The gold open interest fell a stunning 8289 contracts to 386,340. Specs, taking their cue from the price cappers, exited long positions rather than rolling into Oct or Dec. The silver open interest rose 263 contracts to 97,498. The silver price managers sucked in a few more longs before wiping them out today.

The yield on the 10 yr T note rose above 3.7%, but fell back later to close at 3.66%.

The dollar rose .54 to 79.51. Geez, what a surprise ... just as the key part of the Treasury auctions are taking place. These Orwellians have no shame.

The euro fell to $1.4045. The pound was little changed at $1.6325. Surprisingly, the yen fell .57 to 95.

Crude oil was mauled, falling $3.88 per barrel to $63.35.

The CRB fell 6.97 to 243.24.

More gold goodies:

Tuesday, July 28, 2009

TGL stopped out?

Monday’s erosion of a $6.90 intraday gain and up 40c close was indeed caused by heavy selling – actual volume of 150,024 lots was 18% above estimate. But the open interest action was indecisive – down, but only by 1,113 lots – 3.52 tonnes.

Today was not indecisive. Massive selling overwhelmed a strong (according to ScotiaMocatta) early Comex bid – estimated volume of 124,953 lots by 10 AM has rarely if ever been surpassed. Aug gold closed down $14.40 at $939.10, having bottomed down $19.70. At 231,284 contracts estimated volume, today’s trading has only been exceeded by actual volume on three days this year. Days of over 200,000 volume recently have tended to be climactic.

Gold shares were hard hit: the HUI closed down 4.27% and the XAU down 4.07%.

MarketVane’s Bullish Consensus dropped two points to 78%; the GLD ETF stirred itself and shed 3.36 tonnes to 1983.25 tonnes. The HGNSI was unchanged at 30.2%.

On July 22 The Gartman Letter set a 1 hr/$937 stop for its new gold position. If this holds for the second tranche bought yesterday, the stop was almost triggered – on the basis of thebulliondesk’s charts, the time spent under $937 was slightly less than an hour. Maybe the seller is a careless reader! If the stop was triggered, this would not be an unprecedented event and probably marks a low.

Technical observers are of course very dismayed by today’s events: many in India will be delighted.

***

Wednesday, July 29, 2009

Bear trap building?

Indian ex-duty premiums: AM $1.36, PM $1.68, with world gold at $938.44 and $936.50. Adequate for legal imports. The rupee softened 0.4% to $1=R48.42 (Tuesday R48.21). The stock market lost 1.03%. Comforting for gold’s friends and a reasonable response to such a sudden move in world gold.

Vietnam local gold jumped to a $7.10 premium to world gold at $939.60 (Tuesday discount $3.70/$952.45).

Although the TOCOM day session was active, with volume equivalent to 11,144 Comex contracts open interest was, surprisingly, static. But the public added 2.57 tonnes (6%) to their long in a pleasant example of bottom fishing. The active contract lost 93 yen and world gold went out $2 below the NY close having lost $3 during the session.

Having subsided from a $941 high seen early in the TOCOM session, gold has come under some pressure again on Comex. Interestingly, the action since the NY open has been almost perfectly tracked by Euro gold, suggesting that some real selling has entered. With the physical market showing signs if reviving, the ingredients for a bear trap are being assembled. Volume is once again very heavy: estimated at 105,807 by 10 AM.

The Gartman Letter closed its gold position yesterday, which some would see as a necessary condition for a rally.

As statement from the World Gold Council puts the WAG2 sales this year at 140 tonnes so far. The absence of news about a renewal is becoming curious. See

http://www.forbes.com/feeds/reuters/2009/07/29/
2009-07-29T112838Z_01_LT548041_RTRIDST_0_
PRECIOUS-CENTRALBANKS-FACTBOX.html