The gold price did nothing until London opened yesterday morning...and then it promptly got sold down about thirteen bucks, with the low coming of the day coming at the Comex open around 8:20 a.m. Eastern time.

From there, a rally developed which added twenty bucks to the gold price. This rally lasted until 12:15 p.m. in New York, before basically trading sideways for the rest of the day.

Gold closed at $1,667.00 spot....up $10.30 on the day. Net volume was pretty light...around 101,000 contracts.

The silver price basically followed gold's price track...but the rally that started at the Comex open in New York was far more substantial...and it's hard to tell whether this was short covering, or the technical funds putting on new long positions, or maybe a little bit of both.

Silver finished at $32.20 spot, up $1.56 on the day. Volume was pretty substantial at around 38,000 contracts.

The dollar was pretty flat until about 7:30 a.m. London time...and from there it rallied about 35 basis points by 10:00 a.m. GMT. Then the dollar spent the rest of the day slowly losing that gain...and by the time New York closed, the dollar index was basically unchanged from Thursday's close.

It's obvious that the dollar index played absolutely no part in yesterday's precious metal price action.

I have no explanation for what happened to the gold stocks yesterday. Either someone was manipulating the shares, or a long position was being liquidated, as there was no rhyme nor reason to the share price action. The HUI actually finished down 0.10% yesterday.

It was pretty much the same for the silver stocks, as a lot of them barely moved...and there was nothing in their price action to indicate that the silver price rose over five percent yesterday. Nick Laird's Silver Sentiment Index closed up only 0.61%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 29 gold and 49 silver contracts were posted for delivery on Tuesday. In both metals it was, as usual, Jefferies as the short/issuer...and the Bank of Nova Scotia and JPMorgan as the long/stoppers...although R.J. O'Brien did post 2 silver contracts for delivery of the 49 issued. The link to the Issuers and Stoppers Report is here.

I forgot to bring my historical data with me for GLD and SLV, so I can't really tell if there were any changes on Friday or not...but if there were, they weren't very big, as the numbers look pretty much the same as Thursday's report.

I have a correction to make from yesterday's column. It appears that the 8,160,120 troy ounces of silver that was supposed to have been added to the Zürcher Kantonalbank silver ETF never happened. Nick Laird read the numbers wrong...and since I didn't have the original data to look at, I just assumed that Nick was correct. That turned out not to be the case.

But I did receive another e-mail from Nick late last night that said the following..."Sprott just added another 1.3 million ounces of silver to PSLV after Thursday's addition of 9.278 million ounces."

I don't have Thursday's U.S. Mint sales with me either, but there didn't appear to be any changes to gold eagle or gold buffalo sales....but silver eagles looked like they increased by 100,000.

Thursday was another busy day over at the Comex-approved warehouses. They reported receiving 1,841,762 troy ounces of silver...and shipped 308,457 ounces out the door.

The Commitment of Traders Report wasn't nearly as bad as Ted Butler and I feared it might be. In silver, the Commercial traders only increased their net short position by 1,320 contracts...and in gold they increased their net short position by about 6,400 contracts. We were both expecting far worse. But I doubt we'll be so lucky with next Friday's report, especially after Friday's big gain in silver. We'll see.

The good folks over at wefresearch.com were kind enough to provide their analysis of yesterday's COT report...along with all the excellent charts that go with it. The link to the silver COT report is here...and the gold COT report is here.

Silver analyst Ted Butler had a special commentary for his paying clients yesterday...and here are two free paragraphs...

"Every week, I review the latest data in the Commitment of Traders Report (COT). I zero in on what the big concentrated traders, like JPMorgan, have done, as well as a group of commercials traders I refer to as the raptors. The raptors are smaller commercials who act in collusion with JPMorgan to rig silver prices to their advantage. Of the 32,500 net contracts bought by the commercials in total on the silver price smash starting in late-September, JPMorgan (the big 4 category) and the raptors bought 32,000 contracts, or more than 98% of the total (based upon the COT’s from September 6 thru Dec 27)."

"I have previously made the allegation that such concentrated trading activity could not possibly occur without collusion. Where I now admit to being wrong is for not realizing that this collusion is directly related to these commercial traders intending to evade any possible position limit restrictions. The raptors have collusively teamed up expressly to manipulate the silver market while evading position limits. No one trader could pull off buying 98% of the 162 million oz, as it would show up like a sore thumb in the COTs and even the CFTC would have to notice that. But by acting in unison through multiple accounts, only a COT analyst intently studying the raptors as a group (which I’ve done for years) could uncover the collusive behavior. I always knew that the raptors were acting collusively; it’s just that I didn’t realize the illegal activity was also intended to evade any legitimate position limit regime that might appear."

Reader Scott Pluschau has a technical report on palladium for us today. It's headlined "Want to invest in precious metals? Take a look at Palladium."...and the link to his blog is here.

¤ Critical Reads

GOP chairman shelves Stop Online Piracy Act [SOPA]

I only have a few stories today, and because of time constraints...plus the fact that I can hardly keep my eyes open, I'm just going to list them in order and link the headline. I also have no time for attributions today, so I hope that all the contributors of these stories will [under the circumstances] understand. I consider stories 3 through 6 inclusive to be must reads.

1] GOP chairman shelves Stop Online Piracy Act [SOPA]

2] India Joins Asian Dollar Exclusion Zone: Will transact with Iran in Rupees

3] Nato's Afghan alliance unhinged by growing mutual mistrust - The Guardian

4] The myth of an "isolated' Iran‏ - Asia Times

5] The US-GCC fatal attraction - Asia Times

6] Afghanistan’s Soldiers Step Up Killings of Allied Forces - N.Y. Times

7] James Dines - This Will be a Dangerous Collapse & Endgame

8] Ben Davies forecasts gold and silver for King World News

9] Bullion banking system 'not fully backed,' Naylor-Leyland tells CNBC Europe

View full GSD edition

Today's 'blast from the past' is thirty-nine years young this year. It's another 'oldie-but-goodie' that you should recognize it right away...so turn up your speakers and then click here.

Yesterday was a real head-scratcher. Gold turned in a decent performance...but the shares closed down. Silver soared, and silver shares barely budged. What it all means is a big unknown to me. I'd like to say I have some definite answers, but I don't.

Is there some logical explanation that I can't think of? Perhaps. Or is it all market management by darkling forces? I don't know for sure, but I suspect the latter.

Friday's preliminary open interest numbers were not much help. Open interest was up a bit in both metals, but nothing shocking.

The February delivery month for gold is coming up hard...and prices always have a tendency to be volatile around options expiry...and there are lots of roll-overs as well, as most traders roll their February contracts into future months, unless they're standing for delivery. But that certainly doesn't explain silver's five plus percent rise yesterday, nor the lousy share action.

Let's see what Monday brings.

I'm off to bed...and I'll see you here on Tuesday morning.