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Tuesday, March 18: Today in Gold and Silver

NEW YORK ( TheStreet) -- The price spike at the open in New York on Sunday evening got dealt with in the usual manner---and by 10 a.m. in Hong Kong on their Monday morning, the price was back to unchanged.  From there it chopped more or less sideways until London closed for the day, which was noon in New York.  And that, as they say, was that. 

The low tick came at 2:30 p.m. EDT in electronic trading.  The gold price gained a few dollars after that, before trading sideways in the 5:15 p.m. close.

The CME Group recorded the high and low ticks as $1,392.60 and $1,361.90 in the April contract.

Gold closed in New York yesterday at $1,367.50 spot, down $14.50 from Friday's close.  Volume, net of roll-overs, was around 140,000 contracts.  About 15% of that volume was used to snuff out the rally in early Far East trading.

The price action in silver was similar, although the selling pressure in Far East and morning trading in London, was a bit more intense at times.  Silver's final sell-off also began at the close of London trading [noon in New York]---and from there it followed an almost identical price path to gold.

The high and low ticks were recorded as $21.65 and $21.125 in the May contract.  Volume, net of March and April, was around 35,000 contracts.

Platinum moved higher at the open on Sunday night as well---and managed to stay in positive territory for quite a while.  It's high tick came shortly before 9 a.m. GMT in London---and then it was a long, slow slide into the close, with the low tick in platinum coming the same time as it did for gold and silver---2:30 p.m. EDT.  Platinum closed down a couple of bucks on the day.

The palladium price chart sort of looked like the platinum chart, except its low of the day came shortly before 9 a.m. in New York.  After that it struggled back to unchanged, and managed to finish up a whole dollar on the day.

Based on the price action of platinum and palladium, you would never guess that there's a looming supply problem in both these metals, as JPMorgan Chase has a death grip on their prices as well.

The dollar index closed late on Friday afternoon in New York at 79.43---and its high tick of 79.55 on Monday came at 3:30 p.m. Hong Kong time.  It chopped around that high until 8 a.m. in New York---and then headed south---hitting its 79.305 low about 10:45 a.m. EDT.  The subsequent rally didn't get far---and the index finished the Monday session at 79.40---down 3 basis points from Friday.

The gold stocks gapped down, then rallied to their high of the day around 10:20 a.m. EDT---and it was all down hill from there, as the HUI closed on its absolute low tick, down 3.70%.

The silver equities fared slightly better, but that was small consolation.  Nick Laird's Intraday Day Silver Sentiment Index closed down 'only' 2.60%.

The CME's Daily Delivery Report showed that zero gold and 124 silver contracts were posted for delivery within the Comex-approved depositories tomorrow.  Jefferies was by far the biggest short/issuer with 120 contracts.  JPMorgan Chase gobbled up 82 of those contracts in its in-house [proprietary] trading account.  The second-largest short in the Comex silver market, Canada's Bank of Nova Scotia, stopped 26 of these contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There was a withdrawal from GLD yesterday, as an authorized participant took out 122,730 troy ounces.  And as of 9:25 p.m. EDT yesterday evening, there were no reported changes in SLV.  The last deposit in SLV was on February 26---and there were two withdrawals in early March.  Ted Butler is reasonably sure that this is the main reason that the silver price has been kept under wraps this year---because JPM doesn't want the silver ETFs adding very much metal because of increased demand by way of higher prices.

And just as a matter of interest, of the 1,851 silver contracts issued this month, JPMorgan has stopped 1,275 of them---a hair more than two thirds.  That's more than 6 million ounces they've taken delivery of so far in March---and if they're buying it and taking delivery hand over fist, so should you.

There was a decent sales report from the U.S. Mint yesterday.  They reported selling 2,500 troy ounces of gold eagles---3,000 one-ounce 24K gold buffaloes---and another 621,000 silver eagles.

There was no reported in/out movement in gold over at the Comex-approved depositories on Friday.

As is almost always the case, the same can't be said for silver, as 19,722 troy ounces were reported received---and 594,838 troy ounces were shipped out for parts unknown.  The link to that activity is here.

Since this is my Tuesday column, I always have more stories than normal---and this column is no exception.  And with the exception of the gold and silver related stories, most of them are Ukraine/Crimea/Russia oriented.  The final edit is yours.

¤ The Wrap

Given the level of world geopolitical and economic stress, it would not be surprising to see gold extend its price run, especially if tensions resulted in more physical buying.  But since it appears that the price run to date has been based, almost exclusively, on COMEX speculative positioning, it would not be surprising if the run came in for a sudden adjustment. As for why silver has lagged gold, that’s easy – the commercials, led by JPMorgan, have kept a much tighter grip on prices because a flare up in physical buying is much more critical in silver. - Silver analyst Ted Butler: 15 March 2014

I know you get tired of hearing it---just as much as I get tired of saying it---as it was another trading where free-markets weren't anywhere to be found within the precious metal trading arena yesterday.  It was the same old, same old.

As Ted Butler says in his quote above, virtually 100% of the price move in both gold and silver since late December has  been paper buying and selling on the Comex---and here's one more sentence from his column yesterday to go with the quote above: " … most data indicate that the rise in gold this year may be exclusively due to COMEX positioning, as is usually the case. Since just before year end (December 24) thru last Tuesday, speculative buying (mostly technical fund short covering plus new buying of long contracts) and speculative selling (by traders classified as commercials) of a net 100,000 contracts is just about the sole reason for gold’s price advance. That’s the equivalent of 10 million ounces of gold, worth around $13 billion. It is not real gold, just a derivative of real gold, but it has a real effect on the price of real gold."  This is the way it has always been---and will continue this way until it ends.  Nobody knows exactly when, but it will.

And the mining company executives and boards of directors---every man and woman knows what's going on---but say and do nothing.

It reminds me of what King Théoden said---as he stood on the ramparts of Helm's Deep looking across Saruman's army of Uruk-hai just before the Battle of the Hornburg---" How did it come to this?"

Precisely, dear reader!

The precious metal mining companies we own shares in are working against their own, and our, best interests by totally abandoning their fiduciary responsibilities to their stock holders by not confronting this issue.  How did it come to this, I wonder?

And as I write this paragraph, the London open is about 15 minutes away.  I see that a not-for-profit seller carved over ten bucks of the gold price and twenty cents off the silver price around 9 a.m. Hong Kong time---and both platinum and palladium are also selling off a bit going into the open.  Gold is below $1,360 spot---and silver is at $20.90 spot at the moment.  Volumes are very high in both metals---and the dollar index isn't doing a thing.

And as I hit the send button on today's missive, gold and silver prices are about unchanged from where they were when London opened---and volumes are north of 40,000 contracts in gold and 12,000 in silver.  I also note that the HFT boyz are having their way with platinum and palladium prices at the moment.

That's all I have for today---and I'll be prepared for any eventuality when I power up my computer later this morning.  It will be interesting to see if JPMorgan et al are still in a position to have their way with precious metal prices going forward---and we shouldn't have too long to wait to find out.

See you 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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