I was a happy camper to see the precious metal price charts
The gold price gained—and then lost about five bucks between the beginning of Far East on their Friday morning—and the London p.m. fix the following afternoon in London. But once the fix was out of the way, a rally began that didn't end until about an hour before the close of electronic trading.
The low and high tick were reported as $1,257.50 and $1,285.40 in the April contract.
Gold closed yesterday in New York at $1,283.10 spot, up an even $25 on the day. Net volume was 178,000 contracts
The silver price followed the same price pattern as gold up until the afternoon London gold fix. But the subsequent rally got capped around 11:30 a.m. EST in New York—and after that, the price wasn't allowed to do much.
The low and high price ticks were recorded by the CME Group as $16.815 and $17.32 in the March contract.
Silver finished the Friday session at $17.225 spot, up 31 cents from Thursday—and would have obviously performed far better if the rally hadn't been cut off at the knees as the futures market was about to go “no ask.” Net volume was 52,000 contracts.
The platinum price traded flat, but on the positive side, and began to rally once Zurich opened. What appeared to be a not-for-profit seller appeared shortly after 10 a.m. Europe time—and platinum got sold down from there into the London p.m. gold fix. The subsequent 'rally' lasted until minutes after 2 p.m. EST—and traded flat after that. Platinum closed at $1,238 spot, up an even 20 bucks from Thursday.
Palladium tacked ten bucks onto its price by shortly after 10 a.m. Europe time on their Friday morning—and then got turned lower, just like platinum—and by the time New York closed, it was down two bucks on the day, finishing the Friday session at $769 spot,
The dollar index closed at 94.68 late on Thursday afternoon in New York—and began to drift lower the moment that trading began in the Far East on their Friday morning. The 94.45 low tick came shortly before lunch in London—and then rallied up to 94.90 by the London p.m. gold fix. After that it chopped lower by a bit. The index finished the Friday session at 94.86—and up 18 basis points from Thursday.
The trading action in the dollar index yesterday [and Thursday] should forever lay to rest the assumed connection between what the currencies are doing—and what precious metal prices are doing. Because no matter what the dollar index did, the precious metals did their own thing.
The gold stocks started off in the red, but quickly rallied into the black once the gold price began to rise after the London p.m. fix was done for the day—and that's where they stayed for the remainder of the day, as the HUI closed almost on its high tick—and up 3.12 percent.
It was almost the same chart pattern for the silver equities, as Nick Laird's Intraday Silver Sentiment Index closed up 4.18 percent.
The CME Daily Delivery Report for “Day 2” of the February delivery month in gold, showed that only 16 gold and 5 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. The February delivery month for gold is off to a very slow start.
The CME Daily Delivery Report for the Friday trading session showed that February open interest in gold took a big hit, just as I mentioned it would. Open interest fell by 5,678 contracts all the way down to 2,777 contracts still open—and it will be interesting to see just how much of that amount remains when I post my Tuesday column. Silver o.i. for February declined by 273 contracts, the amount posted for delivery on Monday, leaving 43 contracts still open.
There were no reported changes in GLD yesterday—and as of 10:01 p.m. EST yesterday evening, there were no reported changes in SLV, either.
There was another smallish sales report from the U.S. Mint to round out the month. They sold another 130,000 silver eagles—and that was it.
For the full month, and provided there are no additional sales included on Monday, the mint sold 81,000 troy ounces of gold eagles—34,500 one-ounce 24K gold buffaloes—and 5,530,000 silver eagles. Based on this data, the silver/gold sales ratio works out to just under 48 to 1.
Over at the COMEX-approved depositories on Thursday, only a tiny amount of gold was reported removed—192 troy ounces to be exact—and nothing was reported received. In silver, there was 600,404 troy ounces received—and 100,011 ounces shipped out the door. The link to the silver activity is here.
Looking at the 6-month gold and silver charts in yesterday's column, I was hoping that yesterday's Commitment of Traders Report wouldn't be too bad—unchanged at worst was my guess.
Well, I wasn't even close. It was almost as horrific as the report on January 23.
