Thursday, November 28: Today in Gold and Silver

NEW YORK ( TheStreet) -- No sooner I had I hit the send button on yesterday's column when the selling pressure showed up in London.  The low of the day for gold came around 3:30 p.m. in electronic trading in New York, and the price traded sideways from there.

The CME recorded the high and low ticks as $1,254.80 and $1,235.50 in the December and February contracts.

Gold finished the Wednesday trading session at $1,238.00 spot, down an even $4.00 from Tuesday.  Net volume, once December was subtracted out, was very decent at 163,000 contracts.

The top of the rally in silver that began shortly after the London open, ended a few hours later at 11 a.m. GMT.  Most of the subsequent price decline was done by 12:30 p.m. in New York, and the rally that followed wasn't allowed to get far.  The absolute low came a few minutes before the 5:15 p.m. EST electronic close.

The high and low ticks in the December month were reported by the CME as $20.08 and $19.585.

Silver closed on Wednesday at $19.665 spot, down 15 cents, and safely back under the $20 spot price for the second day in a row.

And also for the second day in a row, platinum got sold down for a loss.  Yesterday's sell off began shortly after 11 a.m. Zurich time, and most of the engineered price decline was done shortly before the Comex close.  This was another new low for platinum in this move down.  Palladium rallied a bit in overnight trading, but obviously ran into a price ceiling in Zurich trading before it, too, succumbed to selling.  Palladium closed lower for the last two days, but only by a dollar or so each day.  Here are the charts.

The dollar index closed in New York on Tuesday at 80.75, but began chopping lower as soon as Far East trading began on their Wednesday.  The index got as low as 80.50, but at precisely 9 a.m. EST a rally developed that took it back to almost unchanged on the day, as it closed at 80.73 on Wednesday, down a couple of basis points.

The gold stocks spiked up over a percent at the open, but then got sold down to almost unchanged by 10:30 a.m. in New York.  After that they chopped sideways for the remainder of the trading session.  The HUI finished up 0.79%.

It was pretty much the same story with the silver stocks, but they got sold down into negative territory by 10:30 a.m. EST, but recovered to close in the black by day's end.  Nick Laird's Intraday Silver Sentiment Index closed up 0.40%.

The CME Daily Delivery Report yesterday for the last day of November drew a blank, as there was no data to report; so the November delivery month was obviously done as of Tuesday.  The First Day Notice numbers for delivery into the December contract were a bit of a surprise, as only 68 gold and 786 silver contracts were posted for delivery on Monday.

In gold, the short/issuers were RCG with 40 contracts, and R.J. O'Brien with 24 contracts.  JPMorgan stopped 45 contracts in its in-house [proprietary] trading account and another 5 for its client account.  I expect the next few days will bring much more delivery action in gold, and it will be interesting to see who the issuers and stoppers are.  But if I had to guess, it would be "all the usual suspects."

In silver, it was Canada's Bank of Nova Scotia, Jefferies, and in distant third, Barclays as the biggest short/issuers; with 393, 326 and 46 contracts respectively.  Of course the tallest hog at the trough as long/stopper was JPMorgan Chase with 360 contracts in its proprietary trading account and 81 for its client account.  In distant second was BNP Prime Brokerage with 105 contracts.  The rest of the contracts were divided up between twenty or so of the smaller commercial brokerage houses.  Yesterday's Issuers and Stoppers Report is definitely worth skimming, and the link is here.

There was another big withdrawal from GLD yesterday, as an authorized participant shipped out 183,306 troy ounces for parts unknown.  And as of 9:54 p.m. EST there were no reported changes in SLV.

The U.S. Mint had a small sales report yesterday.  They sold 5,000 troy ounces of gold eagles and 1,500 one-ounce 24K gold buffaloes, and that was all.

It was a very quiet in/out day in gold over at the Comex-approved depositories on Tuesday, as only 257 troy ounces were reported received, and nothing was shipped out.

But, as it almost always is, it was a totally different story in silver, as 300,586 troy ounces were reported received and 608,227 troy ounces were shipped out.  All of the activity was at Brink's, Inc. and the link to that action is here.

I have the usual number of stories for a mid-week column, and I'm sure there are several posted below that you'll find to your liking.

¤ The Wrap

You don’t have to look far to see why gold and silver prices fell over the past four weeks – new technical fund short selling on the Comex. That’s a fact, Jack. And you don’t even have to accept my version that JPMorgan and other collusive commercials lured the technical funds into those short sales by lowering the price at key points, through HFT and spoofing. Let’s leave that aside and just look at the data in the COT reports and other indisputable facts. - Silver analyst Ted Butler, 23 November 2013

It was another day where the precious metals got sold down after rallying a bit in Far East and early London trading, and for no reason I could think of.  The supply/demand fundamentals in all four precious metals are off the charts, but JPMorgan et al are not allowing that to be reflected in the price, at least not until they've covered every short, and gone long every contract that they possibly can in all four precious metals.

"Da Boyz" are still working over platinum pretty good, and it's been in a virtual non-stop down-trend for the last two weeks.  It's now in oversold territory, and one has to wonder if the bullion banks finally cleared out their huge short position in this precious metal to the best of their abilities.  Here's the six-month platinum chart.

Are we at the bottom yet?  Based on the price action, I'd guess so.  " But it ain't over 'till it's over" as Yogi Berra used to say, and there's no way of knowing if JPMorgan et al are done sticking it to the technical funds and small traders.  But there isn't much meat left on their bones, as they are so mega short already, and it's hard to imagine that they would go any further down that road.

But it's what happens on the next rally that matters, and what "da boyz" do when it begins.  I've always wondered what might trigger it, and I've always thought that when JPMorgan et al finally allow prices to rise for real by not showing up as short sellers of last resort, there will be some black swan event happening at the same instant.  It could be economic, monetary, political, or now maybe even military.  But whatever it is, it won't be by happenstance, as there are no coincidences anymore.

As to when this seminal event might occur, I haven't a clue.  But it's out there somewhere.

Very little has happened price wise in Far East trading on their Thursday as I write this paragraph about 10 minutes before London opens.  Volumes are certainly on the lighter side, and most of the trading activity in gold and silver is now in their respective new front months.  The dollar index isn't doing much of anything.

And as I hit the send button on today's missive at 5:10 a.m. EST, all four precious metals are attempting to rally in mid-morning London trading, and all are up a bit from yesterday's close in New York.  Volumes in both gold and silver are still very light, so I wouldn't read much into the current price action.  The dollar index is down about 14 basis points.

As I said in this space yesterday, I'm not expecting much in the way of price activity during the next two days, unless one of those 'black swans' I was referring to puts in an appearance.

Don't forget that unless something blows up or melts down today, I won't have a column tomorrow.

I'll see you here on Saturday, or Sunday if you live 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.

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