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I’d just love to see what the COT structure looked like after Friday’s trading day was done.The engineered price decline in gold came to a halt less than half an hour before the noon London silver fix during their Friday morning…and the subsequent rally came to an end at the London p.m. gold fix…which was 10:00 a.m. Eastern time.From there, the gold price got sold down a bit until about 11:35 a.m. in New York before resuming the rally…albeit at a much slower rate.  Shortly after 3:00 p.m. the gold price jumped up a few more bucks, before trading sideways into the 5:15 p.m. electronic close.Gold’s low price tick of the day in London was around $1,625 spot…and the high tick of the day [$1,659.80 spot] came late in electronic trading in New York.Gold finished the Friday session at $1,646.80 spot…down $7.00 from Thursday’s close.  Net volume was immense…around 230,000 contracts.Of course it’s always silver that JPMorgan et al are after…and they nailed it pretty good for the second day in a row.  The actual low price tick [around 29.20 spot] came around 10:30 a.m. in London…the time of the a.m. gold fix.  From there the silver price pattern pretty much followed the gold price pattern into the close of trading.  And, like gold, silver’s high print of the day [$30.38 spot] occurred in electronic trading just before the market closed.Silver actually finished in the green at $30.18 spot…up 8 cents from Thursday’s close.  Volume was very heavy at around 72,000 contracts.The dollar index opened at 80.50 on Thursday evening…and by 11:30 a.m. in London on their Friday morning, it had reached its high of the day, which was around 80.85.  It hung in there at that value until just before 8:30 a.m. Eastern time…and then gave up all of those gains during the New York trading session that followed.  The index closed almost where it started the day…at 80.49…down an eyelash from Thursday.Not surprisingly, the gold stocks gapped down at the open…and spent most of the trading day down at least a percent.  But the sharp rally in gold [and silver] shortly after 3:00 p.m. Eastern caused an equally impressive pop in the gold shares as well…and the HUI actually finished in positive territory…up 0.14%.  Not a lot, to be sure, but better than the alternative.With the odd exception, all the silver stocks finished in the green yesterday…but Nick Laird’s Intraday Silver Sentiment Index only closed up the same amount as the HUI…0.14%…which I thought was rather strange.(Click on image to enlarge)The CME’s Daily Delivery Report showed that 129 gold and zero silver contracts were posted for delivery on Tuesday from within the Comex-approved depositories.  Merrill was the only short/issuer…and the lion’s share [116 contracts] were stopped by the Bank of Nova Scotia and JPMorgan Chase.  The link to yesterday’s Issuers and Stoppers Report is here.After the big withdrawal on Thursday, the GLD ETF showed that an authorized participant added 58,100 troy ounces of gold yesterday.  Over at SLV, an authorized participant withdrew 628,824 ounces of silver.The U.S. Mint had a sales report for the third day running.  They sold 8,500 ounces of gold eagles…and another 1,500 one-ounce 24K gold buffaloes.  For the first three days of the year, the mint has sold 65,000 ounce of gold eagles, along with 14,500 one-ounce 24K gold buffaloes.In January of 2012 the mint sold 127,000 ounce of gold eagles…and 13,500 one-ounce 24K gold buffaloes.  Based on mint sales to date, the January 2012 sales number should be beaten by quite a bit…and they already have in buffaloes.  But it’s still my opinion that most of these sales happened in December, but were shoved into January.  And if I were an American citizen, I’d be buying 2013 silver eagles with both hands the moment they became available.There was big activity over at the Comex-approved depositories on Thursday.  They reported receiving 2,163,705 troy ounces of silver…and shipped 600,440 ounce of the stuff out the door.  The link to all that activity is here.The new Commitment of Trader Report came out yesterday at the usual time…and there were no surprises…and no big news.  All the ‘juice’ will be in the next COT Report…as the engineered price decline began on Wednesday, the day after the cut-off for yesterday’s report.  As any long-term reader of this daily rant already knows, this is standard operating procedure for JPMorgan et al if they wish to hide their tracks for as long as possible.In silver, the Commercial net short position declined by 1,372 contracts, or about 6.9 million ounces.  Ted Butler says that it was pretty much all raptor buying during the reporting week…and that the ‘Big 4’ didn’t change their positions by much.  The Commercial net short position is now down to 226.7 million ounces.The ‘Big 4’ bullion banks are short 239.8 million ounces of silver…which is 13.1 million ounces more than the entire Commercial net short position shown in the paragraph above.  On a ‘net’ basis, these four traders are short 49.0% of the entire Comex futures market in silver…but the truth of the matter is that it’s only two traders in the ‘Big 4’ bullion bank category that really matter…and they are JPMorgan Chase and the Bank of Nova Scotia.  