It was a quiet trading session in both the Far East and London on Friday… and gold was only down a few dollars when New York opened for business. Almost from the open, gold was under selling pressure. But once the London p.m. gold fix was in at 10:00 a.m. Eastern time, gold quickly rallied back to it’s Comex opening price. But a few minutes after 10:30 a.m. the news broke about the “Giant Vampire Squid”… and the bullion banks hit the gold price immediately.
Under ‘normal’ circumstances, news such as this would be extremely gold friendly… but ‘da boyz’ were there to make sure that that didn’t happen. It wouldn’t surprise me in the slightest if they had been told in advance and were lying in wait. The powers that be wanted to make sure that everyone would see that bad financial news is a negative for gold… and a positive for the U.S. dollar… which was rallying at the same time.
Anyway, by the time the smoke cleared at gold’s low of the day… which occurred at precisely 12:00 noon Eastern time… gold was down $30 from its Thursday close. Then the selling pressure disappeared, volume evaporated… and gold gained back about $8 from it’s low… which was $1,129.30 spot.
Of all the precious metals, it was silver that was singled out to really get pounded. This, dear reader, should be no surprise to you by now. Like gold, silver’s price was basically unchanged at the Comex open… but was under pressure immediately upon the open. I wonder if someone in the know was establishing a small short position in silver [and gold too] knowing what was coming in a few hours time. It wouldn’t surprise me a bit if that was the case.
Anyway, once the p.m. gold fix was in at 10:00 a.m… silver rallied a dime only to get slammed along with gold shortly after 10:30 a.m. The major portion of the selling in silver was also over at noon… but the absolute low of the day [$17.59 spot] was a brief spike down that occurred a few minutes before 2:00 p.m. From it’s absolute N.Y. high to its absolute N.Y. low… silver was down 85 cents… but finished down only 70 cents.
The U.S. dollar was totally unfazed by what happened to Goldman Sachs yesterday… and gained about 35 basis points. Needless to say, the dollar didn’t have any impact on precious metals prices on Friday.
I suppose you would think that it could be hard to be cheerful about a 2.35% loss in the HUI. But considering the deliberate stomping of the entire precious metals complex on Friday… and the big down day on the Dow… the gold and silver shares held up surprisingly well, all things considered.
Thursday’s open interest numbers were very similar to Wednesday’s numbers. Gold o.i. dropped another 2,157 contracts. Final volume was reported as a smallish 109,795 contracts. Total open interest in gold as of Thursday was a very large 524,716 contracts.
Silver’s open interest rose another chunky 2,560 contracts on volume of 31,570 contracts. Both Ted and I agree that this was probably spread related, as neither the volume nor the price action indicated anyone going long… or short. Total open interest in silver is back up to 128,188 contracts. Friday’s crucifixion certainly dropped open interest in both silver and gold substantially… but we won’t find out how much until late Monday morning Eastern time.
The CME Delivery Report on Friday showed that 61 gold and 3 silver contracts are posted for delivery on Tuesday. The GLD showed no change once again… and surprise, surprise… another big chunk of silver was pulled out of SLV once again. This time it was ‘only’ 1,470,729 troy ounces. 17.9 million ounces of silver have been withdrawn since February 26th… 12.5 million of that was in April. Ted Butler and I spent a lot of time talking about this on the phone yesterday.
The U.S. Mint had no report… and the Comex-approved depositories showed that a tiny 12,733 ounces of silver were taken into their collective inventories on Thursday. That number is slightly deceiving… as there was, once again, lots of activity in and out of most of the warehouses… and you can view Thursday’s ‘action’ here.
Well, yesterday’s Commitment of Trader report was no surprise in silver… as the bullion banks increased their net short position by another 3,703 contracts. The ‘4 or less’ bullion banks are short 260.9 million ounces of silver… and the ‘8 or less’ traders are short 328.9 million ounces. This is a staggering amount considering that the net short position in the Commercial category… where all these bullion banks reside… currently sits at 276.9 million ounces. So the ‘4 or less’ traders hold 94.2% of the net short position in silver all by themselves. The ‘8 or less’ hold 118.7% of the net short position. The full-colour COT graph for silver is linked here.
In gold, the bullion banks increased their net short position by 18,578 contracts… which wasn’t as bad a number as Ted Butler was expecting. The Commercial net short position currently sits at 263,484 contracts… which is 26.3 million ounces of gold. The ‘4 or less’ traders are short 18.8 million ounces of that… and the ‘8 or less’ traders are short 24.0 million ounces. The full-colour COT gold graph is linked here.
Here’s the usual weekly King World News interview with silver analyst Ted Butler. Needless to say it’s worth listening to… and you should stop reading at this point and click here.
I can’t think of anyone [can you, dear reader?] that isn’t in rapture about the charges that were filed against Goldman Sachs yesterday. All of the major Wall Street brokerage firms are part of this organized crime syndicate that’s basically raping the world with no one to stop them. So I’m kind of glad to see the SEC finally grow big enough gonads [as Ted Butler so succinctly put it] to take on one of the big boys. Can JPMorgan be far behind? Ted hope that this action against GS will empower the CFTC to take some concrete action themselves. Anyway, I have one story about it, and it’s a piece posted over at yahoo.com that’s headlined “SEC accuses Goldman Sachs of defrauding investors”… and the link is here.
The next story highlights Congressman Ron Paul [R – Texas]. As Obama’s star continues to fall… Ron Paul is now being seen in a different light. I think I stole this story from yesterday’s King Report. It’s posted at the washingtonexaminer.com… and the headline reads “Hating the government finally goes mainstream”… and the link is here.
