Wednesday, August 6: Today in Gold and Silver

NEW YORK ( TheStreet) -- Like Tuesday, the gold price didn't do much of anything until around 1 p.m. Hong Kong time---and from there it rallied three bucks or so, before trading sideways until 1 p.m. BST in London, which was 20 minutes before the Comex open in New York.  From that point, the usual selling pressure put in an appearance---and the low tick was in around 10:30 a.m. EDT. 

The price didn't do much from there until the 1:30 p.m. Comex close---and precisely at that point, the gold price rallied to its high of the day which came at precisely 2:30 p.m.  From there it gave up half its gains by 4:00 p.m.---and then traded sideways into the 5:15 p.m. Comex close.

The CME Group recorded the low and high ticks as $1,283.30 and $1,295.00 in the December contract.

Gold closed on Tuesday at $1,288.60 spot, up a whole 40 cents from Monday's close.  Volume, net of August and December, wasn't overly heavy at 113,000 contracts.

Here's the New York Spot Gold [Bid] chart showing the one hour rally that occurred precisely between 1:30 p.m. and 2:30 p.m. EDT.

Silver traded within a nickel of its Monday closing price in New York, right up until a minute or so after 1 p.m. BST in London---the same as gold.  The selling pressure appeared at that time---and the technical funds puked, and down went the price.  The selling ended around 11:15 EDT in New York---and the tiny rally between 1:30 p.m. and 2:30 p.m. EDT that gold enjoyed, was barely a hiccup on the silver chart.  But once that tiny little rally was in, the silver price pattern pretty much followed what was going on in the gold price.

The high and low ticks in silver were reported as $20.29 and $19.76 in the September contract.

Silver finished the Monday trading session at $19.74 spot, down 39 cents from Monday's close.  Net volume was very decent at 47,000 contracts.

Platinum traded flat until shortly before the Zurich open, when it jumped five bucks or so.  But shortly after Zurich opened, the price trend became decidedly negative, with the low tick coming at the 8:20 a.m. EDT Comex open.  The subsequent rally didn't/wasn't allowed to get far---and the price chopped sideways into the close.  Platinum finished down nine bucks on the day.

It was more or less the same for palladium, but the rally off the Comex low had some more juice to it---and palladium was closed down 9 bucks as well.

The dollar index closed at 81.32 late on Monday afternoon in New York---and then didn't do much until 2 p.m. Hong Kong time on their Tuesday afternoon.  The 81.30 low came at that time---and the subsequent rally made it all the way up to its 81.61 high by shortly before 11 a.m. in New York.  After that, the index slid a few basis points into the close.  It finished the day at 81.53---up another 21 basis points.

Like on Monday, the gold stocks rallied briefly into positive territory during the first ten minutes of trading, before heading south.  The low came around 12:30 p.m. EDT---and quickly rallied back into positive territory one the gold price began to rally at the 1:30 p.m. Comex close.  Once the stocks broke into positive territory, they chopped sideways for the remainder of the Tuesday session---and the HUI closed up 0.74%.

It was more or less the same chart pattern for the silver equities, as Nick Laird's Intraday Silver Sentiment Index closed up 0.67%---which was a big surprise in the face of the 2 percent loss the metal itself took.

The CME Daily Delivery Report showed that 1,282 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Thursday.  The only two short/issuers that mattered were Deutsche Bank with 820 contracts in its in-house [proprietary] trading account---and Barclays with 400 contracts in its client account.  The four largest long/stoppers were JPMorgan in its client account with 542 contracts---and Morgan Stanley, Barclays and Canada's Scotiabank with about 240 contracts each in their respective in-house [proprietary] trading accounts.  The link to yesterday's Issuers and Stoppers Report is here.  It's worth a quick look.

Glancing at the CME's Preliminary Report for yesterday, August open interest in gold is down to 4,228 contracts---and to get a more accurate number, you can subtract the 1,282 contracts posted for delivery tomorrow, so there's about 3,000 contracts left open in August

There were no changes in GLD yesterday---and as of 8:58 p.m. yesterday evening, there were no reported changes in SLV, either.

The good folks over at Switzerland's Zürcher Kantonalbank updated their website with the latest reports on their gold and silver ETFs.  Both showed declines for the week ending on 31 July.  Their gold ETF declined by 8,937 troy ounces---and their silver ETF shed 275,918 troy ounces.

