"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Tuesday, March 29, 2011

Silver Deliveries picking up - Gold rollovers continue

As March draws to a close, deliveries in the March Silver contract are ramping up. A total of 290 deliveries were posted for tomorrow with Merrill Lynch the biggest issuer for customers while JP Morgan was second also issuing for both customers and their own accounts.

Barclays continues to gobble up the silver for its clients.

The total deliveries for the month of March has thus far been 1,707. Open interest remaining in the March contract is 330 contracts.

Notable is the fact that the March silver contract, which recently had been trading at a small premium to the May is now back to a discount of about a cent and a half. That pretty much means any fireworks related to the delivery process for the rest of March are over. These front month spreads have been extremely volatile but they have not moved in the direction that would indicate any short squeeze is forthcoming. Such an event would have been marked by a steady and continuous widening of any premium that March would have held over the May.

Rollovers continue in the gold pit with traders' move into the June being accompanied by a further reduction in open interest as longs hesitate to push the market higher as the end of the quarter draws near.

Both gold and silver are weakening as they head into the close of pit session trading. We'll see if they are able to garner any strength in the after market hours. The end of the month is currently is working against the bulls. It will be up to physical market buyers to keep a floor of buying support under the market until the speculators decide to return to the long side more aggressively.

Strength in the HUI might be the result of hedge fund unwinding of ratio spread trades due to the move higher in the broader US equity markets.

Dollar strength is the result of downgrades to Portugal and Greek debt which is weighing slightly on the Euro. Additionally the Yen is seeing a strong bout of selling pressure today. Even at that, the Dollar is only marginally higher.

The long bond is looking heavy today.

Gold - 8 Hour chart update

Silver - 8 hour chart update

Consumer Confidence Plunges - No Worries - We have the Fed

The Headline says it all - stocks shrug it off. Stocks shrug off Japan. Stocks shrug off unrest in MENA. Stocks shrug off the Housing Market woes. Stocks shrug off rising gasoline prices. Stocks shrug off the sun rising in the West and setting the East.

All you need to know is that the Fed keeps printing money.