I was delighted to see both gold and silver head higher in New York yesterday...but unhappy about the fact that the strong rallies that started before London opened early yesterday morning, were sold off pretty hard. As I mentioned at the start of this column, there was very big volume in both gold and silver yesterday...particularly in gold...so these rallies are obviously running into strong resistance from the usual traders in the Commercial category.
We still need to see both metals power higher from here in order to form a clear break out. Yesterday's price action in New York was a good start, but we'll need more price action like that...and soon.
All of yesterday's price and volume data will be in Friday's Commitment of Traders Report, if it's all reported in a timely manner, that is. And because of the holiday on Monday, yesterday was the cut-off for that report. With a new COT weekly cycle now starting, it will be interesting to see how JPMorgan et al allow gold and silver prices to perform during the next day or so.
Looking at overnight action, both metals got sold off a bit right from the open in New York at 6:00 p.m. Eastern time last night...and although they both recovered somewhat going into the London open, both got sold down again at the usual time...just a few minutes before trading began at 8:00 a.m. GMT. As I hit the 'send' button at 5:18 a.m. Eastern time, gold is down about seven bucks...and silver is down about 25 cents.
With the subdued price action, the volume numbers are lower than they were this time yesterday...but not by a lot, at least in gold. The roll-overs out of the March delivery month in silver are getting more frantic as the days go by. First Day Notice for March is next Wednesday, the 29th. As of this writing, there are still 94 silver contracts open in February...and it remains to be seen if the owners of these remaining contracts will sell, roll over, or stand for delivery. We'll know in the next five business days.
The dollar index is still hanging in there...very tight to the 79.00 mark for the third day in a row.
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See you on Thursday.
