The U.S. Mint Reports Another 1,696,000 Silver Eagles Sold

After a brief sell-off on Tuesday morning in Far East trading, the gold price recovered all of its losses, plus a bit more, by the time that Comex trading began in New York at 8:20 a.m. yesterday morning. The spike high of the day [$1,424.80 spot] was squashed the moment that New York opened. Both attempts by gold to break higher got sold off... and once trading in New York was through for the day...and electronic trading began...the U.S. bullion banks took the price down about five bucks. Gold basically closed on its low price of the day, which was $1,412.00 spot.

Silver's price path was virtually identical to gold's... except that the U.S. bullion bank-inspired sell-off in electronic trading after the New York session was particularly vicious... although there wasn't much in the way of volume associated with it. Silver's high price of the day was at the New York open...and printed $31.22 spot. The sell-off [probably courtesy of JPMorgan] in electronic trading took the price down over 60 cents, with the low of the day coming around 3:20 p.m. Eastern time at $30.47 spot. As always, the silver price was more 'volatile' than the gold price.

The dollar started trading below the 79 cent mark on Monday morning... but didn't stay there long... and rose about 55 basis points over the next nine hours. But once that top was in around 3:00 a.m. Eastern, the dollar rolled over, but 'strong hands' showed up a couple of times to ensure that it didn't fall back below the 79 cent mark. In my opinion, the dollar was not a factor in yesterday's precious metals price action.

The gold stocks pretty much followed the gold price...and the HUI finished down 1.15% on the day...but closed up from its absolute low.

The CME Delivery Report showed little action on Monday, as most of January's deliveries were posted last Friday. The report showed that only 13 gold and 10 silver contracts were posted for delivery today and tomorrow.

There were no changes reported by either GLD or SLV.

But over at Switzerland's Zürcher Kantonalbank for the week that was, they reported receiving 32,074 ounces of gold, along with 346,172 ounces of silver. I thank Carl Loeb for these numbers.

The U.S. Mint had a sales report yesterday. However, it's blatantly obvious that these sales actually occurred in December sometime... but they didn't want to add them to the 2010 totals. December is normally the biggest sales month of the year...and the reason it wasn't in 2010 was because the mint didn't report the sales in a timely manner. That was deliberate.

Anyway, they reported selling 9,000 ounces of gold in their gold eagle program, along with 1,696,000 silver eagles.

Over at the Comex-approved depositories, they reported that a further 301,597 troy ounces of silver were withdrawn from their inventories on December 31st. They finished the 2010 year with 104,547,631 ounces of silver on their books...the lowest level in more than four years.

The Commitment of Traders report came out at the usual time yesterday...and I must admit that I was disappointed...but, after a long chat with Ted Butler, I now understand what happened.

First of all, the Commercial net short position in silver increased by 3,834 contracts. A lot of the decline was the '9 or more' traders [the Raptors, as Ted calls them] selling long positions for a profit... but there was some selling by the 'big 4' shorts... almost all of which would have been JPMorgan.

In gold, the Commercial net short position rose 7,962 contracts.

Ted figures that JPMorgan et al were forced to sell on last Tuesday's [December 28th] big run-up in the price of silver... or the silver price would have gone ballistic on them. They became, rather reluctantly, the sellers of last resort [or a not-for-profit seller, as I sometimes call them]... as there was no free-market seller prepared to go short against all the longs that were pouring into the market on that day.

If you remember, last Tuesday's open interest numbers were sky high in both metals... so Ted and I thought the worst...that JPMorgan was up to its old tricks. The next day, Ted and Carl Loeb thought it might have something to do with in-the-money options holders converting to futures... as Tuesday was options expiry day. So that's where the matter lay...as we all waited for Monday's COT report.

Well, as the COT report showed, it was the bullion banks up to their old tricks. As Ted pointed out, this isn't the first time during the last several months that JPMorgan has been forced to ride to the rescue as the silver price was about to go supernova. Ted said that the situation reeked of desperate men doing desperate deeds in order to save themselves...and others.

