Tuesday, October 1: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price spiked up over twenty bucks the moment that trading began in New York at 6 p.m. on Sunday night, so it was obvious that there were no sellers around at the open.  But a seller or last resort appeared seconds later, and within fifteen minutes, "da boyz" had the price back under control.

From that point, nothing happened until the price began to head lower at 1 p.m. BST in London, and shortly before the stock market opened in New York, gold had hit its low tick of the day, which the CME recorded at $1,322.00 spot in the December contract.

The subsequent rally, which really developed some legs around 10:45 EDT, got cut off at the knees just a few minutes before London closed for the day.  After that, the gold price chopped lower into the 5:15 p.m. electronic close.

Gold finished the New York session at $1,327.90 spot, which was down $8.30 from Friday's close.  It would have obviously finished materially higher if it had not been interfered with, which it obviously was.   Net volume was fairly light at only 124,000 contracts.

The silver price action certainly had more shape to it, or volatility, as some so-called analysts like to say.  The spike over $22 at the Sunday night open in New York got dealt with in the usual manner, and from there it got sold down to its Far East low around 1 p.m. Hong Kong time.

The subsequent rally lasted until about 9:30 a.m. BST in London, before getting sold down to its absolute low of the day [$21.435 in Dec.] at 9:15 a.m. EDT.

From there it rallied a bit until, like gold, it blasted higher shortly after the London p.m. gold fix.  And, also like gold, it ran into a not-for-profit seller within minutes of breaking above $22 spot once again.  After getting sold down to around $21.70 spot, the silver price traded sideways for the rest of the New York session, with every little rally attempt [also like gold's] getting sold down before it got anywhere.

Silver closed at $21.705 spot, down 7.5 cents from Friday.  Net volume was pretty light at 34,000 contracts.

Here's the New York Spot Silver [Bid] chart on its own, so you can see yesterday's trading activity in more detail.

The platinum chart is a mini version of the silver chart, with the only real difference being the size of the rally between the New York low at 9:15 EDT, and the subsequent high that was set shortly before 11 a.m. EDT.  Platinum was down a percent when all was said and done.  It was virtually the same for palladium.  Here are the charts.

The dollar index, which closed in New York at 80.26 on Friday, popped 10 basis points at the open on Sunday night, and then chopped slightly lower until 1 p.m. in London, which was 8 a.m. in New York.  Then, in less than an hour, the index shed around 25 basis points, with the low tick of 80.05 coming just minutes before 9 a.m. in New York.  And, for the third time in ten days, there was a deep-pocket buyer waiting to catch a falling knife and prevent the dollar from taking out 80.00 to the down side once again.  From there, the dollar index chopped higher into the close, finishing the Monday session at 80.22, which was down 4 basis points on the day.

If you can see any correlation between the precious metal price action and the dollar index, especially between 8 a.m. and 9:15 a.m. EDT, I'd love to hear from you.

The gold stocks struggled valiantly on either side of unchanged for the entire New York trading session, and the HUI finished down a tiny 0.17%.  It could have been worse.

The silver stocks spent virtually the entire day in the red, and Nick Laird's Intraday Silver Sentiment Index closed down 1.49%.

The CME's Daily Delivery Report for "Day 2" of the October delivery month showed that 118 gold and 6 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  There were no stand-out issuers in gold, but the biggest long/stopper was HSBC USA, as they picked up 92 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in either GLD or SLV yesterday.

Over at the U.S. Mint they had a small sales report to round out the month of September.  They reported selling 488,000 silver eagles, and nothing else.  For the month, the mint sold 13,000 ounces of gold eagles; 10,000 one-ounce 24K gold buffaloes; and 3,013,000 silver eagles.  Based on these sales figures, the silver/gold sales ratio works out to 131 to 1.

