Saturday, May 31: Today in Gold and Silver

NEW YORK ( TheStreet) -- It was pretty quiet in Far East trading on their Friday. The high of the day came shortly before 9 a.m. Hong Kong time---and then it was a long, slow slide into the 8:40 a.m. EDT open in New York.  The subsequent rally only lasted until shortly after 9 a.m.---and by the time the HFT boyz were done with it, gold hit its low minutes before noon EDT.  From that point, the gold price rallied quietly until 4:30 p.m.---and then traded mostly sideways into the close.

The CME recorded the high and low ticks at $1,260.60 and $1,242.20 in the August contract.

Gold closed in New York on Friday at $1,251.30 spot, down another $4.60 on the day---and at a new low for this move down.  Volume, net of June was pretty decent at 142,000 contracts.

The silver price traded sideway within a dime of unchanged either side of Thursday's closing price in New York and, like gold, the hammer fell shortly after 9 a.m. EDT---and by 12:45 p.m., all the damage was done, as silver also closed at a new low for this move down.  The silver price rallied until 4 p.m. in electronic trading before flat-lining for the rest of day.

The high and low ticks were posted as $19.085 and $18.615 in the July contract.

Silver finished the Friday session at $18.81 spot, down 23 cents from Thursday's close---and you would have to go all the way back to the late June close in 2013 to find a lower closing price.

Platinum wasn't spared, either---and had a similar price path to both gold and silver---and closed down six bucks on the day.  Palladium traded in a one percent range for the entire Friday session---and actually finished up two bucks from Thursday's close.  Here are the charts.

The dollar index closed late Thursday afternoon in New York at 80.50---and chopped quietly lower on Friday, finishing the day at 80.38---down 12 basis points.  Nothing to see here.

The gold stocks traded in a tight range either side of unchanged for the first 45 minutes of trading on Friday---and then headed lower, hitting their low tick at the same time as the metal itself, a few minutes before noon in New York.  From there the rallied quietly before heading sharply higher starting around 3:15 p.m. EDT.  The HUI blasted into the green---and closed up 0.98%.

The silver equities opened down---and headed lower immediately---and by lunchtime in New York, were down 2%.  But, like the gold stocks, they rallied back, but didn't quite make it into the black, as Nick Laird's Intraday Silver Sentiment Index close down 0.21%.

The CME Daily Delivery Report was another surprise in gold, as only 27 contracts were posted for delivery on Day 2 of the June delivery month.  There were a dozen issuers---and half a dozen stoppers.  In silver, there were 51 contracts posted for delivery within the Comex-approved depositories on Tuesday.  ABN Amro was the short/issuer on 50 of them---and JPMorgan and Scotiabank stopped 25 of them in total. There were deliveries posted in platinum and palladium as well and, like yesterday, the Issuers and Stoppers Report is worth a quick look.  The link is here.

The other big surprise was that there were no reported changes in either GLD or SLV on Friday---and after the big price smack-downs on Tuesday, one would have expected that to happen.  I'm only speculating here, but it's my opinion that JPMorgan and the other bullion banks were buyers of every share of these two ETFs that John Q. Public was puking up.  That goes for every other day of this week as well.

The U.S. Mint had a smallish sales report yesterday.  They sold 1,000 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 125,000 silver eagles.  Although there may be more sales reported on Monday that will change things, as of the last trading day in May, the U.S. Mint has sold 35,500 troy ounces of gold eagles---12,500 one-ounce 24K gold buffaloes---and 3,988,500 silver eagles during the month just past.  Based on these sales the silver/gold sales ratio was 83 to 1 in May.  Year-to-date the U.S. Mint has sold 21,436,500 silver eagles.

Over at the Comex-approved depositories on Thursday, there was no in/out movement in gold for the second day in a row.  But it was an entirely different kettle of fish in silver, as 600,135 troy ounces were reported received---and a whopping 2,000,163 troy ounces were shipped out the door.  The link to that action is here.

Well, yesterday's Commitment of Traders Report lived up to its hoped-for advance billing.  Maybe not all of Tuesday's engineered price decline made it into yesterday's report, but enough of it did to show big changes---and set some new records.

In silver, the Commercial net short position declined by a chunky 3,367 contracts, or 16.8 million ounces. The Commercial net short position is now down to 71.1 million troy ounces.

Because of the timing of the report, which was 15 minutes before my flight to Vancouver left Edmonton, I never had a chance to talk to Ted Butler about yesterday's numbers, but he did e-mail the highlights---and here they are.  The standouts were as follows:  the technical funds added 5,100 contract to their short position which takes them to a new record short position.  The raptors, the Commercial traders other than the 'Big 8', added 3,000 contracts to their new record long position of 48,800 Comex contracts.  And lastly, the big long position hiding in the bushes in the Managed Money category is still there.  I was afraid it might have been a casualty of the engineered price decline, but it wasn't.  And lastly, JPMorgan managed to cover about 1,000 contracts of their short-side corner in the Comex silver market---and are now short 'only' 90 million ounces of silver.  That represents 125% of the entire Commercial net short position.  How outrageous can you get? 

