Thursday, July 31: Today in Gold and Silver

NEW YORK ( TheStreet) -- It was a very quiet trading day on Wednesday everywhere on Planet Earth.  Gold traded basically unchanged up until 1 p.m. BST in London, which was 20 minutes before the Comex open.  There was a bit of price flurry in the first hour of trading in New York, but that was it---and gold traded mostly flat for the remainder of the day.  Nothing to see here---and the high and low ticks aren't worth looking up.

Gold closed down for the third day in a row---and closed at $1,294.50 spot, down $4.30 from Tuesday's close.  Volume, which had been microscopic for most of the day, netted out to 139,000 contracts, with the vast majority of that occurring in December, which is now the new front month for gold.

It was more or less the same for silver, as price action and volume during the early going didn't amount to much.  Like gold, silver spiked up about 8:45 a.m. in New York, but that was quickly dealt with.  The low, such as it was, came around 10:40 EDT---and from there it rallied unsteadily higher in the close.

The low and high ticks, which are barely worth the effort of looking up, were reported by the CME Group as $20.76 and $20.48 in the September contract.

Silver finished the Wednesday trading session in New York at $20.615 spot, up 5.5 cents from Tuesday.  Volume, net of July and August, was around 35,000 contracts, of which 3,400 were in Dec/14 and Mar/15.

Platinum traded within five dollars of its Tuesday closing price for the entire Wednesday trading session---and closed up a buck.  There wasn't much excitement in palladium---and it closed unchanged.  Here are the charts.

The dollar index closed at 81.21 on Tuesday---and then tacked on another 10 basis points by 9 a.m. BST in London.  From there it traded flat until the Comex open---and by 10:50 a.m. EDT was up to its 81.54 high, before giving some of that back going into the close.  The index finished the day at 81.40---up 19 basis points.

The gold stocks gapped down a bit more than a percent at the open---and the sold off to their low which came minutes after 11:30 a.m. in New York.  From there they chopped quietly higher, cutting their losses by a bit, as the HUI closed down only 1.13%.

Despite the fact that silver finished up on the day, the long knives were out for all the precious metal equities yesterday---and Nick Laird's Intraday Silver Sentiment Index closed down 1.31%.

The CME Daily Delivery Report for first day notice for the August delivery month showed that only 102 gold and and a surprisingly large 225 silver contracts were posted for delivery within the Comex-approved depositories on Friday.  There were three short/issuers in gold---Jefferies, Deutsche Bank and ABN Amro---and the long stoppers were "all the usual suspects."  In silver, there was only one short/issuer---and that was Jefferies.  There were big deliveries in copper on first notice day as well---and if you wish to check out the details, the link to yesterday's Issuers and Stoppers Report is here.

The CME's preliminary report for the Wednesday trading session showed that there were 9,035 gold contracts still open in the August delivery month but, without doubt, that will shrink substantially by tomorrow, as the remaining trades from yesterday and today finally get reported.  In silver, there were 237 contracts open in the August delivery month, so the lion's share of that showed up in the figures above.  I'll update these numbers in this space in tomorrow's column.

There were no reported changes in GLD yesterday---and as of 8:56 p.m. EDT yesterday evening, there were no reported changes in SLV, either.

There was no sales report from the U.S. Mint.

There was no in/out movement in gold worth mentioning at the Comex-approved depositories on Tuesday.  In silver, there was 1,202,119 troy ounces reported received---and 5,210 ounces were shipped out.  All the silver received went into Brink's, Inc.  The link to that activity is here.

Once again I have a boat load of stories for you---and there should be some in here that are of interest.

¤ The Wrap

Until the physical tightness in silver develops into a genuine shortage, the price manipulators on the COMEX will determine what prices do. Currently, the commercials responsible for maintaining the manipulation are not positioned for a silver shortage. That doesn’t mean it is impossible for prices to rise sharply and the commercials to get overrun, but that’s not the high probability bet. This was the high probability bet two months ago when the technical funds were massively short and the commercials (the raptors anyway) were holding record net long silver positions. The high probability bet two months ago did play out, although the big surprise (and disappointment) was how small was the price jump and how large and aggressive was the accompanying commercial selling.

To be fair, I suppose the high probability bet in the short term is for the collusive COMEX commercials to snooker the technical funds to the downside, given the historical scorecard. Offsetting that, the extremely high probability bet for the longer term is for the price of silver to climb far higher than most would imagine. Admittedly, that creates a dilemma or anxiety for silver investors. - Silver analyst Ted Butler: 30 July 2014

It was another yawner in the precious metal market yesterday as the roll-overs out of August ended quietly---and nothing happened yesterday from a price perspective that's worth noting.  Volume was below ultra light for most of the day, but picked up substantially once New York began trading.  The traders in New York are the prime movers in the prices of all four precious metals, as their reach is global through the Globex trading system.  And if it's not them directly, it's their agents in other markets that are doing the dirty work on their behalf.

Here are the 6-month charts for both gold and silver, updated with yesterday's price/volume data.  There's nothing much to see here.

And as I type this paragraph, the London open is about 35 minutes away.  Gold, silver and platinum are down tiny amounts---and palladium is up a couple of bucks.  Nothing to see here.  Net gold volume is 10,000 contracts---and silver volume is microscopic once again at only 2,350 contracts.  The dollar index has been trading pretty much ruler flat all day long in the Far East---and is still flat approaching the London open.

I must admit that I don't know how to read the precious metal markets at the moment, but I'm always mindful that JPMorgan et al are riding shotgun over them at all times.  And not to be forgotten in all of this is the monstrous Commercial net short position in silver that hangs like the sword of Damocles over that market, along with the decent-sized Commercial net short position in gold as well.  "Da boyz" can engineer another price decline in these metals when it suits them---and the only thing we don't know, is when.

But unless they get over run by a physical shortage in silver, or a black swan out of left field, the 'powers that be' will harvest the technical fund longs for fun, profit and price management at some point.

I know you're probably getting tired of reading the above comments, as I've been saying this in one form or another for the last three weeks, but in the grand scheme of things, these are the only things that matter.

I'm off to bed earlier than usual this morning as well, as there's still not much going on now that London has been open an hour and change.  All four precious metals are trading close to unchanged as of 4:20 a.m. EDT.   Gold volume has increased by 50 percent since I last reported on it, which is still very light for this time of day---and silver's trading volume has doubled, but even at 4,800 contracts, it's still ultra light.  The dollar index isn't doing much, either.

Today is the last day of the month---and I haven't the foggiest idea how the rest of the Thursday session will unfold, but I would suspect that any decent price action in either direction will occur in New York.

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.

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