Here's Ted's "Days of World Production To Cover" graph that's courtesy of Nick Laird over at sharelynx.com.

In a note to clients in the wee hours of this morning, silver analyst Ted Butler, had the following to say about JPMorgan going short the silver market again last Tuesday... "What I do know is that I am sick and tired of this continued silver manipulation, even though silver seems to be in the process of shaking off the long-term price suppression. There's no question silver is going higher, but the short crooks may be planning another self-created sell-off first. The crooked commercial shorts appear to be staging a strategic retreat, but I remind you and the regulators that this is still very much a crime in progress. Silver is a great buy, with or without a phony sell-off, but it is infuriating that these commercial crooks are still at it after so many years."

Before I get into my stories for today, I thought that Nick Laird's 'Silver Sentiment Index' graph might be worth looking at as well. As you can see, we're within striking distance of the old highs...but the smaller junior silver producers are vastly outperforming these seven large silver companies.

¤ Critical Reads

CNBC Interview with Retail/Commercial Real Estate Expert Howard Davidowitz

I'm glad that I had a column yesterday, as I have another big batch of stories for you today.

The first one is a piece I ran yesterday where the imbedded video wouldn't play. This was pointed out to me by reader Scott Pluschau. It was that 12 minute and 30 second CNBC Interview with Retail/Commercial Real Estate Expert Howard Davidowitz. The zerohedge.com story is linked here...but the now-working video from that story, is posted over at youtube.com... and is linked here. And, as I said yesterday, the video is more than worth your time, as Howard paints a really ugly picture.

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Consumer bankruptcies hit 5-year high in 2010

The next story is from 'David in California'. It's an item posted over at news.yahoo.com that bears the headline "Consumer bankruptcies hit 5-year high in 2010". Roughly 1.53 million consumer bankruptcy petitions were filed in 2010, up 9 percent from 1.41 million in 2009, according to the American Bankruptcy Institute, citing data from the National Bankruptcy Research Center. This item, plus the story above, plus the fact that 13% of U.S. citizens are on food stamps means that the economic recovery is a myth... and always has been. The link is here.

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BofA Scrambling Amid WikiLeaks Threat, Report Says

Washington state reader S.A. sent along a Reuters story yesterday evening that was posted over at foxnews.com. The headline reads "BofA Scrambling Amid WikiLeaks Threat, Report Says". A team of up to 20 Bank of America officials, led by the chief risk officer, Bruce Thompson, have been reviewing thousands of documents amid a threat that it may be a target of WikiLeaks, The New York Times reported on Sunday. The link is here.

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Forget Pep Talks; Governors Warn of Tough Times

Here's another unhappy story out of yesterday's King Report. It's from The Wall Street Journal... and is headlined "Forget Pep Talks; Governors Warn of Tough Times"... New governors in 26 U.S. states are starting to take office with somber warnings to constituents of more tough times amid revenue shortfalls and a weak job market. The link is here.

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European debt markets 'face second credit crisis'

In overseas news, here's a story from Sunday's edition of The Telegraph. The headline reads European debt markets 'face second credit crisis'. Banks alone must refinance about €400bn [£343bn] of debt in the first half of the year, but add in the more than €500bn European governments must replace over the same period, as well as further hundreds of billions of euros of mortgage-backed debt maturing and there is the potential for chaos in the credit markets. The link is here.

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Iran, India resolve oil trade dispute

Here's another story from reader 'David in California'. This piece was posted over at the Iranian website payvand.com last Friday. The headline reads "Iran, India resolve oil trade dispute". They did this by deciding that Indian payments for Iranian oil would not longer be made in U.S. dollars. It's not an overly long piece...and the link is here.

