Positive interest rates are light years away, so it will be up, up, up and away for the gold price.
Gold rallied a few dollars in Far East trading on their Wednesday…and that rally developed more legs once the dollar index rolled over shortly after London opened.
The rally ran out of gas around noon in London as the dollar index rallied back to unchanged by noon in New York. But an hour before that, the gold price spiked above $1,725 spot…and then got sold off exactly two hours later, as a not-for-profit seller showed up thirty minutes before the Comex close. After that, the gold price didn’t do much.
The low tick [$1,709.00 spot] was at the Wednesday morning open in Tokyo…and the high tick [$1,727.30 spot] came about 11:20 a.m. in New York.
The gold price closed in New York at $1,720.20 spot…up $11.20 on the day. Volume was a little more robust at 130,000 contracts.
Silver’s price path was very similar to gold’s…so I’ll spare you the play-by-play. However it was obvious that there was even more price interference in silver during the New York trading session than there was in gold.
The low tick…around $31.70 spot…came moments after the Tokyo open…and the high tick…$32.54 spot…like gold, came around 11:20 a.m. in New York. After that spike high, the silver price got sold down going into the 5:15 p.m. Eastern electronic close.
Silver closed at $32.26 spot…up 51 cents on the day. Volume was only about 32,600 contracts.
Like countless times in the past, it should be obvious to anyone with an open mind, that gold and silver would have finished materially higher if JPMorgan et al hadn’t been standing by as the not-for-profit sellers of last resort during the New York trading session.
The dollar index opened at 79.93 in Tokyo…and then traded flat until shortly after London trading began at 8:00 a.m. GMT. From that point, it got sold down to its low of 79.69…with its nadir coming about 11:15 a.m. in London, which was 7:15 a.m. in New York.
The index then rallied back to unchanged by noon in New York…and traded sideways into the close, finishing virtually flat on the day at 79.96.
Not surprisingly, the gold stocks gapped up at the 9:30 a.m. New York open…and then worked their way steadily higher until they topped out shortly after 12 o’clock noon Eastern time. They sagged a bit from there, but rallied during the last thirty minutes of trading. The HUI finished virtually on its high of the day…up 3.05%.
The silver stocks did just OK yesterday, although some of the smaller junior producers I own turned in some rather above-average gains. Nick Laird’s Silver Sentiment Index only closed up 2.19%.
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The CME’s Daily Delivery Report for ‘Day 2’ of the November delivery month showed that only 14 gold contracts were posted for delivery on Friday from within the Comex-approved depositories. As I said yesterday, November is not a traditional delivery month…but December is in both gold and silver.
And, not surprisingly, there were no reported changes in either GLD or SLV yesterday, either.
But Switzerland’s Zürcher Kantonalbank updated their gold and silver ETFs as of the close of trading on Tuesday. They added 24,201 troy ounces of gold…and 163,808 troy ounces of silver were reported withdrawn.
However, the U.S. Mint closed off the month of October with a pretty decent sales report. They sold 10,500 ounces of gold eagles…1,000 one-ounce 24K gold buffaloes…and a chunky 569,000 silver eagles. Unless the mint adds some more sales later today, total October sales were as follows: 59,000 ounces of gold eagles…11,000 one-ounce 24K gold buffaloes…and 3,153,000 silver eagles. I do hope you’re getting your share, dear reader.
Based on the sales in October the silver/gold ratio was 45 to 1…and year-to-date its just under 47 to 1…so October was about average.
Year-to-date silver eagle sales total 28,948,000…and if we continue at this current rate of sales, we should hit very close to the 40 million mark by the end of December. But don’t be surprised if the mint pulls a fast one and shoves some December sales into January, so that December…and the year-end figures…don’t look quite as great. They’ve been pulling that stunt for several years in a row now…with December 2011/January 2012 being the last time they did it. That’s why over 6 million silver eagles were ‘sold’ this past January. In actual fact, a huge chunk of those were pulled out of December 2011.
The Comex-approved depositories showed no activity on Tuesday…either in or out.
I have the usual number of stories today…but most of them are gold related, so I hope you can find the time to at least skim the paragraphs that I’ve cut and paste from each.
The most recent news in the precious metals community has been centered on reports of potentially “missing” central bank gold and calls for repatriation of the metal to safer quarters, particularly in Germany. There are suspicions that not all the reported central bank gold is actually on deposit due to concerns that much has been “leased” out. The leasing of gold and silver has been a topic of interest for me for more than 15 years. In fact, I first started writing on the Internet because of gold and silver leasing. From the get-go, I labeled such leasing as one of the most destructive and idiotic creations from Wall Street, even comparing the concept to the movie, “Dumb and Dumber” – Silver Analyst Ted Butler…27 October 2012
There’s not much to add to what I’ve already said about yesterday’s price activity…and where we go from here is anyone’s guess, as I can make an equally convincing case for up big…or down big.
Nick Laird was all excited about the breakout in London early yesterday morning…and had this to say in an e-mail to me at the time…”See the breakout. It turned perfectly on the 50% retracement level, as forecast by my swing chart.”
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Not that I want to be choked with caution all the time…but as you know, dear reader, I was born smack dab in the middle of Missouri in another life…and I’ll believe it when I see it. However, yesterday was a good start…and would have ended even more positively if “da boyz” hadn’t shown up around 11:45 a.m. Eastern time.
However, despite the sell-off in both gold and silver over the last thirty days…about $100 in gold and $3.50 in silver, from top to bottom…the associated mining stocks have held up brilliantly…and that alone makes me optimistic about the long term. It’s only the very short term that concerns me.
Tomorrow we got the jobs numbers…and I’m always interested in watching the price action that occurs at 8:30 a.m. Eastern time when they’re released. With the U.S. Presidential election early next week, I’m sure the numbers will be massaged to perfection.
By the way, if you haven’t been around the precious metals market that long, you should read Ted Butler’s 15-year old “Dumb and Dumber” essay about gold and silver “leasing” that he refers to in the quote above. Trust me, you can’t make this stuff up…and proves beyond a shadow of a doubt that the miners that we own shares in are not the sharpest knives in the drawer. Consider it a must read for sure.
Far East price action in both gold and silver was lifeless on their Thursday. Volumes were non-existent…less than vapours, if that’s possible. The dollar index was as flat as pancake. But now that London has been open a couple of hours, the price action is a bit more lively…but only a bit. Volumes have picked up to more ‘normal’ levels…and there was a tiny spike in the dollar index as well. As I hit the ‘send’ button at 5:06 a.m. Eastern time, gold is up a couple of bucks…and silver is up about 20 cents. Hardly earthshaking action.
I haven’t the foggiest notion as to how New York trading will go today, so I won’t be surprised by whatever I see when I switch on my computer later this morning.
I hope your day goes well…and I’ll see you here tomorrow.
On October 30, 2012, Mason Graphite Inc. began trading on the TSX Venture Exchange under the symbol “LLG”. Mason Graphite is focused on the exploration and development of its Lac Guéret graphite property located in northeastern Quebec. Based on the current National Instrument 43-101 compliant Measured & Indicated mineral resource of approximately 7.6 million tonnes grading 20.4% Cgr (carbon as graphite), the Lac Guéret property hosts one of the highest grade graphite deposits known in the world. Mason Graphite is led by Benoit Gascon, CA CMA, who has held 20 years of executive positions at Timcal, including over 6 years as CEO. Timcal, now owned by Imerys, is one of the largest graphite producers in the world. Mason Graphite has 56.9M shares outstanding and 74M shares on a fully diluted basis. For more information on the company, please visit www.masongraphite.com, email [email protected] or call +1 (416) 861-1685.