Thursday, April 17: Today in Gold and Silver
NEW YORK ( TheStreet) -- The gold price sold off $5 or so during early Far East trading, but had gained it all back by shortly after 9 a.m. in London---and after that the price didn't do a thing until the Comex open. The rally that began at that point got dealt with in the usual manner less than 15 minutes later---and that was it for the remainder of the Wednesday trading session. The lows and highs aren't worth the effort of looking up.
Gold closed in New York at $1,302.20 spot, down 20 cents from Tuesday's close. Volume, net of May, was around 127,000 contracts.
Naturally enough, the silver price got manhandled the most of all four precious metals. The silver price hit its low of the day about 30 minutes before the London open---and the rally that began shortly before the Comex open got dealt with in the usual manner as well---and at the exact same time as the tiny rally in gold got put in its place. After that, the silver price traded pretty flat. The CME Group reported the low and high ticks as $19.325 and $19.805 in the May contract, an intraday move of well over 2%. Silver closed yesterday at $19.63 spot, up 7 cents from Tuesday. Volume, net of roll-overs, was 30,500 contracts. Platinum didn't do much yesterday---and palladium closed up a bit over a percent. Here are the charts. The dollar index closed late on Tuesday afternoon in New York at 79.79---and after flopping around a bit on either side of unchanged on Wednesday, finished the day at 79.83. Nothing to see here. The gold stocks opened up a bit, but there was someone there to happily sell them down---and they never saw positive territory again, although they finished off their lows, as the HUI closed down "only" 1.00%. I spoke with John Embry yesterday---and we're both of the opinion [and have always been] that the precious metal equities are almost as managed as the metal prices themselves. And despite the fact that the silver price did much better, that didn't help the silver equities one bit, as Nick Laird's Intraday Silver Sentiment index closed down another 1.47%. Over at the Comex-approved depositories they reported that 76 gold and one silver contracts were posted for delivery on Friday within the Comex-approved depositories. The largest of the short/issuers was Jefferies once again---and the two biggest long/stoppers were the two usual suspects, JPMorgan and Canada's Scotiabank. Between them, they stood for delivery on 65 contracts. The link to yesterday's Issuers and Stoppers Report is here. The GLD ETF had a monster withdrawal yesterday, as 269,731 troy ounces were removed. What the bullion banks giveth, they can also taketh away---and they did. GLD is now back at the same level it was at the beginning of 2014. And as of 9:27 a.m. EDT, there were no reported changes in SLV. Over at Switzerland's Zürcher Kantonalbank for the period ending 14 April, they reported a smallish increase in their gold ETF of 6,211 troy ounces. That's the first increase since February 7. Their silver ETF went in the other direction, as 64,752 were removed. The U.S. Mint had another sales report yesterday. They sold 2,500 troy ounces of gold eagles---1,500 one-ounce 24K gold buffaloes---200 platinum eagles---and 50,000 silver eagles. There wasn't a lot of activity at the Comex-approved depositories on Tuesday. Once again, there were no reported in/out movements in gold---and in silver, a smallish 170,873 troy ounces were removed. The link to the silver activity is here. I don't have a large number of stories for you today, but some of them are definitely worth reading.
¤ 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.
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