John Embry and I both feel that ‘da boyz’ are foolin’ with the shares as well as the metal prices themselves.

The gold price did little in Far East trading on Tuesday.  But, as is frequently the case, the high in the Far East came just before the London open…and it was, as is also frequently the case, all down hill from there…with the low of the day coming shortly after 9:00 a.m. in New York.

After the low was in, the gold price gained a few dollars and then traded sideways into the close of the New York Access market at 5:15 p.m. Eastern time.

Gold closed the Tuesday trading session at $1,666.40 spot…down $9.90 on the day.  Gross volume was a monstrous 190,000 contracts, but once all the roll-overs out of the February contract were removed, the net volume imploded to a very small 85,000 contracts.

Silver’s Far East high also came shortly before the London open…and its low came at 1:00 p.m. in London right on the button…which was 8:00 a.m. in New York…exactly twenty minutes before the Comex began to trade.

The subsequent rally hit its zenith at 10:45 a.m. Eastern, before getting sold down to the $32 spot level…and from there it traded sideways into the close of electronic trading.

Silver closed at $32.05 spot…down 30 cents on the day.  Approximate net volume was a rather small 27,000 contracts.

The dollar index didn’t do a lot yesterday.  It had a small rally between 9:00 a.m. in London and 9:00 a.m. in New York, before selling off and closing virtually unchanged from Monday.

The only thing of note regarding the dollar index was that the tiny rally made it through the 80 cent level, but couldn’t hold even that small gain.

Here’s the 2-day chart starting right from the Monday morning Far East open at 6:00 p.m. New York time on Sunday night.

Like the Dow, the gold stocks gapped down at the open…and then proceeded to slide further as the trading day progressed.  At the close, the HUI was down 2.17%…despite the fact that the gold price was only down ten bucks.

The silver shares were on the ropes all day long…and Nick Laird’s Silver Sentiment Index closed down 1.87%.

(Click on image to enlarge)

With the January delivery month winding down, so are the physical deliveries between traders in the Comex futures market.  The CME’s Daily Delivery Report yesterday showed that only 2 gold and 5 silver contracts were posted for delivery tomorrow.

There were no reported changes in GLD…but SLV reported a withdrawal of 194,397 troy ounces of silver, which might have been a fee payment of some kind.  That’s the first withdrawal from SLV since January 5th.

The U.S. Mint did not have a sales report on Tuesday.

Well, the forklifts were certainly busy over at the Comex-approved depositories on Monday.  They reported receiving 991,700 troy ounces of silver…and they shipped 1,522,467 ounces of the stuff out the door…for a net decline of 530,767 ounces.  The link to that action, which is worth a peek, is here.

Here’s a set of graphs that Nick Laird sent me in the wee hours of this morning…and I thought I’d stick in here, since I have quite a few graphs in ‘The Wrap’ already.

(Click on image to enlarge)

I’m happy to report that I don’t have that many stories for you today…and after the twenty-six that I posted in my Tuesday column, I’m sure you’re just as grateful.

As I have pointed out throughout the GFC – and long before – the global financial system is long overdue for a “purging” – a sweeping out of the huge pile of debt-induced malinvestments which have now all but brought the entire world to a standstill. When even the World Bank has come to the point where they can see no other way out, one may know that the purging is not far away. – Bill Buckler…The Privateer…January 22, 2012

There was certainly no reason for gold and silver to get sold off yesterday…and it was the same for platinum and palladium as well.  However, volume was very light, so I’m not going to read a lot into the price action…eve though it appeared to be the ‘same old, same old’ drill.

The preliminary open interest numbers for yesterday’s trading showed a smallish decline in gold o.i….and a smallish increase in silver’s open interest.  Yesterday was the cut-off for Friday’s Commitment of Traders Report, so all will be revealed then.

I’ve got my eye on three different charts these days…gold, silver and the HUI.  Here’s the 1-year gold chart.  I’m wondering if the rally will ‘fail’ at the 50-day moving average…and if it does fail, will it be man-made, or market forces at work?

(Click on image to enlarge)

Here’s the 1-year silver, with the drive-by shootings of May 1st and September 27th being the most obvious features.  I’d bet money that we saw the low for this move down between Christmas and New Years…and that any correction won’t last long, or be overly deep…but the momentum to the upside seems to have been lost at the moment.  I’m sure that loss of momentum had some help along the way.

(Click on image to enlarge)

And lastly comes the 1-year HUI chart.  The price action since the beginning of the year has been horrid…and a lot of it has also been inexplicable, as the stock moves were totally counterintuitive to what was going on with the metal itself.

(Click on image to enlarge)

John Embry and I both feel that ‘da boyz’ are foolin’ with the shares as well as the metal prices themselves.

In overnight trading, the gold price didn’t do much in the Far East during their Wednesday but, like Tuesday, the high came within a half-hour of the London open…and it was pretty much the same for the silver price as well.  At precisely those highs, a 25 basis point rally developed in the dollar index as well.  Coincidence, you ask?  Probably not.  As of 5:10 a.m. Eastern time, gold is down about seven bucks…and silver is down about two bits from Tuesday’s close in New York.  Volume, like yesterday at this time, is vanishingly small in both metals.  As I’ve said previously, this is highly unusual for this time of month…and I’m not exactly sure what it means.

Here’s the silver chart as of 5:13 a.m. Eastern time.

With options expiry and the roll-overs out of the February delivery month in gold ongoing, I’d be surprised if the price action did anything of importance to the upside in either gold or silver until we get past First Day Notice next Tuesday.  Time will tell.

One thing that I can say for sure, is that silver and gold sales at the retail level at my local bullion dealer have been pretty robust all month long.

That’s all I have for today…and I’ll see you here tomorrow.

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