In silver, the Commercial net short position blew out by another 5,952 contracts, or 29.8 million troy ounces. The Commercial net short position now stands at 308 million troy ounces which, to put it in other words, is over five months of world silver production.
Under the hood in the Disaggregated COT Report, it was all Managed Money that was buying longs or selling shorts as they continued to fuel the rally—and the Commercials were taking the other side of the trade. The Managed Money traders added 1,714 long positions—and covered 4,164 short contracts.
The Big 4 short holders in the Commercial category added another 1,500 contracts to their short positions. Ted figures that it was mostly JPMorgan doing the honours—and pegs their net short position at 20,000 contract or 100 million troy ounces, so they're short almost a third of the entire Commercial net short position all by themselves. He'll be able to recalibrate JPMorgan's short position to a much finer degree when the February Bank Participation Report comes out next Friday.
The 5 through 8 traders added 1,800 short contracts to their positions—and the remaining Commercial traders, Ted Butler's raptors, sold 2,600 long contracts.
In gold, the Commercial net short position ballooned by another 28,350 contracts, or 2.84 million troy ounces. The Commercial net short position in gold is now at 20.62 million troy ounces.
In the Managed Money category in the Disaggregated COT Report, the traders there bought 17,508 long contracts—and covered 6,388 short contracts.
Going up against them across the board for the second week in a row were the Commercial traders in all three categories—the Big 4, the 5 through 8, and the raptors went short against all comers in the Managed Money category and the other technical funds.
Ted says that JPMorgan no longer has any long position in gold worth mentioning, if it exists at all at this point in time.
With the big down day in gold on Thursday, followed by yesterday's vigorous rally, next week's COT Report is already a crap shoot as far as numbers are concerned—and we have two more trading days left to go before the cut-off.
Below is Nick Laird’s most excellent “Days of World Production to Cover Short Positions” in all physical commodities traded on the COMEX. And what I had to say about the two biggest short holders in silver still stands—and that is that JPMorgan and most likely Canada’s Scotiabank combined, hold more than 50 percent of the COMEX short position in silver between them in the Big 8 category—and about 80 percent of the short position in the Big 4 category.
And, for the first time in about a decade, the four precious metals now occupy four consecutive spots on the very far right of this chart. The four precious metals continue to be the most manipulated commodities on Planet Earth, with silver holding top spot—a position it has held for most of the last 30 years.
Here's one more chart courtesy of Nick Laird. It shows the withdrawal from the Shanghai Gold Exchange for the prior week ending on Friday, January 23—and it was the second 70 plus tonne week in a row, as 70.624 tonnes were reported removed. I have the Koos Jansen story about his in the Critical Reads section below.
It's another day when I have a lot of stories once again. Adding to the pile are the ones that I've been saving all week for content or length reasons—and I hope you can fit them into whatever spare time you have this weekend.
It’s not entirely clear what will happen in the near term, but the financial markets are already pushed to extremes by central-bank induced speculation. With speculators massively short the now-steeply-depressed euro and yen, with equity margin debt still near record levels in a market valued at more than double its pre-bubble norms on historically reliable measures, and with several major European banks running at gross leverage ratios comparable to those of Bear Stearns and Lehman before the 2008 crisis, we're seeing an abundance of what we call “leveraged mismatches” – a preponderance one-way bets, using borrowed money, that permeates the entire financial system. With market internals and credit spreads behaving badly, while Treasury yields, oil and industrial commodity prices slide in a manner consistent with abrupt weakening in global economic activity, we can hardly bear to watch. – John P. Hussman, 26 January 2015
I was a happy camper to see the precious metal price charts when I powered up my computer late yesterday morning—and even happier to see their associated equities up even more than they had lost on Thursday. On top of that, these price moves occurred on a Friday—and the last trading day of the month to boot. I must admit that I was expecting the worst. I'll take all of that as a good omen, at least for the moment.
But always front and center for me is the butt-ass ugly Commercial net short position in both silver and gold that currently exists in the COMEX futures market in both these metals. Since “da boyz” have never been over run, I must admit that I'm always mentally at “battle stations” when the current short positions are over the moon like they are now.
