Friday, August 29: Today in Gold and Silver
NEW YORK ( TheStreet) -- The gold price developed a positive bias almost from the open on Wednesday evening in New York---and really began to rally starting about 2:15 p.m. Hong Kong time on their Thursday afternoon. Of course the rally got capped at the 8:20 a.m. EDT Comex open, but there's no question that JPMorgan et al were at battle stations starting about 45 minutes before the London open.
Once the high tick was in, the price got another kick in the teeth by the HFT boyz and their algorithms around 10:15 a.m. in New York. After that, the price didn't do a lot---and volume died.
The low and high ticks were recorded by the CME Group as $1,283.00 and $1,297.60 in the December contract.Gold finished the Thursday session in New York at $1,289.20 spot, up $6.50 from Wednesday's close. Net volume was 101,000 contract, double what it was on Wednesday---and a big chunk of that was expended by "da boyz" to extinguish the gold rally that developed long before trading began in New York. The silver price traded flat until 2:15 p.m. Hong Kong time---and then away it went to the upside. You can see from the Kitco chart below that it ran into resistance a few times, but the sellers of last resort finally put the fire out shortly after 9 a.m. BST in London. From there it got sold down---and the rally attempt at the Comex open ran into JPMorgan and their HFT algorithms once again. The sell-off ended shortly before 10:30 a.m. EDT---and it traded flat until 3:30 p.m. before getting sold down a bit more into the close of electronic trading. The low and high were reported as $19.415 and $19.875 in the September contract. Silver finished the Thursday session at $19.48 spot, up a whole 4.5 cents from Wednesday. Gross volume was heavy, but so was net volume at 37,000 contracts---and the lion's share of that was JPMorgan et al throwing Comex paper at the big price spike around the London open---and then again at the Comex open. Platinum also rallied a decent amount, but got capped about 1 p.m. in Zurich---and then got sold down once New York opened, giving back over half its earlier gains. That metal got closed at $1,419 spot, up five bucks on the day. Palladium's rally also began at 2:15 p.m. Hong Kong time on their Thursday afternoon---and like the other three metals, hit its high at the Comex open---and that was it for the day. The metal closed up 8 bucks. The dollar index closed late on Wednesday afternoon at 82.47---and then began to head south early in Far East trading. The low tick came around 1:20 p.m. Hong Kong time---and from there it rallied to its 82.58 high around 10:45 a.m. in New York. From there it faded a few basis points into the close, finishing the Thursday session at 82.49---up 2 whole basis points. The gold stocks gapped up a bit more than a percent at the open, but faded a bit as the HFT boyz hit the gold price around 10:15 a.m. EDT Once the low as in fifteen minutes later, the stocks rallied until shortly before 2 p.m.---and from there, sold off a hair into the close. The HUI finished up 1.13%. The gold equities traded in a similar fashion to their golden brethren---and Nick Laird's Intraday Silver Sentiment Index closed up 0.90%. There were two parts to yesterday's Daily Delivery Report from the CME on Thursday evening. The first one showed a 2 contract change in silver, with ABN Amro as issuer---and Jefferies as the stopper. Delivery is today, just under the wire for August, so that will certainly be it for this month. The second part of the Daily Delivery Report was for Day 1 of the September delivery month. It showed that 212 gold and 735 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday. In gold, the largest short/issuer was Morgan Stanley with 207 contracts. The two biggest long/stoppers were Canada's Scotiabank with 120 contracts---followed by Credit Suisse One with 53 contracts. In silver, there were only three short/issuers---ABN Amro with 500 contracts, Jefferies with 158---and Canada's Scotiabank with 77 contracts. There were a couple of dozen long/stoppers---and the biggest were Citigroup, JPMorgan and Barclays. The link to yesterday's Issuers and Stoppers Report is here---and it's definitely worth a look. The CME's Preliminary Report for the Thursday trading session showed that there are 281 gold contracts, along with 3,213 silver contracts still showing as open in the September delivery month. Subtracting the contracts from Day 1 of the September delivery, we're already down to only 70 gold contracts remaining, along with about 2,500 in silver. There were no changes in GLD yesterday, but much to my surprise, an authorized participant added 1,247,162 troy ounces to SLV. I would guess that this is a deposit to cover an existing short position---read JPMorgan. As I mentioned the other day, both Ted and I were disappointed with the small decrease in SLV's short position in the last report from the folks over at shortsqueeze.com, so hopefully the new one that comes out around September 7 will show the results we expect. Joshua