Thursday, January 27, 2011

Harvey Organ - Gold and silver rise with FOMC announcement/CBO adjusts budget deficit to 1.5 trillion dollars

Gold and silver rise with FOMC announcement/CBO adjusts budget deficit to 1.5 trillion dollars

Good evening Ladies and Gentlemen:

Today at 2:15 pm the Fed made their announcement and basically they announced that the economy was soft and that QEII will continue to add stimulation to the economy. I would like to inform you that the Fed will engage in QEIII and then QE iv ad nauseum . Do not be fooled that the USA is looking at ways to exit their massive infusion of cash. It cannot and will not happen. The government has receipts of 2 trillion dollars and yet spends 4 trillion dollars. The deficit must be financed somehow and it is this money that becomes the QEII, III Iv etc. Please keep this in the back of your mind and never let the boob tube change your thinking on this matter.

Let us see how things fared at the comex:

Gold closed at closing time 1:30 (comex closing time) at $1333.00 up 80 cents on the day. Silver on the other hand add a much better day rising by 32 cents to $27.13. However at 2:15 with the news of continued QEII and the revised CBO budget deficit, gold took off in the access market and right now it is trading at $1342.80. It did hit 1348.00 an hour ago. Silver this minute is trading at $ 27.62.

Here is a summary for the gold comex trading:

The total gold comex OI rose by 7049 contracts to 506,047 from yesterday's recorded open interest of 498,998. I guess the recorded drop in OI yesterday was real. The front options delivery month of January saw the strangest of all events today. It saw a massive increase in its OI from 9 contracts yesterday to 333. Many are saying this is real. It find it totally unbelievable that this quantity of exercised options were finally reported by the CME. The front February delivery month saw its open interest fall from 176,672 to 146,812 as these fellows rolled into the next big delivery month of April. I would like to point out another strange trading factoid: the volume on the February gold contract exceeded the total open interest for February. I guess the regulator boys will overlook this detail in the surveillance. The estimated volume today was normal for the end of a non delivery/entering a delivery month January entering February. The estimated volume was 224,040 contracts. The confirmed volume yesterday was a very high 306044 where we witnessed the huge 81000 drop in open interest.

On now onto our famous silver comex trading;

The total comex silver open interest saw a drop of 2999 contracts from yesterday's level of 128,228 to 125,229. I think this is very bullish for silver. The front options delivery month of January saw its open interest fall marginally from 179 to 113 contracts for a fall of 66 contracts. However yesterday's deliveries were 126 so all the fall was for these deliveries.

to read the full report

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