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And so it begins…another precious metals rally in the making…at least that’s what the talk is on the Internet right now.Gold’s low print on Friday came about 2:30 p.m. Hong Kong time…and the subsequent rally was only ten bucks…and that came to an end shortly after 10:00 a.m. in London.  From that point, gold gave back half those gains going into the Comex open.The rally that began at that point came to an end at its high tick of the day…$1,667.70 spot…just a few minutes after 11:00 a.m. Eastern time in New York…which was a few minutes after the London close at 4:00 p.m. GMT.  But by the time that electronic trading was done in New York at 5:15 p.m…gold had slid back five bucks from that high.Gold closed at $1,662.80 spot…up $17.90 on the day.  Net volume was on the lighter side…around 112,000 contracts.Silver’s chart looks more or less the same as the gold chart…but the rally during the Comex trading session in New York was far more substantial on a percentage basis…and the high tick of the day [$32.41 spot] came either shortly before, or just after, the close of Comex trading at 1:30 p.m. Eastern time.  From that high, silver gave back a bit of its gain going into the weekend.Silver closed at $32.24 spot…up 65 cents on the day.  Net volume was pretty light…around 31,000 contracts.The dollar index traded mostly flat during early Far East trading, with the high tick [79.74] coming shortly after 3:00 p.m. Hong Kong time…less than an hour before London opened on their Friday morning.Less than three hours later…and a few minutes after 10:00 a.m. in London…the dollar index had fallen 50 basis points.  Three hours after that…8:00 a.m. in New York…the dollar index had gained back 30 points of that decline…but continued to fall after that, closing almost on its low of the day.  When all was said and done, the dollar index was down 43 basis points from Thursday’s close.If you examine the major dollar index inflection points against the major deflection points in gold and silver prices, you’ll find a perfect match but…as I’ve said for the last three days…the match is almost too perfect.  It looks suspiciously like the same traders buying gold/silver and selling the dollar simultaneously…or doing the exact opposite…selling gold/silver and buying the dollar.  There’s no lag time at all, as the inflection points in both are either simultaneous or within minutes…and the only people who would know the exact price direction of either the dollar index or the precious metals, would be those who are doing those trades at the same time.Talk about insiders gaming the system!  I wish I was making their money.But, as I’ve said before, maybe I’m looking for black bears in dark rooms that aren’t there.Even though both gold and silver were up a decent amount at the open of the New York equity markets, the HUI opened flat…but began climbing from there…reaching it’s high tick a few minutes after 12 o’clock noon Eastern time.  It held that level until about 1:45 p.m…and then declined a few basis points going into the close at 4:00 p.m.  All in all, the gold stocks pretty much mirrored the gold price.  The HUI finished up 1.74% on the day.Well, the silver shares were certainly the stars yesterday…particularly the juniors.  It’s too bad that Nick Laird’s Silver Sentiment Index doesn’t reflect all that, but it still closed up a respectable 3.18%.(Click on image to enlarge)The CME’s Daily Delivery Report for Friday showed that 29 gold and 113 silver contracts were posted for delivery on Tuesday and, as has been the case all year, it was Jefferies as the short/issuer on all 113 contracts…and the Bank of Nova Scotia and JPMorgan were the long/stoppers…with 75 and 31 contracts respectively.  The Issuers and Stoppers Report is worth a look…and the link is here.There were no reported changes in GLD yesterday…but an authorized participant withdrew a rather smallish 339,921 troy ounces of silver out of SLV.And, for the first time in a while, the U.S. Mint had a sales report worthy of the name.  They sold 8,500 troy ounces of gold eagles…4,500 one-ounce 24K gold buffaloes…and 275,000 silver eagles.  Month-to-date the mint has sold 43,500 ounce of gold eagles…23,000 one-ounce 24K gold buffaloes…and 2,137,000 silver eagles.So far this month, silver eagles are up about 33% over February’s sales month…and gold eagle/buffalo sales are up 120% over the same period.  I would agree with what Ted Butler had to say in one of his recent commentaries, that once this market turns to the upside with some real force behind it, we’ll see some daily sales that will make your eyes water, because the mint has probably been building up inventory over the last six weeks or so…and will be able to fill all orders regardless of size, as they won’t be constrained by current production levels.Thursday was another day of big silver inflows into the Comex-approved warehouses.  They reported receiving 1,215,567 troy ounces of silver…and shipped out an insignificant 10,610 ounces.  When they finally parked the forklifts on Thursday night, the five depositories held 135,850,575 ounces of silver.  The link to that action is here.It suddenly dawned on me yesterday that maybe the reason that silver inventories are climbing at these warehouses is that Jefferies has been bringing in silver to meet its delivery requirements since December 1st of 2011.  