Saturday, March 15: Today in Gold and Silver
NEW YORK ( TheStreet) -- For the third day in a row there was a brief rally in gold during morning trading in the Far East, but that didn't get far, and there wasn't much volume associated with it. From there, the gold price sank to its low of the day, which came an hour before London open. Once the low was in, gold developed a positive bias that lasted until 11 a.m. GMT in London---and then away it went to the upside until JPMorgan et al put an end to the fun at 9:30 a.m. EDT---the moment that the equity markets began to trade in New York.
For a while, it traded flat, but about 30 minutes before the London close, the HFT boyz showed up and took back virtually very dollar of gains since the 8:20 a.m. EDT Comex open. But once the New York low was set, the gold price began to rally anew, but never got anywhere near its 9:30 a.m. EDT high.
The CME Group recorded the low and high ticks at $1,368.20 and $1,388.40 in the April contract.Gold finished in New York on Friday at $1,382.00 spot, up $10.90 on the day---and well off its high. Gross volume was around 213,000 contracts, but netted out to 157,000 contracts, which is still pretty chunky. Here's the New York Spot Gold [Bid] chart on its own so you can see the handiwork of JPMorgan et al. The silver chart looks the same as the gold chart---complete with the interventions at the same times. The low and high prices were reported as $21.14 and $21.795 in the May contract---and another trading day when there was an intraday move of more than 3%. Silver finished the day at $21.46 spot, and well off its high. Volume, net of March and April, was very decent at 50,500 contracts. Here's the New York Spot Silver [Bid] chart on its own. Note the 8:45 a.m. EDT price spike that got hammered flat by the usual not-for-profit sellers. It's barely visible on the 24-hour chart above, but it's more than obvious on the chart below. The HFT sell-off into the London close was particularly obvious---and vicious. Platinum and palladium didn't do much until 11 a.m. GMT in London---and then they took off to the upside, only to run into the same not-for-profit sellers shortly after trading began in New York yesterday morning. Then they finished the job by selling off both metals for small loses on the day going into the close of London trading. They were mini versions of what happened to both gold and silver. Here are the charts. Copper managed to gain a couple of cents on the day, but is still monstrously oversold. The dollar index closed on Thursday afternoon in New York at 79.59---and then rose to its 79.69 Friday high by 2 p.m. in Hong Kong trading. From there, it was all down hill to its 79.34 low shortly after 10 a.m. EDT. The index recovered a bit from there, but faded a handful of basis points after 2 p.m. The dollar index finished the Friday session at 79.43---which was down about 16 basis points from Thursday. Although the gold stocks gapped up at the open, they began to sell off immediately once JPMorgan et al capped the price at exactly 9:30 a.m. EDT yesterday. And despite the fact that the gold price began to rally anew after 12 o'clock in New York, the equities continued to trade either side of unchanged. Their low tick came at 2:30 p.m.---and from there they manged to rally into positive territory going into the close. The HUI finished up only 0.52%. The silver equities followed almost the same pattern tick for tick---and Nick Laird's Silver Sentiment Index closed up 0.66%. All things considered, I must admit that I was expecting better price action from the precious metal equities than this. The CME's Daily Delivery Report showed that 34 gold and 1 silver contract were posted for delivery within the Comex-approved depositories on Tuesday. All of the above contracts, except for two in gold, were stopped by JPMorgan in its in-house [proprietary] trading account. The link to yesterday's Issuers and Stoppers Report is here. Another day---and another deposit into GLD, as an authorized participant added 106,006 troy ounces. And as of 9:37 p.m. EDT yesterday evening, there were no reported changes in SLV. While on the subject of SLV, Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with the goings-on within SLV at the close of business on Wednesday---and here's what he had to say: " Analysis of the 12 March 2014 bar list, and comparison to the previous week's list---No bars were added, removed, or had serial number changes. As of the time that the bar list was produced, it was overallocated 99.8 oz. All daily changes are reflected on the bar list." The link to Joshua's website is here. It's still my opinion that SLV is owed many millions of ounce of silver, as there hasn't been a deposit made in that ETF since February 26. But the price activity over the last trading week certainly indicates that some is owed. The U.S. Mint had a sales report yesterday. They sold 3,000 ounces of gold eagles and another 755,000 silver eagles. They also sold 8,700 one ounce platinum eagles as well. Month-to-date, silver eagle sales continue their torrid pace. For March so far, the mint has sold 9,500 troy ounces of gold eagles---5,500 one-ounce 24K gold buffaloes---and 2,300,000 silver eagles. Based on these sales, the silver/gold sales ratio works out to 153 to 1. Year-to-date the mint has sold 10,825,000 silver eagles. Simply amazing! The question still remains unanswered as to who is buying all these silver eagles, because I know for a fact it isn't John Q Public. Over at the Comex-approved depositories in gold on Thursday, they reported receiving a tiny 405 troy ounces---and shipped out 35,284 troy ounces. Virtually all of the activity was at Canada's Scotiabank. The link to that activity is here. In silver, there was nothing reported received, but 432,578 troy ounces were shipped off for parts unknown. Most of the action was at the CNT Depository---and the link to that action is here. The Commitment of Traders Report ended up being not as bad as expected. The reason I suspect that it's better than expected is because all the price/volume