Ill put my marker down here and say that a major

first_imgI’ll put my marker down here and say that a major bottom in gold and silver was set The gold price got sold down to a new low around 9:30 a.m. in Hong Kong trading on their Friday morning. From there, the price jumped ten bucks to just over $1,390 spot…and stayed very range bound above that price for the rest of Friday trading everywhere on Planet Earth yesterday. Of course, every attempt to break above the $1,300 spot price mark got sold off.  The New York high tick was recorded by Kitco at $1,300.20 spot. Gold closed at $1,298.60 spot…up $20.80 on the day.  Gross volume was pretty chunky at 205,000 contracts, as the 25% increase in gold margins had their intended effect. (Click on image to enlarge) I thank Nick for this particular chart, because I know that he’s taking the weekend off to celebrate his father’s 100th birthday…but he got this one done for us. The CME’s Daily Delivery Report showed that 12 gold and 8 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. Another day, another withdrawal from GLD.  This time it was 173,966 troy ounces.  And as of 10:44 p.m. EDT yesterday evening, there were no reported withdrawals from SLV. The U.S. Mint had another sales report yesterday.  They sold 9,000 ounces of gold eagles…2,000 one-ounce 24K gold buffaloes…and 600,000 silver eagles.  Month-to-date the mint has sold 42,000 ounces of gold eagles…10,000 one-ounce 24K gold buffaloes…and 2,428,000 silver eagles.  Based on these sales figures, the silver/gold sales ratio currently sits at just under 47 to 1. Over at the Comex-approved depositories on Thursday, they reported receiving 5,247 troy ounces of silver…and shipped out 339,724 ounce of the stuff.  The link to that activity is here. In gold, these same depositories received 3,199 troy ounces…and shipped out 32,081 troy ounces.  The link to that activity is here. It was another busy day at the store on Friday…and like it has always been, silver sales were great, but gold sales were astonishing once again. Well, my guess that there wouldn’t be much in yesterday’s Commitment of Traders Report turned out to be only half right.  There were no changes worth noting in silver…but gold was a horse of a different colour. In gold, the Commercial net short position declined by a very chunky 14,207 contracts, or 1.42 million ounces.  The Commercial net short position is now down to only 4.41 million ounces…a level not seen, according to reader E.W.F…”since February 8, 2005.”  He also noted that the gold ‘raptors’…”hold their biggest net long position since February 20, 2001.” The Big 4 short contract holders [which, of course, no longer includes JPMorgan Chase] are short 10.22 million troy ounces of gold which, on a ‘net’ basis, represents 31.9% of the entire Comex futures market in gold…once the market-neutral spread trades are subtracted from the total open interest. The ‘5 through 8’ short holders in gold are short an additional 4.60 million troy ounces of gold on a ‘net’ basis.  That represents another 14.4 percentage points of the total Comex futures market on the short side. So the ‘Big 8’ in total are short 46.3% of the entire Comex futures market in gold on a net basis…and are short 236% of the Commercial net short position, which is preposterous. But to put things in perspective for gold, the ‘Big 8’ short holders in silver are short 252.5 million ounces of the stuff…and the Commercial net short position is only 29.8 million ounces…so that puts their combined short position at 1,080% of the Commercial net short position. The 236 percent in gold…and the 1,080 percent in silver…are almost impossible to believe…but there they are…and will be even more over the moon in both metals as the Commercial net short positions in both shrinks to zero, which they’re probably close to right now. After the events of Wednesday and Thursday, it’s a good bet that JPMorgan Chase is out of its silver short position…and if not out, then close enough that what remains of it no longer matters, as they are covered in other markets…particularly in gold…which they have an even bigger long position in now than they did at the Tuesday cut-off for yesterday’s COT Report. We’ll only see these numbers IF the precious metal prices remain flat through the close of Comex trading on Tuesday, the cut-off for the COT Report on Friday, June 28th…and I certainly wouldn’t bet the ranch on that. Because Nick is celebrating his dad’s 100th birthday, I don’t have the “Days to Cover Comex Short Positions” graph that I normally post in this space.  But to tell you the truth, dear reader, it doesn’t matter anymore…as the precious metals world has now changed forever…even though it looks and feels the same as it did just days ago.  It’s what’s changed under the hood that matters…and everything will be different going forward. Here’s a chart that Washington state reader S.A. sent our way yesterday.  He obviously stole it from the stansberryresearch.com Internet site…and it needs no further explanation from me. It was pretty the same price pattern in silver…complete with the 9:30 a.m. Hong Kong low price tick on their Friday morning.  However silver managed to move above the $22 spot price mark…but not by much. Silver closed at $20.12 spot…up 52 cents from Thursday’s close.  Gross volume was off the charts…and net volume was pretty decent as well…34,000 contracts. The gold stocks opened in the plus column, but that didn’t last long…and they quickly got sold down to their low of the day, which came shortly before 11:00 a.m. EDT.  