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TheStreet Open House

Tuesday, August 5: Today in Gold and Silver

Stocks in this article: GLDSLV

NEW YORK ( TheStreet) -- It was a pretty quiet trading day on Monday everywhere on Planet Earth.  Gold traded down a few bucks until 1 p.m Hong Kong time---and the rallied until it got just above Friday's closing price, which occurred at precisely 9 a.m. BST in London---and it was pretty much all down hill from there, with the exception of a minor rally at the Comex open.  The downwards price pressure continued shortly after 9 a.m. EDT---and the low tick came at 12:30 in New York---and after that, the price didn't do much.

The high and low ticks were recorded by the CME Group as $1,296.40 and $1,287.00 in the December contract.

Gold closed on Monday at $1,288.20 spot, down an even six bucks from Friday.  Volume, net of August and September, was pretty quiet at only 75,000 contracts.

Once again silver got sold down the moment that trading began in New York at 6 p.m. on Sunday evening.  From there it rallied back to up a dime on the day, hitting its high tick minutes after 9 a.m. BST in London.  But, like gold, that all ended around 9 a.m. in New York.  Unlike gold, however, the selling pressure continued past 12:30 p.m. EDT---and silver was closed basically on its low of the day.

The high and low ticks in silver were reported as $20.48 and $20.17 in the September contract.

Silver finished the Monday trading session at $20.13 spot, down 17 cents from Friday's close.  Net volume was only 25,000 contracts once the December activity was subtracted out, as that volume was probably the start of roll-overs out of the September contract.

Platinum traded flat until 1 p.m. Hong Kong time---and then it rallied until 10 p.m. in Zurich.  The spike high at that point got dealt with in the usual fashion---and it was then under steadying selling pressure until shortly before 11 a.m. in New York.  After that it traded flat---and finished the day unchanged.

Palladium also traded flat until about 1 p.m. Hong Kong time.  It's high also came at 10 a.m. in Zurich.  An attempted rally shortly after the Comex open got stopped cold---and then shortly after 10 a.m., someone marked the price down by ten bucks in just a minute or so.  The palladium price recovered from its low of the day by a dollar and a bit---and went on to finish the Monday session down 8 bucks.

The high ticks for all four precious metals hit their respective high ticks at the same time yesterday--- and it was just another day where all four precious metals would have closed higher if allowed to do so.

The dollar index closed in New York late on Friday afternoon at 81.30---and then didn't do much at all during the Monday trading session.  It got as high as 81.38, but then sold down to 81.32 at the close. Nothing to see here---and here's the chart starting from Sunday night.

The gold stocks poked their noses about above changed very briefly within ten minutes of the open of the equity markets in New York yesterday.  From there they got sold down to their low of the day which came shortly before 12:30 p.m. EDT.  The subsequent rally just about made it back to unchanged, but got sold off again as the trading day progressed---and the HUI finished down 1.04%---and well off its low.

The chart for the silver equities was a virtual carbon copy of the gold chart, but they got sold down deeper at their 12:20 EDT low---and the subsequent recovery only got Nick Laird's Intraday Silver Sentiment Index back up to a loss of 1.76%.

The CME Daily Delivery Report for Day 3 of the August delivery month showed that only 16 gold and 13 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  The link to yesterday's Issuers and Stoppers Report is here.

The preliminary report from the CME for Monday's trading day shows that there are still 4,791 gold contracts open in the August delivery month---and only a few dozen contracts in silver open.  Based on this fact, I was somewhat surprised that there were only 16 gold contracts posted for delivery tomorrow.  One must wonder what the short/issuers are waiting for.  Maybe they're waiting for the 18 tonnes of gold that JPMorgan shipped out of their vaults on Friday.  For more on that, just keep reading.

There was a decline is GLD yesterday, as an authorized participant withdrew 57,730 troy ounces of the stuff---and as of 7:50 p.m. EDT yesterday evening, there were no reported changes in SLV.  But when I checked back at 11:01 p.m. the iShares.com Internet site showed a smallish decline of 140,913 troy ounces, which I would guess was a fee payment of some kind.

The U.S. Mint had a sales report yesterday.  They sold 5,000 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 300,000 silver eagles.

It was a big day in both gold and silver at the Comex-approved depositories on Friday.  In gold, there was 40,054 troy ounces reported received---and a whopping 595,102 troy ounces shipped out.  The big withdrawal was from JPMorgan---and the link to that action is here.

Silver movements were incredible as well, as they almost always are, as 1,225,494 troy ounces were received---and 735,330 troy ounces were shipped out the door.  Virtually all the activity was at Canada's Scotiabank and JPMorgan.  The link to that activity is here.

