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Tuesday, April 15: Today in Gold and Silver

NEW YORK (TheStreet) -- The gold price rallied sharply at the 6 p.m. Sunday evening open in New York---and ran into short sellers of last resort almost immediately.  Volume wasn't overly heavy, but it was enough to do the job.  From there the price didn't do much until the 8 a.m. BST London open---and then got sold down to its low of the day, which came at 8:30 a.m. in New York, 10 minutes after the Comex open.  The subsequent rally got capped shortly before the London close---11 a.m. EDT---and from there got sold down $5 before trading sideways starting at noon in New York.

The CME recorded the low and high ticks as $1,318.70 and $1,331.40 in the June contract.

Gold finished the Monday session in New York at $1,326.60 spot. up $8.20 on the day.  Net volume was around 106,000 contracts, which was about 5,000 more than Friday's volume---and pretty light.



It was more or less the same chart pattern in silver, except for the fact that it got sold down once London began to trade---and looking at the chart pattern on the decline, it appears that the technical funds were doing some shorting, which added to the size of the price decline.  The low was in at the noon silver fix---and from there the price was allowed to rally back to the $20 spot price mark---and that as it for the day, as every rally back over that price got firmly put in its place.

The low and high ticks were $19.735 and $20.11 in the June Contract.

Silver closed in New York at $19.965 spot, up half a cent.  Net volume was 25,500 contracts, which is on the lighter side.



Here's the New York Spot Silver [Bid] chart on its own, so you can see how carefully the silver price was managed around the $20 price mark in the Comex session.



After their initial rallies at the New York open on Sunday evening, neither platinum and palladium were allowed to get far after that.  Here are the charts.





The dollar index closed late Friday afternoon at 79.49---and spiked down to 79.42 immediately, before heading north seconds later, settling out at 79.62.  From there it didn't do much until about 20 minutes after London opened.  The subsequent rally took the index up to 79.82 before it fell back a bit into the close.  The dollar index finished at 79.76---up 27 basis points on the day.



The gold stocks gapped up about 2% at the open---and hit their high tick the same time as the gold price did, shortly before the London close.  They hung on to most of these gains until shortly before 3 p.m. EDT---but then got sold down about 1% going into the New York close.  The HUI finished up 1.49%---the exact same amount it lost on Friday.



The silver equities put in a similar performance, but Nick Laird's Intraday Silver Sentiment Index only closed up 1.20---which isn't bad considering that the metal itself closed flat on the day.



I forgot to "fill in the blanks" for Friday's CME Daily Delivery Report.  I have the paragraph typed before the CME posts the numbers on their website around 10 p.m. EDT---but then put "x"s where the actual numbers are supposed to go---and then fill them in when I edit the column, or sooner if I remember.  The editor missed that---and he ensures that he'll be more careful next time.

Anyway, the Friday numbers were nothing to write home about, as only three gold and two silver contracts were posted for delivery within the Comex-approved depositories on Tuesday, so you didn't miss much.

The CME's Daily Delivery Report for yesterday showed that 45 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  Jefferies was the short/issuer on all 45 contracts---and JPM and Canada's Scotiabank stopped 38 of them.  The link to yesterday's Issuers and Stoppers Report is here.

An authorized participant added gold to GLD yesterday---57,801 troy ounces to be exact.  And as of 6:47 p.m. EDT yesterday evening, there were no reported changes in SLV.

Since yesterday was a Monday, there was a decent sales report from the U.S. Mint.  They sold 5,500 troy ounces of gold eagles---and 752,500 silver eagles.

There was a pretty decent deposit in gold over at the Comex-approved depositories on Friday, as 158,397 troy ounces were reported received.  About a tonne went into HSBC USA---and the balance was taken by Canada's Scotiabank.  Nothing was shipped out.  The link to Friday's activity is here.

It was another decent in/out day in silver as well.  597,216 troy ounces were reported received---and 607,136 troy ounces were shipped out.  The link to that action is here.

Yesterday, reader "T.B." sent me the information below about 1-ounce gold coin holdings at the Permanent Fund---and I thought it worth sharing.

Ed,

Just thought I'd give you an update on the 1-ounce gold coin holdings of the Permanent Fund.  As normal it's delayed info, but should give you some insight to the supply/(decreasing) demand for the newly minted eagles/maples.
 
Holdings on July 31, 2013: 1,200,000 coins
Holdings on Oct 31, 2013: 1,080,000 coins
Holdings on Jan 31, 2014: 930,000 coins
 
Without the selling of some 270,000 coins over a six-month period, the mint stats would obviously have been that much stronger.  I guess one has to assume that these coins made their way back into individual investor aftermarket sales. 
 
When you start to see big 25-50,000-ounce sales weeks in gold eagles again you can probably assume that the $9 Billion Permanent Fund is once again growing and increasing its mandated allocation to gold.
 
Cheers,  T.B.

Here's a chart of the almost-18-year-old Ukrainian hryvnia [the national currency] vs. the U.S. dollar over the last six months---a graph that I shamelessly stole from an email that Casey Research's Bud Conrad sent around yesterday.  One would suspect that it's only a matter of time before the U.S. dollar chart is similarly configured.



I have a lot of stories today---and the final edit is yours.

