Since February 9th, there has been 4.1 million ounces of silver withdrawn from SLV, even though the silver price has basically traded sideways for the last month.

By 3:00 p.m. in Hong Kong on their Tuesday afternoon, gold was up about seven dollars…and from there until shortly before the Comex opened in New York, the gold price gave back about half of that gain…such as it was.

But the moment that trading began in New York, it was a whole new ball game.  In four separate steps, gold rose another twenty dollars…and closed virtually on its high of the day.

Gold closed at $1,760.30 spot…up $26.20 from Monday’s close.  Net volume, which was pretty chunky around the London open…checked in around 188,000 contracts.  A bunch of that volume was from Monday, so it wasn’t as heavy as it seemed, but heavy enough nonetheless.

As I pointed out in ‘The Wrap’ in yesterday’s column, the rally going into the London open on their Tuesday morning ran into some real resistance…and it’s obvious that the $20 rally in New York ran into heavy resistance as well.

It was pretty much the same price action in silver.  Nothing much happened until shortly before 2:00 p.m. in Hong Kong on their Tuesday afternoon.  The subsequent rally ran into a lot of resistance…and every penny of those gains…and a few cents more…disappeared by 12:30 p.m. in London.

Then, in a manner very similar to gold, away silver went to the upside when the Comex opened less than an hour later.  The high of the day [$34.58 spot] came moments before the Comex trading day ended at 1:30 p.m. Eastern time.  Silver then got sold off about two bits into the close.

Silver finished the Tuesday trading day at $34.35 spot…up 74 cents.  Net volume [after removing the roll-overs and Monday’s trading volume] was around 36,000 contracts.  I was expecting a much higher volume number than that…and was happy that it was ‘only’ that much.

The dollar index spent Tuesday in a wild 40 basis point trading range around the 79.00 mark…which is exactly what it was doing when I wrote about it twenty-four hours ago as well.

The gold stocks gapped up…and then added to their gains for the next hour or so.  But by 11:00 a.m. Eastern..more or less…they traded basically sideways in a very tight range, despite what the gold price did after that.  The HUI finished up 3.08% on the day.

It almost goes without saying that the silver stocks put in a robust performance as well…helped along immensely by the Hecla Mining announcement of silver-linked dividends.  Nick Laird’s Silver Sentiment Index closed up 3.35%.

(Click on image to enlarge)

The CME’s Daily Delivery Report showed that only 24 gold contracts were posted for delivery on Thursday.

The GLD ETF showed a small increase yesterday as an authorized participant shipped in 9,718 troy ounces.  But it was a different story over at the SLV ETF yesterday, as 680,164 ounce were reported withdrawn.

Obviously the silver was more desperately needed elsewhere, as there was nothing in the price activity during the last two or three trading days that would warrant such a withdrawal.  Since February 9th, there has been 4.1 million ounces of silver withdrawn from SLV, even though the silver price has basically traded sideways for the last month, at just under $34 the ounce.

The U.S. Mint started off the week with a sales report…but a very small one.  They sold 1,000 ounces of gold eagles…1,000 one-ounce 24K gold buffaloes…and 115,000 silver eagles.  Month-to-date sales are pretty pathetic…16,000 ounce of gold eagles…4,500 one-ounce 24K gold buffaloes…and 950,000 silver eagles.

The Comex-approved depositories reported receiving 930,708 ounces of silver on Friday…and shipped 457,876 ounces out the door.  The link to that action is here.

I have slightly fewer stories today than I did yesterday, which suits me just fine…and you as well, I would suspect.

I was delighted to see both gold and silver head higher in New York yesterday…but unhappy about the fact that the strong rallies that started before London opened early yesterday morning, were sold off pretty hard.  As I mentioned at the start of this column, there was very big volume in both gold and silver yesterday…particularly in gold…so these rallies are obviously running into strong resistance from the usual traders in the Commercial category.

We still need to see both metals power higher from here in order to form a clear break out.  Yesterday’s price action in New York was a good start, but we’ll need more price action like that…and soon.

All of yesterday’s price and volume data will be in Friday’s Commitment of Traders Report, if it’s all reported in a timely manner, that is.  And because of the holiday on Monday, yesterday was the cut-off for that report.  With a new COT weekly cycle now starting, it will be interesting to see how JPMorgan et al allow gold and silver prices to perform during the next day or so.

Looking at overnight action, both metals got sold off a bit right from the open in New York at 6:00 p.m. Eastern time last night…and although they both recovered somewhat going into the London open, both got sold down again at the usual time…just a few minutes before trading began at 8:00 a.m. GMT.  As I hit the ‘send’ button at 5:18 a.m. Eastern time, gold is down about seven bucks…and silver is down about 25 cents.

With the subdued price action, the volume numbers are lower than they were this time yesterday…but not by a lot, at least in gold.  The roll-overs out of the March delivery month in silver are getting more frantic as the days go by.  First Day Notice for March is next Wednesday, the 29th.  As of this writing, there are still 94 silver contracts open in February…and it remains to be seen if the owners of these remaining contracts will sell, roll over, or stand for delivery.  We’ll know in the next five business days.

The dollar index is still hanging in there…very tight to the 79.00 mark for the third day in a row.

I know that the good folks over at Casey Research have already sent you a separate e-mail about the following, but I thought that I would mention it here just one more time.  The Casey Research premium energy alert service has some available spots open.  If you’re interested in getting in on early-stage energy exploration investments, I suggest you act now, as it will only be open for a very short time.  This is not a cheap service…but if you want to be at the pointy end of the energy market, or any other market for that matter, there’s a price to be paid for that.

And it’s not really a ‘price to be paid’…so much as an investment in your future.  This fee includes complimentary subscriptions to both Casey Energy Report [$995 per year] and Casey Energy Opportunities [$79 per year]. So if energy is your bailiwick, you can find out more about Casey Energy Confidential…and the link is here.

See you on Thursday.

Sponsor Advertisement

Pelangio Exploration Inc. (PX:TSX-V; PGXPF:OTC) announced the results of seven diamond drill holes totaling 1,574 metres from its ongoing drilling program at the Pokukrom East zone on the Manfo Property in Ghana.  Highlights of the results included:

·        1.19 g/t gold over 113 metres, including 9.05 g/t gold over 7 metres;
·        2.60 g/t gold over 64 metres, including 11.94 g/t gold over 10 metres; and
·        16.72 g/t gold over 4 metres.

The results continued to confirm a higher grade, shallow north plunging core of Pokukrom East zone with an open plunge of 600 metres from near surface in previously reported hole SPDD-088 (7.01 g/t gold over 19 metres) to 210 metres depth in the holes reported this week.  Warren Bates, Senior Vice President Exploration, commented: “These are our best holes on the Manfo Property to date. These holes represent the north-plunging core of higher grade mineralization at Pokukrom East, now demonstrating an open plunge length of 600 metres.Please visit our website to learn more about the project and request additional information.