Friday, October 11: Today in Gold and Silver

NEW YORK ( TheStreet) -- Gold did precisely nothing in Far East trading on their Thursday, and got sold down just below the $1,300 spot mark by the 10:30 a.m. BST London morning gold fix.  From there it rallied quietly into the the Comex open.

About 10 minutes after New York began to trade, the price really took off to the upside and was met by a seller of last resort the moment it broke above $1,310 spot, which was almost immediately.  Within 30 minutes the gold price was down to $1,295 spot.

Gold rallied back above the $1,300 price mark, but couldn't hold on, and then around 3:15 p.m. in electronic trading, the high-frequency traders took gold a bit over ten bucks by shortly after 4 p.m. in electronic trading.  That was pretty much it for the day.

The low and high ticks in the December contract were $1,281.00 and $1,312.00 respectively.

Gold closed at $1,2886.40 spot, down $20.60 on the day.  Net volume was pretty decent at 150,000 contracts.

It was exactly the same price pattern in silver.  The price broke above the $22 spot mark with a vengeance at 8:30 a.m. EDT, but within two or three minutes the usual suspects showed up and silver was back below the $22 mark by 9 a.m.

After that it traded pretty flat until it, too, got hit in the electronic market, shedding almost 30 cents by 4:20 p.m. before gaining back a bit of that loss going into the 5:15 p.m. close of electronic trading.

The low and high for silver in the December contract was $21.55 and $22.25 the ounce respectively, and another day with an intraday move over more than 3%.

Silver closed at $21.68 spot, which was down 21 cents from Wednesday's close.  Net volume was 38,500 contracts.

Platinum was having a decent rally, but that got chopped off at the knees by a willing seller shortly after 11 a.m. in New York.  However, the price spike in palladium wasn't firmly dealt with until 1 p.m. EDT.  Here are the charts.

The dollar index closed at 80.37 on Wednesday afternoon in New York.  From there it rallied up as high as 80.57 a couple of times in Far East trading, but then began to slide a little.  The index closed late Thursday afternoon in New York at 80.43, which was almost unchanged.  For the umpteenth time there was no correlation between what the currencies were doing and precious metal prices.

Despite the lackluster gold price, the shares rallied into positive territory shortly after trading began in New York yesterday morning.  The high came around 12:30 p.m. in New York, and then drifted a hair lower.  But once the high-frequency traders showed up shortly after 3 p.m. in electronic trading, the stocks caved as well, and the HUI finished down 0.85%.

The silver stocks opened mixed, but were solidly in the green shortly after.  The high came just after 12:30 p.m. EDT, and from there the chart pattern was identical to the HUI chart pattern.  Nick Laird's Intraday Silver Sentiment Index managed to closed up a tiny 0.05%.

I'll repeat what I said in this spot yesterday, and that was that I wasn't sure who was buying the precious metal equities right now;  the good guys, or the bad guys.

The CME's Daily Delivery Report showed that 25 gold and four silver contracts were posted for delivery on Monday within the Comex-approved depositories.  Here's the link to yesterday's Issuers and Stoppers Report.

There was a withdrawal from GLD yesterday, as authorized participant took out another 57,918 troy ounces.  And as of 9:49 p.m. EDT yesterday evening, there were no reported changed in SLV.

Over at Switzerland's Zürcher Kantonalbank for the week ending October 4, they reported small withdrawals from both their gold and silver ETFs.  In their gold ETF it was 10,870 troy ounces, and in their silver ETF it was a rather smallish 91,502 troy ounces.

Surprisingly enough, the U.S. Mint had a smallish sales report on Thursday.  They sold 1,500 ounces of gold eagles and 500 ounces of the 1-ounce 24K gold buffaloes; but no silver eagles.

There was virtually no in/out movement in gold over at the Comex-approved depositories on Wednesday.  Only 64 troy ounces were reported received, and 289 troy ounces were shipped out.  I could hold that in one hand.  The link to that activity, if you wish to dignify it with that word, is here.

As is always the case, the real action was in silver, as 509,663 troy ounces were shipped in, and 318,836 troy ounces were shipped out.  The link to that action is here.

Yesterday was another quiet news day, and I don't have a huge number of stories, but some of them are definitely worth your time.

¤ The Wrap

A political party cannot be all things to all people. It must represent certain fundamental beliefs which must not be compromised to political expediency or simply to swell its numbers. – Ronald Reagan

It was pretty much one of the usual take-down scenarios, with this one coming the moment prices ran away to the upside in both silver and gold shortly after the Comex trading session began in New York yesterday.  If you didn't read the KWN interview with John Hathaway posted further up in this column, now would be a good time, as he explains it in more detail than I have time for at the moment.

I was more than happy to see the story by Adrian Ash about the LBMA meeting in Italy, and all the veiled references that gold was still money by all the bankers that spoke there.

That's why my confidence remains high that at some point there will be a great revaluation in gold to balance the books of the world's central banks, and the other three precious metals will be revalued upwards as well.  This is one of the reasons that China is actively buying up as much gold as they can, JPMorgan is long gold, and may be a reason why the powers that be are keeping a lid on prices at the moment.

Of course the timing of this event is unknown to us, but if it is in the cards, then there is a small group of people who do know.  Maybe not necessarily the date, but certainly there's a time frame.

Not much happened in gold trading in the Far East or at the London open.  Silver was more "volatile", as a rally in mid-morning trading in Hong Kong got dealt with in the usual manner, and the high-frequency traders also showed up going into the London open, taking the price down to below $21.50 in the spot market.  Volumes in both metals are pretty decent, and all is of the HFT variety.

And as I hit the send button on today's efforts at 5:25 a.m. EDT, I note that all four precious metals got sold down to new lows by the HFT gang at precisely 10 a.m. BST in London, and as you've probably already figured out on your own, these could not possibly be random events. Gold volume is north of 37,000 contracts, and silver is over 10,000 contracts.  The dollar index isn't doing a thing.

With today being Friday, it's hard to say what lies ahead in New York trading today, but you should prepare yourself for any eventuality.

That's all for today, and I'll see you here on Saturday, which will be Sunday west of the International Date Line.

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.


More from Gold

Gold Prices Look 'Rich' at Current Levels - Here's What Could Change That

Gold Prices Look 'Rich' at Current Levels - Here's What Could Change That

Watch This If You're Wondering How Much Gold to Have and When to Sell

Watch This If You're Wondering How Much Gold to Have and When to Sell

How Can Gold Continue This Upward Momentum?

How Can Gold Continue This Upward Momentum?

The Outlook for Gold Prices Looks Awful Even With 10-Year Yields Above 3%

The Outlook for Gold Prices Looks Awful Even With 10-Year Yields Above 3%

Gold Owes Everything to Investor Interest

Gold Owes Everything to Investor Interest