Wednesday, October 20, 2010

India Was Buying Last Night + Interesting Comex O/I report...

Looks like India was in serious "buy" mode last night after the London/NY ambush of paper gold.  Per JB's invaluable report to be found at
Indian ex-duty premiums: AM $5.19, PM $5.19, with world gold at $1,339.56 and $1,340.20. Very ample for legal imports...Overnight gold weakness (Dec gold low down $4.90) was primarily an issue of $US weakness – and the strength at present is the obverse. However with Indian premiums at this level, a serious retreat is difficult to envisage. (emphasis is mine)
In addition, the daily open interest report from the CME, found HERE shows that the open interest for gold declined by a surprisingly small 7.7 thousand contracts.  Even more interesting was the fact that the open interest for the February contract actually increased by 3,903 contracts.  This o/i report stands out because historically on a day when gold gets shot by the cartel for $40+, we would typically see a much larger o/i liquidation and would never see any single-month increase.  February is the next "front-month" for gold after December.

In silver, the o/i declined by a surprisingly small 362 contracts. Again, historically on day when silver is hit for a buck, typical o/i liquidation would be 10x that amount.  It would appear to those of us who have been trading/investing/observing the precious metals market for the duration of the bull market that it is possible, maybe probable, that opportunistic dip-buying is being front-run by the competition of a growing number of accumulators (i.e. strong hands) globally looking to increase or start core positions.


  1. "that opportunistic dip-buying is being front-run by the competition of a growing number of accumulators (i.e. strong hands) globally looking to increase or start core positions."


    Good let them try and play catch up to the rest of us Ha ha ha ha.

    Thanks Dave great blogging as of late.

  2. hey dave,

    I can vouch for this, I for sure contributed a lot for this yesterday ;)~

    By the way any comment on world's foremost investor (Buffett) and his statement :- "You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

    From India

  3. Dave,

    What is your opinion of Bix Weir and this post on his website?



  4. Hey India. Looks like Mumbai is in a race with Shanghai to see who can buy more gold!!!

    I think Warren Buffet is part of the inside elite who are in the process of leading the sheeple to slaughter. Either that or he's going senile.

    I would not be surprised if he personally has big Swiss or Lichtenstein bank vault loaded up with 400 oz. LBMA non-tungsten bars.

  5. WisMadChE:

    I stopped reading Bix many years ago. He's just too far out "there" for me.

  6. "I would not be surprised if he personally has big Swiss or Lichtenstein bank vault loaded up with 400 oz. LBMA non-tungsten bars."

    Instant Classic! Great one.

  7. That story on the CFTC judge is up at ZH as well. It's quite a sordid tale, and the entire apparatus should be taken down and the perps should be made to walk.

  8. Dave,

    Thanks for the insight into Bix Weir(d).

    But Bix Beiderbecke lives!


  9. The CFTC is just a sideshow. The main circus with all of its clowns and monkeys is the FED. The FED also has a fat lady, currently walking up to the podium warming up voice.

    Joe M.

  10. The super rich, India and China are all buying gold now like crazy. Inflation is going up, gov debt is going up, gold is a great place to be now.

  11. See this yet Dave?

  12. Dave,

    I was wondering what your opinion of junior miners was that are only located in one country. My thinking is with the way things are going it seems like there is a good chance governments are going to go after mining companies as they may be the only sector left booming as things really come unraveled. Strategically speaking it seems that companies that have properties located in multiple countries are much safer. I am new to investing in this sector and just wanted to get your opinion.

    Two of the miners I had in mind were Jaguar mining and Canadian Zinc.

    Thanks in advance!

  13. Bill, I did see that. I don't even really pay attention to that stuff anymore. We already know the Government/CFTC is insanely corrupt. Other than Ron Paul, I don't think ANYONE can be trusted.

    There's nothing we can do about it. Probably not a bad time to start planning for the possibilty of having to leave the country eventually.

  14. JD, the fact of the matter is that the only true way to shield your money from any kind of Government action/corruption is to get it completely out of the system by moving as much of it as you can into physical bullion. That's the true hard-core goldbug stance, and the 100% correct one, in my view.

    Having said that, I think there's still plenty of time before we see system totalitarianism in the Western hemisphere. In fact, I trust this country less than I trust some of the Easterh hemi countries.

    But for the time being, the best way to leverage the upside in gold/silver is via mining stocks. I have my personal allocation about 40% stocks/60% bullion, not including my fund investment. But right now our fund split is about 44 stocks 56 bullion.

    As for single country juniors, I try to stick with Canada, US, Mexico, Brazil, Chile, Peru, Argentina, Turkey, China, Western Africa, Australia. And actually Eurasian Minerals has a potential home run property in Haiti, which has become politically friendly for outside business development.

  15. Hey Dave,

    You have convinced me to jump on the sdrg bandwagon with what's going
    on in silver. Comex going berserk, the news in China, I have no choice to sell 10% of my metals and get some sdrg stock. Unless I'm wrong, this stock is selling silver for nearly pennies on the dollar!

    The only problem is Ive never bought a stock before and just learning the ropes online. I guess I just find the stock symbol, pay the market price (.24 now per share) sit and hold for a year or so and just wAit to explodes right? Thanks Dave again!

  16. I really do not think we have much time left. If you think these totally corrupt peoples can kick the can down the road much further, think again.

    This whole derivative mess is about to go active and along with it the USD.

    Plan accordingly.

    Joe M.

  17. Dave,
    thanks for the great comments on the blog last night, I appreciate it. That is some serious games going on, though I am not surprised.

    I am off to the Bahamas tomorrow morning, see you next week!

  18. Thanks Fauvi, gyc!!

    Have fun in the Bahamas gyc

    Joe I agree.