POG #3 in "hot searches" according to AOL......
A stroll down memory lane...From a newsletter, Friday 1/25/80, during the week of silver's high:
*************RECORD SWINGS***************
Monday gold peaked at $889 on the open in NY, ebbing early Wed on the London open at $585- a $304 swing in a day and a half. Silver was even more volatile, peaking at $52, Mon, ebbing at $30 Wed- a 40% swing, comparable to a 350 point move on the DOW
(why the comparison? Because silver on occasion has had a larger 1 day dollar volume than all NY stock trading). With the Russians reportedly digging in (presumably with US financed or made shovels) next to the Pakistani and Iranian borders and using gas on their Moslem victims, the news wasn't any better internationally. But the pullback illustrated gold's dependency on silver.
The drop came after Monday's NY Comex silver futures restraints, announced after a 4 hour delayed open; copied by Chicago Tuesday, after an hour and a half delayed open. These restraints represent the 3rd major attempt in 4 months to squeeze Hunt; but for the short term I will continue to vote for Hunt, as silver closed even higher Mon and started another short term and admittedly cautious rally Wed. Gold rebounded $100 from $585 in London in a bit over an hour Wed, when silver refused to go below Tues levels; but Thurs confusion again reigned, as silver fell back despite gold's jump. Short of a massive gold sale or a definite improvement in the Middle East, it appears as if Hunt could more easily cause another run up to $50 for silver and $900 for gold.
Miller again confused the gold selling issue by stating the US had not changed its policy to sell gold when "appropriate" - whatever that means. Talk of a one ounce gold coin made by the US to compete with the Krugerrand and Maple Leaf is being bounced around.
Curious,also, that the correction came immediately following the secret Big-5 Finance meet in Germany, including Miller and Solomon from the US and officials from Japan, Britain, Germany, and France...Gold WAS discussed, along with the IMF substitution account, to soak up excess dollars in the future with SDR's, which will be scarcely a sponge in the pool. The continuation of gold sales is more than likely...
If Hunt can simply sit back and take delivery of positions bought years ago and watch the market being squeezed upward, then why the partnership with AZIZ and the nervousness over the exchange limitations that wouldn't affect these types of long-term positions as they come due? Hunt was rumored to have offered $40 for 5 million ounces of pure "deliverable" silver late Tues causing the $40 open Wed and a high of $41. The unstable bag market has steadied as expected, with the discounts from actual pure silver content narrowing from the low levels of a few days ago
(19% for 90% silver bags and 23% for 40% silver clad bags). Our spread on bags is $2000, compared with $4500 spreads by the so-called wholesalers. We are concerned with the public and are pushing to at least stabilize the local bag markets. We were forced to cut off the sellers-only line Mon at 3pm to process the bulk through by a reasonable hour...I think the volatility we saw this week was a good and humbling experience for many..The sellers line was cut in half when the market corrected, while the buyers line swelled. On Wed we experienced the 1st day this year that we sold more silver than we bought, with the imbalance moving to a 3 to 1 ratio by Thur.
It is highly unusual for the public to sell on rallies and buy on dips. By Fri the seller's waiting line dropped from 4 hours to under 1 hour, with buyers waiting 30 minutes.
PRICES
closing price
1/21/80 Au 825.50(NY) Ag 47.50(Chicago)
1/22/80 Au 682.00 Ag 33.50
1/23/80 Au 660.00 Ag 37.00
1/24/80 Au 681.00 Ag 35.50
1/25/80 Au 634.00 Ag 34.00
(prices as of Fri 1/25/80 close)
$1000 90% Silver Bags (-14.4%) $21,000
$1000 40% Silver Bags (-14.7%) $8,500
Canadian Dollar $.861 US
Krugerrands(6.1% over content) Buy-$645 Sell-$675
Maple Leafs(8.8% over content) Buy $665
Sell- $695
***From Jonathon's Coin "Real News" Letter, one of the largest gold and silver dealers in Los Angeles at that time. |
