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Thursday, July 10: Today in Gold and Silver

NEW YORK (TheStreet) -- The gold price didn't do much of anything in Far East and early London trading on their Wednesday, but was up about five bucks by 1 p.m. BST in London, which was twenty minutes before the Comex open.  The real---and surprising---activity came after the Comex close, as gold rallied sharply at exactly 2:30 p.m. in electronic trading.  The high tick of the day came shortly before 3:30 p.m.---and from there the price got sold down about five bucks off its high.

The low and high ticks recorded by the CME Group were $1,318.70 and $1,333.40 in the August contract.

Gold finished the Wednesday session in New York well of its high tick at $1,326.60 spot, up seven bucks on the day.  Gross volume was around 214,000 contracts, but netted out at only 111,000 contracts.

The price action in silver was very similar to the price action in gold, so I shall dispense with the commentary.  The rally in electronic trading after the Comex close encountered a similar fate.

The low and high tick were $21.04 and $21.285 in the September contract.

Silver finished the Wednesday session at $21.095 spot, up 8 whole cents, but would [like gold] closed with a much bigger gain had it been allowed to do so.  Volume, net of July and August, was way up there as well---39,000 contracts, which is the lowest net volume number for silver I've seen in the last two weeks.

The dollar index closed late on Tuesday afternoon at 80.17---and after dipping briefly about 40 minutes before the London open, rallied to its 80.22 'high' of the day just before the Comex opened.  Then shortly after the equity markets opened in New York, the dollar headed south until shortly before 11 a.m.---then rallied until precisely 2 p.m. ---and tanked to its 79.99 low minutes before 3 p.m.  From there it rallied a handful of points and closed the Wednesday trading day at 80.03---down 14 basis points from its Tuesday close.

Just eye-balling the US$ Index chart below, it sure looks like it wants to turn up its toes and die but, as has been the case for years, there's always a not-for-profit buyer waiting in the wings.

The gold stocks gapped up a bit at the open---and crawled higher as the trading day progressed.  Then they jumped a percent and change at 2:30 p.m. when gold spiked---and the HUI finished the day up 2.82%.

The silver equities rallied in a similar manner---and when all was said and done, Nick Laird's Intraday Silver Sentiment Index closed up 2.66%.

The CME Daily Delivery Report showed that 13 gold and 56 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  ABN Amro and Jefferies were the short/issuers on all these contracts---and it was "all the usual suspects" as the long/stoppers.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday---and as of 10:12 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

The good folks over at Switzerland's Zürcher Kantonalbank updated their gold and silver ETFs as of the end of trading on Friday, July 4---and here's what they had to report:  Their gold ETF added 7,207 troy ounces---and their silver ETF declined by 103,396 troy ounces.

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

There wasn't much activity in gold over at the Comex-approved depositories on Tuesday, as only 6,358 troy ounces was reported received---and nothing was shipped out.  It was pretty quiet in silver as well, as only 71,204 troy ounces were received---and 29,243 troy ounces were shipped out the door.  This activity level isn't worth linking.

Here's the latest---and official---China gold imports through Hong Kong for May.  Of course this chart [going forward] is no longer a good proxy for China's total gold imports, as they can now do it through Beijing---and probably Shanghai as well, without doing it in the public spotlight.  But it's a good bet that their gold imports continue unabated.  I thank Nick Laird for sliding this chart into my in-box yesterday evening.

Before hitting the stories today, I just like to mention that Ted Butler posted his mid-week commentary to his paying subscribers yesterday---and it was a stunner.  It's titled "The Silver Conspiracy"---and although I haven't spoken to him since he posted it, I'm sure it's bound to turn up in the public domain at some point.

But in the interim, here's what Jim Rickards had to say about it after he read it last night---

Ed,

Excellent analysis; thanks for sending.

My reaction is similar to Ted's. There is clearly manipulation going on. I focus more on gold than silver, but you need to manipulate both if you want to manipulate gold because if inflationary expectations are raised due to a run up in silver, it will spillover into the gold market, which will undo the Fed's gold manipulation. So you need to squash both.

