Wednesday, May 7: Today in Gold and Silver

NEW YORK ( TheStreet) -- It was a very quiet trading day in gold on Tuesday, both from a price and volume perspective.  Both tiny rallies prior to the New York open got put in their place before they could get far---and the price action in New York was almost ruler flat.  The highs and lows aren't worth looking up.

Gold finished the day at $1,307.90 spot, down $1.80 on the day.  Net volume was extremely light at only 80,000 contracts.

The silver price action was slightly more volatile---getting sold down to its low of the day around noon Hong Kong time and, like gold, the two subsequent rallies got dealt with in the same old way.  New York trading was basically flat, although some thoughtful trader sold the silver price down in electronic trading just enough so that it finished down on the day as well.

The CME Group recorded the low and high price ticks as $19.505 and $19.715 in the July contract.  These number don't quite jibe with the KItco spot silver chart below, but they are what they are.

Silver finished the Tuesday trading session in New York at $19.55 spot, down 3.5 cents from Monday's close.  Volume, net of May and June, was pretty decent at 32,500 contracts, so it's obvious that JPMorgan et al had to throw some Comex paper at the price in London trading to get the price to behave.

Both platinum and palladium had price roller coaster rides of sorts, but in the end, their gains were tiny, as all rally attempts were met by a seller of last resort as well.  Here are the charts.

The dollar index closed in New York late on Monday afternoon at 79.50---and held reasonably steady until around 2 p.m. Hong Kong time on Tuesday.  From that point the index fell rapidly to its 79.07 low at 8:20 a.m. EDT before a "bargain hunters" shows up to stop its fall.  After that it gained a handful of basis points into the close.  The index finished the day at 79.14---which was down 36 points.

It was obvious that the early rallies in both gold and silver were most likely in response to the move in the dollar index---and that the not for profit selling was designed to prevent the correlation from occurring.  It that was the plan, it worked to perfection.

The gold stocks opened in positive territory for a few brief moments before heading quietly lower for the remainder of the Tuesday session---and they finished almost on their lows of the day, as the HUI closed down 0.69%.

It was almost the same chart pattern for the silver equities---and Nick Laird's Intraday Silver Sentiment Index closed down 0.77%.

The CME's Daily Delivery Report showed that 3 gold and 60 silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  The only short/issuer of note in silver was Jefferies with 57 contracts---and they were stopped/received by about ten different companies.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD---and as of 9:35 p.m. EDT there were no changed in SLV, either. [But when I checked at 3:55 a.m. EDT this morning, there was a withdrawal of 1,921,700 troy ounces showing on the Internet site---Ted Butler's " large buyer" avoiding the SEC's reporting requirements, perhaps?]

In my chat with Ted yesterday, his comment on the big deposit in SLV on Monday was that it was in response to the price run-up on Friday---and that the silver deposited was probably already sitting in-house, but not under the control of SLV directly, but was being temporarily held in SLV's warehouse in the case of such an eventuality---as there was absolutely no way that 2.6 million ounces could be shipped in over the weekend from anywhere.  Based on that, Ted also wondered how much more silver like that might be sitting around SLV's warehouse for just such a purpose.

Ted posts his mid-week commentary to his paying subscribers later today---and if he has anything to say about this new 1.92 million ounce withdrawal, I'll borrow it for my Thursday column.

The U.S. Mint had a sales report yesterday.  They sold 1,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 532,500 silver eagles.

Over at the Comex-approved depositories on Monday, they reported receiving 31,905 troy ounces of gold---and it all went into the HSBC USA warehouse---along with with 110,000 troy ounces of gold they received on Friday.  The link to that activity is here.

In silver, there was a big 1,019,085 troy ounce deposit into Canada's Scotiabank depository---and only 998 troy ounces were shipped out.  The link to that action is here.

Here are a couple of charts that Nick sent my way last night.  They are the intraday price movements for both gold and silver for the month of April.  Nick takes every 2-minute tick from each day---and adds it to the same 2-minute tick from each trading day of the month---and when he averages them out, the gold and silver intraday price movements show up as posted below.  It shows the times of the day each day, on average, where "da boyz" show up to lean on the price in both metals.  Sometimes its hard to spot the pattern on a daily basis, but when averaged out like this, it's impossible for JPMorgan et al to cover their tracks.

Both charts are worth a few minutes of your time---and I thank Nick for sharing them with us.

I have the usual number of stories for a mid-week column---and the final edit is all yours.

¤ The Wrap

You can always count on Americans to do the right thing—after they’ve tried everything else. - Winston Churchill

It was a nothing sort of day yesterday, except for the fact that both gold and silver attempted to rally during the decline in the dollar index---and it was equally as obvious that the sellers of last resort were there to ensure that it didn't occur.  And with volume as light as it was, it wasn't hard for anyone with an agenda to shove precious metal prices in whatever direction they wished---and we saw some of that happening yesterday between 2 a.m. and 8:20 a.m. EDT.

As I mentioned in yesterday's column, the cut-off for this Friday's Commitment of Traders Report occurred at the 1:30 p.m. EDT close of Comex trading on Tuesday.  Just glancing at the gold and silver charts for the 5-day reporting week, I'd guess that we'll see an increase in the Commercial net short positions in both metals when the report comes out on Friday, as there were significant rallies in both metals the previous Friday that negated any possible improvements---unless, of course, the rally was short covering by JPMorgan et al---which I highly doubt.

Here are the 6-month gold and silver charts as of Tuesday's close---and you can see the prior five days worth of price action that this Friday's COT Report will be based.

The gold price is now above its 200-day moving average, but "da boyz" halted the budding rally at that point---and I'll be very surprised, based on the low volumes lately, if the price is allowed to get above the 50-day moving average.  Silver is miles below any moving average of consequence---and until it does rally above them, or the moving averages decline below the current price, there won't be much pressure from the technical funds to rush out and cover the grotesque short positions they currently hold.

In Far East trading on their Wednesday, the smallish rallies that developed in both gold and silver haven't amounted to much---and like Tuesday, the volumes are so light that the current price action really doesn't mean much.  London has been open about 40 minutes as I type this paragraph---and net volume in gold is just under 20,000 contracts, and silver's volume is a hair over 5,000 contracts.

Here's another chart that Nick slid into my in-box late last night.  It's the " Total PMs Pool" graph---and as you can see, it's been chopping more or less sideways since it peaked in February of 2013.  I'm sure that the powers that be would like it to remain that way, as big rallies in all four precious metals would mean that metal would be pouring into all the associated ETFs, which is a situation that would put JPMorgan et al under even greater stress than they are now---especially in silver, platinum and palladium, as there's virtually no wiggle room in the physical supply of these metals.

And as I prepare to fire this out the door to Stowe, Vermont---I see that there were smallish rally attempts in both gold and silver that got dealt with in the usual manner within an hour or so of the London open.  Gold volume [net] is now up to 27,000 contracts---and silver's volume is a hair above 8,200 contracts, a 60% increase in volume since I reported on it 90 minutes ago.  Obviously JPMorgan et al had to step in front of this silver rally as sellers of last resort to prevent the price from blowing sky high, which it would have done with ease if they hadn't put in an appearance when they did.  The dollar index hasn't done a thing up to this point in the Wednesday trading session.

Like I said yesterday---and it applies once more today---it's obvious that "da boyz" are holding gold and silver prices on a short leash.  How long they can continue this state of affairs is unknown, but in the face of Ted Butler's "locked and loaded" scenario---and the continuing situation in Ukraine, it's difficult to envision that this intolerable situation can last much longer.  Of course I and others have been saying this for years---and only time will tell if this current situation is any different.

I'm done for the day---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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