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Friday, February 7: Today in Gold and Silver

NEW YORK (TheStreet) -- There was little volume during the trading day on Thursday, but it was still obvious that the tiny rallies in all four precious metals were sold down by JPMorgan et al shortly after the Comex open.

The gold price didn't do much in Far East trading on their Thursday---and the low of the day, such as it was, came around 12:30 p.m. Hong Kong time.  From there the price crawled higher, but picked up a bit of steam once the London a.m. gold fix was in at 10:30 GMT in London.  Most of that gain disappeared by the Comex open, but then the gold price rallied until 8:50 a.m. in New York.  Then the not-for-profit sellers showed up and had the price back in the box by the London p.m. gold fix.  From there the gold price once again crawled higher into the 5:15 p.m. EST close.

The low and high ticks, such as they were, were recorded by the CME Group at $1,252.50 and $1,267.50 in the April contract.

Gold closed in New York at $1,267.50 spot, up 20 cents on the day.  Net volume was only 90,000 contracts.

The silver price action was the same---and the CME recorded their low and high as $19.83 and $20.18 in the March contract.

Silver finished the trading day in New York at $19.945 spot, up 5 cents from Wednesday's close.  Once again the silver price got sold back below the $20 spot price mark.  Net volume was 27,500 contracts.

The platinum and palladium charts were the same---and they closed mixed.  Here are the charts.

The dollar index closed late on Wednesday afternoon in New York at 81.05---and then did nothing until shortly before 8 a.m. EST on Wednesday morning.  It spiked up to its 81.18 high at the Comex open---and then plunged to its low of the day [80.74] around 9:20 a.m. an hour later  From there it recovered back to 80.90 by 3 p.m. EST and proceeded to trade sideways into the close from that point.  It closed at that level, down 15 basis points from Wednesday.

It's obvious from looking at the spot bid charts in both gold and silver, that the rallies in all four precious metals that began shortly after the Comex open was in response to this plunge in the dollar---and that the JPMorgan et al showed up at 8:50 a.m. to ensure that none of the precious metal prices ran away to the upside.

The gold stocks spiked up a bit at the open, but that didn't last---and their low of the day came shortly before 11 a.m. EST.  From there the stocks recovered nicely---and were back in the green shortly after noon in New York.  But, for the third time this week, a mystery seller appeared---this time shortly after 1 p.m. EST---and sold the stocks down for a small loss on the day.  Here's what I said about this phenomenon in Wednesday's column---"Then some thoughtful soul came along shortly before 3 p.m. EST and sold gold stocks right into the close---and the HUI finished on its low tick of the day, down 1.92%.  You have to wonder who might do that---and why."  Why, indeed!

This silver stocks followed a similar chart pattern to the gold stocks, including the same sell-off at the same time.  However, Nick's Intraday Silver Sentiment Index managed to close up a smallish 0.52%.

The CME's Daily Delivery Report showed that 177 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The biggest short/issuer was Canada's Bank of Nova Scotia---and the biggest long/stopper was HSBC USA with 117 contracts.  Barclays was a distant second with 45 contracts stopped.  The link to yesterday's Issuers and Stoppers Report is here.

Looking at the CME's preliminary volume and open interest data for yesterday, which was posted in the wee hours of this morning EST, I figure that February's gold open interest [once Friday's and Monday's already-posted deliveries are made] will be down to well under a thousand contracts.  There are 2 silver contracts showing as still open in February.

There were no reported changes in GLD yesterday, but an authorized participant withdrew 1,443,066 troy ounces of silver from SLV.  Based on the price action over the last five days or so, I doubt very much that this was plain vanilla liquidation.  Ted Butler may feel differently about it---and if he does, I'll let you know.

Joshua Gibbons, the "Guru of the SLV Bar List" updated his website with the current data from SLV---and this is what he had to say:  "Analysis of the 05 February 2014 bar list, and comparison to the previous week's list---2,116,608.7 troy ounces were added (all to Brinks London), 140,974.1 oz. were removed (all from Brinks London), and no bars had a serial number change.

The bars added were from: Kazakhmys (0.8M oz), Russian State Refineries (0.6M oz), KGHM (0.3M oz), and 7 others.  The bars removed were from: Handy Harman (0.1M oz), Asarco (29,185 oz), and Degussa (12,6290 oz).

As of the time that the bar list was produced, it was overallocated 458.5oz. All daily changes are reflected on the bar list"  The link to Joshua's website is here.

The U.S. Mint had a small sales report yesterday.  They sold 2,000 ounces of gold eagles---and 300,000 silver eagles.

Over at the Comex-approved depositories in gold on Wednesday, they reported receiving a tiny 600 troy ounces, but shipped out 40,395 troy ounces.  The withdrawals all came from Scotia Mocatta's vault---and the link to that activity is here.

As is almost always the case, there was far more in/out activity in silver.  They reported receiving 899,254 troy ounces---and shipped out 813,305 troy ounces.  JPMorgan took in a bunch---and there was a lot of in/out activity at Scotia Mocatta.  The link to that 'action' is here.

I don't have a lot of stories today, which suits me just fine---and I hope you see some that are worth reading.

¤ The Wrap

The common denominator between HFT up and down moves is that they are both primarily intended to instigate a reaction from the technical funds. No matter the direction of the sudden move, the induced buying or selling by the technical funds comes mostly after the price move. That’s the manipulative feature of HFT moves – the commercials move the price first and then the technical fund buying or selling comes in. Down moves are intended to get the technical funds to sell---and Wednesday’s up move looks designed to have caused the technical funds to buy.

The problem is that this has nothing to do with legitimate price discovery; it’s all about tricking technical funds into and out of futures positions. Combined with JPMorgan’s unnatural market shares in COMEX gold and silver, as well as the obscenely large market shares held by the bank on the OTC gold and silver markets (60%), miners and investors are still confronted with pricing they have no participation in, or that is determined by supply/demand fundamentals. - Silver analyst Ted Butler: 05 February 2014

Another day, another rally in London---and another engineered sell-off during the Comex trading session in New York.  As I've said too many times in this space over the years---even Stevie Wonder could see this.

Today, at 8:30 a.m. EST, we get the jobs report and, without doubt, we'll have a "reaction" in both gold and silver.  The only unknown is the direction and the magnitude.  So we wait.

Since today is Friday, we also get the latest Commitment of Traders Report, along with the companion Bank Participation Report---the data for which is extracted directly from the COT Report.  For this one day a month [the cut-off was the 1:30 p.m. Comex close on Tuesday] we get to see the short and long positions of all the banks in all four precious metals.  With the exception of silver, the Comex futures positions in all four precious metals held by the non-U.S. banks, are basically irrelevant.  As I keep saying, this price management scheme is 100% "Made in the U.S.A."---with a little help from Canada's Scotiabank in the silver market.

Eye-balling the gold and silver charts over at the stockcharts.com Internet site just now, I'm not sure what the COT or BPR reports will show in both metals, but whatever the numbers do show, I'll have all the information and charts in Saturday's column.

As I write this paragraph, the London open is 20 minutes away and, with the exception of silver, all the precious metals are hanging onto small gains.  Volumes are pretty light, but not nearly as light as they were at this point on Tuesday morning.  The dollar index is unchanged---and has hardly moved since it opened in New York yesterday evening.

It's been a bit more than two hours since I wrote the above paragraph---and there hasn't been much change in the interim.  Volumes are somewhat heavier, but not by a lot---and the dollar index still isn't doing much.

I await this morning's job report with great interest.

Enjoy your weekend, or what's left of it---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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