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Tuesday, November 19: Today in Gold and Silver

NEW YORK (TheStreet) -- Gold was under selling pressure right from the 6 p.m. EST New York open on Sunday night.  Ten bucks got sliced off the price between then and 11:30 a.m. EST on Monday morning.  Then the HFT boyz took another ten spot off the price in a bit over an hour.

The low came around 12:35 p.m. in New York, the dollar index high, and the subsequent rally attempt gained back about six bucks or so.

The CME recorded the low tick at $1,269.20 in the December contract.  The high was the Friday afternoon EST close.

Gold finished the Monday trading session at $1,276.00 spot, down $14.40 on the day.  Net volume was not overly heavy at a hair under 99,000 contracts.

The silver price action was almost a carbon copy of what happened in gold, except the New York low came in a spike down just minutes after 3 p.m. in electronic trading.  The subsequent recovery off that low wasn't allowed to amount to much.

The CME high and lows ticks were recorded as $20.80 and $20.29 in the December contract.

Silver closed on Monday at $20.395 spot, down 38.5 cents from Friday's close.  Net volume was only 21,500 contracts, and over half of yesterday's total volume was roll-overs out of the December delivery month.  In comparison, the roll-overs out of gold were only a small fraction of the total volume.

And as you already know, JPMorgan et al didn't spare platinum and palladium, either.  Here are the charts.

You may have also noticed that both gold and silver rallied at the 8:20 a.m. EST Comex open in New York, but at 9:10 a.m., 50 minutes later, both rallies ran into the usual sellers of last resort.

For the day, Kitco recorded the loses as follows: gold down 1.12%, silver down 1.85%, platinum down 1.95% and palladium down 2.19%.

The dollar index opened at 80.84 on Sunday evening, and within a few hours had "rallied" to its 80.91 high of the day.  After that it was a long, slow slide into the 80.58 low which came at precisely 10 a.m. in New York, which just happened to coincide with the London p.m. gold fix.  The subsequent rally topped out at 80.79 around 12:40 p.m. in New York, and then chopped sideways into the close.  The index closed at 80.73, which was down 11 basis points from Friday's close.

The 12:40 p.m. high in the dollar coincided precisely with the low ticks in gold and silver during the Comex trading session.

Not surprisingly, the gold stocks opened lower and continued to decline until their low tick, which came minutes after 3:30 p.m.  A smallish rally into the close cut the HUI's loss to only  2.01%.

Nick Laird's Intraday Silver Sentiment Index chart looks similar, except the silver equities closed down 2.62%.

The non-eventful November delivery month continues to live up to its advance billing, as zero gold and one lonely silver contract were posted for delivery tomorrow.

There was another withdrawal from GLD, as an authorized participant withdrew 38,594 troy ounces.  And as of 10:04 p.m. yesterday evening, there were no reported changes in SLV.

Since yesterday was Monday, there was a sales report from the U.S. Mint.  They sold 6,000 ounces of gold eagles; 1,000 one-ounce 24K gold buffaloes; and 361,000 silver eagles.

Over at the Comex-approved depositories on Friday, they reported receiving 32,026 troy ounces, and shipped out a smallish 1,171 troy ounces.  The link to that activity is here.

For a change, there was very little in/out activity in silver.  Nothing was reported received, and only 10,180 troy ounces were shipped out the door.  The link to that movement is here.

I don't have all that many stories today, and I hope you find some in here that interest you.

¤ The Wrap

I see little reason why silver and gold should move in constant lockstep. More individual patterns in silver and gold, from exchange warehouse stock levels and movements, to ETF inflows and outflows, to production and consumption statistics and to the fact that central banks own, buy and sell gold and not silver, argue that price action shouldn’t be joined at the hip.

The question becomes what is causing gold and silver prices to move in tandem, or more broadly, causing most absolute price movement? The answer is almost undeniable – electronic trading on the Comex. Gold and silver prices rarely move on real world supply/demand considerations; prices usually move when the commercials are zooming the technical funds in some way; rigging prices to induce tech fund buying or selling.  Because I believe the price of silver is much more controlled and artificial than is the price of gold, when that artificial control is lifted, silver will climb much higher than gold on a percentage basis. - Silver analyst Ted Butler: 16 November 2013

Despite, or maybe because of, the low volume, JPMorgan et al had their way with all four precious metals again yesterday, at it was another day where "da boyz" took a big slice out of the salami, as Ted Butler is wont to say from time to time.

We hit new lows for this move down in silver, and platinum and palladium as well.  But not in gold.  Here are the six-month charts for all four precious metals.

As I said sometime last week, this engineered price decline may not be done until December goes off the board at the end of this month.  But that's just speculation on my part.  However, with December being a big delivery month in both gold and silver, it's a good bet that this may be the final washout as the month winds down into First Notice Day.

But it's what happens after that, that really counts.  Once JPMorgan and the raptors have finished doing the dirty to the downside, will they go short/sell longs into the next rally?  That, and that alone, will determine how high we go in price, and how fast we get there.  Nothing else matters.  As you've seen over the years, and even the last six months, it's always the same pattern, with JPMorgan and friends capping all rallies as short buyers/long sellers of last resort.  Will they be there this time when they allow the tide to turn?

Since today is Tuesday, it's also the cut-off for this Friday's Commitment of Traders Report.  Any and all volume/price data up until the 1:30 p.m. EST Comex close should be in that report, and I'm certainly interested in how the HFT boyz spin prices today.

As I write this paragraph, London has been open about six minutes.  Gold hasn't been doing much price wise, and no new lows were set in Far East trading.  The price is back to unchanged from Monday's close, but the day is young.  I'm sure you've carefully noted the fact that silver set a new low price tick down about 11:30 a.m. Hong Kong time on their Tuesday, but is almost back to unchanged as well.  The same goes for platinum and palladium.  Gold volume is pretty light, and most of it is of the HFT variety.  But silver volume is much heavier, and a large chunk of that is roll-overs out of December.  And, not that it matters, but the dollar index is doing nothing.

And as I hit the send button at 5:15 a.m. EST, the smallish rallies in all four precious metals got turned aside right at the London open, and all are trading at or below their respective Monday afternoon closes in New York.  Gold volume is a bit under "average", but is still all HFT.  Silver's volume is high, and although there was some decent roll-over volume earlier, most of the volume now is of the HFT variety as well.  The dollar index is still chopping sideways, and basically unchanged.

That's all I have for you today, 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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