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Friday, February 21: Today in Gold and Silver

NEW YORK (TheStreet) -- The gold price chopped sideways in a five dollar price range up until shortly before 1 p.m. GMT in London on their Thursday.  Then, in a minute or so, the price got sold down about six bucks, before rallying strongly after that.  The rally got capped less than an hour later at 8:30 a.m. in New York.  From there, gold traded sideways until about noon---and at that point it developed a slightly positive price bias, which really developed some legs at 2:30 p.m. in the thinly-traded New York Access Market.  That rally lasted until just about 4 p.m. EST---gold's high of the day---and then the price didn't do much after that going into the electronic close.

The CME Group recorded the low and high ticks as $1,307.10 and $1,325.30 in the April contract.

Gold finished the Thursday session in New York at $1,323.00 spot, up $12.10 from Wednesday.  Volume, net of February and March, was very decent at 144,000 contracts.

Here's the New York Spot Gold [Bid] chart so you can see the Comex price action in more detail.

The silver price had much more of a roller coaster ride in Far East and morning trading in London---but after the sell-off just before 1 p.m. GMT in London, the silver price action followed the gold price action like a shadow, including the rally in the thinly-traded electronic market after the Comex close---and silver's high price tick of the day just before 4 p.m. EST.

The low and high prices were reported as $21.515 and $21.90 in the March contract.

Silver finished the Thursday session at $21.82 spot, up 28.5 cents from Wednesday's close.  Net volume was less than on Wednesday, but a still very decent 32,500 contracts.

Here's the New York Spot Silver [Bid] chart for yesterday---and as I said, it looks almost identical to the spot gold chart posted above.

After getting sold down early in Far East trading on their Thursday, both platinum and palladium rallied to finish in the green, but only by a few dollars each.  Here are the charts.

The dollar index closed late on Wednesday afternoon in New York at 80.21---and once the trading day began in the Far East on their Thursday, the index slid down to its 80.04 low shortly before 2:30 p.m. Hong Kong time.  From there it rallied to its 80.41 high at noon in New York in a broad trading range.  After that it gave up some of its gains by 4 p.m. EST---and then didn't do much after that, closing the day at 80.28---up a whole 7 basis points from Wednesday's close.

The gold stocks rallied right from the open, with a big chunk of the gains in by the London p.m. gold fix.  After that, the stocks rallied continued to rally higher, but at a much more modest rate.  Then, when gold had its rally in the thinly-traded electronic market after the Comex close, the shares rallied a bit more---and the HUI finished up 3.89%---virtually on its high of the day, gaining back all of Wednesday's losses and a bit more.  I was impressed.

The silver equities rallied right from the open as well---and most of their gains were in by precisely 11 a.m. EST.  After that they traded sideways, but caught a bit of a tail wind as well when silver rallied in after hours trading in New York before the equity markets closed.  Nick Laird's Intraday Silver Sentiment Index closed up 4.03%---not gaining back everything it lost on Wednesday, but pretty close.

The CME's Daily Delivery Report showed that 145 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The short/issuer on 140 of those contracts was Barclays.  They also stopped 50 contracts as well.  HSBC USA stopped another 65 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD on Thursday---but over at SLV there was a big surprise in store.  After a huge deposit of 3.85 million troy ounces on Tuesday, there was a big withdrawal of 2,212,315 troy ounces yesterday.

The only answer I have for this, is something that Ted Butler has been talking about for the last couple of years.  He suspects that a big buyer has been purchasing shares by the truckload [read JPMorgan Chase] and has been continuously redeeming their shares for physical metal so they don't exceed SLV reporting requirements.  In a nutshell, this means that JPM is using SLV as a vehicle to load up on the shares---and the physical metal at the same time---without having  to report it to anyone.   This is over and above what they show in their Comex-approved depository.

This may also have been what's happening in GLD since the start of they year as well.

As I mentioned yesterday, the big rallies in both silver and gold have not been matched by corresponding deposits in either SLV or GLD---and Ted Butler's explanation as to why it's not happening is the only theory that holds any water., at least for me.  If you have another idea, I'd love to here from you.

Over at the Switzerland's Zürcher Kantonalbank for the week ending Friday, February 14, they reported a smallish decline in their gold ETF of 5,611 troy ounces.  Their silver ETF showed a small increase of 29,353 troy ounces.

Joshua Gibbons, the "Guru of the SLV Bar List" had this to report on the weekly goings-on within the SLV ETF for the week ending at the close of trading on Wednesday:  "Analysis of the 19 February 2014 bar list, and comparison to the previous week's list---9,670,272.5 troy ounces were removed (all from Brinks London), 13,037,078.1 troy ounces were added (all to Brinks London), no bars had a serial number change."

