1)

Are times a changin’?

Gold was higher going into the US jobs report and silver was a bit on fire, up more than 20 cents. After the numbers were announced, both were trounced as the euro cratered for some unknown reason. Gold fell nearly $10 to $844 and silver broke $11 again, dropping to $10.96.

Then, A Funny Thing Happened On The Way To The Forum again. In YEARS past gold and silver would have stayed in the weeds all day regardless. Today, however, both made a u-turn and went positive, even though the euro remained under a good deal of pressure. Gold soared at one point reaching $868. Silver leaped to $11.60.

The sudden buying seemed to catch The Gold Cartel off guard again. But, leave it General Paulson … word went out the thugs and by the close gold gave up all of its gains. The euro weakened further as gold came down, but that certainly was not why gold dropped $14 off its high, as it rallied $24 off its lows with the euro down .02. In the end it was just another day at the cabal ranch. It is grotesque. In the end the Orwellians prevented gold from doing anything on the upside on a jobs report day. The Bush bums are going out with their intervention tactics intact.

2)

Thursday’s powerful c. $25 intraday rally on Comex and up $12.80 close rather surprisingly saw virtually no change in open interest – up 81 contracts. This suggests that a fair proportion of the selling of the previous two days – which added 16,120 lots (50.1 tonnes or 5.1%) to open interest – was actually commercially motivated short selling, rather than the dogged and obstinate resistance frequently seen. In turn this could encourage the bulls to feel the opposition is not as strong as might be expected.

This idea was put to the test in NY today. After the usual morning downward test, a breakout was attempted around noon. An intra-day move of some $23 had the active contract up $14.80, but what Scotia Mocatta describes as “dealer selling” eradicated the gain. The active contract closed up only 50c. Estimated volume was 117,629 lots (of which a fairly significant 29,170 traded in the last 90 minutes). The switch effect was 9,834 contracts.

This week has been something of a stand-off. Heavy selling on Monday caused $21.70 of the week’s $25.20 loss. Since then the addition of 16,120 (40.8 tonnes) of open interest, most of it on rallies, could not prevent another $4.50 loss. But, despite some serious efforts, the bears could not develop downside momentum, and judging by Thursday’s open interest data, an unusually high proportion of them are commercially motivated and therefore weak. There seem to be some signs that the world’s key bullion buyer, India, is edging a little closer to resuming imports. So this rally attempt may well go on some more days.