Saturday, November 30: Today in Gold and Silver

NEW YORK ( TheStreet) -- There wasn't much going on price wise in gold on Thursday because of the American Thanksgiving holiday.  That lackluster performance lasted until about 30 minutes before the London open on Friday morning, but the rally that developed at that point had its wings clipped very shortly thereafter, as did every other rally attempt in all four precious metals during the Friday trading session on Planet Earth.  Trading was pretty much done for the day by the 1:30 p.m. Comex close in New York.

The CME recorded the high and lows ticks over that past two day trading period as $1,254.50 and $1,234.10 in the new front month, which is February.

Gold closed on Friday at $1,252.00 spot, up $7.00 from Thursday's close, and an even $14 from Wednesday's close.  Total net volume over those two days was only 119,000 contracts.

The silver price action was similar in many respects to the gold price action, with every rally being cut short in Friday trading, and the price was obviously capped at $20.10 in New York before the getting sold down a bit as the trading day wound down.

The low and high ticks were recorded by the CME as $19.645 and $20.10 in the new front month for silver which is March.

Silver closed at $20.025 spot, up 27 cents from Thursday, and up 36 cents from Wednesday's close.  Net volume for Thursday and Friday combined was around 31,500 contracts.

Platinum and palladium also had very decent rallies, but ran into sellers of last resort in the New York trading session as well.  Both finished up on the day, but only just, as "day boyz" were obviously out in force in all four precious metals.  Here are the charts.

The dollar index closed on Wednesday afternoon in New York at 80.73 and then chopped lower until 2 p.m. Hong Kong time on their Friday afternoon, where it hit 80.50.  It rallied a bit from there, but put in a double bottom at 11 a.m. in New York, which was time that London closed for the weekend.  Then it rallied sharply, and by 1 p.m. EST had topped out at 80.68, and traded sideways into the close, finishing the day at 80.64, which was down 9 basis points from Wednesday.  Nothing to see here.

With New York closed on Thursday, there was no trading in gold equities.  But on Friday morning they gapped up about 2% at the open, and then tacked on a bit more before trading sideways into the 1 p.m. EST close.  The HUI finished up 2.24%.

The silver stocks did even better on Friday, they gapped up and then rallied even further.  Nick Laird's Intraday Silver Sentiment Index closed up 4.04%.

The CME's Daily Delivery Report for Day 2 of the December delivery month was another surprise, at least in gold.  It showed that only 12 contracts were posted for delivery on Tuesday.  However, JPMorgan was the long/stopper on all 12 of them.  Why so few deliveries in gold in the first two days of the biggest delivery month of the year sure has me scratching my head, and I'll be more than curious to know what Ted Butler thinks of this state of affairs in his weekend review to his paying subscribers later today.

The silver deliveries looked more normal as there 552 silver contracts posted for delivery within the Comex-approved depositories on Tuesday.  The two big short/issuers were Credit Suisse with 309 and, like on Wednesday, BNP Prime Brokerage issued another 105 contracts.  It was the "usual suspects" as long/stoppers, the two biggest silver short holders, JPMorgan Chase with 350 in its in-house [proprietary] trading account, along with 68 in its client account.  In distant second was Canada's Bank of Nova Scotia with 74 contracts stopped.

Yesterday's Issuer's and Stoppers Report is certainly worth a quick peek, and the link is here.

There were no reported changes in GLD yesterday, and obviously none on Thursday either.  And as of 9:40 p.m. yesterday evening, there were no reported changes in SLV.

The good folks over at the Internet site updated the short interest in both GLD and SLV on Thursday as well.  I was somewhat surprised to see an increase in the short position in SLV, especially when there as decent decrease in the short position in GLD.  However, the numbers are what they are.

The short position in SLV rose by 8.83% during the first half of November.  The new short position is 18,717,700 shares/troy ounces, up about 1.52 million ounces from the previous report.  Said another way, SLV is owed 542 tonnes of silver.  One can only fantasize what the silver price might be if this amount was purchased and delivered to SLV.  The other problem is that this amount of physical silver is just not available anywhere.  It could become available, I suppose, but not at the current market price.

The short position in GLD declined by 8.56% during the first half of November.  The new short position, in troy ounces, is 2.24 million; which is a bit over 69 tonnes of the stuff.  That's a little over half of what China imported through Hong Kong in October.

While on the subject of SLV, Joshua Gibbons, the " Guru of the SLV Bar List", updated his website with SLV's in/out activity for the current reporting week, and here is what he had to say:  " Analysis of the 27 November 2013 bar list, and comparison to the previous week's list:  3,370,836.0 troy ounces were removed (all from Brinks London), 385,030.8 troy ounces were added (all to JPM London V), and no bars had a serial number change.

The bars removed were from: Russian State Refineries (0.7M oz), Degussa (0.6M oz), Kazakhmys (0.6M oz), and 23 others.  The bars added were from: Russian State Refineries (0.3M oz) and 3 others.

As of the time that the bar list was produced, it was overallocated 129.6 troy ounces.

There was a withdrawal of 674,098.6 troy ounces on Monday that has not yet been reflected on the bar list, that should appear on the next bar list (as it normally takes a day or two for the bar list to get updated). The link to Joshua's website is here.

The U.S. Mint had a sales report on Friday, for the last day of the month.  They didn't sell any gold, but they did sell another 362,000 silver eagles.  Unless there's a final update from the mint on Monday, the November sales month finished as follows: 48,000 troy ounces of gold eagles; 14,000 one-ounce 24K gold buffaloes; and 2,300,000 silver eagles.  Based on these sales, the silver gold ratio was 37 to 1.

