One thing I did notice in the preliminary report was another big jump in gold open interest in the December delivery month…up 539 contracts.
With trading winding down for the season, the lack of activity yesterday came as no surprise. The gold price traded between $1,615 and 1,600 spot the entire day…and closed at $1,605.40 spot, down $9.60. Volume was a rather anemic 94,000 contracts.
The price action in silver was a bit more exciting, but only just. Silver’s low, close to $29 spot, came at 9:00 p.m. in Hong Kong…and then rallied sixty cents to its high of the day shortly before 9:00 a.m. in London.
From there, every tiny rally got sold off, with the low of day coming about 10:15 a.m. in New York. From that point it traded quietly into the close. Silver closed at $29.13 spot…down 19 cents on the day. Net volume was around 20,000 contracts.
The US dollar index traded right at the 80 cent mark until 2:00 a.m. Hong Kong time, before heading lower. The low of the day came at 8:30 a.m. in London…and by 9:00 a.m. in New York, had regained its 30 basis point loss. From there, the dollar faded a hair into the close.
I guess it’s fair to say that the gold price followed the dollar move pretty closely. Silver did as well, but its 50 cent rise…followed by a 40 cent decline…was out of all proportion to the dollar move itself.
A question I keep asking myself these last few days is whether the precious metal prices are following the dollar naturally, or are they being ‘assisted’ in that regard?
Although the gold stocks never made it into positive territory yesterday, they did follow the general pattern of the Dow chart far more closely than what was going on with the gold price itself. The HUI turned in a small loss of 1.01%.
The large cap silver producers did just about the same as the gold stocks…and Nick Laird’s Silver Sentiment Index closed down 0.86%. And as a group, most junior silver producers got hit harder than that.
(Click on image to enlarge)
I was expecting a rather insignificant set of numbers when I checked the CME’s Daily Delivery Report. I was surprised to see that 577 gold and 4 silver contracts were posted for delivery next Tuesday. The silver number was no surprise, but the gold number certainly was.
The big short/issuer was a surprise as well…Goldman Sachs. It’s pretty late in the delivery month for the likes of them to be showing up. I wonder why they waited so long? They will be delivering 559 contracts. The big long/stopper was no surprise, as it was JPMorgan. They will receive 415 of these contracts in their proprietary [house] trading account…and 99 contracts in their client account. A very distant second was the Bank of Nova Scotia with 54 contracts. The action is worth a quick glance…and the link is here. [I have more on this in ‘The Wrap’ section further down]
For the second day in a row, the GLD ETF had a withdrawal. This time it was 427,842 troy ounces. Since the end of November…1.41 million ounces of gold has been withdrawn from GLD…and about 820,000 of that occurred yesterday and Wednesday.
The SLV ETF went the other direction, as they reported taking in a very tiny shipment of 48,621 troy ounces.
The U.S. Mint had a small sales report yesterday. They sold 4,500 one-ounce 24K gold buffaloes and 100,000 silver eagles. Month-to-date they have sold 65,000 ounces of gold eagles…20,000 one-ounce 24K gold buffaloes…and 2,009,000 silver eagles.
Wednesday was a busy day over at the Comex-approved depositories, as they reported receiving 1,195,568 troy ounces of silver…and shipped only 108,856 ounce of the stuff out the door. The link to that action is here.
DUBAI — or DO SELL?
Reader Bill Downey over at GoldTrends.net sent me the following e-mail that he received from a contact that has been in the Dubai gold industry for twenty years…and has an office there.
Bill asked him to comment on the ‘Gold Buying in Dubai’ article that I had posted in my column very recently…and this is what his contact had to say. This gentleman’s first language is obviously not English…and I’ve cleaned it up as best I could…and what I really didn’t understand, I just left unedited…
“Bill this is b.s….. Today i literally went around [to] help my staff in retail to sell… As u know, the jewellery business here is dominated by men salesmen. Since the demand is almost zero in wholesale, i decided to go out to the retails and make a tour there [to] catch the clients by myself and try to convince them to buy. The clients are all pessimistic about gold. I feel that crash from $1,900 made lots of them lose trust in buying jewellery…. The sidewalks are empty. Before people use to walk in the road because the sidewalks were full…no space to walk. All these almost from 100 walk-in customer, 75 will buy…. Each person minimum was about 50 grams to 100. Now from 100 not even 5 buy…and the grams dropped dramatically to 15 grams, meaning each retail cannot cover the cost even by the end of the month…because gold is charged as gold…and manufacturing charges is a different premium. I’m starting to feel very negative. This is one of the biggest jewellery markets after hong kong…it’s the center of old dubai. Where are the jewellery were from 30-50 years. But it’s hopeless. If the market is good, it’s good for all…and when the market is bad, it’s bad for all.”
“On the bullion side, it’s true there is a good demand…. But still less, less, less than before by large mostly speculative positions which they are going to exit after any bounce or spike….and physical bullion is picking up, but there is no comparison compared to the quantities in the beginning of the year the market is down by 80 percent or more…”
Yep, blood is definitely running in the streets…and a major bottom is in when you hear gold dealers talking like that, regardless of what language they speak, or what culture or country they’re from.
Sun-grazing Comet Lovejoy was photographed shortly before sunrise on December 21st by Colin Legg of Mandurah, Western Australia. A short exposure with was sufficient to reveal the comet’s reflection in the waters of the Mandurah Estuary. [Photo courtesy of spaceweather.com]
I’m delighted to report that I don’t have that many stories today, but the ones I do have are all worth your time, if you have some to spare.
Every dollar the Federal Government does not take from us, every decision it does not make for us will make our economy stronger, our lives more abundant, our future more free. – Ronald Reagan
With this being another short report, I thought I’d throw in another Christmas-type song for your listening pleasure today. This is 11-year old Anna Graceman…and if you couldn’t see her, you’d never know her age. It’s hard to believe such a big voice comes out of such a little person. Gifted children like her are rare…and one can only imagine how far she will go if fame and fortune shine their light on her in the years ahead. I thank reader Eldon Johnson for sharing this 4:35 youtube.com video with us…and it’s definitely worth a listen. The link is here.
Considering the lack of price activity, there was a surprisingly large increase in gold’s open interest in the CME’s preliminary report early this morning. Maybe it was spread trades.
Silver’s price activity was far more pronounced than gold’s…and silver’s o.i. was up, but not by a lot. All will be revealed in next Friday’s Commitment of Traders Report.
One thing I did notice in the preliminary report was another big jump in gold open interest in the December delivery month…up 539 contracts. That pretty much explains the surprising gold number in yesterday’s Daily Delivery Report from the CME at the top of this column, where I reported that 577 gold contracts had been posted for delivery on Tuesday…almost all from Goldman Sachs.
First Day Notice for delivery into the January contract is next Friday. January is not a big delivery month for either metal, but it will be interesting to see if there are any more December delivery surprises between now and then.
And while on the subject of the COT report, today’s version will be posted at the CFTC’s website at 3:30 p.m. sharp…and I’ll be sitting in front of my computer waiting for it.
With the western world winding down for the Christmas break, I’m sure that absenteeism will be high in Europe, England and the U.S.A. as the Friday trading day wears on.
As of 5:08 a.m. Eastern time, both precious metals are in the plus column at the moment. London has been open for about two hours…and trading volume in gold is tiny…and silver’s volume is almost invisible.
That’s all for today…and I’ll see you here sometime on Saturday.
The Greatest Heist in World History…Exposed
When most investors hear the word “inflation,” they instinctively think of gold. But what if everything you knew about gold was untrue? What if…there was no gold in Fort Knox?