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TheStreet Open House

Friday, December 6: Today in Gold and Silver

NEW YORK ( TheStreet) -- As I mentioned in The Wrap in yesterday's column, once the big short covering rally in gold got capped during the New York lunch hour on Wednesday, it continued to get sold down almost with a break going into the London open yesterday morning.  This trend continued until the low was in a hair after 10:30 a.m. EST.  The subsequent rally lasted until shortly before noon, and then got sold down again starting around 2 p.m. in the New York electronic market.

The high and low were recorded by the CME as $1,243.20 and $1,216.30 in the February contract.

Gold closed in New York at $1,225.10 spot, down $18.20 from Wednesday, giving up virtually its entire gain from that day.  Net volume was pretty hefty at 161,000 contracts.

The chart pattern in silver was very similar, with the inflection points coming at the same time as the ones in gold.  And after getting sold back down in electronic trading, the silver price didn't do much after that.

The high and low in the March contract were reported as $19.60 and $19.27.

Silver finished the Thursday trading session at $19.435 spot, which was down 28 cents from Wednesday's close.  Net volume was a very healthy 47,000 contracts.

The platinum price didn't do much yesterday, but for the second day in a row, palladium was the star of the day after it rallied briefly in mid-morning trading in New York.  Here are the charts.

The dollar index close late Wednesday afternoon in New York at 80.64, and then traded basically sideways until around 1 p.m. Hong Kong time.  Then it dipped down to 80.40 during the next couple of hours, and then rallied back to around unchanged by shortly after 9 a.m. in London trading.  The index spiked up to its high of the day [80.80] at 8:30 a.m. in New York, and then fell all the way down to 80.25 by 11:35 a.m.  After that it traded flat for the remained of the Thursday session.  The index finished the day at 80.26, which was down 38 basis points from Wednesday's close.

There was zero correlation between the currencies and the precious metal price action yesterday.

The gold stocks never got a sniff of positive territory.  They gapped down at the open, rallied along with the gold price between 10:30 an 11:45 a.m. in New York, and then sold off for the rest of the day, as the gold price rolled over.  The HUI finished down 2.74%, finishing on it's low of the day, and giving back everything it gained on Wednesday, plus a bit more.  The daily HUI chart is M.IA., so here's the 5-day chart, and it's pretty ugly.

It was a very similar chart pattern for the silver equities, but they only gave back about half of what they gained on Wednesday.  Nick Laird's Intraday Silver Sentiment Index closed down 2.17%, and virtually on its low as well.

Looking at these equity charts, you have to ask yourself one question, dear reader; and that is "whose buying all these precious metal shares that have been falling off the table for the last year or so", as somebody owns them.

The CME's Daily Delivery Report for Day 5 of the December delivery month showed that 199 gold, along with 169 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  In gold, the short/issuers were of no particular importance.  What was important, but no surprise, was the fact that the only long/stopper of note was JPMorgan Chase in its in-house [proprietary] trading account, with 193 of those contracts.

In silver, the largest short/issuers of note were Jefferies and HSBC USA, with 82 and 75 contracts respectively.  JPMorgan stopped 121 of those contracts, of which 116 contracts were for its in-house [proprietary] trading account.  The link to yesterday's Issuers and Stopper Report is here.

There were not reported changes in GLD yesterday, and as of 9:39 p.m. EST yesterday evening, there were no reported changes in SLV, either.

Joshua Gibbons, the "Guru of the SLV Bar List", updated his website for the goings-on inside SLV for the past reporting week, and this is what he had to say -- "Analysis of the 04 December 2013 bar list, and comparison to the previous week's list:  819,078.4 troy ounces were removed (all from Brinks London), no bars were added or had a serial number change.

"The bars removed were from: Doe Run (0.3M oz.), Met-Mex (0.2M oz.), and five others. As of the time that the bar list was produced, it was overallocated 737.6 troy ounces.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

The U.S. Mint had another sales report yesterday.  They sold another 8,500 troy ounces of gold eagles; and 1,000 one-ounce 24K gold buffaloes.

