Tuesday, August 26: Today in Gold and Silver

NEW YORK ( TheStreet) -- The gold price got hit for six bucks the moment that trading began at 6 p.m. EDT on Sunday evening in New York.  Then shortly after London opened, the gold price began to struggle back---and made it almost to the unchanged mark by the 8:20 a.m. Comex open---and that was it for the day.

Once again the high and low ticks aren't worth mentioning.

Gold closed in New York on Monday at $1,276.20 spot, down $4.60 on the day.  Volume, because of the fact that the Globex trading system was down for part of the day, was a very anemic 50,000 contracts.

It was more or less the same for silver, expect the low tick came shortly after 10 a.m. BST---and then the subsequent rally into the Comex open in New York met the same price fate as gold.

The low and high ticks are barely worth posting, but here they are.  The low was 19.295---and the high was 19.47 in the September contract.

Silver closed yesterday at $19.345 spot, down a nickel from Friday.  Net volume was a tiny 6,000 contracts.

The platinum price chopped sideways until the Zurich open---and then get sold off a few dollars, closing down four bucks on the day.

The palladium price didn't do a whole lot until the Comex open.  At that point it got sold down a few dollars, with its low coming minutes before 10 a.m. EDT.   The subsequent rally took it back into positive territory---and it printed its high tick in electronic trading after the Comex close.  The metal finished up five bucks.

The dollar index closed in New York late on Friday afternoon at 82.31.  It rallied almost 30 basis points at the open at 6 p.m. in New York on Sunday evening---and then didn't do much for the rest of the Monday trading session, closing at 82.58---up 27 basis points from Friday.  Here's the 3-day chart.

The gold stocks gapped down a bit at the open---and then crawled quietly lower from there, as the HUI finished down 1.44%.

The silver equities turned in a similar performance, as Nick Laird's Intraday Silver Sentiment Index closed down 1.68%.

The CME Daily Delivery Report showed that 162 gold and zero silver contracts were posted for delivery within the Comex-approved depositories on Wednesday.  The three largest short/issuers were JPMorgan out of its client account with 95 contracts---and Morgan Stanley and Jefferies with 44 an 21 contracts respectively.  The two largest long/stoppers were HSBC USA and Canada's Scotiabank with 72 and 71 contracts respectively. The link to yesterday's Issuers and Stoppers Report is here.

CME's Preliminary Report for the Monday trading session showed that there were 223 gold contracts still open in August, of which 162 contracts will disappear on Wednesday when the above-noted delivery occurs.  There are only a couple of silver contracts left open.

Not surprisingly, an authorized participant withdrew 96,194 troy ounces of gold from GLD---and as of 5:56 p.m. Monday afternoon, there were no reported changes in SLV.

The U.S. Mint had a sales report to start off the new week.  They sold 2,500 troy ounces of gold eagles---500 one-ounce 24K gold buffaloes---and 292,500 silver eagles.

There wasn't much in/out gold activity at the Comex-approved depositories on Friday, as only 3,858 troy ounces were reported received---and 300 troy ounces shipped out.  All of the activity was at Canada's Scotiabank---and the link to that is here.

There was very decent activity in silver once again, as 766,292 troy ounces were received, but only 62,002 troy ounces were shipped out.  I would guess that the silver being received lately is in preparation for the September delivery month which begins next Monday.  The link to the silver action is here.

As I mentioned in my comments about gold at the top of this column, the Globex trading system was down for several hours early on Monday.  Rather than go into the details myself, Mark O'Byrne over at the goldcore.com Internet site describes it better than I could, so I recommend you read his Monday column, as it's all there.  The link to his webpage his here.

Since this is my Tuesday column, I have three days worth of stories posted below---and I'll happily leave the final edit up to you once again.

