Saturday, August 2: Today in Gold and Silver
NEW YORK ( TheStreet) -- The gold price gapped up a few bucks at the 6 p.m. EDT open on Thursday evening in New York---and then pretty much stayed at that level until the 8:20 a.m. Comex open the next morning. At that point it got sold down five bucks or so, only to come roaring back at the 8:30 a.m. jobs number release. Gold rallied until the London p.m. gold fix---and that was more or less it for the day.
The low and high ticks were recorded by the CME Group as $1,281.00 and $1,298.40 in the December contract, which is the new front month for gold. You will also note that the price got stopped cold before it could breach the $1,300 spot price mark.
Gold finished the Friday trading session at $1,294.20 spot, up $13.70 from Thursday's close. Volume, net of August and September, was around 151,000 contracts.And it should come as no surprise that silver, once again, got sold down the moment that trading began in New York on Thursday evening---and it stayed down, with the low tick coming shortly after the noon silver fix in London. From there it rallied unsteadily into the London p.m. gold fix, which was the high of the day---and from that point onwards, silver ran into selling pressure more or less right into the close. The low and high ticks were recorded as $20.245 and $20.58 in the September contract. Silver closed on Friday at $20.295 spot, down 8.5 cents from Thursday. Volume was way up there at 53,000 contracts, of which 6,700 were traded in December 2014 and March 2015. Platinum rallied a bit in Far East trading, but that came to an end an hour after Zurich opened---and from there it got sold down to its low at 8:30 a.m. in New York. The subsequent rally also got capped as it approached the London p.m. gold fix---and it got sold off a few dollars after that, finishing the Friday session up a whole 2 bucks. The palladium price chart was sort of a mini version of the platinum chart, except the price got capped at 9 a.m. in New York---and the metal got sold down for an 8 dollar loss on the day. The dollar index closed late on Thursday afternoon in New York at 80.46---and then rallied a hair above the 81.50 mark in early Far East trading---and stayed there until the 8:20 a.m. Comex open. By 10:50 a.m. EDT it was down to its 81.22 low---and from there it rallied a bit into the close, finishing the day down 16 basis points at 81.30. The gold stocks gapped up about 2 percent at the open, but couldn't hold those gains. However, the HUI managed to close up 1.34% in rather choppy trading. The silver equities gapped up as well, but got sold off into negative territory within an hour or so, as the silver price got sold into negative territory. The low came shortly before noon in New York---and it recovered a hair as the Friday trading session drew to a close. Nick Laird's Intraday Silver Sentiment Index closed up an even 1.00%. The CME Daily Delivery Report for Day 3 of the August delivery month showed that 416 gold and 19 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. The two biggest short/issuers were Jefferies with 320 contracts---and in distant second place was JPMorgan with 60 contracts in its in-house [proprietary] trading account. The only long/stoppers that mattered were JPMorgan in its client account, Barclays, Morgan Stanley---and Canada's Scotiabank. The link to yesterday's Issuers and Stoppers Report is linked here. The CME's Preliminary Report for Friday's trading session was posted on their website about 1 a.m. EDT this morning---and it showed that August open interest in gold fell down to 5,558 contracts, a decline of 2,562 contracts from Thursday, of which 1,800 were physical deliveries from Day 2 of the August delivery month. You can also subtract the 416 gold contracts from the Day 3 of the August delivery month to get a truer picture of net potential deliveries still to go. There were no reported changes in GLD yesterday---and as of 7:53 p.m. EDT yesterday evening, there were no reported changes in SLV, either. There was no sales report from the U.S. Mint yesterday---and no revisions made to their July sales numbers, so the data in yesterday's column still stand. But using the abysmal sales numbers reported for the month of July, the silver/gold ratio worked out to a hair over 55 to 1. It was a busy day in both gold and silver at the Comex-approved depositories on Thursday. In gold, there was 66,155 troy ounces reported received---and 98,880 troy ounces were shipped out. The link to that activity is here. In silver, the numbers were even more impressive, as 176,080 troy ounces were received---and 1,501,291 troy ounces were reported shipped off to parts unknown. The link to that action is here. Here's the 5-minute tick gold chart. It runs from 9 p.m. MDT on Thursday evening, up until 2 p.m. MDT on Friday afternoon, which is thirty minutes after the Comex close. And as I point out every time, the times on this chart are Mountain Daylight