In gold, the Commercial net short position declined by 27,372 contracts, or 2.74 million troy ounces.  The new Commercial short position now stands at 7.86 million troy ounces.  The standouts in gold were as follow---and I just cut and paste what Ted sent our way---and lightly edited in the process--- In gold, the tech funds added 22,000 new shorts, JPM bought 4,000 contracts---and their long-side corner in the Comex gold market now stands at 3.4 million troy ounces---34,000 contracts.  Mostly of the rest of the buying in the Commercial category was done by the gold raptors.

Ted added the following comment to his e-mail, which I thought worth sharing as well--- Good report, but should be much better now - hard to see how it could get much better than what transpired through Friday.

The only thing to add to the above is Nick Laird's " Days of World Production to Cover Short Positions" chart, which is posted below.  Despite the improvements, it's little changed from the one posted in last Saturday's column, which you can check out by clicking here, and then scrolling down a bit.

Because I'm in Vancouver this weekend, I've cut the stories down to as few as I could.  I hope there are some in there that you like.

¤ The Wrap

There are no markets anymore---only interventions. - Chris Powell, GATA---April 2008

Today's pop "blast from the past" is one that popped into my head out of the blue---and I immediately rushed to the computer to look it up on the Internet site---and the link is here.  The singer, Marty Balin, was one of the founding members of Jefferson Airplane back in the 1960s---along with its spin-off, Jefferson Starship,

Today's classical "blast from past" is the second moment of Mozart's Piano Concerto No. 20 in D minor, K. 466.  I've posted this before, but it was years ago.  The pianist is Ivan Klánský---and I'm just sorry that this recording is not available on CD, because I'd buy it in a heartbeat if it was, as I consider it to the definite recording of the work.  If you've ever seen the movie Amadeus, this is the music that's playing as the credits roll at the end.  It's the only movie I have ever seen in a theatre where the audience remained in their seats until the credits were done---and the piano piece was over.  I was one of them.  It was a surreal experience. The link is here.

Just when you think that this price management scheme couldn't get any more blatant than it already was, JPMorgan et al pull off this stunt during the New York trading session yesterday.

And as spectacular as the COT Report was on Friday, the one that we will get next Friday will certainly be another one for the record books, provided we don't have a big rally before the cut-off for that report at the close of Comex trading on Tuesday.

Ted Butler was certainly right about the fact that "da boyz" hadn't finished loading up the technical funds on the short side in gold.  Well, they added 22,000 shorts in the last COT Report---and a bunch more since then, including a big chunk yesterday.  As Ted said in his comments further up in this column---"[It's] hard to see how it could get much better than what transpired through Friday."  I agree totally.

Here are the 1-year charts for both gold and silver---and you can tell that we are near a major bottom in both metals, especially in silver.

But it's what happens going forward that really matters now.  Whether we're at the exact bottom or not, the rally that starts at some point will be met by raptor selling as they take profits as the technical funds begin to cover their short positions .  But if the raptors don't sell enough of their long positions to contain the price as the tech funds rush to cover as moving averages are penetrated to the upside, will JPMorgan et al as sellers of last resort step in to prevent the rallies from going supernova?  They've always done that in the past.  Will this time be different?  Beats me.

As Jim Rickards has so correctly pointed out, the price management scheme is now so obvious that the manipulators should be embarrassed by what they're doing.  Embarrassed or not, will it make any difference?

Whatever happens, I'll be watching the price activity closely from this point onward---and I was encouraged by the share price action today despite the beating the metals themselves got.

And if I had to bet ten bucks, I'd say that we're done to the downside. But I felt that way at the close of trading on Tuesday, Wednesday and Thursday as well.  The open in New York on Sunday evening should tell us a lot.

I'm done for the day---and for the week.  I'll be interested in what Ted has to say in his weekly review for his paying subscribers later today---and I'll steal what I think I can get away with for my Tuesday missive.  See you then.

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

Commodities Surge as Energy Stocks Lead Market Higher

Commodities Surge as Energy Stocks Lead Market Higher

Enjoy This Market Hoorah Before the Worst Correction of Your Lifetime

Enjoy This Market Hoorah Before the Worst Correction of Your Lifetime

With Everything Going On, Why Is Gold Not Higher?

With Everything Going On, Why Is Gold Not Higher?

Kevin O'Leary: Stay Away From Gold Miners, Hold Bullion

Kevin O'Leary: Stay Away From Gold Miners, Hold Bullion

Surprisingly, Higher Gold Prices Aren't Being Driven By Fears of War With Russia

Surprisingly, Higher Gold Prices Aren't Being Driven By Fears of War With Russia