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Friday, October 18: Today in Gold and Silver

Stocks in this article: GLD SLV

NEW YORK ( TheStreet) -- The gold price didn't do much in Far East trading on their Thursday, but the moment that London opened, a rally began that went vertical a few minutes before 9 a.m. BST.  But a seller of last resort appeared, and volume exploded.  Even before the London a.m. fix was in, volume was over 80,000 contracts, which is the biggest number I can ever remember seeing at that time of day.  From that information alone, you can easily surmise that the price would have blown sky high if JPMorgan et al hadn't been there.

Gold traded sideways from 9 a.m. until the noon silver fix, and then began to rally anew.  The smallish price spike at the 8:20 a.m. EDT Comex open got dealt with in the usual manner, as did the tiniest rally after that.  After the high was in, the gold price sold off a few dollars into the 5:15 p.m. electronic close.

According to the CME, the low December tick was $1,173.70 just before the London open, and the high tick of $1,324.20 came about 15 minutes before the Comex close in New York.

Gold closed the Thursday session in New York at $1,320.10 spot, which was up $37.40 from Wednesday.  Volume, net of October and November, was an eye-watering 219,000 contracts.

Here's the New York Spot Gold [Bid] chart so you can observe how carefully JPMorgan et al micromanaged the price during the Comex trading session.

Silver's price chart was similar, but only up to a point.  The price blasted to its $22.18 London high at 9 a.m. BST, and at that point it got hit hard, driving the price back below the $22 spot mark.  Once the noon silver fix was in, silver rallied anew, and the second big price spike over $22 at the Comex open also got squashed flat in short order.

From its 9:30 a.m. New York low, silver began to rally very quietly but, like gold, the price was kept on a very short leash.  Once the 1:30 p.m. Comex close was in, silver traded sideways to down for the rest of the day.

Silver's low, like gold's low, came shortly before the London open, and the high tick was in less than 10 minutes after the Comex opened.  The CME recorded those prices as  $21.10 and $22.20 in the December contract, an intraday move of 5%.

Silver closed on Thursday in New York at $21.89 spot, up 47 cents from Wednesday.  Volume, net of October and November was pretty chunky at 60,000 contracts.

Here's the New York Silver Silver Spot [Bid] chart so you can see how short the leash really was.

After their smallish 9 a.m. rallies in London, both platinum and palladium quietly worked their way higher in price for the remainder of the day, both closing almost on their highs.  Here are the charts.

For the day, gold closed up 2.92%; silver was up 2.19%; platinum and palladium were up 2.80% and 3.22% respectively.  And it's obvious to anyone except the willfully blind that both gold and silver would have finished materially higher, if they had been allowed to trade freely, which they obviously weren't.

The dollar index closed on Wednesday afternoon in New York at 80.50.  The high of 80.56 came shortly after the index began to trade in the Far East on their Thursday, and it was all down hill from there.  By the London open it was down to 80.30, and then collapsed all the way down to 79.90 by 9 a.m. BST, less than an hour later.  It continued to decline from there, hitting its low tick of 79.63 shortly before the 4 p.m. London close, which was shortly before 11 a.m. in New York.  The index traded flat from there.

You'll note that a large portion of the dollar index decline was in before gold and silver prices went vertical shortly before 9 a.m. BST in London.   And the currency moves had zero to do with the price spikes in both metals at the 8:20 a.m. EDT Comex open.

Not surprisingly, the gold stocks gapped up and continued to climb as the day wore on, but gave back about two percentage points of those gains as gold got sold down a few dollars in late electronic trading.  This was probably day trader-types heading for the exits.  As it was, the HUI managed to close up 5.51%.

It was pretty much the same story for the silver stocks, as Nick Laird's Intraday Silver Sentiment Index finished higher by 4.72%.

The CME's Daily Delivery Report showed that 13 gold and three silver contracts were posted for delivery on Monday. As I said earlier this week, barring an unforeseen surprise delivery requests, the balance of the October delivery month should be very quiet.

Another day, and another withdrawal from GLD.  This time it was 106,174 troy ounces.  And as of 10:21 p.m. EDT yesterday evening, there were no reported changes in SLV.

