I was really encouraged by the share price action yesterday…and I’m hoping that this is a harbinger of things to come.

As has been the usual situation these days, the gold price didn’t do much of anything during Far East trading on Thursday, but did develop a positive price bias starting almost at the 8:00 a.m. BST London open…which also happened to be the low price print of the day as well.

There was a bit of a pop minutes after the Comex open, but that didn’t last.  The real fireworks started the moment that the London p.m. gold fix was in at 3:00 p.m. BST…which was 10:00 a.m. in New York.  In one hour flat the gold price rose seventeen bucks, with the high tick of the day [$1,621.00 spot] coming a minute or so after 11:00 a.m. Eastern.

At that point a willing not-for-profit seller showed up…and gold gave up five bucks of those gains in very short order…and from there the gold price traded pretty flat into the close of electronic trading.

Gold closed the Thursday session at $1,614.70 spot…up $11.60 from Wednesday.  Net volume was in the 112,000 contract area.  The lion’s share of that volume occurred during the New York trading session, so it’s obvious [based on these volume figures] that the rally did not go unopposed.

It was pretty much the same price path in silver.  Most of the gains were in by 11:00 a.m. Eastern, but the high tick of the day [$28.41 spot] came just a few minutes before the Comex close…but that spike got pounded flat immediately by the usual suspects, I would think…as there’s barely a hint of it even on the New York Spot Silver [Bid] chart.

Silver closed at $28.22 spot…up 39 cents from Wednesday.  Net volume was around 25,000 contracts.

Here’s the New York Spot Silver [Bid] chart I just spoke of.  You will note that there’s no indication that the high tick of the day came anywhere near $28.41 spot.

Platinum and palladium did better than either gold or silver…especially platinum.  It was up a whopping 3.02%…and palladium was up 1.57%.  As a comparison, gold was up 0.72%…and silver up 1.40%.

The dollar index opened around the 82.65 mark…and rose to around 82.85 shortly before the London open.  It hung in there reasonably well until shortly after 8:00 a.m. in New York, before it headed south.

Most of the approximately 45 basis point decline was in by shortly before 11:00 a.m. in New York…and it mostly traded sideways into the 5:30 p.m. Eastern close.  When all was said an done, the dollar index was down about 25 basis points on the day.

Once again it’s a stretch to find much co-relation between what gold and silver did…and what the dollar index did.

The gold stocks gapped up a hair at the open, but then away they went to the upside…with most of the gains coming before noon Eastern time.  But the stocks continued to grind slowly higher from that point…and the HUI finished on its high tick of the day, up 3.40%.

The silver stocks put in a good show as well…and Nick Laird’s Silver Sentiment Index closed up 3.75%.

(Click on image to enlarge)

The CME’s Daily Delivery Report showed that 131 gold and 26 silver contracts were posted for delivery inside the Comex-approved warehouses on Monday.  There were only two short/issuers in gold…the Bank of Nova Scotia and Merrill, with 67 and 64 contracts issued.  All but one of those contracts went to either HSBC USA [83 contracts] or Deutsche Bank [47 contracts].  The only thing about the deliveries in silver worth noting was the fact that the Bank of Nova Scotia was the long/stopper on all 26 contracts.  The link to yesterday’s Issuers and Stoppers Report is here.

GLD reported that an authorized participant[s] added 174,569 troy ounces of gold yesterday…and there were no reported changes in SLV.

It was another day of no sales report from the U.S. Mint.

The Comex-approved depositories reported receiving 599,490 troy ounces of silver on Wednesday…and shipped a smallish 32,813 ounces out the door.  The link to that activity is here.

Here’s a chart and some text from Peter DeGraaf’s website at pdegraaf.com, that Australian reader Wesley Legrand sent me last night…and I thought you might find it useful.

“This is the Chart of the Day for August 17, 2012 AD.”

“It’s the index that compares the gold and silver producers of the HUI index to the price of gold.  Historically whenever HUI outperforms bullion it represents a bull market for both sectors.  Price broke out above the 50-day moving average on Thursday, and a close above the blue arrow will confirm the breakout, with a target at the green arrow.  A breakout becomes all the more important when it comes off a double bottom, or an ABC bottom.  The supporting indicators are positive.”

