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Tuesday, April 1: Today in Gold and Silver

NEW YORK (TheStreet) -- The gold price made the usual rally attempt in Far East trading on their Monday, but every attempt to break back above the $1,300 spot price market got turned back by the HFT crowd.  There wasn't big volume in the early going, so it wasn't difficult to do.  From there, the gold price chopped around a handful of dollar either side of the $1,295 spot price mark.  That state of affairs lasted until the London p.m. gold fix at 10 a.m. EDT---and then down went the price.  The selling was down by the 1:30 p.m. Comex close in New York---and the price barely moved after that.

The high and low yesterday were recorded as $1,299.30 and $1,282.70 in the new front month, which is June.

Gold finished the Monday session in New York at $1,284.80 spot, down $10.10 on the day.  Volume, net of April and May, was around 137,000 contracts.  Not heavy, but not exactly light, either.

The silver price wasn't allowed to get far in Far East trading, either---and the low of the day came at the 8 a.m. BST open of the London market.  The subsequent rally got stopped in its tracks as it attempted to blast through the $20 price mark just about two hours later and, like gold, it was all down hill into the Comex close.  The price chopped sideways for the remainder of electronic trading.

The CME recorded the low and high ticks in the May contract at $20.01 and $19.725.

Silver finished the Monday session at $19.755 spot, down 6.5 cents from Friday's close.  Net volume was 30,500 contracts.

Platinum and palladium prices were a mini version of the gold and silver price charts, as the charts below show.  Both metals finished up a few dollars on the day but, like both gold and silver, would have finished materially higher as well, if the HFT boyz hadn't put in an appearance starting around 10 a.m. in London.

The dollar index closed in New York late on Friday afternoon at 80.17---and spiked to its high tick of 80.26 at precisely 9 a.m. EDT in New York.  The index chopped lower from there, hitting its 79.98 low shortly before 11 a.m. in New York.  At that point it appeared as if a not-for-profit buyer showed up---and the index 'rallied' to close at 80.11.

The gold stocks gapped down about a percent at the open---and valiantly attempted to rally back to unchanged.  But shortly before 10:30 a.m. EDT, they gave up the ghost---and down they went until 11:30 a.m.  Then they continued to drift lower from there, but rallied a hair in the last 15 minutes of trading to close just off their lows.  The HUI finished down 2.51%.

The silver equities followed a somewhat similar path, but Nick Laird's Intraday Silver Sentiment Index closed down 1.23%.

The CME Daily Delivery Report for Day 2 of the April delivery month showed that 681 gold and 5 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  There were a couple of dozen short/issuers.  The two biggest were HSBC USA and Jefferies with 203 and 100 contracts respectively---and the two biggest long/stoppers were Scotiabank with 352 contracts---and JPMorgan Chase with 203 contracts split up between both accounts.  Yesterday's Issuers and Stoppers Report is worth a look---and the link is here.

There was another withdrawal from GLD for the last business day of March.  This time an authorized participant took out 125,254 troy ounces.  And as of 9:43 p.m. EDT, there were no reported changes in SLV.  There has been no in/out activity in SLV since March 4.  But when I checked their website at 3:57 a.m. EDT this morning, they showed that 1,538,179 troy ounces had been added.  Based on the price action, it's a good bet that this deposit was made to cover an existing short position.

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

Over at the Comex-approved depositories on Friday, they reported receiving 41,748 troy ounces of gold, most of which ended up at HSBC USA.  Nothing was reported shipped out.  The link to that activity is here.

It was another very big in/out day for silver, as 855,443 troy ounces were received---and 746,527 troy ounces were shipped out.  The link to that action is here.

Nick Laird slid this chart into my in-box early yesterday evening MDT.  For the second month in a row the dollar value of silver eagles sold, has exceeded the dollar value of gold eagles sold.  That's beginning to happen with increasing frequency during the last couple of years---and as both Ted Butler and myself have been asking for a while---you have to wonder who is buying them all, as it isn't John Q. Public.

I had a whole bunch of stories---and taking the big axe to it only reduced the size of the pile by a little.  There are lot of quality items to read today, so I hope you can find the time for the ones that interest you the most.

¤ The Wrap

It’s important to remember that this silver warehouse turnover is no simple bookkeeping entry; this is take metal out of the warehouses and put in on trucks and take it off trucks and put it into the warehouse. Since I’m convinced that the surest (and maybe only) end to the silver manipulation is a physical shortage, how could I not notice a distinct and unique physical factor suddenly bursting onto the scene and then persisting for three years? And how could I not connect the dots and notice that the turnover pattern suddenly started just as silver was entering into a physical shortage in the spring of 2011?

As for the data being reliable, this silver turnover involves trucks, insurance, warehouses and auditors and assorted middlemen that track movement to the ounce. A typical truckload runs 600,000 oz of silver or $12 million, not an amount that wouldn’t be closely accounted for every step of the way. And it certainly costs money to move this amount of metal (or more) every day. That means that the silver is being moved for a good reason. Some still claim that the data is phony (because of some boilerplate disclaimer on the CME website), but what would be the point in reporting rapid turnover when it didn’t exist? - Silver analyst Ted Butler: 29 March 2014

Although there wasn't a lot of price activity, or huge volume, it was obvious to anyone who could see the tell-tale footprints, that JPMorgan et al were in the market again yesterday.  The biggest footprints were stopping gold's rise at $1,300 and silver at $20 the ounce--and the sell-offs after the London p.m. gold "fix" was in.

They also sliced another $10 off the gold salami yesterday, along with a few pennies in silver.  Here are the 6-month charts for both metals so you can keep up with the day-to-day activity as this engineered price decline unfolds.

With the HFT boyz that work for JPMorgan et al pretty much controlling the precious metal markets at the moment, it's a tough call on the prices going forward.  We already know what would happen if all four precious metals were left to their own devices---and it remains to be seen how long they can keep the prices down in the face of supply/demand fundamentals, no matter what their cause.

However, Comex paper is trumping everything at the moment, so we'll just have to wait it out.

Today, at the close of Comex trading, is the cut-off for Friday's Commitment of Traders [COT] Report---and along with that we get the companion Bank Participation Report [BPR] which will show us what the U.S. and non-U.S. banks have been up to in all four precious metals for the last month.  I'm expecting big improvements in the COT Report, but I'm not sure what to expect from the BPR.

We also get the job numbers at 8:30 on Friday, so expect gold and silver prices to get hammered on the news, or just moments before they're released.  This has been their S.O.P. for months now---and doubt very much that things will be different this time around.

As I type this paragraph, London has been open 45 minutes, as they are now on British Summer Times [BST].  Both gold and silver set new lows for this move down in morning trading in the Far East, but now that London is open, three of the four precious metals are rallying a bit---and are above yesterday's closing price in New York, albeit not by much.  Palladium is trading down a bit over a percent at the moment.  The volumes in both gold and silver are certainly higher than I like to see them at this time of day, so it's obvious that the HFT boyz are out and about.  The dollar index is down a handful of basis points at the moment.

And as I hit the send button on today's efforts at 5:25 a.m. EDT, gold and silver prices haven't changed much, although platinum is making a bit of a run to the upside at the moment.  Palladium is still down about a percent.  Volumes continue to climb, but haven't really increased all that much since I wrote the last paragraph about 90 minutes ago.  The dollar index is still down a handful of basis points.

I haven't the foggiest idea as to what might happen today.  Nothing will surprise me, but if I had to bet ten bucks, I'd say that the precious metals, gold and silver in particular, will come under selling pressure in New York once again.

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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