Saturday, August 30: Today in Gold and Silver
NEW YORK ( TheStreet) -- As expected, it was a nothing sort of day for gold yesterday. It traded within a five dollar price range for almost all of the Friday session, but it should be pointed out that the tiny rally that began at the noon silver fix in London, ran into some sort of not-for-profit selling shortly before 10:30 a.m. EDT in New York as it was about to break into positive territory.
Once again, the low and high ticks aren't worth looking up.
Gold closed yesterday at $1,287.20 spot, down an even two bucks on the day. As expected, net volume was very light at only 71,000 contracts.The price pattern in silver was a virtual carbon copy of the price pattern in gold, as 'da boyz' showed up around the same time in silver as well---and turned a positive close into a negative one. Silver traded within a one percent range all day, but would have traded in a far bigger range than that if allowed to do so. Ditto for gold. Silver closed on Friday at $19.46 spot, down 2 cents from Thursday. Net volume was fairly decent at 26,000 contracts, with the lion's share in the new front month, which is December. Platinum traded within a ten dollar range---and closed exactly unchanged. Palladium was the star of the day---and after trading pretty much ruler flat until noon in Zurich, it finally developed a positive bias that developed some legs shortly after the Comex open. The high tick of $906 spot came around 1 p.m. EDT---and it managed to close above $900 at $902 spot, which was up seven bucks on the day. The dollar index closed late on Thursday afternoon in New York at 82.49. The index didn't do much until after its 82.43 low tick, which happened around 10:20 a.m. EDT on Friday morning, which also just happened to coincide with time that both gold and silver topped out---and got sold down. The rally in the index peaked at $82.75 around 3 p.m. in New York---and didn't do much after that, as it closed up 24 basis points on the day at 82.73. The gold stocks opened ever so slightly in the red, but didn't stay there for long. They rallied as gold rallied---and then pretty much stopped once the gold price hit its zenith just before 10:30 p.m. EDT. After that they added a handful of basis points as the day went along---and the HUI closed up 1.27%. The silver equities dipped a full percent at the open---and it took them a bit longer to make it back into positive territory, with the high tick coming just before 11:30 a.m. in New York. By the time that trading was done, the silver equities had given up over half their gains---and Nick Laird's Intraday Silver Sentiment Index closed up only 0.11%. The CME Daily Delivery Report for Day 2 of the September delivery month showed that 53 gold and 1,026 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday. In silver, the two largest short/issuers were Barclays and Deutsche Bank with 534 and 276 contracts respectively---and all of the Barclays contracts were from its client account---and for Deutsche Bank it was all out of their in-house [proprietary] trading account. The biggest long/stopper was also Barclays with 280 contracts, but out of its in-house [proprietary] trading account, so it was obviously trading against its own customers. There was so much issuer and stopper activity yesterday, that it's really impossible to describe here, so a minute or so face down in yesterday's Issuers and Stoppers Report is a must---and the link is here. The CME Preliminary Report for Friday showed that 104 gold and 2,579 silver contracts remain open in the September delivery month. From these numbers you can subtract the deliveries posted above to find out what's left. The way deliveries have been going in the first couple of days in September means that if they keep this pace up, there won't be much left to deliver by the end of next week, or sooner. There were no reported changes in GLD yesterday---and as of 8:19 p.m. EDT yesterday evening, there were no reported changes in SLV, either. There was no sales report from the U.S. Mint yesterday. For the month of August, the mint sold 25,000 troy ounces of gold eagles---8,000 one-ounce 24K gold buffaloes---700 platinum eagles---and 2,007,500 silver eagles. Based on these sales, the silver/gold ratio for August worked out to just under 60 to 1. Once again there was no movement in gold worth of mentioning over at the Comex-approved depositories on Thursday. But in silver, it was another big day, as 599,707 troy ounces were reported received---and 602,090 troy ounces were shipped out. There was also a transfer of 1,943,825 troy ounces from the Eligible category to the Registered category over at the CNT Depository. The silver action is worth a quick look---and the link to that is here. The Commitment of Traders Report, for positions held at the close of Comex trading on Tuesday, was somewhat of a surprise, but very much in line with what Ted Butler though it would be. My estimation wasn't even close. In silver, there was very little change in the Commercial net short position, as it declined only 64 contracts, which is not even a rounding error in the grand scheme of things. The Commercial net short position still sits at 186 million troy ounces---and Ted says that JPMorgan's short position didn't change for the week, as it remained around 17,500 contracts, or 87.5 million troy ounces. Their short-side corner in the Comex silver market represents about 45 percent of the entire Commercial net short position. The 'Big 8' short holders in silver are short 314 million troy ounces, or 148 days of world silver production. JPMorgan's share of that is a hair under 42 days. As Ted pointed out, the big surprise in silver was under the hood. The technical funds in the 'Managed Money' category added 3,416 short contracts during the reporting week, which is not a surprise considering the negative price action. The surprise was that they, as a group, increased their long position as well. Normally it would be the opposite, as they would be selling long positions by the bucketful at the same time they were adding short positions, as JPMorgan et al engineered the price lower. Not this time. Ted feels, and I agree, that the mystery non-technical fund long holder[s] that's been hiding in the bushes in this category for almost a year, is not only still there, but added to their long position during the reporting week that was. And what was even more obvious was that they had to have added a huge amount to this long position, as the long position in the Managed Money category showed an increase of 1,430 contracts. Under normal Managed Money selling in a declining price environment, this number should have been negative two or three times this amount. In gold, the Commercial net short position declined by a chunky 24,114 contracts, or 2.41 million troy ounces. The Commercial net short position is now down to 12.35 million troy ounces. Almost all the decline was the technical funds in the 'Managed Money' funds both going short and selling longs by the bucketful---and in about equal amounts. This was the 'Managed Money' technical funds doing what they always do---and right on cue as well. 