First Notice Day
Today is First Notice Day for the Dec15 gold and silver contracts. For trading, this means that the new front month for gold is the Feb16 and for silver it's the Mar16 while the December contracts begin their sham "delivery" phase.
Speaking of deliveries...The Dec15 silver got started with a bang back on Friday with 2,746 "deliveries" made versus a total of 4,078 open contracts at expiration. You might recall that we followed silver deliveries quite closely back in July and September as the patterns were quite unusual: http://www.tfmetalsreport.com/blog/7031/wrapping-july-comex-silver-deliveries
Will Dec15 silver see another 100%+ delivery month? Will buyers show up again to "jump the queue"? This is important if you recall how silver refused to go down and break below $14 back in July. Well, here we are again...
And in gold, just the opposite occurred as only two "deliveries" were made versus an open interest allegedly standing for delivery of 7,849. Recall that the most recent delivery month for gold was October and that the entire month was very odd with just 950 total deliveries being made (most of them right at the end of the month) versus 3,092 standing at expiration on September 29. We followed this all through October and note that this occurred during a period of extreme bullion bank short issuance and price capping: http://www.tfmetalsreport.com/blog/7241/futures-market-fraud
So, we'll see what happens this month. As you know, I expect a price rally into year end that extends into January, at a minimum. How will this impact Dec15 "deliveries"? Who cares? Does it really matter? Though the delivery sheet for silver (as you can see below) at least has the appearance of actual silver being issued and delivered, gold...where the real action is...will continue to be a shell game.
Speaking of that year end rally...As you know, I've been patiently waiting for the opportunity to buy/trade the next dip and the plan has worked almost entirely as forecast. The only error, if you can call it that, is that prices have fallen a bit farther than anticipated. As a reminder see this post which contains the paragraph below: http://www.tfmetalsreport.com/blog/7248/three-more-weeks
"Again, NONE OF THIS should come as any surprise to anyone here as we've discussed this at length recently. I expect price to remain pressured all month. HOWEVER, my plan is to look for some opportunity AFTER Dec15 contract expiration on the 27th of this month. That's three weeks from now! So, be patient. Understand why and how this is happening and then take advantage of this knowledge."
The final piece of the puzzle will be the CoT that is due to be released at 3:30 pm EST today. It will undoubtedly show another significant improvement as there was significant Spec long liquidation in gold and considerable long liquidation/fresh shorting in silver. This CoT should show NET positions that are close to the record lows we saw late last summer...right before the September-October rally. So, it should come as no surprise that the next rally will span December-January. Again, let's wait to see the CoT before taking any action. We will, of course, fully discuss the report in today's podcast.
In other news...There's some buzz this morning about the "meeting under expedited rules" that the Fed held last week. It turns out that they want to rescind some of the stuff put in place back in 2008. To me, it's really no big deal but you may think otherwise. Check these two links below:
And we're gaining on the final decision regarding the yuan and the SDR as, apparently, we'll know something later today: http://www.theguardian.com/business/2015/nov/29/chinese-yuan-imf-special-basket-of-currencies-us-dollar
Prices have bounced a little today...which is nice...but it's nothing to write home about just yet. Again, gold needs to first crawl back above $1080 and then $1105. Only then can we safely claim that the current Spec rinse cycle is finally over. In the meantime, there's still a possibility...maybe even a likelihood...of a drop to that $1035-1045 level that we've been discussing. In silver, we need to continue to hold $14 and then see a close back above $14.40 before we can move with confidence.
So put a smile on your face and be happy. It's the holiday season...peace on earth, goodwill toward men and all that jazz! Plus, it's going to be a very interesting week around Turdville, culminating with the latest "most important BLSBS of all time" on Friday. We'll be back later today with a full podcast summary and review so please be sure to check back later. Have a great day!