I also agree that 2008 was a turning point. It's all part of a much bigger play to freeze assets in place, deny access to physical metal, force savings into banks, money market funds, and stock markets and then prevent people from getting out.

This will certainly get worse. Ted's analysis is correct but the problem is even larger than what he is seeing.

All best,

Jim

I'm happy to announce that I don't have a huge number of stories again today---and I'll happily leave the final edit up to you.

¤ The Wrap

Despite not looking for a conspiracy (and not wanting to find one), the greater weight and flow of the evidence convinces me one exists in silver. To be clear, my distinction is that it is not just a small group of traders on the COMEX involved in a secret plot to suppress silver prices, but has now grown to include the CME Group and the CFTC. Since my long term understanding of the CFTC is that it has been, perhaps, the weakest and most ineffective federal agency of all, it is most likely that the CFTC’s inclusion involves more important federal agencies, specifically, the Treasury Department and the Federal Reserve.

First, let me make the point that I see the conspiracy as having started when JPMorgan acquired Bear Stearns in 2008, but really kicked into overdrive a little more than three years ago around the time silver reached $49. Currently the conspiracy to control and manipulate silver prices has never been stronger or easier to prove. In other words, while I can date the ongoing silver manipulation on the COMEX to 1983, it did not become an organized conspiracy involving the U.S. Government until 2008. Moreover, I don’t believe that the regulators’ involvement was well-planned and deliberate from the start; it was more a case of bungling a set of emergency circumstances and a subsequent cover up. - Silver analyst Ted Butler: 09 July 2014

[The other U.S. organization I would add to Ted's list would be the Exchange Stabilization Fund, as it's a lead-pipe cinch that they're involved in this to some extent.  I can't prove it, of course, but highly suspect it. - Ed]

None of the precious metals did much price wise yesterday, or weren't allowed to do much.  The rallies in electronic trading after the Comex close in both gold and silver were a bit of a surprise, but I'm careful not to read too much into them at the moment.

There were a couple of stories yesterday about how palladium is now back to a price level not seen since 2001---and that's certainly true enough.  But one can only imagine what the free market price of palladium would be [along with the prices of the other three precious metals] if JPMorgan et al weren't sitting on them in the Comex futures market.

Here are the 3-year gold and silver charts---and you can tell from the RSI traces on both of them that this overbought situation has gone on for quite some compared to past instances---and they have all ended in the same fashion.  Could things be different this time?  I don't know, but those are dangerous words.  However, the circumstances are so extreme at this juncture, that something has got to give one way or another pretty soon---and Ted's lengthy commentary to his paying subscribers yesterday certainly packs a sense of urgency, as do Jim Rickards comments on it posted further up, just before the Critical Reads section.

And as I write this paragraph, the London market has been open about twenty minutes.  All four precious metals moved slightly higher in Far East trading on their Thursday---and are still holding on to those gains at the moment in very choppy trading.  Gold volume is around 18,000 contracts, which isn't overly heavy, but silver's volume is about 7,700 contracts, which is more than decent---and much more than I like to see compared to gold.  The dollar index traded within one basis point of 80.00 in the Far East, but has managed to climb to 80.06 in the last hour of trading going into the London open.

The dollar index wants to crash and burn as badly as the precious metal prices want to explode to the upside, but "da boyz" are ever vigilant---and one wonders how long they can keep this up.  But "forever" is not an option.

And as I hit the send button on today's effort at 5:30 a.m. EDT, this is what the Kitco silver chart looked like.

Gold has spiked up as well.

Volumes in both metals have exploded---43,000 contracts [net] in gold---and 15,000 in silver, so it's obvious that these price spikes are not going unopposed, as JPMorgan et al are throwing everything they've got at them.  The dollar index continues to hang on to the 80.00 level by its proverbial finger nails.

I'll be more than interested in what these charts look like when I haul myself out of bed later this morning.

That it for today---and I'll see you 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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