Thursday, May 8: Today in Gold and Silver
NEW YORK ( TheStreet) -- The tiny rally that began early in the Far East trading day lasted until about 9:30 a.m. BST in London---and it was all down hill from there, as "da boyz" worked their magic with their trading algorithms. The low tick of the day came at 12:20 a.m. in New York---and the gold price rallied a couple of bucks before trading almost ruler flat for the remainder of the day.
The CME Group recorded the high and low ticks at $1,315.00 and $1,286.60 in the June contract.
Gold finished the Wednesday trading session at $1,289.90 spot, down an even $18 from Tuesday's close. Net volume was decent, but not overly heavy at 144,000 contracts.It was exactly the same story in silver, so I shall spare you the details, as you can read the Kitco chart as well as I can. The high and low ticks were posted as $19.73 and $19.295 in the July contract. Silver finished the day at $19.295 spot, down 25.5 cents from Tuesday. Volume, net of May and June, was pretty brisk at 48,500 contracts. The platinum price actually began to head south around noon Hong Kong time, but the real selling started around 12:30 BST in London. The low was also at 12:20 p.m. EDT---the same as both gold and silver. Then also like gold and silver, the price traded flat into the close. Palladium traded almost flat up until just before 2 p.m. in Zurich, then it got the same HFT algorithm treatment that the other precious metals received. The low for palladium came at 1 p.m.---and not 12:20 p.m. EDT like the other three metals. The dollar index closed on Tuesday afternoon in New York at 79.14. From there it traded pretty flat until about 9 a.m. in London---and then rallied very quietly for the remainder of the day, finishing the Wednesday session at 79.24---up a whole 10 basis points from it's prior close. The gold stocks opened down a bit---and with the exception of the odd rally attempt, continued to head lower, hitting their lows of the day around 3:30 p.m. EDT. From there they rallied a hair into the close. The HUI finished down 2.17%. It could have been worse. The silver equities followed a similar path---and Nick Laird's Intraday Silver Sentiment Index closed down 2.37%. The CME's Daily Delivery Report was a quiet affair yesterday, as only 5 gold contracts were posted for delivery on Friday. I shan't bother linking the Issuers and Stoppers Report. There were no reported changes in GLD yesterday---and as of 9:55 p.m. EDT yesterday evening, there were no reported changes in SLV, either. I asked Ted Butler for his thoughts on the surprise 1.92 million ounce withdrawal from SLV on Tuesday---as he didn't comment on them in his Wednesday missive to his paying subscribers---and he said he totally agreed with my take on it. Here's what I said on this issue in this space yesterday--- Ted Butler's "large buyer" avoiding the SEC's reporting requirements, perhaps? The U.S. Mint had a decent sales report yesterday. They sold 7,500 troy ounces of gold eagles---594,000 silver eagles---and 400 platinum eagles. There was no in/out activity in gold over at the Comex-approved depositories on Tuesday---but as is almost always the case, it was a different story in silver, as 634,025 troy ounces were reported received---all into the HSBC USA warehouse---and 94,125 troy ounces were reported shipped out. The link to that activity is here. I have the usual number of stories for you today---and I hope there are some in the list below that you think worth reading.
¤ The WrapThe truth is incontrovertible. Malice may attack it, ignorance may deride it---but in the end, there it is. - Winston Churchill The precious metal Pabulum was all over the Internet yesterday---Russia pulls its troops back from Ukraine's borders---and precious metal prices fall in response. If you believe that, then you haven't been paying attention. The big problem I have with these types of explanations is why the declines in each precious metal began at different times of the day---platinum first, palladium last, and gold and silver in between. However, this news may have been the catalyst that allowed JPMorgan et al to do a number on all the precious metals. What you saw you saw yesterday was strictly a Comex paper affair in all four precious metals. I know for a fact, as should you by now dear reader, that JPMorgan et al were buying every long contract offered for sale yesterday---whether it was a long puked up by the technical funds, or the long side of a short trade---"da boyz" were buyers all the way down. The only thing that miffs me about all this is that it happened on a Wednesday, the day after the cut-off for tomorrow's Commitment of Traders Report---and the companion Bank Participation Report. Here, once again, are the 6-month chart for both gold and silver---and as you can see at a glance, a lot of the gains from last Friday in both metals has already been taken back. As Ted Butler has mentioned on numerous occasions---and the Commitment of Traders data has confirmed---is that we might not have seen the bottom in gold if the technical funds can be induced into putting on even more short contracts, which will only happen if "da boyz" engineer the price to new lows for this move down. There were signs in the price action yesterday that this was indeed happening, but we'll have to wait until next Friday's COT Report for that confirmation---and anything can happen between now and then. Of course if this is JPMorgan's plan, then they will use that opportunity to bash the crap out of silver even more. But as I've said on several occasions, even with lower prices, the law of diminishing returns has already set in---and there's very little blood left in this silver stone. The same technical situation doesn't currently exist in the Comex futures market in gold. There certainly wasn't much price action in Far East trading on their Thursday, as all four precious metals didn't do much. And as I write this paragraph, London has been open 10 minutes---and not much is happening there, either---at least in gold and silver, but platinum and palladium are up a few bucks each. Volumes in both gold and silver are very light at the moment. The dollar index, which had rallied a hair in early Far East trading, is now down 6 basis points. So where we go from here is anyone's guess. JPMorgan et al---and their HFT algorithms---are still very much in control of the precious metal markets, plus copper. What happens going forward is, as always, 100% up to them---until they are instructed to do otherwise. And while all these paper shenanigans continue, the World Gold Council, The Silver Institute---and the miners themselves pretend that all is well. It's obvious that since they've done nothing to put an end to the ongoing precious metals price management scheme up to this point, they won't lift a finger to do anything from hereon in, either. How did it come to this? And as I hit the send button on today's efforts at 5:05 a.m. EDT, I see that three of the four precious metals are up from yesterday's close in New York---and only silver is down on the day. Volumes in both silver and gold are a bit higher, of course, but still very much on the lighter side---and the dollar index is now down 13 basis points, and heading for the 79.00 mark as I write this. Will someone be there to catch the proverbial falling knife if it breaks below that level? We'll find out soon enough. See you tomorrow.
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