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Wednesday, November 20: Today in Gold and Silver

NEW YORK (TheStreet) -- With net volume being what it was in gold yesterday, I wouldn't read a thing into Tuesday's price action, and the highs and lows aren't even worth my while to look up.

Gold closed at $1,275.20 spot, down 80 cents from Monday's close.  Net volume was microscopic at only 72,000 contracts.

But the silver price action was slightly different.  The HFT boyz set a new low price tick for this move down about 11:30 Hong Kong time on their Tuesday morning.  The subsequent rally made it back above Monday's New York close by the noon silver fix in London, and that pretty much all she wrote for the remainder of the day both in London and New York.

The CME recorded the low and high ticks at $20.20 and $20.475.

Silver closed in New York yesterday afternoon at $20.34 spot, down 5.5 cents from Monday.  Net volume was pretty light as well at only 24,500 contracts.

Platinum and palladium didn't do much price-wise until the equity markets opened in New York.  Then both spiked higher until 10 a.m. EST, and then both rallies were met by sellers of last resort.  Both finished up a few dollars on the day.  Here are the charts.

The dollar index close in New York on Monday at 80.73, and then chopped sideways in a very tight range on Tuesday, before falling off a small cliff just before the close yesterday.  The index finished at 80.54, which was down 19 basis points on the day.

The gold stocks opened in positive territory and hung around just above unchanged until about 12:30 in New York.  Then they got sold down into the red and struggled for the rest of the day.  The HUI finished down 0.10%.

It was more or less the same chart pattern in the silver equities, although you have to wonder why that would have to be the case, but it almost always is.  Nick Laird's Intraday Silver Sentiment Index closed up 0.13%.

The CME Daily Delivery Report was another non-event, as only 1 gold and 1 silver contract were posted for delivery within the Comex-approved depositories on Thursday.  So far this month only two gold and 106 silver contracts have been delivered in the November delivery month.  That's not a lot.

Once again there was a withdrawal from GLD.  This time it was 48,243 troy ounces.  And as of 10:05 p.m. EST yesterday evening, there were no reported changes in SLV.

The U.S. Mint had a small sales report, as they sold 239,000 silver eagles and nothing else.

Monday was a very quiet day over at the Comex-approved depositories in both gold and silver.  In gold, only 1,099 troy ounces were reported received, and nothing was shipped out.  In silver, nothing was reported received, but 121,517 troy ounces were removed.  The link to the silver "action" is here.

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

¤ The Wrap

At this time last week, I had estimated that the total net commercial short positions in Comex gold and silver would be down 25,000 contracts in gold and more than 3,000 contracts in silver, if the report was cut-off last Friday (and not the coming Tuesday). I should have left out the qualifier, as more than 28,000 contracts of gold and 3,200 contracts of net commercial shorts were eliminated as of Tuesday.

The fact is that many COT mavens were expecting big declines in the commercial short positions, so my point is not to pat myself on the back. My point is that more observers who study the COT reports can see that what moves prices are how the tech funds behave on the Comex. If you think about that for a moment, it’s kind of extraordinary. I agree that not everyone makes the connection that the commercials are tricking and controlling when the tech funds buy and sell, but to my mind it’s just a matter of time before they do. As backing for my assertion I would point out that a few years ago, a very small number of precious metals investors even considered the COTs. Now, many are making predictions of what the new reports may show based upon reporting week price action. That’s just a short distance away from viewing the reports as being what caused prices to move and the realization of that is price manipulation. - Silver analyst Ted Butler: 16 November 2013

I don't have a thing to add to what I said earlier about yesterday's price action, or lack of it, in both silver and gold.  It was just another day off the calendar as we approach First Notice Day for the December delivery month.

All traders who hold futures or options contracts for December, have to sell, roll, or stand for delivery, and all that has to occur between now and the close of Comex trading next Thursday.  I don't expect much price action, except to the downside, between now and then.  But as I said in this space yesterday, once December goes off the board, it's a whole new ball game in my opinion, and we'll have to wait until then.

Yesterday, at the close of Comex trading, was the cut-off for Friday's Commitment of Traders Report.  Just eye-balling the weekly price action that will be in that report, it's a certainty that there will be an improvement in the Commercial net short position in silver, because a new low price was set for this move down yesterday.  However, Ted Butler says that it's too hard to tell with gold, as their was a big out-of-the-blue rally in electronic trading last Wednesday to start off this current reporting week, and it's unknown whether it was short covering or a new long position being placed that caused it.  So I'm prepared for either scenario.

Also turning in lower prices yesterday were both copper and crude oil.  The prices of these two key commodities, along with gold and silver, are also under pressure by JPMorgan et al, and both are very oversold.  The traders in these commodities also have to sell, roll, or stand for delivery before next Friday as well, and it will be interesting to see how the price of these two commodities, along with the precious metals, are allowed to "react" once we get into the new front month.  Here are the six-month charts in both.

As I've said before, if the Fed is looking for a little inflationary pressure, all they have to do is get their foot off these key commodities, and the free market will do the rest.  Will it happen?  Beats me, but it's a scenario that I've been expecting for some time.

It was very quiet in Far East and early London trading on their Wednesday.  As I hit the send button on today's column at 5:15 a.m. EST, all four precious metals are at or below their respective closes on Tuesday.  Volumes are about average, whatever that means these days, and there are a decent number of roll-overs in both gold and silver, but particularly in silver.  The dollar index is currently up about 18 basis points, gaining back everything it lost yesterday, at least for the moment.

I'm not expecting a lot of wild price action during the New York session today, but it wouldn't surprise me if it turns out differently, nor should it surprise you.

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.

Stock quotes in this article: GLD, SLV 
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