Saturday, May 24: Today in Gold and Silver

NEW YORK ( TheStreet) -- Gold didn't do much during the Friday session.  The 'high' of the day came at noon Hong Kong time---and then slid quietly down to its low at the New York open.  From there it rallied back to almost unchanged by 9 a.m. EDT---and then traded quietly sideways for the remainder of the day.

The high and low aren't even worth the effort to look up.

Gold finished the Friday trading session in New York at $1,292.90 spot, down 80 cents from Thursday's close.  But gross volume was over the moon at 233,000 contracts---but net volume was a very tiny 60,000 contracts.

It was more or less the same chart pattern in silver, with the low of the day coming about 10 minutes after the New York open.  From there it rallied a bit, before trading sideways until 3:30 p.m.  It added a few cents going into the 5:15 p.m. electronic close.

Once again the highs and lows aren't worth looking up, as silver traded within a 1 percent range for the entire Friday session.

Silver closed on Friday at $19.475 spot, down a penny from Thursday.  Volume, net of May and June, was 34,000 contracts, with 5,400 contracts of that coming in the September and December delivery months.

Platinum was under selling pressure right from the 6 p.m. open on Thursday evening in New York---and hit its interim low in Zurich just before 2 p.m. Europe time.  The subsequent rally ran into a major seller shortly before noon in New York, with the absolute low of the day coming about 12:30 p.m. EDT.  The subsequent rally didn't get far---and platinum closed down $19 on the day, giving up all Thursday's gains, plus a bit more.  For a quiet Friday trading session, it sure didn't look like ordinary selling.

Palladium didn't do much until shortly after London opened---and then the selling pressure began---and by 11 a.m. in New York the price was back to where it closed on Thursday.  Then came the big out-of-the-blue $10 up/down spike.  From there it traded flat for the remainder of the Friday session and, like platinum, gave up all its Thursday gains.

I don't know about you, dear reader, but the sell-offs in platinum and palladium looked orchestrated to me.  However, you're entitled to your own opinion.

The dollar index closed late on Thursday afternoon in New York at 80.22---and the traded flat until  shortly after the London open.  From there it rallied up to its noon BST high, before sliding a bit going into the New York open.  After that, it didn't do much.

The gold stocks opened flat, but began to slide shortly before 10 a.m. in New York.  Their low tick came around 1:30 p.m. EDT---and the subsequent rally cut the day's losses, as the HUI closed down 0.44%.

It was almost the same chart pattern in the silver equities, with the low also coming at 1:30 p.m. EDT.  But the subsequent rally only cut their losses by a little bit, as Nick Laird's Intraday Silver Sentiment Index closed down another 1.57%.

The CME Daily Delivery Report showed that zero gold and 54 silver contracts were posted for delivery within the Comex-approved depositories on Tuesday.  The two short/issuers were Deutsche Bank and ABN Amro with 38 and 16 contracts respectively.  JPMorgan stopped 42 of them---32 for its in-house [proprietary] trading account---and 10 for its client account.  The link to yesterday's Issuers and Stoppers Report is here.

There were no reported changes in GLD yesterday---and as of 7:51 p.m. Friday evening, there were no reported changes in SLV, either.

There was a smallish sales report from the U.S. Mint yesterday.  They sold another 5,000 troy ounces of gold eagles---and 500 one-ounce 24K gold buffaloes---but no silver eagles.  Except for a small 200,000 silver eagles reported on Tuesday, there have been no further silver eagle sales this week.  Both Ted and I are amazed by this---and I'm sure that he will have something to say about it in his Weekly Review this afternoon.

Month-to-date, the mint has sold 28,500 troy ounces of gold eagles---9,000 one-ounce 24K gold buffaloes---3,562,000 silver eagles---and 1,000 platinum silver eagles.  Based on these sales, the silver/gold ratio month-to-date is 95 to 1.  It would have easily been over 100 to 1 if the mint had reported all the silver eagles that it had actually sold this past week.

There was only a smallish amount of activity in gold at the Comex-approved depositories on Thursday.  They reported receiving 3,858 troy ounces of the stuff---and didn't ship any out.  All of it went into Canada's Scotiabank---and I won't bother posting the link.

However, it was another big in/out day in silver, as 794,406 troy ounces were reported received---all into Brink's, Inc.---and 310,938 troy ounces were shipped out.  The link to that action is here.

The Commitment of Traders Report data was a mixed bag.  There was more improvement in silver, along with some deterioration in gold.

In silver, the Commercial net short position declined by 1,837 contracts, or 9.2 million ounces, bringing the Commercial net short position down to 88.0 million troy ounces.  Ted Butler said that the technical funds now hold the largest gross short position in history---and the raptors [the Commercial traders other than the Big 8] are within an eyelash of holding their biggest long position in history.  Ted also pegs JPMorgan's short position at 19,000 Comex contracts, or 95 million ounces of silver which, if you do the math, represents about 108% of the Commercial net short position.  This short position redefines the words "grotesque" and "outrageous".

