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Saturday, April 26: Today in Gold and Silver

Stocks in this article: GLDSLV

NEW YORK ( TheStreet) -- [ Note: After three years without a break, I'll be taking some time off.  There will be no Gold and Silver Daily next week.  Ed]

It was a very uneventful day for the gold price in Far East trading on their Friday, but the price began to develop a positive bias right from the London open---and that continued right up until 10:30 a.m. EDT in New York.  After that, it didn't do much.  However, it did manage to close about the $1,300 spot price mark---and I'm happy about that, as "da boyz" could have just as easily sold in down below that mark before they headed out the door for the weekend.

The CME Group recorded the low and high ticks as $1,290.40 and $1,304.80  in the June contract.

The gold price closed in New York at $1,303.80 spot, up $9.90 from Thursday's close.  Volume, net of April and May, was reasonably light at only 113,000 contracts.

Silver got sold down about 20 cents starting around 9 a.m. Hong Kong time, but then began to rally around 11 a.m. in London---with the high tick of the day also coming at 10:30 a.m. EDT New York.  From there it got sold down about 15 cents, but recovered a bit of that during that last hour or so of electronic trading.

The low and highs were recorded as $19.515 and $19.81 in the May contract.

Silver finished the Friday trading session at $19.725 spot, up 7.5 cents from Thursday's close.  Gross volume was very heavy, with lots of roll-overs---and net volume was miniscule at only 17,000 contracts.

The platinum chart was very similar to both silver and gold---and the rally that began at 10 a.m. BST in London spiked to its high of the day around 10:30 a.m. in New York.  But a seller was waiting---and carved 10 bucks off its gain by 2 p.m. in electronic trading.  After that it traded flat into the close.

Palladium spent 12 hours trading a few dollars below the $800 spot price mark, but got bumped a few dollars above it starting around 9 a.m. in London.  From there it traded ruler flat once again until shortly after 10 a.m. in New York---and the tiny rally that began at that point got capped within an hour or so before it got very far.  But I was happy to see palladium close above the $800 price mark.

The dollar index closed late Thursday afternoon in New York at 79.77---and began drifting gently lower as soon as Far East trading began on their Friday morning.  The low tick of 79.68 was set twice---once just before 9 a.m. EDT, and the other a minute or so after 10 a.m. EDT.  From there it rallied back to basically unchanged [79.76] by the close of trading.  And as has been the case most of this week, the scale of the chart made the 'action' look far more dramatic looking than it actually was.

The gold stocks gapped up a bit over a percent at the open---and hit their interim high shortly after 10 a.m. in New York when the gold price topped out.  From there they drifted gently lower, hitting their low tick around 1:30 p.m.  But then a rally of some substance developed, which accelerated during the last 45 minutes of trading---and the HUI finished on its absolute high of the day, up 2.43%.

The gold equities had a pretty decent week.  Here's the 5-day chart courtesy of ino.com.

Not surprisingly, the silver equities followed a very similar price pattern, but at the end of the day, Nick Laird's Intraday Silver Sentiment Index closed up only 0.67%.

The CME's Daily Delivery Report showed that 127 gold and 14 silver contracts were posted for delivery on Tuesday.  The only short/issuer in gold was Canada's Scotiabank---and the largest long/stopper was JPMorgan in its in-house [proprietary] trading account.  Scotiabank also stopped all 14 silver contracts---and the link to Friday's Issuers and Stoppers Report is here.

For the second day in a row there were no reported changes in either GLD or SLV.

The good folks over at shortsqueeze.com updated their website with the current short positions for both GLD and SLV [for the period ending April 15] very early on Saturday morning EDT.  They weren't big changes, but both were headed in the right direction.  The short position in GLD declined by 7.65%---and the short position in SLV declined by 1.76%.  Based on the small residual short positions that still exist in both ETFs, I would guess that the authorized participants who may have been short the metal earlier, are now completely covered---and there are just 'plain vanilla' investors holding what's left.

