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Thursday, April 10: Today in Gold and Silver

Stocks in this article: GLD SLV

NEW YORK ( TheStreet) -- The gold price rallied about five bucks or so during early trading in the Far East on their Wednesday, but then began to sell off a bit starting around 2 p.m. Hong Kong time---an hour before the London open.  Then, at the noon London silver fix, the gold price got sold down another five bucks or so---and then didn't do much until the Fed minutes were released at 2 p.m. EDT.  The subsequent price spike ran into a not-for-profit seller within 30 minutes---and that was pretty much it for the remainder of the day.

The CME recorded the high and low ticks at $1,301.10 and $1,315.50 in the June contract.

The gold price closed in New York on Wednesday at $1,312.30 spot, up $4.30 on the day.  Volume, net of April and May, was fairly decent at 137,000 contracts.

The silver price got sold down back down below the $20 level the moment trading began at 6 p.m. EDT in New York on Tuesday evening---and traded within a dime of that price until noon Hong Kong time.  Then, like gold, the HFT boyz went to work, with the absolute low of the day coming minutes before 9 a.m. in New York.  The subsequent rally didn't get far---and the price spike at 2 p.m. ran into the usual sellers of last resort shortly after that.  From there, the price traded sideways into the close.

The high and low price ticks were reported as $20.095 and $19.60 in the May contract.

Silver closed yesterday in New York at $19.845 spot, down 21.5 cents from Tuesday's close.  Not surprisingly, gross volume was through the roof at almost 90,000 contracts, but netted out to 36,000 contracts---which was more than double the net volumes of both Monday and Tuesday.

The platinum price also rallied a bit in Far East trading yesterday---and also began to sell off about an hour before the London open.  The low tick, like silver, came at 9 a.m. in New York.  The metal rallied a bit after that---and manged to close up a couple of bucks on the day.

Palladium traded ruler flat once again, but popped five bucks or so on the Fed news---and finished up on the day as well.

The dollar index closed at 79.78 on Tuesday afternoon in New York---and then didn't do much until an hour before London opened.  At 10 a.m. BST, the index hit its 79.86 'high' of the day---and then began to fade until about 11:20 a.m. in New York. From there it rallied into the release of the Fed minutes, before getting hit for around 25 basis points when the news actually hit the tape.  After that, the index barely twitched.  The index closed at 79.53 down 25 basis points.

The gold stocks only opened down a percent---and then chopped sideways until 2 p.m.---before blasting skywards on the 'news'.   The rally ended when the seller of last resort showed up in the Comex futures market shortly after 2:30 p.m. EDT, but the stocks finished the day in the plus column, with the HUI up 0.65%.

The silver equities opened down a bit over a percent, but climbed back to unchanged within a couple of hours.  They, too, took off to the upside at 2 p.m.---but gave up a percent of those gains when JPMorgan et al put in an appearance in the Comex futures market around 2:30 p.m.  Considering the fact that silver closed down more than a percent yesterday, Nick Laird's Intraday Silver Sentiment Index closed up a remarkable 1.63%---and well off its high tick to boot!

The CME Daily Delivery Report showed that 16 gold and 14 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  Once again, the Issuers and Stoppers Report isn't worth the effort of hyperlinking.

There were no reported changes in GLD yesterday---and as of 10:07 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

Yesterday evening, the good folks over at the shortsqueeze.com Internet site updated the short positions of both GLD and SLV as of the end of March.  The short position in SLV declined by 4.77%---and is now down to 12,657,900 ounces/shares, or just under 394 tonnes.  The decline in the short position in GLD was far more substantial, as it dropped by 21.11%.  The short position in that ETF is now down to 1.09 million troy ounces of gold, or just under 34 tonnes.

Over at Switzerland's Zürcher Kantonalbank they reported that both their gold and silver ETFs had withdrawals for the week ending April 4.  Their gold ETF declined by 15,997 troy ounces---and their silver ETF dropped by 100,030 troy ounces.

There was a tiny sales report from the U.S. Mint yesterday, as they only sold 1,500 troy ounces of gold eagles.

Over at the Comex-approved depositories on Tuesday, there was pretty big activity in gold.  Precisely 1 metric tonne [32,150.000 troy ounces] was reported received over at Brink's, Inc.---and 148,344 troy ounces were shipped out for parts unknown.  The biggest chunk of it came out of JPMorgan's warehouse.  The link to that activity is here.

In silver, only one good delivery bar was reported received, but a very chunky 1,062,229 troy ounces were reported shipped out.  With the exception of one bar, all of it came out of HSBC USA and Canada's Scotiabank.  The link to that action is here.

I have the usual number of stories for a mid-week column but, once again, I'm a little short of precious metal related news items.

