Wednesday, December 18: Today in Gold and Silver

NEW YORK ( TheStreet) -- Gold rallied a bit a few hours before the London open, but that wasn't allowed to last---and the gold price got sold down right in the the 8:20 a.m. Comex open.  The subsequent rally attempt cut cut off at the knees minutes after the equity markets opened in New York.  By 10:30 a.m. EST, gold was at, or close, to its low of the day---and from there it chopped sideways into the 5:15 p.m. electronic close.

The CME reported the high and low ticks as $1,247.60 and $1,226.50 in the February contract.

Gold closed in New York at $1,231.10 spot, down $9.60 on the day.  Net volume was pretty decent at 142,000 contracts.

The price action in silver was almost the same as gold's.  The brief price spike above $20 spot early in Hong Kong trading got met by the usual seller[s] of last resort.  The absolute low price of the day occurred a few minutes before the Comex open---and the 9:30 a.m. EST rally in silver also met the same fate as gold at that particular juncture.  Within minutes, the silver price was back below the $20 spot mark.  From it's post-rally low, the silver price never got a sniff of the $20 price mark again.

The high and low prices for silver were reported as $20.23 and $19.675 in the March contract.

Silver closed at $19.95 spot, down 1.5 cents from Monday's close.  One can only fantasize about what the silver price might have closed at if left to the free markets yesterday.  Net volume was pretty heavy at 46,000 contracts, so JPMorgan et al had to throw a lot of paper silver at the price to keep it from doing what it really wanted to do.

But it was platinum and palladium [in particular] that got hit the hardest on Tuesday.  Like gold and silver, their highs of the day came at 2 p.m. Hong Kong time.  From there they drifted lower, but really got sold down starting late in the London lunch hour, with the lows coming at, or just after, the 1:30 p.m. EST Comex close.  Here are the charts.

The dollar index closed in New York on Monday afternoon at 80.11.  From there it drifted lower, hitting its Tuesday low of 80.00 at precisely 8 a.m. GMT, which was the London open---a data point i reported on in The Wrap in yesterday's column.  From there it rallied to its high of 80.25 at 10:30 a.m. EST in New York, which just happened to be the post-rally low ticks in both gold and silver in New York yesterday.  By the Comex close, the index was back to 80.01---and from there rallied a few basis points into the close.  The index finished the day at 80.04, which was down seven points from Monday.

The gold stocks gapped down about a percent at the open, but then rallied back to unchanged on the back of the 9:30 a.m. EST price spike yesterday.  Once the price got squashed, the shares followed, hitting their low of the day at 10:30 a.m. EST---coinciding precisely with the low tick of the day in gold.  The shares rallied back a bit from there, but then chopped sideways into the close.  The HUI finished down 0.47%.

Even though silver did better on a price basis yesterday, the shares were softer---and Nick Laird's Intraday Silver Sentiment Index only bears a passing resemblance to the HUI chart, as it closed down 0.55%.

The CME's Daily Delivery Report showed that 67 gold and 8 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  In gold, the short/issuers didn't matter, but the biggest long/stopper was, once again, JPMorgan Chase in its in-house [proprietary] trading account with 65 of those 67 contracts.  In silver, JPM stopped five contracts in it's proprietary trading account as well---picking up nickles in front of a steam roller, one would think.  The link to yesterday's Issuers and Stoppers Report is here.

Another day, another withdrawal from GLD.  This time it was 67,033 troy ounces.  And as of 10:20 p.m. EST yesterday evening, there were no reported changes in SLV.

And, for the second day in a row this week, there was no sales report from the U.S. Mint, which I find most strange.

Over at the Comex-approved depositories on Monday, it was the fifth day in a row that JPMorgan Chase reported receiving precisely two tonnes of gold kilobars into the Eligible category in their warehouse.  I'd love to know who the refiner is, and who owns them.  The link to all of yesterday's activity in gold is here.

It was a monster day for silver in these same Comex-approved depositories on Monday.  They reported receiving 1,133,903 troy ounces, and shipped out 786,243 troy ounces.  The link to that action is here.

I have a lot of stories for you today, even more than I had in my Tuesday column, so I hope you can find the time to wade through the ones that interest you.

¤ The Wrap

The delivery situation in the December Comex gold and silver contract month continued to feature JPMorgan as almost the exclusive taker (stopper) of gold deliveries and the leading stopper of silver deliveries. So far this month, JPMorgan has taken 4,426 of the 4,614 gold contracts offered for delivery in the bank’s proprietary (house) trading account, or almost 96% of the total gold contracts issued. This would appear to be fitting for a bank I allege to hold a market corner in Comex gold. - Silver analyst Ted Butler: 14 December 2013

It was another day where all four precious metals wanted to rally, but the sellers of last resort were always at the ready.  And, like Monday, there was a decent amount of volume associated with yesterday's price action, so it's a good bet that the technical fund short covering rallies were met by JPMorgan et al selling their long positions, or going short themselves.  There are a negligible number of producers or consumers in the Comex futures market in precious metals.  Virtually all of the big players are hedged in the OTC market---and that certainly includes all the miners that have sold metal forward. 

Yesterday was the cut-off for the reporting week for Friday's COT Report.  It's a good bet that there will be an improvement in the Commercial net short positions in all four precious metals, but there have been capped rallies for the last three business days since last Thursday's big engineered price decline, so the report won't be quite a positive as it might have been.

Here are the 30-day charts for both silver and gold.  The last five candles on each chart is the data that will be in Friday's COT report.  The big engineered price decline in both metals last Thursday is obvious---as are the other JPMorgan et al-instigated price declines shown on these charts.

Gold and silver prices were as quiet as the proverbial church mice in Far East trading on their Wednesday---and volume was extremely light, with virtually all of it of the HFT variety.  London has been open about 20 minutes as I write this paragraph---and not much is happening there, either.  The dollar index has been as flat a pancake since it opened in New York at 6 p.m. EST last night.

I would guess that the financial world is waiting for what Bernanke & Co. have to say for themselves later this afternoon when they're finished their deliberations on the hopelessness of it all.  I would certainly expect there to be a "reaction" in the precious metals---and probably a few microseconds before the announcements are made.  Such is the way of the "free markets" nowadays.

And as I send off today's efforts to Stowe, Vermont at 5:15 a.m. EST---I note that all four precious metals had tiny rallies shortly after London opened for business, and with the exception of palladium, these rallies were hit hard almost immediately.  Silver made it up to $20 spot, but that was as far as it was allowed to get, at least for the moment.  Volumes, which had been fumes and vapours at the London open, have blown out by more than 50% in both gold and silver during the last couple of hours, so it's obvious that these rallies are running into the usual resistance from what I would think would be "all the usual suspects".  The dollar index still isn't doing a thing.

I'm not sure what to expect when the smoke goes up the chimney over at the Fed tomorrow afternoon, but whatever happens, I expect a lot of movement in the precious metals---and the U.S. dollar index. 

I'll see you here tomorrow---and I'll certainly be talking about the aftereffects then.

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