Gold & Silver Daily: Jim Rogers: Pound Could Collapse Within Weeks - Feb 27, 2010

Jim Rogers: British Pound Could Collapse Within Weeks
Gold didn't do much of anything in either Far East or early London trading... and was pretty much unchanged from it's Thursday close by the time New York opened for business yesterday morning. From that point, gold made three separate attempts to break higher... and all were quickly squashed. Once the Comex closed, gold [as usual] traded sideways for the rest of the New York session. Gold was up $11.30 on the day.

Silver's trading action on Friday was very similar to gold's... but it's rally in New York proved to be more successful. However, if you examine silver's graph carefully enough, you can still detect opposition to its rally. Silver rose 39 cents.

The dollar spent most of Friday grinding slowly lower. Here's a 2-year chart. I'm not a technician, but the dollar looks like it's rolling over to me... even though the 50-day moving average just headed north through the 200-day moving average. But with the problems that the euro's having these days... I'm going to keep an open mind on which direction the dollar is going to go short term... even though it's hugely overbought at the moment.

The HUI chart looks more like the Dow chart than the gold chart, although the precious metals shares did catch a bid during the last half hour of trading as the Dow headed south. The HUI was up a paltry 0.81% to 404.18... which was down a bit over ten points on the week.

Well, the CME's website is not performing the way it should at the moment, and I had to steal these open interest changes from Bill Murphy over at lemetropolecafe.com. Gold's open interest change for Thursday's trading was an unhappy surprise when I checked it yesterday morning... as it was up a very large 12,201 contracts. On the other hand, silver's open interest was down a whopping 5,827 contracts. Both metals had decent rallies on Thursday... so why the monstrous dichotomy? Don't know. Ted Butler and I had an 'animated' discussion about it... and that didn't help.

The CME's website does have some data available, however, The latest Delivery Report is now posted and it shows that 38 gold and 518 silver contracts are up for delivery on Tuesday. The big issuer in silver was Bank of Nova Scotia... and they, along with JPMorgan, were the biggest stoppers. This is another day when the list of issuers and stoppers is worth looking over, and the link to that web page is here.

There were no changes in GLD yesterday... but over at SLV they reported receiving 981,116 ounces. The U.S. Mint had no report yesterday and finished the month at 80,000 one-ounce gold eagles and 2,050,000 silver eagles. The Comex-approved depositories reported a net inflow of a smallish 25,091 ounces of silver on Thursday... but there was a lot of activity nonetheless, and you can check out the action here.

The COT report [for positions held at the end of trading on Tuesday, February 23rd] did not make me happy. True, silver's open interest only rose 1,544 contracts... but gold's o.i. was up an astonishing 18,166 contracts. Considering the price action in gold last week, I'm still trying to get my head around why this is so. Add to that the big increase in Thursday's open interest reported above, and it's obvious that gold's tiny rally to date is running into huge opposition. But, so far, it appears that silver has not suffered the same fate. Ted figures that the bullion banks may be trying to divorce the price of silver from gold... a thought that he's had for quite a number of years now. Anyway, I'm not going to try and dissect and bisect this data any further, as Ted Butler has his usual Friday interview with Eric King over at King World News... and I'll let him explain what he thinks may be happening... and the link is here. I suggest you give this interview your undivided attention.