Joshua Gibbons, the "Guru of the SLV silver bar list" updated his website yesterday with the latest report from SLV.  Here is what he had to say:  " Analysis of the 16 October 2013 bar list, and comparison to the previous week's list -- 1,927,746.3 troy ounces was removed (all from Brinks London), and no bars had a serial number change.  The bars removed were from: Russian State Refineries (0.7M oz), Kazakhmys PLC (0.5M oz), KGHM (0.3M oz), and three others."

" As of the time that the bar list was produced, it was over-allocated 276.4 troy ounces. There were withdrawals of 1,927,232.0 oz. on Monday and 1,734,440.4 oz. on Tuesday that have not yet been reflected on the bar list, that should appear on the next bar list (as it normally takes a day or two for the bar list to get updated)."  The link to Joshua's website is here.

The U.S. Mint had another small sales report yesterday.  They sold 1,000 ounces of gold eagles and another 1,000 one-ounce 24K gold buffaloes.  They also reported selling 50,500 silver eagles.

Over at the Comex-approved depositories on Wednesday, they reported receiving 83,024 troy ounces of gold, and didn't ship any out.  All of the action was at HSBC USA, and the link to that is here.

Once again there was more big activity in silver at these same depositories on Wednesday.  HSBC USA received 1,092,107 troy ounces, and Brink's, Inc. shipped out 11,343 troy ounces.  The link to that action is here.

Here's a chart that Nick Laird slid into my in-box in the wee hours of this morning.  Along with the comment that " I see the premiums hit 30%.  The Indians are paying $350 more than the U.S. gold price."

I have the usual number of stories for a weekday column and, as usual, the final edit is up to you.

¤ The Wrap

While I try to avoid short term price predictions, the recent price action seems to also indicate a sooner rather than later end to the silver manipulation. The recent sudden price take-downs and dismal price action seem indicative of a market washed out to the downside. Certainly, it’s hard to imagine a market (silver and gold) with more extreme negative sentiment, also a sign of a washout and price bottom. If the CFTC had moved against JPMorgan for manipulating silver instead of credit default swaps, we’d be over $100 silver right now. That the agency didn’t just means it will take a little longer. - Silver analyst Ted Butler -- 16 October 2013

One can only imagine what the closing precious metal prices would have been if JPMorgan et al hadn't show up in early London trading, and also at the Comex open.  If you read, and even more importantly, understood what Ted Butler was saying in today's last story, it's obvious [at least to me] "Da Boyz" threw everything they had at both gold and silver yesterday to prevent them from exploding to the outer edges of the known universe, especially at the London open where volume blew out by a stunning amount.  So, for the moment, the price management scheme is still on.

As Ted pointed out on the phone yesterday, no important moving averages were violated to the upside with yesterday's price action, and it's hard to say what will happen when that finally occurs.  Here are the six-month charts for both gold and silver so you can see the lay of the land as of yesterday's close.

Ted informed me that there will be no Commitment of Traders or Bank Participation Reports today, so we'll obviously have to wait until next Friday.  By the time that day rolls around, we'll have been without a COT Report for a whole month.

Gold and silver prices did nothing in Far East trading on their Friday, and the smallish rallies that began an hour or so before the London open earlier this morning were dealt with in the usual manner when trading began at 8 a.m. BST.  Volumes in both metals, which had been pretty light up until that time, quickly blew out as the high-frequency traders did the dirty.  So these tiny rallies didn't go unopposed, either.  The dollar is basically flat as of 4:07 a.m. EDT as I write this paragraph.

And as I hit the send button on today's column at 5:20 a.m. EDT, I note that all four precious metals are now trading sideways, and volumes have really tapered off.  The dollar index is still comatose.

It beats me what the rest of today's trading action will bring.  But considering all the bad news out there, along with that fact that it's a Friday, nothing will surprise me, nor should it surprise you.

Enjoy your weekend, or what's left of it if you live west of the International Date Line, and I'll see you here tomorrow.

This is an abbreviated version of Ed Steer's Gold & Silver Daily Sign-up to have to the complete market review delivered to your email inbox each morning for free.

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