Silver To $30 In 18 Days: James Turk

Gold was basically flat all during Far East trading on Thursday, despite the fact that dollar continued to slide from its 1:30 p.m. Eastern time high tick on Wednesday.


Gold's low of the day [around $1,323 spot] occurred around 9:00 a.m. in London… and from there gold rose about $15 until 9:00 a.m. in New York.  Then the gold price sold off a few bucks before launching vertically to its high of the day at $1,346.90 spot.  This price spike occurred at the dollar's exact low of the day… which was shortly before 11:30 a.m. Eastern time.  After declining a few dollars off its peak price,  gold price basically traded sideways for the rest of the New York session.

Compared to gold, the silver price was comatose yesterday… with virtually all of its gains of the day coming at the same 11:00 a.m. price spike as gold's in New York yesterday morning.  Silver managed to close almost on its high of the day, which was $24.06 spot.

Here's the 3-day dollar chart.  From it's 1:30 p.m. high on Wednesday… to it's absolute low  moments before 11:30 a.m. on Thursday, the world's reserve currency fell about 105 basis points.  During that time period, gold gained about $28, with the vast majority of that occurring between 9:00 a.m. in London and 11:30 a.m. in New York on Thursday.  Comparing the smooth and orderly decline of the dollar… the gold and silver prices were very volatile.  It's obvious that the decline in the dollar was not the only force in the precious metal markets yesterday.

The gold stocks gapped up on Thursday morning, with virtually all of the gains coming before the 11:30 a.m. price spike in gold.  The HUI finished up 2.90%… but most of the juniors and virtually all of the silver companies didn't join what was mostly a 'large cap' gold stock party.

First day notice for the November contract showed that 644 gold and 376 silver contracts were posted for delivery on Monday, November 1st.  With no exceptions, JPMorgan was the issuer of all of these contracts and, with the exception of one contract in gold, the Bank of Nova Scotia was the stopper [receiver] of all of these contracts.  There were no other participants.

The other standouts in this report showed that JPMorgan was trading heavily in its proprietary [house] account.  The other thing worth noting was that every single contract that was stopped [received] by the Bank of Nova Scotia was entirely for their own proprietary trading account.  Not one single contract was stopped [received] on behalf of any of their customers.  It was totally in-house trading.  I don't know what to make of this, but it's well worth looking at… and the link is here.

The GLD ETF showed a decline of 166,049 ounces yesterday… and SLV showed a decline of 1,369,142 ounces.  There was no sales report from the U.S. Mint… and nothing worth mentioning happened at the Comex-approved depositories on Wednesday.