Well, it was an interesting start to Far East trading on Monday morning… 6:00 p.m. Eastern time on Sunday evening. Both gold and silver gapped up… as the U.S. dollar gapped down. Gold’s low of the day [around $1,104 spot] was at precisely 11:00 a.m. in Hong Kong trading… and from there, gold rose for the next six hours… gaining about eight bucks in the process. Then, about half an hour after the London open, gold basically traded sideways for the rest of the of the Monday session… including New York. There was a brief price spike that started once the London p.m. gold fix [3:00 p.m. in London/10:00 a.m. in New York] was in… but the U.S. bullion banks made short work of that moments after London closed for the day an hour later. That price spike proved to be the high of the day at $1,115.90 spot.
Silver had a different kind of day. The low was basically Friday’s close in New York, as silver’s price gapped up to $17.00 and gave virtually nothing back for the next seven hours worth of trading. But shortly after Sydney closed for the day, silver began a slow rise that added about 15 cents to its price by the Comex open. The price jumped another 17 cents in the first 15 minutes of New York trading… flat-lined… and then took another jump once the London p.m. gold fix was in… with the peak price coming the same time as gold’s… shortly after London closed for the day. The high price spike around 11:15 a.m. Eastern was $17.45 before one of the usual not-for-profit sellers showed up. This is a different looking silver graph than we’ve seen in a while.
That’s the 24-hour silver chart. Here’s Kitco’s New York silver chart. Either there wasn’t a lot big buyers… or the price was tightly controlled. Or maybe it’s this writer’s imagination.
The dollar chart is what’s really interesting. As I mentioned [fleetingly] in the first paragraph was the gap down at the start of trading in the Far East on Monday morning… 6:00 p.m. Eastern Daylight time. Here’s the 3-day dollar chart. Note the gap down at precisely 5:00 p.m. Central Daylight time [6:00 p.m. in New York]. It looks like it was around 35 basis points. I can’t remember ever seeing a gap down open like that after a weekend. What caused it, or what it means, is beyond my pay grade… but it can’t be happy news.
The HUI looked it followed the gold price pretty closely on Monday. Stocks were up at the open, down into the London p.m. gold fix shortly after 10:00 a.m. local time, then rose smartly until the U.S. bullion banks put a swift end to that rise in the precious metals prices at 11:15 a.m. Eastern time yesterday morning. From there, the stocks drifted gently lower into the close… and managed to finish up 1.22% on the day.
As I mentioned in my Saturday column, Friday’s volume in gold was huge. The final numbers were very close to the preliminary numbers… 283,838 contracts… of which the vast majority were switches out of the April delivery month… or spread trades being put on or removed. Ted Butler said that Friday’s true volume was well under 100,000 contracts. Total gold open interest fell 2,314 contracts. And open interest for the April contract took another big hit… down 33,908 contracts… to 91,285 still left open. That number will fall again with Monday’s preliminary CME volume data. And as usual, I’ll have that at the bottom of this report when it’s released. Silver’s open interest fell another 750 contracts on volume of 2,938 contracts.
Monday’s CME’s Monday Daily Delivery Report showed that 10 gold and 23 silver contracts were posted for delivery on March 31st. The GLD ETF showed another jump in bullion inventory yesterday… this time it was 166,430 troy ounces… a hair over 5 tonnes. In the last six business days… 460,147 ounces of gold have been added to the GLD… 734,207 ounces since February 23rd. But not an ounce of silver has gone into the SLV since February 26th. As a matter of fact, 6.28 million ounces of silver have been removed from the SLV during that period. If you’ve been following Ted Butler’s weekly interviews with Eric King… no further explanation is needed from me.
Over at Switzerland’s Zürcher Kantonalbank yesterday, they reported the weekly changes in their gold and silver ETFs. Last week their gold ETF added 35,451 ounces… and their silver ETF added another big chunk as well. This time it was 318,444 troy ounces. I thank Carl Loeb for these weekly numbers. There were no further sales reported by the U.S. Mint on Monday… and the Comex-approved depositories added a very small 48,385 ounces of silver to their respective inventories on Friday.
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Since it’s Tuesday, I have a lot of stories for you today… and I’m going to start with the ones related to precious metals. Today’s first offering is a Bloomberg piece courtesy of reader Scott Pluschau. The headline reads ‘Gold Imports by India Jump Before 1 Million Weddings‘… ‘Purchases [from March 1st] until March 25th were between 28 and 30 tons, up from 4.8 tons a year earlier’… said Suresh Hundia, president of the Bombay Bullion Association. The link is here… and it’s worth the read.
The next piece is also a Bloomberg story. This one’s courtesy of Russian reader Alex Lvov. The headline reads ‘China Gold Demand May Double Within Decade, WGC Says‘… “China has an insatiable appetite for gold, which looks likely to continue in an environment where domestic mine supply lags behind demand,” the council said in a report today. “On the investment side, we see exponential growth,” Albert Cheng, the council’s managing director for the Far East, said in an interview in Beijing. This story is a must read as well… and the link is here.
Here’s living, breathing proof that truth is stranger than fiction. The next [and last] precious metals story is right out of a James Bond movie thriller. London metals trader Andrew Maguire, who warned an investigator for the U.S. Commodity Futures Trading Commission in advance about a gold and silver market manipulation to be undertaken by traders for JPMorgan Chase in February… and whose whistle-blowing was publicized by GATA at last Thursday’s CFTC hearing on metals futures trading… was injured along with his wife the next day when their car was struck by a hit-and-run driver in the London area. It took police cars and a helicopter to track the driver down, but they got him! I have two stories on this. The first is the GATA release headlined ‘CFTC whistleblower injured in London hit-and-run‘… and the link to that story is here. The second is a story out of Monday’s New York Post headlined ‘JPMorgan ‘chase’ story in UK‘… and that link is here. You can’t make this stuff up!!!
