Expect Extremely Bullish Action in Mining Shares: James Turk


Gold rose gently in Far East trading during their Thursday session, with an interim high set at the 8:00 a.m. London open.  From there it went into an equally gentle decline, hitting an interim low minutes before 9:00 a.m. in New York.  From that morning low, gold jumped up to its high of the day [$1,399.70 spot] in three separate bouts of buying, the last of which got capped around 11:25 a.m. Eastern time, just before it was about to blow through the $1,400 spot price.

Then, at 12:45 p.m. during lunchtime on the east coast, some not-for-profit seller decided to erase virtually all of the day's gains in fifteen minutes.  From there, gold drifted lower, hitting its low price of the day [$1,382.10 spot] minutes after 4:00 p.m… and closed the electronic trading session in New York a few dollars off that low.

Silver's price action was very similar to gold's… and a quick glance between both graphs confirms that.  Silver made several attempts to break through the $29 spot level… but not with a lot of conviction that I could see.  Although the high of the day was $29.05… the same seller sold off silver the same time as they sold off gold.  Silver closed at another record-high price despite all the shenanigans that went on.

The other two precious metals suffered similar fates at exactly the same times.  Both had monster gains posted intraday, before someone showed up to sell them off.  Despite that, platinum finished up 1.54%… with palladium closing up 3.83%.  Gold finished Thursday's trading down 0.12%… with silver up 0.42%.

During Thursday's trading, the dollar finished down about 50 basis points, but had a really big intraday gain of 55 points that began at 5:30 a.m. Eastern time… followed immediately by an even bigger decline of 85 basis points.  The sell-off began at precisely 9:00 a.m. in New York… and ended two and a half hours later at precisely 11:30 a.m.  Once that bottom was in, the world's reserve currency gained back about 10 basis points going into the New York close at 5:15 p.m. Eastern.

The relationship between the dollar's activity and gold during that big drop in the dollar between 9:00 a.m. and 11:30 a.m. Eastern time is there, but rather disjointed.  Here's the New York gold chart broken out on its own so you can see the details more clearly.  One thing is for sure, there was no dollar reason why gold got smacked between 12:45 and 1:00 p.m. yesterday afternoon.  Someone obviously dumped a position in a hurry… and it's hard to tell whether it was 'da boyz' or not, but it sure looks like something they would do.

The gold share action was interesting… and rather subdued… as the price of gold rose and fell over the New York trading session.  I was particularly intrigued by the fact that there was no big panic selling of the shares when that not-for-profit seller smacked all the precious metals yesterday at 12:45 p.m. Eastern.  Considering the fact that gold actually finished down on the day, I consider the share price action to be a big positive, with the HUI finishing up 1.34%.

The CME Delivery Report yesterday showed that another 520 gold contracts were posted for delivery on Monday.  The big issuers was JPMorgan with 450 contracts in its client account… and the big stopper was Deutsche Bank with 371 contracts to be received.  After three delivery days have passed in the December contract… 7,558 contracts have already been posted for delivery.

In silver, there was another 313 contracts posted for delivery.  The big issuers was, once again, JPMorgan with 256 contracts in their proprietary [house] trading account.  The Bank of Nova Scotia was the big stopper with 180 contracts received.  Month-to-date… 1,003 silver contracts have been posted for delivery.

Thursday's delivery report is worth a quick look… and the link is here.

The GLD ETF had another addition to report yesterday.  This time it was 146,462 ounces of gold.  There was a small withdrawal from SLV yesterday… 128,766 ounces.  My guess is that this was a fee payment of some kind.

The U.S. Mint had a sales report as well.  Nothing changed in the gold eagle category… but they reported 42,000 silver eagles sold.  December is normally the biggest month of the year for silver eagle sales… and, considering the blistering production pace of the mint, it will be interesting to see how this particular December fares compared to prior years.

It was pretty busy day over at the Comex-approved depositories on December 1st… as the four warehouses reported a net drawdown of 599,879 troy ounces of silver on that date.  The link to that action is here.