Canada's Royal Canadian Mint posted its third quarter/YTD financial statements on its website on Thursday, and I stole the precious metal data below from Page 7 of that report the same night, but it had to wait for today's column.

The volume of Gold Maple Leaf (GML) sales increased 17.5% to 195,000 ounces compared to 166,000 ounces in the same period in 2012. Sales of Silver Maple Leaf (SML) coins increased to 6.7 million troy ounces from 4.8 million troy ounces in the same period last year, a 37.1% increase over Q3 of 2012.

The continued growth in demand for GMLs that began in November 2011 continued through July 2013 as the gold price rebounded from a low of US$1,192. In August and September market conditions were not optimal for the sale of new gold bullion coins, although a modest, short-term recovery in demand was sparked by negotiations around the U.S. debt ceiling.

Silver Maple Leaf coin demand continues to be very strong in key markets such as Canada, the U.S. and Europe; the price rose from a low of US$18.61 per ounce in the second quarter to a high of $24.74 during the third quarter. Our silver bullion coins remain very popular among global physical investors, which could result in record sales of SMLs in 2013.

The Mint is also experiencing continued growth in demand for bullion bars, particularly gold kilo bars and silver 100-ounce bars, as well as demand for the storage of physical precious metal for individual and institutional investors.

During the 39 weeks [The first three quarters of 2013. - Ed] ended September 28, 2013, sales of GML coins increased 82.5% to 876,000 troy ounces from 480,000 troy ounces in 2012; while sales of SML coins increased 61.7% to 20.7 million ounces from 12.8 million ounces in the previous year.

Well, dear reader, these are really big numbers, so it's obvious that demand is very robust, but I don't think it's even close to being all retail demand.  The reason I know this for sure is that I work in the retail bullion business in my day job, and I talk to our wholesalers all the time, so I know precisely what's going on in that area.

It's my opinion that someone with very deep pockets is buying every silver eagle and silver maple leaf that the U.S. and Canadian mints are able to produce.  And if they're buying the stuff hand over fist, so should you, as I suspect that these "strong hands" know that the day is fast approaching when a two digit silver price will be a thing of the past.

Over at the Comex-approved warehouses on Wednesday there 1,768 troy ounces of gold reported received, and 16,1032 troy ounces were shipped out.  The link to that activity is here.

But there was more big movement in silver, as 596,643 ounces were received, and 980,804 ounces were shipped out the door for parts unknown.  The link to that action is here.

Before getting into today's list of stories, here's Nick Laird's " Global Indices" chart showing the world-wide melt-up in the stock markets.  This, will, of course, end badly.  But when, is the question.

With two days worth of news items, plus what I've been saving for today's column on top of that, I have a very large number of stories for you today.  I hope you can find the time over what's left of your weekend to read the ones that float your boat.

¤ The Wrap

War is no longer made by simply analysed economic forces if it ever was. War is made or planned now by individual men, demagogues and dictators who play on the patriotism of their people to mislead them into a belief in the great fallacy of war when all their vaunted reforms have failed to satisfy the people they misrule. - Ernest Hemingway: " Notes on the Next War: A Serious Topical Letter" first published in Esquire (September 1935)

Today's pop "blast from the past" is a rather somber/melancholy piece, and the video clip its embedded in doesn't help the mood at all.  But in some ways it reflects what's going on in the world at the moment.  It was a big hit for this British rock band back in 1985, and the link is here.

Today's classical "blast from the past" by Johannes Brahms dates from 1881, and is his four-movement Piano Concerto No. 2 in B-flat major, Op.83, which he composed a full 22 years after his first piano concerto.  The premiere of the work was given in Budapest on November 9, with Brahms himself as soloist and, not surprisingly, it was an immediate success.  Even today it brings the house down every time and everywhere it's performed.

This performance is with the Munich Philharmonic Orchestra.  Sergiu Celibidache conducts, and the incomparable Daniel Barenboim does the honours at the keyboard.  It doesn't get any better than this, and the link is here.

Even though volumes were light on Friday, it was obvious that the precious metals wanted to rally despite that fact, and it was equally as obvious that a not-for-profit seller was there to make sure that these rallies never amounted to much.  All four precious metals got sold down well of their highs going into the Comex close.

I wish I had a Commitment of Traders Report to look at, but that has to wait until Monday.  I know that it will show reduced Commercial net short positions in both gold and silver, with the only question being how much more JPMorgan has reduced their short position in silver, and added to their long position in gold.

I can't figure out how much longer this price management scheme in all four precious metals, plus copper, will continue; but I'm guessing that we're pretty close to the end.  Of course I've said that before, so you can take that statement for what its worth.

The story about platinum prices I posted in the Critical Reads section further up, gets to the nub of the issue, and it's refreshing to see some straight up commentary.  Hopefully other writers will pick up on it, but I'm not holding my breath.

Nick Laird slid the updated " Total PMs Pool" into my in-box in the wee hours of this morning, and as you can tell, despite the pounding the precious metals have taken over the last month or so, the total precious metals in visible above-ground stocks hasn't changed a lot, despite the recent large withdrawals from GLD, and now SLV.

All we can do is sit here and watch this world-wide insanity unfold.  As I said further up, it will end badly some day, but what day that might be is unknown; at least to us.  I've done what I can to prepare for what eventuality may befall me, but there's always that gnawing doubt that I haven't done enough.  I would guess, that at times, you would feel the same.

I'll leave you on that cheery note, and I'll see you on Tuesday.

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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