Gibbons, the " Guru of the SLV bar list," updated his website with the goings-on inside SLV for their business week ending on Wednesday---and here is what he had to say about it: " Analysis of the 27 August 2014 bar list, and comparison to the previous week's list---1,438,984.8 troy ounces were added, no bars were removed or had a serial number change." " The bars added were from: Korea Zinc (0.6M oz), Solar Applied Materials (0.5M oz), and 5 others. As of the time that the bar list was produced, it was overallocated 4.3 oz. All daily changes are reflected on the bar list." The link to Joshua's website is here. For the second day in a row there was no sales report from the U.S. Mint. There was no in/out activity worth of the name in gold over at the Comex-approved depositories on Wednesday---but in silver, there was 599,879 troy ounces reported received---and none shipped out. All of it ended up in JPMorgan's vault. The link to that action is here. Here's one of two charts that Nick Laird slid into my in-box in the wee hours of this morning. The first is his " Global Indices" chart---and it's obviously at a new record high. The other chart, the " Total PMs Pool", is posted in The Wrap section. I have a lot of stories today---and I hope you have the time to read the ones that interest you the most.
¤ The WrapThe probabilities still suggest that further technical fund selling to continue in COMEX gold and silver, but that is not written in stone. In fact, on a short term basis, anything could occur because the collusive commercials still appear to be in complete control. If the commercials want to ring the cash register further and buy gold and silver contracts on prices rigged lower, they will. If the commercials want to see the technical funds buy more contracts first, the commercials will rig prices higher. Not for an instant do I think it will remain this way forever, but it looks that way for the short term. In the interim, if we do experience a final COMEX commercial flush out, I intend to treat it as the final flush out. - Silver analyst Ted Butler: 27 August 2014 It was just another day where the price management in all four precious metals, but particularly silver and gold, was so obvious that, as Jim Rickards said---" it's becoming embarrassing." JPMorgan et al did what was necessary to contain and mostly reverse the rallies in both silver and gold, not only during early London trading, but also at the usual time, which is the 8:20 a.m. EDT open of Comex trading---and a cursory glance at the Kitco gold and silver charts at the top of this column shows that to be the case. Only the willfully blind won't admit it, even though they can see it as well. Here are the 6-month gold and silver charts with yesterday dojis in place. The price capping is even more obvious on these two charts. And as I type this paragraph, the London open is 30 minutes away---and not a creature is stirring. Prices of all four precious metals are flat---and volumes in both gold and silver are very light. The dollar index is up a handful of basis points. Today we get the weekly Commitment of Traders Report for positions held at the close of Comex trading on Tuesday. Just eyeballing the two charts above, I'd guess that we'll see further improvement in the Commercial net short position in both metals---with more improvement in silver than gold, I would think. There also may be some spill-over from the prior reporting week which may help things even more. But, having said that, there's certainly been deterioration in both gold and silver since the cut-off for today's report, especially in gold, since the price broke back above its 200-day moving average. But there are still three days left in the reporting week for next Friday's COT Report---and anything can happen between now and next Tuesday's cut-off. Here's the other chart that Nick sent my way earlier this morning. It's the " Total PMs Pool"---and it's looking rather bullish. And here's another chart that Nick passed around just before I put the finishing touches on today's missive. Nick's comments were as follows: " The longest running gold index - the BGMI - recently hit new lows vs. gold. This index covers the major U.S. Gold Stocks---and they are: ABX, ASA, FCX, GG, KCG, NEM and SSRI. This means that the major gold stocks have never been cheaper [relative to the price of gold - Ed] in 75 years ." And as I send this off to Stowe, Vermont at 4:55 a.m. EDT, not much has changed in the last two and half hours. Prices still aren't doing a thing---and volumes in both gold and silver are still very light for this time of day---and the dollar index isn't doing much, either. With Labour/Labor Day being a holiday in both Canada and the U.S. on Monday, I don't expect volumes to pick up a lot, even during the New York session today, as traders will be heading out the door early for the last long weekend of summer in the northern hemisphere. Enjoy your long weekend, if you get one---and I'll see you here tomorrow.
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