If you think these two graphs are spectacular, wait until the see the one that I’ll be posting in this space tomorrow.

Note to all GSD readers:  Because of the gold conference in Vancouver this weekend, I will probably NOT have a column on Saturday…but if I do, it will be very brief. Ed

It was another nothing sort of day in the gold market on Wednesday, with the gold price trading in a fifteen dollar price range everywhere on Planet Earth…a range of less than one percent.

Gold closed at $1,658.90 spot…up $7.30 on the day…and net volume was decent at 128,000 contracts, a lot of which would have been of the high-frequency trading variety.

Silver had a bit more direction.  It got sold off at the London open…and you can see from the Kitco chart below that every rally attempt, no matter how tiny, ran into a not-for-profit seller.  The high price tick of the day [$30.73 spot] came at 12:45 p.m. Eastern time…and then basically traded sideways from there.

Silver closed at $30.52 spot…up 46 cents on the day.  It obviously would have done better if it hadn’t run into a determined seller every time it attempted to move higher.  Silver had an intraday price move of almost three percent.  Volume was pretty heavy at 39,000 contracts…about a 40% increase from Tuesday.

The U.S. dollar index had an almost straight-line decline of 55 basis points yesterday…and since midnight on Monday night, the dollar is down 1.1 cents.  That’s a lot.  It’s obvious from the Kitco gold chart, that neither the gold nor silver price have been allowed to respond in the manner that they normally would.  Here’s the 3-day dollar index.

The gold stocks were up about a percent by 1:30 p.m. Eastern time before they mysteriously got sold off a percent during the following hour.  But once that bout of selling stopped, the shares managed to crawl back into positive territory just before the close…and the HUI finished up 0.28%.

Even though the gold price is up a bit more than a percent this week so far…the gold stocks are down a bit more than a percent.  You’ll excuse me for thinking that someone is dicking with the gold price…and the shares.

The silver shares finished mixed…and Nick Laird’s Silver Sentiment Index closed up 1.31% yesterday.

(Click on image to enlarge)

The CME’s Daily Delivery Report showed that 58 gold and 23 silver contracts were posted for delivery on Friday.  In silver, it was the Jefferies, Bank of Nova Scotia, JPMorgan 3-ring circus once again…with Jefferies the short/issuer…and the two bullion banks as the long/stoppers…as per usual.  It’s been like that all through January.  The link to yesterday’s Issuers and Stoppers Report is here.

There were no reported changes in either GLD or SLV yesterday.

But there was another sales report from the U.S. Mint.  They sold another 16,000 ounces of gold eagles…along with 50,000 silver eagles.  Month-to-date the mint has sold 106,000 ounces of gold eagles…9,500 one-ounce 24K gold buffaloes…along with 5,172,000 silver eagles.  I’m only speculating here, but it’s my belief that a lot of this product is ending up in Europe.

The Comex-approved depositories did not report receiving any silver on Tuesday…but they did ship 464,284 troy ounces of the stuff out the door.

Silver analyst Ted Butler had his mid-week commentary to paying clients yesterday…and here are a couple of paragraphs about the Sprott Silver ETF [PSLV] Offering that closed yesterday…

“The important takeaway is that a decent size chunk of physical silver will be taken off the market. It’s an open speculation as to what impact this will have on the price of silver, both short and long term. My guess is that while it certainly can’t be considered negative in any way, there are obvious forces that would prefer to make it look like it has no effect. These forces will do what they can to mute the impact of a fairly large physical purchase. Unfortunately, these commercial crooks may have built up some physical reserves over the past six months or so and may be able to accommodate Sprott’s physical purchase without too much difficulty. A couple or a few more similar-sized purchases would have a big price impact, in my opinion.”

“I hope I’m wrong, but my sense is that Sprott is likely to get fairly quick delivery of whatever silver it purchases so as to avoid a repeat of the delivery delays that occurred the last time they purchased a chunk of silver. Eric Sprott has become an outspoken advocate of silver and antagonist against the silver manipulation…and I doubt the suppliers will risk delivery delays to his fund and give him the opportunity to point to tightness. I think that tightness is there, just that the sellers will be able to hide it a bit longer.”

John Embry called me yesterday…and he said that by the time the smoke clears, the fund should be looking to purchase about ten million ounces of silver, which is around 10,000 good delivery bars.  He said they would have sold a lot more silver if the shares hadn’t been sold at such a high premium [12.5%] to the spot price.  Here’s the press release on that, which I dug up over at the marketwire.com website yesterday.

About two hours after I wrote the above paragraph, Nick Laird advised me that the PSLV website has updated their silver stock by 9,258,000 troy ounces.

I don’t have a lot of stories today, which suits me just fine.

