Friday, May 9: Today in Gold and Silver
NEW YORK ( TheStreet) -- It was a 'nothing' sort of trading day in gold yesterday. The smallish rally that developed shortly after the London a.m. gold fix got put in its place two hours later---and the low tick of the day came just before 9 a.m. in New York an hour after the high tick. The gold price recovered a few dollars after that---and then chopped sideways for the remainder of the Thursday session.
The high and low ticks aren't worth the trouble of looking up.
Gold finished the trading session yesterday at $1,289.80 spot, down one thin dime from Thursday's close. Net volume was an even 100,000 contracts.It was more or less the same price action in silver, except that once the high tick was in just before 1 p.m. London time, the silver price got sold down to its low of the day by the 1:30 p.m. close of the open outcry market in New York. After that it traded pretty flat. The high and low, such as they were, were reported by the CME Group as $19.39 and $19.125 in the July contract. Silver closed in New York on Thursday at $19.15 spot, down 14.5 cents from Wednesday's close. Volume, net of May and June, was pretty decent at 34,500 contracts. Platinum edged quietly higher during Far East and morning trading in London, only to run into the same not-for-profit seller that showed up in gold and silver just before 1 p.m. BST in London. By the time the low was in at 10 a.m. in New York, platinum had given up all its $10 gain---plus about another ten bucks on top of that. But it did manage to recover a lot of that decline and finished up four bucks on the day. Palladium followed a similar, but mini version of the platinum price action---and it closed up ten bucks on the day, and back above the $800 price mark once again. How long it's allowed to remain there remains to be seen. The dollar index closed late on Wednesday afternoon at 79.24---and began to edge lower very shortly after trading began in the Far East on their Thursday morning. Then, at the New York open, it fell off the proverbial cliff---and cut through the 79.00 price mark like a hot knife through soft butter---hitting its 78.92 low seconds later. But, as I pointed out in the last paragraph of The Wrap in yesterday's column, there was a not-for-profit buyer there to rescue it from oblivion at the very moment it happened---with the subsequent rally topping out at 79.41 at precisely 10 a.m. EDT. After that it added a few more basis points, finishing the trading day at 79.44---up 20 points from its Wednesday's close, but over 50 points off its pre-rescue low. Needless to say, there was little correlation between precious metal price action and the moves of the dollar index. The gold stocks opened up a bit---and then chopped around the unchanged mark for the remainder of the Thursday session---closing basically unchanged, up 0.06%. The silver stocks started the day off relatively strong, but faded as the afternoon wore on---and Nick Laird's Intraday Silver Sentiment Index closed down 0.67%. The CME's Daily Delivery Report showed that zero gold and 34 silver contracts were posted for delivery within the Comex-approved depositories on Monday. The only short/issuer was Jefferies out of its client account---and deliveries were spread out between eight different stoppers. The link to yesterday's Issuers and Stoppers Report is here. There were no reported changes in GLD yesterday---and as of 9:57 p.m. EDT yesterday evening, there were no reported changes in SLV. Joshua Gibbons, the " Guru of the SLV Bar List" updated his website yesterday with the data from SLV for their current reporting week---and here's what he had to say--- "Analysis of the 07 May 2014 bar list, and comparison to the previous week's list: 6,489,776.3 troy oz were added (all to Brinks London). No bars were removed, and 1 bar had a serial number change. The bars added were from Solar Applied Materials (1.6M oz), Kazakhmys (0.9M oz), KGHM (0.6M oz), Korea Zinc (0.6M oz), Krasnoyarsk (0.6M oz), and 11 others. As of the time that the bar list was produced, it was overallocated 342.4 oz." "The Tuesday deposit is reflected in the bar list, but the Tuesday withdrawal (1,921,700.0 oz) is not." The link to Joshua's website is here. There was a tiny sales report from the U.S. Mint yesterday. They sold 1,500 troy ounces of gold eagles---and that was it. Over at the Comex-approved depositories on Wednesday there were 1,286 troy ounces of gold reported received---and that was a transfer into Scotiabank from HSBC USA. But a big chunk was shipped out of Scotiabank at the same time---to the tune of 122,628 troy ounces. The link to that activity is here. It was another decent day in silver, as 6,937 troy ounces were reported received---and 767,534 troy ounces were shipped out. The link to that action is here. I have a decent number of stories today---and I hope you find some of them of interest.