It was rather quiet day for gold in the Comex-approved depositories on Wednesday.  They reported receiving only 6,365 troy ounces, and didn't ship any out  All of the activity was at Brink's, Inc., and here's the link.

For a change, it was even quieter in silver, as nothing was reported received, and only 1,456 troy ounces were reported shipped out.  The link to that activity is here.

I have a decent number of stories again today and, as usual, the final edit is up to you.

¤ The Wrap

Completing the December delivery intrigue is copper, where no deliveries have been made yet and a clear backwardation has developed. Just as a reminder, JPMorgan is very long copper futures. Is there any market these crooks don’t seek to dominate? The ironic aspect is that the Volcker Rule is set to be finalized by the CFTC next Tuesday, December 10. I say ironic because if either a legitimate Volcker Rule or position limits were established, JPMorgan would not be allowed to dominate the markets as it does. Who knows – maybe JPMorgan sees the handwriting on the wall and that is why they positioned themselves for an upside price explosion. - Silver analyst Ted Butler: 04 December 2013

Wednesday's short covering rallies in both gold and silver ended up being flashes in the New York pan, as nothing happened in any of the world's precious metals markets during the following 24 hours.  Instead, it was followed by the same price pressure that we've become accustomed to, interrupted only briefly by a smallish rally in mid-morning trading in New York that got capped shortly before lunch.

Since today is the first Friday of the new month, we get the jobs report at 8:30 a.m. EST, and I expect that JPMorgan et al will do the dirty with their high-frequency traders starting milliseconds before the numbers are actually released, because I'm sure that they'll be given the "heads up".

I'd love to be wrong, of course.  But using the past as prologue, I have to place my bet on that outcome.

We also get the latest Commitment of Traders Report, along with the monthly Bank Participation Report which strips out the Comex futures positions of all the banks [both U.S. and foreign] and for that one day a month we get to see how dominant the U.S. banks really are in all four precious metals.

As far as the COT Report is concerned, I'm expecting more improvements in the Commercial net short positions in the precious metals, especially after the hammering they took at the hands of "da boyz" on Monday.  Gold, silver and platinum all set new lows for this move down on that day, and gold and silver set marginally new lows again on Tuesday as well.  So if the numbers are reported in a timely manner, all this data should be in today's report.

Nothing much happened during early trading in the Far East on their Friday, and the tiny rallies in gold, silver and platinum in the afternoon session got sold back to unchanged about 45 minutes before the London open.

London has been open an hour as I type this paragraph, and nothing much is happening there, either.  I would suspect that traders are waiting for the jobs numbers just as we are.  Volumes in both gold and silver are extremely light, and the dollar index is up about 10 basis points.

And as I fire this off to Stowe, Vermont at 5:15 a.m. EST, all four precious metals continue to languish, and volumes are still very subdued.  The dollar index is not doing much, either.

Before heading out the door, I note that Doug Casey’s new book Right on the Money will be released on December 16.

Right on the Money is the second book in the Conversations with Casey series.  This time, the conversations focus on speculating, economics, investing, politics, and how to profit in times of political and economic chaos.

“In it, famed speculator and New York Times best-selling author Doug Casey tackles investing head on.  In his typical no-holds-barred style, Doug shares his philosophical views on economics, politics, and life itself… and his tools to turn them into actionable investment ideas.

This book is nothing less than a speculator's guide to profiting from the Greater Depression… a set of keys to a potential fortune, available only to contrarians who are brave enough to use them during a time of chaos and volatility gripping our world.”

If you want to learn more, or find out how you can order it, all you need to know is at this link here.

That's all I have for today, and considering what might [or might not] transpire at 8:30 a.m. EST in New York, nothing will surprise me when I power up my computer later this morning.

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