Saturday, February 1: Today in Gold and Silver
NEW YORK ( TheStreet) -- The gold price didn't do a thing in Far East trading on their Friday. But just before the London open the price got clipped for a few bucks---and the low of the day was in shortly before 9 a.m. GMT. The subsequent rally really took off the moment that the Comex opened---and within 10 minutes JPMorgan et al had put an end to that---and finished the job once the London p.m. gold "fix" was done for the day. The New York low came minutes after 2 p.m. EST in electronic trading---and after that, the gold price rallied into the close and actually finished up on the day.
The CME Group recorded the low and high ticks as $1,238.20 and $1,254.80 in the April contract.
Gold closed in New York at $1,24.90 spot, up $2.80 on the day. Net volume was 119,000 contracts.Not surprisingly, the silver price action mostly mirrored the gold price action---and the Kitco silver chart posted below certainly shows that. But once the New York low was in around 11:30 a.m. EST, the price traded basically flat for the remainder of the day. The low and high ticks were $19.065 and $19.465 in the March contract. JPMorgan et al closed silver on Friday at $19.165 spot, up 3 whole cents. Volume, net of February, was 44,000 contracts. Platinum and palladium had tiny rallies during the London trading session as well, but they weren't allowed to get far, either---and both got sold down for losses on the day. Here are the charts. The dollar index closed at 81.05 late on Thursday afternoon---and then traded virtually ruler flat until very shortly after 1 p.m. Hong Kong time. From there it chopped quietly higher in a very tight range, before trading sideways once again starting at the London p.m. gold fix. The index finished the Friday session in New York at 81.25---which was up 20 basis points from where it closed on Thursday. The gold stocks opened in positive territory, but couldn't hold the gains. The low came about 15 minutes before the Comex close---and then they popped higher and back to almost unchanged shortly before 3 p.m. EST. The HUI finished down a tiny 0.11%. The silver stocks fared far worse. They broke into positive territory very shortly after the equity markets opened in New York on Friday---and then down they went. The rally before 3 p.m. recouped part of their loses, but Nick Laird's Intraday Day Silver Sentiment Index closed down 1.00%. The CME's Daily Delivery Report for Day 2 of the February delivery month showed that only 4 gold, but a surprising 134 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. Once again it was Jefferies as the short/issuer on 124 of those contracts and, once again, it was Canada's Scotiabank that was the big long/stopper with 131 contracts. I'm surprised that there haven't been more gold deliveries so far this month, but maybe that's still to come. But what I've also been surprised with so far is the number of silver contracts issued and stopped in the first two days of the delivery month---315 contracts---with the same two parties as issuers and stoppers on both days. The link to yesterday's Issuers and Stoppers Report is here. There were no reported changes in GLD yesterday---and as of 9:55 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 with the bar changes at SLV for the just-ended reporting week---and here is what he had to say: " Analysis of the 29 January 2014 bar list, and comparison to the previous week's list---No bars were added, removed, or had a serial number change. As of the time that the bar list was produced, it was overallocated 746.5 oz. All daily changes are reflected on the bar list." The link to Joshua's website is here. The U.S. Mint had another tiny sales report yesterday. They sold 20,000 silver eagles, along with 2,000 one-ounce 24K gold buffaloes---and that was it. Month and year-to-date the mint has sold 91,500 ounce of gold eagles---41,500 one-ounce 24K gold buffaloes---and 4,775,000 silver eagles. Based on these sales, the silver/gold sales ratio works out to just about 36 to 1. The mint may have another addition to January's sales on Monday---but it wouldn't surprise me in the slightest if they had a big silver eagles sales report for the first business day in February instead. If they do, it would be clear to me that the sales actually took place in January, but the mint didn't want to report them in January and let the sales month look too good. This is a game that the mint has started to play in just the last three years. In prior years, you could look at the mint numbers without suspicion, but not any more. Over at the Comex-approved depositories on Thursday, they only reported receiving 160 troy ounces of gold---and shipped nothing out. In silver, these same depositories reported receiving only 2,005 troy ounces---and shipped out 416,473 troy ounces. The link to that action is here. The Commitment of Traders Report [for positions held at the close of Comex trading on Tuesday, January 28] was sort of what I expecting. In silver, the Commercial net short position improved by 2,918 contracts, or 14.6 million ounces---and is now down to 105.2 million troy ounces. The technical funds got tricked into selling long contracts and going further short to the tune of 5,376 contracts during the reporting week---and without doubt they have increased their short position since then. However, things were different in gold, as the big spike up in price on Wednesday, January 22 was for the reasons feared. The rally was mostly driven by technical fund buying as the price crossed the 50-day moving average---and as the tech funds rushed en masse to cover part of their massive short position, JPMorgan et al responded in kind by selling their long positions, or buying the short positions offered---mostly the former. In the end, "Da Boyz" bought or sold whatever amount of contracts necessary to kill the gold rally stone cold dead. If they hadn't been there as sellers of last resort, the price of gold---and silver---would have been over the moon by now. It's the same old, same old. Since the Tuesday cut-off, there has been further deterioration in the silver price as "da boyz" engineer the prices lower---tricking more technical funds into going short and JPMorgan et al buying everything that the technical funds are selling. In gold, the big sell-off on Thursday has reversed a goodly portion of what occurred in the prior week, as the technical funds sold longs and go short---and JPMorgan et al did the opposite. We've seen it all before so many times---and it's impossible to tell when it will end. But end it will---someday. I have a very decent number of stories for you today---and a few that I've been saving for my Saturday column. There are a lot of first rate stories in today's column---and I hope you have the time to read the ones that interest you the most.
