Thursday, April 3: Today in Gold and Silver
NEW YORK ( TheStreet) -- The gold price didn't do a whole heck of a lot in either Far East or early London trading on their Wednesday. But shortly before 1 p.m. BST in London, the price spiked sharply higher, only to run into a seller of last resort about 15 minutes later. After making it up to the $1,295 spot price mark during morning trading in New York, the price got sold off five bucks by 2 p.m. EDT---and after that the price traded flat into the electronic close at 5:15 p.m.
The CME Group recorded the low and high ticks as $1,278.90 and $1,294.90 in the June contract.
The gold price ended the trading day at $1,209.90 spot, up $10.10 from Tuesday's close. Volume, net of April and May, was 130,000 contracts.The silver price traded within about a dime of its Wednesday close for all of Far East and London trading, but blasted higher at the same time as gold---about 12:45 p.m. in London. That rally got cut off at the knees by a not-for-profit seller about five minutes before the Comex opened---and by the Comex open the price was back in the box---and JPMorgan et al even managed to close the price back below the $20 spot mark by the end of the day as well. The low and high price ticks were recorded by the CME Group as $19.73 and $20.145 in the May contract. Silver closed yesterday in New York at $19.975 spot, which was up 21.5 cents from Wednesday's close. One can only imagine what the closing price would have been if "da boyz" hadn't stepped in. Net volume was 32,000 contracts. Platinum made a rally attempt early in Far East trading, but that got turned back around 9:30 a.m. Hong Kong time. After that it didn't do much until it began to rally just before noon in London. It wasn't much of a rally---and it ran out of gas shortly before the Comex close. After that it traded sideways. Palladium traded pretty much ruler flat until London opened. From there it developed a positive price bias, which turned into a decent rally around 11 a.m. BST. That happy state of affairs lasted until the Comex open---and at that time it suffered the same fate as gold and silver prices did. The dollar index closed late on Tuesday afternoon in New York at 80.08---and as I mentioned in The Wrap section of yesterday's column, it barely got saved from falling below the 80.00 mark [for the third time in 24 hours] just a few minutes before the 8 a.m. BST London open. A rally with a little more substance to it began at precisely 8 a.m. EDT---and the high tick of the day was in shortly before noon in New York. After that, the dollar gave back a handful of basis points before trading flat for the remainder of the Wednesday session. The index closed at 80.22---up 14 basis points on the day. The gold stocks gapped up 2% at the open---and after that they didn't do much. The HUI closed up 2.78% The silver equities turned in a similar chart pattern, but by the end of the day, Nick Laird's Intraday Silver Sentiment Index closed up only 1.57%. The CME's Daily Delivery Report for Day 4 of the April delivery month showed that 716 gold and 60 silver contracts were posted for delivery within the Comex-approved depository on Friday. The biggest short/issuer in gold was Barclays with 522 contracts---and in distant second was Credit Suisse with 84 contracts. It should come as no surprised that the two biggest long/stoppers were Canada's Scotiabank with 369 contract---and JPMorgan with 168 contracts in its in-house [proprietary] trading account, along with an additional 69 in its client account. In silver, the only issuer was F.C. Stone---and Canada's Bank of Nova Scotia stopped 59 of the 60 contracts. The link to yesterday's Issuers and Stoppers Report is here. There were no reported changes in GLD---and as of 9:33 p.m. EDT yesterday evening, there were no reported changes in SLV, either. But when I was editing today's column at 3:29 a.m. EDT, I note that there had been a changes in SLV, as an authorized participant withdrew a smallish 145,922 troy ounces. This may have been a fee payment of some kind. The U.S. Mint didn't have a sales report yesterday. However, they did have an April Fool's joke up their sleeve which I didn't notice on Tuesday---but Ted Butler was more than happy to point it out to me when I spoke to him on the phone yesterday. I said in my Tuesday column that the mint did not have a sales report for the last day of March, which was Monday---so I made the assumption that they were done for the month and that the total silver eagles sales for March were as I reported on Saturday---and that was 4,476,000. That proved to incorrect by a mile---almost 20%. When the mint reported April 1 sales of 293,000 silver eagles on Tuesday, I dutifully reported it in my column yesterday---but what I missed was the fact that they also added 878,000 silver eagles sales to March at the same time. So March sales for silver eagles are now up to 5,354,000---and not the 4,476,000 that I reported on Saturday. Year-to-date silver eagles sales as of the end of March now total 13,879,000---and not the 13,001,000 ounces that I, along with all the news media, were tricked into reporting. Very little that's silver related gets past Ted---and here's what he had to say about March silver eagles sales in his commentary to paying subscribers in his mid-week column yesterday afternoon: " This is the highest total of Silver Eagles sold in any “regular” month in the 27 year history of the American Eagle Bullion Program. There have been three Januarys where more Silver Eagles were sold than were sold this March, but those Januarys always “borrowed” sales from December as the Mint retooled for coins with the new yearly date. The 5.3 million coins sold this past month indicate a daily production run rate or blank availability never achieved before by the Mint of more than 170,000 coins per day." And the question that still remains unanswered is---who the &%$@ is buying all these things? As both Ted Butler and I have said, it ain't John Q. Public. But whoever it is, not only has the deepest pockets in the world, but pretty much knows that the days of $20 silver are numbered---and it's only a matter of what 3-digit price tag this metal will have when the smoke clears. There wasn't a huge amount of activity over at the Comex-approved depositories in either gold or silver on Tuesday. In gold there were precisely 2 metric tonnes of gold deposited in Scotiabank's vault---and two kilobars were removed. The link to that activity is here. In silver, nothing was reported received---and only 79,047 troy ounces were shipped out. The link to that activity, such as it was, is here. Here are the intraday price charts for both gold and silver for March, courtesy of Nick Laird. They're computed by adding the 2-minute price tick data for every day of the month---and averaging out each 2-minute time period for the entire month. What the chart shows is the daily primary price trend once all the day-to-day noise is averaged out. In gold it showed that the average high of the day came at 12:30 p.m. Hong Kong time, with the usual take-down around the Comex open, then the rally into the London p.m. gold fix---and the price pressure starts anew, with the low coming very late in the electronic trading market. The average loss in gold per business day was about $2.70. The Intraday silver chart for March is almost a duplicate of the gold chart---and requires no further embellishment from me, except for the fact that silver lost, on average, a bit over 8 cents every business day during March. For the second day in a row I don't have that many stories---and I'll leave the final edit up to you.
