Hi CWI get the feeling that we are now starting to see a break...

Hi CW

I get the feeling that we are now starting to see a break between the physical market and the paper market. Unfortunately the pricing for physical is still tied to the paper pricing and we are seeing this in the FML SP.

Havey Organ provided insightful comment this morning on last nigths COMMEX action:

" Gold closed today down $4.30 d at $1659.60 while silver generally held its own rising by 27 cents to $31.20

I am witnessing some strange things going on at the comex and I would like to present this to you.

The total gold comex OI rose by 2080 contracts despite the 48 dollar wallop yesterday. That makes no sense as it generally means the banking raid solves nothing as no gold leaves are falling from the gold tree. Now please get a load of this next entry.

The OI for the front delivery month of December rose by 489 contracts to 2034 despite 21 delivery notices yesterday and of course the raid. This also makes no sense. We thus have an additional 510 contracts of gold standing or 51000 oz and we lost nothing to cash settlements.

The big boys are scurrying the planet looking for the ever depleting physical gold. The next big delivery month is February and here the OI fell from 261,430 to 259,956. The estimated volume today was tame at 142,447 as most investors refuse to play with the crooks. Thus the bankers are playing with themselves."

Reference - http://harveyorgan.blogspot.com/

Silver is starting to become very scarce (ABC Bullion has no 1 oz coins for sale at the moment) but Gold is still in reasionable supply. Silver is the canary in the coal mine for the PM market.

My reading on the current situation is that the TBTF banks with REAl assets i.e. GOLD, maybe selling these to maintain their liquidity and hense dragging the PM market down, with the MF Global situation adding to the mess, once they run out of asset then its game over.

Every dog has its day and I think that FML is looking real good for 2012.

BTFD if you can.