Precious metal stocks get crushed. Another surprise deposit in GLD---and no change in SLV once again. A decent sales report from the U.S. Mint. More receipts in gold at the Comex-approved depositories on Friday---but huge in/out moment in silver once again.
NEW YORK ( TheStreet) -- It was obvious that the gold price was going to have a rough go of it on Monday. By around 10:30 a.m. Hong Kong time, gold was down ten bucks---and volume was well over 20,000 contracts, which is extremely high for that time of day, so the HFT boyz were busy. After that, not much happened until precisely 8:30 a.m. EDT---and the New York HFT traders had their work done for the day by 11:30 a.m. The gold price traded pretty flat from there into the 5:15 p.m. EDT close. The CME Group recorded the high and low ticks at $1,335.70 and $1,308.50 in the April contract. Gold closed in New York at $1,309.60 spot, down $25.10 from Friday's close. Gross volume was well over 200,000 contracts, but once the roll-overs out of the April delivery month were subtracted, the volume netted out at around 118,000 contracts. Here's the New York Spot Gold [Bid] chart---and you can see where the HFT boyz showed up at exactly 8:30 a.m. The silver price action was fairly similar, as it was already down a bunch by 10:30 a.m. in Hong Kong, but the real engineered price decline didn't begin until 10:45 a.m. in New York---and most of silver's losses on the day came from that point onwards. The high and low price ticks in the May contract for silver were reported as $20.315 and $19.92 Silver finished the Monday session in New York at $19.93 spot, which was down 34.5 cents from it's Friday close. Volume, net of March and April, was 42,500 contracts. Platinum rallied a bit during early Far East trading, with the high tick coming at 9 a.m. Hong Kong time---and from thereon in the price chopped unsteadily lower for the remainder of the day. The low tick came at precisely 4 p.m. EDT in New York. Here's the chart. Palladium did nothing in Far East trading, but had another go at the $800 spot price mark, only to run into a short seller of last resort. From that point it headed lower, hitting its low around 11:45 a.m. EDT. At that point, a willing buyer showed up and bid it back to unchanged by 1 p.m. After that, it didn't do much. The dollar index closed in New York late on Friday afternoon at 80.12---and then didn't do a thing until the 8 a.m. GMT London open. After getting rescued from falling below the 80.00 mark at that point, the dollar 'rallied' to it's 80.28 high minutes after 10 a.m. in London. After that it chopped quietly lower before falling off a 35+ basis point cliff starting just after 1 p.m. in New York. The low of 79.79 was in just minutes before 2 p.m., as someone was there to catch the proverbial falling knife. From there it rallied a bit, cutting its losses on the day, as the index closed at 79.94. There wasn't a hint of a price change in any one of the precious metals on this precipitous 1-hour drop in the dollar index. The gold stocks gapped down about a percent at the open---and then followed the gold price lower until the engineered price decline ended in that metal around 11:30 a.m. in New York. They recovered a bit, then didn't do much, before getting sold down again in the last few minutes of trading. The HUI closed down 3.99% which was at, or close to, it's absolute low of the day. The price path for the silver equities was almost the same---and the lion's share of the day's losses were in by 11:30 a.m. From there, the equities slid another percent into the close---and Nick Laird's Intraday Silver Sentiment Index closed down a whopping 6.63%. So much for my theory of someone buying up silver equities on the sly, as the loses yesterday were out of all proportion to the drop in the metal itself. The CME Daily Delivery Report showed that 2 gold and 156 silver contracts were posted for delivery within the Comex-approved depositories on Wednesday. The largest short/issuers were Jefferies and ABN Amro with 97 and 58 contracts respectively. Jefferies was also the biggest long/stopper with 56 contracts---and in second and third place came Canada's Scotiabank and JPMorgan Chase out of it's in-house [proprietary] trading account---with 42 and 24 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here. Another day---and another surprise deposit in GLD. This time an authorized participant added 144,535 troy ounces. Based on the price action, this looks like another deposit made to cover an existing short position. And as of 10:28 p.m. EDT yesterday, there were no reported changes in SLV. There has been no in/out activity of any significance in SLV since March 3---and I'm sure that's just the way JPMorgan wants to keep it until they've bought all the physical silver they can get their hands on. There was a decent sales report from the U.S. Mint to start the week yesterday. They sold 1,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 654,500 silver eagles. They also reported selling 300 platinum eagles as well. The question still unanswered is: Who is buying all these silver eagles, as it's not the general population. A decent amount of gold was reported received over at the Comex-approved depositories on Friday, as 192,732 troy ounces were shipped in---and nothing was shipped out. About 5 tonnes went into JPM's vault---and about a tonne into HSBC USA. The link to that activity is here. As big as the activity in gold movement was, it paled in comparison to what happened in silver last Friday, as 1,141,122 troy ounces were shipped in---and 1,115,180 troy ounces were reported shipped out. The big activity was at Brink's, Inc., CNT---and Canada's Scotiabank. The link to the action is here---and is worth a quick look. Here's a chart that I thought worth sticking in today's column at this point. It's the 3-year gold/silver ratio---and as you can tell at glance at almost 66 to 1---it's about the highest it has been in the last three years. It shows how horrible under-priced silver is vs. gold. Since today is Tuesday, I have more than the normal quota of stories for you today---and I hope you have the time to wade through the ones that interest you.