¤ The WrapAn appeaser is one who feeds a crocodile—hoping it will eat him last. - Winston Churchill It was another day where not much happened in the precious metals, or perhaps more correctly, nothing was allowed to happen. Gold volume wasn't particularly heavy, but silver's volume was pretty decent. I want to return to comments that I made when I spoke of the Rosa Abrantes-Metz interview posted in the Critical Reads section above. I have four charts for you---and they're simple to read, as this whole Anglo/American price management scheme---if we're only talking about London trading and the 'fixes'---is laid bare in these charts---and all are courtesy of Nick Laird over at sharelynx.com. The data is courtesy of the LBMA---and it's all based on the prior work of German researcher and GATA consultant Dimitri Speck, which he began working on more than a decade ago. The first is the " 5-year Intraday Average Gold Price Movements" chart---and the daily price action is an open book. The fixes stand out like the proverbial sore thumbs they are. But you'll note that the downward price pressure begins about 40 minutes before London opens, with the low at the p.m. gold fix---and after that it's basically rally time until the next morning when the cycle repeats. This, of course, isn't 100% obvious on a daily basis, but when you've got five years of daily price data to average out---there's no place for "da boyz" to hide. The comments that Rosa makes about nothing going on at the London a.m. gold fix over the last five years is patently false, as this LBMA data makes perfectly clear. Here's the " 1-year Intraday Average Gold Price Movements" chart for the last 12 months---and there are some obvious changes---and all of them are big. The downward price pressure now starts at 7 a.m. London time---and all the price damage is done by the London a.m. gold fix. The p.m. gold fix barely registers. The New York low comes at the opening of their equity markets---and the gold price actually rallies into the London p.m. gold fix. Here's another chart you've seen before, as I've posted it many times in the past. It's the " LBMA Overnight vs. Intraday Index"---and you'll definitely need to use the 'click to enlarge' feature here to see the "black line" that Nick refers to in the bottom dialogue box, as it barely crawls off the zero mark on the 'y' axis of this chart. In a nutshell---and as the numbers show at the top of the chart---if you theoretically [you couldn't do this in real life] bought the London a.m. gold fix and sold the p.m. gold fix every day for 43 years in a row, starting on January 1, 1970, using $100 as your base amount and investing the 'proceeds' of the previous day's sale each time, you'd be left with $13.41 at the end of trading yesterday. But if you'd bought the p.m. gold fix and sold your position at the London a.m. fix the next morning every day for 43 years, your initial $100 investment would now be worth $27,363.35. This state of affairs is simply not possible in a free market---which it isn't. Here's another 40-year chart that boggles the mind. As the charts states, the green bars are ex-London trading---and the red bars are London trading hours. In the biggest gold bull market in history, running from 2001 up until 2011, London was short the market every single year---as the chart shows---and as Nick points out in the bottom dialogue box. How is that possible in a free market? Well, the only answer is, that it isn't. If the comments by Rosa Abrantes-Metz in the above BNN interview represents the overall case against the gold price fixing scheme, then it is doomed to fail from the outset, just like the lawsuit again JPMorgan for rigging the silver market. Ted Butler was never optimistic about the outcome of the lawsuit against JPM, because the thrust of the lawsuit was way off base, almost deliberately so. This lawsuit in gold looks like it's headed in the same direction---and I'm wondering out loud if that's deliberate as well, as the ongoing "in your face" price action of JPMorgan et al certain indicates that they're not worried about a thing. Today we get the weekly Commitment of Traders Report, along with the companion Bank Participation Report---and I'll have all the ugly details on both in my column tomorrow. Far East---and early London trading on their Friday---was dead, dead, dead. Volumes in gold and silver were vanishingly small---and the U.S. dollar is flat as of 4:07 a.m. EDT as I write this paragraph. And as I hit the send button on today's missive at 5:13 a.m. EDT, all four precious metals are down a bit from their Thursday closing prices in New York. Volumes are still extremely light---and the dollar index is up 10 basis points. Since today is Friday, nothing will surprise me regarding the price action during the New York trading session later this morning. Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll take this opportunity to wish all my readers that are mothers---and I have quite a few of them---a Happy Mother's Day on Sunday. I hope you get spoiled. 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