It’s only a matter of time before “conspiracy theory” becomes “conspiracy fact”…if it isn’t already.

It was pretty quiet in the gold market yesterday. The price began to rally a bit as soon as Tokyo opened at 9:00 a.m. local time on Wednesday morning…which was 6:00 p.m. in New York on Tuesday evening.

That state of affairs only lasted about four hours…and then the gold price traded in a very tight price range from there, right up until a few minutes after 9:00 a.m. in New York.  At that point, gold was up about five bucks from Tuesday’s close.  Then ‘da boyz’ went to work…and by 2:00 p.m. they had sliced about fifteen bucks off the price…and that turned out to be the low of the day at $1,697.20 spot.  The gold price recovered only by a few dollars into the 5:15 p.m. electronic close.

Gold closed at $1,701.50 spot…down another $6.20 on the day.  Volume wasn’t overly heavy at 147,000 contracts.

Silver made several decent attempts to break above the $32 spot price mark, but got turned back every time.  The last attempt came at the Comex open…and that ‘failed’ as well…and it was all down hill from that moment onwards.  Silver’s low price tick [$31.44 spot] came around 11:45 a.m. Eastern time.

From there, silver rallied a decent amount and really looked like it was going to fly shortly after 2:00 p.m. in electronic trading, but a not-for-profit seller showed up at that point…and after several attempts, had the price situation well in hand.  From 2:30 p.m., the price tailed off into the electronic close.

Silver closed at $31.73 spot…up 6 cents on the day.  Volume was around 43,500 contracts.

The dollar index opened at 79.91…and then traded sideways until just after the London open.  It jumped quickly to its 80.14 high of the day…and then slowly slid into the New York close, finishing at 79.96…basically unchanged from Tuesday.  But it was another ‘failed’ attempt to break above the 80.00 mark.  It appears, at least to me, that the dollar index is being capped at this price.

With a tight trading range of about 20 basis points or less, I’m hard pressed to pin the precious metal price activity on movements within the currency market.

The gold stocks opened in the black, but quickly slid into the red…and even though the gold price traded sideways from just before noon in New York until the electronic close, the stocks got sold off some more starting shortly after 2:00 p.m. Eastern time.  It beats me what that was all about.  The HUI closed on its absolute low tick…down 1.68%.

Even though the silver price fared much better than the gold price, the silver stocks didn’t do particularly well…and Nick Laird’s Silver Sentiment Index got beaten down by another 2.00%.

(Click on image to enlarge)

The CME’s Daily Delivery Report showed that 25 gold and zero silver contracts were posted for delivery tomorrow within the Comex-approved depositories.

There were no reported changes in GLD…but surprisingly enough, an authorized participant added 968,384 troy ounces of silver to SLV.

Over at Switzerland’s Zürcher Kantonalbank, they updated their gold and silver ETFs as of October 22nd.  They added 53,020 ounces of gold…and 359,284 troy ounces of silver to those respective ETFs.

There was no sales report from the U.S. Mint.

Tuesday was another quiet day over at the Comex-approved depositories.  They didn’t receive any silver…and only shipped out a smallish 25,714 troy ounces. The link to this ‘action’ is here.

Here’s a chart courtesy of Washington state reader…and it requires no further embellishment from me.

I have a fair number of stories…and the ones posted in the precious metals sections are more than worthy of your time today.

As collusive as the commercials may be in seeking to lure the technical funds into selling on declining prices, there should be some competition amongst the commercials to buy silver (and gold) contracts. In silver, the buying competition to watch will be the raptors versus JPMorgan. In June, the raptors held more than 27,000 net long silver contracts versus their current net long position of 2,400 contracts. On lower prices, I see no reason why the raptors wouldn’t be interested in buying 25,000 new long contracts in silver. I also see no reason why JPMorgan wouldn’t be interested in buying back the 20,000 silver contracts they recently shorted. Therefore, the raptors and JPMorgan will be looking to divvy up and buy every contract that they can trick the technical funds and other speculators into selling. This is how the markets work. According to commodity law, this is all illegal, of course…but since when has what is legal mattered in silver?Silver analyst Ted Butler, 24 October 2012

It was pretty much another day off the calendar yesterday.  Both gold and silver would have fared better if the New York market hadn’t been open, of course…as that was where all the price damage was done, as usual.

And as you have already noted, there was lots of big news in the gold world yesterday…with more to come in the days, weeks and months ahead.  I wouldn’t be surprised if we didn’t see more countries ask for their gold back now that it’s public knowledge that Germany did that itself.  And the other question is…did Germany really take its gold back, or was it leased or sold?  Question, questions!  It makes Venezuela’s President Chavez look like a visionary now.

It remains to be seen how well JPMorgan Chase et al are able to “slice the salami” to the downside from this point.  You have to wonder if all the news about Germany’s gold is having an effect behind the scenes.  I’d guess ‘yes’…but it’s impossible to know for sure.  Could “da boyz” lose control of this market like they did when the first Washington Agreement was signed back in 1999?  Sure…and if that turns out to be the case, the first clue will be found in the price.

Whatever way this turns out, we’ll just have to wait and see.  I’m guessing that we’ll be looking at a bottom here in the next few days, or a week…and it would make sense to place some bets here.  There are few that can pick the bottom precisely…but being close is sometimes good enough…like in horseshoes, hand grenades…and atomic bombs.

The price action in both gold and silver was a bit more frisky during the Far East trading session on their Thursday…and that trend has now extended into the London trading day as well.  The dollar index is down a bit…about 22 basis points…and it remains to be seen if it gets another sniff of the 80.00 mark.  Volumes, which had been pretty light right up until the London open, are now getting up there.  As I hit the ‘send’ button at 5:15 a.m. Eastern time, gold is up about $13…and silver is up 35 cents.  The New York trading session could prove interesting.

It’s my opinion that these revelations about Germany’s gold this week will be seen, in hindsight, as a pivotal moment in the history of the precious metal markets in this century.  How it plays out from here is certainly unknown…but this genie is definitely out of the bottle…and it ain’t going back in.  As I said before, I expect much more revelations going forward…and it’s only a matter of time before “conspiracy theory” becomes “conspiracy fact”…if it isn’t already.

See you on Friday.

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The 2012 exploration program includes additional drilling on both Golden Summit and Vinasale. An updated NI 43-101 resource was calculated on Golden Summit in December 2011 and using a 0.35 g/t cutoff is 14,840,000 tonnes @0.66 g/t Au – hosts 316,000 ounces in the indicated category and 50,0460,000 tonnes @0.61 g/t Au – hosts 991,000 ounces in the inferred category. Drilling has been underway on this road accessible project since mid January. To date over 36,000 feet have been drilled since January on the project, of which 30,000 feet have been aimed at resource expansion. Drilling remains ongoing.  An updated NI 43-101 is expected to be completed in Q3. 

Additional drilling is also underway on Vinasale. Vinasale currently hosts recently updated NI 43-101 resource calculation of 49,320,000 mt @1.09 g/t for a total of 1,735,000 contained gold ounces in the inferred category using a 0.5 g/t cutoff. Please visit our website for more information.