Saturday, February 22: Today in Gold and Silver
NEW YORK ( TheStreet) -- Once again the gold price got sold down during the morning trading session in the Far East on their Friday morning. The low of the day was in by shortly after 1 p.m. Hong Kong time---and from there, the price rallied a bit until shortly after the Comex open in New York. The gold price gave up five bucks between then and 12 o'clock noon, but from there it rallied rather strongly through the Comex close, hitting its high of the day at exactly 2:30 p.m. EST. At that point a willing seller appeared and put an end to the fun. From there the price chopped sideways, but rallied a hair into the close.
The CME Group recorded the low and high ticks at $1,315.90 and $1,328.80 in the April contract.
Gold closed at $1,3216.10 spot, up $3.10 from Thursday. Volume, net of February and March, was 131,000 contracts, which wasn't exactly light---and a bit more than a quarter of that came after 12 o'clock noon in New York.The price pattern in silver was very similar to the one in gold. The only big difference was the price spike that came at the 1:30 p.m. Comex close---and JPMorgan et al dealt with that within a few minutes. Then the silver price got sold down even further at 2:30 p.m. along with gold. After that, the price didn't do too much. The low and high were recorded as $21.575 and $21.975 in the March contract. Once again silver was prevented from breaking above the $22 spot price mark. Net volume was pretty light at only 27,500 contracts. Here's the New York Spot Silver [Bid] chart on its own so you can see the 1:30 p.m. EST price spike more clearly. There's been a lot of price/volume activity in gold and silver in the thinly-traded New York Access Market between the 1:30 p.m. Comex close and the 5:15 close of electronic trading, lately---and I'm not sure what to make of it. Platinum and palladium traded pretty flat until about noon in London---and then they both rallied a bit into the Comex close. After that, their respective prices didn't do much. Here are the charts. The dollar index closed at 80.28 on Thursday afternoon---and when trading opened on Friday morning in the Far East, the index began crawling higher, hitting its 80.41 high tick at 8 a.m. EST. From there the index had about a 20 basis point down/up move that ended shortly after 11 a.m.---and then faded a hair into the close. The index finished the Friday trading session at 80.27---which was basically unchanged from Thursday's close. The gold stocks struggled mightily all day long---and although they poked their noses into positive territory on a number of occasions, they just couldn't keep them there---and the HUI finished down a smallish 0.34%. It was more or less the same for the silver equities---and Nick Laird's Intraday Silver Sentiment Index closed down 0.11%. The CME's Daily Delivery Report was a quiet affair yesterday, as only 21 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. The Issuers and Stoppers Report for Friday isn't worth linking. Well, there was a deposit in GLD yesterday. This time an authorized participant added 86,750 troy ounces---and as of 9:34 p.m. yesterday evening, there were no reported changes in SLV. But when I checked the SLV website at 4:06 a.m. EST this morning, I noted that they had reported a new deposit. This time an authorized participant added 2,116,096 troy ounces of silver. That's about 96,000 ounces less than what was reported withdrawn on Thursday. As I said in yesterday' column, Ted Butler's thoughts on these strange in/out moments is the only plausible explanation for why it's happening---and I'll cut and paste what he/I had to say about this in the next two paragraphs. The only answer I have, 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. I know for a fact that Ted will have more to say about this to his paying subscriber in his weekend review which will be posted on his website early this afternoon EST. The U.S. Mint had a decent sales report yesterday. They sold 4,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 69,000 silver eagles. Month-to-date the mint has sold 24,000 ounces of gold eagles---11,500 one-ounce 24K gold buffaloes---and 2,500,000 silver eagles. Based on these sales, the silver/gold ratio works out to a hair over 70 to 1. That's a very big number---and shows the buying public is spending more of their investment dollars in silver bullion than gold gold bullion. There wasn't much activity in either gold or silver at the Comex-approved depositories on Thursday. In gold, only 1,286 troy ounces were reported received---and in silver they reported shipping out 65,463 troy ounces. As for the Commitment of Traders Report, I was hoping for the best, but expecting the worst---and the worst is what I got. In silver, the Commercial net short position blew out by an astounding 10,436 contracts, or 52.2 million troy ounces. That's 26 days of world silver production. The Commercial net short position now sits at 164.3 million ounces. The raptors [the Commercial traders other than the Big 8] were big