NEW YORK ( TheStreet) -- For the third day in a row the high tick of the day [such as it was] came in Far East trading, and for the third day in a row the gold price got sold down after that. On Friday the sell-off came right at the London open, and the smallish rally in New York trading back over the $1,400 price mark wasn't allowed to last.
Gold closed in New York on Friday at $1,396.50 spot, down another $10.70. Net volume was still pretty decent at 126,000 contracts, with over 25 percent of that amount occurring by 9 a.m. in London.
Every attempt by silver to break above the $24 spot mark in Far East trading on Friday met with not-for-profit selling. Then the silver price got sold down until shortly after London opened before making another rally attempt to the $24 spot mark, and that got smacked shortly after Comex trading began, and that was pretty much it for the day. Silver's New York high and lows ticks were $24.02 and $23.31 respectively, a intraday move of almost 3 percent. Both high and low came within ninety minutes of each other. Nothing free market about that. Silver finished the Friday trading session at $23.53 spot, down 34 cents from Thursday's close. Net volume was very decent at 44,000 contracts. Here's the New York Spot Silver [Bid] chart on its own, so you can see the not-for-profit seller's footprints that came less than ten minutes after the Comex open as silver blasted for the $24 spot mark. Platinum and palladium went their separate ways yesterday, and here are the charts. The dollar index closed late Thursday afternoon in New York at 82.005, and did very little during the Friday trading session. The rally up to 82.24 by 11 a.m. in New York [the close of London trading] faded into the 5:15 p.m. electronic close. The index finished the day at 82.07, up a handful of basis points. Nothing to see here. The gold stocks started off about 2 percent in the red at the open in New York on Friday morning, but managed to make it into positive territory just before noon EDT, and then slid into the close. The HUI finished down 1.50%. The silver stocks didn't do well at all, as Nick Laird's Intraday Silver Sentiment Index closed down 2.52%.
(Click on image to enlarge)For the week that was, the gold stocks finished down about 9 percent, and the silver stocks were down about 10 percent The CME's Daily Delivery Report for "Day 2" of the September delivery month showed that 20 gold and 642 silver contracts were posted for delivery on Wednesday of next week. The 20 gold contracts were issued by JPMorgan Chase, and the stopper was Canada's Bank of Nova Scotia. There were about two dozen firms issuing and stopping silver contracts yesterday. The three biggest short/issuers were JPMorgan out of its client account with 233 contracts, ABN Amro with 134 contracts, and Macquarie Futures with 97 contracts. The three largest long/stoppers were Canada's Bank of Nova Scotia with 358 contracts, JPMorgan Chase in its client account once again with 132 contracts, and Credit Suisse with 99 contracts in its proprietary trading account. [I'm wondering out loud if these client account numbers reported for JPMorgan are right. I'll be on the lookout for a correction. - Ed] The current Issuers and Stoppers Report is worth looking at once again, and the link is here. There were no reported changes in either GLD or SLV yesterday, and Ted Butler is still of the opinion, rightly, that SLV is owed around 10 million ounces. Joshua Gibbons, the "Guru of the SLV Bar List" had this to say about the changes in SLV for the end of trading on Monday, August 26: " Analysis of the 26 August bar list, and comparison to the previous week's list: 964,135.0 troy ounces was added (all to Brinks London), no bars were removed or had a serial number change." " The bars added were from: Korea Zinc (0.6M oz.), Met-Mex Penoles (0.2M oz.), Prioksky (0.1M oz.), and 3 others." The link to Joshua's website is here. There was a smallish sales report from the U.S. Mint yesterday. They sold 500 ounces of gold eagles and 500 one-ounce 24K gold buffaloes, but no silver eagles sales were reported sold. Based on mint sales so far this month, 11,500 ounces of gold eagles; 10,000 one-ounce 24K gold buffaloes and 3,625,000 silver eagles, the silver/gold ratio is still a ridiculous 168 to 1. But there's no doubt that the mint sold more silver eagles during the week just past, but they always report silver eagles sales on the first day of the week, so it's a very safe bet that whatever silver eagles are reported sold by the U.S. Mint on Tuesday, will actually have been sold in August. I'll update this data in my Wednesday column. Over at the Comex-approved depositories on Thursday, they reported receiving 11,633 troy ounces of gold, and didn't ship anything out. The link to that activity is here. In silver, nothing was reported received on Thursday, but 361,191 troy ounces were shipped off to parts unknown. The link to that action is here. The Commitment of Traders Report showed deterioration in both silver and gold. In silver, the Commercial net short position increased by only 1,100 contracts, or 5.5 million ounces, and it now sits at 121.9 million ounces. Ted said that JPMorgan only increased their short position by about 500 contracts, and the '5 through 8' traders added to their short positions as well. It could have been worse. In gold, the Commercial net short position blew out by 20,000 contracts, or 2.0 million ounces, and the Commercial net short position is now back up to 8.05 million ounces. JPMorgan sold another 5,000 contracts of their long position, which Ted Butler says is down to about 6 million ounces. The smaller Commercial traders other than the Big 8 sold the balance [15,000 contracts] at a profit. The Non-Commercial traders covered a bit over 19,000 contracts of their big short position, and the small traders went long 2,000 contracts net. The COT Report is still very bullish, but not as wildly bullish as it was three weeks ago, as JPMorgan has obviously been selling into these rallies and that, in part, has capped the price, because if they had just sat on their hands and done nothing, the prices of both metals would be far higher than they are today. But no matter how you slice it or dice it, JPMorgan Chase still has a long-side corner in the gold market to go along with their short-side corner in the silver market. Their long corner in the gold market is slowly shrinking, while their short corner in the silver market is on the rise again. I'll be very interested in what Ted has to say about all this in his weekend commentary to his paying subscribers later today. I don't have all that many stories for a Saturday, so I hope you can find time in what's left of your weekend to read the ones that you feel are important to you.