From then until yesterdays close, Jefferies has delivered 2,874 silver contracts on the Comex.  That works out to 14.37 million ounces…447 tonnes…and that, dear reader, is a lot.The Commitment of Traders Report came in as Ted Butler expected…however I was hoping for a bigger improvement in silver, but regardless of what I thought, the improvement was pretty substantial, as the Commercial net short position declined by 3,505 contracts…or 17.5 million ounces.  The Commercial net short position in silver is now down to 160.6 million ounces.  That’s pretty low, but about 90 million paper ounces above its late-December absolute low.The ‘1 through 4’ largest Commercial traders are short 188.3 million ounces of silver…and the ‘5 through 8’ Commercial traders are short another 42.3 million ounces on top of that.  Once you subtract all the market-neutral spread trades out of the Non-Reportable category, the ‘1 through 4’ Commercial traders/bullion banks are short a bit more than 43% of the entire Comex futures market in silver.  That’s preposterous!!!For the second week in a row, it was gold that showed the biggest improvement, as the Commercial net short position declined by 25,550 contracts, or 2.56 million ounces.  As of Tuesday’s cut-off, the Commercial net short position is now down to 16.6 million ounces.  The ‘1 through 4’ and ‘5 through 8’ Commercial traders on the short side are short 11.4 million and 5.2 million ounces respectively.  And once the market-neutral spread trades are removed, the ‘1 through 4’ Commercial traders/bullion banks are short 28.4% of the entire Comex futures market in gold.  That’s equally as preposterous.Here’s Nick Laird’s up-to-date “Days of World Production to Cover Short Contract” chart that he designed at Ted Butler’s request over a decade ago.  This shows all the commodities that are traded on the Comex in New York.  Notice that the biggest short positions by the four largest bullion banks are in the four precious metals…and how silver stands out “Above the Crowd”…as they say over at Re/Max.(Click on image to enlarge)I got a monster e-mail from Nick Laird late last night…and thought all the charts, plus everything had to say in association with them, was worth posting….so here goes.“The gold oscillator is indicating that the latest move up by gold is a breakout.“There is good probability that gold has finished it’s decline and the next wave should be up and taking out the recent highs at $1,780.(Click on image to enlarge)“On a larger scale, the impending move up – if it is strong enough i.e.. takes out $1,800 & then $1,900 – will then trigger a massive rise out of the triangle shown in the chart below.“This is indicative of a major rise coming in gold – something strong enough to take us up to the mid $2,000’s.(Click on image to enlarge)“The first rise up off the bottom was from $1,520 to $1,790 – a rise of 270 or 17.7%.  We are now down at the retest level and should move up from here so a 270 rise up from $1,640 will take us up to $1,910.“We will in all probability see a larger rise here i.e. larger than 18%.“With that rise we retest the all time highs & break through.  This will trigger the breakout on the Long Term Gold Oscillator giving us the buy signal for the next leg up to $3,500.“The last major wave up took us from $700 to $1,900 in 2.5 years. This major wave up should take us from $1,500 to $3,600 in 1.5 years.“So – a rise from here up to the old highs should occur in the next leg up. This should trigger the buy signal signaling a major move up to the mid $2,000’s. A pullback and then a continued rise into the high $2,000’s – low $3,000’s.“Another pullback and then the parabolic move up to the top of the leg in mid 2013 at around $3,500.  This a possible wave structure for the major rise – a major wave comprised of several sub-major waves.“That will put in a wave up that will fit in with the e-wave chart…(Click on image to enlarge)“So expectations are for a strong move up to be continued by strong moves – large runs up with minor pullbacks moving the market up over 100% from low to high i.e. from $1,500 to $3,500.  If it does take on this stance then it will be affirmative of the plotted advance speculated on in the chart above.“If it doesn’t then one can suspect that we are more likely to follow Martin Armstrong’s path for gold with a soft year this year as gold gathers strength to run up  from 2013 through to 2017.“At the moment I prefer my version & believe that it has good chance to play out. What the market will depend upon is any manipulation that will prevent the above scenario from playing out.“But when I look at the last 12 years I see nothing that has impeded the price and amounted to much in stopping gold’s relentless rise.“So we are fast closing in on a position that if confirmed would mean that you should be fully invested in gold & ready for the rise ahead…and I still prefer bullion over gold stocks for this move up.“I’m still looking for a major bear market in equities & believe that this will weigh heavily upon gold stocks leaving few out performers.“However if we do get this equities correction then gold stocks will become a definitive buy.