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Thursday, February 13: Today in Gold and Silver

NEW YORK (TheStreet) -- After getting sold down about five bucks or so in the early going in Far East trading on their Wednesday, the gold price bottomed out just after 12 o'clock noon Hong Kong time.  From there it rallied very slowly and quietly until the noon silver fix was in, in London.  Then the rally picked up a little bit more steam, but came to an end around 12:30 p.m. in New York.  After that it got sold back down to about unchanged on the day.

The CME recorded the low and high ticks at $1,283.90 and $1,296.60 in the April contract.

Gold closed in New York yesterday at $1,291.80 spot---up 90 cents.  Volume, net of February and March, was 122,000 contracts---which is a number higher than I like to see based on the price action.

The silver price hit its low of the day at the same time as gold did in Hong Kong.  From there it chopped sideways until about 10 a.m. GMT in London.  Then a decent rally began that got cut off at the knees at, or shortly after, the noon London silver fix.  Another rally began around 9:45 a.m. in New York---and that ran into a willing seller at exactly 10:30 a.m. EST---and once Comex trading finished for the day, the silver price got sold back to precisely unchanged.

The low and high were reported as $20.08 and $20.39 in the March contract.

Silver finished the day at $20.24 spot, exactly where it closed on Tuesday.  Net volume was 33,000 contracts---and it's obvious to me that JPMorgan et al had to throw a decent amount of Comex paper at the silver price during the New York session to get it to behave.  And closing it exactly on its Tuesday closing price as well, is simply too cute for words.

Platinum and palladium fared far better than the other two precious metals, but just eye-balling the charts, it's hard for me to believe that the price action was totally free market, if you get my drift.  But maybe I'm looking for black bears in dark rooms that aren't there.  You can make up your own mind.  Here are the charts.

The dollar index closed on Tuesday afternoon in New York at 80.62---and then didn't do much until shortly before noon Hong Kong time.  From there it got sold down to its 80.50 low of the day, before spiking up to its 80.83 high by 12:30 p.m GMT in London.  For the rest of the day it quietly sold off, finishing the Wednesday session at 80.70---up 8 basis points.

Just for fun, here's the one-year dollar index so you can get an idea of where we stand at the moment compared to the action during the last 12 months.

The gold stocks opened in the green, but headed lower immediately---and by the end of the trading day on Wednesday, they closed down 2.77%---giving back a large chunk of what they gained on Tuesday.

It was pretty much the same story in the silver stocks, as they followed a similar path to the gold stocks---and Nick Laird's Intraday Silver Sentiment Index closed down a chunky 3.00%---giving back virtually all of their gains from Tuesday as well.

The CME's Daily Delivery Report showed that 63 gold and zero silver contracts were posted for delivery on Friday within the Comex-approved depositories.  Canada's Bank of Nova Scotia was the short/issuer on 59 contracts---and HSBC USA and Barclays were the two largest long/stoppers with 41 and 18 contracts apiece.  The link to yesterday's Issuers and Stoppers Report is here.

According to the CME's Wednesday preliminary report, which was posted on their website in the wee hours of this morning EST, there are about 1,000 gold contracts still open in the February delivery month---but only 11 silver contracts.

There were no reported changes in GLD yesterday---and as of 9:13 p.m. EST yesterday evening, there were no reported changes in SLV.

The U.S. Mint had nothing to say for itself on Wednesday, either.

There was little in/out activity in either gold or silver at the Comex-approved depositories on Tuesday.

In gold, 5,075 troy ounces were received---and 20,125 troy ounces were shipped out.  In silver, nothing was reported received, but 23,096 troy ounces were shipped out.  Because of the lack of activity, I won't bother with links to the depositories today.

I have the usual number of stories for a mid-week column---and I hope you can find the time to read the ones you like.

¤ The Wrap

Since Bear Stearns was a failure that threatened the financial system, it necessarily invited the involvement of the nation’s highest regulators, the Treasury Secretary and the chairman of the Federal Reserve, as the historical record clearly indicates. As such, both had to be aware of the gold and silver margin problem at Bear Stearns, although neither has ever openly indicated that. Additionally, since Bear Stearns was the leading clearing member of the exchange, you can be certain that the CME Group was at the very forefront of awareness in Bear’s gold and silver matters – the CME was the one issuing the margin calls to Bear. Also, there is no way that JPMorgan wasn’t aware of Bear Stearns’ gold and silver predicament.

Therefore, these facts fully indicate that everyone at the top had to be aware that gold and silver shorting was at the center of the Bear Stearns’ fiasco. Since the Feds requested JPMorgan’s assistance, there can be no question that JPMorgan demanded (and received) permanent immunity from future gold and silver allegations. I never said JPMorgan was dumb. - Silver analyst Ted Butler: 12 February 2014

Based on the price action visible on the charts and the associated volume yesterday, especially in silver, it would appear that there was more interference in all four precious metals on Wednesday.  It's easy to see in silver, but far more subtle in the other three precious metals.  And as I said yesterday in this column, I may be looking for a black bears in dark rooms that aren't there.  But if I had to wager ten bucks, I know how I'd bet it.

There isn't much else to add to yesterday's price action that I haven't already discussed, both here and further up.  I was less than happy with the precious metal share price action yesterday, but we've seen some pretty impressive gains in the equities since last Friday based on rather small gains in the precious metals themselves, so I'm going to be careful about complaining too much at this point.

All four precious metals aren't doing much price-wise in Far East trading on their Thursday.  And as I write this paragraph, the London open is 35 minutes away.  Volumes in both gold and silver are very light---and all of the HFT variety.  The dollar index is down about 19 basis points.

And as I send today's efforts off to Stowe, Vermont at 5:10 a.m. EST, all four precious metals are down a bit from Wednesday's close.  Volumes are now up to average for this time of day---and virtually all of it is of the HFT variety still.  The dollar index took a header about 9:15 a.m. GMT in London---and is now down 37 basis points, but that's obviously not having any affect on the metals, at least not at the moment.

That's all I have for today---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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