Tuesday, March 11: Today in Gold and Silver
NEW YORK ( TheStreet) -- The gold price was under selling pressure from the HFT boyz almost right from the open in New York on Sunday evening. The low of the day came about 90 minutes before the London open---and by 8 a.m. GMT, gold volume was already well north of 30,000 contracts, which is enormous for that time of day for such a "thinly traded" market.
From the pre-London open low, gold rallied until the London p.m. gold fix, which now comes an hour later than normal in New York because London is not yet on British Summer Time, although it did experience a slight downdraft for a couple of hours starting at the Comex open, which is obvious from a quick glance at the Kitco chart below. Once the "fix" was in, gold got sold down until shortly after 2 p.m. EDT---and then traded flat into the 5:15 p.m. electronic close.
The low/high ticks were recorded by the CME Group at $1,327.50 and $1,344.90 in the April contract.Gold closed in New York on Monday at $1,339.80 spot, up 30 cents on the day. Volume, net of roll-overs out of the April delivery month, were pretty light at only 99,000 contracts. But as I mentioned further up, almost a third of that occurred in the "thinly traded" Far East market, so it's obvious that the JPMorgan et al were out and about to influence prices during that time period. The silver chart was almost a carbon copy of the gold chart, except for the fact, that the high of the day came at, or just before, the Comex open---and silver never rallied going into the 11 a.m. EDT London p.m. gold fix, before getting sold off in a similar manner to gold in electronic trading. The low and high ticks in silver were recorded as $20.61 and $21.06 in the May contract. Silver finished the Monday trading session at $20.835 spot, down a nickel from Friday's close. Volume, net of March and April, was very chunky at 48,000 contracts. Both platinum and palladium got sold down before the London open as well. Platinum managed to claw back most of its losses, but palladium recovered little after that. Here are the charts. I mentioned copper's price smash on Friday in my Saturday column---and the HFT boyz were still pounding away again on Monday---and here's what the 6-month copper chart looks like after Monday's action. I'd guess that major price bottom is in now that JPMorgan et al have the technical funds loaded up on the short side. When the next rally begins, will they let the technical funds off easy, like they're doing in gold and silver right now, or will they really stick it to them? It's all to JPMorgan. The dollar index closed at 79.71 on Friday afternoon in New York---and weakened a handful of basis points during the Far East trading day on their Monday. But the moment that London opened, a rally developed that was pretty much all done a few hours later---and from there, the dollar chopped sideways into the close in New York. The index finished at 79.75---up 4 basis points from where it started the day. Nothing to see here. The gold stocks gapped down a bit, hitting their low of the day around 10 a.m. EST. Then they rallied to their high of the day, which was in positive territory, by around 11:30 a.m. EDT. But they couldn't hang on once the "fix" was in, and got sold down as the trading day progressed. A smallish rally into the close cut their loses a bit---and the HUI finished down 0.57%. The silver equities opened down---and stayed down for the rest of the day, although they did get the same bounce that gold shares got going into the close. But the equities still finished the day worse off than their golden brethren, closing down 1.67%. The CME Daily Delivery Report wasn't much to look at yesterday, as only 5 gold contracts were posted for delivery within the Comex-approved depositories on Wednesday. However, just a matter of interest, JPMorgan Chase in its in-house [proprietary] trading account stopped 4 of the 5 contracts. The Issuers and Stoppers Report isn't worth linking. And I note that the number of silver contracts still outstanding in the March delivery month is up to almost 700---but it still remains to be seen how many get delivered. However, from what I'm seeing at the moment, I'd guess most of the long/stoppers will be looking to take delivery. I would also guess that JPMorgan Chase will gobble up most of them. Much to my surprise, there was another deposit in GLD yesterday. This time an authorized participant added a very respectable 240,929 troy ounces. And as of 9:52 p.m. EDT yesterday evening, there were no reported changes in SLV. The U.S. Mint also had a sales report to start the week. They sold 4,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and a very healthy 736,000 silver eagles. And as Ted Butler has asked on numerous occasions this year---who is the buyer for all these silver eagles, as it certainly isn't the retail trade. There was only a small amount of gold received at the Comex-approved depositories on Friday, as 4,501 troy ounces were deposited in Scotia Mocatta's warehouse---and nothing was reported received. The link to that activity, if you wish to dignify it with that name, is here. Of course the silver action in these same depositories on Friday was far more substantial, as 867,884 troy ounces were shipped in---and only 29,027 troy ounces were shipped out. The link to that action is here. The stories started off at a reasonable number early yesterday, but it didn't last. Now I have lots---and I turn the final editing job over to you once again.
¤ The WrapI don’t know who is buying all these Silver Eagles, as reports from the retail front do not suggest broad demand. As such, if it is one big buyer, perhaps that buying could end. On the other hand, it could continue, particularly if the buyer is well-informed. What I do know is that Silver Eagles are outselling Gold Eagles by an amount never witnessed in the 27 years of the Mint’s bullion coin program. One would think that this demonstrable and heavy relative demand for silver over gold would be reflected somewhat in price, instead of the pronounced relative weakness seen in silver. But one would think that only if he was unaware of the COMEX and JPMorgan. Yes, I know – this is only one slice of the supply/demand equation; but then again more silver is, effectively, consumed in Silver Eagles than in any other single demand component. - Silver analyst Ted Butler: 08 March 2014 You'd never know by just looking at the gold and silver charts from yesterday that there was big activity---but there was. The volume in Far East trading was about as big as I've seen it---and it was obvious, at least to me, that the HFT boyz were out and about big time. Even before London opened, all four precious metals had another hole to dig themselves out of by the end of Monday's trading---and some of them didn't make it. And as far as I'm concerned, that's just another form of price management. It should be obvious that JPMorgan et al are active in all four precious metal markets 24/7. Here's a chart I ripped from a Zero Hedge posting further up in today's column. I'm posting it on its own here, because I know perfectly well that not everyone reads all the stories that I post each day---and I wanted to make sure that you saw this. It's the "official" gold holdings of all counties in the world as of the end of February 2014. Like the U.S. jobs numbers and employment figures, you can bet that a lot of these figures are pure bulls hit---starting with China's gold reserves. The World Gold Council admitted several years ago that their data was only as good as the reporting countries were providing---and for that reason you should take it with a pound of salt as well. After getting sold down a bit in early Far East trading, all four precious metals are attempting to rally. Both gold and silver are up a titch---and platinum and palladium are unchanged. Volumes are very light in both silver and gold---and the dollar index is up a handful of basis points. Because London hasn't switched over to British Summer Time as of yet, their open is still about an hour away as I write this paragraph. And as I hit the send button on today's column, I see that both gold and silver popped a bit at the London open, which was just over an hour ago and, not surprisingly, volumes---especially in gold---have picked up substantially. The dollar index is still up only a handful of basis points. I haven't a clue how precious metal prices will perform today, or any other day this week. I know what they should be doing---and what they want to do---but whether they're allowed to or not is entirely up to JPMorgan. That's all that I have for today, which is more than enough---and I'll see you here tomorrow.
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