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TheStreet Open House

Thursday, March 27: Today in Gold and Silver

Stock quotes in this article: GLD, SLV

NEW YORK ( TheStreet) -- Once again the gold price didn't do much in either Far East or early London trading.  However, that all changed when trading got under way on the Comex.  The gold price rolled over into the London p.m. gold fix---and then hit its low of the day [a hair below $1,300 spot] at exactly 3:30 p.m. EDT in electronic trading.  Then the price recovered a handful of dollars going into the close.

The CME Group reported the high and low ticks at $1,317.10 and $1,299.30 in the April contract.

Gold finished the Wednesday session at $1,305.80 spot, down $5.90 from Tuesday's close.  Gross volume was over 200,000 contracts once again, but once the roll-overs were subtracted out, net volume crashed all the way down to 86,000 contracts.

The silver price chart was a carbon copy of the gold chart, so there's nothing left to talk about, as it was all so orchestrated.

The high and low were recorded as $20.145 and $19.68 in the May contract.

Silver closed yesterday at $19.735 spot, down 26.5 cents from Tuesday's close.  Volume, net of March and April, was 42,000 contracts.

Platinum and palladium didn't do much until London opened---and then both began to slide from there.  Both finished with loses on the day as well.  Here are the charts.

The dollar index closed at 79.94 on Tuesday afternoon in New York, rose to its 80.13 high at 9:30 a.m. EDT in New York---and closed at 80.006.  Nothing to see here.

The golds stocks started in positive territory, but that only lasted about 20 minutes---and then they began to head lower---and by the time trading was done at 4 p.m. EDT, the HUI was down 3.73%---out of all proportion to the six dollar decline in the gold price.

It was the same thing in silver, another decline out of all proportion to the decline in the metal itself.  Nick Laird's Intraday Silver Sentiment Index closed down 4.62%.

The CME Daily Delivery Report showed that 1 gold and 56 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  The short/issuer on all of the above contracts was JPMorgan Chase---and the biggest long/stopper in gold was Canada's Scotiabank with 52 contracts.  The link to yesterday's Issuers and Stoppers Report is here.  And looking at the preliminary volume/open interest figures for yesterday's trading from the CME at 3:33 a.m. EDT earlier this morning, it appears that these contracts are the last of the March deliveries in both metals.

Another day---and another withdrawal from GLD.  This time it was 57,813 troy ounces.  After one deposit and two withdrawals in the past week, GLD is now back within 2 troy ounces of the amount of gold it held on March 21.  As of 10:41 p.m. EDT yesterday evening, there were no reported changes in SLV.

Over at Switzerland's Zürcher Kantonalbank they reported a decline in their gold ETF---and a tiny increase in their silver ETF for the week ending March 21.  Their gold ETF dropped by 34,456 troy ounces---and their silver ETF gained 7,362 troy ounces.

There was no sales report from the U.S. Mint.

Over at the Comex-approved depositories on Tuesday, there was 71,542 troy ounces of gold reported received---and 204 troy ounces were shipped out.  The link to that activity is here.

After two frantic days in a row, it was much quieter in silver on Tuesday, as only 4,185 ounces were received---and 136,149 troy ounces were shipped out.  The link to that action is here.

Here's a photo that I ripped from a Zero Hedge posting yesterday---and I thank reader M.A. for sharing it with us.  As I've said on countless occasions, Putin could bring the West to it's financial and monetary knees overnight, as he knows all about the Anglo/American price management scheme in the precious metals.

I don't have that many stories today, so I hope you find some that interest you.

¤ The Wrap

The biggest problem of all is that technical fund activity is often at odds with real world supply and demand fundamentals. What difference does it make if silver’s long term fundamentals are spectacularly bullish if the technical funds go on a selling binge? If the technical funds sell aggressively and collectively, the price of any market is going lower until that selling is exhausted. This is how these markets work. Knowing that, what’s the long term investor to do? It seems to me that, at a minimum, the long term investor should be aware when the technical funds are in position to sell so as not to be blindsided emotionally.

