On New Years eve day, gold got sold off in the Far East a bit…and then the down trend accelerated through London trading, with the bottom being the London p.m. gold fix. From there…and to everyone’s surprise…the price took off to the upside with some real authority. True, there hadn’t been a lot of volume up until that point, but that changed from the London p.m. fix until the close of trading in New York. Silver’s chart was very similar, with the metal turning in an outstanding day as well. Gold put in an “outside day key reversal to the upside”…which is a very bullish technical indicator. The boyz have never…ever…allowed this technical indicator to work in gold…and have taken gold down the very next day to negate it.

The world’s gold market’s were closed on January 1st, but once early morning trading began on January 2nd in the Far East,

Gold added about $20 to its price in Sydney trading first thing on Monday morning. This lasted right up until Hong Kong trading started a few hours later, and then went into a slow decline from there. This decline lasted through London…and then Comex trading in New York. Gold added to its gains in after-hours Globex trading.

Silver followed a similar path until New York opened. The price spike that ensued quickly got extinguished…and silver got sold off for about 50 cents right into the Comex close. From there the price recovered somewhat.

Volume in gold trading on Monday was still pretty light…but three times heavier than Friday’s volume. The HUI tacked on another 3% to the upside. Considering that the U.S. dollar came within an eyelash of gaining two full cents yesterday, I guess we should be thankful that both metals did as well as they did.

As far as changes in

More on Gold Backwardation

By James Turk

http://www.kitco.com/ind/Turk/turk_dec122008.html

Over the last few weeks, there have been a lot of articles on the Internet about backwardation, i.e., when the price of commodities for delivery today is higher than the price of commodities for delivery in the future. Like nearly all the things on the Internet, most of what was written is useful, but some of it is total rubbish, and it takes time to sort through to find the gems from the rest.  I offer the following in the hope that it clears up some of the confusion that has arisen about backwardation as well as to provide some insight into today’s gold market.

Backwardations are no big deal in most commodities, but they are indeed a very big deal for gold. Since I started following gold in the 1970s, I can recall seeing a gold backwardation against the US dollar only

Gold peaked just north of $810 in late Hong Kong trading, then fell steadily save for a couple of small bumps up, from there all the way through the Globex, before it finally settled at $768.20, down a whopping $48.10 from Friday. Overnight, gold has edged higher.

Platinum likewise peaked in Hong Kong, just over $850, and likewise eased from there through the Globex to end at $790, down $78. Overnight, platinum is trending higher.

Silver also declined from Hong Kong on, but really went waterfall when New York opened, shedding 70 cents in the first hour, and it never did recover as it ground to a close at $9.23, down $1.03. Overnight, silver has moved higher. (Click here for charts)

There’s no putting lipstick on this particular pig. It was simply a wicked bad day for the precious metals yesterday, a turnaround that was especially disappointing after the solid

There wasn’t a lot of activity in Thursday’s trading in gold in the Far East. However, at 3:00 a.m. New York time, there were some signs of life…but even the slightest attempt at a rally was met by equal bouts of selling. This ‘up-down-up-down’ activity went on for eight hours.

But shortly after the London p.m. fix was in, a serious seller showed up and took both gold and silver down to their respective lows of the day. Then, at precisely 1:00 p.m., G-Dubya opened his mouth…and one of the biggest turnarounds in gold, silver…and the stock markets…took place. The prices of both metals continued higher into after-hours trading on the Globex. Once again, these rallies in gold and silver looked like short covering to me. But, regardless of the cause of the price rises, the precious metals stocks did equally as well. Volume was only so-so in both metals.

Gold open

Gold sank in the overseas markets, rallied back into positive territory by mid-morning Friday, but made its high for the day there, as it declined for the rest of the Comex before steadying through the Globex and finishing at $723.70, down $12.00. For the week, gold was off 1.5%.

Platinum bottomed near $770 in late Hong Kong trading, but moved gradually higher through most of the rest of the day, ending at $819/oz., down $7. For the week, platinum gained 3%.

Silver also hit its low late in Hong Kong, and it too pushed steadily higher, making it back into positive territory to close at $9.86/oz., up 13 cents. For the week, silver tacked on 5.2%. (Click here for charts)

While silver had a decent day, gold turned in yet another lackluster performance, ending October with a loss of 18%, the largest monthly decline for the metal in 28 years.

Gold

Well, the current fiasco over the physical shortage symptoms surely isnt quieting down, if anything its getting more gas poured on daily as more and more analysts weigh in on the situation.

I was just reading one such article on Seeking Alpha, and ran across a rather excellent and well put comment:

Actually, the U.S. Mint has not just “run out of blanks” as Bron suggests.

Bron says that Perth Mint is not having trouble getting adequate supply. But, remember, the U.S. Mint is several orders of magnitude bigger than the Perth Mint. Its coin production many times larger than any other mint in the world. It needs a level of supply that the Perth Mint couldn’t even dream of. And, it doesn’t have any “unallocated storage” schemes with which it might have metal, it now is using, stored up from long ago, when availability of physical metal was higher.

The U.S. Mint’s daily