Gold got hit for over five bucks about two hours after Far East trading began on Monday morning…but began to recover shortly after 10:00 a.m. in Hong Kong trading. Then, minutes before 9:00 a.m. in London trading, someone hit the ‘buy dollar/sell gold’ button. This dip lasted until about half an hour before the Comex opened… and this proved to be gold’s low for the day around $1,182.00 spot. But from there, gold rose in fits and starts right through the end of Comex trading and into after-market electronic trading. Gold’s peak price [$1,198.00 spot] came shortly after 4:30 Eastern time. From there it got sold off about five bucks going into the close of trading at 5:15 p.m.
Silver took off right from the Far East open in their Monday morning. This rather impressive rally also died at the same time as the gold rally… minutes before 9:00 a.m. in London yesterday morning… probably by the same bullion bank[s] that hit the ‘sell gold/buyer dollar’ button that I referred to in the previous paragraph. Silver’s New York low of $17.71 spot was minutes after the Comex began trading… but it’s absolute low on Monday was the Far East open… which was the Friday night close at $17.64 spot. The silver price made it as high as $18.06 spot… but wasn’t allowed to close there.
Today is option expiry in gold and silver for the June contract… and I’m sure that the bullion banks in New York… led by JPMorgan… will fight like hell to make sure that the huge number of $1,200 gold call options finish out of the money by the end of Comex trading tomorrow. It should be quite a battle… and as I scan the trading activity in Hong Kong right now… I can see that the fight has already begun.
For a change, gold and silver price pretty much followed what the dollar did yesterday… but that sharp rise in the dollar that started shortly after the London open looked a little contrived to me… as the metals got hit exactly the same moment that the dollar turned up. As I said, someone hit the ‘buy dollar/sell precious metals’ button at the same time.
The HUI was up a reasonable amount throughout the entire day… but the selling pressure began about 15 minutes after gold and silver reached their peaks… and got sold off with the general equity markets going into the close of trading. The HUI finished up only 0.54% on the day.
Preliminary volume figures for Monday’s trading shows that a monstrous 253,580 contracts were traded in gold. But when you take out the roll-overs… volume fell dramatically to an around 110,000 contracts… which is pretty light. Silver’s volume was also pretty light… 29,710 contracts… and once you take out the roll-overs… real volume traded fell to 22,000 contracts. So, all in all, volume wasn’t overly heavy yesterday… and it didn’t take a lot of contracts to move the price either higher or lower.
The CME’s Delivery Report for Monday showed that 16 gold and 26 silver contracts were posted for delivery on Wednesday. The link to the report is here. The GLD took in another big chunk of gold yesterday. This time it was 538,137 troy ounces. This is a rather impressive performance considering how badly the gold price has been hit during the last week or so. There were no reported changes in SLV. And, for whatever reason, the Zürcher Kantonalbank did not have a report for last week. Hopefully they’ll have something to say for themselves today.
But the U.S. Mint had another big jump in their three big bullion products. There were another 15,500 one-ounce gold eagles sold… 5,000 24-k gold buffaloes… and a huge 459,500 silver eagles reported sold on Monday. Month-to-date, these three items total 158,000… 66,000… and 3,500,000 respectively. These are serious numbers, dear reader.
There was also a lot of action at the Comex-approved depositories on Friday as well. By the time the smoke had cleared, they had received another 857,779 ounces of silver into their inventories. The action was made even more frantic by the fact that there was no action at all in the Delaware depository. The Metal Depository Report is worth looking at… and the link is here. This activity makes it even more obvious that nobody currently holding Comex Registered Warehouse Receipts wants to sell at today’s prices… and they have to bring in silver from the outside in order to meet delivery requirements.
I have a lot of stories for you today, so I hope you have the time to read them all.
On Saturday night, James Turk of goldmoney.com… and consultant to GATA, wrote that silver’s ‘huge accumulation pattern’ of the last three years is almost finished and as a result ‘silver is inching closer to an upside breakout.’ That’s the headline on Turk’s commentary and you can find it linked here. This short piece [and wonderful graph] is definitely worth your time.
This gold-related item showed up in Friday’s edition of the Financial Times in London. The headline reads ‘The only currency that can’t be printed on a whim‘… and the link is here.