I received a report from Switzerland's Zürcher Kantonalbank yesterday---and this is what they had to say for themselves for the reporting period ending on Thursday, April 17.  There were withdrawals from both ETFs.  Their gold ETF was down 13,666 troy ounces---and their silver ETF declined by 114,071 troy ounces.

The U.S. Mint  had another sales report yesterday.  They sold 106,000 silver eagles and that was all.  Month-to-date the Mint has sold 31,500 troy ounces of gold eagles---14,000 one-ounce 24K gold buffaloes---3,675,000 silver eagles---and 1,000 platinum eagles.  Based on these numbers, the silver/gold sales ratio for April works out to be a bit over 80 to 1.  Year-to-date the silver/gold ratio stands at 69 to 1.

Over at the Comex-approved depositories on Thursday, there was no reported in/out movement in gold once again.  But silver was far more active, as nothing was reported received---and 975,362 troy ounces were shipped out.  CNT and Scotiabank were the two depositories involved---and the link to that action is here.

With not much change in the silver price---and about a ten dollar decline in the gold price during the reporting week, along with some expected spill-over from the big down-day on Tuesday, April 15---both Ted and I were expecting a decent Commitment of Traders Report yesterday---but we didn't get it in either metal, as the Commercial net short positions were up in both.

In silver, the Commercial net short position increased by a smallish 521 contracts, or 2.61 million ounces.  The Commercial net short position now sits at 113.9 million troy ounces.  Ted says that JPMorgan's short-side corner in the Comex silver market didn't change much---and is still around 100 million ounces, or about 87% of the Commercial net short position.

In gold, the Commercial net short position increased by 2,921 contracts, or 292,000 troy ounces.  The Commercial net short position now stands at 9.05 million troy ounces---and Ted says that JPMorgan's long-side corner in the Comex gold market remains unchanged at around 38,000 contracts, or 3.8 million troy ounces.

I would have been interested in what the COT Report looked like at the close of trading on Thursday when JPMorgan et al engineered that big price decline in all four precious metals.  But, alas, that data will be buried by the time next Friday's COT Report manifests itself.

Here's Nick Laird's " Days of World Production to Cover Short Positions" chart updated with Friday's COT data for the Big 4 and Big 8 traders.  If it wasn't for JPMorgan's long-side corner in the Comex gold market, the four precious metals would occupy the first four spots in a row on the right-hand side of the chart.

Here's another couple of charts courtesy of Nick Laird.  They show only the short positions of the Big 4 and Big 8 traders in both gold and silver in the Comex futures market---along with their respective prices going back eight years---and not just the one week shown in the "Days to Cover" chart posted above.  I said in Friday's column that I was " very comfortable putting my marker down" that we'd seen the lows for this move down in both metals on Thursday.

If that is truly the case---and I think it is---just look at the huge difference in the short positions of the Big 4 and Big 8 in both gold and silver now that prices are washed out to the downside in both metals.  The short positions of the Big 8 traders are almost at record lows in gold---but it's almost the exact opposite in silver.  I know that I've posted a couple of other charts this week that attempt to hammer home this point that Ted Butler has been making recently---and that's the dichotomy that exists between them.  It's more than obvious in these two charts, especially since the middle of 2012.

So---what will the Big 8 short holders do on the next rally in silver?  Will they pile the shorts on even higher to kill it, or will they begin to cover?  Beats me, but we'll find out which scenario develops on the next big silver rally.  We would have found on Thursday if "da boyz" hadn't stepped in to kill the silver rally before it could get anywhere.  Stay tuned!

Since this is my last column until May 6---every story that's currently sitting in my in-box is going into this column---and I'll leave the final edit up to you.

