Friday, September 20: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price did very little on Thursday just about everywhere on Planet Earth.  However, you can tell by the saw-tooth pattern that every rally attempt, no matter how tiny, got sold down before it could get very far, especially in New York.  The low tick of the day came at the London p.m. gold fix.

Gold closed at $1,365.10 spot yesterday, down 20 cents from Wednesday's close.  Volume was huge, around 184,000 contracts.  Virtually all of it was of the HFT variety to keep the price in check.

Silver traded very close to the the $23 spot mark right up until 1 p.m. in London, which was 8 a.m. in New York, twenty minutes before the Comex open.  The rally that began at that point got capped at the open, as did every subsequent rally attempt, no matter how tiny.

Silver closed on Thursday at $23.085 spot, up 12.5 cents from Wednesday.  Net volume was a very chunky 57,500 contracts and, like gold, it was virtually all of the HFT variety.

Platinum appeared to have the same price capping in place that gold and silver did, except the capping there was even more obvious.  Palladium had a smallish rally, but it also looked like it wanted to move higher than it actually did.  Here are the charts, and you can make up your own mind.

The dollar index closed late on Wednesday at 80.27, andand traded in a pretty tight 30 basis point range for the entire day on Thursday.  The index closed at 80.34 which was up a whole 7 basis points from the prior day.  Nothing to see here.

The gold stocks got sold into negative territory the moment that trading began.  The low came minutes after 2 p.m. EDT, and at that point, the gold stocks were down about 4.5%.  However they recovered part of those loses after that, and the HUI closed down only 3.21%.

The chart pattern for silver stocks was almost a carbon copy of the gold stocks, but Nick Laird's Intraday Silver Sentiment Index closed down only 1.89%.

I would guess that some day-type traders, nervous about the fact that gold and silver didn't show any follow-through price action up to that point on Thursday, decided to sell their shares.  I had a couple of e-mails from worried readers about this share price action, and I told them that they shouldn't read much into just one day's worth of trading.  I forget to mention to them that they should take a blue pill, so I'll mention it now.

The CME's Daily Delivery Report showed that 68 gold and 43 silver contracts were posted for delivery on Monday within the Comex-approved depositories.  In gold, Jefferies was the short/issuer on all 68 contracts, and HSBC USA and Canada's Bank of Nova Scotia were the long/stoppers on 51 and 16 contracts respectively.

In silver, Newedge was the short/issuer of note with 25 contracts, and Canada's Bank of Nova Scotia stopped 22 contracts.  Yesterday's Issuers and Stoppers Report is worth a quick peek, and the link is here.

There were deposits made in both GLD and SLV yesterday.  In GLD an authorized participant added 28,206 troy ounces.  But over at SLV, they reported receiving a very chunky 3,373,727 troy ounces of the stuff.  I'm not sure if that deposit into SLV was to cover an existing short position, or if it was in response to Wednesday's price action.  Because it was so quick, I suspect the former, but must admit that I really don't know for sure.  As I said in yesterday's column, the deposits going into both ETFs after Wednesday's big price run-ups, bear watching closely during the next three or four business days.

Joshua Gibbons, the "Guru of the SLV Bar List", updated his website with internal goings-on within SLV for the week just ended.  Here, in part, is what he had to say:  "Analysis of the 18 September 2013 bar list, and comparison to the previous week's list:  2,120,572.4 troy ounces were removed (all from Brinks London), and 963,679.6 troy ounces were added (all to Brinks London), no bars had a serial number change."

"The bars removed were from: Degussa (0.9M oz), Noranda (0.2M oz), Comptoir Lyon-Alemand (0.2M oz), J.M. UK (0.2M oz), and 17 others.  The bars added were from: Kazakhmys (0.5M oz), Krasnoyarsk (0.2M oz), Russian State Refineries (0.2M oz), and 4 others." The link to Joshua's website, and the rest of his short commentary, is here.

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

Once again there was no gold activity worthy of the name within the Comex-approved depositories on Wednesday, as just 1 kilo bar was shipped out of Brink's, Inc., and nothing was reported received.

It was also quiet in silver as well.  Nothing was received, and only 46,865 troy ounces were shipped out.

Here's a FRED chart that Casey Research's own Jeff Clark sent our way early yesterday evening Denver time.  Jeff commented that "They’re gonna need to make more room at the top of their graph again…"  That they are!

It was a very quiet news day as well, so today's missive should be a quick read if you're the type that reads a lot of stories that I post.

¤ The Wrap

There are no markets anymore, only interventions. - Chris Powell, GATA

I don't have much to add to what I've already said about yesterday's price action further up in this column.

But I was surprised by the lack of follow-through in all the precious metals during the Thursday trading session, and it's my opinion that their respective prices were kept firmly under control because of the huge volumes yesterday, most of which were of the HFT variety.  Volume was heavy in both Far East and London trading, but really blew out as the Comex session wore on in New York yesterday.

In overnight trading it was obvious that the even the church mouse had died, as price action was very quiet with a negative bias, along with volumes as low as I can remember them ever being.  The same can be said for the dollar index, as it is ruler-flat.  I don't thing I've seen such quiet price action in Far East trading as I'm looking at right now going into the 3 a.m. EDT London open.  It seems unnatural, and I'm not sure what to make of it.

Today we get the new Commitment of Traders Report for positions held at the close of Comex trading on Tuesday.  All of the price/volume activity from last Thursday's big down day will be included, and I expect the Commercial net short positions in both gold and silver to reflect that.  I'm sure there will be some improvement in platinum and palladium as well, which are two other markets that JPMorgan has short-side corners in.  Whatever the numbers show, I'll have them for you in my Saturday column.  My only regret is that Wednesday's numbers won't be included

Here's Nick Laird's now-famous "Total PMs Pool" chart updated as of the close of trading yesterday, and it certainly appears that the chart pattern is resuming its path from lower left to upper right.

And as I hit the send button on today's column at 5:15 a.m. EDT, London has been open for a bit more than two hours.  All four precious metals were sold down a bit more, but are now off their lows a hair, and volumes which had been ultra-light prior to the open, have really blow out.  Gold  and silver volumes are well over double what they were prior to the London open.  The dollar index is still doing nothing.  At this particular moment, gold is down an even ten bucks and silver is down 40 cents.

With today being Friday, I have no idea what price activity lies in store for us in New York this morning, but using the price "action" of the last two days as a guide, it will be far removed from what a free market would dictate, so be ready for anything.

Enjoy your weekend, or what's left of it if you live west of the International Date Line, and I'll see you here tomorrow.

This is an abbreviated version of Ed Steer's Gold & Silver DailySign-up to have to the complete market review delivered to your email inbox each morning for free.


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