The next story is a Bloomberg piece from yesterday. It was sent to me by quite a few readers… but the first one through the proverbial door was reader Danny Cheung. The story starts off with this rather startling sentence… ‘Speculators are buying gold faster than the world’s biggest producers can mine it…’ That’s been the case for a long time, dear reader, but with the Fed, the Treasury and the major bullion banks sitting all over it… that fact is not allowed to manifest itself in the price. The rest of the article is just as interesting… and the headline reads ‘Gold Rising as Euro Weakens Spurs More Speculation‘. This article is also well worth your time… and the link is here.
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Here’s a gold-related story posted over at thestreet.com of all places. This is a longish article posted yesterday that touches all the bases. The headline reads ‘Top 5 Reasons Gold Prices Move‘… and the link is here.
Does the name Nick Leeson ring a bell? It should. He destroyed Britain’s Barings Bank all by himself and ended up in the crowbar Hilton for a spell. They made a movie out of it called Rogue Trader. Here’s an interview with the man himself. Gold and other market manipulation, GATA, and the British gold dishoarding of a decade ago come up in this interview done by Mark O’Byrne, executive director of the Anglo-Irish bullion dealer GoldCore. The headline reads ‘Interview with Nick Leeson on Gordon Brown, GATA and Gold‘. The link is here.
Here’s a story from the Sunday evening edition of The Telegraph in London. It is, of course, by Ambrose Evans-Pritchard… courtesy of reader Roy Stephens. ‘Investors are braced for fresh turbulence in European bank shares after Spain’s authorities stepped in to rescue Cajasur, one of the country’s largest regional lenders.’ The headline reads ‘European bank jitters as Spain steps in to save Cajasur‘. Most of E-A’s articles aren’t very long… and this one isn’t either. But it’s a must read… and the link is here.
This next story is also about the big problems in Europe. It’s a UPI piece that was posted in the wee hours of Sunday morning from Milan, Italy… and written by UPI Editor Emeritus, Martin Walker. Considering his title, I’d say this guy has been around the block a few times… and I would take what he has to say pretty seriously. The piece is entitled ‘Walker’s World: Euro’s Crisis Deepens‘. I once again thank reader Roy Stephens for digging this item up… and the link to this must read story is here.
The next piece is from Saturday online edition of The Wall Street Journal. I certainly don’t agree with Seth Klarman’s opinion on gold… but his letter to clients where he compares the financial markets to a Hostess Twinkie, is right on the money. ‘There is no nutritional value,’ he said. ‘There is nothing natural in the markets. Everything is being manipulated by the government.’ He added, ‘I’m skeptical that the European bailout will work.’ Mr. Klarman is president of the Baupost Group, an investment firm in Boston that manages $22 billion of his client’s money. The headline reads ‘Legendary Investor Is More Worried Than Ever‘… and the link is here.
I have more stories, but I have to end it somewhere… and this 20-minute interview with Sprott Asset Management CEO Eric Sprott is where I’ll stop. The interview was done on the ‘Squeeze Play‘ program of Business News Network in Canada… and Eric remarked, in part, about complaints of silver market rigging by J.P. Morgan Chase traders. He also comments on the obvious market rigging of the precious metals as we approach monthly options expiry, which happens to be today… so the goings-on in the Far East and London gold markets early this Tuesday morning would not surprise him in the slightest. The interview runs for 20 minutes… with a short commercial break between the two 10-minute segments… and the link to this must listen/watch interview is here.
Well, not much changed over the weekend. We’re still well down the road to economic, financial and monetary Armageddon. The bullion banks are still doing their thing… and I’m not expecting much positive price activity until options expiry… and maybe the last day of trading for the June contract on Friday… are out of the way. First day notice for delivery into the June gold contract is on Monday. But, we could get a surprise between now and then… and the rest of this week’s trading activity in gold and silver could be interesting despite these important dates.
But I was more than surprised at the big addition to the GLD ETF yesterday. Normally gold is only added when the gold price is in rally mode… but not this time. Someone was socking away substantial amounts of physical metal regardless of what the price was doing. One has to wonder what’s going on with all the other gold and silver ETFs around the world as well. I’m expecting the Zürcher Kantonalbank to show some impressive gains when they finally get around to reporting last week’s activity.
I left out two big gold and silver stories in today’s column that I will post tomorrow. As I said earlier, there was lots to read in the stories I’ve already posted, without adding these to it.
Volume in gold [as of 5:17 a.m. Eastern time] is a very respectable 23,200 contracts net of roll-overs… and silver’s net volume is a huge 7,000 contracts.
It could be a wild day during the New York trading session today, so be ready for anything… and all eyes should be on the $1,200 gold price. If it closes well above that…….!
I hope your Tuesday goes well… and I’ll see you here tomorrow.
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