Gold and Silver Update 10/19/11

 

 

Submitted by: Francis Soyer

This week Gold and Silver are in the throws of the same B.S. different day. Every month the Fed, Treasury departments, JPM, HSBC do basically the same thing. They hammer gold and silver as best as possible to signal to the market that all is well. This is especially true during options expiration which is this Friday and all those who are seeking the cash in on a bull move (novice investors) using options for leverage get their asses handed to them as their call options expire worthless. Those call options almost always written by the likes of the banking power houses JPM and HSBC not to mention the Fed and Treasury departments around the world especially this week with more spin, more B.S. of how:

• MERKEL SPEAKS AT TRICHET FAREWELL IN FRANKFURT
• MERKEL SAYS EURO IS STABLE, HAS PROVED ITSELF IN TURBULENT TIME
• MERKEL SAYS IF THE EURO FAILS, EUROPE FAILS
• MERKEL SAYS 'WE SHALL NOT ALLOW' EURO TO FAIL
• MERKEL SAYS NEXT EU SUMMIT IS `NOT THE END POINT' FOR CRISIS

In reference to the above comments out of our Fearless leaders in Europe. Simply put there is not a snowballs chance in hell that the Euro will survive. They will continue to Spin, Kick the Can Down the Road and outright Lie rite to our faces up until the moment Greece defaults and the rest of the Union follows suit. The nail in the coffin will be when Germany announces they are abandoning membership to the Union all together. Bond Holders, Equity Holders and anyone and everything denominated in Euros will make a mass exodus and that exodus will be into the U.S.D. still the world reserve currency. This will cause a spike in relative val in the U.S.D. stocks will crumble initially. There will be a quiet before the next storm (about two or three weeks) when all eyes will focus on the USD and how the U.S. is also about to default on its debt i.e. debt ceiling increases needed in December 2011.

So what do you think will happen to gold and silver when that happens? They are going to go through the freaking roof is what is going to happen. So in the meantime let them play their games. Do not try to day trade the markets are way too rigged with HFT algos (High Frequency Trading Algorithms) and the likes of JPM and HSBC trying desperately to do the bidding of the treasury and Fed Banks around the world to try to send that signal that all is well.

Looking at the raw mechanics of the last few trading sessions enclosed the reports from someone I respect and the link.

http://harveyorgan.blogspot.com/2011/10/bart-ready-to-speak-his-mind-on-cftc.html
The total gold comex OI fell by a rather large 7652 contracts from 445,391 to 437,739 contracts as the bankers succeeded again in knocking out some weak gold longs.  However the front delivery month of October saw its OI RISE by 3 contracts despite zero deliveries yesterday.  We thus gained more gold standing and lost nothing to cash settlements.  The big December gold month saw its OI fall by almost 10,000 contracts from 275,361 to 264,187.  This no doubt pleased the JPMorgan higher echelon.  The estimated volume today was on a shallow end at 112,082.  The confirmed volume yesterday was huge at 206,356.
It seems that in order to manipulate the price lower they need massive non backed paper to do their dirty work.

The total silver comex OI surprised everyone by rising by 753 contracts to 103,357 from 102,604.
The JPMorgan boys are not enthralled with this development as they thought that they were gaining some headway in removing weaker longs.  It seems that the higher margin requirements have knocked out just about all of our leverage players leaving just the physical players who do not care about margin requirements and are ready to take delivery.  The front options expiry month of October surprisingly rose from 127 to 146 for a gain of  19 contracts.  We had 4 deliveries yesterday so we gained 23 contracts of silver standing or 115,000 oz and lost nothing to cash settlements.  The big December contract failed to go along with its older cousin gold by remaining relatively constant at 60,041.  The estimated volume today was still very low at 49,794.  The confirmed volume yesterday, the day of the big raid came in at 60,179.