“So – exciting times ahead of us. – NickFrank Barbera’s The Gold Stock Technician report for Thursday had this to say in its opening paragraph…“This report is unlike any other report we have ever written, as the list of data extremes in the Gold Stocks has grown so rapidly in the last few days, that it is almost impossible to stress how potentially major a low we could be witnessing in the mining stocks at the current time. That a violent upside reversal rally, lies dead ahead, there can be virtually no doubt. Personally, I would not be the least bit surprised to see the Gold Stocks up 150% to 200% over the next 18 months coming off the current lows. There is now historical technical evidence in spades to support the case that we are watching the final day or two of what is likely another major secular low in the group, and a bottom which could easily kick start a major bull market advance. We feel there is very good chance that today was the closing low on GDX, XAU, and HUI. In the past, readings like those now present, have systematically led to major upside advances in the sector, and we see no reason to believe that past precedent won’t repeat again. In this report, which we believe will stand as a seminal update, we summarize our views right up front, and then provide a lot of historical charts to support the case walking down the long list of individual indicators which we track each day. For some, looking at a long list of charts, can be to taxing, and that is why we cut straight to the bottom line on this first page.”This is all well and good.  I’m certainly of the belief that we saw the bottom on Thursday…but how things turn out in the future is…as Nick Laird pointed out in his comments…as always, in the hands of JPMorgan et al.  Supply and demand fundamentals mean nothing when you’re dealing with a managed market.And as much as the wildly bullish part of me wants to believe both Nick and Frank…the ‘born in Missouri’ part of me says “show me”.  Stay tuned.Here’s a chart from a Zero Hedge article that Australian reader Wesley Legrand sent my way yesterday.  It need needs no further embellishment from me…and the link to the hard copy of the story is here.(Click on image to enlarge)These last three charts were sent to me by reader Phil Barlett…and shows just how much monetary pumping at all levels is currently going on at the moment.  It’s already showing up in the real inflation numbers…and certainly before the end of the year, monetary inflation will be noticeable to all…even if official government figures don’t show it.(Click on image to enlarge)(Click on image to enlarge)(Click on image to enlarge)In his latest blog, reader Scott Pluschau points out that the Commitment of Traders short/long ratio for the U.S. dollar is now greater than 10 to 1.  I would suggest that his short blog is worth the read…and the link is here.Since it’s Saturday, I have a huge list of stories for you that I hope you have the time to plow through in what’s left of the weekend.A “simple” question:  Is the U.S. stock market a Bubble?  Have the Fed and global central bankers prolonged the U.S. Credit Bubble sufficiently to the point of having again incited Bubble dynamics within our equities market?  Sure looks like it.  As we’ve witnessed repeatedly for twenty-odd years now, every government bailout/policy response to a burst Bubble ends up inflating fledgling Bubbles to full-blown Bubble fruition excess.  From my point of view, U.S. stocks were, at the minimum, a “fledgling” Bubble prior to recent LTRO and concerted global central bank liquidity operations. – Doug Noland, Credit Bubble Bulletin, 23 March 2012Here’s a ‘blast from the past’ that you’ll recognize instantly.  I can’t remember how many times in my life I’ve danced my brains out to this 1978 disco classic.  The link is here.  Enjoy!And so it begins…another precious metals rally in the making…at least that’s what the talk is on the Internet right now after Thursday and Friday’s action.I, like you, would really like that to be the case.  But, as I’ve said ad nauseam in this column for years…it’s all up to JPMorgan et al.  Will they be the short sellers of first and last resort when this rally starts to grow some real legs?  Don’t know.We’re now below the 50 and 200-day moving averages on the all the precious metals…and once prices break over that level, the game will hopefully be on.  At that point we’ll find out soon enough how these rallies will end.Of course there could still be some more down-side price action, but one has to wonder just how much more blood ‘da boyz’ can get out of these precious metal stones.This column has already gone on for too long, but before I sign off, I want to remind you one more time that with the precious metals and their shares still on sale…but for how much longer, nobody knows…there’s still the opportunity to either readjust your portfolio, or get fully invested in the continuing major up-leg of this bull market in both silver and gold…and I respectfully suggest that you take a trial subscription to either Casey Research’s International Speculator [junior gold and silver exploration companies], or BIG GOLD [large producers], with all our best (and current) recommendations…as well as the archives. Don’t forget that our 90-day guarantee of satisfaction is in effect for both publications.Enjoy what’s left of your weekend…and I’ll see you in this space on Tuesday.last_img

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