The run up in gold and lesser run up in silver prices this year was entirely due to technical fund buying, as I hope I have reported all along. After such buying is concluded, the odds rise that the technical funds can or will be induced into selling by the commercials.  It’s hard to predict in advance when technical fund buying will be concluded and when the funds may be induced to sell, but that is much more likely after large ownership changes, like now. - Silver analyst Ted Butler: 26 March 2014

It was another day of exceptionally low net volume---and no price action to speak until trading began on the Comex in New York yesterday.  Once again I was surprised that both gold and silver weren't pounded into the ground, but the rotten share price action more than made up for it.

Once again I present you with the 6-month gold and silver charts so you can see how this commercial trader-induced engineered price decline is progressing.

As you can deduce from the above chart, the price bounced off its 50 and 200-day moving averages yesterday, but if/when JPMorgan et al run the sell stops at this price and lower using their HFT boyz, the technical funds will dump their longs en masse---and if the price gets low enough, they may be even enticed into going short.  The very act of dumping longs and buying short positions is what causes the price to fall, once JPMorgan et al get the ball rolling down the hill---and with the current chart set-up, which I'm guessing was painted to perfection, the decline, once these moving averages are broken, will be ugly.

And what the technical funds are selling or buying---"da boyz" will be on the opposite side of that trade for fun, profit---and price management.

Here's the silver chart.  We are miles below the 50 and 200 day moving averages already, but JPMorgan et al could easily peel another buck or so off the price---and set new lows as well---if the technical funds can be tricked into going short on top of puking up what existing long positions they have left.

Of course, I could get fooled entirely---and we could get a rally from this point as well, because from a T.A. perspective, one is possible because we could "bounce" off these moving averages.  But if I was forced to bet a dollar, that's not how I would bet it.  So we wait.

As I type this paragraph, the London open is about 35 minutes away.  With the exception of platinum, all the other precious metals are down a bit from Wednesday's New York close.  Net volume in gold is fumes and vapours---and silver's volume is almost as low.  The U.S. dollar continues to hang onto the 80.00 level by its proverbial fingernails.

I was just looking at the CME's Preliminary Daily Bulletin for gold and silver volume on Wednesday---and I note that there are still 78,864 contracts open in April.  Except for those standing for delivery, all of that open interest has to disappear in the next two business days---and I'm sort of wondering out loud why it's being left to the very last moment.

And as I hit the send button on today's efforts at 5:20 a.m. EDT, I note that all four precious metals came under more selling pressure either at, or just before the London open. Both gold and silver are down a bunch more than before---gold down 12 bucks and silver down 20 cents---but platinum is still in the plus column, at least for the moment.  But palladium got bludgeoned.  At 5:08 a.m. EDT, this is what the Kitco palladium chart looked like---down more than 3%.

Gross volume in gold is more than double what it was less than an hour ago, but once the roll-overs out of April are subtracted out, volume is still pretty light---all things considered at the moment.  Silver's volume is almost double what it was, with virtually no switching.  The dollar index is in "rally" mode, up a whole 10 basis points.

Well, with two trading days left to roll out of the April contract---and  three trading days left in the month of March and the first quarter of 2014---nothing will surprise me as the rest of this month winds down.

Before signing off, I'd like to point out that Casey Research just opened up its Casey OnePass service for a limited time.  The deal includes subscriptions to eight of CR's newsletter all rolled into one [very] cheap price PLUS the Casey Compendium (only available to lifetime and OnePass members.)  If you have any interest, you can find out more by clicking here, and it doesn't cost a thing to check it out.  Naturally, Casey Research's 90-day risk-free policy applies in full.

That's it for another day.  I must admit that I'll be powering up my computer later this morning with some fear and trepidation as to what sights may await me.

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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