In gold, the Commercial net short position increased by a smallish 3,689 Comex contracts, or 369,000 troy ounces.  The Commercial net short position now stands at 10.60 million troy ounces.  Ted said that for the second week in a row, it was the actions of JPMorgan that was mostly responsible for capping the gold price, as they sold between 6 to 7,000 of their long-side corner in the Comex gold market---and Ted pegs their now-reduced long-side corner to just under 30,000 contracts, or 3 million ounces.

Here's Nick Laird's now-famous " Days of World Production to Cover Short Positions" of the Big 4 and Big 8 traders in all physically traded commodities on the Comex.

As you are already aware, Friday was a pretty busy day for news in the gold world---and it was for a lot of other things as well.  Add to that the stories I've been saving all week for today's column---and I'm sure I have a record number for you to peruse.  I hope you can find the time in what's left of your weekend to read the ones that interest you the most.

¤ The Wrap

The strongest factor pressuring the 8 big shorts to cover is the coming physical silver shortage. Let a physical silver shortage emerge (again, as was the case in early 2011) and these 8 shorts will rue the day they ever heard the word “silver.” That’s because if a silver shortage hits and the concentrated short position exists to the extent it exists now, it will be doomsday for the shorts. - Silver analyst Ted Butler: 21 May 2014

Today's pop "blast from the past" is by an American group that has spanned the " entire musical genre" during its long existence.  This particular R&B number is from 1979---and if you haven't heard this song before, you'll be one of the few people that hasn't.  The link is here.

Today's classical "blast from the past" is a short piano work by Franz Liszt, which everyone on Planet Earth has heard several times in various iterations during their lives.  Lang Lang does the honours---and the link is here.

As I pointed out at the top of this column, there wasn't much price activity in either gold or silver, but there sure was a lot of volume---especially in gold.  The preliminary report for Friday from the CME showed that about 27,000 gold contracts disappeared out of the June delivery month, so that's a pretty good start to the roll-overs, as all traders, expect those standing for June delivery, have to be out by the end of Comex trading next Thursday.

Here are the 6-month charts for both gold and silver once again.  As you can see in gold, and as I mentioned in yesterday's missive, the 50-day moving average [which is ruler flat] is being vigorously defended, although it was never an issue during the Friday session.  Silver closed above its 20-day moving average once again, but not by a material amount.

The rubber band in silver is pretty much stretched to the limit with the data that was contained in this week's COT Report---and I wait with great interest to see how this situation resolves itself.  At some point the technical funds will begin to cover---and it will be fascinating to watch if the raptors sell enough longs to cap the price as they begin to take profits.  If they don't, will JPMorgan et al and the other seven traders in the 'Big 8' category [as short sellers of last resort], dig themselves a deeper hole by adding to their already obscene and grotesque short positions?  The answer to that question will determine how high---and how fast---the silver price rises when the next rally begins.

I was happy to see that somebody on the inside [the first cockroach of many] finally got caught rigging the gold price for their own personal benefit.  But that, as many have said, is just the tip of the proverbial iceberg.  As Zero Hedge so succinctly put it in this article posted further up in the Critical Reads section:

"It would appear that Plunkett is indeed nothing more than another instance of "Kerviel" or "Tourre" - an irrelevant mid-level trader thrown at the wolves of public consumption just so the attention can be redirected from the real manipulation elsewhere, and much higher up.

"By handing Plunkett to the public on a silver platter, it simply means that the far bigger and more important players in the gold manipulation market - stretching all the way to central bank and, of course, bank of central bank level, will simply be allowed to continue business "as usual."

"So for those who want the real people behind the real manipulation before they all scatter into the dust, we urge you to reread "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold." Because the gold manipulation rabbit hole goes far, far deeper than just one single, solitary trader.

That, dear reader, is exactly correct ---but this is a good first start, and I'm sure there will be other cases of "banging the fix"---or banging away at any other time of day, for that matter---before this is all said and done.

For the very last time, I'd like to remind you once again that Casey Research has a limited-time offer [it ends at midnight EDT on Monday] on their Casey Extraordinary Technology subscription service.  Alex Daley is all pumped up about the successes they've had over the last year, with an average return of 47%.  The commentary is rather provocatively headlined " Gold is Dead: Long Live Tech".  It costs nothing to check it out, which I urge you to do when you have a spare minute.  The link is here---and Casey Research is now providing a 6-month guarantee of customer satisfaction with this offer.

That's all I have for the day---and the week.  Enjoy what's left of your weekend---and I'll see you here on Tuesday.

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

Market Bears Have Devoured Gold Prices

Market Bears Have Devoured Gold Prices

Gold to Skyrocket as Italian Rebellion Unfolds

Gold to Skyrocket as Italian Rebellion Unfolds

2010-Style Crisis Approaches: Prepare For Flight To Safety

2010-Style Crisis Approaches: Prepare For Flight To Safety

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