¤ The WrapThe only continuing concern for lower prices is the market structure on the COMEX and what JPMorgan intends following its recent heavy selling in COMEX gold and silver. This Friday’s Commitments of Traders and Bank Participation Reports should show a reduction in the commercials’ total net short position with the only real question being how much more to go, in terms of lower prices and further commercial buying? Only one entity has the answer to that question. - Silver analyst Ted Butler: 02 April 2014 It was another day where the short sellers of last resort had to ride to the rescue to prevent gold, silver and palladium prices from blasting skyward once again. Some day JPMorgan et al won't be there when prices rally like that---but I haven't the foggiest idea of when that day will come. However, it can't come soon enough to suit me---or you either, I would imagine. Here are the 6-month charts for both gold and silver showing yesterday's price action. Are we in a bottoming pattern here? Based on the numbers both Ted and I expect in Friday's COT Report, the answer is no---but as I've been saying all week, I'm surprised that "da boyz" haven't pushed their advantage to the downside. It's impossible to tell where we go from here, but I'm cheering for up. But if the reaction to yesterday's blast off in prices is any indication of what will happen during the next price rally, then JPMorgan et al will be piling in on the short side in silver---and selling more long contracts in gold---to cap this rally as well. I certainly don't want that to happen, but that's the way it has been for 15 years now---and only the willfully blind won't acknowledge it, even though they can clearly see it. Here's a chart courtesy of Nick Laird over at sharelynx.com. It's the intraday price chart for gold for the last 30 days---and Nick's embedded comment was as follows " One could surmise here that the bottom is in for gold---and judging by the reaction in the price, it looks like the traders think so as well." We'll see. Jim Rickards latest tome " The Death of Money: The Coming Collapse of the International Monetary System" hits the bookstores within the next week. I've already read an advanced copy---and to say it is a must read is an understatement. Most of the "juice" about gold shows up in Chapters 9 and 10---but I didn't make the mistake of reading those chapters first, as the chapters that precede them, built the logical case for gold step by step. I'll quote the last two paragraphs on page 267 to give you an idea of the flavour of it---and where Jim's head is at. " Financial avalanches are goaded by greed, but greed is not a complete explanation. Banker's parasitic behavior, the result of a cultural phase transition, is entirely characteristic of a society nearing collapse. Wealth is no longer created: it is taken from others. Parasitic behavior is not confined to bankers; it also infects high government officials, corporate executives, and the elite societal stratum." " The key to wealth preservation is to understand the complex processes and to seek shelter from the cascade. Investors are not helpless in the face of elite decadence." If you're interested---and you should be---the link to ordering it is here. And as I type this paragraph at 3 a.m. EDT, London has just opened. Nothing happened in Far East trading on their Thursday---and all four precious metals are up a bit from Wednesday's close. Volumes are vanishingly small in both silver and gold---and the dollar index is basically unchanged. As I've mentioned on numerous occasions over the years---and several times during the last week or so, it would seem the most natural thing in the world for Russia [and maybe China] to pull the plug on the Anglo/American precious metal price management scheme, as they've both known about it for over a decade. If push really becomes shove in other areas, they just might---and that would give JPMorgan and the BIS et al the perfect out, as the real reason would never come to light. Then the whole world would know that it was "those pesky Russians" that brought this whole thing down on our heads---and no one would be the wiser. But will it happen? Beats me, but as I've suggested to Ted over the years, this whole thing might end under the cover of some economic, financial, monetary, or maybe even military event---so that all eyes will be elsewhere. Opportunities of this magnitude don't grow on trees---and it will be interesting to see if it ends in this manner or not. And as I send this off to Stowe, Vermont at 5:10 a.m. EDT, I see that the smallish rallies going into the London open all got sold down to below their closing prices in New York on Wednesday---and only palladium is still up on the day. Volumes have really picked up in both gold and silver---and most of it is of the HFT variety, as there's very little activity except in the current front months of both metals. The dollar index is still flat. That's all I have for today---and after yesterday's price action, nothing will surprise me when I power up my computer later this morning. Enjoy your day---and I'll see you here tomorrow.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts