Wednesday, March 19: Today in Gold and Silver
NEW YORK ( TheStreet) -- The gold price didn't do much at the open on Tuesday morning in Tokyo, but at 9 a.m. Hong Kong time, the price got taken down by around ten bucks. From there it traded almost ruler flat until about 11:30 a.m. GMT in London---and that point it got sold down a bit more to its low of the day, which came around 8:45 a.m. in New York. The subsequent rally took ten bucks off its losses for the day, but shortly before 1 p.m. EDT, the rally topped out---and from there it got sold down until 3:30 p.m. before trading flat into the 5:15 p.m. EDT close.
The high and low price ticks were recorded by the CME Group at $1,367.90 and $1,351.10 in the April contract.
Gold closed in New York at $1,355.50 spot, down an even 12 bucks. Net volume was around 141,000 contracts, the same as Monday's volume.It was more or less the same price pattern in silver, except the sell offs were more extreme on a percentage basis. The only real difference was that the low tick in silver came at precisely 9 a.m. EST in New York. Other than that, the chart patterns were almost identical. The high and low ticks were recorded as $21.25 and $20.625 in the May contract, another intraday move of 3%. Silver finished the Tuesday session at $20.815 spot, down 37.5 cents from Monday's close. Volume, net of March and April, was pretty heavy at 50,000 contracts. Here's the New York Spot Silver [Bid] chart on its own so you can see the precision of the low tick at 9 a.m. EDT. Timing like this doesn't happen by accident---and as you know, dear reader, we see it all too often. The platinum price pattern was similar to both gold and silver---and palladium's spike low came at 8 a.m. New York time. Both metals recovered off their respective lows, but both finished down on the day. And as I said in this space yesterday, it's hard to believe by looking at the price action, that there has been a two month strike going on in one of the largest platinum and palladium producing areas of the world. Here are the charts. The dollar index closed in New York late on Monday afternoon at 79.40. After a tiny dip down to 79.34, it rallied to its high 79.54 high of the day shortly before 11 a.m. in New York. It was all down hill from there---and the index closed at 79.38---basically unchanged. The scale of the chart makes the action appear more impressive than it actually was. The gold stocks gapped down 2% at the open---and then didn't do much until shortly after 12 o'clock noon in New York. From there they made it back to unchanged shortly before 1 p.m. EDT, which just happened to be the high price ticks for both gold and silver---and once gold got sold down after that, the stocks followed in sympathy. The HUI closed down 1.37%. I was all prepared for similar price action in the silver equities, but I was in for a shock when I went to Nick Laird's website. Yes, there was a spike down at the open, but the shares were back in the green within 20 minutes---and never looked back. The high of the day was at 1 p.m. EDT, which was silver's high tick---and from there they faded very little as the price got sold down. Then about 15 minutes before the equity market's closed, the shares had a vertical spike of 1 full percent in seconds. From there it traded sideways into the close. Nick Laird's Silver Sentiment Index closed up 2.51%. It beats me as to why silver shares did as well as they did---and that 3:45 p.m. spike got my full and undivided attention. You have to ask yourself who was buying silver stocks with both hands yesterday---especially considering how poorly the gold equities performed. What do they know that we don't? There were no reported changes in GLD---and as of 9:48 p.m. EDT, there were no reported changes in SLV, either. The CME Daily Delivery Report showed that only 6 gold and 2 silver contracts were posted for delivery within the Comex-approved depositories on Thursday. JPMorgan Chase stopped "all of the above" contracts in its in-house [proprietary] trading account. The U.S. Mint had another sales report. They sold 1,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 222,000 silver eagles. For the second day in a row there was no reported in/out movement in gold at the Comex-approved depositories. That certainly wasn't the case in silver on Monday. They reported receiving 1,009,802 troy ounces. All of it went into Brink's, Inc or CNT. I've wondered on many occasions who owns all the silver being stored at Brink's---and especially at the CNT Depository, as it's the new kid on the block. The link to that 'action' is here. Once again I have lots of stories---and I'll happily lave the final edit up to you.
