NEW YORK ( TheStreet) -- As you're already aware, the gold price didn't do much during the Far East trading session on their Wednesday, and volumes weren't overly heavy. This pattern continued in London until shortly after 9 a.m. BST. At that point, gold spiked up a bit, and you can tell from chart that it ran into "resistance."
Then at 10 a.m. BST right on the button, the high-frequency traders arrived, and they worked the gold price lower until the London p.m. gold fix, which occurred minutes after 10 a.m. EDT in New York. The subsequent rally developed some real legs around the 1:30 p.m. Comex close, and gold was up twelve bucks in no time until the usual seller of last resort put in an appearance, and from 2:30 p.m. EDT onwards, the gold price chopped sideways into the close of electronic trading.
According to the CME Group, December's high and low price ticks were $1,294.60 and $1,323.30.Gold closed at $1,307.00 spot, down $11.90 on the day. Net volume, mostly of the HFT variety, was pretty decent at 164,000 contracts. The silver price action was very similar to gold's, so I shan't dwell on it much. The low of the day came at 10:15 a.m. in New York, and the rally that began moments before the Comex close also met the same fate as gold's rally that occurred at that point. The CME's high and low ticks in silver for the December contract were $22.41 and $21.75, which was a 3% intraday move, a nearly daily occurrence in this metal. Silver closed at $21.89 spot, down 40 cents from Tuesday's close, and comfortably back under the $22 spot price once again. Net volume was pretty decent as well, around 41,500 contracts. It was the same chart pattern for platinum, and the palladium price had a mini version of it as well. Here are the charts. The dollar index closed at 79.99 on Tuesday afternoon in New York, fell to its low tick [79.88] in very early Far East trading yesterday. From there, it rallied up until 9:30 a.m. EDT, before selling off a hair into the close. The index finished the Wednesday session at 80.37, up 38 basis points. It's a real stretch to associate yesterday's price action in the precious metals to what happen in the currencies, as the dollar index rally was pretty long in the tooth before gold and silver "reacted" to that fact. The gold stocks gapped down a bit at the open, before selling off to their lows of the day at the London p.m. gold fix. The rally after that was rather lackluster, but the gold equities popped into positive territory on the back of gold's rally that began shortly after the Comex close. The HUI almost closed in positive territory, but finished down 0.01%. The sell off into the silver's 10:15 a.m. EDT low tick was far more severe, as the silver stocks were down about 3.5% at their lows. The stocks popped into positive territory very briefly, but couldn't hold those gains, and Nick Laird's Intraday Silver Sentiment Index closed down 0.87%. I'm not sure whether it was the good guys or bad guys buying the shares yesterday. The CME's Daily Delivery Report showed that 21 gold and 2 silver contracts were posted for delivery on Friday within the Comex-approved depositories. The link to yesterday's Issuers and Stoppers Report is here. There were no reported changes in GLD yesterday, and as of 9:35 p.m. EDT last evening, there were no reported changes in SLV, either. The folks over at the shortsqueeze.com updated their Web site with the data for the last couple of weeks of August. In GLD, the short position declined from 2.53 million ounces down to 2.20 million ounces, a drop of 12.79% from the mid-August report. The short position in GLD declined by 30% over the entire month. But the short report for silver was the big surprise. It actually increased by 5.84%. Based on the price action since the middle of August, along with the fact that 4.1 million ounces of silver were deposited during the reporting period, I was expecting a rather decent decline in SLV's short position, and it didn't happen. I don't know what to make of it. I'm sure that Ted Butler will have something to say about it when I talk to him tomorrow, and I'll borrow what I can from the conversation and stick it in Friday's column. There was no sales report from the U.S. Mint. Over at the Comex-approved depositories on Tuesday, they reported that 31,953 troy ounces of gold were deposited, all of it into HSBC USA. The link to that activity is here. As per usual, there was big activity in silver. A smallish 15,070 troy ounces were deposited, but a very chunky 911,616 troy ounces were shipped out of the Bank of Nova Scotia's vault for parts unknown. The link to that action is here. From feast to famine, as I don't have very many stories for you today, and I hope you like some of the articles in the few presented below.