harveyorgan.blogspot.com / February 19, 2013
Good evening Ladies and Gentlemen:
Gold closed down $5.20 (from Friday’s NY close) to finish the comex session at $1603.60. Silver finished the day at $29.38 down 45 cents.
In European news we witness new car registrations in the euro area collapse. Also Euro area construction collapsed as well with Germany the biggest culprit. This initially caused the euro to fall but by the end of the day it rebounded to finish in the plus column. China has decided to pull liquidity and thus the Shanghai stock exchange fell for the last two days. Italy now waits for the election which will be this Sunday. Monti has decided that there is nothing in common with the centre left leader Bersani. The banking system in Italy refuses to loan any money to anyone as the level of loans drop to its lowest ever.
South Korea is now very worried about it’s exports and it too is contemplating entering the currency wars.
Exports dominate this nation.
Spain just witnessed a huge bankruptcy as Reyel Urbis sought protection with debt equal to 3.6 billion euros.
The bad bank SAREB and the other major Spanish banks are owners of this defaulted debt. Also included as holders of Reyel Urbis debt is American David Tepper’s hedge fund, Appaloosa.
Before we examine the major stories which will have an influence on gold and silver, let us now head over the comex and see how trading fared today:
The total comex gold open interest (basis Friday) surprisingly rose by 854 contracts despite the huge drubbing that gold took on Friday down almost $26.00. It surely does not look like we had any liquidation of the longs. No doubt major entities were thankful for the lower price of gold and loaded up with the large specs joining Dennis Gartman as the supplier of non backed paper together with JPMorgan and friends.
The active contract month of February saw it’s OI fall by 103 contracts from 1339 down to 1236. We had 127 delivery notices filed on Friday so in essence we gained back 24 contracts or an additional 2400 oz of gold will stand in February. The non active March contract month saw it’s OI fall by 44 contracts down to 1237. The next big active delivery contract month is April and here the OI actually rose by 3480 contracts from 259095 up to 262,575. The estimated volume today was an unheard of 741,131 contracts.
In ounces this represents almost 75 million oz or equal to annual gold production. The confirmed volume on Friday was also huge at 284,331. The bankers are not happy campers seeing volume rise to such levels and yet no liquidation by the longs.