¤ The Wrap

But under the hood, things got a lot stranger in silver.  For starters, the concentrated short position of the four largest shorts increased by nearly 1,900 contracts. Accordingly, I would peg JPMorgan’s short corner in Comex silver to now be 22,000 contracts, up from the 20,000 contracts the bank held last week. After removing spreads (as must be done), JPMorgan holds 16.6% of the short side of the entire Comex short position in silver futures. If the 4 and 8 largest shorts in Comex silver added shorts (which they did to the tune of 2.200 contracts combined) and the commercial short position increased by less than 500 contracts that means the raptors (the smaller commercials apart from the big 8) had to buy 1,700 new longs, which was the case.
 
Here’s what is so strange – even as the raptors have built up their net long position by almost 18,000 contracts to 37,500 contracts since March 4, JPMorgan and the other 7 big silver shorts have added 7,000 new shorts in that same time (with JPM accounting for 4,000 new short contracts). In fact, the concentrated net short position of the 8 largest Comex silver shorts is now at the highest level in three and a half years; 66,435 contracts, or the equivalent of 332 million oz. Huh? Silver prices are stinking up the joint and near the lowest levels in 3.5 years and the concentrated short position is the largest it has been in that time. What other evidence is required to prove that silver has been manipulated lower by JPMorgan and the other concentrated Comex shorts?

Up until very recently, the raptors and JPMorgan and the other big concentrated silver shorts generally worked the same side of the street, but with different agendas. Usually it was the raptors and the big shorts aligned against and milking the technical funds; the raptors for pure profit, the big shorts in order to contain the price first, with profits a secondary objective. That meant that the raptors and JPM and the other big silver shorts all bought and sold in harmony. These past four or five weeks have featured a very different pattern with the raptors buying big and JPM and the other big shorts actually selling pretty heavy. I don’t think I’ve ever seen the raptors adding long contracts while JPM and the others added shorts. - Silver analyst Ted Butler: 12 April 2014

It was another day that, even though there were relatively low volumes in both silver and gold, it was obvious that prices were being actively managed---and that the prices of all four precious metals [silver and gold in particular] were capped during the New York trading session.  Fortunately, all this data should be in Friday's Commitment of Traders Report.

Here are the silver and gold charts with yesterday's price data included.

With the exception of one day, silver has been closed at or just below the $20 spot price for three straight weeks.  A chart pattern like the one above cannot occur in a free market---which it isn't.

The gold price has now closed about its 50-day moving average for 3 consecutive days---and it will be interesting to see if this rally is allowed to continue.  Even if it does continue, it's obvious from the chart patterns of the last week or so, that the daily price rises are being heavily controlled---and it's equally as obvious that all four precious metals would be doing much better than they are if allowed to trade freely.  It's still entirely possible that we could get a "failure" at this level, but we'll have to wait it out.

In the Grant Williams' commentary that's posted in the Critical Reads section, he had a couple of gold charts embedded in it that you can't make out at all, so I asked Nick to send them along---and here they are below.  I've posted them on many occasions---and the "click to enlarge" feature works wonders here.  The contents in the dialogue boxes tells all.  If you started with $100 on January 1, 1970---and invested as indicated on these two charts, the amounts show on the far right is what that $100 investment would have returned after 40+ years.

As Grant pointed out---and as I've said on many occasions as well---these 40+ year charts are prima facie evidence of the Anglo/American price management scheme that has been in place since gold hit $850/oz. 30+ years ago.  Only the willfully blind can't/won't see it, but I know you can, dear reader---or you wouldn't be reading this.

Today is the cutoff for this Friday's COT Report and as always, I'm hoping that everything that happens today in gold and silver gets reported in a timely manner.  The data from two week ago, wasn't---and we had big spillover into last Friday's report, which really skewed the numbers in the last two reports.

And as I write this paragraph at 3:05 a.m. EDT, the London market has been open about five minutes.  I also note that the HFT boyz have been up to their usual tricks during Far East trading, as all four precious metals got "the treatment."  Gold volume is already a hair over 30,000 contracts---and silver's volume is around 9,000 contracts---with little, if any of the volume, rollovers or switches.  And not that it matters, but the dollar index is up a handful of basis points.

When I was talking to Ted yesterday, I mentioned the fact that I was concerned about the large net long position that still existed in the Non-Commercial category of the COT Report.  In reply, Ted pointed out that there was the big long position in the "Managed Money" category in the Disaggregated Commitment of Traders Report.  The "Managed Money" position is included in the "Non-Commercial" category of the legacy COT Report, the one I follow every week.  But, as Ted mentioned, normally this category would be net short---especially considering the current silver price action as of late---but that's not the case this time.  At the moment, the category is net long about 8,400 contracts---and Ted is wondering who might be sitting in the bushes on the long side at this juncture---and in that category in particular.  That's a good question---and I know that Ted will have much more to say about it in his mid-week commentary to paying subscribers tomorrow.

And as I send today's column off to Stowe, Vermont, I note that all four precious metals are still under selling pressure from the high-frequency traders.  Gold volume is over 45,000 contracts---and silver's net volume is just above 10,000 contracts.  The dollar index is still up about the same number of basis points as it was a couple of hours ago.

I'm must admit that I'm not exactly looking forward to what might await me from a price perspective when I check in later this morning.  As you are more than keenly aware, the price action at the moment has nothing to do with supply and demand, as it's all paper trading on the Comex.  You wonder what has to happen to goad the mining companies into action.  If not these engineered prices---and not the multitude of class-action lawsuits against the LBMA---then what, you might ask?  A good question for which there is no answer, as it doesn't appear the executives running these companies have a gonad to share amongst each other---let alone two of them.

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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