Friday, September 5: Today in Gold and Silver

NEW YORK ( TheStreet) -- Gold rallied a bit just before lunch Hong Kong time---and from there it was a slow grind downhill for the rest of the Thursday session---with the exception of a spike around 9:15 a.m. EDT, which got dealt with by "da boyz" within a minute or so.  Gold closed almost on its low tick---and at a slight new low for this move down.

The high and low were reported by the CME as $1,279.20 and $1,261.30 in the December contract.

Gold finished the Thursday session at $1,260.90 spot, down $8.40 on the day.  Net volume was in the neighbourhood of 138,000 contracts.

The silver price traded mostly sideways on Thursday until the 9:15 a.m. EDT spike.  That got hammered flat within 10 minutes and, like gold, it was all downhill into the close, with the low tick coming shortly after 4 p.m. EDT in electronic trading.  It was another slice off the salami, as it was a new low for this move down in this ongoing engineered price decline.

The high and low were recorded by the CME Group as $19.39 and $19.045 in the December contract.

The silver price closed yesterday at $19.055 spot, down 11 cents from Wednesday's close.  Net volume was around 34,500 contracts.

The platinum price action was a sort of mini version of the silver chart---and it got closed down $6.

Palladium rallied quietly until shortly before the Comex close yesterday---and then traded sideways, as it finished the Thursday trading session up $16.

The dollar index closed on Wednesday at 82.85 and then traded flat until the news of the cut in interest rates out of Europe---and then it really blew out to the upside.  Most of the gains were in by minutes before noon in New York, and it traded flat after that, closing up 83.85---an even 100 basis points.  First time I've seen a dollar move that size---and I would bet that a good chunk of it was short covering.

The interesting thing to note is that the precious metals never reacted to this dollar move at any time.

Here's the 6-month dollar chart---and the RSI indicator is certainly well into overbought territory.  Since its low in early May, the dollar index has risen 6.2%.  I'm sure that U.S. exporters are screaming about this.

Although the gold stocks started out in the green, they began to sell off right from the open---and that continued for the rest of the Thursday session, as the HUI finished down a chunky 3.55%---and barely off its low tick.  The HUI is now down just about 8% in the first three trading days of September.

The silver equities also opened in the green---and manged to stay there until around 11:45 a.m. EDT---and then they too headed south with a vengeance, as Nick Laird's Intraday Silver Sentiment Index closed down an eye-watering 4.50%, which was out of all proportion to the 11-cent down day in the metal itself.

The CME Daily Delivery Report showed that 33 gold and 285 silver contracts were posted for delivery within the Comex-approved depositories on Monday.  In gold, FC Stone issued 30 of those contracts---and Canada's Scotiabank stopped all 33 of them.  In silver, the only two short/issuers of note were Citigroup and Jefferies, with 171 and 109 contracts respectively.  There were about a dozen long/stoppers, but none really stood out. The link to yesterday's Issuers and Stoppers Report is here.

The CME's Preliminary Report for the Thursday trading session showed that 158 gold along with 1,319 silver contracts are still open in the September delivery month.  Of course, Monday's deliveries posted in the previous paragraph must be subtracted out to get a more accurate picture of the current situation as of the close of trading yesterday.

There was a big withdrawal from GLD yesterday.  This time it was 153,894 troy ounces.  And as of 9:37 p.m. EDT yesterday evening, there were no reported changes in SLV.

Joshua Gibbons, the " Guru of the SLV bar list" updated his website with what happened during the reporting week over at the iShares.com Internet site---and this is what he had to say.  " Analysis of the 03 September 2014 bar list, and comparison to the previous week's list: 3,165,866.8 troy ounces were added, no bars were removed or had a serial number change."

" The bars added were from: Aurubis AG (1.3M oz), Solar Applied Materials (0.7M oz), Kazakhmys (0.4M oz) and 9 others."

" As of the time that the bar list was produced, it was overallocated 76.3 oz.  All daily changes are reflected on the bar list, except a 239,269.0-oz withdrawal Wednesday night."  The link to Joshua's website is here.

The U.S. Mint finally had  sales report.  They sold 10,500 troy ounces of gold eagles, 2,500 one-ounce 24K gold buffaloes, 100 platinum eagles, and 240,000 silver eagles.

Over at the Comex-approved depositories on Wednesday, there certainly wasn't much activity in gold once again, as only 3,697 troy ounces were reported received.  And, as is almost always the case, the silver activity didn't disappoint, as 588,828 troy ounces were moved in---and 877,215 troy ounces were moved out.  The link to the silver action is here.

I have a very decent number of stories again today---and I hope you find a few on this list that interest you.

¤ The Wrap

The biggest question is how much further down, in price and in number of contracts, the commercials will rig gold, silver, and copper prices from here. It certainly appears we are past the midway mark in both Comex silver and copper in terms of numbers of contracts and close to that in gold.   With silver now well below the primary cost of mine production, it would appear that there is little reason to expect the commercials to be extra vicious to the downside, but like terrorists, criminals can’t be depended on to act rationally. I do remain convinced that the coming bottom, whenever and whatever it turns out to be, should be treated as the final bottom in silver. - Silver analyst Ted Butler: 03 September 2014

The gold and silver salamis continue to get sliced to the downside---and the slices appear to be getting thinner by the day.  But I'm still not convinced the ultimate low is in for either metal.  A vicious assault to the downside by the HFT boyz and their algorithms is still a possibility, as they can do whatever they want---whenever they want---and there isn't a soul out there to stop them, as everyone is complicit now---JPMorgan et al., the CME Group, the CFTC, the Central Banks---and the miners themselves, complicit by their very silence.  And not to be forgotten in all of this is the World Gold Council and The Silver Institute.

Here are the six-month gold and silver charts once again---and both show the thin slice off the salamis yesterday.

As I write this paragraph, the London open is 10 minutes away.  After getting sold down to new lows during the first hour of trading once New York opened at 6:00 p.m. on Thursday evening, both gold and silver rallied back to up a hair.  Platinum is up a dollar or so as well---and palladium is down the same amount, so there isn't much happening, or being allowed to happen.  Gold volume is just above 17,000 contracts---and silver's volume is around 4,000 contracts.  A decent chunk of that amount would have been technical funds longs in the 'Managed Money' category puking up more longs and/or going short.  The dollar index is now down a small handful of basis points after trading flat during the first half of the Far East trading session on their Friday.

At 8:30 a.m. EDT we get the jobs report---and as I said yesterday, it will be interesting to see how the HFT boyz spin their precious metal algorithms when the news hits the wire.

Also we get the latest Commitment of Traders Report, along with the companion Bank Participation Report.  Both Ted and I will be looking to see how much of Tuesday's price/volume data made it into these reports, as it was big down day in both gold and silver.

And as I hit the send button on today's column at 4:55 a.m. EDT, I note that nothing much has changed as far as precious metal prices are concerned now that London has been open a couple of hours, although prices are softer by a hair.  Gold volume is now a bit over 22,000 contracts---and silver's volume is 5,200 contracts.  The dollar index is still down a small handful of basis points.

That's all I have for today and, once again, it's more than enough.

Enjoy your weekend, or what's left of it if you live west of the International Date Line---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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