Nothing has changed in the ‘locked and loaded’ situation since yesterday…and it’s just a matter of waiting until gold and silver are allowed to rally a decent amount.

As I mentioned in ‘The Wrap’ in this column yesterday, the gold price rallied in the Hong Kong afternoon on Thursday…and then got sold off the moment that London began to trade at 8:00 a.m. GMT.  This sell-off intensified once the Comex opened at 8:20 a.m. Eastern time…and the low tick of the day came at precisely 9:30 a.m….an hour and ten minutes later.

From there, gold rallied back to its London high…and then traded sideways into the close of electronic trading in New York at 5:15 p.m.

The gold price closed at $1,621.40 spot…up $8.90 on the day.  Volume net of roll-overs was a very healthy 151,000 contracts…or thereabouts.

The silver price more or less followed the same pattern as gold…rally in the Hong Kong afternoon…sold off as soon as London opened…sold off some more at the Comex open…and then hit its low price tick of the day about two minutes after 10:00 a.m. in New York.

The subsequent rally didn’t get far…and the silver price basically traded sideways from about 12:25 p.m. in New York until the close of trading in the New York Access Market at 5:15 p.m. Eastern.

Silver did manage to close up a bit on the day at $29.37 spot…up 21 cents.  Net volume was in the neighbourhood of 36,000 contracts.

The dollar opened about 80.10…and more or less stayed at that level until precisely 3:00 a.m. Eastern time…the open of the London markets.  From there, the dollar moved sharply higher, reaching its high tick about 11:15 a.m. in New York…and then did nothing for the rest of the Thursday trading day.  The dollar closed up about 80 basis points…almost a full percent.

It’s interesting to note that the gold price began to rally in New York almost the moment that the dollar rally ended.

The gold stocks hit their nadir about 9:45 a.m…and then climbed back into positive territory.  After the gold rally in New York ended in the early afternoon, the stocks got sold off a bit going into the close…but still managed to finish in the black, with the HUI closing up 0.23%.

As a group, the silver stocks fared somewhat better…and Nick Laird’s Silver Sentiment Index, which is comprised of the seven silver stocks shown on the chart below, closed up 0.75%.

(Click on image to enlarge)

The CME’s Daily Delivery Report showed that 24 gold and only 2 silver contracts were posted for delivery on Monday.  As I’ve mentioned several times before, January is not a traditional delivery month for either metal…and unless a big delivery is added during the month, most of the deliveries for January have already occurred.

There were no changes in GLD again yesterday…and despite the engineered price decline between Christmas and New Years…not an ounce has been withdrawn from the GLD ETF since December 22nd.

However, that’s not the case in SLV…as another chunk was withdrawn again yesterday.  This time it was 972,210 troy ounces.  So far this week, a total of 2.9 million ounces has been withdrawn.

The U.S. Mint did not have a sales report yesterday.

But it was another big day over at the Comex-approved depositories on Wednesday, as they reported receiving another large amount of silver.  This time it was 2,019,191 troy ounces…with the lion’s share going into HSBC USA.  They didn’t ship any out the door.  The link to that action is here.

Here’s a chart that Washington state reader S.A. sent me yesterday.  I have a feeling that I’ve posted it before, but I just can’t remember for sure.  And even if I have, it’s worth a second look.

I have the usual number of stories today…and I hope you’re able to at least skim all of them.  But there are some important must reads as well.

It’s not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. – Charles Darwin

Thursday’s price action in both gold and silver was almost a carbon copy of what happened on Wednesday, with gold hitting its Far East high at the London open…and then getting sold off until sometime in the New York trading day…and then rallying from there.

The preliminary open interest numbers for yesterday showed very tiny increases in both metals…and I doubt that the final numbers published on the CME’s website later this morning will show much change from what’s already posted.

The final open interest numbers for Wednesday’s trading day showed a small decline in gold…along with a decent decline in silver.  What this translates into in real terms won’t be known until the COT report on January 13th.

Today we get three important reports.  Two of them are the job numbers at 8:30 a.m. Eastern time…and the anxiously-awaited Commitment of Traders Report at 3:30 p.m.  As has been the case for many years, there’s always a spike up in gold and silver the moment the job numbers are released…followed by the usual smack-down within half an hour or so.  Let’s see if that holds true again today.

The third one is the January Bank Participation Report which uses data extracted from tomorrow’s Commitment of Traders Report…for positions held at the close of Comex trading on Tuesday, January 3rd.  Both Ted Butler and myself are hoping/expecting a big drop in silver’s short position held by the two largest U.S. bullion banks…JPMorgan and HSBC USA.

Not much happened in Far East trading during their Friday.  Silver is down about a dime…and gold is basically unchanged as I await the London open in less than ten minutes.  The dollar has been as quiet as a church mouse…and the chart is as flat as a pancake…and has been since noon in New York yesterday.  Gold volume is about average…and silver volume is pretty light.  And as I hit the ‘send’ button, at 4:54 a.m. Eastern time, trading has been going on in London for about two hours…and not much of anything is happening.  

And nothing has changed in the ‘locked and loaded’ situation since yesterday…and it’s just a matter of waiting until gold and silver are allowed to rally a decent amount.  Then we’ll find out in a real hurry whether the bullion banks are going to show up as sellers of last resort again.  I don’t think they will, especially in silver…but you can never say ‘never’.

And as I said in this space a week ago, you should carefully note that JPMorgan et al still have gold and silver bullion marked down to fire-sale prices, so there’s still time to either re-adjust 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 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. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well.  And don’t forget that our 90-day guarantee of satisfaction is in effect for both publications.

Enjoy your weekend…and I’ll see you here on Saturday morning.

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