The gold price was quiet in Far East trading...but starting at 10:00 a.m. in London, it got sold off to its low of the day two hours later.
From there, a rally began that carried all the way through to the London p.m. gold fix at 10:00 a.m. Eastern time...although it did get sold off about nine bucks when the jobs report came out at 8:30 a.m.
But once the London fix was in...the bullion banks leaned on the price pretty hard...and the price moved sideways in choppy trading for the balance of the New York trading day. Volume wasn't overly heavy.
Silver, on the other hand, came under selling pressure the moment that the London market opened at 8:00 a.m. local time...3:00 a.m. Eastern...and hit its London low at noon, which is the London silver fix.
Like gold, it rallied from there, but got sold off hard on the release of the jobs number at 8:30 a.m. Eastern. The low [$34.92 spot] for silver was in at that point, but the subsequent rally was well contained...and silver barely made it above Thursday's close by the end of the trading day. Volume was moderate...and a hair less than Thursday's.
The dollar was steady all through Far East and London trading...but shortly after the jobs number was reported, the dollar headed south with a vengeance, losing almost 60 basis points on the day...and closing right on its low. It's obvious that with the lousy jobs numbers...along with a cratering dollar...the gold price wanted to break out strongly to the upside, but was prevented from doing so.
The gold stocks struggled mightily...but even though the metal finished up on the day, the stocks just couldn't hold their gains...with the HUI finishing down a smallish 0.27% on the day. Here's the 5-day HUI chart for the week that was.
Needless to say, the silver stocks had another losing day...but it could have been worse, as Nick Laird's Silver Sentiment Index was only down 0.71%.
The CME's Daily Delivery Report showed that 154 gold contracts were posted for delivery on Tuesday. The Bank of Nova Scotia and JPMorgan were the big issuers...and JPMorgan was the by far the biggest stopper...and in its proprietary [house] trading account. Another instance of JPM trading against its own clients. The link to the report, which is worth the look, is here.
There were no reported changes in GLD yesterday...but another chunk of silver vanished from SLV, as 1,757,819 ounces of silver were withdrawn.
The U.S. Mint reported selling 4,500 ounces of gold eagles yesterday...along with another 22,000 silver eagles.
The Comex-approved depositories received 621,411 ounces of silver on Thursday...and shipped 133,902 ounces out the door, for a net gain of 487,509 ounces.
Yesterday's Commitment of Traders Report [for positions held at the close of trading on Tuesday, May 31st showed that the bullion banks reduced their net short position in silver by a smallish 636 contracts. Since the big smack-downs in the silver price this week didn't start until Wednesday, we won't see much of a drop in the banks' net short position until next Friday's COT...and the cut-off for that report is Tuesday next week.
It was an entirely different story with gold, as the bullion banks increased their net short position by an eye-watering 23,271 contracts. A big chunk of that was the smaller traders [everyone but the '8 or less' bullion banks] selling out their long positions and taking profits. The bullion banks themselves didn't change their positions much.
Here's a long-term dollar chart [from T. Ferguson's website] that was sent to me by Alberta reader B.E.O. yesterday. There's no vertical or horizontal scale...but I don't think it really needs one, do you?
As I said in this column yesterday...I'm at the Vancouver Resource Conference until Tuesday....and this [along with Tuesday's column] was going to be as short as I could make it. I'm just going to link each headline, as I have no time to wordsmith preambles this early in the morning. I also apologize in advance that there are no accreditations given to any of my readers who were kind enough to share these stories with us.
For your weekend reading pleasure...
1] Pushing for a return to the gold standard - L.A. Times
2] If India and Pakistan Come to Nuclear Blows, Blame U.S. - Bloomberg
3] U.S. wealthy exit Swiss bank accounts: study - Chicago Tribune
5] Ron Paul dismisses speaker's debt cut demand - Bloomberg/GATA
6] Seasonal Gold Price Trends Favor Summer Purchases - USAGold
7] $8,000 gold & $400 silver - James Turk
8] The Road to Hyperinflation - James Turk
9] Libyan rebels broke despite pile of gold - AP/Yahoo
10] The counter-revolution club - Asia Times
11] The U.S. Postal Service Nears Collapse - Bloomberg/Businessweek
12] Interview with Chris Whalen - King World News
13] Interview with Jim Rickards - King World News
SLAM Exploration Ltd., SXL on TSX-V, is drilling for gold on its wholly owned Reserve Creek gold project in Ontario. All 16 of SLAM’s previous holes have hit gold mineralization including a 16.85 m core interval grading 16.45 g/t gold in hole RS1016. This included a bonanza intercept of 274 g/t over 0.5 m in hole RS1016. The previous hole, RS1015 hit similar mineralization ranging up to 107 g/t over 0.3 m within a 12.64 m interval grading 5.48g/t gold. SLAM has traced the Reserve Creek deposit by drilling over a strike length of 350 m and to a depth of 125 m. The deposit is open at depth and along strike.
The Company expects to complete the current 2,000 metre drilling program on the Reserve Creek gold project before Christmas. With $4M in the bank, the company intends to expand this program and sustain drilling activity through much of 2011. The Company is also drilling at Silverjack where SLAM hit high grade silver-copper-lead-zinc mineralization early this year. Seventeen holes hit high grade silver and base metals with assays ranging up 19 oz/ton silver, 2.69% copper, 14.60% zinc and 12.8% lead.
SLAM is poised for positive gold and silver results and expects to deliver a steady stream of positive news while precious metals continue their upward momentum.
Please visit our profile on Casey’s website to learn more about the company and request information.
Today's musical selection is one that's similar to one I ran about a month ago. It's three teenage Italian guys that are taking Europe by storm. They call themselves Il Volo....and they are dynamite. Here's the link...and be prepared to be blown away. I was...and I've been around!
Gold volume on Friday was around 145,000 contracts net of all roll-overs...but the preliminary open interest was up big...12,161 contracts, so it's obvious that JPMorgan et al threw everything they had at the gold price to prevent it from soaring to new highs. I'm sure that the final number on Monday will show a decrease...but I doubt it will be by much.
Gold's final open interest number for Thursday's trading day showed a decline of 7,118 contracts, which was no surprise...as I mentioned in my column yesterday, the preliminary o.i. number showed a "shockingly low increase of only 539 contracts."
Silver's net trading volume was a moderate 70,000 contracts, give or take...and the preliminary open interest number there showed only a moderate increase of 2,415 contracts. I was expecting worse.
Silver's final open interest number for Thursday showed an increase of 1,587 contracts...which was a big decline from the preliminary o.i. number of 4,804 contracts. Based on the price action, it's a distinct possibility that the o.i. increased because the tech funds were laying on short positions...but we won't know for sure until next Friday's COT report.
It's also a good bet, based on this past week's price action in silver, that we'll see another drop in the bullion banks' short position in that metal in next week's COT report as well.
Ted Butler's weekly report to his clients will be in my inbox later today...and I'll steal what I can and post it in my Tuesday column.
So, we are now officially in the "summer doldrums"...but you should have figured out by now that we are there only because of the brute force smack-downs in both metals that began on May 1st...and have continued almost without respite since then. There is nothing free-market about these summer doldrums at all. One can only imagine to what heights that both gold and silver would reach without the malignant intervention by JPMorgan et al. But this, too, shall pass.
Despite the horrific price action in both the metals and their shares, the time to buy anything is when there is 'blood running in the streets'. This is indeed one of those times.
So 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.
Enjoy what's left of your weekend...and I'll see you here on Tuesday.