James Turk Says Gold To Hit $2,000 in 2010

The last day of trading for the 2009 calendar year started out quite well in the Far East and early London trading. From it's Wednesday close of $1,092.10 spot... gold rose a bit over $15 to its high just before noon in London on Thursday. Then the dollar began to rally at exactly the same moment that gold topped out... about 11:30 a.m. in London... and gold began its usual decline. Once Comex trading began in New York, the dollar really took off to the upside... and that was that for both precious metals.

Silver's price path was similar with similar tops and bottoms in price as gold.

Here's the 24-hour dollar graph. I found it amazing that the U.S. dollar and the precious metals prices turn on exactly the same dime with zero lag time. Note that the dollar was lower shortly before 2:00 a.m and began a small rally at that point... but the gold price continued to rise for the next four and a half hours. Whose 'trading' activity can be that precise? Just asking.

Open interest for Wednesday's trading showed that gold o.i. rose another 2,437 contracts and silver o.i. fell 366 contracts. The CME has published its preliminary volume data for December 31st trading. Volume was pretty light. Gold traded around 74,000 contracts... and silver about 12,600 contracts. The open interest changes will be out later this morning.

Thursday's CME Delivery Notice showed that 42 gold and 14 silver contracts were put up for delivery on November 5th. There were no reported changes in either the GLD or SLV ETFs. The U.S. Mint had a final report as well... selling another 12,000 ounces of gold in their gold eagle program, and another 86,000 silver eagles. Year-to-date... 1,425,000 ounces of gold disappeared into the gold eagle bullion program in 2009... of which 1,315,000 was the 1-ounce gold eagle. In silver, 2,773,500 eagles were sold during December... and for the entire year the total was 28,766,500. The Comex-approved depositories reported receiving 675,607 ounces. That was last Wednesday's activity. Their last update for the 2009 calendar year will be posted later today and I'll have it for you tomorrow.

I have a Monday commentary mainly because of the huge number of stories sitting in my in-box. The first one [from the Financial Times in London] has to do with Vietnam and gold. Thanks to the previous contributions by "the usual New York gold commentator"... you, dear reader, have a working knowledge of how important gold is in Vietnamese society. Well, the government "has ordered all gold trading floors to close by the end of March, putting an end to a business which turns over $1bn a day but which the government feared was spinning out of control." Gold imports were creating havoc with the national currency [the dong] and accelerating the trade deficit. It will be interesting to see what happens to the premiums right now, which currently stand around $40/ounce. I'm sure that smuggling will continue at its current frantic rate. The story [well worth the read] is headlined "Vietnam to put an end to gold trading"... and the link is here.

Then there's a story about Indian gold imports for 2009. It was filed from Mumbai, India early in their Monday morning. The headline reads "India imports about 200 tonnes of gold vs. 420 tonnes one year ago". "India's gold imports in December jumped to 32-35 tonnes provisionally from 3 tonnes a year ago, the head of Bombay Bullion Association (BBA) said on Friday... and that data of the past few months was slated to be revised." [probably upwards - Ed] The link is here... but isn't worth reading as I've already hit the highlights.

Marc Faber is still pounding the table to buy gold. Here's a January 3rd story filed from Singapore and posted at commodityonline.com bearing the headline "Gold is cheap to buy at $1,100/oz: Marc Faber". I thank Craig McCarty for sending it along... and the link is here.

James Turk over at goldmoney.com was writing up a storm over the New Year's long weekend... and has two pieces for you today. The first one is pretty short and the other is quite a bit longer... but both are very much worth your while.

1] Gold Shines for the Ninth Consecutive Year
2] Outlook for 2010

Here's a real estate story [courtesy of the King Report] filed from Madrid and contained in the December 29th edition of The Wall Street Journal. During 2009 I linked several stories about the economic implosion of some of the 'tropical' European countries that border the Mediterranean. Along with Greece... Spain is another one of those. Everything is going from bad to worse over there... and this headline says it all... "Spanish Banks Start to Unload Property Portfolios"... and the link is here.

The next item is a video from reader Brad Robertson. It's from Canada's Business News Network. Just before Christmas I posted the monthly "Markets at a Glance" commentary by Eric Sprott and David Franklin of Sprott Asset Management in Toronto. And now David Franklin, the co-author of these reports, is interviewed for about eight minutes on this show, and talks about their latest [very] bearish commentary. This is well worth watching... and the link is here.

This story is from The Telegraph in London and was written by their international business editor, Ambrose Evans-Pritchard. The title reads "Eurozone credit contraction accelerates"... "Bank loans and the M3 money supply in the eurozone contracted at an accelerating pace in November, raising the risk that a lending squeeze will choke the region's fragile recovery next year." The deflation monster is very much alive in Europe... and the link is here.

And lastly comes this 18-page report by my good friend Ian Gordon over at longwavegroup.com. The first time I heard Ian speak at a conference was also the first time that I heard Doug Casey speak... and that was quite a number of years ago. Between the two of them it was an education... and that's putting it mildly to say the least. Neither one of them has changed their tune one iota since then. This report is a must read from one end to the other. The title reads "Dow 1,000 Is Not a Silly Number"... and the link is here.

It appears that a lady has a cat that gets a special visitor every morning. She finally took some photos... and I'll post another one in this sequence tomorrow. I thank reader Dave Delve for sending them along.

We're in a bear market that will last 15 or 20 years - Eric Sprott, Sprott Asset Management, December 2009

Both gold and silver were moving slightly higher in early Monday trading in the Far East... but shortly before 4:00 p.m. in Hong Kong, both metals moved sharply higher. Here's the gold graph moments after London opened this morning.

Volume in gold is currently sitting at 29,393 contracts... with silver at 3,726 contracts. That's as of 4:01 a.m. Eastern time. But, as I've said on many an occasion, what happens in the Far East and in London trading means little if the U.S. bullion banks show up on the scene and are determined to ramp the dollar and then take the precious metals prices down. Right now the dollar is down about 20 basis points from its high of an hour ago which was 78.12 as of this writing.

Today we get the new Commitment of Traders report at 3:30 p.m. Eastern time... and it seems to me that a new Bank Participation Report is in our future pretty soon as well. I'm not sure if it's today or next Monday.

Anyway, it looks like gold is starting off the new year on the right foot. Let's see what JPMorgan et al do with this when they show up in the market. Maybe they're the buyers right now? It could be a wild day in New York if this sort of activity keeps up.

See you on Tuesday.