If inflation is what the Fed wants, one of the ways to do that would be to let the precious metals run to the upside

Gold ticked higher on Sunday night in New York at the open…but then got sold off as the trading day advanced in the Far East, with the low of the day coming about fifteen minutes before the London open.

From there, the gold price rallied about five bucks into the 8:20 a.m. Comex open…and then jumped up another five bucks.  But its attempt to move above the $1,700 price mark ran into a willing seller on every attempt.  The high tick of the day, if one wishes to dignify it with that name, was $1,700.30 spot…and that came at 10:30 a.m Eastern.

Gold closed at $1,698.10 spot…up $1.90 from Friday’s close.  Volume was very light at only 92,000 contracts.

The silver price path was very similar to gold’s right up to and including the rally after the Comex open.  Silver then got sold off after that…and then struggled back to close at a small loss.

Silver finished the day at $32.28 spot…down a whole 3 cents.  Volume was pretty light as well…around 27,000 contracts.

The dollar index price action wasn’t very exciting on Monday, either.  It opened at 79.56…rallied to it’s ‘high’ of the day at precisely 3:00 p.m. Hong Kong time…and the slid to its ‘low’ of the day around 10:20 a.m. in New York.  The index rallied a hair from there…and closed at 79.66

It’s a real stretch to say that the gold and silver prices moves yesterday were in response to such tiddling little moves in the dollar index…but stranger things have happened.  It’s up to you if you want to read anything into it or not.

The gold stocks wandered around either side of unchanged all day long…and a tiny rally during the last fifteen minutes of trading propelled the HUI to a small gain of 0.31%.

With the announced buyout of Orko Silver by First Majestic, it was a wild day in the silver equities yesterday…and coupled with the fact that the metal spent most of the New York trading day in the red, Nick Laird’s Intraday Silver Sentiment Index closed down 1.58%.

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The CME’s Daily Delivery Report for Monday drew a blank in both gold and silver, as there no deliveries posted in either for Wednesday.

There was a smallish decline in GLD, as an authorized participant withdrew 29,056 troy ounces of gold.  There were no reported changes in SLV.

The U.S. Mint had a sales report today.  They sold 2,500 ounces of gold eagles…500 one-ounce 24K gold buffaloes…and 232,000 silver eagles.

It was a very quiet Friday over at the Comex-approved depositories, as no silver was deposited…and only 6,034 ounces were reported shipped out.

Well, I fired off an e-mail to ombudsman at Scotiabank of Sunday…and it’s my last swing for the fences because, as you’ll note in the e-mail below, I’ve gone as far as I’m prepared to go to get a real answer out of them on this issue.

Dr. Mr. Dougall,

Thank you for your reply of last Monday.

Both Mr. Shearim and yourself have been kind enough to answer a question that I never asked.  I know perfectly well that the “Scotiabank/Scotia Mocatta has no connection with data provided by the CFTC”…but I also know, that as a market-making member of the LBMA, you are required to report COMEX gold and COMEX silver futures and options positions to the CFTC on a weekly basis.

Here’s my question one more time as put to Dave Shearim…and now to you, again.

“Part of my reading material includes two reports that are issued by the U.S. Commodity Futures Trading Commission…the CFTC.  The most notable of those are the weekly Commitment of Traders Report and the monthly Bank Participation Report.

“If you click on the Bank Participation Report link, you’ll note that the CFTC has included a comment about its October figures that took quite a few people who follow this report, completely by surprise…including me.

“The comment states… “The October 2012 Bank Participation Report includes COMEX gold and COMEX silver futures and options positions for a newly classified non-U.S. bank, based upon the entity’s self-description on its latest CFTC Form 40. Given the methodology of the Bank Participation Report, the entity’s most recent Form 40 submission results in all of its futures and options positions now being included within the report. For more information on the methodology used for the Bank Participation Report, see Explanatory Notes” [Emphasis is mine. – Ed]

“All I would like to know is if the “non-U.S. bank” that the CFTC is referring to in its comments above…and on its Bank Participation Report home page…is The Bank of Nova Scotia – Scotia Mocatta?

Mr. Dougall, if you do not wish to answer, we can drop the issue right here…and you won’t hear from me again.  I was hoping for a definitive answer…but since all I’ve received is a series of “non-denial denials”…I’m not prepared to push this issue further.

Hoping to hear from you in the near future, I remain,

Yours truly,

Edward Steer, Editor

Ed Steer’s Gold & Silver Daily

Casey Research, LLC

Here’s a chart of the U.S. M3 money supply courtesy of Nick Laird…and it requires no further embellishment from me.

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Wesley Legrand sent me the chart below…along with the following commentary…”You can see in the chart above that in the last decade, the relatively ‘slow years’ of 2004 and 2008 have been followed by big years.  And gold has now had two slow years in a row – so maybe gold is now set for a boomer year in 2013.”

And lastly…here’s a chart from Washington state reader S.A.  He sent me a tiny jpg version of this graph…and Nick was kind enough to upgrade it to the full-size png chart you see before you now.

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It’s a Tuesday…and that means I have a lot of stories for you today.  Once again it gives me great pleasure to leave the final edit up to you.

Lost in the weekly observations of COT changes is the enormity of the size of JPMorgan’s COMEX silver short position. It would be impossible for any one entity to hold a short position equaling 23.4% of the world annual production of most food or industrial commodities (like corn or crude oil) because such a position would require a size well in excess of current total open interest levels in most markets. For instance, someone holding 23.4% of world annual oil production would have to hold 7 million NYMEX contracts; a neat trick for a market that has a total open interest of 1.5 million contracts. The record still indicates that JPMorgan added more than 100 million oz of COMEX short positions since the summer, making the bank the only real silver short seller during that time. When there is only one buyer or seller in any market, that market is manipulated.Silver analyst Ted Butler…15 December 2012

Well, it was another slow start to the week for both gold and silver, as there wasn’t a lot of volume…and that allowed anyone with a vested interesting in managing the precious metal prices to so…and it’s my belief that they did, as both gold and silver’s attempt to move higher shortly after the Comex open ran into the usual not-for-profit sellers.

Today is the cut-off for this Friday’s Commitment of Traders Report…and I’ll be more than interested in the numbers when they’re posted…especially in silver.

I just want to repeat something that I mentioned in this space on either Friday or Saturday…and that is the fact that with all this massive money printing on our doorstep in the coming year, there’s no way that JPMorgan et al will be able to keep the price under control.  If inflation is what the Fed wants, one of the ways to do that would be to let the precious metals run to the upside as another sign that inflation was about to rear its ugly head.  We’ll just have to wait and see how all of this unfolds in the new year.

In Far East trading on their Tuesday, both metals rallied a bit into the Hong Kong lunch hour…and then didn’t do much after that…and aren’t doing much now that London has been open for a couple of hours.  Volumes are about average for this time of day…and the dollar index isn’t doing much.

That’s way too much for one day…but my Tuesday column is like that at times. See you here tomorrow.

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