Here's a chart that a reader sent my way late last week.  It's been sitting on my desktop until now, as I just never had the space for it.  The last six years on the chart are projections, but the chart speaks volumes---with, or without that data.

Since this is my Tuesday column, I have a decent number of stories for your reading 'pleasure'---and I'll leave the final edit up to you, as usual.

¤ The Wrap

Following two weeks of extraordinarily massive movement within the COMEX-approved silver warehouses, this [past] week’s turnover fell back to the “average” weekly level of the year to date. This week, 4.3 million oz of silver were either brought into, or were removed from the COMEX warehouses, as total inventories declined a very slight 0.3 million oz, to 175.3 million oz. Thus, the same story of the past three years remains in effect, namely, unprecedented and continuous massive physical movement in the world’s second largest repository of silver.

That such an easily documented and unusual physical pattern has emerged in silver, yet remains almost totally ignored or unmentioned is just one of my many personal mysteries. Four and a half million oz of silver have physically come into or have departed the COMEX silver warehouses on average each week since January, an annualized rate of more than 230 million oz, and I can count on one finger the number of other commentators who I’ve seen mention it. I don’t know which is the greater mystery - why the metal in in such a continuous churn or why it is not commented on? - Silver analyst Ted Butler: 02 August 2014

With very light volume in all four precious metals on Monday, it was no trouble whatsoever for any party with an agenda to close prices lower on the day---and that's pretty much what they did.

Here are the 6-month gold and silver charts from yesterday.

Gold has been trading in either side of its respective 50 and 200-day moving averages for the last three trading sessions.  Right now the gap between these moving averages hasn't changed much in the last two or three weeks, as it has been somewhere between 5 and 8 bucks---and both averages are flat-lined for the moment.

Silver's trend has been down almost without respite---and silver's 50 and 200-day moving averages are within a penny of each other---and silver closed below both of them again on Monday.

At the moment we're about 50 bucks off the mid-July high in gold---and about a buck in silver.  Notwithstanding that fact, the volume associated with these price declines hasn't been that great---and I was even more underwhelmed by silver's volume yesterday considering the fact that silver closed below both its two big moving averages for the second time in three business days.

The point I'm making by what I said in the previous paragraph is that the monstrous Commercial net short position in silver has barely changed despite the dollar drop in the price and the violation of the moving averages---and it's almost the same situation in gold.  No doubt there will be improvement in this Friday's Commitment of Traders Report, but those changes will border on immaterial as well.

What will happen when JPMorgan et al---along with their HFT buddies---really decide to lay the lumber to the price?  Beats me, but it will be ugly.  But don't forget it's still the number of technical fund long contracts left to liquidate that's the real issue, not the price.  Of course, "da boyz" could allow the price to rally from here as well---and we could get a 'bounce' off these same moving averages.  But if that does happen, it will be because the powers-that-be allow it to happen.  Remember, there are no market anymore, only interventions.

The other thing I find disturbing is the attitude of the precious metal miners---and I've spoken about them often.  Most of them know precisely what's going on, but will never say a word about it in public, however some will speak off the record to me---and those are the "good guys" in the mining industries.

But all the larger precious metal miners, including their representative organizations, the World Gold Council or The Silver Institute, wouldn't give the time of day to GATA, Ted Butler---and anyone else that happens to have come to the conclusion that the precious metal prices are managed, after having spent years or decades reviewing the evidence.

One would think that these two organizations---or just maybe some of the miners that make up their membership, might at least show a sliver of interest by taking a look at the evidence gathered over the years.  But they aren't---and it doesn't matter the message, or the messenger.

And in some cases it's even worse than that.  Not only will they actually deny there is a price management scheme, but they will drop you---and the issue as quickly as they can.  They just aren't interested---period---and you have to ask yourself, or them maybe, why that's the case.

If you want to put it to the test.  Pick out a gold company, along with a couple of silver companies that you own stock in---and call them at their 1-800 numbers.  Try to talk with someone fairly high up, but if it's a larger firm, you'll probably get shuffled off to their Investor Relations department.  They've heard it all before---and will most likely have a pat answer for you.  But if you're a long-suffering shareholder, you're entitled to push the issue, as it's your company---not theirs.

As I write this paragraph, it's almost two hours before London opens---and it's early afternoon in Hong Kong.  All four precious metals are basically unchanged from Monday's close.  Volumes in both gold and silver are very low---and the dollar index isn't doing a thing.

And as I hit the send button, London has been open about two hours---and all the metals are struggling higher and up slightly on the day.  Volumes are still extremely light, so not much should be read into the current price action.  The dollar index is now up 10 basis points.

That's all I have 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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