The next piece is from last Friday’s Financial Times in London. ‘The bond vigilantes are finally flexing their muscles. A long period of stability for the US government bond market showed signs of cracking [last] week as a lack of investor appetite for new debt sent the benchmark 10-year yield to its highest level since last June.’ Well, it’s finally happening. Foreign central banks and ‘investors’ are demanding higher interest rates. Shorting the U.S. bond market may be a profitable trade. The headline reads ‘Supply fears start to hit Treasuries‘… and the link is here.
It’s been a while since I posted an article about Greece… but the story hasn’t gone away. Here’s an offering posted at The Telegraph in London. It is, of course, by Ambrose Evans-Pritchard. The headline reads ‘Europe has left Greece hanging in the wind‘… ‘However you dress it, the Greek package agreed by EU leaders is a capitulation to German-Dutch demands… Far from stemming contagion, the deal leaves Club Med exposed. Underlying default risk has risen for Greece, Portugal, Italy and Spain, as well as for Ireland, Slovakia and Malta… The ‘rescue’ resolves nothing for Greece, either short-term or long-term.’ This story, courtesy of Craig McCarty, is a must read… and the link is here.
Here’s another story from The Telegraph. I stole this from yesterday’s King Report. It’s dated last Friday… and the headline reads ‘Naval battle between UAE and Saudi Arabia raises fears for Gulf security‘… ‘The United Arab Emirates navy is thought to have opened fire on a small patrol vessel from Saudi Arabia after a dispute over water boundaries. According to one report, two Saudi sailors were injured. The Saudi vessel was forced to surrender, and its sailors were delivered into custody in Abu Dhabi for several days, before being released and handed over to the Saudi embassy earlier this week.’ I had no idea that these two nations were at ‘daggers drawn’… as I thought that all these Arab countries were up in arms over Iran… not each other. Anyway, this story is well worth your time… and the link is here.
While we’re in the Gulf area… here’s another story from The Telegraph in London… this one sent to me by Australian reader, Wesley Legrand. The headline reads ‘Oil Reserves ‘exaggerated by one third’ – Sir David King‘. This is no surprise to me, as I’ve always had serious doubts about Middle East oil reserves, even before I read Matt Simmons excellent book ‘Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy‘. This article is also worth the read… and the link is here.
Last week [after running a few other alarming stories on oil] I mentioned that a subscription to Casey’s Energy Report might be in your best interest. These two previous stories are another couple of reasons that this world-class monthly report by senior energy strategist Marin Katusa might be worth investing in. Please do yourself a favour and check it out.
The next offering is an essay written by Gretchen Morgensen from the March 26th edition of The New York Times. Apparently the job creation bill that the president signed on March 18 makes it much harder for United States citizens to avoid taxes by hiding money in overseas bank accounts. As Morgensen says… ‘there is nothing more maddening than stories of tax-avoidance schemes created by fee-hungry bankers for well-heeled clients.’ The headline reads ‘Fair Game: Death of a Loophole, and Swiss Banks Will Mourn‘… and the link is here.
And lastly comes this piece from Paul Craig Roberts. It appears that this is his swan song… as the title and ending sure do sound like he has written his last. It’s posted over at globalresearch.ca… and the headline states ‘Good-bye: Truth Has Fallen and Taken Liberty With It‘. I thank Texas reader James Rodgers for bringing it to my attention… and now to yours. It’s a must read from one end to the other… and the link is here.
Billboard on I-70 in Missouri…
With March drawing to a close… and first notice day for April delivery almost upon us… the switching and spread trades the last few days have pretty much buried all regular trading activity. Preliminary volume figures for Monday show almost 300,000 gold contracts were traded yesterday, with less than 100,000 of that being real trading. Gold open interest for April plunged 43,251 contracts in this preliminary report, leaving 48,034 still open. Silver traded about 38,500 contracts on Monday… and about 15% of that was switches out of May [the next front month for silver] and into other months… principally July. As always, I look forward to Monday’s changes in open interest when they’re posted later this morning. I expect increases in both… especially in silver… but the large amount of spreads and switching going on at the moment may hide the real changes.
Unless I miss my guess, I don’t expect anything serious to happen in either gold or silver until these last few days of March are behind us… and maybe even the Easter long weekend. I could be wrong of course… and it wouldn’t be the first time. We’ll see.
Far East trading [plus early morning London trading] is pretty quiet in both metals. There’s not a lot of volume… and most of that is switches and spread trades. The dollar is down about 22 basis points as I write this… and both gold and silver are each up a bit. The dollar isn’t looking too healthy… and the Dow is looking really toppy on declining volume. Here’s the 3-year dollar chart once again.
Gold is now back above its 50-day moving average… but just barely. And after its big move yesterday, silver is now well above its 50-day moving average, as the tech longs start piling back into the market. [Who is going short against them?] There was quite a dichotomy between the gold and silver price action yesterday… and Ted Butler is hoping that this is the beginning of a trend. Me too.
That’s all I have for today… which was way too much.
I hope your Tuesday goes well… and I’ll see you here tomorrow.