Wednesday, May 21: Today in Gold and Silver
NEW YORK ( TheStreet) -- Not much happened with the gold price until about 30 minutes before the London open. It got sold down a bit---and then didn't do a lot until until the 8:20 a.m. New York open. Then the usual suspects showed up with their computer algorithms---and gold was down five bucks in seconds. The same thing happened at the 9:30 a.m. EDT open of the equity markets, except it was in the other direction. Once that rally was capped, the gold price traded sideways in a tiny range for the remainder of the day.
The low and high ticks, such as they were, were recorded by the CME Group as $1,286.00 and $1,297.20 in the June contract.
The gold price closed in New York on Tuesday at $1,294.30 spot, up $1.70 on the day. Volume, net of roll-overs, was only 102,000 contracts---only 7,000 more than the volume on Monday.The silver price was under light selling pressure during most of the Far East and morning trading session in London. There was no sign of "da boyz" at the New York open, but the price also popped at the 9:30 a.m. open of the New York equity markets. Once the high was in minutes after the London p.m. gold fix, silver also traded basically ruler flat for the remainder of the day. The low and highs weren't much to write home about, either---$19.225 and $19.465. Silver finished the day at $19.385 spot, up a nickel form Monday. Volume was 31,500 contracts. The platinum price chart was similar to the gold and silver chart, at least up until the London p.m. gold fix. But by the close the sellers of last resort had platinum back almost down where it ended the Monday session---and for the second day in a row all the gains of the day had disappeared by the close. They allowed platinum to close up a whole two bucks. After the low of the day, which came moments before the London open, palladium was in rally mode---and made it up to its high of the day around 11 a.m. EDT. After that, the rally gt capped---and the metal traded sideways for the rest of the Tuesday session. The dollar index, which closed the Monday session at 80.01, didn't do much of anything during the Tuesday session---and it closed at 80.04. The gold stocks started in negative territory, but rallied into the black in the first five minutes of trading. That didn't last, of course---and the stocks traded in slightly negative territory for the remainder of the Tuesday session. The HUI finished down 0.11%---which wasn't bad considering the flat performance of the gold price and the lousy action of the general equity markets. The silver equities started off in negative territory---and the subsequent rally hadn't cracked the unchanged mark by 9:40 a.m. EDT. After that, this silver stocks slid lower, but finally caught a bit of a bid shortly after 2:30 p.m. ---and Nick Laird's Intraday Silver Sentiment Index cut its loss to only 1.13%. The CME Daily Delivery Report showed that 1 gold and 121 silver contracts were posted for delivery within the Comex approved depositories on Thursday. ABN Amro was the short/issuer on all but one of the contracts---and it should come as no surprise that the two largest long/stoppers were Canada's Scotiabank and JPMorgan Chase. Scotiabank stopped only 10 contracts---but JPMorgan stopped 94 contracts---72 for its in-house [proprietary] trading account---and 22 for its clients account. The link to yesterday's Issuers and Stoppers Report is here. There was another withdrawal from GLD yesterday. This time it was 57,778 troy ounces. Since the start of 2014, the GLD ETF has had net withdrawals of a hair under 580,000 troy ounces. And as of 9:40 p.m. EDT yesterday evening, there were no reported changes in SLV. However, since the 2014 year began, there has been net additions into the SLV ETF of 11,626,263 troy ounces. Over at Switzerland's Zürcher Kantonalbank for the period ending Friday, May 16---they reported that their gold ETF had declined by 32,390 troy ounces---and their silver ETF had dropped by 65,909 troy ounces from the prior Friday report. The U.S. Mint had a sales report yesterday. They sold 5,500 troy ounces of gold eagles---2,500 one-ounce 24K gold buffaloes---300,000 silver eagles---and 300 platinum eagles. Ted Butler was expecting way more silver eagle sales than that---and so was I. Let's see what today brings. Over at the Comex-approved depositories in gold on Monday, they reported receiving 32,292 troy ounces---and shipped out 24,701 troy ounces. Virtually all of the activity was at HSBC USA. The link to that action is here. For a change, there wasn't big activity in silver. They didn't report receiving any, but they did ship out 229,287 troy ounces and, like gold, almost all the activity was confined to the HSBC USA warehouse. The link to that action is here. Since yesterday was the 20th of the month---and it fell on a weekday--- The Central Bank of the Russian Federation updated their website with their April numbers. What they showed was that they had purchased 900,000 troy ounces of gold during the reporting month. That, along with their purchase in January 2010, represents the second-largest monthly Russian Central Bank purchase ever---and only the 1.1 million troy ounces added in May 2010 was larger. Nick Laird's most excellent chart below tells all. Once again I have a lot of stories for you today---and the final edit is up to you.