data from Tuesday's big rally didn't make it into the report. And if that's the case, then it sets up next Friday's COT Report to be even uglier than I mentioned in this column yesterday. Anyway, yesterday's report showed that the Commercial net short position in silver actually declined by 2,135 contracts, or 10.7 million ounces of silver. The total Commercial net short position now sits at 188.2 million troy ounces. I guess this improvement shouldn't come a surprise considering the terrible price action in silver compared to gold. Ted Butler said that the reduction all came through the raptors [the Commercial traders other than the Big 8] buying around 2,000 long contracts. Ted pegs JPMorgan's short-side corner in the Comex silver market as unchanged from last week---still around 18,000 contracts---and just under 17% of the entire Comex futures market in silver. Just some simple math shows that the 18,000 contracts that JPMorgan's holds short, represents almost 50% of the entire net short position of the Commercial category of the COT Report---and the other 42 traders in the Commercial category hold the other 50% divided up between them. How outrageous can you get? Not surprisingly, the Commercial net short position in gold showed a deterioration, as the Commercial net short position increased by 4,218 contracts, or 422,000 troy ounces of gold. The Commercial net short position in that metal now stands at 12.54 million troy ounces. Ted says that JPMorgan did all the selling, as they sold about 6,000 contracts of their long-side corner into the rally during the reporting week. Their long-side corner in gold is now around 4.7 million ounces, which is a hair under 15% of the entire Comex futures market in gold. Hidden in the COT Report for gold was the fact that the 8 largest Commercial traders holding short positions actually covered about 2,600 of those short contracts during the reporting week. Ted says that these 8 traders have been quietly reducing their short position in the Comex gold market since sometime in January. Heading for the exits while hiding behind JPMorgan's skirt as the long seller of last resort, perhaps. Anyway, when all is said and done with this report, there weren't really big changes in either direction in either metal. But unless we have big sell-offs on Monday and Tuesday of next week, it's a safe bet that next Friday's COT Report is one that I'm already dreading. Here's a chart that Nick Laird sent our way in the wee hours of this morning. It's the Global Indices graph---and if it doesn't want to make you sell at the open on Monday, I don't know what will. I have a lot of stories again today---mostly about the Ukraine/Crimea/Russia situation---plus I'm including a few I've been saving for today's column because of length. I hope you have enough time this weekend to read the ones that interest you the most.
¤ The WrapThey wrote in the old days that it is sweet and fitting to die for ones country. But in modern war there is nothing sweet nor fitting in your dying. You will die like a dog for no good reason. - Ernest Hemingway: " Notes on the Next War: A Serious Topical Letter" first published in Esquire (September 1935) Today's pop "blast from the past" is by a British rock group from the early 1960s---and this composition was there last big hit together---and what a hit is was. You should know it instantly---and the link is here. Today's classical "blast from the past" is one that's been playing in my head for the last week as the situation in the Ukraine/Crimea comes to a head. Any reader who knows the history behind this Jean Sibelius symphonic poem doesn't need an explanation as to why I'm posting in today's column. This is an excellent youtube.com video---and the link is here. Another day---and another major intervention in the bullion market by JPMorgan et al. One can only fantasize on how high precious metal prices would have risen if the usual sellers of last resort hadn't intervened when they did. The intervention was so egregious, that no one could have possibly missed it---and I'll spare you the usual Stevie Wonder joke at this point. Eric Sprott mentioned the upcoming "golden cross" as the 50 day moving average crosses above the 200-day moving average. As you can see from this chart, the 50 day hasn't been above the 200 day m.a. for a bit more than a year, but it looks like it will make it this time. Let's hope it stays here. While I'm at it, here's the 3-year chart for silver: Along with the situation in the Ukraine/Crimea, there's also the little matter of the FOMC meeting on Tuesday and Wednesday of this coming week. One has to wonder why they bother meeting at all anymore, as what they decide is not only irrelevant; but the economic, financial and monetary situation is now completely out of their control. Anyway, it's in our faces now, so we'll see what happens when the smoke goes up the chimney on Wednesday afternoon. However, events prior could certainly trump whatever happens at this meeting. I'm somewhat at loss as to what to write at this point, as events in the Ukraine and surrounding area are rapidly spinning out of control. And whether that's by chance or by design, it will only take a small error in judgement by some of the West's sociopaths with their fingers in the pie over there, to make things turn ugly---and deadly, in a very short period of time. There are no "cooler heads" at the moment, except for maybe Putin, and it will be interesting to see how he responds to whatever dictates come out of the West in the next 48 hours or so. But whatever happens regarding the Ukraine during the next few days, will most certainly change the world as we know it, forever. Before heading off to bed, here's another chart that Nick Laird sent my way. It's the " Total PMs Pool" graph updated with the current data---and all the traces are pointing in the right direction. I await the Sunday evening open in New York with great interest. I'm done for the day---and the week. Beware the Ides of March! See you on Tuesday.
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