Let's take a look at why they hit the paper price of gold today. As usual, the key is to follow the money. The magic number today is 11,356. That's the open interest on June Comex gold going into first notice day. Theoretically, every one of those contracts could receive notice of delivery today and that would entail the delivery of 1,356,000 ounces of gold. That number represents 40% of the gold available to be delivered on the Comex. Let's take this 1 step further. Scotia Mocatta has been repeatedly accused of having in custody far less gold than they report - an accusation they have never denied. Currently Scotia is reporting to hold 1.4 millon of the 3.2 million "dealer" or registered gold - that which can be delivered (the other 7+ mm ounces is investor gold kept in custody at the Comex). Let's just say that if Scotia only has half of its reported available to deliver, then today's June open interest represents 55% of deliverable Comex gold.
Needless to say, if the market senses that a large porition of the June open interest stands for actual physical delivery (as opposed to tendering for cash or GLD in lieu of taking possession of gold), then the next month could get very interesting for the price of gold (hint: Apollo moonshot).
On another note, anyone holding their eyes closed and keeping their underwater position in BP stock should start thinking about heading for the exits. BP was down 6% at one point today, indicating that its latest "top kill" attempt to plug the well is not working. Yesterday they told us they would need 24 hours to know if it was working. Today they are telling us they need another 48 hours to know. Conveniently, how many people will actually be paying attention to the news on Sunday? Here's is a chart of BP's stock price over the last 6 months: