It just feels like the precious metal markets are wound up just about as tight as they can get…especially in silver
It was a pretty unexciting day in the gold market on Thursday. The tiny rally that developed around 3:00 p.m. Hong Kong time, didn’t amount to much…and got sold off the moment that Comex trading began in New York.
At that point another tiny rally developed that peaked a few minutes after the 1:30 p.m. Eastern time Comex close…and then sold off a hair into the 5:15 p.m. electronic close.
The gold price closed at $1,725.80 spot…up $6.00 from Wednesday. There was big gross volume yesterday…and once the last of the December contracts were subtracted out of that total, the net volume showed as 185,000 contracts…most of it in February…the new front month for gold.
The silver price was much more ‘volatile’. After selling off about two bits in Far East trading…it, too, began to rally around 3:00 p.m. Hong Kong time. And, like gold, it got sold off shortly after Comex trading began.
But the subsequent rally really developed some legs from there, before getting cut off at the knees going into the 10:00 a.m. Eastern time London p.m. gold fix. From there it more or less traded sideways into the close…although the high tick of the day….$34.52 spot…came about five minutes before the Comex trading session ended.
The silver price closed at $34.27 spot…up 50 cents. Volume, net of December roll-overs, was pretty decent at 61,500 contracts, most of which was in March…the new front month for silver.
The dollar index opened at 80.30…and traded flat until about 3:30 p.m. in Hong Kong…before rolling over. The low price tick came at precisely 10:00 a.m. in New York…and the subsequent rally lasted two hours. About one minute before noon, the index began to sag a bit…and the dollar index closed the day at 80.21…down a whole 9 basis points.
I suppose a case can be made for some co-relation between the dollar index and the gold price up until the 3:00 p.m. London gold fix…10:00 a.m. in New York. But it’s a bit of a stretch after that.
At the moment, it appears that the dollar index is holding onto the 80.00 mark by its proverbial fingernails.
The gold stocks gapped higher right at the open…but by noon [the HUI’s nadir] they were down about a percent. After that they traded mostly sideways, but a late-day rally pulled the stocks higher…and the HUI finished the day up a tiny 0.20%.
Once again the HUI chart over at ino.com was M.I.A….so I had to borrow this one from Kitco.
With silver up 50 cents, most of the silver stocks posted decent gains…but there were more than a few red arrows in the group I track. Nick Laird’s Silver Sentiment Index closed up 1.40%.
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The CME Daily Delivery Report for Day One of the December delivery month was a big surprise…at least in gold…as it showed that only 71 gold contracts were posted for delivery on Monday. I was expecting thousands of contracts…which would be normal.
In silver, there were 571 contracts posted for delivery on Monday within the Comex-approved depositories. It came as no surprise to me that the two big short/issuers were JPMorgan with 358 from its proprietary in-house account…and the Bank of Nova Scotia with 142 contracts. The two biggest long/stoppers were JPMorgan in its customer account with 239 contracts…and Barclays with 163 contracts. The Issuers and Stoppers Report is definitely worth looking over…and the link is here.
There were no reported changes in GLD…but it was the same old story over at SLV, as an authorized participant withdrew 725,937 troy ounces of silver…making it almost 9.5 million ounces withdrawn since the peak on November 9th.
It was another big sales day over at the U.S. Mint…as they reported selling 11,000 ounces of gold eagles…1,500 one-ounce 24K gold buffaloes…and 75,000 silver eagles.
With this latest sales figure, the U.S. Mint has now surpassed gold eagles sales for January…and that makes November the biggest gold eagles sales month of 2012 so far.
And it was also a busy day at the Comex-approved depositories on Wednesday. They received 1,655,376 troy ounces of silver…and shipped 624,870 troy ounces of the stuff out the door. The link to that activity is here.
The chart below is self-explanatory…and comes from a November 26th article by Doug Short over at the advisorperspectives.com Internet site. The article [with lots of other excellent charts] is headlined Median Household Incomes: The “Real” Story…and I found it in yesterday’s edition of the King Report. The link is here.
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Washington state reader S.A. sent me the 1-year Gold:Silver Ratio chart…and as you can see, we’re testing new lows for this move down. Let’s all join hands and pray that it continues.
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I have the usual number of stories for a weekday…and I hope you find the time to at least skim the parts of each that I’ve cut and paste below
Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium. – Murray N. Rothbard
With all traders, except those standing for physical delivery, now out of the December contract…we await how the precious metals will react [or be allowed to react] to the upcoming “fiscal cliff”.
We’ve had a lot of strange price activity in the precious metals market over the last week or so…and at least as of this past Tuesday’s cut-off, the short positions by JPMorgan Chase/Scotia Mocatta were at multi-year extremes in the Commitment of Traders Report. But what happened on Wednesday’s engineered price decline won’t be known until next Friday…a lifetime away.
To go along with that, has been this strange start to the December delivery month in gold…as only 71 gold contracts were posted for delivery. As I pointed out earlier, normally there would be many thousands on First Day Notice. Then there has been the huge surge in the sale of gold from the U.S. Mint this week…over 60,000 ounces of eagles and buffaloes in just the last couple of days. Ted Butler figures that this gold was probably heading overseas…and I didn’t argue the point.
It just feels like the precious metal markets are wound up just about as tight as they can get…especially in silver, where the frantic in/out activity on the Comex…and the big draw-downs in SLV during the last two weeks, have been stand out features…along with the recent price activity.
Today we get the weekly Commitment of Traders Report for positions held at the close of Comex trading on Tuesday…and as I’ve mentioned several times already, the volume and open interest from JPMorgan Chase et al‘s engineered price decline on Wednesday will not be in that report.
In overnight trading in the Far East on their Friday, both gold and silver have been inching higher…and that has extended into the early morning trading session in London as well. The dollar hasn’t been doing a lot, although it is drifting closer to the 80.00 mark…and is down 11 basis points as of 3:53 a.m. Eastern time. Volumes are light…and virtually all of it is in the current front months for each metal. As is usually the case, nothing much of real importance will happen until Comex trading begins at 8:20 a.m. Eastern time this morning…and since it’s a Friday…and the last day of the month as well…we should prepare ourselves for any eventuality.
And as I hit the ‘send’ button on today’s column at 5:15 a.m. Eastern time, I see that gold and silver prices have weakened a hair now that London has been open for a bit more than two hours. The dollar index is still down a bit…and volumes are still light.
Although I hate to beat this to death just about every week at this point, I’d like to remind you one more time that there’s still an 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 out 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.
That’s more than enough for today. Enjoy your weekend…and I’ll see you here tomorrow.
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