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Wednesday, March 12: Today in Gold and Silver

NEW YORK (TheStreet) -- The gold price didn't do much in Far East trading on their Tuesday, but was up a couple of bucks going into the 8 a.m. GMT London open.  At that point it popped for a few more dollars---and then climbed to its high of the day which came at the 8:20 a.m. EDT Comex open---and then down it went, hitting its New York low about a minute before London closed for the day.  From there, the gold price recovered about ten bucks of its loses by the Comex close---and traded quietly sideways into the close of electronic trading.

The CME Group recorded the low and high ticks as $1,337.80 and $1,353.00 in the April contract.

Gold closed in New York yesterday at $1,349.50 spot, up $9.70 from Monday's close.  Net volume was around 123,000 contracts, which was about 25% more volume than on Monday.

Silver followed a very similar price pattern to gold, with the sellers of last resort also showing up at the Comex open as well.

The low and high ticks were recorded as $20.67 and $21.325 in the May contract, an intraday move of more than 3%.

Silver finished the New York trading session at $20.885 spot, up a nickel on the day.

The rallies in both platinum and palladium lasted until 10 a.m. EDT yesterday before the not-for-profit sellers showed up there as well.  Then minutes before the London close, the HFT boyz did their thing in these two metals as well---and that, as they say, was that.  Both metals recovered a bit, but not by much.  Here are the charts.

It should be obvious to anyone except the willfully blind, that all four precious metals would have finished materially higher if allowed to trade freely during the Comex session yesterday, which they obviously weren't.

Copper was under the gun again yesterday for the third day in a row---the worst 3-day thrashing the metal has ever had.  Here's the 1-year chart.

"Copper slumped to its lowest level in nearly four years, with May futures off 2.5 percent to $2.9520 a pound and now down 8 percent in three sessions. China is responsible for 40 percent of the world's copper imports." is a paragraph out of a copper story posted on the CNBC website yesterday that reader M.A. sent our way.

Ted Butler thinks that the Commercial traders [JPMorgan et al] took the opportunity with the news coming out of China to drive the technical funds into going mega-short the copper market---and as you can see from the chart, this is certainly the case, as the copper market is now more technically oversold than it has been in over three years.

The dollar index closed in New York late on Monday afternoon at 79.75---and traded fairly flat until about 7 a.m. GMT in London.  Then it rallied to its 79.96 high minutes after 11 a.m. GMT.  From there it headed south, hitting its absolute low of the day of 79.72 around 2:20 p.m. in New York.  Then it gained back a handful of basis points into the close.  The index finished on Tuesday afternoon at 79.79---down 4 basis points from Monday's close.  Nothing much to see here, except to note that the index failed at the 80.00 mark on its weak rally attempt.

The gold stocks popped about a percent and change at the open of the equity markets in New York, but began to fade almost immediately, hitting their low at the 12 p.m. EDT London close.  From there they bounced along the bottom for most of the remainder of the trading session, despite the fact that gold had rallied well off its low tick.  But they managed to catch a bid in the last few minutes, as the HUI finished up 0.56%.

The silver stocks also jumped up about the same amount as the gold stocks within 10 minutes of the New York open, but it was pretty much down hill for the remainder of the day from that point---and Nick Laird's Intraday Silver Sentiment Index closed down 0.96%.

The CME's Daily Delivery Report showed that 2 gold and 114 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  In silver, the two biggest short/issuers were Barclays and Jefferies with 61 and 52 contracts respectively.  Of course JPMorgan Chase was the biggest long/stopper in its in-house [proprietary] trading account with 89 contracts.  Canada's Scotiabank was a distant second with 16 contracts stopped.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday---and as of 10:19 p.m EDT yesterday evening, there were no reported changes in SLV, either.

The good folks over at shortsqueeze.com were kind enough to update the changes in the short interest in both SLV and GLD as of the end of February.  There was a huge drop in the short position of SLV, as it declined by 22.73% from 17.65 million shares/troy ounces to 13.64 million shares/troy ounces.  The 4 million troy ounces deposit on February 18 may have been used for just that purpose.

The drop in GLD's short position was only 4.97% from 1.29 million ounces to 1.23 million ounces.  Ted Butler has been speculating that some of the gold deposited in GLD over the last few days may be the authorized participants covering short positions.  If that's the case, then we should see that in the next report for mid-March, which will be out two weeks from now.

The U.S. Mint had another sales report.  They didn't sell any gold of any description, but they did sell more silver eagles.  This time it was 388,500 of them.  Ted's question of who is buying all these silver eagles [2.22 million in the first seven business days of March] remains unanswered.

Over at the Comex-approved depositories on Monday, there were 30,032 troy ounces of gold shipped out of HSBC USA's vault---and nothing was reported received.  The link to that activity is here.

Of course there was big movement in silver on Monday, as 843,525 troy ounces were reported received---and 539,955 troy ounces were shipped out.  The link to that action is here.

I have a very decent number of stories again today---and I hope you have the time to read the ones that interest you the most.

¤ The Wrap

War is no longer made by simply analysed economic forces if it ever was. War is made or planned now by individual men, demagogues and dictators who play on the patriotism of their people to mislead them into a belief in the great fallacy of war when all their vaunted reforms have failed to satisfy the people they misrule. - Earnest Hemingway: "Notes on the Next War: A Serious Topical Letter" first published in Esquire (September 1935)

Just when you think that the price management scheme in all four precious metals couldn't get more obvious, the HFT boyz top themselves again.  As I said at the top of this column, only the willfully blind won't acknowledge that fact.

It was a very active day in both gold and silver in Far East trading on their Wednesday.  Volume, which was enormous on Monday, now pales into insignificance compared to the volume going into the London open today, which happens about 25 minutes from now.  Gold volume is currently north of 51,000 contracts---and silver's volume is already over 13,000 contracts.  Well over two thirds of that volume was posted before lunchtime in Hong Kong trading---as it took a lot of Comex paper to put out the rally fires that began at 10 local time.  But by 11 a.m. it was pretty much done---and prices were in lockdown from there.

It's unfortunate that this action took place on a Wednesday, as it won't show up in the Commitment of Traders Report until the report on March 21.

And as I hit the send button on today's efforts at 5:15 a.m. EDT, I note that the markets in Asia took it on the chin pretty good earlier today---and early trading in Europe isn't looking that hot, either.  One has to wonder if the Plunge Protection Team will show up to save the day in New York later this morning.

Now that London has been open an hour and change, all four precious metals came under selling pressure, with both platinum and palladium now back below their closing prices in New York yesterday---and silver is also back to being close to unchanged after it's capped rally in morning trading in the Far East.  Only gold is hanging on to most of its gains, at least for the moment.  Volumes have quieted down a bit from earlier, but are still over the moon for this time of day.  Gold volume is well over 60,000 contracts---and silver volume is north of 16,000 contracts.  The dollar index isn't doing anything.

As far as the precious metal prices are concerned for the rest of this week, I'll stand by what I said yesterday---and that was "I don't have a clue."  It always depends, as Ted Butler says, on what JPMorgan et al do---and we saw an Academy Award winning performance yesterday---and again earlier this morning in Far East trading---so it remains to be seen what kind of encore they have in store for us as the rest of the Wednesday trading session unfolds, especially in New York.

That's all for another day---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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