It’s my guess that they are short about 45% of the entire Comex silver market all by themselves.The ‘5 through 8’ largest traders are short an additional 55.2 million ounces of silver…and on a ‘net’ basis are short an additional 11.3 percentage points of the entire Comex futures market in silver.  Adding up the numbers, the ‘Big 8’ bullion banks are short a bit over 60% of the entire Comex silver market.In gold, the Commercial net short position actually increased by 995 contracts, or 99,500 troy ounces…and now sits at 18.86 million ounces.  The ‘Big 4’ bullion banks are short 11.81 million ounces of gold, which represents 33.3% of the entire Comex futures market on a ‘net’ basis.  The ‘5 through 8’ bullion banks are short an additional 5.01 million ounces.  This represents 14.1% of the entire Comex gold market on a ‘net’ basis.  The total for the ‘Big 8’ comes to 16.82 million ounces of gold…and 47.4% of the entire Comex gold market.Here’s Nick’s most excellent “Days of World Production to Cover Short Positions” chart that shows ‘all of the above’ in graphic form…and the links to the historic [and interactive] COT Reports are here for silver…and here for gold.  They take a while to load if you have an older browser.(Click on image to enlarge)Of course, this is all ‘yesterday’s news’ as Ted Butler is wont to say…as the price action since the Tuesday Comex close has mostly relegated this last COT Report to the trash bin.  I would love to have seen what a new COT report would have looked like if the cut-off was at the Comex close yesterday.  I’m sure that with the big new low in silver…and the new low in gold…there were huge declines in the Commercial net short position in both metals, as the tech funds puked up their longs…and the Commercial traders covered short positions…and/or went long themselves.I’ll have more on this in ‘The Wrap’ section further down.Since it’s the weekend, I have more than the usual number of stories for your reading ‘pleasure’ today…and I hope you can find the time over what’s left of your weekend to read the ones that interest you.An idea not coupled with action will never get any bigger than the brain cell it occupied. – Arnold H. GlasowI’ve got a couple of musical selections for you today…starting off with an 8-year old trumpet-playing prodigy.  Here he is blowing a medley of old Herb Alpert tunes…and he sounds just like him, too.  This kid is definitely going places…and once his physical size catches up to his playing ability…look out.  It’s posted over at the wimp.com Internet site…and it’s courtesy of Roy Stephens.  The link is here.Going back a lot further in time is this short piano piece by French composer Claude Debussy.  He started the composition on the suite that contains this work back in 1890, but he didn’t finish or publish it until 1905…and this piece is the third movement of that suite.  This as good a recording of this work as you will find anywhere…and you should know it straight away.  It’s posted on the youtube.com Internet site…and the link is here.Without doubt, JPMorgan Chase et al managed to flush out a lot more of the technical fund long positions yesterday, as they hit new lows for both gold and silver for this move down.  Although they’re after as many of the technical fund long holders they can get in all the metals, it’s more than obvious…as it has always been…that silver is the metal that always gets pounded the hardest.Below are the 2-year charts for both gold and silver to put this last 30-day price move in both metals into a longer-term perspective and, as Ted Butler said once again on the phone yesterday…”Are they done to the downside yet???”  Nobody knows, but we came a giant step closer with the early price action on Friday.  The big surprise for me was that “da boyz” didn’t press their advantage in the New York trading session.And as I mentioned in my discussion on the COT Report, I’d just love to see what the COT structure looked like after Friday’s trading day was done…because without doubt, it would look totally different than it did in the report from Tuesday’s cut-off.(Click on image to enlarge)(Click on image to enlarge)From a technical viewpoint, I really liked the ‘positive hammers’ that yesterday’s price action painted on the charts above.  But, as I’ve mentioned on many occasions in this space, the bullion banks can read these charts as well…and can paint any pattern they want when necessary.But whenever the ‘bottom’ arrives, it always boils down to what JPMorgan et al will do on the subsequent rally.  Will they become the short sellers of last resort once again…like they’ve been doing for 25 years…or will they stand there with their hands in their pockets, or maybe do some short covering themselves? What they do…and only what they do…will determine how high we go in price…and how fast we get there, once that day arrives.That pretty much covers what I have to say for the day…and the week.  I hope you had the opportunity to ‘buy the dip’ as I suggested…and if we go lower from here, you should be buying that dip as well.  I certainly will be.See you on Tuesday.last_img

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