Another decent day for the precious metal stocks. No changes in GLD, but a big withdrawal from SLV. Huge gold and silver sales reported YTD by the U.S. Mint. Another active day over at the Comex-approved depositories on Friday---especially in silver.
NEW YORK ( TheStreet) -- The gold price popped five bucks or so at 9 a.m. Hong Kong time on their Monday morning, but by 9:45 a.m. GMT in London, that gain [and a bit more] had disappeared. From that point gold traded more or less sideways up until the low tick at 7:15 a.m. in New York, five minutes before the Comex open. Then gold began to rally quietly, hitting it's high tick of the day around 4 p.m. in electronic trading in New York. It sold off a hair after that, but not by a lot. The low and high ticks were $1,243.00 and $1,255.30 in the February contract. Gold closed in New York on Monday at $1,252.40 spot, up $3.80 from Friday's close. Volume, net of roll-overs, was a very light 87,000 contracts, with a big chunk of that coming before the London open. London volume was almost non-existent yesterday. The price path in silver was much the same as gold's. The only real difference was that most of silver's gains were in by 2 p.m. After that, the silver price didn't do much. The CME recorded the low and high ticks at $19.955 and $20.47 in the March contract. Silver finished the Monday trading session at $20.405 spot, up 23.5 cents from Friday's close. Gross volume was pretty decent at 39,000 contracts and, like gold, a healthy chunk of that came before the London open as well. Both platinum and palladium rallied a bit in Far East trading on their Monday---and hit their respective lows at the 10:30 a.m. GMT London morning gold fix. Both then chopped higher, but platinum finished up on the day---and palladium closed with a small loss. Here are the charts. The dollar index closed late Friday afternoon in New York at 80.62---and then proceeded to trade in a very tight range either side of that number all through the Monday session. The index finished the day at 80.57---which was down a whole 5 basis points. Nothing to see here. The gold stocks sagged a bit at the open, but by shortly after 10:30 a.m. EST they were back in the green---and never looked back. The HUI finished virtually on its high tick, up 3.04%. The silver stocks followed a similar price path, but didn't rally nearly as much, as Nick Laird's Intraday Silver Sentiment Index closed up only 2.01%. The CME's Daily Delivery Report showed that zero gold and 16 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday. JPMorgan issued all 16 contracts out if its in-house trading account---and Canada's Bank of Nova Scotia stopped 15 of them. The link to yesterday's Issuers and Stoppers Report is here. There were no reported changes in GLD yesterday, but over at SLV an authorized participant withdrew a chunky 1,924,796 troy ounces. It would be my guess, based on the recent price movement in silver, that this was not [as Ted Butler would call it] a "plain vanilla" withdrawal, but was probably silver that was more desperately needed elsewhere. The possibility also exists that it was withdrawn in order to prevent an entity that already owns a big chunk of SLV shares from exceeding the reporting requirement limits of the SLV ETF. JPMorgan comes to mind. Well, the U.S. Mint hasn't fixed their website yet, but thanks to Ted Butler---and Joshua Gibbons the "Guru of the SLV Bar List"---I have the latest sales figures for the U.S. Mint as of the close of business yesterday. So far in 2014, the mint has sold 63,000 troy ounces of gold eagles---32,500 one-ounce 24K gold buffaloes---and 3,180,500 silver eagles. The silver eagles were no surprise at all, but the gold sales are quite something. It will be interesting to see how the rest of the month unfolds. Over at the Comex-approved depositories in gold on Friday, they reported receiving 32,096 troy ounces---all of it into the HSBC USA warehouse. Only 675 troy ounces were reported shipped out. Here's the link to that activity. It was a monster day for silver movements on Friday, as 1,373,081 troy ounces were shipped in---and 1,747,967 troy ounces were shipped out. BUT---and it's a big but---of that in/out movement, 1,277,666 troy ounces was a transfer from Scotia Mocatta's vault directly into JPMorgan's vault. The link to that action is here---and it's worth a look. Here's some eye candy for you. It was a photo taken inside the vaults of Switzerland's Zürcher Kantonalbank a few years back---and I found it while I was "housecleaning" my computer on the weekend. With some rather ruthless editing, I managed to get the list of stories down to what I consider a reasonable number, and I hope there are some in here that you like.
¤ The Wrap
The exact path of prices is more difficult to divine, at least in the short term. But considering all the facts, the risk of a sell-off in the short term is vastly overshadowed by the higher prices to come in the long term. And prices can just as easily rise in the short term, particularly considering that we just closed right at the 50-day moving averages that I have discussed so often recently. Will the crooks at JPMorgan take a stand here and prevent gold and silver from decisively penetrating this key moving average by rigging prices lower forthwith? Or will we get a rush of buying by technical funds that blast us through the moving averages? If the raptors don’t sell aggressively enough (on higher prices), JPMorgan will be forced to shoulder the short selling duties in silver and that may lead them to getting over run. All these possibilities could occur and all must be anticipated. About the only thing I can rule out is that we will remain at current prices for very long. In a very real sense, it’s time to buckle up and prepare, at least mentally and emotionally, for price volatility. - Silver analyst Ted Butler: 11 January 2014 With gold volume as low as it was, I'm not prepared to read much, if anything, into yesterday's price action. Silver did OK for itself, but the volumes, seemingly no matter what the price action, are always elevated, even yesterday---and I must admit that I was somewhat surprised by that. As Ted and I mentioned on Saturday, the 50-day moving averages are now in play---and yesterday's price action in both metals put prices just above those levels. Now we wait and see what the technical funds do---and how "da boyz" respond. Here are the one-year charts for both metals to put this situation in some perspective. There's not much to add to what I've just said above, and I'm in total agreement with what Ted said in his quote. As I write this paragraph, the London open is five minutes away. None of the four precious metals is doing much from a price perspective---and volumes are microscopic in gold, and a bit heavier in silver. The dollar index isn't doing much, either. And as I'm about to hit the send button today's column at 5:20 a.m. EST, I see that all four precious metals have come under some selling pressure starting right at, or just before, London opened for the day. Platinum and palladium are down a percent---silver is down 12 cents, and gold is down three bucks. I have no idea whether this is the beginning of an engineered price decline or not, but all should be clear to us by the 10 a.m. EST London p.m. gold fix, so I shan't jump to conclusions just yet. Net volume in gold is still pretty light---but silver's volume is getting up there, but still not overly heavy. The dollar index is bouncing around a bit, but only up a couple of basis points at the moment. That's all for today---and I'll see you here tomorrow.