¤ The WrapFor the 20 weeks of 2014 through Saturday, approximately 90 million oz of silver were physically removed from, or brought into, the six various COMEX warehouses. That’s an average weekly turnover of 4.5 million oz (and not the 3 million oz average I had assumed), or 234 million oz on an annualized basis. Interestingly, total COMEX silver inventories are nearly the same today as they were on January 4---and total inventories have fluctuated only a small amount over the past 20 weeks. Certainly, at least for the first 20 weeks of this year (and for the past three years), total inventories are not newsworthy compared to the movement of metal, a theme I admit to repeating. The equivalent of 30% of world mine production has physically entered and exited the COMEX silver warehouses over the past 20 weeks; that is a massive amount and something that has never occurred in any other commodity to my knowledge. Since I believe that investment holdings make up the vast bulk of total COMEX silver inventories and no more than 35 million ounces are available, the 4.5 million oz weekly average movement represents a stunningly higher effective turnover. On any basis that could be imagined either compared to silver’s actual supply and demand or compared to other commodities, the COMEX silver warehouse movements must be considered highly unusual. - Silver analyst Ted Butler: 17 May 2014 It was another day of marking time where not much was allowed to happen in any of the precious metals---and anything of importance that did, met the usual fate during the New York trading session. How long this will last is anyone's guess, as it's very quiet out there---and JPMorgan et al are determined to keep it that way for the moment. Here are the 6-month gold and silver charts once again, with the 50 and 200 day moving averages in gold---and the 20 and 50-day moving averages in silver. Even though not much is happening price wise, I do have a couple of things I'd like to comment on here that has to show up in prices sooner or later. The first of which was the approximately 28 metric tonnes of gold that Russia's Central Bank purchased in April. It was during the time that the Ukraine/Crimea situation was at its peak---and sanctions against Russia were imminent. Wisely, Russia decided to take the opportunity to dump a portion of its U.S. bonds and treasuries and buy gold with it. I had been waiting for their May 20th website update with some anticipation---expecting/hoping that this would turn out to be the case---and it was. I'll be equally interested in what The Central Bank of the Russia Federation does this month when their website is updated on Friday, June 20. The other thing is the turn-over of silver stocks at the Comex-approved depositories. Ted has been talking about this for years---and I've been fortunate enough to be able to post his thoughts on this as time has gone by. I also post the actual numbers every day on this site, so we've been able to watch the goings-on in real time. But even I was taken aback by what Ted had to say about it in the quote above that I borrowed from his weekly review on Saturday. Just think about it---" The equivalent of 30% of world mine production has physically entered and exited the Comex warehouses in the last twenty weeks." And not another person on the Internet has seen fit to comment on this extraordinary [and preposterous, I might add] situation. Even at 3 million ounces per week, Ted's original estimate, it was still big news. While I'm at it, I also mentioned at the top of this column that year-to-date GLD has seen about 580,000 troy ounces head out the door---but over 11.6 million ounces has been added to SLV---and the silver price action has stunk up the place compared to gold. Would someone please let me know why this---and the turnover---aren't big news? Aren't there any curious minds left out there? Nothing much of anything happened in Far East trading on their Wednesday---and as I write this paragraph, London has been open about an hour. Gold and silver are down a hair---and platinum and palladium are up the same amount. Net volume in gold is microscopic, just under 12,000 contracts---and silver's volume is around 4,400 contracts. The dollar index slipped back below the 80.00 mark about 30 minutes before the London open. Yesterday, at the close of Comex trading, was the cut-off for this Friday's Commitment of Traders Report. Just glancing at the price action during the reporting week, I'd guess that we'll see further improvement in the Commercial net short positions in both gold and silver. However, I reserve the right to be wrong about that, as the price action has occurred in a very narrow range during that period. And as I hit the send button on today's efforts at 5:05 a.m. EDT, I note that all four precious metals rallied a bit starting shortly after the London open. Gold and silver are back at almost unchanged, platinum is up ten bucks---and palladium's rally attempt didn't get above the $827 price level it was held at in New York yesterday. Surprisingly enough, the volumes in both gold and silver although up from an hour ago, aren't up by much. The dollar index is down about 12 basis points. That's all I have for today---and nothing will surprise me when I check the charts later this morning. I hope your day goes well---and I'll see you tomorrow.
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