¤ The WrapAs regular readers know, it is not just the fact that gold, silver, copper, platinum, and palladium are traded on the Comex/Nymex; it is in how each are traded that most reasonably explains why all five declined sharply on Tuesday. The pricing in each is determined by the same technical fund/commercial paper trading tango that I harp on continuously in Comex silver and gold. The price of all five metals went sharply lower yesterday as a direct result of the commercials (led by JPMorgan) rigging prices lower in order to induce technical fund selling (so that the commercials could buy). This is the essence of the price control that the commercials possess. I know it seems counterintuitive and difficult for many to grasp, but on the big down days like yesterday, the commercials were not the big sellers, but were the big buyers. In fact, the sole reason for the big price decline was for the purpose of allowing the commercials the opportunity to buy. - Silver analyst Ted Butler: 16 April 2014 After Tuesday's engineered price decline, "da boyz" decided to take a breather on Wednesday. I wouldn't read much of anything into yesterday's price action, except to point out that the tiny rallies in all four precious metals that began at the Comex open in New York, all ran into a not-for-profit seller at 8:37 a.m. EDT, which was less than 15 minutes after the open. This was particularly noticeable in silver. Here are the six-month gold and silver charts once again. As I mentioned yesterday, silver is pretty much washed out to the downside---and it's impossible to know what's in store for the other three precious metals going forward. JPMorgan has short-side corners in silver, platinum, and palladium---and long-side corners in gold and copper. What they do, are instructed to do, will determine prices going forward. I would suspect that not much will happen, or be allowed to happen, at least until we get past first notice day for the May delivery month. Of course things could go bump in the night sooner than that, but as we know, the real world supply and demand pricing mechanism is no longer functioning in these five metals---and if there is market-moving news to the upside, "da boyz" are there to kill any rallies before they get even close to getting out of hand. And as I type this paragraph at 3:20 a.m. EDT, I note that both gold and silver got sold down a bit in Far East trading---and are still down now that London has been open for 20 minutes. Gold is lower by about four bucks---and silver is down another 15 cent. Platinum and palladium are within a dollar of unchanged. Volumes are very light in both gold and silver---15,000 contracts in one and 5,000 contracts in the other, so I wouldn't read a thing into the current price action. The dollar index took a bit of a header about 9 a.m. Hong Kong time---and is down 15 basis points as of this writing.
I've been looking at the CME's Daily Bulletin closely starting on Wednesday to see if there's a clue in the volume/open interest numbers to indicate if the figures from Tuesday's big sell-off were reported in a timely manner or not---and it's not possible to tell. And as Ted Butler has mentioned on numerous occasions over that last ten years, the bullion banks [besides withholding data] can hide their tracks very well using spread trades. This could be one of those times---and any speculation in advance is fraught with danger, as I've had egg on my face a number of times over the years from attempting to divine what the Commitment of Traders numbers will show. Whatever they are, I'll have them for you on Saturday.
And as I hit the send button on today's column at 4:55 a.m. EDT, there hasn't been much change in either gold or silver prices, but platinum and palladium are now both down a few dollars from Wednesday's close in New York. Volumes in both silver and gold are heavier now, of course, but nothing really out of the ordinary for this time of day---and the dollar index is still down the same amount as it was a bit over 90 minutes ago.
That's everything for today---and I'll see you here tomorrow.