¤ The WrapThe low prices of the past few years have succeeded in postponing enough investment buying from developing into the next physical silver shortage. But, while widespread investment buying has been postponed, it has not and cannot be eliminated forever. In fact, while widespread investment buying has been postponed, the backdrop has actually improved. That’s because the amount of silver available for purchase is much less today than it was in the mid 1960’s, or when the Hunts or Buffett bought. - Silver analyst Ted Butler: 15 March 2014 All four precious metals got sold down a bit more during the Tuesday trading session---and it remains to be seen whether this is the beginning of an engineered price decline or not. We'll just have to wait it out. Yesterday, at the close of Comex trading, was the cut-off for this Friday's Commitment of Traders Report---and as I mentioned in Saturday's missive, I'm more than apprehensive about what it will show. Here are the 6-month gold and silver charts. As you can tell from the gold chart, the chances of a "golden cross" are starting to dim a little---and it would come as no surprise to me [nor should it to you] that JPMorgan et al will not let it happen, at least not without a fight. You can see that the first two trading days of this week have already had an effect on the 50-day moving average---and a couple of big down days in a row would turn that moving average into a horizontal line, or worse, real quick. As for silver, because of the fact that JPMorgan has kept a lid on silver prices vs. the gold price for such a long time, there has never been a danger of a "golden cross" in that precious metal. As a matter of fact, silver is now back below its 200-day moving average---and came close to touching the 50-day moving average at its low yesterday. Just eye-balling the above charts, if "da boyz" wanted to, they could peal another $100 off the gold price---along with a dollar or so in silver---any time they choose, as the technical funds are massively long. That means that JPMorgan and the raptors can ring the cash register at their leisure. The only question that remains is---will it be now, or later. Of course there's always the chance that they could get over run, or let the prices go if they're positioned correctly in other markets. But just watching the price action lately, they don't seem to have lost their iron grip, nor are they about to relinquish it. But, having said all of the above, the dichotomy between the performance of the gold equities versus the silver equities yesterday is something I've never seen before---and it's worth keeping an eye on. Here's a chart that Nick Laird sent around to all and sundry last night---and I thought I'd stick in today's column at this point. It's shows the price of gold in U.S. dollars from 1970 to date---along with its 300-day moving average. Here's what Nick had to say in his covering e-mail: " With this indicator we are about to cross back into positive territory---and we all know what happened after this happened way back in the late 1970's… ." Just to play the devil's advocate here, I pointed out to Nick that the chart pattern is also reminiscent of what happened starting in mid-1982. Here's his succinct and learned response: " Yes, if the fiat markets had corrected---and all problems were solved. But, alas, as you know, that is not so… ..You cynic - you heathen you… (:-))))" Tee hee! As I write this paragraph, it's less than 10 minutes to the London open. Gold and silver didn't do much in Far East trading, but came under a tiny bit of selling pressure starting during the Hong Kong lunch hour. Gold and silver are both down a bit---and platinum and palladium are flat. Net volume in gold is pretty light---and silver's volume is about average for this time of day. The dollar index, which hasn't done much all week, is still chopping sideways in a very tight range. Today is the final day of the latest FOMC meeting. There hasn't been much news about it that I've seen---and as I said on Saturday, what they say or do---for the most part---is pretty irrelevant. But we'll find out at 2 p.m. EDT what they have to say for themselves---and it's a safe bet that gold and silver will get pounded on the news---unless they announce a new round of QE, of course. So we wait. And as I fire this off to Stowe, Vermont at 5:25 a.m. EDT I note that all four precious metals rallied a bit going into the London open, but it didn't take long for the not-for-profit sellers to show up. Both gold and silver are down a bit more---and platinum and palladium are back to unchanged. Not surprisingly, volumes in both gold and silver are up substantially---and the dollar index is now up 10 basis points. So far, the Wednesday trading session in not starting out that well, but that should not be a surprise---and I must admit that I probably won't like what I see on my computer screen when I get out of bed later this morning. That's more than enough for today---and I'll see you here tomorrow.
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