sellers, but that should come as no surprise as they took profits. The unhappy part was the JPMorgan increased their short position by 4,500 contracts during the reporting week. Ted Butler says that they are now holding a 17,500 contract short-side corner in the Comex silver market. It was just about as bad in gold, as the Commercial net short position increased by a chunky 19,097 contracts, or 1.91 million ounces. The Commercial net short position is back up to 9.18 million ounces. The bad news there was that JPMorgan sold 10,000 contracts of their long position into the rally during the reporting week. Ted says that JPM's long-side corner in the Comex futures market in gold dropped from 6.8 million ounces to 5.8 million ounces. It's obvious that if JPMorgan hadn't been the predominant seller in both gold and silver in the Comex futures market, both metals would be sporting price tags far higher than they are now. Can we go higher in price from here? Absolutely. But this rally's days are numbered. I don't know whether it will happen next week, or next month---but unless JPMorgan et al lose control of the precious metal markets, the day is coming when they will instigate the inevitable HFT sell-off that will precipitate another engineered price decline---and they'll ring the cash register once more. You can bet on it. I had so many charts in yesterday's column, that I forgot about posting one of them. It was the update for the gold reserves for January for The Central Bank of the Russian Federation. They added zero ounces during the reporting month, at least that's what the bank's official website reported. Here's Nick Laird's wonderful chart. I don't have all that many stories for you today, so I hope you find the time to at least read the parts I've cut and paste from each one.
¤ The WrapThe most unusual feature to the dirty price fixing on the COMEX is that JPMorgan has become the poster child for metals manipulation. That’s because the bank’s positions have been so large as to be easily tracked by government public data. The worst thing imaginable to anyone involved in major market manipulations, as JPMorgan is in silver and gold, is to be publicly identified as the manipulator. Yet that is precisely the case with JPMorgan and it is becoming more visible daily. - Silver analyst Ted Butler: 19 February 2014 Today's pop 'blast from the past' from 1981 needs no introduction---neither the tune nor the band. It was their biggest U.S. Billboard Hot 100 hit---and rightly so. Here's Steve Perry doing the honours while he was still with the group---click here. I would be remiss if I didn't include the Arnel Pineda version---and the link to that is here. Today's classical 'blast from the past' is an old chestnut by Peter I. Tchaikovsky. Of all the waltzes he ever composed, this is my absolute favourite. Here's a 7:19 minute CBC video clip of the the Vancouver Symphony Orchestra playing up a storm---with maestro Bramwell Tovey conducting. Put it on 'Full Screen' and turn up the sound. The link is here. It was another rather different day in the precious metals market again yesterday, as the price action in the thinly-traded electronic market was on the strange side once again---especially for a Friday. And as I said yesterday, I'm not sure what to make of it. I was less than happy with the numbers in yesterday's Commitment of Traders Report---as it's a clear indication that JPMorgan et al have no intentions, at least for the moment, of releasing their iron grip on this market. The big increase in their short-side corner in the Comex silver market is an "up yours" signal to all silver miners and investors---and sooner or later it means another engineered price decline is in the cards. We just don't know when that day will arrive. Of course, JPMorgan may get over run, but in the meantime they appear to be accumulating physical metal---along with shares in SLV---at a prodigious rate. They're doing it for a reason that is not know to us, at least not yet. One has to make the assumption that, someday, this will all be bullish for the price. Unfortunately we just don't know what day that is. But one should also assume that if they're doing it---along with HSBC and Scotiabank in their Comex-approved depositories---we should be doing it as well. I certainly am. As of the end of trading yesterday, the HUI is up 24% on the year---and Nick Laird's Silver Sentiment Index is in the green to the tune of over 21%. I would expect that before this year is out, these percentage gains will be substantially higher than they are now, although the road to those increases will certainly be strewn with more than the odd JPMorgan-designed pothole. I look forward to the Sunday evening open in New York with the usual amount of interest. In closing, it might be worth your while to jump back into, or increase your exposure to the precious metals once again. 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---and the week. Enjoy what's left of it---and I'll see you here on Tuesday.
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