Russia's Central Bank Purchases 300,000 Ounces of Gold in November
Yesterday in Gold and Silver
There's not much to talk about in gold market action for Monday's trading session. The price started out strongly at the start of trading in the Far East… and held on to its $10 gain right up until the Comex opened in New York at 8:20 a.m. Eastern time.
The low of the day… $1,375.30 spot… occurred moments before 10:30 a.m. in New York… and then recovered all its losses before the trading day ended at 5:15 p.m. Volume was light.
Silver had gained about two bits by the time trading began in Hong Kong yesterday morning… but lost all those gains by the New York open… and then got smacked [just like gold] between 9:45 a.m. and 10:28 a.m. Eastern time. The low price of the day was $28.77 spot. Silver also recovered its New York losses in short order… and spiked to $29.55 spot [its high of the day] in electronic trading minutes after 2:00 p.m. Needless to say, silver's price didn't close anywhere near that value… but still finished in the plus column. Volume in silver was also pretty light.
Between 9:45 a.m. and 10:30 a.m. Eastern time yesterday, the dollar spiked by about 30 basis points. This partly explains the sell off [$11 in gold… and 45 cents in silver] that occurred during that time period.
Now let's fast-forward to 8:00 p.m. in New York last night… which is 9:00 a.m. in Hong Kong on Tuesday morning. As you can see from the chart below… in the space of about ninety minutes, the dollar cratered to the tune of 35 basis points. Gold and silver's gains on that dollar price drop were only a small fraction of the price drops they experienced when the dollar gained less than that amount in New York during Monday's trading day. It's my opinion that the bullion banks in New York capitalize on these moments of dollar strength to drive the precious metals lower than they would normally go… and also prevent the precious metals from rising higher than they normally would, when the dollar falls. We've seen this sort of counter-intuitive price action before… and this is just another example of that.
The gold stocks bottomed about 15 minutes before the gold and silver prices hit their respective lows of the day… and then pretty much followed the gold price action for the rest of the New York trading session. The HUI finished up 1.01%… which is a much better performance than the rest of the equity markets. Most of the silver stocks… and a lot of the juniors… did far better than that.
Monday's CME Delivery Report showed that 13 gold and 109 silver contracts were posted for delivery on Wednesday. In silver, JPMorgan was the only issuer, with 105 of those contracts issued from its client account… and the Bank of Nova Scotia was the big stopper at 87 contract in their proprietary [house] trading account. The link to the activity is here.
There were no changes reported in either the GLD and SLV ETF.
Over at Switzerland's Zürcher Kantonalbank for the week that was, they reported an increase of 31,420 ounces in their gold ETF… but a huge 1,635,017 ounces of silver withdrawn. Somebody obviously needed a large amount of silver in a hurry. As always, I thank Carl Loeb for those numbers.
The U.S. Mint had a sales report on Monday. They sold another 8,500 ounces of gold eagles, along with another 325,000 silver eagles. Month-to-date sales in gold eagles is 51,500 ounces… and silver eagles is 1,747,000.
There was a lot of activity over at the Comex-approved warehouses on Friday. By the end of the day, they had shipped another 372,075 ounces of silver out the door. The big withdrawal was from the Delaware depository… and the link to all the action [which is worth a look] is here.
Well, the Central Bank of the Russian Federation updated their website for November yesterday. They added another 300,000 ounces of gold to their official reserves… which now stand at 25.2 million ounces. The graph below is a brand new one from Nick Laird over at sharelynx.com. The person who used to made up the old graph every month [thanks Susan!] is no longer able to do so… and I asked Nick if he could whip one up… and he stuck this one together in just a couple of days.