¤ The Wrap

We in America should see that no man is ever given, no matter how gradually or how noble and excellent the man, the power to put this country into a war which is now being prepared and brought closer each day with all the pre-meditation of a long planned murder. For when you give power to an executive you do not know who will be filling that position when the time of crisis comes. - Ernest Hemingway: " Notes on the Next War: A Serious Topical Letter" :: Esquire (September 1935)

Today's pop "blast from the past" has an incredible story behind it---and when I ran across it on the youtube.com Internet site two weeks ago, I was gobsmacked!  This smash hit for Tommy James & The Shondells was released in 1969---and if you're of that vintage, you'll know it instantly.  The link is here.  But even more incredible than the song, is the story behind the group itself---and what they went through during their "famous" years.  Here's the 30-minute video interview from the Christian Broadcasting Network that is a must watch right to the end.

Today's classical "blast from the past" is courtesy of Richard Wagner.  When I was child back in the mid-to-late 1950s, this is the first piece of classical music that stuck with me into adulthood.  And every time I hear it, it takes me back almost 60 years in just seconds.  It's the Prelude to Act III of his opera, Lohengrin---and the link is here.

It was a much quieter day in all four precious metals on Friday, although it was still obvious to me that the gentle hands of the 'powers that be' were still active during the New York trading session.  But I was happy to see, as I mentioned before, that no attempt was made to close three of the four precious metals below the price ceilings that they had been attempt to break above for the last week or so.

But it's much too soon to call "all clear," as it still remains to be seen how the Big 8 shorts in all four precious metals [silver in particular] react when the next rally begins.

Sooner or later this Ukraine/Russia situation will make an impact on precious metal prices.  But that should be rephrased to read "will be allowed to make an impact on precious metal prices"---as JPMorgan et al are still firmly in the driver's seat---and the price activity on Thursday should be clear proof of that.

I'm still wondering, when push really becomes shove, if Putin will play the precious metal card, as the price management scheme is well known by the Russian government.  And, as I mentioned before, if things turn out that way, "da boyz" will be able to blame it on those "pesky Russians"---and no one will be the wiser.  And as I've also mentioned over the years, when this price management scheme does breath its last, it won't be happening in a news vacuum.  The current set-up, or something worse, would be made to order.

But will it happen, you ask?  Beats me, but it's the best cover that I've seen in the last ten years.  So we wait.

Then there's the matter of JPMorgan's monster short-side silver corner in the Comex futures market which, according to Ted Butler, is around 100 million troy ounces---or 20,000 Comex contracts.  A runaway "no ask" silver rally would bankrupt the firm virtually overnight, as it did Bear Stearns---although their current long-side corner in gold would help them somewhat.

I feel, as I mentioned further up, that JPMorgan has paid off any silver owed to SLV---and as Ted has mentioned on numerous occasions over that past year, they are probably sitting on a few hundred million ounces of the physical metal as well.  It's squirreled away in their own vaults---and it's a possibility that some of the other Comex-approved depositories are holding some for them as well.  Plus they could have a couple of warehouses full that they aren't disclosing---but that's pure speculation on my part.

But that really doesn't help their current paper short position on the Comex---and for years both Ted and I have speculated on the possibility that JPMorgan may raid the long positions held by the raptors [the small traders in the Commercial category other than the Big 8] to get them off the hook.  I don't know how it might be arranged, but faced with financial Armageddon, there's nothing [and no one] to prevent JPMorgan from buying the raptor's long positions in a non-free market transaction.  The CME Group and the CFTC won't say a word, as they are both complicit in this engineered price-fixing scheme as well, so why would one more criminal act, no matter how egregious, slow JPMorgan down at this point?

That's all I have for the day---and the week.  As I've stated at the top of my daily column since Monday, I'm taking some time off---and will be back in the saddle with my column on Tuesday, May 6.  However, I may have a report on Monday, May 5 if I get back in time, but that scenario is definitely pie-in-the-sky at the moment.  However, just in case something does blow up, or melt down while I'm gone, I have my laptop with me---and my vacation will just have to wait a few hours while I report on events.

Enjoy what's left of your weekend---and I'll see you in a week and a bit.

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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