And Then There’s This…Friday, June 20th, 2008
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The gold price lost about eight bucks (silver was down about 20 cents) from the open in Sydney on Thursday morning until about fifteen minutes before the Comex opened in New York yesterday morning.
A rally commenced which quickly turned into a vertical line that looked like it was heading for the outer edges of the known universe. Ditto for silver. Then, around 9:15 a.m. NY time..and as expected, the bullion banks showed up and hammered both rallies as flat as a pancake. Silver actually closed down on the day, and down 42 cents from it’s high peak of $17.74. Gold was driven back below $900…down more than $10 from it’s peak…which was $908.60.
You have to be brain dead not to see what’s happening here. This is the third time this week that vertical price spikes in both metals were clobbered shortly after the Comex open. As I’ve said in the past…no profit-maximizing seller ever sells like this…ever! Only those trying to control the price do this sort of thing. And, as always, the CFTC, SEC and your mining company’s executives are nowhere to be found.
Open interest for Wednesday’s price gains are as follows…gold up a pretty big 5,648 contracts, and silver added an insignificant 179 contracts. Volume in both metals was very heavy yesterday, and the open interest numbers will certainly reflect that (hopefully) when they come out later this morning.
I spoke with Ted Butler yesterday morning as both gold and silver were being driven down from their highs. He also confirmed heavy volume along with massive buying (and short covering) by the tech funds in the Non-Commercial category, coupled with the bullion banks taking the short side of all trades. Even Gartman went long again yesterday. Unfortunately, this week’s rally is rapidly turning into a carbon copy of every other rally we’ve ever had…tech funds go long, bullion banks go short. How long this rally lasts is anyone’s guess. However, options expiry is next Wednesday…and first day notice for delivery will be two days later on Friday, June 27th. Anything (and I mean anything) can happen between now and then…and the fireworks have already begun. And once again, we’ll have to wait until next Friday to see Thursday’s activity show up in the Commitment of Traders report.
In gold news I see that South African gold output (in April) fell 10.1% in volume terms. The Reuters story didn’t say if this was m/m or y/y. Does it matter? I also note that Rhodium closed above the $10k mark for the first time ever at $10,010. Now that’s a precious metal!!!
Today’s first story is from The Telegraph out of London. Mervyn King, the governor of the BOE, has some rather frank words for the public about what’s happening…and what’s coming down the road…although I have no idea how he sees inflation coming to an end when the printing presses are running flat out. I guess it’s the British version of spin. The story entitled “Things will get worse, warns Bank of England governor Mervyn King” and is linked here.
The second story is rather interesting and worth noting carefully. It will be of more than passing interest if this bill gets passed. It’s entitled “Senators propose ban on commodities investing” and the link is here.
Let’s see…what else happened yesterday. Twice the PPT saved the Dow after it fell below 12,000. Two ex-Bear Stearns fund managers were arrested by the FBI. Mexico imposed price controls on food. House Democrats called for nationalization of all oil refineries. That’s quite enough.
Today is Friday…and they are always interesting. This one should be no different. Have a great weekend and all of us at Casey’s Daily Resource Plus will see you right here on Saturday.
Source: And Then There’s This…Friday, June 20th, 2008
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