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Thursday, October 31: Today in Gold and Silver

NEW YORK ( TheStreet) -- Gold hit its Far East low around 9:30 a.m. Hong Kong time, and then began to work its way slowly higher from there, picking up a bit more steam at the 8:20 a.m. EDT Comex open.  That rally came to an end at the London p.m. gold fix, and from there it sold off a bit going into the FOMC news.

It rallied sharply minutes before the news was released, but at 2 p.m. on the button the high-frequency traders did their magic, and gold was down about twenty bucks in less than 30 minutes.  From there it rallied back to unchanged, but then got sold down a few dollars going into the 5:15 p.m. electronic close in New York.

The CME recorded the high and low in the December contract at $1,359.60 and $1,334.50.

The gold price finished the New York session at $1,342.90 spot, which was down $1.40 from Tuesday's close.  Net volume was around 147,000 contracts.

Here's the New York Spot Gold [Bid] chart on its own.

The silver price more or less followed the same chart pattern as gold, except its New York rally got cut off at the knees minutes after 9 a.m. EDT, and it pretty much traded flat until 2 p.m. when it met the same fate as the gold price.

The low and high in the December contract were reported as $22.39 and $23.095.

Silver closed in New York at $22.735 spot, which was up 21.5 cents from Tuesday.  Net volume was pretty high at 52,000 contracts.

And here also is the New York Spot Silver [Bid] chart so you can see the price action that matters in more detail.

The platinum and palladium charts looked somewhat similar, except for the fact that their high ticks got capped at different times.  Here are the charts.

The dollar index closed in New York late on Tuesday at 79.61, and from there quietly sank down to its low tick of 79.46, which came a minute or so before the 2 p.m. Fed announcement.  Then the index blasted skyward, and within 45 minutes, it had gained 40 basis points.  From there it sold off a bit into the close, finishing the day at 79.74, up 13 basis points from Tuesday.

It was obvious, at least to me, that the order went out to the HFT boyz to ramp the dollar index and kill gold and silver, and that they did in all three with great success.

The gold stocks gapped up 2% at the open, and then proceeded to slide a hair until the magic hour of 2 p.m. EDT.  Then, in sympathy with the metal itself, the stock got sold down about 4%.  However, they came bouncing back and closed the day up 1.45%.

It was a very similar trading pattern in silver stocks as well, but Nick Laird's Intraday Silver Sentiment Index closed up only 1.01%, despite the fact that the metal itself closed well into positive territory.  However, I'm not complaining, just making an observation.

The CME's Daily Delivery Report for "Day 1" of the November delivery month showed that zero gold and 53 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  Jefferies was the short/issuer on all 53 contracts, and Canada's Bank of Nova Scotia, along with JPMorgan Chase in its client account, stopped 47 contracts in total.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday, and as of 9:57 a.m. EDT, there were no reported changes in SLV, either.

The U.S. Mint had a tiny sales report yesterday, as they sold 1,000 ounces of gold eagles, and that was all.

Once again there was no activity in gold over at the Comex-approved depositories on Tuesday.  But in silver, these same depositories reported receiving 900,797 troy ounces of the stuff, and didn't ship any out.  All the activity was at Brink's, Inc. and CNT. The link to the silver action is here.

I don't have as many stories today as I had yesterday, or on Tuesday.  I hope you can find the time to read the articles that interest you the most.

¤ The Wrap

There are no markets any more, only interventions. -- Chris Powell, April 2008

I wasn't entirely surprised by yesterday's price action, as I'm sure that JPMorgan's high-frequency traders had their instructions to ramp the dollar index and squash gold and silver prices the moment that the FOMC made their announcement.

I also noted that silver broke above its 50-day moving average with some authority yesterday, but that got dealt with in the usual manner within 10 minutes of the Comex open.  I suspect, but have no proof, that yesterday's engineered price decline at two p.m. EDT was done to prevent those exact events from getting out of hand to the upside in both metals, which is precisely what would have happened if "da boyz" hadn't stepped in when they did in both silver and gold throughout the New York trading session.

Since today is the last trading day of the month, nothing will surprise me as far as price action goes.   It's also Hallowe'en, and one wonders what "da boyz" have in store for us.  Will it be "trick or treat?"  I've already noted the fact that all four precious metals got sold down the moment that New York opened at 6 p.m. yesterday evening, and all have hit their respective lows heading into the last hour of Far East trading before the London open.  Silver is down about 2% at the moment.  The other three precious metals are down a fraction of a percent.

But that's no indication of how prices will unfold during the balance of the trading session, especially in New York.

And as I hit the send button on today's efforts at 5:10 a.m. EDT, I note that all four precious metals got sold down a bit more at the London open, but are all off these lows by a tiny bit.  Volumes are certainly getting up there, especially in silver, and that should come as no surprise since it got hit the hardest to the downside.  The dollar index is chopping sideways, and basically unchanged from its close in New York yesterday.

I await the Comex open in New York with more than the usual amount of interest.

See you 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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