“The Gold Direction Indicator [GDI…a personal indicator Peter uses] closed at 78% compared to 46%.  The interpretation is:  hold off buying until price backs off.  Whenever the GDI rises above 70% we are close to a point where commercials start to sell.”

I’ll have more on this in ‘The Wrap’.

As usual, I have a lot of stories for you again today…and a lot of them are gold-related

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

The dollar index hit the skids just about the time the Comex opened yesterday but, for whatever reason, gold and silver got hit the moment they started rallying at the open…and they weren’t allowed to go anywhere until the London p.m. gold fix was in.  From that point they were away to the races.  I wonder how far they would have gone if they hadn’t run into a willing seller less than five minutes after trading began in New York?

Since the mid-May bottom in the gold price, every rally attempt, no matter how tiny, has been sold off by JPMorgan et al.  I count six times in total on the 6-month gold chart below…and I’m wondering out loud if the current ‘rally’ will meet the same fate.  Time will tell.

(Click on image to enlarge)

As Peter DeGraaf mentioned further up in this column, once we get past a certain point, we can look forward to a sell-off of some sort.  Normally we have to wait until we get into overbought territory around the 70 level on the RSI on the above chart, but that certainly hasn’t been the case since the mid-May low, as gold and silver both get sold off the moment they develop any upward momentum at all.  ‘Da Boyz’ are keeping things range bound, but for what reason…and for how much longer?

I was really encouraged by the share price action yesterday…and I’m hoping that this is a harbinger of things to come. But, as you know, I’m always on the lookout for “in your ear”…and until we have a clear break-out, you should be, too.

As has been the case for quite a while, the gold and silver price action in the Far East on their Friday was comatose…and not much is going on in early London trading, either.  Volumes are astonishingly light once again…and the dollar index [as of 5:20 a.m. Eastern time] isn’t doing much of anything.  It’s obvious that if there is going to be any excitement in the precious metals market today, it will happen in New York…or five minutes after I hit the ‘send’ button on today’s column.

Today we get the latest Commitment of Traders Report…and based on the reporting week’s price action, there may be minor declines in the Commercial net short position in both gold and silver.  Whatever the number are, I’ll have comments about them in tomorrow’s column.

There’s still the opportunity 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. Don’t forget that our 90-day guarantee of satisfaction is in effect for both publications.

Enjoy your weekend, or what’s left of it, depending where on Planet Earth you live.

Sponsor Advertisement

Tosca Mining Corporation’s goal is to acquire advanced stage projects that can be placed into production quickly. The company’s primary asset is the Red Hills Molybdenum/Copper project located in Presidio County, Texas. A program to confirm, and expand the considerable size and potential of the project and evaluate various economic scenarios was completed in 2011. 

Tosca recently received results from the 13 remaining holes from its phase two, 16,000 M (4,873 m) diamond drill program. Per Tosca’s Chairman, Dr. Sadek El-Alfy, “the drill program has successfully verified historic drill results of the shallow Copper-Molybdenum cap and confirmed the presence of a deeper, well mineralized Molybdenum Porphyry deposit.” The results of 21 holes drilled through the copper/moly cap in Tosca’s 2011 drill program give a weighted average grade of 0.39 % Cu over a core length of 113 feet (34.5 m). Since the copper cap is subhorizontal, the average core length can be interpreted as being approximately equivalent to true width. The copper/moly cap is crescent shaped, approximately 4,000 feet (1220 metres) long and 400 feet (122 m) to 1000 feet (305 m) wide.

The 2011 program encountered numerous thick  Molybdenum mineralized intervals including Hole TMC-25 wich  intersected 1,189 feet (362.4 m) averaging 0.089 per cent Mo including 830 feet (253 m) of 0.1 per cent Mo from 359 feet (109.8 m) to the bottom of the hole. Hole TMC-29 cut 989 feet (301.4 m) averaging 0.09 per cent Mo including 139 feet (42.4 m) of 0.16 per cent Mo. The molybdenum grades are similar and in some cases higher than those of projects currently considered of potential economic interest.”

Aggressive plans are in place for 2012 to conduct metallurgical tests, produce an updated resource estimate and  Pre Economic Assesment. Tosca is operated by an experienced mine development team, operates in Texas, a  mine-friendly jurisdiction and its property iseasily accessible with infrastructure in place to advance operations. Please visit our website to learn more about the company ad request information.