The U.S. Mint sells another 350,000 silver eagles. FDIC asked to put Bank of America into receivership. Where can we find 20,000 tonnes of gold? The monetary breakdown of the west. From global depression to global governance… and much more.

The gold price was pretty flat during Far East trading on Friday.  This all changed the moment that London opened for business at 8:00 a.m. local time… which is 3:00 a.m. in New York… as the not-for-profit seller[s] showed up with a vengeance.  Within an hour the gold price was at its low of the day… which was around $1,314 spot.

I filed my Thursday commentary at 5:00 a.m. Eastern time yesterday morning… and as I indicated in my closing paragraph, I feared the worst when New York opened.  Nothing of the sort happened.  Gold popped ten bucks at the Comex open, but got sold off beginning at 9:00 a.m. before resuming the quiet upward trend that had started earlier in London.  Gold close almost at it’s high of the day yesterday, which was reported as $1,329.50 spot.

Silver’s price was a bit more entertaining than the gold price during Far East trading on Friday… but it, too, ran into the same not-for-profit seller at the London open.  Silver’s low of the day occurred at 9:00 a.m in London around the $22.80 spot level… and from that point climbed quietly [and unevenly] right into the New York close at $23.29 spot… which also happened to be silver’s high price of the day.

There was very little net change in the world’s reserve currency during the Friday trading day… and, in the broad strokes, the gold and silver prices were loosely co-related with the dollar… but it’s a stretch to say it was the only factor in yesterday’s precious metals price action.

  

The precious metals price action pretty much followed the gold price around while the New York equity markets were open.  Most silver shares did better than their gold counterparts.  The HUI managed to close a hair over five hundred at 500.06… up 0.95% on the day.  Here’s the chart for the week that was.

  

The graph speaks volumes.  Tuesday’s bear raid stands out like a sore thumb.  But once the nervous longs hit the bid at the Tuesday open… and even though the gold price had declined even more since then… the HUI finished the week basically unchanged from its Tuesday morning low, which was around the 500 mark.  Most investors were either buying the dips, or refused to be scared out of the market.

It’s been ten days since I’ve mentioned the CME’s Delivery Report, so I thought I’d throw Friday’s report in here just for fun.  They reported that 88 gold and 6 silver contracts were posted for delivery on Tuesday.  In gold, Prudential and JPMorgan were the big issuers.  JPMorgan is still trading for its house account.  The link to the ‘action’ is here.

There were no changes reported for either the GLD or SLV ETFs yesterday.

The U.S. Mint had a sales report.  They sold another 9,500 ounces of gold eagles and 350,000 silver eagles.  Month-to-date… 78,500 ounces of gold eagles and 2,350,000 silver eagles have been sold.

Over at the Comex-approved depositories, they reported that a net 152,407 ounces of silver were withdrawn on Thursday.  The link to this activity is here.

Well, the Commitment of Traders report was more positive than I expected.  In silver, the bullion banks reduced their net short position by 3,354 contracts.  Ted Butler pointed out to me that the Commercial net short position is back below 300 million ounces for the first time since the end of August… 290.8 million ounces to be exact.

The ‘4 or less’ bullion banks are still short 247.0 million ounces… and the ‘8 or less’ bullion banks are short 324.1 million ounces.  Nothing has changed here, as these bullion banks are still trapped on the short side with these obscene and grotesque short positions that they can’t get out of… and they haven’t even started to cover them in any meaningful way.

There was also improvement in gold… with the bullion banks covering 6,940 short positions.  As of Tuesday’s cut-off, the total net Commercial short position sat at 29.3 million ounces.  Of that amount, the ‘4 or less’ bullion banks were short 21.7 million ounces… and the ‘8 or less’ bullion banks were short 30.2 million ounces of gold.

Needless to say, the short positions in both gold and silver have fallen substantially since Tuesday’s bear raid.  Next week’s report should tell us more.

Here’s Ted Butler’s “Days to Cover” graph that’s courtesy of Nick Laird over at sharelynx.com.  You can see at a glance just how outrageous these silver and gold short positions really are when you compare them against other commodities.

  

Cautious, careful people, always casting about to preserve their reputation and social standing, never can bring about a reform. Those who are really in earnest must be willing to be anything or nothing in the world’s estimation, and publicly and privately, in season and out, avow their sympathy with despised and persecuted ideas and their advocates, and bear the consequences. – Susan B Anthony

Today’s ‘blast from the past’ goes back about 35 years or so.  Everyone knows it, so turn up your speakers and click here.

I must admit that I was surprised [but delighted] to wake up Friday morning and find that both precious metals were on the road to recovery after their little ‘mishap’ at the London open.  Are we out of the woods yet?  I don’t know… nor does anyone else… except ‘da boyz’.

The other surprise on Friday morning was just how poorly the general equity markets were doing.  There was a POMO from the Fed… but as Bill King of King Report fame put it:  “This makes today’s [Friday’s] POMO interesting. If the NY Fed does another meager POMO, it leads credence to the notion that a currency deal with China has been struck and any further QE cannot be large enough to usurp the currency deal.

Another clue arrived on Thursday when St. Louis Fed President James Bullard made two key assertions.  Bullard said the disinflation trend “has flattened out”. This means there is no ‘deflation’ excuse for QE.  Bullard added, “We are not here to ratify what the markets think.” This is a crystal clear rebuke to all the Street creatures that have ordained that a massive QE 2.0 is an absolute certainty.”

We’ll find out on November 3rd what the real story is once the FOMC meeting ends and Bernanke & Co. make their announcement.

I mentioned earlier in this column that I would have more to say about the silver shortage in ‘The Wrap’… and here it is.  I keep in daily contact with my coin guy here in Edmonton.  He’s a major bullion dealer in western Canada… and certainly the largest in Alberta.  He’s been in the business for decades and is really plugged in to the delivery pipeline.

He mentioned a couple of times this past week that deliveries are starting to get pretty stretched out once again.  One-ounce rounds, maple leafs, and silver eagles are three weeks at best… and everything else is six weeks or more.  If you check Tulving, you’ll see that product availability is becoming a problem once again… as the refiners obviously can’t keep up with demand.

My coin guy says that as the price rose during the last month or so, buying activity increased… and as the price fell this week, buying activity increased even more… as buyers who had delayed purchases, hoping for a pull back, finally got their wish.  He’s taking their orders, but can’t guarantee when he’ll get the stock to fill them.  The same situation exists in a lot of product coming out of A-Mark as well.

You can read into that whatever you want, but it just confirms what Rick Rule had to say earlier.  So based on this news, dear reader, please take whatever action you deem to be in your best financial interests.

Here’s the 1-year silver chart.

  

So… is it time to ‘buy the dip’ in the precious metal stocks?  I don’t know, but when the selling is finally all over, it will be another huge buying opportunity that may not last long. In my opinion you should make your preparations ahead of time, so you’ll be ready when the bottom is in… and the first place I’d start would be with a subscription to either Casey Research‘s Big Gold report… or their flagship publication… the International Speculator. Please click on the links, as it costs nothing to check them out… and the subscriptions come complete with CR‘s usual money-back guarantee.  I’ve already had at least a 25 times return on my subscription investment just this year alone!  These subscriptions don’t cost… they pay!!!

I hope you enjoy what’s left of your weekend… and I’ll see you here on Tuesday morning.

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