"In reality, 5,290,714.0 oz were added---and 1,923,884.0 removed. The other 7.7M oz appears to be a 'substitution' (JPM removed bars, such as 6.7M oz of Russian State Refineries and Met-Mex bars, and replaced them with different ones, such as Kazakhmys and Valcambi bars)."

"As of the time that the bar list was produced, it was overallocated 557.5 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

For the second day in a row, there was no reported in/out movement in gold at the Comex-approved depositories on Wednesday---and is almost always the case, there was more in/out activity in silver, as 74,150 troy ounces were reported received---and 303,398 troy ounces were shipped out.  The link to that activity is here.

Here's a three-year chart of the Continuous Commodity Index, the CCI, which is the new name for the old CRB Index---and look at it fly as of the start of the year.  It's hugely overbought, but worth keeping an eye on.  If the central banks of the world are looking for inflation, here's the first sign that it's on its way.  The new CRB chart looks similar.

Here's a chart that Casey Research's own Jeff Clark sends our way every few weeks.  It's the latest monetary base numbers from the St. Louis Fed.  Soon the line will break through the $4.0 trillion mark.

Here's a chart that Washington state reader S.A. shamelessly ripped from a Zero Hedge piece yesterday---and I thought I'd offer it with no comment.

I have another bunch of stories for you today---and you can cherry pick from the selections offered.

¤ The Wrap

Undoubtedly, we’ll get a measure of what they may be up to in Friday’s Commitments of Traders Report. Specifically, what JPMorgan has done, particularly in silver, will likely be the key feature. JPM hasn’t sold on higher prices over the past two reporting weeks in either gold or silver and that has been the big standout so far. If JPMorgan turns out to have sold some of its long gold position on higher prices, there’s not much to say. But if this crooked bank starts adding short positions in silver, there will be plenty to say, namely, overt price manipulation. - Silver analyst Ted Butler: 19 February 2014

To tell you the truth, I don't know what to make of yesterday's price action in either gold or silver.  Don't get me wrong, I was more than happy to see both metals do as well as they did---and as Ted Butler has told me on many occasions, it's a mug's game trying to forecast what might happen in day to day price action.

As Ted mentioned in his quote above, we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday---and I will be awaiting the numbers with some anticipation; hoping for the best, but expecting the worst.  Whatever the numbers show, I'll have it all for you in tomorrow's column.

Once again I was amazed by the big withdrawal from SLV yesterday.  As I said in yesterday's column, with gold up $100---and silver up 2 bucks so far this year, metal should be pouring into both GLD and SLV.  They are to a certain extent, but no sooner does metal get deposited, when some is taken out.

Ted has his explanation for this, which I posted further up---and it makes perfect sense to me.  If you wish to refresh your memory, you can scroll up and read it again, as I don't wish to repeat myself in this space.

One thing I have noticed is that the further down the road we get on this price management scheme in all four precious metals, the more inexplicable it gets.  Whatever is happening out of sight of the general public, which includes us, appears to be well organized---and sooner or later it will all come to an end.  At that point we should have some sort of dénouement on all of this---and that day can't come soon enough for me, although it does fall into the category of "be careful what you wish for."

We did have the usual sell-off in both gold and silver in early trading in the Far East on the their Friday morning---but both platinum and palladium emerged unscathed.  Both gold and silver struggled higher later in the day---and as I write this paragraph, London has been open for 10 minutes.  Both silver and gold are down from Thursday's close in New York---and both platinum and palladium are basically unchanged.  Volumes in both metals are considerably lighter than they were this time yesterday---and the dollar index is up a handful of basis points.

And as I put the finishing touches on today's efforts shortly after 5 a.m. EST, I note that prices haven't changed by much in all four precious metals.  Gold volume is still on the lighter side---and mostly of the HFT variety.  Silver's volume is decent as well, but once the roll-overs are subtracted out, the real volume is not overly heavy, either---and the dollar is still up the same handful of basis points.

Since today is Friday, it's hard to know what to expect as far as price action is concerned for the rest of the day.  But as is almost always the case, it's what happens during the New York trading day that really matters---and I don't expect today will be any different.

By the way, with what appears to be the start of a major up-trend in the precious metals, it might be worth your while to jump back in, or increase your exposure to the precious metals once again, as the HUI is already up over 22% year-to-date.  Your best bets for that are Casey Research's monthly BIG GOLD newsletter---and Casey Research's flagship publication---Casey International Speculator.  If you go for Casey International Speculator, it includes a subscription to BIG GOLD at no extra charge. It costs nothing to check them out---and Casey Research's 90-day money back guarantee applies to both.

That's all I have for today.  I hope you 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.

Stock quotes in this article: GLD, SLV 

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