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Friday, May 30: Today in Gold and Silver

NEW YORK (TheStreet) -- The gold price did little of anything during most of the Far East trading session on their Thursday.  Then shortly after 2 p.m. Hong Kong time, an HFT-type dropped the price by about seven bucks.  The low of the day came shortly after the London open---and from there it traded flat until 10 minutes before the 8:20 a.m. EDT New York open.  The rally that began at that juncture got capped moments after London closed at 11 a.m. EDT---and just as it was about to break above its Wednesday closing price.  From its high at that point, the gold price got sold down until noon EDT---and from there it traded ruler flat into the 5:15 p.m. close of electronic trading.

The high and low ticks, such as they were, were reported by the CME Group as $1260.60---and $1,250.90 in the June contract.

Gold closed in New York yesterday at $1,255.90 spot, down another $2.70 on the day.  Volume, net of May, was very decent at 146,000 contracts as June goes off the board.

Silver had a very similar chart pattern, with the only real difference being the timing of the low price tick.  This was set about 10 minutes before the Comex open---and at that point silver and gold rallied together until minutes after the London close, when silver met the same fate as gold.  After that, it traded flat for the remainder of the Thursday session in New York.

The high and low ticks were recorded as $19.095 and $18.78 in the July contract.

The silver price finished the Thursday trading session at $19.04 spot, up 1.5 cents on the day.  I wonder if some trader somewhere got a special prize for closing the Tuesday, Wednesday and Thursday sessions within a 2 cent range?  Just asking.  Gross volume was a chunky 53,000 contracts, with 8,000 contracts of that amount trading in the September and December delivery months.

Platinum and palladium didn't do a lot, or weren't allowed to do a lot---you choose.  Here are the charts.

The effects of the strikes at the platinum and palladium producers in South Africa certainly isn't being allowed to show up in the prices of these two 'precious' metals.

The dollar index close at 80.56 late on Wednesday afternoon in New York---and from the Thursday open, it chopped and flopped a hair lower, finishing the Thursday session at 80.56---down 6 basis points.

The gold stocks opened slightly in the red, but rallied to their highs of the day minutes after 11 a.m. EDT, which is when gold got capped after the London close.  The stocks slid a bit from there---but the HUI managed to cling to a positive close, finishing up 0.32%.

The silver equities performed in a similar manner---and their respective charts looks almost identical, as Nick Laird's Intraday Silver Sentiment Index closed up 0.50%.

The CME Daily Delivery Report showed the last of the deliveries for May, as 2 silver contracts were posted for delivery by HSBC USA.  They were stopped by the CME Group once again---and then the 10 bars that comprised those two contracts were used to delivery against the 10 contracts that stood for delivery in the silver mini-futures market---the 1,000 ounce bar contract.

The First Day Notice for delivery into the June gold contract proved to a surprise, as there was just one short/issuer---and that was Canada's Bank of Nova Scotia, with only 65 contracts.  Morgan Stanley stopped 30 of them---and there were a dozen other long/stoppers that each took a couple of contracts of what was left.  In silver, there were 9 silver contracts issued---and that was it.  I certainly was expecting a bigger gold number than that.  There were platinum an palladium deliveries as well---and the Issuers and Stoppers Report is definitely worth a look---and the link is here.

There were no changes in GLD yesterday---and as of 10:01 p.m. EST yesterday evening, there were no reported changes in SLV, either.

Joshua Gibbons, the "Guru of the SLV Bar List", updated his website yesterday with the latest bar movements inside SLV for their reporting week, which was Wednesday---and this is what he had to say. "Analysis of the 28 May 2014 bar list, and comparison to the previous week's list: 1,152,824.1 troy ounces were removed (all from Brinks London). No bars were added or had a serial number change.  The bars removed were from Johnson Matthey (0.4M oz), Noranda (0.1 M oz), Handy Harman (0.1M oz), KCM (0.1M oz), and 24 others.

As of the time that the bar list was produced, it was overallocated 192.5oz.  All daily changes are reflected on the bar list. The mix of bars removed was similar to those removed on May 14."

The link to Joshua's website is here.

There was no sales report from the U.S. Mint yesterday.

And much to my amazement, there was no in/out movement in either gold or silver within the Comex-approved depositories on Wednesday.  I can't remember the last time that happened.

I have a decent number of stories today---and I'm sure that there are several in here that you'll find of interest.

¤ The Wrap

Tuesday’s high volume sell-off in gold and silver looks to be, once again, an exclusive COMEX production, namely, a deliberate price rigging lower by the commercials for the intent of generating technical fund selling (for the purpose of permitting commercial buying). There’s little question that the technical funds were the big sellers in COMEX gold and silver---and that the commercials were the big buyers, as there has never been a large price decline in which the technical funds haven’t sold, or in which the commercials haven’t bought. The only question is how much technical fund selling and commercial buying occurred.

I would guess that there was a reduction in the total net commercial short position of at least 20,000 contracts in gold---and as much as 4000 contracts in COMEX silver futures as a result of Tuesday’s action. However, since Tuesday was the cut-off for the COT report, there is some question as to whether the CFTC will report the data in Friday’s release in a timely manner. But more important than what the report may reveal on a timely basis, is what actually occurred. - Silver analyst Ted Butler: 28 May 2014

I have no further comments to make on yesterday's price action other than the ones I made at the top of this column.  It was the last day for all traders to roll out of the June contract, or stand for delivery---and that pretty much consumed the whole trading session.  But I did note the fact that silver was taken below the $19 spot price mark with some authority---and there certainly wasn't anything free market about that.  It's just unfortunate that Thursday's trading data won't be in today's Commitment of Traders Report, although JPMorgan et al couldn't have got much with silver being all sold out to the downside already.

Here are the 6-month charts for both gold and silver.  Gold is well and truly into oversold territory---and silver is as well although, as I said yesterday, the RSI trace doesn't indicate that.

As I type this paragraph, London has been open just about 10 minutes.  Gold rallied about five bucks in the early going in Far East trading, but that didn't last---and the price is up a few dollars as of 8 a.m. BST in London.  Silver was under a bit of selling pressure right up until the London open---and at the moment its unchanged from its Thursday close in New York.  Platinum is up 9 bucks---and palladium is flat.  Net volume in gold is pretty light---and virtually all of it is now in the new front month, which is August.  Silver's volume is nothing special.  The dollar index is down a handful of basis points.

Today we get the new Commitment of Traders Report for positions held at the close of Comex trading on Tuesday.  As Ted Butler pointed out in the quote posted above, the big question that awaits an answer is whether or not all the trading data from Tuesday's engineered price declines in both gold and silver on options expiry day, will be in this report or not.  If it is, it will be a blockbuster---but if it isn't, there won't be much to see.

And as I prepare to send today's column into cyberspace, I note that the HFT boyz showed up at 9 a.m. BST and took back what little gains any of the precious metals had up until that point---and all are now back below their Thursday closing prices in New York.  Volumes in both gold and silver are nothing special---and the dollar index hasn't changed much since the London open two hours ago.

Today is Friday---and the last trading day of May.  As I said in yesterday's missive, I had no idea of the price action during the last two trading days of the month---and I still don't.  I can't see any justification for JPMorgan et al to pound the crap out of them again today, but you just never know.

As I mentioned earlier in The Wrap further up, I'm off to Vancouver for the Cambridge Investment Conference later today---and both my Saturday and Tuesday columns---which I write while I'm "on the road"---are going to be as short as I can make them, as I have other things on my plate while I'm there.

I hope you have a good weekend---or enjoy what's left of it, if you live west of the International Date Line---and I'll see here tomorrow.

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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