'Da Boyz' sure know how to play these guys. It wasn't like that in silver at all, which is why I spent some time explaining the difference. Ted says that JPMorgan added to their long-side corner in the Comex gold market---and are now up to 20,000 contracts, or 2.0 million troy ounces. Despite all these 'improvements' in the internal structure of the COT during the reporting week, we're still miles away from being washed out to the downside like we were back at the end of May. And the situation has not improved since the Tuesday cut-off---and with world conditions being what they are, I shan't hazard a guess as to where we go from here. Bill Rice, Jr. is the managing editor of the Montgomery Independent---and he had this to say about the precious metal mining industry---and their lack of interest in doing anything about the precious metal price management scheme that has decimated their industry. "The miners are gambling (praying/hoping) that this manipulation will somehow end on its own without them having to take any action. "For some reason, taking action – standing up to those who are trying to kill your business – is repugnant to them" "Apparently, they’d just rather go broke and let all of their shareholders go down with them, which is both bizarre and repugnant to those of us who grew up believing it’s okay to fight back when someone is attacking you. Or if a travesty of justice is being committed, it’s okay to point this out. “To fight back or not to fight.” This is, no doubt, the question that's being privately debated in corporate headquarters of precious metal miners. "So far, we know the answer. The industry’s tombstone is probably being chiseled even today---and it reads “They Chose Not to Fight.” "Their children must be so proud." I couldn't put it better myself. The rest of Bill's commentary can be read here---and I thank Phil Barlett for finding this for us. I have a lot of stories for you today---and I hope you have enough time during the weekend to spend the time on the ones you like.
¤ The WrapThe first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists. - Earnest Hemingway, " Notes on the Next War: A Serious Topical Letter" first published in Esquire (September 1935) Today's pop 'blast from the past' is one I've posted before, but I though it worth posting again. I thank reader B.E.O. for sending it along. This Crosby, Stills, Nash and Young cover of a Joni Mitchell tune, was a smash hit for them in 1971. The link is here. Enjoy! Today's classical 'blast from the past' certainly has some political overtones to it, that are similar to what's happening between the Ukraine and Russia today. Tchaikovsky composed his Slavonic March, an orchestral Tone poem, in 1876. In June 1876, Serbia and the Ottoman Empire were engaged in the Serbo-Turkish War (1876–78). Russia openly supported Serbia. The Russian Musical Society commissioned an orchestral piece from Tchaikovsky for a concert in aid of the Red Cross Society, and ultimately for the benefit of wounded Serbian veterans. Many Russians sympathized with their fellow Slavs and Orthodox Christians and sent volunteer soldiers and aid to assist Serbia. Tchaikovsky referred to the piece as his " Serbo-Russian March" while writing it. It was premiered in Moscow in November of 1876, conducted by Nikolai Rubinstein. In this recording posted over at the youtube.com Internet site, the Youth Orchestra of Caracas does the honours---and the link is here. It was a very quiet trading day in front of the Labour/Labor Day long weekend in North America. The only thing worth noting is that the rallies that developed in all four precious metals before or during the New York session, all got sold down during the Comex trading session yesterday, as nothing was allowed to close anywhere near its high tick. Here are the 6-month charts for both gold and silver---and I have nothing to add to what I've said already in days past. Looking beyond the precious metal markets, one has to be fearful of what is happening in the Ukraine. The U.S. and NATO are pushing Russia harder with each passing week---and it doesn't appear that they are prepared to accept anything other than an armed conflict of some type, fought on European soil, of course. And, of course, Russia wants nothing to do with this, as they are all too aware of what happened to other countries in both Africa and Middle East that the U.S. et al has provoked in the past. Russia is much bigger game---and one has to wonder what will come of this when push really becomes shove. And as I've said on several occasions recently, it wouldn't surprise me in the slightest if the world's economic, financial and monetary systems were deliberate casualties of the current crises once things turn 'hot.' Included in that would be the end of the precious metal price management scheme as well. As others, including Doug Noland, David Stockman, Paul Craig Roberts---and Jim Rickards have pointed out repeatedly, we are close to some sort of world-wide denouement on all fronts. The Friday article in The Wall Street Journal by Henry Kissinger is just another brick in the wall in my opinion. Lost in all of this, of course, is the fate of Flight MH17---which now has all the appearances of a 'false flag' event of some kind---and it matters not what that flight data recorders show, or what the air traffic control tapes reveal. This data should have been made public within days of the incident, but it never was, and still hasn't---and you have to ask yourself why that was the case. It's the next 9/11 event that is of concern to me, as the American public has been now been primed for it with some of the headlines that have been out in recent days---and as far as I'm concerned it's now a matter of when, not if, it happens. Even the U.K. is now on Red Alert for just such an event---and I wouldn't be surprised if the British government has cooked up its own version of that fateful day. These are very dangerous times---and no effort, except by the Russians, to cool things off has been attempted anywhere in the West. The Pit Bulls attacking Russia from all sides keep turning up the heat---and they could soon turn into the "dogs of war." As many commentators have said over the years, what good is an over-the-moon silver and gold price if the world that exists when that happens is not a fit place to live in. Well, we may find that out sooner than we think. And on that cheery note, I'm done for the day---and the week. Enjoy what's left of your weekend, as the last quarter of 2014 is shaping up to be ugly on all fronts. See you on Tuesday.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts