lunar

Monday, March 28, 2011

Internal notes on Gold and Silver open interest and deliveries

Open interest in both gold and silver were down for Friday's session. Rollovers continue in gold with the specs moving out of the April and into the June. For all practical purposes, June is now the most active contract although volume in the April is still higher. That will end by Wednesday this week.

Some of the weakness in gold is still associated with these rollovers continuing as the inability of gold to continue pushing through $1440 last week has engendered some light long liquidation. Once we clear option expiration and the rollover activity, we will be able to get a better sense for where the market is heading next. For now it is still consolidating above $1410.

Silver too experienced some long liquidation on Friday with some of the longs ringing the cash register after it was unable to keep pushing through the $38 level.

Open interest remaining in the expiring March contract is now down to 388 contracts. Deliveries for tomorrow will be lead by Morgan for its own account. Barclays is the largest stopper once again for clients. As stated last week, Barclays has some clients who want to take delivery. Total deliveries for March thus far are 1,417.

March silver remains at a premium to the active May of about a half a cent but May is slipping some in relation to July and is now trading at a 2 cent discount to it. While the backwardation structure on the overall board is noteworthy it is not dynamic enough to keep the front 3 contract months in a full backwardation mode. That takes some of the bullishness out of it somewhat compared to what I would consider it were March and May both trading at a premium to the July. I will continue watching to see how these spreads behave as we near the end of the month.

The HUI is lower today falling further from the 580 level and establishing that as an important technical chart resistance level. It is well off its worst levels of the session however and should it be able to close the day near current levels (563) it would be somewhat of a moral victory of the bulls after the disappointment of last week's inability to clear 580. The index is trading above all the major moving averages but the 10 day is below the 20 day which is not what one wants to see for a market that is in a bullish posture. The index will need to stabilize near its current level and hold here for the next few days to allow the shorter term 10 day moving average to make a bullish crossover of the 20 day. Downside support is near 549 - 546. I would not want to see the HUI below 538 for any length of time as that would move it back down to 520.
Posted by Trader Dan at 11:11 AM

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Hoka

Gold Daily and Silver Weekly Charts - Blythe Rises Early But Lacks Staying Power

http://jessescrossroadscafe.blogspo...-charts_28.html

"Skillful accumulation is what my observation has been telling me as well. this market is trading just like I used to try and trade illiquid junk bond names that I was trying to buy - hit the market's bid side for a bit and try to shake out sellers and fill in with your own bid...feels like that's what's happening out there right now."

Denver Dave

It was option expiration on the Comex today and they hit the metals again hard, but earlier than usual.

My friend Dave made that comment above early this morning, and I thought he was right. This was not so much a real bear raid as a chance to skin the naive amongst the options traders and holders of miners and funds, and then cover shorts and get a little long.

They keep hitting the miners, probably taking gains there in addition to what they can wring out of the metal itself.

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lunar

Massive Raw Gold Shortage In China - Supply And Demand Crunch Looms

Submitted by Tyler Durden on 03/29/2011 08:31 -0400

Asian demand is especially strong in the increasingly important China. The Chinese strong cultural affinity and love affair with gold (primarily due to a distrust of Chinese paper money) shows no signs of abating. Indeed, it may be accelerating as was seen in the recent figures from the Shanghai Gold Exchange and customs in China and now reports (including from CNTV – the national TV station of the People's Republic of China) of shortages of raw gold or unrefined gold. China, now the largest producer of gold in the world is seeing its gold mines struggle to cater for surging Chinese demand. The raw gold trade has been growing by up to 30% per annum and demand has leapt in recent months leading to a developing raw gold shortage in China. The industry in China expects only 27,000 tonnes of raw gold can be delivered this year. That is way below the estimated demand of 50,000 tonnes. A potential supply shortage of 23,000 tonnes of gold is a large amount of gold in the small gold bullion market which is tiny versus equity, bond and derivative markets. It is infinitesimal when compared to the $4,000 billion a day traded in currency markets.

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Build In Oil Inventories Leads To Plunge In... Gold

Submitted by Tyler Durden on 03/30/2011 10:43 -0400



Exhibit A in Efficient Market Theory. A few minutes ago the DOE released its crude oil inventory data for the Week of March 25. With Crude inventories expected to decline from 2,131K to 1,500K (you know the whole economic improvement thing and what not), instead we got a build to 2,945K, with Cushing surging from 177K to 1,689K. What would one expect should get killed on this data? Oil right? Yet below we get a glimpse of what mega leveraged and ultra trigger finger happy correlation desks trade like these days.

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by TruthInSunshine
on Wed, 03/30/2011 - 10:45
#1116856
These are the schizophrenia markets, because you'd have to be schizophrenic to think that there's any correlation to reality -
- whatsoever

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@Hoka - schaffe, schaffe .


Wednesday, March 30, 2011

Gold - 8 Hour chart update - general comments

Rollovers are continuing in gold with traders moving out of the April as it enters its delivery period and into the June. Some are also moving into August and December. Open interest continues to decline as end of the month and quarter pressures continue but the bulk of that should be over today.

How this market behaves Friday and Monday of next week will be a better indicator of what we can expect in the immediate near term. Trying to get too much of a read on a market that is being jostled by book squaring and low volume is generally not wise.

High oil inventories at Cushing were being blamed somewhat for gold's weakness today but I do not agree with that reasoning. Oil is still above $100, high inventories or not, and a mere blip lower in crude oil is not going to dissuade those who are focused on increasing price pressures throughout the economy. Besides, even though crude was weaker today, unleaded gasoline is higher and it is gasoline prices that more directly impact consumer perceptions of inflation anyway.

The Dollar is experiencing two-way money flows today but for whatever the reason, it has been stopped dead in its tracks near 76.70 on the USDX chart. It has been drawing a bit of recent strength from the verbal intervention campaign being engaged by several FOMC governors who are talking hawkishly about ending QE. One went as far as saying that the last $100 billion of the scheduled $600 billion might not be necessary. That was enough to pull the rug out from under the bond market yesterday so it is hard to believe that we will see too much more of that sort of talk if the Fed wishes to keep bond speculators from blasting the long bond into the nether regions and sending rates higher in the process.

As stated many times here already: If they attempt to talk the Dollar up by sounding hawkish, they will send the long bond into the toilet. If they try to talk the long bond back up again by expressing reservations about the strength of the US recovery, they will send the Dollar into the toilet. Pick your poison is a good motto at this point.




Posted by Trader Dan at 10:26 AM

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Hochsaison





Gold Daily and Silver Weekly Charts - "I love a warm pig belly for my aching feet."


http://jessescrossroadscafe.blogspo...-charts_30.html

"There is a place. Like no place on Earth. A land full of wonder, mystery, and danger! Some say to survive it: You need to be as mad as a hatter."

End of quarter antics, and of course Obama went before the nation and put forward his plan for US oil independence.

Although he said he wanted to reduce the use of foreign oil by 1/3, he was a bit sketchy on details. Annexing Libya and Iraq?

Natural gas companies caught a bid, and they are getting the oil drilling rigs fitted out for tundra and wetlands.

Blythe threw her best stuff at silver today, to little avail. It looks ready to take another leg up again unless equities fall apart.

If gold breaks through the big neckline this could be impressive.

Non-farm Payrolls on Friday. ADP came in pretty much as expected today.

Given that it was the end of quarter, and the bonuses of the wiseguys are heavily dependent on making their targets, I doubt anything short of Tokyo melting into the Marianas Trench could have stopped a stock market rally today.

And gold and silver must go down to make Ben and Timmy look good, if just for a day.

I am still trying to regain my equilibrium from reading Greenspan's Op-Ed on the danger of too much banking regulation. It seems like attending a seminar given by Josef Mengele on the dangers of the Hippocratic Oath.

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Hawkeye

Angehängte Grafiken

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Hoka

The Anti-Thesis of the New World Order / Die Anti-These der Neuen Weltordnung


Vis-à-vis a pile of “Silver Keiser Thalers” I talked to Max Keiser about the status of his “Crash JP Morgan” campaign. Moreover: Rob Kirby on the “How and Why of the silver price manipulation.” – Vis-à-vis eines Haufens von “Silber-Keiser-Talern“ unterhielt ich mich mit Max Keiser über den Stand seiner “Crash JP Morgan“-Kampagne. Des Weiteren: Rob Kirby über das “Wie und Warum der Silberpreis-Manipulation.“

http://www.larsschall.com/2011/03/29/the-anti-thesis-of-the-new-world-order-–-die-anti-these-der-neuen-weltordnung/

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Hoka

von Ed Steer:


Cramer: Buy Physical Silver

I only have two precious metals-related stories for you today...and both of them are about silver.

I must admit that I don't hold Mad Money's Jim Cramer in high regard. But in this case, the old saying that 'the enemy of my enemy, is my friend' applies in spades. This 1:45 minute video was posted over at thestreet.com yesterday...and is definitely worth watching. I thank reader Randall Reinwasser for bringing it to my attention...and the link is here.




Strike halts Bolivia silver mine, exports - union

Today's last story is courtesy of Washington state reader S.A...and the Reuters headline is pretty much self-explanatory. This mine used to be owned by Apex...and they went belly up when their hedge book blew up many years ago...and Japan's Sumitomo Corporation picked it up for a song.

This is a must read...and it's only two short paragraphs long...so it will only take a minute of your time. The link is here.

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Hoka

Gold demand in India to continue to grow in the next decade, strengthening its position as the heart of the global gold market

...

Mahesh Vyas, Managing Director & CEO of the CMIE, said:
“Our macroeconomic forecast to 2020 shows India is poised for a very strong period of economic growth and this has significant, positive implications for all forms of gold purchasing in India.”

“Our findings endorse the fundamental strength of the Indian gold market. We predict that new demand for gold will be driven by rapid GDP growth; urbanisation; the emergence of a strong middle class; and a sustained and potentially rising savings rate of 30-40% of income.”

The studies highlight that, in India, categories of demand that can be observed in other markets are less distinct:

The motivation for a jewellery purchase can be inextricably linked to value, wealth preservation and growth rather than pure adornment – there is therefore little distinction between investment and jewellery demand

Gold is integral to all Indian wedding ceremonies: purchases relating to Indian weddings typically account for 50% of annual jewellery demand

With 50% of the Indian population under 25 and approximately 150 million weddings anticipated over the next decade, the World Gold Council estimates that wedding-related purchasing will drive approximately 500 tonnes a year

A further 500 tonnes of existing gold will be gifted by one family to another

...

http://www.gold.org/media/press_rel...emand_in_india/

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Hoka

Marc Faber Interview on Fed Policy, Investment Strategy


http://www.bloomberg.com/video/68175846/


Gold ab 13:00

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Hoka

Silver - 8 hour chart update


http://traderdannorcini.blogspot.co...-update_31.html

Range trade until it clears $38 and holds the level.

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Hoka

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