There was another sales report from the U.S. Mint on Tuesday.  They sold 2,500 troy ounces of gold eagles---1,000 one-ounce 24K gold buffaloes---and 275,000 silver eagles.

It was another big day in gold over at the Comex-approved depositories on Monday, as 390,395 troy ounces were reported received---and 22,343 troy ounces were reported shipped out.  All the receipts were at JPMorgan and Canada's Scotiabank.  The link to Monday's activity in gold is here.

For a change, the activity in silver was reasonably quiet, as only 20,748 troy ounces were reported received---and 92,137 troy ounces shipped out the door.  The link to that action is here.

Another day---and another reasonably large pile of stories for you again, so have at it.

¤ The Wrap

67,000 COMEX contracts are the equivalent of 335 million oz of silver and I don’t think a single ounce of the concentrated short position is remotely linked to legitimate mining or inventory hedging. With eight crooked COMEX traders (mostly banks) net short 40% of the world’s mine production---and almost 200% of the total COMEX silver warehouse inventories, no one should wonder why silver is priced so cheap. Quite simply, silver is the most manipulated market in the world because it has the world’s most concentrated short position, thanks to the crooks at JPMorgan and the CME.

Accordingly, no one should wonder how and why I can get away with calling JPMorgan and the CME (and the CFTC) market criminals with no rebuke. I’d like to see anyone explain---with a straight face---how the world’s most concentrated and uneconomic short position is legitimate. It’s hard to calculate how high the price of silver would be if the illegitimate concentrated short position in COMEX silver didn’t exist. - Silver analyst Ted Butler: 02 August 2014

Yesterday looked like just another day where "da boyz" were slicing the golden price salami to the downside, but the rally that began the second that Comex trading began at 1:30 p.m. EDT yesterday came as a big surprise.  If you're looking for a reason for that rally in the thinly-traded electronic market, I don't have one.

But it was pretty much 'business as usual' in silver, as JPMorgan et al went after it in a big way once again---and closed it well below the key 50 and 200-day moving averages.  Volume was pretty heavy, but I must admit that I was expecting more tech fund selling than we got.

Here are the 6-month charts for both metals updated with yesterday's price/volume data.

We're quickly heading into oversold territory in silver, but as I keep repeating, it's not the price, but the number of long contracts sold, or short contracts bought by the technical funds that matters, as this engineered price decline continues to unfold.  When the HFT boyz have forced as many long contract holders to sell---and have got as many of these same technical funds to go short as they can then, and only then, will the bottom be in.

So we wait.

Since yesterday's price action occurred on a Tuesday, there's a reasonable hope that some, if not all of yesterday's price action will appear in this Friday's Commitment of Traders Report, as yesterday was the cut-off for it.  We also get the monthly Bank Participation Report---and that will show us just how short the bullion banks still are in all four precious metals---and how much further we may have to go, particularly in gold and silver.

I was happy to see the positive price action in the precious metal equities yesterday, especially in the silver stocks, even though the metal itself had another poor day like it did on Monday.  One would like to think that deep pockets are searching for a bottom in the shares, but that would be assuming too much at this point.  But, having said that, someone was obviously a big buyer yesterday.

As I write this paragraph, London has been open about 20 minutes.  All four precious metals were in positive territory by a few dollars, or a few cents, as the case may be during the Far East trading session---but nothing much has happened in London trading so far.  December volume in gold is just under 11,000 contracts at the moment---and silver's net volume is pretty chunky at around 7,000 contracts, as the roll-overs out of the September delivery month are already well under way, which is rather unusual for this time of day and this early in the month.  The dollar index is up a handful of basis points.

And as I hit the send button on today's column at 4:45 a.m. EDT, all four precious metals are headed a bit lower---and most of the earlier gains, such as they were, have all but disappeared.  Volumes in both gold and silver are up a bit more, of course, but still very much on the lighter side---and the dollar index is back to almost unchanged as well.

I haven't a clue what will happen in today's trading action.  The only thing I do know is that barring some black swan, there will be nothing free market about it.

I'm off to bed---and I'll see you here tomorrow.

This is an abbreviated version of Ed Steer's Gold & Silver Daily Sign-up to have to the complete market review delivered to your email inbox each morning for free.

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