There are no markets anymore…only interventions. – Chris Powell, GATA

It was no surprise that the high of the day came just before the London open…and the low of the day came at the London p.m. gold fix at 3:00 p.m. GMT…or 10:00 a.m. Eastern time.  Once again the London p.m. fix was lower than the London a.m. fix.

The preliminary open interest numbers in gold showed a moderate increase in o.i….and silver’s open interest declined several hundred contracts.  The final open interest numbers for Monday and Tuesday showed a decent increase in gold open interest…and a smallish increase in silver’s open interest.  All of that will be in tomorrow’s Commitment of Traders Report.

Nick Laird has been busy the last couple of days…and had a whole pile of new charts for me to look at when I checked my e-mails on Wednesday when I got up.  I spent an hour on the phone with him earlier this morning…which was late Thursday afternoon on the east coast of Australia…and we had a lot to talk about.

By the time I was through talking to him, I decided that my Vancouver presentation will center around the data that he has provided…and I will spend very little time talking about the Commitment of Traders Report, as all this new data has eclipsed that.

Here are two more charts that will be in my presentation at the Casey Research pavilion at the Vancouver Resource Conference this weekend.  They may seem complicated at first glance…but they are not.  If you spend a few minutes studying them, it won’t take you long to see what the charts show.

The first graph shows the percentage gain or loss every year since the bull market in gold started in 1999…so you are looking at thirteen consecutive years of data.  Nick informed me that all this data came from the LBMA website, so it’s all official.

There are two bars for every year.  The green bar is the price gain or loss that year if you bought the London p.m. gold fix…and then sold at the London a.m. fix the following morning, a nineteen and a half hour time period.  The red bar shows the price gain or loss if you bought the London a.m. fix…and sold the London p.m. fix four and a half hours later.

The ‘click to enlarge’ feature come in real handy here. 

(Click on image to enlarge)

As Nick states in the two boxes on the graph…”Since 1999 there has been a cumulative upward bias on the price of the ex-London trading hours of +343%…with a cumulative downward bias on the price of the London trading hours of -151%.”  But it’s the comment in the other box that is the most damning…”As can be seen on an annual basis, London is short each and every year of the gold bull market.

As Nick also pointed out…”What are the odds that we can be in the biggest bull market in gold’s history…and the price between the a.m. and p.m. gold fixes has shown a price decline every single year for thirteen years in a row?”  That’s a good question!

Well, dear reader, it’s NOT possible unless the market is rigged seven ways to heaven…and the proof of that is staring you right in the face.

The next graph is a derivative of the first graph…and it shows the dollar gain or loss every year since the bull market in gold started in 1999…and it reads exactly the same as the percentage graph above.

(Click on image to enlarge)

As Nick points out on this graph…”Since 1999, there has been a cumulative upward bias on the price of the ex-London trading hours of +$2,426…with a cumulative downward bias on the price of the London trading hours of -$1,139.

Any questions?

If you think these two graphs are spectacular, wait until the see the ones that I’ll be posting in this space tomorrow.

In Thursday trading in the Far East, not much happened to the gold price.  There was a quick spike up at 9:00 a.m. in London…and that was quickly sold down.  The silver price didn’t do a thing until shortly after the London open…and then rose sharply to almost the $31 level before getting sold off to unchanged.  As of 5:25 a.m. Eastern time, gold’s net volume is about average…and silver volume is pretty chunky.  The dollar index is down about 20 basis points.

That’s all I have for today…and I await the New York open with more than the usual amount of interest.

I hope your Thursday goes well…and I’ll see you here tomorrow.

Sponsor Advertisement

Prophecy Coal Corp (TSX-V: PCY) is a Mongolian thermal coal producer with over 1.4 billion tonnes of surface minable thermal coal resources. Prophecy’s primary coal assets are the Ulaan Ovoo coal mine and the Chandgana coal property. Ulaan Ovoo has 209 million tonnes of resources and is operational (only the second mine in Mongolia to be commissioned by a Canadian company). The Chandgana coal property has 1.2 billion tonnes of resources and will feed the Chandgana 600 MW mine-mouth power plant, which Prophecy is developing. Prophecy also owns significant equity interests in Canadian nickel and PGM assets through a 45% interest in Prophecy Platinum Corp (TSX-V: NKL) and a 9.8% interest in Victory Nickel Inc (TSX-VI) and an 8% equity interest in a Canadian metallurgical coal exploration company, Compliance Energy Corporation (TSX-V-CEC). Overall, Prophecy’s Mongolian coal assets are strategically located to being a key supplier in meeting Asia’s growing energy needs. Please click here to learn more about Prophecy Coal.

(Click on image to enlarge)