Thursday, September 26: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price didn't do much on Wednesday up until shortly after the Comex open in New York.  The low of the day [$1,1315.90 spot] was set at 8:45 a.m. EDT, and from there the gold price rallied until shortly after the 11 a.m.  EDT London close.  The high print [$1,339.20 spot] came at 1 p.m.  After that it sold off a handful of dollars into the close of electronic trading in New York at 5:15 p.m.

Gold finished the Wednesday trading session at $1,333.10 spot, up $10.10 on the day.  Net volume was close to 151,000 contracts, down a bit from Tuesday.

It was very much the same story in silver, with the low print [$21.43 spot] coming at the same time as gold, at 8:45 a.m. EDT.  From there the silver price rallied to its 12:45 p.m. high [$22.07 spot] before getting sold down about two bits into the close.

There seems to be some sort of ceiling  at $22 the ounce at the moment, as every attempt that breached that number so far this week has been met with a wave of obvious not-for-profit sellers.

Silver closed on Wednesday at $21.795, which was up 7.5 cents from Tuesday's close.  Net volume was 42,000 contracts.

Platinum and palladium traded in a very tight range around the unchanged mark everywhere on Planet Earth yesterday.  Here are the charts.

The dollar index closed on Tuesday at 80.59 and then peaked at 80.62 at precisely 12 noon in Hong Kong on their Wednesday.  The index slid to its low of 80.29 just minutes before noon in New York, and then rallied a handful of basis points into the close.  The index finished at 80.345, which was down about 25 basis points from Tuesday.

The dollar index has been trading in a very tight range between 80.2 and 80.6 for about a week now.

The gold stocks opened in the green and rallied to their highs of the day shortly before the 1:30 p.m. Comex close.  From there, they sold off a bit as the gold price got sold down as the day worn on. The HUI closed up 1.98%.

The silver equities had a similarly shaped chart, but didn't close the day up quite as much as the gold stocks.  Nick Laird's Intraday Silver Sentiment Index finished the Wednesday session up 1.68%.

The CME's Daily Delivery Report showed that 22 gold and 57 silver contracts were posted for delivery within the Comex-approved depository on Friday.  In gold, JPMorgan Chase was the only short/issuer out of its in-house [proprietary] trading account.  HSBC USA and Scotiabank stopped them all.  In silver, Credit Suisse was the short/issuer on 56 contracts.  Scotiabank and HSBC USA were the long/stoppers on 52 of them.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in either GLD or SLV yesterday, and also no sales report from the U.S. Mint.

There was very little activity in gold in the Comex-approved depositories on Tuesday, as only 3,009 troy ounces were reported deposited, and nothing was shipped out.  And in silver, only 996 troy ounces were reported received.

I have a fair number of stories for you today, and I'll leave the final edit up to you.

¤ The Wrap

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

Except for the smallish rallies in both gold and silver during the New York trading session yesterday, it was very quiet in the precious metal markets yesterday.

Of course the big news of the day was the CFTC press release about the end of the 5-year "investigation" into price management in silver.  As I said in the second last story posted above, any weekly Commitment of Traders Report, or monthly Bank Participation Report reveals the short/long side corners in all four precious metals.   What makes this CFTC decision even more ridiculous is the fact that their very own data from these two reports makes liars out of them.  As the headline of today's column reads, the "CFTC can't stop market rigging when U.S. government does it -- it's the law."  That's the situation we've always had to deal with.

Silver analyst Ted Butler had more than a few things to say about it in his mid-week commentary yesterday which was headlined " Five Years Was Enough," and I've stolen a few paragraphs.

Today, the CFTC announced it had closed its formal silver investigation began in September 2008. The Enforcement Division decided not to recommend to the Commission that any charges be brought in silver.

Undoubtedly, to those (like me) that are convinced that silver has been and is manipulated in price, the announcement doesn’t seem to offer any substantive evidence that silver wasn’t manipulated; just an affirmation that the investigation was thorough. The announcement touched on many issues, but not the key issue – the degree of concentration on the short side of COMEX silver (and gold) held by one or two US banks in the August 2008 Bank Participation Report. Shortly afterward, it came to be known that JPMorgan was the big bank holding the concentrated short positions as a result of the Bear Stearns takeover.

This was the key issue and the announcement, effectively, left it out. This is not surprising. This investigation was only initiated, in my opinion, because the Commission couldn’t answer a simple question, namely; how a 30% net market share by JPMorgan wouldn’t be manipulative to the price. Such a large percentage of market share had always been prosecuted by the CFTC in the past for being a market corner and manipulation. Rather than answer that simple question, the Commission initiated an expensive taxpayer-funded investigation designed to avoid answering the real question.

Today’s announcement confirms something I felt for years, namely, that the agency would intend to close the investigation without specifically addressing the documented concentration on the short side of COMEX silver. There’s good reason for that – there’s no way market corners by JPMorgan could ever be legitimately explained away. The most likely outcome was always that the agency would say in the end - “we looked real hard for wrongdoing, believe you me, but didn’t find any and we can’t tell you anymore because of confidentiality considerations.”

The truth is that I was kind of annoyed when this investigation was announced five years ago because I thought we needed another silver investigation like I needed a hole in my head. It was a cop-out move by a weak agency designed to deceive the public and pander to the crooks at JPMorgan (although I didn’t know JPMorgan was so crooked back then). All that was needed was a simple explanation for why a 30% market share wouldn’t be manipulative to price, and no such answer existed.

I'm quite sure that Ted will have more to say about all of this in the public domain at some point, and when he does, I'll have it for you.

Not much happened in Far East trading on their Thursday, and as I write this paragraph, London has been open about five minutes. Nothing much is happening there, either. Volumes are extremely light, and the dollar index is up a handful of basis points.

And as I hit the send button on today's efforts at 5:15 a.m. EDT, I note that minutes after I wrote the above paragraph, both gold and silver attempted to rally higher, but ran into a seller of last resort almost immediately.  Gold volume is almost double what it was at the London open, and silver volume is up 50%, so it should be obvious to anyone except the willfully blind that these rally attempt are being forcefully resisted. The dollar index is now up 13 basis points.

That's more than enough for today, 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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