Year-to-date the mint has sold 36,088,000 silver eagles, so unless something unforeseen pops up between now and year end, silver eagles sales should set a new sales record by a wide margin, and well over the 40 million mark.  By the way, those 36 million silver eagles sold so far this year equates to a bit more than all the silver that the U.S.A. will dig out of the ground in 2013.  One can only wonder how much silver the U.S. will have to import this year to meet overall physical demand.

There wasn't much in/out activity in either gold or silver over at the Comex-approved depositories on Friday.  In gold, only 482 troy ounces was reported shipped out, and in silver it was only 88,645 troy ounces that met the same fate.

Since this is my Tuesday column, I have a fair number of stories for you today, and I hope you can find the time to wade through them all.

¤ The Wrap

If the CFTC or JPMorgan could have refuted the sole issue that led to the original investigation and all subsequent allegations of manipulation on my part, both would have done so. In a real sense, I am trying to help the agency and JPM explain away the data and market facts and have them shoot down my allegations that JPMorgan is manipulating silver and gold prices. Yes, I’m trying to make it easy for the CFTC and JPMorgan to make this all go away for good and even put me out to pasture (only figuratively speaking please). It’s simple – all either has to do is explain why JPMorgan’s historic (over the past 5 years) concentrated holdings of as much as 25% to 40% of the COMEX gold and silver market wouldn’t necessarily be market corners and manipulative to prices. If either could offer a legitimate explanation, there would be no allegations on my part.

But that legitimate explanation does not exist, and both the CFTC and JPMorgan are trying their best to avoid even a discussion of concentration in COMEX gold and silver for fear it would open a can of worms. So the only alternative is to close the investigation with no full explanation and for JPMorgan to continue to ignore credible allegations of illegal market behavior. As it turns out, the CFTC had no other practical choice but to lie. - Silver analyst Ted Butler… 28 September 2013

It should be obvious to anyone with an open mind that the precious metal prices were heavily regulated yesterday, as every rally attempt, not matter how big or small, got crushed before they could get very far, especially the New York open on Sunday night.  Of course silver was kept under the $22 price mark once again.  Here's the 30-day chart.

Other than that, there's not too much to add to yesterday's price action.  Yes, volume was on the lighter side, but until the sellers of last resort showed up, all the metals would have obviously closed materially higher.

I'm sure that JPMorgan et al are actively intervening [with the Fed's consent] to keep prices contained in the Comex futures market as the U.S. government goes through the trials and tribulations of the budget impasse, along with the impending shut-down of parts of the U.S. government.  How long this lasts, and how successful it will be, is still unknown.  But so far, they haven't had much trouble keeping gold and silver prices in check.

Today, at the close of Comex trading, is the cut-off for this Friday's Commitment of Traders report.  Just glancing at the gold and silver charts for the four reporting days so far, the price of both metals have been held as flat as a pancake, and note that fact in the above chart.  As you can tell, this is not normal free-market price action, as it's obvious that "da boyz" have prices locked down.

Gold and silver prices didn't do much in Far East trading on their Tuesday until 1 p.m. local time, and then they rallied a bit into the London open.  Volumes are extremely light, with the emphasis on "extremely," and much lighter than this time on Monday.  Based on that, I wouldn't read much into the current price action, either up or down.

I note that the dollar index, which was barely above the 80.00 level during most of the Far East trading session, took a header shortly after 2 p.m. local time in Hong Kong, and dropped down to the 79.87 mark before a buyer of last resort showed up just minutes before the London open.  The index is barely above the 80.00 mark as I hit the send button on today's column at 5:20 a.m. EDT, but all four precious metals have now been sold back to almost unchanged on the back of the dollar index "rally" off its low.

Before heading off to bed, I'd like to point out something that you're probably already aware of, and that's the pre-show promotion of the Casey Research 2013 Summit Audio Collection.  The Summit itself starts this Friday and ends on Sunday, October 6.  The pre-show pricing will be valid until the product is ready to ship, which will be a few days after the show is over.  All you need to know about this offer is linked here, and there's no cost to you just to check it out, which I urge you to do.

See you 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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