Friday, April 11: Today in Gold and Silver

NEW YORK ( TheStreet) -- The price action in gold on Thursday was very similar in most respects to the price action on Tuesday---and you can see that in the Kitco chart below.  There were a couple of short, sharp rallies in Far East trading between the New York open on Wednesday evening, right up until 9 a.m. Hong Kong time on their Thursday morning.  Then the price traded flat until the 8 a.m. BST London open.  The rally continued at that point, as did the efforts of the sellers of last resort.  However it all ended minutes after Comex trading began in New York yesterday morning---and it was all downhill into the close from there.

The low and high ticks were recorded by the CME Group as $1,311.0 and $1,324.90 in the June contract.

Gold finished the Thursday session at $1,318.10 spot, up $5.80 on the day.  Volume, net of May, was 134,000 contracts, with well over a third of that amount occurring before the London a.m. gold fix, as the HFT boyz did what was necessary to prevent the gold price from blowing out to the upside and taking out the 50-day moving average with any kind of authority---which it would have done handily if the not-for-profit sellers hadn't intervened.

It was virtually the same story in silver---and one can only imagine the rather large handle the silver price would have closed at if JPMorgan et al hadn't interfered.

The low and high ticks were recorded as $19.86 and $20.40 in the May contract, an intraday move of almost 3%.

Silver closed the trading day barely above the $20 spot mark at $20.03---up 18.5 cents on the day---but "da boyz" took it back below twenty bucks 45 minutes later, the moment that trading began in the Far East on their Friday.  Gross volume was over 80,000 contracts once again, but it all netted out to around 38,000 contracts, about the same volume as Tuesday.

Platinum and palladium had similar chart patterns, but their prices weren't capped for the final time until noon in New York.  Both closed with very decent gains on the day.  Here are the charts.

The dollar index closed in New York late on Wednesday afternoon at 79.53---and then didn't do much of anything until the equities markets opened in New York yesterday morning.  Then the index dropped down to its 79.35 low around 11:20 a.m. EDT---and from there it rallied a handful of basis points into the close.  The index finished the Thursday session at 79.41---down 12 basis points on the day.

Here's the 6-month dollar index chart---and you can see the damage that has been done during the last five trading sessions.

Although the gold stocks gapped up a bit at the open on the positive gold price action, they probably got caught up in the general sell-off in the U.S. equity markets---and down they went as well.  The HUI finished the day down 1.77%.

It was the same for the silver stocks, as Nick Laird's Intraday Silver Sentiment Index got clocked to the tune of 2.29%.

The CME's Daily Delivery Report showed that 46 gold and 20 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  Credit Suisse was the short/issuer on 45 of the gold contracts---and JPMorgan and Canada's Scotiabank stopped 38 of them.  In silver, Morgan Stanley and JPM were the two issuers---and Canada's Scotiabank stood for delivery on all 20 contracts.  The link to yesterday's Issuers and Stoppers Report is here.

There was a tiny withdrawal from GLD yesterday, as an authorized participant took out 8,429 troy ounces.  I would guess that this would represent a fee payment of some kind.  And as of 10:05 p.m. EDT yesterday evening, there were no reported changes in SLV.

Joshua Gibbons, the " Guru of the SLV Bar List," updated his website with the goings-on over at SLV for the reporting week that ended on Wednesday---and here's his report:  "Analysis of the 09 April 2014 bar list, and comparison to the previous week's list---672,916.9 oz were added (all to Brinks London), 145,919.6 oz were removed, no bars had a serial number change."

"The bars added were from: KGHM Poland (0.4M oz), Solar Applied Materials (0.2M oz and 2 others.  The bars removed from were: KCM SA (0.1M oz), and 2 others. As of the time that the bar list was produced, it was overallocated 39.6 oz.  All daily changes are reflected on the bar list."  The link to Joshua's website is here.

The U.S. Mint had sales report yesterday, but it was on the skinny side.  They sold 3,000 troy ounces of gold eagles---25,000 silver eagles---and 300 platinum eagles.

Over at the Comex-approved depositories on Wednesday, they reported receiving 14,202 troy ounces---and shipped out zip.  All of the gold went into Brink's, Inc.  The link to that 'activity' is here.

Of course it was a lot busier in silver, as a chunky 1,123,832 troy ounces were reported received---and nothing was shipped out.  The link to that action is here.

If you haven't noticed from the CME warehouse report yet---and just as a point of interest---JPMorgan Chase is the top dog in physical silver as well, as their depository now hold 45.49 million troy ounces of the stuff---a couple of million more than does HSBC USA.  One has to wonder how much more silver they may have stashed away, either in other Comex depositories [or elsewhere] in good delivery form that we just don't know about.  Then there's the question of who the mystery buyer is of all those silver eagles that have been sold for the last year or so.  Ted Butler suspects JPMorgan---and I'm not about to argue the point.

I have the usual number of stories for a week-day column---and I hope you find some in here that interest you.

¤ The Wrap

My advice, as it has been, is to move to the sidelines while holding large positions in physical silver and gold. Regardless of what the markets do, silver and gold represent eternal wealth, and the bid to sleep undisturbed at night. No amount of money is worth the loss of peace of mind. The power of gold opened the American West and populated Alaska. Men have spent their lives searching for gold. You can own gold by the simple action of swapping Federal Reserve notes for the yellow metal. I advise you to do it. - Richard Russell

It's getting repetitive, so I'm not going to dwell too much on what happened in Far East and early London trading on Thursday except to say that the sellers of last resort were at battle stations once again preventing all four precious metals from doing what they wanted to---and that's move sharply higher.  This was particularly true in gold, as "da boyz" wanted to prevent a major break-out above its 50-day moving average---and they succeeded.

Here, once again, are the 6-month gold and silver charts with yesterday's price action included.

Note that gold closed above its 50-day moving average, but would have closed considerably higher than that if the HFT traders hadn't been involved.

And no matter how well silver performs intraday, it's always sold back down to, or just below, the $20 spot price mark.  Yesterday they had to peel about 40 cents off the price to do it---and looking at the chart, it's a pattern that's obvious over the last 13 consecutive trading days.

In Far East trading on their Friday, the gold price didn't do much, but got sold back down below unchanged an hour before London opened.  And as I mentioned earlier, silver got sold back below the $20 mark the moment that trading began in New York yesterday evening---and every tiny rally attempt above that price mark has been sold off.  Platinum and palladium aren't doing much.  And as I write this paragraph, London has been open 75 minutes---and volumes aren't overly heavy, less than half of what they were yesterday at this time.  Roll-overs out of the May silver contract continue unabated.  The dollar index is comatose.

Today, at 3:30 p.m. EDT, we get the latest Commitment of Traders Report, I'll guess that we might see further deterioration in the Commercial net short position in gold, but that's just a guess based on a quick glance at the gold price action during the reporting week.  I'm neutral on silver, but nothing will surprise me.  The thing that makes me uncertain as to direction is that fact that all the volume from the prior week's COT Report may not have been reported in a 'timely manner'---so we could see some spill-over into today's report.  But whatever the numbers, I'll have them for you tomorrow.

And as I hit the 'send' button on today's column, I note that all four precious metals are below their closing prices in New York yesterday afternoon. Volumes are still nothing special---and the dollar index is now up a small handful of basis points.

Since today is Friday, nothing would surprise me regarding precious metal price action, especially during the New York session.  Gold is now a few dollars above its 50-day moving average---and I'll be interested in seeing if the rally [such as it is] will be allowed to continue, or whether it 'fails' at this point.

That's all I have for today.  Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.

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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