Time---and you have to add 2 hours to that to get EDT. Note that virtually the entire volume of the day occurred between the Comex open and fifteen minutes after the London p.m. gold fix was in. Both before and after those times, volumes were somewhere between miniscule and non-existent. On the big rally during that period, it was most likely the technical funds piling back in on the long side, or covering shorts---and the not-for-profit Commercials traders were doing the opposite in order to prevent the gold price [along with the prices of the other three precious metals] from blowing sky high. The Commitment of Traders Report, for positions held at the close of Comex trading on Tuesday, came out at 3:30 p.m. EDT yesterday afternoon---and that data was as I suspected it might be---some improvement in the Commercial net short positions in both gold and silver, but nothing of real substance. In silver, the Commercial net short position declined by 1,764 contracts, or 8.8 million troy ounces. The new Commercial net short position now stands at 282.9 million troy ounces. Ted Butler said that JPMorgan's bought back 1,000 contracts during the reporting week---and their short-side corner in the Comex silver market is now down to 19,000 contracts, or 95 million ounces. In gold, the improvement was a bit more, but still incremental. The short position in gold declined by 11,259 contracts, or 1.13 million troy ounces. The Commercial net short position in this precious metal is now down to 14.89 million troy ounces. Ted said that JPMorgan actually sold a couple of thousand contracts of their long-side corner in the Comex gold market---and it's now down to 23,000 contracts, or 2.3 million troy ounces. Here's Nick Laird's " Days of World Production to Cover Comex Short Positions" by the Big 4 and Big 8 traders for every physically traded commodity. Nothing has changed on this chart for many years. It's still three of the four precious metals pinned to the far right-hand side of this graph---and gold would be there as well if JPMorgan didn't hold it's current long-side corner. I don't have an overly large number of stories for you today, which suits me just fine.
¤ The WrapEven though its current concentrated short position in COMEX silver is way down from previous peak levels, JPMorgan still holds 15% of the entire net (minus spreads) short open interest (20,000 contracts out of 131,000 total net open interest). A fifteen percent market share of any modern futures market by a single trading entity constitutes market control and manipulation on its face. That the CFTC can charge JPMorgan for filing false individual reports, yet at the same time overlook the continued blatant concentration JPM has held in COMEX silver and gold since acquiring Bear Stearns in 2008 can only be explained by gross incompetence or complicity---and I’m sticking with conspiracy. - Silver analyst Ted Butler: 30 July 2014 Today's pop 'blast from the past' dates from 1965---and I was in Grade 11 at the time. It was a smash hit---and virtually the only hit---from an American rock group called The Knickerbockers. And if you're of a certain vintage, you'll know it instantly. The link is here. Today's classical 'blast from the past' dates from 1721 or earlier. It's Bach's Brandenburg Concerto No. 6 in B flat major, BWV 1051. If there's a better performance than this one out there, I haven't heard it. This is a recording from April 2007 with the Orchestra Mozart. The link is here---and you will enjoy it! Since I wasn't sure what to expect with yesterday's jobs number, nothing really surprised me when I saw the charts when I rolled out of bed late yesterday morning. If anything was noteworthy, it was the fact that silver did so poorly relative to gold, especially considering the volume traded in that metal yesterday. Here are the 6-month charts for both metals. Gold broke back above both the 50 and 200-day moving averages---and closed above them---after doing exactly the opposite on Thursday. The technical funds really got whipsawed on that one. Silver continued its losing ways---and dropped briefly below both the 50 and 200-day moving averages in both metal, as these moving averages are only pennies apart now, but did not close below either one. Where do we go from here, you ask? Beats the hell out of me. I could make the case for either up or down going forward---but always lurking out there is that obscene and grotesque short position in silver held by the Commercial traders, with the situation in gold not quite as bad, but bad enough. By the way, I mentioned twice this past week that one of the clouds hanging over gold and silver prices was the FOMC meeting next Tuesday and Wednesday. Well, Harold Jacobsen kindly reminded me that the FOMC meeting was on Tuesday and Wednesday of the week just past, so the price action of gold and silver during the first part of the week now makes some sense. I thank Harold for pointing out the error of my ways, a