After trading flat until 12:30…they began to rise as the dollar index rolled over and gold rallied ten bucks up to the $1,300 spot price mark. Despite the fact that gold couldn’t make it over the $1,300 spot price ceiling, the shares spend most of the remainder of the New York trading session trading in the black. The HUI finished up 1.26%. Sponsor Advertisement Since this is my Saturday column, I get to empty out my in-box with everything I’ve been saving all week…and that’s what I’ve done.  I hope you can find the time to read the stories that interest you…and there are a lot of must reads on the list. The liberties of a people never were, nor ever will be secure, when the transactions of their rulers may be concealed from them. – Patrick Henry Today’s pop ‘blast from the past’ is 40 years old…almost impossible to believe.  It’s the original video of Billy Joel’s greatest hit…and you’ll know it instantly.  I thank reader Marshall Angeles for sending me this on Christmas Eve of 2012.  The link is here. Today’s classical ‘blast from the past…the Élégie for cello and orchestra…Op. 24, was written by Gabriel Fauré in 1883. The piece, in C minor, features a sad and somber opening and climaxes with an intense, fast-paced section. The piece was originally conceived as part of an unfinished cello sonata. Fauré dedicated the work to Jules Loeb, who died in 1883. Originally for cello and piano, the piece was orchestrated by Fauré in 1890. Here’s Julian Lloyd Webber doing the honours in the original piano version…and Yo Yo Mah playing the piece in the full orchestral version…which I posted in this space many years ago.  I prefer the orchestral version myself, as that’s the only way, up until now, I’ve ever heard it. With everyone thinking that there’s still more pain to come, I’ll put my marker down here and say that a major bottom in gold and silver was set in early trading in the Far East on their Friday morning. It’s my opinion that the Commercial net short positions in both gold and silver are only tiny remnants of what they used to be…if they exist at all after Wednesday and Thursday’s engineered price decline…and if they do exist, they are now immaterial in the grand scheme of things.  Could JPMorgan go after them as well?  I suppose, but if that was the plan, why didn’t they press their advantage on Friday in London and New York when the precious metal markets were already beaten to the ground…and bearish sentiment was running rampant? It’s also my opinion that the Fed, through its agent JPMorgan Chase, is about to play the only real card it has left in its arsenal…and that’s the gold card…something I’ve spoken about on many occasions in this column over the years.  If there ever was a time for that to happen, it would be now.  I can’t think of any other reason why the U.S. bullion banks would be in such an obvious hurry to get long the precious metals market…particularly gold. Of course many other analysts/commentators have voiced the same opinion over the years…and I feel that the moment has arrived, or is very close at hand.  And as I said yesterday, it’s only the timing I’m unsure of.  But if this is their plan, then we shouldn’t have long to wait. Before heading off to bed, I’d like to remind you again that Casey Research has another FREE ON-LINE VIDEO EVENT in the works.  This one is entitled “GOLD: Dead Cat…or Raging Bull?“ It will feature Jim Cramer, Eric Sprott, Doug Casey, Steven Feldman, Rob McEwen and Jeff Clark. They explore the recent fluctuations of the gold price and what it means for investors. Does gold’s drop signal the end of its bull run, or is it just taking a breather? Should investors load up on or unload gold? The free online event Gold: Dead Cat…or Raging Bull? hosted by The Street and Casey Research, with Jim Cramer, Eric Sprott, Doug Casey, and others will provide some answers.  This free video will air on June 25th at 2:00 pm Eastern Daylight Time.  It will be available for viewing after the initial stream for those who have schedule conflicts.  You can check it out…and then sign up for it here.  Based on the events of this past week, it pretty much goes without saying that it will be worth your time. That’s it for the day…and for the week.  I await the Sunday night open in New York with great interest…and I’ll see you here on Tuesday.center_img Is Gold Dead? Does gold’s drop signal the end of its bull run, or is it just taking a breather? Should you load up on or unload gold? Watch the free online event Gold: Dead Cat or Raging Bull? hosted by The Street and Casey Research, with Jim Cramer, Eric Sprott, Doug Casey, and others. Register here. The silver stocks turned in a rather mixed performance, but Nick Laird’s Intraday Silver Sentiment Index showed they closed up 2.47%. The dollar index closed late Thursday afternoon in New York at 81.75…and then declined slowly to its low price tick of the day…81.65…at 10:30 a.m. Hong Kong time on their Friday.  After that, it slowly rallied up to 81.90 shortly before 8:00 a.m. in New York.  From that point, the rally accelerated, hitting its zenith [82.50] at 12:30 p.m. EDT…before selling off into the 5:15 p.m. close.  The dollar index finished the Friday trading session at 82.41…up another 66 basis points. Here’s the New York Spot Gold [Bid] chart, so you can see the New York price action in greater detail.  It should be obvious to all but the willfully blind, that the gold price was deliberately held below $1,300 spot…just like it was at the $1,400 spot price mark.last_img

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