Japan begins Hyper-Printing/Greek GDP falters/European meeting cancelled tomorrow/Moody's threaten UK with downgrade

Tuesday, February 14, 2012

Good evening Ladies and Gentlemen:

Gold closed down by $6.10 to $1715.90 while silver, the object of interest to our bankers, fell by 38 cents
to $33.32. Yesterday we had the silver and gold equity shares weak together with a negative lease on silver.
These two red flags signaled to all the bankers and to the HFT traders that a raid was on and they did not disappoint. However our bankers were thrown a curve ball as late in the day, the big meeting scheduled for tomorrow was called off. We will go into this in the body of my commentary.

Let us head over to the comex and assess trading:

The total gold comex OI fell by 1775 contracts from 428,559 to 426,784. Gold had a somewhat good day yesterday so we saw a tiny bit of bank liquidation. The front delivery month of February saw its OI fall from 538 to 493 contracts for a loss of 45 contracts. We had 27 delivery notices yesterday so we lost 18 contracts to cash settlements. The next big delivery month is April and here the OI fell slightly from 232,524 to 231,263 contracts. The estimated volume today came in at 159,977 as the raid certainly saw an increase volume due to the copious supply of non backed paper and the influence of the HFT traders. The confirmed volume yesterday was very anemic at 113,529.

The total silver comex OI continues to play havoc to our bankers as the OI refuses to buckle. Today the OI registered a gain of 223 contracts from 105,969 to 106,192. The longs are in strong hands. The front option expiry month of February rose from 135 to 212 for a gain of 77 contracts. Generally when we see this, we get a big delivery notice filed and you will see below that we did receive such a notice. We are rapidly approaching first day notice for the March delivery contract (Feb 29.2012). The March OI fell marginally from 38,395 to 36,695 contracts. The March players moved into May. The estimated volume today registered 53,891 which is quite good. The confirmed volume yesterday was also quite good at 50,858.


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