Watching Grass Grow… and Paint Dry
Yesterday in Gold and Silver
Wednesday's trading activity in gold was like watching paint dry… no price action on light volume. The chart says it all. The gold price made it above $1,390 spot a couple of times… and that was all the excitement there was.
Silver's price action was like watching grass grow. Volume was light as well.
From the Far East open at 6:00 p.m. on Tuesday evening… right up until precisely 5:00 a.m. Eastern time yesterday morning… the world's reserve currency fell 40 basis points. Then at that precise moment, the dollar began to rally, gaining about 45 basis points by around 1:30 p.m. Eastern time. Coincidentally, gold and silver's high ticks of the day were at precisely 5:00 a.m. Eastern time as well… and the prices of both metals slowly declined for the rest of the trading session.
The gold and silver stocks poked their heads into positive territory several times… the last time being around 12:15 p.m. From that point, they rolled over and finished down on the day, with the HUI declining 1.08%. A lot of the juniors [both gold and silver] fared far worse than that. Trading volume was pretty thin, so it's obvious that what sellers there were, were just hitting the bid and taking their money off the table in front of the holidays. There wouldn't be a lot of stock-loss selling in the gold and silver equities this year… as pretty much every precious metals stock was up substantially from a year ago.
The CME's Daily Delivery report showed that 40 gold and 50 silver contracts were posted for delivery on Monday.
The GLD ETF had a rather large withdrawal yesterday. This time it was 302,561 troy ounces. There was no report from SLV.
The U.S. Mint's sales report on Wednesday showed that they sold another 5,500 ounces of gold eagles… bringing month-to-date sales up to 57,000 ounces. Silver eagles sales for December currently sit at 1,772,000.
There was a small decline in silver stocks reported over at the Comex-approved depositories on Tuesday. This time it was 64,644 ounces. The link to that activity is here.
Before I start my stories for the day, I've got two more charts for you. Yesterday I ran the CRB chart, noting that the CRB was a long way away from taking out its highs of 2008. For those of you who have been around long enough, you may remember that the 'powers that be' re-engineered the CRB about five years ago [or more]… and reduced the oil and gold weighting… along with a few other things. They basically did a Greenspan Hedonistic Adjustment to the index… gutting the whole thing. If you look at the old CRB… which is now called the CCI… you'll note that we are back above the old highs of 2008 for the first time. Here's the 3-year CCI chart.
And, in case you've forgotten, here's the 'new and improved' 3-year CRB index… the one we use today. It's obvious why they changed it… it keeps inflation and the cost of living down. Any questions?
Here's another sharelynx.com chart that was sent to me late last evening by Australian reader, Wesley Legrand. With a zero base as of January 1, 1970… the graph needs no further comment from me. Don't forget to 'Click to Enlarge'… as this is a pretty busy chart when it's this small.