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Chile opts for record intervention to stem peso rise

Here's a Reuters story posted over at The Guardian in London. Chile's central bank said on Monday it will buy $12 billion in U.S. currency in its biggest-ever forex intervention aimed at taming the soaring peso, which is near 3-year highs and hammering local exporters. The bank joins Brazil, Columbia and Venezuela in trying to tame local currencies. The headline reads "Chile opts for record intervention to stem peso rise"... and the link is here.

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Australia's worst floods in about 50 years hit commodity exports

Here's another Reuters story, this one courtesy of Nick Laird, that showed up over at the mineweb.com yesterday. The headline reads "Australia's worst floods in about 50 years hit commodity exports". Military aircraft flew supplies to an Australian town slowly disappearing beneath floodwaters on Monday, as record flooding in the country's northeast continues to cut coal exports and devastate wheat production. Flooding covering an area greater than France and Germany and has seen many firms declare force majeure. This is serious... and the link to this must read story is here.

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Australia Floods to Worsen as U.S. Offers Assistance

Bloomberg filed a more recent story on the problems in Queensland. The headline reads "Australia Floods to Worsen as U.S. Offers Assistance". This is worth a quick run-through as well... and the link is here. There are also a couple of related videos linked at the bottom of the story.

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Join GATA at the Vancouver conference January 23-24th

Here are a couple of announcements about upcoming conferences. One's in Vancouver... and the other is in London. I'll have my GATA hat on in Vancouver... and will be speaking on a panel. This is a GATA release bearing the headline "Join GATA at the Vancouver conference January 23-24th"... and all the details are linked here. If you check it out, you will also note that Casey Research is well represented at the conference as well.

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Cheviot Asset Management's Sound Money Conference

The other is Cheviot Asset Management's Sound Money Conference, to be held at Guildhall in London on Thursday, January 27th. It will also have a big GATA component. The link to the conference information is here.

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Is the World's Richest Man Getting into Silver?

Eric King of King World News and GoldMoney's James Turk today discuss speculation that Mexican zillionaire Carlos Slim is considering getting into the precious metals market by purchasing a large position in silver miner Fresnillo. Excerpts from their discussion have been posted at the KWN blog under the headline "Is the World's Richest Man Getting into Silver?". I should point out, dear reader, that the operative word in this preamble is 'speculation'... and you should keep that word firmly planted in mind as you run through it. The link is here.

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Gold Rises 29.8% in 2010 to End a Stellar Decade

Lastly today, is this GATA release that has another James Turk commentary imbedded in it. His essay summarizes the performance of gold and silver in 2010, reporting that gold did spectacularly well, rising substantially in all currencies except the Australian dollar, and silver did even better. As he expects monetary debasement to remain central bank policy around the world, Turk expects 2011 to be another great year for the metals. His commentary is headlined "Gold Rises 29.8% in 2010 to End a Stellar Decade" and you can find it at GoldMoney's Internet site... and the link is here.

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Gold volume was pretty light on Monday... around 80,000 contracts net of all roll-overs. But silver volume was a bit over 40,000 contracts net. Not a lot...but quite a lot relative to gold's volume.

Here are a couple of charts that Nick Laird sent me late last night. The first is the yearly tick gold chart going back to 1960. It's quite a sight...and looks rather parabolic to me.

The corresponding silver chart looks even more parabolic.

Volume in both metals is already pretty decent... and I note the moment that London opened at 8:00 a.m. local time...3:00 a.m. in New York...both silver and gold got sold off a bit. New York will be open soon as well... and we'll find out shortly what JPMorgan et al have in store for us, as precious metals trading in the new year gets underway in earnest. As Ted Butler said, considering the price action in silver after the Comex close yesterday afternoon, the short crooks may be planning another self-created sell-off before they step back and allow the prices of both silver and gold to move higher once again. If that's what happens, the CFTC will do nothing to stop it, even though they've been told it may be coming.

With the new year upon us, there's still time 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. A subscription to the International Speculator also includes a free subscription to BIG GOLD as well. And don't forget that our 90-day guarantee of satisfaction is in effect for both publications.

I hope your Tuesday goes well... and I'll see you here tomorrow.