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Friday, January 3: Today in Gold and Silver

NEW YORK (TheStreet) -- The gold price rallied the moment that the markets opened in New York on Wednesday evening, with most of the price action done for the day by around 11:30 a.m. Hong Kong time.  After that, the price chopped around either side of the $1,220 spot mark, with a tiny spike over $1,230 spot right at the 1:30 p.m. EST Comex close.  However, that gain got sold down as trading in the New York electronic market wore on.

The CME recorded the low and high price ticks as $1,202.50 and $1,230.80 in the February contract.

Gold close on Friday afternoon in New York at $1,223.00 spot, which was up $17.50 from Tuesday's close.  Volume in the first four hours of trading on Wednesday night in New York was pretty heavy---as well over 20,000 contracts were traded by lunchtime in Hong Kong.  Gross volume for the entire trading day was pretty decent at 153,000 contracts.

It was pretty much the same price action in silver, except for a big 40 cent plus spike around 11:30 a.m. Hong Kong time.  That spike had all the hallmarks of a "no ask" market---and it took some pretty heavy-duty paper hanging by a seller of last resort to put that rally back in the bottle.  However, 90 minutes later, the job had been done.  From there, the price traded more or less sideways on either side of the $20 spot price mark for the rest of the Thursday session.

There was also a tiny price spike at the Comex close but, like gold, that gain all got taken back [plus a bit more] during the remainder of electronic trading.

The low and high in the March contract were recorded as $19.43 and $20.44---which was the second business day in a row that the silver price had an intraday move of over a buck.

Silver finished the Thursday session at $20.01 spot and, obviously, well off its high tick.  Volume was decent as well at 49,000 contracts---and a third of that amount was posted before London opened.

Both platinum and palladium had decent rallies yesterday as well, however, the bulk of their respective gains occurred during the New York session.  Here are the charts.

The dollar index closed in New York on New Year's Eve at 80.205---and then didn't do much until 2 p.m. Hong Kong time on their Thursday.  The rally that began at that point was pretty much done by 8 a.m. in New York---and the index chopped a hair lower into the close, finishing the day at 80.60, which was up about 39 basis points.  Here's the 3-day chart.

The gold stocks gapped up over 2% at the open---and then tacked on another percent and change as the trading day wore on.  The HUI finished up a respectable 3.85%.

The silver stocks turned in a similar performance, but had a bit more of a roller coaster ride than the gold stocks.  Nick Laird's Intraday Silver Sentiment Index closed up 3.42%.

The CME Daily Delivery Report for Day 3 of the January delivery month showed that zero gold and 68 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The short/issuer of note was Jefferies with 60 contracts---and the largest stopper was Canada's Bank of Nova Scotia with 61 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

The GLD ETF started the New Year off with another withdrawal.  This time it was 117,726 troy ounces.  And as of 7:37 p.m. EST, there were no reported changes in SLV.

While on the subject of the SLV---Joshua Gibbons, "The Guru of the SLV Bar List", updated his website with the following data last night: "Analysis of the 01 Jan 2014 bar list, and comparison to the previous week's list ---

5,823,853.1 troy ounces were removed (all from Brinks London), no bars were added or had a serial number change. The bars removed were from: Met-Mex (2.4M oz), Nordeutsche (1.6M oz), Handy Harman (0.8M oz), and 14 others. As of the time that the bar list was produced, it was overallocated 713.5 oz. All daily changes are reflected on the bar list."

The U.S. Mint didn't update their website with the 2014 year yet, so there's no way of telling if they sold anything yesterday or not.

There were no in/out movements in gold in the Comex-approved depositories on Tuesday but, once again, it was another story in silver, as they reported receiving 611,139 troy ounces of the stuff---and shipped out 30,563 troy ounces.  And not [at least to my knowledge] that it means anything, but there was 574,545 troy ounces of silver shifted from the Registered to the Eligible category.  The two depositories involved in that were Delaware and HSBC USA.  The link to all that "action" is here.

I have quite a few stories for you today---and the final edit is all yours.

¤ The Wrap

Here’s something new I’ve been meaning to mention. The CME Group (owner-operator of the Comex) lists a spot month position limit and monthly limit on actual deliveries of 7.5 million silver oz and 300,000 gold ounces by any one trader. Yet the CME is reporting that JPMorgan in its house account took delivery of more than double the amount of gold allowed in any one month. Since JPMorgan held the 6,254 gold contracts from first delivery day forward, it also means that JPM was in violation of CME rules limiting spot month holdings in gold futures of 3,000 contracts for the entire month. The violations in silver were less egregious but were violations nonetheless.

I’m sure, if pressed, the CME could come up with some cockamamie excuse why JPMorgan was allowed to hold and take delivery of so many gold and silver contracts in one month, but the real reason is that JPMorgan is above all rules and law. The CFTC backed down on policing JPMorgan and it would be foolish to think the CME would restrict its most important client in any way. Far from a band of brothers, this is a brotherhood of criminals. Besides, rules are for the little people, not JPMorgan. - Silver analyst Ted Butler: 01 January 2014

It was obvious that the metals wanted to fly right out of the gate during the Thursday Far East trading session, the first trading day of the new year, but were only allowed to get so far---and that particularly applied to the way the silver price was hammered the moment that the market went "no ask" around 11:30 a.m. Hong Kong.  Volume, as I mentioned at the opening, was pretty heavy for that time of today, so it should be obvious that  JPMorgan et al were at battle stations until the fires had been put out.

I expect the precious metals market to move higher from here, but after watching "da boyz" put up a fight yesterday, I'm not expecting prices to blast to new highs on this rally.  We'll just have to see how it's allowed to unfold in the days---and hopefully, weeks---ahead.

Gold is still nowhere near its 50-day moving average, but silver came close on its spike high yesterday---and that was probably the reason the JPMorgan et al stepped in, as a break above that moving average would have sent the technical funds into panic short covering mode---and the subsequent price melt-up would have been a sight to see.

Here are the six-month gold and silver charts with their respective 50 and 200 day moving averages embedded.

I mentioned at least once this week, on either Tuesday or Wednesday, that there will be no Commitment of Traders Report today because of the New Year's holiday.  That won't be out until Monday.

In Far East trading on their Friday, I note that every rally attempt in both gold and silver is meeting up with a seller of last resort before prices can really get going.  The London open is about 35 minutes away as I write this---and gold is up twelve bucks, silver is up 9 cents, platinum is up 10 bucks---and palladium is trading basically flat.  Gold volume is already huge---north of 27,000 contracts.  Silver volume is over 7,000 contracts.  So it's obvious once again that JPMorgan et al are selling a blizzard of Comex paper [going short and selling longs] in order to prevent these budding rallies from going postal as the technical funds start to cover. The dollar index is flat.

And as I hit the send button on today's missive at 5 a.m. EST, there isn't much going on.  Gold is still above the $1,230 mark, but not being allowed to rally higher much higher, at least for the moment.  Silver is up a bit more---and platinum and palladium are about where they were two hours ago.  Gold volume is just about where it was yesterday at this time, a bit under 40,000 contracts---and silver's volume is a hair under 10,000 contracts.  The dollar index is still flat

I haven't the foggiest notion as to what will happen price-wise between now and the close of trading in New York today, but considering the fact that it's Friday, one should be prepared for any eventuality I suppose.

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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