fact I could have easily checked using my Internet search engine. Another e-mail that I received yesterday was from Mark O'Byrne the proprietor over at Ireland's very popular goldcore.com Internet site. He was commenting on the headline to my Friday column which read " Chinese Gold Jewellery Demand Sees First Quarterly Drop in 8 Years"---and this is what he had to say: " Jewellery demand. Do not trust GFMS numbers at all. Their analyst did an interview with Reuters Global Gold Forum last week and [there were] lots of 'discrepancies'. Requested PDF and will forward to you. Enjoy your weekend, Ed---and keep fighting the good fight." Mark It has been an open secret for years that the supply/demand numbers from both GFMS and CPM Group have had some rather glaring inconsistencies, but there were so few gold stories out there on Thursday---and I needed a headline desperately, so I used that one, only to find out via Mark that it was bulls hit. I thank him for setting us straight on this. [ Note: Everything below was written before I received the Zero Hedge essay headlined " Internationalists Are Pushing the World Towards Globally Engineered Economic Warfare" in the wee hours of this morning. It's 3:42 a.m. EDT on Saturday morning now---and I have neither the inclination nor energy to rewrite what I've posted from this point onward. - Ed] I've posted quite a few stories lately about the possibility of some sort of war with Russia vs. the U.S. et al---and there's one I want to revisit briefly that appeared in last Saturday's column. It's the Paul Craig Roberts piece headlined " Washington is Escalating the Orchestrated Ukrainian “Crisis” to War"---and it's worth re-reading at this point. In it, he mentioned Bill S.2277 that is currently before Congress---and as Paul so correctly states: " However you look at this, it comprises a declaration of war. Moreover, these provocative and expensive moves are presented as necessary to counter Russian aggression for which there is no evidence." When I saw the outline of the bill, it immediately reminded me of the McCollum memo dated October 7,1940---more than a year before the attack on Pearl Harbor. The McCollum memo was first widely disseminated with the publication of Robert Stinnett's book Day of Deceit: The Truth About FDR and Pearl Harbor. Stinnett presented the memo as part of his argument the Roosevelt Administration conspired to secretly provoke the Japanese to attack the United States in order to bring the United States into the European war without generating public contempt over broken political promises. Roosevelt had recently issued a campaign promise the United States would not become entangled in Europe's war under his watch. Whether the memo was actually part of the final plan to draw Japan into WW2 has been discounted, but I wonder if this Bill S.2277 is the 2014 version of the same thing, except it's aimed at Russia this time. We'll find out soon enough I would think. And finally, I've often wondered if this manufactured Russian threat that's being cooked up by the U.S. and its 'allies' will be the final straw that breaks the back of the current economic, financial and monetary system that is already on its last legs, as one of its casualties would certainly be the precious metal price management scheme. The Russians could end it at any time they choose---and they may use that as a financial weapon if push really becomes shove at some point down the road. I want it to end, but I didn't want it to end like this, if that's what actually happens. Before closing, here's Nick Laird's famous " Global Indices" chart updated with the latest stock market data from Friday's closes around Planet Earth. Before heading off to bed, I'd like to mention [one last time] a new special report from Miller's Money Forever at Casey Research. It's entitled " The Truth About Annuities". Annuities are sold as the perfect solution for retirement---a way to collect guaranteed, worry-free income no matter what happens. But this guarantee isn't all it’s cracked up to be---and here you can get the full truth on annuities from an independent resource. In these times of bubbles and crashes, investors are racing to sign up for them. But annuities are not risk-free. In fact, we’ve found 3 hidden dangers you must consider before committing a dime to an annuity. All of these risks are detailed in a new free report from Casey Research. Before you do anything, read this report first! This is independent research. Casey Research does not sell annuities and are free to reveal whatever they find, good or bad---and the link to that report is here. [NOTE: This data regarding annuities applies only to U.S. citizens, as the rules are probably different in other countries, as they certainly are differences here in Canada. - Ed] That's all I have for the day---and the week Enjoy what's left of your weekend---and I'll see you here on Tuesday.
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