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Friday, July 18: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price rallied quietly until shortly after 2 p.m. Hong Kong time on their Thursday afternoon---and from there it got sold down to almost unchanged by 1 p.m. BST in London, which was twenty minutes before the Comex open.  The tiny rally that followed only added six bucks to the price---and from there it drifted lower until the news of the Malaysian airliner crash hit the wires.  Gold rallied twenty or so dollars, but the price got capped at noon in New York.  By 12:45 p.m. some of those gains had vanished---and gold chopped sideways until the 5:15 p.m. electronic close.

The low and high ticks were recorded by the CME Group as $1,298.10 and $1,325.90 in the August contract.

Gold finished the Thursday trading session at $1,318.20 spot, up $18.40 from Wednesday's close.  Net volume was way up there at 158,000 contracts, as the Commercial traders in New York threw everything that was necessary at the rally to cap the price before they headed out the door for lunch.

The price chart for silver was almost a carbon copy of the gold chart, so I shall spare you the play-by-play on it.

The low and high in silver were reported as $20.76 and $21.30 in the September contract.

Silver closed yesterday at $21.155 spot, up 36.5 cents, but well off its high.  Volume, net of July and August, blew out to 51,500 contracts.

The platinum and palladium price patterns were mini versions of the gold and silver charts and, by no coincidence I'm sure, their respective rallies ended minutes after 12 o'clock noon in New York as well.  Nothing free market about any of this.  Platinum was closed up 20 bucks---and palladium 10 bucks.  Here are the charts.

The dollar index closed late on Wednesday afternoon at 80.53---and proceeded to chop sideways in a very narrow range for the entire Thursday session, closing unchanged.

The gold stocks opened in positive territory, but only just, but rallied smartly on the gold spike that began a 11:15 a.m. EDT.  The stocks topped out a minute or so before noon---and traded pretty flat for the rest of the day.  The HUI finished up 2.47%.

The silver equities opened a bit stronger---and rallied more on the crash news.  The high tick in the silver equities came around 3:15 p.m. EDT---and slid a bit from there.  Nick Laird's Intraday Silver Sentiment Index closed up 3.61%.

The CME's Daily Delivery Report showed that 79 gold and 44 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  In gold, the only two short/issuers were Jefferies and ABN Amro with 50 and 29 contracts respectively.  The largest long/stoppers was Canada's Scotiabank with 76 contracts.  In silver, it was Barclays and Jefferies as short/issuers on 42 of those contracts---and Scotiabank and JPMorgan were the two biggest stoppers with 34 contracts in total.  The link to yesterday's Issuers and Stoppers Report is here if you wish to dig into the rest of the details.

GLD Not surprisingly, there was another withdrawal from GLD.  This time an authorized participant took out 86,640 troy ounces.  And as of 9:46 p.m. EDT last evening, there were no reported changes in SLV.

Since yesterday was Thursday, Joshua Gibbons, the " Guru of the SLV Bar List," updated his website with the internal goings-on inside SLV for their business week ending on Wednesday afternoon in London---and this is what he had to say:  " Analysis of the 16 July 2014 bar list, and comparison to the previous week's list.  No bars were removed, added, or had a serial number change.  As of the time that the bar list was produced, it was overallocated 519.2 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

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

For some reason I had problems accessing the CME's Comex-approved depositories stocks in both gold and silver for Wednesday---and I had to fall back on the data over a Jon De Weese's excellent website  His data showed that gold stocks rose by 5,000 troy ounces---and nothing was shipped out.  In silver it was another busy day, as 52,170 troy ounces were reported received---and 663,783 troy ounces were reported shipped out.  The link to silver activity is here.

Here's the 5-minute gold chart from yesterday courtesy of reader Brad Robertson.  Note the volume chart on the bottom---and you have to add 2 hours to the time on the bottom if you want New York time.

I don't have all that many stories for you today---so this section of my daily column shouldn't take you too long unless you read every one.

¤ The Wrap

I'm still amazed that the equivalent of 240 million oz of COMEX silver were sold by commercials over the past five weeks at prices below the primary cost of silver production. I’d like to see someone try to explain how that could possibly be legitimate. While the long term prospective rewards of higher silver prices are as strong as ever, the collusive and manipulative sale of 240 million oz of COMEX silver will be the sole explanation of any near term price declines. - Silver analyst Ted Butler: 16 July 2014

Although I was happy to see the precious metals spike up on Thursday, I was more than saddened by the reason---which I discovered as soon as I opened my in-box yesterday morning.

It's impossible to tell whether this rally has any legs or not, but the associated volume that went along with the price spikes indicated that JPMorgan et al were going short against all comers, or selling longs as short holders covered.  As far as I could tell after reading the tea leaves when all was said and done, it was just another case of "da boyz" doing what was necessary to prevent the precious metals from blowing sky high.

Here are the 6-month charts for both gold and silver.  Yesterday's price action certainly threw a spanner in the works for in the Commercial traders efforts to force the technical funds to liquidate, even if only temporarily.

As I write this paragraph, it's just under an hour to the London open.  Both gold and silver moved sharply higher in the first hour or so of trading once New York opened yesterday evening, but those rallies were dealt with in the usual manner in early Far East trading---and now both metals are trading back below their Thursday closing prices in New York.  Platinum and palladium had much smaller price moves at the same time---but they're now trading lower as well.  The dollar index is chopping sideways.

It's obvious, at least to me that 'the powers that be' don't want any excitement to develop in the precious metals regardless of the reason---at least for the moment.

Today we get the latest Commitment of Traders Report for positions held at the close of Comex trading on Tuesday.  Last week, when I stuck my neck out and tried to predict what the COT Report would say, I was so spectacularly wrong that I'm reluctant to make a prediction here.  But, after the pounding that both gold and silver received on Monday and Tuesday, I'd guess that we'll see some improvement in the Commercial net short position but, sadly, I doubt that it will be a meaningful amount.

And it's a pretty good bet that the rallies we had on Wednesday---and again yesterday---have pretty much negated any gains that today's COT Report will show.  Of course that won't be know for sure until next Friday's report---and we still have three more trading days before the cut-off for it, so it's rather presumptuous of me to project that outcome from this distance.

Yesterday I posted a chart in this space that Nick Laird provided.  It didn't show up correctly---and even the 'click to enlarge' feature didn't help---so here it is again.  It shows the slow turn in the accumulation of physical gold in all the world's visible depositories.

And as I hit the send button on today's column, I note that not much has changed from a price perspective now that London has been open for an hour and change.  All four precious metals are a bit lower than they were a couple of hours ago.  Gold and silver volumes are higher than I like to see for this time of day, so it's obvious that JPMorgan et al had to throw a decent amount of Comex paper at those early rallies in Far East trading on their Friday morning, to keep their respective prices in line.  The dollar index is still chopping sideways.

Since today is Friday, I have no idea what to expect for the remainder of the day as far as price action goes.  I would guess that anything major will occur during the Comex trading session in New York---and nothing will faze me when I check out the Kitco charts later this morning when I roll out of bed.

Enjoy your weekend, or what's left of it if you live on the west side of the International Date Line---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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