Iran the 'Axis of Evil'?...Absolutely Not!

Gold's high of the day [around $1,145 spot] was right at the Hong Kong open... and then it was mostly downhill from there. The dollar rally influenced the price to a certain extent, but the not-for-profit seller that showed up at 9:30 a.m. in New York put an end to all hopes of a price recovery... and although a valiant attempt was made at some sort of rally after that... gold basically traded sideways for the rest of the New York session. From its high to its low [$1,125.40 spot]... gold traded in a $20 range yesterday.

Silver's price pattern was similar... except it's closing price was virtually on its low of the day... which was $18.38 spot.

The precious metals shares were also down on the day... but it could have been worse.

Thursday's open interest numbers didn't show much change. Gold o.i. rose a very small 219 contracts... and silver open interest was up 322 contracts.

The Commitment of Traders report was another bummer... especially in silver. The net short position in silver increased a very unhealthy 4,356 contracts... and the net short position is now up to 61,746 contracts, which translates into 308.7 million ounces of silver. All of it [and more] is held by '4 or less' bullion banks... with the lion's share held by JPMorgan. In gold, the bullion banks increased their net short position by another 3,937 contracts... bringing the net short position held by the bullion banks to 28.3 million ounces... of which about 21.1 million ounces of that is held by 'four or less' traders. It's easy to see that the four major bullion banks can do as they wish with the prices of both metals... and they do. That's why Ted Butler is up in arms about position limits and phony trading exemptions.

The CME didn't report any deliveries worth mentioning yesterday... and because I'm in Vancouver... I'm not able to figure out what the ETFs did yesterday, because I have no hard copy [I write this stuff down] from Thursday's numbers to compare to Friday's numbers. An update on the ETFs will have to wait until my Wednesday report. Once again the U.S. Mint did not have an update in either gold or silver eagle sales. But the Comex-approved warehouses reported a very large intake of silver on Thursday... 1,676,640 ounces.

Just as point of interest shortsqueeze.com updated their short positions on GLD and SLV the other day. As of that report, SLV has 11,407,000 shares sold short... up 15.6% from the previous report. That's 11,407,000 shares that have more than one owner, but no silver backing their shares. GLD's short position fell by 16.0%... and is now down to 14,363,700 shares sold short... which translates into 1,436,370 ounces of gold that's not backing those shares.

My first story today is gold related. It's a BBC Radio interview with Egon von Greyerz, the founder of GoldSwitzerland. It starts around the 20-minute mark of the program and lasts for about 4 minutes. He says that gold at $1,135 will be regarded as an absolute bargain in 12 months time... and forecasts a really high gold price down the road somewhere. You can use your cursor to move to that spot in the program without having to listen to everything in between. I thank Florida reader Donna Bacdach for sending it along... and the link is here.

In his January 6th market letter, Murray Pollitt of Pollitt & Co. in Toronto remarks on the desire of governments to sell unlimited amounts of their bonds while disparaging gold, and he wonders -- probably not too perplexedly -- who is selling all the gold hitting the market when miners aren't. Pollitt's market letter can be found at GATA's Internet site... and is linked here.

The Financial Times had a story yesterday headlined "Treasury Bids Drive Speculation". In the GATA release, Chris Powell inserted his own headline "Big Mystery buyer for Treasuries: are his initials Ben Bernanke?"... and the link is here.

Reuters carried a story yesterday about the CFTC meeting in Washington. It was headlined "Gold, silver markets seen as much harder target for CFTC". Ted Butler said that this piece contains half truths by commentators he felt should know better, so I'd take a lot of what's said in here with a grain of salt if I were you... and the link is here.

And lastly is my big read of the day. It's an hour-long video actually... and, in my humble opinion, very much worth the time. The gentleman giving the lecture on Iran made a TV program which [by pure chance] was on PBS this past weekend. It's about the REAL Iran... the Iran that the U.S. government doesn't want you to know anything about. After watching the TV program... and this commentary that reader Dave Delve sent me... I had to totally rewrite everything I thought I knew about that country... and the people that live there. So please do yourself, and the world, a favour by spending the time on this video that it so richly deserves... and the link is here.

I apologize for not having a cartoon or photo... or a 'blast from the past' in this commentary. I just never thought of it when I was transferring data to my lap top.

As far as what's going to happen next week, I don't have clue. I'm not happy about the build up in the bullion banks' net short position in the COT. The U.S. dollar continues to 'act' reasonably well in the face of massive debt monetization by the Fed. The Treasury Department has several trillion dollars that it has to roll over this year... so how long they can keep the dollar afloat remains to be seen.

The opening of the gold and silver markets in the Far East on Sunday evening should tell us a lot.

I hope you enjoy the rest of your weekend... and I'll see you on Tuesday morning.