¤ The WrapThat the manipulation continues unabated is still evident in the current price action, particularly in silver. I wish I could end it, but all I can do is to explain it the best I can in the hopes of exposing it. More and more it seems to me like the exposure is working against JPMorgan, although that is not evident in price. It’s important to recognize that time is not an ally to manipulations since all must end at some point. I also have the sense that JPMorgan is going out of its way to make silver look as crummy as possible against gold for the purpose of discouraging silver investors in particular. But seeing how much the price of silver has declined already suggests additional deliberate price sell-offs are of limited distance and duration. Since silver is in the throes of an epic long-term price manipulation, the only effective reaction is to approach it on a long term basis and not to be overly concerned with the short term. - Silver analyst Ted Butler: 28 January 2014 Today's pop "blast from the past" goes all the way back to 1957. I heard this piece embedded in a movie that my wife was watching on Thursday evening---and I'm sure I hadn't heard it for at least 50 years. It was the first really big hit for song-writing duo Burt Bacharach and Hal David. Perry Como does the honours---and the link is here. Today's classical blast from the past dates back to only 1924---which is an era that few would call classical, including this writer. It's a short 6-minute work from the symphonic poem Pines of Rome by Italian composer Ottorino Respighi. This is the last 'movement' of the work---and it's entitled " Pines of the Appian Way". The orchestration is first rate---and I never get tired of listening to the ever-increasing layers of instrumentation that the composer lays one on top of the other. It's a big orchestra performance as well, which is what this piece requires. It's performed by the Radio Sinfonie Orchester Stuttgart SWR---and conducted by Georges Prêtre. The link is here. Another day---and another engineered price decline in the precious metals that began shortly after prices got out of hand at the Comex open. But "da boyz" weren't just suppressing precious metal prices yesterday, as they had their hands full in the New York equity markets about 90 minutes later, as they all imploded in unison at the open. However, someone was there to catch the proverbial falling knife, or 1,000+ point drop in the Dow appeared to be in the cards. As I keep repeating over and over---if the powers that be weren't propping up everything that wanted to implode---or suppressing the price of everything that wanted to explode to the outer edges of the known universe---the world's current economic, financial and monetary system would be a smouldering ruin in five business days, or less. I'm sure you're just as tired of reading that as I am writing it. I'll give it rest, but the "powers that be" were everywhere yesterday---and they had to be to prevent "all of the above" from happening in just one day. It will happen someday, of course, but da boyz just didn't want it be yesterday. So where we go from here is anyone's guess. Ted is still of the opinion that JPMorgan et al are going to take out the 50-day moving average in gold to the downside---probably with a vengeance---and they will take the rest of the precious metal complex with them at the same time. If that turns out to the be the case, one wonders what they'll do when they get to the bottom of the barrel this time. Will they head for the exits and let the world implode and metals do their thing, or will we have a repeat performance of the same old, same old? If these figures of China's off-take in gold can be believed, there has to be a reckoning day in the physical market at some point, but the timing of that point is not know by us---and all we can do is wait it out. As always, I'll be watching the New York open on Sunday night with some interest. Before heading off to bed, I'd like to remind you again about Casey Research's FREE video event coming your way. It's entitled " Upturn Millionaires: How to Play the Turning Tides in the Precious Metals Market"---and it's happening at 2 p.m. EST on Wednesday, February 5. You've already been bombarded with notifications about this, but if you're still sitting on the fence about it, you can find out more by clicking here. I'm outta here. See you on Tuesday.
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