This story… and the next one… are both from yesterday’s King Report. The first is a piece from The Telegraph in London. It is, of course, by Ambrose Evans-Pritchard. The headline is startling… but not surprising. It reads “Morgan Stanley fears German exit from EMU”… “Morgan Stanley has warned that the Greek debt crisis is setting off a chain of events that may prompt German withdrawal from the eurozone, with grim implications for investors caught off-guard.” It’s not a particularly long story, but it is worth reading… and the link is here.
Israel and Iran are back in the news again. Russia has just announced that it will allow Iran’s nuclear reactor located in Bushehr to go ‘hot’ in August. This puts Israel up against it. What will they do… with, or without, American approval? The story is posted over at worldpress.com… and is headlined “Will Israel Strike By August?” That’s a good question, which is now within 100 days of resolution. This is a must read story… and the link is here.
Toronto-based Inter-Citic Minerals Inc. (TSX: ICI) is a gold exploration and development company, developing what could be one of China’s largest open-pit gold deposits. Inter-Citic’s 279 sq km Dachang Gold Project in Qinghai Province, China, with 50,000 meters of drilling underway in 2008.
The total NI 43-101 compliant Inferred Mineral Resource Estimate at Dachang now stands at 2.9 million oz Au contained (approximately 25 million tonnes with an average grade of 3.6 gpt Au), with more drilling underway on the DMZ to further define the existing 43-101 inferred mineral resource estimate in preparation for a scoping study, as well as additional drilling in highly prospective new areas focused on resource expansion. Gold mineralization in the Dachang Main Zone begins at surface and has not been significantly drilled below 150 meters, and numerous known areas of surface gold mineralization on adjacent and other parts of the property have the potential for further discoveries. The Dachang Main Zone itself remains open at depth and along strike.
Under a 30-year joint venture agreement with the Qinghai Geological Survey Institute (QGSI the provincial geological survey body), Inter-Citic has a fully-vested 83% interest in the property, with 17% belonging to QGSI. Inter-Citic has a further option to increase its total interest to 90% at pre-feasibility. The Dachang property consists of several exploration license areas. They have all been renewed by the Company as they have come due in regular course. The business license for the Dachang Gold Project is currently valid to December 26, 2033.
Learn more here.
Earlier this week I ran a story about the Russian-encouraged ‘revolution’ in Kyrgyzstan… and it’s implications in the 21st century version of the “Great Game”. Posted over at oilprice.com is a 3-part exposÃ© on this issue… not only on how it affects geopolitics in the region… but Washington’s response, or lack thereof. The first paragraph pretty well sums up the tenor of the essay… “The extraordinary events of last week in Kyrgyzstan, which saw the overthrow of President Kurmanbek Bakiyev’s administration by a popular uprising and its replacement by a provisional government have been portrayed by many in the “Beltway-istan” (Washington, D.C.) as the latest tussle betwixt Russia and the U.S. in the â€˜Great Gameâ€ for influence in the post-Soviet space.” The truth is considerably more complex, however… and the further one digs, the more the complex realities of the situation emerge. It’s a microcosm of what’s going on at the outer edges of the American Empire empire… and it’s goal of Full Spectrum Dominance. The headline reads “The Truth Behind the Recent Unrest in Kyrgyzstan”. Part 1, Part 2… and Part 3. All three parts should take about a half hour of your time. I thank Australian reader Wesley Legrand for bringing them to my attention… and now to yours.
If the history of welfare teaches us anything, it teaches us that government money is as addictive as any narcotic. – Michael D. Tanner
Today’s ‘blast from the past’ is known by all… so turn up your speakers and click
Whether or not the U.S. bullion banks try to press their advantage further on Monday is a big unknown. They certainly have the ability if they wish to do so… but will they? Ted doesn’t know for sure, either… but feels that whatever sell-off we do get next week shouldn’t last too long, nor go too deep. I’ll reserve judgment for the time being.
However, ‘day boyz’ did provide another buying opportunity for those who have not made their investments in either the precious metals or their respective shares… and if I wasn’t already ‘all in’… I would certainly be in the market on Monday… and physical metal would also be part of my purchase.
As I mentioned yesterday, Casey Research has this $199 super-special deal on until midnight tomorrow. You can subscribe to our flagship Casey Report for a full year for just $199 [which, on a monthly basis, is just $16.58… a pittance] and receive both Casey’s Gold & Resource Report and Casey’s Energy Opportunities free for one year! You save over $300!!! This is a heck of a deal, dear reader, so please click here to learn more.
Here’s the 1-year gold graph. You can see that the 50-day moving average is just a chip shot away if the bullion banks want to press their advantage. But silver has a long way to go from its current price. Both metals are now in ‘market neutral’ territory… at least according to their respective RSI’s. We also have options expiry coming up shortly. May is not a delivery month for gold… but it certainly is for silver… so I’m going to be watching next week’s price action in both metals very carefully.
The CME has posted their preliminary volume numbers for both precious metals… and it shows that gold volume yesterday was a monstrous 212,247 contracts… of which very little was roll-overs. Silver’s volume was equally stunning… with 63,365 contracts traded. Only about 20% of that was switches… so there was a lot of tech fund long liquidation in silver on Friday. I can hardly wait to see what the drop in open interest is for both metals when they’re posted on Monday. Of course the bullion banks can mask their short covering by going long… and it wouldn’t surprise me if these crooks did exactly that.
That’s all for this week… but don’t forget about Casey Research’s $199 “Tax Day Deal” Subscription Special which ends tomorrow night! Click here.
See you on Tuesday morning.