The Resolute Buyer(s) Vs. Overwhelmed Silver Shorts
Great and Wonderful Wednesday Morning Folks,
Gold is trading lower this FOMC morning with December’s trade at $1,510.30, down $5.40 after dipping down to $1,506.50 with the early morning high to beat at $1,518.40. Silver is held back as well with Decembers price now at $17.20, down 8.6 cents after it was pushed to $17.115 with the high close by at $17.265. The US Dollar doesn’t seem to be moving at all compared to the metals with the value pegged at 98.03, down 3.3 points and very close to the low at 98.02 with the high up at 98.18. All of this occurred before 5 am pst, the Comex open, and the London close.
The emerging markets currency watch is showing price reductions with the Venezuelan Bolivar now valuing Gold at 15,084.12 showing a 63.92 Bolivar drop in value with Silver now priced at 171.785 showing a gain (only due to the Sept/Dec rollout) of 1.997 Bolivar. In Argentina, the Peso now has Gold valued at 82,646.98 showing a loss of 533.01 A-Pesos with Silver now at 941.305 A-Pesos. The Turkish Lira now has Gold trading at 8,625.28 proving a loss of 52.36 T-Lira with Silver now gauged at 98.2218 Lira.
The Delivery Count for August Silver proves a purchase was made during yesterday’s trades as the buyer came in and added 4 more fully paid for contracts to the mix leaving the Open Interest at 5, also proving 1 buyer got his receipt for physicals as well. So far this morning we have Zero Volume and no trading range to offer as we wind down the physical deliveries for the month.
Silver’s Overall Open Interest proves a large amount of short trades had to be added to the mix in order to keep prices steady on the same day JP Morgan’s former employee pleaded guilty to conspiracy and spoofing charges after he admitted he was trained and guided by his superiors on how to manipulate precious metals prices. Silver’s Overall Open Interest now stands at 238,664 Overnighters proving 7,875 more Short positions had to be added in order to supply liquidity at these super low prices. If it wasn’t for this ability to add liquidity, Silver prices would have already exploded. Apparently the Shorts are willing to lose as much physical as possible before they are forced to remove this low priced liquidity strategy, let’s see how this turns out, I’m pretty positive about the outcome, how ‘bout you? :) . The battle is right here with the Resolute Buyer and the Overwhelmed Shorts as we wait for that last sale of physical Silver at these super low prices.
As of today, the December contract in Silver is the lead trading month with the Open interest now higher than September’s with 6 days left before the September Options come off the board with another day before the last physical buy in August is served. Also of interest is the Open Interest in the $17 Call in September Silver which still stands at 1,426 showing a minor amount of liquidation as the day’s stress piles on at Jackson’s Hole and with a group of gagged presidents not allowed to talk. What could go wrong?
We will eventually see all this melt away as the international race to negative interest rates closes in on its final lap. So keep your precious metals close, enjoy the FOMC day by keeping a positive attitude in the head and a smile on the brain basket, and as always …
Stay Strong!
J. Johnson