Today seems like a good day to get caught up on a few things.
Whew! Option expiration for the Feb13 gold contract is finally behind us and prices have begun to recover. I bet ya just can't wait for Monday, Feb 25 when the Mar13 silver options expire. Mark your calendars!
Until then, we should see a general rally. The next three weeks will likely be positive as the metals regain the ground lost late last week, and then some. ("Is that the footlong? And then some!")
For now, let's just get our feet under us and recover. The CoT structure has undoubtedly become considerably more bullish after last week and the metals are primed for a sizeable short squeeze if we can just get a spark. Might that spark come the Fedlines tomorrow ( https://www.bkassetmanagement.com/us-outlook/fomc-preview-why-this-months-meeting-important_3905/) or perhaps the BLSBS on Friday? Hard to say, of course. We'll see.
But I like the possibility of a decent jump in price here. Consider the OI numbers. On Thursday and Friday of last week, while price was falling over $30, the total OI in gold rose by over 2000 contracts and you have to take into consideration that gold OI should have been falling rapidly due to the falling price and expiring Feb13 contract. Instead, it rose. This tells me that a considerable amount of new shorts were added and those shorts are quite vulnerable because they don't have a lot of wiggle room on any rally.
And then there's silver. While price was falling $1.24 over the Thu-Fri trading days, the total OI rose by over 5,400 contracts. Clearly a significant rise in short interest. Additionally, total OI in silver is all the way back up to 149,593. This is the highest level since 11/27/12 and just 6,000 below the high of all 2012. Keep in mind, too, that on 11/27/12 price closed at 34.08. Just as there were some vulnerable longs at $34, there are now some vulnerable shorts at $31.
So, let's see if we can begin to recover here. Gold needs to reclaim $1670 and silver $31.60 before we can get excited so watch those levels closely.
And just a few, other random charts for you to consider. First, here's platinum. Though it was sharply lower yesterday, support near $1660 held again so the party definitely isn't over. Will attempt #8 at surpassing $1700 finally get it done?
Crude keeps inching ever higher. If I was sitting on a profit, though, I'd sure be getting an itchy trigger finger to ring the register. $98-100 has to be pretty significant resistance.
And check out these two losers...The Pig and the 10-yr note. Neither are at a critical moment...yet...but both are moving in that direction. In particular, the 10-year. Demand hasn't waned enough yet that it requires a boost in QE∞ but that day is coming. Maybe by this summer?
OK, finally...to the mailbag. There was a lot of talk around here earlier this month regarding the manufacture and sale of TFMR silver rounds. I am looking into this but, logistically, it's much more difficult to pull off than you might imagine. I'll keep you posted.
Many folks are wondering when The Jackass might make a return appearance on a podcast. We are tentatively set for one later this week. If it happens, I will post it in its usual timeslot of late Friday.
Someone sent me an email which included some very interesting info on the "HSBC acquiring silver" story from last week. It also included this helpful chart.
Here is the news release re. HSBC from KGHM: https://www.kghm.pl/index.dhtml?module=articles&id=4962
At an exchange rate of 3.1 Polish Zloties per USD, the Jan 21, 2013 contract was for ~ USD 539 M
Using a constant exchange rate of 3.1 PLN/USD, contracts between KGHM and HSBC over the past 12 months total USD 1.18 B
Assuming $32/oz silver for the last 12 months, the Jan 21, 2013 contract with HSBC was for ~ 16.9 million oz. of silver and the prior 12 months of sales to HSBC is ~ 36.8 million oz. of silver
In 2011, KGHM produced approximately 41 million oz. of silver - HSBC is purchasing almost all of their silver production.
According to their presentation, KGHM is the world's largest silver producer:
Speaking of nice charts, here's one that shows the varying inventory of the SLV:
And this is an interesting story. The Turdite who alerted me to it has his theory as to why this is important and I think he is correct. However, I'll let you read it and draw your own conclusions. https://profit.ndtv.com/news/economy/article-rbi-may-let-banks-buy-back-gold-in-a-bid-to-curb-demand-317032
Chris Duane has a new medallion out for purchase. They've already sold over 7,000 of them! If you're interested in buying some, please use this link: https://www.silverbulletsilvershield.com/freedom-girl-one-ounce-medallio...
Finally...and somewhat reluctantly...I'm going to post this link to a segment from Dr. Janda's show last weekend. After a few minutes, the guest turns his attention to an anti-Obama diatribe. Take it for what it's worth and shut it off if you need to. However, the first five minutes or so definitely deserve your attention. Dr. Dave clearly feels this guy is legitimate, so, listen closely. https://www.davejanda.com/audio/JimGarrow012713.mp3
OK, that's it for today. Have a great one!