¤ The Wrap

Every man’s heart one day beats its final beat. His lungs breathe their final breath. And if what that man did in his life makes the blood pulse through the body of others and makes them believe deeper in something that’s larger than life, then his essence, his spirit, will be immortalized by the storytellers — by the loyalty, by the memory of those who honor him, and make the running the man did, live forever. - James Brian Hellwig: The Ultimate Warrior

The attempt to sell gold back below the $1,300 spot price mark didn't pan out---and I was happy to see gold jump back into positive territory on the Fed minutes news.  Silver, of course, was another matter entirely, as JPMorgan et al kept pounding away at the price---causing more technical fund selling of long positions, along with new short positions being added.  JPMorgan et al happily took the other side of all these technical fund trades---ringing the cash register in the process.  This was the reason that silver's volume was through the roof yesterday---and none of this price/volume activity will show up in tomorrow's Commitment of Traders Report, as it happened the day after the cut-off.

Here are the 6-month gold and silver charts once again.

The gold price closed right at its 50-day moving average again---and would have handily closed above it after the Fed news at 2 p.m. EDT yesterday, but a seller of last resort was on hand to ensure that didn't happen.

The silver price came within a few pennies of taking out its March 27 low yesterday---and is about a buck away from taking out its late-December 2013 low as well.  Could JPMorgan et al pull that off?  You betcha---and in a New York minute if desired.  All they have to do is turn their HFT boyz loose like they did yesterday---and the combination of long contract selling and new shorting by the technical funds would take care of that.  "Da boyz" have painted the silver chart to perfection for just such an event.  The only question remaining is---will they, or not?

I was happy to see the gold stocks do as well as they did yesterday, even before the Fed news, as they were already hanging on to tiny gains before the announcement.  But the real surprise was in the silver equities.  Despite the fact that the metal itself got pounded, there were buyers in the market picking up every silver stock that was being sold in a panic, plus a lot more.  Silver closed down more than a percent, but Nick's chart was up nicely on the day.

As I write this paragraph at 3:47 a.m. EDT, the market in London has been open about 45 minutes---and since the open last night in New York, gold has spent almost the entire Thursday trading session in the black---and rallied a bit more during the early going in London as well.

The silver price did nothing until around 8 a.m. Hong Kong time---and it's attempt to rally above the $20 spot price mark met with the usual selling pressure.  However, it really took off at the London open, but ran into very heavy selling pressure once again as it broke above $20.20 spot---and is now back at $20.12 as I type this sentence.

Platinum also spent most of the Far East trading session in positive territory as well---and it, along with palladium are back in rally mode as of the London open.

Gold and silver volumes, which had been more or less 'normal' going into the London open, have both blown out considerably, so it's obvious that JPMorgan et al are at battle stations in all four precious metals once again.  If/when they put these rally fires out, it will be of interest to see how much Comex paper they had to throw at them to get them to behave.  Right now, gold volume is north of 33,000 contracts---and 99.9% of that is in the current front month.  In silver, the gross volume is already north of 13,000 contracts---and a bit over 10 percent of that is roll-overs---and all of the remaining volume is the current front month as well.  Based on that, it's easy to see that the lion's share [and then some] of the current volume is all HFT price management.

And to give you some idea of how tiny the platinum market is, as of this writing at 4 a.m. EDT, there have been 1,701 platinum contracts traded on the Comex so far today---and all but one of those contracts is in the current front month, which is July.  It's even more ridiculous in palladium.  Only 525 contracts have been traded so far on Thursday---and all except one is the current front month, which is June.

As of last Friday's Bank Participation Report---'4 or less' U.S. bullion banks in platinum---and '3 or less' bullion banks in palladium, were net short 19.2% and 23.5% of the platinum and palladium markets respectively.  And to put it in real perspective, the '4 or less' U.S. bullion banks were net short a stunning 12,828 Comex platinum contracts---and '3 or less' U.S. bullion banks were net short 9,653 Comex contracts in palladium.

It should be obvious to all except the willfully blind, that there's a very good reason why platinum and palladium prices are going nowhere.

If you want to review the Bank Participation Report data in my Saturday column, the link is here---and you have to scroll down a bit to find it.

And as I fire this off to Stowe, Vermont at 5:25 a.m. EDT, I note that all four precious metals continue to struggle higher---and are obviously still being met with heavy selling pressure, as the not-for-profit sellers pull out all the stops. Gold volume is approaching 45,000 contracts---and silver's gross volume is a hair under 20,000 contracts.  I forgot to mention what the dollar index was doing---and it has remained almost unchanged from it's open in early Far East trading on their Thursday.

Using the past as prologue, I'll stick my neck out here and surmise that we may have already seen the highs for both silver and gold today.  However, I'd be delighted to be proven wrong, as I'd dearly love to see JPMorgan et al get over run at this point.  And they just might if Russia and maybe China decide to move the battlefield onto the Comex futures market.

That's more than enough for one day.  I hope your Thursday goes well---and if you live west of the International Date Line, I hope you have a good weekend.

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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