¤ The Wrap

But just this [past] week for example, the technical funds sold and the commercials bought more than 30 million oz of silver futures, an amount close to what the U.S. mines in a year and the U.S. is in the top ten of silver producing countries. It is not possible that the concerted one-week sale of the equivalent of such an amount of metal not to have been the primary influence on price. Over the past four weeks, the technical funds have sold to the commercials, 105 million oz of silver contracts, or three times what the U.S. produces in a year. What difference could it make what else may be going on in the world or in the metals world if such massive amounts are being transacted in full view?

The world’s gold, silver and copper producers, consumers and investors have been shut out from the price discovery process at the hands of large speculators plunging into and out from derivatives positions on the COMEX. Not only is this preposterous, it's illegal. Most responsible for this sorry state of affairs is the crooked CME and CFTC. Funny how no part of me ever wants to apologize for calling them (along with JPMorgan) crooks. - Silver analyst Ted Butler: 23 August 2014

With the Globex trading system down for a good chunk of time yesterday, it's hard to make a case that anything substantial happened as far as price is concerned.  However, if you look at the charts carefully, it's easy to spot the price capping in both gold and silver that began at the Comex open.  But considering the fact that all traders have to roll their Comex futures and options contracts by the end of Thursday's trading, I must admit that I was expecting far heavier volume.  So whatever is left in the September contract, has to be dealt with within the next three days---except those who are standing for delivery.

Here are the 6-month charts for both gold and silver with Monday's data included.

Although gold is approaching oversold---and silver has been there for a while, I'm still on the lookout for "in your ear," as the JPMorgan et al are still massively short both metals compared to the huge long positions they held at the last price low at the end of May.

As you are aware, I've been harping on this situation for several weeks now, but it's all that matters at the moment.  We could certainly blast off from here, but if I were thinking like a crook that wanted to stick it to the brain-dead technical funds in the 'Managed Money' category, the current configuration of the Commitment of Traders Report is not the launching pad for higher prices that I would want---or choose, if it was within my power to change it in my favour.

So we await developments.

And as I type this paragraph, the London open is less than 15 minutes away.  Gold rallied a few bucks in the early going in Far East trading, but then really made a move starting around noon in Hong Kong---and at this moment it's up twelve bucks from Monday's close in New York.  Ditto for silver, but it's price spike ran into 'da boyz' almost immediately---and it's now up less than a dime.  Platinum's rally is also running into resistance, but it, too, is up on the day---7 dollars at the moment.  Only palladium is down from yesterday.  Gold volume is a bit under 25,000 contracts---and almost all of it is in the December contract, so it's obviously HFT related.  Silver's volume, net of roll-overs, is very light at only 3,600 contracts, but its substantially higher than it was just an hour before this, so whatever is happening in that metal isn't taking place on very much volume, so it's easy for anyone with an agenda, such as JPMorgan et al, to keep the price in check---which is what they're obviously doing.

Today, at the close of Comex trading, is the cut-off for this Friday' Commitment of Traders Report.  There should be decent volume today, regardless of the price action, but the really big volume days will be Wednesday and Thursday, as all the large traders have to be out of the September contract by the end of Comex trading on Wednesday---and all the rest by the end of trading on Thursday.  What will be of interest, of course, is the price action associated with it.

And as I fire this out the door at 5:05 a.m. EDT, I see that the rallies in all four precious metals have come to an end, at least for the moment.  However,  I'd say they're also done for the day, as it's obvious that the sellers of last resort were there to throw whatever Comex paper was necessary to put out the fires.  Gold volume is now up to 36,000 contracts---and over 95% of it is in the December contract.  Silver's net volume is up to 5,400 contracts, which is very much on the lighter side, but very decent for this time of day. 

The dollar index took a bit of a header starting in early Far East trading on their Tuesday, but began to rally back shortly before the London open---and about the time the precious metals began to run into 'resistance.'  At the moment, it's down 8 basis points.

If the price action around the London open is any indication, the New York trading session may prove interesting as well.  But if forced to bet ten bucks, I'll stick my neck out and say that we've already seen most of the price excitement for the day, unless the proverbial black swan shows up.

That's all I have, which is more than enough---and I'll see you here 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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