¤ The Wrap
Turnover or physical movement of metal into and out from the Comex-approved silver warehouses moderated to under 2.5 million oz. this week, as total inventories fell 250,000 oz to 182.5 million oz. Over the last three weeks, 10 million oz. have come in or departed the Comex warehouses as total levels have barely fluctuated on a weekly basis. There must be a reason for this activity and at the core of that reason must include the fact that most of the existing inventory is not available for sale at current prices, which necessitates the bringing in of new supply to meet demand. This certainly would not seem to be in keeping with silver’s rotten price performance, both absolutely and relative to gold. - Silver analyst Ted Butler: 22 March 2014 I hope you weren't too surprised by yesterday's price action. This is what I was expecting on Friday, but the out-of-the-blue rally shortly after London opened was a fire that JPMorgan et al had to put out before they could get back to business---which is precisely what they did yesterday. As I mentioned on Saturday, we have options and futures expiry for the April contract this week---and every trader, both large and small, has to roll, sell, or stand for delivery before the Comex closes on Friday. Without doubt, I'm sure that "da boyz" would want to arrange for gold to be well below it's 50 and 200 day moving averages by Thursday at the latest. We'll soon find out if that's in the cards or not. Here are the 6-month charts for both gold and silver. In gold, the 50 and 200-day moving averages are very close---and silver is now well under both those moving averages. But we could still see "da boyz" knock another $75 off the gold price---and a buck off silver---as the technical funds are still massively long despite the sell-off we've had during the last week of trading. That is, of course, if JPMorgan et al can pull it off. Ted Butler says that it's a near certainty that they will, it's just a matter of when---and over what period of time---that "da boyz" will slice the salami to the downside. And while I'm at it, here's the 6-month copper chart---which is another JPMorgan et al-controlled metal. Copper is obviously very oversold---and the RSI trace indicates that. I'm sure that JPMorgan would like to arrange for the precious metal charts to have RSI traces that look like that as well. I'm sure they'll give it the old college try as the days unfold. But one wonders if they can pull it off by the end of trading on Friday. We'll see. But there's the international situation to contend with, as this engineered price decline in all four precious metals is occurring in the face of the Ukraine/Russia tensions---and a strike at South Africa's platinum and palladium mines approaching two months in length. You just have to wonder when something will go 'bump' in the night. Friday's price activity at the London open could have been a precursor of more of that sort of thing to come, but I'm still on the lookout for "in your ear." GATA's secretary/treasurer Chris Powell, is at the Mines and Money Conference in Hong Kong at the moment, had this to say to a donor who wrote GATA a rather large cheque/check on the weekend---and I though it worth sharing. While I do feel deep gratitude to our longtime supporters and much obligation to them, I'm not always sure of the efficacy of what GATA is doing. The gold mining industry is nearly hopeless -- it acts as if the central banks are its largest shareholders (and if I was a gold-suppressing central banker, that's exactly what I would have done -- buy the industry) and the Western financial press is absolutely hopeless. (Certainly most of it is owned by big money.)My visit to Suriname last month was well-received and made me wonder if our focus should not be redirected on a national basis -- to political agitation in gold-mining countries in the developing world. But I had a personal connection to Suriname, someone very much involved in public life there who arranged my visit and introductions. We don't have such connections elsewhere and even several trips to South Africa by GATA people over the years seem to have produced nothing there. South African remains a rich country adamant on remaining poor. And as I said in my Saturday column, Russia or China---or both countries jointly---could end this price management scheme in instant if they choose to do so. It remains to be seen whether they use precious metals as weapon or not. But if the decision had been left up to me, I would have done it a long time ago---and let the chips fall where they may. As I write this paragraph, the London open is ten minutes away. There was a bit of positive price action in all four precious metals during the early going in Far East trading on their Tuesday---and that positive action is still with us with 10 minutes to go. Net volumes in gold are rather light---but silver's volume is pretty heavy and, not that it matters, but the dollar index isn't doing a thing. And as I hit the send button on today's effort---gold, silver and platinum are still struggling higher, but palladium is down a percent as of 5:19 a.m. EDT. Gold and silver volumes have blown out by quite a bit in the last 90 minutes, so even these tiny rallies are being met by the usual not-for-profit sellers. The dollar index is still flat. Today is the cut-off for this Friday's Commitment of Traders Report---and whatever price/volume data is reported at the close of Comex trading, should be in Friday's report, if everything is reported in a timely manner, that is. And as I've said before, JPMorgan et al hold back data if it suits them. That's more than enough for today. I'm off to bed. See you here tomorrow.