Published on February 07 2013

Print Those Blues Away: Why Gold is Under Accumulation Globally

There’s an old trading adage that states that one should “never short a quiet market”

It was a nothing sort of day in gold yesterday.  After getting sold down about five bucks by 11:00 a.m. in London, a smallish rally developed that lasted until about twenty minutes after the Comex open in New York that took gold back into positive territory…and from there the price chopped sideways into the 5:15 p.m. Eastern time electronic close.

The high of the day…such as it was…came shortly after the equity markets opened in New York yesterday morning…and Kitco recorded that as $1,681.00 spot.  The low of the day…such as it was…was around the $1,668 spot mark…and occurred in late morning London trading.

Gold finished the Wednesday trading session at $1,677.30 spot…up $4.10 on the day.  Volume was light…around 106,000 contracts. 

It was pretty much the same story in silver…and the price path was very similar to gold’s.  The only notable difference was that silver rallied from the 11:00 a.m. GMT London low, almost to the close of electronic trading in New York…and that silver’s high tick of the day came about five minutes before the Comex close.

Silver’s low tick was just under $31.60 spot…and the 1:25 p.m Eastern time high tick was reported by Kitco as $32.00 right on the button.

The silver price closed at $31.85 spot…up 3 cents.  I’m underwhelmed. Net volume was very light…around 25,000 contracts. 

Here’s the Kitco platinum chart…and as you are probably more than aware, it is now outperforming gold…and is over fifty dollars an ounce higher than gold is at the moment.

The dollar index opened in the Far East at 79.54…and then rallied up to 79.80 by the 8:00 a.m. GMT London open.  From there it chopped around for the rest of the day, closing the Wednesday trading session at 79.74…up 20 basis points from Tuesday’s close.

The gold stocks basically followed the gold price around yesterday…and the HUI finished up 0.63% on the day.

Most of the silver stocks finished in positive territory, including those ones that mattered…and Nick Laird’s Silver Sentiment Index closed up 0.79%.  Nick is having some issues with his new Intraday Silver Sentiment Index, so until he’s fixed that, the older version of the chart is the one that’s posted below.

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The CME’s Daily Delivery Report showed that zero gold and 4 silver contracts were posted for delivery on Friday from within the Comex-approved depositories.

There were no reported changes in either GLD or SLV…and there was no sales report from the U.S. Mint, either.

Over at the Comex-approved depositories on Tuesday, they didn’t reported receiving any silver, but they did ship 195,490 troy ounces of it out the door…and the link to that activity is here.

As promised yesterday, here are three charts from Nick Laird showing all the action in the Hong Kong/China Import/Export/Re-Export in gold bullion.

Imports in December rose to an all time high of 109.825 tonnes with cumulative imports since 2001 now reaching 1,352 tonnes.

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Imports for the year of 2012 were also at an all time high of 572.575 tonnes.

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Coupled with mine production, we get a potential 970 tonnes of gold finding it’s way into their hands this year.  Cumulative gold – imports plus production – now reach 4,793 tonnes since 2001.

(Click on image to enlarge)

For those who think that gold no longer has any value as currency in the modern world, these charts should put an end to that type of thinking.

I have a rather large number of stories for you again today, so I hope you have the time to read the ones that are of interest.

The message today is not just that JPMorgan is the big silver crook…and that the CFTC and the CME are negligent and conflicted. It’s much more than that. The pattern over the past year of JPMorgan being the sole new short seller of last resort represents a dramatic escalation in the silver manipulation that appears certain to self-destruct. Just as it has become obvious to most that the CFTC is investigating silver instead of answering how a 25% or 35% share of the market wouldn’t be manipulative to the price, JPMorgan goes ahead and ups the ante and becomes the only new silver short seller to boot. This new pattern smacks of desperation.Silver analyst Ted Butler…06 February 2013

It was a very quiet trading day yesterday…and there was no volume to speak of, so there’s not much to read into Wednesday’s price action.  It was pretty much just another day of the calendar, as Ted Butler is wont to say…and another day where the grotesque short positions in the precious metals…particularly silver…remain unresolved.

Those three gold charts on China’s production and imports over the last ten years speaks volumes for the fact that the current fiat currency system is now on its last legs, as the Chinese are not doing this without a good reason.  It’s just a matter of the timing of the announcement of just how much gold they have socked away that will be the surprise…and if these numbers are even close to being accurate, they have quite a bit…and this is only what we know about through ‘official’ channels.

There sure isn’t much happening in the precious metals as we approach the 8:00 a.m. GMT London open, as it was totally dead in Far East trading.  Volumes are even lighter than they were this time on Wednesday morning…and the dollar index is hovering around the unchanged mark.

And as I hit the ‘send’ button a couple of hours later at 5:10 a.m. Eastern time…both metals are down a hair in mid-morning London trading…as is the dollar index.  Volumes are still very light…and mostly of the high-frequency trading variety.

There’s an old trading adage that states that one should “never short a quiet market” and, in my opinion, this would apply in spades here…even if we get blasted to the downside one more time by JPMorgan Chase and friends.

If you live just west of the International Date Line…I hope you enjoy your weekend…and I’ll see you here on Saturday.  If you live elsewhere, I’ll see you on Friday.

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