Friday, June 13: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price did absolute nothing on Thursday in Far East trading, but did begin to head quietly higher starting shortly before 11 a.m. in London.  Then shortly after the London p.m. gold fix, the price began to rally a bit more, but got capped within 30 minutes---and didn't do much after that.

The CME Group recorded the low and high ticks as $1,260.00 and $1,275.10 in the August contract.

Gold closed in New York on Thursday at $1,273.10 spot, up $12.50 from Wednesday.  Volume, net of June and July, was 120,000 contracts, so it's obvious that this rally didn't go unopposed by JPMorgan et al.

The silver price traded within a dime of its Wednesday closing price in New York---and really didn't rally with any enthusiasm until shortly before 1 p.m. London time---and about half an hour before the Comex open in New York.  From there it rallied about 35 cents to its high of the day, which came a minute or so before the Comex close. After that it traded flat.

The low and high were recorded as $19.15 and $19.565 in the July contract.

Silver finished the day at $19.525 spot, up 33 cents from Wednesday's close.  Net volume was very chunky at 44,500 contracts.  I'd guess that this was a short covering rally---and the tech funds were covering shorts and the silver raptors were selling them longs for a profit.

With the news about the possible strike settlement in South Africa, both platinum and palladium were hit hard.  Both had 37 dollar loses on the day.  Here are the charts.

The dollar index closed on Wednesday afternoon in New York at 80.77---and from there didn't do much until the 8:20 a.m. Comex open---and then began to head south immediately.  The low tick of 80.54 came at precisely 4 p.m. EDT in New York---and it recovered a couple of basis points after that.  The index closed at 80.59---down 18 basis points.

The gold stocks gapped up a few points, hitting their highs of the day at the 1:30 p.m. EDT Comex close.  After that they sold off a bit, but rallied back to close just off their high, as the HUI finished up 2.42%.

It was a similar story with the silver equities, although they hit their highs just after the Comex close.  They got sold down from there---and the subsequent recovery was less than robust.  Nick Laird's Intraday Silver Sentiment Index closed up 2.23%.

The CME Daily Delivery Report showed that 10 gold and zero silver contracts were posted for delivery on Monday within the Comex-approved depositories.  Nothing to see here.

There were no reported changes in GLD yesterday---and as of 9:45 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

Joshua Gibbons, the " Guru of the SLV Bar List," update his website with the weekly data from the Internet site---and this is what he had to say:  " Analysis of the 11 June 2014 bar list, and comparison to the previous week's list: 145,429.7 oz were removed (all from Brinks London). No bars were added or had a serial number change.  As of the time that the bar list was produced, it was overallocated 335.2 oz. This report does not reflect a 1,056,400.4 oz withdrawal on Wednesday."  The link to Joshua's website is here.

There was a tiny sales report from the U.S. Mint.  They sold 1,000 troy ounces of gold eagles---and 200 platinum eagles.

Over at the Comex-approved depositories on Wednesday, they reported receiving 32,315 toy ounces of gold---and only shipped out 434 troy ounces.  Almost all the activity was at Canada's Scotiabank.  The link to that activity is here.

For a change, there was very little activity in silver, as only 1,000 ounces were reported received---and 61,305 troy ounces were shipped out.  The link to that action is here.

I have the usual number of stories today---and a lot of them are about the desperate situation that's evolving in Iraq.

¤ The Wrap

The big potential negative remains what happens on the next silver rally, namely, will JPMorgan and the other big commercial shorts add to the concentrated short position? This is something not to be worried about in the sense it will only occur on higher prices, but it goes to the heart of the manipulation. As a result of JPMorgan buying back 4,000 short contracts during the reporting week, the concentrated position of the 8 largest shorts is now under 60,000 contracts, or 300 million oz.

