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TheStreet Open House

Friday, April 4: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price didn't do much during Far East trading on their Thursday, but was up a couple of bucks by the London open.  The selling began at the point---and the low of day came shortly after 12 o'clock noon BST.  The gold price rallied a bit from there until a few minutes after the London close---and didn't do much after that.  Volume was very light.

The high and lows are barely worth mentioning---$1,294.20 and $1,281.90 in the June contract.

Gold closed in New York on Thursday at $1,286.80 spot, down $3.10 from Wednesday's close.  Volume, net of April and May, was only 95,000 contracts.

It was more or less the same chart pattern in silver, as it's brief foray back above the $20 spot price mark got smacked the moment that London opened as well---and that was that.

The high and low ticks were recorded by the CME as $20.08 and $19.66 in the May contract.

Silver finished the Thursday session at $19.815 spot, down 16 cents from Wednesday.  Net volume was pretty light at 28,500 contracts.

Both platinum and palladium got sold off a bit as well, but rallied a hair starting late in the morning in London---and both closed up a few bucks on the day.  Here are the charts.

The dollar index closed in New York on Wednesday afternoon at 80.22---and traded pretty flat until its spike low of 80.16 which came at exactly 8:30 a.m. in New York.  The subsequent rally was mostly done by 9:15 a.m. EDT---and the index didn't do much after that.  It closed at 80.46---which was up 24 basis points on the day.

The gold stocks gapped down a bit at the open, hit their low of that day a minute or so after 10 a.m. EDT---and didn't do much until 2 p.m.  Then they rallied into the close---and the HUI cut its loses---finishing down only 0.50%.

However, the silver equities got sold down harder, but with a very similar chart pattern---and at their low, were down 2%.  But, like the gold shares, the silver shares rallied a bit into the close as well---and Nick Laird's Intraday Silver Sentiment Index closed down 1.54%.

The CME's Daily Delivery Report for Day 5 of the April delivery month showed that 60 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Monday.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changed in GLD---but after a small withdrawal from SLV on Wednesday, there was a deposit of 672,909 troy ounces yesterday.  Based on the price action over the last few days, I'd guess that the deposit was made to cover a short position, a fact that won't be known for sure until late this month when the good folks over at shortsqueeze.com issues their report that covers the current reporting period.

Over at Switzerland's Zürcher Kantonalbank for the ten day period ending March 31, they reported declines in both their gold and silver ETFs.  Their gold ETF was down 4,864 troy ounces---and their silver ETF declined by 134,422 troy ounces.

The U.S. Mint had a small sales report yesterday.  They sold 1,000 troy ounces of gold eagles---and 3,000 one-ounce 24K gold buffaloes.

There wasn't much in/out activity in gold over at the Comex-approved depositories on Wednesday, as only 3,200 troy ounces were reported shipped in---and 208 troy ounces were shipped out.  The link to that activity is here.

But, as is usually the case, there was much more in/out activity in silver as 591,718 troy ounces were received---and 700,629 troy ounces shipped out.  Most of the action was at the CNT Depository---and the link to that is here.

It was another day when there weren't that many stories floating around.  I have a few more than I did yesterday, but not by a lot.

¤ The Wrap

There have been no serious flash crashes in the stock market in four years; there have been too many HFT price smashes in COMEX gold and silver in that time. The most egregious price smashes were the two separate 30%+ price plunges in silver that occurred within a few days, in May and September of 2011. Twice silver fell by $15 in short order, or more than three times the percentage amount of the great May 6, 2010 stock market crash. Yet, unlike the immediate attention from the regulators that the 9% temporary decline in the stock market attracted, neither the CFTC nor the CME had any comment whatsoever on the two silver smashes in 2011, even though these were the largest price declines in commodity history and silver was supposedly under a CFTC formal investigation at those times. - Silver analyst Ted Butler: 02 April 2014

With all four precious metals enjoying smallish rallies going into the London open, it should have been obvious to anyone that the sell-offs in all four were premeditated, as they all got sold down at the very same instant the moment that trading began at 8 a.m. BST.  No free market ever operates like this.

Nothing has changed since yesterday, as we're still at the mercy of JPMorgan et al.  This will continue until we aren't---and all the commentaries by other so-called analysts in precious metals as to where prices are headed [including mine] don't amount to a bucket of warm spit.

As I write this paragraph, the London open is about 30 minutes away.  Gold and silver are trading unchanged from Thursday's close in New York---and both platinum and palladium are down a couple of bucks each.  I've never seen volume this light, not even during the Christmas/New Year's holiday season just past.  Gold volume is 7,500 contracts---and silver is just 1,800 contracts.  Based on that, I wouldn't read a thing into the current price of any of the four precious metals.

Today we the jobs report at 8:30 a.m. EDT and, as always, it will be interesting to see how gold and silver react, or are allowed to react---either at, or minutes before, the numbers become public.

The other two reports today are the weekly Commitment of Traders Report---and the April Bank Participation Report.  These reports are generated from data up to the 1:30 p.m. EDT cut-off at the Comex close on Tuesday afternoon.  And as I say every time at this juncture, the data in the Bank Participation Report is extracted from the COT Report---and for that one day a month we get to see what JPMorgan and the other U.S. banks are up to, along with what's happening in the non-U.S. banking system as far as their collective short positions in all four precious metals are concerned.

As the previous reports have shown---and this one will as well---except for the long-side corner in gold held by JPMorgan, every other bank on Planet Earth that holds Comex contracts in the precious metals, is net short all four of them.  It only remains to be seen how bad the report is.

As Ted Butler mentioned in his mid-week commentary to his paying subscribers on Wednesday, there will certainly be improvements in both reports, but it's only a matter of degree.  And whatever the numbers show, I'll have it all for you in tomorrow's column.

And as I send this off to Stowe, Vermont at 5:15 a.m. EDT, I see that both gold and silver have rallied a hair during the first couple of hours of trading in London.  Gold is up about five bucks---and silver is up a dime.  Platinum and palladium are each down a dollar or so.  Needless to say, volumes are way up from what they were 30 minutes before the London open.  Gold volume now sits at 17,500 contracts---and silver's net volume is now 4,000 contracts, so it's obvious that even this smallish positive price momentum is being met with fairly chunky selling resistance.  The dollar index is still flat.

I'd love to be proven wrong of course, but I already have a pretty clear idea as to what the gold and silver price charts are going to look like by the time I roll out of bed later this morning.

But before heading off to bed, I want to remind you that today is the LAST DAY that you can sign up for the Casey OnePass.  It's one heck of a bargain, and you can read all about it here.  Naturally, Casey Research's 90-day risk-free policy applies in full.

Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll 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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