Greece/Italy/Gold rises/ MFGlobal customers will not see their money/Sears

Thursday, January 12, 2012

Good evening Ladies and Gentlemen:

The price of gold rose today to the tune of $8.50 to close at $1647.80. Silver on the other hand rose 23 cents to break the 30 dollar barrier to $30.07. Yesterday the gold/silver shares lagged the bullion price which is generally a signal that a raid was forthcoming. However during the night, over in Europe they had successful auctions in the Italian bonds which triggered euphoria. The trouble here is that the bonds offered were the 1 to 3 year in duration. These bonds will be swapped from the buyers (the banks) to the ECB for freshly minted euros in the second round of LTRO which will begin in earnest in February. The euphoria caused European bourses to rise and this signaled a risk on trade. However on this side of the pond, the markets were stunned that the jobless went back to the 400000 level. Thus the Dow did not join her European friends in excitement but it did close up by 21 points.

Let us head over to the comex and assess trading with respect to open interest, inventory movements and amounts of metal standing.

The total gold comex open interest fell by 3634 contracts despite gold's advance yesterday. It rests tonight at 414,289. The front options expiry month of January saw its OI remain constant at 30 contracts.
We had 14 delivery notices yesterday so we gained 1400 oz of additional gold standing.
The next big delivery month is February where we have 2 1/2 weeks left before first day notice. Here the OI fell by over 11000 contracts to 181,498. The estimated volume at the gold comex today came in at 181,498 which is quite low considering the rollovers. The confirmed volume yesterday was also weak at 168,995.

The total silver comex OI continues to fall. Today it registered a level of 103,882 a drop of about 500 contracts from yesterday. The front options expiry month of January saw its OI rise from 83 to 185 for a gain of 102 contracts. We had one delivery notice so we gained an additional 103 contracts or 515,000 oz.
Someone was in great need of physical silver. The next delivery month is March and here the Oi slipped about 800 contracts to 55,649. The estimated volume at the silver comex came in at 38,310. The confirmed volume yesterday resulted in an OI of 38,952.