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Wednesday, July 13, 2011

...from Ed Steer - Yesterday in Gold and Silver


After briefly flirting with the prospect of breaking through $1,555 spot in early Far East trading on Tuesday morning, gold got sold off about fifteen bucks...hitting its low of the day shortly after high noon in London.
From that low, the gold price spent the New York Comex session grinding its was back to Tuesday's closing price. Shortly after it got there, a serious buyer showed up about fifteen minutes before the Comex close, and bid the price up twenty bucks in just over an hour.
After the buyer vanished, the gold price sold off a few dollars into the close of electronic trading at 5:15 p.m. Eastern time...but still managed to close the day at a new record high price. For a summer trading day, volume was pretty heavy.
Silver pretty much traded sideways up until about a half hour before London opened...and then got sold off to its low of the day at the exact same moment that gold hit its low, which was shortly after twelve noon in London. This looked like a slightly late silver fix to me.
From that point, the silver price then pretty much duplicated the run-up in price that the gold had...but a willing seller showed up shortly after the price broke through its 50-day moving average...and that was that for the rest of the trading session in the New York Access Market. Volume was pretty heavy.
The dollar opened around the 76.00 cent mark...and then proceeded to rally a hair over 70 basis points, hitting it's zenith a few moments before 4:00 a.m. Eastern, which was shortly before 9:00 a.m. London time.
From that high, which was more than three hours before gold and silver hit their lows, the dollar headed south with a vengeance...losing about 90 basis points...and hitting its low of the day shortly after 2:00 p.m. in New York. The dollar gained back about 20 basis points before the end of the New York trading day...and the buck closed within an eyelash of unchanged.
Once again the two precious metals traded with a mind of their own relative to the dollar.
While we're on the subject of the almighty dollar...although this applies to all fiat currencies...here's a chart that Nick Laird sent me in the wee hours of this morning. Since the bottom in gold in the first quarter of 2001...the U.S. dollar has lost almost 85% of its purchasing power vs. the yellow metal since then. I would think that the chart for every other currency on Planet Earth would bear a striking resemblance to this chart before you.
(Click on image to enlarge)
Even though the gold price was not back above its Monday opening price, the gold stocks were in the black almost from the moment that the equity markets began trading in New York at 9:30 a.m. Eastern time.
Once the HUI was up about a percent, it traded sideways until the big breakout at 1:15 p.m. Eastern..and that point is not hard to pick out on the chart below. The HUI closed just off it's high of the day... up 3.09%.
For obvious reasons, the silver stocks didn't do quite as well as their golden brethren, but they turned in a very respectable performance nonetheless...with Nick Laird's Silver Sentiment Index up 2.31% when all was said and done.
(Click on image to enlarge)
The CME's Daily Delivery Report showed that one gold, along with 201 silver contracts, were posted for delivery on Thursday. In silver, the big issuer was Merrill with 191 contracts...and the biggest stopper/receiver was the Bank of Nova Scotia [108 contracts] and JPMorgan [45 contracts] in their client account. The link to the action is here.
The GLD ETF received a very chunky 357,113 ounces of gold yesterday...and there were no reported changes in SLV.
The U.S. Mint had a smallish sales report yesterday, as they reported selling 1,000 ounces of gold eagles.
The Comex-approved depositories reported receiving 613,435 ounces of silver on Monday...and shipped 17,788 ounces out the door. 

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