There is no conceivable legitimate explanation for why this concentrated short position should increase from this point. If it does increase, which undoubtedly would only occur on rising silver prices, it is proof in advance that silver remains manipulated. The only possible explanation for a future increase in the concentrated short position is for the purpose of price capping. While we have almost always witnessed an increase in concentrated shorting on silver price rallies, it is not guaranteed that must occur in the future. The growing awareness of the COT report, for one thing, suggests one of these days the old crooked tricks won’t be tolerated. - Silver analyst Ted Butler: 07 June 2014

Volumes were microscopic up until the rallies began in both gold and silver in London on Thursday---and then they both blew way out once the larger rallies began shortly after 10 a.m. in New York.  This was textbook price action in a managed market.  The tech funds began to cover as major moving averages were broken---and the raptors were willing sellers all the way up.

The price moves weren't overly large---and the profits the raptors were making weren't overly large, either---and it was obvious, at least to me, that "da boyz" appeared to be letting the tech funds off easy, at least for the moment.  If they wanted to, they could have just as easily put their hands in their pockets and the market would have gone "no ask" in a flash---and the prices of both metals would have skyrocketed.  Then the raptors would have made some serious profits.  Sadly, that was not to be---and unless JPMorgan et al change their methods as this rally unfolds, it will end up the same way as every other rally in the past.

A question that needs an answer---and I know that Ted is giving it some thought---is whether or not JPMorgan and the other seven largest short sellers in silver had to increase the size of their short positions to cap the rally, because the raptors weren't selling enough longs to keep the price in check to the upside.  Please re-read Ted's quote just above one more time.

The situation in gold is similar, except that JPMorgan would have had to sell some of their long-side corner in the Comex gold market to accomplish the same objective.  Until next Friday's Commitment of Traders Report shows up, we won't have a clue.

But one thing is certain, there was deterioration in the Commercial net short position in gold yesterday---and it was probably substantial in silver.

Looking at the CME's Preliminary Report for yesterday's trading action, which I know I shouldn't do, the report showed that open interest in gold was only up by 3,410 contracts---and in silver it was only 1,280 contracts.  And like I said in this space yesterday, it's not wise to read too much into these numbers, as "da boyz" can hide their tracks easily.

Here are the 6-month charts for both gold and silver.  As you can see the 20 and 50-day moving averages both were pierced to the upside with some conviction, as was the 20-day moving average in gold.

It's much too soon to say how and when these rallies will end, but I'm certainly not happy with the way they've started.

Of course both platinum and palladium were both taken out to the proverbial woodshed yesterday---and it remains to be see how these two metals perform in the days and weeks ahead.

As I write this paragraph, the London open is five minutes away.  Both gold and silver got sold off a hair during Far East trading, but are showing signs of life as the open gets ever closer.  Volumes in both metals are double what they were at this time yesterday, but still very much on the lighter side.  The dollar index is down 5 basis points.

The latest Commitment of Traders Report, for positions held at the close of Comex trading on Tuesday, will no doubt show deterioration in the Commercial net short positions in both gold and silver, as the rallies that are currently underway started at the beginning of the reporting week last Wednesday.  It's just a matter of how bad it is---and I'll have that for you tomorrow.

You have to wonder how long the powers that be can keep the precious metal prices suppressed, especially in the face of everything that's going on in the world these days.  Right now they're having a pretty easy time of it, but it can't last forever.

As many commentators [including this writer] have said in the last month or so, the world's economic, financial and monetary system has now become a complete fantasy---and not to be overlooked in all of this is the deteriorating political/military situations in several areas of the world.  Out of all of this, or something else from left field, one has to wonder what the trigger will be when JPMorgan et al are finally allowed to let prices run.

There are lots of black swans out there, but none of them, either individually or collectively have been sufficient to overpower the crooks on the Comex---and until they are overpowered, or are instructed to step back from the market, things will remain exactly as they are now.

And as I send this off to Stowe, Vermont at 5:08 a.m. EDT, all four precious metals are back below their Thursday closing prices in New York---and the tiny rallies in both gold and silver got snuffed out the moment that London opened.  Volumes in gold and silver are now up substantially from two hours ago, so it took a decent amount of Comex paper for JPMorgan et al to put out those rallies, such as they were.  Platinum and palladium had some good gains in overnight trading, but all that and more disappeared in the last hour of trading.  The dollar index is now down about 12 basis points.

I await the New York open with great interest.

I'm done for the day.  I hope your weekend goes well, or you enjoy what's left of it if you live west of the International Date Line---and I'll see you 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.

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