the gold price suppression that constantly takes place while the London and New York markets are open, a trading plan drawn largely from the work of GATA board member Adrian Douglas, editor of the Market Force Analysis newsletter.

"What really has startled us - and we were astounded by the returns in August 2010 - is that not only has the discrepancy increased, but it's arguably increasing. As you mentioned a $100 million fund starting in 2001 doing the strategy would be worth 2.6 billion [2010]. Well if that fund had continued on for the last year and a half or so, it would now be worth $5.2 billion. So that's an increase of 143% in just over a year, which is quite startling really."

This is an absolute must read, of course...and my thanks to Mesa, Arizona reader Jim Word who sent me the Benzinga interview...and shortly thereafter it ended up as a GATA release.  The link to that is here.


Central-Bank Gold: Joining the Dots

But just as in late 2007 - from where gold began a 55% run inside 6 months - this week the price of gold bullion jumped on news that is fundamental: the price of money, specifically Dollars, the world's #1 currency for trade and central-bank reserves.

Back in 2007, the catalyst came as a baby-step rate cut of 0.25%, signaling the Fed's switch from raising to destroying the returns paid on cash savings. Now the Fed's new zero-rate promise "took gold comfortably clear of the 50, 100 and 200-day moving averages, and opened up some big targets to the upside," says one London technician. The previous ceiling of $1700 has become a support level according to bullion bank Scotia Mocatta, "with further key support at the 200-day moving average at $1645."

Whatever you make of such numbers, it's worth stepping back to see the wood for the trees. Because the trend in who's buying gold, and why, is so plain to spot that you hardly need join the dots.

This longish Adrian Ash essay was posted over at the website yesterday and is definitely worth your time.  It's another Roy Stephens offering...and the link is here.


Hedge Fund Guru Sees Gold Price Soaring

DAVOS, Switzerland—In the current uncertain environment, one hedge fund guru is in no doubt where investors should put their money – gold.

The fund manager, who wishes to remain anonymous, was unequivocal in his belief and was bullish on the longer-term outlook for the value of the precious metal: “Thousands of dollars per ounce,” he says. “Thousands.”

By the end of 2012, he sees the price of gold at between $2,000 and $3,000 per ounce. Even the bottom end of that range would represent a handsome gain. On the New York Mercantile Exchange Thursday, gold was trading at $1,726.10 per ounce.

This short 5-paragraph story was posted in Barron's on Thursday afternoon...and you've already read three of them.  This is Roy Stephens final offering of the day...and the link to all five paragraphs is here.


Four King World News Blogs/Interviews

Because I felt like I was on death's door on Thursday night, a lot of stories that should have been posted in Friday's column, all got shoved into today...and these are four of them...and I'm posting them all under one heading: 1] Rick Rule - Monetary System is Based On Confidence, Fraud & Force. 2] Jim Sinclair Audio Interview. 3] Eric Sprott Audio Interview. 4] Gerald Celente - War, BAnk Runs, Riots & Gold Going Mainstream.

I haven't had time to read or listen to any of them yet, but I'm sure they're more than worth your while.


James Turk: Fear Index shows gold is undervalued

Gold remains undervalued and is not in a bubble, GoldMoney founder and GATA consultant James Turk wrote last night, testing the price against his "Fear Index." The headline on his commentary is "Fear Index Shows that Gold Is Undervalued" and it's posted at the GoldMoney Internet site.  It's a must read and the charts alone are worth the trip.  The link is here.



¤ The Funnies

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¤ The Wrap

The boom can last only as long as the credit expansion progresses at an ever-accelerated pace. The boom comes to an end as soon as additional quantities of fiduciary media are no longer thrown upon the loan market. But it could not last forever even if inflation and credit expansion were to go on endlessly. It would then encounter the barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system. - Ludwig von Mises

Besides my 'blast from the past'...posted just below this...I received this hilarious video from reader Dave Delve before I left for the Vancouver conference last weekend.  I've been just itching to post it...and today's the day.

I'm not sure if John Cleese [of Monty Python's Flying Circus fame] had a brother or not...but if he did, this would be the he certainly deserved a guest spot on that show after this performance from 1986.  It's too bad that the series ended in 1974.  The skit goes like this...these three German shepherds walk into a bar, see...and the link to this must watch video [which has Dutch subtitles] is here.  Make sure you've got your speakers turned up.

Today's 'blast from the past' comes from 1975...and if you do the math, that's thirty-seven years ago.  This group had several hits...and this piece is probably the best known.  The link is here.

Well, it was interesting week...and I must admit that I was quite expecting how it all turned out.  All the precious metals have clearly broken out to the upside...and it just remains to be seen how long these rallies last, or are allowed to last.

Certainly the Commitment of Traders is set up for a blast to the upside...and the economic, financial and monetary conditions all over Planet Earth are imploding on all fronts.  Then there's the problems in Syria and Iran overhanging the whole thing...and let's not forget about the U.S. dollar.

The situation in silver is getting ever stranger with the passage of time.  Twenty million ounces [or thereabouts] being deposited into the Comex...and large outflows from SLV so far in 2012, with an ever-increasing short position on the SLV ETF as prices rise.  Eric Sprott and the U.S. silver eagle program have gobbled up more than 16 million ounces since the beginning of January.  All this is just the big stuff I can see.  Solid retail demand for silver, other than silver eagles, is ongoing.  How this activity manifests itself pricewise in the future, is still a big unknown...but bears watching closely.

The preliminary open interest numbers for the Friday trading day showed that gold's o.i. was only up a few thousand contracts...and silver's o.i. was only up a few hundred contracts.

The final open interest numbers for Thursday showed minor declines in both metals...and I wouldn't be at all surprised if Friday's final open interest numbers showed declines as well.  But, as I said before, the meaning of all this won't be know until next Friday's COT report.

With silver up about eight bucks from it's late-December low...and gold up about a bit more than $200 from that same low on December 29th...both gold and silver [along with platinum] are about to head into overbought territory on the charts.  It remains to be seen if we have a small sell-off at this point, or some future point in the days and weeks ahead, to 'relieve' this 'condition'.  Here's the 6-month silver chart as a 'for instance'...

(Click on image to enlarge)

It all makes for interesting times ahead...and with the Chinese New Year now just past, the 'Year of the Dragon' may live up to its reputation.

As much as I hate to keep beating this story to death, there's still time to either re-adjust 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] 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.

Before closing, I'd like to thank all those readers who were kind enough to send me everything from good wishes for a speedy all the home remedies one could ask for.  I appreciated every one.

I'm still 'all in'.