Of course—and as Ted Butler has mentioned many times over the years—the day may come when what's happening in the COT Report will mean nothing in the grand scheme of things. And with all the black swans out there, that day could be approaching—or not.
How much more downside potential in both gold and silver is now dependent almost entirely on whether JPMorgan et al can entice the Managed Money traders show in the Disaggregated COT Report to not only puke up what's left of their fast-dwindling long positions, but they must also be able to coax these same traders onto the short side in a big way as well. That—and that alone Ted said—will determine how low the Big 8 Commercial traders can engineer the respective prices of these two precious metals.
So we wait some more.
Once again, here are the 6-month charts for the Big 6 commodities and, with only palladium being the exception, they all rallied smartly yesterday. And whether this is a harbinger of things to come in a world where paper assets and currencies are looking increasingly risky, is hard to say at the moment. But when that change does manifest itself, as it certainly will at some point, it will be in these six commodities—and especially gold and silver—where it will show up first.
I forgot all about my two “blasts from the past” until I was running Spellcheck in preparation for sending today's column out the door. It's already 5:30 a.m. EST—and I'm just not up to writing anything to go with my selections on such short notice. So the link to the pop “blast from the past” is here—and the classical “blast from the past” is here. I'll do better next week.
As things stand today, I see an almost hopeless future ahead in no matter which arena I look—economic, financial, monetary or political—and it's all rooted in the fact that our entire planet is now confronted with a failed financial and economic experiment in fiat paper money that is now on its very last legs.
The powers that be in the world's central banks are more than terrified of what now appears to be a world-wide deflationary spiral that no amount of money-out-of-thin-air will ever fix—and whether it can all by saved by the IMF's Special Drawing Rights backed by some sort of gold component, is open to debate.
I know Jim Rickards has been going on about this for a very long time—and expended a lot of ink on it his last book “The Death of Money: The Coming Collapse of the International Monetary System“. But if this new monetary system is, in fact, in our future—there hasn't been a peep about it in the main stream press—and I've been looking hard.
Jim also mentioned the fact that the world's current and financial economic system won't make it past the next couple of years—and he said that about a year ago, so time is running out. So his “chaos” theory may end being the only game in town until the IMF gets its act together, if it ever does. Because if they're currently working on it, it's certainly the best kept secret on Planet Earth at the moment—which it would have to be, I suppose.
And commensurate with any new monetary system, it's pretty much a given that gold and silver will be repriced to fit their newly appointed rolls as money par excellence.
That's all I have for today—and it's more than enough.
See you on Tuesday.
Drilling Intersects 102 Meters of 1.97 gpt Gold at Columbus Gold’s Paul Isnard Gold Project; Drilling Confirms Depth Extension of Gold Mineralization
Columbus Gold Corporation (CGT: TSX-V) (“Columbus Gold”) is pleased to announce results of the initial five (5) core drill holes at its Paul Isnard gold project in French Guiana. The holes confirm depth extension of gold mineralization below shallow holes drilled on the 43-101 compliant 1.9 million ounce Montagne d’Or inferred gold deposit at Paul Isnard in the 1990’s and support the current program of resource expansion through offsetting open-ended gold mineralization indicated by the earlier holes.
Robert Giustra, CEO of Columbus Gold, commented: “These drill results validate Columbus Gold’s approach to adding ounces with a lower-risk drilling program designed to infill and to extend the mineralized zones to 200 m vertical depth from surface; a depth amenable to open pit mining.”
Fourteen (14) holes have been completed (assays pending) by Columbus Gold in the current program and drilling is progressing at the rate of about 3,000 meters per month with one drill-rig on a 24 hour basis. Columbus Gold plans to accelerate the current program by engaging a second drill-rig as soon as one can be obtained.
I finally got around to downloading the photos of my vacation in Arizona—and here are a couple of photos I took of a Curve-billed thrasher while I was having lunch at the Desert Botanical Garden in Phoenix. It's a pretty decent-sized bird, although rather nondescript as far as colouring goes. But since I'd never see one, or heard of them before, it was fair game. I took about 25 photos in total—and kept three of them.