The banking boys showed up in London and in the USA doing their usual, by raiding paper gold and paper silver.
The real stuff, they have problems getting. Gold closed today down by $32.00 to $1392.60. Silver fell by $1.70 to $34.12, as the bankers supplied massive unbacked paper (see below) in their attempt to show the world that everything is fine. The nuclear fallout in Japan is severe.
Let us go to the comex and see how trading fared today.
The total gold comex OI fell by 8253 contracts with today's reading which is basis yesterday.Todays reading came it at 511,672 and yesterday's level was 519925. Gold held its own yesterday so I do not fully understand why the huge drop in OI. The front March expiry month saw its OI mysteriously rise from 36 to 90 as I guess the bankers had these exercised contracts in their back pocket and did not reveal them until today. The next front month for gold is April and here we saw the open interest fall marginally from 268,991 to 257,932 for a drop of 11,059 which seems to be the rate of rollovers into the next delivery month of June.
The estimated volume today at the comex was a criminal 263,397 with only 11000 rollovers. The confirmed volume yesterday (with an identical 11000 rollovers) came in at 125,497 which is below average. With a volume of 125,000 gold will remain pretty stationary. It is when you throw 265,000 contracts which represents 26.5 million oz, that is when you see massive drops in the price of paper gold. By the way 26.5 million oz represents approximately 35% of annual world gold production. And the comex is not the major bourse in the world for gold, it is the LBMA over in London.
In silver, the total comex silver OI fell by only 884 contracts to 136,093 from yesterday's 138,970. The OI reading in silver seems fine here. It is the gold reading that seems way off. The front delivery month of March saw its OI rise from 1303 to 1309. Strange indeed, as we had 72 contracts delivered yesterday. We certainly got more silver standing for March.
The next delivery month of May saw the OI fall from 85,379 to 80,675/ Since we have quite a way to go until May this is also a little strange as to why so many decided to leave May and go to July. The estimated volume at the silver comex today was a monster of a day: 101,076. The confirmed volume for yesterday was quite good at 61,854. That kind of shows you what kind of unbacked paper was supplied today and our regulators as always look the other way at this criminal behavior.
By Harvey Organ
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