Wednesday, June 4: Today in Gold and Silver
NEW YORK ( TheStreet) -- There's nothing to talk about regarding yesterday's gold price action, as it traded in a five dollar price range for the entire Tuesday session everywhere on Planet Earth. Nothing to see here---and the high and low aren't worth the effort of looking up.
Gold finished the day at $1,244.90 spot, up $1.40 from Monday's close. Volume, net of June and July, was a very quiet 89,000 contracts.
There's a little more shape to the silver price action, but only just. The 'rally' that began around 1 p.m. Hong Kong time on their Tuesday afternoon, ran into a not-for-profit seller at exactly 9 a.m. BST in London, as it attempted to rally above the $19 spot price mark. And by 15 minutes after the London p.m. gold fix six hours and a bit later, the silver price was back to unchanged---but did rally a hair into the close. According to the CME Group, the low and high ticks were recorded as $18.71 and $18.92 in the July contract. Silver closed in New York on Tuesday at $18.805 spot, up 4.5 cents from Monday. Net volume was pretty decent at 32,000 contracts, so it took a fair bit of Comex paper to put out that tiny rally I spoke of in the previous paragraph. Platinum had a chart pattern very similar to silver, with the high tick at 9 a.m. in London---and the low coming about 15 minutes after the p.m. gold fix as well. Platinum got closed down five bucks. Palladium also got capped a bit starting at 9 a.m. in London/10 a.m. in Zurich, but once the London p.m. gold fix was in, it rallied a bit and closed up seven dollars. The dollar index closed late on Monday afternoon in New York at 80.63---and drifted lower by a few basis points before falling all the way down to the 80.45 mark starting around noon in London---and ending shortly after 8 a.m. in New York. From there it rallied back to almost unchanged to close at 80.62. The gold stocks spent most of the Tuesday session in the red, but when the gold price rallied into positive territory shortly after the 1:30 p.m. Comex close, the shares followed---and the HUI finished up 0.50%. The same can be said of the silver equities, as Nick Laird's Intraday Silver Sentiment Index closed up 0.25%. The CME Daily Delivery Report for 'Day 4' of the June delivery month finally flushed a big short/issuer out of the weeds, as Canada's Scotiabank posted 1,237 gold contracts for delivery within the Comex-approved warehouse system on Thursday. Not surprisingly, the long/stoppers were comprised of "all the usual suspects"---although the appearance of Morgan Stanley as the biggest stopper with 748 contracts was a bit of a surprise. Then there was Barclays with 182, Deutschebank with 179---and JPMorgan in its client account with 89 contracts stopped. There were six silver contracts issued as well---and the link to yesterday's Issuers and Stoppers Report is here---and worth a quick look. I was surprised to see that an authorized participant added 57,768 troy ounces of gold to GLD yesterday. And, like the big 2.4 million ounce silver deposit in SLV on Monday, this deposit in GLD has all the hallmarks of someone covering a short position. As of 1:17 a.m. EDT on Wednesday morning, there were no reported changes in SLV. One thing that Ted Butler pointed out to me yesterday was the fact that the 2.4 million ounces of silver added to SLV was done on Monday [June]---and not on the previous Friday [May]---so neither that deposit, nor the 57.8 million ounces of gold added yesterday, will show up on the next SLV and GLD short position report from the shortsqueeze.com Internet site that's due out in about 10 days from now. We'll have to wait until almost the end of June before we can see what happened, which is a lifetime in these markets. Whether they were deliberate acts is pure speculation on Ted and my parts, but it's worth noting. There was another sales report from the U.S. Mint yesterday. They sold 5,500 troy ounces of gold eagles---2,000 one-ounce 24K gold buffaloes---400 platinum eagles---and 620,000 silver eagles. Over at the Comex-approved depositories in gold on Monday, they reported receiving a smallish 3,054 troy ounces of gold, all of which went into Scotiabank's warehouse. The link to that activity is here. In silver, the activity was far more more substantial, as 1,181,225 troy ounces were reported received---and 605,206 troy ounces were shipped out for parts unknown. All of the in/out activity was at Canada's Scotiabank---and the CNT Depository. The link to that action is here. I have the usual number of stories for you today---and there should be a few in here that are of interest.
¤ The WrapI was all set to report [on Saturday] that the turnover of physical metal into and out from the COMEX-approved silver warehouses had come to an abrupt halt this past week, as there was little movement reported for the first three days of the holiday-shortened week. However, we had a 2.6 million ounce movement reported on Thursday, which left the week’s movement at close to 3 million oz. Total COMEX silver inventories declined by 1.5 million oz, to 174.7 million oz. Even if the big movement on Thursday hadn’t been reported, I would have reserved judgment about the turnover coming to an end. After all, the rapid turnover has persisted for three years and whatever the reason behind it, it is more likely to peter out rather than end suddenly. As you know, I continue to feel tight supply conditions in the wholesale physical market is the most plausible explanation. - Silver analyst Ted Butler: 31 May 2014 Without much volume associated with Tuesday's price action, one shouldn't read too much into what happened yesterday, although it's hard not to come to the conclusion that despite that, the powers that be were trying to shape the price curves of some of the precious metals. As I mentioned in yesterday's column, we managed to make it through the trading day on Tuesday without any surprises to the upside. Both Ted and I feel that the Commitment of Traders Report on Friday will be even more wildly bullish than the one we had last week. Ted says he's not sure if it's possible for silver to be more oversold than it is, as the current Comex set-up is the most bullish in history. I would expect that gold is now in a similar position---and we'll know more about that on Friday. Here are the 6-month charts for gold and silver updated with yesterday's price/volume data---and we're still bouncing along the bottom in silver---and are basically there in gold as well. And as I write this paragraph, the London market has been open a bit over an hour. Gold is unchanged, silver is down a bit---and both platinum and palladium are down five bucks apiece. Volumes in both gold and silver are fumes and vapours, so there's nothing to be read into their current price activity, such as it is. The dollar index is basically unchanged from where it closed in New York on Tuesday afternoon. And as I fire this out the door to Stowe, Vermont at 5:10 a.m. EDT, both gold and silver are unchanged, but platinum and palladium are down on the day. Total volume is literally non-existent in both gold and silver---and there's been very little increase in volume in the hour since I wrote the last paragraph. I don't remember when trading activity was this quiet. Although the ino.com Internet site says the dollar index is up 13 basis points since Tuesday's close, the chart indicates that it's basically unchanged. That's all I have for today. It's deathly quiet out there. Is this the "summer doldrums?" I'd bet not, considering the extreme configuration of both gold and silver on the Comex. So we wait. See you here tomorrow.
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